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EXHIBIT 10.43 INTERNATIONAL DISTRIBUTORSHIP AGREEMENT THIS INTERNATIONAL
DISTRIBUTORSHIP AGREEMENT ("Agreement") is entered into effective as of the
Effective Date contained in Schedule A, between ReShape Medical Inc., having its
principal place of business at 1001 Calle Amanacer, San Clemente, USA ("RSM")
and the company identified in Schedule A ("DISTRIBUTOR"). WITNESSETH WHEREAS,
RSM is in the business of selling various medical devices primarily used to
perform medical procedures; and WHEREAS, DISTRIBUTOR desires lo actively and
diligently promote the sale, on its own behalf and for its own account, of
certain of RSM's products; and WHEREAS, RSM and DISTRIBUTOR desire to enter into
a non-exclusive distributorship agreement covering certain ReShape Medical
product lines under the terms and conditions set out below. NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein, the
parties agree as follows: l. DISTRIBUTION 1.1 Products. The products that are
subject to this Agreement (the "Products") shall be those products identified on
Schedule B hereto, together with such other products as may from time to time be
included thereon by mutual written agreement of the parties. DISTRIBUTOR
acknowledges that Schedule B will not necessarily include all products sold by
RSM, and that Products are subject to modification or discontinuance by RSM upon
notice to DISTRIBUTOR, and, upon DISTRIBUTOR's receipt of such notice, Schedule
B will be deemed amended accordingly. 1.2 Appointment. l.2.1 Effective as of the
Effective Date of this Agreement, RSM hereby appoints DISTRIBUTOR, and
DISTRIBUTOR accepts such appointment, as a nonexclusive distributor of Products
in the geographical area described on Schedule C hereto (the "Territory"),
subject to the terms and conditions set forth in this Agreement. 1.2.2
DISTRIBUTOR shall not directly or indirectly deliver or promote the sale of the
Products outside the Territory or locate or utilize an office, branch, or
distribution depot for the sale or distribution of the Products outside the
Territory. DISTRIBUTOR shall immediately notify RSM if it becomes aware that any
DISTRIBUTOR customer exports or sells or plans to export or sell any of the
Products outside the Territory. 1.3 Noncompetition. DISTRIBUTOR represents that
as of the Effective Date there are no agreements in effect providing for the
marketing, sale or distribution by «Distributorname» «Territory» 4782913v1

 

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DISTRIBUTOR of products that compete with the Products covered hereby and that
DISTRIBUTOR is not precluded by any contractual obligation or any other reason
from entering into or performing under this Agreement. DISTRIBUTOR agrees that
during the term of this Agreement DISTRIBUTOR will not, directly or indirectly,
sell, promote or distribute any products that compete with the Products covered
hereby. 1.4 Sub-Distributors. DISTRIBUTOR agrees that it will not establish any
sub­ distributors without the prior written consent of RSM. It is understood
that such appointment shall be made only in the name and for the account of
DISTRIBUTOR and shall be for a term no greater than the term of this Agreement.
DISTRIBUTOR shall not grant to any sub-distributor any rights greater than those
which are granted by RSM to DISTRIBUTOR under this Agreement. DISTRIBUTOR shall
also impose on any sub-distributor the same obligations as RSM has imposed on
DISTRIBUTOR under this Agreement for the purpose of protecting the goodwill of
RSM and the Products. DISTRIBUTOR shall insure that all its sub-distributors
comply with any regulatory requirements with respect to the Products.
DISTRIBUTOR shall defend, indemnify, and hold RSM harmless against any claim,
loss, liability, or expense (including attorney’s fees and court costs) arising
out of or based upon any claim made by any of DISTRIBUTOR's sub-distributors,
sales representatives, or employees against RSM. 1.5 Manufacturer’s
Representative. RSM or its affiliated companies shall have the right, at their
option and expense, to maintain representatives in or supporting the Territory
from time to time to participate in the marketing, sale, and after­ sale support
of the Products. If RSM or its affiliated companies elect to maintain such
representatives, DISTRIBUTOR shall share information and cooperate in good faith
in connection with all material contacts and activities with customers and
potential customers. DISTRIBUTOR agrees that during the term of this Agreement
and for a period of one year thereafter it will not, without RSM's consent,
induce or solicit any such ReShape Medical personnel to terminate their
employment with ReShape Medical in order to become employed by, or otherwise
affiliated with, DISTRIBUTOR. 1.6 Non-Agency. The parties acknowledge that
DISTRIBUTOR is an independent contractor, and that neither the making of this
Agreement nor the performance of any of the provisions hereof shall be construed
to constitute DISTRIBUTOR or any of its agents acting hereunder an agent or
legal representative of RSM for any purpose, nor shall this Agreement be deemed
to establish a joint venture, partnership, franchise, agency, or
employer-employee relationship. DISTRIBUTOR is not granted, and shall not
exercise, the right or authority to assume or create any obligation or
responsibility on behalf of or in the name of RSM or its affiliated companies.
1.7 Remuneration. Except as otherwise provided herein, DISTRIBUTOR shall not be
entitled to any remuneration of any nature whatsoever other than the profit it
makes on the delivery of Products to its customers in the Territory. 2. PURCHASE
OF PRODUCTS AND TERMS OF SALE

