Document:

Corrected Second Amended and Restated Severance Agreement with Keith L. Barnes

 EXHIBIT 10.3 
 CORRECTED SECOND AMENDED AND RESTATED SEVERANCE 
 AGREEMENT 
 This Corrected Second Amended and Restated Severance Agreement (the “Agreement”) is entered into this     day of March, 2010 (the “Effective
Date”), between Verigy Ltd., a Singapore corporation (the “Company”), and Keith L. Barnes (“Executive”), who currently serves as Chairman, President and Chief Executive Officer of the
Company. 
 RECITALS 
 WHEREAS, the Company and Executive entered into a severance agreement, dated on or about December 20, 2006 (the “Original Severance Agreement”), which was replaced in
its entirety by an Amended and Restated Severance Agreement dated on or about March 7, 2008 (the “First Restated Severance Agreement”); 
 WHEREAS, the First Restated Severance Agreement was replaced in its entirety by a Second Amended and Restated Severance Agreement dated on or about December 17, 2008 (the “Second
Restated Severance Agreement”) in light of the regulations and guidance provided under, and to bring the severance terms into documentary compliance with Section 409A of the Internal Revenue Code (the
“Code”) and the final regulations and other official guidance thereunder; and 
 WHEREAS, it was
subsequently discovered that the Second Amended & Restated Severance Agreement contained a typographical error which the parties desire to correct by executing and delivering this Agreement. 
 NOW THEREFORE, in consideration of the following: 
 A. As is the case with most, if not all, publicly traded businesses, it is expected that the Company from time to time may consider or may be presented with the need to consider the possibility of
an acquisition by another company or other change in control of the ownership of the Company. The Board of Directors of the Company (the “Board”) recognizes that such considerations can be a distraction to Executive and can
cause Executive to consider alternative employment opportunities or to be influenced by the impact of a possible change in control of the ownership of the Company on Executive’s personal circumstances in evaluating such possibilities. The Board
has determined that it is in the best interests of the Company and its shareholders to ensure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of a Change of
Control of the Company. 
 B. The Board believes that it is in the best interests of the Company and its shareholders to
provide Executive with an incentive to continue his/her employment and to motivate Executive to maximize the value of the Company for the benefit of its shareholders. 
 C. The Board believes that it is important to provide Executive with certain benefits upon Executive’s termination of employment in certain instances that provide Executive with enhanced
financial security and incentive and encouragement to Executive to remain with the Company. 

 D. At the same time, the Board expects the Company to receive certain benefits in
exchange for providing Executive with this measure of financial security and incentive under the Agreement. Therefore, the Board believes that Executive should provide various specific commitments, which are intended to assure the Company that
Executive will not direct Executive’s skills, experience and knowledge to the detriment of the Company for a period not to exceed the period during which payments are being made to Executive under this Agreement. 
 E. Certain capitalized terms used in this Agreement are defined in Article VIII. 
 The Company and Executive hereby agree as follows: 
 ARTICLE I 
 EMPLOYMENT BY THE COMPANY 
 1.1 This Agreement shall be in effect commencing on the Effective Date and ending on the later of (i) the date when Executive
ceases to be employed by the Company for any reason or (ii) the date when all obligations of the parties under this Agreement have been met. 
 1.2 The Company and Executive each agree and acknowledge that Executive is employed by the Company as an “at-will” employee and that either Executive or the Company has the right at any
time to terminate Executive’s employment with the Company, with or without cause or advance notice, for any reason or for no reason. This Agreement does not constitute a contract of employment or impose on Executive any obligation to remain as
an employee or impose on the Company any obligation (i) to retain Executive as an employee, (ii) to change the status of Executive as an at-will employee or (iii) to change the Company’s policies regarding termination of
employment. In this Agreement, the Company and Executive wish to set forth the compensation and benefits that Executive shall be entitled to receive in the event that Executive’s employment with the Company terminates under the circumstances
described in Article II or III. 
 1.3 The duties and obligations of the Company to Executive under this
Agreement shall be in consideration for Executive’s past services to the Company, Executive’s continued employment with the Company, Executive’s compliance with the obligations described in Section 5.4, and Executive’s
execution of the general waiver and release described in Section 5.5. The Company and Executive agree that Executive’s compliance with the obligations described in Section 5.4 and Executive’s execution of the general waiver and
release described in Section 5.5 are preconditions to Executive’s entitlement to the receipt of benefits under this Agreement and that these benefits shall not be earned unless all such conditions have been satisfied through the scheduled
date of payment. The Company hereby declares that it has relied upon Executive’s commitments under this Agreement to comply with the requirements of Article V and would not have been induced to enter into this Agreement or to execute this
Agreement in the absence of such commitments. 
  

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 ARTICLE II 
 TERMINATION BEFORE CHANGE IN CONTROL 
 2.1
Termination without Cause. In the event (i) Executive’s employment with the Company and its subsidiaries is involuntarily terminated at any time by the Company without Cause or (ii) Executive voluntarily terminates his/her
employment within three months of the occurrence of an event constituting Good Reason and on account of an event constituting Good Reason and, in each case, Article III does not apply, then such termination of employment will be a Termination
Event and the Company shall pay Executive the compensation and benefits described in this Article II, subject to Executive complying with his/her obligations described in Sections 5.4 and 5.5 of this Agreement. 
 2.2 Disability. In the event Executive’s employment with the Company and its subsidiaries terminates as a result of his/her
Disability, then Executive shall be entitled to the pro rated final period bonus described in Section 2.5, the stock award acceleration described in Section 2.6 and the Company-reimbursed health insurance coverage described in
Section 2.7 (but none of the other compensation and benefits described in this Article II). 
 2.3 Death. In
the event Executive’s employment with the Company and its subsidiaries terminates as a result of his/her death, then Executive’s survivors shall be entitled to the pro rated final period bonus described in Section 2.5 and the stock
award acceleration described in Section 2.6 (but none of the other compensation and benefits described in this Article II). 
 2.4 Lump Sum Payment upon Termination before Change in Control. If a Termination Event described in Section 2.1 occurs, Executive shall receive a single lump sum amount equal to the sum of Executive’s Base Salary and Target
Bonus, less any applicable withholding of federal, state, local or foreign taxes within five business days after the later of: (i) the date of the Termination Event or (ii) the effective date of the general waiver and release of claims
entered unto between Executive and the Company, subject to the terms provided in Section 5.5 below; provided, however, that the timing of such payments shall be subject to any delay period required under Section 5.6 of this Agreement.

