Exhibit 10.1

[**] Certain confidential information contained in this document, marked by
brackets and asterisks, 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.

 

EXCLUSIVE FEDERAL GOVERNMENT RESELLER AND BUSINESS CHANNEL SERVICES AGREEMENT  
LOGO [g223842g86z57.jpg]

WHEREAS, Enteromedics, Inc. (“Manufacturer”), with primary offices located in
St. Paul, MN, produces and markets the products collectively listed in Exhibit A
hereto (“the Products”) to commercial and non-Government institutional
customers;

WHEREAS, Academy Medical LLC (“Reseller”), a Service-Disabled Veteran-Owned
Small Business located in West Palm Beach, Florida, has substantial experience
in the establishment, operation and maintenance of effective sales channels,
contract vehicles and business protocols to promote the sale of products to the
United States Federal Government, with principal focus on Federal Government
customers of medical products and supplies;

WHEREAS, Manufacturer now desires to engage Reseller as its exclusive Federal
Government business channel partner to provide sales support services, customer
liaison services, federal contract acquisition and management services, order
processing services and other value added logistical support services to enable
the sale of the Products to Federal Government customers; and

WHEREAS, Reseller now desires to accept Manufacturer’s appointment as its
exclusive Federal Government business channel partner to provide for the sale of
the Products to Federal Government customers.

NOW THEREFORE, Manufacturer and Reseller hereby agree as follows effective this
25 day of April, 2016:

 

1. DEFINITIONS

A. The term “Product” means any product identified in Exhibit A. Product
additions to Exhibit A may be made upon mutual agreement between Manufacturer
and Reseller as may be required to fulfill the terms and obligations hereunder.

B. The term “Customer” means any entity authorized by law or contract to
purchase products for use by Federal Government entities. Customers include the
following:

i. All Federal Government entities accounts in the United States and U.S.
Territories, including without limitation the United States Department of
Defense, Department of Veterans Affairs, Department of Homeland Security, Indian
Health Services, and Department of Health and Human Services and their
respective sub-agencies and facilities; and

ii. All Prime Vendors or other parties authorized by contract or other written
authorization to procure supplies on behalf of Federal Government entities;

C. The term “Net Sales” means the invoice price of the product purchased by
Reseller from Manufacturer. Net Sales do not include (i) shipping, handling,
freight charges, or insurance paid by or on behalf of Manufacturer in connection
with shipment or delivery; or (ii) duties and taxes, or any other governmental
charges levied on or measured by the invoiced amount, whether absorbed by the
billing party or paid by the billed party.

 

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D. The term “Shipment Date” means the date that Manufacturer ships any
Manufacturer Product ordered by Reseller.

E. The term “Term” means the period of one(1) year from the date of execution of
this Agreement during which time the terms of this Agreement shall be binding on
all parties. This Agreement shall automatically renew each year thereafter for
successive one (1) year periods (each renewal period defined as a “Renewal
Term”) unless this Agreement is earlier terminated as provided herein. All
references in this Agreement to the “Term” shall refer to the “Initial Term” and
all “Renewal Terms.”

 

2. APPOINTMENT AS EXCLUSIVE RESELLER

A. Manufacturer hereby appoints Reseller as its exclusive representative for
purposes of receiving and processing orders to sell the Products to Customers.

B. In furtherance of this Agreement, Reseller has or shall acquire and maintain
appropriate contract vehicles to facilitate the sale of the Products to
Customers. These contract vehicles will include Department of Veterans Affairs
(VA) Federal Supply Schedule (FSS) contracts and Department of Defense (DOD)
Distribution and Pricing Agreements (DAPA) or E-Catalog (E-Cat) contracts
applicable to the Products.

C. The parties hereby agree and acknowledge that sales to the Customers may be
accomplished by the following means:

i. Orders placed against FSS and VA Strategic Acquisition Center (SAC) contracts
maintained by Reseller, as well as Blanket Purchase Agreements entered into
under the terms of one or more FSS or SAC contracts maintained by Reseller;

ii. Orders placed against DOD DAPAs or E-Cat Contracts maintained by; and

iii. Open market orders placed by government Customers unrelated to a
pre-existing contract; and

The parties agree that all such orders shall be processed for delivery and
payment through Reseller.

