Exhibit 10.1

 

VOTING AND STANDSTILL AGREEMENT

 

This Voting and Standstill Agreement (this “Agreement”), dated as of October 2,
2017, is by and between EnteroMedics Inc., a Delaware corporation (“Parent”),
and                            (“Stockholder”).

 

A.                                    Parent, ReShape Medical, Inc., a Delaware
corporation (the “Company”), Nixon Subsidiary Inc., a Delaware corporation and
wholly-owned subsidiary of Parent (“Merger Sub”), Nixon Subsidiary Holdings LLC,
a Delaware limited liability company and wholly-owned subsidiary of Parent, and
the stockholder representatives named therein have entered into an Agreement and
Plan of Merger (as amended from time to time, the “Merger Agreement”), dated as
of the date hereof, pursuant to which, among other things, the Merger Sub is to
merge with and into the Company, with the Company surviving as a wholly-owned
subsidiary of Parent (the “Merger”).

 

B.                                    In connection with the Merger, Stockholder
became the Beneficial Owner (as defined below) of that number of shares of
common stock, par value $0.01 per share, of Parent (“Parent Common Stock”), and
series C convertible preferred stock, par value $0.01 per share, of Parent
(“Parent Preferred Stock” and, together with the Parent Common Stock, the
“Parent Shares”), as set forth beside Stockholder’s name on Schedule A hereto.

 

C.                                    Parent has required that Stockholder enter
into this Agreement as a condition and inducement to the willingness of Parent
to enter into the Merger Agreement.

 

Accordingly, and in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I.
Voting Agreement

 

1.1                               Irrevocable Proxy.  Concurrently with the
execution of this Agreement, Stockholder agrees to deliver to Parent a proxy in
the form attached hereto as Exhibit A (the “Proxy”), which will be irrevocable
to the extent provided in Section 212 of the Delaware General Corporation Law
(the “DGCL”) with respect to the Subject Shares (as defined below).

 

1.2                               Agreement to Vote.

 

(a)                                 From the date of this Agreement until the
Expiration Date (as defined below), Stockholder will (and, if applicable, will
cause any of its Affiliates who have the right to vote or direct the voting of
any Subject Shares (as defined below) to) (i) appear at any meeting of
stockholders or otherwise cause any Subject Shares to be counted as present
thereat for purposes of calculating a quorum and (ii) vote (or consent pursuant
to an action by written consent of the stockholders, if applicable) the Subject
Shares with respect to any matter in which the vote (or, if applicable, consent)
of the holders of Parent’s capital stock is required for or against such matter
in the same manner as and in the same proportion as the votes cast on the matter
(determined separately in respect of any series or vote, and disregarding
abstentions) by the holders of voting securities of Parent entitled to vote
thereon other than Stockholder, its Affiliates and any Other Stockholder (as
defined below), in each case, other than with respect to any Parent Preferred
Stock Matter.

 

(b)                                 Stockholder will not enter into any
agreement with any Person (other than Parent) prior to the Expiration Date (with
respect to periods prior to or after the Expiration Date)

 

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directly or indirectly to vote, grant any proxy or give instructions with
respect to the voting of, the Subject Shares, the effect of which would be
inconsistent with or violate any provision contained in this Section 1.2.  Any
vote or consent (or withholding of a vote or consent or otherwise abstaining
from voting or consenting) by Stockholder that is not in accordance with this
Section 1.2 will be considered null and void, and the provisions of the Proxy
will be deemed to take immediate effect.

 

(c)                                  The Parent may, in its sole discretion,
waive the provisions of this Section 1.2 as to any matter brought to the
stockholders of Parent for a vote (or consent pursuant to an action by written
consent of the stockholders, if applicable).

 

1.3                               Revocation of Proxies.  Stockholder hereby
represents and warrants that any proxies heretofore given in respect of the
Subject Shares are not irrevocable, and Stockholder hereby revokes any and all
prior proxies with respect to the Subject Shares.  Prior to the Expiration Date,
Stockholder will not directly or indirectly grant any proxies or powers of
attorney (other than to Parent), deposit any of the Subject Shares into a voting
trust or enter into a voting agreement (other than this Agreement) with respect
to any of the Subject Shares.

