Exhibit 10.2

[*] Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately, accompanied by a confidential
treatment request, with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT (the “Agreement”), dated as of 28th March, 2011 (the
“Operative Date”), is by and between Enteromedics, Inc. a Minnesota corporation
located at 2800 Patton Road, St. Paul MN 55113 (“Supplier”) and Device
Technologies Australia Pty Limited, located at Unit 8, 25 Frenchs Forest Road,
Frenchs Forest, New South Wales 2086 Australia, with ABN 40 058 091 973
(“Distributor”).

WHEREAS, Supplier is engaged in the Business and wishes to engage Distributor to
sell the Products.

WHEREAS, Distributor has certain experience relevant to the distribution of the
Products in the Territory.

WHEREAS, Supplier wishes to appoint Distributor, and Distributor agrees to be
appointed, as Supplier’s exclusive distributor of the Products in the Territory
on the terms set out in this Agreement.

 

1 INTERPRETATION

 

1.1 Definitions

In this Agreement:

“Agreement” means this Distribution Agreement and includes any annexes,
schedules and exhibits;

“Business” means Supplier’s business of, among other things, manufacturing and
distributing the Products;

“Business Day” means a day on which banks are open for general banking business
in Sydney, Australia but does not include a Saturday, Sunday or public holiday;

“Competitive Product” means any implanted product approved for implant for six
(6) months or longer by any of the TGA, US FDA or CE Mark authorities which has
a clinical indication for use in patients with obesity who have a BMI between 30
and 45.

“Confidential Information” means information of every kind contained in or
concerning:

(a) the past, present or future business, operations or affairs of the
disclosing Party;

(b) the possibilities, procedures, operations, practices, studies,
feasibilities, evaluations, processes, organization and procedures of the
disclosing Party directly or indirectly touching or concerning the disclosing
Party’s business;

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(c) written reports, memoranda and other writings and papers or computer records
or electronic databases including any technical data files relating to the
disclosing Party’s business;

(d) prices and cost information relating to the disclosing Party’s business;

(e) any intellectual or industrial property owned or otherwise available for use
by the disclosing Party;

(f) the business transactions, business methods, records, forms costings,
charges, financial affairs and trade secrets of the disclosing Party;

(g) all manuals, records, computer files and software, documents and materials
generated or arising directly or indirectly out of any disclosure by the
disclosing Party;

(h) all other documents and things whether recorded or not and however recorded,
supplied or made available by the disclosing Party to the other; and

(i) this Agreement;

whether or not such information is described as confidential;

“Control” of a corporation includes the power (whether it is legally enforceable
or not) to control, whether directly or indirectly, a composition of the board
of directors of that corporation, the voting rights of the majority of the
voting shares of the corporation or the management of the affairs of the
corporation;

“Cooperative Contractor” means Australian Institute of Weight Control Pty
Limited, or other such entity as may be nominated by Supplier from time to time.

“Corporations Act” means Corporations Act 2001 and the Corporations Regulations
in each Australian jurisdiction and (where the context so permits) includes any
prior corresponding legislation;

“Distributor’s Business” means that part of Distributor’s business that relates
to this Agreement;

“Delivery” means delivery of the Products by Supplier to Distributor or any
agent, employee or representative of Distributor in accordance with clause 5.1;

“GST” means any goods and services tax or similar tax imposed in Australia;

“Initial Order” means the first stocking order from the Distributor;

“Initial Term” means the period commencing on the Operative Date and ending on
the fourth anniversary of the TGA approval date;

 

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“Insolvency Event” with respect to an entity means the happening of any one or
more of the following events:

(a) an order is made that the entity be wound up;

(b) an order is made appointing a liquidator, receiver, receiver and manager or
other administrator in respect of any of the assets or undertaking of the
entity;

(c) the entity enters into, or resolves to enter into, a scheme of arrangement
or composition with, or assignment for the benefit of, all or any class of its
creditors, or its proposes a reorganization, moratorium or other administration
involving any of them;

(d) the entity resolves to appoint an administrator to itself, wind itself up,
or otherwise dissolves itself, or gives notice of intention to do so, or is
otherwise wound up or dissolved;

(e) the entity is, or states that it is, unable to pay its debts when they fall
due or is presumed to be insolvent within the meaning of the Corporations Act;

(f) the entity takes any step to obtain protection, or is granted protection,
from its creditors under any applicable legislation; and

(g) anything having a substantially similar effect to any of the events
specified in paragraphs (a) to (g) above happens under the law of any applicable
jurisdiction;

“Intellectual Property” means any industrial or intellectual property throughout
the world, including without limitation:

(a) any patent, trademark (whether registered or unregistered) or service mark,
copyright, design, business name, or any right to register such rights; and

(b) all present and future rights in an invention, discovery, trade secret,
confidential information, know-how, concept, idea, data or formula and rights in
information, including any serendipitous discoveries, granted by law or equity
from time to time under the law of any jurisdiction;

“Liability” means all liability, however arising, including but not limited to
liability in tort (including liability as to negligence) and liability in
contract;

“Nominated Representative” means the President of Supplier and the Managing
Director of Distributor, unless otherwise notified by a Party in writing;

“Operative Date” means the date set forth in the preamble above;

“Party” means a party to this Agreement and “Parties” means the parties to this
Agreement;

 

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“Products” means, subject to clause 2.4, the products described in Exhibit A and
such other products which are agreed in writing between Supplier and Distributor
from time to time;

“Product Warranty” means the warranty for a Product offered in writing by
Supplier;

“Related Company” means a related body corporate (as defined in the Corporations
Act);

“Reportable Events” means an event in relation to a Product that is required to
be reported under the United States Food and Drug Administration’s Adverse Event
Reporting System and any equivalent system in the Territory, and includes
adverse events;

“Supplier” means Enteromedics, Inc.;

“Tax” means all duties, stamp and other taxes, value added taxes, goods and
services tax, levies, imposts, deductions, charges and withholdings whatsoever
(excluding income tax), any interest or penalty, and any charges, fees or other
amounts made on, or in respect of, the same, relating to the export or import of
Products;

“Term” means the period from the Operative Date until termination of this
Agreement under clause 14;

“Territory” means Australia and New Zealand;

“TGA” means Therapeutic Goods Administration;

“Trademarks” means Supplier’s trademarks as listed (and in the form set out) in
Exhibit C.

 

1.2 Construction

Unless expressed to the contrary:

 

  (a) if a word or phrase is defined cognate words and phrases have
corresponding definitions;

 

  (b) a reference to:

 

  (i) a person includes a firm, unincorporated association, corporation and a
government or statutory body or authority;

 

  (ii) a stature, ordinance, code or other law includes regulations and other
statutory instruments under it and consolidations, amendments, re-enactments or
replacements of any of them;

 

  (iii) time is to local time in Sydney,

 

  (iv) “$” or “dollars” is a reference to the lawful currency of Australia;

 

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  (c) this or any other document includes the document as varied or replaced and
notwithstanding any change in the Identity of the parties;

 

  (i) writing includes any mode of representing or reproducing words in tangible
and permanently visible form, and includes facsimile transmission; and

 

  (ii) any thing (including, without limitation, any amount) is a reference to
the whole or any part of it and a reference to a group of things or persons is a
reference to any one or more of them.

