Document:

Exhibit 10.4

      

      

        MERCEDES-BENZ AUTO RECEIVABLES TRUST 20[__]-[_],

      as Issuer,

       

      MERCEDES-BENZ FINANCIAL SERVICES USA LLC,

      as Administrator,

       

      MERCEDES-BENZ RETAIL RECEIVABLES LLC,

      as Depositor,

       

      and

       

      [●],

      as Indenture Trustee

       

      	
               

              

              ADMINISTRATION AGREEMENT

               

              

              Dated as of [●], 20[__]

               

              

            

       

      

      
        
          

      

      
      TABLE OF CONTENTS

       

      	 	
              Page

            
	 	 
	
              Section 1.01. Capitalized Terms; Interpretive Provisions

            	
              1

            
	
              Section 1.02. Duties of the Administrator

            	
              2

            
	
              Section 1.03. Records

            	
              8

            
	
              Section 1.04. Compensation

            	
              8

            
	
              Section 1.05. Additional Information to be Furnished to the Issuer

            	
              8

            
	
              Section 1.06. Independence of the Administrator

            	
              8

            
	
              Section 1.07. No Joint Venture

            	
              8

            
	
              Section 1.08. Other Activities of Administrator

            	
              9

            
	
              Section 1.09. Term of Agreement; Resignation and Removal of Administrator

            	
              9

            
	
              Section 1.10. Action Upon Termination, Resignation or Removal

            	
              9

            
	
              Section 1.11. Notices

            	
              10

            
	
              Section 1.12. Amendments

            	
              10

            
	
              Section 1.13. Successors and Assigns

            	
              11

            
	
              Section 1.14. GOVERNING LAW

            	
              11

            
	
              Section 1.15. WAIVER OF JURY TRIAL

            	
              11

            
	
              Section 1.16. Table of Contents and Headings

            	
              11

            
	
              Section 1.17. Counterparts

            	
              11

            
	
              Section 1.18. Severability

            	
              11

            
	
              Section 1.19. Limitation of Liability of Owner Trustee and Indenture Trustee

            	
              12

            
	
              Section 1.20. Third‐Party Beneficiary

            	
              12

            
	
              Section 1.21. Successor Servicer and Administrator

            	
              12

            
	
              Section 1.22. Nonpetition Covenants

            	
              13

            
	
              Section 1.23. Electronic Signatures

            	
              13

            
	 	 
	
              EXHIBITS

            
	 	 
	
              Exhibit A - Form of Power of Attorney 

              

            	A-1

      

      

      
        i

        
          

      

      
      This ADMINISTRATION AGREEMENT, dated as of [●], 20[__] (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is among MERCEDES-BENZ AUTO RECEIVABLES TRUST
        20[__]-[_], as issuer (the “Issuer”), MERCEDES-BENZ FINANCIAL SERVICES USA LLC (“MBFS USA”), as administrator (the “Administrator”), MERCEDES-BENZ RETAIL RECEIVABLES LLC (“Mercedes-Benz Retail Receivables”), as depositor (the “Depositor”), and [●],
        not in its individual capacity but solely as trustee (the “Indenture Trustee”).

       

      WHEREAS, the Issuer was continued pursuant to an amended and restated trust agreement, dated as of [●], 20[__] (the “Trust Agreement”), between the Depositor and [●], as trustee (the “Owner
        Trustee”);

       

      WHEREAS, the Issuer is the Notes pursuant to an indenture, dated as of the date hereof (the “Indenture”), between the Issuer and the Indenture Trustee;

       

      WHEREAS, in connection with the issuance of the Notes and of certain beneficial ownership interests in the Issuer, certain documents have been executed, including (i) the Indenture, (ii) a sale and
        servicing agreement, dated as of the date hereof (the “Sale and Servicing Agreement”), among the Issuer, the Depositor, MBFS USA, as seller (the “Seller”) and as servicer (in such capacity, the “Servicer”), and (iii) a receivables purchase
        agreement, dated as of the date hereof (the “Receivables Purchase Agreement”), between the Seller and the Depositor;

       

      WHEREAS, pursuant to the Trust Agreement, the Sale and Servicing Agreement and the Indenture, the Issuer and the Owner Trustee are required to perform certain duties in connection with the (i)
        Notes and the collateral therefor pledged pursuant to the Indenture (the “Collateral”) and (ii) beneficial ownership interests in the Issuer;

       

      WHEREAS, the Issuer and the Owner Trustee desire to have the Administrator perform certain of the duties of the Issuer and the Owner Trustee referred to in the preceding clause and to provide such
        additional services consistent with the terms of this Agreement and the other Basic Documents as the Issuer and the Owner Trustee may from time to time request; and

       

      WHEREAS, the Administrator has the capacity to provide the services required hereby and is willing to perform such services for the Issuer and the Owner Trustee on the terms set forth herein.

       

      NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and of other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the
        parties hereto agree as follows:

       

      Section 1.01.  Capitalized Terms; Interpretive Provisions.  Capitalized terms used herein that are not otherwise defined
        shall have the meanings ascribed thereto in Appendix A to the Sale and Servicing Agreement, which Appendix is hereby incorporated into and made a part of this Agreement.  Appendix A also contains rules as to usage applicable to this Agreement.

       

      
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      Section 1.02.  Duties of the Administrator.