 

ARTICLE II.
Standstill Provisions

 

2.1                               Standstill.  From the date of this Agreement
until the Expiration Date, Stockholder agrees that it will not, and will cause
each of its controlled Affiliates (as such term is defined in Rule 12b-2
promulgated by the Securities and Exchange Commission (the “SEC”) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (collectively
and individually, the “Stockholder Affiliates”) to not:

 

(a)                                 (i) make, engage in, or in any way
participate in, directly or indirectly, any “solicitation” of proxies (as such
terms are used in the proxy rules of the SEC but without regard to the exclusion
set forth in Rule 14a-1(l)(2)(iv) of the Exchange Act) or consent to vote or
advise, encourage or influence any person with respect to the voting of any
securities of Parent or any securities convertible or exchangeable into or
exercisable for any such securities (collectively, “securities of Parent”) for
the election of individuals to the board of directors of Parent (the “Board”) or
to approve shareholder proposals, or become a “participant” in any contested
“solicitation” for the election of directors with respect to Parent (as such
terms are defined or used under the Exchange Act), in each case, other than a
“solicitation” or acting as a “participant” in support of all of the nominees of
the Board at any shareholder meeting or voting its shares at any such meeting in
its sole discretion (subject to compliance with this Agreement), (ii) make or be
a proponent of any shareholder proposal (pursuant to Rule 14a-8 under the
Exchange Act or otherwise) or (iii) initiate, encourage or participate in any
“withhold” or similar campaign, directly or indirectly;

 

(b)                                 form, join, encourage, influence, advise or
in any way participate in any group (as such term is defined in
Section 13(d)(3) of the Exchange Act) with any persons who are not Stockholder
Affiliates with respect to any securities of Parent or otherwise in any manner
agree, attempt, seek or propose to deposit any securities of Parent in any
voting trust or similar arrangement, or subject any securities of Parent to any
arrangement or agreement with respect to the voting thereof, except as expressly
set forth in this Agreement;

 

(c)                                  sell, offer or agree to sell directly or
indirectly, through swap or hedging transactions or otherwise, the securities of
Parent (including the Subject Shares) or any rights decoupled from the
underlying securities of Parent held by Stockholder or any Stockholder

 

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Affiliate to any person or entity not a (i) party to this Agreement or an
agreement substantially similar to this Agreement, (ii) member of the Board,
(iii) officer of Parent or (iv) a Stockholder Affiliate (a “Third Party”), in
each case, that would knowingly result in such Third Party, together with its
affiliates and associates, owning, controlling or otherwise having any
beneficial or other ownership interest in the aggregate of more than 4.9% of the
shares of Common Stock outstanding at such time, except in a transaction
approved by the Board;

 

(d)                                 (i) effect or seek to effect, offer or
propose to effect, cause or participate in, or in any way assist or facilitate
any other person to effect or seek, offer or propose to effect or participate
in, any tender or exchange offer, merger, consolidation, acquisition, scheme,
arrangement, business combination, recapitalization, reorganization, sale or
acquisition of material assets, liquidation, dissolution or other extraordinary
transaction involving Parent or any of its subsidiaries or joint ventures or any
of their respective securities (each, an “Extraordinary Transaction”),
(ii) frustrate or seek to frustrate any Extraordinary Transaction proposed or
endorsed by Parent, or (iii) make any public statement with respect to an
Extraordinary Transaction; provided, however, that this clause (d) will not
preclude the (x) tender (or action not to tender) by Stockholder or a
Stockholder Affiliate of any securities of Parent into any tender or exchange
offer or the conversion of any securities of Parent in any merger or similar
transaction, or (y) vote by Stockholder or a Stockholder Affiliate of any
securities of Parent with respect to any Extraordinary Transaction (in
accordance with the terms of this Agreement);

 

(e)                                  engage in any short sale or any purchase,
sale or grant of any option, warrant, convertible security, stock appreciation
right, or other similar right (including any put or call option or “swap”
transaction) with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from a decline in the market price or value of the securities of
Parent;

 

(f)                                   (i) call or seek to call any meeting of
Parent stockholders, including by written consent, (ii) seek representation on,
or nominate any candidate to, the Board, (iii) seek the removal of any member of
the Board, (iv) solicit consents from Parent stockholders or otherwise act or
seek to act by written consent, or (v) conduct a referendum of Parent
stockholders;

 