 2.5 Bonus for Final Period. If a Termination Event described in Section 2.1 occurs, Executive shall receive a pro
rated bonus for the performance period in which the Termination Event occurs (in addition to the amount described in Section 2.4). The amount of the bonus shall be equal to the Target Bonus for the period in which the Termination Event occurred
multiplied by a fraction in which (i) the numerator is the number of days from and including the first day of the performance period until and including the date of the Termination Event and (ii) the denominator is the number of days in
the performance period. Subject to any delay period required under Section 5.6 of this Agreement. Such bonus shall be paid at the time prescribed in Section 2.4. Executive’s rights to the payment provided in this Section 2.5
shall not be subject to Section 5.4. 
  

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 2.6 Stock Award Acceleration upon Termination before Change in Control. 

(a) Executive’s Stock Options that are outstanding as of the date of a Termination Event described in this Article II shall
become fully vested upon the occurrence of such Termination Event and exercisable so long as Executive complies with the restrictions and limitations set forth in Article V. The Stock Options shall remain exercisable until the earlier of
(i) the fifteen month anniversary of the date of the Termination Event or (ii) the expiration of each option in accordance with its original terms provided, in either case, that Executive complies with his/her obligations under Article V
of this Agreement. The term “Stock Options” shall not include any rights of Executive under the Company’s 2006 Employee Shares Purchase Plan or similar plans. 
 (b) Executive’s Restricted Stock awards that are outstanding as of the date of a Termination Event described in this Article II
shall become fully vested and free from any contractual rights of the Company to repurchase or otherwise reacquire the Restricted Stock as a result of Executive’s termination of employment. All shares of Restricted Stock that have not yet been
delivered to Executive or his/her designee (whether because subject to joint escrow instructions or otherwise) shall be promptly delivered to Executive or his/her designee upon the occurrence of a Termination Event described in this Article II.

 Executive’s Stock Units that are outstanding as of the date of a Termination Event described in this Article II shall become fully
vested as a result of Executive’s termination of employment. All Stock Units that have not yet been settled shall be promptly settled, in the form specified in the relevant Stock Unit agreements and relevant stock plans under which the Stock
Units were granted, upon the occurrence of a Termination Event described in this Article II. 
 2.7 Health &
Welfare Benefits Coverage. 
 (a) Following the occurrence of a Termination Event described in Section 2.1, to the
extent permitted by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and codified in Section 4980B of the Code and the regulations thereunder (“COBRA”) and by the Company’s group health insurance
policies, Executive and/or Executive’s covered dependents will be eligible to continue their health insurance benefits at their own expense. However, if Executive and/or Executive’s covered dependents timely elect COBRA continuation for
Executive and/or Executive’s covered dependents, the Company shall reimburse Executive and/or Executive’s covered dependents’ COBRA continuation premiums for group health coverage for 12 months, provided that the Company’s
obligation to make such reimbursements shall cease immediately to the extent that Executive and/or Executive’s covered dependents are no longer entitled by law to receive COBRA continuation coverage. Executive agrees to notify a duly authorized
officer of the Company in writing immediately upon Executive’s and/or a covered dependent’s beginning to receive health benefits from another source, or as otherwise required by COBRA. This Section 2.7(a) provides only for the
Company’s reimbursement of COBRA continuation premiums for the periods specified above, and does not affect the rights of Executive and/or Executive’s covered dependents under any applicable law with respect to health insurance
continuation coverage. Such reimbursements shall be made as soon as administratively feasible following the Company’s receipt of appropriate documentation. 
  

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 ARTICLE III 
 TERMINATION AFTER CHANGE IN CONTROL 
 3.1
Involuntary Termination upon or Following Change of Control. In the event Executive’s employment with the Company and its subsidiaries is involuntarily terminated at any time by the Company without Cause either (i) at the time of or
within 24 months following the occurrence of a Change of Control, (ii) within three months prior to a Change of Control, whether or not such termination is at the request of an Acquiror, or (iii) at any time more than three months prior to
a Change of Control that constitutes a “change in control” within the meaning of Section 409A if such termination is at the request of an Acquiror, then such termination of employment will be a Termination Event and the Company shall
pay Executive the compensation and benefits described in this Article III in the manner and at the time described in Section 3.3, subject to Executive complying with his/her obligations described in Sections 5.4 and 5.5 of this Agreement.
If the Company reasonably believes that a Change of Control will not occur within three months following the termination of Executive, but in fact a Change of Control does occur within three months following such termination, Executive will be
provided with the compensation and benefits described in this Article III in the manner and at the time described in Section 3.3. An “Acquiror” is either a person or a member of a group of related persons representing such
group that in either case obtains effective control of the Company in the transaction or a group of related transactions constituting the Change of Control. For the elimination of doubt, in the event Executive’s employment with the Company and
its subsidiaries is involuntarily terminated by the Company without Cause and the circumstances described in this Section 3.1 are not applicable, then Article II will apply to such event. 
 3.2 Voluntary Termination For Good Reason Upon or Following Change of Control. 
 (a) In the event Executive voluntarily terminates his/her employment within three months of the occurrence of an event constituting Good
Reason and on account of an event constituting Good Reason, which event occurs either (i) at the time of or within 24 months following the occurrence of a Change of Control, (ii) within three months prior to a Change of Control,
whether or not such termination is at the request of an Acquiror, or (iii) at any time more than three months prior to a Change of Control that constitutes a “change in control” within the meaning of Section 409A if such
triggering event or Executive’s termination is at the request of an Acquiror, then such termination of employment will be a Termination Event and the Company shall pay Executive the compensation and benefits described in this Article III
in the manner and at the time described in Section 3.3, subject to Executive complying with his/her obligations described in Sections 5.4 and 5.5 of this Agreement. If the Company reasonably believes that a Change of Control will not occur
within three months following the voluntary termination for Good Reason by Executive, but a Change of Control does in fact occur within three months following such termination, Executive will be provided with the compensation and benefits described
in this Article III in the manner and at the time described in Section 3.3. 
  