       

      (a)          The Administrator agrees to perform all of its duties as Administrator, including its duties under
          the Asset Representations Review Agreement, and, except as specifically excluded herein, agrees to perform all the duties of the Issuer and the Owner Trustee under the Issuer Basic Documents.  In addition, the Administrator shall consult with the
          Owner Trustee regarding the duties of the Issuer or the Owner Trustee under the Issuer Basic Documents.  The Administrator shall monitor the performance of the Issuer and shall advise the Owner Trustee when action is necessary to comply with the
          respective duties of the Issuer and the Owner Trustee under the Issuer Basic Documents.  Further, on behalf of the Issuer, the Administrator shall perform the duties and obligations related to a transition from the then-current Benchmark,
          including but not limited to the determination of a Benchmark Transition Event and its related Benchmark Replacement Date and any Benchmark Replacement Conforming Changes pursuant to the terms of the Indenture. The Administrator shall perform
          such calculations (including any calculations related to a transition from the then-current Benchmark pursuant to the terms of the Indenture), and shall prepare for execution by the Issuer or the Owner Trustee or shall cause the preparation by
          other appropriate persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer or either Trustee to prepare, file or deliver pursuant to the Issuer Basic Documents.  In furtherance
          of the foregoing, the Administrator shall take (or, in the case of the immediately preceding sentence, cause to be taken) all appropriate action that the Issuer or the Owner Trustee is required to take pursuant to the Indenture including such of
          the foregoing actions as are required with respect to the following matters under the Indenture (references are to Sections of the Indenture):

       

      (i)            the preparation, obtaining or filing of the instruments, opinions and certificates and other documents
          required for the release of Collateral (Section 2.13);

       

      (ii)          the duty to cause newly appointed Paying Agents, if any, to deliver to the Indenture Trustee the instrument
          specified in the Indenture regarding funds held in trust (Section 3.03);

       

      (iii)         the direction to the Indenture Trustee to deposit monies with Paying Agents, if any, other than the
          Indenture Trustee (Section 3.03);

       

      (iv)          the obtaining and preservation of the Issuer’s qualifications to do business in each jurisdiction where such
          qualification is or shall be necessary to protect the validity and enforceability of the Indenture, the Notes, the Collateral and each other instrument or agreement included in the Trust Estate, including all licenses required under the (A)
          Maryland Vehicle Sales Finance Act and (B) Pennsylvania Motor Vehicle Sales Finance Act (Section 3.04);

       

      (v)          the preparation of all supplements and amendments to the Indenture and all financing statements, continuation
          statements, instruments of further assurance and other instruments and the taking of such other actions as are necessary or advisable to protect the Trust Estate (Section 3.05);

       

      
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      (vi)         the delivery of the Opinion of Counsel on the Closing Date and the annual delivery of Opinions of Counsel as
          to the Trust Estate, and the annual delivery of the Officer’s Certificate and certain other statements as to compliance with the Indenture (Sections 3.06 and 3.09);

       

      (vii)        the identification to the Indenture Trustee in an Officer’s Certificate of a Person with whom the Issuer has
          contracted to perform its duties under the Indenture (Section 3.07(b));

       

      (viii)       the preparation and delivery of written notice to the Indenture Trustee, the Depositor and the Rating
          Agencies of each Servicer Termination Event and, if such Servicer Termination Event arises from the failure of the Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Receivables, the
          taking of all reasonable steps available to remedy such failure (Section 3.07(d));

       

      (ix)         the preparation and obtaining of documents and instruments required for the conveyance or transfer by the
          Issuer of its properties or assets (Section 3.10(b));

       

      (x)          the duty to cause the Servicer to comply with the Sale and Servicing Agreement (Section 3.12);

       

      (xi)          the delivery of written notice to the Indenture Trustee and each Rating Agency of each Event of Default
          under the Indenture and each default by the Servicer, the Seller or the Depositor under the Sale and Servicing Agreement or by the Seller or the Purchaser under the Receivables Purchase Agreement (Section 3.17);

       

      (xii)        [compliance with and performance under the [Swap][Cap] Agreement by the Issuer and negotiating the terms of
          any interest rate protection or swap agreements (Section [__]);]

       

      (xiii)       the monitoring of the Issuer’s obligations as to the satisfaction and discharge of the Indenture and the
          preparation of an Officer’s Certificate and the obtaining of the Opinion of Counsel and the Independent Certificate relating thereto (Section 4.01);

       

      (xiv)       the compliance with Section 5.04 of the Indenture with respect to the sale of the Trust Estate if an Event of
          Default shall have occurred and be continuing (Section 5.04);

       

      (xv)        the preparation and delivery of notice to Noteholders of the removal of the Indenture Trustee and the
          appointment of a successor Indenture Trustee (Section 6.08);

       

      (xvi)       the preparation of any written instruments required to confirm more fully the authority of any co‐trustee or
          separate trustee and any written instruments necessary in connection with the resignation or removal of the Indenture Trustee or any co‐trustee or separate trustee (Sections 6.08 and 6.10);

       

      
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      (xvii)      the furnishing of the Indenture Trustee with the names and addresses of Noteholders during any period when
          the Indenture Trustee is not the Note Registrar (Section 7.01);

       

      (xviii)     the preparation and, after execution by the Issuer, the filing with the Commission and the Indenture Trustee
          of documents required to be filed on a periodic basis with, and summaries thereof as may be required by rules and regulations prescribed by the Commission and the transmission of such summaries, as necessary, to the Noteholders (Section 7.03);

       

      (xix)       the opening of one or more accounts in the Indenture Trustee’s name, established with the [Paying
          Agent][Securities Intermediary] and the taking of all other actions necessary with respect to investment and reinvestment of funds in such accounts (Sections 8.02 and 8.03);

       

      (xx)         the preparation of an Issuer Request and Officer’s Certificate and the obtaining of an Opinion of Counsel
          and Independent Certificates, if necessary, for the release of the Trust Estate (Sections 8.04 and 8.05);

       

      (xxi)       the preparation of Issuer Requests and Officer’s Certificates, the obtaining of Opinions of Counsel and the
          certification to the Indenture Trustee with respect to the execution of supplemental indentures and the mailing to the Noteholders and the Rating Agencies, as applicable, of notices with respect to such supplemental indentures (Sections 9.01 and
          9.02);

       

      (xxii)      the preparation and delivery of all Officer’s Certificates, Opinions of Counsel and Independent Certificates
          with respect to any requests by the Issuer to the Indenture Trustee to take any action under the Indenture (Section 11.01(a));

       

      (xxiii)     the preparation and delivery of Officer’s Certificates and the obtaining of Opinions of Counsel and
          Independent Certificates, if necessary, for the release of property from the Lien of the Indenture (Section 11.01(b));

       

      (xxiv)     the preparation and delivery of written notice to the Rating Agencies, upon the failure of the Issuer, the
          Depositor or the Indenture Trustee to give such notification, of the information required pursuant to the Indenture (Section 11.04); and

       

      (xxv)       the recording of the Indenture, if applicable (Section 11.16).