(g)                                  take any action in support of or make any
proposal or request that constitutes: (i) controlling, changing or influencing
the Board or management of Parent, including any plans or proposals to change
the number or term of directors or to fill any vacancies on the Board; (ii) any
material change in the capitalization, stock repurchase programs and practices,
capital or asset allocation programs and practices or dividend policy of Parent;
(iii) any other material change in Parent’s management, business or corporate
structure; (iv) seeking to have Parent waive or make amendments or modifications
to Parent’s certificate of incorporation or by-laws, or other actions, that may
impede or facilitate the acquisition of control of Parent by any person;
(v) causing a class of securities of Parent to be delisted from, or to cease to
be authorized to be quoted on, any securities exchange; or (vi) causing a class
of securities of Parent to become eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; provided, however, that this
clause (g) will not preclude the (x) tender (or action not to tender) by
Stockholder or a Stockholder Affiliate of any securities of Parent into any
tender or exchange offer or the conversion of any securities of Parent in any
merger or similar transaction, or (y) vote by Stockholder or a Stockholder
Affiliate of any securities of Parent with respect to any Extraordinary
Transaction (in accordance with the terms of this Agreement);

 

(h)                                 make any statement or announcement that
constitutes an ad hominem attack on, or otherwise disparages or causes to be
disparaged, Parent, any of Parent’s Affiliates, or any of Parent’s past, present
or future officers or directors appointed during the term of this Agreement;

 

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(i)                                     other than litigation to enforce the
provisions of, or asserting any claim with respect to, this Agreement, Parent’s
certificate of incorporation or bylaws, the Series C Certificate of Designation,
or any other contract or agreement with Parent any of its Affiliates, or any of
their respective past, present or future directors, officers or employees,
including the Merger Agreement, institute, solicit or assist or join as a party
(or threaten to institute, solicit, assist or join as a party), any action,
complaint, litigation, arbitration, or similar proceeding against or to which
Parent, its Affiliates or any of their respective past, present or future
directors, officers or employees appointed during the terms of this agreement
(including derivative actions) is a party;

 

(j)                                    make any public disclosure, announcement
or statement regarding any intent, purpose, plan or proposal with respect to the
Board, Parent, its management, policies or affairs, any of its securities or
assets or this Agreement that is inconsistent with the provisions of this
Agreement;

 

(k)                                 enter into any discussions, negotiations,
agreements or understandings with any Third Party to take any action with
respect to any of the foregoing, or advise, assist, knowingly encourage or seek
to persuade any Third Party to take any action or make any statement with
respect to any of the foregoing, or otherwise take or cause any action or make
any statement inconsistent with any of the foregoing; or

 

(l)                                     request, directly or indirectly, any
amendment or waiver of the foregoing.

 

Notwithstanding anything herein to the contrary, and for the avoidance of doubt,
nothing in this Agreement, including this Section 2.1 shall prohibit Stockholder
or any of its Affiliates from directly or indirectly (i) participating in or
giving instruction to the Company Holder Committee with respect to its duties
owing to the Company Holders, including the designation of two (2) Persons to be
elected to the Board, (ii) serving on the Board and fulfilling his or her duties
as a member of the Board, and (iii) enforcing the provisions of, or asserting
any claim with respect to, this Agreement, Parent’s certificate of incorporation
or bylaws, the Series C Certificate of Designation, or any other contract or
agreement with Parent any of its Affiliates, or any of their respective past,
present or future directors, officers or employees, including the Merger
Agreement.

 

2.2                               Private Communications.  The provisions of
Section 2.1 will not be deemed to prohibit Stockholder or its directors,
officers, partners, employees, members or agents (acting in such capacity)
(“Representatives”) from communicating privately with, or from privately
requesting a waiver of any of the foregoing provisions of Section 2.1 from,
Parent’s directors or officers, so long as such communications or requests are
not intended to, and would not reasonably be expected to, require any public
disclosure of such communications or requests. Stockholder further agrees that
the provisions of Section 2.1 will apply, mutatis mutandis, with respect to
(x) any and all of Parent’s subsidiaries and (y) any and all other entities in
which Parent, to the knowledge of Stockholder, directly or indirectly,
beneficially owns at least 20% of the outstanding capital stock, in each case to
the same extent as such provisions apply with respect to Parent.

 

ARTICLE III.
Definitions

 

Capitalized terms used but not defined in this Agreement are used in this
Agreement with the meanings given to such terms in the Merger Agreement.  In
addition, for purposes of this Agreement:

 

“Parent Preferred Stock Matter” means any matter that requires the affirmative
vote or consent of the Holders of a majority of the then outstanding shares of
the Parent Preferred Stock, voting as a separate class, including in accordance
with Section 4 of the Series C Certificate of Designation.