 

1.3 Headings

Clause headings do not affect the interpretation of this Agreement.

 

2 APPOINTMENT

 

2.1 Exclusive distribution

 

  (a) Supplier appoints Distributor as its exclusive distributor in the
Territory for the Products for the Term subject to the terms of this Agreement.

 

  (b) Distributor accepts the appointment referred to in paragraph (a).

 

2.2 Restricted supply by Supplier

Subject to clause 14.2(c), Supplier shall not appoint any other person to act as
its distributor in the Territory for the Products during the Term without
Distributor’s prior written approval.

 

2.3 Distribution outside the Territory

Distributor shall:

 

  (a) not distribute, resell or otherwise supply Products to:

 

  (i) any person outside the Territory; or

 

  (ii) any person who Distributor knows or could reasonably be expected to know
intends to distribute or resell or otherwise supply Products to any person
outside the territory;

 

  (b) impose on all its purchasers of the Products and enforce a condition of
sale to the effect that the Products are supplied for use only within the
Territory and may not be on-sold outside the Territory or for use outside the
Territory; and

 

  (c) promptly inform Supplier of any inquiries that Distributor receives for
the supply of Products outside the Territory.

 

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2.4 Changes in production

Supplier may cease to manufacture the Products or make material changes in the
design, production, packaging or finish of the Products from time to time, upon
giving not less than 60 days’ written notice to Distributor. In the event that
such changes require additional Regulatory or Reimbursement action by the
Distributor, consideration to any agreed Order Forecasts or Sales Performance
Objectives will be given accordingly by the Supplier.

 

2.5 Import into Territory

Supplier shall not supply Products to a person outside the Territory if Supplier
knows or could reasonably be expected to know that the person intends to resell
the Products in the Territory.

 

2.6 No agency

Distributor shall not hold itself out as Supplier’s agent for sales of the
Products or as being entitled to bind Supplier in any way.

 

2.7 Resale by Distributor

Distributor is entitled to resell the Products to Distributor’s customer at such
prices as it determines.

 

2.8 Reimbursement

Supplier will negotiate with any relevant government authority in the Territory
to determine the level of any applicable governmental funded customer
reimbursement in relation to the Products. Distributor shall do all things
necessary, including complying with Supplier’s directions, to assist Supplier in
such negotiations.

 

3 SUPPLY OF PRODUCTS AGAINST ORDERS

 

3.1 Order forecast

 

  (a) To facilitate Supplier’s production schedule, Distributor shall provide
Supplier with a written forecast of Distributor’s anticipated quarterly
requirements for Products for the following two quarters, to be submitted at
least 90 days prior to commencement of the forecast period (“Order Forecast”).
The first two months of each Order Forecast shall constitute a binding
commitment of Distributor to purchase the quantities of Products described
therein once the Distributor has obtained TGA approval and after the first six
(6) months of subsequent sales into the Territory.

 

  (b)

The Distributor will place an Initial Order, for a quantity of Products to be
mutually agreed between the Supplier and the Distributor, for stocking purposes
six (6) weeks post the TGA submission. In the event that the TGA approval is

 

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delayed, the Supplier agrees that the payment time of this Initial Order will be
correspondingly adjusted by the same TGA delayed approval time.

 

  (c) Distributor shall:

 

  (i) use its best efforts to ensure the Order Forecasts are as accurate as
possible; and

 

  (ii) promptly notify Supplier if it becomes aware that a submitted Order
Forecast is not an accurate prediction of its requirement for Products in the
relevant period.

 

3.2 Supply

Supplier shall make delivery of Products under orders that Supplier accepts in
writing according to the delivery terms in the relevant order.

 

3.3 Separate contracts

Each shipment which Supplier makes of Products in response to Distributor’s
orders is a separate contract of sale.

 

3.4 Orders in writing

Orders for the Products shall be provided by Distributor to Supplier in writing.
Supplier shall examine each order and confirm whether it accepts or declines
each order in writing no later than 10 Business Days from its receipt of
Distributor’s order. No order shall be final and binding until expressly
accepted by Supplier in writing. Distributor is, in respect of each order for
the Products to be supplied under this Agreement, responsible for ensuring the
accuracy of the order.

 

4 PRICE AND PAYMENT

 

4.1 Price

The prices payable by Distributor to Supplier for each of the Products are set
out in Exhibit B and are inclusive of packaging but exclusive of delivery costs
and Tax (subject to adjustment in accordance with clause 16).

 

4.2 Review of price

The prices for the Products are fixed for 6 months from the Operative Date and
for the Initial Order, after which time Supplier may increase or decrease the
price of the Products from time to time upon 180 days’ written notice to
Distributor. The new prices shall apply to all Products ordered by Distributor
from Supplier after the date that the written notice takes effect.

 

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4.3 Payment

 

  (a) Distributor shall pay Supplier the prices for all Products ordered and
accepted by it within forty five(45) days of the date of Seller’s invoice which
will accompany the delivery of the Products, by direct wire transfer to the
nominated bank account. Any payment not made when due will accrue interest at a
rate of 1.5% per month or part thereof.

 

  (b) If Distributor owes any amount to Supplier under this Agreement which is
outstanding by more than fourteen (14) days, Supplier may, at its sole
discretion and without prejudice to any of its other rights under this
Agreement, do any or all of the following:

 

  (i) withhold some or all future supplies of Products until the amount has been
paid in full;

 

  (ii) require Distributor to furnish security for payment acceptable to
Supplier;

 

  (iii) set-off that amount against any amount owing by Supplier to Distributor;
and

 

  (iv) require payment for all future supplies of Products to be made in cash
either before, or immediately upon, the delivery of those Products to
Distributor.

 

5 DELIVERY

 

5.1 Delivery

Delivery of the Products to Distributor’s premises or nominated address is to be
taken to constitute delivery to Distributor and Supplier’s obligation in respect
of delivery satisfied. Shipping, insurance, customs duties, etc. are the
responsibility of the Distributor.

 

5.2 Returns

 

  (a) All Products shall be received subject to inspection. Signed delivery
dockets shall not mean acceptance by Distributor of Products delivered but only
confirmation of the number of packages or cartons delivered.

 

  (b) Distributor will notify Supplier of any defective Products within 30 days
of receipt of the Products and hold such Products for Supplier’s instructions
for a reasonable period (not exceeding 60 days). If Supplier’s instructions are
not received within such period Distributor may return the defective Products to
Supplier’s premises at Supplier’s expense and any expense incurred by
Distributor in such return will be payable forthwith by Supplier and may be set
off by Distributor against any moneys otherwise due by Distributor to Supplier.

 

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  (c) If Distributor can verify to Supplier’s reasonable satisfaction that a
Product was defective at the time it was delivered to Distributor, Supplier
shall use reasonable endeavors to repair or replace that defective Product with
a Product which is free of defects within thirty (30) days.

 

  (d) If Supplier is not able to repair or replace the defective Product as
required under clause 5.2(c), it shall refund the cost of the defective Product
to Distributor.

