Document:

2003 Stock Incentive Plan

 EXHIBIT 10.12 
 ENTEROMEDICS INC. 
 2003 STOCK INCENTIVE PLAN 
 Section 1. Purpose. 
 The purpose of the
EnteroMedics Inc. 2003 Stock Incentive Plan (the “Plan”) is to aid in attracting and retaining employees, management personnel and other personnel and members of the Board of Directors who are not also employees (“Non-Employee
Directors”) of EnteroMedics (the “Company”) capable of assuring the future success of the Company, to offer such personnel and Non-Employee Directors incentives to put forth maximum efforts for the success of the Company’s
business and to afford such personnel and Non-Employee Directors an opportunity to acquire a proprietary interest in the Company. 
 Section 2.
Definitions. 
 As used in the Plan, the following terms shall have the meanings set forth below: 
 (a) “Affiliate” shall mean (i) any entity that, directly or indirectly through one or more intermediaries, is controlled by the Company and
(ii) any entity in which the Company has a significant equity interest, in each case as determined by the Committee. 
 (b)
“Award” shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent, Other Stock Grant or Other Stock-Based Award granted under the Plan. 
 (c) “Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing any Award granted under the Plan.

 (d) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated
thereunder. 
 (e) “Committee” shall mean either the Board of Directors of the Company or a committee of the Board of Directors
appointed by the Board of Directors to administer the Plan. 
 (f) “Company” shall mean EnteroMedics Inc., a Delaware corporation,
and any successor corporation. 
 (g) “Dividend Equivalent” shall mean any right granted under Section 6(e) of the Plan.

 (h) “Eligible Person” shall mean any employee, officer, consultant, independent contractor or Non-Employee Director providing
services to the Company or any Affiliate whom the Committee determines to be an Eligible Person. 

 (i) “Fair Market Value” shall mean, with respect to any property (including, without
limitation, any Shares or other securities), the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. Notwithstanding the foregoing, unless otherwise determined by
the Committee, the Fair Market Value of Shares on a given date for purposes of the Plan shall not be less than (i) the closing price as reported for composite transactions, if the Shares are then listed on a national securities exchange,
(ii) the last sale price, if the Shares are then quoted on the Nasdaq National Market or (iii) the average of the closing representative bid and asked prices of the Shares in all other cases, on the date as of which fair market value is
being determined. If on a given date the Shares are not traded in an established securities market, the Committee shall make a good faith attempt to satisfy the requirements of this clause and in connection therewith shall take such action as it
deems necessary or advisable. 
 (j) “Incentive Stock Option” shall mean an option granted under Section 6(a) of the Plan that
is intended to meet the requirements of Section 422 of the Code or any successor provision. 
 (k) “Non-Qualified Stock
Option” shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option. 
 (l)
“Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option. 
 (m) “Other Stock Grant” shall mean any
right granted under Section 6(f) of the Plan. 
 (n) “Other Stock-Based Award” shall mean any right granted under
Section 6(g) of the Plan. 
 (o) “Participant” shall mean an Eligible Person designated to be granted an Award under the Plan.

 (p) “Performance Award” shall mean any right granted under Section 6(d) of the Plan. 
 (q) “Person” shall mean any individual, corporation, partnership, association or trust. 
 (r) “Plan” shall mean the EnteroMedics Inc. 2003 Stock Incentive Plan, as amended from time to time. 
 (s) “Restricted Stock” shall mean any Shares granted under Section 6(c) of the Plan. 
 (t) “Restricted Stock Unit” shall mean any unit granted under Section 6(c) of the Plan evidencing the right to receive a Share (or a cash
payment equal to the Fair Market Value of a Share) at some future date. 
 (u) “Shares” shall mean shares of Common Stock, $0.01
par value, of the Company or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(c) of the Plan. 
  

