Exhibit 4.7


 





DESCRIPTION
OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT

TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934


 


As
of the date of filing of the Annual Report on Form 10-K for the year ended December 31, 2019, GI Dynamics, Inc.’s (the “Company”)
class of common stock is registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).


 


The
following description of the Company;s common stock is a summary and does not purport to be complete. It is subject to and qualified
in its entirety by reference to the Company’s certificate of incorporation, as amended, and the Company’s bylaws,
each of which is incorporated herein by reference as an exhibit to the Annual Report on Form 10-K filed with the Securities and
Exchange Commission, of which this Exhibit 4.7 is a part. We encourage you to read the Company’s certificate of incorporation,
bylaws and the applicable provisions of the Delaware General Corporation law for additional information.


 


Authorized
and Outstanding Capital Stock


 


As
of March 20, 2020, the Company had 75,500,000 authorized shares of capital stock, par value $0.01 per share, of which 75,000,000
were shares of common stock and 500,000 were shares of “blank check” preferred stock.


 


Common
Stock


 


The
holders of the Company’s common stock will be entitled to one vote per share. In addition, the holders of common stock will
be entitled to receive pro rata dividends, if any, declared by the Company’s board of directors out of legally available
funds; however, the Company expects that the board of directors will retain earnings, if any, for operations and growth. Upon
liquidation, dissolution or winding-up, the holders of common stock will be entitled to share ratably in all assets that are legally
available for distribution. The holders of common stock will have no preemptive, subscription, redemption or conversion rights.
The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights
of the holders of any series of preferred stock, which may be designated solely by action of the board of directors and issued
in the future.


 


Anti
- takeover Provisions 


 


As
a foreign company registered in Australia, the Company will not be subject to Chapters 6A, 6B and 6C of the Australian Corporations
Act dealing with the acquisition of shares.


 


Provisions
of the Delaware General Corporation Law, the Company’s certificate of incorporation and bylaws could make it more difficult
to acquire the Company by means of a tender offer (takeover), a proxy contest or otherwise, or to remove incumbent officers and
directors. These provisions, summarized below, are expected to discourage certain types of coercive takeover practices and takeover
bids that the board of directors may consider inadequate and to encourage persons seeking to acquire control of the Company to
first negotiate with the board of directors. The Company believes that the benefits of increased protection of its ability to
negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure the Company outweigh the disadvantages
of discouraging takeover or acquisition proposals because, among other things, negotiation of these proposals could result in
an improvement of their terms.


 


Delaware
anti-takeover statute — Delaware General Corporation Law prohibits a publicly held Delaware corporation from engaging
in a “business combination” with an “interested shareholder” for a period of three years following the
time the person became an interested shareholder, unless the business combination or the acquisition of shares that resulted in
a shareholder becoming an interested shareholder is approved in a prescribed manner. A “business combination” can
include a merger, asset or share sale or other transaction resulting in a financial benefit to an interested shareholder. Generally,
an interested shareholder is a person who, together with its affiliates and associates, owns (or within three years prior to the
determination of interested shareholder status did own) 15% or more of a corporation’s voting shares. The existence of this
provision would be expected to have an anti-takeover effect with respect to transactions not approved in advance by the board
of directors, including discouraging attempts that might result in a premium over the market price for the Company’s common
stock held by shareholders.


 






     


     


    

 


Classified
board — The Company’s certificate of incorporation and bylaws provide that the board of directors is divided into
three classes.


 


Directors
for each class will be eligible for re-election at our annual meeting held in the year in which the term for that class expires
and, if re-elected, will serve for a term of three years. The election of directors will be determined by a plurality of the votes
cast by the shareholders entitled to vote at the election. Under this mechanism, shareholders are effectively not provided with
the option to vote ‘against’ the proposed resolutions to re-elect directors. The two nominees receiving the highest
number of ‘for’ votes will be elected as directors. Shareholders who withhold their vote or vote against a director
being re-elected would not be counted as votes cast and have no effect on the re-election of directors.


