Document:

Exhibit 10.13

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is made as of September 26, 2016, by MAM SOFTWARE GROUP, INC., a Delaware corporation (the “Borrower”) and JPMORGAN CHASE BANK, N.A., a national banking association (the “Lender”).

 

RECITALS

 

A.     .The Borrower and the Lender are parties to a Credit Agreement dated December 1, 2015 (as amended, restated, modified, substituted, extended, and renewed from time to time, the “Credit Agreement”). The Credit Agreement provides for some of the agreements between the Borrower and the Lender with respect to the “Loans” (as defined in the Credit Agreement), including a revolving credit facility in an amount not to exceed $2,500,000.00 and a term facility in the original principal amount of $9,500,000.00.

 

B.     .The Borrower has requested that the Lender amend certain covenants in the Credit Agreement.

 

C.     .The Lender is willing to agree to the Borrower’s request on the condition, among others, that this Agreement be executed.

 

AGREEMENTS

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, receipt of which is hereby acknowledged, the Borrower and the Lender agree as follows:

 

1.     .The Borrower and the Lender agree that the Recitals above are a part of this Agreement. Unless otherwise expressly defined in this Agreement, terms defined in the Credit Agreement shall have the same meaning under this Agreement.

 

2.     .The Borrower and the Lender agree that on the date hereof the aggregate outstanding principal balance under the Revolving Credit Note (subject to change for returned items and other adjustments made in the ordinary course of business) is $1,250,000.00 and under the Term Note is $8,075,000.03.

 

3.     .The Credit Agreement is hereby amended as follows: 

 

(a)     ()Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended by adding the following new definition in its correct alphabetical order:

 

“Minimum Liquidity” means, on the date of determination, the sum of (i) unrestricted cash, plus (ii) Availability.

 

(b)     ()The definition of “Applicable Rate” in Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended by restating the chart contained therein in its entirety to read as follows:

 

	
			Total Leverage

			Ratio

				
			Revolving 

			Commitment

			CBFR

			Spread

				
			Revolving 

			Commitment

			Eurodollar

			Spread

				
			Term Loan CBFR Spread

				
			Term Loan Eurodollar Spread

				
			Commitment Fee Rate

			
	
			Category 1

			< 1.50 to 1.00

				
			 

			CB Floating Rate + 3.50%

				
			 

			LIBO Rate + 3.50%

				
			 

			CB Floating Rate + 3.50%

				
			 

			LIBO Rate + 3.50%

				
			 

			0.30%

			
	
			Category 2

			< 2.00 to 1.00 but

			 > 1.50 to 1.00

				
			 

			CB Floating Rate + 3.75%

				
			 

			LIBO Rate + 3.75%

				
			 

			CB Floating Rate + 3.75%

				
			 

			LIBO Rate + 3.75%

				
			 

			0.30%

			
	
			Category 3

			> 2.00 to 1.00

				
			 

			CB Floating Rate + 4.00%

				
			 

			LIBO Rate + 4.00%

				
			 

			CB Floating Rate + 4.00%

				
			

			LIBO Rate + 4.00%

				
			 

			0.30%

			

 

(c)     ()Section 5.01(b) (Financial Statements and Other Information) of the Credit Agreement is here by amended and restated in its entirety to read as follows:

 

“(b)     for the period beginning October 1, 2016, within 30  days after the end of each month except the final month of the fiscal year of the Borrower, and for the period beginning after the Lender has, in its sole discretion, provided written notice of such change to the Borrower, within 45  days after the end of each of the first three fiscal quarters of the Borrower, its consolidated balance sheet and related statements of operations and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

 

(d)     ()Subsections (e), (i), (j), (k), and (l) of Section 6.01 (Indebtedness) of the Credit Agreement are hereby amended and restated in their entireties to read as follows:

 

“(e)     Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with clause (f) below; provided that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) together with any Refinance Indebtedness in respect thereof permitted by clause (f) below, shall not exceed $50,000 at any time outstanding, provided however, such limit may be increased to $100,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower;”

 

“(i)     Subordinated Indebtedness in an aggregate principal amount not exceeding $50,000 at any time outstanding, provided however, such limit may be increased to $100,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower;”

 

“(j)     Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (j) together with any Refinance Indebtedness in respect thereof permitted by clause (f) above, shall not exceed $50,000 at any time outstanding, provided however, such limit may be increased to $100,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower;”

 

“(k)     Existing operating lease obligations (in effect as of the Effective Date), including increases in existing operating lease obligations and new operating lease obligations; provided that the sum of such increases in existing operating lease obligations, plus new operating lease obligations do not exceed, in the aggregate, $100,000 annually, provided however, such limit may be increased to $500,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower; and”

 

“(l)     any other unsecured Indebtedness, provided however, the Borrower may incur other unsecured Indebtedness in an aggregate principal amount not to exceed $100,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower.”

