Document:

Amended and Restated Investors' Rights Agreement

 EXHIBIT 4.2 
 Execution Copy 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 
 This AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (the “Agreement”) is made as of the 6th day of July, 2006, by and among EnteroMedics
Inc., a Delaware corporation (the “Company”), and the investors listed on Schedule A hereto, each of which is herein referred to as an “Investor.” 
 RECITALS 
 WHEREAS, the Company and certain Investors are parties to the
Series C Preferred Stock Purchase Agreement of even date herewith (the “Series C Agreement”), pursuant to which such Investors are purchasing shares of the Company’s Series C Preferred Stock; and 
 WHEREAS, the Company and certain of the Investors (the “Existing Investors”) have previously entered into that certain Investors’ Rights
Agreement dated as of July 31, 2004 (the “Prior Agreement”) and, pursuant to Section 4.7 of the Prior Agreement, desire to amend and restate the Prior Agreement and to accept the rights created pursuant hereto in lieu of the
rights created under the Prior Agreement; and 
 WHEREAS, as a material inducement to the Investors who are a party to the Series C Agreement
to purchase shares of Series C Preferred Stock, the Parties desire to replace by substitution the Prior Agreement with this Amended and Restated Investor Rights Agreement. 
 AGREEMENT 
 NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained
herein, the Parties hereby agree as follows: 
 1. Registration Rights. The Parties covenant and agree as follows: 
 1.1 Definitions. For purposes of this Section 1: 
 (a) The term “Act” means the Securities Act of 1933, as amended. 
 (b) The term “Common
Stock” means the Company’s Common Stock, par value $0.01 per share. 
 (c) The term “Form S-3” means such form
under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the
SEC. 
 (d) The term “Holder” means any person owning or having the right to acquire Registrable Securities or any assignee
thereof in accordance with Section 1.11 hereof. 

 (e) The term “Initial Offering” means the Company’s first firm commitment underwritten
public offering of its Common Stock under the Act. 
 (f) The term “1934 Act” means the Securities Exchange Act of 1934, as
amended. 
 (g) The term “Preferred Stock” means the Company’s Series A Preferred Stock, Series B Preferred Stock and Series
C Preferred Stock, each with a par value of $0.01 per share. 
 (h) The terms “register,” “registered,” and
“registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document.

 (i) The term “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock
(including Preferred Stock issued upon the exercise of warrants outstanding on the date hereof) and (ii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is
issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of, the shares referenced in (i) above, excluding in all cases, however, any Registrable Securities (x) sold by a person in a transaction in
which his rights under this Section 1 are not assigned or (y) sold by a person to the public either pursuant to a registration statement or Rule 144. 
 (j) The number of shares of “Registrable Securities” outstanding shall be determined by the number of shares of Common Stock outstanding that are, and the number of shares of Common Stock issuable pursuant
to then exercisable or convertible securities that are, Registrable Securities. 
 (k) The term “Rule 144” shall mean Rule 144
under the Act. 
 (l) The term “SEC” shall mean the Securities and Exchange Commission. 
 1.2 Request for Registration. 
 (a)
Subject to the conditions of this Section 1.2, if at any time after the earlier of (i) three (3) years after the date of this Agreement or (ii) six (6) months after the effective date of the Initial Offering, the Company
shall receive a written request from the Holders of fifty percent (50%) or more of the Registrable Securities then outstanding (for purposes of this Section 1.2, the “Initiating Holders”) that the Company file a registration
statement under the Act covering the registration of at least 20% of the Registrable Securities then outstanding with an anticipated aggregate offering price of at least $5,000,000 then the Company shall, within twenty (20) days of the receipt
thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 1.2, use all commercially reasonable efforts to effect, as soon as practicable, the registration under the Act of all Registrable
Securities that the Holders request to be registered in a written request received by the Company within 

  

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twenty (20) days of the mailing of the Company’s notice pursuant to this Section 1.2(a); provided, however, that only one such request
may be made by Holders during any twelve (12) month period. 
 (b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 1.2 and the Company shall include such information in the written notice referred to in
Section 1.2(a). In such event the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable
Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders (which underwriter or underwriters shall be reasonably acceptable to the
Company). Notwithstanding any other provision of this Section 1.2, if the underwriter advises the Company that marketing factors require a limitation on the number of securities underwritten (including Registrable Securities), then the Company
shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities pro rata
based on the number of Registrable Securities held by all such Holders (including the Initiating Holders). In no event shall any Registrable Securities be excluded from such underwriting unless all other securities are first excluded. Any
Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration. 
 (c) Notwithstanding the
foregoing, the Company shall not be required to effect a registration pursuant to this Section 1.2: 
 (i) in any particular
jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Act;
or 
 (ii) after the Company has effected two (2) registrations pursuant to this Section 1.2, and such registrations have been
declared or ordered effective; or 
 (iii) during the period starting with the date ninety (90) days prior to the Company’s good
faith estimate of the date of the filing of and ending on a date one hundred eighty (180) days following the effective date of a Company-initiated registration subject to Section 1.3 below, provided that the Company delivers notice of such
proposed registration to the holders of the Registrable Securities within 30 days of any registration request by the holders and that the Company is actively employing in good faith all commercially reasonable efforts to cause such registration
statement to become effective; or 
  

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 (iv) if the Initiating Holders propose to dispose of Registrable Securities that may immediately be
registered on Form S-3 pursuant to Section 1.4 hereof; or 
 (v) if the Company shall furnish to Holders requesting a registration
statement pursuant to this Section 1.2 a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of
the request of the Initiating Holders, provided that such right shall be exercised by the Company not more than once in any twelve (12) month period and provided further that the Company shall not register any securities for the account of
itself or any other stockholder during such ninety (90) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or
transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a
registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered). 
 1.3 Company Registration. 
 (a) If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the Company for stockholders other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities (other than a
registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include
substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon
conversion of debt securities that are also being registered), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing
of such notice by the Company in accordance with Section 6.5, the Company shall, subject to the provisions of Section 1.3(c), use all commercially reasonable efforts to cause to be registered under the Act all of the Registrable Securities
that each such Holder requests to be registered. 
 (b) Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 1.3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn
registration shall be borne by the Company in accordance with Section 1.7 hereof. 
 (c) Underwriting Requirements. In
connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall 

  

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not be required under this Section 1.3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by the Company (or by other persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with such underwriters, and then only
in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in
such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, that the underwriters determine in their sole discretion will not jeopardize the success of the offering. In no event shall any Registrable Securities be excluded from such offering
unless all other stockholders’ securities have first been excluded. In the event that the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable
Securities that are included in such offering shall be apportioned pro rata among the selling Holders based on the number of Registrable Securities held by all selling Holders or in such other proportions as shall mutually be agreed to by all such
selling Holders. Notwithstanding the foregoing, in no event shall (i) the amount of securities of the selling Holders included in the offering be reduced below thirty percent (30%) of the total amount of securities included in such
offering, unless such offering is the initial public offering of the Company’s securities, in which case the selling Holders may be excluded if the underwriters make the determination described above and no other stockholder’s securities
are included in such offering. For purposes of the preceding sentence concerning apportionment, for any selling stockholder that is a Holder of Registrable Securities and that is a venture capital fund, mutual fund, business trust, partnership or
corporation, the affiliated venture capital funds, mutual funds, business trusts, partners, retired partners and stockholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate amount of Registrable Securities owned by all
such related entities and individuals. 
 1.4 Form S-3 Registration. In case the Company shall receive from Holders of Registrable
Securities (for purposes of this Section 1.4, the “Initiating Holders”) a written request or requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of
the Registrable Securities owned by such Holder or Holders, the Company shall: 
 (a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders; and 
 (b) use all commercially reasonable efforts to
effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as
are specified in such request, together with all or such portion of the Registrable Securities of any other Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written
notice from the Company, provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 1.4: 
 (i) if Form S-3 is not available for such offering by the Holders; 
  

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 (ii) if the Holders, together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of less than $1,000,000; 
 (iii) if the Company has, within the twelve (12) month period preceding the date of such request, already effected two registrations on
Form S-3 for the Holders pursuant to this Section 1.4; 
 (iv) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance; 
 (v) during the period starting with the date ninety (90) days prior to the Company’s good faith estimate of the date of the filing of and ending on a date one hundred eighty (180) days following the
effective date of a Company-initiated registration subject to Section 1.3 below, provided that the Company delivers notice of such proposed registration to the holders of the Registrable Securities within 30 days of any registration request by
the holders and that the Company is actively employing in good faith all commercially reasonable efforts to cause such registration statement to become effective; or 
 (vi) if the Company shall furnish to the Initiating Holders a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than
ninety (90) days after receipt of the request of the Initiating Holders, provided that such right shall be exercised by the Company not more than once in any twelve (12) month period and provided further that the Company shall not register
any securities for the account of itself or any other stockholder during such ninety (90) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a
corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the
Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered). 
 (c) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise
the Company as a part of their request made pursuant to this Section 1.4 and the Company shall include such information in the written notice referred to in Section 1.4(a). The provisions of Section 1.2(b) shall be applicable to such
request (with the substitution of Section 1.4 for references to Section 1.2). 
  

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 (d) Subject to the foregoing, the Company shall file a registration statement covering the Registrable
Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders. Registrations effected pursuant to this Section 1.4 shall not be counted as requests for
registration effected pursuant to Sections 1.2. 
 1.5 Obligations of the Company. Whenever required under this Section 1 to
effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible: 
 (a) prepare and file
with the SEC a registration statement with respect to such Registrable Securities and use all commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed;

 (b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement; 
 (c) furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act,
and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them; 
 (d) use all commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions; 
 (e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering; 
 (f) notify each Holder of Registrable Securities covered by such registration
statement at any time when a prospectus relating thereto is required to be delivered under the Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will use reasonable efforts to amend
or supplement such prospectus in order to cause such prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing. 
  

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 (g) Use its reasonable efforts to furnish, on the date that such Registrable Securities are delivered to
the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily
given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters. 
 (h)
cause all such Registrable Securities registered pursuant to this Section 1 to be listed on a national exchange or trading system and on each securities exchange and trading system on which similar securities issued by the Company are then
listed; and 
 (i) provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number
for all such Registrable Securities, in each case not later than the effective date of such registration. 
 1.6 Information from
Holder. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such
information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Holder’s Registrable Securities. 
 1.7 Expenses of Registration. All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Sections 1.2, 1.3 and 1.4, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees
and disbursements of one counsel for the selling Holders shall be borne by the Company. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 1.2 or
Section 1.4 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses pro rata based upon
the number of Registrable Securities that were to be included in the withdrawn registration), unless, in the case of a registration requested under Section 1.2, the Holders of a majority of the Registrable Securities requested to be included in
such registration agree to forfeit their right to one demand registration pursuant to Section 1.2 and provided, however, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition,
business or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall
not be required to pay any of such expenses and shall retain their rights pursuant to Section 1.2 and 1.4. 
  

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 1.8 Delay of Registration. No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1. 
 1.9 Indemnification. In the event any Registrable Securities are included in a registration statement under this Section 1: 
 (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, members, officers, directors, trustees and
stockholders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the 1934 Act,
against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state in such registration
statement a material fact required to be stated therein, or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities laws or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities laws, and the Company will reimburse each such Holder, underwriter, controlling person or other aforementioned person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the indemnity agreement contained in this subsection l.9(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such
registration by any such Holder, underwriter, controlling person or other aforementioned person. 
 (b) To the extent permitted by law, each
selling Holder will indemnify and hold harmless, severally and not jointly, the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the
Act, legal counsel and accountants for the Company, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws, insofar
as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection with such registration; and 

  

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each such Holder will reimburse any person intended to be indemnified pursuant to this subsection l.9(b) for any legal or other expenses reasonably incurred
by such person in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the indemnity agreement contained in this subsection l.9(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld), and provided that in no event shall any
indemnity under this subsection l.9(b) exceed the net proceeds from the offering received by such Holder. 
 (c) Promptly after receipt
by an indemnified party under this Section 1.9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this
Section 1.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of liability to the indemnified party under this Section 1.9 to the extent of such prejudice, but the omission to
so deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 1.9. 
 (d) If the indemnification provided for in this Section 1.9 is held by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand in connection with the statements or
omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations; provided, however, that no contribution by any Holder, when combined with any amounts paid by such Holder
pursuant to Section 1.9(b), shall exceed the net proceeds from the offering received by such Holder. The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission. 
  

