Document:

<PAGE>

                                                                     EXHIBIT 4.2

                              CURON MEDICAL, INC.

                CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT

     This CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT, dated as of May 19,
2000 (the "Agreement") is entered into by and between CURON MEDICAL, INC., a
Delaware corporation with principal offices located at 735 Palomar Avenue,
Sunnyvale, California 94086 (the "Company"), and the individuals/entities whose
names appear on the last page of this Agreement (each an "Investor" and
collectively "Investors").

     On the terms and subject to the conditions set forth herein, the Investors
are willing to purchase from the Company, and the Company is willing to sell to
the Investors convertible promissory notes (the "Notes") on the date hereof and
in the principal amounts set forth opposite each Investor's name on Exhibit A
hereto.

     Capitalized terms not otherwise defined herein shall have the meaning set
forth in the form of Note attached hereto as Exhibit B.

     Accordingly, the Investors agree with the Company as follows:

     1.  The Notes and Warrants.
         -----------------------

               1.1  The Notes.  Each Investor severally agrees, on the terms
                    ---------
of and subject to the conditions specified in this Agreement, to lend to the
Company the sums set forth on Exhibit A hereto. With respect to each loan made
by each Investor, each Investor will receive a Note dated as of the date of each
Closing (as defined below) in the form attached hereto as Exhibit B. These Notes
are collectively referred to as the "Notes." The securities into which the Notes
are convertible are referred to as the "Conversion Stock."

               1.2  The Warrants.  In connection with the sale of the Notes by
                    ------------
the Company, the Company shall issue to the Investors stock purchase warrants
(the "Warrants") dated as of the initial Closing in the form attached hereto as
Exhibit C to purchase shares of the Company's Series C Preferred Stock in such
amounts and on such terms as are provided in the Warrants. The securities for
which the Warrants are exercisable are referred to as the "Exercise Stock." The
Notes and the Conversion Stock, and the Warrants and the Exercise Stock are
collectively referred to as the "Securities."

               1.3  Place and Date of Closing.  The sale to and purchase by
                    -------------------------
each Investor of the Notes and the issuance of the Notes and Warrants in respect
thereof will be held at the offices of Wilson Sonsini Goodrich & Rosati, 650
Page Mill Road, Palo Alto, California at such time and place as the Company and
each Investor shall mutually agree (each a "Closing").

               1.4  Delivery.  At the Closing, the Company shall deliver to
                    --------
each Investor a Note in the principal amount set forth on Exhibit A hereto and a
Warrant to purchase shares of the Company's Series C Preferred Stock.
<PAGE>

         1.5  Conversion.  Conversion of the Notes shall be automatic or on
              ----------
demand, subject to and as defined in the Notes. The outstanding principal of and
any accrued but unpaid interest on the Notes shall convert at such time into
shares of Series D Preferred Stock or into shares of the Company's Common Stock
in the event of an earlier initial public offering (an "IPO") by the Company
pursuant to the Securities Act of 1933, as amended (the "Act").

     2.  Representations and Warranties of the Company.  The Company hereby
         ---------------------------------------------
represents and warrants to the Investors as follows:

         2.1  Organization and Standing Certificate and Bylaws.  The Company is
              ------------------------------------------------
a corporation duly organized and existing under, and by virtue of, the laws of
the State of Delaware and is in good standing under such laws. The Company has
the requisite corporate power to own and operate its properties and assets and
to carry on its business as presently conducted and as proposed to be conducted.

         2.2  Corporate Power/Authorization.  The Company has all requisite
              -----------------------------
legal and corporate power to perform its obligations under this Agreement, the
Notes and the Warrants (collectively, the "Loan Documents"). All corporate
action on the part of the Company and its stockholders necessary for the
authorization, execution, delivery and performance of all obligations of the
Company under the Loan Documents has been taken on or prior to the Closing Date.
The Loan Documents constitute the valid and binding obligation of the Company
and are enforceable against the Company in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights generally, and except that the
availability of the remedy of specific performance or other equitable relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.

         2.3  Compliance with Other Instruments.  The Company is not in
              ---------------------------------
violation of any term of (i) its Certificate of Incorporation or Bylaws, (ii)
any provision of any mortgage, indenture, or material contract, agreement or
instrument to which the Company is a party or by which it is bound, or (iii) any
judgment, decree or order binding upon the Company or any statute, rule or
regulation applicable to the Company.

         2.4  Litigation, etc. There are no actions, proceedings or
              ----------------
investigations pending against the Company or its properties, or to the
Company's knowledge, any threat thereof, which, either in any case or in the
aggregate, might result in any material adverse change in the business or
financial condition of the Company or any of its properties or assets or in any
material impairment of the right or ability of the Company to carry on its
business as now conducted, and none which challenges the validity of the Loan
Documents or any action taken or to be taken in connection herewith.

         2.5  Proceeds.  None of the proceeds of the Loans made by the
              --------
Investors to the Company hereunder will be used, directly or indirectly, by the
Company for the purpose of purchasing or carrying, or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any "margin stock" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System or for any other purpose which might
make the transactions contemplated herein a "purpose credit" within the meaning
of Regulation U, or cause the Loan Documents to violate any other regulation of
the Board of Governors of the Federal
<PAGE>

Reserve System or the Securities Exchange Act of 1934, as amended, or any rules
or regulations promulgated under any of such statutes.

     3.  Representations and Warranties of Investors.  Each Investor, for that
         -------------------------------------------
Investor alone, represents and warrants to the Company upon the acquisition of
the Note and the Warrant and upon conversion of the Note and upon exercise of
the Warrant as follows:

               3.1  Binding Obligation.  Each of this Agreement, the Note and
                    ------------------
the Warrant issued to the Investor is a valid, binding and enforceable
obligation of the Investor.