 

(e)     ()Section 6.02(d) (Liens) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“(d)     Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 85% of the cost of acquiring, constructing or improving such fixed or capital assets at any time outstanding, provided however, such limit may be increased to 100% of the cost of acquiring, constructing or improving such fixed or capital assets at any time outstanding for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower, and (iv) such Liens shall not apply to any other property or assets of the Borrower or any Subsidiary;”

 

(f)     ()Subsections (d) and (f) of Section 6.04 (Investments, Loans, Advances, Guarantees and Acquisitions) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“(d)     loans or advances (excluding non-cash allocation of costs or expenses among Subsidiaries done in the ordinary course of business) made by any Loan Party to any Subsidiary and made by any Subsidiary to a Loan Party or any other Subsidiary, provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Security Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together with outstanding investments permitted under Section 6.04(c) and outstanding Guarantees permitted under Section 6.04(e)) shall not exceed $100,000 at any time outstanding, provided however, such limit may be increased to $250,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower (in each case determined without regard to any write-downs or write-offs);”

 

“(f)     loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $50,000 in the aggregate at any one time outstanding, provided however, such limit may be increased to $100,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower;”

 

(g)     ()Section 6.05(g) (Asset Sales) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“(g)     sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other clause of this Section, provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this paragraph (g) shall not exceed $100,000 during any fiscal year of the Borrower, provided however, such limit may be increased to $250,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower;”

 

(h)     ()Subsections (a) and (b) of Section 6.12 (Financial Covenants) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

(a)     Maximum Total Leverage Ratio. The Borrower will not permit the Total Leverage Ratio, on the last day of each month for the period beginning on September 30, 2016, through and including September 30, 2017, and of any fiscal quarter thereafter, ending during any period set forth below, to be greater than the ratio set forth below opposite such period:

 

	
			Period

				
			Maximum Total Leverage Ratio

			
	
			 

			September 30, 2016, through and including August 31, 2017

				
			 

			2.50 to 1.00

			
	
			 

			September 30, 2017

				
			 

			2.25 to 1.00

			
	
			 

			December 31, 2017, and thereafter

				
			 

			2.0o 1.00

			

 

 

 

(b)     Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed Charge Coverage Ratio, for any period of four consecutive fiscal quarters ending on the last day of the fiscal quarter ending December 31, 2017, and for each fiscal quarter thereafter, to be less than 1.20 to 1.00.

 

(i)     ()Section 6.12 (Financial Covenants) of the Credit Agreement is hereby amended by adding the following new subsections:

 

(c)     Minimum LTM EBITDA. The Borrower will not permit EBITDA, for any period of twelve consecutive months ending on the last day of each month for the period beginning on September 30, 2016, through and including September 30, 2017, to be less than $3,750,000.00.

 

(d)     Minimum Liquidity. The Borrower will not permit Minimum Liquidity, for any period of twelve consecutive months ending on the last day of each month for the period beginning on September 30, 2016, through and including September 30, 2017, to be less than $750,000.00.

 

4.     .The agreement of the Lender under this Agreement are subject to the following terms and conditions, time being of the essence:

 

(a)     ()At the time this Agreement is executed and delivered, the Borrower shall pay the Lender an amendment fee in the amount of $25,000.00, which fee is fully earned and non-refundable. 

 

(b)     ()At the time this Agreement is executed and delivered, the Guarantor (as that term is defined in the Credit Agreement) shall execute and deliver the Agreement of Guarantor below.

 

5.     .The Borrower represents and warrants to the Lender as follows:

 

(a)     ()The Borrower (i) is duly organized, existing and in good standing under the laws of the jurisdiction of its formation stated in the preamble to this Agreement and is organized in no other jurisdiction, (ii) has the entity power to own its property and to carry on its business as now being conducted, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned by it therein or in which the transaction of its business makes such qualification necessary.

 

(b)     ()The Borrower has the entity power and authority to execute and deliver this Agreement and to incur and perform its obligations hereunder and has taken all necessary and appropriate entity action to authorize the execution, delivery and performance of this Agreement.

 

(c)     ()The Credit Agreement, as amended by this Agreement, and each of the other Loan Documents remain in full force and effect, and each constitutes the valid and legally binding obligation of the Borrower, enforceable in accordance with its terms.

 

(d)     ()All of the Borrower’s representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct on and as of the date of the Borrower’s execution of this Agreement.

 

(e)     ()No Event of Default and no event which, with notice, lapse of time or both would constitute an Event of Default, has occurred and is continuing under the Credit Agreement or the other Loan Documents which has not been waived in writing by the Lender.

 

(f)     ()The execution, delivery and performance of the terms of this Agreement will not conflict with, violate or be prevented by (i) as applicable, charter or bylaws, operating agreement, articles of organization, partnership agreements, or other constituent certificates, documents and agreements governing the Borrower’s formation, governance and management, (ii) any existing mortgage, indenture, contract or agreement binding on the Borrower or affecting its property, or (iii) any Laws.