 

6 RISK AND TITLE

 

6.1 Distributor’s risk

The Products are at Distributor’s risk from the time of Delivery, and in the
case of returned Products, risk passes to Supplier upon its receipt of the
returned Products.

 

6.2 Title

Property in and ownership of the Products passes to Distributor at the time when
full payment for the Products is made.

 

7 SUPPLIER’S AND DISTRIBUTOR’S OBLIGATIONS

 

7.1 Reports and database

 

  (a) At the end of each three (3) month period commencing at the end of the
first calendar quarter following the Operative Date, Distributor shall render to
Supplier a report of sales and marketing information concerning each type of
Product.

 

  (b) Distributor shall maintain a database containing details of customers to
whom it sells Products during the Term (including the type and quantity of
Product purchased by each customer), and Distributor shall grant Supplier
reasonable access to this database upon Supplier’s request.

 

7.2 Promotions

Distributor shall use its best efforts to offer the Products as part of its
existing product range and promote and extend and increase the sale of the
Products throughout the Territory. Distributor will use its best endeavors to
promote the Products in the relevant markets for the Product and where
appropriate include the Products in any electronic promotion (including any
Internet-related promotion) that Distributor may conduct from time to time.

 

7.3 No representations

Distributor shall not make any representations or give any warranties or other
benefits in favor of any proposed purchaser or to the detriment of Supplier
beyond those authorized in writing by Supplier.

 

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7.4 Applicable regulations

Distributor shall report to Supplier regularly during the Term to enable it to
ensure that the Products meet regulations applicable in the Territory relating
to safety and labeling, but this obligation to report shall in no way derogate
from Supplier’s obligations under clause 7.14(b).

 

7.5 Description of Distributor as authorized distributor

In all correspondence, commercial documents and on any name plate or sign on any
premises, on vehicles or in directories and similar media, Distributor shall
describe itself as “authorized distributor” of the Products and take any other
necessary steps as required by Supplier or otherwise to make clear the extent of
the limitation of Distributor’s authority to act on behalf of Supplier.

 

7.6 Applications for applicable licenses

 

  (a) The Distributor shall obtain and maintain all certificates, licenses,
authorizations or registrations as required to import, promote, sell, use or
distribute the Products in the Territory. Each Party shall provide reasonable
aid or assistance as may be required by the other Party to obtain the same.
Unless otherwise required by law, all certificates, licenses, authorizations and
registrations that relate to the Products shall be in Supplier’s name.

 

  (b) Upon receipt by Distributor of any document or approval set out in clause
7.6(a), Distributor shall provide a copy to Supplier.

 

  (c) At the expiration or termination of this Agreement, or at any time on
Supplier’s direction, Distributor will transfer, or assist to transfer all
certificates, licenses, authorizations and registrations set out in clause
7.6(a) that are in its name to the Supplier’s Australian entity nominee at no
charge.

 

7.7 Referrals on inquiries

Distributor shall refer promptly to Supplier any inquiries made by persons
regarding sales or potential sales of Products outside the Territory.

 

7.8 Further development

Distributor shall regularly meet with Supplier to consider new opportunities and
markets for the Products, and will work with Supplier and the Cooperative
Contractor to develop the market for the Products in the Territory.

 

7.9 Sub-Distributors

Distributor may appoint sub-distributors, agents or other intermediaries to
perform its obligations under this Agreement provided that Distributor will be
responsible for any act or omission by the sub-Distributor, agent or
intermediary, and subject to any terms that Supplier may impose in its sole
discretion.

 

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7.10 Competitive products

Distributor shall not, during the Initial Term and any renewal terms thereafter,
without mutual agreement between the parties, manufacture, import, sell, supply,
develop, provide, promote or market “Competitive Products” in the Territory.

 

7.11 Cooperative Contractor terms

Distributor shall offer the Cooperative Contractor reasonable commercial terms
of supply for Products which are no less favorable than the terms of supply for
Products that are offered by Distributor to its other customers.

 

7.12 Distributor’s further obligations

In addition to fulfilling the other obligations imposed by this Agreement,
Distributor shall:

 

  (a) pay all Taxes payable with respect to Products delivered to Distributor;

 

  (b) only provide Products to customers that have an acceptable level of
training or resources and have been accredited, as mutually determined by the
Distributor and the Supplier;

 

  (c) nominate an officer to sit on a steering committee (to join the nominee
from Supplier and the nominee from the Cooperative Contractor), which committee
Distributor agrees shall receive and make recommendations to the parties
regarding surgeon training, bariatric center accreditation and technical
materials;

 

  (d) provide such customer support services and assistance as may be necessary
for purchasers of Products to obtain satisfactory results from their use of the
Products;

 

  (e) refrain from practicing medicine or giving medical treatment or advice in
Supplier’s name or on Supplier’s behalf;

 

  (f) comply with Supplier’s business standards as notified by Supplier;

 

  (g) at all times during the Term, observe all laws (including privacy laws)
and standards and maintain all accreditations applicable to the conduct of its
business and carrying out its obligations under this Agreement (including in
respect of the storage, transportation and sale of the Products in the
Territory);

 

  (h) assist Supplier to discharge its regulatory obligations by providing
requested information to Supplier regarding Product traceability in accordance
with generally accepted industry standards, including customer by Product and
Product by customer tracking;

 

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  (i) follow the same quality control standards with respect to the storage,
preservation, sale and use of the Products as followed by Supplier and
communicated to Distributor by Supplier and not remove Products from packages
designated for delivery to end-user customers when such removal may affect the
quality of the Products or destroy any trademark identity; and

 

  (j) promptly notify Supplier all Reportable Events, product defects, adverse
events and customer complaints that come to its attention, including such detail
as Supplier may reasonably require.

 

7.13 Good faith

Each Party shall at all times during the Term act towards the other Party
dutifully and in good faith.

 

7.14 Compliance with laws

 

  (a) Supplier shall at all times comply with all the applicable laws and
regulations in the Territory relating to the nature, method of manufacture,
packaging and labeling of the Products.

 

  (b) If Distributor is aware that changes are required to the Product labeling
in order to comply with the laws and regulatory requirements in the Territory,
Distributor shall immediately notify Supplier of the required changes.

 

  (c) Distributor shall not modify, remove or replace any Product labeling,
package inserts, warnings, instructions for use or other similar materials under
any circumstances without Supplier’s prior written consent.

 

7.15 Insurance

 

  (a) Supplier’s insurance

 

  (i) Supplier shall take out and maintain appropriate and adequate insurance
during the Term in relation to any Liability that may arise from the
manufacture, sale or use of the Products. Such insurance will include, as a
minimum, public liability and product liability insurance.

 

  (ii) Supplier shall make all insurance policies available to Distributor for
inspection.

 

  (b) Distributor’s insurance

 

  (i) Distributor shall effect and maintain for the Term, at its own expense and
with an insurer of repute and good standing, a comprehensive public liability
insurance policy against any Liability related to personal injury and property
damage resulting from acts or omissions of Distributor, its

 

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officers, employees, agents or third party contractors. The insurance policy
shall meet the following insurance level requirements:

 

Claim type

  

Minimum insurance level

Personal injury arising from public liability   

Aust$20,000,000 per person

Aust$20,000,000 per occurrence

Property damage arising from product liability    Aust$20,000,000 aggregate
claims each year.

