Document:

Exhibit 10.4

 

THIS UNSECURED CONVERTIBLE
PROMISSORY NOTE (THIS “NOTE”) AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED
OR HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING THE SECURITIES
REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. THE ISSUER OF THESE SECURITIES MAY REQUIRE
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER OTHERWISE COMPLIES WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS OR LAWS OF ANY OTHER RELEVANT COUNTRY.

 

UNSECURED CONVERTIBLE PROMISSORY
NOTE

 

	US$4,596,893	August 21, 2019
	 	Boston, Massachusetts

 

For
value received, GI Dynamics, Inc., a Delaware corporation (“Payor”), hereby promises to pay
to the order of Crystal Amber Fund Limited (the “Holder”),
an aggregate principal sum of Four Million Five Hundred Ninety-Six Thousand Eight Hundred Ninety Three Dollars (US$4,596,893),
or such lesser amount as may be advanced and outstanding pursuant to Section 1(d) hereof, or such greater amount as shall
become due after giving effect to Section 2(b) or 2(c) hereof, with interest on the outstanding principal amount
at the rate of ten percent (10%) per annum. Interest (i) shall commence with the date of receipt by Payor of the Advance Amount
(as defined below) on the Funding Date (as defined below) and shall be compounded annually based on a 365-day year, and (ii) shall
continue on the outstanding principal until paid in full or, if permitted by the terms of the Note, converted pursuant to Section
2 below.

 

1. Payment
and Maturity

 

(a) Reference
is hereby made to the Securities Purchase Agreement (the “Purchase Agreement”), dated as of even date
herewith, between Payor and the Holder. Capitalized terms used herein and not otherwise defined herein shall have the respective
meanings given to them in the Purchase Agreement.

 

(b) If
this Unsecured Convertible Promissory Note (this “Note”) has not already been paid in full or, if permitted
by the terms of this Note, converted in accordance with the terms of Section 2(a) below, the entire outstanding principal
balance of this Note and all unpaid accrued interest thereon shall be due and payable on the date which is the fifth anniversary
of the Funding Date (the “Maturity Date”). All payments of interest and principal shall be in
lawful money of the United States of America. All payments shall be applied first to accrued interest, and thereafter to principal.
If any payments on this Note become due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such
payment shall be made on the next succeeding business day and such extension of time shall be included in computing interest in
connection with such payment.

 

    1.

     

    

 

(c) Upon
the occurrence and during the continuance of any Event of Default, the principal balance of this Note shall bear interest at the
rate of sixteen percent (16%) per annum, including after the commencement of, and during the pendency of, any bankruptcy or other
insolvency proceeding.

 

(d) Subject
to the terms of this Note, the Holder shall make an advance (the “Advance”) to Payor on December 6, 2019
(or such earlier or later date as may be requested by Payor) (the “Funding Date”) in an amount equal
to Four Million Five Hundred Ninety-Six Thousand Eight Hundred Ninety Three Dollars (US$4,596,893), or such lesser amount as may
be set forth in a notice delivered by Payor to the Holder not later than five (5) days prior to the Funding Date (the “Advance
Amount”). Notwithstanding the foregoing, no Advance shall be made during the continuance of any Event of Default. 
In such an event, Advance to Payor may resume on the third (3rd) day, and shall resume no later than the seventh (7th)
day, following the Holder’s receipt of notice delivered by Payor affirming that Payor has cured its Event of Default. 
The parties shall cause Schedule A to be updated as of the Funding Date. For the avoidance of doubt, the Holder and Payor may jointly
waive any requirement set forth in this Section 1(d), provided, however, that only the Payor may waive the Holder’s obligation
to deliver the Advance Amount.

 

2. Conversion

 

(a) Optional
Conversion. Subject to Section 2(c) and Section 6(c) of this Note, the Holder shall have the option (the “Conversion
Option”), but not the obligation, at any time after the Funding Date and prior to the Maturity Date, exercisable
upon written notice to Payor, to (a) convert all (but not less than all) of the then outstanding unpaid principal amount of this
Note together with any interest accrued but unpaid thereon (such principal amount and interest, the “Outstanding Amount”)
into the number of CDIs equal to the quotient obtained by dividing (x) the Outstanding Amount by (y) US$0.02 (such conversion price,
the “Conversion Price”). In lieu of receiving CDIs, upon exercising the Conversion Option, the Holder
may elect to instead receive the corresponding number of shares of Common Stock for the CDIs to be issued upon such conversion.

