EXHIBIT 10.15.1
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT MARKED WITH [***]
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit Agreement (this “Amendment”) is entered into as
of February 20, 2012, by and between WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Bank”) and ENDOLOGIX, INC. (“Existing Borrower”) and NELLIX, INC. (“New
Borrower” and together with Existing Borrower, each a “Borrower” and,
collectively, “Borrowers”).
RECITALS
Existing Borrower and Bank are parties to that certain Credit Agreement dated as
of October 30, 2009, as amended from time to time, including by that certain
First Amendment to Credit Agreement dated as of April 13, 2010 and that certain
Second Amendment to Credit Agreement dated as of December 21, 2011 (the
“Agreement”). The parties desire to amend the Agreement in accordance with the
terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1.The term “Borrower” as used in the Agreement shall mean Existing Borrower and
New Borrower, individually and collectively, jointly and severally.
2.    Section 1.1(a) of the Agreement hereby is amended and restated in its
entirety to read as follows:
“(a)    Line of Credit. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make advances to Borrower from time to time up to and
including March 31, 2013, not to exceed at any time the aggregate principal
amount of Twenty Million Dollars ($20,000,000) (the “Line of Credit”), the
proceeds of which shall be used for general working capital and corporate
purposes. Borrower’s obligation to repay advances under the Line of Credit shall
be evidenced by a promissory note dated as of October 30, 2009, as amended and
restated on February 20, 2012 (as may be further amended, restated, modified or
supplemented from time to time, the “Line of Credit Note”), all terms of which
are incorporated herein by this reference.”
3.    Section 1.1(b) of the Agreement hereby is amend and restated in its
entirety to read as follows:
“(b)    Limitations on Borrowings. Outstanding borrowings under the Line of
Credit, to a maximum of the principal amount set forth above, shall not at any
time exceed to aggregate amounts set forth on Schedule I hereto, which Schedule
I shall be completed by Bank and appended hereto from time to time after an
audit of the Collateral and/or an audit of Borrower’s inventory, and all terms
of which are incorporated herein by this reference.”
4.    Section 1.1(c) of the Agreement hereby is amend and restated in its
entirety to read as follows:

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“(c)    Letter of Credit Subfeature. As a subfeature under the Line of Credit,
Bank agrees from time to time during the term thereof to issue or cause an
affiliate to issue letters of credit for the account of Borrower (each, a
“Letter of Credit” and collectively, “Letters of Credit”); provided however,
that the aggregate undrawn amount of all outstanding Letters of Credit shall not
at any time exceed One Million Dollars ($1,000,000). The form and substance of
each Letter of Credit shall be subject to approval by Bank, in its sole
discretion. Each Letter of Credit shall be issued for a term not to exceed three
hundred sixty five (365) days, as designated by Borrower (subject to automatic
renewal). If a Letter of Credit is outstanding after the term of the Line of
Credit (or after acceleration by Bank pursuant to the terms hereof), Borrower
will cash collateralize the undrawn amount of such Letter of Credit in an amount
equal to one hundred five percent (105%) of such undrawn amount. The undrawn
amount of all Letters of Credit shall be reserved under the Line of Credit and
shall not be available for borrowings thereunder. Each Letter of Credit shall be
subject to the additional terms and conditions of the Letter of Credit
agreements, applications and any related documents required by Bank in
connection with the issuance thereof. Each drawing paid under a Letter of Credit
shall be deemed an advance under the Line of Credit and shall be repaid by
Borrower in accordance with the terms and conditions of this Agreement
applicable to such advances; provided however, that if advances under the Line
of Credit are not available, for any reason, at the time any drawing is paid,
then Borrower shall immediately pay to Bank the full amount drawn, together with
interest thereon from the date such drawing is paid to the date such amount is
fully repaid by Borrower, at the rate of interest applicable to advances under
the Line of Credit. In such event Borrower agrees that Bank, in its sole
discretion, may debit any account maintained by Borrower with Bank for the
amount of any such drawing.”
5.    Section 1.1(d) of the Agreement hereby is amend and restated in its
entirety to read as follows:
“(d)    Credit Card Services Subfeature. Subject to the terms and conditions of
this Agreement, Borrower may request corporate credit cards from Bank (the
“Credit Card Services”). The aggregate limit of the corporate credit cards shall
not exceed Two Million Dollars ($2,000,000), provided that availability under
the Line of Credit shall be reduced by the aggregate limits of the corporate
credit cards issued to Borrower. In addition, Bank may, in its sole reasonable
discretion, charge as advances under the Line of Credit any amounts that become
due or owing to Bank in connection with the Credit Card Services. If any Credit
Card Services remain outstanding after the term of the Line of Credit (or after
acceleration by Bank pursuant to the terms hereof), Borrower will cash
collateralize the outstanding amount of such Credit Card Services in an amount
equal to one hundred five percent (105%) of such outstanding amount. The terms
and conditions (including repayment and fees) of such Credit Card Services shall
be subject to the terms and conditions of the Bank’s standard forms of
application and agreement for the Credit Card Services, which Borrower hereby
agrees to execute.”
6.    New Section 1.6 hereby is added to the Agreement to read as follows:
“SECTION 1.6.    GUARANTIES. The payment and performance of all Indebtedness and
other obligations of Borrower to Bank hereunder shall be guaranteed jointly and
severally by all present and future Material Subsidiaries which guaranties shall
be secured by unconditional, continuing pledges and security interests in and to
all of the assets and properties of such Material Subsidiaries (any such
Material Subsidiary, together with any other guarantors of the Line of Credit
and/or any other Indebtedness of Borrower to Bank from time to time, each a
“Guarantor” and collectively, “Guarantors”), as evidenced by and subject to the
terms of guaranties in form and substance satisfactory to Bank (the “Guaranty”).
Upon the creation or acquisition of any new Material Subsidiary or of any
Subsidiary becoming a Material Subsidiary, Borrower and such Subsidiary shall:
(a) promptly notify Bank of the creation or acquisition of such Material
Subsidiary, (b) take all such action as may be reasonably required by Bank to
cause such Material Subsidiary to guarantee the