 

  (c) Certificates. Distributor and Supplier shall furnish each other with
copies of all insurance certificates within thirty (30) days of the execution of
this Agreement. For the avoidance of doubt, nothing in this clause 7.15(b)
limits either Party’s liability under this Agreement.

 

8 PROMOTION AND TECHNICAL MATERIALS

 

8.1 Promotion

 

  (a) Distributor shall conduct promotional exercises and promotions in relation
to the Products including direct marketing from time to time to medical
conferences and medical practitioners, and advertise the Products in the
Territory from time to time.

 

  (b) Distributor shall ensure that all advertising and promotional materials it
wishes to use comply with the laws and regulatory requirements of the countries
within the Territory in which they will be used.

 

  (c) Distributor shall not use, publish, broadcast or disseminate any
advertising and promotional materials without Supplier’s approval. When
submitting the materials to Supplier for approval, Distributor shall give
details of when, where and in which medium the materials will be used. Supplier
shall take reasonable steps to promptly respond to Distributor’s request for
approval upon receipt of the materials.

 

8.2 Technical materials

Supplier shall, at its cost and upon request by Distributor, supply to
Distributor reasonable quantities of masters of such technical data sheets,
manuals and drawings relating to the Products as the Parties determine are
reasonably required to facilitate Distributor’s performance of its obligations
under this Agreement.

 

9 SUPPORT AND TRAINING

 

9.1 Samples and catalogues

 

  (a) Supplier shall, as mutually agreed and at reasonable cost, provide samples
of the Products to Distributor for marketing purposes.

 

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  (b) Supplier shall, at its cost, from time to time provide Distributor with
such catalogues, brochures and up to date information concerning the Products as
Supplier may consider appropriate or as Distributor may reasonably require in
order to assist Distributor in the sale of the Products in the Territory, and
Supplier shall endeavor to answer as soon as practicable any technical enquiries
concerning the Products which are made by Distributor or its customers.

 

9.2 Keep Distributor Informed

Supplier shall supply to Distributor any information which may come into its
possession which Supplier considers is likely to be relevant in relation to the
marketing of the Products in the Territory and which may assist Distributor to
effect sales.

 

9.3 Market strategies

Each Party shall keep the other informed from time to time as to its market
strategies for the Products and intended marketing positioning.

 

9.4 Training

As agreed by the Parties from time to time, taking into account the role of the
Cooperative Contractor in marketing and providing training for the Products in
the Territory:

 

  (a) Supplier shall provide Distributor (at such time as may be agreed and for
a period not exceeding 5 Business Days in each year of the Term) with the
services of a suitably qualified employee of Supplier or of an associate or
contractor of Supplier at no charge, to assist Distributor in the marketing of
the Products; and

 

  (b) Supplier will provide or arrange training for up to 3 suitably qualified
employees of Distributor in relation to matters relating to the Products and
their marketing at such time as may be agreed and for a period not exceeding 5
Business Days in each year of the Term.

 

10 AFTER SALES SERVICE

 

10.1 Warranty Labor Support

Distributor will, at its cost, provide to third parties labor and telephone
support including that required under the Product Warranty, and if there is a
dispute as to the level of support required, as reasonably determined by
Supplier.

 

10.2 Warranty Product Support

Supplier at its cost will provide all non-labor items (such as replacement
components) as reasonably required by Distributor to complete the warranty
service set out in clause 10.1.

 

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11 TRADEMARKS AND INTELLECTUAL PROPERTY

 

11.1 License of Trademarks

 

  (a) Supplier grants Distributor a non-exclusive, non-transferable license to
use the Trademarks in connection with the distribution, sale, promotion and/or
advertising of the Products in the Territory in accordance with Supplier’s
standards and instructions. Distributor shall acquire no other right, title or
interest in the Trademarks, and Distributor shall not use any Trademark as part
of Distributor’s corporate or trade name or permit any third party to do so
without the prior written consent of Supplier.

 

  (b) Distributor acknowledges Supplier’s proprietary rights in and to the
Trademarks, and Distributor waives in favor of Supplier all rights to any
trademarks or trade names now or hereafter originated by Supplier. Distributor
shall not at any time adopt, use or register any words, phrases or symbols which
are identical or confusingly similar to any of Trademark.

 

11.2 Intellectual property

 

  (a) Distributor shall only be permitted to use Supplier’s Intellectual
Property in connection with the distribution, sale, promotion and/or advertising
of the Products as provided in this Agreement, and then only in the form and
manner approved by Supplier.

 

  (b) Except for the limited trademark license in clause 11.1 and use rights
granted in this clause 11.2, this Agreement does not grant to Distributor any
rights in any Intellectual Property.

 

11.3 Developed materials

The Distributor and the Supplier shall develop marketing materials which may be
used by the Supplier outside of the Territory. The Supplier will be responsible
for developing all manufactured related materials such as Instructions for Use
and Operating and Technical manuals.

 

11.4 Infringement of rights

Distributor shall report forthwith to Supplier any infringement or suspected
infringement by third parties of Supplier’s Intellectual Property which come to
the notice of Distributor and Supplier has the exclusive right to determine
whether any action is brought, maintained or disposed of in respect of any
infringement or suspected infringement. The Distributor will provide all
reasonable assistance to the Supplier in this event but shall not have any
financial involvement.

 

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11.5 No challenge by Distributor

Distributor shall not challenge the validity or ownership of Supplier’s
Intellectual Property. Distributor acknowledges that the use of Supplier’s
Intellectual Property by Distributor is only on behalf of Supplier as a licensee
under its control.

 

12 CONFIDENTIALITY

Each Party shall treat Confidential Information disclosed to it by the other
Party as confidential and to this end (but without limiting the generality of
the obligation hereunder) each Party shall:

 

  (a) initiate a system for the safe custody of the Confidential Information and
for the control of the making of copies of it and their safe custody;

 

  (b) not, without the prior written consent of the disclosing Party, disclose
Confidential Information belonging to the disclosing Party to any other person
except for:

 

  (i) those of its employees involved in performance of this Agreement and who
need to know the Confidential Information in question; and

 

  (ii) in the case of Supplier, its Related Companies;

 

  (c) instruct each and every employee who will be required to use the
Confidential Information to the effect that it is to be treated as confidential
and kept in safe custody;

 

  (d) use the Confidential Information belonging to the Disclosing Party solely
in connection with performing, or receiving the benefit of this Agreement, and
not for its own benefit or the benefit of any third party; and

 

  (e) allow each Party to inspect the premises and method of administration of
these provisions by the other at any reasonable time.

The obligation of confidentiality imposed by this clause does not extend to any
part of the Confidential Information:

 

  (f) which is in the public domain other than as a result of any breach of this
Agreement;

 

  (g) which was disclosed by a third party other than in breach of an obligation
of confidentiality; or

 

  (h) to the extent that disclosure is necessary for a Party to comply with any
applicable law, any court proceedings, the requirements of any regulatory body
or the rules of any stock exchange on which the shares of that Party are listed.