 


Under
the classified board provisions, it would take at least two elections of directors for any individual or group to gain control
of the board of directors. Accordingly, these provisions could discourage a third party from initiating a proxy contest, making
a tender offer or otherwise attempting to gain control of us.


 


Removal
of directors — The Company’s bylaws provide that shareholders may only remove directors with cause.


 


Amendment
— The Company’s certificate of incorporation and bylaws provide that the affirmative vote of the holders of at
least a majority of the Company’s voting shares is required to amend either of these documents.


 


Size
of the Board and Board vacancies — The Company’s certificate of incorporation and bylaws provide that the number
of directors on the board of directors is to be fixed exclusively by the board of directors. Newly created directorships resulting
from any increase in the authorized number of directors or any vacancies will be filled by a majority of the remaining directors
in office, unless otherwise required by law or by resolution of the board of directors.


 


Special
shareholder meetings — The Company’s certificate of incorporation and bylaws provide that special meetings of
shareholders may be called by either a majority of the board of directors or by the holders of at least a majority of the Company’s
voting shares.


 


Requirements
for advance notification of shareholder nominations and proposals — The Company’s bylaws establish advance notice
procedures with respect to shareholder proposals and nomination of candidates for election as directors other than nominations
made by or at the direction of the board of directors or a committee of the board of directors.


 


No
cumulative voting — The Delaware General Corporation Law provides that shareholders are denied the right to cumulate
votes in the election of directors unless the Company’s certificate of incorporation provides otherwise. The Company’s
certificate of incorporation does not provide for cumulative voting.


 


Undesignated
preferred stock — The authority possessed by the board of directors (subject to the ASX Listing Rules and Delaware General
Corporation Law) to issue preferred stock could potentially be used to discourage attempts by third parties to obtain control
of the Company through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult or more costly.
The board of directors may (subject to the ASX Listing Rules and Delaware General Corporation Law) issue preferred stock with
conversion rights that, if exercised, could adversely affect the voting power of the shareholders.


 


Authorized
but unissued shares — Subject to the limitations on the issue of securities under the ASX Listing Rules and Delaware
General Corporation Law, the authorized but unissued common stock and preferred stock will be available for future issue without
shareholder approval. The Company may use additional shares of common stock for a variety of purposes, including future public
offerings to raise additional capital, to fund acquisitions and as employee compensation. The existence of authorized but unissued
common stock and preferred stock could render more difficult, or discourage, an attempt to obtain control of the Company by means
of a proxy contest, tender offer, merger or otherwise.


 



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CHESS
Depositary Interests, or CDIs


 


In
order for the Company’s common stock to trade electronically on ASX, the Company participates in the electronic transfer
system known as CHESS operated by ASX Settlement.


 


CHESS
cannot be used directly for the transfer of securities of companies domiciled in certain foreign jurisdictions, such as the U.S.
Accordingly, to enable the Company’s common stock to be cleared and settled electronically through CHESS, the Company issues
depositary interests called CHESS Depositary Interests, or CDIs.


 


CDIs
confer the beneficial ownership in foreign securities such as the common stock on the CDI holder, with the legal title to such
common stock being held by an Australian depositary entity. The Company has appointed CDN, a subsidiary of ASX, to act as the
Company’s Australian depositary. Accordingly, by completing an Application Form, an Applicant will apply for shares of common
stock to be issued to CDN, which will in turn issue CDIs to the Applicant.


 


Each
CDI holder will receive a holding statement which sets out the number of CDIs held by the CDI holder and the reference number
of the holding. These holding statements will be provided to a holder when a holding is first established and where there is a
change in the holdings of CDIs.