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 (e) The obligations of the Company and Holders under this Section 1.9 shall survive the completion
of any offering of Registrable Securities in a registration statement under this Section 1 and otherwise. 
 1.10 Reports Under the
1934 Act. With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to: 
 (a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after the effective date of the Initial Offering; 
 (b) file with the SEC in a timely
manner all reports and other documents required of the Company under the Act and the 1934 Act; and 
 (c) furnish to any Holder, so long as
the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after the effective date of the first registration
statement filed by the Company), the Act and the 1934 Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it
so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to avail any Holder of
any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form. 
 1.11
Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 1 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such
securities that (i) is a subsidiary, parent, partner, limited partner, retired partner, member, retired member, affiliated venture capital fund, affiliated mutual fund, affiliated business trust or stockholder of a Holder, (ii) is a
Holder’s family member or trust for the benefit of an individual Holder, or (iii) after such assignment or transfer, holds at least 1,000,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock
dividends, combinations or the like), provided: (a) the Company is, within ten (10) days after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which
such registration rights are being assigned; (b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including, without limitation, the provisions of Section 1.13 below;
(c) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act; and (d) such transferee is not a direct competitor of
the Company, as determined in the good faith judgment of the Board of Directors, at the time of such transfer. 
 1.12 Limitations on
Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the holders 

  

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of at least sixty-three percent (63%) of the Registrable Securities held by holders of the Company’s Series B Preferred Stock and Series C
Preferred Stock (together and not as a separate class on an as-converted basis), enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder (a) to include
any of such securities in any registration filed under Section 1.2, Section 1.3 or Section 1.4 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration
only to the extent that the inclusion of such securities will not reduce the amount of the Registrable Securities of the Holders that are included or (b) to demand registration of their securities. 
 1.13 “Market Stand-Off” Agreement. 
 (a) Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the Company’s Initial Offering and ending on
the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock held immediately
prior to the effectiveness of the Registration Statement for such offering, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise. The foregoing provisions of this Section 1.13 shall apply only to the
Company’s initial offering of equity securities, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall only be applicable to the Holders if all officers, directors and greater than two
percent (2%) stockholders of the Company enter into similar agreements and such restrictions are not waived as to them. The underwriters in connection with the Company’s Initial Offering are intended third-party beneficiaries of this
Section 1.13 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in the
Company’s Initial Offering that are consistent with this Section 1.13 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the
underwriters shall apply to all Holders subject to such agreements pro rata based on the number of shares subject to such agreements. 
 In
order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the
end of such period. 
 (b) Each Holder agrees that a legend reading substantially as follows shall be placed on all certificates
representing all Registrable Securities of each Holder (and the shares or securities of every other person subject to the restriction contained in this Section 1.13): 
 THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD OF UP TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION STATEMENT FILED UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE SHARES. 
  

 12 

 1.14 Termination of Registration Rights. No Holder shall be entitled to exercise any right
provided for in this Section 1 (i) after five (5) years following the consummation of the Initial Offering, (ii) as to any Holder, such earlier time after the Initial Offering at which all Registrable Securities held by such
Holder (together with any affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144) that holds less than one percent (1%) of the Company’s outstanding Common Stock (treating all shares of Preferred Stock
on an as converted basis) and all such Registrable Securities can be sold in any three (3)-month period without registration in compliance with Rule 144 or (iii) after the consummation of a Liquidation Event, as that term is defined
in the Company’s Amended and Restated Certificate of Incorporation (as amended from time to time) (the “Restated Certificate”). 
 1.15 Black-Out Period. 
 (a) Following the effectiveness of any registration statement and the filings with any state
securities commissions, the Company shall be entitled to postpone or suspend, for a reasonable period of time, but in any event such period shall not exceed ninety days (the “Suspension Period”) sales of Registrable Securities under such
registration statement or any such filings upon written notice to the Holders that the Company has determined that such sales would in the good faith judgment of the Board of Directors of the Company (a) materially adversely impair the
consummation of any pending or proposed material offering or sale of any class of securities by the Company or (b) require disclosure of material nonpublic information that, if disclosed at such time, would be materially harmful to the interest
of the Company and its shareholders; provided, however, that during any such period all executive officers and directors of the Company are also prohibited from selling securities of the Company (or any security of any of the Company’s
subsidiaries or affiliates). The Holder may recommence effecting sales of the Registrable Securities pursuant to the registration statement or such filings following further notice to such effect from the Company, such notice to be given by the
Company not later than five (5) business days after the conclusion of the reason for the postponement or suspension. The Company shall use its best efforts to limit the length of any such period of suspended sales and shall use its best efforts
to correct, amend or update any incomplete or misleading registration statement. No more than two (2) such Suspension Periods shall occur in any twelve month period. 
 (b) In the event of the suspension of effectiveness of any registration statement or other filings pursuant to this Section 1.15, the applicable
time period during which such registration statement or other filing is to remain effective shall be extended by that number of days equal to the number of days the effectiveness of such registration statement or filing was suspended. 
  

 13 

 2. Covenants of the Company. 
 2.1 Delivery of Financial Statements. So long as any shares of Preferred Stock remain outstanding, the Company shall deliver to each Investor (or
transferee of an Investor) that holds at least 1,000,000 shares of Registrable Securities (as adjusted for stock splits, stock dividends, combinations or the like) (a “Major Investor”): 
 (a) as soon as practicable, but in any event within one hundred and twenty (120) days after the end of each fiscal year of the Company, an income
statement for such fiscal year, a balance sheet of the Company and statement of stockholders’ equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail, prepared
in accordance with generally accepted accounting principles (“GAAP”), and audited and certified by independent public accountants selected by the Company and approved by the directors nominated by the holders of Series B Preferred Stock
and Series C Preferred Stock pursuant to Sections 3.1 and 3.2 of the Second Amended and Restated Voting Agreement among the Company and the other parties thereto dated as of the date hereof; 
 (b) as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal
year of the Company, an unaudited income statement, statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter in reasonable detail including a comparison to plan figures for such period,
prepared in accordance with generally accepted accounting principles consistently applied (except as noted therein), with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made; and

 (c) within forty-five (45) days of the end of each month, an unaudited income statement and statement of cash flows and balance
sheet for and as of the end of such month, in reasonable detail including a comparison to plan figures for such period, prepared in accordance with generally accepted accounting principles consistently applied (except as noted therein), with the
exception that no notes need be attached to such statements and year-end audit adjustments may not have been made; and 
 (d) as soon as
practicable, but in any event at least thirty (30) days prior to the end of each fiscal year, a capital and operating budget and business plan for the next fiscal year, prepared on a monthly basis, including balance sheets, income statements
and statements of cash flows for such months and, as soon as prepared, any other budgets or revised budgets prepared by the Company. 
 2.2
Inspection. The Company shall permit each Major Investor that holds at least 3,000,000 shares of Registrable Securities (as adjusted for stock splits, stock dividends, combinations or the like), at such Major Investor’s expense, to visit
and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be 

  

 14 

 
requested by such Major Investor; provided, however, that the Company shall not be obligated pursuant to this Section 2.2 to provide access to
any information that it reasonably considers to be a trade secret or similar confidential information. 
 2.3 Termination of Information
and Inspection Covenants. The covenants set forth in Sections 2.1 and 2.2 shall terminate and be of no further force or effect upon the earlier to occur of (i) the consummation of the sale of securities pursuant to a registration
statement filed by the Company under the Act in connection with the firm commitment underwritten offering of its securities to the general public, (ii) when the Company first becomes subject to the periodic reporting requirements of
Sections 13 or 15(d) of the 1934 Act, whichever event shall first occur or (iii) the consummation of a Liquidation Event, as that term is defined in the Restated Certificate. 
 2.4 Right of First Offer. Subject to the terms and conditions specified in this Section 2.4, the Company hereby grants to each Major Investor
who holds shares of Preferred Stock a right of first offer with respect to future sales by the Company of its Shares (as hereinafter defined). For purposes of this Section 2.4, the term “Major Investor” includes any general partners
and affiliates of a Major Investor. A Major Investor shall be entitled to apportion the right of first offer hereby granted it among itself and its partners and affiliates in such proportions as it deems appropriate. 
 Each time the Company proposes to offer any shares of, or securities convertible into or exchangeable or exercisable for any shares of, its capital stock
(“Shares”), the Company shall first make an offering of such Shares to each Major Investor who holds shares of Preferred Stock in accordance with the following provisions: 
 (a) The Company shall deliver a notice in accordance with Section 3.5 (“Notice”) to the Major Investors stating (i) its bona fide
intention to offer such Shares, (ii) the number of such Shares to be offered and (iii) the price and terms upon which it proposes to offer such Shares. 
 (b) By written notification received by the Company within twenty (20) calendar days after the giving of Notice, each Major Investor may elect to purchase, at the price and on the terms specified in the Notice,
up to that portion of such Shares that equals the product of the number of Shares times the fraction obtained by dividing (i) the sum of the total number of shares of (A) Common Stock issuable or issued upon conversion of the Preferred
Stock then held by such Major Investor and (B) Common Stock issuable upon exercise of any options or warrants then held by such Major Investor by (ii) the sum of the total number of shares of (A) Common Stock, (B) Common Stock
issuable upon the conversion of the Preferred Stock and (C) Common Stock issuable upon any exercise of any options or warrants then outstanding. The Company shall promptly, in writing, inform each Major Investor that elects to purchase all the
shares available to it (a “Fully-Exercising Investor”) of any other Major Investor’s failure to do likewise. During the ten (10) day period commencing after such information is given, each Fully-Exercising Investor may elect to
purchase that portion of the Shares for which Major Investors were entitled to subscribe, but which were not subscribed for by the Major Investors, that is equal to the proportion that the number of shares of (A) Common Stock issuable or issued
upon conversion of the Preferred Stock then held by such Fully- 

  

 15 

 
Exercising Investor and (B) Common Stock issuable upon exercise of any options or warrants then held by such Fully-Exercising Investor bears to the
total number of shares of (A) Common Stock, (B) Common Stock issuable upon the conversion of the Preferred Stock and (C) Common Stock issuable upon any exercise of any options or warrants then outstanding. 
 (c) If all Shares that Major Investors are entitled to obtain pursuant to subsection 2.4(b) are not elected to be obtained as provided in
subsection 2.4(b) hereof, the Company may, during the ninety (90) day period following the expiration of the period provided in subsection 2.4(b) hereof, offer the remaining unsubscribed portion of such Shares to any person or persons
at a price not less than that, and upon terms no more favorable to the offeree than those, specified in the Notice. If the Company does not enter into an agreement for the sale of the Shares within such period, or if such is not consummated within
sixty (60) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Shares shall not be offered unless first reoffered to the Major Investors in accordance herewith. 
 (d) The right of first offer in this Section 2.4 shall not be applicable to (i) the issuance or sale of shares of Common Stock (or options
therefor) to employees, directors, consultants and other service providers for the primary purpose of soliciting or retaining their services pursuant to plans or agreements approved by the Company’s Board of Directors; (ii) the issuance of
securities pursuant to a bona fide, firmly underwritten public offering of shares of Common Stock registered under the Act, (iii) the issuance of securities pursuant to the conversion or exercise of convertible or exercisable securities,
(iv) the issuance of securities in connection with a bona fide business acquisition of or by the Company approved by the Company’s Board of Directors, whether by merger, consolidation, sale of assets, sale or exchange of stock or
otherwise, (v) the issuance and sale of Series C Preferred Stock pursuant to the Series C Agreement, or (vi) the issuance of stock, warrants or other securities or rights to persons or entities with which the Company has business
relationships, provided such issuances are primarily for other than equity financing purposes and which issuances have been approved by a majority of the Board of Directors. In addition to the foregoing, the right of first offer in this
Section 2.4 shall not be applicable with respect to any Major Investor in any subsequent offering of Shares if (i) at the time of such offering, the Major Investor is not an “accredited investor,” as that term is then defined in
Rule 501(a) of the Act and (ii) such offering of Shares is otherwise being offered only to accredited investors. 
 (e) The rights
provided in this Section 2.4 may not be assigned or transferred by any Major Investor to a competitor of the Company (as determined in good faith by the Board of Directors of the Company). 
 (f) The covenants set forth in this Section 2.4 shall terminate and be of no further force or effect upon the consummation of (i) the
Company’s sale of its Common Stock or other securities pursuant to a Qualified Public Offering, as that term is defined in the Restated Certificate or (ii) a Liquidation Event, as that term is defined in the Restated Certificate.