               3.2  Investment Experience.  The Investor is either an
                    ---------------------
accredited investor within the meaning of Regulation D prescribed by the
Securities and Exchange Commission pursuant to the Act, or (by virtue of the
Investor's experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company) the Investor is
capable of evaluating the merits and risks of the Investor's investment in the
Company and has the capacity to protect the Investor's own interests.

               3.3  Investment Intent.  The Investor is acquiring the
                    -----------------
Securities for investment for the Investor's own account and not with a view to,
or for resale in connection with, any distribution thereof. The Investor
understands that the Securities have not been registered under the Act by reason
of a specific exemption from the registration provisions of the Act that depends
upon, among other things, the bona fide nature of the investment intent as
expressed herein.

               3.4  Rule 144.  The Investor acknowledges that the Securities
                    --------
must be held indefinitely unless subsequently registered under the Act, or
unless an exemption from such registration is available. The Investor is aware
of the provisions of Rules 144 and 144A promulgated under the Act that permit
limited resale of securities purchased in a private placement subject to the
satisfaction of certain conditions.

               3.5  Discussions with Management.  The Investor has had an
                    ---------------------------
opportunity to discuss the Company's business, management, and financial affairs
with the Company's management and to review the Company's facilities.

               3.6  Transfer Among Affiliates.  Without in any way limiting
                    -------------------------
the representations set forth in this Section 3, an Investor may transfer all or
any portion of the Securities to its partners or affiliated funds if the Company
and its counsel are satisfied that the transfer is exempt from the registration
requirements of federal and applicable state securities laws.

               3.7  Legends.  All certificates representing any shares of
                    -------
stock of the Company subject to the provisions of this Agreement, including the
Conversion Stock and Exercise Stock, shall have endorsed thereon legends
substantially as follows:

                         (a)  "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED."
<PAGE>

                         (b)  Any legend required by the laws of the State of
California or any other applicable state, including any legend required by the
California Department of Corporations and Sections 417 and 418 of the California
Corporations Code.

     4.  Conditions to Closing.
         ---------------------

               4.1  Conditions to Obligations of the Investor.   Each of the
                    -----------------------------------------
Investor's obligations at the Closing are subject to the fulfillment, on or
prior to each Closing of all of the following conditions, any of which may be
waived in whole or in part by such Investor:

                         (a)  Except for the notices required or permitted to be
filed after each Closing with certain federal and state securities commissions,
the Company shall have obtained all governmental approvals required in
connection with the lawful sale and issuance of the Securities.

                         (b)  At the Closing, the sale and issuance by the
Company, and the purchase by the Investor, of the Securities shall be legally
permitted by all laws and regulations to which the Investor or the Company is
subject.

                         (c)  All corporate and other proceedings in connection
with the transactions contemplated at the Closing and all documents and
instruments incident to such transaction shall be reasonably satisfactory in
substance and form to the Investor.

               4.2  Conditions to Obligations of the Company.  The Company's
                    ----------------------------------------
obligation to issue and sell the Securities at each Closing is subject to the
fulfillment, to the Company's satisfaction on or prior to each Closing of the
following conditions, any of which may be waived in whole or in part by the
Company:

                         (a)  Except for the notices required or permitted to be
filed after each Closing with certain federal and state securities commissions,
the Company shall have obtained all governmental approvals required in
connection with the lawful sale and issuance of the Securities.

                         (b)  At each Closing, the sale and issuance by the
Company, and the purchase by the Investors, of the Securities shall be legally
permitted by all laws and regulations to which the Investors or the Company is
subject.

               4.3  Affirmative Covenant of the Company.  Upon the earlier to
                    -----------------------------------
occur of (i) May 30, 2001 or (ii) the conversion of Conversion Stock, the
Company shall amend the Amended and Restated Stockholder Rights Agreement dated
August 30, 1999 to include the Conversion Stock under such agreement.

     5.  Lock-Up Period.  Each Investor hereby agrees that, if so requested by
         --------------
the Company or any representative of the underwriters  in connection with any
registration of the offering of any securities of the Company under the
Securities Act, such Investor shall not sell or otherwise transfer any
Securities during the 180-day period (or such other period as may be requested
in writing by the underwriter and agreed to in writing by the Company) (the
"Market Standoff Period") following the effective date of a registration
statement of the Company filed under the Securities Act.  Such restriction shall
apply only  to the first registration statement of the Company to become
effective under the Securities Act that includes securities to be sold on behalf
of the Company to the public in
<PAGE>

an underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.

     6.  Miscellaneous.
         -------------

            6.1  Waivers and Amendments.  With the written consent of the
                 ----------------------
Company and the record holders of more than 70% of the principal amount of Notes
then outstanding, the rights and obligations of the Company and of the Investors
under this Agreement may be waived (either generally or in a particular
instance, either retroactively or prospectively and either for a specified
period of time or indefinitely), and with the same consent the Company, when
authorized by resolution of its Board of Directors, may enter into a
supplementary agreement for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement; provided,
however, that no such waiver or supplemental agreement shall reduce the
aforesaid percentage of the principal amount of Notes the holders of which are
required to consent to any waiver or supplemental agreement, without the consent
of all of the holders of the then outstanding Notes. Upon the effectuation of
each such waiver, consent, agreement, amendment or modification the Company
shall promptly give written notice thereof to the record holders of the
Securities who have not previously consented thereto in writing. Neither this
Agreement nor any provisions hereof may be changed, waived, discharged or
terminated orally, but only by a signed statement in writing. Provided, however,
no amendment or waiver of this Agreement nor any supplemental agreement shall
(i) increase any financial obligation or liability of an Investor beyond that
set forth herein or permitted hereby without such Investor's written consent or
(ii) materially and adversely affect the rights of an Investor in a manner that
discriminates against such Investor vis-a-vis other Investors without such
Investor's written consent.

            6.2  Governing Law.  This Agreement shall be governed in all
                 -------------
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.