 

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2.1 Quotas. 2. l. l The parties agree to the quota levels set forth in Schedule
D hereto (or as it may be amended from time to time by mutual agreement of the
parties) as the minimum requirements for DISTRIBUTOR purchases of Products from
RSM, and DISTRIBUTOR shall purchase Products in no less than such amounts in the
applicable calendar quarters. 2. l.2 DISTRIBUTOR agrees that the minimum
purchase requirements appearing on Schedule D hereto arc reasonable in view of
the market potential for Products in the Territory and acknowledges that all
such requirements have been established as the result of a mutual examination of
market potential and negotiations between the parties. 2.1.3 It is further
agreed that in the event additional Products are added to Schedule B hereto, the
minimum purchase requirements for such Products will be determined by RSM after
consultation with DISTRIBUTOR, and such new minimum purchase requirements will
be incorporated in and be made subject to the terms of this Agreement. 2.3
Orders. 2.3.1 DISTRIBUTOR shall purchase from RSM, and RSM shall sell to
DISTRIBUTOR, such quantities of Products as DISTRIBUTOR may order from time to
time pursuant to the terms of this Agreement. Orders shall be placed by written
purchase order and submitted by e-mail or facsimile, or by other means agreed
upon by the parties. No order shall be binding upon RSM until the same shall
have been accepted in writing by RSM. In case of conflict between the standard
printed terms of purchase/sale of DISTRIBUTOR and RSM, the terms of
purchase/sale of RSM shall prevail, but in no event shall either party’s
standard terms override any provisions of this Agreement. 2.3.2 Notwithstanding
any other provision hereof, it is agreed that the obligation of RSM to sell any
Product to DISTRIBUTOR is subject to the availability of such Product. RSM shall
make reasonable efforts to fill each order that is accepted, but RSM shall not
be liable for damages caused by failure to ship or delay in shipment resulting
from product shortage of any kind or conditions beyond the control of RSM,
including, but not limited to, the unavailability of such Products because of
the inability to obtain materials and supplies or to produce sufficient Products
to meet sales demands. If RSM believes that it will not be able to satisfy
DISTRIBUTOR’s requirements for the Products, it shall promptly notify
DISTRIBUTOR, specifying the reasons for the expected delay and its anticipated
duration. 2.4. Prices.

 

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2.4.1 Prices for the Products as of the Effective Date of this Agreement shall
be as set forth on Schedule B hereto 2.5 Payments. All payments due to RSM
pursuant to this Agreement shall be paid according to the payment terms set
forth on Schedule E hereto. All payments to RSM pursuant to this Agreement shall
be made in United States dollars, without set-off or counterclaim and without
deduction for any other charges. RSM shall retain a security interest in the
Products until full payment is made, and DISTRIBUTOR shall assist RSM in any
local recording of such security interest. If DISTRIBUTOR fails to make any
payment when due, RSM shall have the right to take whatever action it deems
appropriate or necessary, including, but not limited to, requiring immediate
return of unsold Products, refusal of further orders, requiring payment in full
before shipment, or termination of this Agreement pursuant to Section 6.2 hereof
2.6 Shipping. Except as set forth below, all fees for shipping to the
DISTRIBUTOR will be paid by the DISTRIBUTOR. Products shall be shipped to
DISTRIBUTOR at the address (es) specified by DISTRIBUTOR from time to time. Risk
of loss and title to the Products will pass to DISTRIBUTOR at port of entry at
the foreign airport destination in the Territory. DISTRIBUTOR shall bear the
cost of any handling, shipping, and insurance, within the designated territory.
DISTRIBUTOR shall be responsible for clearing the Products through customs
unless RSM notifies DISTRIBUTOR otherwise. DISTRIBUTOR shall be responsible for
paying any and all duties and taxes due in connection with the importation of
the Products. DISTRIBUTOR will be responsible for inspecting Product upon
receipt in the Territory. DISTRIBUTOR shall submit to RSM all claims for
non-delivery, shortages in shipment or defects reasonably discoverable on
careful inspection in writing within 10 days of receipt of such shipment by
DISTRIBUTOR. If DISTRIBUTOR does not provide such written notice to RSM within
the specified timeframe, RSM will be discharged from liability for any such
non-delivery, short delivery or defect. RSM shall promptly file a notice of
claim against the freight handler in the event that DISTRIBUTOR provides written
notice to RSM that any of the Products arrive other than in external good order
and condition. 3. OBLIGATIONS OF DISTRil3UTOR 3.1 Distribution of Products.
DISTRIBUTOR agrees to devote DISTRIBUTOR’s best efforts to (i) develop and
promote the use and sale of the Products in the Territory, and (ii) furnish such
service of accounts as will enable DISTRIBUTOR adequately to develop and
maintain the goodwill of customers and prospective customers and their
acceptance of the Products. DISTRIBUTOR also agrees to abide by RSM’s
recommendations regarding the use of the Products, and plan orders adequately to
meet customer delivery requirements. 3.2 Legal Requirements. Except as otherwise
set forth in Section 3.4, DISTRIBUTOR will obtain and maintain, at its expense,
all licenses, approvals, consents, and permits necessary for DISTRIBUTOR to
perform its obligations under this Agreement. DISTRIBUTOR agrees to comply with
all laws, statutes,