 2.5 Proprietary Information and Inventions Agreements. The Company shall require all employees and consultants with access to
confidential information to 

  

 16 

 
execute and deliver a proprietary information and inventions agreement or a consulting agreement, as applicable, in substantially the form approved by the
Company’s Board of Directors. 
 2.6 Director and Officer Liability Insurance. To the extent that such coverage is available on
commercially reasonable terms (as determined in the good faith judgment of the Board of Directors), the Company shall purchase and at all times maintain director and officer liability insurance with coverage limits customary for similarly situated
companies. 
 2.7 Reimbursement of Expenses. The Company shall reimburse members of the Board of Directors for reasonable expenses
incurred in connection with the performance of their duties as a member of the Board of Directors. 
 2.8 Qualified Small Business
Stock. 
 (a) The Company shall not make any purchases of its stock or take other actions which would jeopardize the status of the Series
B Preferred or Series C Preferred as “qualified small business stock” under Section 1202 of the Internal Revenue Code. 
 (b)
The Company will use commercially reasonable efforts to comply with any applicable filing and reporting requirements of Section 1202 of the Internal Revenue Code, as amended or as may be amended from time to time, and any regulations
promulgated thereunder; provided, however, that “reasonable efforts” as used in this Section 2.7(b) shall not be construed to require the Company to operate its business in a manner which would adversely affect its business,
limit its future prospects or alter the timing or resource allocation related to its planned operations or financing activities. 
 2.9
Compensation and Audit Committees. The Company’s Board of Directors shall create and maintain a Compensation Committee and an Audit Committee, both of which shall consist of no more than four directors, at least two of which shall be
directors designated by the directors elected by the holders of Preferred Stock and one of whom shall be the director that serves as the Chief Executive Officer of the Company (the “CEO Director”); provided, that the CEO Director shall be
a non-voting member of such committees. 
 2.10 Directors’ Liability and Indemnification. The Company’s Certificate of
Incorporation and Bylaws shall provide (a) for elimination of the liability of director to the maximum extent permitted by law and (b) for indemnification of directors for acts on behalf of the Company to the maximum extent permitted by
law. In addition, the Company shall enter into and use its best efforts to at all times maintain indemnification agreements substantially in the form attached as Exhibit G to the Series C Agreement with each of its directors to indemnify such
directors to the maximum extent permissible under applicable law. 
 2.11 Visitation Rights. The Company shall allow one
representative designated by Onset Ventures to attend all meetings of the Company’s Board of Directors in a nonvoting capacity, and in connection therewith, the Company shall give such representative copies of all notices, minutes, consents and
other materials, financial or otherwise, which the Company provides to its Board of Directors; provided, however, that the Company reserves the 

  

 17 

 
right to exclude such representative from access to any material or meeting or portion thereof if the Company believes upon advice of counsel that such
exclusion is reasonably necessary to preserve the attorney-client privilege, to protect confidential information or for other similar reasons. The decision of the Board with respect to the privileged or confidential nature of such information shall
be final and binding. 
 3. Miscellaneous. 
 3.1 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective heirs, personal representatives,
successors and permitted assigns (including transferees of any shares of Registrable Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 
 3.2 Governing Law. This Agreement shall be interpreted under the laws of the State of Minnesota without reference to Minnesota conflicts of law provisions. 
 3.3 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument. 
 3.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement. 
 3.5 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed facsimile if sent during normal business hours of the recipient; if not, then on
the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth on the signature pages attached hereto (or at such other addresses as shall be specified by
notice given in accordance with this Section 3.5). 
 3.6 Expenses. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 
 3.7 Entire Agreement; Amendments and Waivers. This Agreement (including the Exhibits hereto, if any) constitutes the full and entire understanding
and agreement among the parties with regard to the subjects hereof and thereof. Any term of this Agreement (other than Section 2.1, Section 2.2, Section 2.3 and Section 2.4) may be amended and the 

  

 18 

 
observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the
written consent of the Company and the holders of at least sixty-three percent (63%) of the issued and outstanding shares of Series B Preferred Stock and Series C Preferred Stock (together and not as a separate class). The provisions
of Section 2.1, Section 2.2, Section 2.3 and Section 2.4 may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the
holders of at least sixty-three percent (63%) of the Registrable Securities that are held by the Major Investors; provided, however, that notwithstanding any such waiver of rights under Section 2.4, in the event that any Major Investor
actually purchases Shares in any such offering by the Company, then each other Major Investor shall be permitted to participate on a pro rata basis (based on the level of participation of the other Major Investor purchasing the largest portion of
such other Major Investor’s pro rata share) in accordance with the other provisions, including notice and election periods, as set forth in Section 2.4(a) and (b). Any amendment or waiver effected in accordance with this paragraph shall be
binding upon all the parties hereto. 
 3.8 Severability. If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision(s) shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms. 
 3.9 Aggregation of Stock. All shares of Registrable Securities held or acquired by affiliated entities (including affiliated venture capital
funds) or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement. 
 3.10
Restrictions on Transfer. In addition to, and not in limitation of the rights of an Investor to transfer its rights hereunder, an Investor’s rights and obligations hereunder may be transferred to any of such Investor’s
“affiliates,” as that term is defined under the Securities Act, so long as such affiliate is an “accredited investor” (within the meaning of Regulation D under the Securities Act); provided that the prospective transferee agrees
in writing to be subject to the terms hereof to the same extent as if he, she or it were an original Investor hereunder. 
 3.11
Substitution. This Amended and Restated Investors’ Rights Agreement replaces by substitution that certain Investors’ Rights Agreement, dated July 31, 2004, by and among the Company and the parties listed on Schedule A thereto.

  

 19 

 IN WITNESS WHEREOF, the parties have executed this Amended and Restated Investors’ Rights Agreement
as of the date first above written. 
  

			
	ENTEROMEDICS INC.
		
	By:	 	 /s/ Mark B. Knudson

	Name:	 	Mark B. Knudson
	Title:	 	President and Chief Executive Officer
		
	Address:	 	2800 Patton Road
		 	St. Paul, MN 55113

 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

			
	INVESTORS:
	
	INTERWEST PARTNERS IX, LP
		
	By:	 	InterWest Management Partners IX,
		 	LLC its general partner
		
	By:	 	 /s/ Ellen Koskinas

	Name:	 	Ellen Koskinas
	Title:	 	Venture Member
	
	ONSET V, L.P.
		
	By:	 	ONSET V Management, LLC
		 	its General Partner
		
	By:	 	 /s/ Leslie Bottorff

	Name:	 	Leslie Bottorff,
	Title:	 	Managing Director
	
	MAYO FOUNDATION FOR MEDICAL EDUCATION AND RESEARCH
		
	By:	 	 /s/ Steven P. VanNurden

	Name:	 	Steven P. VanNurden
	Title:	 	Assistant Treasurer

 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

			
	INVESTORS:
	
	MPM BIOVENTURES III, L.P.
	By:	 	MPM BioVentures III GP, L.P., its General Partner
	By:	 	MPM BioVentures III LLC, its General Partner
		
	By:	 	 /s/ Luke B. Evnin

	Name:	 	Luke B. Evnin
	Title:	 	Series A Member
	
	MPM BIOVENTURES III-QP, L.P.
	By:	 	MPM BioVentures III GP, L.P., its General Partner
	By:	 	MPM BioVentures III LLC, its General Partner
		
	By:	 	 /s/ Luke B. Evnin

	Name:	 	Luke B. Evnin
	Title:	 	Series A Member
	
	MPM BIOVENTURES III Parallel Fund, L.P.
	By:	 	MPM BioVentures III GP, L.P., its General Partner
	By:	 	MPM BioVentures III LLC, its General Partner
		
	By:	 	 /s/ Luke B. Evnin

	Name:	 	Luke B. Evnin
	Title:	 	Series A Member
	
	MPM BIOVENTURES III GMBH & CO. BETEILIGUNGS KG
	By:	 	MPM BioVentures III GP, L.P., in its capacity as the Managing Limited Partner
	By:	 	MPM BioVentures III LLC, its General Partner
		
	By:	 	 /s/ Luke B. Evnin

	Name:	 	Luke B. Evnin
	Title:	 	Series A Member
	
	MPM ASSET MANAGEMENT INVESTORS 2002 BVIII LLC
		
	By:	 	 /s/ Luke B. Evnin

	Name:	 	Luke B. Evnin
	Title:	 	Manager

 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

	
	INVESTORS:
	
	PACIFIC ASSET PARTNERS
	
	 /s/ Robert M. Stafford

	Robert M. Stafford
	Managing Partner
	Pacific Asset Partners

 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

	
	INVESTORS:
	
	 /s/ Kenneth Martin

	Kenneth Martin

 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

			
	INVESTORS:
	
	MARK B. KNUDSON REVOCABLE TRUST U/A DTD APRIL 18, 2003 WITH SUSAN J. KNUDSON AS DONOR
	
	 /s/ Mark B. Knudson

	Mark B. Knudson, Trustee
	
	Dorsey & Whitney Trust Company LLC, Trustee
		
	By:	 	 /s/ Barry J. Newman

	Name:	 	Barry J. Newman
	Its:	 	Vice President
	
	SUSAN J. KNUDSON REVOCABLE TRUST U/A DTD APRIL 18, 2003 WITH SUSAN J. KNUDSON AS DONOR
	
	 /s/ Mark B. Knudson

	Mark B. Knudson, Trustee
	
	Dorsey & Whitney Trust Company LLC, Trustee
		
	By:	 	 /s/ Barry J. Newman

	Name:	 	Barry J. Newman
	Its:	 	Vice President
	
	THE SPRAKER FAMILY TRUST U/A/D 10/13/98
	
	 /s/ Terry Spraker

	Terry Spraker, Trustee
	
	 /s/ Linda Spraker

	Linda Spraker, Trustee
	
	 /s/ Timothy R. Conrad

	Timothy R. Conrad
	
	 /s/ Robert S. Nickoloff

	Robert S. Nickoloff
	
	 /s/ Richard R. Wilson, M.D.

	Richard R. Wilson, M.D.

 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

	
	 /s/ Donald C. Harrison, M.D.

	Donald C. Harrison, M.D.
	
	 /s/ Susan J. Knudson

	Susan J. Knudson
	
	 /s/ Anne H. Nickoloff

	Anne H. Nickoloff

 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

			
	INVESTORS:
	
	CHARTER LIFE SCIENCES, L.P.
		