 

(b) Change
of Control. Upon the consummation of a Change of Control prior to the Maturity Date, the Holder may, at its option, (i) receive
an amount in cash equal to all unpaid interest that has accrued to date hereunder and 110% of the then outstanding unpaid principal
amount of this Note in full satisfaction of all obligations under the Note, or (ii) subject to the provisions of Section
2(c) and Section 6(a) hereof, retain the Note, including, without limitation, the Conversion Option set forth in Section
2(a) hereof. A “Change of Control” means any transaction or series of related transactions that could
result in any of the following: (i) the sale of all or substantially all of the assets of Payor to any person or related group
of persons (other than the Holder or a person that directly or indirectly controls, is controlled by, or is under common control
with, the Holder), (ii) the acquisition, directly or indirectly, by any person or related group of persons (other than Payor or
the Holder or a person that directly or indirectly controls, is controlled by, or is under common control with, Payor or the Holder)
of beneficial ownership of securities possessing more than fifty percent (50%) of the total combined voting power of the Payor’s
outstanding securities pursuant to a tender or exchange offer made directly to Payor’s stockholders, (iii) a merger or consolidation
of Payor, other than for the purpose of re-domiciling Payor, unless following such transaction or series of transactions, the holders
of Payor’s securities prior to the first such transaction continue to hold more than fifty percent (50% percent) of the voting
rights and equity interests in the surviving entity, (iv) a recapitalization, reorganization or other transaction involving Payor
that constitutes or results in a transfer of more than one-third of the equity interests in Payor, unless following such transaction
or series of transactions, the holders of Payor's securities prior to the first such transaction continue to hold more than fifty
percent (50%) of the voting rights and equity interests in the surviving entity or acquirer or (v) the execution by Payor or its
controlling stockholders of an agreement providing for or reasonably likely to result in any of the foregoing events.

 

    2.

     

    

 

(c) Stockholder
Approval. Notwithstanding anything to the contrary contained herein or in the Purchase Agreement, in the event that the rules
of the Australian Securities Exchange (“ASX”) (or any other exchange on which the CDIs or Common Stock
is then traded) require Payor to obtain stockholder approval to issue CDIs pursuant to Section 2(a) hereof, Payor shall
use its commercially reasonable efforts to convene a meeting of stockholders on or prior to December 31, 2019 to seek approval
to issue those CDIs or Common Stock. If such approval is not obtained at such meeting, the Holder shall instead become entitled
to receive an amount in cash equal to all unpaid (and unconverted) interest that has accrued to date hereunder and 110% of the
then outstanding unpaid (and unconverted) principal amount of this Note in full satisfaction of all obligations under the Note,
and such amounts shall be due and payable upon the earlier of (i) the Maturity Date, or (ii) the date that is six months following
the date of the stockholders’ meeting at which such approval is not obtained. For the avoidance of doubt, while Payor is
listed on the ASX and the rules of the ASX require Payor to obtain stockholder approval to issue CDIs, no conversion may occur
under this Note, and no CDIs or Common Stock may be issued pursuant to Section 2(a) hereof, unless and until Payor has obtained
stockholder approval pursuant to this Section 2(c).

 

(d) Fractional
Shares and Conversion Process. No fractional shares of Payor’s capital stock will be issued upon conversion of this Note.
In lieu of any fractional share to which the Holder would otherwise be entitled, Payor will pay to the Holder in cash the amount
of the unconverted principal and interest balance of this Note that would otherwise be converted into such fractional share. Upon
valid conversion of this Note pursuant to Section 2, the Holder shall surrender this Note, duly endorsed, at the principal
offices of Payor and Payor must, if the CDIs are quoted on the ASX, do the following:

 

	(i)	allot and issue to CHESS Depositary Nominees Pty Ltd (“CDN”) the number
of shares of Common Stock underlying the CDIs the subject of the conversion notice and procure CDN to allot and issue to the Holder
the number of CDIs representing the Common Stock issued to CDN under this provision;

 

	(ii)	enter CDN into Payor’s register of members as the holder of the relevant number of shares
of Common Stock and procure CDN to enter the Holder into the register of CDI holders as the holder of the relevant number of CDIs;

 

    3.

     

    

 

	(iii)	deliver to the Holder a holding statement showing the Holder as the holder of the relevant number
of CDIs;

 

	(iv)	apply for, and use its reasonable efforts to obtain, official quotation of the relevant number
of CDIs (and underlying shares of Common Stock) on ASX as soon as practicable; and

 

	(v)	deliver to the Holder a check payable to Holder for any cash amounts payable as a result of any
fractional shares.

 

If, at the time of conversion, CDIs are
no longer quoted on ASX, then on conversion of the Note Payor must issue directly to the Holder the number of shares of Common
Stock over which the Note is convertible into and must procure that those shares be listed for trading on any securities exchange
on which Payor’s Common Stock is tradeable and deliver to the Holder a check payable to Holder for any cash amounts payable
as a result of any fractional shares.

 

(e) Holder
Representations and Warranties; Transfer and Assignment. The representations and warranties and rights and obligations of transfer
and assignment of Holder that are set forth in Section 4 of the Purchase Agreement with respect to the shares of Common
Stock or CDIs issuable to Holder are hereby made a part of this Note and incorporated herein by this reference.

 

(f) Restriction
on Transfer. Notwithstanding any other provision of this Note or the Purchase Agreement, the Holder may not sell or transfer
any shares of Common Stock or CDIs issued to the Holder pursuant to Section 2(a) hereof (“Restricted Securities”),
or grant, issue or transfer interests in, or options over, any Restricted Securities, at any time within 12 months after the issue
of those Restricted Securities (“Restricted Period”) except as permitted by section 708 or any other
applicable section of the Corporations Act 2001 (Cth).  Before commencement of the Restricted Period, to prevent any
such restricted dealings in the Restricted Securities during the Restricted Period, the Holder agrees to (i) the application of
a holding lock to the Restricted Securities by Payor’s securities registry for the Restricted Period, and (ii) enter into
any other documents reasonably necessary to prevent any such restricted dealings in the Restricted Securities during the Restricted
Period.