 

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“Affiliate” means, with respect to any specified Person, a Person who, at the
time of determination, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such specified Person.  For purposes of this Agreement, with respect to
Stockholder, “Affiliate” does not include Parent and the Persons that directly
or indirectly through one or more intermediaries are controlled by Parent.

 

“Beneficially Owned” or “Beneficial Ownership” with respect to any securities
means having beneficial ownership of such securities (as determined pursuant to
Rule 13d-3 under the Exchange Act, disregarding the phrase “within 60 days” in
paragraph (d)(1)(i) thereof), including pursuant to any agreement, arrangement
or understanding, whether or not in writing.  Without duplicative counting of
the same securities, securities Beneficially Owned by a Person include
securities Beneficially Owned by (i) all Affiliates of such Person, and (ii) all
other Persons with whom such Person would constitute a “group” within the
meaning of Section 13(d) of the Exchange Act and the rules promulgated
thereunder.

 

“Beneficial Owner” with respect to any securities means a Person that has
Beneficial Ownership of such securities.

 

“Other Stockholders” means other Persons who have entered into voting and
standstill agreements with Parent on terms substantially similar to those in
this Agreement.

 

“Person” has the meaning ascribed thereto in the Merger Agreement.

 

“Series C Certificate of Designation” means Parent’s Certificate of Designation
of Preferences, Rights and Limitations of Series C Convertible Preferred Stock,
dated as of October 2, 2017 (as amended from time to time).

 

“Subject Shares” means, with respect to Stockholder, without duplication,
(i) the shares of Parent Common Stock acquired by Stockholder in connection with
the Merger as described on Schedule A, and (ii) any additional shares of Parent
Common Stock acquired by Stockholder or over which Stockholder acquires
Beneficial Ownership from and after the date hereof, including shares of Parent
Common Stock acquired upon the conversion of shares of Parent Preferred Stock. 
Without limiting the other provisions of this Agreement, in the event that
Parent changes the number of shares of Parent Common Stock issued and
outstanding prior to the Expiration Date as a result of a reclassification,
stock split (including a reverse stock split), stock dividend or distribution,
combination, recapitalization, subdivision, or other similar transaction, the
number of Subject Shares subject to this Agreement will be equitably adjusted to
reflect such change.

 

ARTICLE IV.
Representations, Warranties and Additional Covenants of Stockholder

 

Stockholder represents, warrants and covenants to Parent that:

 

4.1                               Ownership.  Stockholder is the sole Beneficial
Owner and the record and legal owner of the Parent Shares identified on Schedule
A, subject to Parent’s due authorization and valid issuance thereof, and such
shares constitute all of the capital stock of Parent that are Beneficially Owned
by Stockholder.  Subject to Parent’s due authorization and valid issuance
thereof, Stockholder has good and valid title to all of the Parent Shares, free
and clear of all liens, claims, options, proxies, voting agreements and security
interests and has the sole right to such Parent Shares and there are no
restrictions on rights of disposition or other liens or encumbrances pertaining
to such Parent Shares other than pursuant to this Agreement and compliance with
applicable securities laws.  None of the Parent Shares are subject to any voting
trust or other contract with respect to the voting thereof, and no proxy, power
of attorney or other authorization has been granted with respect to any of such
Parent Shares.

 

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4.2                               Authority and Non-Contravention.

 

(a)                                 Stockholder is a [       ] duly organized,
validly existing and in good standing under the laws of the State of [       ]. 
Stockholder has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.  The execution and delivery of this Agreement
by Stockholder and the consummation by Stockholder of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of Stockholder
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby.

 

(b)                                 Assuming due authorization, execution and
delivery of this Agreement by Parent, this Agreement has been duly and validly
executed and delivered by Stockholder and constitutes the legal, valid and
binding obligation of Stockholder, enforceable against Stockholder in accordance
with its terms except (i) to the extent limited by applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.

 

(c)                                  Stockholder is not nor will it be required
to make any filing with or give any notice to, or to obtain any consent from,
any Person in connection with the execution, delivery or performance of this
Agreement or obtain any permit or approval from any government authority for any
of the transactions contemplated hereby, except to the extent required by
Section 13 or Section 16 of the Exchange Act and the rules promulgated
thereunder.