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 (b) In the event Executive voluntarily terminates his/her employment for any reason other
than on account of an event constituting Good Reason under the circumstances described in Section 3.2(a), then such termination of employment will not be a Termination Event, Executive will not be entitled to receive any payments
or benefits under the provisions of this Agreement, and the Company will cease paying compensation or providing benefits to Executive as of Executive’s termination date. 
 3.3 Lump Sum Payment upon Termination after Change in Control. 
 (a) If a Termination Event described in this Article III occurs, Executive shall receive an amount equal to two times the sum of
Executive’s Base Salary and Target Bonus, less any applicable withholding of federal, state, local or foreign taxes; provided, however, that the Company may deduct from amounts payable to Executive pursuant to this Article III any amounts paid
to Executive pursuant to Article II. 
 (b) The salary and bonus amounts payable pursuant to this Article III shall be paid in a
single lump sum. Such payments, (i) up to the amounts that would have payable under Article II had the Termination Event occurred under Article II, will be paid at the time(s) and in the form provided under Section 2.4, and (ii) any
remaining salary and bonus amounts shall be paid in a lump sum (x) on the 3-month anniversary of the Termination Event, or (y) if the triggering event is Section 3.1(iii) or Section 3.2(a)(iii), on the Change of Control, in each
case subject to the terms provided in Section 5.5 below, and provided further that the timing of such payments shall be subject to any delay period required under Section 5.6 of this Agreement. 
 3.4 Bonus for Final Period. If a Termination Event described in this Article III occurs, Executive shall receive a pro rated
bonus for the performance period in which the Termination Event occurs (in addition to the amount described in Section 3.3). The amount of the bonus shall be equal to Target Bonus for the period in which the Termination Event occurred
multiplied by a fraction in which (i) the numerator is the number of days from and including the first day of the performance period until and including the date of the Termination Event and (ii) the denominator is the number of days in
the performance period. Such bonus shall be paid at the time prescribed in Section 2.4. 
 3.5 Stock Award Acceleration
upon Termination after Change in Control. 
 (a) Executive’s Stock Options that are outstanding as of the date of a
Termination Event described in this Article III shall become fully vested upon the occurrence of such Termination Event and exercisable so long as Executive complies with the restrictions and limitations set forth in Article V. The Stock
Options shall remain exercisable until the earlier of (i) the second anniversary of the date of the Termination Event or (ii) the expiration of each option in accordance with its original terms provided, in either case, that Executive
complies with his/her obligations under Article V of this Agreement. The term “Stock Options” shall not include any rights of Executive under the Company’s 2006 Employee Shares Purchase Plan or similar plans. 
  

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 (b) Executive’s Restricted Stock awards that are outstanding as of the date of a
Termination Event described in this Article III shall become fully vested and free from any contractual rights of the Company to repurchase or otherwise reacquire the Restricted Stock as a result of Executive’s termination of employment.
All shares of Restricted Stock that have not yet been delivered to Executive or his/her designee (whether because subject to joint escrow instructions or otherwise) shall be promptly delivered to Executive or his/her designee upon the occurrence of
a Termination Event described in this Article III. 
 (c) Executive’s Stock Units that are outstanding as of the date
of a Termination Event described in this Article III shall become fully vested as a result of Executive’s termination of employment. All Stock Units that have not yet been settled shall be promptly settled, in the form specified in the
relevant Stock Unit agreements and relevant stock plans under which the Stock Units were granted, upon the occurrence of a Termination Event described in this Article III, but in no event later than sixty (60) days after which such vesting
occurs. Notwithstanding the foregoing, such settlement shall be subject to any delay period required under Section 5.6 of this Agreement. 
 3.6 Health & Welfare Benefits Coverage. 
 (a) Following the
occurrence of a Termination Event described in this Article III, to the extent permitted by COBRA and by the Company’s group health insurance policies, Executive and/or Executive’s covered dependents will be eligible to continue their
health insurance benefits at their own expense. However, if Executive and/or Executive’s covered dependents timely elects COBRA continuation for Executive and/or Executive’s covered dependents, the Company shall reimburse Executive’s
and/or Executive’s covered dependents’ COBRA continuation premiums for group health coverage for 24 months, provided that the Company’s obligation to make such reimbursements shall cease immediately to the extent that Executive and/or
Executive’s covered dependents are no longer entitled to receive COBRA continuation coverage. Executive agrees to notify a duly authorized officer of the Company, in writing, immediately upon Executive’s and/or a covered dependent’s
beginning to receive health benefits from another source, or as otherwise required by COBRA. This Section 3.6(a) provides only for the Company’s reimbursement of COBRA continuation premiums for the periods specified above. This
Section 3.6(a) does not affect the rights of Executive or Executive’s covered dependents under any applicable law with respect to health insurance continuation coverage. Such reimbursement shall be made as soon as administratively feasible
following the Company’s receipt of appropriate documentation. 
 ARTICLE IV 
 TERMINATION FOR CAUSE 
 4.1 General Effect of Termination for Cause. In the event Executive’s employment with the Company and its subsidiaries is involuntarily terminated by the Company with Cause at any time,
whether before or after a Change of Control, then such termination of employment will not be a Termination Event, Executive will not be entitled to receive any payments or benefits under the provisions of this Agreement, and the
Company will cease paying compensation or providing benefits to Executive as of Executive’s termination date. 
  

