Exhibit 10.38


 


EXECUTION VERSION


 


CREDIT AGREEMENT


 


This Credit Agreement
("Agreement") dated as of March 25, 2020 between ReShape Lifesciences Inc., a Delaware corporation ("Borrower"),
and Armistice Capital Master Fund Ltd., a Cayman Islands exempted company (“Lender”).


 


In consideration of
the mutual agreements herein contained, the parties hereto agree as follows:


 


		Section 1.	Definitions; Interpretation.



 


		1.1.	Definitions.



 


When used herein the
following terms shall have the following meanings:


 


Account
has the meaning set forth in the Guarantee and Collateral Agreement.


 


Acquisition
means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business or division of
a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity
of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is already a Subsidiary).


 


Affiliate
of any Person means (a) any other Person which, directly or indirectly, controls or is controlled by or is under common control
with such Person, (b) any officer or director of such Person and (c) with respect to Lender, any entity administered
or managed by Lender or an Affiliate or investment advisor thereof which is engaged in making, purchasing, holding or otherwise
investing in commercial loans. A Person shall be deemed to be "controlled by" any other Person if such Person possesses,
directly or indirectly, power to vote 10% or more of the securities (on a fully diluted basis) having ordinary voting power for
the election of directors or managers or power to direct or cause the direction of the management and policies of such Person whether
by contract or otherwise. Unless expressly stated otherwise herein, Lender shall not be deemed an Affiliate of Borrower or of any
Subsidiary.


 


Agreement
has the meaning set forth in the Preamble.


 


Authorized
Officer means any of the (a) chief executive officer, (b) president, (c) chief financial officer or (d) senior
financial officer.


 


Board
means the Board of Directors of the Borrower.


 


Borrower
has the meaning set forth in the Preamble.


 


Business
Day means any day on which commercial banks are open for commercial banking business in New York, New York and, in the
case of a Business Day which relates to the determination of the LIBOR Rate, on which dealings are carried on in the London interbank
eurodollar market.


 


Capital
Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal
property by such Person that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person.


 






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Change
in Control means, the consummation of any of the following:


 


(i)          any “person”
(as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) who did not own shares of the capital stock
of the Borrower as of the Closing Date shall, together with his, her or its Affiliates and Associates (as such terms are defined
in Rule 12b-2 promulgated under the Exchange Act), become the “Beneficial Owner” (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of securities of the Borrower representing 50% or more of the combined
voting power of the Borrower’s then outstanding securities (any such person being hereinafter referred to as an “Acquiring
Person”);


 


(ii)         the Continuing Directors cease to constitute a majority of the Borrower’s Board;


 


(iii)        there should
occur (A) any consolidation or merger involving the Borrower and the Borrower shall not be the continuing or surviving corporation
or the shares of the Borrower’s capital stock shall be converted into cash, securities or other property; provided, however,
that this subclause (A) shall not apply to a merger or consolidation in which (1) the Borrower is the surviving corporation
and (2) the stockholders of the Borrower immediately prior to the transaction have the same proportionate ownership of the
capital stock of the surviving corporation immediately after the transaction; (B) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially all of the assets of the Borrower; or (C) any
liquidation or dissolution of the Borrower; or


 


(iv)        the majority
of the Continuing Directors determine, in their sole and absolute discretion, that there has been a Change in Control.


 


Closing
Date means the date on which Lender makes the Closing Date Term Loan hereunder.


 


Closing
Date Term Loan Commitment means $2,500,000.


 


Closing
Date Term Loan has the meaning set forth in Section 2.1.1.


 


Collateral
has the meaning set forth in the Guarantee and Collateral Agreement.


 


Collateral
Access Agreement means an agreement in form and substance reasonably satisfactory to Lender pursuant to which a lessor
of real property on which Collateral is stored or otherwise located, or a warehouseman, processor or other bailee of Inventory
or other property owned by any Loan Party, acknowledges the Liens of Lender and waives or subordinates any Liens held by such Person
on such property, and, in the case of any such agreement with a lessor, permits Lender reasonable access to any Collateral stored
or otherwise located thereon.


 


Collateral
Documents means, collectively, the Guarantee and Collateral Agreement, any Collateral Access Agreement, each account
control agreement and each other agreement or instrument pursuant to or in connection with which any Loan Party grants a security
interest in any Collateral securing the Obligations to Lender, each as amended, restated or otherwise modified from time to time.


 


Commitment
means the Closing Date Term Loan Commitment and the Delayed Draw Term Loan Commitment.


 


Common
Stock means the common stock of Borrower, par value $0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.


 


Common
Stock Equivalents means any securities of Borrower 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.


 






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Contingent
Obligation means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes
or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply
funds to or otherwise to invest in a debtor, or otherwise to assure a creditor against loss) any Debt, or guarantees the payment
of dividends or other distributions upon the shares of any other Person. The amount of any Person's obligation in respect of any
Contingent Obligation shall (subject to any limitation set forth therein) be deemed to be the principal amount of the debt, obligation
or other liability supported thereby or, if not stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.


 


Continuing
Directors means (a) any member of the Board who was a director (or comparable manager) of Borrower on the Closing
Date, and (b) any individual who becomes a member of the Board after the Closing Date if such individual was approved, appointed
or nominated for election to the Board by a majority of the Continuing Directors.


 


Debt
of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all indebtedness
evidenced by bonds, debentures, notes or similar instruments (including, without limitation, any notes issued to sellers in connection
with an Acquisition), (c) all obligations of such Person as lessee under Capital Leases which have been or should be recorded
as liabilities on a balance sheet of such Person in accordance with GAAP, (d) all obligations of such Person to pay the deferred
purchase price of property or services (excluding accrued expenses, licenses and purchases of software to the extent that such
Person may terminate the payment obligations thereunder at will, and trade accounts payable), (e) all indebtedness secured
by a Lien on the property of such Person, whether or not such indebtedness shall have been assumed by such Person, (f) all
obligations, contingent or otherwise, with respect to letters of credit (whether or not drawn), banker's acceptances and surety
bonds issued for the account of such Person, (g)  all Contingent Obligations of such Person with respect to indebtedness,
(h) all indebtedness of any partnership of which such Person is a general partner and (i) all obligations of such Person
under conditional sale or other title retention agreements relating to property or assets purchased by such Person.


 


Default
means any event described in Section 8.1 that, if it continues uncured during an applicable grace period, will, with
the lapse of such grace period or the giving of notice or both, constitute an Event of Default.


 


Delayed
Draw Term Loan Commitment means $1,000,000.


 


Delayed
Draw Term Loans has the meaning set forth in Section 2.1.2.


 


Dollar
and $ mean lawful money of the United States of America.


 


Domestic
Subsidiary means any Subsidiary that is incorporated or organized under the laws of a State within the United States
of America or the District of Columbia.


 


Environmental
Claim means all written claims by any governmental, regulatory or judicial authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law, or for release or injury to the environment or any Person or
property.


 






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Environmental
Laws means all present or future federal, state or local laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all binding and enforceable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental authority, in each case relating to any matter arising
out of or relating to health and safety, or pollution or protection of the environment or workplace, including any of the
foregoing relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal,
distribution, discharge, release, control or cleanup of any Hazardous Substance.


 


Equity
Interest means the interest of any (a) shareholder in a corporation; (b) partner in a partnership (whether
general, limited, limited liability or joint venture); (c) member in a limited liability company; or (d) other Person
having any other form of equity security or ownership interest.


 


ERISA
means the Employee Retirement Income Security Act of 1974, as amended.


 


Event
of Default means any of the events described in Section 8.1.


 


Excluded
Taxes means any of the following Taxes imposed on or with respect to a Lender or required to be withheld or deducted
from a payment to Lender: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch
profits Taxes, in each case, (i) imposed as a result of Lender being organized under the laws of, or having its principal
office or, in the case of Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes
imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment or (ii) such
Lender changes its lending office, except in each case to the extent, that pursuant to Section 3.1, amounts with respect
to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such
Lender immediately before it changed its lending office and (c) any U.S. federal withholding Taxes imposed under FATCA.


 


Exempt
Accounts means any deposit accounts, securities accounts or other similar accounts (i) into which there is deposited
no funds other than those intended solely to cover wages for employees of the Loan Parties; (ii) constituting employee withholding
accounts and contain only funds deducted from pay otherwise due to employees for services rendered to be applied toward the tax
obligations of such employees; (iii) constituting Trust Accounts or other escrow accounts; (iv) in which there is not
maintained at any point in time funds on deposit greater than $500,000 in the aggregate for all such accounts pursuant to this
clause (iv); and (v) in which there is deposited cash collateral in respect of Debt permitted by Section 7.1(n).


 


FATCA
means Sections 1471 through 1474 of the IRC, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof
and any agreements entered into pursuant to Section 1471(b)(1) of the IRC.


 


Fiscal
Quarter means a fiscal quarter of a Fiscal Year.


 


Fiscal
Year means the fiscal year of Borrower which period shall be the 12-month period ending on December 31 of each
year.


 






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Foreign
Subsidiary means any Subsidiary (a) that is not incorporated or organized under the laws of a State within the
United States of America or the District of Columbia, and that is a "controlled foreign corporation" within the meaning
of Section 957 of the IRC with respect to which a Loan Party is a "US Shareholder" within the meaning of Section 951(b) of
the IRC or (b) that has no material assets other than the capital stock of one or more Subsidiaries described in clause
(a) and other assets relating to an ownership interest in any such capital stock or subsidiaries.


 


FRB
means the Board of Governors of the Federal Reserve System or any successor thereto.


 


GAAP
means generally accepted accounting principles in effect in the United States of America set forth from time to time in the opinions
and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority
within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination; provided,
that Financial Accounting Standard No. 150 shall be disregarded of the purposes of this Agreement.


 


Governmental
Authority means any nation or government, any state or other political subdivision thereof, and any agency, branch of
government, department or Person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining
to government.


 


Guarantee
and Collateral Agreement means the Guarantee and Collateral Agreement dated as of the Closing Date by each Loan Party
signatory thereto in favor of Lender.


 


Guarantor
has the meaning set forth in the Guarantee and Collateral Agreement.


 


Hazardous
Substances means hazardous waste, hazardous substance, pollutant, contaminant, toxic substance, oil, hazardous material
or chemical or other hazardous of toxic substance regulated by any Environmental Law.


 


Indemnified
Taxes means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account
of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.


 


Infringement
or Infringing when used with respect to Intellectual Property Rights, means any infringement, misappropriation, dilution
or other violation of Intellectual Property Rights.


 


Intellectual
Property has the meaning set forth in the Section 5.13.


 


Intellectual
Property Rights means all actual or prospective rights in connection with any Intellectual Property or other proprietary
rights, including all patents, patent applications, registrations and applications for registration, common law rights, trade secret
rights and any other proprietary rights in connection with Intellectual Property anywhere in the world.


 


Inventory
has the meaning set forth in the Guarantee and Collateral Agreement.


 


Investment
means, with respect to any Person, (a) the purchase of any debt or equity security of any other Person, (b) the making
of any loan or advance to any other Person, (c) becoming obligated with respect to a Contingent Obligation in respect of Debt
of any other Person (other than travel and similar advances to employees in the ordinary course of business) or (d) the making
of an Acquisition.


 


IRC
means the U.S. Internal Revenue Code of 1986, as amended.


 






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Legal
Costs means (a) with respect to Lender pursuant to Section 9.4, (i) all reasonable and documented
out-of-pocket fees and expenses of any one outside counsel to Lender, (ii) all reasonable and documented out-of-pocket fees
and expenses of necessary outside local counsel to Lender, and (iii) all court costs and similar legal expenses, in each case,
to the extent reimbursable by Borrower under this Agreement, and (b) with respect to all other Persons, (i) all reasonable
fees and charges of any counsel, accountants auditors, appraisers, consultants and other professionals to such Persons and (ii) all
court costs and similar legal costs.


 


Lender
has the meaning set forth in the Preamble.


 


LIBOR
Rate means, with respect to any Loan, the greater of (a) a rate per annum equal to the offered rate for deposits
in Dollars for a one-month period and for the amount of the applicable Loan that appears on the Reuters Screen LIBOR01 Page at
11:00 a.m. London time (or, if not so appearing, as published in the "Money Rates" section of The Wall Street
Journal) two Business Days prior to the date of determination; provided that if neither of the foregoing is available,
the rate shall be the arithmetic mean of the rates quoted by three major banks in New York City, selected by the Lender at approximately
11:00 a.m., New York time, two (2) Business Days prior to the date of determination for loans in U.S. Dollars to leading European
banks for a one-month period and in a principal amount of not less than U.S. $1,000,000, and (b) 1.50% per annum.


 


Lien
means, with respect to any Person, any interest granted by such Person in any real or personal property, asset or other right owned
or being purchased or acquired by such Person which secures payment or performance of any obligation and shall include any mortgage,
lien, encumbrance, charge in the nature of a security interest, whether arising by contract, as a matter of law, by judicial process
or otherwise.


 


Loan
Documents means this Agreement, the Notes, the Collateral Documents, and all documents, instruments and agreements delivered
in connection with the foregoing.


 


Loan
Party means Borrower and each Guarantor.


 


Loans
means the Closing Date Term Loan and the Delayed Draw Term Loans, collectively.