	By:	 	 /s/ A. Barr Dolan

	Name:	 	A. Barr Dolan
	Title:	 	Managing Director of CLS Management, LLC
		 	The General Partner of CLS Partners, L.P., The General Partner of Charter Life Sciences, L.P.

 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

			
	INVESTORS:
	
	BAY CITY CAPITAL MANAGEMENT IV, LLC
	
	 /s/ Carl Goldfischer

	
	General Partner of:
	Bay City Capital Fund IV Co-Investment Fund, L.P.
	By:	 	Bay City Capital LLC, its Manager
	By:	 	Fred Craves, Manager and Managing Director
	
	BAY CITY CAPITAL MANAGEMENT IV, LLC
	
	 /s/ Carl Goldfischer

	
	General Partner of:
	Bay City Capital Fund IV, L.P.
	By:	 	Bay City Capital LLC, its Manager
	By:	 	Fred Craves, Manager and Managing Director

 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

			
	INVESTORS:
	
	ABERDARE VENTURES II, L.P.
	By:	 	Aberdare GP II, L.L.C.
		 	its General Partner
		
	By:	 	 /s/ Paul H. Klingenstein

		 	Paul H. Klingenstein
		 	Managing Director
	
	ABERDARE VENTURES II (Bermuda), L.P.
	By:	 	Aberdare GP II, L.L.C.
		 	its General Partner
		
	By:	 	 /s/ Paul H. Klingenstein

		 	Paul H. Klingenstein
		 	Managing Director
	
	ABERDARE II ANNEX FUND, L.P.
	By:	 	Aberdare GP II, L.L.C.
		 	its General Partner
		
	By:	 	 /s/ Paul H. Klingenstein

		 	Paul H. Klingenstein
		 	Managing Director
		
		 	 /s/ Paul H. Klingenstein

		 	Paul H. Klingenstein
		
		 	 /s/ John H. Odden

		 	John H. Odden

 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 SCHEDULE A 
 Interwest Partners IX, LP 
 Onset V, L.P. 
 MAYO
Foundation for Medical Education and Research 
 Pacific Asset Partners 
 Kenneth Martin 
 MPM BioVentures III, L.P. 
 MPM
BioVentures III-QP, L.P. 
 MPM BioVentures III Parallel Fund, L.P. 
 MPM BioVentures III GmbH & Co. Beteiligungs KG 
 MPM Asset Management Investors 2002 BVIII LLC 
 Bay City Capital Fund IV, L.P. 
 Bay City Capital Fund IV Co-Investment
Fund, L.P. 
 Aberdare Ventures II, L.P. 
 Aberdare Ventures II
(Bermuda), L.P. 
 Aberdare II Annex Fund, L.P. 
 Paul H.
Klingenstein 
 John H. Odden 
 Charter Life Sciences, L.P.

 MARK B. KNUDSON REVOCABLE TRUST U/A DTD APRIL 18, 2003 WITH SUSAN J. KNUDSON AS DONOR 
 SUSAN J. KNUDSON REVOCABLE TRUST U/A DTD APRIL 18, 2003 WITH SUSAN J. KNUDSON AS DONOR 
 THE SPRAKER FAMILY TRUST U/A/D
10/13/98 

 Timothy R. Conrad 
 Robert
S. Nickoloff 
 Richard R. Wilson, M.D. 
 Donald C. Harrison,
M.D. 
 Susan J. Knudson 
 Anne H. Nickoloff 
 SIGNATURE PAGE TO ENTEROMEDICS INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENTLicensing Agreement

 EXHIBIT 10.1 
 [ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

 MAYO FOUNDATION FOR MEDICAL EDUCATION AND RESEARCH 
 LICENSE AGREEMENT 
 This license agreement (“Agreement”) is by and between Mayo Foundation
for Medical Education and Research, a Minnesota charitable corporation, located at 200 First Street SW, Rochester, Minnesota 55905-0001 (“MAYO”), and EnteroMedics Inc., a private for-profit COMPANY located at 2800 Patton Road, Roseville,
MN 55113 (“COMPANY”). 
 WHEREAS, MAYO desires to make certain patent rights available for the development and commercialization of
medical devices for public use and benefit; and 
 WHEREAS, COMPANY represents itself as being knowledgeable in developing devices to treat
obesity and GI disorders; and 
 WHEREAS, MAYO is willing to grant and COMPANY is willing to accept an exclusive license under certain patent
rights and is willing to confer with COMPANY on development of such devices as set forth below; and 
 WHEREAS, COMPANY will be solely
responsible for regulatory compliance, marketing and selling any products in accordance with the grant of rights hereunder. 
 NOW THEREFORE,
in consideration of the foregoing and the promises and covenants set forth below, the parties hereby agree as follows: 
 Article 1.00 -
Definitions 
 For purposes of this Agreement, the terms defined in this Article will have the meaning specified and will be applicable both to the
singular and plural forms: 
 1.01 “Affiliate”: For MAYO: shall mean any corporation or other entity within the same “controlled
group of corporations” as MAYO or its parent Mayo Foundation. For purposes of this definition, the term “controlled group of corporations” will have the same definition as Section 1563 of the Internal Revenue Code as of
November 10, 1998, but will include corporations or other entities which, if not a stock corporation, more than 50% of the board of directors or other governing body of such corporation or other entity is controlled by a corporation within the
controlled group of corporations of MAYO or Mayo Foundation. MAYO’s Affiliates include, but are not limited to: Mayo Foundation; Mayo Collaborative Services, Inc.; Rochester Methodist Hospital; Saint Marys Hospital; Mayo Clinic Rochester; Mayo
Clinic Jacksonville, Florida; St. Luke’s Hospital, Jacksonville, Florida; Mayo Clinic Arizona; Mayo Clinic Hospital, Arizona; Mayo Regional Practices, P.C., Decorah, Iowa; and Mayo Health System West Central Wisconsin and controlled or
wholly-owned subsidiary corporations of all of the above. 

 1.02 “COMPANY Product(s)”: shall mean MAYO Patented Product, Jointly Patented Product and Know-How
Product. 
 1.03 “COMPANY Sublicense Revenue”: shall mean all revenue (including but not limited to consideration payments, upfront fees,
milestone payments, and royalties) received by COMPANY from sublicensing of its rights to third parties per the terms of this Agreement for the Licensed Patents, Jointly Owned Patents and Know-How. 
 1.04 “Effective Date”: February 3, 2005. 
 1.05
“Field”: The treatment of obesity using devices or the use of electrical signaling to block the vagal nerve. 
 1.06 “First Commercial
Sale”: First Company Product sale in the US following a United States regulatory allowance for sale or first sale in Europe following a CE mark of a COMPANY Product. 
 1.07 “Future Patents”: shall mean all patent applications assigned exclusively to MAYO filed on inventions arising out of Product Development by the Obesity Device Group and Vagal Blocking Device
Group, including any continuation, division, substitution, reissue, or reexamination and any patents issuing from any of the foregoing and any foreign counterpart of any of the foregoing. Future Patents shall not be interpreted to include Jointly
Owned Patents. 
 1.08 “Know–How”: shall mean Obesity Device Group Know-How and Vagal Blocking Device Group Know-How. 
 1.09 “Jointly Owned Patents”: any patent or patent application filed on inventions arising out of Product Development and where such patent or patent
application is filed in the names of at least two individuals one of which has an obligation to assign to MAYO and one of which has an obligation to assign to the COMPANY. 
 1.10 “Jointly Patented Product”: means products or services that are covered by a Valid Claim within the Jointly Owned Patents 
 1.11 “Know-How Product”: shall mean products or services that incorporate, use, are manufactured using or are developed using (including tested) Know-How including but not limited to a COMPANY Vagal
Device or other obesity devices. 
 1.12 “License Year”: begins on the Effective Date, and thereafter begins on the first day of each
January during the Term. 
 1.13 “Licensed Patents”: shall mean MAYO Patents and Future Patents. 
  

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	1.14	“MAYO Patented Product”: means products or services that are covered by a Valid Claim within the Licensed Patents. 

  

	1.15	“MAYO Patents”: shall mean U.S. Patent Application Serial Numbers: 

 (a)    60/547,483; 
 (b)    60/576,826; 
 (c)    60/589,429 
 (d)    60/589,481;

 (e)    60/603,705; 
 (f)    60/589,291; 
 (g)    10/924,249; 
 (h)    60/612,088; and 
 (i)    any continuation, division, substitution, reissue, or
reexamination and any patents issuing from any of the foregoing and any foreign counterpart of any of the foregoing. 
 1.16 “Net Sales”:
the amount invoiced by COMPANY for sales of COMPANY Products to a third party, less sales, excise or use taxes shown on the face of the invoice; less credits for defective or returned COMPANY Products; and less all regular trade and discount
allowances. Leasing, lending, consigning or any other activity by means of which a third party acquires the right to possession or use of a COMPANY Product will be considered a sale for the purpose of determining Net Sales 
  

	1.17	“Obesity Device Group”: The Obesity Device Group includes the following members: 

 Michael Camilleri, M.D. ; 
 Amy
Foxx-Orenstein, D.O.; 
 Christopher Gostout, M.D.; 
 Michael Levy, M.D.; 
 Joseph Murray, M.D.; 
 Elizabeth Rajan, M.D.; 
 Kevin Bennet; and

 William Sandborn, M.D. 
 1.18 “Obesity
Device Group Know-How”: shall mean information, whether patentable or not, developed for and provided to COMPANY by the Obesity Device Group through Product Development or Product Testing. 
 1.19 “Product Development”: shall mean the development, design and/or enhancement of devices. 
 1.20 “Product Testing”: shall mean protocol, assay and/or measurement tool design and development, and participation in preclinical and clinical testing
and/or validation. 
  

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	1.21	“Vagal Blocking Device Group”: The Vagal Blocking Device Group includes the following members: 

 Michael Kendrick, MD; 
 Bret Petersen, MD;
and 
 Michael Sarr, MD 
 1.22 “Vagal
Blocking Device Group Know-How”: shall mean information, whether patentable or not, developed for and provided to COMPANY by the Vagal Blocking Device Group through Product Development or Product Testing. 
 1.23 “Vagal Device”: shall mean any device that blocks the vagus nerve by using electrical signaling. 
 1.24 “Valid Claim”: shall mean a claim of an unexpired, issued patent that has not lapsed or been abandoned or determined by a court from which no
further appeal can be taken to be invalid or unenforceable. 
 Article 2.00 - Grant Of Rights 
 2.01 MAYO GRANTS. Subject to the reservation of rights set forth in Section 2.03, below, MAYO grants the COMPANY a worldwide, royalty-bearing, exclusive
license under the Licensed Patents and its interests in the Jointly Owned Patents to make, have made, use, offer for sale, sell and import COMPANY Products in the Field. 
 During the term of the Know-How commitment set forth below, COMPANY is hereby granted a first option to obtain an exclusive, royalty-bearing, worldwide license under the Licensed Patents and MAYO’s interest in
the Jointly Owned Patents to make, have made, use, offer for sale, sell, and import COMPANY Products outside the Field. In order to exercise the option, COMPANY will notify MAYO of its desire to exercise the option and the parties will negotiate in
good faith for one hundred and eighty days (180) to consummate a license. If the parties are unable to do so after such one hundred and eighty (180) days, MAYO shall be free to grant a license outside the Field to any third party.

 COMPANY shall have the right to sublicense the Licensed Patents and the Jointly Owned Patents in the Field. Any such sublicense will include obligations
of confidentiality, name use, warranties, waivers and indemnification for the benefit of MAYO to the same scope as set forth herein. COMPANY will be responsible for the performance of its sublicensees under any such sublicense. COMPANY will notify
MAYO of any sublicense within thirty (30) days of execution thereof and provide MAYO a copy of the same. 
  