 

(d)                                 Neither the execution and delivery of this
Agreement by Stockholder nor the consummation of the transactions contemplated
hereby will directly or indirectly (whether with notice or lapse of time or
both) (i) conflict with, result in any violation of or constitute a default by
Stockholder under any mortgage, bond, indenture, agreement, instrument or
obligation to which Stockholder is a party or by which it or any of the Parent
Shares are bound, or violate any permit of any government authority, or any
applicable law or order to which Stockholder, or any of the Parent Shares, may
be subject, or (ii) result in the imposition or creation of any lien or
encumbrance upon or with respect to any of the Parent Shares; except, in each
case, for conflicts, violations, defaults or liens or encumbrances that would
not individually or in the aggregate be reasonably expected to prevent or
materially impair or delay the performance by the Stockholder of its obligations
hereunder.

 

(e)                                  Stockholder has requisite voting power and
requisite power to issue instructions with respect to the matters set forth in
Article II hereof and requisite power to agree to all of the matters set forth
in this Agreement, in each case with respect to all of the Parent Shares, with
no limitations, qualifications or restrictions on such rights, in each case, to
the extent permitted by applicable law.

 

4.3                               Total Shares.  Except as set forth on Schedule
A, Stockholder is not the Beneficial Owner of, and does not have (whether
currently, upon lapse of time, following the satisfaction of any conditions,
upon the occurrence of any event or any combination of the foregoing) any right
to acquire, and has no other interest in or voting rights with respect to, any
Parent Shares or any securities convertible into or exchangeable or exercisable
for Parent Shares.

 

4.4                               Reliance.  Stockholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance upon
Stockholder’s execution, delivery and performance of this Agreement.

 

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ARTICLE V.
Representations, Warranties and Covenants of Parent

 

Parent represents, warrants and covenants to Stockholder that, assuming due
authorization, execution and delivery of this Agreement by Stockholder, this
Agreement constitutes the legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms, except (i) to the
extent limited by applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought. 
Parent has the corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.  The execution and delivery
by Parent of this Agreement and the consummation by Parent of the transactions
contemplated hereby have been duly and validly authorized by Parent and no other
corporate proceedings on the part of Parent are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby.  This Agreement
has been duly and validly executed and delivered by Parent.

 

ARTICLE VI.
Term and Termination

 

This Agreement will become effective immediately following completion of the
Merger.  This Agreement will terminate upon the earliest of (a) the date that
Stockholder and its Affiliates no longer Beneficially Own at least 5% of the
outstanding capital stock of Parent or (b) written notice by Parent to
Stockholder of the termination of this Agreement (the date of the earliest of
the events described in clauses (a) and (b), the “Expiration Date”).  The
termination of this Agreement will not relieve Stockholder from any liability
for any inaccuracy in or breach of any representation, warranty or covenant
contained in this Agreement, and Article VII of this Agreement will survive any
termination of this Agreement.

 

ARTICLE VII.
General Provisions

 

7.1                               Action in Stockholder Capacity Only. 
Stockholder is entering into this Agreement solely in Stockholder’s capacity as
a record holder and beneficial owner, as applicable, of the Parent Shares and
not in Stockholder’s capacity as a director or officer of the Company.  Nothing
herein will limit or affect Stockholder’s ability to act as an officer or
director of the Company.

 

7.2                               No Ownership Interest.  Nothing contained in
this Agreement will be deemed to vest in Parent or any of its Affiliates any
direct or indirect ownership or incidents of ownership of or with respect to the
Subject Shares.

 

7.3                               Legends.  Until the Expiration Date, the
certificates representing the Parent Shares held by Stockholder will bear a
legend making reference to the existence of this Agreement, including the voting
agreement and irrevocable proxy pursuant to Article I and the standstill
provisions pursuant to Article II.

 

7.4                               Notices.  All notices and other communications
hereunder must be in writing and will be deemed given if delivered personally or
by commercial messenger or courier service, or mailed by registered or certified
mail (return receipt requested) or sent via facsimile (with acknowledgment of
complete transmission) or e-mail to the parties at the following addresses (or
at such other address for a party as specified by like notice or, if
specifically provided for elsewhere in this Agreement, by email); provided,
however, that notices sent by mail will not be deemed given until received:

 

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if to Parent or Merger Sub, to:

 

EnteroMedics Inc.

2800 Patton Road

St. Paul, MN 55113

Attention: Dan W. Gladney, President and Chief Executive Officer

Facsimile No.: (651) 634-3212

Email: dwgladney@enteromedics.com

 

with a copy (which will not constitute notice) to:

 

Fox Rothschild LLP

222 South Ninth Street, Suite 2000

Minneapolis, Minnesota 55402

Attention:  Bruce A. Machmeier and Brett R. Hanson

Facsimile No.: (612) 607-7100

Email: bmachmeier@foxrothschild.com

bhanson@foxrothschild.com

 

If to Stockholder, to Stockholder’s address set forth on Schedule A.