       

      (b)          The Administrator shall:

       

      (i)            pay or cause the Servicer to pay to the Indenture Trustee from time to time such compensation and fees for
          all services rendered by the Indenture Trustee under the Indenture as have been agreed to in a separate fee schedule between the Administrator and the Indenture Trustee (which compensation shall not be limited by any Applicable Law in regard to
          the compensation of a trustee of an express trust);

       

      
        4

        
          

      

      (ii)          except as otherwise expressly provided in the Indenture, reimburse the Indenture Trustee upon its request
          for all reasonable expenses, disbursements and advances incurred or made by the Indenture Trustee in accordance with any provision of the Basic Documents (including the reasonable compensation, expenses and disbursements of its agents and
          counsel), except any such expense, disbursement or advance as may be attributable to its willful misconduct, negligence or bad faith;

       

      (iii)         indemnify, or cause the Servicer to indemnify, the Indenture Trustee for, and hold it harmless, or cause
          the Servicer to hold it harmless, against, any and all losses, liabilities or expenses, including attorneys’ fees, incurred by it in connection with the administration of the Issuer and the performance of its duties under the Indenture, including
          any Expenses incurred by the Indenture Trustee in connection with the enforcement of the Administrator or Servicer’s indemnification or other obligations hereunder, except the Indenture Trustee will not be indemnified for, or held harmless
          against, any loss, liability or expense incurred by it through its own willful misconduct, negligence or bad faith;

       

      (iv)          except as otherwise expressly provided in the third sentence of Section 7.01 of the Trust Agreement,
          reimburse the Owner Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Owner Trustee in accordance with any provision of the Trust Agreement (including reasonable compensation, expenses and
          disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its willful misconduct, negligence or bad faith of the Owner Trustee;

       

      (v)          indemnify the Owner Trustee and its agents, successors, assigns, directors, officers and employees for, and
          hold them harmless against, any loss, obligation, damage, tax, claim, suit, liability or expense incurred without negligence, willful misconduct or bad faith on their part, arising out of or in connection with the acceptance or administration of
          the transactions contemplated by the Trust Agreement, including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties under the
          Trust Agreement; and

       

      (vi)          promptly appoint a successor Indenture Trustee pursuant to Section 6.08 of the Indenture, upon the Indenture
          Trustee’s resignation or removal, or if the office of the Indenture Trustee becomes vacant for any other reason.

       

      
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      (c)          In addition to the duties set forth in Sections 1.02(a) and (b), the Administrator shall (i) execute on behalf of the Issuer or
          the Owner Trustee and (ii) perform such calculations and shall prepare or shall cause the preparation by other appropriate Persons of all such documents, notices, reports, filings, instruments, certificates and opinions that the Issuer or the
          Owner Trustee are required to prepare, file or deliver pursuant to the Issuer Basic Documents or are otherwise authorized to prepare, file or deliver pursuant to the Basic Documents, and at the request of the Owner Trustee, shall take all
          appropriate action that the Issuer or the Owner Trustee are required to take pursuant to the Issuer Basic Documents.  In furtherance thereof, the Owner Trustee shall, on behalf of itself and of the Issuer, execute and deliver to the Administrator
          and to each successor Administrator appointed pursuant to the terms hereof, one or more powers of attorney substantially in the form of Exhibit A, appointing the Administrator the attorney-in-fact of the Owner Trustee and the Issuer for the
          purpose of executing on behalf of the Owner Trustee and the Issuer all such documents, reports, filings, instruments, certificates and opinions.  Subject to Section 1.06, and in accordance with the directions of the Owner Trustee, the
          Administrator shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Basic Documents) as are not covered by any of the foregoing provisions and as are expressly requested
          by the Owner Trustee and are reasonably within the capability of the Administrator. The Administrator shall have the power and authority to negotiate, execute and deliver on behalf of the Issuer
          obligations under any interest rate protection or swap agreement or agreements with one or more counterparties and other documents in connection therewith.

       

      (d)          Notwithstanding anything in this Agreement or the other Basic Documents to the contrary, the Administrator shall be responsible
          for promptly notifying the Owner Trustee in the event that any withholding tax is imposed on the Issuer’s payments (or allocations of income) to a Certificateholder as contemplated in Section 5.01(c) of the Trust Agreement.  Any such notice shall
          specify the amount of any withholding tax required to be withheld by the Owner Trustee pursuant to such provision.

       

      (e)          Notwithstanding anything in this Agreement or the other Basic Documents to the contrary, the Administrator shall be responsible
          for performance of the duties of the Owner Trustee set forth in Section 5.04 of the Trust Agreement with respect to, among other things, accounting and reports to Certificateholders.

       

      (f)          To the extent that any tax withholding is required, the Administrator shall deliver to the Owner Trustee and the Indenture
          Trustee, on or before [●], 20[__], a certificate of an Authorized Officer in form and substance satisfactory to the Owner Trustee as to such tax withholding and the procedures to be followed with respect thereto to comply
          with the requirements of the Code.  The Administrator shall update such certificate if any additional tax withholding is subsequently required or any previously required tax withholding shall no longer be required.

       

      (g)          The Administrator shall perform the duties of the Administrator specified in Section 10.02 of the Trust Agreement required to be
          performed in connection with the resignation or removal of the Owner Trustee, and any other duties expressly required to be performed by the Administrator under the Trust Agreement, the Asset Representations Review Agreement or any other Basic
          Document.

       

      (h)          In carrying out the foregoing duties or any of its other obligations under this Agreement, the Administrator may enter into
          transactions or otherwise deal with any of its Affiliates; provided, however, that the terms of any such transactions or dealings shall be in accordance with any directions received from the Issuer and shall be, in the Administrator’s opinion, no
          less favorable to the Issuer than would be available from unaffiliated parties.