D. To facilitate Reseller’s acquisition and maintenance of appropriate contract
vehicles, Manufacturer agrees to provide Reseller, upon request, with letters of
commitment, product descriptions, price lists, commercial warranty terms,
country of origin information and other information terms as may be requested of
Reseller by Customers. Manufacturer further agrees to update and supplement this
information when requested.

E. In establishing and maintaining contract vehicles for the Products, and
accepting and processing orders for Products, Reseller expressly agrees to
comply with any policy, terms, and conditions adopted by Manufacturer for the
sale and distribution of the Product to commercial customers, including any
policy concerning the distribution, handling, promotion, marketing, sale,
resale, warranties, or returns of Manufacturer Products (“Manufacturer
Policies”). Manufacturer shall provide Reseller with all such Manufacturer
Policies within either fifteen (15) days of the execution of this Agreement or
within fifteen (15) days of the addition of new Products under this Agreement.

F. Reseller expressly agrees to service all customer requirements in a
commercially reasonable manner, subject to this Agreement’s terms and
conditions.

 

3. FEDERAL BUSINESS CHANNEL SERVICE TERM

A. Pricing

 

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i. The pricing of Products under this Agreement reflect the price to be remitted
to Manufacturer by Reseller in response to orders for Products placed by
Customers. The initial prices for the Products are set forth in Exhibit A
hereto.

ii. Such pricing is inclusive of the following:

(a) Packaging, boxing, palletizing, shipping, and storage in accordance with
Manufacturer’ standard practices in effect at the time of shipment;

(b) Special packing or handling established on individual orders as agreed to by
Manufacturer at the time of order placement;

(c) Delivery to the Customer at the Customer’s specified location; and

(d) All federal, state or local sale or excise taxes or other surcharges
applicable to the Products.

iii. Manufacturer may increase prices under this Agreement provided that:
(a) such price increases are consistent with price increases Manufacturer has
established with its commercial distributors and resellers and (b) Reseller is
provided ninety (90) days advance notice of such increases so as to affect
pricing increases under its applicable contracts with government Customers. In
the event that Reseller is unable to obtain a price increase for a Product under
such contracts, the Parties agree that Reseller may delete the product from such
contract.

B. Order Processing

i. Reseller maintains a robust e-commerce program for the placement and
fulfillment of orders. Sales will be initiated by means of orders placed by
Customers with Reseller. Upon receipt, Reseller will input the order into its
e-commerce program for electronic transmission to Manufacturer. As Reseller
typically has no more than five calendar days to acknowledge or decline such
orders, Manufacturer shall acknowledge or decline all such orders within two
calendar days or one business day, whichever is longer, of receipt of the order
from Reseller. All orders not declined within these time limits will be deemed
accepted by Manufacturer.

ii. Acceptance of an order transmitted by Reseller shall obligate Manufacturer
to ship the product to the Customer within its standard delivery time as
communicated to Reseller as a part of its Manufacturer policies. In the event
that the Customer requires more rapid delivery of Product, Manufacturer will
inform Reseller of the additional charges associated with the accelerated
delivery requested by the Customer to enable Reseller to obtain Customer
approval of such additional delivery charges.

iii. In the event delivery to the Customer will be delayed, Manufacturer shall
promptly notify Reseller of the delay and the expected delivery date to enable
Reseller to communicate the delay and revised delivery schedule to the customer.
In the event the Customer elects to cancel an order because of a proposed
delivery delay, the order shall be canceled at no cost to Reseller or the
Customer.

iv. Upon shipment of product to the Customer, Manufacturer shall notify Reseller
through Resellers e-commerce system to enable Reseller to confirm delivery to
and acceptance by the Customer.

C. Invoicing. Manufacturer will invoice Reseller when Reseller Purchase Order is
received and product is shipped. The invoice amount shall reflect the prices set
forth in Exhibit A or any amendments thereto, and any special shipping charges
agreed to by the Customer.

 

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D. Payment Terms. Terms of payment will be Net 30 from date of invoice, unless
Customer has declined acceptance of Product or has voiced other concerns related
to the Product.

The terms set forth in this Agreement shall apply to each order by a Reseller,
whether such order is communicated by telephone, facsimile, or through
electronic order entry, or any other method, or whether reference is made to
this Agreement.

E. Shipping. Manufacturer shall be responsible for selecting the method of
shipment and all associated freight costs thereon be included in pricing
attached in Exhibit A., except that emergency or overnight shipment requests by
Customer will be paid by Reseller after confirmation of the additional shipping
costs by the Customer.