 

6.     .The Borrower hereby issues, ratifies and confirms the representations, warranties and covenants contained in the Credit Agreement, as amended hereby. The Borrower agrees that this Agreement is not intended to and shall not cause a novation with respect to any or all of the Obligations.

 

7.     .The Borrower acknowledges and warrants that the Borrower has no (and alternatively waives each and every) counterclaim, recoupment, setoff, reduction or defense with respect to the Obligations or otherwise, however arising, in contract, in tort or otherwise and whenever arising; and alternatively, releases, withdraws, waives and discharges any and all claims, rights, demands, damages, causes of action, judgments or liabilities which the Borrower has, had or may have ever had against the Lender, including but not limited to any arising in connection with the Obligations or otherwise.

 

8.     .The Borrower shall pay at the time this Agreement is executed and delivered all fees, commissions, costs, charges, taxes and other expenses incurred by the Lender and its counsel in connection with this Agreement, including, but not limited to, reasonable fees and expenses of counsel and all recording fees, taxes and charges.

 

9.     .This Agreement and the rights and obligations of the parties hereunder shall be governed by and interpreted in accordance with the Laws of New York.

 

10.     .This Agreement is one of the Loan Documents. This Agreement may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute but one and the same agreement. Each party to this Agreement agrees that the respective signatures of the parties may be delivered by fax, PDF, or other electronic means acceptable to the Lender and that the parties may rely on a signature so delivered as an original. Any party who chooses to deliver its signature in such manner agrees to provide promptly to the other parties a copy of this Agreement with its inked signature, but the party’s failure to deliver a copy of this Agreement with its inked signature shall not affect the validity, enforceability and binding effect of this Agreement. 

 

Signatures begin on the following page.

 

Signature Page to

FIRST AMENDMENT TO CREDIT AGREEMENT

 

IN WITNESS WHEREOF, the Borrower and the Lender have executed this Agreement under seal as of the date and year first written above.

 

ATTEST:     MAM SOFTWARE GROUP, INC.

 

 

 

_____________________________     By:__________________________(SEAL)

Name:     Brian H. Callahan

Title:     Chief Financial Officer

 

 

WITNESS:     JPMORGAN CHASE BANK, N.A.

 

 

 

_____________________________     By:__________________________(SEAL)

Name:

Title:

 

Agreement of Guarantor begins on the following page.

 

 

 

 

 

 

FIRST AMENDMENT TO CREDIT AGREEMENT 

 

AGREEMENT OF GUARANTOR

 

Reference is made to the foregoing First Amendment to Credit Agreement (the “First Amendment”) for the meaning of capitalized terms not otherwise defined in this Agreement of Guarantor. The undersigned is the “Guarantor” under a Guaranty of Payment Agreement, dated December 1, 2015 (as amended, modified, substituted, extended and renewed from time to time, the “Guaranty”), in favor of the Lender. In order to induce the Lender to enter into the First Amendment, the Guarantor (a) consents to the transactions contemplated by, and agreements made by the Borrower under, the First Amendment, (b) ratifies, confirms and reissues the terms, conditions, promises, covenants, grants, assignments, security agreements, waivers, agreements, representations, warranties and provisions contained in the Guaranty, and (c) agrees that the Guarantor has no (and alternatively waives each and every) counterclaim, recoupment, setoff, reduction or defense with respect to the Guarantor's obligations under the Guaranty, however arising, in contract, in tort or otherwise and whenever arising; and (d) alternatively, releases, withdraws, waives and discharges any and all claims, rights, demands, damages, causes of action, judgments or liabilities which the Guarantor has, had or may have ever had against the Lender, including but not limited to any arising in connection with the Guaranty or the other Loan Documents. Without limiting the foregoing, the Guarantor acknowledges and agrees that in the Guaranty the Guarantor agreed, among other things, that the parties to the Credit Agreement may from time to time modify, amend, change or terminate any provisions of any of the Loan Documents without in any way releasing, affecting or in any way impairing the obligations and liabilities of the Guarantor under the Guaranty, and notwithstanding the acceptance of this Agreement of Guarantor by the Lender, the parties may hereafter modify, amend, change or terminate any provisions of any of the Loan Documents without notice to, the further agreement of, or the consent of the Guarantor. This Agreement is one of the Loan Documents. This Agreement may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute but one and the same agreement. Each party to this Agreement agrees that the respective signatures of the parties may be delivered by fax, PDF, or other electronic means acceptable to the Lender and that the parties may rely on a signature so delivered as an original. Any party who chooses to deliver its signature in such manner agrees to provide promptly to the other parties a copy of this Agreement with its inked signature, but the party’s failure to deliver a copy of this Agreement with its inked signature shall not affect the validity, enforceability and binding effect of this Agreement.

 

Signature to Agreement of Guarantor begins on the following page.

 

 

 

 

 

 

First AMENDMENT TO credit AGREEMENT 

 

Signature page to

AGREEMENT OF GUARANTOR

 

WITNESS signature and seal of the Guarantor as of the date of the First Amendment.