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 4.2 Procedure for “Cause” Finding. 
 (a) Prior to a Change in Control, Executive may only be terminated for Cause if a majority of the Board then in office determines that
grounds for Cause exist. In the event of such determination, the Company will give Executive notice of the finding of Cause with reasonable specificity, and will provide Executive with a reasonable opportunity to meet with the Board to refute the
finding. 
 (1) If Executive elects to appear before the Board to dispute the finding, the Board will meet with the Executive.
Following such meeting, the Board shall reconsider its initial finding and the decision of a majority of the Board then in office will be required to confirm the determination that grounds for Cause exist. 
 (2) If Executive declines to appear before the Board to dispute the finding, then the initial action by the Board shall constitute the
determination to terminate Executive for Cause. 
 (b) Subsequent to a Change in Control, the procedural requirements of
Section 4.2(a) shall apply, except that the findings of the Board must be approved by not less than 2/3rds of the directors then in office. 
 ARTICLE V 
 LIMITATIONS AND CONDITIONS ON BENEFITS 
 5.1 Right to Benefits. If a Termination Event does not occur, Executive shall not be entitled to receive any benefits described in
this Agreement, except as otherwise specifically set forth herein. If a Termination Event occurs, Executive shall be entitled to receive the benefits described in this Agreement only if Executive complies with the restrictions and limitations set
forth in this Article V. 
 5.2 No Mitigation. Except as otherwise specifically provided herein, Executive shall not
be required to mitigate damages or the amount of any payment provided under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by
Executive as a result of employment by another employer or by retirement benefits after the date of the Termination Event, or otherwise. 
 5.3 Withholding Taxes. The Company shall withhold appropriate federal, state, local or foreign income, employment and other applicable taxes from any payments hereunder. 
 5.4 Obligations of Executive. 
 (a) For two years following a Termination Event, Executive agrees not to personally solicit any of the employees either of the Company or of any entity in which the Company directly or indirectly
possesses the ability to determine the voting of 50% or more of the voting securities of such entity (including two-party joint ventures in which each party possesses 50% of the total voting power of the entity) to become employed elsewhere or
provide the names of such employees to any other company that Executive has reason to believe will solicit such employees. 
  

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 (b) Following the occurrence of a Termination Event, Executive agrees to continue to satisfy
his/her obligations under the terms of the Company’s standard form of Agreement Regarding Confidential Information and Proprietary Development previously executed by Executive (or any comparable agreement subsequently executed by Executive in
substitution or supplement thereto). 
 (c) Executive acknowledges and agrees that the Company’s remedies at law for a
breach or threatened breach of any of the provisions of Section 5.4(a) or (b) would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at
law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and, with respect to a breach or threatened breach of Section 5.4(a) or (b) only,
obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction, or any other equitable remedy that may then be available. 
 5.5 Employee Release Prior to Receipt of Benefits. Upon the occurrence of a Termination Event, and prior to the receipt of any
benefits under this Agreement on account of the occurrence of the Termination Event, Executive shall execute and not revoke an employee release substantially in the form attached hereto as Exhibit A and such employee release must be irrevocably
effective within sixty (60) days following the occurrence of the Termination Event (the “Release Deadline”). Such employee release shall specifically relate to all of Executive’s rights and claims in existence at
the time of such execution relating to Executive’s employment with the Company, but shall not include (i) Executive’s rights under this Agreement, (ii) Executive’s rights under any employee benefit plan sponsored by the
Company, (iii) Executive’s rights to indemnification or advancement of expenses under applicable law, the Company’s bylaws or other governing instruments or any agreement addressing such subject matter between Executive and the
Company or (iv) any claims that cannot be released as a matter of law. It is understood that Executive has 21 days (or such longer period as may be required by applicable law) to consider whether to execute such employee release and Executive
may revoke such employee release within seven days after execution of such employee release. In the event Executive does not execute such employee release within the 21-day period (or such longer period as may be required by applicable law), or if
Executive revokes such employee release within the seven-day period, or the employee release is not irrevocably effective by the Release Deadline, no benefits shall be payable under this Agreement and this Agreement shall be null and void. Nothing
in this Agreement shall limit the scope or time of applicability of such employee release once it is executed and not timely revoked. Notwithstanding anything to the contrary in this Agreement, in the event the Termination Event occurs at a time
during the calendar year where the Release Deadline is in the calendar year following the calendar year in which the Executive’s termination occurs, any severance pay and/or severance benefits that would constitute deferred compensation subject
to Section 409A of the Code (as described in Section 5.6) will be paid on the first payroll date following the Release Deadline, or such later time as required by the payment schedule applicable to each payment or benefit, or
Section 5.6. 
  

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 5.6 Compliance with Section 409A. In the event that (i) one or more
payments of compensation or benefits (and any other severance payments or benefits which may be considered deferred compensation under Section 409A) received or to be received by Executive pursuant to this Agreement (“Agreement
Payment”) would constitute deferred compensation subject to Section 409A of the Code and the regulations or other authority promulgated thereunder, as amended from time to time (“Section 409A”), and (ii) Executive
is deemed at the time of such termination of employment to be a “specified employee” under Section 409A(a)(2)(B)(i), then such Agreement Payment shall not be made or commence until the earlier of (i) the expiration of the
six-month period measured from the date of Executive’s “separation from service” (as such term is at the time defined in Treasury Regulations under Section 409A) with the Company (the “delay period”) or (ii) such
earlier time permitted under Section 409A of the Code; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Executive under Section 409A, including (without limitation) the
additional 20% tax for which Executive would otherwise be liable under Section 409A(a)(1)(B) or any state law equivalent of Section 409A in the absence of such deferral. During any period in which an Agreement Payment to Executive is
deferred pursuant to the foregoing, Executive shall be entitled to interest on the deferred Agreement Payment at a per annum rate equal to the highest rate of interest applicable to six-month non-callable certificates of deposit with daily
compounding offered by Citibank N.A., Wells Fargo Bank, N.A. or Bank of America on the date of such separation from service. Upon the expiration of the applicable delay period, any Agreement Payment that would have otherwise been made during that
period (whether in a single sum or in installments) in the absence of this Section 5.6 shall be paid to Executive or Executive’s beneficiary in one lump sum, including all accrued interest, and all remaining Agreement Payments, if any,
will be payable in accordance with the payment schedule applicable to each payment or benefit. 
 Each payment and benefit
payable under the Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. The foregoing provisions are intended to comply with the requirements of Section 409A so that none
of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Executive agree to work together in
good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under
Section 409A. 
 5.7 Golden Parachute Payments. 
 (a) In the event that any payment received or to be received by Executive pursuant to this Agreement or otherwise
(“Payment”) would be subject to the excise tax imposed by Section 4999 of the Code, or any comparable federal, state, local or foreign excise tax (such excise tax, together with any interest and penalties, is hereinafter
collectively referred to as the “Excise Tax”), then Executive shall be entitled to receive an additional payment from the Company (“Gross-Up Payment”) in such an amount that after the payment of all taxes
(including, without limitation, any interest and penalties on such taxes and the Excise Tax) on the Payment and on the Gross-Up Payment, Executive shall retain an amount equal to (a) the Payment minus (b) all applicable taxes on the
Payment other than the Excise Tax. The intent of