 


Margin
Stock means any "margin stock" as defined in Regulation T, U or X of the FRB.


 


Material
Adverse Effect means (a) a material adverse change in, or a material adverse effect upon, the financial condition,
operations, assets, business or properties of Loan Parties taken as a whole, (b) a material impairment of the ability of the
Loan Parties taken as a whole to perform any of their Obligations under any Loan Document, (c) a material adverse effect on
the rights and remedies of the Lender under any Loan Document or (d) a material adverse effect upon the legality, validity,
binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.


 


Maturity
Date means (a) the later of (i) September 24, 2020 or (ii) if Borrower exercises the first or second
extension option pursuant to Section 2.3, the date set forth in Section 2.3, or (b) such earlier date
on which the Commitments terminate pursuant to Section 8.


 


Note
means a promissory note executed by Borrower in favor of a Lender hereunder pursuant to this Agreement, substantially in the form
of Exhibit A.


 


Obligations means
all liabilities, indebtedness and obligations (monetary (including post-petition interest, allowed or not) or otherwise) of
any Loan Party under this Agreement, any other Loan Document, in each case howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due.


 






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OFAC
has the meaning set forth in Section 6.4(a).


 


Other
Connection Taxes means, with respect to any Lender, Taxes imposed as a result of a present or former connection between
such Lender and the jurisdiction imposing such Tax (other than connections arising from such Lender having executed, delivered,
become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged
in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).


 


Other
Taxes means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise
from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection
of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection
Taxes imposed with respect to an assignment.


 


Paid
in Full, Pay in Full or Payment in Full means, with respect to any Obligations, the payment in full in
cash of all such Obligations (other than contingent indemnification obligations to the extent no claim giving rise thereto
has been asserted).


 


Permitted
Acquisition means any Acquisition by any Loan Party in each case to the extent that:


 


(a)  each
of the following conditions precedent shall have been satisfied in a manner reasonably satisfactory to Lender in its sole discretion;


 


(i)          Lender
shall receive (A) not less than 30 days prior written notice before such Loan Party becomes bound under any agreement to complete
such Acquisition, which notice shall include a reasonably detailed description of the proposed terms of such Acquisition and identify
the anticipated closing date thereof and (B) not less than 15 days before such Loan Party becomes bound under any agreement
to complete such Acquisition, substantially final drafts of all material definitive documents for such transaction;


 


(ii)         such
Acquisition shall be structured as (A) an asset acquisition by Borrower or a Guarantor, (B) a merger of the Target with
and into Borrower or a Guarantor, with Borrower or such Guarantor as the surviving corporation in such merger, or (C) a purchase
of no less than 100% of the equity interests of the Target by Borrower or a Guarantor;


 


(iii)        Lender
shall receive evidence that effective as of the closing date of such Acquisition the applicable Target has in place insurance satisfying
the requirements of Section 6.3;


 


(iv)        Lender
(A) is granted a first priority perfected Lien (subject only to Permitted Liens) on all Collateral being acquired
pursuant to such Acquisition (and, in the case of an Acquisition involving the purchase of any applicable Target's equity
interests, all of such purchased equity interests to the extent constituting Collateral shall be pledged to Lender, and such
Target shall guarantee the Obligations and grant to Lender, a first priority perfected Lien (subject only to Permitted Liens)
on such Person's assets) and (B) will be provided such other documents, instruments and legal opinions as Lender shall
reasonably request in connection therewith, all such documents, instruments and opinions to be delivered no later than ten
(10) Business Days after the closing of such Acquisition (or such longer period as agreed by Lender in its sole
discretion) and shall each be in form and substance reasonably satisfactory to Lender in its sole discretion;


 






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(v)         all
material consents necessary for such Acquisition (including such consents as Lender deems reasonably necessary) have been acquired
and such Acquisition is consummated in accordance with the applicable acquisition documents and applicable law; and


 


(b)          such
Acquisition shall not be hostile and shall have been approved by the board of directors (or other similar body) and/or the stockholders
or other equityholders of the Target; and


 


(c)          no
Event of Default is in existence or would occur immediately after giving effect to such Acquisition.


 


Permitted
Debt has the meaning set forth in Section 7.1.


 


Permitted
Investment has the meaning set forth in Section 7.6.


 


Permitted
Liens means Liens permitted by Section 7.2.


 


Person
means any natural person, corporation, partnership, trust, limited liability company, association, governmental authority or unit,
or any other entity, whether acting in an individual, fiduciary or other capacity.


 


Subordinated
Debt means any unsecured Debt of Borrower or a Subsidiary which has subordination terms which have been approved in
writing by Lender in its sole discretion.


 


Subsidiary
means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person owns,
directly or indirectly, such number of outstanding Equity Interests as to have more than 50% of the ordinary voting power for the
election of directors or other managers of such corporation, partnership, limited liability company or other entity. Unless the
context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of Borrower.


 


Target
means the Person, or business or substantially all of the assets of a Person, acquired in an Acquisition.


 


Taxes
means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.


 


Termination
Date means the earliest to occur of (a) the date on which Lender has funded Delayed Draw Term Loans in an aggregate
principal amount equal to the Delayed Draw Term Loan Commitment, (b) September 24, 2020 and (c) the date on which
the Delayed Draw Term Loan Commitment terminates pursuant to Section 8.


 


Trust
Accounts means those trust accounts maintained by Borrower or its Subsidiaries to receive and hold in trust for payment
to the federal government of the United States of America, payments on the account of holders of student loans.


 


Wholly-Owned
Domestic Subsidiary means a Wholly-Owned Subsidiary that is a Domestic Subsidiary.


 






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Wholly-Owned
Subsidiary means, as to any Person, another Person all of the equity interests of which (except directors' or employees'
qualifying shares or other minimal share allocations required by the law of the jurisdiction of organization or allocated for tax
considerations) are at the time directly or indirectly owned by such Person and/or another Wholly-Owned Subsidiary of such Person.


 


Withholding
Agent means any Loan Party.


 


		1.2.	Interpretation.



 


In the case of this
Agreement and each other Loan Document, (a) the meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms; (b) Annex, Exhibit, Schedule and Section references are to such Loan Document unless otherwise
specified; (c) the term "including" is not limiting and means "including but not limited to"; (d) in
the computation of periods of time from a specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including"; (e) unless otherwise expressly provided in such Loan Document, (i) references to
agreements and other contractual instruments shall be deemed to include all subsequent amendments, restatements, supplements, replacements,
extensions, renewals, and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited
by the terms of any Loan Document, and (ii) references to any statute or regulation shall be construed as including all statutory
and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation; (f) this Agreement
and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters,
all of which are cumulative and each shall be performed in accordance with its terms; and (g) all references to "knowledge",
 "aware" or "awareness" or other similar terms of any Loan Party means the actual knowledge of the chief executive
officer or chief financial officer of Borrower, (i) the words "asset" and "property" shall be construed
as having the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights in this Agreement and the other Loan Documents are the result of negotiations among and
have been reviewed by counsel to Borrower, Lender and the other parties hereto and thereto and are the products of all parties;
accordingly, they shall not be construed against Borrower or Lender merely because of Borrower’s or Lender’s involvement
in their preparation.


 


		Section 2.	Credit Facilities.



 


		2.1.	Commitments.



 


On and subject to the
terms and conditions of this Agreement, Lender agrees as follows:


 


		2.1.1.	Closing Date Term Loan Commitments.



 


Lender agrees to make a
loan to Borrower (each such loan, a "Closing Date Term Loan") on the Closing Date in an amount equal to the Closing
Date Term Loan Commitment. The Commitment of Lender to make Closing Date Term Loan shall terminate concurrently with the making
of the Closing Date Term Loan on the Closing Date.


 


		2.1.2.	Delayed Draw Term Loan Commitments.



 


Lender agrees to
make a loan to Borrower (each such loan, a "Delayed Draw Term Loan") from time to time after the
Closing Date, in a principal amount not to exceed the Delayed Draw Term Loan Commitment; provided, that the
Lender will make the initial Delayed Draw Term Loan no sooner than 30 days after Closing Date and any subsequent Delayed Draw
Term Loan no sooner than 30 days after the date of any previous Delayed Draw Term Loan. The Commitment of Lender to make
Delayed Draw Term Loans shall terminate on the Termination Date.


 






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		2.2.	Warrants.



 


(a)  On
a date that is no sooner than April 1, 2020 and no later than April 15, 2020, Lender will exercise its warrants to purchase
an aggregate of 5,085,834 shares of Common Stock with a current exercise price of $0.12 per share.


 


(b)  As
inducement to Lender to make the Loan, Borrower will issue to Lender a warrant (the “Warrant”) to purchase an
aggregate of 1,200,000 shares of Common Stock, substantially in the form attached hereto as Exhibit B.


 


		2.3.	Borrowing Procedures.



 


Borrower shall give
written notice or telephonic notice (followed promptly by written confirmation thereof) to Lender of each proposed borrowing of
a Delayed Draw Term Loan not later than 1:00 p.m. Eastern time at least three Business Days prior to the proposed date
of such borrowing. Each such notice shall be effective upon receipt by Lender, shall be irrevocable, and shall specify the date
and amount of such borrowing. Not later than 1:00 p.m. Eastern time on the date of a proposed Delayed Draw Term Loan borrowing,
Lender, so long as the conditions precedent set forth in Section 4.2 with respect to such borrowing have been satisfied,
shall pay over the requested Delayed Draw Term Loan to Borrower on the requested borrowing date. Each borrowing shall be on a Business
Day. Each borrowing of Delayed Draw Term Loans shall be in an aggregate amount of at least $500,000 (or if less, the remaining
undrawn amount of the Delayed Draw Term Loan Commitment).


 


		2.4.	Loan Accounting.



 


		2.4.1.	Recordkeeping.



 


Lender shall record in
its records the date and amount of each Loan made by Lender, and each repayment thereof. The aggregate unpaid principal amount
so recorded shall be rebuttably presumptive evidence of the principal amount of the Loans owing and unpaid. The failure to so record
any such amount or any error in so recording any such amount shall not, however, limit or otherwise affect the Obligations of Borrower
hereunder or under any Note to repay the principal amount of the Loans hereunder, together with all interest accruing thereon.


 


		2.4.2.	Notes.



 


Promptly following the
request of Lender, the Loans shall be evidenced by a Note, payable to Lender in a face principal amount equal to the outstanding
principal balance of the Loans at such date and payable in such amounts and on such dates as are set forth herein.


 


		2.5.	Interest.



 


		2.5.1.	Interest Rates.



 


Borrower promises
to pay interest on the unpaid principal amount of each Loan for the period commencing on the date of such Loan until such
Loan is paid in full at a rate per annum equal to the sum of the LIBOR Rate plus 2.5%; provided, that at any time an
Event of Default exists, if elected by Lender, the Applicable Margin corresponding to each Loan or Obligation shall be
increased by two percentage points per annum effective as of the date upon which such Event of Default first occurred or such
later date determined Lender in writing; provided, further that, (i) any such increase may thereafter be
rescinded by Lender and (ii) upon the occurrence of an Event of Default under Section 8.1.1 or 8.1.3,
any such increase described in the foregoing clause (i) shall occur automatically. In no event shall interest payable by
Borrower to Lender hereunder exceed the maximum rate permitted under applicable law, and if any such provision of this
Agreement is in contravention of any such law, such provision shall be deemed modified to limit such interest to the maximum
rate permitted under such law.


 






    	 	-10-	 



     


    





 


		2.5.2.	Interest Payment Dates.



 


Accrued interest on each
Loan shall be payable in arrears on the last day of each Fiscal Quarter, upon a prepayment of such Loan in accordance with Section 2.7
and at maturity in cash; provided that if the last day of a Fiscal Quarter would otherwise end on a day that is not a Business
Day, interest shall be paid on the preceding Business Day. After maturity and at the election of Lender at any time an Event of
Default exists, all accrued interest on all Loans shall be payable in cash on written demand at the rates specified in Section 2.5.1.


 


		2.5.3.	Computation of Interest.



 


Interest shall be computed
for the actual number of days elapsed on the basis of a year of 365/366 days.


 


		2.6.	Prepayment.



 


At any time after 30
days of the Closing Date, Borrower may from time to time, on at least one Business Day's written notice or telephonic notice (followed
promptly by written confirmation thereof) to Lender not later than 2:00 p.m. Eastern time on such day, prepay the Loans
in whole or in part (without premium or penalty), plus all accrued but unpaid interest thereon as of such payment date. Such notice
to Lender shall specify the date and amount of prepayment. All prepayments of Loans pursuant to this Section 2.6 shall
be applied to the Loans and then to the scheduled installments thereof in such order as directed by Borrower.


 


		2.7.	Repayment.



 


The Closing Date Term Loan
and any Delayed Draw Term Loan shall be due on the Maturity Date.


 


Payment.


 


		2.7.1.	Making and Settlement of Payments.



 


All payments of principal
of or interest on the Loans, and of all fees, shall be made by Borrower to Lender without setoff, recoupment or counterclaim and
in immediately available funds at the office specified by Lender not later than 2:00 p.m. Eastern time on the date due, and
funds received after that hour shall be deemed to have been received by Lender on the following Business Day.