 

3. Default;
Remedies

 

(a) The
occurrence of any Event of Default described in Section 5.1 of the Purchase Agreement shall be an Event of Default hereunder.

 

(b) Upon
the occurrence and during the continuance of any Event of Default, all unpaid principal on this Note, accrued and unpaid interest
thereon and all other amounts owing hereunder shall, at the option of the Holder, and, upon the occurrence of any Event of Default
pursuant to Sections 5.1(b), (c) or (d) of the Purchase Agreement, automatically, be immediately due, payable and collectible by
Holder pursuant to applicable law.

 

(c) Upon
the occurrence and during the continuance of any Event of Default, Payor shall pay, on demand, all reasonable attorneys’
fees and court costs incurred by Holder in enforcing and collecting this Note.

 

    4.

     

    

 

4. Prepayment. Subject
to Section 1(d), Payor may not prepay this Note prior to the Maturity Date without the consent of the Holder, except
to the extent permitted pursuant to Section 2(b) and Section 2(c) hereof.

 

5. Non-Transferable.
The Holder may not sell or transfer this Note, or grant, issue or transfer interests in, or options over, this Note at any
time within 12 months after the date hereof except as permitted by section 708 or any other applicable section of the Corporations
Act 2001 (Cth).

 

6. Fundamental
Transactions; Corporate Events.

 

(a) Fundamental
Transactions. If, at any time while this Note is outstanding, (i) Payor effects any merger or consolidation of Payor with or
into another person pursuant to which the Common Stock is effectively converted and exchanged, (ii) Payor effects any sale of all
or substantially all of its assets in one or a series of related transactions pursuant to which the Common Stock is effectively
converted and exchanged, (iii) any tender offer or exchange offer (whether by Payor or another person) is completed pursuant to
which at least a majority of the outstanding Common Stock is tendered and exchanged for other securities, cash or property or (iv)
Payor effects any reclassification 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 (other than as a result of a subdivision or combination of shares
of Common Stock) (in any such case, a “Fundamental Transaction”), then prior to any subsequent conversion
of this Note, and subject to the provisions of Section 2(b) hereof, the Holder shall be entitled to require the surviving
entity to issue to the Holder an instrument identical to this Note (with an appropriate adjustment to the conversion price(s))
such that the Holder may receive stock (or a beneficial interest in stock) of the surviving company’s stock. Subject to the
provisions of Section 2(b) hereof, the terms of any agreement pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (a) and insuring
that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

 

(b) Notice
of Corporate Events. If Payor (i) declares a dividend or any other distribution of cash, securities or other property in respect
of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any shares of
Payor or any subsidiary, (ii) authorizes and publicly approves, or enters into any agreement contemplating or solicits stockholder
approval for any Fundamental Transaction or (iii) publicly authorizes the voluntary dissolution, liquidation or winding up of the
affairs of Payor, then Payor shall deliver to the Holder a notice describing the material terms and conditions of such transaction,
at least ten (10) business days prior to the applicable record or effective date on which a person would need to hold Common Stock
or CDIs in order to participate in or vote with respect to such transaction, and Payor will take all steps reasonably necessary
in order to insure that the Holder is given the practical opportunity to convert this Note prior to such time so as to participate
in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall
not affect the validity of the corporate action required to be described in such notice.

 

    5.

     

    

 

(c) Subsequent
Equity Sales. Notwithstanding any provision of this Note to the contrary, in the event that Payor issues any CDIs or Common
Stock or any security that is exchangeable or convertible into CDIs or Common Stock (“Additional Securities”)
after the date hereof at a price per CDI (or the equivalent for shares of Common Stock) that is less than the Conversion Price
(or the equivalent for shares of Common Stock) in an equity financing, then the Conversion Price shall be reduced to the lowest
price per CDI (or the equivalent for shares of Common Stock) at which any Additional Security was issued or sold or deemed to be
issued or sold. Payor agrees that it will provide a notice to the Holder describing the material terms and conditions of any issuance
of Additional Securities promptly after the issuance thereof. For the avoidance of doubt, the price per CDI (or the equivalent
for shares of Common Stock) at which any Additional Securities are issued by Payor to the Holder after the date hereof, including,
without limitation, upon conversion into CDIs or Common Stock of the Senior Secured Convertible Promissory Note, dated June 15,
2017, and amended December 31, 2018, March 31, 2019, April 30, 2019, June 30, 2019 and of even date herewith, will have no effect
on the Conversion Price.

 

7. Waiver;
Payment of Fees and Expenses. Payor waives presentment and demand for payment, notice of dishonor, protest and
notice of protest of this Note, and shall pay all costs of collection when incurred, including, without limitation,
reasonable attorneys’ fees, costs and other expenses. The right to plead any and all statutes of limitations as a
defense to any demands hereunder is hereby waived to the full extent permitted by law. No delay by the Holder shall
constitute a waiver, election or acquiescence by it.