 

7.5                               Publicity.  Unless required by applicable law
or permitted by the Merger Agreement, Stockholder will not, and will not
authorize or direct any of its Affiliates or representatives to, make any press
release or public announcement with respect to this Agreement or the Merger
Agreement or the transactions contemplated hereby or thereby, without the prior
written consent of Parent in each instance.

 

7.6                               Further Actions.  Upon the request of any
party to this Agreement, the other party will (a) furnish to the requesting
party any additional information, (b) execute and deliver, at their own expense,
any other documents and (c) take any other actions as the requesting party may
reasonably require to more effectively carry out the intent of this Agreement. 
Stockholder hereby agrees that Parent may publish and disclose in any filing
made by Parent with the SEC, the Nasdaq Stock Market or other applicable
regulatory authority, the Stockholder’s identity and ownership of any Parent
Shares and the nature of such Stockholder’s commitments, arrangements, and
understandings under this Agreement and may further file this Agreement as an
exhibit to any other filing made by Parent with the SEC.  Stockholder agrees to
(x) provide any information reasonably requested by Parent for any such
regulatory application or filing and (y) notify Parent promptly of any
additional shares of capital stock of Parent of which Stockholder becomes the
record or beneficial owner after the date of this Agreement.

 

7.7                               Entire Agreement and Modification.  This
Agreement, the Proxy and any other documents delivered by the parties in
connection herewith constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to its
subject matter and constitute (along with the documents delivered pursuant to
this Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter.  This Agreement may not
be amended, supplemented or otherwise modified except by a written document
executed by the party against whose interest the modification will operate.  The
parties will not enter into any other agreement inconsistent with the terms and
conditions of this Agreement and the Proxy, or that addresses any of the subject
matters addressed in this Agreement and the Proxy.

 

7.8                               Severability.  Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without affecting the validity or enforceability of the
remaining provisions hereof.  Any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such

 

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provision in any other jurisdiction.  If any provision of this Agreement is so
broad as to be unenforceable, the provision will be interpreted to be only so
broad as is enforceable.

 

7.9                               No Third-Party Rights.  Stockholder may not
assign any of its rights or delegate any of its obligations under this Agreement
without the prior written consent of Parent.  This Agreement will apply to, be
binding in all respects upon, and inure to the benefit of each of the respective
successors, personal or legal representatives, heirs, distributes, devisees,
legatees, executors, administrators and permitted assigns of Stockholder and the
successors and permitted assigns of Parent.  Nothing expressed or referred to in
this Agreement will be construed to give any Person, other than the parties to
this Agreement, any legal or equitable right, remedy or claim under or with
respect to this Agreement or any provision of this Agreement except such rights
as may inure to a successor or permitted assignee under this Section.

 

7.10                        Enforcement of Agreement.  Stockholder acknowledges
and agrees that Parent could be damaged irreparably if any of the provisions of
this Agreement are not performed in accordance with their specific terms and
that any breach of this Agreement by Stockholder could not be adequately
compensated by monetary damages.  Accordingly, Stockholder agrees that, (a) it
will waive, in any action for specific performance, the defense of adequacy of a
remedy at law, and (b) in addition to any other right or remedy to which Parent
may be entitled, at law or in equity, Parent will be entitled to enforce any
provision of this Agreement by a decree of specific performance and to
temporary, preliminary and permanent injunctive relief to prevent breaches or
threatened breaches of any of the provisions of this Agreement, without posting
any bond or other undertaking.

 

7.11                        Waiver.  The rights and remedies of the parties to
this Agreement are cumulative and not alternative.  Neither any failure nor any
delay by a party in exercising any right, power or privilege under this
Agreement, the Proxy or any of the documents referred to in this Agreement will
operate as a waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege.  To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement, the Proxy or any of the
documents referred to in this Agreement can be discharged by one party, in whole
or in part, by a waiver or renunciation of the claim or right unless in a
written document signed by the other party, (b) no waiver that may be given by a
party will be applicable except in the specific instance for which it is given,
and (c) no notice to or demand on one party will be deemed to be a waiver of any
obligation of that party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement, the Proxy or the documents referred to in this Agreement.

