Exhibit 10.2

CORPORATE INTEGRITY AGREEMENT
BETWEEN THE
OFFICE OF INSPECTOR GENERAL
OF THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES
AND
CARDIOVASCULAR SYSTEMS, INC.

I.    PREAMBLE

Cardiovascular Systems, Inc. (CSI) hereby enters into this Corporate Integrity
Agreement (CIA) with the Office of Inspector General (OIG) of the United States
Department of Health and Human Services (HHS) to promote compliance with the
statutes, regulations, and written directives of Medicare, Medicaid, and all
other Federal health care programs (as defined in 42 U.S.C. § 1320a-7b(f))
(Federal health care program requirements). Contemporaneously with this CIA, CSI
is entering into a Settlement Agreement with the United States.

CSI represents that, prior to the Effective Date of the CIA (as defined below),
CSI established a voluntary compliance program (Compliance Program) applicable
to CSI’s directors, officers, and employees. CSI’s Compliance Program includes,
among other features, a Compliance Officer position, a code of conduct, written
policies and procedures, and educational and training initiatives.

CSI shall continue its Compliance Program throughout the term of the CIA and
shall do so in accordance with the terms set forth below. CSI may modify its
Compliance Program as appropriate but, at a minimum, CSI shall ensure that
during the term of the CIA it shall comply with the obligations set forth
herein.

II.    TERM AND SCOPE OF THE CIA

A.The period of the compliance obligations assumed by CSI under this CIA shall
be five years from the effective date of this CIA. The “Effective Date” shall be
the date on which the final signatory of this CIA executes this CIA. Each
one-year period, beginning with the one-year period following the Effective
Date, shall be referred to as a “Reporting Period.”

B.    Sections VII, X, and XI shall expire no later than 120 days after OIG’s
receipt of: (1) CSI’s final Annual Report or (2) any additional materials
submitted by CSI pursuant to OIG’s request, whichever is later.

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C.    For purposes of this CIA, the term “Covered Persons” includes:

(1)
all owners who are natural persons, except:

(i)
shareholders who: (a) have an ownership interest of less than 5% and (b)
acquired the ownership interest through public trading, and

(ii)
shareholders who have an ownership interest of less than 5% of the common stock
of CSI and who acquired that interest as compensation for services to CSI, or as
a stock grant or through the issuance of stock under a CSI stock plan approved
by CSI’s shareholders;

(2)
officers, directors, and employees of CSI; and

(3) all contractors, subcontractors, agents, and other persons who perform
Covered Functions (as defined in Section II.E below) on behalf of CSI, and in
that capacity interact directly with healthcare professionals (HCPs) and
healthcare institutions (HCIs).

D.    The term “Government Reimbursed Products” refers to all CSI products that
are: (a) marketed or sold by CSI in the United States (or pursuant to contracts
with the United States) and (b) reimbursed by Federal health care programs.

E.    The term “Covered Functions” includes: (a) the selling, detailing,
marketing, advertising, promoting, or branding of Government Reimbursed
Products; (b) contracting with HCPs or HCIs for Co-Marketing Activities and
Consulting Activities, and (c) the preparation or external dissemination of
promotional materials or information about, or the provision of promotional
services relating to, Government Reimbursed Products, including those functions
relating to CSI’s review and approval processes for promotional materials and
any applicable review committee(s).

F.    The term “Third Party Educational Activity” shall mean any scientific,
educational, or professional program, meeting, or event for HCPs conducted by a
third party and supported by CSI, including but not limited to, continuing
medical education (CME), disease awareness, or sponsorship of symposia at
medical conferences.

G.    The term “Co-Marketing Activity” shall mean any marketing or other
promotional activity that CSI performs with or on behalf of (in addition to
itself) one or more HCPs or HCIs involving a Government Reimbursed Product.

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H.    The term “Consulting Activity” shall mean any fee-for-service arrangement
entered with HCPs, including but not limited to speaker programs, advisory
boards, research and development meetings, product training and education
sessions, presentations, ad hoc advisory activities, research and any other
financial engagement or arrangement related to Government Reimbursed Products
and all related expenses.

III.    CORPORATE INTEGRITY OBLIGATIONS

CSI shall establish and maintain a Compliance Program that includes the
following elements:

A.
Compliance Officer and Committee, Board of Directors, and Management Compliance
Obligations

1.    Compliance Officer. Within 90 days after the Effective Date, CSI shall
appoint a Compliance Officer and shall maintain a Compliance Officer for the
term of the CIA. The Compliance Officer shall be an employee and a member of
senior management of CSI, shall report directly to the Chief Executive Officer
of CSI, and shall not be or be subordinate to the General Counsel or Chief
Financial Officer or have any responsibilities that involve acting in any
capacity as legal counsel or supervising legal counsel functions for CSI. The
Compliance Officer shall be responsible for, without limitation:

a.
developing and implementing policies, procedures, and practices designed to
ensure compliance with the requirements set forth in this CIA and with Federal
health care program requirements and FDA requirements;

b.
making periodic (at least quarterly) reports regarding compliance matters
directly to the Board of Directors of CSI and shall be authorized to report on
such matters to the Board of Directors at any time. Written documentation of the
Compliance Officer’s reports to the Board of Directors shall be made available
to OIG upon request; and

c.
monitoring the day-to-day compliance activities engaged in by CSI as well as any
reporting obligations created under this CIA.

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Any noncompliance job responsibilities of the Compliance Officer shall be
limited and must not interfere with the Compliance Officer’s ability to perform
the duties outlined in this CIA.

CSI shall report to OIG, in writing, any changes in the identity of the
Compliance Officer, or any actions or changes that would affect the Compliance
Officer’s ability to perform the duties necessary to meet the obligations in
this CIA, within five days after such a change.

2.    Compliance Committee. Within 90 days after the Effective Date, CSI shall
appoint a Compliance Committee. The Compliance Committee shall, at a minimum,
include the Compliance Officer and other members of senior management necessary
to meet the requirements of this CIA (e.g., senior executives of relevant
departments, such as sales, marketing, legal, medical affairs/medical
information, regulatory affairs, research and development, human resources,
audit, finance, manufacturing, and operations). The Compliance Officer shall
chair the Compliance Committee and the Committee shall support the Compliance
Officer in fulfilling his/her responsibilities (e.g., shall assist in the
analysis of CSI’s risk areas and shall oversee monitoring of internal and
external audits and investigations). The Compliance Committee shall meet at
least quarterly. The minutes of the Compliance Committee meetings shall be made
available to OIG upon request.

CSI shall report to OIG, in writing, any actions or changes that would affect
the Compliance Committee’s ability to perform the duties necessary to meet the
obligations in this CIA, within 15 days after such a change.

3.    Board of Directors Compliance Obligations. The Board of Directors (or a
committee of the Board of Directors) of CSI (Board) shall be responsible for the
review and oversight of matters related to compliance with Federal health care
program requirements, FDA requirements, and the obligations of this CIA. The
Board must include independent (i.e., non-executive) members.

The Board shall, at a minimum, be responsible for the following:

a.
meeting at least quarterly to review and oversee CSI’s compliance program,
including but not limited to the performance of the Compliance Officer and
Compliance Committee;

b.
submitting to OIG a description of the documents and other materials it
reviewed, as well as any additional steps taken,

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such as the engagement of an independent advisor or other third party resources,
in its oversight of the compliance program and in support of making the
resolution below during each Reporting Period; and

c.
for each Reporting Period of the CIA, adopting a resolution, signed by each
member of the Board summarizing its review and oversight of CSI’s compliance
with Federal health care program requirements, FDA requirements, and the
obligations of this CIA.

At minimum, the resolution shall include the following language:

“The Board of Directors has made a reasonable inquiry into the operations of
CSI’s Compliance Program, including the performance of the Compliance Officer
and the Compliance Committee. Based on its inquiry and review, the Board has
concluded that, to the best of its knowledge, CSI has implemented an effective
Compliance Program to meet Federal health care program requirement, FDA
requirements, and the obligations of the CIA.”

If the Board is unable to provide such a conclusion in the resolution, the Board
shall include in the resolution a written explanation of the reasons why it is
unable to provide the conclusion and the steps it is taking to implement an
effective Compliance Program at CSI.

CSI shall report to OIG, in writing, any changes in the composition of the
Board, or any actions or changes that would affect the Board’s ability to
perform the duties necessary to meet the obligations in this CIA, within 15 days
after such a change.