            6.3  Survival.  The representations, warranties, covenants and
                 --------
agreements made herein shall survive any investigation made by any Investor and
each Closing. All statements as to factual matters contained in any certificate
or other instrument delivered by or on behalf of the Company pursuant hereto or
in connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder as of the date of such
certificate or instrument.

            6.4  Successors and Assigns.  Except as otherwise expressly
                 ----------------------
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.

            6.5  Entire Agreement.  This Agreement (including the exhibits and
                 ----------------
schedules attached hereto) and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.

            6.6  Notices, etc.  All notices and other communications required
                 ------------
or permitted hereunder shall be effective upon receipt and shall be in writing
and may be delivered in person, by
<PAGE>

telecopy, overnight delivery service or U.S. mail, in which event it may be
mailed by first-class, certified or registered, postage prepaid, addressed (a)
if to an Investor, at such Investor's address set forth on Exhibit A hereto, or
at such other address as such Investor shall have furnished the Company in
writing, or, until any such holder so furnishes an address to the Company, then
to and at the address of the last holder of such Securities who has so furnished
an address to the Company, or (b) if to the Company, at its address set forth at
the beginning of this Agreement, or at such other address as the Company shall
have furnished to the Investor and each such other holder in writing.

          6.7  Separability of Agreements; Severability of this Agreement.  The
               ----------------------------------------------------------
Company's agreement with each Investor is a separate agreement and the sale of
the Securities to each Investor is a separate sale. If any provision of this
Agreement shall be judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

          6.8  Payment of Fees and Expenses.  The Company and the Investor
               ----------------------------
shall each bear their own expenses incurred with respect to this transaction;
provided, however, the Company will pay the reasonable fees and expenses of one
counsel to the Investors.

          6.9  Counterparts.  This Agreement may be executed in any number of
               ------------
counterparts, each of which shall be an original, but all of which together
shall be deemed to constitute one instrument.
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
date and year first written above.

CURON MEDICAL, INC.                   INVESTOR

By:____________________________       By:____________________________

Print Name:____________________       Print Name:____________________

Title:_________________________       Title:_________________________
<PAGE>

                                   EXHIBIT A
                                   ---------

                             SCHEDULE OF INVESTORS

          Name                   Amount of Note       Shares Underlying
          ----                   --------------       -----------------
                                                           Warrants
                                                           --------
<PAGE>

                                   EXHIBIT B
                                   ---------

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF.  THE SECURITIES
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN
OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.

                              CURON MEDICAL, INC.

                          CONVERTIBLE PROMISSORY NOTE

                                                           Sunnyvale, California
$_______________                                                   May ___, 2000

     1.  Principal and Interest.
         ----------------------

     Curon Medical, Inc., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to the order of _______________ or holder
("Payee") in lawful money of the United States at the address of Payee set forth
below, the principal amount of  $_____________, together with simple interest at
a rate equal to eight percent (8%) per annum.

     The principal of and accrued interest on this Note are due and payable on
demand by holder on or after the five (5) year anniversary of this Note unless
the Note has previously been converted pursuant to Section 2 herein.  This Note
may be prepaid at any time without penalty following the closing of an initial
public offering ("IPO") of the Company's Common Stock.

     Upon payment in full of all principal and interest payable hereunder, this
Note shall be surrendered to the Company for cancellation.

     2.  Conversion.
         ----------

            (a)  Automatic Conversion.  The outstanding principal balance of
                 --------------------
and any accrued but unpaid interest on this Note shall be automatically
converted upon the closing of an equity financing (excluding an IPO) of the
Company involving the receipt by the Company of at least $10,000,000 (excluding
amounts received on conversion of the Notes), at least 50% of which is received
from venture capital or other financial investors, at a price of at least $3.00
per share, as adjusted for stock splits, dividends, recapitalizations or the
like (the "Next Financing"), into Series D Preferred Stock priced at $3.00 per
share (the "Securities") having rights, preferences and privileges substantially
similar to those of holders of Series C Preferred Stock.
<PAGE>

          (b)  Demand Conversion.  If not earlier automatically converted
               -----------------
pursuant to Section 2(a) above, upon the demand of the holders in interest of
70% of the amounts underlying the Notes, the principal and accrued interest of
all Notes shall be converted into the Securities at the price of $3.00 per
share. This demand conversion right may only be exercised after the one year
anniversary of the issuance of the Notes.

          (c)  Such conversion into the Securities is conditioned upon Payee
entering into or executing such documents as other purchasers of Series D
Preferred Stock enter into or execute, and meeting the reasonable conditions and
being subject to the reasonable terms applicable to such other purchasers
(including customary 180-day market stand-off terms); provided, however, that
Payee shall not be required to enter into or execute any agreement which
contains terms terminating or diminishing the Warrants granted pursuant to the
Agreement.

          (d)  Upon such conversion of this Note, Payee shall surrender this
Note, duly endorsed, at the principal office of the Company. At its expense, the
Company shall, as soon as practicable thereafter, issue and deliver to such
Payee at such principal office a certificate or certificates for the number of
shares to which Payee shall be entitled upon such conversion (bearing such
legends as are required by applicable state and federal securities laws and in
the opinion of counsel to the Company), together with any other securities and
property to which Payee is entitled upon such conversion under the terms of this
Note.

          (e)  No fractional shares shall be issued upon conversion of this
Note. In lieu of the Company issuing any fractional shares to Payee upon the
conversion of this Note, the Company shall pay to Payee an amount in cash equal
to the product obtained by multiplying the conversion price applied to effect
such conversion by the fraction of a share not issued pursuant to the previous
sentence. Upon conversion of this Note in full and the payment of the amounts
specified in this Note, Company shall be released from all its obligations and
liabilities under this Note.