 

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The obligation of confidentiality under this clause shall continue for the Term
and shall survive termination or expiration unless it is agreed by both parties
that any such Confidential Information is in the public domain or is otherwise
sufficiently public as to negate this obligation.

 

13 WARRANTIES AND INDEMNITY

 

13.1 Supplier’s warranties

 

  (a) Supplier warrants to Distributor that:

 

  (i) all Products supplied to Distributor shall be free from defects in
construction, material and workmanship for a minimum period of one (1) year from
the date of the Distributor’s invoice accompanying the delivery of the Products
to the customer;

 

  (ii) all Products supplied to Distributor will correspond to Supplier’s
descriptions of them and will comply with any specification stipulated by
Distributor to Supplier and expressly agreed to in writing by Supplier;

 

  (iii) all the Intellectual Property in and related to the Products that is
required for use by Distributor under this Agreement is owned by or licensed to
Supplier or a Related Company of Supplier and that Supplier has the right to
allow Distributor to use such Intellectual Property in accordance with the terms
of this Agreement; and

 

  (iv) Supplier is not aware of any rights of any third party in the Territory
which would or might render the sale of the Products, or the use of any of the
Trademarks on or in relation to the Products, unlawful.

 

  (b) If a Product proves to be defective in regards to sub-clause 13.1 above,
Supplier will, at its option, replace the Product at its own expense within
thirty (30) days of notice by the Distributor or refund the purchase price paid
by Distributor for the Product, unless the product defect was not caused by
Supplier. Such replacement or refund shall be Supplier’s sole obligation and
Distributor’s sole remedy for breach of warranty hereunder.

 

  (c) ALL CLAIMS UNDER THIS CLAUSE 13.1 SHALL BE MADE BY DISTRIBUTOR AND MAY NOT
BE MADE DIRECTLY BY DISTRIBUTOR’S CUSTOMERS. THE WARRANTIES SET FORTH ABOVE ARE
IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED
AND EXCLUDED BY SUPPLIER, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.

 

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13.2 Distributor’s warranties

 

  (a) Distributor warrants in favor of Supplier that:

 

  (i) it has the necessary skills, knowledge, expertise and ability to perform
its obligations under this Agreement;

 

  (ii) it will perform its obligations under this Agreement in a competent and
professional manner;

 

  (iii) it has full corporate power and lawful authority to execute and deliver
this Agreement and to perform its obligations under this Agreement;

 

  (iv) this Agreement constitutes a legal, valid and binding obligation
enforceable in accordance with its terms by appropriate legal remedy; and

 

  (v) there is no claim, action, proceeding, demand or investigation pending or
threatened against it or by, against or before any person in relation to it
which may have a material effect on the subject matter of this Agreement.

 

13.3 Indemnity

Subject to clause 13.4 and clause 13.5, each Party (the Indemnifying Party)
indemnifies the other Party against all losses, damages, Liabilities, claims,
charges and expenses (including legal costs on an indemnity basis) incurred or
suffered by the other Party (including claims by an injured patient or third
party) arising out of or in connection with any third-party claim based on:

 

  (a) any breach by the Indemnifying Party of its obligations under this
Agreement;

 

  (b) any negligent act, omission or willful misconduct of the Indemnifying
Party or any of its respective officers, employees, agents or third party
contractors; and

 

  (c) any claim by a person that a Party’s use of any Intellectual Property or
material provided by the Indemnifying Party pursuant to this Agreement infringes
a third party’s intellectual property rights, except to the extent that the
claim arises through a breach by the Party of its obligations under this
Agreement.

 

13.4 Exclusion for consequential loss or damage

EXCEPT FOR BREACHES OF CLAUSE 7.10 (COMPETITIVE PRODUCTS), CLAUSE 12
(CONFIDENTIALITY) AND ANY INDEMNIFICATION OBLIGATIONS UNDER CLAUSE 13.3, IN NO
EVENT SHALL EITHER PARTY BE LIABLE FOR ANY KIND OF SPECIAL, INDIRECT, INCIDENTAL
OR CONSEQUENTIAL LOSSES OR DAMAGES, INCLUDING LOST PROFITS, LOSS OF REVENUE,
LOSS OF USE, LOSS OF CONTRACT, LOSS OF GOODWILL OR INCREASED COST OF WORKING,
EVEN IF THE PARTY SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL
LOSS OR DAMAGE

 

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13.5 Notifying claim

The indemnity in clause 13.2 is subject to the condition that the Party seeking
the indemnity shall promptly notify the Indemnifying Party on becoming aware of
any potential loss, damage, Liability, claim, charge or expense.

 

14 TERM AND TERMINATION

 

14.1 Term

This Agreement commences on the Operative Date and subject to clause 14.2
continues for the Initial Term. At the expiry of the Initial Term this Agreement
will continue for successive further 12-month terms unless either a new contract
is then negotiated subject to mutual agreement or it is terminated at any time
during any such successive further term by either Party giving to the other not
less than 3 months’ written notice.

 

14.2 Termination for breach

 

  (a) Either Party may terminate this Agreement by written notice to the other
if the other Party commits any substantial breach of the provisions contained in
this Agreement and does not remedy the breach within 60 days after receipt of
written notice requiring it to do so. If the breach is not capable of being
remedied, the Party not in breach is entitled to terminate this Agreement with
immediate effect by written notice to the other.

 

  (b) In addition to the right of termination granted by clause 14.2 either
Party may terminate this Agreement with immediate effect by written notice to
the other Party in any of the following events;

 

  (i) if any moneys payable under this Agreement are in arrears and one Party
fails to pay the same within 45 days of a written notice to pay from the other
Party;

 

  (ii) if the other Party assigns or attempts to assign its rights under this
Agreement without the consent of the other Party under clause 23.5;

 

  (iii) if at any time there is any majority change in the organization,
management, direction, Control or constitution of a Party without the prior
written notice of the other Party;

 

  (iv) if an Insolvency Event occurs in relation to a Party;

 

  (v) if either Party is prohibited by any law, regulation or requirement of any
government or governmental authority in any part of the Territory from complying
with this Agreement;

 

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  (vi) if a force majeure event causes delay to performance for a continuous
period of 3 months or for a period of 3 months out of any 6-month period; and

 

  (vii) if either Party ceases to carry on business in the normal course.

 

  (c) Sales performance objective

 

  (i) A sales performance objective will be determined by agreement by both
Parties for the first year of the trading Term within 30 days following TGA
approval and will be reviewed and amended by mutual agreement on an annual
basis.

 

  (ii) If the Parties fail to reach agreement on the sales performance objective
after the period defined in (i):

(A) for the second year of the trading Term, it will be determined by agreement
by both Parties; and

(B) for subsequent years, it will be set at the sales performance objective
level of the previous year plus 5%.

 

  (iii) Distributor acknowledges and agrees that (i) it has participated to fix
these sales performance objectives, (ii) these sales performance objectives are
reasonable in view of Distributor’s capabilities and market conditions in the
Territory, and (iii) the provisions of this clause 14.2(c) are essential to this
Agreement as stating the minimum amount of Product sales which justify
Supplier’s grant to Distributor of exclusive distribution rights for the
Products.