4.    Management Certifications. In addition to the responsibilities set forth
in this CIA for all Covered Persons, certain CSI employees (Certifying
Employees) are expected to monitor and oversee activities within their areas of
authority and shall annually certify that the applicable CSI department is in
compliance with applicable Federal health care program requirements, FDA
requirements, and the obligations of this CIA. These Certifying Employees shall
include, at a minimum, the following: President, Chief Executive Officer, Chief
Financial Officer, the principal Human Resources executive, Chief Operating
Officer, General Counsel, Compliance Officer, Senior Vice President of
Operations, and all Senior Vice Presidents, Vice Presidents, and Senior
Directors. For each Reporting Period, each Certifying Employee shall sign a
certification that states:

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“I have been trained on and understand the compliance requirements and
responsibilities as they relate to [insert name of department], an area under my
supervision. My job responsibilities include ensuring compliance with regard to
the [insert name of department] with all applicable Federal health care program
requirements, FDA requirements, obligations of the Corporate Integrity
Agreement, and CSI policies, and I have taken steps to promote such compliance.
To the best of my knowledge, the [insert name of department] of CSI is in
compliance with all applicable Federal health care program requirements and the
obligations of the Corporate Integrity Agreement. I understand that this
certification is being provided to and relied upon by the United States.”

If any Certifying Employee is unable to provide such a certification, the
Certifying Employee shall provide a written explanation of the reasons why he or
she is unable to provide the certification outlined above.

Within 90 days after the Effective Date, CSI shall develop and implement a
written process for Certifying Employees to follow for the purpose of completing
the certification required by this section (e.g., reports that must be reviewed,
assessments that must be completed, sub-certifications that must be obtained,
etc. prior to the Certifying Employee making the required certification).

B.
Written Standards

Within 90 days after the Effective Date, CSI shall develop and implement written
policies and procedures regarding the operation of its Compliance Program,
including the compliance program requirements outlined in this CIA and CSI’s
compliance with Federal health care program requirements and FDA requirements
(Policies and Procedures). The Policies and Procedures shall, at a minimum,
address appropriate ways to conduct Covered Functions in compliance with (i) all
applicable Federal healthcare program requirements, including, but not limited
to the Federal Anti-Kickback Statute (42 U.S.C. §1320a-7b((b)) and the False
Claims Act (31 U.S.C. §§ 3729-3733) and (ii) all applicable FDA requirements.
Throughout the term of this CIA, CSI shall enforce its Policies and Procedures
and shall make compliance with its Policies and Procedures an element of
evaluating the performance of all employees. The Policies and Procedures shall
be made available to all Covered Persons.

At least annually (and more frequently, if appropriate), CSI shall assess and
update, as necessary, the Policies and Procedures. Any new or revised Policies
and Procedures shall be made available to all Covered Persons.

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All Policies and Procedures shall be made available to OIG upon request.

C.
Training and Education

1.     Covered Persons Training. Within 90 days after the Effective Date, CSI
shall develop a written plan (Training Plan) that outlines the steps CSI will
take to ensure that all Covered Persons receive at least annual training
regarding CSI’s CIA requirements and Compliance Program, the applicable Federal
health care program requirements, including but not limited to the requirements
of the Anti-Kickback Statute and the Stark Law, and FDA requirements. The
Training Plan shall include information regarding the following: training
topics, categories of Covered Persons required to attend each training session,
length of the training session(s), schedule for training, and format of the
training. CSI shall furnish training to its Covered Persons pursuant to the
Training Plan during each Reporting Period.

2.    Board Member Training. Within 90 days after the Effective Date, each
member of the Board of Directors shall receive at least two hours of training.
This training shall address the corporate governance responsibilities of board
members, and the responsibilities of board members with respect to review and
oversight of the Compliance Program. Specifically, the training shall address
the unique responsibilities of health care Board members, including the risks,
oversight areas, and strategic approaches to conducting oversight of a health
care entity. This training may be conducted by an outside compliance expert
hired by the Board and should include a discussion of the OIG’s guidance on
Board member responsibilities.

New members of the Board of Directors shall receive the Board Member Training
described above within 30 days after becoming a member or within 90 days after
the Effective Date, whichever is later.

3.    Training Records. CSI shall make available to OIG, upon request, training
materials and records verifying that Covered Persons and Board members have
timely received the training required under this section.

D.
Requirements for Consulting Activities

To the extent that CSI engages HCPs for Consulting Activities, such HCPs shall
be referred to herein as Consultants. Within 90 days after the Effective Date,
CSI shall establish a process requiring all Consultants to enter into written
agreements describing the scope of work to be performed, the fees to be paid,
and the compliance obligations for

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the Consultant. Consultants shall be paid according to a centrally-managed,
pre-set rate structure that is determined based on a fair-market value analysis
conducted by CSI.

Within 90 days after the Effective Date, CSI shall establish a process to
develop an annual budgeting plan that identifies the business needs for, and the
estimated numbers of, the various Consultant engagements and activities to occur
during the following year. The annual Consultant budgeting plan shall also
identify the budgeted amounts to be spent on Consulting Activities. CSI
compliance personnel shall be involved in the review and approval of such plans,
including any subsequent modifications of an approved plan. The purpose of this
review shall be to ensure that Consulting Activities and related events are used
for legitimate and lawful purposes in accordance with applicable Federal health
care program and FDA requirements and CSI's Policies and Procedures.

Within 90 days after the Effective Date, CSI shall establish a process to ensure
that a needs assessment has been completed to justify the retention of a
Consultant prior to the retention of the Consultant. The needs assessment shall
identify the business need for the retention of the Consultant and provide
specific details about the consulting arrangement (e.g., information about the
numbers and qualifications of the HCPs to be engaged and a description of the
proposed work to be done and the type of work products to be generated). Any
deviations from the Consultant budgeting plans shall be documented in the needs
assessment form and shall be subject to review and approval by CSI compliance
personnel.

E.    Review Procedures

1.    General Description

a.
Engagement of Independent Review Organization. Within 90 days after the
Effective Date, CSI shall engage an entity (or entities), such as an accounting,
auditing, or consulting firm (hereinafter “Independent Review Organization” or
“IRO”), to perform the reviews listed in this Section III.E. The applicable
requirements relating to the IRO are outlined in Appendix A to this CIA, which
is incorporated by reference.

b.
Retention of Records. The IRO and CSI shall retain and make available to OIG,
upon request, all work papers, supporting documentation, correspondence, and
draft reports (those exchanged between the IRO and CSI) related to the reviews.

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2.    Systems and Transactions Reviews. As set forth more fully in Appendix B,
the IRO Reviews shall consist of two components: Systems Reviews and
Transactions Reviews relating to the Covered Functions. The Systems Reviews
shall assess CSI’s systems, processes, policies, and procedures relating to the
Covered Functions. If there are no material changes in CSI’s relevant systems,
processes, policies, and procedures, the Systems Reviews shall be performed for
the second and fourth Reporting Periods. If CSI materially changes its relevant
systems, processes, policies, and procedures, the IRO shall perform a Systems
Review for the Reporting Period in which such changes were made in addition to
conducting the Systems Review for the second and fourth Reporting Periods, as
set forth more fully in Appendix B.

The Transactions Reviews shall be performed annually and shall cover each of the
five Reporting Periods. The IRO(s) shall perform all components of each annual
Transactions Review. As set forth more fully in Appendix B, the Transactions
Review shall include review of Co-Marketing Activities and Consulting
Activities.

3.    Independence and Objectivity Certification. The IRO shall include in its
report(s) to CSI a certification that the IRO has (a) evaluated its professional
independence and objectivity with respect to the reviews required under this
Section III.E and (b) concluded that it is, in fact, independent and objective,
in accordance with the requirements specified in Appendix A to this CIA. The
IRO’s certification shall include a summary of all current and prior engagements
between CSI and the IRO.

F.    Risk Assessment and Internal Review Process

Within 90 days after the Effective Date, CSI shall develop and implement a
centralized annual risk assessment and internal review process. The risk
assessment and mitigation process shall require compliance, legal and business
unit leaders, at least annually, to evaluate and identify risks associated with
each Government Reimbursed Product, including risks associated with the sales,
marketing, and promotion of such products. Based on the outcomes of the
risk-identification component of the risk assessment and mitigation process,
CSI’s legal, compliance and other personnel shall centrally develop and
implement specific plans designed to mitigate or reduce the identified risks.
The risk mitigation plans shall be developed annually and a plan shall be
developed for each Government Reimbursed Product. CSI shall implement the risk
mitigation plans and shall track the implementation of the mitigation plans. CSI
shall maintain the risk assessment and mitigation process for the duration of
the CIA.

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G.    Disclosure Program

Within 90 days after the Effective Date, CSI shall establish a Disclosure
Program that includes a mechanism (e.g., a toll-free compliance telephone line)
to enable individuals to disclose, to the Compliance Officer or some other
person who is not in the disclosing individual’s chain of command, any
identified issues or questions associated with CSI’s policies, conduct,
practices, or procedures with respect to a Federal health care program or any
FDA requirement believed by the individual to be a potential violation of
criminal, civil, or administrative law. CSI shall appropriately publicize the
existence of the disclosure mechanism (e.g., via periodic e-mails to employees
or by posting the information in prominent common areas).