          (f)  In the event of a "Change in Control" (as defined below) of
Company prior to the payment or conversion of this Note (as provided above), all
outstanding principal and unpaid accrued interest due on this Note shall be due
and payable in full upon the closing of the Change in Control transaction. The
Company shall provide each Investor 20 days notice of such Change in Control in
accordance with Section 4 and shall provide each Investor the right to convert
the principal and accrued interest of its respective Note into the Securities at
the price of $3.00 per share. For purposes of this Note, a Change in Control
shall be deemed to be occasioned by, and to include, (i) the acquisition of the
Company by another entity by means of any transaction or consolidation, (ii) a
sale of all or substantially all of the assets of the Company (including, for
purposes of this section, intellectual property rights which, in the aggregate,
constitute substantially all of the Company's material assets) or (iii) a sale
of all or substantially all of the voting securities of the Company; unless in
each case, the Company's stockholders of record as constituted immediately prior
to such acquisition or sale will, immediately after such acquisition or sale (by
virtue of securities issued as consideration for the corporation's acquisition
or sale or otherwise) hold at least seventy percent (70%) of the voting power of
the surviving or acquiring entity.

     3.  Attorneys' Fees.  If the indebtedness represented by this Note or any
         ---------------
part thereof is collected in bankruptcy, receivership or other judicial
proceedings or if this Note is placed in the
<PAGE>

hands of attorneys for collection after default, the Company agrees to pay, in
addition to the principal and interest payable hereunder, reasonable attorneys'
fees and costs incurred by Payee.

     4.  Notices.  Any notice, other communication or payment required or
         -------
permitted hereunder shall be in writing and shall be deemed to have been given
upon delivery if personally delivered or upon deposit if deposited in the United
States mail for mailing by certified mail, postage prepaid, and addressed as
follows:

     If to Payee:    At the address set forth on Exhibit A of the Agreement.

     If to Company:  Curon Medical, Inc.
                     735 Palomar Avenue
                     Sunnyvale, California  94086
                     Attn.: John W. Morgan

     Each of the above addressees may change its address for purposes of this
paragraph by giving to the other addressee notice of such new address in
conformance with this paragraph.

     5.  Acceleration.  This Note shall become immediately due and payable if
         ------------
(i) the Company commences any proceeding in bankruptcy or for dissolution,
liquidation, winding-up, composition or other relief under state or federal
bankruptcy laws; or (ii) such proceedings are commenced against the Company, or
a receiver or trustee is appointed for the Company or a substantial part of its
property, and such proceeding or appointment is not dismissed or discharged
within 60 days after its commencement.

     6.  Waivers.  Company hereby waives presentment, demand for performance,
         -------
notice of non-performance, protest, notice of protest and notice of dishonor. No
delay on the part of Payee in exercising any right hereunder shall operate as a
waiver of such right or any other right. This Note is being delivered in and
shall be construed in accordance with the laws of the State of California,
without regard to the conflicts of laws provisions thereof.

CURON MEDICAL, INC.

By ______________________________

Title: __________________________
<PAGE>

                                   EXHIBIT C
                                   ---------

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933.  THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

                                                                      Void after
                                                                   May ___, 2007

                              CURON MEDICAL, INC.

                 WARRANT TO PURCHASE SHARES OF PREFERRED STOCK

     This Warrant is issued to _____________________________________ by Curon
Medical, Inc., a Delaware corporation (the "Company"), pursuant to the terms of
that certain Convertible Note and Warrant Purchase Agreement (the "Agreement")
dated as of May ___, 2000 in connection with the Company's issuance to the
holder of this Warrant and one or more Convertible Promissory Notes  (the
"Notes").

     1.  Purchase of Shares.  Subject to the terms and conditions hereinafter
         ------------------
set forth and set forth in the Agreement, the holder of this Warrant is
entitled, upon surrender of this Warrant at the principal office of the Company
(or at such other place as the Company shall notify the holder hereof in
writing), to purchase from the Company up to ____________ shares of the
Company's Series C Preferred Stock (the "Shares").

     2.  Purchase Price. The Purchase Price for the Shares shall be $2.50 per
         --------------
share. Such price shall be subject to adjustment pursuant to Section 8 hereof
(such price, as adjusted from time to time, is herein referred to as the
"Exercise Price").

     3.  Exercise Period.  This Warrant shall be exercisable, in whole or in
         ---------------
part, during the term commencing immediately and ending at 5:00 p.m. on the
earlier of (a) May ____, 2007 or (b) 5 years following the conversion or
repayment of the Notes.

     4.  Method of Exercise.  While this Warrant remains outstanding and
         ------------------
exercisable in accordance with Section 3 above, the holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:

               (i)  the surrender of the Warrant, together with a duly executed
copy of the form of subscription attached hereto, to the Secretary of the
Company at its principal offices; and

               (ii) the payment to the Company of an amount equal to the
aggregate Exercise Price for the number of Shares being purchased.
<PAGE>

     5.  Net Exercise.  In lieu of cash exercising this Warrant, the holder of
         ------------
this Warrant may elect to receive shares equal to the value of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with notice of such election, in which
event the Company shall issue to the holder hereof a number of shares of
Preferred Stock computed using the following formula:

                                    Y (A - B)
                                    ---------
                              X =       A
     Where

          X --  The number of Shares to be issued to the holder of this Warrant.

          Y --  The number of Shares purchasable under this Warrant.

          A --  The fair market value of one share of the Company's Series C
                Preferred Stock.

          B --  The Exercise Price (as adjusted to the date of such
                calculations).

     For purposes of the above calculation, fair market value of one share of
Series C Preferred Stock shall be determined by the Company's Board of Directors
in good faith; provided, however, that in the event the Company makes an initial
public offering of its Common Stock the fair market value per share shall be the
average of the closing bid and asked prices of the Common Stock into which each
share of Series C Preferred Stock has been converted, as quoted in the over-the-
counter market in which the Common Stock is traded or the closing price quoted
on any exchange on which the Common Stock is listed, whichever is applicable, as
published in the Western Edition of The Wall Street Journal for the ten (10)
trading days prior to the date of determination of fair market value (or such
shorter period of time during which such stock was traded over-the-counter or on
such exchange).  If the Common Stock is not traded on the over-the-counter
market or on an exchange, the fair market value shall be the price per share
that the Company could obtain from a willing buyer for shares of Series C
Preferred Stock (or Common Stock, if the Series C Preferred Stock has been
converted to Common Stock) sold by the Company from authorized but unissued
shares, as such prices shall be determined in good faith by the Company's Board
of Directors.