 


		2.7.2.	Reserved.



 


		2.7.3.	Payment Dates.



 


If any payment of
principal or interest with respect to any of the Loans, or of any fees, falls due on a day which is not a Business Day, then
such due date shall be extended to the immediately following Business Day (unless such immediately following Business Day is
the first Business Day of a calendar month, in which case such due date shall be the immediately preceding Business Day) and,
in the case of principal, additional interest shall accrue and be payable for the period of any such extension.


 






    	 	-11-	 



     


    

 


		2.7.4.	Set-off.



 


Borrower agrees that
Lender and its Affiliates have all rights of set-off and bankers' lien provided by applicable law, and in addition thereto, Borrower
agrees that at any time an Event of Default has occurred and is continuing, Lender may apply to the payment of any Obligations
of Borrower hereunder then due and owing, any and all balances, credits, deposits, accounts or moneys (other than money held in
Exempt Accounts excluding Exempt Accounts described in clause (iv) of the definition of Exempt Accounts) Borrower then or
thereafter with Lender.


 


		Section 3.	Taxes; Yield Protection.



 


		3.1.	Taxes.



 


(a)  For purposes
of this Section 3.1, the term “applicable law” includes FATCA.


 


(b)  All payments
of principal and interest on the Loans and all other amounts payable hereunder or under any other Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good
faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by
a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely
pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under
this Section) Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.


 


(c)  The
Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the
relevant Lender timely reimburse it for the payment of, any Other Taxes.


 


(d)  The
Loan Parties shall jointly and severally indemnify each Lender, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable
or paid by such Lender or required to be withheld or deducted from a payment to such Lender and any reasonable expenses arising
therefrom or with respect thereto whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by the Lender shall
be conclusive absent manifest error. If Borrower reasonably believes that such Taxes were not correctly or legally asserted, such
Lender will use reasonable efforts to cooperate with Borrower to obtain a refund of such Taxes as long as such efforts would not
result in any unreimbursed costs or expenses, provided, such amounts have accrued on or after the day which is 180 days
prior to the date on which such Lender first made demand therefor; provided, that if the event giving rise to such costs
or reductions has retroactive effect, such 180 day period shall be extended to include the period of retroactive effect; and, provided
further that if Borrower reasonably believes that such Taxes were not correctly or legally asserted, such Lender will use reasonable
efforts to cooperate with Borrower to obtain a refund of such Taxes as long as such efforts would not result in any unreimbursed
costs or expenses shall equal the amount such Person would have received had such Taxes not been asserted.


 






    	 	-12-	 



     


    

 


(e)  As
soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 3.1,
such Loan Party shall deliver to the relevant Lender the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory
to such Lender.


 


		Section 4.	Conditions Precedent.



 


The obligation of Lender
to make the Loans is subject to the satisfaction or waiver of the following conditions precedent:


 


		4.1.	Initial Credit Extension.



 


The obligation of Lender
to make the Closing Date Loans is subject to the satisfaction or waiver of following conditions precedent, each of which shall
be reasonably satisfactory in all respects to Lender:


 


		4.1.1.	Fees.



 


Borrower shall have paid
all fees, reasonable costs and reasonable out-of-pocket expenses, due and payable under this Agreement and the other Loan Documents
on the Closing Date, it being agreed and understood that fees due to Lender’s counsel are capped at $30,000.


 


		4.1.2.	Delivery of Loan Documents.



 


Borrower shall have delivered
the following documents in form and substance reasonably satisfactory to Lender (and, as applicable, duly executed and dated the
Closing Date or an earlier date reasonably satisfactory to Lender):


 


(a)  Agreement
and Note. This Agreement and the Note.


 


(b)  Collateral
Documents. The Guarantee and Collateral Agreement, all other Collateral Documents, and all instruments, documents, certificates
and agreements executed or delivered pursuant thereto (including, if applicable, Intellectual Property security agreements
and pledged Collateral, with undated irrevocable transfer powers executed in blank).


 


(c)  Financing
Statements. Properly completed Uniform Commercial Code financing statements and other filings and documents required by law
or the Loan Documents to provide Lender perfected Liens (subject only to Permitted Liens) in the Collateral.


 


(d)  Lien
Searches. Copies of Uniform Commercial Code search reports listing all effective financing statements (other than with respect
to this Agreement) filed against any Loan Party, with copies of such financing statements.


 


(e)  Authorization
Documents. For each Loan Party, such Person's (i) articles of incorporation, certificate of incorporation or
certificate of formation (or similar formation document), certified by the appropriate governmental authority, (ii) good
standing certificates in its state of incorporation (or formation) and in each other state in which it is required to be
qualified to do business pursuant to its representation in Section 5.1, (iii) bylaws, operating agreement or
partnership agreement (or similar governing document), (iv) resolutions of its board of directors (or similar governing
body) approving and authorizing such Person's execution, delivery and performance of the Loan Documents to which it is party
and the transactions contemplated thereby, and (v) signature and incumbency certificates of its officers executing any
of the Loan Documents, all certified by its secretary or an assistant secretary (or similar officer) as being in full force
and effect without modification.


 






    	 	-13-	 



     


    

 


(f)  Insurance.
Certificates of insurance, together with endorsements containing a lender’s loss payable endorsement in the Lender’s
favor with respect to property insurance and, with all liability insurance, naming the Lender as an additional insured.


 


		4.1.3.	Representations and Warranties.



 


The representations and
warranties of Borrower or any other Loan Party set forth in this Agreement and the other Loan Documents shall be true and correct
in all material respects with the same effect as if then made (except to the extent stated to relate to a specific earlier date,
in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).


 


		4.1.4.	Absence of Event of Default.



 


No Event of Default or
Default shall have then occurred and be continuing.


 


		4.1.5.	Material Adverse Effect.



 


No litigation, proceeding,
injunction, writ, restraining order or other order that has or would reasonably be expected to have a Material Adverse Effect shall
be pending before or have been issued and remain outstanding by any Governmental Authority.


 


		4.1.6.	Warrant.



 


Borrower shall deliver a fully executed Warrant.


 


		4.1.7.	Registration Rights Agreement.



 


Borrower shall deliver a fully executed registration
rights agreement, substantially in the form attached hereto as Exhibit C.


 


		4.1.8.	Other Documents.



 


Borrower shall deliver such other documents
as Lender may reasonably require in connection with this Agreement.


 


		4.2.	Delayed Draw Term Loans.



 


The obligation of Lender
to make Delayed Draw Term Loans is subject to the satisfaction or waiver of the following conditions precedent: (a) the representations
and warranties of Borrower or any other Loan Party set forth in this Agreement and the other Loan Documents shall be true and correct
in all material respects with the same effect as if then made (except to the extent stated to relate to a specific earlier date,
in which case such representations and warranties shall be true and correct in all material respects as of such earlier date),
and (b) no Event of Default or Default shall have then occurred and be continuing. Each request by Borrower for the making
of a Delayed Draw Term Loan shall be deemed to constitute a representation and warranty by Borrower that the conditions precedent
set forth in Section 4.2 will be satisfied or waived at the time of the making of such Loan and giving effect thereto.


 






    	 	-14-	 



     


    

 


		Section 5.	Representations and Warranties.



 


To induce Lender to
enter into this Agreement and make Loans hereunder, Borrower represents and warrants to Lender that, after giving effect to the
transactions contemplated by the Loan Documents, on the Closing Date:


 


		5.1.	Organization.



 


Borrower is a corporation
validly existing and in good standing under the laws of the State of Delaware; each other Loan Party is validly existing and in
good standing under the laws of the jurisdiction of its organization; and each Loan Party is duly qualified to do business in each
jurisdiction where, because of the nature of its activities or properties, such qualification is required, except for such jurisdictions
where the failure to so qualify would not reasonably be expected to have a Material Adverse Effect.


 


		5.2.	Authorization; No Conflict.



 


Each of Borrower and
each other Loan Party is duly authorized to execute and deliver each Loan Document to which it is a party, Borrower is duly authorized
to borrow monies hereunder, and each of Borrower and each other Loan Party is duly authorized to perform its Obligations under
each Loan Document to which it is a party. The execution, delivery and performance by Borrower of this Agreement and by each of
Borrower and each other Loan Party of each Loan Document to which it is a party, and the borrowings by Borrower hereunder, do not
and will not (a) require any consent or approval of any governmental agency or authority (other than any consent or approval
which has been obtained and is in full force and effect and the filing of applicable Uniform Commercial Code financing statements
and other filings), (b) conflict with (i) any provision of applicable law, (ii) the charter, by-laws or other organizational
documents of Borrower or any other Loan Party or (iii) any agreement, indenture, instrument or other document, or any judgment,
order or decree, which is binding upon Borrower or any other Loan Party or any of their respective properties or (c) require,
or result in, the creation or imposition of any Lien on any asset of Borrower, any Subsidiary or any other Loan Party (other than
Liens in favor of Lender created pursuant to the Collateral Documents) in each case of the foregoing clauses (a), (b) and
(c), except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.


 


		5.3.	Validity; Binding Nature.



 


Each of this Agreement
and each other Loan Document to which Borrower or any other Loan Party is a party is the legal, valid and binding obligation of
such Person, enforceable against such Person in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting
the enforceability of creditors' rights generally and to general principles of equity.


 


		5.4.	Litigation.



 


No litigation (including
derivative actions), arbitration proceeding or governmental investigation or proceeding is pending or, to Borrower's knowledge,
threatened in writing against any Loan Party which would reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect.


 


		5.5.	Ownership of Properties; Liens.



 


Each of Borrower and
each other Loan Party owns good and, in the case of real property, marketable title to all of its properties and assets, real and
personal, tangible and intangible, of any nature whatsoever other than Intellectual Property free and clear of all Liens, charges
and claims, except Permitted Liens.


 






    	 	-15-	 



     


    

 


		5.6.	Investment Company Act.



 


Neither Borrower nor
any other Loan Party is an "investment company" or a company "controlled" by an "investment company"
or a "subsidiary" of an "investment company", within the meaning of the Investment Company Act of 1940.


 


		5.7.	No Default.



 


No Event of Default
or Default exists or would result from the incurrence by any Loan Party of any Debt hereunder or under any other Loan Document.


 


		5.8.	Margin Stock.



 


Neither Borrower nor
any other Loan Party is engaged principally, or as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock. No portion of the Obligations is secured directly or indirectly by Margin Stock.


 


		5.9.	Taxes.



 


Each of Borrower and
each other Loan Party has filed all tax returns and reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be or otherwise owing, except (i) for taxes and other governmental charges which in
the aggregate (x) would not reasonably be expected to result in a Material Adverse Effect and (y) would not result in
the creation of a Lien other than a Permitted Lien, and (ii) any such taxes or charges which are being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its
books.


 


		5.10.	Solvency.



 


On the Closing Date,
and immediately prior to and after giving effect to each borrowing of Loans hereunder and the use of the proceeds thereof, the
fair salable value of Borrower’s and its Subsidiaries’ consolidated assets (including goodwill minus disposition costs)
exceeds the fair value of Borrower’s and its Subsidiaries liabilities; Borrower is not left with unreasonably small capital
after the transactions contemplated by this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature
and has not stopped paying its debts as they fall due and the value of its assets is not less than the value of its liabilities
(taking into account Contingent Obligations).


 


		5.11.	Environmental Matters.



 


The on-going
operations of Borrower and each other Loan Party comply in all respects with all Environmental Laws, except such
non-compliance which could not (if enforced in accordance with applicable law) reasonably be expected to result in a Material
Adverse Effect. Borrower and each other Loan Party have obtained, and maintained in good standing, all licenses, permits,
authorizations and registrations required under any Environmental Law and necessary for their respective ordinary course
operations, and Borrower and each other Loan Party are in compliance with all material terms and conditions thereof, except
in each case where the failure to do so could not reasonably be expected to result in material liability to Borrower or any
other Loan Party and could not reasonably be expected to result in a Material Adverse Effect. None of Borrower, any other
Loan Party or any of their respective properties or operations is subject to any outstanding written order from or agreement
with any Federal, state or local governmental authority, nor subject to any judicial or docketed administrative proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous Substance that would reasonably be expected to result in a
Material Adverse Effect. There are no Hazardous Substances or other conditions or circumstances existing with respect to any
property, or arising from operations prior to the Closing Date, of Borrower or any other Loan Party that could reasonably be
expected to result in a Material Adverse Effect. Neither Borrower nor any other Loan Party has any underground storage tanks
that are not properly registered or permitted under applicable Environmental Laws or that are leaking or disposing of
Hazardous Substances, except, in each case, as would not reasonably be expected to have a Material Adverse Effect.


 






    	 	-16-	 



     


    

 


		5.12.	Insurance.



 


Borrower and each other
Loan Party and their respective properties are insured with financially sound and reputable insurance companies which are not Affiliates
of Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by similarly situated companies
engaged in similar businesses and owning similar properties in localities where Borrower or such other Loan Party operates.