 

8. Cumulative
Remedies. The Holder’s rights and remedies under this Note and the Purchase Agreement shall be cumulative.
No exercise by the Holder of one right or remedy shall be deemed an election, and no waiver the by Holder of any Event of
Default shall be deemed a continuing waiver of such Event of Default or the waiver of any other Event of Default.

 

9. Miscellaneous

 

(a) Governing
Law. The terms of this Note shall be construed in accordance with the laws of the State of New York, as applied to contracts
entered into by New York residents within the State of New York, and to be performed entirely within the State of New York.

 

(b) Exclusive
Jurisdiction. All actions and proceedings arising out of, or relating to, this Agreement shall be heard and determined in any
state or federal court sitting in the State of New York, County of New York. The undersigned, by execution and delivery of this
Agreement, expressly and irrevocably consent and submit to the personal jurisdiction of any of such courts in any such action or
proceeding; and (ii) waive any claim or defense in any such action or proceeding based on any alleged lack of personal jurisdiction,
improper venue or forum non conveniens or any similar basis.

 

(c) Successors
and Assigns; Assignment. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Payor may not assign this Note or delegate any of its obligations hereunder without the
written consent of the Holder. Subject to Section 5 hereof, the Holder may assign this Note and its rights hereunder without
the consent of Payor, subject to compliance with Section 4 of the Purchase Agreement.

 

    6.

     

    

 

(d) Titles
and Subtitles. The titles and subtitles used in this Note are used for convenience only and are not to be considered in construing
or interpreting the Note.

 

(e) Notices.
All notices required or permitted hereunder by the Holder of this Note to Payor shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the principal offices of Payor, to the attention of the Chief Executive Officer, (b)
five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (c) one
(1) day after deposit with a nationally recognized overnight courier, specifying next day delivery. Any refusal of delivery of
a notice by Payor shall be deemed to have been delivered.

 

(f) Amendment;
Modification; Waiver. No term of this Note may be amended, modified or waived without the written consent of Payor and the
Holder provided that, while Payor is admitted to the Official List of the ASX, any amendment, modification or waiver must not contravene
the ASX Listing Rules.

 

(g) Counterparts. This
Note may be executed in two or more counterparts, each of which shall be deemed and original, but all of which together shall
constitute one and the same instrument.

 

(h) Voting
Rights. This Note does not carry any voting rights at stockholder meetings of Payor unless and until the Note is converted.

 

(i) Participation
Rights. The Holder is not by virtue of holding this Note entitled to participate in any new issue of securities made by
Payor to stockholders without first converting the Note.

 

(j) Equal
Ranking. The Common Stock and CDIs issued pursuant to a conversion of this Note will rank, from the date of issue, equally
with the existing shares of Common Stock and CDIs of Payor in all respects.

 

(k) Reorganisations. While
Payor is admitted to the Official List of the ASX, the rights of the Holder will be changed to the extent necessary to comply
with the ASX Listing Rules applying to a reorganization of Payor’s capital at the time of the reorganization.

 

[Signature page follows]

 

    7.

     

    

 

In Witness Whereof,
the parties have executed this Convertible Promissory Note as of
the date first written above.

 

	 	GI Dynamics, Inc.
	 	 
	 	By:	                    
	 	Name: Scott Schorer
	 	Title: Chief Executive Officer

 

Agreed to and Accepted:

 

Crystal Amber Fund
Limited

 

	By:	 	 

 

Name: Laurence McNairn

Title: Director

Executed by Crystal Amber Asset Management (Guernsey) Ltd

as Investment Manager of Crystal Amber Fund Limited

 

     

     

    

 

SCHEDULE A

 

ADVANCE (in US$)

 

	Advance Date	 	Advance Amount
	 	 	 

 

Will be determined on draw dateExhibit 10.5

 

 

THIS WARRANT AND THE SECURITIES ISSUABLE
UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED
UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.
HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE
OR TRANSFER OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR LAWS OF ANY OTHER RELEVANT COUNTRY.

 

Warrant
to purchase Chess Depositary Interests 

 

Issue Date: _________,
2019

 

This Warrant to Purchase
CHESS Depositary Interests (the “Warrant”) certifies that, for good and valuable consideration, Crystal
Amber Fund Limited (along with its permitted assignees, the “Holder”) is entitled to, and
GI Dynamics, Inc., a Delaware
corporation (the “Company”), hereby grants the Holder the right to, purchase, as of the date of issuance
set forth above (the “Issue Date”), up to such number of fully paid and non-assessable CHESS Depositary
Interests (with each CDI representing 1/50th of a share of the Company’s common stock, par value $0.01 per share
(the “Common Stock”)) (the “CDIs”) as determined pursuant to Section 1(a)
below, at a price per CDI equal to the Exercise Price (as defined below), subject to the provisions and upon the terms and conditions
set forth in this Warrant. This Warrant is issued pursuant to the Securities Purchase Agreement (the “Purchase Agreement”),
dated as of August 21, 2019, by and between the Company and the Holder.