The Disclosure Program shall emphasize a nonretribution, nonretaliation policy
and shall include a reporting mechanism for anonymous communications for which
appropriate confidentiality shall be maintained. The Disclosure Program also
shall include a requirement that all of CSI’s Covered Persons shall be expected
to report suspected violations of any Federal health care program requirements
to the Compliance Officer or other appropriate individual designated by CSI.
Upon receipt of a disclosure, the Compliance Officer (or designee) shall gather
all relevant information from the disclosing individual. The Compliance Officer
(or designee) shall make a preliminary, good faith inquiry into the allegations
set forth in every disclosure to ensure that he or she has obtained all of the
information necessary to determine whether a further review should be conducted.
For any disclosure that is sufficiently specific so that it reasonably: (1)
permits a determination of the appropriateness of the alleged improper practice;
and (2) provides an opportunity for taking corrective action, CSI shall conduct
an internal review of the allegations set forth in the disclosure and ensure
that proper follow-up is conducted.

The Compliance Officer (or designee) shall maintain a disclosure log and shall
record each disclosure in the disclosure log within two business days of receipt
of the disclosure. The disclosure log shall include a summary of each disclosure
received (whether anonymous or not), the status of the respective internal
reviews, and any corrective action taken in response to the internal reviews.

H.    Ineligible Persons

1.    Definitions. For purposes of this CIA:

a.
an “Ineligible Person” shall include an individual or entity who:

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i.
is currently excluded from participation in any Federal health care program; or

ii.
has been convicted of a criminal offense that falls within the scope of 42
U.S.C. § 1320a-7(a), but has not yet been excluded.

b.
“Exclusion List” means the HHS/OIG List of Excluded Individuals/Entities (LEIE)
(available through the Internet at http://www.oig.hhs.gov).

2.    Screening Requirements. CSI shall ensure that all prospective and current
Covered Persons are not Ineligible Persons, by implementing the following
screening requirements.

a.
CSI shall screen all prospective Covered Persons against the Exclusion List
prior to engaging their services and, as part of the hiring or contracting
process, shall require such Covered Persons to disclose whether they are
Ineligible Persons.

b.
CSI shall screen all current Covered Persons against the Exclusion List within
90 days after the Effective Date and on a monthly basis thereafter.

c.
CSI shall implement a policy requiring all Covered Persons to disclose
immediately if they become an Ineligible Person.

Nothing in this Section III.H affects CSI’s responsibility to refrain from (and
liability for) billing Federal health care programs for items or services
furnished, ordered, or prescribed by an excluded person. CSI understands that
items or services furnished, ordered, or prescribed by excluded persons are not
payable by Federal health care programs and that CSI may be liable for
overpayments and/or criminal, civil, and administrative sanctions for employing
or contracting with an excluded person regardless of whether CSI meets the
requirements of Section III.H.

3.    Removal Requirement. If CSI has actual notice that a Covered Person has
become an Ineligible Person, CSI shall remove such Covered Person from
responsibility for, or involvement with, CSI’s business operations related to
the Federal health care program(s) from which such Covered Person has been
excluded and shall remove such Covered Person from any position for which the
Covered Person’s compensation or the items or services furnished, ordered, or
prescribed by the Covered

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Person are paid in whole or part, directly or indirectly, by any Federal health
care program(s) from which the Covered Person has been excluded at least until
such time as the Covered Person is reinstated into participation in such Federal
health care program(s).

4.    Pending Charges and Proposed Exclusions. If CSI has actual notice that a
Covered Person is charged with a criminal offense that falls within the scope of
42 U.S.C. §§ 1320a-7(a), 1320a-7(b)(1)-(3), or is proposed for exclusion during
the Covered Person’s employment or contract term, CSI shall take all appropriate
actions to ensure that the responsibilities of that Covered Person have not and
shall not adversely affect the quality of care rendered to any beneficiary or
the accuracy of any claims submitted to any Federal health care program.

I.    Notification of Government Investigation or Legal Proceeding

Within 30 days after discovery, CSI shall notify OIG, in writing, of any ongoing
investigation or legal proceeding known to CSI conducted or brought by a
governmental entity or its agents involving an allegation that CSI has committed
a crime or has engaged in fraudulent activities. This notification shall include
a description of the allegation, the identity of the investigating or
prosecuting agency, and the status of such investigation or legal proceeding.
CSI also shall provide written notice to OIG within 30 days after the resolution
of the matter and a description of the findings and/or results of the
investigation or proceeding, if any.

J.    Reportable Events

1.    Definition of Reportable Event. For purposes of this CIA, a “Reportable
Event” means anything that involves:

a.
a matter that a reasonable person would consider a probable violation of
criminal, civil, or administrative laws applicable to any Federal health care
program for which penalties or exclusion may be authorized;

b.
a matter that a reasonable person would consider a probable violation of FDA
requirements relating to the promotion of Government Reimbursed Products;

c.
the employment of or contracting with a Covered Person who is an Ineligible
Person as defined by Section III.H.1.a; or

d.
the filing of a bankruptcy petition by CSI.

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A Reportable Event may be the result of an isolated event or a series of
occurrences.

2.    Reporting of Reportable Events. If CSI determines (after a reasonable
opportunity to conduct an appropriate review or investigation of the
allegations) through any means that there is a Reportable Event, CSI shall
notify OIG, in writing, within 30 days after making the determination that the
Reportable Event exists.

3.    Reportable Events under Section III.J.1.a and III.J.1.b. For Reportable
Events under Section III.J.1.a and III.J.1.b, the report to OIG shall include:

a.
a complete description of all details relevant to the Reportable Event,
including, at a minimum, the types of claims, transactions or other conduct
giving rise to the Reportable Event; the period during which the conduct
occurred; and the names of individuals and entities believed to be implicated,
including an explanation of their roles in the Reportable Event;

b.
a statement of the Federal criminal, civil or administrative laws or FDA
requirements that are probably violated by the Reportable Event, if any; and

c.
a description of CSI’s actions taken to correct the Reportable Event and prevent
it from recurring.

4.    Reportable Events under Section III.J.1.c. For Reportable Events under
Section III.J.1.c, the report to OIG shall include:

a.
the identity of the Ineligible Person and the job duties performed by that
individual;

b.
the dates of the Ineligible Person’s employment or contractual relationship;

c.
a description of the Exclusion List screening that CSI completed before and/or
during the Ineligible Person’s employment or contract and any flaw or breakdown
in the screening process that led to the hiring or contracting with the
Ineligible Person;

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d.
a description of how the Ineligible Person was identified; and

e
a description of any corrective action implemented to prevent future employment
or contracting with an Ineligible Person.

5.    Reportable Events under Section III.J.1.d. For Reportable Events under
Section III.J.1.d, the report to OIG shall include documentation of the
bankruptcy filing and a description of any Federal health care program
requirements implicated.

K.    Requirements for Co-Marketing Activities

Within 90 days after the Effective Date, CSI shall establish the processes
described in this section. CSI shall establish a process to ensure that a needs
assessment has been completed for any Co-Marketing Activities, prior to engaging
in such Co-Marketing Activities. The needs assessment shall identify the
business need for performing the Co-Marketing Activities and provide details
about the Co-Marketing Activities (i.e., information about the type of
Co-Marketing Activities and the role and contribution of each HCP or HCI
involved in the Co-Marketing Activities). CSI shall establish a process to
evaluate the fair market value of such Co-Marketing Activities. CSI shall also
establish a process ensuring that all arrangements to engage in Co-Marketing
Activities are set forth in a written agreement that describes the scope of work
to be performed by all parties to the arrangement, the fees to be paid, and any
work product that will be produced.

L.     Field Force Monitoring and Review Efforts

Within 90 days after the Effective Date, CSI shall establish a comprehensive
Field Force Monitoring Program (FFMP) to evaluate and monitor its field sales
personnel’s interactions with Health Care Professionals (HCPs) and Health Care
Institutions (HCIs). The FFMP shall be a formalized process designed to directly
and indirectly observe the appropriateness of sales personnel’s interactions
with HCPs and HCIs and to identify improper conduct. As described in more detail
below, the FFMP shall include: (1) direct field observations of sales personnel;
and (2) the monitoring and review of other records relating to sales personnel’s
interactions with HCPs and HCIs (Records Reviews).

1.    Observations. As a component of the FFMP, CSI compliance or other
appropriately trained CSI personnel who are independent from the product sales
and marketing function (Monitoring Personnel) shall conduct observations of
field sales representatives (including any contract sales personnel) to assess
whether the messages delivered and materials distributed to HCPs and HCIs are
consistent with applicable legal requirements and with CSI's Policies and
Procedures. These observations shall be full

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day ride-alongs with field sales representatives (Observations), and each
Observation shall consist of directly observing all meetings between a field
sales representative and HCPs and HCIs during the workday. The Observations
shall be scheduled throughout the year, selected by Monitoring Personnel using
appropriate criteria, include a review of each therapeutic area and actively
promoted product, and be conducted across the United States.