  

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the parties is that the Company shall be solely responsible for, and shall pay, any Excise Tax on the Payment and Gross-Up Payment and any income, employment and other taxes (including, without
limitation, penalties and interest) imposed on the Gross-Up Payment (as well as any loss of tax deduction caused by the Payment or the Gross-Up Payment). Notwithstanding the foregoing, in the event that Excise Taxes could be avoided by a reduction
in payments to Executive pursuant to this Agreement, the Company may reduce such payments to bring the total payments to that amount that falls immediately below the threshold triggering the Excise Tax, up to a total reduction not to exceed $25,000.
Any reduction in payments and/or benefits required by this Section 5.7 shall occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of equity awards other than stock options;
(3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits paid to the Executive. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting
shall be cancelled in the reverse order of the date of grant for the Executive’s equity awards. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis. Executive in no event will have any
discretion regarding the ordering of any reduction in payments or benefits. Any Gross-Up Payment under this Agreement shall be made with thirty (30) days following the date in which the related taxes are remitted to the taxing authorities by
Executive. 
 (b) Unless the Company and Executive otherwise agree in writing, all determinations required to be made under this
Section 5.7 and the assumptions to be utilized in arriving at such determinations shall be made in writing in good faith by an independent tax professional designated by the Company and reasonably acceptable to Executive (the
“Independent Tax Professional”). For purposes of making the calculations required by this Section 5.7, the Independent Tax Professional may make reasonable assumptions and approximations concerning applicable taxes and
may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive shall furnish to the Independent Tax Professional such information and documents as the
Independent Tax Professional may reasonably request in order to make a determination under this Section 5.7. The Company shall bear all costs that the Independent Tax Professional may reasonably incur in connection with any calculations
contemplated by this Section 5.7. 
 ARTICLE VI 
 OTHER RIGHTS AND BENEFITS NOT AFFECTED 
 Nothing in
the Agreement shall prevent or limit Executive’s continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company and for which Executive may otherwise qualify, nor
shall anything herein limit such greater rights as Executive may have under any agreements with the Company applicable to his/her Stock Options, Restricted Stock, Stock Units or other equity awards; provided, however, that any benefits
provided hereunder shall be in lieu of any other severance benefits to which Executive may otherwise be entitled, including (without limitation) under any employment contract or severance plan, program or arrangement. Except as otherwise expressly
provided herein, amounts that are vested benefits or that Executive is otherwise entitled to receive under any plan, policy, practice or program of the Company at or subsequent to the date of a Termination Event shall be payable in accordance with
such plan, policy, practice or program. 
  

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 ARTICLE VII 
 NON-ALIENATION OF BENEFITS 
 No benefit hereunder
shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. 
 ARTICLE VIII 
 DEFINITIONS 
 For purposes of the Agreement, the following terms shall have the meanings set forth below: 
 8.1 “Base Salary” means Executive’s annual salary (excluding bonus, any other incentive or other
payments and stock option exercises) from the Company at the time of the occurrence of the Change of Control (if applicable) or the Termination Event, whichever is greater. 
 8.2 “Cause” means (i) an unauthorized use or disclosure by Executive of the Company’s confidential
information or trade secrets, which use or disclosure causes material harm to the Company, (ii) a material breach by Executive of a material agreement between Executive and the Company, (iii) a material failure by Executive to comply with
the Company’s written policies or rules resulting in material harm to the Company, (iv) Executive’s conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State
thereof or the equivalent under the applicable laws outside of the United States, (v) Executive’s gross negligence or willful misconduct resulting in material harm to the Company, (vi) a continuing failure by Executive to perform
assigned duties after receiving written notification of such failure or (vii) a failure by Executive to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company
has requested Executive’s cooperation. 
 8.3 “Change of Control” means: 
 (a) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if
persons who were not shareholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding
securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent corporation of such continuing or surviving entity; 
 (b) The sale, transfer or other disposition of all or substantially all of the Company’s assets; 
  

 12 

 (c) A change in the composition of the Board, as a result of which fewer than 50% of the
incumbent directors are directors who either: 
 (i) Had been directors of the Company on the date 24 months prior to the date
of such change in the composition of the Board (the “Original Directors”); or 
 (ii) Were appointed to
the Board, or nominated for election to the Board, with the affirmative votes of at least a majority of the aggregate of (A) the Original Directors who were in office at the time of their appointment or nomination and (B) the directors
whose appointment or nomination was previously approved in a manner consistent with this Paragraph (ii); or 
 (d) Any
transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), directly or indirectly, of securities
of the Company representing at least 30% of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Subsection (d), the term “person” shall have the same meaning as when used
in Sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Parent or Subsidiary and (ii) a corporation owned
directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of Shares. 
 A transaction
shall not constitute a Change in Control if its sole purpose is to change the jurisdiction of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the
Company’s securities immediately before such transaction. 
 8.4 “Company” means Verigy
Ltd., a Singapore corporation, and any successor thereto and its subsidiaries; provided, however, that with respect to determining whether a Change in Control has occurred, the term “Company” shall mean Verigy Ltd. exclusively. 