 

1.
Number of CDIs; Exercise Price

 

(a)
Number of CDIs. Subject to the terms of that certain Unsecured Convertible Promissory Note issued by the Company
to the Holder on August 21, 2019 (the “Note”), upon receipt of the Advance (as defined in the Note) by
the Company pursuant to the Note, and with effect from the Issue Date, this Warrant automatically shall become exercisable for
the number of CDIs set forth on Schedule A hereto, which amounts represent a proportionate number of shares of Common Stock
set forth on Schedule A. All CDIs for which this Warrant becomes exercisable from time to time pursuant to this Paragraph
1(a), and as may be adjusted from time to time in accordance with the provisions of this Warrant, are referred to herein cumulatively
and collectively as the “Warrant CDIs.”

 

(b)
Exercise Price. With respect to each Warrant CDI for which this Warrant becomes exercisable pursuant to Paragraph
1(a) above, the purchase price therefor (the “Exercise Price”) shall be US$0.02.

 

     

     

    

 

2.
Exercise; Payment. 

 

(a)
Method of Exercise. This Warrant may be exercised by the Holder at any time during the term (as set forth in Section
8) and in compliance with the provisions of this Warrant for all or any part of the Warrant CDIs, by the surrender of this
Warrant together with the duly executed notice of exercise form attached hereto as Exhibit A (the “Notice of
Exercise”) at the principal office address of the Company. If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the Holding Statement or the book entry notice pursuant to Section 2(e), deliver
to the Holder a new Warrant evidencing the rights of the Holder to purchase the then unpurchased, or remaining but not yet available
for issuance, Warrant CDIs, which new Warrant shall in all other respects be identical to this Warrant, or at the request of the
Holder, appropriate notation may be made on this Warrant and the same returned to the Holder.

 

(b)
Cash Exercise. Upon exercise of this Warrant, the Holder shall pay the Company an amount (“Exercise Payment”)
equal to the product of the Exercise Price multiplied by the total number of Warrant CDIs purchased pursuant to such exercise
of this Warrant, by wire transfer of immediately available funds or check payable to the order of the Company. In the manner set
out in Paragraph (e) below, the Holder shall be deemed to have become the holder of record of, and shall be treated for all purposes
as the record holder of, the Warrant CDIs represented by such exercise (and such Warrant CDIs shall be deemed to have been issued)
immediately prior to the close of business on the date upon which the Exercise Payment is paid to the Company.

 

(c)
Net Exercise. The Exercise Payment also may be paid at the Holder’s election by surrender of all or a portion
of the Warrant for the Warrant CDIs to be exercised under this Warrant (“Net Exercise”). If the Holder
elects the Net Exercise method, the Company will issue Warrant CDIs in accordance with the following formula:

 

X = Y(A-B)

    A

 

Where:

 

X = the number
of Warrant CDIs to be issued upon the Net Exercise of the Warrant

 

Y = the number
of Warrant CDIs to be surrendered

 

A = the fair
market value of one (1) CDI on the date of exercise of this Warrant

 

B = the Exercise
Price

 

    -2-

     

    

 

For purposes of the
above calculation, fair market value of CDIs shall mean the following (“Fair Market Value”):

 

(i)
if CDIs are then quoted on the Australian Securities Exchange (“ASX”), then the Fair Market Value per
share of one (1) CDI shall be equal to the volume weighted average closing price of the Company’s CDIs on the ASX for the
five (5) trading days ending immediately prior to the business day on which the Company receives the Holder’s written Notice
of Exercise (regardless if received during the trading hours or after);

 

(ii)
if CDIs are not then quoted on the ASX, then if the Company’s Common Stock is traded on another national securities
exchange, the Fair Market Value of the CDIs shall be equal to the result obtained by dividing (A) the volume weighted average
closing price of the Company’s Common Stock on such securities exchange for the five (5) trading days ending immediately
prior to the business day on which the Company receives the Holder’s written Notice of Exercise (regardless if received during
the trading hours or after), by (B) the number of CDIs (or fraction thereof) which equal an interest in exactly one share of Common
Stock on such dates;

 

(iii)
if CDIs are not then quoted on the ASX and the Common Stock is not then traded on another securities exchange, then if the
Common Stock is traded over-the-counter, the Fair Market Value of the CDIs shall be equal to the result obtained by dividing
(A) the volume weighted average closing price of the Company’s Common Stock quoted on the principal market on which or through
which the Common Stock is traded over the five (5) consecutive trading days ending immediately prior to the business day on which
the Company receives the Holder’s written Notice of Exercise (regardless if received during the trading hours or after),
by (B) the number of CDIs (or fraction thereof) which equal an interest in exactly one share of Common Stock on such dates; or

 

(iv)
if CDIs are not then quoted on the ASX and the Common Stock is not then listed on any securities exchange or traded in the
over-the-counter market, the Fair Market Value of the CDIs shall be as determined by its Board of Directors in its reasonable good
faith judgment (which determination shall take into consideration any available appraisals).

 

If any of the amounts used to calculate
the Fair Market Value are expressed in Australian dollars and not the United States dollar, then each such amount shall be converted
into United States dollars based on the closing exchange rate published by the Reserve Bank of Australia in their Official Bulletin
at 4 pm for the applicable date. The amounts used to calculate the Fair Market Value shall be equitably adjusted for the occurrence
of any of the events for which an adjustment would be made pursuant to Section 4 but which is not otherwise fully reflected
in the Fair Market Value calculation.