     6.  Certificates for Shares.  Upon the exercise of the purchase rights
         -----------------------
evidenced by this Warrant, one or more certificates for the number of Shares so
purchased shall be issued as soon as practicable thereafter, and in any event
within thirty (30) days of the delivery of the subscription notice.

     7.  Issuance of Shares.  The Company covenants that the Shares, when issued
         ------------------
pursuant to the exercise of this Warrant, will be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens, and charges with respect
to the issuance thereof.

     8.  Adjustment of Exercise Price and Number of Shares.  The number of and
         -------------------------------------------------
kind of securities purchasable upon exercise of this Warrant and the Exercise
Price shall be subject to adjustment from time to time as follows:
<PAGE>

          (a)  Subdivisions, Combinations and Other Issuances.  If the Company
               ----------------------------------------------
shall at any time prior to the expiration of this Warrant subdivide its
Preferred Stock, by split-up or otherwise, or combine its Preferred Stock, or
issue additional shares of its Preferred Stock or Common Stock as a dividend
with respect to any shares of its Preferred Stock, the number of Shares issuable
on the exercise of this Warrant shall forthwith be proportionately increased in
the case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination. Appropriate adjustments shall also be made to the
purchase price payable per share, but the aggregate purchase price payable for
the total number of Shares purchasable under this Warrant (as adjusted) shall
remain the same. Any adjustment under this Section 8(a) shall become effective
at the close of business on the date the subdivision or combination becomes
effective, or as of the record date of such dividend, or in the event that no
record date is fixed, upon the making of such dividend.

          (b)  Reclassification, Reorganization and Consolidation.  In case of
               --------------------------------------------------
any reclassification, capital reorganization, or change in the Preferred Stock
of the Company (other than as a result of a subdivision, combination, or stock
dividend provided for in Section 8(a) above), then, as a condition of such
reclassification, reorganization, or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the holder of this Warrant, so that the holder of this
Warrant shall have the right at any time prior to the expiration of this Warrant
to purchase, at a total price equal to that payable upon the exercise of this
Warrant, the kind and amount of shares of stock and other securities and
property receivable in connection with such reclassification, reorganization, or
change by a holder of the same number of shares of Preferred Stock as were
purchasable by the holder of this Warrant immediately prior to such
reclassification, reorganization, or change. In any such case appropriate
provisions shall be made with respect to the rights and interest of the holder
of this Warrant so that the provisions hereof shall thereafter be applicable
with respect to any shares of stock or other securities and property deliverable
upon exercise hereof, and appropriate adjustments shall be made to the purchase
price per share payable hereunder, provided the aggregate purchase price shall
remain the same.

          (c)  Notice of Adjustment.  When any adjustment is required to be
               --------------------
made in the number or kind of shares purchasable upon exercise of the Warrant,
the Company shall promptly notify the holder of such event and of the number of
shares of Preferred Stock or other securities or property thereafter purchasable
upon exercise of this Warrant.

     9.  No Fractional Shares or Scrip.  No fractional shares or scrip
         -----------------------------
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor.

     10. No Stockholder Rights.  Prior to exercise of this Warrant, the holder
         ---------------------
shall not be entitled to any rights of a stockholder with respect to the Shares,
including (without limitation) the right to vote such Shares, receive dividends
or other distributions thereon, exercise preemptive rights or be notified of
stockholder meetings, and such holder shall not be entitled to any notice or
other communication concerning the business or affairs of the Company.

     11. Successors and Assigns.  The terms and provisions of this Warrant and
         ----------------------
the Agreement shall inure to the benefit of, and be binding upon, the Company
and the holders hereof and their respective successors and assigns.
<PAGE>

     12.  Amendments and Waivers.  Any term of this Warrant may be amended and
          ----------------------
the observance of any term of this Warrant may be waived (either generally or in
a particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders of 70% in interest of shares of
Preferred Stock issued or issuable upon exercise of Warrants issued pursuant to
the Agreement that are then outstanding. Any waiver or amendment effected in
accordance with this Section shall be binding upon each holder of any Shares
purchased under this Warrant at the time outstanding (including securities into
which such Shares have been converted), each future holder of all such Shares,
and the Company; provided that no amendment or waiver shall materially and
adversely affect the rights of the holder in a manner that discriminates against
such holder vis-a-vis other holders without such holders' written consent.

     13.  Effect of Amendment or Waiver.  The holder of this Warrant
          -----------------------------
acknowledges that by the operation of Section 12 hereof, the holders of at least
70% in interest of the Warrants issued pursuant to the Agreement that are then
outstanding will have the right and power to diminish or eliminate all rights of
such holder under this Warrant or under the Agreement.

     14.  Governing Law.  This Warrant shall be governed by the laws of the
          -------------
State of California as applied to agreements among California residents made and
to be performed entirely within the State of California.

CURON MEDICAL, INC.

By: ______________________________

Tile: _____________________________
<PAGE>

                                 SUBSCRIPTION

Curon Medical, Inc.
Attention:  Corporate Secretary

     The undersigned hereby elects to purchase, pursuant to the provisions of
the Warrant to purchase shares issued by Curon Medical, Inc. and held by the
undersigned, shares of Series C Preferred Stock of Curon Medical, Inc.

     Payment of the exercise price per share required under such Warrant
accompanies this Subscription.

     The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.