 

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regulations and other legal requirements and not to place RSM in jeopardy of not
complying with any such requirements. DISTRIBUTOR understands that the ReShape
Medical Code of Conduct requires that the Products be sold only on the basis of
quality, service, price and other legitimate marketing attributes, and that the
payment of bribes for any purpose has no place in DISTRIBUTOR’S performance
under this Agreement and is absolutely prohibited. Furthermore, DISTRIBUTOR
agrees to use good judgment, high ethical standards and honesty in DISTRIBUTOR’s
dealings with customers, end-users and employees, recognizing that even the
appearance of unethical actions is not acceptable. DISTRIBUTOR acknowledges and
expressly agrees that certain laws of the United States of America and other
countries, including, without limitation, the United States Export Control
Regulations, the United States Anti-Money Laundering laws, the United States
Anti-Terrorism laws and the Foreign Corrupt Practices Act, may result in the
imposition of sanctions on RSM or its affiliated companies in the event that,
directly or indirectly, (i) Products are exported to various countries,
including without limitation Cuba, Iran, North Korea, Syria, Sudan, or any
country embargoed by Executive order or otherwise, or (ii) offers, promises, or
payments are made to government officials or others for the purpose of
influencing decisions favorable to RSM. DISTRIBUTOR expressly agrees, therefore,
that in performing its obligations under this Agreement it shall comply at all
times with such laws or regulations and refrain from making or promising to make
payment or transfer of anything of value that would have the purpose or effect
of public or commercial bribery, or acceptance of or acquiescence in extortion,
kickbacks, or other unlawful or improper means of obtaining business.
DISTRIBUTOR also agrees to furnish to RSM by affidavit or other reasonable means
from time to time at RSM’s request, and to RSM’s reasonable satisfaction,
assurances that the appointment of DISTRIBUTOR and DISTRIBUTOR’s activities
under this Agreement, and the payment to DISTRIBUTOR of any commissions,
discounts, or any monies or consideration contemplated in this Agreement, are
proper and lawful under said laws and regulations. DISTRIBUTOR further
acknowledges that no person employed by it is an official of any government
agency or a corporation owned by a governmental unit within the Territory and
that no part of any monies or consideration paid pursuant to the terms and
conditions of this Agreement or any proceeds from the sale of the Products in
the Territory shall accrue for the benefit of any such official. Breach of this
provision, or reasonable grounds for RSM to believe it has been breached (in
RSM’s sole discretion), will result in immediate termination of this Agreement.
DISTRIBUTOR will not make any performance or safety claims with respect to
Product not contained in the label or otherwise approved by RSM consistent with
applicable laws. 3.3 Quality Requirements. RSM has, and requires of its
distributors, a primary commitment to patient safety and product quality. To
this end, DISTRIBUTOR agrees to comply with ReShape Medical’s Quality
requirements regarding the Products as specified in Annex A hereto or as they
may be further communicated to DISTRIBUTOR from time to time. These include,
without limitation, requirements regarding appropriate storage of the Products,
maintaining traceability, prompt reporting and handling of complaints, and
implementation of recalls and other field actions. These requirements shall
survive the expiration or other termination of this Agreement.

 

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3.4 Product Registrations 3.4.1 Unless prohibited by applicable law, DISTRIBUTOR
will assist RSM or its affiliates in securing all registrations and approvals
pertaining to the Products and required for the sale or importation of the
Products in the Territory, and all such approvals or registrations will be
applied for and maintained in the name of RSM unless RSM agrees otherwise in
writing. 3.4.2 RSM agrees to provide DISTRIBUTOR with all required documents in
English upon request. DISTRIBUTOR will be responsible for all translation of
necessary documents, and for answering any and all questions required by local
government agencies ReShape Medical with the input and approval of RSM. RSM will
assist in answering all questions.  3.4.4 In the event that any registrations
arc maintained in the name of DISTRIBUTOR, upon termination of this Agreement
DISTRIBUTOR shall cooperate in any and all procedures (including, but not
limited to, the completion of any documentation) required to transfer such
registrations to RSM or its designee and shall not oppose any new registration
for the Products by RSM or its designee. Copies of all regulatory permits shall
be provided to RSM and copies of DISTRIBUTOR’s files relating to such permits
shall be provided to RSM on request. 3.4.5 DISTRIBUTOR shall not market or sell
Product in the Territory prior to receipt of regulatory approval. 3.5 Reports
and Other Information. DISTRIBUTOR agrees that during the term of this Agreement
it will: 3.5.1 Respond in writing to any reasonable requests by RSM for market
and inventory information, including information concerning competitive
activity, pricing, distribution, and Territory surveys and forecasts and, as
requested by RSM, meet with RSM representatives to review these matters. 3.5.2
Promptly forward to RSM any inquiry or other communication, including
correspondence or notices from regulatory authorities in the Territory, received
by DISTRIBUTOR concerning any of RSM’s products that appropriately should be
responded to by RSM, and all inquiries related to the sale or distribution of
Products outside the Territory. 3.5.3 If so requested by RSM, provide RSM
reasonable financial information on a confidential basis or provide credit
references to assure RSM of DISTRIBUTOR’s financial capability to conduct its
ongoing business.