 

WITNESS OR ATTEST:     MAM SOFTWARE, INC.

 

 

 

______________________________     By:__________________________(SEAL)

Name:     Brian H. Callahan

Title:     Chief Financial Officer

 

 

 

 

4836-6248-1208, v. 2Form of Indemnity Agreement

 Exhibit 10.1 

INDEMNITY AGREEMENT 
 This
Indemnity Agreement, dated as of                  , 2016 is made by and between Obalon Therapeutics, Inc., a Delaware corporation (the
“Company”), and                     , a director, officer or key employee of the Company or one of the Company’s
subsidiaries or other service provider who satisfies the definition of Indemnifiable Person set forth below (“Indemnitee”). 

RECITALS 
 A. The Company
is aware that competent and experienced persons are increasingly reluctant to serve as representatives of corporations unless they are protected by comprehensive liability insurance and indemnification, due to increased exposure to litigation costs
and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no relationship to the compensation of such representatives; 

B. The members of the Board of Directors of the Company (the “Board”) have concluded that to retain and attract
talented and experienced individuals to serve as representatives of the Company and its Subsidiaries and Affiliates and to encourage such individuals to take the business risks necessary for the success of the Company and its Subsidiaries and
Affiliates, it is necessary for the Company to contractually indemnify certain of its representatives and the representatives of its Subsidiaries and Affiliates, and to assume for itself maximum liability for Expenses and Other Liabilities in
connection with claims against such representatives in connection with their service to the Company and its Subsidiaries and Affiliates; 

C. Section 145 of the Delaware General Corporation Law (“Section 145”), empowers the Company to indemnify by agreement
its officers, directors, employees and agents, and persons who serve, at the request of the Company, as directors, officers, employees or agents of other corporations, partnerships, joint ventures, trusts or other enterprises, and expressly provides
that the indemnification provided thereby is not exclusive; and 
 D. The Company desires and has requested Indemnitee to serve or continue
to serve as a representative of the Company and/or the Subsidiaries or Affiliates of the Company free from undue concern about inappropriate claims for damages arising out of or related to such services to the Company and/or the Subsidiaries or
Affiliates of the Company. 
 AGREEMENT 

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: 

1. Definitions. 

(a) Affiliate. For purposes of this Agreement, “Affiliate” of the Company means any corporation,
partnership, limited liability company, joint venture, trust or other enterprise in respect of which Indemnitee is or was or will be serving as a director, officer, trustee, 

 
manager, member, partner, employee, agent, attorney, consultant, member of the entity’s governing body (whether constituted as a board of directors, board of managers, general partner or
otherwise), fiduciary, or in any other similar capacity at the request, election or direction of the Company, and including, but not limited to, any employee benefit plan of the Company or a Subsidiary or Affiliate of the Company.

(b) Change in Control. For purposes of this Agreement, “Change in Control” means (i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a Subsidiary or a trustee or other fiduciary holding securities under an employee benefit plan of the Company or
Subsidiary, is or becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then
outstanding capital stock or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the outstanding capital stock of
the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into capital stock of the surviving entity) at least 80% of the total voting power represented by the capital stock of
the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in
one transaction or a series of transactions) of all or substantially all of the Company’s assets. 
 (c)
Expenses. For purposes of this Agreement, “Expenses” means all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements, and
other out-of-pocket costs), paid or incurred by Indemnitee in connection with either the investigation, defense or appeal of, or being a witness in, a Proceeding, or establishing or enforcing a right to indemnification under this Agreement, Section
145 or otherwise; provided, however, that Expenses shall not include any judgments, fines, ERISA excise taxes or penalties or amounts paid in settlement of a Proceeding. 

(d) Indemnifiable Event. For purposes of this Agreement, “Indemnifiable Event” means any event or
occurrence related to Indemnitee’s service for the Company or any Subsidiary or Affiliate as an Indemnifiable Person (as defined below), or by reason of anything done or not done, or any act or omission, by Indemnitee in any such capacity. 

(e) Indemnifiable Person. For the purposes of this Agreement, “Indemnifiable Person” means any
person who is or was a director, officer, trustee, manager, member, partner, employee, attorney, consultant, member of an entity’s governing body (whether constituted as a board of directors, board of managers, general partner or otherwise) or
other agent or fiduciary of the Company or a Subsidiary or Affiliate of the Company.

  
 2 

 (f) Independent Counsel. For purposes of this Agreement,
“Independent Counsel” means legal counsel that has not performed services for the Company or Indemnitee in the five years preceding the time in question and that would not, under applicable standards of professional conduct,
have a conflict of interest in representing either the Company or Indemnitee. 
 (g) Independent Director. For purposes
of this Agreement, “Independent Director” means a member of the Board who is not a party to the Proceeding for which a claim is made under this Agreement. 

