Exhibit 10.40


 


SECOND AMENDMENT TO CREDIT AGREEMENT


 


This Second Amendment
(this “Second Amendment”), dated as of September 14, 2020, is entered into by and among ReShape
Lifesciences Inc., a Delaware corporation (the “Borrower”), and Armistice Capital Master Fund Ltd. (the
 “Lender”).


 


WHEREAS, the Borrower
and the Lender entered into a Credit Agreement dated as of March 25, 2020, which was amended on March 31, 2020 (as amended,
the “Agreement”), and a Registration Rights Agreement dated as of March 25, 2020 (the “RRA”).


 


WHEREAS, pursuant to
Section 9.1(a) of the Agreement and Section 6(f) of the RRA, the Agreement and the RRA, respectively, may be
amended with the written consent of the Borrower and the Lender.


 


WHEREAS, capitalized
terms used herein but not otherwise defined shall have the meanings ascribed to them in the Agreement.


 


NOW THEREFORE, for
good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:


 


1.            Amendment
of Definition of Delayed Draw Term Loan Commitment. The definition of “Delayed Draw Term Loan Commitment” set forth
in Section 1.1 (Definitions) of the Agreement is hereby amended and restated in its entirety to read as follows:


 


“Delayed Draw Term Loan
Commitment means $3,000,000, of which $1,000,000 is subject to outstanding Delayed Draw Term Loans extended prior to the date
of this Second Amendment.”


 


2.            Amendment
of Definition of Maturity Date. The definition of “Maturity Date” set forth in Section 1.1 (Definitions) of
the Agreement is hereby amended and restated in its entirety to read as follows:


 


“Maturity Date means
(a) March 31, 2021 or (b) such earlier date on which the Commitments terminate pursuant to Section 8.”


 


3.            Amendment
to Section 2.1.2 of the Agreement. Section 2.1.2 (Delayed Draw Term Loan Commitments) is hereby amended to add the
following sentences at the end of such section:


 


“Lender agrees to make a Delayed Draw Term Loan
to Borrower on the date of this Second Amendment in an amount equal to $1,000,000. Accordingly, Borrower will be entitled to borrow
up to an additional $1,000,000 in Delayed Draw Term Loans after the date of this Second Amendment.”


 


4.            Amendment
of Definition of Filing Date in RRA. The definition of “Filing Date” set forth in Section 1 (Definitions)
of the RRA, dated March 25, 2020, between Borrower and Lender is hereby amended to replace the phrase “the 60th
calendar day following the date hereof” with “the 60th calendar day following the date of the Second Amendment.”


 


5.            Warrant
Issuance. As an inducement to Lender to enter into this Second Amendment and make the additional Delayed Draw Term Loans contemplated
hereby, Borrower will issue to Lender a warrant (the “Warrant”) to purchase an aggregate of 1,200,000 shares
of common stock of Borrower, par value $0.001 per share, at an exercise price equal to $3.25 per share, substantially in the form
of the Series G Common Stock Purchase Warrant issued by Borrower to Lender on March 25, 2020. The shares of Common Stock
issuable upon exercise of the Warrant will be considered “Warrant Shares” and, therefore, “Registrable Securities”
under the RRA.


 






     


     


    

 


6.             Miscellaneous.
  Except as expressly set forth hereunder, the terms and provisions of the Agreement and the RRA shall remain in full force and
effect after the execution of this Second Amendment and shall not be in any way changed, modified or superseded by the terms
set forth herein. This Second Amendment may be executed in several identical counterparts all of which shall constitute one
and the same instrument.


 


(Signature Page Follows)


 






     


     


    

 


IN WITNESS WHEREOF, the parties hereto
have caused this Second Amendment to Credit Agreement to be duly executed as of the day and year written above.


 


	BORROWER:	 	LENDER:
	 	 	 
	RESHAPE LIFESCIENCES INC.	 	ARMISTICE CAPITAL MASTER FUND LTD.
	 	 	 
	 	 	 
	By:	/s/ Barton P. Bandy	 	By:	/s/ Steven Boyd
	Name: Barton P. Bandy	 	Name: Steven Boyd
	Title: Chief Executive Officer	 	Title: CIO of Armistice Capital, LLC, the Investment Manager