 


		5.13.	Intellectual Property.



 


Borrower and each other
Loan Party owns and possesses or has a license or other right to use all patents, patent rights, know how, propriety processes,
inventions, trademarks, trademark rights, trade names, trade name rights, trade secrets, trade dress, mask works, service marks,
service mark rights, copyrights, works of authorship, compilations of information, know-how, confidential information, designs,
developments, software, databases and methods anywhere in the world, including, but not limited to, technology related to lap band
and vest technology (collectively, "Intellectual Property"), free and clear of all Liens except Permitted Liens,
as are necessary for the conduct of the business of Borrower and the other Loan Parties, without any Infringement to Borrower's
knowledge, upon rights of others, other than, in each case, as could not reasonably be expected to have a Material Adverse Effect.


 


		5.14.	Labor Matters.



 


Neither Borrower nor
any other Loan Party is subject to any labor or collective bargaining agreement as of the Closing Date. There are no existing,
and no Loan Party has received notice of any threatened, strikes, lockouts or other labor disputes involving Borrower or any other
Loan Party that singly or in the aggregate could reasonably be expected to have a Material Adverse Effect. Hours worked by and
payment made to employees of Borrower and the other Loan Parties are not in violation of the Fair Labor Standards Act or any other
applicable law, rule or regulation dealing with such matters, except where such violations would not be reasonably expected
to have a Material Adverse Effect.


 


		Section 6.	Affirmative Covenants.



 


From and after the
Closing Date and until the date on which all Obligations have been Paid in Full and the Commitments have been terminated, Borrower
agrees that, unless at any time Lender shall otherwise expressly consent in writing, it will:


 


		6.1.	Information.



 


Furnish to Lender,
in each case in form and detail reasonably acceptable to Lender:


 


		6.1.1.	Reports to SEC and Shareholders.



 


Promptly upon the
filing or sending thereof, copies of (a) all regular, periodic or special reports of each Loan Party filed with the
Securities Exchange Commission, (b) all registration statements of each Loan Party filed with the Securities Exchange
Commission (other than on Form S-8) and (c) all proxy
statements or other material communications made to security holders generally. Documents required to be delivered
hereunder (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which Borrower posts such
documents, or provides a link thereto or other direction as to where such information is posted; or (ii) on which such
documents are posted Borrower’s behalf on an Internet or intranet website, if any, to which Lender has access; provided
that Borrower shall deliver paper copies of such documents to Lender upon request.


 






    	 	-17-	 



     


    

 


		6.1.2.	Notice of Default; Litigation; Intellectual Property;
Other Matters.



 


Promptly, and in any
even within five (5) Business Days, upon any Authorized Officer obtaining knowledge of any of the following, written notice
describing the same and the steps being taken by Borrower or the applicable Loan Party affected thereby with respect thereto:


 


(a)  the occurrence
of an Event of Default or a Default;


 


(b)  any litigation,
arbitration or governmental investigation or proceeding not previously disclosed by Borrower to Lender which has been instituted
or, to the knowledge of Borrower, is threatened against Borrower or any other Loan Party or to which any of the properties of any
thereof is subject which could reasonably be expected to have a Material Adverse Effect;


 


(c)  any cancellation
or material change in any insurance maintained by Borrower or any other Loan Party that could reasonably be expected to result
in a Material Adverse Effect;


 


(d)  notice
of (i) any Infringement on its material Intellectual Property Rights by others, (ii) written claims that a Loan Party
is Infringing on another Person’s Intellectual Property Rights and (iii) any threatened (in writing) cancellation, termination
or material limitation of its material Intellectual Property Rights;


 


(e)  copies
of all copyright and trademark registrations, copyright and trademark applications, patents issued and patent applications filed
after the date hereof anywhere in the world with respect to its material Intellectual Property Rights, or any abandonment, expiration
of lapsing thereof; and


 


(f)  any other
event (including (i) any violation of any Environmental Law or the assertion of any Environmental Claim or (ii) the enactment
or effectiveness of any law, rule or regulation) which could reasonably be expected to have a Material Adverse Effect.


 


		6.1.3.	Other Information.



 


Promptly from time to
time, such other information concerning Borrower and any other Loan Party as Lender may reasonably request. In no event shall the
requirements set forth in this Section 6.1.3 require any Loan Party to provide (a) information restricted by a
third party confidentiality agreement in the ordinary course of business to the extent such disclosure to Lender is prohibited
thereby and (b) other information (i) in respect of which disclosure to Lender (or its representatives or contractors)
is prohibited by Law or (ii) that is subject to attorney client or similar privilege or constitutes attorney work-product.


 


		6.2.	Books; Records; Inspections.



 


Keep, and cause
each other Loan Party to keep, its books and records in accordance with sound business practices sufficient to allow the
preparation of financial statements in accordance with GAAP in all material respects; and permit, and cause each other Loan
Party to permit, at any reasonable time during normal business hours and with reasonable prior notice not more than once per
year (or at any time without notice if an Event of Default exists), Lender or any representative thereof to (i) visit
any or all of its offices, to discuss its financial matters with its officers and its independent auditors (and Borrower
hereby authorizes such independent auditors to discuss such financial matters with Lender or any representative thereof, so
long as Borrower or its representative is given the opportunity to be present) (ii) inspect the properties and
operations of Loan Parties, and (iii) inspect, examine, audit, check and make copies of and extracts from the books,
records, computer data, computer programs, journals, orders, receipts, correspondence and other data relating to any
Collateral. All such visits, inspections, examinations or audits by Lender shall be at Borrower's expense, provided that so
long as no Event of Default or Default exists, Borrower shall not be required to reimburse Lender for visits more frequently
than once each Fiscal Year or in an amount in excess of $10,000 in the aggregate in any Fiscal Year and Borrower shall
not be required to reimburse Lender for any inspections, examinations, appraisals and audits.


 






    	 	-18-	 



     


    

 


		6.3.	Maintenance of Property; Insurance.



 


(a)  Keep,
and cause each other Loan Party to keep, all property useful and necessary in the business of Borrower or such other Loan Party
in good working order and condition, ordinary wear and tear and casualty and condemnation excepted, except to the extent the failure
to do so would reasonably be expected to result in a Material Adverse Effect.


 


(b)  Maintain,
and cause each other Loan Party to maintain, with responsible insurance companies, such insurance coverage as shall be required
by all laws, governmental regulations and court decrees and orders applicable to it and such other insurance, to such extent and
against such hazards and liabilities, as is customarily maintained by companies similarly situated. Upon request of Lender, Borrower
shall furnish to Lender a certificate setting forth in reasonable detail the nature and extent of all insurance maintained by Borrower
and each other Loan Party.


 


(c)  Unless
Borrower provides Lender with evidence of the continuing insurance coverage required by this Agreement, Lender may purchase insurance
at Borrower's expense to protect Lender’s interests in the Collateral. This insurance may, but need not, protect Borrower's
and each other Loan Party's interests. The coverage that Lender purchases may, but need not, pay any claim that is made against
Borrower or any other Loan Party in connection with the Collateral. Borrower may later cancel any insurance purchased by Lender,
but only after providing Lender with evidence that Borrower has obtained the insurance coverage required by this Agreement. If
Lender purchases insurance for the Collateral, as set forth above, Borrower will be responsible for the costs of that insurance,
including interest and any other charges that may be imposed with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance and the costs of the insurance may be added to the principal amount of the Loans owing
hereunder.


 


		6.4.	Compliance with Laws; Payment of Taxes and Liabilities.



 


(a) Comply,
and cause each other Loan Party to comply with all applicable laws, rules, regulations, decrees, orders, judgments, licenses
and permits, except where failure to comply could not reasonably be expected to have a Material Adverse Effect;
(b) without limiting clause (a) above, ensure, and cause each other Loan Party to ensure, that no person who owns a
controlling interest in or otherwise controls a Loan Party is or shall be (i) listed on the Specially Designated
Nationals and Blocked Person List maintained by the Office of Foreign Assets Control ("OFAC"), Department of
the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or
regulation or (ii) a person designated under Section 1(b), (c) or (d) or Executive Order No. 13224
(September 23, 2001), any related enabling legislation or any other similar Executive Orders; (c) without limiting
clause (a) above, comply and cause each other Loan Party to comply, with all applicable Bank Secrecy Act and anti-money
laundering laws and regulations and (d) pay, and cause each other Loan Party to pay, prior to delinquency, all Taxes and
other governmental charges against it or any of its property, as well as claims of any kind which, if unpaid, could become a
Lien on any of its property; provided that the foregoing shall not require Borrower or any other Loan Party to pay any
such Tax, charge or claim so long as (i) it shall contest the validity thereof in good faith by appropriate proceedings
and shall set aside on its books adequate reserves with respect thereto in accordance with GAAP or (ii) the nonpayment
of such tax or charge would not (x) reasonably be expected to result in a Material Adverse Effect, and (y) would
not result in the creation of a Lien other than a Permitted Lien.


 






    	 	-19-	 



     


    

 


		6.5.	Maintenance of Existence.



 


Maintain and preserve,
and cause each other Loan Party to maintain and preserve, (a) its existence and good standing in the jurisdiction of its organization
and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such
qualification necessary, other than any such jurisdiction where the failure to be qualified or in good standing could not reasonably
be expected to have a Material Adverse Effect.


 


		6.6.	Environmental Matters.



 


If any release or disposal
of Hazardous Substances shall occur or shall have occurred on any real property or any other assets of Borrower or any other Loan
Party, cause, or direct the applicable Loan Party to cause, the prompt containment and removal of such Hazardous Substances and
the remediation of such real property or other assets as is necessary to comply with all Environmental Laws, except where the failure
to comply (x) would not reasonably be expected to result in a Material Adverse Effect and (y) would not result in the
creation of a Lien other than a Permitted Lien. Without limiting the generality of the foregoing, Borrower shall, and shall cause
each other Loan Party to, comply with each valid Federal or state judicial or administrative order requiring the performance at
any real property by Borrower or any other Loan Party of activities in response to the release or threatened release of a Hazardous
Substance, except where the failure to comply (x) would not reasonably be expected to result in a Material Adverse Effect
and (y) would not result in the creation of a Lien other than a Permitted Lien.


 


		6.7.	Further Assurances.



 


(a)  Take,
and cause each other Loan Party to take, such actions as are necessary and as Lender may reasonably request from time to time to
ensure that the Obligations of Borrower and each other Loan Party under the Loan Documents are secured by a first priority perfected
Lien in favor of Lender (subject only to the Permitted Liens) on substantially all of the Collateral (other than Excluded Property
(as defined in the Guarantee and Collateral Agreement)) of Borrower and each other Loan Party (other than Foreign Subsidiaries),
in each case including (a) the execution and delivery, if applicable, of guaranties, security agreements, pledge agreements,
financing statements and other documents, and the filing or recording of any of the foregoing and (b) the delivery of certificated
securities and other Collateral with respect to which perfection is obtained by possession; provided that in no event shall (x) a
Foreign Subsidiary guarantee the Obligations or any Loan Party or (y) a Loan Party be required to obtain any leasehold mortgage.


 


(b)  Following
the Closing Date, upon the reasonable request of the Lender, the Loan Parties shall use commercially reasonable efforts to cause
each landlord with respect to any leased location specified by the Lender to deliver a Collateral Access Agreement.


 


(c)  Within
ten (10) days after the Closing Date, Borrower shall deliver to Lender such documents as Lender shall reasonably request
to evidence the termination of any security interest filed or recorded in the Intellectual Property (other than such security
interests in favor of Lender) as in existence on the Closing Date.


 






    	 	-20-	 



     


    





 


		Section 7.	Negative Covenants.



 


From and after the
Closing Date and until the date on which all Obligations have been Paid in Full and the Commitments have been terminated, Borrower
agrees that, unless at any time Lender shall otherwise expressly consent in writing, it will:


 


		7.1.	Debt.



 


Not, and not permit
any other Loan Party to, create, incur, assume or suffer to exist any Debt, except the following ("Permitted Debt"):


 


(a)  Obligations
under this Agreement and the other Loan Documents;


 


(b)  Debt
incurred in connection with Liens permitted under Section 7.2(b);


 


(c)  Debt
secured by Liens permitted by Section 7.2(c), and extensions, renewals and refinancings thereof;


 


(d)  Reserved;


 


(e)  Contingent
Obligations arising with respect to customary indemnification obligations or purchase price adjustments or similar obligations
in connection with asset dispositions, Permitted Acquisitions or Permitted Investments;


 


(f)   Reserved;


 


(g)  Contingent
Obligations (i) by endorsement of instruments for deposit or collection in the ordinary course of business, (ii) consisting
of guarantees of Debt incurred for the benefit of any other Loan Party if the primary obligation is permitted elsewhere in this
Section 7.1 or (iii) with respect to statutory, surety and appeal bonds, performance bonds and other similar obligations
(including with respect to workers' compensation claims);


 


(h)  accrual
and capitalization of interest on any Permitted Debt;


 


(i)   Debt
incurred in connection with the financing of insurance premiums;


 


(j)   Debt
in respect of netting services, cash management services, overdraft protections and otherwise in connection with deposit accounts,
so long as such Debt is incurred in the ordinary course of business;


 


(k)  Debt
and Contingent Obligations arising in connection with the Existing Letters of Credit and any other letters of credit issued at
the request of any Loan Party in the ordinary course of such Loan Party’s business;


 


(l)   Subordinated
Debt;


 


(m) Reserved;


 






    	 	-21-	 



     


    

 


(n)  Debt
incurred by Borrower under customary agreements consisting of indemnification, adjustment of purchase price or similar obligations
entered into in connection with asset dispositions, Permitted Acquisitions and Permitted Investments, or from guarantees or letters
of credit, securing the performance of any Obligor pursuant to such agreements, incurred or contracted for in connection with asset
dispositions, Permitted Acquisitions and such Permitted Investments;


 


(o)  Debt
representing deferred compensation, severance, pension and health and welfare retirement benefits or the equivalent thereof to
current and former employees of Borrower incurred in the ordinary course of business or existing on the Closing Date;


 


(p)  Debt
owed to Apollo Endosurgery, Inc. outstanding on the date hereof; and


 


(q)  Debt
assumed or acquired by Borrower or any Subsidiary in connection with a Permitted Acquisition; provided that such Debt exists
at the time that such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming
a Subsidiary and extensions, renewals and replacements of any such Debt that do not increase the outstanding principal amount thereof
(immediately prior to giving effect to such extension, renewal or replacement, other than with respect to the accrual of interest,
fees or other similar costs imposed as a result of the refinancing) or shorten the maturity or the weighted average life thereof.