F. Production. Manufacturer shall not be excused from performance under this
Agreement in the event acts which may frustrate the purpose of this Agreement or
ability to perform under its terms, provided such acts are within Manufacturer
control. Additionally, if production, delivery, or distribution is delayed for
any reason not the fault of Reseller, Manufacturer shall take all reasonable
measures to assure fulfillment and shall be solely liable for any additional
costs of fulfillment and the costs of capital. Manufacturer shall, at all times,
maintain a plan for continued performance under this contract in the face of
delays or impediments to fulfillment due to acts of God and shall, upon receipt
of request from Reseller, provide Reseller with specifics of said plan for which
Reseller may inspect and become familiar, but in the event such acts impair
Manufacturer’s ability to perform, Manufacturer will be excused from
performance.

G. Reseller’s Representations & Continuing Obligations

i. Reseller hereby represents and warrants to Manufacturer that (i) neither its
entering nor performing this Agreement will violate any right of or breach any
obligation to any third party under any agreement or arrangement between
Reseller and such third party, (ii) Reseller has all licenses, permits,
authorizations and approvals that are necessary for the conduct of its business
in the Territory; and (iii) neither this Agreement (or any term hereof) nor the
performance of or exercise of rights under this Agreement by either Party is
contrary to, in conflict with, ineffective under, or violates any applicable law
or regulation including, without limitation, the federal anti-kickback statute
(42 U.S.C. §1320a-7b(b)(2)), the federal prohibition on self-referrals or Stark
Law (42 U.S.C. §1395nn), or any other similar federal or state statute or any
applicable regulations promulgated thereunder.

ii. Reseller shall not make any claims or representations concerning the
Products that are inconsistent with those made by Manufacturer.

H. Manufacturer’s Continuing Obligations

i. Manufacturer agrees to send all Product notices, as well as notices of any
other changes affecting the Products and notices of new Products, to Reseller.
Manufacturer shall notify Reseller, in writing and no later than the date of
execution of this Agreement, of the names of those Products which contain latex,
carcinogens, DEHP or 2 di-ethyl hexyl phthalate, halogenated organic flame
retardants, lead, mercury, persistent bioaccumulative toxins, PVC or polyvinyl
chloride, reproductive toxins and any Product(s) designed specifically for
pediatric applications.

ii. Manufacturer shall notify Reseller in writing and within three (3) days
after becoming aware of any patient safety issue involving the Products. If any
Product or any of its components is subject to recall as that term is defined
under 21 C.F.R. Part 7, or a voluntary recall by Manufacturer or is subject to
an FDA-initiated court action for removing or correcting violative, distributed
products or components (any of the foregoing being referred to as a “Recall”),
Manufacturer shall notify Reseller within twenty-four (24) hours after becoming
aware of any such recall or after Manufacturer provides notice of the Recall to
the FDA. To the extent any such Recall precludes Manufacturer from supplying any
Products under this Agreement, any compliance requirements or purchase
requirements under this Agreement or any facility agreement between any Reseller
and Manufacturer related to such Products shall not be effective for as long a
Manufacturer is unable to supply such Products. If any Product pricing is
dependent upon Reseller meeting compliance or purchase volume requirements for
designated Products, Reseller pricing will not change for failure to meet the
compliance or purchase requirements during the time period when Manufacturer is
unable to provide said designated Products.

 

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I. Returns. Reseller shall have the right to return to Manufacturer any Product
that does not comply with the warranties expressed herein. Furthermore, Reseller
shall have the right to return to Manufacturer Products or any components
therein which are subject to a Recall, regardless of whether actual return of
the Products or components to Manufacturer is required, recommended, or
suggested by the Recall, in which case Manufacturer shall pay all freight costs
incurred for the return of each affected Product and shall reimburse Reseller
for original costs, including freight, in acquiring each affected Product.

J. Resale Prices. Reseller may set the resale prices for any Manufacturer
Product purchased from Manufacturer pursuant to this Agreement. By signing this
Agreement, Reseller unequivocally acknowledges that it has not, and will not,
enter into any written or oral agreement with Manufacturer concerning the amount
that Reseller charges to its customers for any Manufacturer Product. Nothing in
this Agreement shall prevent Manufacturer from unilaterally adopting,
announcing, and following any resale pricing policy, suggested resale pricing
policy, or minimum advertised pricing policy.