 

(d)
Election to receive Common Stock. The Holder may include in its Notice of Exercise, the election to receive the corresponding
number of shares of Common Stock for the Warrant CDIs to be purchased.

 

(e)
Exercise Process including Holding Statement. In the event of the valid exercise of this Warrant, the Company must,
if the CDIs are quoted on the ASX, do the following:

 

(i) allot
and issue to CHESS Depositary Nominees Pty Ltd (“CDN”) the number of shares of Common Stock underlying
the CDIs the subject of the Notice of Exercise and procure CDN to allot and issue to the Holder the number of CDIs representing
the Common Stock issued to CDN under this provision;

 

    -3-

     

    

 

(ii) enter
CDN into the Company’s register of members as the holder of the relevant number of shares of Common Stock and procure CDN
to enter the Holder into the register of CDI holders as the holder of the relevant number of CDIs;

 

(iii) deliver
to the Holder a holding statement showing the Holder as the holder of the relevant number of CDIs;

 

(iv) apply
for, and use its reasonable efforts to obtain, official quotation of the relevant number of CDIs (and underlying shares of Common
Stock) on ASX as soon as practicable; and

 

(v) deliver
in accordance with Section 6 to the Holder a check payable to the Holder for any cash amounts payable as a result of any
fractional shares.

 

If, at the time of exercise, CDIs are no
longer quoted on ASX, then on exercise of the Warrant the Company must issue directly to the Holder the number of shares of Common
Stock over which the Warrant is exercised and must procure that those shares be listed for trading on any securities exchange on
which the Company’s Common Stock is tradeable and in accordance with Section 6 deliver to the Holder a check payable
to the Holder for any cash amounts payable as a result of any fractional shares.

 

3.
Stock Fully Paid; Reservation of Shares. All of the Warrant CDIs or Common Stock issuable upon the exercise of
this Warrant, upon issuance and receipt by the Company of the Exercise Price therefor (or upon Net Exercise thereof, as provided
in Section 2(c)), shall be fully paid and nonassessable, and free from all preemptive rights, rights of first refusal or
first offer, taxes, liens and charges with respect to the issuance thereof except as noted in Section 5. During the period
within which the rights represented by this Warrant may be exercised, the Company shall at all times have authorized and reserved
for issuance a sufficient number of shares of its Common Stock to provide for the exercise of this Warrant.

 

4.
Adjustment of Exercise Price and Number of Shares. The number and kind of Warrant CDIs to be issued upon the
exercise of this Warrant and the Exercise Price payable therefor shall be subject to adjustment from time to time upon the occurrence
of certain events, as follows:

 

(a)
Reclassification, Consolidation or Reorganization. Subject to Section 10, in case of any reclassification
of the CDIs (other than as a result of a subdivision or combination), or in case of any consolidation or merger of the Company
with or into another corporation or sale of all or substantially all of the Company’s assets (any of which is a “Reorganization
Transaction”), the Company, or such successor corporation as the case may be, shall execute a new warrant, providing
that the Holder shall have the right to exercise such new warrant, and procure upon such exercise and payment of the same aggregate
Exercise Price, in lieu of the Warrant CDIs then issuable upon exercise of this Warrant, the kind and amount of shares of stock,
other securities, money and property as would be received by the Holder for such Warrant CDIs as if such Warrant CDIs were outstanding
immediately prior to the consummation of the Reorganization Transaction.

 

    -4-

     

    

 

(b)
Stock Splits, Dividends and Combinations. Subject to Section 10, in the event that the Company shall at any
time subdivide the outstanding shares of Common Stock, or shall issue a stock dividend on its outstanding shares of Common Stock,
the number of Warrant CDIs issuable upon exercise of this Warrant immediately prior to such subdivision or to the issuance of such
stock dividend shall be proportionately increased and the Exercise Price shall be proportionately decreased, and in the event that
the Company shall at any time combine the outstanding shares of Common Stock, the number of Warrant CDIs issuable upon exercise
of this Warrant immediately prior to such combination shall be proportionately decreased and the Exercise Price shall be proportionately
increased, effective at the close of business on the date of such subdivision, stock dividend or combination, as the case may be
such that in each case, the result obtained by multiplying the Exercise Price by the number of Warrant CDIs shall be the
same immediately prior to, and immediately after, such event.

 

(c)
Notice of Corporate Action. If the Company (i) declares a dividend (other than a cash dividend payable out of earnings
or earned surplus legally available for the payment of dividends under the laws of the jurisdiction of incorporation of the Company)
or other distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any
class or any other securities or property, or to receive any other right; (ii) authorizes and publicly approves, or enters into
any agreement contemplating or solicits stockholder approval for any Reorganization Transaction; or (iii) publicly authorizes the
voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a
notice describing the material terms and conditions of such transaction, at least ten (10) business days prior to the applicable
record or effective date on which a person would need to hold Common Stock or CDIs in order to participate in or vote with respect
to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical
opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction. Each
such written notice shall be sufficiently given if addressed to the Holder at the last address of the Holder appearing on the books
of the Company and delivered in accordance with Section 11(d); provided, however, that the failure to deliver such notice
or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

 