(h) Other Liabilities. For purposes of this Agreement, “Other Liabilities” means any and all
liabilities of any type whatsoever (including, but not limited to, judgments, fines, penalties, ERISA (or other benefit plan related) excise taxes or penalties, and amounts paid in settlement and all interest, taxes, assessments and other charges
paid or payable in connection with or in respect of any such judgments, fines, ERISA (or other benefit plan related) excise taxes or penalties, or amounts paid in settlement). 

(i) Proceeding. For the purposes of this Agreement, “Proceeding” means any threatened, pending, or
completed action, suit or other proceeding, whether civil, criminal, administrative, investigative, legislative or any other type whatsoever, preliminary, informal or formal, including any arbitration or other alternative dispute resolution and
including any appeal of any of the foregoing. 
 (j) Subsidiary. For purposes of this Agreement,
“Subsidiary” means any entity of which more than 50% of the outstanding voting securities is owned directly or indirectly by the Company. 

2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to serve as an Indemnifiable Person in the capacity
or capacities in which Indemnitee currently serves the Company as an Indemnifiable Person, and any additional capacity in which Indemnitee may agree to serve, until such time as Indemnitee’s service in a particular capacity shall end according
to the terms of an agreement, the Company’s Certificate of Incorporation or Bylaws, governing law, or otherwise. Nothing contained in this Agreement is intended to create any right to continued employment or other form of service for the
Company or a Subsidiary or Affiliate of the Company by Indemnitee. 
 3. Mandatory Indemnification.

(a) Agreement to Indemnify. In the event Indemnitee is a person who was or is a party to or witness in or is threatened to
be made a party to or witness in any Proceeding by reason of an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses and Other Liabilities incurred by Indemnitee in connection with (including in
preparation for) such Proceeding to the fullest extent not prohibited by the Delaware General Corporation Law (“DGCL”), as the same may be amended from time to time (but only to the extent that such amendment permits the
Company to provide broader indemnification rights than the DGCL permitted prior to the adoption of such amendment). 

  
 3 

 (b) Exception for Amounts Covered by Insurance and Other
Sources. Notwithstanding the foregoing, the Company shall not be obligated to indemnify Indemnitee for Expenses or Other Liabilities of any type whatsoever (including, but not limited to judgments, fines, penalties, ERISA excise taxes or
penalties and amounts paid in settlement) to the extent such have been paid directly to Indemnitee (or paid directly to a third party on Indemnitee’s behalf) by any directors and officers, or other type, of insurance maintained by the
Company.
 (c) Company Obligations Primary. The Company hereby acknowledges that Indemnitee may have rights to indemnification
for Expenses and Other Liabilities provided by [name of VC or other sponsoring organization (“Other Indemnitor”)]. The Company agrees with Indemnitee that the Company is the indemnitor of first resort of Indemnitee with
respect to matters for which indemnification is provided under this Agreement and that the Company will be obligated to make all payments due to or for the benefit of Indemnitee under this Agreement without regard to any rights that Indemnitee may
have against the Other Indemnitor. The Company hereby waives any equitable rights to contribution or indemnification from the Other Indemnitor in respect of any amounts paid to Indemnitee hereunder. The Company further agrees that no
reimbursement of Other Liabilities or payment of Expenses by the Other Indemnitor to or for the benefit of Indemnitee shall affect the obligations of the Company hereunder, and that the Company shall be obligated to repay the Other Indemnitor for
all amounts so paid or reimbursed to the extent that the Company has an obligation to indemnify Indemnitee for such Expenses or Other Liabilities hereunder. 

4. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of any Expenses or Other Liabilities but not entitled, however, to indemnification for the total amount of such Expenses or Other Liabilities, the Company shall nevertheless indemnify Indemnitee for such total amount
except as to the portion thereof for which indemnification is prohibited by the provisions of the DGCL. In any review or Proceeding to determine the extent of indemnification, the Company shall bear the burden to establish, by clear and
convincing evidence, the lack of a successful resolution of a particular claim, issue or matter and which amounts sought in indemnity are allocable to claims, issues or matters which were not successfully resolved. 

5. Liability Insurance. So long as Indemnitee shall continue to serve the Company or a Subsidiary or Affiliate of the
Company as an Indemnifiable Person and thereafter so long as Indemnitee shall be subject to any possible claim or threatened, pending or completed Proceeding as a result of an Indemnifiable Event, the Company shall use reasonable efforts to maintain
in full force and effect for the benefit of Indemnitee as an insured (i) liability insurance issued by one or more reputable insurers and having the policy amount and deductible deemed appropriate by the Board and providing in all respects coverage
at least comparable to and in the same amount as that provided to the Chairman of the Board or the Chief Executive Officer of the Company and (ii) any replacement or substitute policies issued by one or more reputable insurers providing in all
respects coverage at least comparable to and in the same amount as that being provided to the Chairman of the Board or the Chief Executive Officer of the Company. The purchase, establishment and maintenance of any such insurance or other
arrangements shall not in any way limit or affect the rights and obligations of the Company or of Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee
shall not in any way limit or affect the rights and obligations of the 