 


		7.2.	Liens.



 


Not, and not permit
any other Loan Party to, create or permit to exist any Lien on any of its real or personal properties, assets or rights of whatsoever
nature (whether now owned or hereafter acquired), except any of the following ("Permitted Liens"):


 


(a)  Liens
for Taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or that are being diligently
contested in good faith by appropriate proceedings and for which it maintains adequate reserves in accordance with GAAP;


 


(b)  Liens
arising in the ordinary course of business (such as (i) Liens of carriers, warehousemen, mechanics, landlords, repairmen and
materialmen and other similar Liens imposed by law and (ii) Liens incurred in connection with worker's compensation, unemployment
compensation, deferred compensation, supplemental retirement plans and other types of social security (excluding Liens arising
under ERISA) or in connection with surety bonds, bids, performance bonds and similar obligations or pledges or deposits in connection
with insurance, leases, or other contracts or bids) for sums not overdue or being diligently contested in good faith by appropriate
proceedings and not involving any deposits or advances or borrowed money or the deferred purchase price of property or services
and, in each case, for which it maintains adequate reserves in accordance with GAAP and the execution or other enforcement of which
is effectively stayed;


 


(c)  subject
to the limitation set forth in Section 7.1(c), (i) Liens arising in connection with Capital Leases (and attaching
only to the property being leased, proceeds, accessions and substitutions thereof), (ii) Liens existing on fixed assets at
the time of the acquisition thereof by Borrower or any Subsidiary (and not created in contemplation of such acquisition) and (iii) Liens
that constitute purchase money security interests on any fixed assets securing Debt incurred for the purpose of financing all or
any part of the cost of acquiring such property, provided that any such Lien attaches to such fixed assets within 90 days of the
acquisition thereof and attaches solely to the fixed assets so acquired;


 


(d)  attachments,
appeal bonds, judgments and other similar Liens, for sums not constituting an Event of Default arising in connection with
court proceedings; provided that the execution or other enforcement of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good faith and by appropriate proceedings;


 






    	 	-22-	 



     


    

 


(e)  zoning
restrictions, easements, rights of way, restrictions, minor defects or irregularities in title and other similar Liens not interfering
in any material respect with the ordinary conduct of the business of Borrower or any Subsidiary;


 


(f)   Liens
arising under the Loan Documents;


 


(g)  the
replacement, refinancing, restructuring, extension or renewal of any Lien permitted by clause (c) above upon or in the same
property subject thereto (and proceeds thereof) arising out of the extension, renewal, refinancing, restructuring, or replacement
of the Debt secured thereby (without increase in the amount thereof except accrued interest, fees and expenses, and premium paid
in connection with such extension, renewal, replacement, restructuring and refinancing thereof);


 


(h)  Liens
on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;


 


(i)   Any
interest or title of a licensor, sublicensor, lessor or sublessor under any license or lease agreement (including licenses and
leases pertaining to intellectual property) and any precautionary uniform commercial code financing statements filed in connection
therewith granted to any Loan Party in the ordinary course of business to the extent limited to the item licensed, leased, sublicensed
or subleased;


 


(j)   Licenses,
sublicenses, leases or subleases granted to third Persons in the ordinary course of business;


 


(k)  Liens
which arise under Article 4 of the UCC on items in collection and documents and proceeds related thereto;


 


(l)   Liens
deemed to exist in connection with Permitted Investments that constitute repurchase obligations;


 


(m) Liens
in favor of customs and revenue authorities arising in the ordinary course of business and as a matter of law to secure the payment
of customs duties in connection with importation of goods; and


 


(n)  earnest
money deposits of cash or Cash Equivalent Investments made in good faith in connection with any letter of intent or purchase agreement
with respect to a transaction expressly permitted hereunder.


 


		7.3.	Restricted Payments.



 


Not, and not permit
any other Loan Party to, (a) make any dividend or other distribution to any of its equity holders, in their capacity as equity
holders, (b) purchase or redeem any of its equity interests or any warrants, options or other rights in respect thereof, (c) pay
any management fees or similar fees to any of its equity holders or any Affiliate thereof, (d) make any redemption, prepayment
(whether mandatory or optional), defeasance, repurchase or any other payment in respect of any Subordinated Debt or (e) set
aside funds for any of the foregoing. Notwithstanding the foregoing,


 


(i)          so
long as no Default has occurred and is then continuing or would result from such payment, Borrower may reimburse expenses and
pay fees and indemnifications in respect of the services provided by directors in the ordinary course of business and
consistent with Borrower’s recent public disclosures; and


 






    	 	-23-	 



     


    

 


(ii)         Borrower
may make payments to employees that are stockholders pursuant to the termination provisions of employment agreements.


 


		7.4.	Modification of Organizational Documents.



 


Not permit the charter,
by-laws or other organizational documents of Borrower or any other Loan Party to be amended or modified in any way which could
reasonably be expected to materially adversely affect the interests of Lender.


 


		7.5.	Use of Proceeds.



 


Use the proceeds of
the Loans, solely (a)  to pay fees and expenses in connection with the closing of this Agreement and (b) for working
capital and other general business purposes of Borrower and not use or permit any proceeds of any Loan to be used, either directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of "purchasing or carrying" any Margin Stock.


 


		7.6.	Subsequent Financings.



 


Until December 31,
2021, if Borrower intends to enter into any agreement to issue any shares of Common Stock or Common Stock Equivalents or to incur
any Debt (a “Financing Transaction”), Borrower shall deliver to Lender a notice setting forth in reasonable
detail the proposed structure of the Financing Transaction. Upon receipt of such notice, Lender shall have ten (10) days to
provide Borrower with a preliminary indication of whether or not Lender is interested in entering into an agreement regarding the
Financing Transaction and 30 days to submit an offer to Borrower regarding such Financing Transaction (such 30 day period, the
 “Review Period”). During the Review Period, Borrower shall not enter into any agreement regarding the Financing
Transaction or enter into any arrangement that limits Borrower’s ability to negotiate with Lender or discuss the Financing
Transaction with Lender.


 


		7.7.	Intellectual Property.



 


Enter into any material
agreement that would reasonably be expected to affect Lender’s security interest in the Intellectual Property or Intellectual
Property Rights.


 


		7.8.	Investments.



 


Not, and not permit any other Loan Party
to make any Investment, except the following, (“Permitted Investments”):


 


(a) investments
in direct obligations of the United States of America or any agency or instrumentality thereof whose obligations constitute full
faith and credit obligations of the United States of America having a maturity of one year or less, commercial paper issued by
U.S. corporations rated “A-1” or “A-2” by Standard & Poor’s Ratings Services or “P-1”
or “P-2” by Moody’s Investors Service or certificates of deposit or bankers’ acceptances having a maturity
of one year or less issued by members of the Federal Reserve System having deposits in excess of $100,000,000 (which certificates
of deposit or bankers’ acceptances are fully insured by the Federal Deposit Insurance Corporation);


 


(b) prepaid
rent not exceeding one month or security deposits;


 






    	 	-24-	 



     


    

 


(c) investments
in cash and cash equivalents;


 


(d) reserved;


 


(e) investments
acquired in connection with the settlement of delinquent Accounts in the ordinary course of business or in connection with the
bankruptcy or reorganization of suppliers or customers;


 


(f) extensions
of trade credit in the ordinary course of business;


 


(g) reserved;


 


(h) deposits
made in the ordinary course of business to secure the performance of leases or other contractual arrangement;


 


(i) to
the extent constituting an investment, any capital expenditures and any other expenditures permitted under this Agreement;


 


(j) advances
in the form of prepayments of expenses to a vendor, supplier or trade creditor in the ordinary course of business;


 


(k) investments
in deposit accounts and securities accounts opened in the ordinary course of business and in compliance with the terms of the
Loan Documents;


 


(l) travel
advances or loans to any employees and officers of any Loan Party not exceeding at any one time an aggregate of $10,000;


 


(m) investments
constituting Permitted Debt;


 


(n) investments
constituting Permitted Acquisitions;


 


(o) non-cash
consideration received pursuant to the consummation of asset dispositions and Permitted Acquisitions, in each case as permitted
under this Agreement; and


 


(p) investments
existing on the date of this Agreement and disclosed in writing to Lender.


 


		7.9.	Transactions With Affiliates.



 


Not enter into any
transaction with any Affiliates after the Closing Date.


 






    	 	-25-	 



     


    

 


		Section 8.	Events of Default; Remedies.



 


		8.1.	Events of Default.



 


Following the Closing
Date, each of the following shall constitute an Event of Default under this Agreement:


 


		8.1.1.	Non-Payment of Credit.



 


Default in the payment
when due of the principal of any Loan; or default, and continuance thereof for three (3) days, in the payment when due of
any other Obligations, including any interest, fee, or other amount payable by any Loan Party hereunder or under any other Loan
Document.


 


		8.1.2.	Bankruptcy; Insolvency.



 


(a)  Any
Loan Party becomes insolvent or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become
due; or


 


(b)  Any
Loan Party applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for such Loan Party
or any property thereof, or makes a general assignment for the benefit of creditors; or in the absence of such application, consent
or acquiescence, a trustee, receiver or other custodian is appointed for any Loan Party or for a substantial part of the property
of any thereof and is not discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding
under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is commenced in respect of any Loan Party,
and if such case or proceeding is not commenced by such Loan Party, it is consented to or acquiesced in by such Loan Party, or
remains for 60 days undismissed; or any Loan Party takes any action to authorize, or in furtherance of, any of the foregoing.


 


		8.1.3.	Non-Compliance with Loan Documents.



 


(a) Failure by Borrower
to comply with or to perform any covenant set forth in Section 6 and Section 7, or (b) the failure
of any Loan Party to comply with or to perform any other provision of this Agreement or any other Loan Document applicable to it
(and not constituting an Event of Default under any other provision of this Section 8 and continuance of such failure
described in this clause (b) for five (5) Business Days after the earlier to occur of (i) any Authorized Officer
of any Loan Party knows or in the exercise of reasonable due diligence should have known of any such failure, or (ii) the
delivery of notice thereof to Borrower by Lender.


 


		8.1.4.	Representations; Warranties.



 


Any representation or
warranty made by any Loan Party herein or any other Loan Document is breached or is false or misleading in any material respect,
or any schedule, certificate, financial statement, report, notice or other writing furnished by any Loan Party to Lender in connection
herewith is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified;
provided that it is acknowledged and agreed that projections as to future events provided by the Loan Parties are not to
be viewed as facts or as a guarantee of performance or achievement of a particular result, are subject to significant uncertainties
and contingencies many of which are beyond the control of the Loan Parties, no assurances can be given that such projections will
be realized and actual results during the periods covered by any such projections and forecasts may differ significantly from projected
or forecasted results and such differences may be material).


 


		8.1.5.	Invalidity of Collateral Documents.



 


Any Collateral Document
shall cease to be in full force and effect (other than in accordance with its terms); or any Loan Party (or any Person by, through
or on behalf of any Loan Party) shall contest in any manner the validity, binding nature or enforceability of any Collateral Document.


 






    	 	-26-	 



     


    

 


		8.1.6.	Change in Control.



 


A Change in Control shall
occur.


 


		8.2.	Remedies.



 


In addition to all
other rights and remedies provided by applicable laws and terms of the Loan Documents, if any Event of Default described in Section 8.1.2
shall occur, the Commitments shall immediately terminate and the Loans and all other Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind; and, if any other Event of Default shall occur and be continuing,
Lender may declare the Commitments to be terminated in whole or in part and/or declare all or any part of the Loans and other Obligations
to be due and payable, whereupon the Commitments shall immediately terminate (or be reduced, as applicable) and/or the Loans and
other Obligations shall become immediately due and payable (in whole or in part, as applicable), all without presentment, demand,
protest or notice of any kind. Lender shall promptly advise Borrower of any such declaration, but failure to do so shall not impair
the effect of such declaration.


 


		Section 9.	Miscellaneous.



 


		9.1.	Waiver; Amendments.



 


(a)  No
amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or any of the other Loan Documents
(or any subordination and intercreditor agreement or other subordination provisions relating to any Subordinated Debt) shall in
any event be effective unless the same shall be in writing and signed by Borrower (with respect to Loan Documents to which Borrower
is a party) and by Lender and then any such amendment, modification, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.