At the completion of each Observation, Monitoring Personnel shall prepare a
report which includes:

1)
the identity of the field sales representative;

2)
the identity of the Monitoring Personnel who conducted the Observation;

3)
the date and duration of the Observation;

4)
the Government Reimbursed Product(s) promoted during the Observation;

5)
an overall assessment of compliance with CSI's Policies and Procedures; and

6)
the identification of any potential improper conduct by the field sales
representative.

Monitoring Personnel shall conduct Observations of 10% of the field sales
representatives employed during each Reporting Period, or at least 20 field
sales representatives, whichever is greater, during each Reporting Period.

2.    Records Reviews. As a component of the FFMP, CSI shall also review various
types of records to assess field sales representatives’ interactions with HCPs
and HCIs and to identify potential or actual compliance violations. For each
Reporting Period, CSI shall develop and implement a plan for conducting Records
Reviews associated with one Government Reimbursed Product. The Records Reviews
shall include a review of records relating to the activities of field sales
representatives in every separate district and/or region (as applicable) who
promoted the Government Reimbursed Product under review.

These Records Reviews shall include the monitoring and review of (1) records and
systems associated with field sales representatives’ interactions with HCPs
(including records relating to Co-Marketing Activities, consulting arrangements,
travel and entertainment, expense reports, any payments to HCPs, and sales
communications from managers); (2) field sales representative notes or other
records from sales calls with HCPs, (3) field sales representative emails and
other electronic records, and (4) recorded

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results of the Observations of field sales representatives, coaching guides, and
manager notes.

3.    Reporting and Follow-up. Monitoring Personnel shall have access to all
relevant records and information necessary to assess field sales
representatives’ interactions with HCPs and HCIs and to identify potential or
actual compliance violations. Results from the FFMP shall be compiled and
reported to the Compliance Officer for review and remediation as appropriate.
Potential violations of Federal health care program or FDA requirements shall be
reported to the Compliance Officer for appropriate follow-up activity. In the
event that a compliance issue, including but not limited to any potential
improper promotion or noncompliance with CSI’s Policies and Procedures or legal
or compliance requirements, is identified during any portion of the FFMP, CSI
shall investigate the incident consistent with established Policies and
Procedures for the handling of investigations. As part of the investigative
procedures, findings shall be made and all necessary and appropriate responsive
action (including disciplinary action) and corrective action shall be taken,
including the disclosure of Reportable Events pursuant to Section III.J above,
as applicable. Any compliance issues identified during the FFMP and any
corrective action shall be recorded in the files of the Compliance Officer.
    
CSI shall include a summary of the FFMP and the results of the FFMP as part of
each Annual Report. As part of each Annual Report, CSI also shall provide the
OIG with copies of the Observation report for any instances in which it was
determined that improper promotion occurred and a description of the action(s)
that CSI took as a result of such determinations. CSI shall make the Observation
reports for all other Observations available to the OIG upon request.

M.    Reporting of Physician Payments.

1.    Reporting of Payment Information. Within 90 days after the Effective Date,
CSI shall post on its website a description of the types of Payments it makes to
Covered Recipients and include a link to the Centers for Medicare & Medicaid
Services (CMS) Open Payments Data website (www.cms.gov/openpayments). CSI also
shall include on its website instructions regarding how to utilize the CMS Open
Payments Data search tool to search for information regarding Payments provided
to Covered Recipients from CSI.

2.    Definitions. For purposes of this Section III.M, the terms “Payments” and
“Covered Recipient” are defined as specified in 42 U.S.C. § 1320a-7h and the
related regulations and guidance (including FAQs) published by CMS.

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IV.
SUCCESSOR LIABILITY

In the event that, after the Effective Date, CSI proposes to (a) sell any or all
of its business, business units, or locations (whether through a sale of assets,
sale of stock, or other type of transaction) relating to the furnishing of items
or services that may be reimbursed by a Federal health care program, or (b)
purchase or establish a new business, business unit, or location relating to the
furnishing of items or services that may be reimbursed by a Federal health care
program, the CIA shall be binding on the purchaser of any business, business
unit, or location and any new business, business unit, or location (and all
Covered Persons at each new business, business unit, or location) shall be
subject to the applicable requirements of this CIA, unless otherwise determined
and agreed to in writing by OIG.

If, in advance of a proposed sale or a proposed purchase, CSI wishes to obtain a
determination by OIG that the proposed purchaser or the proposed acquisition
will not be subject to the requirements of the CIA, CSI must notify OIG in
writing of the proposed sale or purchase at least 30 days in advance. This
notification shall include a description of the business, business unit, or
location to be sold or purchased, a brief description of the terms of the
transaction and, in the case of a proposed sale, the name and contact
information of the prospective purchaser.

V.    IMPLEMENTATION AND ANNUAL REPORTS

A.    Implementation Report

Within 120 days after the Effective Date, CSI shall submit a written report to
OIG summarizing the status of its implementation of the requirements of this CIA
(Implementation Report). The Implementation Report shall, at a minimum, include:

1.    the name, address, phone number, and position description of the
Compliance Officer required by Section III.A.1, and a summary of other
noncompliance job responsibilities the Compliance Officer may have;

2.    the names and positions of the members of the Compliance Committee
required by Section III.A.2;

3.    the names of the Board members who are responsible for satisfying the
Board of Directors compliance obligations described in Section III.A.3;

4.    the names and positions of the Certifying Employees required by Section
III.A.4 and a copy of the written process for Certifying Employees;

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5.    a list of the Policies and Procedures required by Section III.B;

6.    the Training Plan required by Section III.C.1 and a description of the
Board of Directors training required by Section III.C.2 (including a summary of
the topics covered, the length of the training, and when the training was
provided);

7.    the processes for an annual budgeting plan and needs assessment for
Consulting Activities required by Section III.D;

8.    the following information regarding the IRO(s): (a) identity, address, and
phone number; (b) a copy of the engagement letter; (c) information to
demonstrate that the IRO has the qualifications outlined in Appendix A to this
CIA; and (d) a certification from the IRO regarding its professional
independence and objectivity with respect to CSI;

9.    a description of the risk assessment and internal review process required
by Section III.F;

10.    a description of the Disclosure Program required by Section III.G;

11.    a description of the Ineligible Persons screening and removal process
required by Section III.H;

12.    a summary of the policies and procedures relating to Co-Marketing
Activities implemented by CSI pursuant to Section III.K;

13.    a copy of the Policies and Procedures for the FFMP required by Section
III.L;

14.    a certification from the Compliance Officer that the information
regarding Payments and the link to CMS’s Open Payments Data website has been
posted on CSI’s website as required by Section III.M;

15.    a list of all of CSI’s locations (including locations and mailing
addresses) and the corresponding name under which each location is doing
business;

16.    a description of CSI’s corporate structure, including identification of
any parent and sister companies, subsidiaries, and their respective lines of
business; and

17.    the certifications required by Section V.C.

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B.    Annual Reports

CSI shall submit to OIG a report on its compliance with the CIA requirements for
each of the five Reporting Periods (Annual Report). Each Annual Report shall
include, at a minimum, the following information:

1.    any change in the identity, position description, or other noncompliance
job responsibilities of the Compliance Officer; a current list of the Compliance
Committee members, a current list of the Board members who are responsible for
satisfying the Board of Directors compliance obligations, and a current list of
the Certifying Employees;

2.    the dates of each report made by the Compliance Officer to the Board
(written documentation of such reports shall be made available to OIG upon
request);

3.    the Board resolution required by Section III.A.3 and a description of the
documents and other materials reviewed by the Board, as well as any additional
steps taken, in its oversight of the compliance program and in support of making
the resolution;

4.    a list of any new or revised Policies and Procedures developed during the
Reporting Period;

5.    a description of any changes to CSI’s Training Plan developed pursuant to
Section III.C, and a summary of any Board of Directors training provided during
the Reporting Period;

6.    a description of any changes to the annual budgeting plan and need
assessments processes for Consulting Activities required by Section III.D,
including the reasons for such changes

7.    a complete copy of all reports prepared pursuant to Section III.E and
CSI’s response to the reports, along with corrective action plan(s) related to
any issues raised by the reports;

8.    a certification from the IRO regarding its professional independence and
objectivity with respect to CSI;

9.    a description of any changes to the risk assessment and internal review
process required by Section III.F, including the reasons for such changes;

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10.    a summary of the following components of the risk assessment and internal
review process during the Reporting Period as required by Section III.F: work
plans developed, internal audits performed, corrective action plans developed in
response to internal audits, and steps taken to track the implementation of the
corrective action plans. Copies of any work plans, internal audit reports, and
corrective action plans shall be made available to OIG upon request;

