Form of Warrant to Puchase Stock



 Exhibit 10.20 
 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW,
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION. 
 WARRANT TO PURCHASE STOCK 

 

			
	Company:	  	EnteroMedics Inc., a Delaware corporation
		
	Class of Stock:	  	At Holder’s option, the “Shares” shall be (subject to any adjustment pursuant to this Warrant (an “Adjustment”)): (1) the Company’s common stock or
(2) any other class of the Company’s stock that the Company sells (other than (i) stock sold to employees, directors, consultants and other service providers for the primary purpose of soliciting their services, and (ii) stock sold to persons
or entities with which the Company has business relationships, provided that such sale is primarily for other than equity financing purposes) during the period beginning on the Issue Date and ending on [insert date 18 months after Issue date],
inclusive (the “Choice Period”). Holder may choose the class of stock that shall constitute the Shares (subject to any Adjustment) at any time prior to the Deemed Choice (as defined below) by giving the Company written notice of
Holder’s choice, and at Holder’s request the Company shall promptly provide Holder with Sale Information (as defined below) and such other information as Holder shall reasonably request. Within 30 days after the expiration of the Choice
Period, if Holder has not yet given the Company written notice of its choice, the Company shall give Holder written notice that Holder may choose the class of stock that shall constitute the Shares and that absent such choice, such class of stock
shall be the Company’s common stock. The notice from the Company shall list the classes of the Company’s stock sold (other than (i) stock sold to employees, directors, consultants and other service providers for the primary purpose of
soliciting their services, and (ii) stock sold to persons or entities with which the Company has business relationships, provided that such sale is primarily for other than equity financing purposes) during the Choice Period, provide a copy of the
Company’s Certificate of Incorporation (including all stock designations), provide the prospectus and any other information provided to the purchasers of each such class of stock, and indicate the lowest price at which each was sold during the
Choice Period (the “Sale Information”). Holder shall have 90 days from receipt of the written notice from the Company to notify the Company in writing of Holder’s choice, and if Holder fails to so notify the Company, the Shares
shall be









			
		
		  	deemed (the “Deemed Choice”) to be the Company’s common stock (subject to any Adjustment). Holder’s choice (whether via Holder’s notice to the Company or the Deemed
Choice provision) shall be irrevocable.
		
	Warrant Price:	  	(1) if pursuant to “Class of Stock” above, the Shares are the Company’s common stock (before any Adjustment), the per share “Warrant Price” (before any Adjustment) shall
be the lower of (a) $[average of closing price of five prior trading days before issuance] and (b) the lowest price per share at which the Company sells its common stock during the Choice Period prior to exercise of this Warrant, but (2) if pursuant
to “Class of Stock” above, the Shares are other than the Company’s common stock (before any Adjustment), the per share Warrant Price (before any Adjustment) shall be the lowest price per share at which the Company sells the Shares
during the Choice Period prior to exercise of this Warrant.
		
	Number of Shares:	  	(1) if pursuant to “Class of Stock” above, the Shares are the Company’s common stock (before any Adjustment), the number of Shares that may be acquired upon exercise of this
Warrant (before any Adjustment) shall be equal to the result of dividing $[11% of Holder’s Loan Committment] by the Warrant Price for such common stock (before any Adjustment), and (2) if pursuant to “Class of Stock” above, the Shares
are other than the Company’s common stock (before any Adjustment), the number of Shares that may be acquired upon exercise of this Warrant (before any Adjustment) shall be equal to the result of dividing $[Insert Loan Amount] by the Warrant
Price for such other stock (before any Adjustment).
		
	Issue Date:	  	__________, 2008
		
	Expiration Date:	  	The 10th anniversary after the Issue Date (subject to early termination pursuant to Section 1.6.2)
		
	Credit Facility:	  	This Warrant is issued in connection with the Term Loan referenced in the Loan and Security Agreement dated November 18, 2008, between Company, Silicon Valley Bank, Compass Horizon Funding
Company LLC, and Venture Lending & Leasing V, Inc.

 THIS WARRANT CERTIFIES THAT, for good and valuable consideration, [Insert Holder Name] ([Insert
Holder Name], together with any registered holder from time to time of this Warrant or any holder of the shares issuable or issued upon exercise of this Warrant, “Holder”) is entitled to purchase the number of fully paid and
nonassessable shares of the class of securities (the “Shares”) of the Company at the Warrant Price, all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and
conditions set forth in this Warrant. 