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 2.02 MAYO KNOW-HOW COMMITMENT. For a period of five (5) years from the Effective Date, unless terminated
earlier by either COMPANY or MAYO as provided for in this Agreement, MAYO commits to the following: 
  

	(a)	Subject to existing obligations to third parties, MAYO policies and for so long as members are employees of MAYO, the Obesity Device Group would confer with the COMPANY in the Field
as follows: (i) exclusively for Product Development for devices to treat obesity and nonexclusively for Product Testing; and (ii) non-exclusively for Product Development and Product Testing with COMPANY for Vagal Devices to treat
gastrointestinal disorders other than obesity (for example, pancreatitis and irritable bowel syndrome) and excluding obesity. 

  

	(b)	Subject to existing obligations to third parties and MAYO policies and for so long as members are employees of MAYO, the Vagal Blocking Device Group would confer exclusively with
the COMPANY for Product Development and nonexclusively for Product Testing, all for Vagal Devices. 

  

	(c)	Subject to existing obligations to third parties, MAYO policies and for so long as members are employees of MAYO, MAYO hereby grants COMPANY a royalty-bearing, worldwide license to
use the Know-How in the Field to develop, make, use and sell COMPANY Products as provided below: 

 1. With respect to Obesity
Device Group Know-How for: 
  

	 	(a)	Product Development, such license shall be exclusive for obesity devices and non-exclusive for Vagal Devices for treating conditions other than obesity; and

  

	 	(b)	Product Testing, such license shall be non-exclusive. 

 2.
With respect to the Vagal Blocking Device Group Know-How for: 
  

	 	(a)	Product Development, such license shall be exclusive; and 

  

	 	(b)	Product Testing, such license shall be non-exclusive. 

 COMPANY shall have the right to sublicense such know-how, but not any obligation of MAYO to confer, on the same terms and conditions as set forth above with respect to Licensed Patents. 
  

	(d)	MAYO represents and warrants that to the best of internal patent counsel’s knowledge as of the Effective Date and without a duty to inquire, MAYO is not aware of any existing
third party obligations that will materially interfere with the Obesity Device Group and the Vagal Blocking Device Group from conferring with COMPANY under Section 2.02, in accordance the terms and conditions of this Agreement.

 Each member of the Obesity Device Group and the Vagal Blocking Device Group shall use reasonable efforts to attend meetings,
achieve specific Product Development objectives and milestones, and conduct Product Testing, contributing on average among 

  

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the individuals of the groups between [ * ] person hours per month to achieve an intended aggregate contribution of [ * ] hours per month as
requested by COMPANY. Any time credited under this Section shall not also be subject to compensation under any other agreement including any agreement referenced under Section 3.14 of this Agreement. 
 2.03 RESERVATION OF RIGHTS. The grant of rights in Sections 2.01 and 2.02 are subject to the rights of the United States government, if any, in the Licensed
Patents, the Jointly Owned Patents and Know-How and MAYO’s and its Affiliates’ reserved, irrevocable and royalty free right under the Licensed Patents and Jointly Owned Patents to make, have made, use, offer for sale and sell (for
the benefit solely of MAYO and its Affiliate’s programs, including research), any product or service and to use the Know-How for the same. For avoidance of doubt, MAYO reserves the right to conduct Product Testing with third parties.

 2.04 ALL OTHER RIGHTS RESERVED. This Agreement does not grant a license to any patent or patent application not defined in the Licensed Patents or
the Jointly Owned Patents or know-how that exists prior to the Effective Date or arising outside of MAYO Product Development or MAYO Product Testing. Except as granted in Sections 2.01 and 2.02, no other license is granted by MAYO under any
intellectual property rights owned or controlled by MAYO, including any patents, know-how, copyrights, proprietary information, and trademarks. All such rights are expressly reserved by MAYO. COMPANY acknowledges that in no event will this Agreement
be construed as an assignment by MAYO to COMPANY of any intellectual property rights. During the term of the obligation to confer under Section 2.02, subject to any obligations to third parties and MAYO policies, if MAYO, through Mayo Medical
Ventures, becomes aware of any MAYO owned patent or patent application in the Field that is required for COMPANY to make use or sell a COMPANY Product in the Field, and such patent or patent application is not otherwise licensed under this
Agreement, MAYO will make its best efforts to so notify the COMPANY to permit the COMPANY to consider negotiating rights thereto before any third parties. 
 2.05 CONFIDENTIALITY. During the Term, and for a period of five (5) years thereafter, each Party agrees to keep confidential by not disclosing to any third party any information (i) relating to this Agreement, including the
terms and conditions thereof, or (ii) transmitted to one Party by the other Party. Each Party may use this information solely as necessary for complying with the terms and conditions of this Agreement. The obligations of non-disclosure and
non-use will not apply when and to the extent such information: 
  

	(a)	becomes part of the public domain through no action or fault of the receiving Party; or 

  

	(b)	was in the receiving Party’s possession before disclosure, as demonstrated by the receiving Party’s written records, and was not acquired, directly or indirectly, from the
disclosing Party; or 

  

	(c)	was received by the receiving Party from a third party having a legal right to transmit such information. 

  

 [ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 
 Confidential
–Page 6 of 24- 

 At a Party’s request, the other Party will cooperate fully, except financially, in any legal actions taken by the
requesting Party to protect its rights in the information disclosed hereunder. 
 For avoidance of doubt, any violation of the receiving Party’s
obligations stated in this Section 2.05 constitutes a material breach of this Agreement. 
 2.06 PURCHASE AT DISCOUNT. MAYO may, at its sole
option, purchase the COMPANY Products in any quantity at a discount price of [ * ] percent from the price that would otherwise be available to MAYO from COMPANY for use within MAYO’s and its Affiliates’ own programs. This discount
shall only apply to devices implanted at St. Mary’s Hospital, Methodist Hospital, or any other MAYO facility in Rochester, Minnesota, USA. 
 Article 3.00 - Consideration and Royalties. 
 3.01 CONSIDERATION. Upon execution of the Agreement, the COMPANY will issue MAYO [ *
] shares of COMPANY common stock as partial consideration for MAYO Patents and Future Patents of the Obesity Device Group and the Obesity Device Group Know-How. This initial issuance is not an advance or creditable against any payments otherwise
due under this Agreement. Failure to provide such shares is a material breach of this Agreement. 
 3.02 EARNED ROYALTIES. The COMPANY will pay MAYO
the following earned royalties on Net Sales (“Earned Royalties”) for each COMPANY Product: 
  

	(a)	for each MAYO Patented Product, [ * ] percent; 

  

	(b)	for each Know-How Product, [ * ] percent; 

  

	(c)	for each Jointly Patented Product, [ * ] percent. 

 COMPANY shall
be responsible for paying only the highest royalty rate due to MAYO for each COMPANY Product. In the event COMPANY is paying a royalty on a Know-How Product and a patent within Licensed Patent issues with a Valid Claim covering such Know-How
Product, then COMPANY shall begin paying the MAYO Patented Product royalty rate of [ * ] percent from such date. 
 The obligation to pay royalties on a Know-How Product shall, on a product by product basis, commence upon the First Commercial Sale of such COMPANY Product and cease on December 31st of the tenth calendar year after the year within which the First Commercial Sale occurred, unless it becomes a MAYO Patented
Product. Thereafter, such license, with respect to Know-How for such COMPANY Product, shall be considered paid-up. The obligation to pay earned royalties under Sections 3.02(a) or 3.02(c) shall run until the last to expire Valid Claim within the
Licensed Patents and Jointly Owned Patents, respectively. 
  

 [ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 
 Confidential
–Page 7 of 24- 

 The Earned Royalties are payable as described in Section 4.01. 
 3.03 MINIMUM ROYALTIES. In order for COMPANY to maintain its license, COMPANY will pay MAYO a minimum annual royalty of [ * ] dollars for the second and
third year after First Commercial Sale of the initial COMPANY Product. The Earned Royalties due and accrued under Section 3.02 within a given License Year are fully creditable against minimum royalties due only for that License Year. If the
Earned Royalty does not equal or exceed the minimum royalty due, COMPANY will pay the difference. Payment must be made within (30) thirty days of the last relevant License Year and failure to do so constitutes a material breach of this
Agreement. It is a material breach of this Agreement if such payment is not made to MAYO. 
 3.04 ROYALTY STACKING. If COMPANY is a party to a license
agreement with any third party, which license required for the manufacture, use and/or sale of a COMPANY Product and the total royalty due such third party and MAYO (to be paid by COMPANY) exceeds [ * ] of Net Sales on a product-by-product basis,
COMPANY may reduce the royalty rate applicable hereunder on such COMPANY Product (on a product by product basis) by [ * ] for each [ * ] of the royalty rate payable to such third party; provided, however, that in no event will the
royalty rate otherwise due to MAYO be reduced to less than [ * ] percent for a MAYO Patented Product and [ * ] of a percent [ * ] for a Know-How Product or a Jointly Patented Product. If such other license includes a royalty
stacking provision of like intent to this Section, the royalty rate reduction provided for in this Section that would be calculated as if such provision in such other license were absent. 
 3.05 OBESITY DEVICE GROUP MILESTONE PAYMENTS. MAYO shall receive shares of COMPANY stock for obtaining the following milestones: 
  

	(a)	Two Hundred and Fifty Thousand (250,000) shares of COMPANY common stock within thirty (30) days on the first to issue patent within Licensed Patents; and

  

	(b)	Eight Hundred Thousand (800,000) shares of COMPANY common stock within thirty (30) days of the first F.D.A. regulatory approval in the United States on a COMPANY Product.

 3.06 KNOW-HOW RETAINER FEES: The COMPANY shall pay MAYO a minimum annual retainer fee of [ * ] for the Obesity Device Group as
partial compensation for its Know-How. The COMPANY shall also pay MAYO an additional minimum annual retainer fee of [ * ] for the Vagal Blocking Device Group as partial compensation for its Know-How. The following payments shall be made
within ten (10) days of the dates listed: 
  

			
	 Date
	  	 Retainer fee payment due MAYO

	a) The Effective Date            	  	[ * ]
		
	b) November 1, 2005            	  	[ * ]

  

 [ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 
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–Page 8 of 24- 

			
	c) January 1, 2006 	  	[ * ]
		
	d) July 1, 2006 	  	[ * ]
		
	f) January 1, 2007 	  	[ * ]
		
	g) January 1, 2008 	  	[ * ]
		
	h) January 1, 2009 	  	[ * ]

 It is a material breach of this Agreement if MAYO does not receive such payments. 
 3.07 KNOW-HOW MILESTONE PAYMENTS: The COMPANY shall have a pool of COMPANY common shares (825,000 in aggregate, [ * ]) to issue MAYO within ninety (90) days
of FDA approval for a Company Product for providing Know-How. It is a material breach of this agreement if such shares are not received within ninety (90) days of achieving the milestone. 
 3.08 CERTAIN COMMON STOCK PROVISIONS. In connection with the COMPANY’s obligation to issue shares of its common stock to MAYO under Sections 3.01, 3.05 and
3.07, the COMPANY and MAYO hereby covenant and agree as follows: 
 (a) The COMPANY hereby represents and warrants that the terms of this Agreement have been
duly and validly approved and authorized by all requisite corporate action of the Board of Directors of the COMPANY, and that the performance of the COMPANY’s obligations under this Agreement will not result in the violation of the terms or
provisions of any other agreements to which the COMPANY is a party or is otherwise bound. 
 (b) The COMPANY represents and warrants that a sufficient number
of shares of COMPANY common stock for performance of the COMPANY’s obligations under this Agreement have been and will continue to be duly and validly reserved for issuance by all requisite corporate action of the Board of Directors of the
COMPANY, and upon the issuance of the common stock in accordance with this Agreement such shares of common stock will be duly and validly issued and fully paid and non-assessable shares of capital stock of the COMPANY. 
 (c) The COMPANY and MAYO covenant and agree that the number of shares of COMPANY common stock that may be issued from time to time to MAYO in the future pursuant to the
Sections 3.05 and 3.07 shall be equitably adjusted to give effect to all stock combinations or stock splits affecting COMPANY common stock and all dividend distributions payable to holders of COMPANY common stock in shares of additional COMPANY
common stock. 
 (d) The COMPANY agrees that, simultaneous with the occurrence of a Liquidation Event (as defined in Section B.2. of Article IV the
COMPANY’s Amended and Restated Certificate of Incorporation), or simultaneous with the initial closing in an arrangement involving the COMPANY’s first firm commitment underwritten public offering of its common stock under the Securities
Act of 1933, as amended, MAYO shall automatically, and without need for further action, be entitled to receive, and shall be deemed the beneficial owner of, all shares of 