       

      
        6

        
          

      

      (i)          With respect to matters that in the reasonable judgment of the Administrator are non‐ministerial, the Administrator shall not
          take any action unless within a reasonable time before the taking of such action, the Administrator shall have notified the Owner Trustee of the proposed action and the Owner Trustee shall not have withheld consent, which consent shall not be
          unreasonably withheld or delayed, or provided an alternative direction.  For the purpose of the preceding sentence, “non‐ministerial matters” shall include:

       

      (i)            the amendment of or any supplement to the Indenture;

       

      (ii)          the initiation of any claim or lawsuit by the Issuer and the compromise of any action, claim or lawsuit
          brought by or against the Issuer (other than in connection with the collection of the Receivables);

       

      (iii)         the amendment, change or modification of the Basic Documents;

       

      (iv)          the appointment of successor Note Registrars, successor Paying Agents and successor Indenture Trustees
          pursuant to the Indenture or the appointment of successor Administrators or Successor Servicers, or the consent to the assignment by the Note Registrar, any Paying Agent or Indenture Trustee of its obligations under the Indenture;

       

      (v)           the appointment of successor Owner Trustees pursuant to the Trust Agreement; and

       

      (vi)          the removal of the Indenture Trustee.

       

      (j)          Notwithstanding anything to the contrary in this Agreement, the Administrator shall not be obligated to, and shall not, (i) make any payments to the Noteholders under the Basic Documents, (ii) take any
        other action that the Issuer directs the Administrator not to take on its behalf or (iii) take any other action which may be construed as having the effect of varying the investment of the Securityholders.

       

      (k)          The Administrator may enter into subservicing agreements with one or more subservicers for the performance of all or part of the Administrator’s duties hereunder.  References herein to actions taken or to
        be taken by the Administrator include actions taken or to be taken by a subservicer on behalf of the Administrator.  Each subservicing agreement will be upon such terms and conditions as are not inconsistent with this Agreement and as the
        Administrator and the subservicer have agreed.

       

      (l)          If requested by the Depositor for purposes of compliance with its reporting obligations under the Exchange Act, the Administrator will provide to the Depositor and the Servicer on or before March 31 of
        each year beginning March 31, 20[__], the servicing criteria assessment required to be filed in respect of the Issuer under the Exchange Act under Item 1122 of Regulation AB if periodic reports under Section 15(d) of the Exchange Act, or any
        successor provision thereto, are required to be filed in respect of the Issuer and shall cause a firm of independent certified public accountants, who may also render other services to the Administrator, the Servicer, the Seller or the Depositor,
        to deliver to the Depositor and the Servicer the attestation report that would be required to be filed in respect of the Issuer under the Exchange Act if periodic reports under Section 15(d) of the Exchange Act, or any successor provision thereto,
        were required to be filed in respect of the Issuer.  Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.  In the event that an overall opinion cannot be
        expressed, such registered public accounting firm shall state in such report why it was unable to express such an opinion.

       

      
        7

        
          

      

      The Administrator and the Depositor acknowledge and agree that the purpose of this Section 1.02(l) is to facilitate compliance by the Depositor with the provisions of Regulation AB and the related rules and regulations
        of the Commission.  The Depositor shall not exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act
        and the rules and regulations of the Commission under the Securities Act and the Exchange Act.  The Administrator acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance
        provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel or otherwise, and the Administrator agrees to comply with all reasonable requests made by the Depositor in good faith
        for delivery of information and shall deliver to the Depositor all information and certifications reasonably required by the Depositor to comply with its Exchange Act reporting obligations, including with respect to any of its predecessors or
        successors. The obligations of the Administrator to provide such information shall survive the removal or termination of the Administrator as Administrator hereunder.

       

      Section 1.03.  Records.  The Administrator shall maintain appropriate books of
        account and records relating to services performed hereunder, which books of account and records shall be accessible for inspection by the Issuer and the Depositor at any time during normal business hours, upon reasonable prior notice.

       

      Section 1.04.  Compensation.  As compensation for the performance of the
        Administra-tor’s obligations under this Agreement and as reimbursement for its expenses related thereto, the Administrator shall be entitled to a monthly payment of compensation which shall be solely an obligation of the Servicer.

       

      Section 1.05.  Additional Information to be Furnished to the Issuer.  The
        Administrator shall furnish to the Issuer from time to time such additional information regarding the Collateral as the Issuer may reasonably request.

       

      Section 1.06.  Independence of the Administrator.  For all purposes of this
        Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer or the Owner Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder.  Unless
        expressly authorized by the Issuer, the Administrator shall have no authority to act for or represent the Issuer or the Owner Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.

       

      Section 1.07.  No Joint Venture.  Nothing contained in this Agreement shall (i)
        constitute the Administrator and either the Issuer or the Owner Trustee as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) be construed to impose any liability as such on any
        of them or (iii) be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others.

       

      
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      Section 1.08.  Other Activities of Administrator.  Nothing herein shall prevent
        the Administrator or its Affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an administrator for any other Person, even though such Person may engage in business activities similar to those
        of the Issuer, the Owner Trustee or the Indenture Trustee.

       

      Section 1.09.  Term of Agreement; Resignation and Removal of Administrator.  This
        Agreement shall continue in force until the dissolution of the Issuer, upon which event this Agreement shall automatically terminate.

       

      (a)          Subject to Section 1.09(c), (i) the Administrator may resign its duties hereunder by providing the Issuer with at least 60 days’
          prior written notice and (ii) the Issuer may remove the Administrator without cause by providing the Administrator with at least 60 days’ prior written notice.

       

      (b)          Subject to Section 1.09(c), at the sole option of the Issuer, the Administrator may be removed immediately upon written notice
          of termination from the Issuer to the Administrator if any of the following events shall occur:

       

      (i)            the Administrator shall default in the performance of any of its duties under this Agreement and, after
          notice of such default, shall not cure such default within ten days (or, if such default cannot be cured in such time, shall not give within ten days such assurance of cure as shall be reasonably satisfactory to the Issuer); or

       

      (ii)          an Insolvency Event occurs with respect to the Administrator.