                              WARRANTHOLDER:

Date:___________________      By:_______________________________________

                              Address:_____________________________________
                                      _____________________________________
                                      _____________________________________

Name in which shares should be registered:_________________________________<PAGE>

                                                                    Exhibit 10.1

                              CURON MEDICAL, INC.

                           INDEMNIFICATION AGREEMENT

     This Indemnification Agreement ("Agreement") is effective as of
_______________, 2000 by and between Curon Medical, Inc., a Delaware corporation
(the "Company"), and __________________ ("Indemnitee").

     WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and its related
entities;

     WHEREAS, in order to induce Indemnitee to continue to provide services to
the Company, the Company wishes to provide for the indemnification of, and the
advancement of expenses to, Indemnitee to the maximum extent permitted by law;

     WHEREAS, the Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the Company's directors, officers, employees,
agents and fiduciaries, the significant increases in the cost of such insurance,
and the general reductions in the coverage of such insurance;

     WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited; and

     WHEREAS, the Company and Indemnitee desire to have in place the additional
protection provided by an indemnification agreement to provide indemnification
and advancement of expenses to the Indemnitee to the maximum extent permitted by
Delaware law;

     WHEREAS, in view of the considerations set forth above, the Company desires
that Indemnitee shall be indemnified and advanced expenses by the Company as set
forth herein;

     NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth below.

     1.   Certain Definitions.
          -------------------

          (a) "Change in Control" shall mean, and shall be deemed to have
occurred if, on or after the date of this Agreement, (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended) or group acting in concert, other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company acting in such
capacity or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock of
the Company, becomes the
<PAGE>

 "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing more than 50% of the total
voting power represented by the Company's then outstanding Voting Securities,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least two
thirds (2/3) of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof,
(iii) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation other than a merger or consolidation which
would result in the Voting Securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity) at least 80% of
the total voting power represented by the Voting Securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or (iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of (in one transaction or a series of related transactions) all
or substantially all of the Company's assets.

          (b) "Claim" shall mean with respect to a Covered Event:  any
threatened, pending or completed action, suit, proceeding or alternative dispute
resolution mechanism, or any hearing, inquiry or investigation that Indemnitee
in good faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other.

          (c) References to the "Company" shall include, in addition to Curon
Medical, Inc. any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger to which Curon Medical, Inc.
(or any of its wholly-owned subsidiaries) is a party which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees, agents or fiduciaries, so that if Indemnitee is
or was a director, officer, employee, agent or fiduciary of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.

          (d) "Covered Event" shall mean any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or any subsidiary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of Indemnitee while serving in
such capacity.

                                      -2-
<PAGE>

          (e) "Expenses" shall mean any and all expenses (including attorneys'
fees and all other costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, to be a witness in or to participate in, any
action, suit, proceeding, alternative dispute resolution mechanism, hearing,
inquiry or investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of any Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement.

          (f) "Expense Advance" shall mean a payment to Indemnitee pursuant to
Section 3 of Expenses in advance of the settlement of or final judgement in any
action, suit, proceeding or alternative dispute resolution mechanism, hearing,
inquiry or investigation which constitutes a Claim.

          (g) "Independent Legal Counsel" shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(d) hereof,
who shall not have otherwise performed services for the Company or Indemnitee
within the last three years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other Indemnitees under similar
indemnity agreements).

          (h) References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan; and references to "serving
at the request of the Company" shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.

          (i) "Reviewing Party" shall mean, subject to the provisions of Section
2(d), any person or body appointed by the Company's Board of Directors in
accordance with applicable law to review the Company's obligations hereunder and
under applicable law, which may include a member or members of the Company's
Board of Directors, Independent Legal Counsel or any other person or body not a
party to the particular Claim for which Indemnitee is seeking indemnification.

          (j) "Section" refers to a section of this Agreement unless otherwise
indicated.

          (k) "Voting Securities" shall mean any securities of the Company that
vote generally in the election of directors.

                                      -3-
<PAGE>

     2.   Indemnification.
          ---------------

          (a) Indemnification of Expenses.  Subject to the provisions of Section
              ---------------------------
2(b) below, the Company shall indemnify Indemnitee for Expenses to the fullest
extent permitted by law if Indemnitee was or is or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, any Claim (whether by reason of or arising in part out of
a Covered Event), including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses.

          (b) Review of Indemnification Obligations.  Notwithstanding the
              -------------------------------------
foregoing, in the event any Reviewing Party shall have determined (in a written
opinion, in any case in which Independent Legal Counsel is the Reviewing Party)
that Indemnitee is not entitled to be indemnified hereunder under applicable
law, (i) the Company shall have no further obligation under Section 2(a) to make
any payments to Indemnitee not made before such determination by such Reviewing
Party, and (ii) the Company shall be entitled to be reimbursed by Indemnitee
(who hereby agrees to reimburse the Company) for all Expenses theretofore paid
to Indemnitee to which Indemnitee is not entitled hereunder under applicable
law; provided, however, that if Indemnitee has commenced or thereafter commences
     --------  -------
legal proceedings in a court of competent jurisdiction to secure a determination
that Indemnitee is entitled to be indemnified hereunder under applicable law,
any determination made by any Reviewing Party that Indemnitee is not entitled to
be indemnified hereunder under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expenses
theretofore paid in indemnifying Indemnitee until a final judicial determination
is made with respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed). Indemnitee's obligation to reimburse the Company for
any Expenses shall be unsecured and no interest shall be charged thereon.

          (c) Indemnitee Rights on Unfavorable Determination; Binding Effect.
              --------------------------------------------------------------
If any Reviewing Party determines that Indemnitee substantively is not entitled
to be indemnified hereunder in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation seeking an initial determination by
the court or challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and, subject to
the provisions of Section 15, the Company hereby consents to service of process
and to appear in any such proceeding. Absent such litigation, any determination
by any Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.