8.5 “Disability” means that Executive is unable to perform the duties of his/her office with the Company
or any subsidiary, and is unable to perform substantially equivalent duties, by reason of any medically determinable physical or mental impairment, and such condition has lasted or can be expected to last for a continuous period of not less than 12
months. 
 8.6 “Good Reason” means: (i) a reduction of Executive’s rate of compensation
as in effect on the Effective Date of this Agreement or, if a Change of Control has occurred, as in effect immediately prior to the occurrence of a Change of Control, other than reductions in Base Salary that apply broadly to employees of the
Company or reductions due to varying metrics and achievement of performance goals for different periods under variable-pay programs; (ii) either (A) failure to provide a package of benefits that, taken as a whole, provides substantially
similar benefits to those in which Executive is entitled to participate as of the Effective Date (except that employee contributions may be raised to the extent of any cost increases related to such benefits where such increases in employee
contributions are broadly applicable to employees of the Company) or (B) any action by the Company that would significantly and adversely affect Executive’s participation or reduce Executive’s benefits under any of the Company’s
benefit

  

 13 

 
plans, other than changes that apply broadly to employees of the Company; (iii) a change in Executive’s duties, responsibilities, authority, job title or reporting relationships
resulting in a significant diminution of position, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith that is remedied by the Company promptly after notice thereof is given by Executive; (iv) a
request that Executive relocate to a worksite that is more than 25 miles from his/her prior worksite, unless Executive accepts such relocation opportunity; (v) a failure or refusal of a successor to the Company to assume the Company’s
obligations under this Agreement, as provided in Section 9.9 or (vi) a material breach by the Company or any successor to the Company of any of the material provisions of this Agreement. For purposes of clause (iii) of the immediately
preceding sentence, Executive’s duties, responsibilities, authority, job title or reporting relationships shall be considered to be significantly diminished (and therefore shall constitute “Good Reason”) if Executive no longer to
performs substantially the same functional role for the Company as Executive performed immediately prior to the occurrence of the Change of Control of an entity whose equity securities are publicly traded; provided, however, that prior to
terminating his/her employment for Good Reason under clause (iii) of the immediately preceding sentence solely as a result of the entity for which Executive is providing services not being an entity whose securities are publicly traded,
Executive shall notify the successor entity of his/her intention to so terminate his/her employment and shall provide the successor entity with a reasonable period of time, not to exceed 90 days, to negotiate terms of employment which meet
Executive’s requirements. If, at the end of the notice and negotiation period, the parties are unable to arrive at mutually satisfactory terms and conditions of employment, then Executive may exercise his/her right to termination for good
reason as a result of no longer serving in a comparable role with a company whose securities are publicly traded. 
 8.7
“Target Bonus” means an amount equal to an average of the annualized bonus compensation paid to Employee with respect to the two fiscal years of the Company most recently preceding the date of the Termination Event;
provided, however, that if the Executive’s target bonus in the year in which the Termination Event occurs, expressed as a percent of Executive’s Base Salary, is higher than the percentage target bonus levels in the years used for purposes
of the average, then an equitable adjustment will be made to the prior year amounts so as to treat Executive as if s/he were at the higher target bonus percentage for the years used to determine the average. 
 8.8 “Termination Event” means an involuntary termination of employment described in Section 2.1
or 3.1(a) or a voluntary termination of employment described in Section 3.2(a). No other event shall be a Termination Event for purposes of this Agreement. 
 ARTICLE IX 
 GENERAL PROVISIONS 
 9.1 Interpretation. The parties acknowledge that Executive may serve as an officer and/director of the Company as well as an officer
and/or director of one or more of the Company’s subsidiaries. It is the parties’ intention that, when determining whether a Termination Event or Change of Control has occurred, the parties will look at the facts and circumstances affecting
the highest level entity in the Company’s corporate family in which Executive plays a role. For example, an executive officer of the Company who also served on

  

 14 

 
the Board or as an officer of one or more of the Company’s subsidiaries will not be deemed to have experienced a change in Executive’s duties, responsibilities, authority, job title or
reporting relationships resulting in a significant diminution of position solely as a result of the change at the subsidiary level, i.e., changes implemented solely at the subsidiary level but not at the higher level would not constitute Good Cause
unless the overall effect of the subsidiary-level changes resulted in a significant diminution of overall position with the Company and its subsidiaries taken as a whole. 
 9.2 Subsidiaries Bound. To the extent that Executive is employed by a subsidiary of Verigy Ltd. and not by Verigy Ltd. itself, (i) Executive’s Base Salary and Target Bonus shall be the
amounts as so defined as payable by Executive’s direct employer; and (ii) to the extent that Verigy Ltd. itself is not the direct employer or otherwise paying the benefits due to Executive under this Agreement, Verigy Ltd. shall cause the
subsidiary directly employing Executive to make provide the benefits due to Executive under this Agreement. 
 9.3
Notices. Any notices provided hereunder must be in writing, and such notices or any other written communication shall be deemed effective upon the earlier of personal delivery (including personal delivery by facsimile) or the third day after
mailing by first-class mail, to the Company at its primary U.S. office location and to Executive at Executive’s address as listed in the Company’s payroll records. Any payments made by the Company to Executive under the terms of this
Agreement shall be delivered to Executive either in person or at such address as listed in the Company’s payroll records. 
 9.4 Severability. It is the intent of the parties to this Agreement that, whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein. 
 9.5 Waiver. If either party should waive any breach of any provisions of this Agreement, that party shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any
other provision of this Agreement. 
 9.6 Complete Agreement. This Agreement, including Exhibit A, constitutes the
entire agreement between Executive and the Company and is the complete, final and exclusive embodiment of their agreement with regard to this subject matter; provided that (subject to any delay period required under Section 5.6) nothing herein
shall limit such greater rights as Executive may have under any agreements with the Company applicable to his/her Stock Options, Restricted Stock, Stock Units or other equity awards. This Agreement shall be deemed to be an amendment of any
agreements between Executive and the Company applicable to his/her Stock Options, Restricted Stock, Stock Units or other equity awards to the extent that this Agreement provides greater rights. This Agreement is entered into without reliance on any
promise or representation other than those expressly contained herein. Without limiting the foregoing, this Agreement supersedes and replaces all prior agreements and understandings, whether written or oral, on the matters set forth herein that may
exist between Executive and the