 ARTICLE 1. EXERCISE. 
 1.1 Method of Exercise. Holder may exercise this Warrant by delivering a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company. Unless Holder
is exercising the conversion right set forth in Article 1.2, Holder shall also deliver to the Company a check, wire transfer (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant
Price for the Shares being purchased. 
 1.2 Conversion Right. In lieu of exercising this Warrant as specified in Article 1.1, Holder
may from time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of this Warrant minus the
aggregate Warrant Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares shall be determined pursuant to Article 1.3. 
 1.3 Fair Market Value. If the Company’s common stock is traded in a public market and the Shares are common stock, the fair market value of each Share shall be the closing price of a Share reported for the
business day immediately before Holder delivers its Notice of Exercise to the Company. If the Company’s common stock is traded in a public market and the Shares are preferred stock, the fair market value of a Share shall be the closing price of
a share of the Company’s common stock reported for the business day immediately before Holder delivers its Notice of Exercise to the Company, multiplied by the number of shares of the Company’s common stock into which a Share is
convertible. If the Company’s common stock is not traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment. 
 1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this Warrant and, if applicable, the Company receives
payment of the aggregate Warrant Price, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, a new Warrant representing the Shares not so
acquired. 
 1.5 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation on surrender and cancellation of
this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor. 
 1.6 Treatment of Warrant
Upon Acquisition of Company. 
 1.6.1 “Acquisition”. For the purpose of this Warrant,
“Acquisition” means any sale, license, or other disposition of all or substantially all of the assets of the Company, or any reorganization, consolidation, or merger of the Company where the holders of the Company’s securities
before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction. 
  

	 	1.6.2	Treatment of Warrant at Acquisition. 








 A) Upon the written request of the Company, Holder agrees that, in the event of an “arms length” Acquisition in
which the sole consideration is cash or shares of a publicly traded company with a market capitalization of not less than One Billion Dollars ($1,000,000,000) listed on a national market or exchange and whereby the shares receivable by Holder were
Holder to exercise this Warrant in full as of immediately prior to the consummation of such Acquisition may be publically re-sold by the Holder in their entirety within the three (3) months following such consummation pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or pursuant to Rule 144 (subject to compliance with Rule 144’s holding period and other applicable requirements), or a combination thereof, either (a) Holder shall
exercise its conversion or purchase right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (b) if Holder elects not to exercise the Warrant, in the case of an Acquisition
that is a sale of all or substantially all of the Company’s assets (and only its assets) to a third party, this Warrant will continue until the Expiration Date, and in all other cases, this Warrant will expire upon the consummation of such
Acquisition. The Company shall provide Holder with written notice of its request relating to the foregoing (together with such reasonable information as Holder may request in connection with such contemplated Acquisition giving rise to such notice),
which is to be delivered to Holder not less than ten (10) days prior to the closing of the proposed Acquisition. 
 B) Upon the closing of any
Acquisition other than those particularly described in subsection (A) above, the successor entity shall assume the obligations of this Warrant, and this Warrant shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price and/or number of Shares shall be adjusted
accordingly. 
 ARTICLE 2. ADJUSTMENTS TO THE SHARES. 
 2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on the Shares payable in common stock, or other securities, then upon exercise of this Warrant, for each Share acquired, Holder shall
receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend occurred. If the Company subdivides the Shares by reclassification or
otherwise into a greater number of shares or takes any other action which increase the amount of stock into which the Shares are convertible, the number of shares purchasable hereunder shall be proportionately increased and the Warrant Price shall
be proportionately decreased. If the outstanding shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be
proportionately decreased. 
 2.2 Reclassification, Exchange, Combinations or Substitution. Upon any reclassification, exchange,
substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and
kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, 








 
exchange, substitution, or other event. Such an event shall include any automatic conversion of the outstanding or issuable securities of the Company of the
same class or series as the Shares to common stock pursuant to the terms of the Company’s Articles or Certificate (as applicable) of Incorporation upon the closing of a registered public offering of the Company’s common stock. The Company
or its successor shall promptly issue to Holder an amendment to this Warrant setting forth the number and kind of such new securities or other property issuable upon exercise or conversion of this Warrant as a result of such reclassification,
exchange, substitution or other event that results in a change of the number and/or class of securities issuable upon exercise or conversion of this Warrant. The amendment to this Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new Warrant. The provisions
of this Article 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events. 
 2.3 Adjustments
for Diluting Issuances. The Warrant Price and the number of Shares issuable upon exercise of this Warrant or, if the Shares are preferred stock, the number of shares of common stock issuable upon conversion of the Shares, shall be subject to
adjustment, from time to time in the manner set forth in the Company’s Articles or Certificate of Incorporation as if the Shares were issued and outstanding on and as of the date of any such required adjustment. The provisions set forth for the
Shares in the Company’s Articles or Certificate (as applicable) of Incorporation relating to the above in effect as of the Issue Date may not be amended, modified or waived, without the prior written consent of Holder unless such amendment,
modification or waiver affects the rights associated with the Shares in the same manner as such amendment, modification or waiver affects the rights associated with all other shares of the same series and class as the Shares granted to Holder.