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 (v) “Stock Appreciation Right” shall mean any right granted under Section 6(b) of the
Plan. 
 Section 3. Administration. 
 (a) Power and Authority of the Committee. The Plan shall be administered by the Committee. Subject to the express provisions of the Plan and to applicable law, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights or other matters are to be
calculated in connection with) each Award; (iv) determine the terms and conditions of any Award or Award Agreement; (v) amend the terms and conditions of any Award or Award Agreement and accelerate the exercisability of Options or the
lapse of restrictions relating to Restricted Stock, Restricted Stock Units or other Awards; (vi) determine whether, to what extent and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited or suspended; (vii) determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award under the Plan
shall be deferred either automatically or at the election of the holder thereof or the Committee; (viii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (ix) establish, amend,
suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (x) make any other determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion
of the Committee, may be made at any time and shall be final, conclusive and binding upon any Participant, any holder or beneficiary of any Award. 
 (b) Delegation. The Committee may delegate its powers and duties under the Plan to one or more officers of the Company or any Affiliate or a committee of such officers, subject to such terms, conditions and limitations as the
Committee may establish in its sole discretion. 
 Section 4. Shares Available for Awards. 
 (a) Shares Available. Subject to adjustment as provided in Section 4(c), the aggregate number of Shares that may be issued under all Awards
under the Plan shall be 3,901,103. If any Shares covered by an Award or to which an Award relates are not purchased or are forfeited, or if an Award otherwise terminates without delivery of any Shares, then the number of Shares counted against the
aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture or termination, shall again be available for granting Awards under the Plan. Notwithstanding the foregoing, the number of Shares
available for granting Incentive Stock Options under the Plan shall not exceed 3,901,103, subject to adjustment as provided in the Plan and Section 422 or 424 of the Code or any successor provision. 
 (b) Accounting for Awards. For purposes of this Section 4, if an Award entitles the holder thereof to receive or purchase Shares, the number
of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan. 
  

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 (c) Adjustments. In the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or
other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to
be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the
number and type of Shares (or other securities or other property) that thereafter may be made the subject of Awards, (ii) the number and type of Shares (or other securities or other property) subject to outstanding Awards and (iii) the
purchase or exercise price with respect to any Award; provided, however, that the number of Shares covered by any Award or to which such Award relates shall always be a whole number. 
 Section 5. Eligibility. 
 Any Eligible Person of the Company or any Affiliate, shall be eligible
to be designated a Participant. In determining which Eligible Persons shall receive an Award and the terms of any Award, the Committee may take into account the nature of the services rendered by the respective Eligible Persons, their present and
potential contributions to the success of the Company or such other factors as the Committee, in its discretion, shall deem relevant. Notwithstanding the foregoing, an Incentive Stock Option may only be granted to full or part-time employees (which
term as used herein includes, without limitation, officers and directors who are also employees), and an Incentive Stock Option shall not be granted to an employee of an Affiliate unless such Affiliate is also a “subsidiary corporation” of
the Company within the meaning of Section 424(f) of the Code or any successor provision. 
 Section 6. Awards. 
 (a) Options. The Committee is hereby authorized to grant Options to Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine: 
 (i) Exercise
Price. The purchase price per Share purchasable under an Option shall be determined by the Committee; provided, however, that the purchase price of an Incentive Stock Option shall not be less than 100% of the Fair Market Value of a Share on the
date of grant of such Option. 
 (ii) Option Term. The term of each Option shall be fixed by the Committee; provided,
however, that the term of an Incentive Stock Option may not extend more than ten years from the date of grant of such Incentive Stock Option. 
 (iii) Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or 

  

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methods by which, and the form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination
thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price, which terms shall be set forth in the Award Agreement) in which payment of the exercise price with respect thereto may be made or deemed to have been
made. 
 (iv) Ten Percent Shareholder Rule. Notwithstanding any other provision in the Plan, if at the time an Option
is otherwise to be granted pursuant to the Plan to a Participant who owns, directly or indirectly (within the meaning of Section 424(d) of the Code), Common Stock of the Company possessing more than 10% of the total combined voting power of all
classes of stock of the Company or its parent or any subsidiary, then any Incentive Stock Option to be granted to such Participant pursuant to the Plan shall satisfy the requirements of Section 422(c)(5) of the Code, and the exercise price of
such Option shall be not less than 110% of the Fair Market Value of the Shares covered, and such Option by its terms shall not be exercisable after the expiration of five years from the date such Option is granted. 
 (b) Stock Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Participants subject to the terms of the
Plan and any applicable Award Agreement. A Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive upon exercise thereof the excess of (i) the Fair Market Value of one Share on the date of exercise
(or, if the Committee shall so determine, at any time during a specified period before or after the date of exercise) over (ii) the grant price of the Stock Appreciation Right as specified by the Committee, which price shall not be less than
100% of the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right. Subject to the terms of the Plan and any applicable Award Agreement, the grant price, term, methods of exercise, dates of exercise, methods of
settlement and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee. The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it may deem
appropriate. 
 (c) Restricted Stock and Restricted Stock Units. The Committee is hereby authorized to grant Restricted Stock and
Restricted Stock Units to Participants with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine: 
 (i) Restrictions. Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may
impose (including, without limitation, a waiver by the Participant of the right to vote or to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times, in
such installments or otherwise as the Committee may deem appropriate. 
 (ii) Stock Certificates. Any Restricted Stock
shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock. In the case of Restricted Stock Units, no Shares shall be issued at the
time such Awards are granted. 
  