 

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3.6 Trademarks. RSM hereby grants to DISTRIBUTOR the right and license to use
the trademarks, service marks, trade names, and trademark registrations of RSM
and its affiliated companies for the Products in the Territory, but only in
connection with sales in the Territory of the Products purchased from RSM during
the term of this Agreement and solely in connection with trademark usage
procedures provided by RSM. All right, title, and interest to the trademarks and
other intellectual property rights of RSM and its affiliated companies shall
remain with such companies, and no other license relating thereto is granted
hereunder (except the right to use such trademarks as set forth herein).
DISTRIBUTOR shall not market the Products under any tradename or trademark other
than the trademarks and tradenames approved by RSM. 3.7 Expenses, Except as
otherwise specifically provided herein, DISTRIBUTOR shall bear all costs and
expenses associated with its performance of this Agreement, including (but not
limited to) amounts due employees or agents of DISTRIBUTOR, advertising, bad
debt expense, inventory losses, commissions, licensing fees, regulatory fees,
and taxes. In no event shall RSM be liable for any expenses incurred by
DISTRIBUTOR unless RSM has agreed in writing to pay such expense. 3.8
Proprietary Rights. DISTRIBUTOR shall report promptly to RSM: (i) any
infringement of the patents, trademarks, or other intellectual property rights
of RSM or its affiliated companies of which DISTRIBUTOR may learn, but
DISTRIBUTOR shall not initiate any protective action with respect to such
infringement without RSM’s prior written authorization; and (ii) receipt of any
notice or service of legal action against DISTRIBUTOR and/or RSM or its
affiliated companies claiming any infringement, misappropriation or breach of
any intellectual property right, including but not limited to patent, copyright.
trademark, or trade name infringement, and RSM shall have full rights and
responsibility to manage and control the defense of DISTRIBUTOR and RSM in any
such action, including the right to settle on behalf of either or both, and
DISTRIBUTOR agrees to cooperate to the fullest extent necessary to enable RSM to
conduct such defense. 3.9 Business Review. DISTRIBUTOR hereby gives RSM the
right, upon reasonable advance notice, to conduct business reviews involving an
examination, either directly or through a designee, of DISTRIBUTOR’S inventory
of Products, quality systems, copies of promotional materials, and business
records, including financial and sales records relating to the business
performed pursuant to this Agreement, in order to ensure DISTRIBUTOR’s
compliance with the terms of this Agreement. 3.10 Product Materials. DISTRIBUTOR
shall sell Product in the same containers and with the same labeling and
packaging as provided by RSM or otherwise approved by RSM, and in all other
respects in the same condition as when delivered lo DISTRIBUTOR by RSM.
DISTRIBUTOR will not use any promotional materials with respect to Product other
than those provided by RSM or approved by RSM under Section 4.4.

 