(d)
Subsequent Equity Sales. Notwithstanding any provision of this Warrant to the contrary, in the event that the Company
issues any CDIs or Common Stock or any security that is exchangeable or convertible into CDIs or Common Stock (“Additional
Securities”) after the date hereof at a price per CDI (or the equivalent for shares of Common Stock) that is less
than the Exercise Price (or the equivalent for shares of Common Stock) in an equity financing, then the Exercise Price shall be
reduced to the lowest price per CDI (or the equivalent for shares of Common Stock) at which any Additional Security was issued
or sold or deemed to be issued or sold. The Company agrees that it will provide a notice to the Holder describing the material
terms and conditions of any issuance of Additional Securities promptly after the issuance thereof. For the avoidance of doubt,
the price per CDI (or the equivalent for shares of Common Stock) at which any Additional Securities are issued by the Company to
the Holder after the date hereof, including, without limitation, upon conversion into CDIs or Common Stock of (i) the Senior Secured
Convertible Promissory Note, dated June 15, 2017, and amended as of December 31, 2018, March 29, 2019, April 30, 2019, June 30,
2019 and August 21, 2019, issued to the Holder by the Company, will have no effect on the Exercise Price.

 

    -5-

     

    

 

5.
Holder Representations and Warranties; Transfer and Assignment.

 

(a)
The representations and warranties and rights and obligations of transfer and assignment of the Holder that are set forth
in Section 4 of the Purchase Agreement with respect to the shares of Common Stock or Warrant CDIs issuable to the Holder
are hereby made a part of this Warrant and incorporated herein by this reference

 

(b)
Notwithstanding any other provision of this Warrant or the Purchase Agreement, the Holder may not sell or transfer any shares
of Common Stock or CDIs issued to the Holder pursuant to this Warrant (“Restricted Securities”), or grant,
issue or transfer interests in, or options over, any Restricted Securities, at any time within 12 months after the issue of those
Restricted Securities (“Restricted Period”) except as permitted by section 708 or any other applicable
section of the Corporations Act 2001 (Cth).  Before commencement of the Restricted Period, to prevent any such restricted
dealings in the Restricted Securities during the Restricted Period, the Holder agrees to (i) the application of a holding lock
to the Restricted Securities by the Company’s securities registry for the Restricted Period, and (ii) enter into any other
documents reasonably necessary to prevent any such restricted dealings in the Restricted Securities during the Restricted Period.

 

(c)
The Holder may not sell or transfer this Warrant, or grant, issue or transfer interests in, or options over, this Warrant
at any time within 12 months after the Issue Date except as permitted by section 708 or any other applicable section of the Corporations
Act 2001 (Cth).

 

6.
Fractional Shares. No fractional shares of the Company’s capital stock will be issued in connection with
any exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor upon the basis
of the Exercise Price then in effect.

 

7.
Rights of Stockholders. The Holder shall not be entitled to vote or receive dividends or subscription rights
or be deemed the holder of the CDIs, Common Stock or any other securities of the Company which may at any time be issuable on the
exercise of this Warrant for any purpose, nor shall anything contained herein be construed to confer upon the Holder any of the
rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders
at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value, consolidation, merger, conveyance, or otherwise) with respect to the Warrant
CDIs until this Warrant shall have been exercised and the Warrant CDIs purchasable upon the exercise of this Warrant shall have
become deliverable, as provided in Section 2(a).

 

8.
Term of Warrant. This Warrant shall become exercisable on the Issue Date and shall terminate and no longer be
exercisable from and after 5:00 p.m., Eastern Time, on the date that is the fifth (5th) anniversary of the Funding Date.

 

    -6-

     

    

 

9.
Registry of Warrants. The Company shall maintain a registry showing the name and address of the registered holder
of this Warrant. The Holder’s initial address, for purposes of such registry, is set forth below the Holder’s signature
on this Warrant. The Holder may change such address by giving written notice of such changed address to the Company.

 

10.
ASX Listing Rules. Until such time as the Company is removed from the Official List of the ASX, the following
additional provisions will apply to the Warrant notwithstanding any other provision of this Warrant:

 

(a)
Voting Rights. The Warrant does not carry any voting rights at stockholder meetings of the Company unless and until
the Warrant is exercised.

 

(b)
Participation Rights. There are no participating rights or entitlements inherent in the Warrant and the Holder is
not by virtue of holding the Warrant entitled to participate in any new issue of capital that may be offered to stockholders (except
upon exercise of the Warrant).

 

(c)
Reorganizations. The rights of the Holder will be changed to the extent necessary to comply with the ASX Listing
Rules applying to a reorganization (including a reconstruction, consolidation, subdivision or reduction or return of capital) of
the Company’s capital at the time of the reorganization.

 

(d)
Bonus Issues. If there is a bonus issue to the holders of CDIs, the number of CDIs representing shares of Common
Stock over which the Warrant is exercisable will be increased by the number of CDIs which the Holder would have received if it
had exercised the Warrant before the record date for the bonus issue.

 

(e)
Pro Rata Issue. If the Company proceeds with a pro rata issue (except a bonus issue) of securities to stockholders
after the date of issue of the Warrant, the Exercise Price of the Warrant will be reduced in accordance with the formula set out
in ASX Listing Rule 6.22.2.