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 (iii) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment (as determined under criteria established by the Committee) during the applicable restriction period, all Shares of Restricted Stock and all Restricted Stock Units at such time subject to restriction shall be forfeited and
reacquired by the Company at the original purchase price; provided, however, that the Committee may, when it finds that a waiver would be in the best interest of the Company, waive in whole or in part any or all remaining restrictions with respect
to Shares of Restricted Stock or Restricted Stock Units. Upon the lapse or waiver of restrictions and the restricted period relating to Restricted Stock Units evidencing the right to receive Shares, such Shares shall be issued and delivered to the
holders of the Restricted Stock Units. 
 (d) Performance Awards. The Committee is hereby authorized to grant Performance Awards to
Participants subject to the terms of the Plan and any applicable Award Agreement. A Performance Award granted under the Plan (i) may be denominated or payable in cash, Shares (including, without limitation, Restricted Stock and Restricted Stock
Units), other securities, other Awards or other property and (ii) shall confer on the holder thereof the right to receive payments, in whole or in part, upon the achievement of such performance goals during such performance periods as the
Committee shall establish. Subject to the terms of the Plan and any applicable Award Agreement, the performance goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Award granted,
the amount of any payment or transfer to be made pursuant to any Performance Award and any other terms and conditions of any Performance Award shall be determined by the Committee. 
 (e) Dividend Equivalents. The Committee is hereby authorized to grant Dividend Equivalents to Participants, subject to the terms of the Plan and
any applicable Award Agreement, under which such Participants shall be entitled to receive payments (in cash, Shares, other securities, other Awards or other property as determined in the discretion of the Committee) equivalent to the amount of cash
dividends paid by the Company to holders of Shares with respect to a number of Shares determined by the Committee. 
 (f) Other Stock
Grants. The Committee is hereby authorized, subject to the terms of the Plan and any applicable Award Agreement, to grant to Participants Shares without restrictions thereon as are deemed by the Committee to be consistent with the purpose of the
Plan. 
 (g) Other Stock-Based Awards. The Committee is hereby authorized to grant to Participants subject to the terms of the Plan
and any applicable Award Agreement, such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as
are deemed by the Committee to be consistent with the purpose of the Plan. Shares or other securities delivered pursuant to a purchase right granted under this Section 6(g) shall be purchased for such consideration, which may be paid by such
method or methods and in such form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property or any combination thereof), as the Committee shall determine. 
  

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 (h) General. 
 (i) No Cash Consideration for Awards. Awards shall be granted for no cash consideration or for such minimal cash consideration as
may be required by applicable law. 
 (ii) Awards May Be Granted Separately or Together. Awards may, in the discretion
of the Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award or any award granted under any plan of the Company or any Affiliate other than the Plan. Awards granted in addition to or in tandem
with other Awards or in addition to or in tandem with awards granted under any such other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

 (iii) Forms of Payment under Awards. Subject to the terms of the Plan and of any applicable Award Agreement,
payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine (including, without limitation, cash, Shares, other securities, other
Awards or other property or any combination thereof), and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents with respect to installment or deferred payments.

 (iv) Limits on Transfer of Awards. No Award (other than Other Stock Grants) and no right under any such Award shall
be transferable by a Participant otherwise than by will or by the laws of descent and distribution; provided, however, that, with the approval of the Committee, a Participant may, in the manner established by the Committee, transfer Options (other
than Incentive Stock Options) or designate a beneficiary or beneficiaries to exercise the rights of the Participant and receive any property distributable with respect to any Award upon the death of the Participant. Each Award or right under any
Award shall be exercisable during the Participant’s lifetime only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative. No Award or right under any such Award may be pledged,
alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate. 
 (v) Term of Awards. The term of each Award shall be for such period as may be determined by the Committee. 
 (vi) Restrictions; Securities Exchange Listing. All Shares or other securities delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such restrictions as the Committee may deem advisable under the Plan, and to any applicable federal or state securities laws and regulatory requirements. The Committee may cause appropriate entries to be made
or legends to be affixed to reflect such 

  