  
 4 

 
Company or the other party or parties thereto under any such insurance or other arrangement. In the event of a Change in Control subsequent to the date of this Agreement, or the Company’s
becoming insolvent, including being placed into receivership or entering the federal bankruptcy process, the Company shall maintain in force any directors’ and officers’ liability insurance policies then maintained by the Company in
providing insurance in respect of Indemnitee, for a period of six years thereafter. 
 6. Mandatory Advancement of
Expenses. If requested by Indemnitee, the Company shall advance prior to the final disposition of the Proceeding all Expenses reasonably incurred by Indemnitee in connection with (including in preparation for) a Proceeding related to an
Indemnifiable Event. Indemnitee hereby undertakes to repay such amounts advanced if, and only if and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company under the provisions of this
Agreement, the DGCL, and no additional form of undertaking with respect to such obligation to repay shall be required. The advances to be made hereunder shall be paid by the Company to Indemnitee or directly to a third party designated by Indemnitee
within thirty (30) days following delivery of a written request therefor by Indemnitee to the Company. Indemnitee’s undertaking to repay any Expenses advanced to Indemnitee hereunder shall be unsecured and shall not be subject to the accrual or
payment of any interest thereon. In the event that Indemnitee’s request for the advancement of expenses shall be accompanied by an affidavit of counsel to Indemnitee to the effect that such counsel has reviewed such Expenses and that such
Expenses are reasonable in such counsel’s view, then such expenses shall be deemed reasonable in the absence of clear and convincing evidence to the contrary. 

7. Notice and Other Indemnification Procedures. 

(a) Notification. Promptly after receipt by Indemnitee of notice of the commencement of or the threat of commencement of
any Proceeding, Indemnitee shall, if Indemnitee believes that indemnification or advancement of Expenses with respect thereto may be sought from the Company under this Agreement, notify the Company of the commencement or threat of commencement
thereof. However, a failure so to notify the Company promptly following Indemnitee’s receipt of such notice shall not relieve the Company from any liability that it may have to Indemnitee except to the extent that the Company is materially
prejudiced in its defense of such Proceeding as a result of such failure. 
 (b) Insurance and Other Matters. If, at the
time of the receipt of a notice of the commencement of a Proceeding pursuant to Section 7(a) above, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to
the issuers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all reasonable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in
accordance with the terms of such insurance policies. 
 (c) Assumption of Defense. In the event the Company shall be
obligated to advance the Expenses for any Proceeding against Indemnitee, the Company, if deemed appropriate by the Company, shall be entitled to assume the defense of such Proceeding as provided herein. Such defense by the Company may include the
representation of two or more 

  
 5 

 
parties by one attorney or law firm as permitted under the ethical rules and legal requirements related to joint representations. Following delivery of written notice to Indemnitee of the
Company’s election to assume the defense of such Proceeding, the approval by Indemnitee (which approval shall not be unreasonably withheld) of counsel designated by the Company and the retention of such counsel by the Company, the Company will
not be liable to Indemnitee under this Agreement for any fees and expenses of counsel subsequently incurred by Indemnitee with respect to the same Proceeding. If (A) the employment of counsel by Indemnitee has been previously authorized by the
Company, (B) Indemnitee shall have notified the Board in writing that Indemnitee has reasonably concluded that there is likely to be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or (C) the Company
fails to employ counsel to assume the defense of such Proceeding, the fees and expenses of Indemnitee’s counsel shall be subject to indemnification and/or advancement pursuant to the terms of this Agreement. Nothing herein shall prevent
Indemnitee from employing counsel for any such Proceeding at Indemnitee’s expense. 
 (d) Settlement. The Company
shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent; provided, however, that if a Change in Control has occurred
subsequent to the date of this Agreement, the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement. Neither the Company nor any Subsidiary or Affiliate shall
enter into a settlement of any Proceeding that might result in the imposition of any Expense, Other Liability, penalty, limitation or detriment on Indemnitee, whether indemnifiable under this Agreement or otherwise, without Indemnitee’s written
consent. Neither the Company nor Indemnitee shall unreasonably withhold consent from any settlement of any Proceeding. The Company shall promptly notify Indemnitee upon the Company’s receipt of an offer to settle, or if the Company makes an
offer to settle, any Proceeding, and provide Indemnitee with a reasonable amount of time to consider such settlement, in the case of any such settlement for which the consent of Indemnitee would be required hereunder. The Company shall not, on its
own behalf, settle any part of any Proceeding to which Indemnitee is a party with respect to other parties (including the Company) without the written consent of Indemnitee if any portion of the settlement is to be funded from insurance proceeds
unless approved by a majority of the Independent Directors, provided that this sentence shall cease to be of any force and effect if it has been determined in accordance with this Agreement that Indemnitee is not entitled to indemnification
hereunder with respect to such Proceeding or if the Company’s obligations hereunder to Indemnitee with respect to such Proceeding have been fully discharged. 