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4 RSM’s ODLIGATIONS 4.l 4.2 4.3 Quality Control. RSM agrees to maintain ongoing
quality assurance and testing procedures sufficient to satisfy applicable
regulatory requirements. Assistance. RSM shall provide DISTRIBUTOR with
reasonable access to its technical and marketing personnel at no charge to
DISTRIBUTOR, except as otherwise agreed. Training. RSM will provide DISTRIBUTOR
with technical training seminars as RSM and DISTRIBUTOR agree is needed in the
English language for DISTRTRUTOR’s employees directly engaged in distributing
the Products. Travel and living expenses for DISTRIBUTOR’s employees connected
with attendance at such training seminars shall be paid by DISTRIBUTOR.
DISTRIDUTOR agrees that each of DISTRIBUTOR’s employees directly engaged in
distributing the Products who has not previously attended a RSM technical
training seminar will attend such a seminar or will be trained by DISTRIBUTOR in
a program approved by RSM within a reasonable period of time after the
commencement of their involvement in the sale of the Products. 4.4 Advertising.
RSM will furnish at no cost to DISTRIBUTOR reasonable quantities of promotional
materials in the English language where available, such as sales literature,
technical data, instruction manuals, and technical journal reprints. At the
request of RSM, DISTRIBUTOR shall return all such literature or data in
DISTRIBUTOR’s custody or control at the time of such request. DISTRIBUTOR may
print literature or brochures in other languages at its own cost; however, prior
to the printing or distribution of any such translated Product literature,
DISTRIBUTOR agrees to submit the translation for RSM's review and written
approval. The copyright rights to any such translations shall be deemed assigned
to RSM or its affiliated companies, and all translations shall have adequate
copyright notices evidencing such rights. 5 WARRANTIES AND INDENIFICATION 5.1
Product Warranty. The Products are warranted to be free of defects in
workmanship and material according to the written warranty contained in the
literature that accompanies the Products, which warranty may be changed from
time to time by RSM upon written notice to DISTRIBUTOR. RSM's obligation under
this warranty shall be limited to the repair or replacement of any Products that
RSM determines were defective when delivered to DISTRIBUTOR. The foregoing is
the only express warranty made by RSM related lo Product delivered under this
Agreement. RSM EXPRESSLY DISCLAIMS ALL OTHER EXPRESS WARRANTIES AND ANY AND ALL
IMPLIED WARRANTIES, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE. DISTRIBUTOR shall not add to or otherwise alter or
modify any applicable warranty, nor make any false representation regarding RSM
or the Products or any other representation that is not included in the Product
labeling in promoting sales of the Products, including any misrepresentation
regarding the permissible uses of the Products. DISTRIBUTOR will hold RSM, its
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employees harmless from and indemnify all of them against any liability that may
arise out of or result from any such unauthorized warranty or representation.
5.2 Limitations IN NO EVENT WILL RSM BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL OR
SPECIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR OTHERWISE RELATED TO PRODUCT,
INCLUDING ANY LOSS OF PROFITS, EVEN IF RSM HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. IN NO EVENT SHALL RSM’S LIABILITY TO DISTRIBUTOR EXCEED AN
AMOUNT EQUAL TO THE AGGREGATE PRICES PAID BY DISTRIBUTOR TO RSM FOR PRODUCTS
DURING THE LAST CALENDAR QUARTER PRECEDING THE DATE IN WHICH THE CLAIM IS MADE,
except that this liability limitation shall not apply to RSM's indemnity
obligation under Sections 5.2 and 5.3. 5.2 Intellectual Property Infringement.
Subject to the following sentence, RSM will defend DISTRIBUTOR against any
action, proceeding, or claim by any third party for RSM’s infringement of any
intellectual property rights (including patent, copyright, trademark, and trade
name rights) of any third party. RSM shall at all times during the term of this
Agreement and thereafter indemnify, defend, and hold DISTRIBUTOR harmless
against any and all costs (including but not limited to reasonable attorneys’
fees), expenses, loss, damages, or liability to any third party as a result of
any such action, proceeding, or claim referred to in the preceding sentence,
provided that DISTRIBUTOR promptly notifies RSM in writing of such action,
proceeding, or claim, allows RSM to control defense of such claim, cooperates at
RSM’s request and expense in such defense and docs not settle any such claim
without RSM’s prior written approval. 5.3 Indemnification. DISTRIBUTOR and RSM
shall each defend, indemnify, and hold harmless the other party, its officers,
directors, agents, insurers, employees, shareholders, and affiliated companies
from and against any claim, loss, suit, liability, or expense (including but not
limited to attorneys’ fees and other costs associated with the handling of or
defense of any such action or claim) arising out of or based upon a breach by
the indemnifying party of any of the warranties in this Section 5 or other
failure by the indemnifying party to comply with any material provision of this
Agreement, provided that the indemnified party provides prompt written notice to
the indemnifying party of such action, proceeding, or claim, allows the
indemnifying party to control defense of such claim, cooperates at the
indemnifying party's request and expense in such defense and does not settle any
such claim without the indemnifying party’s prior written approval. 6 TERM AND
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6.1 Term. This Agreement shall commence on the Effective Date, and, unless
otherwise terminated earlier as provided below, shall remain in effect until the
Expiration Date listed on Schedule A, at which time it shall expire
automatically. Notwithstanding the number of renewals, this Agreement shall
always be construed as a fixed-term contract. This Agreement is subject to
DISTRIBUTOR's cooperation with and satisfactory completion of a due diligence
background check. If, within RSM's sole discretion, the results of the
background check are unsatisfactory, RSM may suspend this Agreement upon
immediate notice to DISTRIBUTOR. 6.2 Termination. Either party shall have the
right to terminate this Agreement without liability therefore, after written
notice to the other party, (i) effective immediately in the event of a breach by
the other party of any of its obligations hereunder, which breach (if curable)
is not cured within 10 days of written notice of such breach, or (ii) without
cause upon 180 days' advance written notice to the other party. 6.3 Effect of
Termination or Expiration. Upon termination or expiration of this Agreement, all
amounts due by DISTRIBUTOR to RSM will become due and payable at the time of
termination or expiration. The parties agree that neither party shall be liable
to the other for damages or otherwise by reason of the nonrenewal of this
Agreement or its termination as provided in this Section 6, provided that such
nonrenewal or termination shall not operate to discharge or release either party
of obligations assumed by it prior to such nonrenewal or termination and the
foregoing is not intended to limit a party's liability for breach of this
Agreement. Acceptance of orders from DISTRIBUTOR by RSM after termination will
not constitute a renewal of this Agreement or a waiver of the right of RSM to
treat this Agreement as terminated. The granting of any notice of nonrenewal or
termination of this Agreement by RSM shall entitle RSM, before shipment of any
pending or new orders, lo require advance payment, or other security for
payment, of all previously outstanding balances (whether or not otherwise due)
plus the amount of the new order. Upon expiration or termination of this
Agreement, DISTRIBUTOR shall return to RSM all technical and commercial
materials, customer lists, price lists, and other materials that are RSM's
property. 6.4 Inventory Repurchase. Upon termination of this Agreement for any
reason, RSM may, at its sole option, elect to purchase back from DISTRIBUTOR,
and by doing so require DISTRIBUTOR to sell to RSM, any unsold inventory of
Products in DISTRIBUTOR's possession or control, provided that such Products arc
unopened and in saleable condition, the expiration date of sterility of such
Products is at least 365 days beyond the effective date of repurchase, and such
products are currently marketed by RSM and not obsolete. The price to be paid by
RSM for the purchase of such inventory shall be the purchase price actually paid
by DISTRIBUTOR for the Products, increased by transportation and customs duties,
if any, paid by DISTRIBUTOR for the transportation of the Products into the
Territory. Any Products designated for return by DISTRIBUTOR (and related
storage and handling records) will be inspected by RSM or an authorized
representative of RSM in order to determine if the Products to be purchased by
RSM fulfill the conditions mentioned above. Upon