       

      The Administrator agrees that if an Insolvency Event occurs with respect to the Administrator, it shall give written notice thereof to the Issuer and the Indenture Trustee within seven days after
        the occurrence of such event.

       

      (c)          No resignation or removal of the Administrator pursuant to this Section shall be effective until (i) a successor Administrator
          shall have been appointed by the Issuer and (ii) such successor Administrator shall have agreed in writing to be bound by the terms of this Agreement in the same manner as the Administrator is bound hereunder.  The appointment of any successor
          Administrator shall be effective after providing prior written notice to each Rating Agency with respect to the proposed appointment.

       

      (d)          Subject to Section 1.09(c), the Administrator acknowledges that upon the appointment of a Successor Servicer pursuant to the
          Sale and Servicing Agreement, the Administrator shall immediately resign and such Successor Servicer shall automatically become the Administrator under this Agreement.

       

      Section 1.10.  Action Upon Termination, Resignation or Removal.  Promptly upon
        the effective date of termination of this Agreement pursuant to the first sentence of Section 1.09 or the resignation or removal of the Administrator pursuant to Section 1.09(a), (b) or (d), respec-tively, the Administrator shall be entitled to be
        paid all fees and reimbursable expenses accruing to it to the date of such termination, resignation or removal.  The Administrator shall forthwith upon such termination pursuant to the first sentence of Section 1.09 deliver to the Issuer all
        property and documents of or relating to the Collateral then in the custody of the Administrator.  In the event of the resignation or removal of the Administrator pursuant to Section 1.09(a), (b) or (d), respectively, the Administrator shall
        cooperate with the Issuer and take all reasonable steps requested to assist the Issuer in making an orderly transfer of the duties of the Administrator.

       

      
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      Section 1.11.  Notices.  Unless otherwise specified in this Agreement, all notices, requests, demands, consents, waivers or
        other communications to or from the parties to this Agreement will be in writing.  Notices, requests, demands, consents and other communications will be deemed to have been given and made, (i) upon delivery or, in the case of a letter mailed via
        registered first class mail, postage prepaid, three days after deposit in the mail and (ii) in the case of (a) a facsimile, when receipt is confirmed by telephone or by reply e‐mail or reply facsimile from the recipient, (b) an e-mail, when receipt
        is confirmed by telephone or by reply e‐mail from the recipient and (c) an electronic posting to a password-protected website, upon printed confirmation of the recipient’s access to such password-protected website, or when notification of such
        electronic posting is confirmed in accordance with clauses (ii)(b) through (ii)(c) above.  Unless otherwise specified in this Agreement, any such notice, request, demand, consent or other communication will be delivered or addressed, in the case of
        (i) the Issuer or the Owner Trustee, at the Corporate Trust Office [●], (ii) the Administrator, at 35555 W. Twelve Mile Road, Suite 100, Farmington Hills, Michigan  48331, Attention: Steven C. Poling (e-mail: [●]),
        (iii) the Depositor, at 35555 W. Twelve Mile Road, Suite 100, Farmington Hills, Michigan 48331, Attention: [●] (email: [●]) and (iv) the Indenture Trustee, at its Corporate Trust Office, [●]; or as to each of the foregoing, at such other address as
        shall be designated by written notice to the other entities.

       

      Section 1.12.  Amendments.  This Agreement may be amended from time to time by a
        written amendment duly executed and delivered by the parties hereto, with the written consent of the Owner Trustee but without the consent of the Securityholder, for the purpose of adding any provisions to or changing in any manner or eliminating
        any of the provisions of this Agreement or of modifying in any manner the rights of the Securityholders; provided, that no such amendment shall materially and adversely affect the interest of any Noteholder.  This Agreement may also be amended by
        the parties hereto with the written consent of the Noteholders evidencing at least 51% of the Note Balance [of the Controlling Class] or, if the Notes have been paid in full, the Certificateholders evidencing at least 51% of the aggregate
        Certificate Percentage Interest for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Securityholders; provided, however, that no
        such amendment may (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on the Receivables or distributions that are required to be made for the benefit of the Securityholders without the
        consent of all Securityholders adversely affected thereby or (ii) reduce the percentage of the Note Balance of the Notes or of the Certificate Percentage Interest, the consent of the Noteholders or the Certificateholders, respectively, of which is
        required for any amendment to this Agreement without the consent of 100% of the Holders of all Notes then Outstanding or all Certificates, respectively.

       

      An amendment to this Agreement shall be deemed not to materially adversely affect the interests of any Noteholder if the Person requesting such amendment obtains and delivers to the Owner Trustee
        and the Indenture Trustee an Opinion of Counsel or an Officer’s Certificate of the Issuer to that effect and by satisfaction of the Rating Agency Condition with respect to such amendment.  Notwithstanding the foregoing, the Administrator may not
        amend this Agreement without the consent of the Depositor, which consent shall not be unreasonably withheld.

       

      
        10

        
          

      

      Section 1.13.  Successors and Assigns.  This Agreement may not be assigned by the
        Administrator unless such assignment is previously consented to in writing by the Issuer and the Owner Trustee, and subject to the satisfaction of the Rating Agency Condition in respect thereof.  An assignment with such consent and satisfaction, if
        accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder.  Notwithstand-ing the foregoing, this Agreement may be assigned by the Administrator without the consent of the Issuer or the
        Owner Trustee to a corporation or other organization that is a successor (by merger, consolidation or purchase of assets) to the Administrator; provided, that such successor organization executes and delivers to the Issuer, the Owner Trustee and
        the Indenture Trustee an agreement, in form and substance reasonably satisfactory to the Owner Trustee and the Indenture Trustee, in which such corporation or other organization agrees to be bound hereunder by the terms of said assignment in the
        same manner as the Administrator is bound hereunder.  Subject to the foregoing, this Agreement shall bind any successors or assigns of the parties hereto.

       

      Section 1.14.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
          GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

       

      Section 1.15.  WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE BETWEEN THE PARTIES HERETO
          ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
          TRIAL WITHOUT A JURY.

       

      Section 1.16.  Table of Contents and Headings.  The Table of Contents and the various headings in this Agreement are included for
        convenience only and will not affect the meaning or interpretation of any provision of this Agreement.