 


(b)  No
delay on the part of Lender in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single
or partial exercise by any of them of any right, power or remedy preclude other or further exercise thereof, or the exercise of
any other right, power or remedy.


 


		9.2.	Notices.



 


All notices hereunder
shall be in writing (including facsimile or other electronic (including .pdf) transmission) and shall be sent to the applicable
party at its address shown on Annex I or at such other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by facsimile or other electronic transmission shall be deemed
to have been given when sent; notices sent by mail shall be deemed to have been given three Business Days after the date when sent
by registered or certified mail, postage prepaid; and notices sent by hand delivery or overnight courier service shall be deemed
to have been given when received.


 


		9.3.	Computations.



 


Unless
otherwise specifically provided herein, any accounting term used in this Agreement shall have the meaning customarily given such
term in accordance with GAAP, and all financial computations (including with respect to the character or amount of any asset or
liability or item of income or expense, or any consolidation or other accounting computation) hereunder shall be computed in accordance
with GAAP consistently applied.


 






    	 	-27-	 



     


    

 


		9.4.	Costs; Expenses.



 


Borrower agrees to
pay promptly following written demand all reasonable and documented out-of-pocket costs and expenses of Lender (including Legal
Costs, and for the avoidance of doubt, such costs and expenses for accountants, auditors, appraisers, consultants and other professionals)
in connection with the preparation, delivery and administration (including perfection and protection of Collateral) of this Agreement,
the other Loan Documents and all other documents provided for herein or delivered or to be delivered hereunder or in connection
herewith (including any proposed or actual amendment, supplement or waiver to any Loan Document), and all reasonable and documented
out-of-pocket costs and expenses (including Legal Costs and the other costs and expenses described above) incurred by Lender after
an Event of Default in connection with the collection of the Obligations and enforcement of this Agreement, the other Loan Documents
or any such other documents. In addition, Borrower agrees to pay (promptly following written demand), and to save Lender harmless
from all liability for, any fees of Borrower's auditors in connection with any reasonable exercise by Lender of its rights pursuant
to Section 6.2 (subject to the limitations set forth therein). All Obligations provided for in this Section 9.4
shall survive repayment of the Loans, cancellation of the Notes, and termination of this Agreement).


 


		9.5.	Assignments.



 


Lender may assign all
or any portion of Lender's Loans and Commitments without the prior consent of Borrower; provided, however, that Borrower
will be notified of the assignment.


 


		9.6.	Confidentiality; Competitor Matters.



 


(a)          Lender
agrees to maintain as confidential all information provided to them by any Loan Party, except that Lender may disclose such information
(a) to Persons employed or engaged by Lender or any of their Affiliates in evaluating, approving, structuring or administering
the Loans and the Commitments; (b) to any assignee or participant or potential assignee or participant that has agreed to
comply with the covenant contained in this Section 9.6 (and any such assignee or participant or potential assignee
or participant may disclose such information to Persons employed or engaged by them as described in clause (a) above); (c) as
required or requested by any federal or state regulatory authority or examiner, or any insurance industry association, or as reasonably
believed by Lender to be compelled by any court decree, subpoena or legal or administrative order or process as long as Borrower
has received prior notice and the opportunity to seek a protective order; (d) as, on the advice of Lender’s counsel,
is required by law; (e) in connection with the exercise of any right or remedy under the Loan Documents or in connection with
any litigation to which Lender is a party; (f) to any nationally recognized rating agency or investor of a Lender that requires
access to information about a Lender’s investment portfolio in connection with ratings issued or investment decisions with
respect to Lender; and (g) that ceases to be confidential through no fault of Lender.


 


		(b)	Captions.



 


Captions used in this
Agreement are for convenience only and shall not affect the construction of this Agreement.


 


		9.7.	Nature of Remedies.



 


All Obligations
of Borrower and rights of Lender expressed herein or in any other Loan Document shall be in addition to and not in limitation
of those provided by applicable law. No failure to exercise and no delay in exercising, on the part of Lender, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.


 






    	 	-28-	 



     


    

 


		9.8.	Counterparts.



 


This Agreement may
be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement. Receipt
by facsimile or other electronic method of any executed signature page to this Agreement or any other Loan Document shall
constitute effective delivery of such signature page. This Agreement and the other Loan Documents to the extent signed and delivered
by means of a facsimile machine or other electronic transmission (including “pdf”), shall be treated in all manner
and respects and for all purposes as an original agreement or amendment and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. No party hereto or to any such other Loan Document
shall raise the use of a facsimile machine or other electronic transmission to deliver a signature or the fact that any signature
or agreement or amendment was transmitted or communicated through the use of a facsimile machine or other electronic transmission
as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.


 


		9.9.	Severability.



 


The illegality or unenforceability
of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair the
legality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.


 


		9.10.	Entire Agreement.



 


This Agreement, together
with the other Loan Documents, embodies the entire agreement and understanding among the parties hereto and supersedes all prior
or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and
thereof and any prior arrangements made with respect to the payment by (or any indemnification for) Borrower of any fees, costs
or expenses payable to or incurred (or to be incurred) by or on behalf of Lender.


 


		9.11.	Indemnification.



 


(a)          Except
for losses, claims, damages or liability arising out of the gross negligence or willful misconduct of Lender, Borrower hereby agrees
(i) to indemnify and hold harmless Lender, its officers, agents, (including outside legal counsel), directors, employees successors
and assigns (the “Indemnified Parties”) from and against any and all losses, claims, damages, penalties, liabilities,
fees (including, without limitation, any reasonable broker’s or finder’s fees), reasonable costs or expenses to which
Lender, its officers, agents and employees, or any one or more of them, may become subject under any law, contract or agreement
in connection with the carrying out of the transactions contemplated by this Agreement or any other Loan Document and (ii) to
reimburse Lender, its officers, agents and employees for any and all reasonable out-of-pocket legal and other expenses (including
reasonable attorneys’ fees and costs, whether incurred at trial, on appeal, in bankruptcy proceedings, or otherwise) incurred
by Lender, its officers, agents and employees, or any one or more of them, in connection with investigating any such losses, claims,
damages, penalties, liabilities, fees (including, without limitation, any broker’s or finder’s fees), reasonable costs
or expenses or in connection with defending any actions relating thereto. Lender agrees, at the request and reasonable expense
of Borrower, to cooperate in the making of any investigation in defense of any such claim and promptly to assert any or all of
the rights and privileges and defenses, which may be available to Lender.


 






    	 	-29-	 



     


    

 


(b)          Notwithstanding
anything to the contrary contained in this Agreement or the other Loan Documents and in addition to the indemnification provided
in Section 9.11, Borrower hereby agrees to indemnify and hold harmless Lender from and against any and all losses,
claims, damages, penalties, liabilities, fees, reasonable costs or expenses (including reasonable legal fees, whether incurred
at trial, on appeal, in bankruptcy proceedings or otherwise) directly or indirectly resulting from, due to or arising out of (i) any
misrepresentation of information furnished to Lender by or on behalf of Borrower, (ii) any breach, violation, untruthfulness
or inaccuracy of any representation or warranty of Borrower under any of the Loan Documents, or (iii) any breach or violation
of or noncompliance with any covenant or agreement of Borrower under any of the Loan Documents. Borrower’s liability under
this Section 9.11 shall not be limited by any other provision of this Agreement.


 


(c)          The
provisions of this Section 9.11 shall survive the payment of the Obligations and the termination of this Agreement.


 


		9.12.	Successors; Assigns.



 


This Agreement shall
be binding upon and shall inure to the benefit of Borrower and Lender and their respective successors and permitted assigns.
No other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents. Borrower may not assign or transfer any of its rights or Obligations
under this Agreement without the prior written consent of Lender.


 


		9.13.	Governing Law.



 


THIS AGREEMENT AND
EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES.


 


		9.14.	Forum Selection; Consent to Jurisdiction.



 


ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE
OF NEW YORK; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE STATE OF NEW YORK AND
THE COUNTY OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. BORROWER AND LENDER FURTHER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
BORROWER AND LENDER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.


 






    	 	-30-	 



     


    








 


9.15.        Waiver
of Jury Trial.


 


EACH OF BORROWER AND
LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT,
ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY
OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.


 


[signature pages follow]


 



    -31-


     


    







 


 


The parties hereto
have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first set forth above.


 


	 	RESHAPE LIFESCIENCES INC.,
	 	as Borrower 
	 	 
	 	By:	/s/ Barton
    P. Bandy         
	 	Name: Barton P. Bandy 
	 	Title: Chief Executive Officer



 






     


     


    

 





	 	ARMISTICE CAPITAL MASTER FUND LTD.,
	 	as Lender
	 	 
	 	By: 	/s/ Steven Boyd            
	 	Name: Steven Boyd
	 	Title: CIO of Armistice Capital, LLC, the Investment Manager



 






     


     


    




 


ANNEX I


 


Addresses


 


ReShape Lifesciences Inc.





1001 Calle Amanecer





San Clemente, California 92673





Attention:      Bart
Bandy, Chief Executive Officer Telephone:         949-429-6680


 


Armistice
Capital Master Fund Ltd.,

510 Madison Avenue, 7th Floor

New York, New York 10022

Attention:      Daniel Radden

Telephone:    (212) 231-4930


 


Address for Payments:


 


JPMorgan Chase Bank, N.A., New York

ABA: 021000021





Beneficiary: A/C No: 066001633





A/C Name: J.P. Morgan Securities LLC





For Credit to A/C Armistice Capital Master Fund Ltd.

A/C # 102-53544


 






    I-1


     


    







 


 


Exhibit A


 


Form of Note


 


	$ 	 	 	 



 








The undersigned
("Borrower"), for value received, promises to pay to Armistice Capital Master Fund Ltd. (the "Lender")
the aggregate unpaid amount of all Loans made to Borrower by Lender pursuant to the Credit Agreement referred to below, such principal
amount (which such amount may change over time pursuant to the Credit Agreement) to be payable on the dates set forth in the Credit
Agreement.


 


Borrower
further promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such Loan is paid
in full, payable at the rate(s) and at the time(s) set forth in the Credit Agreement. Payments of both principal and
interest are to be made in lawful money of the United States of America.


 


This Note
evidences indebtedness incurred under, and is subject to the terms and provisions of, the Credit Agreement, dated as of March 25,
2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the "Credit Agreement";
terms not otherwise defined herein are used herein as defined in the Credit Agreement), between Borrower and Lender, to which Credit
Agreement reference is hereby made for a statement of the terms and provisions under which this Note may or must be paid prior
to its due date or its due date accelerated.


 


This Note
is made under and governed by the laws of the State of New York applicable to contracts made and to be performed entirely within
such State.


 


	 	RESHAPE LIFESCIENCES INC.
	 	 
	 	By:	                        
	 	Title:	 



 






    A-1


     


    




 


 


Exhibit B


 


Form of Warrant


 


(see attached)


 



     


     


    




 


NEITHER THIS SECURITY NOR THE
SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE U.S. 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 G COMMON STOCK PURCHASE
WARRANT RESHAPE LIFESCIENCES INC.


 


	Warrant Shares: 1,200,000	Initial Exercise Date: March 25, 2020


 


THIS SERIES G COMMON STOCK PURCHASE WARRANT (the
 “Warrant”) certifies that, for value received, Armistice Capital Master Fund Ltd. 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 date hereof (the “Initial Exercise
Date”) and until the fifth anniversary of the Initial Exercise Date (the “Termination
Date”) but not thereafter, to subscribe for and purchase from ReShape Lifesciences Inc., a Delaware corporation
(the “Company”), up to 1,200,000 shares (as subject to adjustment hereunder, the
 “Warrant Shares”) of 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.       [RESERVED]


 


Section 2.       Exercise.


 


a)     Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or
times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly
executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form attached
hereto as Exhibit A (the “Notice of Exercise”). Within the earlier of (i) two
(2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein)
following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares
specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless
the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice
of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the 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) Trading 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 aggregate exercise price per share of Common stock under this Warrant shall be the lesser of $3.70 or the average
of the two lowest VWAPs for the Common Stock during the ten (10) Trading Days immediately prior to the date of Exercise, subject
to adjustment hereunder (the “Exercise Price”).


 


c)     Cashless
Exercise. If at any time after the six-month anniversary of the Closing Date, there is no effective registration statement
registering, or no current prospectus available for, the resale of the Warrant Shares by 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.


 


If Warrant
Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of
the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position
contrary to this Section 2(c).


 


“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if
the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the
nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg 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 mutually determined by the
Company and the Holder, provided that, if the Company and the Holder are unable to agree upon the fair market value of such
share of Common Stock, then the fair market value as determined by an independent appraiser selected in good faith by the Holders
of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is
then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the
nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg
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
Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the
Company.


 






     


     


    

 


Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).


 


		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 the Holder or (B) the Warrant Shares are eligible
for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise
of the Warrants), and otherwise by physical delivery of a certificate or book-entry notation, 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 by the Warrant Share Delivery Date. 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 (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages
begin to accrue) 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.


 


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 as Exhibit B
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)	[RESERVED]



 


		f)	[RESERVED]



 






     


     


    

 


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)	[RESERVED]



 


c)     Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company
grants, issues or sells any Common 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
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.


 


d)     Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash, 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 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. 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.