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obligations of Borrower hereunder and grant such pledges and security interests
in all of its properties and assets to secure payment and performance of such
obligations, and (c) take all such action as may be reasonably required by Bank
to grant and pledge to Bank a first-priority security interest in the stock or
other equity interests of, and any indebtedness owing from, such Material
Subsidiary. Notwithstanding anything to the contrary contained herein, in the
event that Borrower demonstrates to Collateral Agent’s reasonable satisfaction
that a Guaranty by a Foreign Subsidiary or pledge of more than sixty five
percent (65%) of the Shares of a Foreign Subsidiary creates a present and
existing adverse tax consequence to Borrower under the U.S. Internal Revenue
Code (i) no Foreign Subsidiary shall be required to provide a Guaranty and (ii)
Borrower shall not be required to pledge more than sixty five percent (65%) of
the of the total combined voting power of all classes of stock entitled to vote
the shares of capital stock of any such Foreign Subsidiary.

As used herein, “Subsidiary” is, as to any person or entity, a corporation,
partnership, limited liability company or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time owned,
or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such person or entity.

As used herein, “Material Subsidiary” means as of the last day of each of
Borrower’s fiscal quarters, any of Borrower’s direct or indirect Subsidiaries
that owns or holds assets as of such date (excluding assets consisting of equity
interests in Borrower’s Subsidiaries) equal to or greater than ten percent
(10.0%) of Borrower’s and its consolidated Subsidiaries’ total assets as of such
date.

As used herein, “Foreign Subsidiary” means any Subsidiary of Borrower not
incorporated or organized under the laws of one of the States or jurisdictions
of the United States.”

7.    Section 4.3(a) of the Agreement hereby is amended and restated in its
entirety to read as follows:
“(a)    (x) not later than one hundred twenty (120) days after and as of the end
of each fiscal year, CPA audited financial statements of Borrower, prepared by a
CPA firm reasonably acceptable to Bank, together with an unqualified opinion
with respect to the financial statements prepared by such CPA firm as well as
auditor’s report; and (y) not later than ninety (90) days after and as of the
end of each fiscal year, company prepared annual financial statements; in each
case, which financial statements shall include a balance sheet, income
statement, statement of cash flows and all supporting schedules;”
8.    Section 4.3(b) of the Agreement hereby is amended by deleting the phrase
“forty-five (45) days” as it appears therein and replacing it with the phrase
“sixty (60) days”.
9.    Section 4.3(e) of the agreement hereby is amended by deleting the term
“and” as it appears at the end thereof.
10.    Section 4.3(f) of the Agreement hereby is amended and restated in its
entirety to read as follows:
“(f)    (x) prior to requesting any advance under the Line of Credit (other than
advances in respect of Letters of Credit or Credit Card Services); and (y) for
any month during which advances are outstanding under the Line of Credit (other
than advances in respect of Letters of Credit or Credit Card Services), not
later than thirty (30) days after the end of each month, a borrowing base
certificate, an aged listing of accounts receivable and accounts payable, and a
reconciliation of accounts, and immediately upon each request from Bank, a list
of the names and addresses of all Borrower’s account