          (d) Selection of Reviewing Party; Change in Control.  If there has not
              -----------------------------------------------
been a Change in Control, any Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately before such Change in Control), any
Reviewing Party with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnification of Expenses under this Agreement or any
other agreement or under the Company's Certificate of Incorporation or Bylaws as
now or hereafter in effect, or under any other applicable law, if desired by
Indemnitee, shall be Independent Legal Counsel selected by

                                      -4-
<PAGE>

Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent Indemnitee would be
entitled to be indemnified hereunder under applicable law and the Company agrees
to abide by such opinion. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel referred to above and to indemnify fully such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto. Notwithstanding any other provision of this Agreement, the
Company shall not be required to pay Expenses of more than one Independent Legal
Counsel in connection with all matters concerning a single Indemnitee, and such
Independent Legal Counsel shall be the Independent Legal Counsel for any or all
other Indemnitees unless (i) the employment of separate counsel by one or more
Indemnitees has been previously authorized by the Company in writing, or (ii) an
Indemnitee shall have provided to the Company a written statement that such
Indemnitee has reasonably concluded that there may be a conflict of interest
between such Indemnitee and the other Indemnitees with respect to the matters
arising under this Agreement.

          (e) Mandatory Payment of Expenses.  Notwithstanding any other
              -----------------------------
provision of this Agreement other than Section 10 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
Claim, Indemnitee shall be indemnified against all Expenses incurred by
Indemnitee in connection therewith.

     3.   Expense Advances.
          ----------------

          (a) Obligation to Make Expense Advances.  Upon receipt of a written
              -----------------------------------
undertaking by or on behalf of the Indemnitee to repay such amounts if it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
therefore by the Company hereunder under applicable law, the Company shall make
Expense Advances to Indemnitee.

          (b) Form of Undertaking.  Any obligation to repay any Expense Advances
              -------------------
hereunder pursuant to a written undertaking by the Indemnitee shall be unsecured
and no interest shall be charged thereon.

          (c) Determination of Reasonable Expense Advances.  The parties agree
              --------------------------------------------
that for the purposes of any Expense Advance for which Indemnitee has made
written demand to the Company in accordance with this Agreement, all Expenses
included in such Expense Advance that are certified by affidavit of Indemnitee's
counsel as being reasonable shall be presumed conclusively to be reasonable.

     4.   Procedures for Indemnification and Expense Advances.
          ---------------------------------------------------

          (a) Timing of Payments.  All payments of Expenses (including without
              ------------------
limitation Expense Advances) by the Company to the Indemnitee pursuant to this
Agreement shall be made

                                      -5-
<PAGE>

to the fullest extent permitted by law as soon as practicable after written
demand by Indemnitee therefor is presented to the Company, but in no event later
than thirty (30) business days after such written demand by Indemnitee is
presented to the Company, except in the case of Expense Advances, which shall be
made no later than ten (10) business days after such written demand by
Indemnitee is presented to the Company.

          (b) Notice/Cooperation by Indemnitee.  Indemnitee shall, as a
              --------------------------------
condition precedent to Indemnitee's right to be indemnified or Indemnitee's
right to receive Expense Advances under this Agreement, give the Company notice
in writing as soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the Chief Executive Officer of the Company at the
address shown on the signature page of this Agreement (or such other address as
the Company shall designate in writing to Indemnitee). In addition, Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee's power.

          (c) No Presumptions; Burden of Proof.  For purposes of this Agreement,
              --------------------------------
the termination of any Claim by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere, or its
                                                         ---------------
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by this Agreement or applicable
law. In addition, neither the failure of any Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by any
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, before the commencement of legal proceedings by Indemnitee to
secure a judicial determination that Indemnitee should be indemnified under this
Agreement under applicable law, shall be a defense to Indemnitee's claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief. In connection with any
determination by any Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder under applicable law, the burden of
proof shall be on the Company to establish that Indemnitee is not so entitled.

          (d) Notice to Insurers.  If, at the time of the receipt by the Company
              ------------------
of a notice of a Claim pursuant to Section 4(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Claim in
accordance with the terms of such policies.

          (e) Selection of Counsel.  In the event the Company shall be obligated
              --------------------
hereunder to provide indemnification for or make any Expense Advances with
respect to the Expenses of any Claim, the Company, if appropriate, shall be
entitled to assume the defense of such Claim with counsel approved by Indemnitee
(which approval shall not be unreasonably withheld) upon the

                                      -6-
<PAGE>

delivery to Indemnitee of written notice of the Company's election to do so.
After delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees or expenses of separate counsel
subsequently retained by or on behalf of Indemnitee with respect to the same
Claim; provided that, (i) Indemnitee shall have the right to employ Indemnitee's
separate counsel in any such Claim at Indemnitee's expense and (ii) if (A) the
employment of separate counsel by Indemnitee has been previously authorized by
the Company, (B) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense, or (C) the Company shall not continue to retain such counsel to
defend such Claim, then the fees and expenses of Indemnitee's separate counsel
shall be Expenses for which Indemnitee may receive indemnification or Expense
Advances hereunder.

     5.   Additional Indemnification Rights; Nonexclusivity.
          -------------------------------------------------

          (a) Scope.  The Company hereby agrees to indemnify the Indemnitee to
              -----
the fullest extent permitted by law, notwithstanding that such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute. In
the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a
member of its board of directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder except as set forth in Section 10(a) hereof.

          (b) Nonexclusivity.  The indemnification and the payment of Expense
              --------------
Advances provided by this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the Company's Certificate of Incorporation, its
Bylaws, any other agreement, any vote of stockholders or disinterested
directors, the General Corporation Law of the State of Delaware, or otherwise.
The indemnification and the payment of Expense Advances provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though subsequent thereto
Indemnitee may have ceased to serve in such capacity.

     6.   No Duplication of Payments.  The Company shall not be liable under
          --------------------------
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's Certificate of
Incorporation, Bylaws or otherwise) of the amounts otherwise payable hereunder.