  

 [ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 
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–Page 9 of 24- 

 
COMPANY common stock issuable pursuant to Sections 3.05 and 3.07, regardless of whether the conditions precedent to such issuance as set forth in each such
Section have theretofore been achieved or satisfied. If at any time there is a recapitalization of COMPANY common stock (other than as contemplated upon the occurrence of a Liquidation Event), the COMPANY agrees that MAYO shall automatically, and
without need for further action, be entitled to receive the number of shares of capital stock or other securities or property to which a holder of an aggregate number of shares of COMPANY common stock equal to the maximum number of shares which MAYO
may have become entitled to receive in the future pursuant to Sections 3.05 and 3.07 would be entitled to receive in connection with such recapitalization, regardless of whether the conditions precedent to such issuances as set forth in
Section 3.05 or 3.07 have theretofore been achieved or satisfied. Upon issuance of common stock, capital stock or other securities pursuant to this subsection, the COMPANY shall have no further obligation to issue common stock to MAYO pursuant
to the terms of this Agreement. 
 (e) The COMPANY hereby represents and warrants that the issuance the common stock of the COMPANY to MAYO is excepted from
the provisions of Section 2.4 of the Investors’ Rights Agreement dated July 30, 2004 to which the COMPANY is a party and from Section 4(d) of the COMPANY’s Amended and Restated Certificate of Incorporation. 
 (f) MAYO hereby represents and warrants that it is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself,
can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the common stock of the COMPANY. MAYO also represents it
has not been organized for the purpose of acquiring the common stock of the COMPANY. 
 (g) MAYO hereby represents and warrants that it is an
“accredited investor” within the meaning of SEC Rule 501 of Regulation D, as presently in effect. 
 (h) MAYO understands that the common stock of
the COMPANY will be characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the COMPANY in a transaction not involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the Securities Act of 1933, as amended, (the “Act”), only in certain limited circumstances. In this connection, MAYO represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and by the Act. 
 (i) Without in any way limiting the representations set forth
above, MAYO further agrees not to make any disposition of all or any portion of the shares of common stock of the COMPANY unless and until: 
 (1) There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or 
  

 Confidential –Page 10 of 24- 

 (2) If requested by the COMPANY, MAYO shall have furnished the COMPANY with an opinion of counsel,
reasonably satisfactory to the COMPANY that such disposition will not require registration of such shares under the Act. It is agreed that the COMPANY will not require opinions of counsel for transactions made in reliance upon Rule 144 except in
unusual circumstances. 
 (3) Notwithstanding the provisions of subsections (1) and (2) above, no such registration statement or
opinion of counsel shall be necessary for a transfer by MAYO to any of its “affiliates,” as that term is defined under the Act, so long as such affiliate is an “accredited investor” (within the meaning of Regulation D under the
Act). 
 (j) It is understood that the certificates evidencing the common stock of the COMPANY may bear the following legend: 
 “These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the Company that such registration is not required or unless sold pursuant to Rule 144 of such
Act.” 
 3.09 SUBLICENSE REVENUE: 
 (a) For Future Patents, Jointly Owned Patents and Know-How, the COMPANY shall pay MAYO [ * ] percent of all COMPANY Sublicense Revenue it receives during the Term. 
 (b) For MAYO Patents the COMPANY shall pay MAYO [ * ] percent of all COMPANY Sublicensing
Revenue it receives during the Term for sublicenses executed within one (1) year of the Effective Date. The COMPANY shall pay MAYO [ * ] percent of all COMPANY Sublicensing Revenue it receives during the Term for sublicenses executed
between the first (1st) year anniversary and the third (3rd) year anniversary of the Effective Date of this Agreement. The COMPANY shall pay MAYO [ * ] percent of all COMPANY Sublicensing Revenue it
receives for sublicenses executed after such third (3rd) year anniversary. 
 (c) COMPANY Sublicensing Revenue is payable as described in Section 4.01 below. 
 3.10 TAXES. The COMPANY is responsible for all taxes (other than net income taxes), duties, import deposits, assessments, and other governmental charges, however designated, which are now or hereafter will be
imposed by any authority on the COMPANY, (a) by reason of the performance by MAYO of its obligations under this Agreement, or the payment of any amounts by the COMPANY to MAYO under this Agreement; (b) based on the Licensed Patents or use
or sale of the COMPANY Product. 
  

 [ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 
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–Page 11 of 24- 

 3.11 NO DEDUCTIONS. All payments to be made by the COMPANY to MAYO under this Agreement represent net amounts MAYO
is entitled to receive, and will not be subject to any deductions or offsets for any reason whatsoever. 
 3.12 U.S. CURRENCY. All payments to MAYO
under this Agreement will be made by draft drawn on a United States bank, and payable in United States dollars. 
 3.13 DISTRIBUTION OF CONSIDERATION
WITHIN MAYO. MAYO may distribute any shares or funds received by reason of this Article 3 to individuals within the Obesity Device Group or Vagal Blocking Device Group as MAYO, in its sole discretion, deems advisable and will hold the COMPANY
harmless from any claims by any employee member of the Obesity Device Group or Vagal Blocking Device Group that any such distribution or related allocation is inadequate or unreasonable. 
 3.14 RESEARCH AND CLINICAL TRIALS. The Parties acknowledge that any COMPANY sponsored research or clinical trial at MAYO related to this Agreement will be subject to a separate agreement consisting of a defined
protocol, associated budget and any terms and conditions that may be required by law or MAYO policy, but will be governed by the intellectual property provisions of this Agreement. Any such agreement will not require any compensation beyond the
mutually agreed upon costs for conducting the research or clinical trial. 
 Article 4.00 - Accounting and Reports. 
 4.01 PAYMENT. The COMPANY will deliver to MAYO on or before 1 February a detailed written report stating Net Sales on which Earned Royalties are based,
COMPANY Sublicense Revenue on which sublicense revenue payment is due MAYO and all activities for all other payments due under Article 3.00 for the preceding License Year. Each such report will be accompanied by the payment(s) due to MAYO for such
License Year. In the event no royalties are due, the COMPANY shall submit a detailed written report on the progress of the development of COMPANY Products and a timeline for commercialization of the same, including a description of activities
conducted as set forth in Section 7.02. It is a material breach of this agreement if MAYO does not receive such reports and payments. 
 4.02
ACCOUNTING. The COMPANY will keep complete, true, and accurate books of accounts and records sufficient to support calculation of Net Sales, COMPANY Sublicense Revenue and all other payment payable to MAYO under this Agreement. Such books and
records will be kept at the COMPANY’s principal place of business for at least three (3) years after the end of the License Year to which they pertain, and will be open at all reasonable times for inspection by a representative of MAYO for
verification of payments. The MAYO representative will treat as confidential all relevant matters and will be a person or firm reasonably acceptable to the COMPANY. In the event such audit reveals an underpayment by COMPANY, COMPANY will within
thirty (30) days pay the amount due in excess of the payments actually paid. In the event the audit reveals an underpayment by COMPANY of more than five percent of the amount due, COMPANY will pay interest on the amount due in excess of the
amount actually 

  

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paid at the highest rate then permitted by law. In either event, COMPANY will pay all of MAYO’s costs in conducting the audit. Failure by COMPANY to
make any payment required under this Section 4.02 constitutes a material breach of this Agreement. 
 Article 5.00 - Warranties and
Indemnification. 
 5.01 USE OF NAME AND LOGO. The COMPANY will not use publicly for publicity, promotion, or otherwise, any logo, name, trade
name, service mark, or trademark of MAYO or its Affiliates, including, but not limited to, the terms “MAYO®,” “MAYO Clinic®,” and the triple shield MAYO logo, or any simulation, abbreviation, or adaptation of the same, or the name of any MAYO employee or agent, without MAYO’s prior, written, express consent. MAYO may
withhold such consent in MAYO’s absolute discretion. Violation of this Section 5.01 constitutes a material breach of this Agreement. 
 5.02 NO
WARRANTIES. Nothing in this Agreement will be construed as: 
  

	(a)	a warranty or representation by MAYO as to the validity or scope of any of the Licensed Patents, Jointly Owned Patents and Know-How; or 

  

	(b)	an obligation to bring or to prosecute actions against third parties for infringement of the Licensed Patents, Jointly Owned Patents or Know-How; or 

  

	(c)	a warranty or representation that the manufacture, use, sale, offer for sale or importation of any COMPANY Product or the use or practice of any of the Licensed Patents, Jointly
Owned Patents or Know-How are free from infringement or misappropriation of a third party’s intellectual property rights. 

 5.03
DISCLAIMER. MAYO HAS NOT MADE AND PRESENTLY MAKES NO PROMISES, GUARANTEES, REPRESENTATIONS OR WARRANTIES OF ANY NATURE, DIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, REGARDING THE MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
NON-INFRINGEMENT FOR THE COMPANY PRODUCTS, LICENSED PATENTS, JOINTLY OWNED PATENTS OR KNOW-HOW. THE KNOW-HOW, JOINTLY OWNED PATENTS AND LICENSED PATENTS, LICENSED UNDER THIS AGREEMENT ARE PROVIDED “AS IS,” “WITH ALL FAULTS,” AND
“WITH ALL DEFECTS,” AND COMPANY EXPRESSLY WAIVES ALL RIGHTS TO MAKE ANY CLAIM WHATSOEVER AGAINST MAYO FOR MISREPRESENTATION OR FOR BREACH OF PROMISE, GUARANTEE, OR WARRANTY OF ANY KIND RELATING TO THE COMPANY PRODUCTS, KNOW-HOW, JOINTLY
OWNED PATENTS AND LICENSED PATENTS. COMPANY IS SOLELY RESPONSIBLE FOR DETERMINING WHETHER THE LICENSED PATENTS, JOINTLY OWNED PATENTS AND KNOW-HOW HEREUNDER HAVE APPLICABILITY OR UTILITY IN THE COMPANY’S MANUFACTURING, DESIGN, MARKETING AND
SALES ACTIVITIES. COMPANY ASSUMES ALL RISK AND LIABILITY IN CONNECTION WITH SUCH DETERMINATION. 
  