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debtors;”
11.    A new Section 4.3(g) hereby is added to the Agreement to read as follows:
“(g)    from time to time such other information as Bank may reasonably
request.”
12.    Section 4.9(a) of the Agreement hereby is amended and restated in its
entirety to read as follows:
(a)    Modified Quick Ratio greater than (i) 1.50 to 1.00 at all times, measured
quarterly, with “Modified Quick Ratio” defined as (I) the sum of the aggregate
of Borrower’s unrestricted cash at Bank or subject to an account control
agreement in favor of, and in form and substance satisfactory to, Bank, plus
Eligible Accounts, divided by (II) total current liabilities plus, to the extent
not already included therein, all indebtedness owing from Borrower to Bank.
13.    Section 4.9(b) of the Agreement hereby is amended and restated in its
entirety to read as follows:
“(b)    net loss (excluding all non-cash contingent payments and/or accruals
associated with Borrower’s acquisition of New Borrower, approved by Bank) at all
times, measured cumulatively and on a quarterly basis, of not more than (i) Six
Million Five Hundred Thousand Dollars ($6,500,000) through March 31, 2012; (ii)
Eleven Million Dollars ($11,000,000) through June 30, 2012; and Thirteen Million
Dollars ($13,000,000) thereafter.”
14.    Section 5.2 of the Agreement hereby is amended and restated in its
entirety to read as follows:
“CAPITAL EXPENDITURES. Make any additional investment in fixed assets in excess
of an aggregate of Three Million Dollars ($3,000,000) in the fiscal year ending
December 31, 2012.”
15.    Section 6.1(f) of the Agreement hereby is amended and restated in its
entirety to read as follows:
“(f)    Other than with respect to a judgment or settlement filed against
Borrower [***] at any time, the filing of a notice of judgment lien against
Borrower or any Third Party Obligor; or the recording of any abstract of
judgment against Borrower or any Third Party Obligor in any county in which
Borrower or such Third Party Obligor has an interest in real property; or the
service of a notice of levy and/or of a writ of attachment or execution, or
other like process, against the assets of Borrower or any Third Party Obligor;
or the entry of a judgment against Borrower or any Third Party Obligor; or any
involuntary petition or proceeding pursuant to the Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy, reorganization or other
relief for debtors is filed or commenced against Borrower or any Third Party
Obligor.”
16.    No course of dealing on the part of Bank or its officers, nor any failure
or delay in the exercise of any right by Bank, shall operate as a waiver
thereof, and any single or partial exercise of any such right shall not preclude
any later exercise of any such right. Bank’s failure at any time to require
strict performance by Borrower of any provision shall not affect any right of
Bank thereafter to demand strict compliance and performance. Any suspension or
waiver of a right must be in writing signed by an officer of Bank.
17.    Unless otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement. The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects. Except as
expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Bank under the Agreement, as in effect prior to the date
hereof.

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18.    Borrower represents and warrants that the Representations and Warranties
contained in the Agreement are true and correct as of the date of this
Amendment, and that no Event of Default has occurred and is continuing.
19.    As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank:
(a)    this Amendment, duly executed by Borrower;
(b)    an Amended and Restated Promissory Note dated as of even date herewith;
(c)    Corporate Resolution: Borrowing, duly executed by the Secretary of each
Borrower; and
[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE SECURITES AND
    EXCHANGE COMMISSION.
(d)    Payment of a commitment fee in the amount of Twenty Five Thousand Dollars
($25,000).
(e)    all reasonable fees and expenses incurred through the date of this
Amendment, which may be debited from any of Borrower's accounts.
20.    This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instrument.

[Balance of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.
 
ENDOLOGIX, INC.
 
 
 
 
 
By: /S/ ROBERT KRIST
 
 
 
Title:CFO
 
 
 
 
 
NELLIX, INC.
 
 
 
 
 
By:/S/ JOHN MCDERMOTT
 
 
 
Title: Officer and Director
 
 
 
 
 
WELLS FARGO BANK, NATIONAL ASSOCIATION
 
 
 
 
 
By:/S/ JASON WELLS
 
 
 
Title:Vice President