 

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issuance of a return authorization to DISTRIBUTOR by RSM, DISTRIBUTOR shall ship
the Products to RSM or to any entity or individual designated by RSM, freight
prepaid. 6.5 The Sections 3.4.4, 5, 6, and 7 and the last sentence of Sections l
.4 shall survive termination or expiration of this Agreement. 7 GENERAL TERMS 7.
l Confidential Information. DISTRIBUTOR agrees that it shall keep confidential
and shall not publish or otherwise divulge or use for its own benefit or for the
benefit of any third party any information of a proprietary nature furnished to
it by or on behalf of RSM or its affiliated companies without the prior written
approval of the communicating party, except (i) as required by court order, or·
(ii) as reasonably necessary to perform its sales-related obligations under this
Agreement and in the case of any disclosure under clause (ii) subject to the
obligations of confidentiality and restrictions on use at least as stringent as
those set forth in this Agreement. Information of a proprietary nature shall
include, but not be limited to, information concerning RSM's or its affiliated
companies' products, proposed products, marketing plans, manufacturing
processes, proprietary software, financial information, or any other marketing
information or materials in whatever form not generally known to the public. 7.2
Force Majeure. In the event that a delay or failure of a party to comply with
any obligation created by this Agreement is caused by a force majeure condition,
that obligation shall be suspended during the continuance of the force majeure
condition. For the purposes of this Agreement, the term "force majeure" shall
mean any event beyond the control of the parties, including, without limitation.
fire. flood, riots, strikes, epidemics, war (declared or undeclared and
including the continuance, expansion or new outbreak of any war or conflict now
in existence), embargoes, and governmental actions or decrees. 7.3 Assignment.
This Agreement shall not be assignable by DISTRIBUTOR without the prior written
consent of RSM, but this Agreement or any portion hereof is assignable by RSM
without the consent of DISTRIBUTOR. 7.4 Non-Waiver. The waiver or failure of
either party to exercise in any respect any right provided for herein shall not
be deemed a waiver of any further right hereunder. 7.5 Notices. Any notice or
request given under this Agreement shall be in writing and in the English
language and may be delivered by hand or may be sent by telefax or certified or
registered mail or commercial carrier (return receipt or confirmation of
delivery requested) addressed to the other party at the address shown on the
first page of this Agreement, or at such other address designated in writing lo
the other party. Any notices sent by telefax must be followed by a confirmation
copy by airmail or other reliable means.

 

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7.6 Arbitration. Any and every dispute, controversy or claim between the parties
and/or their valid and lawful assignees and successors, including, but not
limited to (i) any and every dispute, controversy or claim arising out of or
relating to this Agreement and/or its amendments, and (ii) any and every
dispute, controversy or claim not arising out of or not relating to this
Agreement and/or its amendments, shall be finally settled by arbitration in
Orange County, U.S.A. in accordance with the International Arbitration Rules of
the International Centre for Dispute Resolution ("ICDR"). Judgment on, the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. A sole arbitrator shall be chosen at the mutual agreement of the
parties from a list of ICDR proposed arbitrators under the ICDR's arbitration
rules. if the parties fail to mutually agree on the choice of an arbitrator
within 30 days of receipt of claimant's request for arbitration by the other
party, the sole arbitrator shall be appointed by the ICDR in accordance with its
International Arbitration Rules. The language of the arbitration proceedings
shall be English and the law applied to the dispute shall be solely and
exclusively the laws of the California. The award shall state with specificity
the reasons upon which the Award is based, and shall contain the arbitrator's
findings of fact. Except as required by law, neither party nor the arbitrator
may disclose to a third party the existence, content, or results of any
arbitration hereunder without the prior written consent of both parties.
Notwithstanding the above, RSM shall, at its sole discretion, have the right to
initiate in any court sitting in California, USA or in the Territory a non-jury
collection lawsuit against DISTRIBUTOR in an effort to collect from DISTRIBUTOR
any and all moneys charged by RSM to DISTRIBUTOR for the Products sold by RSM to
DISTRIBUTOR or to obtain temporary injunctive relief. All other issues, without
exception, must be arbitrated. 7.7 Entire Agreement. The terms and provisions
contained in this Agreement and the attached Schedules constitute the entire
Agreement between the parties and supersede all previous communications,
representations, agreements, and understandings, whether oral or written,
between the parties with respect to the subject matter hereof. Except as this
Agreement specifically authorizes RSM to modify certain provisions of this
Agreement or the attached Schedules upon written notice to DISTRIBUTOR, no
agreement or understanding extending this Agreement or varying its terms
(including any inconsistent terms in any purchase order, acknowledgment, or
similar form) shall be binding upon either party unless it is in a writing
specifically referring to this Agreement and signed by the duly authorized
representatives of the respective parties. 7.8 Severability. Should any
provision of this Agreement be determined to be unenforceable or prohibited by
applicable law, such provision shall be ineffective only to the extent of such
unenforceability or prohibition without invalidating the remainder of such
provision or the remaining provisions of this Agreement. 7.9 Captions. The
captions of provisions in this Agreement are for convenience only and shall not
control or affect the meaning or construction of any of the provisions of this
Agreement.