                                      -7-
<PAGE>

     7.   Partial Indemnification.  If Indemnitee is entitled under any
          -----------------------
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

     8.   Mutual Acknowledgment.  Both the Company and Indemnitee acknowledge
          ---------------------
that in certain instances, federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.

     9.   Liability Insurance.  To the extent the Company maintains liability
          -------------------
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are provided to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.

     10.  Exceptions.  Notwithstanding any other provision of this Agreement,
          ----------
the Company shall not be obligated pursuant to the terms of this Agreement:

          (a) Excluded Action or Omissions.  To indemnify or make Expense
              ----------------------------
Advances to Indemnitee with respect to Claims arising out of acts, omissions or
transactions for which Indemnitee is prohibited from receiving indemnification
under applicable law.

          (b) Claims Initiated by Indemnitee.  To indemnify or make Expense
              ------------------------------
Advances to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, counterclaim or crossclaim, except (i)
with respect to actions or proceedings brought to establish or enforce a right
to indemnification under this Agreement or any other agreement or insurance
policy or under the Company's Certificate of Incorporation or Bylaws now or
hereafter in effect relating to Claims for Covered Events, (ii) in specific
cases if the Company's Board of Directors has approved the initiation or
bringing of such Claim, or (iii) as otherwise required under Section 145 of the
Delaware General Corporation Law, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, Expense Advances, or
insurance recovery, as the case may be.

          (c) Lack of Good Faith.  To indemnify Indemnitee for any Expenses
              ------------------
incurred by the Indemnitee with respect to any action instituted (i) by
Indemnitee to enforce or interpret this Agreement, if a court having
jurisdiction over such action determines as provided in Section 13 that each of
the material assertions made by the Indemnitee as a basis for such action was
not made in

                                      -8-
<PAGE>

good faith or was frivolous, or (ii) by or in the name of the Company to enforce
or interpret this Agreement, if a court having jurisdiction over such action
determines as provided in Section 13 that each of the material defenses asserted
by Indemnitee in such action was made in bad faith or was frivolous.

          (d) Claims Under Section 16(b).  To indemnify Indemnitee for Expenses
              --------------------------
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

     11.  Counterparts.  This Agreement may be executed in one or more
          ------------
counterparts, each of which shall constitute an original.

     12.  Binding Effect; Successors and Assigns.  This Agreement shall be
          --------------------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouses, heirs and
personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place. This Agreement
shall continue in effect regardless of whether Indemnitee continues to serve as
a director, officer, employee, agent or fiduciary (as applicable) of the Company
or of any other enterprise at the Company's request.

     13.  Expenses Incurred in Action Relating to Enforcement or Interpretation.
          ---------------------------------------------------------------------
In the event that any action is instituted by Indemnitee under this Agreement or
under any liability insurance policies maintained by the Company to enforce or
interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be
indemnified for all Expenses incurred by Indemnitee with respect to such action
(including without limitation attorneys' fees), regardless of whether Indemnitee
is ultimately successful in such action, unless as a part of such action a court
having jurisdiction over such action makes a final judicial determination (as to
which all rights of appeal therefrom have been exhausted or lapsed) that each of
the material assertions made by Indemnitee as a basis for such action was not
made in good faith or was frivolous; provided, however, that until such final
judicial determination is made, Indemnitee shall be entitled under Section 3 to
receive payment of Expense Advances hereunder with respect to such action.  In
the event of an action instituted by or in the name of the Company under this
Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee
shall be entitled to be indemnified for all Expenses incurred by Indemnitee in
defense of such action (including without limitation costs and expenses incurred
with respect to Indemnitee's counterclaims and cross-claims made in such
action), unless as a part of such action a court having jurisdiction over such
action makes a final judicial determination (as to which all rights of appeal
therefrom have been exhausted or lapsed) that each of the material defenses
asserted by Indemnitee in such action was made in bad faith or was frivolous;
provided, however, that until

                                      -9-
<PAGE>

such final judicial determination is made, Indemnitee shall be entitled under
Section 3 to receive payment of Expense Advances hereunder with respect to such
action.

     14.  Period of Limitations.  No legal action shall be brought and no cause
          ---------------------
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two year period; provided, however, that if any shorter
                                    --------  -------
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.

     15.  Notice.  All notices, requests, demands and other communications under
          ------
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and signed for by the party addressed, on the date of such
delivery, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked.  Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.

     16.  Consent to Jurisdiction.  The Company and Indemnitee each hereby
          -----------------------
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.

     17.  Severability.  The provisions of this Agreement shall be severable in
          ------------
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including without limitation each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

     18.  Choice of Law.  This Agreement, and all rights, remedies, liabilities,
          -------------
powers and duties of the parties to this Agreement, shall be governed by and
construed in accordance with the laws of the State of Delaware as applied to
contracts between Delaware residents entered into and to be performed entirely
in the State of Delaware without regard to principles of conflicts of laws.

     19.  Subrogation.  In the event of payment under this Agreement, the
          -----------
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

                                      -10-
<PAGE>

     20.  Amendment and Termination.  No amendment, modification, termination or
          -------------------------
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed to be or shall constitute a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver.

     21.  Integration and Entire Agreement.  This Agreement sets forth the
          --------------------------------
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.

     22.  No Construction as Employment Agreement.  Nothing contained in this
          ---------------------------------------
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries or affiliated entities.

                                      -11-
<PAGE>

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

CURON MEDICAL, INC.

By:                                            AGREED TO AND ACCEPTED
           _______________________

Print Name:                                    INDEMNITEE:
           _______________________

Title:
           _______________________
                                               _______________________________
Address:  735 Palomor Avenue                   (signature)
          Sunnyvale, CA 94086
                                               Print Name:
                                                          ____________________

                                               Address:
                                                       _______________________

                                      -12-

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