 

7.12                        Governing Law.  This Agreement and all claims,
causes of action (whether in contract, tort or statute) or other matter that may
be based upon, arise out of, or relate to this Agreement, or the execution or
performance of this Agreement (including any claim or cause of action based
upon, arising out of, or related to any representation or warranty made in or in
connection with this Agreement) the Merger or the other Transactions or matters
contemplated herein (“Relevant Matters”), shall be governed by, construed and
enforced in accordance with the internal laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof, including its statute of limitations.

 

7.13                        Exclusive Jurisdiction.  Each of the parties hereto
irrevocably consents to the exclusive jurisdiction and venue of the Delaware
Court of Chancery in connection with any and all Relevant Matters (or, only if
the Delaware Court of Chancery declines to accept jurisdiction over a particular
matter, any federal court within the state of Delaware).  Each party agrees not
to commence any legal proceedings related to any Relevant Matter except in the
Delaware Court of Chancery (or, only if the Delaware Court of Chancery declines
to accept jurisdiction over a particular matter, in any federal court

 

9

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within the state of Delaware).  By execution and delivery of this Agreement,
each party hereto and the Stockholders irrevocably and unconditionally submits
to the exclusive jurisdiction of such courts and to the appellate courts
therefrom solely for the purposes of disputes in connection with Relevant
Matters and not as a general submission to such jurisdiction or with respect to
any other dispute, matter or claim whatsoever.  The parties hereto and the
Stockholders irrevocably consent to the service of process out of any of the
aforementioned courts in any such action or proceeding by the delivery of copies
thereof by overnight courier to the address for such party to which notices are
deliverable hereunder.  Any such service of process shall be effective upon
delivery.  Nothing herein shall affect the right to serve process in any other
manner permitted by applicable law.  The parties hereto and the Company Holders
hereby waive any right to stay or dismiss any action or proceeding in connection
with any Relevant Matter brought before the foregoing courts on the basis of
(i) any claim that it is not personally subject to the jurisdiction of the
above-named courts for any reason, or that it or any of its property is immune
from the above-described legal process, (ii) that such action or proceeding is
brought in an inconvenient forum, that venue for the action or proceeding is
improper or that this Agreement may not be enforced in or by such courts, or
(iii) any other defense that would hinder or delay the levy, execution or
collection of any amount to which any party hereto is entitled pursuant to any
final judgment of any court having jurisdiction.

 

7.14                        Counterparts.  This Agreement may be executed in one
or more counterparts, each of which will be deemed to be an original, but all of
which, taken together, will constitute one and the same instrument.  This
Agreement may be executed by facsimile signature (including signatures in Adobe
PDF or similar format).

 

7.15                        Expenses.  Except as otherwise provided in this
Agreement, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby will be paid by the party incurring such
expenses.

 

7.16                        Interpretation and Construction.  When a reference
is made in this Agreement to a Section, such reference is to a Section of this
Agreement, unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include,” “includes” and
“including” are used in this Agreement, they will be deemed to be followed by
the words “without limitation.” The words “hereof, “herein” and “hereunder” and
words of similar import when used in this Agreement will refer to this Agreement
as a whole and not to any particular provision of this Agreement. The word
“will” shall be construed to have the same meaning as the word “shall.” The
words “dates hereof” will refer to the date of this Agreement. The word “or” is
used in the inclusive sense of “and/or.”  The terms “or,” “any” and “either” are
not exclusive. When used herein, the words “to the extent” shall be deemed to be
followed by the words “but only to the extent.” The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms. Any agreement, instrument, law, rule or statute defined or referred
to herein means, unless otherwise indicated, such agreement, instrument, law,
rule or statute as from time to time amended, modified or supplemented. Each of
the parties hereto acknowledges that it has been represented by counsel of its
choice throughout all negotiations that have preceded the execution of this
Agreement, and that it has executed the same with the advice of said independent
counsel. Each party cooperated and participated in the drafting and preparation
of this Agreement and the documents referred to herein, and any and all drafts
relating thereto exchanged among the parties will be deemed the work product of
all of the parties and may not be construed against any party by reason of its
drafting or preparation. Accordingly, any rule of law or any legal decision that
would require interpretation of any ambiguities in this Agreement against any
party that drafted or prepared it is of no application and is hereby expressly
waived by each of the parties hereto, and any controversy over interpretations
of this Agreement will be decided without regards to events of drafting or
preparation.

 

10

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IN WITNESS WHEREOF, the parties hereto have caused this Voting and Standstill
Agreement to be duly executed as of the day and year first above written.

 

PARENT:

ENTEROMEDICS INC.