 

4. TRADEMARK USAGE & INTELLECTUAL PROPERTY

A. Reseller shall have the limited right to use the trademarks, service marks
and trade names associated with the Products in marketing the Products in the
Territory, subject to Manufacturer’s prior written authorization of all such
use, and where the Trademark is registered and a “TM” elsewhere. This limited
right is limited to the Territory.

B. All use of the Manufacturer intellectual property, including without
limitation any goodwill arising there from shall inure to Manufacturer’s sole
benefit.

C. Reseller agrees not to register, attempt to register or use or attempt to
use, directly or indirectly, any trademark, service mark or trade names that are
confusingly similar to Manufacturer.

D. Manufacturer agrees that it shall be solely liable for the protection of the
intellectual property rights that arise under this Agreement and the
intellectual property rights of third parties in fulfilling the terms of this
Agreement.

 

5. TERMINATION

A. This Agreement may be terminated for cause by either party or without cause
by each respective party as provided below:

 

  1. Termination for Cause by Either Party: Either party hereto may terminate
this Agreement, with cause as follows:

 

  a. The failure of the non-terminating party to fail to perform any of the
obligations in this Agreement (unless such failure is caused by a material act
or omission by the other party) and such failure shall continue for a period of
thirty (30) days after written notice thereof;

 

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  b. The non-terminating party shall become insolvent, file a voluntary petition
under any law relating to bankruptcy or insolvency, or shall become unable to
pay its debts when due; or

 

  c. The exclusion of the non-terminating party from participation in federal
health care programs or their suspension or debarment from federal contracting
programs.

 

2. Termination without Cause by Manufacturer: Manufacturer may terminate this
Agreement, without cause, upon providing sixty (60) days’ written notice to
Reseller prior to the expiration of the Initial Term or any Renewal Term,
subject to the following:

 

  a. If Manufacturer terminates this Agreement without cause prior to, during,
or after the first Renewal Term, Manufacturer shall pay to Reseller a Fee of ten
percent (10%) of the gross sales of the Products distributed by Reseller for the
immediately preceding twelve (12) months.

 

  b. If Manufacturer asserts a termination for cause that is later determined to
have been without cause, the above termination fees shall be owed by
Manufacturer to Reseller.

 

3. Termination without Cause by Reseller: Reseller may terminate this Agreement,
without cause, upon providing one hundred eighty (180) days’ notice to
Manufacturer prior to its desired termination date, or the expiration date of
the initial Term or any Renewal Term, which ever period is longer.

The effective date of the termination shall be the later of the date specified
in the termination notice specified by this paragraph or 30 days following such
notice (the “Termination Date”).

B. Upon notice of termination, Reseller may not make additional purchases from
Manufacturer during the (30) day notice period, except in an amount not
exceeding the average monthly purchase for the preceding three months prior to
the notice of termination. Reseller shall not resell any Manufacturer Product to
any person or entity for any reason after the Termination Date.

C. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been properly given when delivered in person or by courier or
three (3) days after mailed by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:

 

If to Manufacturer:

Enteromedics

2800 Patton Road

St. Paul, MN 55113

 

If to Reseller:

Academy Medical, LLC

8120 Belvedere Rd. #3

W. Palm Beach, FL 33411

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

 

6. INDEMNIFICATION

A. Except as to negligent acts of the Reseller, Manufacturer shall defend and
indemnify Reseller from and against all suits, claims, liabilities, fines,
expenses, damages, penalties, judgments, reasonable attorneys’ fees, and
expenses arising out of or related to any (i) failure by Manufacturer to comply
with applicable statutory or regulatory requirements, (ii) Product defect, or
(iii) Product recall, (iv) Manufacturer’s infringement of third-party patent and
misappropriation of third party intellectual property rights, or (iv) any
alleged injury suffered by an end-user of the Product arising out of, incident,
related to Reseller’s fitting of, treatment of, or written instructions
regarding Product use to the end-user pursuant of Manufacturer recommendations
of use.

 

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B. Reseller shall defend and indemnify Manufacturer from and against all suits,
claims, liabilities, fines, expenses, damages, penalties, judgments, reasonable
attorneys’ fees, and expenses arising out of or related to (i) any negligent or
intentional act or omission of Reseller or any employee, officer, director,
shareholder, affiliate or other person engaged or hired by Reseller, including
but not limited to any material breach of this Agreement by Reseller, or by any
of its employees, officers, directors, shareholders, affiliates or other persons
engaged or hired by Reseller, (ii) the making of any representations or
warranties by Reseller with respect to the Products not expressly authorized by
this Agreement or by Manufacturer in writing, or (iii) the infringement by
Reseller of the intellectual property or other proprietary rights of any third
party, or the violation or misappropriation of any of the proprietary rights of
Manufacturer.