11.    a summary of the disclosures in the disclosure log required by Section
III.G that relate to Federal health care programs, including at least the
following information: a description of the disclosure, the date the disclosure
was received, the resolution of the disclosure, and the date the disclosure was
resolved (if applicable). The complete disclosure log shall be made available to
OIG upon request;

12.    a description of any changes to the Ineligible Persons screening and
removal process required by Section III.H, including the reasons for such
changes;

13.    a summary describing any ongoing investigation or legal proceeding
required to have been reported pursuant to Section III.I. The summary shall
include a description of the allegation, the identity of the investigating or
prosecuting agency, and the status of such investigation or legal proceeding;

14.    a summary of Reportable Events (as defined in Section III.J) identified
during the Reporting Period;

15.    a description of any changes to the Co-Marketing Activities process
required by Section III.K, including the reasons for such changes;

16.    a summary of the FFMP and the results of the FFMP required by Section
III.L, including copies of the Observations for any instances in which it was
determined that improper promotion occurred and a description of the action(s)
that CSI took as a result of such determinations;

17.    a certification from the Compliance Officer that the information
regarding Payments has been posted on CSI’s website as required by Section
III.M;

18.    a description of all changes to the most recently provided list of CSI’s
locations as required by Section V.A.15; and

19.    the certifications required by Section V.C.

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The first Annual Report shall be received by OIG no later than 60 days after the
end of the first Reporting Period. Subsequent Annual Reports shall be received
by OIG no later than the anniversary date of the due date of the first Annual
Report.

C.    Certifications

1.    Certifying Employees. In each Annual Report, CSI shall include the
certifications of Certifying Employees required by Section III.A.4;

2.    Compliance Officer and Chief Executive Officer. The Implementation Report
and each Annual Report shall include a certification by the Compliance Officer
and Chief Executive Officer that:

a.
to the best of his or her knowledge, except as otherwise described in the
report, CSI has implemented and is in compliance with all of the requirements of
this CIA; and

b.
he or she has reviewed the report and has made reasonable inquiry regarding its
content and believes that the information in the report is accurate and
truthful.

3.    Chief Financial Officer. The first Annual Report shall include a
certification by the Chief Financial Officer that, to the best of his or her
knowledge, CSI has complied with its obligations under the Settlement Agreement:
(a) not to resubmit to any Federal health care program payors any previously
denied claims related to the Covered Conduct addressed in the Settlement
Agreement, and not to appeal any such denials of claims; (b) not to charge to or
otherwise seek payment from federal or state payors for unallowable costs (as
defined in the Settlement Agreement); and (c) to identify and adjust any past
charges or claims for unallowable costs.

D.Designation of Information

CSI shall clearly identify any portions of its submissions that it believes are
trade secrets, or information that is commercial or financial and privileged or
confidential, and therefore potentially exempt from disclosure under the Freedom
of Information Act (FOIA), 5 U.S.C. § 552. CSI shall refrain from identifying
any information as exempt from disclosure if that information does not meet the
criteria for exemption from disclosure under FOIA.

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VI.    NOTIFICATIONS AND SUBMISSION OF REPORTS

Unless otherwise stated in writing after the Effective Date, all notifications
and reports required under this CIA shall be submitted to the following
entities:

OIG:

Administrative and Civil Remedies Branch
Office of Counsel to the Inspector General
Office of Inspector General
U.S. Department of Health and Human Services
Cohen Building, Room 5527
330 Independence Avenue, S.W.
Washington, DC 20201
Telephone: 202.619.2078
Facsimile: 202.205.0604

CSI:

Compliance Officer
Cardiovascular Systems, Inc.
1225 Old Highway 8 NW
St. Paul, MN 55112
Telephone: 651.259.1600
Facsimile: 612.677.3355

Unless otherwise specified, all notifications and reports required by this CIA
shall be made by electronic mail, overnight mail, hand delivery, or other means,
provided that there is proof that such notification was received. Upon request
by OIG, CSI may be required to provide OIG with an electronic copy of each
notification or report required by this CIA in addition to a paper copy.

VII.    OIG INSPECTION, AUDIT, AND REVIEW RIGHTS

In addition to any other rights OIG may have by statute, regulation, or
contract, OIG or its duly authorized representative(s) may conduct interviews,
examine and/or request copies of or copy CSI’s books, records, and other
documents and supporting materials, and conduct on-site reviews of any of CSI’s
locations, for the purpose of verifying and evaluating: (a) CSI’s compliance
with the terms of this CIA and (b) CSI’s compliance with the requirements of the
Federal health care programs and all applicable FDA requirements. The
documentation described above shall be made available by CSI

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to OIG or its duly authorized representative(s) at all reasonable times for
inspection, audit, and/or reproduction. Furthermore, for purposes of this
provision, OIG or its duly authorized representative(s) may interview any of
CSI’s owners who are natural persons (other than (i) shareholders who: (1) have
an ownership interest of less than 5% and (2) acquired the ownership interest
through public trading, and (ii) shareholders who have an ownership interest of
less than 5% of the common stock of CSI and who acquired that interest as
compensation for services to CSI, or as a stock grant or through the issuance of
stock under a CSI stock plan approved by CSI’s shareholders), employees,
contractors, and directors who consent to be interviewed at the individual’s
place of business during normal business hours or at such other place and time
as may be mutually agreed upon between the individual and OIG. CSI shall assist
OIG or its duly authorized representative(s) in contacting and arranging
interviews with such individuals upon OIG’s request. CSI’s owners, employees,
contractors, and directors may elect to be interviewed with or without a
representative of CSI present.

VIII.    DOCUMENT AND RECORD RETENTION

CSI shall maintain for inspection all documents and records relating to
reimbursement from the Federal health care programs and to compliance with this
CIA for six years (or longer if otherwise required by law) from the Effective
Date.

IX.     DISCLOSURES

Consistent with HHS’s FOIA procedures, set forth in 45 C.F.R. Part 5, OIG shall
make a reasonable effort to notify CSI prior to any release by OIG of
information submitted by CSI pursuant to its obligations under this CIA and
identified upon submission by CSI as trade secrets, or information that is
commercial or financial and privileged or confidential, under the FOIA rules.
With respect to such releases, CSI shall have the rights set forth at 45 C.F.R.
§ 5.65(d).

X.    BREACH AND DEFAULT PROVISIONS  

CSI is expected to fully and timely comply with all of its CIA obligations.

A.    Stipulated Penalties for Failure to Comply with Certain Obligations

As a contractual remedy, CSI and OIG hereby agree that failure to comply with
certain obligations as set forth in this CIA may lead to the imposition of the
following monetary penalties (hereinafter referred to as “Stipulated Penalties”)
in accordance with the following provisions.

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1.    A Stipulated Penalty of $2,500 (which shall begin to accrue on the day
after the date the obligation became due) for each day CSI fails to establish,
implement or comply with any of the following obligations as described in
Section III:

a.
a Compliance Officer;

b.
a Compliance Committee;

c.
the Board of Directors compliance obligations;

d.
the management certification obligations;

e.
written Policies and Procedures;

f.
training and education of Covered Persons and members of the Board;

g.
annual budget plan and needs assessment processes for Consulting Activities;

h.
a risk assessment and internal review process;

i.
a Disclosure Program;

j.
Ineligible Persons screening and removal requirements;

k.
notification of Government investigations or legal proceedings;

l.
the Field Force Monitoring Program;

m.
reporting of Reportable Events;

n.
Co-Marketing Activities Requirements; and

o.
Reporting of Physician Payments requirements.

2.    A Stipulated Penalty of $2,500 (which shall begin to accrue on the day
after the date the obligation became due) for each day CSI fails to engage and
use an IRO, as required by Section III.E, Appendix A, or Appendix B.

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3.    A Stipulated Penalty of $2,500 (which shall begin to accrue on the day
after the date the obligation became due) for each day CSI fails to submit a
complete Implementation Report, Annual Report or any certification to OIG in
accordance with the requirements of Section V by the deadlines for submission.

4.    A Stipulated Penalty of $2,500 (which shall begin to accrue on the day
after the date the obligation became due) for each day CSI fails to submit any
Systems Review Report or Transactions Review Report in accordance with the
requirements of Section III.E and Appendix B.

5.    A Stipulated Penalty of $1,500 for each day CSI fails to grant access as
required in Section VII. (This Stipulated Penalty shall begin to accrue on the
date CSI fails to grant access.)

6.    A Stipulated Penalty of $50,000 for each false certification submitted by
or on behalf of CSI as part of its Implementation Report, any Annual Report,
additional documentation to a report (as requested by the OIG), or otherwise
required by this CIA.