 

 

 

 

 

By:

 

 

 

Name: Scott Youngstrom

 

 

Title: Chief Financial Officer

 

 

 

 

 

STOCKHOLDER:

[ENTITY NAME]

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

[NATURAL PERSON NAME]

 

 

 

 

 

 

 

 

 

Additional Signature (if held jointly):

 

 

 

 

 

(If held jointly)

 

 

 

 

 

(Printed Full Name)

 

[Voting and Standstill Agreement]

 

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SCHEDULE A

 

NAME AND

 

PARENT SHARES

ADDRESS OF STOCKHOLDER

 

BENEFICIALLY OWNED

[Name]

 

                shares of common stock

[Address 1]

 

 

[Address 2]

 

                shares of series C convertible preferred stock

[E-mail]

 

 

 

[Voting and Standstill Agreement]

 

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EXHIBIT A

 

IRREVOCABLE PROXY

 

This Irrevocable Proxy (this “Proxy”) is being executed and delivered pursuant
to that certain Voting and Standstill Agreement (the “Voting Agreement”) dated
October 2, 2017, by and between EnteroMedics Inc. (“Parent”) and the undersigned
stockholder (“Stockholder”).  This Proxy will be effective from the date hereof
until the Expiration Date.  Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Voting Agreement.

 

To effectuate and secure Stockholder’s obligations to vote Parent’s capital
stock in accordance with Section 1.2 of the Voting Agreement, Stockholder hereby
appoints the Chief Executive Officer of Parent, the Chief Financial Officer of
Parent and the Secretary of Parent, or any of them from time to time, or their
designees, as Stockholder’s true and lawful proxy and attorney, with the power
to act alone and with full power of substitution (each a “Proxy Holder”), to
vote (or consent pursuant to an action by written consent of the stockholders,
if applicable) the Subject Shares with respect to any matter in which the vote
(or, if applicable, consent) of the holders of Parent’s capital stock is
required for or against such matter in the same manner as and in the same
proportion as the votes cast on the matter (determined separately in respect of
any series or vote, and disregarding abstentions) by the holders of voting
securities of Parent entitled to vote thereon other than Stockholder, its
Affiliates and any Other Stockholder (as defined below) , in each case, other
than with respect to any Parent Preferred Stock Matter.

 

Upon the undersigned’s execution of this Proxy, any and all prior proxies given
by the undersigned with respect to any Subject Shares are hereby revoked and the
undersigned agrees not to grant any subsequent proxies with respect to the
Subject Shares at any time prior to the Expiration Date.

 

This Proxy is irrevocable, is coupled with an interest and is granted in
consideration of Parent entering into the Merger Agreement.  The Stockholder
agrees that this proxy will be irrevocable until the Expiration Date and is
coupled with an interest sufficient at law to support an irrevocable proxy and
given to Parent as an inducement to enter into the Merger Agreement and, to the
extent permitted under applicable law, will be valid and binding on any Person
to whom Stockholder may transfer any of his, her or its Subject Shares in breach
of the Voting Agreement.  The Stockholder hereby ratifies and confirms all that
such irrevocable proxy may lawfully do or cause to be done by virtue hereof.

 

This Proxy will be binding upon the heirs, estate, executors, personal
representatives, successors and assigns of Stockholder (including any transferee
of any of the Subject Shares), and all authority herein conferred or agreed to
be conferred will survive the death or incapacity of the Stockholder.

 

If any provision of this Proxy or any part of any such provision is held under
any circumstances to be invalid or unenforceable in any jurisdiction, then
(a) such provision or part thereof will, with respect to such circumstances and
in such jurisdiction, be deemed amended to conform to applicable laws so as to
be valid and enforceable to the fullest possible extent, (b) the invalidity or
unenforceability of such provision or part thereof under such circumstances and
in such jurisdiction will not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (c) the invalidity or unenforceability of such provision or
part thereof will not affect the validity or enforceability of the remainder of
such provision or the validity or enforceability of any other provision of this
Proxy.  Each provision of this Proxy is separable from every other provision of
this Proxy, and each part of each provision of this Proxy is separable from
every other part of such provision.

 

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Dated: October 2, 2017

 

 

 

 

[ENTITY NAME]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[NATURAL PERSON NAME]

 

 

 

 

 

 

 

Number of Parent Shares owned of record or Beneficially Owned as of the date of
this Proxy:

 

 

 

           shares of common stock

 

 

 

           shares of series C convertible preferred stock

 

[Irrevocable Proxy]

 

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