 


The
Company operates a certificated register of common stock in the U.S. and an uncertificated issuer sponsored sub-register of CDIs
and an uncertificated CHESS sub-register of CDIs in Australia. The Company’s issuer-sponsored sub-register will be maintained
by Link Market Services Limited. The certificated register is the register of legal title (and will reflect legal ownership by
CDN of the shares of common stock underlying the CDIs) and the two uncertificated sub-registers combined will make up the register
of beneficial title of the shares of common stock underlying the CDIs.


 


A
summary of the rights and entitlements of CDI holders in the Company and CDI holders generally is set out below. Further information
about CDIs is available from ASX, any stockbroker or our share registry.


 


CDI:
Common Stock ratio


 


Each
CDI represents an interest in one-fiftieth of a share of common stock.


 


Voting


 


If
holders of CDIs wish to attend and vote at the Company’s general meetings, they will be able to do so. Under the ASX Listing
Rules, the Company, as an issuer of CDIs, must allow CDI holders to attend any meeting of the holders of shares of common stock
unless relevant U.S. law at the time of the meeting prevents CDI holders from attending those meetings.


 


In
order to vote at such meetings, CDI holders have the following options:


 


		a)	instructing
                                         CDN, as the legal owner, to vote the shares of common stock underlying their CDIs in
                                         a particular manner. A voting instruction form will be sent to CDI holders with the notice
                                         of meeting or proxy statement for the meeting and this must be completed and returned
                                         to the Company’s share registry prior to the meeting;



 


		b)	informing
                                         the Company that they wish to nominate themselves or another person to be appointed as
                                         CDN’s proxy with respect to their shares of common stock underlying the CDIs for
                                         the purposes of attending and voting at the general meeting; or



 


		c)	converting
                                         their CDIs into a holding of shares of common stock and voting these at the meeting (however,
                                         if thereafter the former CDI holder wishes to sell their investment on ASX it would be
                                         necessary to convert the shares of common stock back to CDIs). In order to vote in person,
                                         the conversion must be completed prior to the record date for the meeting. See below
                                         for further information regarding the conversion process.



 






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As
holders of CDIs will not appear on the Company’s share register as the legal holders of the shares of common stock, they
will not be entitled to vote at the Company’s shareholder meetings unless one of the above steps is undertaken. Proxy forms,
CDI voting instruction forms and details of these alternatives will be included in each notice of meeting sent to CDI holders
by the Company.


 


Converting
from a CDI holding to a direct holding of shares of Common Stock


 


CDI
holders who wish to convert their ASX listed CDIs to shares of common stock can do so by instructing the Company’s share
registry either:


 


		●	directly
                                         in the case of CDIs on the issuer sponsored sub-register operated by the Company. CDI
                                         holders will be provided with a “Notice of Transmutation” for completion
                                         and return to the Company’s share registry; or



 


		●	through
                                         their sponsoring participant (usually their broker) in the case of CDIs which are sponsored
                                         on the CHESS sub-register. In this case, the sponsoring broker will arrange for completion
                                         of the relevant form and its return to the Company’s share registry.



 


The
Company’s share registry will then arrange for the shares of common stock to be transferred from CDN into the name of that
holder and a new share certificate will be issued. This will cause the shares of common stock to be registered in the name of
the holder on the Company’s share register and trading on ASX will no longer be possible. The shares of common stock are
not and will not in the near future be quoted on any market in the U.S. Any shares so issued will bear restrictive legends in
accordance with U.S. law.


 


The
Company’s share registry will not charge an individual security holder a fee for transferring CDI holdings into shares of
common stock (although a fee will be payable by market participants). It is expected that this process will be completed within
2 days, provided that the Company’s share registry is in receipt of a duly completed and valid Notice of Transmutation.
However, no guarantee can be given about the time for this conversion to take place. If the shares of common stock are listed
on a U.S. securities exchange in the future, a fee may be payable for entering the shares of common stock into the Depository
Trust Company or Direct Registration System.


 


If
holders of the shares of common stock wish to convert their holdings to CDIs, they can do so by contacting the Company’s
share registry. The Company’s share registry will not charge a fee to a holder of shares of common stock seeking to convert
such shares to CDIs (although a fee will be payable by market participants).