 

  (iv) If the sales performance objective is not met by Distributor, a 3-month
period will be allowed for remediation. Product purchases during this
remediation period that are counted toward the sales performance objective for
the previous year shall not be counted toward the sales performance objective
for the then current year. If after this remediation period the sales objective
is not obtained and an agreement is not reached between the Parties for a
revised sales objective, Supplier may at its sole election:

(A) terminate this Agreement with immediate effect; or

(B) (1) amend the appointment of Distributor under this Agreement to a
non-exclusive distributor, and/or (2) limit the Territory and/or sales channels
in which Distributor has distribution rights and/or (3) limit the Products to
which Distributor has distribution rights, by giving written notice to
Distributor.

 

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  (v) Any termination under this clause 14 is without prejudice to the rights
and remedies of either Party against the other in respect of any antecedent
claim or breach of any of the provisions of this Agreement.

 

14.3 Consequences of termination or expiration of this Agreement

 

  (a) Cease promotions

Subject to clause 14.3(e), Distributor shall not, from the date of termination
or expiration of this Agreement, promote or market the Products or use
Supplier’s Intellectual Property without the written consent of Supplier.

 

  (b) Actions following determinations

Subject to clause 14.3(e), upon termination or expiration of this Agreement,
Distributor, its employees, agents and third party contractors shall
immediately:

 

  (i) refrain from using any of the Trademarks, or any name or names deceptively
similar to the Trademarks alone or in connection with any other names;

 

  (ii) refrain from representing orally or in writing to members of the public
that its business has a sponsorship, approval or affiliation with Supplier;

 

  (iii) refrain from advertising whether by the issue of booklets, leaflets,
brochures or otherwise representing that its business or goods is or are in any
way connected with Supplier; and

 

  (iv) pay to Supplier any amounts due under this Agreement.

 

  (c) Details of Products

Distributor shall within 60 days of termination or expiration of this Agreement
furnish Supplier with details of:

 

  (i) all partially completed contracts sale with customers for the Products;
and

 

  (ii) all Products held by Distributor in store or in transit.

 

  (d) Buy back of Products

Supplier shall buy back any current and saleable Products held by Distributor,
provided it is packaged in the original undamaged wrap and has a minimum of six
months expiry. The purchase price will be the same as the invoiced price
(excluding associated shipping and importing costs).

 

  (e) Orders

 

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Supplier shall fulfill all orders from Distributor to Supplier to the extent to
which they are unfulfilled at the time of termination or expiration of this
Agreement unless Distributor cancels those orders prior to Delivery of the
Products. Distributor may use any labels, wraps, containers, advertising and
other items bearing the Trademarks to enable it to sell Products delivered after
termination of this Agreement.

 

  (f) Return of records and Confidential Information

Subject to clause 14.3(e), upon termination or expiration of this Agreement:

 

  (i) Distributor shall forthwith return to Supplier all records of information
and documents supplied to Distributor under this Agreement;

 

  (ii) each Party shall, at the other Party’s direction, either return or
destroy all documents in its possession or control containing (and any other
records of) the other Party’s Confidential Information, and provide to the other
Party a signed certificate stating that this obligation has been complied with;
and

 

  (iii) the Distributor shall provide the Supplier with all customer sales
information and any marketing material developed for the purpose of representing
the Products.

 

  (g) No rights other than as this Agreement

Subject as otherwise provided in this Agreement and to any rights or obligations
which have accrued prior to termination or expiration, neither Party has any
further obligation to the other under this Agreement.

 

15 COMPENSATION FOR LOSS OF DISTRIBUTORSHIP

If this Agreement is terminated for any reason (including a change of control in
the ownership of Supplier or its ultimate parent company) other than as a result
of a breach of this Agreement by Distributor, a force majeure event or an
Insolvency Event involving Distributor, then Supplier shall, within 60 days of
termination of this Agreement provide the following compensation:

 

  (a) all costs associated with the Regulatory and Reimbursement approvals; and

 

  (b) in the event that the Agreement is terminated during the first twelve
(12) month trading period following TGA approval, payment will be made by the
Supplier to the Distributor of [*], for the remaining months of the twelve
(12) month period; or

 

  (c) in the event that Termination is after the first twelve (12) month trading
period and until the end of the agreed Initial Term, [*] for the previous twelve
(12) months trading period, from the date of the termination notice, will be
paid by the Supplier to the Distributor.

[*] Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately, accompanied by a confidential
treatment request, with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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For the purposes of the calculations under this clause 15, [*].

 

16 GOODS AND SERVICES TAX

 

  (a) Unless otherwise expressly stated, all prices or other sums payable or
consideration to be provided under this document are exclusive of GST.

 

  (b) If:

 

  (i) a Party incurs a liability to pay GST on any supply it makes to the other
Party under this Agreement;

 

  (ii) the Party making the supply certifies that it has not priced the supply
to include GST; and

 

  (iii) the Party making the supply is registered for GST purposes, the Party
receiving the supply agrees to pay the Party making the supply, at the same time
and in addition to any other consideration payable for that supply under this
Agreement, an amount calculated by multiplying the amount payable by the Party
receiving the supply by the prevailing GST rate, provided always that such
amount will not become payable until a valid tax invoice is issued by the Party
making the supply.

 

  (c) Notwithstanding any other provision in this Agreement if imposition of a
GST or any subsequent change in the GST law is accompanied by or undertaken in
connection with the abolition of or reduction in any existing taxes, duties or
statutory charges (in this clause 16 “Non-GST Taxes”), the consideration
(excluding any GST) payable by Distributor for any supply made under this
Agreement will be varied as a consequence of the abolition of or reduction in
Non-GST Taxes, whether directly by way of a variation in Non-GST Taxes paid or
payable by Supplier to its suppliers or to any government or indirectly by way
of a variation in the prices (excluding any GST) charged by suppliers to
Supplier. The parties agree that:

 

  (i) the relevant proportion will be the subject of negotiations made in good
faith between them at the relevant time; and

 

  (ii) those negotiations may, without limitation, deal with the extent to which
any Non-GST Taxes are relevant to this clause (for example, income tax).

 

17 ANCILLARY PROVISIONS

The relationship between the Parties is that of seller and buyer and is not that
of employer/employee, principal/agent, joint venture, partnership or otherwise.
Distributor is not authorized to act on behalf of Supplier purporting to bind
Supplier, or to extend any warranty, commitment or representation on behalf of
Supplier, but acts as an independent contractor buying for itself and selling in
Distributor’s own name and at Distributor’s own risk.

[*] Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately, accompanied by a confidential
treatment request, with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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18 FORCE MAJEURE

 

18.1 No Patty will be liable nor deemed to be liable to the other Party for
failure or delay in meeting any obligation which it had the duty to perform to
the extent that, and for the period of time during which performance of the
obligation is effected by strikes and/or lockouts (whether of their own
employees or those of others and whether or not the Party against whom such
action is taken could have avoided the same by acceding to the demands of the
employees responsible for such action) acts of God, war, fire, flood, embargo,
acts of government or any agency instrumentality or any political subdivision
hereof or any other cause beyond the reasonable control of the Party but does
not include for example, economic problems such as insufficient funds or
substantial price rises, ordinarily foreseeable events like bad weather or
accidents due to miscalculation.