  

 15 

 
Company or its predecessor, Agilent Technologies, Inc. or any of their respective subsidiaries, including the Original Severance Agreement and the First Restated Severance Agreement. With respect
to Stock Options, Restricted Stock, Stock Units or other equity awards granted on or after the date hereof, the acceleration of vesting provided herein will apply to such awards except to the extent otherwise explicitly provided (which must include
reference to this Agreement) in the applicable equity award agreement. 
 9.7 Counterparts. This Agreement may be
executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement. 
 9.8 Headings. The headings of the Articles and Sections hereof are inserted for convenience only and shall neither be deemed to
constitute a part hereof nor to affect the meaning thereof. 
 9.9 Successors and Assigns. This Agreement is intended to
bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not delegate any of Executive’s duties hereunder and may
not assign any of Executive’s rights hereunder without the written consent of the Company, which consent shall not be withheld unreasonably. Any successor to the Company (whether direct or indirect and whether by purchase, merger,
consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the Company’s obligations under this Agreement in the same manner and to the same extent as the Company would be
required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets, whether or not such successor executes
and delivers an assumption agreement referred to in the preceding sentence or becomes bound by the terms of this Agreement by operation of law or otherwise. 
 9.10 Amendment or Termination of this Agreement. This Agreement may be changed or terminated only upon the mutual written consent of the Company and Executive. 
 9.11 Attorney Fees. If either party hereto brings any action to enforce such party’s rights hereunder, the prevailing party in
any such action shall be entitled to recover such party’s reasonable attorneys’ fees and costs incurred in connection with such action. 
 9.12 Arbitration. In order to ensure rapid and economical resolution of any dispute that may arise under this Agreement, Executive and the Company agree that any and all disputes or controversies
arising from or regarding the interpretation, performance, enforcement or termination of this Agreement which cannot be resolved by good faith negotiation between the parties shall first be submitted for non-binding mediation. If complete agreement
cannot be reached within 60 days after the date of submission to mediation, any remaining issues will be submitted to the Judicial Arbitration & Mediation Services, Inc. (“JAMS”) to be resolved by final and binding arbitration
under the its Employment Arbitration Rules & Procedures (the “JAMS Rules”) and California Law. Accordingly, the parties hereby agree to waive their right to have any dispute between them under this Agreement resolved in a court of
law by a judge or jury. 
  

 16 

 9.13 Choice of Law. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the laws of the State of California. 
 9.14 Construction of
Agreement. In the event of a conflict between the text of the Agreement and any summary, description or other information regarding the Agreement, the text of the Agreement shall control. 
  

 17 

 IN WITNESS WHEREOF, the
parties have executed this Agreement on the day and year written above. 
  

					
	Verigy Ltd.,	 		 	EXECUTIVE
	a Singapore corporation	 		 	
			
	  
	 		 	  

	(Signature of Authorized Signatory)	 		 	Keith L. Barnes
			
	  
	 		 	
	(Print Name & Title of Signatory)	 		 	

 Exhibit A: General Release and Agreement 
 Signature Page to Restated Severance Agreement 

 Exhibit A 
 GENERAL RELEASE AND AGREEMENT 
 This General Release
and Agreement (the “Agreement”) is entered into this     day of             , 200     (the
“Effective Date”), between Verigy Ltd., a Singapore corporation (the “Company”), and Keith L. Barnes (“Executive”). The Agreement is part of an agreement between Executive and
Verigy Ltd. (“Verigy”) to terminate Executive’s employment with Verigy on the terms set forth in the Second Amended & Restated Severance Agreement dated December     , 2008, between
Verigy and Executive (the “Severance Agreement”). 
 Verigy and Executive hereby agree as follows: 

 

	1.	Executive agrees to attend a Functional Exit Interview on             
    , 20    , at which time all company property and identification will be turned in and the appropriate personnel documents will be executed. Thereafter, Executive agrees to do such other acts
as may be reasonably requested by Verigy in order to effectuate the terms of this Agreement. Executive agrees to remove all personal effects from his/her current office within seven days of signing this Agreement and in any event not later
than                  , 20    . 

  

	2.	Executive agrees not to make any public statement or statements to the press concerning Verigy, its business objectives, its management practices, or other sensitive
information without first receiving Verigy’s written approval. Executive further agrees to take no action that would cause Verigy or its employees or agents any embarrassment or humiliation or otherwise cause or contribute to Verigy’s or
any such person’s being held in disrepute by the general public or Verigy’s employees, clients, or customers. Verigy agrees to take no action that would cause Executive any embarrassment or humiliation or otherwise cause or contribute to
Executive’s being held in disrepute by the general public or by Verigy’s employees, clients or customers. 

  

	3.	Executive, on behalf of Executive and his/her heirs, estate, executors, administrators, successors and assigns, does fully release, discharge, and agree to hold
harmless Verigy, its officers, agents, employees, attorneys, subsidiaries, affiliated companies, predecessors, successors and assigns (collectively, the “Releasees”) from all actions, causes of action, claims, judgments,
obligations, damages, liabilities, costs, or expense of whatsoever kind and character that he may have, including but not limited to: 

  

	 	a.	any claims relating to employment discrimination on account of race, sex, age, national origin, creed, disability, or other basis, whether or not arising under the
Federal Civil Rights Acts, the Age Discrimination in Employment Act (“ADEA”), California Fair Employment and Housing Act, the Rehabilitation Act of 1973, the Americans With Disabilities Act, any amendments to the foregoing
laws, or any other federal, state, county, municipal, foreign or other law, statute, regulation or order relating to employment discrimination; 

	 	b.	any claims relating to pay or leave of absence arising under the Fair Labor Standards Act, the Family Medical Leave Act, and any similar laws enacted in California or
any other jurisdiction, except as prohibited by law; 