8. Determination of Right to Indemnification. 

(a) Success on the Merits or Otherwise. To the extent that Indemnitee has been successful on the merits or otherwise in
defense of any Proceeding referred to in Section 3(a) above or in the defense of any claim, issue or matter described therein, the Company shall indemnify Indemnitee against Expenses actually and reasonably incurred in connection therewith. 

  
 6 

 (b) Indemnification in Other Situations. In the event that Section 8(a) is
inapplicable, the Company shall also indemnify Indemnitee if Indemnitee has not failed to meet the applicable standard of conduct for indemnification. 

(c) Forum. Indemnitee shall be entitled to select the forum in which determination of whether or not Indemnitee has met the
applicable standard of conduct shall be decided, and such election will be made from among the following: 
 a. Those members of the
Board who are Independent Directors even though less than a quorum; 
 b. A committee of Independent Directors designated by a
majority vote of Independent Directors, even though less than a quorum; or 
 c. Independent Counsel selected by Indemnitee and
approved by the Board, which approval may not be unreasonably withheld, which counsel shall make such determination in a written opinion. 

If Indemnitee is an officer or a director of the Company at the time that Indemnitee is selecting the forum, then Indemnitee shall not select
Independent Counsel as such forum unless there are no Independent Directors or unless the Independent Directors agree to the selection of Independent Counsel as the forum. 

The selected forum shall be referred to herein as the “Reviewing Party”. Notwithstanding the foregoing, following any Change in
Control subsequent to the date of this Agreement, the Reviewing Party shall be Independent Counsel selected in the manner provided in c. above. 

(d) As soon as practicable, and in no event later than thirty (30) days after receipt by the Company of written notice of
Indemnitee’s choice of forum pursuant to Section 8(c) above, the Company and Indemnitee shall each submit to the Reviewing Party such information as they believe is appropriate for the Reviewing Party to consider. The Reviewing Party shall
arrive at its decision within a reasonable period of time following the receipt of all such information from the Company and Indemnitee, but in no event later than thirty (30) days following the receipt of all such information, provided that the
time by which the Reviewing Party must reach a decision may be extended by mutual agreement of the Company and Indemnitee. All Expenses associated with the process set forth in this Section 8(d), including but not limited to the Expenses of the
Reviewing Party, shall be paid by the Company. 
 (e) Delaware Court of Chancery. Notwithstanding a final determination
by any Reviewing Party that Indemnitee is not entitled to indemnification with respect to a specific Proceeding, Indemnitee shall have the right to apply to the Court of Chancery, for the purpose of enforcing Indemnitee’s right to
indemnification pursuant to this Agreement. 
 (f) Expenses. The Company shall indemnify Indemnitee against all Expenses
incurred by Indemnitee in connection with any hearing or Proceeding under this Section 8 involving Indemnitee and against all Expenses and Other Liabilities incurred by Indemnitee in connection with any other Proceeding between the Company and
Indemnitee involving the interpretation or enforcement of the rights of Indemnitee under this Agreement unless a court of 

  
 7 

 
competent jurisdiction finds that each of the material claims of Indemnitee in any such Proceeding was frivolous or made in bad faith. 

(g) Determination of “Good Faith”. For purposes of any determination of whether Indemnitee acted in “good
faith” Indemnitee shall be deemed to have acted in good faith if in taking or failing to take the action in question Indemnitee relied on the records or books of account of the Company or a Subsidiary or Affiliate, including financial
statements, or on information, opinions, reports or statements provided to Indemnitee by the officers or other employees of the Company or a Subsidiary or Affiliate in the course of their duties, or on the advice of legal counsel for the Company or
a Subsidiary or Affiliate, or on information or records given or reports made to the Company or a Subsidiary or Affiliate by an independent certified public accountant or by an appraiser or other expert selected by the Company or a Subsidiary or
Affiliate, or by any other person (including legal counsel, accountants and financial advisors) as to matters Indemnitee reasonably believes are within such other person’s professional or expert competence and who has been selected with
reasonable care by or on behalf of the Company or a Subsidiary or Affiliate. In connection with any determination as to whether Indemnitee is entitled to be indemnified hereunder, or to advancement of expenses, the Reviewing Party or court shall
presume that Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification or advancement of Expenses, as the case may be, and the burden of proof shall be on the Company to establish, by clear and convincing
evidence, that Indemnitee is not so entitled. The provisions of this Section 8(g) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set
forth in this Agreement. In addition, the knowledge and/or actions, or failures to act, of any other person serving the Company or a Subsidiary or Affiliate as an Indemnifiable Person shall not be imputed to Indemnitee for purposes of determining
the right to indemnification hereunder.
 9. Exceptions. Any other provision herein to the contrary notwithstanding, 

(a) Claims Initiated by Indemnitee. The Company shall not be obligated pursuant to the terms of this Agreement to indemnify
or advance Expenses to Indemnitee with respect to Proceedings or claims initiated or brought voluntarily by Indemnitee and not by way of defense, except (1) with respect to Proceedings brought to establish or enforce a right to indemnification under
this Agreement, any other statute or law, as permitted under Section 145, or otherwise, (2) where the Board has consented to the initiation of such Proceeding, or (3) with respect to Proceedings brought to discharge Indemnitee’s fiduciary
responsibilities, whether under ERISA or otherwise, but such indemnification or advancement of Expenses may be provided by the Company in specific cases if the Board finds it to be appropriate; or 