       

      Section 1.17.  Counterparts.  This Agreement may be executed by the parties
        hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

       

      Section 1.18.  Severability.  If any one or more of the covenants, agreements,
        provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions and terms of this Agreement
        and shall in no way affect the validity or enforceability of the other covenants, agreements, provisions and terms of this Agreement.

       

      
        11

        
          

      

      Section 1.19.  Limitation of Liability of Owner Trustee and Indenture Trustee.

       

      (a)          Notwithstanding anything contained herein to the contrary, it is expressly understood and agreed by the parties hereto that (i)
          this Agreement is executed and delivered by [●], not individually or personally but solely as Owner Trustee, in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements
          herein made on the part of the Issuer is made and intended not as a personal representation, undertaking or agreement by the Owner Trustee but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein contained shall
          be construed as creating any liability on the Owner Trustee, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any
          Person claiming by, through or under the parties hereto, (iv) the Owner Trustee has not verified and has made no investigation as to the accuracy or completeness of any representations or warranties made by the Issuer hereunder and (v) under no
          circumstances shall the Owner Trustee be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the
          Issuer under this Agreement or any other related documents.  For all purposes of this Agreement, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the
          terms and provisions of Articles Six, Seven and Eight of the Trust Agreement.

       

      (b)          Notwithstanding anything contained herein to the contrary, this Agreement has been executed by [●] solely in its capacity as
          Indenture Trustee under the Indenture, and in no event shall the Indenture Trustee in its individual capacity have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of
          the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.

       

      Section 1.20.  Third‐Party Beneficiary.  The Owner Trustee is a third‐party
        beneficiary to this Agreement and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if it were a party hereto.

       

      Section 1.21.  Successor Servicer and Administrator.  The Administrator shall
        undertake, as promptly as possible after the giving of notice of termination to the Servicer of the Servicer’s rights and powers pursuant to Section 7.01 of the Sale and Servicing Agreement, to enforce the provisions of Section 7.02 of the Sale and
        Servicing Agreement with respect to the appointment of a Successor Servicer.  Such Successor Servicer shall, upon compliance with the second to last sentence of Section 7.02 of the Sale and Servicing Agreement, become the successor Administrator
        hereunder, subject to Section 7.02 of the Sale and Servicing Agreement; provided, however, that if the Indenture Trustee shall become such successor Administrator, the Indenture Trustee shall not be required to perform any obligations or duties or
        conduct any activities as successor Administrator that would be prohibited by law and not within the banking and trust powers of the Indenture Trustee.  In such event, the Indenture Trustee may appoint a sub-administrator to perform such
        obligations and duties. Any transfer of servicing pursuant to Section 7.02 of the Sale and Servicing Agreement and related succession as Administrator hereunder shall not constitute an assumption by the related successor Administrator of any
        liability of the related outgoing Administrator arising out of any breach by such outgoing Administrator of such outgoing Administrator’s duties hereunder prior to such transfer.

       

      
        12

        
          

      

      Section 1.22.  Nonpetition Covenants.

       

      (a)          Each of the Depositor, the Administrator, the Owner Trustee and the Indenture Trustee covenants and agrees that it will not at
          any time institute against, or join any Person in instituting against, the Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings, or other Proceedings under any Insolvency Law in connection with any
        obligations relating to any of the Basic Documents and agrees that it will not cooperate with or encourage others to file a bankruptcy petition against the Issuer during the same period.

       

      (b)          Each of the Issuer, the Administrator, the Owner Trustee and the Indenture Trustee covenants and agrees that it will not at any time institute against, or join any Person in instituting against, the
        Depositor any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings, or other Proceedings under any Insolvency Law in connection with any obligations relating to any of the Basic Documents and agrees that it will not
        cooperate with or encourage others to file a bankruptcy petition against the Depositor during the same period.

       

      Section 1.23.  Electronic Signatures. Any signature (including any electronic symbol or process attached to, or associated with, a contract or other record and adopted by a Person
        with the intent to sign, authenticate or accept such contract or record) hereto or to any other certificate, agreement or document related to this transaction, and any contract formation or record-keeping through electronic means shall have the
        same legal validity and enforceability as a manually executed signature or use of a paper-based recordkeeping system to the fullest extent permitted by Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act,
        the New York State Electronic Signatures and Records Act, or any similar State law based on the Uniform Electronic Transactions Act.

      

      

      
        13

        
          

      

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers, thereunto duly authorized, as of the day and year first above written.

       

      	 	
              MERCEDES-BENZ AUTO RECEIVABLES TRUST 20[__]-[_], as Issuer

            
	 	 
	 	
              By:

            	
              [●], not in its individual capacity but solely as Owner Trustee

            
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            
	 	 	 
	 	
              MERCEDES-BENZ RETAIL RECEIVABLES LLC,

            
	 	
              as Depositor

            
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            
	 	 	 
	 	
              [●],

            	 
	 	 	
              not in its individual capacity but solely as Indenture Trustee

            
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            

      

      

      	 	
              MERCEDES-BENZ FINANCIAL SERVICES USA LLC, as Administrator

            
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            

      
         

        

        Administration Agreement

      

      

      

      
        
          

      

      
      EXHIBIT A

       

      POWER OF ATTORNEY PURSUANT TO

      SECTION 1.02(c) OF ADMINISTRATION AGREEMENT

       

      KNOW ALL MEN BY THESE PRESENTS, that [●], a [national banking association],  not in its individual capacity but solely as Owner Trustee of Mercedes-Benz Auto Receivables Trust 20[__]-[_], a
        Delaware statutory trust (the “Issuer”), as grantor (in such capacity, the “Grantor”), does hereby appoint MBFS USA LLC, a Delaware limited liability company (“MBFS USA”), as grantee (the “Grantee”), as its attorney-in-fact with full power of
        substitution and hereby authorizes and empowers the Grantee, in the name of and on behalf of the Grantor or the Issuer, to take the following actions from time to time with respect to the duties of MBFS USA, as administrator (in such capacity, the
        “Administrator”) under the administration agreement, dated as of [●], 20[__] (the “Administration Agreement”), among the Issuer, the Administrator, Mercedes-Benz Retail Receivables LLC (“Mercedes-Benz Retail Receivables”) and [●], for the purpose
        of executing on behalf of the Grantor or the Issuer all such documents, reports, filings, instruments, certificates and opinions required pursuant to the Basic Documents.