7.    A Stipulated Penalty of $1,000 for each day CSI fails to comply fully and
adequately with any obligation of this CIA. OIG shall provide notice to CSI
stating the specific grounds for its determination that CSI has failed to comply
fully and adequately with the CIA obligation(s) at issue and steps CSI shall
take to comply with the CIA. (This Stipulated Penalty shall begin to accrue 10
days after the date CSI receives this notice from OIG of the failure to comply.)
A Stipulated Penalty as described in this Subsection shall not be demanded for
any violation for which OIG has sought a Stipulated Penalty under Subsections 1-
6 of this Section.

B.    Timely Written Requests for Extensions

CSI may, in advance of the due date, submit a timely written request for an
extension of time to perform any act or file any notification or report required
by this CIA. Notwithstanding any other provision in this Section, if OIG grants
the timely written request with respect to an act, notification, or report,
Stipulated Penalties for failure to perform the act or file the notification or
report shall not begin to accrue until one day after CSI fails to meet the
revised deadline set by OIG. Notwithstanding any other provision in this
Section, if OIG denies such a timely written request, Stipulated Penalties for
failure to perform the act or file the notification or report shall not begin to
accrue until three days after CSI receives OIG’s written denial of such request
or the original due date, whichever is later. A “timely written request” is
defined as a request in

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writing received by OIG at least five days prior to the date by which any act is
due to be performed or any notification or report is due to be filed.

C.    Payment of Stipulated Penalties

1.    Demand Letter. Upon a finding that CSI has failed to comply with any of
the obligations described in Section X.A and after determining that Stipulated
Penalties are appropriate, OIG shall notify CSI of: (a) CSI’s failure to comply;
and (b) OIG’s exercise of its contractual right to demand payment of the
Stipulated Penalties. (This notification shall be referred to as the “Demand
Letter.”)

2.    Response to Demand Letter. Within 10 days after the receipt of the Demand
Letter, CSI shall either: (a) cure the breach to OIG’s satisfaction and pay the
applicable Stipulated Penalties or (b) request a hearing before an HHS
administrative law judge (ALJ) to dispute OIG’s determination of noncompliance,
pursuant to the agreed upon provisions set forth below in Section X.E. In the
event CSI elects to request an ALJ hearing, the Stipulated Penalties shall
continue to accrue until CSI cures, to OIG’s satisfaction, the alleged breach in
dispute. Failure to respond to the Demand Letter in one of these two manners
within the allowed time period shall be considered a material breach of this CIA
and shall be grounds for exclusion under Section X.D.

3.    Form of Payment. Payment of the Stipulated Penalties shall be made by
electronic funds transfer to an account specified by OIG in the Demand Letter.

4.    Independence from Material Breach Determination. Except as set forth in
Section X.D.1.c, these provisions for payment of Stipulated Penalties shall not
affect or otherwise set a standard for OIG’s decision that CSI has materially
breached this CIA, which decision shall be made at OIG’s discretion and shall be
governed by the provisions in Section X.D, below.

D.    Exclusion for Material Breach of this CIA

1.    Definition of Material Breach. A material breach of this CIA means:

a.
repeated violations or a flagrant violation of any of the obligations under this
CIA, including, but not limited to, the obligations addressed in Section X.A;

b.
a failure by CSI to report a Reportable Event, take corrective action, or make
the appropriate refunds, as required in Section III.J;

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c.
a failure to respond to a Demand Letter concerning the payment of Stipulated
Penalties in accordance with Section X.C; or

d.
a failure to engage and use an IRO in accordance with Section III.E, Appendix A,
or Appendix B.

2.    Notice of Material Breach and Intent to Exclude. The parties agree that a
material breach of this CIA by CSI constitutes an independent basis for CSI’s
exclusion from participation in the Federal health care programs. The length of
the exclusion shall be in the OIG’s discretion, but not more than five years per
material breach. Upon a determination by OIG that CSI has materially breached
this CIA and that exclusion is the appropriate remedy, OIG shall notify CSI of:
(a) CSI’s material breach; and (b) OIG’s intent to exercise its contractual
right to impose exclusion. (This notification shall be referred to as the
“Notice of Material Breach and Intent to Exclude.”)

3.    Opportunity to Cure. CSI shall have 30 days from the date of receipt of
the Notice of Material Breach and Intent to Exclude to demonstrate that:

a.
the alleged material breach has been cured; or

b.
the alleged material breach cannot be cured within the 30 day period, but that:
(i) CSI has begun to take action to cure the material breach; (ii) CSI is
pursuing such action with due diligence; and (iii) CSI has provided to OIG a
reasonable timetable for curing the material breach.

4.    Exclusion Letter. If, at the conclusion of the 30 day period, CSI fails to
satisfy the requirements of Section X.D.3, OIG may exclude CSI from
participation in the Federal health care programs. OIG shall notify CSI in
writing of its determination to exclude CSI. (This letter shall be referred to
as the “Exclusion Letter.”) Subject to the Dispute Resolution provisions in
Section X.E, below, the exclusion shall go into effect 30 days after the date of
CSI’s receipt of the Exclusion Letter. The exclusion shall have national effect.
Reinstatement to program participation is not automatic. At the end of the
period of exclusion, CSI may apply for reinstatement by submitting a written
request for reinstatement in accordance with the provisions at 42 C.F.R.
§§ 1001.3001-.3004.

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E.    Dispute Resolution

1.    Review Rights. Upon OIG’s delivery to CSI of its Demand Letter or of its
Exclusion Letter, and as an agreed-upon contractual remedy for the resolution of
disputes arising under this CIA, CSI shall be afforded certain review rights
comparable to the ones that are provided in 42 U.S.C. § 1320a-7(f) and 42 C.F.R.
Part 1005 as if they applied to the Stipulated Penalties or exclusion sought
pursuant to this CIA. Specifically, OIG’s determination to demand payment of
Stipulated Penalties or to seek exclusion shall be subject to review by an HHS
ALJ and, in the event of an appeal, the HHS Departmental Appeals Board (DAB), in
a manner consistent with the provisions in 42 C.F.R. § 1005.2-1005.21.
Notwithstanding the language in 42 C.F.R. § 1005.2(c), the request for a hearing
involving Stipulated Penalties shall be made within 10 days after receipt of the
Demand Letter and the request for a hearing involving exclusion shall be made
within 25 days after receipt of the Exclusion Letter. The procedures relating to
the filing of a request for a hearing can be found at
http://www.hhs.gov/dab/divisions/civil/procedures/divisionprocedures.html

2.    Stipulated Penalties Review. Notwithstanding any provision of Title 42 of
the United States Code or Title 42 of the Code of Federal Regulations, the only
issues in a proceeding for Stipulated Penalties under this CIA shall be: (a)
whether CSI was in full and timely compliance with the obligations of this CIA
for which OIG demands payment; and (b) the period of noncompliance. CSI shall
have the burden of proving its full and timely compliance and the steps taken to
cure the noncompliance, if any. OIG shall not have the right to appeal to the
DAB an adverse ALJ decision related to Stipulated Penalties. If the ALJ agrees
with OIG with regard to a finding of a breach of this CIA and orders CSI to pay
Stipulated Penalties, such Stipulated Penalties shall become due and payable 20
days after the ALJ issues such a decision unless CSI requests review of the ALJ
decision by the DAB. If the ALJ decision is properly appealed to the DAB and the
DAB upholds the determination of OIG, the Stipulated Penalties shall become due
and payable 20 days after the DAB issues its decision.

3.    Exclusion Review. Notwithstanding any provision of Title 42 of the United
States Code or Title 42 of the Code of Federal Regulations, the only issues in a
proceeding for exclusion based on a material breach of this CIA shall be whether
CSI was in material breach of this CIA and, if so, whether:

a.
CSI cured such breach within 30 days of its receipt of the Notice of Material
Breach; or

b.
the alleged material breach could not have been cured within the 30 day period,
but that, during the 30 day period

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following CSI’s receipt of the Notice of Material Breach: (i) CSI had begun to
take action to cure the material breach; (ii) CSI pursued such action with due
diligence; and (iii) CSI provided to OIG a reasonable timetable for curing the
material breach.

For purposes of the exclusion herein, exclusion shall take effect only after an
ALJ decision favorable to OIG, or, if the ALJ rules for CSI, only after a DAB
decision in favor of OIG. CSI’s election of its contractual right to appeal to
the DAB shall not abrogate OIG’s authority to exclude CSI upon the issuance of
an ALJ’s decision in favor of OIG. If the ALJ sustains the determination of OIG
and determines that exclusion is authorized, such exclusion shall take effect 20
days after the ALJ issues such a decision, notwithstanding that CSI may request
review of the ALJ decision by the DAB. If the DAB finds in favor of OIG after an
ALJ decision adverse to OIG, the exclusion shall take effect 20 days after the
DAB decision. CSI shall waive its right to any notice of such an exclusion if a
decision upholding the exclusion is rendered by the ALJ or DAB. If the DAB finds
in favor of CSI, CSI shall be reinstated effective on the date of the original
exclusion.