 






     


     


    

 


		e)	Fundamental Transaction. If, at any time while this Warrant is outstanding,



 


(i) the Company,
directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into
another Person, (ii) the Company, 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,
(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 or scheme of arrangement) with another Person or
group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination)
(each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder
shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to
the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) or Section 2(f) 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) or Section 2(f) 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. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or
any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or
within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of
the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash
equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the
consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not
within the Company's control, including not approved by the Company's Board of Directors, Holder shall only be entitled to
receive from the Company or any Successor Entity, as of the date of consummation of such Fundamental Transaction, the same
type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this
Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental
Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of
Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental
Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of
the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public
announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the
Remaining Day volatility, wherein “Remaining Day” shall be equal to the number of days remaining on the term of
this Warrant on the date of the public announcement of the applicable Fundamental Transaction, obtained from the HVT function
on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction,
(C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per
share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public announcement of such
Fundamental Transaction and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction and
(D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date. The payment of the Black Scholes Value will be made by wire transfer of immediately
available funds within five Business Days of the Holder’s election (or, if later, on the effective date of the
Fundamental Transaction). The Company shall cause any successor entity in a Fundamental Transaction in which the Company is
not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the
Company under this Warrant and the Transaction Documents in accordance with the provisions of this Section 3(e) pursuant
to written agreements in form and substance reasonably satisfactory to the Holder 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 and the Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this
Warrant and the Transaction Documents with the same effect as if such Successor Entity had been named as the Company
herein.


 






     


     


    

 


f)      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.


 


		g)	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 approval of any
stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation
or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or
any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the
Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company,
then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number
or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the
date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights
or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer
or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the
failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes,
or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event
triggering such notice except as may otherwise be expressly set forth herein.


 



     


     


    




 


Section 4.       Transfer
of Warrant.


 


a)     Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof,
this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment
of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on
which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.


 






     


     


    

 


b)     New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be
issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any
transfer that 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 Exercise Date and shall be identical with this Warrant except as
to the number of Warrant Shares issuable pursuant thereto.


 


c)     Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.


 


		d)	[RESERVED]



 


e)     Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any
exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for
distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.


 


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 that 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)     Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents 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 Agreement and any other Transaction Documents (whether brought against a party
hereto or its 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 (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action
or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such 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 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.


 


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 [or the Exercise Agreement], if the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.


 



     


     


    





 


 


h)           Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the
signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next
Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number or email attachment at the email address as set forth on the signature pages attached hereto on a day that is not
a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2) Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto. To the extent that any notice 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.


 


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 and the Holder.


 


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.


 


********************


 


(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.


 


	 	RESHAPE LIFESCIENCES INC.




 


	 	By:	 
	 	 	Name:
	 	 	Title:


 









     


     


    

 


EXHIBIT A


 


NOTICE OF EXERCISE


 


TO:     RESHAPE
LIFESCIENCES INC.


 


(1)            The
undersigned hereby elects to purchase                Warrant
Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.


 


		(2)	Payment shall take the form of (check applicable box):



 


[
] in lawful money of the United States; or


 


[ ] if permitted, the cancellation
of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise
this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth
in subsection 2(c).


 


(3)            Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:


 


 






 


The Warrant Shares shall be delivered to the following
DWAC Account Number:


 


 






 


 






 


 






 


(4)            Accredited
Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities
Act of 1933, as amended.


 


[SIGNATURE OF HOLDER]


 


Name of Investing


Entity:





 


Signature
of Authorized


Signatory
of Investing


Entity:





 


Name of


Authorized





 


Signatory:





 


Title of Authorized


Signatory:





 


Date:





 









     


     


    

 


EXHIBIT B


 


ASSIGNMENT FORM


 


(To assign the foregoing Warrant, execute this
form and supply required information. Do not use this form to purchase shares.)


 


FOR VALUE RECEIVED, the foregoing Warrant and all
rights evidenced thereby are hereby assigned to


 


	Name:	 
	 	(Please Print)
	Address:	 
	 	(Please Print)
	Phone Number:	 
	Email Address:	
         

	 	 

                                                

	 	 
	
        

        Dated:                                 ,
                       
	 
	Holder’s Signature:                                            	 
	Holder’s Address:                                              	 


 






     


     


    

 


Exhibit C


 


Form of Registration Rights Agreement


 


(see attached)


 









     


     


    

 


REGISTRATION RIGHTS AGREEMENT


 


This Registration
Rights Agreement (this “Agreement”) is made and entered into as of [        ]
[   ], 2020, between ReShape Life Sciences, Inc., a Delaware corporation (the “Company”),
and the purchaser signatory hereto (the “Purchaser”).


 


This Agreement is made pursuant
to the Securities Purchase Agreement, dated as of the date hereof, between the Company and the Purchaser (the “Purchase
Agreement”).


 


The Company and the Purchaser hereby agrees as follows:


 


		1.	Definitions.



 


As used in this Agreement, the
following terms shall have the following meanings: “Advice” shall have the meaning set forth in Section 6(d).


 


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


 


“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.


 


“Effectiveness
Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the later of (i) the
90th calendar day following the date hereof (or, in the event of a “full review” by the Commission, the 120th calendar
day following the date hereof); provided, however, that in the event the Company is notified by the Commission that
one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the
Effectiveness Date as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is
so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a
day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.


 


“Effectiveness Period”
shall have the meaning set forth in Section 2(a).


 


“Event” shall have the
meaning set forth in Section 2(d).


 


“Event Date” shall have
the meaning set forth in Section 2(d).


 


“Filing
Date” means, with respect to the Initial Registration Statement required hereunder, the 60th calendar day following
the date hereof and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or
Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional
Registration Statement related to the Registrable Securities.


 









     


     


    

 


“Holder” means the holder
of Registrable Securities.


 


“Indemnified Party” shall
have the meaning set forth in Section 5(c).


 


“Indemnifying Party” shall
have the meaning set forth in Section 5(c).


 


“Initial Registration
Statement” means the initial Registration Statement filed pursuant to this Agreement.


 


“Losses” shall have the
meaning set forth in Section 5(a).


 


“Plan of Distribution”
shall have the meaning set forth in Section 2(a).


 


“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to
be incorporated by reference in such Prospectus.


 


“Registrable
Securities” means, as of any date of determination, (a) all Shares, (b) all Warrant Shares then
issued and issuable upon exercise of the Warrants (assuming on such date the Warrants are exercised in full without regard to
any exercise limitations therein), (c) any additional shares of Common Stock issued and issuable in connection with any
anti-dilution provisions in the Purchase Agreement and the Warrants (in each case, without giving effect to any limitations
on exercise set forth in the Warrants) and (d) any securities issued or then issuable upon any stock split, dividend or
other distribution, recapitalization or similar event with respect to the foregoing; provided, however, that
any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain
the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a
Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under
the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective
Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or
(c) such securities become eligible for resale without volume or manner-of- sale restrictions and without current public
information pursuant to Rule 144, as set forth in a written opinion letter to such effect, addressed, delivered and
acceptable to the Transfer Agent and the Holder.


 


“Registration
Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and
any additional registration statements contemplated by Section 2(c) or Section 3(c), including
(in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre-
and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated
by reference in any such registration statement.


 






     


     


    

 


“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.


 


“Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.


 


“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.


 


“Selling
Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).


 


“SEC
Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments,
requirements or requests of the Commission staff and (ii) the Securities Act.


 


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


 


“Series G
Warrants” means, collectively, the Series G Common Stock purchase warrants, which Warrants shall be exercisable
immediately, subject to the Issuable Maximum, have an exercise price equal to $[_] per share (subject to adjustment as provided
therein) and have a term of exercise equal to [ ].


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“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 EQ Shareowner Services (f/k/a Wells Fargo Shareowner Services), the current transfer agent of the Company,
with a mailing address of 1110 Centre Pointe Curve, Suite 101, Mendota Heights, Minnesota 55120 and a facsimile number of
651-450-4078, and any successor transfer agent of the Company.


 


“Warrants” means, collectively,
the Series G Warrants.


 


“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.


 


		2.	Shelf Registration.



 


(a)            On
or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale
of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-3 (except
if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration
shall be on another appropriate form in accordance herewith, subject to the provisions of Section 2(e)) and shall contain
(unless otherwise directed by the Holder) substantially the “Plan of Distribution” attached hereto as Annex A;
provided, however, that the Holder shall not be required to be named as an “underwriter” without the
Holder’s express prior written consent. Subject to the terms of this Agreement, the Company shall use its best efforts to
cause a Registration Statement filed under this Agreement (including, without limitation, under Section 3(c)) to be
declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the
applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously effective under
the Securities Act until the date that all Registrable Securities covered by such Registration Statement (i) have been sold,
thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144
and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144,
as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the
Transfer Agent and the Holder (the “Effectiveness Period”). The Company shall request effectiveness of
a Registration Statement as of 5:00 p.m. (New York City time) on a Trading Day. The Company shall immediately notify the Holder
by e-mail of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness
with the Commission, which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by
9:30 a.m. (New York City time) on the Trading Day after the effective date of such Registration Statement, file a final Prospectus
with the Commission as required by Rule 424. Failure to so notify the Holder within one (1) Trading Day of such notification
of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(d).


 









     


     


    

 


(b)            Notwithstanding
the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable
Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single
registration statement, the Company agrees to promptly inform the Holder thereof and use its commercially reasonable efforts to
file amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable
Securities permitted to be registered by the Commission, on Form S-3 or such other form available to register for resale the
Registrable Securities as a secondary offering, subject to the provisions of Section 2(e); with respect to filing on
Form S-3 or other appropriate form; provided, however, that prior to filing such amendment, the Company shall
be obligated to use diligent efforts to advocate with the Commission for the registration of all of the Registrable Securities
in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.


 


(c)            Notwithstanding
any other provision of this Agreement, if the Commission or any SEC Guidance sets forth a limitation on the number of Registrable
Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that
the Company used diligent efforts to advocate with the Commission for the registration of all or a greater portion of Registrable
Securities), unless otherwise directed in writing by the Holder, the number of Registrable Securities to be registered on such
Registration Statement will be reduced as follows:


 


		a.	First, the Company shall reduce or eliminate any securities to be included other than Registrable Securities; and



 


		b.	Second, the Company shall reduce Registrable Securities represented by Warrant Shares underlying the Series G Warrants.



 


In the event of a cutback hereunder,
the Company shall give the Holder at least five (5) Trading Days prior written notice along with the calculations as to the
Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance with the foregoing,
the Company will use its best efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided
to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form
available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement,
as amended.


 






     


     


    

 


(d)            If:
(i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial
Registration Statement without affording the Holder the opportunity to review and comment on the same as required by Section 3(a) herein,
the Company shall be deemed to have not satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the
Commission pursuant to the Securities Act, within five Trading Days of the date that the Company is notified (orally or in
writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will
not be subject to further review, or (iii) prior to the effective date of a Registration Statement, the Company fails to
file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such
Registration Statement within ten (10) calendar days after the receipt of comments by or notice from the Commission that
such amendment is required in order for such Registration Statement to be declared effective, or (iv) a Registration
Statement registering for resale all of the Registrable Securities is not declared effective by the Commission by the
Effectiveness Date of the Initial Registration Statement, or (v) after the effective date of a Registration Statement,
such Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities included
in such Registration Statement, or the Holder is otherwise not permitted to utilize the Prospectus therein to resell such
Registrable Securities, for more than ten (10) consecutive calendar days or more than an aggregate of fifteen (15)
calendar days (which need not be consecutive calendar days) during any 12-month period (any such failure or breach being
referred to as an “Event”, and for purposes of clauses (i) and (iv), the date on which such
Event occurs, and for purpose of clause (ii) the date on which such five (5) Trading Day period is exceeded, and
for purpose of clause (iii) the date which such ten (10) calendar day period is exceeded, and for purpose of clause
(v) the date on which such ten (10) or fifteen (15) calendar day period, as applicable, is exceeded being referred
to as “Event Date”), then, in addition to any other rights the Holder may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event
shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to the Holder an amount in
cash, as partial liquidated damages and not as a penalty, equal to the product of 1.0% multiplied by the aggregate
Subscription Amount paid by the Holder pursuant to the Purchase Agreement. If the Company fails to pay any partial liquidated
damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon
at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are
paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any
portion of a month prior to the cure of an Event. Notwithstanding anything to the contrary contained herein, no liquidated
damages shall accrue as to any Registrable Securities that are subject to a cut- back pursuant to Section 2(c) (“Cut
Back Shares”) until such date as the Company is able to effect the registration of such Cut Back Shares in
accordance with any restrictions required by the Commission. From and after the date that such restrictions are terminated,
all of the provisions of this Section 2(d) shall again be applicable to such Cut Back Shares; provided,
however, that the Filing Date and Effectiveness Date for the Registration Statement including such Cut Back Shares shall be
based on the termination date of such restriction.


 


(e)            If
Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall
(i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register
the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3
covering the Registrable Securities has been declared effective by the Commission.


 






     


     


    

 


(f)            Notwithstanding
anything to the contrary contained herein, in no event shall the Company be permitted to name the Holder or affiliate of the Holder
as an Underwriter without the prior written consent of the Holder.