 

7. ADDITIONAL TERMS

A. Compliance with Laws. Each party agrees to comply with all applicable Federal
laws affecting this Agreement and its performance, and any similar state laws
and regulations. Each party shall obtain and maintain all registrations with
governmental agencies, commercial registries, or any other offices that may be
required under local law to perform its obligations under this Agreement.

B. Non-compete. By signing this Agreement, Reseller affirms that it is not bound
by any non-compete or other contractual arrangements that would prevent it from
selling the Products, or otherwise complying with the terms of this Agreement.

C. Insurance. Manufacturer agrees to maintain adequate and appropriate insurance
coverage throughout the term of this Agreement at its own expense for
(i) commercial general liability insurance for bodily injury, death and property
loss (ii) product liability policy with limits of liability in the minimum
amount of five hundred thousand dollars ($500,000) per occurrence and 3 million
dollars ($3,000,000) in the annual aggregate. Manufacturer agrees to apply
coverage to Reseller for claims, lawsuits or damages arising out of Manufacturer
performance under this Agreement. Manufacturer shall provide Reseller with a
certificate of insurance naming Reseller as an additional insured on its product
liability policy prior to the execution of this Agreement. Reseller shall have
no obligation to obtain or maintain such insurance. Reseller agrees to maintain
adequate and appropriate insurance coverage throughout the term of this
Agreement at its own expense for (i) property loss associated with the consigned
inventory. Reseller shall provide Manufacturer with a certificate of insurance
naming Manufacturer as a loss payee on its property insurance associated with
the consigned inventory.

D. Jurisdiction and Dispute Resolution. This Agreement shall be governed by
Delaware law, excluding its conflict of law principles. Any action arising out
of or relating to this Agreement shall be brought exclusively in the federal and
state courts located in Delaware. The prevailing party in any arbitration or
suit shall be entitled to its reasonable attorney fees.

 

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8. MISCELLANEOUS

A. Interpretation. The parties acknowledge that each has had an opportunity to
have its counsel review and revise this Agreement and that any rule of law or
legal decision that would require interpretation of any claimed ambiguity
against the party drafting it shall have no application to this Agreement and is
expressly waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effectuate the intent of the parties.

B. Entire Agreement. Amendment. This Agreement contains the entire agreement of
the parties, and supersedes any other existing agreements, representations or
promises regarding the same subject matter, whether verbal or written. This
Agreement may not be modified except through a writing that is signed by both
parties.

C. Binding Effect. No Assignment. This Agreement is binding upon and inures to
the benefit of the parties, their respective heirs, executors, administrators,
successors and assigns. Neither party may assign this Agreement or subcontract
any of its obligations without the prior written consent of the other party,
which consent may not be unreasonably withheld.

D. Waiver of Breach. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion is not considered a waiver of said
term, nor does it deprive such party of the right thereafter to enforce said
term or any other term of this Agreement.

E. Severability. If any provision of this Agreement is found to be invalid or
illegal for any reason whatsoever, then notwithstanding such invalidity or
illegality, the remaining terms and provisions of this Agreement will remain in
full force and effect in the same manner as if the invalid or illegal provisions
had not been contained herein.

F. Counterparts. Facsimile Signatures. This Agreement may be executed in
multiple counterparts and so executed will constitute one agreement, binding on
all parties, even though all parties are not signatories to the original or same
counterpart. Any counterpart of this Agreement will for all purposes be deemed a
fully executed instrument. Facsimile signatures shall be as effective as
original signatures.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

Enteromedics, Inc.

Academy Medical, LLC

 

/s/ Greg Lea                                

/s/ W. Kirkland Alexander                     

 

Name: Greg Lea

Name: W. Kirkland Alexander

 

Title: Chief Financial Officer

Title: Chief Operating Officer

 

Date:

Date: 5/6/2016

 

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Exhibit A – PRODUCTS AND PRICING

[**]

[**] Certain confidential information contained in this exhibit, marked by
brackets and asterisks, 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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Exhibit B – MSPV REPRESENTATION DISTRIBUTORSHIP AGREEMENT

This Agreement is made effective April 25, 2016 (“Effective Date”) by and
between Enteromedics, Inc. (“Company”) and Academy Medical, LLC, a Florida
limited liability company (“Distributor”). The Company and Distributors are
sometimes referred to as the “Parties”, and each individually is a “Party”.