 2.4 No Impairment. The Company shall not, by amendment of its Articles or Certificate (as applicable) of Incorporation or through a
reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this
Warrant by the Company, but shall at all times in good faith assist in carrying out of all the provisions of this Article 2 and in taking all such action as may be necessary or appropriate to protect Holder’s rights under this Article against
impairment. 
 2.5 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of this Warrant and the
number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying Holder the
amount computed by multiplying the fractional interest by the fair market value of a full Share. 
 2.6 Certificate as to Adjustments.
Upon each adjustment of the Warrant Price, the Company shall promptly notify Holder in writing, and, at the Company’s expense, promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date thereof and the series of adjustments leading to such
Warrant Price. 







 ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY. 
 3.1 Representations and Warranties. The Company represents and warrants to Holder as follows: 
 (a) [Reserved] 
 (b) All Shares which may be issued upon the exercise of the purchase right represented by this Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid
and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. 
 (c) The following capitalization of the Company is true and complete as of the Issue Date: the Company has 16,881,104 shares of common
stock, par value $0.01 per share, issued and outstanding, options to purchase 3,032,152 shares of Common Stock issued and outstanding, and warrants to purchase 683,235 shares of Common Stock issued and outstanding. 
 3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare any dividend or distribution upon any of its stock, whether
in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to offer for sale any shares of the Company’s capital stock (or other securities convertible into such capital stock), other than
(i) pursuant to the Company’s stock option or other compensatory plans, (ii) in connection with commercial credit arrangements or equipment financings, or (iii) in connection with strategic transactions for purposes other than
capital raising; (c) to effect any reclassification or recapitalization of any of its stock; (d) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (e) offer holders of registration rights the opportunity to participate in an underwritten public offering of the Company’s securities for cash, then, in connection with each such event, the Company shall
give Holder: (1) at least 10 days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of common stock will be entitled thereto)
or for determining rights to vote, if any, in respect of the matters referred to in (a) and (b) above; (2) in the case of the matters referred to in (c) and (d) above at least 10 days prior written notice of the date when
the same will take place (and specifying the date on which the holders of common stock will be entitled to exchange their common stock for securities or other property deliverable upon the occurrence of such event); and (3) in the case of the
matter referred to in (e) above, the same notice as is given to the holders of such registration rights. Company will also provide information requested by Holder reasonably necessary to enable Holder to comply with Holder’s accounting or
reporting requirements. 
 3.3 Registration Under Securities Act of 1933, as amended. The Company and Holder agree that, upon exercise
or conversion of this Warrant, Holder shall, with respect to the Shares that constitute common stock or which are convertible into common stock, (i) be entitled to the registration rights set forth in Sections 1.2, 1.3 








 
and 1.4 of that certain Amended and Restated Investors’ Rights Agreement, dated July 6, 2006 (the “Investors’ Rights Agreement”), by
and among the Company and the Investors named therein, provided, however, that the Holder of this Warrant hereby agrees that it may not be one of the “Initiating Holders” under Section 1.2 of Investors’ Rights Agreement,
(ii) may exercise the registration rights provided in this Section 3.3 only to the extent that the inclusion of Holder’s Shares pursuant to such registration rights will not reduce the amount of “Registrable Securities” (as
defined in the Investors’ Rights Agreement) of the “Holders” (as defined in the Investors’ Rights Agreement) that are included in such registration, and (iii) upon exercise of any such registration rights, be subject to and
bound by the obligations of a “Holder” under Sections 1.2 through 1.10 and Sections 1.12 through 1.15 of the Investors’ Rights Agreement. For purposes of the foregoing, the Shares issued upon exercise hereof shall be deemed
“Registrable Securities” (as defined in the Investors’ Rights Agreement) and Holder shall be deemed a “Holder” (as defined in the Investors’ Rights Agreement). The provisions set forth in the Company’s
Investors’ Right Agreement or similar agreement relating to the above in effect as of the Issue Date may not be amended, modified or waived without the prior written consent of Holder unless such amendment, modification or waiver affects the
rights associated with the Shares in the same manner as such amendment, modification, or waiver affects the rights associated with all other shares of the same series and class as the Shares granted to Holder. 
 3.4 No Shareholder Rights. Except as provided in this Warrant, Holder will not have any rights as a shareholder of the Company until the exercise
of this Warrant. 
 ARTICLE 4. REPRESENTATIONS, WARRANTIES OF HOLDER. Holder represents and warrants to the Company as follows: 
 4.1 Purchase for Own Account. This Warrant and the securities to be acquired upon exercise of this Warrant by Holder will be acquired for
investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act. Holder also represents that Holder has not been formed for the specific purpose of acquiring
this Warrant or the Shares. 
 4.2 Disclosure of Information. Holder has received or has had full access to all the information it
considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities. Holder further has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to Holder or to which Holder has access. 
 4.3 Investment Experience. Holder
understands that the purchase of this Warrant and its underlying securities involves substantial risk. Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk
of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its
underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors 