 

18.2 In any such event, the time for performance of the obligations under this
Agreement will be extended by the same period or periods (as the case may be)
for which performance is delayed by the event. The Party so affected will use
its best endeavors to avoid or remove such causes of non-performance and will
continue performance hereunder with the utmost dispatch as soon as such causes
are removed. Nothing in this clause will be construed as requiring the affected
Party to settle any industrial dispute.

 

18.3 A Party affected by a force majeure event must immediately upon becoming
aware of the occurrence of the event, notify the other Party of the occurrence,
its cause and the steps which the notifying Party is taking to resume
performance of its obligations under this Agreement.

 

18.4 Neither Party may invoke grounds for relief pursuant to a force majeure
event unless such Party can prove that it has taken all reasonable measures to
limit the effects of the delay, and after the impediment has ceased to exist,
attempted to make up for the lost time.

 

19 PRODUCT RECALL

 

  (a) If Supplier wishes to recall any Product, or if any government or
authority requires the recall of any Product for any reason, Distributor shall
effect the recall in accordance with all relevant legal and regulatory
requirements and directions by Supplier.

 

  (b) The Parties shall consult closely and Distributor shall keep Supplier
fully informed from time to time as to the status of any Product recall.

 

  (c) Distributor shall not communicate with the news media, consumers,
government or regulatory authorities in relation to any Product recall without
Supplier’s prior written approval (which shall not be unreasonably withheld) or
as directed by the TGA, and shall only communicate to those parties on terms
reasonably directed by Supplier or the TGA.

 

  (d) Each Party shall provide assistance reasonably requested by the other
Party in connection with the implementation of a Product recall.

 

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20 NOTICES

 

20.1 Manner of service

A notice or other communication required or permitted to be given by a Party to
another shall be in writing and either—

 

  (a) delivered personally;

 

  (b) sent to an address in Australia by security post or registered mail,
postage prepaid;

 

  (c) sent to an address outside Australia by registered prepaid first class
airmail; or

 

  (d) sent by facsimile transmission with acknowledgment of receipt from the
addressee, to the address for service, or to the facsimile number of the sender.

 

20.2 Notice given

A notice or other communication is taken to have been given if:

 

  (a) personally delivered, upon delivery;

 

  (b) mailed to an address in the Commonwealth of Australia, on actual delivery
to the addressee, as evidenced by documentation of the relevant postal
authority;

 

  (c) mailed to an address outside the Commonwealth of Australia, 7 days after
posting; and

 

  (d) sent by facsimile, upon the sender receiving acknowledgment of receipt
from the address.

 

20.3 Acknowledgment of receipt

A Party who receives a notice or the communication by facsimile shall
immediately acknowledge receipt to the sender.

 

20.4 Address

A notice or other communication is taken to be duly given if given in the manner
specified in this clause and if delivered or posted to the Party to whom the
same is addressed to the address set forth on the first page of this Agreement
or to such other address as shall have been furnished.

 

21 NON SOLICITATION

Without the prior written consent of Distributor, Supplier shall not, directly
or indirectly, hire or otherwise engage, or seek to hire or engage or cause, aid
or assist any other person or entity (including any related body corporate of
Supplier) to hire or otherwise engage, any employee of Distributor or employee
who leaves the employment of Distributor during the Term

 

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of this Agreement until the earlier to occur of 12 months after the termination
of this Agreement or 12 months after the termination of the individual’s
employment with Distributor. This clause will survive termination of this
Agreement.

 

22 DISPUTE RESOLUTION

 

22.1 Arbitration. Subject to the rights of the parties set forth in clause 22.3
below, all disputes, claims or controversies arising out of or in connection
with this Agreement shall be finally settled through binding arbitration
conducted in Honolulu, Hawaii under the auspices of JAMS in accordance with the
JAMS International Arbitration Rules (the “Rules”), as modified herein. Such
arbitration shall be conducted by a single arbitrator who shall be independent
and neutral. The award of the arbitrator shall be final and binding, and
judgment upon the award rendered by the arbitrators may be entered in any court
of competent jurisdiction. The arbitration shall be conducted in the English
language.

 

22.2 Procedures. Within thirty (30) days following the appointment of the
arbitrator, each party shall provide to the other party copies of all documents
relevant to the issues raised by any claim or counterclaim. Within thirty
(30) days following the date upon which documents are exchanged the parties may
take up to five depositions of up to five hours each. Discovery disputes shall
be resolved upon application to arbitrator, the arbitrator’s resolution to be
final. Hearings shall be on four successive days within 150 days after the
arbitrator is appointed, and the award of the arbitrator shall be issued within
200 days after the arbitrator is appointed. It is the intent of the parties that
the above time limits be strictly enforced, unless extended by the mutual
agreement of the parties. The parties agree that the arbitrator shall agree to
comply with the above modifications to the Rules prior to accepting appointment.

 

22.3 Equitable Relief. Each Party expressly reserves the right to seek emergency
injunctive relief from a court of competent jurisdiction with respect to the
enforcement of its rights hereunder and waives any bond, surety or other
security that might be required of the other Party with respect to any such
action.

 

23 MISCELLANEOUS

 

23.1 Costs

Subject to any express provision in this Agreement to the contrary, each Party
shall bear its own legal and other costs and expenses relating directly or
indirectly to the preparation of, and performance of its obligations under, this
Agreement.

 

23.2 Amendment

This Agreement may only be varied or replaced by a document duly executed by
both Parties.

 

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23.3 Waiver and exercise of rights

 

  (a) A single or partial exercise or waiver of a right relating to this
Agreement does not prevent any other exercise of that right or the exercise of
any other right.

 

  (b) A Party is not liable for any loss, cost or expense of any other Party
caused or contributed to by the waiver, exercise, attempted exercise, failure to
exercise or delay in the exercise of a right.

 

23.4 Approvals and consent

Subject to any express provision in this Agreement to the contrary, a Party may
conditionally or unconditionally give or withhold any consent to be given under
this Agreement and is not obliged to give its reasons for doing so.

 

23.5 Assignment

Neither Party shall assign any rights under this Agreement without the prior
written consent of the other Party, provided that, a successor in interest by
merger, operation of law, assignment, purchase or otherwise of the entire
business of either Party shall acquire all interest of such Party hereunder
unless such successor is a competitor of the other Party.

 

23.6 Further assurance

Each Party shall promptly execute all documents and do all things that another
Party from time to time reasonably requires of it to effect, perfect or complete
the provisions of this Agreement.

 

23.7 Counterparts

This Agreement may consist of a number of counterparts and if so the
counterparts taken together constitute one and the same instrument.

 

23.8 Governing law

In the event that any legal action is initiated by the Supplier this Agreement
shall be governed by and interpreted in accordance with the laws of the State of
Minnesota, U.S.A. excluding (a) any conflict of law rules or principle therein
contained under which any other law would be made applicable and (b) the United
Nations Convention on Contracts for the International Sales of Goods.