 Confidential –Page 13 of 24- 

 5.04 INDEMNIFICATION. The COMPANY will defend, indemnify, and hold harmless MAYO and MAYO’s Affiliates from
any and all claims, actions, demands, judgments, losses, costs, expenses, damages and liabilities (including but not limited to attorneys fees and other expenses of litigation) (“Claim”), regardless of the legal theory asserted, arising
out of or connected with:(a) use by the COMPANY of Licensed Patents, Jointly Owned Patents or Know-How furnished or licensed under this Agreement; (b) design, manufacture, distribution, use, sale, or other disposition of COMPANY Products by the
COMPANY, transferees or sublicensees; and (c) the Product Development and Product Testing to be conducted for COMPANY hereunder. The foregoing obligations of COMPANY to indemnify are contingent upon MAYO or MAYO’s Affiliates giving COMPANY
prompt and timely notice of any claim requiring indemnification, granting to COMPANY the right to control the defense of any such claim including selection of counsel and the right to settle any such claim (including the right to grant sublicenses,
without royalty to MAYO of MAYO’s Affiliates) of any right licensed under this Agreement. Notwithstanding the foregoing, COMPANY shall not, without MAYO’s prior written consent, settle or compromise any Claim in a manner that would require
MAYO to admit liability or incur financial obligation. MAYO may be represented by counsel of its own choosing, at its own expense. 
 5.05 INSURANCE.
As used in Sections 5.04 and 5.05, MAYO and its Affiliates include the trustees, officers, agents, and employees of MAYO and its Affiliates. The parties agree that the indemnity stated in this Section 5.04 should be construed and applied in
favor of indemnification. The COMPANY will, during the Term, carry claim-based liability insurance, including products liability and contractual liability, in an amount and for a time period sufficient to cover the liability assumed by COMPANY
hereunder, such amount being at least [ * ]. In addition, such policy will name MAYO as an additional-named insured. COMPANY may not settle any Claim in a manner that would require an admission of liability or incur financial obligation on
the part of MAYO, without MAYO’s prior written consent. 
 5.06 WAIVER OF SUBROGATION. The COMPANY expressly waives any right of subrogation that
it may have against MAYO resulting from any claim, demand, liability, judgment, settlement, costs, fees (including attorneys’ fees), and expenses for which the COMPANY has agreed to indemnify MAYO and its Affiliates or hold MAYO and its
Affiliates harmless under this Agreement. 
 5.07 ADDITIONAL WAIVERS. EXCEPT WITH RESPECT TO ANY LIABILITY OF MAYO FOR BREACH OF THIS AGREEMENT
(INCLUDING BREACH OF THE REPRESENTATIONS OR WARRANTIES OF MAYO IN THIS AGREEMENT), THE COMPANY AGREES THAT MAYO WILL NOT BE LIABLE FOR ANY LOSS OR DAMAGE CAUSED BY OR ARISING OUT OF ANY PERFORMANCE UNDER THIS AGREEMENT, WHETHER TO COMPANY OR A THIRD
PARTY. IN NO EVENT WILL MAYO’S LIABILITY OF ANY KIND INCLUDE ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE LOSSES OR DAMAGES, EVEN IF MAYO HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO CASE 

  

 [ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 
 Confidential
–Page 14 of 24- 

 
WILL MAYO’S LIABILITY OF ANY KIND EXCEED THE TOTAL ROYALTIES WHICH HAVE ACTUALLY BEEN PAID TO MAYO BY THE COMPANY AS OF THE DATE OF FILING OF THE ACTION
AGAINST MAYO WHICH RESULTS IN THE SETTLEMENT OR AWARD OF DAMAGES. 
 5.08 REPRESENTATION AND WARRANTY. MAYO represents and warrants that to the best
of internal patent counsel’s knowledge, as of the Effective Date and without a duty to inquire, the MAYO inventors are under an obligation to assign their rights to MAYO, MAYO is otherwise the sole and lawful owner of the MAYO Patents licensed
hereunder and the patent rights licensed hereunder are provided free and clear of any third party ownership rights. Notwithstanding the foregoing, nothing herein shall be construed as an express or implied representation or warranty of
non-infringement and COMPANY acknowledges that it may require rights to third party intellectual property in order to practice the licenses granted hereunder. 
 Article 6.00 - Term and Termination. 
 6.01 TERM. This Agreement will terminate upon the last to expire patent
application or Valid Claim within the Patent Rights or the COMPANY’s last obligation to make payments under Article 3.00, whichever occurs last. 
 6.02 TERMINATION FOR BREACH. If either party commits a material breach of this Agreement, including without limitation for COMPANY, the failure to make any required payments hereunder, the other party may notify the breaching party
in writing of such breach and the breaching party will have sixty (60) days after such notice becomes effective as set forth in Section 9.07 to cure such breach, or this Agreement will automatically terminate. 
 6.03 INSOLVENCY OF COMPANY. MAYO may terminate this Agreement by transmitting a notice of termination to COMPANY in the event COMPANY ceases conducting business
in the normal course, becomes insolvent or bankrupt, makes a general assignment for the benefit of creditors, admits in writing its inability to pay its debts as they are due, permits the appointment of a receiver for its business or assets, or
avails itself of or becomes subject to any proceeding under any statute of any governing authority relating to insolvency or the protection of rights of creditors. 
 6.04 EARLY TERMINATION OF CONFERENCE RIGHTS. Starting three (3) years after the Effective Date of this Agreement, MAYO, at its discretion and without a showing of cause, may terminate the obligations to confer under Sections
2.02(a) and 2.02(b) by giving notice of such election to the COMPANY. If MAYO so terminates, then, upon such notice: 
  

	 	(a)	all licenses granted to the COMPANY for the Licensed Patents, the Jointly Owned Patents and the Know-How shall be fully paid-up and royalty-free; 

  

	 	(b)	any Obesity Group Milestone Payments obligations under Section 3.05 that have not accrued shall expire; 

  

	 	(c)	any Know-How Retainer Fees obligations under Section 3.06 that have not accrued shall expire; 

  

 Confidential –Page 15 of 24- 

	 	(d)	any Know-How Milestone Payments obligations under Section 3.07 that have not accrued shall expire; and 

  

	 	(e)	the grant of licenses from MAYO to the COMPANY shall become non-exclusive. 

 6.05 CONSEQUENCES OF TERMINATION. 
 (a) In the event of termination under Section 6.02 of this Agreement for
COMPANY’s breach, the licenses to Licensed Patents and Jointly Owned Patents from MAYO to COMPANY shall immediately terminate. All licenses to Know-How shall become non-exclusive and any obligation to confer shall immediately terminate.

 (b) In the event of termination of this Agreement under Section 6.02 for MAYO’s breach, then the events of Section 6.04(a)
through 6.04 (e) shall apply as if MAYO had terminated conference rights under Section 6.04. 
 (c) In the event of termination of
this Agreement under Section 6.03, all licenses granted hereunder shall immediately terminate. 
 (d) Subject to the foregoing, nothing
in this Agreement shall be construed to prohibit or enjoin the COMPANY from continuing to use Know-How licensed from MAYO for any reason. In the event of any claim of breach, except as set forth above, MAYO waives any remedy that would otherwise
enjoin the COMPANY from using Know-How as licensed hereunder. In the event MAYO terminates this Agreement under Section 6.02, the COMPANY’s license under such Know-How shall not be terminated and the COMPANY’s license to such Know-How
(and obligation to make payments therefore) shall continue, but only on a non-exclusive basis. In any arbitration or court proceeding involving this Agreement, it is the intention of the parties that the relief for MAYO and the effect on COMPANY be
as least as significant as MAYO having the right to terminate the Know-How license and in this regard, an arbitrator or court may grant MAYO such additional relief as such arbitrator or court deems equitable to compensate MAYO including, but not
limited to, granting MAYO a multiple of any royalties otherwise due or granting payment to MAYO for a fully paid-up license for such Know-How. 
 6.06
Survival. Subject to the foregoing, the following sections survive any termination or expiration of this Agreement, per their terms: 2.05; 2.06; any payment obligations that accrued or are accruable up to the date of termination and thereafter
as may be set forth in Article 3; 3.08(g) and (i); Article 4 for such obligations; Article 5; Article 6; all payment obligations of COMPANY that accrued or are accruable under Article 8 and Article 9. 
 Article 7.00 - Representation and Warranties. 
 7.01 REPRESENTATIONS OF THE COMPANY. The COMPANY represents and warrants to MAYO that it has independently evaluated the Licensed Patents, Jointly Owned Patents and Know-How and is entering into this Agreement on the basis of its own
evaluation and not in reliance of any representation by MAYO. 
  

 Confidential –Page 16 of 24- 

 7.02 COMMERCIALIZATION EFFORTS. The COMPANY will use
commercially reasonable efforts to research, develop and commercialize COMPANY Product(s). If COMPANY has not submitted an application for IDE for an obesity trial to the FDA for a COMPANY Product within Seven (7) years of the Effective Date,
the license to COMPANY for Licensed Patents and Know-How shall terminate unless COMPANY pays MAYO an annual license maintenance fee of [ * ] per year for each year such trial is not started. The first such payment is due within Thirty
(30) days of the Seventh (7th) anniversary of the Effective Date and subsequent maintenance fees are due
within Thirty (30) days of subsequent anniversary dates or the Effective Date. 
 Article 8.00 - Patents 
 8.01 Patent Filing, Prosecution, Maintenance and Enforcement: All patent applications filed within the Licensed Patents shall be assigned to MAYO . All Jointly
Owned Patent applications shall be assigned to both COMPANY and MAYO. The COMPANY shall have control and authority to direct prosecution of the Licensed Patents and Jointly Owned Patents, including the right to amend such patent applications and
file new patent applications which shall be considered within the definition of Licensed Patents and/or Jointly Owned Patents and MAYO will be afforded the opportunity to advise and consult on all such filings and the prosecution. In addition, the
COMPANY will provide MAYO with copies of all papers submitted to or received from the United States Patent and Trademark Office on a timely basis. For so long as the license to Licensed Patents and Jointly Owned Patents remains exclusive, the
COMPANY shall have control and authority to direct the enforcement and defense of the Licensed Patents in the Field and the Jointly Owned Patents. The COMPANY shall be responsible for all costs and expenses related to prosecution, maintenance,
enforcement and defense of the Licensed Patents after the Effective Date and reimbursement of Licensed Patents invoice costs incurred prior to the Effective Date (such invoice costs to be limited to [ * ] in total). The COMPANY shall be
responsible for all costs and expenses related to prosecution, maintenance, enforcement and defense of the Jointly Owned Patents. MAYO agrees to take such actions as are reasonably necessary for COMPANY to file, prosecute, maintain, enforce and
defend the Licensed Patents and Jointly Owned Patents, and will cooperate with COMPANY in any such matters except financially. MAYO may not be joined as a party to any litigation, unless deemed a necessary party by law. If MAYO is joined, COMPANY
will pay all costs on a monthly basis, including attorneys fees, incurred by MAYO with respect thereto and will indemnify MAYO for any damages that may result from such litigation. MAYO may be represented by counsel of its own choosing. Any
recoveries will first be used to reimburse COMPANY’s costs and thereafter, will be shared equally by the parties. 
 If the COMPANY determines in its
sole discretion to abandon any patent application or not to file any continuation patent application with claims suggested by MAYO within the Licensed Patents or Jointly Owned Patent Rights, COMPANY will provide MAYO with thirty (30) days prior

  

 [ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 
 Confidential
–Page 17 of 24- 

 
written notice of such determination and provide MAYO with the opportunity to prosecute, enforce, defend and maintain such patent or patent application at
MAYO’s sole expense and the license granted to COMPANY with respect to such patent or patent application shall convert to a non-exclusive license. This conversion of rights to non-exclusive shall not apply to any decision by COMPANY not to file
in any country other than the U.S. COMPANY shall have the sole discretion, without penalty, to opt to forego any foreign filing. Upon termination of this Agreement, the parties shall confer as to the responsibility of prosecution, maintenance,
enforcement and defense of Jointly-Owned Patents and MAYO shall retain sole rights to prosecute, maintain, enforce and defend Licensed Patents. 
 8.02
THIRD PARTY LITIGATION. In the event a third party institutes a suit against COMPANY for patent infringement involving a COMPANY Product, COMPANY will promptly inform MAYO and keep MAYO regularly informed of the proceedings. In the event the
third party sues or joins MAYO, COMPANY will defend MAYO pursuant to the indemnification obligation in Section 5.04. Any recovery, after reimbursement of COMPANY’s costs, including its obligations under Section 5.04, will be shared
equally by the parties. 
 Article 9.00 - General Provisions. 
 9.01 AMENDMENTS. This Agreement may not be amended or modified except by a writing signed by both parties and identified as an amendment to this Agreement. 
 9.02 NO ASSIGNMENT. Neither party may assign its rights hereunder to any third party without the prior written consent of the other party; provided, that a
party may assign its rights without the prior written consent of the other party to any affiliate or other entity that controls, is controlled by or is under common control with such party. Notwithstanding the foregoing, COMPANY is free to transfer
or assign this Agreement (or any rights granted under this Agreement) with the sale or transfer of assets of that portion of its business to which this Agreement pertains. Nothing herein shall give COMPANY the right to assign the obligations to
confer in Sections 2.02(a) and 2.02(b). COMPANY will promptly notify MAYO of any such assignment. Any purported assignment in violation of this clause is void. Any assignment shall not in any manner relieve the assignor from liability for the
performance of this Agreement by its assignee. Upon the occurrence of an assignment pursuant to this Section 9.02, MAYO may, in its sole discretion, provide notice that it desires to continue to confer per the terms of this Agreement. If MAYO
fails to provide such notice within sixty (60) days of notification of assignment in writing by COMPANY, (1) no Obesity Group Milestone Payments under Section 3.05 shall thereafter accrue and be payable; (2) no Know-How Retainer
Fees under Section 3.06 shall thereafter accrue and be payable; and (3) no Know-How Milestone Payments under Section 3.07 shall thereafter accrue and be payable. 
 9.03 BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of the parties, their heirs, legal representatives, successors and assigns. 
  