4.    Finality of Decision. The review by an ALJ or DAB provided for above shall
not be considered to be an appeal right arising under any statutes or
regulations. Consequently, the parties to this CIA agree that the DAB’s decision
(or the ALJ’s decision if not appealed) shall be considered final for all
purposes under this CIA.

XI.    EFFECTIVE AND BINDING AGREEMENT

CSI and OIG agree as follows:

A.    This CIA shall become final and binding on the date the final signature is
obtained on the CIA.

B.    This CIA constitutes the complete agreement between the parties and may
not be amended except by written consent of the parties to this CIA.

C.    OIG may agree to a suspension of CSI’s obligations under this CIA based on
a certification by CSI that it is no longer providing health care items or
services that will be billed to any Federal health care program and it does not
have any ownership or control interest, as defined in 42 U.S.C. §1320a-3, in any
entity that bills any Federal health care program. If CSI is relieved of its CIA
obligations, CSI shall be required to notify OIG in writing at least 30 days in
advance if CSI plans to resume providing health care items or services that are
billed to any Federal health care program or to obtain an

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ownership or control interest in any entity that bills any Federal health care
program. At such time, OIG shall evaluate whether the CIA will be reactivated or
modified.

D.     All requirements and remedies set forth in this CIA are in addition to
and do not affect (1) CSI’s responsibility to follow all applicable Federal
health care program requirements or (2) the government’s right to impose
appropriate remedies for failure to follow applicable Federal health care
program requirements.

E.    The undersigned CSI signatories represent and warrant that they are
authorized to execute this CIA. The undersigned OIG signatories represent that
they are signing this CIA in their official capacities and that they are
authorized to execute this CIA.

F.    This CIA may be executed in counterparts, each of which constitutes an
original and all of which constitute one and the same CIA.
Electronically-transmitted copies of signatures shall constitute acceptable,
binding signatures for purposes of this CIA.

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30

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ON BEHALF OF CARDIOVASCULAR SYSTEMS, INC.

_/s/ Scott Ward____________________            __6/28/16___________________
SCOTT WARD                        DATE
Chairman of the Board, Interim Chief
Executive Officer and President

_/s/ Michael Loucks________________            __6/28/16___________________
MICHAEL K. LOUCKS                    DATE
Skadden, Arps, Slate, Meagher & Flom, LLP
Counsel to Cardiovascular Systems, Inc.

                        

Cardiovascular Systems, Inc. Corporate Integrity Agreement
31

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ON BEHALF OF THE OFFICE OF INSPECTOR GENERAL
OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES

__/s/ Robert K. Deconti______________                ____6/23/16____________
ROBERT K. DECONTI                        DATE
Assistant Inspector General for Legal Affairs
Office of Inspector General
U.S. Department of Health and Human Services

_/s/ Laura E. Ellis________________________            _____6/24/16___________
LAURA E. ELLIS                            DATE
Senior Counsel

APPENDIX A

INDEPENDENT REVIEW ORGANIZATION

This Appendix contains the requirements relating to the Independent Review
Organization (IRO) required by Section III.E of the CIA.

A.    IRO Engagement

1. CSI shall engage an IRO that possesses the qualifications set forth in
Paragraph B, below, to perform the responsibilities in Paragraph C, below. The
IRO shall conduct the review in a professionally independent and objective
fashion, as set forth in Paragraph D. Within 30 days after OIG receives the
information identified in Section V.A.8 of the CIA or any additional information
submitted by CSI in response to a request by OIG, whichever is later, OIG will
notify CSI if the IRO is unacceptable. Absent notification from OIG that the IRO
is unacceptable, CSI may continue to engage the IRO.

2.    If CSI engages a new IRO during the term of the CIA, this IRO shall also
meet the requirements of this Appendix. If a new IRO is engaged, CSI shall
submit the information identified in Section V.A.8 of the CIA to OIG within 30
days of engagement of the IRO. Within 30 days after OIG receives this
information or any additional information submitted by CSI at the request of
OIG, whichever is later, OIG will notify CSI if the IRO is unacceptable. Absent
notification from OIG that the IRO is unacceptable, CSI may continue to engage
the IRO.

B.    IRO Qualifications

The IRO shall:

1.assign individuals to conduct the IRO Reviews who have expertise in the
medical device industry and have expertise in all applicable Federal health care
program and FDA requirements relating to Covered Functions, including but not
limited to the Federal Anti-Kickback Statute (codified at 42 U.S.C. §
1320a-7b(b)). The assigned individuals shall also be knowledgeable about the
general requirements of the Federal health care program(s) under which
Government Reimbursed Products are reimbursed;
2.assign individuals to design and select the samples for the Transactions
Reviews who are knowledgeable about the appropriate statistical sampling
techniques; and
3.have sufficient staff and resources to conduct the reviews required by the CIA
on a timely basis.
C.    IRO Responsibilities

The IRO shall:

1.    perform each IRO Review in accordance with the specific requirements of
the CIA;
2.    follow all applicable Federal health care program and FDA requirements in
making assessments in each IRO Review;
3.    respond to all OIG inquires in a prompt, objective, and factual manner;
and
4.    prepare timely, clear, well-written reports that include all the
information required by Appendix B to the CIA.
D.    IRO Independence and Objectivity

The IRO must perform each IRO Review in a professionally independent and
objective fashion, as defined in the most recent Government Auditing Standards
issued by the United States Government Accountability Office.

E.    IRO Removal/Termination

1.    CSI and IRO. If CSI terminates its IRO or if the IRO withdraws from the
engagement during the term of the CIA, CSI must submit a notice explaining its
reasons for termination or the reason for withdrawal to OIG no later than 30
days after termination or withdrawal. CSI must engage a new IRO in accordance
with Paragraph A of this Appendix and within 60 days of termination or
withdrawal of the IRO.

2.    OIG Removal of IRO. In the event OIG has reason to believe the IRO does
not possess the qualifications described in Paragraph B, is not independent and
objective as set forth in Paragraph D, or has failed to carry out its
responsibilities as described in Paragraph C, OIG shall notify CSI in writing
regarding OIG’s basis for determining that the IRO has not met the requirements
of this Appendix. CSI shall have 30 days from the date of OIG’s written notice
to provide information regarding the IRO’s qualifications, independence or
performance of its responsibilities in order to resolve the concerns identified
by OIG. If, following OIG’s review of any information provided by CSI regarding
the IRO, OIG determines that the IRO has not met the requirements of this
Appendix, OIG shall notify CSI in writing that CSI shall be required to engage a
new IRO in accordance with Paragraph A of this Appendix. CSI must engage a new
IRO within 60 days of its receipt of OIG’s written notice. The final
determination as to whether or not to require CSI to engage a new IRO shall be
made at the sole discretion of OIG.

APPENDIX B

IRO REVIEWS

A.    IRO Engagement, General Description

As specified more fully below, CSI shall retain an IRO to perform engagements to
assist CSI in assessing and evaluating certain of its systems, processes,
policies, and procedures related to CSI’s Covered Functions (IRO Review). The
IRO Review shall consist of two components - a systems review (Systems Review)
and a transactions review (Transactions Review) as described more fully below.
CSI may engage, at its discretion, a single entity to perform both components of
the IRO Review, provided that the entity has the necessary expertise and
capabilities to perform both.
If there are no material changes in CSI’s systems, processes, policies, and
procedures relating to Covered Functions, the IRO shall perform the Systems
Review of certain systems, processes, policies and procedures relating to
Covered Functions (as set forth below) for the second and fourth Reporting
Periods. If CSI materially changes its systems, processes, policies, and
procedures relating to Covered Functions, the IRO shall perform a Systems Review
for the Reporting Period(s) in which such changes were made in addition to
conducting the Review as set forth above. The additional Systems Review(s) shall
consist of: (1) an identification of the material changes, and (2) a review of
the systems, processes, policies, and procedures that materially changed.

The IRO shall conduct the Transactions Review for each Reporting Period of the
CIA.