For Distributor to contract with various Medical Surgical Prime Vendors (MSPVs),
Company makes the additional representations and gives Distributor permission to
make such representations on its behalf for the purposes of contracting with
various MSPVs.

Company and Distributor hereby acknowledge that their Distributorship Agreement
(“Agreement”) dated April 25, 2016, is hereby amended as follows to add the
following representations.

1. Company representations. Company represents, warrants and covenants:

a. Company has the full right, power, and corporate authority to enter into this
Agreement and to make the promises set forth in this Agreement, and there are no
outstanding agreements, assignments, licenses, liens or encumbrances of any kind
in existence that are either inconsistent with the provisions of this Agreement
or would affect Company’s ability to perform its obligations hereunder.

b. No actions are threatened or pending before any court, Governmental
Authority, or other tribunal of any kind, relating to the Product that would
affect Company’s ability to perform its obligations hereunder. For purposes of
this Agreement, “Governmental Authority” shall mean any supranational, national,
provincial, regional, state, or local governmental or regulatory authority,
agency, or other body with regulatory or legal jurisdiction over Company and/or
the manufacture and sale of the Products, in the form of laws, statutes,
regulations, or guidance documents; including but not limited to the United
States FDA and Health Canada.

c. Company affirms that Products do not infringe on the intellectual property
rights of any third party.

d. That Company, its employees, agents or representatives performing services or
supplying Products, parts, or raw materials in connection with the Products
and/or this Agreement, are not now nor have ever been: (i) convicted of a
criminal offense related to health care; or (ii) excluded, debarred, or
otherwise ineligible for participation in a U.S. “Federal health care program”
as defined in 42 U.S.C. §1320a-7b(f) (or any applicable successor statutory
section) or in any other government payment program. Company hereby further
certifies that it will immediately notify Academy Medical upon its receipt of
any indication, whether or not official, that Company, its employees, agents or
representatives performing services or supplying Products, parts, or raw
materials in connection with the Products and/or this Agreement, shall be
excluded from any U.S. Federal health care program, as defined above, for any
reason during the Term. Company further certifies to Academy Medical that (i) to
the best of its knowledge, it has no knowledge of any circumstances which may
affect the accuracy of the foregoing representations, including, without
limitation, FDA investigations of, or debarment proceedings against Company or
any person or entity performing services or rendering assistance which is in any
way related to activities taken pursuant to this Agreement; and (ii) Company
will immediately notify Academy Medical in writing, via certified or registered
mail, if it becomes aware of any such circumstances described in this Section at
any time during the Term.

e. That all Product claims that it makes with respect to the Products in its
advertising and marketing materials, including any Product claims which are
reviewed and approved by Company at Academy Medical’s requests conform to all
current federal and state regulations, based on FDA submissions and all
regulatory

 

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considerations that may be applicable to the Product. Company is responsible for
assuring that all claims, features, specifications, technical details and
benefits are stated without exaggeration and with fair balance and truthfully
reflect the capabilities of the Product. If applicable, Company will have
appropriate substantiation on file to support Product claims.

f. The Products will comply with the provisions set forth in the Continuing
Guaranty attached hereto as Schedule A, the terms and conditions of which are
made part hereof to the extent consistent with the terms set out in the body of
this Agreement.

No other portion of the Agreement is modified.

IN WITNESS HEREOF, the Parties hereto have executed this Agreement effective as
of the Effective Date.

 

COMPANY:       Enteromedics, Inc.     By:  

/s/ Greg Lea

      Name: Greg Lea       Title:   Chief Financial Officer

 

DISTRIBUTOR:      

Academy Medical, LLC

A Florida Limited Liability Company

    By:  

/s/ W. Kirkland Alexander

      Name: W. Kirkland Alexander       Title:   Chief Operating Officer

 

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Schedule A– CONTINUING GUARANTY