 Confidential –Page 18 of 24- 

 9.04 ENTIRE AGREEMENT. This Agreement constitutes the final, complete and exclusive agreement between the parties
with respect to its subject matter and supercedes all past and contemporaneous agreements, promises, and understandings, whether oral or written, between the parties, and, as of the Effective date of this Agreement, terminates the consulting
agreement between MAYO and COMPANY, dated November 3, 2003 for the services of Dr. Michael Camilleri and the consulting agreement between MAYO and COMPANY, dated February 1, 2004 for the services of Dr. Bret Petersen. 

9.05 INDEPENDENT CONTRACTOR. It is mutually understood and agreed that the relationship between the parties is that of independent contractors. Neither party
is the agent, employee, or servant of the other. Except as specifically set forth herein, neither party shall have nor exercise any control or direction over the methods by which the other party performs work or obligations under this Agreement.
Further, nothing in this Agreement is intended to create any partnership, joint venture, lease, or equity relationship, expressly or by implication, between the parties. 
 9.06 ARBITRATION. Any disputes as described in Exhibit A will be arbitrated as set forth therein. 
 9.07 NOTICES.
All notices and other business communications between the parties related to this Agreement shall be in writing, sent by certified mail, addressed as follows: 
  

			
	 If to COMPANY:
	  	 EnteroMedics Inc.
 Attn: CEO
 2800 Patton Road
 St. Paul, MN 55113
 Facsimile: (651) 634-3212

		
	 If to MAYO:
	  	 Mayo Medical Ventures
 Attn: Leif Nelson
 200 First Street SW
 Rochester, MN 55905
 Facsimile: (507) 284-5410

		
		  	 with a copy to:
 MAYO Legal Department
 Attn: General Counsel
 200 First Street SW
 Rochester, MN 55905
 Facsimile: (507) 284-0929

  

 Confidential –Page 19 of 24- 

 Notices sent by certified mail shall be deemed delivered on the third day following the date of mailing. Either party may
change its address or facsimile number by giving written notice in compliance with this section. 
 9.08 SEVERABILITY. In the event any
provision of this Agreement is held to be invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect as if the invalid or unenforceable provision had never been a part of the Agreement. 
 9.09 WAIVER. The failure of either party to complain of any default by the other party or to enforce any of such party’s rights, no matter how long such
failure may continue, will not constitute a waiver of the party’s rights under this Agreement. The waiver by either party of any breach of any provision of this Agreement shall not be construed as a waiver of any subsequent breach of the same
or any other provision. No part of this Agreement may be waived except by the further written agreement of the parties. 
 9.10 LIMITATION OF RIGHTS.
This Agreement is intended only to benefit the parties hereto. They have no intention to create any interests for any other party. Specifically, no interests are intended to be created for any customer, patient, research subjects, or other persons
(or their relatives, heirs, dependents, or personal representatives) by or upon whom the COMPANY Products may be used. 
 9.11 CONSTRUCTION. Both
parties agree to all of the terms of this Agreement. Both parties execute this Agreement only after reviewing it thoroughly. That one party or the other may have drafted all or a part of this Agreement will not cause this Agreement to be read more
strictly against the drafting party. This Agreement, and any changes to it, will be interpreted on the basis that both parties contributed equally to the drafting of each of its parts. 
 9.12 FORCE MAJEURE. Neither party shall be responsible for the non-performance of its obligations under this Agreement if such non-performance is caused directly or indirectly by acts of God, acts of civil or
military authority, civil disturbance, war, terrorism, fires, or strikes. The party so affected shall give notice to the other party and shall do everything reasonably possible to resume performance. 
 9.13 NON-DISCLOSURE. Neither party will disclose any of the terms of this Agreement without the express, prior, written consent of the other party, or unless
required by law. 
  

 Confidential –Page 20 of 24- 

			
	MAYO FOUNDATION FOR MEDICAL EDUCATION AND RESEARCH:
		
	Signed:	 	/s/ Jonathan J. Oviatt

			
	Printed Name:	 	Jonathan J. Oviatt

			
	Title:	 	Secretary

			
	Date:	 	February 3, 2005
		 	

  

			
	COMPANY:
		
	Signed:	 	/s/ Mark B. Knudson

			
	Printed Name:	 	Mark B. Knudson

			
	Title:	 	President and CEO

			
	Date:	 	February 3, 2005

  

 Confidential –Page 21 of 24- 

 EXHIBIT A 
 MANDATORY MEDIATION AND BINDING ARBITRATION 
 1. NOTICE OF DISPUTE. Any dispute related to this Agreement
between the parties, including its formation, performance, or termination, which cannot be resolved by the parties themselves within thirty (30) days of written notice by one party to the other of the existence of a dispute, may be referred by
either of the parties to mandatory mediation and binding arbitration under the terms of this Exhibit. The parties intend the mediation/arbitration procedure described in this Exhibit to substitute in all cases for litigation related to any such
dispute, subject only to Section 7, below, and this agreement to submit all such disputes to mandatory mediation and binding arbitration is irrevocable. 
 2. LIMITATION PERIOD. No demand for mediation/arbitration may be made regarding any claim more than one hundred eighty (180) days after written notice by one party to the other of the existence of a dispute, regardless of any
otherwise applicable statute of limitations. 
 3. MEDIATOR/ARBITRATOR. If the parties cannot agree upon a single mediator/arbitrator within fourteen
(14) days after written demand by either of them for mediation/arbitration, then a single mediator/arbitrator shall be chosen by the American Arbitration Association office in Minneapolis, Minnesota, within thirty (30) additional days
after the fourteen (14) day period. The mediator/arbitrator shall be generally experienced in the legal and technical matters related to the dispute. 
 4. MEDIATION. Within thirty (30) days of the appointment of the mediator/arbitrator, the parties must attend a mediation session at which the mediator/arbitrator personally shall attempt to guide the parties to a settlement.
Each party may be represented by counsel at the mediation, but each party must attend through an officer having authority to agree to a settlement at the mediation. The mediation session shall occur in Minneapolis or in St. Paul, Minnesota, and
shall extend no longer than a single day. Statements or offers made at the mediation session shall not be admissible in any later arbitration hearing. 
 5. ARBITRATION. If such mediation has not resulted in a mutually-executed settlement agreement (or withdrawal of claim) within five (5) business days after the date of mediation, then the parties shall proceed to arbitration as
described below. Such arbitration, which the parties intend to be final and to substitute for litigation, shall occur in Minneapolis or in St. Paul, Minnesota, and the arbitration results may be entered as a final judgment in any court with
jurisdiction. The decision of the arbitrator shall be final and binding upon the parties both as to law and fact. 
  

	(a)	 Initial Disclosures. Within twenty-one (21) days after the date of mediation, the parties shall exchange written disclosures listing with reasonable
specificity: (i) all exhibits expected to be used by the party at arbitration, and complete copies of such exhibits, (ii) all witnesses expected to be called by the party at arbitration, and (iii) the substance of the 

  

 Confidential –Page 22 of 24- 

	 	 
testimony of each witness. Copies of such disclosures shall be sent to the arbitrator. No exhibit or witness may be called if the same does not appear on
such disclosure, and no witness may testify as to matters not described in such disclosure, except for rebuttal testimony as may be permitted by the arbitrator. 

  

	(b)	Discovery Period. Within fourteen (14) days after exchange of the disclosure notices, the parties shall make specific discovery requests to the arbitrator, and within an
additional fourteen (14) days the arbitrator shall issue to both parties a joint discovery order. The discovery period preceding the arbitration hearing shall not exceed sixty (60) days from the issuance of the discovery order by the
arbitrator. 

  

	(c)	Scope of Discovery. Discovery shall be limited to that ordered by the arbitrator as being reasonable and necessary, and in no case shall exceed the deposition of two
(2) witnesses for each party, and/or the exchange of more than a total of twenty-five (25) specific and non-compound interrogatories by each party, and/or two specific requests by each party for the production of documents considered by
the arbitrator to be reasonably relevant and not unduly burdensome. 

  

	(d)	Hearing. The arbitration hearing, which shall be confidential to the parties and not open to the public, shall not exceed two (2) separate days, and shall be completed within
thirty (30) days of the close of discovery. The arbitrator may admit any testimony or other evidence which the arbitrator decides is reasonably relevant to the issues of the arbitration, but excluding statements or offers made by either party
at the mediation session. 

  

	(e)	Final Decision. The arbitrator shall issue a final written decision no later than sixty (60) days following the end of the arbitration hearing, stating findings as to law and
fact. The decision shall be confidential to the parties. The arbitrator shall be limited to determining and ordering the payment of actual and direct damages if any, and may order the payment of indirect, special, incidental, or consequential
damages only where bad faith has been shown and/or to the extent required to fulfill any obligations under Article 7 of the Agreement. The arbitrator shall not order the payment of punitive or exemplary damages in any case. 

6. COSTS AND FEES. Both parties shall be responsible for their own costs and fees (including attorney’s fees), and shall divide common costs and fees
equally; however, if the arbitrator specifically finds bad faith on the part of either party, then the arbitrator may order a different division of costs and fees. 
 7. EQUITABLE RELIEF. Nothing in this Exhibit prohibits either party from seeking equitable relief to protect its rights to the extent that irreparable harm may occur and damages would not be a sufficient remedy, except that neither
party shall seek to enjoin mediation/arbitration as described in this Exhibit. 
  

 Confidential –Page 23 of 24- 

	(a)	Specific Performance. Among the equitable remedies that a party may seek under this part 7, either party may petition a court for specific performance of the terms of this Exhibit,
including following the failure of either party without good cause to adhere to the time limits set out in this Exhibit. A party securing an order for specific performance under this part 7(a) is entitled to recover costs and reasonable
attorneys’ fees in connection with such petition for specific performance and any related hearings. 

 8. SURVIVAL. The rights and
obligations of the parties described in this Section 8 survive the termination, expiration, non-renewal, or rescission of this Agreement. 
 9.
GOVERNING RULES AND LAW. To the extent not inconsistent with the terms of this Exhibit, the mediation and arbitration are governed by the rules of the American Arbitration Association, the Minnesota Arbitration Act, and the Federal Arbitration
Act (9 U.S.C s. 1 et seq.). 
  

 Confidential –Page 24 of 24-

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