 


Communication
with CDI holders


 


CDI
holders will receive all notices and company announcements (such as annual reports) that shareholders are entitled to receive
from the Company.


 


Dividends
and other shareholder entitlements


 


The
ASX Settlement Operating Rules have the force of law by virtue of the Australian Corporations Act. These rules grant CDI holders
the right to receive any dividends and other entitlements, which attach to the shares of common stock. Despite legal title to
the shares of common stock being vested in CDN, the ASX Settlement Operating Rules provide that CDI holders are to receive all
direct economic benefits and other entitlements in relation to the underlying shares of common stock (such as the right to receive
the same dividends and entitlement to participate in rights issues and bonus issues).


 






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Local
and international trading in CDIs


 


CDI
holders who wish to trade their CDIs will be transferring the beneficial interest in the shares of common stock rather than the
legal title. The transfer will be settled electronically by delivery of the relevant CDI holdings through CHESS. In other respects,
trading in CDIs is essentially the same as trading in other CHESS approved securities, such as shares in an Australian company.


 


Takeovers


 


If
a takeover bid or similar transaction is made in relation to the shares of common stock of which CDN is the registered holder,
under the ASX Settlement Operating Rules, CDN must not accept the offer made under the takeover bid except to the extent that
acceptance is authorized by the relevant CDI holder.


 


Rights
on liquidation or winding up


 


If
the Company liquidates, dissolves or winds up, a CDI holder will be entitled to the same economic benefit on their CDIs as the
Company’s shareholders.


 


Limitations
on Liability, Indemnification of Officers and Directors and Insurance


 


The
Delaware General Corporation Law authorizes corporations to limit or eliminate, subject to specified conditions, the personal
liability of directors to corporations and their shareholders for monetary damages for breach of their fiduciary duties. The Company’s
certificate of incorporation limits the liability of the Company’s directors to the fullest extent permitted by Delaware
law.


 


The
Company has obtained director and officer liability insurance to cover liabilities the Company’s directors and officers
may incur in connection with their services to the Company. The Company’s certificate of incorporation and bylaws also provide
that the Company will indemnify and advance expenses to any of its directors and officers who, by reason of the fact that he or
she is one of the Company’s officers or directors, is involved in a legal proceeding of any nature. The Company will repay
certain expenses incurred by a director or officer in connection with any civil, criminal, administrative or investigative action
or proceeding, including actions by the Company in its name. Such indemnifiable expenses include, to the maximum extent permitted
by law, attorney’s fees, judgments, fines, settlement amounts and other expenses reasonably incurred in connection with
legal proceedings. A director or officer will not receive indemnification if he or she is found not to have acted in good faith
and in a manner he or she reasonably believed to be in, or not opposed to, the Company’s best interests.


 


The
Company has entered into agreements to indemnify its directors to the extent permitted by law and the Company’s certificate
of incorporation and bylaws. The Company believes that these provisions and agreements are necessary to attract and retain qualified
persons as directors.


 


Such
limitation of liability and indemnification does not affect the availability of equitable remedies. In addition, the Company has
been advised that in the opinion of the SEC, indemnification for liabilities arising under the Securities Act is against public
policy as expressed in the Securities Act and is therefore unenforceable. 


 


Listing


 


GI
Dynamics CDIs, each representing one-fiftieth of one share of GI Dynamics common stock after giving effect to the April 9,
2015 1:10 reverse stock split, have been listed on the ASX under the trading symbol “GID” since September 7,
2011. Prior to such time there was no public market for the Company’s securities.


 


Transfer
Agent and Registrar


 


The
Company’s transfer agent and registrar for its common stock is American Stock Transfer & Trust Company, LLC, 6201 15th
Avenue, Brooklyn, New York 11219. The Company’s registar for its CDIs is Link Market Services Limited, Level 12, 680 George
Street, Sydney NSW 2000.


 




 


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