1. Compliance with Laws and Product Warranty: Company specifically represents,
warrants, and guarantees that each product shipped, (A) as of the date of
shipment: (i) is not adulterated or misbranded within the meaning of the U.S.
Federal Food, Drug, and Cosmetic Act, as amended and the regulations issued
thereunder (“Act”); (ii) is free from defects in design, workmanship and
materials, and (iii) has been manufactured, packaged, labeled, and stored in
compliance and in accordance with: (a) the applicable product specifications,
including not containing any material other than those specifically listed in
the product specification; and (b) all applicable local, state, federal and
national laws, regulation, rules, guidelines and procedures, including but not
limited to the Act and standards relating to current good manufacturing
practices for the products; and (B) will as of the date of shipment and
continuing until the expiration date of each product (as indicated on the
product’s label or inserts) or useful life, if the product does not have an
expiration date: (i) conform to the applicable product specifications, and
(ii) meet or exceed the claims made by the Company for the products. Company
shall provide Academy Medical with additional certifications of Company’s
compliance with the representations and warranties set forth herein as Academy
Medical may from time to time reasonably request to fulfill its obligations as a
government contractor.

2. Indemnification: Company agrees to defend, indemnify and hold harmless
Academy Medical, its directors, officers, employees, representatives, agents
and/or affiliated entities from any liability, loss, expense, cost, claim or
judgment (including attorney fees), arising out of: (A) any claim where the
product is alleged to have caused or contributed to the damages, injuries or
death, provided that this indemnification does not extend to injuries, damages
or death to the extent caused by gross negligence or reckless disregard on the
part of Academy Medical or any of its employees; (B) a breach of any
representation, warranty, or covenant in any product and/or distribution
agreement between Academy Medical and Company; and (C) any claim that the
products infringe the patent, trademark or other proprietary rights of any other
party.

3. Corrective Actions and Product Complaints: Notwithstanding any provision in
any agreement to the contrary, if Company’s product is subject to a product
corrective action (including field corrective action, recall, destruction, or
hold), and provided the product corrective action was not caused by Academy
Medical’s gross negligence, recklessness, or willful misconduct, then Company
shall be responsible for reimbursing Academy Medical for all costs and expenses
associated with the product corrective action, including, but not limited to:
inspection, testing, market withdrawal, communications, labor, shipping,
transportation, penalties, fines, and the replacement costs of finished goods
and work-in-process in which Company’s product was included and/or incorporated.
Company shall be responsible for notifying the appropriate federal, state and
local authorities of any customer complaints or other occurrences regarding the
Products which are required to be so reported, evaluating all complaints and
responding to Academy Medical in writing on the resolution of any complaints
from Academy Medical or its customers.

 

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4. Survival of Guaranty: This guaranty shall be continuing and shall be binding
upon the Company and his or its heirs, executors, administrators, successors
and/or assigns and shall inure to the benefit of Academy Medical, its successors
and assigns and to the benefit of its officers, directors, agents and employees.

Effective Date: April 25, 2016

 

COMPANY:       Enteromedics, Inc.     By:  

/s/ Greg Lea

      Name: Greg Lea       Title:   Chief Financial Officer

 

Page 13 of 13

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[**] Certain confidential information contained in this document, marked by
brackets and asterisks, 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.

MODIFICATION TO

RESELLER AND BUSINESS CHANNEL SERVICES AGREEMENT

DATED APRIL 25, 2016

This modification Agreement is made effective July 26, 2016 (“Effective Date”)
by and between Enteromedics, Inc. (“Company”) and Academy Medical, LLC, a
Florida limited liability company (“Distributor”). The Company and Distributors
are sometimes referred to as the “Parties”, and each individually is a “Party”.

Company and Distributor hereby acknowledge that their Reseller and Business
Channel Services Agreement (“Agreement”) dated April 25, 2016, is hereby amended
as follows.

1. “Exhibit A” is replaced with “Exhibit A Revised 07/26/2016” below.

No other portion of the Agreement is modified.

IN WITNESS HEREOF, the Parties herto have executed this Agreement effective as
of the Effective Date.

 

COMPANY:

Enteromedics, Inc.

By: /s/ Greg Lea                                        

Name: Greg Lea

Title:   Chief Financial Officer

 

DISTRIBUTOR:

Academy Medical, LLC

A Florida Limited Liability Company

By: /s/ W. Kirkland Alexander                            

Name: W. Kirkland Alexander

Title:   Chief Operating Officer

 

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Exhibit A Revised 7/26/16 – PRODUCTS AND PRICING

EnteroMedics, Inc.

Negotiated Pricing GOVERNMENT DISTRIBUTOR AGREEMENT

Currency – USD

[**]

[**] Certain confidential information contained in this exhibit, marked by
brackets and asterisks, 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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