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restrictions. If the Shares or other securities are listed on a securities exchange, the Company shall not be required to deliver any Shares or other
securities covered by an Award until such Shares or other securities have been listed on such securities exchange. 
 Section 7. Amendment and
Termination; Adjustments. 
 Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award
Agreement or in the Plan: 
 (a) Amendments to the Plan. The Board of Directors of the Company may amend, alter, suspend, discontinue
or terminate the Plan; provided, however, that, notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the shareholders of the Company, no such amendment, alteration, suspension, discontinuation or
termination shall be made that, absent such approval: 
 (i) if a class of the Company’s securities is then listed on a
securities exchange, would cause Rule 16b-3 or the provisions of Section 162(m)(4)(c) of the Code to become unavailable with respect to the Plan; 
 (ii) would violate the rules or regulations of the Nasdaq National Market, any other securities exchange or the National Association of Securities Dealers, Inc. that are applicable to the Company; or 
 (iii) would cause the Company to be unable, under the Code, to grant Incentive Stock Options under the Plan. 
 (b) Amendments to Awards. The Committee may waive any conditions of or rights of the Company under any outstanding Award, prospectively or
retroactively. The Committee may not amend, alter, suspend, discontinue or terminate any outstanding Award, prospectively or retroactively, without the consent of the Participant or holder or beneficiary thereof, except as otherwise herein provided
or in the Award Agreement. 
 (c) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply
any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect. 
 Section 8. Income Tax Withholding; Tax Bonuses. 
 (a) Withholding. In order to comply with all applicable federal
or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a
Participant are withheld or collected from such Participant. In order to assist a Participant in paying all or a portion of the federal and state taxes to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating
to) an Award, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Participant to satisfy such tax obligation by (i) electing to have the Company withhold a portion of the Shares
otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of 

  

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such taxes or (ii) electing to deliver to the Company Shares other than Shares issuable upon exercise or receipt of (or the lapse of restrictions
relating to) such Award with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined. 
 (b) Tax Bonuses. The Committee, in its discretion, shall have the authority, at the time of grant of any Award under this Plan or at any time
thereafter, to approve cash bonuses to designated Participants to be paid upon their exercise or receipt of (or the lapse of restrictions relating to) Awards in order to provide funds to pay all or a portion of federal and state taxes due as a
result of such exercise or receipt (or the lapse of such restrictions). The Committee shall have full authority in its discretion to determine the amount of any such tax bonus. 
 Section 9. General Provisions. 
 (a) No Rights to Awards. No Eligible Person, Participant
or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Persons, Participants or holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to different Participants. 
 (b) Award Agreements. No
Participant will have rights under an Award granted to such Participant unless and until an Award Agreement shall have been duly executed on behalf of the Company and, if requested by the Company, signed by the Participant. 
 (c) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases. 
 (d) No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate, nor will it affect in any way the right
of the Company or an Affiliate to terminate such employment at any time, with or without cause. In addition, the Company or an Affiliate may at any time dismiss a Participant from employment free from any liability or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award Agreement. 
 (e) Governing Law. The validity, construction and effect
of the Plan or any Award, and any rules and regulations relating to the Plan or any Award, shall be determined in accordance with the laws of the State of Minnesota. 
 (f) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or
intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect. 
  

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 (g) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to
create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate
pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate. 
 (h)
No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash shall be paid in lieu of any fractional Shares or whether such fractional Shares or any
rights thereto shall be canceled, terminated or otherwise eliminated. 
 (i) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. 
 (j) Other Benefits. No compensation or benefit awarded to or realized by any Participant under the Plan shall be included for the purpose of
computing such Participant’s compensation under any compensation-based retirement, disability, or similar plan of the Company unless required by law or otherwise provided by such other plan. 
 Section 10. Effective Date of the Plan. 
 The
Plan shall be effective as of the date of its approval and adoption by the Company’s shareholders. If the Company’s shareholders do not approve the Plan, the Plan shall be null and void. 
 Section 11. Term of the Plan. 
 Awards shall only
be granted under the Plan during a 10-year period beginning on the effective date of the Plan. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond the end of
such 10-year period, and the authority of the Committee provided for hereunder with respect to the Plan and any Awards, and the authority of the Board of Directors of the Company to amend the Plan and to waive any conditions or rights of the Company
under any Award pursuant to 7(b) hereof, shall extend beyond the termination of the Plan. 
  

 10Form of Warrant to Puchase Stock

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

 

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

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

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

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

	 	1.6.2	Treatment of Warrant at Acquisition. 

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

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

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

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

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

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

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

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

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

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

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

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

			
	HOLDER:
	
	 
		
	By:	 	 

			
		
	Name:	 	 

			
		
	Title:	 	 

			
		
	(Date):

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