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EXHIBIT 10.40 CONSULTING AGREEMENT EFFECTIVE DATE: PARTIES: ReShape MEDICAL,
Inc. 236 Avenida Fabricante, Suite 201, San Clemente, CA 92672 USA ("The
Company") HUMAN CAPITAL SAL ("The Consultant") Ashrafieh, Adlieh Square, Al
Faras Street. Boustany Building 2nd Floor, Beirut, Lebanon RECITALS: WHEREAS The
Company is committed to providing the best possible technology for a significant
weight loss without surgery through the "integrated dual balloon technology"
which restricts food intake and slows gastric emptying with an exclusive
intragastric dual balloon design that offers key patient benefits. WHEREAS The
Consultant has substantial expertise in the fields of Marketing/Sales support
and business development of medical devices, equipment and supplies, in the
Middle East and North Africa (the "Territory") and WHEREAS both parties desire
to enter into a business consultancy arrangement (hereinafter referred to as
"the Agreement") to serve their mutual interests and to specify the rights and
obligations of each party in such an arrangement. NOW THEREFORE, in
consideration of the mutual promises and covenants contained herein, and other
good and valuable consideration, the receipt and sufficiency of which is
acknowledged by both parties, the parties agree as follows: Article 1 -
Preamble: The above recitals shall be considered an integral part of this
agreement.

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Article 2 - Services of Consultant: The Company appoints The Consultant as its
exclusive consultant providing the Services (as defined below) in the Territory,
and The Consultant accepts such appointment to provide the following services
("the Services"): The Consultant agrees to use his reasonable best effort to
assist The Company in the marketing and commercialization of its products as
detailed in Annex 1 (hereinafter referred to as "The Products"), including but
not limited to creating a commercialization plan, suggesting preferred partners
and pricing, training, KOL development, marketing in key markets, and field
based physician engagement. It is clearly agreed and understood that any new,
modified or different product not listed in Annex 1 shall not be included herein
unless otherwise agreed in writing between the parties. a. Consultant agrees to
devote such time as is reasonably necessary to the fulfillment of his duties, to
be agreed upon and reviewed quarterly by The Company and The Consultant. b. The
Consultant shall comply fully, at its expense, with any and all applicable laws
and regulations, including without limitation, all applicable health and safety,
medical device, fraud and abuse, anti-kickback and referral laws and regulations
applicable in the Territory. Article 3 - The Company's Obligations: The Company
engages itself to: a. Provide The Consultant at The Company's own costs and
expenses, all technical and commercial documentation, in addition to full
assistance and cooperation, in connection with The Products, and b. Provide a
complete training program for The Consultant and technical expertise in
connection with The Products at no charge, and c. Pay The Consultant the
consultancy fees as provided for herein below in a timely manner, and d. Assist
The Consultant in setting up marketing strategies and plans at The Company's own
costs and expenses. Any marketing material which is provided to The Consultant
by The Company hereunder and which is not used shall remain the property of The
Company, and shall be returned immediately upon The Company's request or upon
termination or expiration of this Agreement.