(b) Actions Based on Federal Statutes Regarding Profit Recovery and Return of Bonus Payments. The Company shall not be
obligated pursuant to the terms of this Agreement to indemnify Indemnitee on account of (i) any suit in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of l934 and amendments thereto or similar provisions of any federal, state or local statutory law, or (ii) any reimbursement of the Company by the Indemnitee of any
bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from 

  
 8 

 
the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to
Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act); or

 (c) Unlawful Indemnification. The Company shall not be obligated pursuant to the terms of this Agreement to indemnify
Indemnitee for Other Liabilities if such indemnification is prohibited by law as determined by a court of competent jurisdiction in a final adjudication not subject to further appeal. 

10. Non-exclusivity. The provisions for indemnification and advancement of Expenses set forth in this Agreement shall not
be deemed exclusive of any other rights which Indemnitee may have under any provision of law, the Company’s Certificate of Incorporation or Bylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, or
otherwise, both as to acts or omissions in his or her official capacity and to acts or omissions in another capacity while serving the Company or a Subsidiary or Affiliate as an Indemnifiable Person and Indemnitee’s rights hereunder shall
continue after Indemnitee has ceased serving the Company or a Subsidiary or Affiliate as an Indemnifiable Person and shall inure to the benefit of the heirs, executors and administrators of Indemnitee. 

11. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable
for any reason whatsoever, (i) the validity, legality and enforceability of the remaining provisions of the Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by
the provision held invalid, illegal or unenforceable. 
 12. Supersession, Modification and Waiver. This Agreement supersedes
any prior indemnification agreement between the Indemnitee and the Company, its Subsidiaries or its Affiliates. If the Company and Indemnitee have previously entered into an indemnification agreement providing for the indemnification of
Indemnitee by the Company, parties entry into this Agreement shall be deemed to amend and restate such prior agreement to read in its entirety as, and be superseded by, this Agreement. No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) and except as expressly
provided herein, no such waiver shall constitute a continuing waiver. 
 13. Successors and Assigns. The terms of this
Agreement shall bind, and shall inure to the benefit of, the successors and assigns of the parties hereto. 

  
 9 

 14. Notice. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and a receipt is provided by the party to whom such communication is delivered, (ii) if mailed by certified or registered mail with postage prepaid, return receipt
requested, on the signing by the recipient of an acknowledgement of receipt form accompanying delivery through the U.S. mail, (iii) personal service by a process server, or (iv) delivery to the recipient’s address by overnight delivery (e.g.,
FedEx, UPS or DHL) or other commercial delivery service. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice complying with the provisions of this Section
14. Delivery of communications to the Company with respect to this Agreement shall be sent to the attention of the Company’s General Counsel. 

15. No Presumptions. For purposes of this Agreement, the termination of any Proceeding, by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable law or otherwise. In addition, neither the failure of the Company or a Reviewing Party to have made a determination as to whether Indemnitee has met any particular
standard of conduct or had any particular belief, nor an actual determination by the Company or a Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of Proceedings by
Indemnitee to secure a judicial determination by exercising Indemnitee’s rights under Section 8(e) of this Agreement shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has failed to meet any particular
standard of conduct or did not have any particular belief or is not entitled to indemnification under applicable law or otherwise. 

16. Survival of Rights. The rights conferred on Indemnitee by this Agreement shall continue after Indemnitee has ceased to
serve the Company or a Subsidiary or Affiliate of the Company as an Indemnifiable Person and shall inure to the benefit of Indemnitee’s heirs, executors and administrators. 

17. Subrogation and Contribution.

(a) In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

(b) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by or on behalf of Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i)
the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) 

  
 10 

 
giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s). 
 18. Specific Performance, Etc. The parties recognize that if any provision of this Agreement is
violated by the Company, Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, Indemnitee shall be entitled, if Indemnitee so elects, to institute Proceedings, either in law or at equity, to
obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as Indemnitee may elect to pursue. 

19. Counterparts. This Agreement may be executed in counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. 

20. Headings. The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not
be deemed to constitute part of this Agreement or to affect the construction or interpretation thereof. 
 21. Governing
Law. This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely with Delaware. 

22. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts
of the State of Delaware for all purposes in connection with any Proceeding which arises out of or relates to this Agreement. 

[Signature Page Follows] 

  
 11 

 The parties hereto have entered into this Indemnity Agreement effective as of the date first
above written. 
  

					
		 	OBALON THERAPEUTICS, INC.
			
		 	By:	 	  

		 	Name:	 	  

		 	Its:	 	  

		
		 	INDEMNITEE
		
		 	  

		 	[Name]
		
	Address:

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