In the event that any legal action is initiated by the Distributor this
Agreement shall be governed by and interpreted in accordance with the laws of
the State of New South Wales, AUSTRALIA excluding (a) any conflict of law rules
or principle therein contained under which any other law would be made
applicable and (b) the United Nations Convention on Contracts for the
International Sales of Goods.

 

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23.9 Entire understanding

 

  (a) This document embodies the entire understanding and agreement between the
parties as to the subject matter of this Agreement.

 

  (b) All previous negotiations, understandings, representations, warranties,
memoranda or commitments in relation to, or in any way affecting, the subject
matter of this Agreement are merged in and superseded by this Agreement and are
of no force or effect whatever and no Party is liable to any other Party in
respect of those matters.

 

  (c) No oral explanation or information provided by any Party to another:

 

  (i) affects the meaning or interpretation of this document; or

 

  (ii) constitutes any collateral document, warranty or understanding between
any of the parties.

 

23.10   Joint and several liability

An obligation of two or more persons binds them jointly and severally.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Operative Date.

 

ENTEROMEDICS, INC.     DEVICE TECHNOLOGIES AUSTRALIA
PTY LIMITED (ABN 40 058 091 973) By:   /s/ Mark B. Knudson     By:   /s/ Peter
Ord Name:   Mark B. Knudson     Name:   Peter Ord Title:   President and CEO    
Title:   CEO

Exhibits:

Exhibit A – Products

Exhibit B – Prices

Exhibit C – Trademarks

 

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Exhibit A

Products

 

Model

  

Name

  

AIMD/MDD

Class

  

Code description

200   

Maestro

Rechargeable

System Kit

   AIMD   

System Kit, Neuroregulator, vagus nerve, rechargeble:

An assembly of devices intended to treat obesity through the application of
electrical stimuli to the vagus nerve below the gastric junction. It is
typically implanted in the abdomen and consists of a rechargeable
battery-operated neuroregulator, implantable lead(s), torque wrench, components
for external charging, and a clinician programmer used to modify operating
parameters. The battery is recharged externally.

2004    Implant Kit    AIMD    Implant Kit, Neuroregulator, vagus nerve,
rechargable: An assembly of devices intended to treat obesity through the
application of electrical stimuli to the vagus nerve below the gastric junction.
It is typically implanted in the abdomen and consists of a rechargeable
battery-operated neuroregulator, implantable lead(s), torque wrench, and
components for external charging. The battery is recharged externally. 2002   
Rechargeable Neuroregulator    AIMD    Neuroregulatur, vagus nerve,
rechargeable: A device intended to treat obesity through the application of
electrical stimuli to the vagus nerve below the gastric junction. It is
typically implanted in the abdomen and consists of a rechargeable
battery-operated neuroregulator and torque wrench. The battery is recharged
externally.

 

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Model

  

Name

  

AIMD/MDD

Class

  

Code description

2200A-47E    Anterior Lead    III    A lead, insulated with non-conductive
material except at the electrode(s), that is implanted in the neurological
tissue. It is used to make an electrical connection between the stimulator and
the vagus nerve. 2200P-47E    Posterior Lead    III    A lead, insulated with
non-conductive material except at the electrode(s), that is implanted in the
neurological tissue. It is used to make an electrical connection between the
stimulator and the vagus nerve.

2403-

300

   Clinician transmit coil    III    Transmit coil - An electronic device that
provides radio-frequency connection between an implanted Vagus Nerve Electrical
Blocking Neurorregulator and an external Mobile Recharger for transmission of
power to charge the battery in the implanted device and to provide infrormation
transfer to and from the implant amd the Mobile Recharger. This device may be
operated by a clinician or patient. 31810    Sterile sleeve    I sterile   
Cover, cable/lead/sensor/probe 80118    Medical adhesive    1 (sterile)   
Medical device adhesive, sterile 2404    Patient kit    III    Recharging Kit,
Neuroregulator, vagus nerve, rechargeable - An assembly of devices used to
transcutaneously recharge the battery of a rechargeable implanted
neuroregulator. Typically includes mobile charger, transmit coil, AC recharger
and transmit coil belt.

 

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Model

  

Name

  

AIMD/MDD

Class

  

Code description

2402    Mobile charger    III    Recharger, Neuroregulator, vagus nerve,
rechargeable - A device used to transcutaneously communicate with a rechargeable
implanted neuroregulator for recharging the battery of a rechargeable implanted
neuroregulator, or review and modification of neuroregulaltor operating
parameters. 2403-60    Patient transmit coil    III    Transmit Coil - An
electronic device that provides radio-frequency connection between an implanted
Vagus Nerve Electrical Blocking Neuroregulator and an external Mobile Recharger
for transmission of power to charge the battery in the implanted device and to
provide information transfer to and from the implant and the Mobile Recharger.
This device may be operated by a clinician or patient. 1660    Patient transmit
coil belt    I    A device used for keeping electrodes in place. This is
typically used for reusable electrodes which do not stick to the body surface or
for electrodes that may require extra securing. This is a reusable device.
2403-60A    Patient transmit coil    III    Transmit Coil - An electronic device
that provides radio-frequency connection between an implanted Vagus Nerve
Electrical Blocking Neuroregulator and an external Mobile Recharger for
transmission of power to charge the battery in the implanted device and to
provide information transfer to and from the implant and the Mobile Recharger.
This device may be operated by a clinician or patient.

 

-31-

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Model

  

Name

  

AIMD/MDD

Class

  

Code description

1660A    Patient transmit coil belt    I    A device used for keeping electrodes
in place. This is typically used for reusable electrodes which do not stick to
the body surface or for electrodes that may require extra securing. This is a
reusable device. 1620    AC recharger    I    A device designed to supply an
electrical charge to rechargeable batteries, restoring the battery to an
appropriate working condition. This device is typically connected to the
building’s electrical power supply and can be used to either charge the
batteries by themselves (removed from the device) or whilst they are still
inside the parent device (in situ), e.g., a defibrillator or ophthalmoscope.
This device usually has current and voltage controls to meet the charge needs of
different types of batteries. 2502   

Clinician

programmer

   III   

Programmer, Implantable Neroregulator - A device used to change,

noninvasively, one or more of the operating parameters of an implanted
neuroregulator. The programmer reads recorded information from the

implanted device, and provides the clinician with information on device
performance and patient complience. The programmer also allows for firmware
revision upgrades of the implanted device.

1600    Programmer cable    I    A device that provides a connection between two
or more devices for the purpose of transmitting an energy that may, or may not,
contain information. 1680    Torque wrench    I (sterile)    Wrench, surgical

 

-32-

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Exhibit B

Prices

[*]

Confirmation of pricing and minimum purchase requirements will be mutually
agreed within

3 months of signing this agreement.

[*] Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately, accompanied by a confidential
treatment request, with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

Exhibit C

Trademarks

VBLOC ® vagal blocking therapy and VBLOC ©Therapy (Australian registered trade
mark number 1178307)

Maestro® System (Australian registered trade mark number 1079091)

EnteroMedics ® (Australian registered trade mark number 1079090)