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Article 4 - Compensation and terms of payment: The Company shall pay to The
Consultant management consultancy fees amounting to $5,000 (USD) payable
monthly, in addition to a performance sales commission fee 10% on net invoice
sales to all chosen distributors in the region (see commission schedule) payable
on a monthly basis for providing the Services, without any deduction or
withholding tax. The Consultant agrees that it is solely responsible for the
payment of all taxes and other related contributions, if any, due as a result of
the amounts paid by The Company pursuant to this Agreement, and The Consultant
agrees to defend, including payment of all related attorneys' fees and cost,
indemnify and hold harmless The Company against any and all claims which may be
asserted by any taxing or other government authority against The Company for
taxes, withholding taxes, penalties, interest, and any other assessment that may
be asserted or levied by any tax or other government authority arising from or
relating to The Company's payment of the amounts set forth in this Agreement. It
is clearly understood and agreed between the parties that in the event The
Company generates any income after the term of the Agreement in execution of an
order placed during the term of this Agreement however not invoiced during said
term, The Company undertakes to pay the commission fee to The Consultant
according to the terms and conditions of this Agreement. In addition, any
returns of product to The Company for any reasons other than company related
issues will be deducted from future compensation. For up to 45 days post
termination The Company may bill The Consultant to recoup paid commissions on
returned or expired product. All payments for undisputed amounts shall be due
and payable within thirty (30) days after the date of The Consultant's invoice.
Any and all costs and expenses related to the performance of the Services by The
Consultant shall be invoiced to The Company with documentary evidence of such
costs and expenses in form reasonably acceptable to The Company, and paid by The
Company. Any delay in payment shall result in the payment by The Company to The
Consultant of a late fee equal to the lesser of one percent (1.00%) or the
maximum interest rate allowable under applicable law per month on the
outstanding amount still owing, such interest to begin accruing on the first day
after such late payment is due.. Article 5 - Confidential information: The
Consultant agrees to treat as confidential and hold in strict confidence all
Confidential Information as defined here below and will not, without the prior
written authorization of The Company, disclose or use any Confidential
Information for the benefit of anyone other than The Company; provided, however,
that such information may be disclosed as required by law or regulation, except
that, insofar as permitted by law or regulation, prior to any such disclosure,
The Consultant shall notify The Company of the obligation to disclose and, if
requested by The Company, cooperate in The Company's efforts to prevent or limit
such disclosure.

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"Confidential Information" means any information, technical data or know-how,
whether patentable or not, which is furnished to The Consultant by The Company
in written, verbal or other form, including but not limited to that which
relates to research, product plans, designs, drawings, engineering, hardware
configuration information, clinical studies, regulatory matters, marketing, or
finances of The Company. It is agreed that this Article 5 shall survive for a
period of 2 years after the termination of this Agreement for any reason
whatsoever. Confidential Information does not include information, technical
data or know-how that The Consultant can document which (1) Was known to
Consultant, free of any confidentiality obligation, prior to learning it from
The Company; or (2) Has become known to The Consultant, free of any
confidentiality obligation, from an independent source without, to The
Consultant's knowledge, any breach of a confidentiality obligation to The
Company; or (3) Has become part of the public knowledge or literature other than
as a result of disclosure by The Consultant; or (4) ls otherwise approved in
writing by The Company for release. Article 6 - Change of Control No change of
control shall preclude the Company from executing the provisions of this
Agreement until its expiry. For purposes of this Agreement, a "change of
control" shall mean the consummation of a merger or consolidation of the Company
with any other corporation that has been approved by the stockholders of the
Company, other than a merger or consolidation which results in outstanding the
Company voting securities immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation. Article 7 - Term;
Termination:

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This Agreement shall commence as of the Effective Date set forth on the first
page of this Agreement and shall continue in effect for one year with automatic
yearly renewals for up to 2 additional years upon written agreement each year,,
at which time it will automatically terminate unless specifically extended by
both parties in writing. Either party may also without prejudice to any of its
other rights, terminate this Agreement at any time by giving the other party a
90 days prior notice in that respect. In case of termination of this Agreement
by The Company pursuant to the provision hereof, the latter agrees and
undertakes to pay in full for all Services rendered by The Consultant prior to
the termination date in addition to any financial commitments and expenses made
by The Consultant within the carrying out of its duties hereunder. Any invoices
during the 90 day "termination period" will be heavily scrutinized to ensure
orders are of normal or historical trends. Any commission deemed beyond normal
trends will not be paid. The Company agrees to pay The Consultant, upon
termination pursuant to this provision, a compensation as a result of the impact
of such termination on the image and credibility of The Consultant towards third
parties, and of the damage incurred, loss of profit or goodwill, amounting to
two months' fees, not including commissions of for each year of the execution of
the services. Termination of this Agreement by any party shall not terminate the
confidentiality obligations of Article 5, indemnification obligations pursuant
to Article 11 or any of the general obligations or provisions pursuant to
Article 12 of this Agreement. In case the obligations under this contract become
either impossible or very difficult to perform wholly or partly due to force
majeure, this contract shall be automatically suspended for the length of the
force majeure. Should, however, force majeure continue for a period exceeding
three months then this contract will be considered as terminated without need to
any notification. The parties will however endeavor to give notice to each other
in this respect. Any change in i) the control or ii) the reorganization or iii)
the management of both companies shall not be considered a case of force
majeure, and therefore both parties shall comply with their contractual
obligations as provided for in this Agreement. Article 8 - Breach: Any breach of
any provision of this Agreement shall entitle the non-breaching party to
terminate this Agreement forthwith without the need to any other notice to the
breaching party and shall be compensated by the latter to the amount of $5,000.
Article - 9 Non- Solicitation: During the course of the Agreement and for a
period of one year immediately following the expiration or termination of the
Agreement for any reason, whether with or without good cause or for any or no
cause, at the option of either party, with or without notice, Company will not,
directly or indirectly through another person or entity induce or attempt to
induce any employee of Consultant or any subsidiary to leave the employ of
Consultant

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or such Subsidiary or in any way interfere with the relationship between
Consultant or any subsidiary and any employee thereof. Article 10 - Independent
Contractor: The Consultant's engagement hereunder is as an independent
contractor and shall at no time be considered an agent, representative,
subcontractor or employee of The Company. The Consultant retains the sole and
exclusive right to control or direct the manner and means by which the Services
are to be performed under this Agreement. Article 11 - Indemnification: Each
party hereby releases and agrees to hold the other party and its directors,
officers, employees, affiliates and agents harmless from and against all
actions, claims, liabilities, losses, damages, obligations, costs and expenses
(including reasonable attorneys' fees and expenses) which may be incurred in
connection with the execution or non-execution of any obligation by the
releasing party pursuant to this Agreement including the adverse event. Article
12 - General Provisions: a. Entire Agreement. This Agreement constitutes the
entire agreement between the parties and supersedes any and all prior and
contemporaneous oral or written understandings between the parties relating to
the subject matter hereof. a. Modification or Waiver. No part of this Agreement
may be waived, modified or supplemented in any manner except in writing signed
by an authorized representative of each party. a. Severability and
Interpretation. In the event that a provision of this Agreement is held by a
court of competent jurisdiction to be invalid, the remaining provisions shall
nonetheless be enforced in accordance with their terms. Further, in the event
that any provision is held by a court of competent jurisdiction to be over broad
as written, such provision shall be deemed amended to narrow its application to
the extent necessary to make the provision enforceable according to applicable
law and shall be enforced as amended. a. Notices.

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Any notices provided for in this Agreement shall be in writing and shall be
deemed sufficiently given two days after being sent by registered mail or upon
receipt at the parties' respective addresses as appearing herein above or the
following day after being deposited with an overnight courier. a. Governing Law.
This Agreement and the performance under this Agreement, and all suits and
special proceedings under this Agreement, shall be construed in accordance with
and governed by, to the exclusion of the law of any other forum, the laws of the
State of California, without regard to the jurisdiction in which any action or
special proceeding may be instituted. a. No Assignment. The Consultant may not,
directly or indirectly, assign its rights or delegate its duties under this
Agreement without the prior written consent of The Company. No permitted
assignment of rights or delegation of duties under this Agreement shall relieve
the assigning or delegating party of its liabilities hereunder. This Agreement
is binding upon, and inures to the benefit of, the parties and their respective
successors and permitted· assigns. IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed for them and in their names by their duly
authorized representatives to be effective as of the day and year first above
written. THE COMPANY Signature Printed Name: Mike Mangano Title: CEO 3/1/2017
THE CONSULTANT Signature Printed Name: Mosbah El Khatib Title: Managing Director

 

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