       

      The Grantee is hereby empowered to do any and all lawful acts necessary or desirable to effect the performance of its duties as Administrator under the Administration Agreement and the Grantor
        hereby ratifies and confirms any and all lawful acts the Grantee shall undertake pursuant to and in conformity with this Power of Attorney.

       

      This Power of Attorney is revocable in whole or in part as to the powers herein granted upon notice by the Grantor.  If not earlier revoked, this Power of Attorney shall expire completely or, if so
        indicated, in part, upon the earlier of the (i) termination of the amended and restated trust agreement, dated as of [●], 20[__] (the “Trust Agreement”), between Mercedes-Benz Retail Receivables, as depositor, and [●], as owner trustee, or (ii)
        termination of the Administration Agreement.  Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Trust Agreement or, if not defined therein, in the Administration Agreement, as the case may
        be.

       

      This Power of Attorney shall be created under and governed and construed under the internal laws of the State of New York.

       

      The Grantor executes this Power of Attorney with the intent to be legally bound hereby, and with the intent that such execution shall have the full dignity afforded by the accompanying witnessing
        and notarization and all lesser dignity resulting from the absence of such witnessing and notarization or any combination thereof.

       

      
        A-1

        
          

      

      It is expressly understood and agreed by the Grantee and any person relying on this Power of Attorney that (a) the Administration Agreement and this Power of Attorney is executed and delivered by
        [●], not individually or personally, but solely as Owner Trustee, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements made in the Administration Agreement or in this
        Power of Attorney on the part of the Grantor is made and intended not as personal representations, undertakings and agreements by [●] but is made and intended for the purpose of binding only the Grantor or the Owner Trustee, respectively, (c)
        nothing in the Administration Agreement or herein contained shall be construed as creating any liability on [●], individually or personally, to perform any covenant either expressed or implied contained in the Administration Agreement or herein of
        the Grantor or the Owner Trustee, all such liability, if any, being expressly waived by the Grantee and any person relying on this Power of Attorney and by any person claiming by, through or under the Grantee or such person, (d) [●] has made no
        investigation as to the accuracy or completeness of any representations and warranties made in the Administration Agreement or herein and (e) under no circumstances shall [●] be personally liable for the payment of any indebtedness or expenses of
        the Grantor or the Owner Trustee or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Grantor or the Owner Trustee under the Administration Agreement, this Power of Attorney or any
        other related documents.

       

      Notwithstanding anything herein to the contrary, this Power of Attorney does not, and is not intended to, and will not be construed to, grant any authority to the Grantee to (i) expand, increase,
        incur, or otherwise impose any duties, liabilities or obligations of or on the Owner Trustee, as trustee or in its individual capacity, or (ii) provide any guaranty, indemnity or property of the Owner Trustee, as trustee or in its individual
        capacity, for any reason whatsoever.

       

      
        A-2

        
          

      

      Dated this ____ day of [●], 20[__].

       

      	
              [Seal]

            	
              [●],

            
	 	
              not in its individual capacity but solely as Owner Trustee of Mercedes-Benz Auto Receivables Trust 20[__]-[_]

            
	 	 	 
	 	
              By:

            	

            
	 	 	
              Name:

            
	 	 	
              Title:

            

      

      

      	
              Signed and delivered in the presence of:

            
	 
	 	 
	 	 
	

            	 

      	
              Address:

            	 	 
	 	 	 
	 	 
	
              [Unofficial Witness]

            	 

      

      

      

      

      
        A-3rmed-ex41_8.htm

Exhibit 4.1

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

SERIES C COMMON STOCK PURCHASE WARRANT

 

RA MEDICAL SYSTEMS, INC.

	
Warrant Shares:
	
 
	
 
	
Issue Date: 
	
July 22, 2022

 

 

THIS SERIES C COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [HOLDER] 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 the Issue Date (the “Initial Exercise Date”) and on or prior to the Termination Date (as defined in Section 1 below) but not thereafter, to subscribe for and purchase from Ra Medical Systems, Inc., a Delaware corporation (the “Company”), up to __________ shares (as subject to adjustment hereunder, the “Warrant Shares”) of the Company’s common stock (“Common Stock”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). 

Section 1.Definitions.  In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

“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 closing bid price of the Common Stock for the Trading Day in question (or the nearest preceding Trading Day until the close of the current Trading Day) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (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 in the “Pink 

1

 

Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the 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 Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

“Board of Directors” means the board of directors of the Company.

 “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Inducement Offer Letter” means the Letter Agreement titled “Inducement Offer to Exercise Common Stock Purchase Warrants”, dated as of even date herewith, between the Company and the Holder.

 

 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 “Termination Date” means 5:00 p.m. (New York City time) on the fifth (5th) anniversary of the Initial Exercise Date.

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

 

 

“Transfer Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 6201 15th Avenue, Brooklyn, New York 11219, and a facsimile number of (718) 234-5001, and any successor transfer agent of 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 Trading Day) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (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 in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the 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 holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

“Warrants” means this Warrant and other Common Stock Purchase Warrants issued by the Company pursuant to the Inducement Offer Letters.

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 (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (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 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 form 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 Warrant Shares 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.   

b)Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $0.28, subject to adjustment hereunder (the “Exercise Price”).

c)Cashless Exercise. 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 Warrant Shares 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)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. 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 of this Warrant, 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.

 

 

 

 

In connection with clause (ii) in (A) above, upon written request of the Company, the Holder will provide evidence reasonably acceptable to the Company of the Bid Price of the Common Stock on the principal Trading Market that was reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise.

 

If Warrant Shares are issued in 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).

 

Without limiting the rights of a Holder to receive Warrant Shares on a “cashless exercise” and without limiting without limiting the liquidated damages provision in Section 2(d)(i) and the buy-in provision in Section 2(d)(iv), in no event will the Company be required to net cash settle a Warrant exercise.