 
or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such
persons. 
 4.4 Accredited Investor Status. Holder is an “accredited investor” within the meaning of Regulation D
promulgated under the Act. 
 4.5 The Act. Holder understands that this Warrant and the Shares issuable upon exercise or conversion
hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Holder’s investment intent as expressed herein. Holder understands that
this Warrant and the Shares issued upon any exercise or conversion hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and
qualification are otherwise available. 
 ARTICLE 5. MISCELLANEOUS. 
 5.1 Term. This Warrant is exercisable in whole or in part at any time and from time to time on or before the Expiration Date. 
 5.2 Legends. This Warrant and the Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form:

 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES
LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION. 
 5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including, without
limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require [Insert Holder Name] to provide an opinion of counsel if
the transfer is to any affiliate of [Insert Holder Name]. Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of current information as referenced in Rule 144(c), Holder
represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of Holder’s notice of proposed sale. 







 5.4 Transfer Procedure. Subject to the provisions of Article 5.3 and upon providing the Company
with written notice, [Insert Holder Name] and any subsequent Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the Shares issuable directly or indirectly, upon conversion of the Shares, if any)
to any transferee, provided, however, in connection with any such transfer, [Insert Holder Name] or any subsequent Holder will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification
number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable). The Company may refuse to transfer this Warrant or the Shares to any person who directly competes with the
Company, unless, in either case, the stock of the Company is publicly traded. 
 5.5 Notices. All notices and other communications
from the Company to Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or Holder, as
the case may (or on the first business day after transmission by facsimile) be, in writing by the Company or such Holder from time to time. Effective upon receipt of the fully executed Warrant and the initial transfer described in Article 5.4 above,
all notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise: 
 [Insert Holder Name] 
 Attn: Chief Financial Officer 
 [Address] 
 Telephone: 
 Facsimile: 
 Notice to the Company shall be addressed as follows until Holder receives notice of a change in address: 
 EnteroMedics Inc. 
 Attn: David Brooks 
 2800 Patton Road 
 Saint Paul, MN 55113 
 Telephone: (651) 789-2673 
 Facsimile: (651) 634-3212 
 5.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

 5.7 Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the
party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees. 
 5.8 Automatic Conversion upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with
Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be 








 
deemed on and as of such date to be converted pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not
previously have been exercised or converted, and the Company shall promptly deliver a certificate representing the Shares (or such other securities) issued upon such conversion to Holder. 
 5.9 Counterparts. This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement. 
 5.10 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to
its principles regarding conflicts of law. 
 [Signature page follows.] 








									
	“COMPANY”	 		 	
			
	ENTEROMEDICS INC.	 		 	
					
	By:	 	 	 		 	By:	 	 
					
	Name:	 	 	 		 	Name:	 	 
		 	(Print)	 		 		 	(Print)
	Title:	 	Chairman of the Board, President or Vice President	 		 	Title:	 	Chief Financial Officer, Secretary, Assistant Treasurer or Assistant Secretary
			
	“HOLDER”	 		 	
					
	By:	 	 	 		 		 	
					
	Name:	 	 	 		 		 	
		 	(Print)	 		 		 	
	Title:	 	 	 		 		 	








 APPENDIX 1 
 NOTICE OF EXERCISE 
 1. Holder elects to purchase ___________ shares of the ____________
[describe] Stock of __________________ pursuant to the terms of the attached Warrant, and tenders payment of the purchase price of the shares in full. 
 [or] 
 1. Holder elects to convert the attached Warrant into Shares/cash [strike one] in the manner
specified in the Warrant. This conversion is exercised for _____________________ of the Shares covered by the Warrant. 
 [Strike paragraph
that does not apply.] 
 2. Please issue a certificate or certificates representing the shares in the name specified below: 
 ________________________________________________ 
                                         
Holder’s Name 
 ________________________________________________ 
 ________________________________________________ 
                                         
(Address) 
 3. By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties
in Article 4 of the Warrant as the date hereof. 
  

			
	HOLDER:
	
	 
		
	By:	 	 



			
		
	Name:	 	 



			
		
	Title:	 	 



			
		
	(Date):