 

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7.10 Counterparts. This Agreement may be executed in any manner of counterparts,
each of which shall be deemed to be an original as against any party whose
signature appears thereon, and all of which shall together constitute one and
the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signature or
all of the parties reflected hereon as the signatories. 7.11 Governing Law. This
Agreement shall he governed and construed in accordance with the laws of the
California, United States of America, to the exclusion of both its rules or
conflicts of laws and the provisions of the United Nations Convention on
Contracts for the International Sale of Goods. 7.12 Release. In exchange for the
agreement by RSM to enter into this Agreement with DISTRIBUTOR, DISTRIBUTOR
hereby releases RSM and its affiliated companies from and waives any claims it
may have had against RSM and its affiliated companies related to any previous
distribution agreement or business dealings between DISTRIBUTOR and RSM or its
affiliated companies. IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed as of the Effective Date. ReShape Medical Inc. By Michael J.
Mangano President 5/11/2017 By Dr. Bader Al Wiss General Manager [SEAL]

 

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Schedule A Distributor and Term Distributor Information Corporate Name: SHIFLI
GULF FOR TRADING IN DRUGS & EQUIPMENTs AND DEVICES COMPANY Address: STATE OF
KUWAIT, HAWALLY, BLOCK 166, TOWW AR ZENAH, STREET BIN KHALDOUN, 3RD FLOOR P.O.
ROX 543

 

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Schedule B Products and Pricing The following indicates the product line(s) to
be included as Products under this Agreement as well as the pricing of such
Products. Prices quoted do not include the cost of any handling, shipping, and
insurance (to be borne by DISTRIBUTOR pursuant to Section 2.6). QTY CATALOG
NUMBER DESCRIPTION UNIT PRICE USD RSM101 Integrated Dual Balloon Assembly, US
$1,500.00 RSM900 Balloon Valve Sealant Assembly (one package included with each
balloon order) N/C RSM210 Removal Catheter Assembly $200.00 RSM300 Tech Device
Guidewire (if desired) $50.00 KIP-II-RS ReShape Infiltration Pump $5,000.00
ITS-10-RS ReShape Pump Tubing (pack of 10) $100.00

 

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Schedule C Territory The customers and or geographical area subject to this
Agreement shall be specifically and exclusively limited to the State of Kuwait.

 

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Schedule D Minimum Purchase Quotas Reshape Forecast (in Units) 2017 Country
Distributor Ql Q2 Q3 Q4 Kuwait Al Shifli N.A. 20 0 20 2018 Country Distributor
Ql Q2 Q3 Q4 Kuwait Al Shifli 20 30 10 30

 

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Schedule E Payment Terms The first two orders for the ReShape Dual Balloon will
be cash pay up front. After successfully executing these orders, future orders
may be extended via the credit terms below. Payment for Products is due within
60 days after date of invoice on open account as long as DISTRIBUTOR’s credit
remains good, payments to RSM are made on time, and the total amount owed by
DISTRIBUTOR to RSM is within the credit limits determined by RSM from time to
time. DISTRIBUTOR’s credit limit as of the effective date of this Agreement
shall be U.S. currency although RSM reserves the right to require DISTRIBUTOR to
provide adequate security for the amount of such credit limit as a condition to
making sales on open account terms. RSM shall have the right to adjust
DISTRIBUTOR’s payment terms and credit limits from time to time. OR DISTRIBUTOR
shall pay RSM for Products in advance of delivery by cash or irrevocable letter
of credit with order. Late Payments: DISTRIBUTOR will pay a late fee on all past
due amounts at the rale of one percent per month or the highest rate permissible
by law, whichever is lower, until paid in full. Taxes. All amounts payable lo
RSM under this Agreement are exclusive of any income, sales, use, property, ad
valorem, value added or other taxes, levies, imposts, duties, charges or
withholdings of any nature (collectively, "Taxes"), arising out of any
transaction contemplated by this Agreement and imposed against DISTRIBUTOR or
the Products by any taxing authority in the Territory (excluding, however, any
Taxes on, or measured solely by, the net income of RSM and Taxes imposed on RSM
in the United States). DISTRIBUTOR shall pay all applicable Taxes or provide RSM
with a certificate of exemption acceptable to the relevant taxing authority. In
the event that any payments to RSM under this Agreement are subject to any
withholding taxes, DISTRIBUTOR shall promptly provide all tax certificates,
applications and related documents to RSM. If RSM is required to pay any Taxes
in the Territory (excluding, however, any Taxes on, or measured solely by, the
net income of RSM and Taxes imposed on RSM in the United States), DISTRIBUTOR
shall promptly reimburse RSM upon written request therefore.