 


		3.	Registration Procedures.



 


In connection with the Company’s registration
obligations hereunder, the Company shall:


 


(a)            Not
less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading
Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to the Holder copies of all
such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference)
will be subject to the review of the Holder, and (ii) cause its officers and directors, counsel and independent registered
public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of counsel to the Holder, to conduct
a reasonable investigation within the meaning of the Securities Act. The Company shall not file a Registration Statement or any
such Prospectus or any amendments or supplements thereto to which the Holder shall reasonably object in good faith, provided that,
the Company is notified of such objection in writing no later than five (5) Trading Days after the Holder have been so furnished
copies of a Registration Statement or one (1) Trading Day after the Holder has been so furnished copies of any related Prospectus
or amendments or supplements thereto. The Holder agrees to furnish to the Company a completed questionnaire in the form attached
to this Agreement as Annex B (a “Selling Stockholder Questionnaire”) on a date that is not less
than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date on which
the Holder receives draft materials in accordance with this Section.


 


(b)            (i) Prepare
and file with the Commission such amendments, including post- effective amendments, to a Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities,
(ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as
promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any
amendment thereto and provide as promptly as reasonably possible to the Holder true and complete copies of all correspondence
from and to the Commission relating to a Registration Statement (provided that, the Company shall excise any information
contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries),
and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with
respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in
accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holder as set forth in
such Registration Statement as so amended or in such Prospectus as so supplemented.


 






     


     


    

 


(c)            If
during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common
Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case
prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holder of not less than the
number of such Registrable Securities.


 


(d)            Notify
the Holder of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof,
be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly
as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing)
and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is
proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with
respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any
request by the Commission or any other federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering
any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by
the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose,
(v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions
to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with
respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not
in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, however,
that in no event shall any such notice contain any information which would constitute material, non-public information
regarding the Company or any of its Subsidiaries.


 






     


     


    

 


(e)           Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.


 


(f)            Furnish
to the Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission, provided that any such item which is available on
the EDGAR system (or successor thereto) need not be furnished in physical form.


 


(g)            Subject
to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto
by the Holder in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment
or supplement thereto, except after the giving of any notice pursuant to Section 3(d).


 


(h)           Prior
to any resale of Registrable Securities by the Holder, use its commercially reasonable efforts to register or qualify or cooperate
with the Holder in connection with the registration or qualification (or exemption from the Registration or qualification) of such
Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United
States as the Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by each Registration Statement, provided that the Company shall not be required
to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material
tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.


 


(i)            If
requested by the Holder, cooperate with the Holder to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be
in such denominations and registered in such names as the Holder may request.


 






     


     


    

 


(j)             Upon
the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances
taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of
the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference,
and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will
contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holder
in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holder shall suspend use of such Prospectus. The Company
will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall
be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement
and Prospectus, subject to the payment of partial liquidated damages otherwise required pursuant to Section 2(d), for
a period not to exceed 60 calendar days (which need not be consecutive days) in any 12-month period.


 


(k)            Otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities
Act and the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including
any supplement or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the
Holder in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172
and, as a result thereof, the Holder is required to deliver a Prospectus in connection with any disposition of Registrable Securities
and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.


 


(l)             The
Company shall use its best efforts to obtain and maintain eligibility for use of Form S-3 (or any successor form thereto)
for the registration of the resale of Registrable Securities.


 


(m)           The
Company may require the Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially
owned by the Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over
the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of
the Registrable Securities solely because the Holder fails to furnish such information within three Trading Days of the Company’s
request, any liquidated damages that are accruing at such time as to the Holder only shall be tolled and any Event that may otherwise
occur solely because of such delay shall be suspended as to the Holder only, until such information is delivered to the Company.


 









     


     


    

 


4.                     Registration
Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred
to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings
made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock
is then listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by
the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue
Sky qualifications or exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event
shall the Company be responsible for any broker or similar commissions of the Holder or, except to the extent provided for in the
Transaction Documents, any legal fees or other costs of the Holder.


 


		5.	Indemnification.



 


(a)            Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless the
Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable
Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment
advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each of them, each Person who controls any the Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors,
members, stockholders, partners, agents and employees (and any other Persons with a functionally equivalent role of a Person
holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as
incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of
the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection
with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that
(i) such untrue statements or omissions are based solely upon information regarding the Holder furnished in writing to
the Company by the Holder expressly for use therein, or to the extent that such information relates to the Holder or the
Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing
by the Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it
being understood that the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of
an event of the type specified in Section 3(d)(iii)-(vi), the use by the Holder of an outdated, defective or
otherwise unavailable Prospectus after the Company has notified the Holder in writing that the Prospectus is outdated,
defective or otherwise unavailable for use by the Holder and prior to the receipt by the Holder of the Advice contemplated in Section 6(d).
The Company shall notify the Holder promptly of the institution, threat or assertion of any Proceeding arising from or in
connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the
transfer of any Registrable Securities by the Holder in accordance with Section 6(h).


 






     


     


    

 


(b)            Indemnification
by the Holder. The Holder shall indemnify and hold harmless the Company, its directors, officers, agents and employees, each
Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable
law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by the Holder to the Company expressly for inclusion
in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that such information relates
to the Holder’s information provided in the Selling Stockholder Questionnaire or the proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by the Holder expressly for use in a Registration Statement (it being
understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or in any amendment or supplement
thereto. In no event shall the liability ofa Holder be greater in amount than the dollar amount of the proceeds (net of all expenses
paid by the Holder in connection with any claim relating to this Section 5 and the amount of any damages the Holder has otherwise
been required to pay by reason of such untrue statement or omission) received by the Holder upon the sale of the Registrable Securities
included in the Registration Statement giving rise to such indemnification obligation.


 









     


     


    

 


(c)            Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity
is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume
the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof, provided that the failure of any Indemnified Party to give such
notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only)
to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal
or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.


 


An Indemnified
Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume
the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding,
or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and
the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than
one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement
of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect
of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.


 


Subject
to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with
this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party, provided that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination
is not subject to appeal or further review) not to be entitled to indemnification hereunder.


 









     


     


    

 



 


(d)            Contribution.
If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient
to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable
by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified
Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among
other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification
provided for in this Section was available to such party in accordance with its terms.


 


The parties
hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined
by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred
to in the immediately preceding paragraph. In no event shall the contribution obligation of the Holder of Registrable Securities
be greater in amount than the dollar amount of the proceeds (net of all expenses paid by the Holder in connection with any claim
relating to this Section 5 and the amount of any damages the Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities
giving rise to such contribution obligation.


 


The indemnity
and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.


 


		6.	Miscellaneous.



 


(a)            Remedies.
In the event of a breach by the Company or by the Holder of its obligations under this Agreement, the Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and the Holder agree
that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of
such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.


 






     


     


    

 


(b)            No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Neither the Company nor any of its security
holders (other than the Holder in such capacity pursuant hereto) may include securities of the Company in any Registration Statements
other than the Registrable Securities. The Company shall not file any other registration statements until all Registrable Securities
are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6(b) shall
not prohibit the Company from filing amendments to registration statements filed prior to the date of this Agreement.


 


		(c)	[RESERVED]



 


(d)            Discontinued
Disposition. By its acquisition of Registrable Securities, the Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), the Holder will
forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing
(the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented
or amended) may be resumed. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly
as is practicable. The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the
disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 2(d).


 


(e)            Piggy-Back
Registrations. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all
of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating
to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable
in connection with the Company’s stock option or other employee benefit plans, then the Company shall deliver to the Holder
a written notice of such determination and, if within fifteen days after the date of the delivery of such notice, the Holder shall
so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities
the Holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable
Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule 144 (without volume
restrictions or current public information requirements) promulgated by the Commission pursuant to the Securities Act or that are
the subject of a then effective Registration Statement that is available for resales or other dispositions by the Holder.


 


(f)             Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed
by the Company and the Holder. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification
of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.


 






     


     


    

 


(g)            Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as
set forth in the Purchase Agreement.


 


(h)            Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of the Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of the Holder. The Holder may assign its rights hereunder in the manner and to the
Persons as permitted under Section 5.7 of the Purchase Agreement.


 


(i)             No
Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the Holder in this Agreement or otherwise conflicts with the provisions
hereof. Except as set forth on Schedule 6(i), neither the Company nor any of its Subsidiaries has previously entered into
any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied
in full.


 


(j)             Execution
and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.


 


(k)            Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.


 


(l)             Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.


 


(m)           Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.


 






     


     


    

 


(n)            Headings.
The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit
or affect any of the provisions hereof.


 


********************


 


(Signature Pages Follow)


 






     


     


    

 


IN WITNESS WHEREOF, the parties
have executed this Registration Rights Agreement as of the date first written above.


 


	 	RESHAPE LIFESCIENCES INC.
	 	 	 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


 


 


Name of Holder:                                                                                        


 


Signature
of Authorized Signatory of Holder:                                                                                   


 


Name of Authorized Signatory:                                                                                     


 


Title of Authorized Signatory:                                                                                       


 






     


     


    

 


Annex A


 


Plan of Distribution


 


The Selling
Stockholder (the “Selling Stockholder”) of the securities and any of its pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their securities covered hereby on the principal Trading Market or any other stock exchange,
market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated
prices. The Selling Stockholder may use any one or more of the following methods when selling securities:


 


		•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;



 


		•	block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction;



 


		•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;



 


		•	an exchange distribution in accordance with the rules of the applicable exchange;



 


		•	privately negotiated transactions;



 


		•	settlement of short sales;



 


		•	in transactions through broker-dealers that agree with the Selling Stockholder to sell a specified number of such securities at a stipulated
price per security;



 


		•	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;



 


		•	a combination of any such methods of sale; or



 


		•	any other method permitted pursuant to applicable law.



 


The Selling
Stockholder may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933,
as amended (the “Securities Act”), if available, rather than under this prospectus.


 


Broker-dealers
engaged by the Selling Stockholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholder (or, if any broker-dealer acts as agent for the purchaser of
securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in
the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440;
and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.


 






     


     


    

 


In connection
with the sale of the securities or interests therein, the Selling Stockholder may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions
they assume. The Selling Stockholder may also sell securities short and deliver these securities to close out their short positions,
or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholder may also enter
into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which
securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).


 


The Selling
Stockholder and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. The Selling Stockholder has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the securities.


 


The Company
is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company
has agreed to indemnify the Selling Stockholder against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.


 


We agreed
to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholder
without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement
for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other
rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under
the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed
brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered
hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.


 


Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities
may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholder will
be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation
M, which may limit the timing of purchases and sales of the common stock by the Selling Stockholder or any other person. We
will make copies of this prospectus available to the Selling Stockholder and have informed them of the need to deliver a copy
of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under
the Securities Act).


 






     


     


    

 


Annex B


 


RESHAPE LIFESCIENCES INC.


 


Selling Stockholder Notice and Questionnaire


 


The undersigned
beneficial owner of common stock (the “Registrable Securities”) of ReShape Lifesciences Inc., a Delaware
corporation (the “Company”), understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”)
for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”),
of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration
Rights Agreement”) to which this document is annexed. A copy of the Registration Rights Agreement is available from
the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Registration Rights Agreement.


 


Certain
legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.


 


NOTICE


 


The undersigned
beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable
Securities owned by it in the Registration Statement.


 


The undersigned hereby provides the following information
to the Company and represents and warrants that such information is accurate:


 


QUESTIONNAIRE


 


		1.	Name.



 


		(a)	Full Legal Name of Selling Stockholder



 


		 



 


		(b)	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:



 


		 



 






    i 


     


    

 


		(c)	Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly
alone or with others has power to vote or dispose of the securities covered by this Questionnaire):



 


		 



 


		2.	Address for Notices to Selling Stockholder:



 


		 



		 



		 



	 	Telephone:	 



	 	Fax:	 



	 	Contact

                                                               Person:


	 



 


		3.	Broker-Dealer Status:



 


		(a)	Are you a broker-dealer?



 


Yes
 ̈     No
 ̈


 


		(b)	If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking
services to the Company?



 


Yes
 ̈     No
 ̈


 


Note:If “no” to
Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration
Statement.


 


		(c)	Are you an affiliate of a broker-dealer?



 


Yes
 ̈     No
 ̈


 


		(d)	If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities
in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements
or understandings, directly or indirectly, with any person to distribute the Registrable Securities?



 


Yes
 ̈     No
 ̈


 


Note:If “no” to
Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration
Statement.


 






    ii 


     


    

 


		4.	Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.



 


Except as set forth below
in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities
issuable pursuant to the Purchase Agreement.


 


		(a)	Type and Amount of other securities beneficially owned by the Selling Stockholder:



 





		 





		 


 


		5.	Relationships with the Company:



 


Except as set forth below,
neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.


 


State any exceptions here:


 





		 





		 


 


The undersigned
agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall
not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.


 


By signing
below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the
inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto.
The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment
of the Registration Statement and the related prospectus and any amendments or supplements thereto.


 


IN WITNESS
WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either
in person or by its duly authorized agent.


 


	Date:                                                                                 	 	Beneficial

Owner:                                                                                                       


 





	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


PLEASE SEND A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED
AND EXECUTED NOTICE AND QUESTIONNAIRE TO:


 






    iii