 

d)Mechanics of Exercise. 

	
 
	
i.
	
Delivery of Warrant Shares Upon Exercise.  The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent 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 Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, 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 Share 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, 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 for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.  The Company agrees to maintain a transfer agent 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.  

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 Transfer Agent 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 by written notice to the Company given no later than the Trading Day immediately following the Warrant Share Delivery Date.

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 Transfer Agent 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 shares of Common Stock 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 Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock 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.

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.  Issuance 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 Transfer Agent 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.

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 the Holder’s Affiliates, and any other Persons acting as a group together 

 

 

with the Holder or any of the Holder’s Affiliates (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 issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock 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 Stock 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 and shall have no liability for exercises of this Warrant that are not in compliance with the Beneficial Ownership Limitation, provided this limitation of liability shall not apply if the Holder has detrimentally relied on outstanding share information provided by the Company or the Transfer Agent.   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 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 Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Trading Days 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% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of the Common Stock 

 

 

outstanding immediately after giving effect to the issuance of shares of Common Stock 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 the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock 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.

f)Exercise Cap.  The Company shall not issue any shares of Common Stock upon exercise of the New Warrants if and to the extent the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock which the Company may issue upon exercise of the New Warrants without breaching the Company’s obligations, if any, under the rules or regulations of the Trading Market (the number of shares which may be issued without violating such rules and regulations, including without limitation, a violation for not obtaining prior stockholder approval, and including rules related to the aggregate of offerings under applicable NYSE American regulations, as applicable, the “Exercise Cap”), except that such limitation shall not apply (i) with respect to the issuance of any shares of Common Stock that do not exceed the Exercise Cap, and (ii) in the event that, and upon such time as, the Company obtains Stockholder Approval. Until such approval is obtained, no Holder shall be issued in the aggregate, upon exercise of any Warrants, shares of Common Stock in an amount greater than the product of (i) the Exercise Cap multiplied by (ii) the quotient of (A) the number of New Warrants issued to a Holder divided by (B) the aggregate number of New Warrants issued to all Holders (with respect to each Holder, the “Exercise Cap Allocation”). In the event that any Holder shall sell or otherwise transfer any of such Holder’s New Warrants, the transferee shall be allocated a pro rata portion of such Holder’s Exercise Cap Allocation with respect to such portion of such New Warrants so transferred, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exercise Cap Allocation so allocated to such transferee. As of the Initial Issue Date, the Exercise Cap is not less than 6,460,550 shares of Common Stock.

Section 3.Certain Adjustments.

a)Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its 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 shares of Common Stock 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 stock split) outstanding shares of Common Stock into a 

 

 

smaller number of shares, or (iv) issues by reclassification of shares of the 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 of 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 shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re‐classification.

b)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 Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares 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). 

c)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, stock 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, 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).  To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.

d)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, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its 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 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 Common Stock or holders of 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is 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 or 50% of the voting power of the common equity of the Company (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 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.

 

 

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 in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) 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 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 with the same effect as if such Successor Entity had been named as the Company herein.

e)Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, 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.

f)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 shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the Company effects a Fundamental Transaction, or (E) a 

 

 

voluntary or involuntary liquidation, dissolution or winding up of the Company is consummated, 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 10 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 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 Fundamental Transaction is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such Fundamental Transaction; 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.

Section 4.Transfer of Warrant.

a)Transfer Restrictions. The Holder understands that: (i) the Warrants have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) the Holder shall have delivered to the Company an opinion of counsel, in a form reasonably acceptable to the Company, to the effect that such Warrants to be sold, assigned or transferred may be sold, assigned or transferred pursuant to Rule 144, as amended, promulgated under the Securities Act (or a successor rule thereto) (“Rule 144”) or an exemption from such registration, (ii) any sale of the Warrants made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Warrants under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Commission thereunder, and (iii) neither the Company nor any other Person is under any obligation to register the Warrants under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

b)Transferability.  This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, subject to any restrictions on such transfer set forth in Section 4(a), 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.  

c)New Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), 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(b), 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. 

d)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.Miscellaneous.

a)No Rights as Stockholder Until Exercise.  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.  

 

 

b)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.

c)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 Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

d)Authorized Shares.  

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under 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 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 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).  

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 certificate 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 Warrant Shares 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 Warrant Shares 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.

e)Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

f)Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

g)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, 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.

h)Notices.  Any notices, consents, waivers or other document or communications required or permitted to be given or delivered under the terms of this Warrant must be in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when sent, if sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server that such e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1) Trading Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. If notice is given by facsimile or email, a copy of such notice shall be dispatched no later than the next business day by first class  mail, postage prepaid. The addresses, facsimile numbers and e-mail addresses for such communications shall be:

If to the Company:

	
Ra Medical Systems, Inc.

	
2070 Las Palmas Drive

	
Carlsbad, CA 92011

	
Attention: 
	
Will McGuire

	
 
	
Chief Executive Officer 

 

With a copy (for informational purposes only) to:

Wilson Sonsini Goodrich & Rosati, P.C.

12235 El Camino Real

San Diego, CA 92130

E-mail: mwaters@wsgr.com

Attention: Martin J. Waters

If to a Holder, to its address, facsimile number or e-mail address set forth herein or on the books and records of the Company.

Or, in each of the above instances, to such other address, facsimile number or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party at least five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date and recipient facsimile number or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iv) above, respectively. A copy of the e-mail transmission containing the 

 

 

time, date and recipient e­ mail address shall be rebuttable evidence of receipt by e-mail in accordance with clause (iii) above.

i)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 Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j)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.

k)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.

l)Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.

m)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.

n)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.

 

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(Signature Page Follows)

 

 

 

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.

 

 

	
RA MEDICAL SYSTEMS, INC.

	
 
	
 
	
 

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

 

 

 

 

 

 

 

 

NOTICE OF EXERCISE

 

To:RA MEDICAL SYSTEMS, 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 subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedures 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: 
	
 

 

 

 

 

 

 

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:

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