 

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ANNEX A- Quality Requirements A) Storage of Products: If applicable Distributor
is required to store products in accordance with product labeling statements and
within an environment that prevents any of their characteristics from being
altered until delivered to the customer. The minimum storage requirements for
RSM products include the following: If applicable, Distributor must establish a
secure storage location and limit access to this location to only those
personnel authorized by Distributor. Products must be stored within this
location to prevent Products from being contaminated or tampered with in any
way. Additionally, Products must be kept in a clean area, free of insects,
rodents and any pests. Distributor shall have a process to prevent expired,
rejected and/or quarantined Products from being sent to final customers. ReShape
Medical RSM reserves the right to provide other instructions to Distributor
regarding such Product, and Distributor agrees to comply with such instructions.
B) Traceability: Distributor is required to maintain records to ensure the
traceability of ReShape Medical products in accordance with applicable
regulatory requirements, and to provide ReShape Medical or its authorized agents
or representatives with reasonable access to such records. The minimum
traceability requirements for ReShapc Medical Products include the following:
Distributor is required to maintain a complete and current list of all customers
who have purchased ReShapc Medical products from Distributor, the dates of such
purchases, the quantity, and the lot numbers, UPNs, serial numbers and/or model
numbers of the units purchased (as applicable) as identified on the product
label. Distributor must ensure the traceability of all ReShape Medical products
at UPN, lot level including the model and serial number where applicable. The
final users for all products must be identified (units sold directly to
hospitals, units sold directly to doctors, units sold directly to patients). If
ReShape Medical products are consigned, the batches consumed at the account must
be reconciled. The traceability of multi-pack boxes must be maintained and
single units originally from multi-packs must never be re-boxed. C) Complaint
Reporting and Handling: Distributor is required to promptly forward all
complaints concerning the products, cooperate fully with ReShape Medical in
dealing with customer complaints, and take such action to resolve such
complaints as may be reasonably requested by ReShape Medical. The complaint
reporting requirements for ReShape Medical products include the following:

 

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All customer complaints involving or contributing to serious adverse events
(including patient death or serious injury) must be reported to ReShape Medical
within 24 hours of Distributor's becoming aware. Complaints involving
non­serious events including comments regarding product dissatisfaction,
potential malfunctions, non-serious patient injury, or unanticipated medical or
surgical intervention shall be reported to ReShape Medical within 48 hours. A
Complaint Notification Form will be provided Lo Distributor by ReShape Medical
and must be completed in full to document each complaint. Additionally, any
ancillary documentation that may facilitate the complaint investigation process
should also be attached, particularly if the product is not available for
return. In cases where additional information is required from the customer, at
least three (3) due diligent attempts must be performed by Distributor to try to
collect this additional complaint information, if requested by ReShape Medical.
Should requested information not be available, Distributor shall document the
reason(s) it is not available and/or the 3 attempts. Products subject to
complaints should be returned to ReShape Medical. Returned products must either,
as directed by ReShape Medical, be accompanied by a disinfection certificate,
even if the products have not been used; or be returned in biohazard controlled
packaging and under safe handling controls. In cases where the customer has
indicated that the complaint product is available to be returned but it has not
been received, at least three (3) due diligent attempts must be made by
Distributor to retrieve the product.

 

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D) Recalls and Other Field Actions: If ReShape Medical initiates a recall or
other field action for any products, Distributor is required to implement such
recall or other field action (including location and retrieval of the recalled
product) with respect to Distributor's customers in accordance with the
instructions provided by ReShape Medical. The minimum requirements for managing
recalls and other field actions affecting ReShape Medical Products include the
following: Recalls and other field actions must be acted upon immediately by
Distributor after receiving the notification packet from ReShape Medical. An
acknowledgement of the receipt of the field action notice must be promptly sent
to Reshape Medical. Distributor must follow the instructions contained in the
notification packet and ensure that actions are carried out in accordance with
the timeframe specified. Where directed in the notice, Distributor must retrieve
products from the following applicable locations: Distributor warehouse(s)
inventories In-transit from ReShape Medical to Distributor Customer locations:
whether sold, consigned or samples At least three (3) due diligent attempts must
be performed and documented to try to retrieve products from customers. Once all
product retrieval actions have been completed, the recalled stock must be
reported to ReShape Medical using the Verification Form contained in the
notification packet. (Note: the quantities documented on the verification forms
must match the units physically returned to ReShape Medical.) The units must be
returned to ReShape Medical following the instructions contained in the
notification packet. ReShape Medical agrees al its option either to refund the
purchase price, or to replace recalled products within a reasonable time at its
expense unless the recall is attributable to Distributor's actions.

 

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E) Record Retention Time: All product related records (e.g. Traceability
records, Complaints records, Recalls data, etc.) must be retained by the
Distributor in accordance with the following requirements: Type of Product l.
Implantable Device 2. Equipment 3. All Other Products Record Retention Timeframe
Indefinitely 2 years beyond dated removal from distribution or as otherwise
indicated by ReShape Medical At least Product lifetime/expiry+ 2 years or as
otherwise indicated by Reshape Medical.  F)  G) At termination of this
agreement, Distributor shall deliver all records required under this section to
ReShape Medical and shall direct future inquiries from customers to ReShape
Medical. Demonstration Units: Demonstration Units (non-sterile, not for human
use) are to be used by Distributor for demonstration purposes only and shall not
be given to final customers. All provisions in this Annex are applicable to
Demonstration Units. Literature and Label Control: All Product literature,
labeling and the use of ReShape Medical logos, templates or trademarks is
subject to ReShape Medical review and approval. Any "Internal Use" training
materials provided by ReShape Medical cannot be given to the customers.

 

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