 

(f)
Not Quoted. The Warrant will not be quoted on ASX or on any other securities exchange.

 

(g)
Equal Ranking. The Common Stock and CDIs issued pursuant to an exercise of the Warrant will rank, from the date of
issue, equally with the existing shares of Common Stock and CDIs of the Company in all respects.

 

(h)
Changes. Other than as set out in this Warrant or the ASX Listing Rules, this Warrant does not confer the right to
a change in the Exercise Price or a change in the underlying securities over which this Warrant can be exercised.

 

11.
Miscellaneous.

 

(a)
This Warrant shall be construed and enforced in accordance with and governed by the laws of the State of New York, without
giving effect to principles of conflicts of laws.

 

(b)
The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms
hereof.

 

    -7-

     

    

 

(c)
The terms of this Warrant shall be binding upon and shall inure to the benefit of any successors or assigns of the Company
and of the Holder and of the Warrant CDIs issued or issuable upon the exercise hereof.

 

(d)
Any notice provided for or permitted under this Warrant shall be treated as having been given (i) upon receipt, when delivered
personally, (ii) one day after sending, when sent by commercial overnight courier with written verification of receipt, (iii) upon
confirmed transmission when sent via facsimile on a business day prior to 5:00 pm local time or, if sent after 5:00 pm local time,
the next business day after confirmed transmission, or (iv) three business days after deposit with the United States Postal Service,
when mailed postage prepaid by certified or registered mail, return receipt requested, in each case, addressed to the address or
facsimile number set forth on the signature pages hereof or as otherwise furnished in writing.

 

(e)
This Warrant, the Note and the Purchase Agreement constitute the full and entire understanding and agreement between the
parties with regard to the matters contained herein.

 

(f)
Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company
at the Holder’s expense will execute and deliver to the holder of record, in lieu thereof, a new Warrant of like date and
tenor.

 

(g)
This Warrant and any provision hereof may be amended, waived or terminated only by an instrument in writing signed by the
Company and the Holder provided that, while the Company is admitted to the Official List of the ASX, any proposed amendment, waiver
or termination must not contravene the ASX Listing Rules.

 

[continued and to be signed on following
page]

 

    -8-

     

    

 

IN WITNESS WHEREOF, each of the
Company and the Holder has caused this Warrant to be signed by its duly authorized officer, all as of the day and year first above
written.

 

	COMPANY:	GI DYNAMICS, INC.
	a Delaware corporation	 	 
	 	 	 
	 	By:	 
	 	Name:	Scott Schorer
	 	Title:	Chief Executive Officer

 

	Notice Address:	320 Congress St
	 	Boston, MA 02210
	 	U.S.A.
	 	Attention: Chief Executive Officer

 

	HOLDER:	CRYSTAL AMBER FUND LIMITED
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	Director
	 	Crystal Amber Asset Management (Guernsey) Ltd

 

	Notice Address:	P.O. Box 286
	 	Floor 2
	 	Trafalgar Court
	 	St. Peter Port
	 	Guernsey
	 	GY1 4LY
	 	 
	 	With a copy (which shall not constitute notice) to:
	 	 
	 	Estera - GG - Crystal Amber Team CrystalAmberTeam@estera.com

 

     

     

    

 

Schedule
A

 

Issuable
Warrant CDIs

  

	CDIs	 	Common Stock
	 	 	 

 

To be determined
on August 2019 Note draw date

 

     

     

    

 

Exhibit
A

Notice
of Exercise

 

		TO:	GI DYNAMICS, INC.

 

_________________________

 

_________________________

 

1. Cash Exercise. The undersigned hereby elects to purchase
____________ CHESS Depositary Interests (with each CHESS Depositary Interest representing 1/50th of a share of the Company’s
common stock, par value $0.01 per share (the “Common Stock”)) (“CDIs”) of GI
DYNAMICS, INC., a Delaware corporation (the “Company”), pursuant to the terms of Section 2(b) of the
Warrant to Purchase CHESS Depositary Interests, dated ____, 2019 (the “Warrant”), and tenders herewith
payment of the Exercise Price (as such term is defined in the Warrant) therefor.

 

2. Net Exercise. The undersigned hereby elects to effect
a Net Exercise for _____________ CDIs pursuant to Section 2(c) of the Warrant.

 

Please issue a Holding Statement certifying said _________ CDIs
have been issued in the name of the undersigned or in such other name as is specified below:

 

	 	Name:	_________________________________
	 	 	 
	 	Address: 	_________________________________
	 	 	 
	 	 	_________________________________

 

3. Common Stock Election. By initialing here, the undersigned
hereby elects to receive the number of shares of Common Stock corresponding to the CDIs noted above in lieu of the CDIs otherwise
issuable: ______________

 

The undersigned hereby represents and warrants
that the aforesaid shares of Common Stock or CDIs, as the case may be, are being acquired for the account of the undersigned for
investment and not with a view to, or for resale, in connection with the distribution thereof, and that the undersigned has no
present intention of distributing or reselling such shares or CDIs.

 

	 	Holder Name: 	 
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 
	 	 	 
	 	Date:

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