B.    IRO Systems Review

The Systems Review shall be a review of CSI’s systems, processes, policies, and
procedures (including the controls on those systems, processes, policies, and
procedures) relating to Covered Functions. More specifically, the IRO shall
review CSI’s systems, processes, policies, and procedures associated with the
following (hereafter “Reviewed Policies and Procedures”):

1.    Co-Marketing Activities, as defined in Section II.G of the CIA, and any
and all events and expenses relating to any such activity;

2.    Consulting Activities, as defined in Section II.H of the CIA and all
events and expenses relating to such engagements or arrangements;

3.     Funding of grants (including CME and non-CME third party educational
activities, research and “in-kind” grants) and healthcare-related charitable
contributions;

4.    Review and approval of travel and related expenses for HCPs including
those in connection with HCPs’ participation in educational, research, or other
CSI-sponsored programs or activities;

5.    Identification, tracking, and reporting to the CMS of Payments pursuant to
Section 6002 of the Patient Protection and Affordable Care Act, as amended by
the Health Care and Education Reconciliation Act of 2010, and the related
regulations and guidance (including FAQs) published by CMS;

6.     Materials and information about Government Reimbursed Products that may
be distributed by CSI sales representatives (including any contract sales
representatives) and materials or information that may be distributed or made
available by CSI through social media and/or direct-to-consumer advertising,
including CSI’s internal review and approval of such materials and information;

7.    Funding of, or participation in, Third Party Educational Activity, as
defined in Section II.F of the CIA, and any and all events and expenses relating
to any such activity.

C.    IRO Systems Review Report

The IRO shall prepare a report based upon each Systems Review performed. For
each of the Reviewed Policies and Procedures identified in Section B above, the
report shall include the following items:

1.    a description of the documentation (including policies) reviewed and any
personnel interviewed;

2.    a detailed description of CSI’s systems, policies, processes, and
procedures relating to the items identified in Sections B.1-7 above, including a
general description of CSI’s control and accountability systems (e.g.,
documentation and approval requirements, and tracking mechanisms) and written
policies regarding the Reviewed Policies and Procedures;

3.    a description of the manner in which the control and accountability
systems and the written policies relating to the items identified in Sections
B.1-7 above are made known or disseminated within CSI;

4.    findings and supporting rationale regarding any weaknesses in CSI’s
systems, processes, policies, and procedures relating to the Reviewed Policies
and Procedures, if any; and

5.    recommendations to improve any of the systems, policies, processes, or
procedures relating to the Reviewed Policies and Procedures, if any.

D.     IRO Transactions Review

The Transactions Review shall include a review of: (1) a sample of Co-Marketing
Activity agreements, and (2) a sample of Consulting Activities. The IRO shall
report on all aspects of its reviews in the Transactions Review Report.

1.    Review of Co-Marketing Activities. The IRO shall review 10% of HCPs and
HCIs with Co-Marketing Activity agreements, or at least 20 HCPs and HCIs with
Co-Marketing Activity agreements, whichever is greater. The IRO shall select its
sample of HCPs and HCIs with Co-Marketing Activity agreements for review in
consultation with OIG after CSI provides the IRO and the OIG with the name and
NPI number of each HCP or HCI with which CSI has a Co-Marketing Activity
agreement.

For each Co-Marketing Activity agreement that the HCP or HCI being reviewed has
with CSI, the IRO shall determine:

a.
How CSI determined the business need for performing Co-Marketing Activities with
the HCP(s) and HCI(s);

b.
How the targets or audience of each Co-Marketing Activity were selected and by
whom;

c.
The contributions of each party to each Co-Marketing Activity, and the financial
value of those contributions;

d.
How CSI determined that each party was contributing and receiving fair market
value to the Co-Marketing Activities;

e.
That the Co-Marketing Activity agreement was reviewed and approved in accordance
with CSI's Policies and Procedures; and

f.
That CSI collected and retained records of the activities of each party to the
Co-Marketing Activity agreement.

2.    Review of Consulting Activities. The IRO shall select and review a sample
of 10% of Consulting Activity arrangements, or at least 20 Consulting Activity
arrangements, whichever is greater, entered into during the Reporting Period
with HCPs and HCIs and all related expenses. Prior to the determination of the
number of each type of Consulting Activity to be reviewed CSI shall provide the
following information to the OIG: 1) a description of each type of Consulting
Activity undertaken during the Reporting Period and a description of the
services to be provided under each Consulting Activity; 2) the number of each
type of Consulting Activity undertaken during the Reporting Period; and 3) the
overall budgeted amount to be spent in connection with each type of Consulting
Activity during the Reporting Period. The IRO shall select its sample of
Consulting Activities for review in consultation with OIG after the provision of
information about the Consulting Activities to the OIG.

For each Consulting Activity reviewed the IRO shall determine whether:

a.    a written agreement was in place for each Consulting Activity that
describes the scope of work to be performed, the fees and related expenses to be
paid for the Consulting Activity, and the compliance obligations for the
Consultant;

b.    the compensation to be paid for the Consulting Activity was determined in
accordance with a centrally managed, pre-set rate structure established by CSI;

c.     the rate structure was established based on a fair market value analysis
conducted by CSI;

d.     the Consulting Activity was identified in the annual Consultant budgeting
plan developed by CSI;

e.    a needs assessment that identifies the business need for the Consulting
Activity and provides details about the Consulting Activity was completed prior
to the initiation of the Consulting Activity;

f.    the Consulting Activity was reviewed and approved in accordance with CSI's
Policies and Procedures;

g.    CSI collected and retained a record of the specific activity performed by
the HCP and, if applicable, a copy of the work product generated by the HCP in
connection with the Consulting Activity; and

h.    the activity undertaken by the Consultant and/or the work product
generated by the HCP was used by CSI in a manner consistent with the needs
assessment that was completed prior to the initiation of the Consulting
Activity.

3.     OIG Review of Proposed Work Plan. At least 30 days prior to the end of
each Reporting Period, the IRO shall submit to OIG a work plan outlining the
methodology for each element of the Transactions Review described above. The OIG
shall have 30 days to provide any comments regarding the work plan; if no
comments are provided, the IRO may proceed with the work plan as proposed.

E.    Transactions Review Report

For each Reporting Period, the IRO shall prepare a report based on its
Transactions Review. The report shall include the following:

1.    General Elements to Be Included in Report.

a.
Review Objectives: A clear statement of the objectives intended to be achieved
by each part of the review;

b.
Review Protocol: A detailed narrative description of the procedures performed
and a description of the sampling unit and universe utilized in performing the
procedures for each sample reviewed; and

c.
Sources of Data: A full description of documentation and other information, if
applicable, relied upon by the IRO in performing the Transactions Review.

2.    Results to be Included in Report. The following results shall be included
in each Transactions Review Report:

a.    Relating to the Review of Co-Marketing Activities

For or each Co-Marketing Activity reviewed, the IRO’s findings and supporting
rationale as to:

(i)
whether and how CSI determined a business need for performing the Co-Marketing
Activities with the HCP(s) and the HCI(s);

(ii)
whether and how the targets or audience of each Co-Marketing Activity were
selected, and by whom;

(iii)
the contributions of each party to each Co-Marketing Activity, and the financial
value of those contributions;;

(iv)
whether and how CSI determined that each party was contributing and receiving
fair market value to the Co-Marketing Activities;

(v)
whether the Co-Marketing Activity was reviewed and approved in accordance with
CSI's Policies and Procedures;

(vi)
whether CSI collected and retained records of the activities of each party to
the Co-Marketing Activities;

 
(vii)
any weaknesses in CSI’s systems, processes, policies, procedures and/or
practices relating to Co-Marketing Activities; and

(viii)
any recommendations for improvements to CSI’s systems, processes, policies,
procedures and/or practices relating to Co-Marketing Activities.

b.    Relating to the Review of Consulting Activities

(i)
in connection with the review of Consulting Activities, a description of each
type of Consulting Activity reviewed, including the number of each type of
Consulting Activity reviewed and an identification of the types of documents and
information reviewed for each Consulting Activity;

(ii)
for each Consulting Activity reviewed, the IRO’s findings and supporting
rationale as to whether:

(1)
a written agreement was in place for each Consulting Activity that describes the
scope of work to be performed, the fees and expenses to be paid for each
Consulting Activity, and the compliance obligations for the Consultant;

(2)
the compensation to be paid for the Consulting Activity was determined in
accordance with a centrally managed, pre-set rate structure set by CSI;

(3)
the rate structure was established based on a fair market value analysis
conducted by CSI;

(4)
the Consulting Activity was identified in the annual Consulting budgeting plan
developed by CSI;

(5)
a needs assessment that identifies the business need for the Consulting Activity
and provides detail about the activity was prepared prior to the initiation of
the Consulting Activity;

(6)
the Consulting Activity was reviewed and approved in accordance with CSI's
Policies and Procedures,

(7)
CSI collected and retained a record of the specific activity performed by the
HCP and, if applicable, a copy of the work product generated in connection with
the Consulting Activity;

(8)
the activity undertaken by the Consultant and/or the work product generated was
used by CSI in a manner consistent with the needs assessment that was completed
prior to the initiation of the Consulting Activity;

(9)
the IRO identified any weaknesses in CSI’s systems, processes, policies,
procedures and/or practices relating to Consulting Activities; and

(10)
the IRO has recommendations for improvements to CSI’s systems, processes,
policies, procedures and/or practices relating to Consulting Activities.

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