  

	 	c.	any claims for reemployment, salary, wages, bonuses, vacation pay, stock options, acquired rights, appreciation from stock options, stock appreciation rights, benefits
or other compensation of any kind; 

  

	 	d.	any claims relating to, arising out of, or connected with Executive’s employment with Verigy, its predecessor Agilent Technologies, Inc.
(“Agilent”), or their respective subsidiaries, whether or not the same be based upon any alleged violation of public policy; compliance (or lack thereof) with any internal policy, procedure, practice or guideline; or any
oral, written, express, and/or implied employment contract or agreement, or the breach of any terms thereof, including but not limited to, any implied covenant of good faith and fair dealing; or any federal, state, county, municipal or foreign law,
statute, regulation or order, whether or not relating to labor or employment; and 

  

	 	e.	any claims relating to, arising out of, or connected with any other matter or event occurring prior to the execution of this Agreement, whether or not brought before
any judicial, administrative, or other tribunal. 

 The foregoing notwithstanding, Executive does not release any
actions, causes of action, claims, judgments, obligations, damages, liabilities, costs or expense of whatsoever kind and character that he may have with respect to (i) Executive’s rights under this Agreement or the Severance Agreement,
(ii) Executive’s rights under any employee benefit plan sponsored by Agilent or Verigy or (iii) Executive’s rights to indemnification or advancement of expenses under applicable law, the bylaws of Agilent or Verigy, or other
governing instruments or any agreement addressing such subject matter between Executive and Agilent or Verigy. Moreover, this release does not release claims that cannot be released as a matter of law, including, but not limited to:
(1) Executive’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or
administer laws related to employment, against the Company (with the understanding that any such filing or participation does not give Executive the right to recover any monetary damages against the Company; Executive’s release of claims herein
bars Executive from recovering such monetary relief from the Company); (2) claims under Division 3, Article 2 of the California Labor Code (which includes California Labor Code section 2802 regarding indemnity for necessary expenditures or
losses by employee); and (3) claims prohibited from release as set forth in California Labor Code section 206.5 (specifically “any claim or right on account of wages due, or to become due, or made as an advance on wages to be earned,
unless payment of such wages has been made”). 
  

	4.	Executive represents and warrants that Executive has not assigned any such claim or authorized any other person or entity to assert such claim on Executive’s
behalf. Further, Executive agrees that under this Agreement Executive waives any claim for damages incurred at any time in the future because of alleged continuing effects of past wrongful conduct involving any such claims and any right to sue for
injunctive relief against the alleged continuing effects of past wrongful conduct involving such claims. 

  

 2 

	5.	Executive agrees not to act in any manner that might damage the business of the Company. Executive further agrees that he/she will not knowingly encourage, counsel, or
assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against any of the Releasees, unless under a subpoena or other court order to do so
or as related directly to the ADEA waiver in this Agreement. Executive agrees both to immediately notify the Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business days of its receipt, a copy of such
subpoena or other court order. If approached by anyone for counsel or assistance in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints against any of the Releasees, Executive shall state no more
than that he/she cannot provide counsel or assistance. 

  

	6.	In entering into this Agreement, the parties have intended that this Agreement be a full and final settlement of all matters, whether or not presently disputed, that
could have arisen between them. 

  

	7.	Executive understands and expressly agrees that this Agreement extends to all claims of every nature and kind whatsoever, known or unknown, suspected or unsuspected,
past or present, and all rights under Section 1542 of the California Civil Code and/or any similar statute or law or any other jurisdiction are hereby expressly waived. Such Section reads as follows: 

 “Section 1542. A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor
at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” 
  

	8.	It is expressly agreed that the claims released pursuant to this Agreement include all claims against individual employees of Verigy, whether or not such employees were
acting within the course and scope of their employment. 

  

	9.	Executive understands and agrees that, as a condition of this Agreement, Executive shall not be entitled to any employment (including employment as an independent
contractor or otherwise) with Verigy, its subsidiaries or related companies, or any successor, and Executive hereby waives any right, or alleged right, of employment or re-employment with Verigy. Executive further agrees not to apply for employment
with Verigy in the future and not to institute or join any action, lawsuit or proceeding against Verigy, its subsidiaries, related companies or successors for any failure to employ Executive. In the event Executive should secure such employment, it
is agreed that such employment is voidable without cause in the sole discretion of Verigy. After terminating Executive’s employment, should Executive become employed by another company that Verigy merges with or acquires after the date of this
Agreement, Executive may continue such employment only if Verigy makes offers of employment to all employees of the acquired or merged company. 

  

 3 

	10.	Executive agrees that the terms, amount and fact of settlement shall be confidential until Verigy needs to make any required disclosure of any agreements between Verigy
and Executive. Therefore, except as may be necessary to enforce the rights contained herein in an appropriate legal proceeding or as may be necessary to receive professional services from an attorney, accountant, or other professional adviser in
order for such adviser to render professional services, Executive agrees not to disclose any information concerning these arrangements to anyone, including, but not limited to, past, present and future employees of Verigy, until such time of the
public filings. 

  

	11.	The terms of this Agreement are intended by the parties as a final expression of their agreement with respect to such terms as are included in this Agreement and may
not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement constitutes the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in
any judicial or other proceeding, if any, involving this Agreement. No modification of this Agreement shall be effective unless in writing and signed by both parties hereto. 

  

	12.	It is further expressly agreed and understood that Executive has not relied upon any advice from Verigy and/or its attorneys whatsoever as to the taxability, whether
pursuant to federal, state, local or foreign income tax statutes or regulations or otherwise, of the payments made hereunder and that Executive will be solely liable for all tax obligations, if any, arising from payment of the sums specified herein
and shall hold Verigy harmless from any tax obligations arising from said payment. 

  

	13.	In order to ensure rapid and economical resolution of any dispute that may arise under this Agreement, Executive and the Company agree that any and all disputes or
controversies arising from or regarding the interpretation, performance, enforcement or termination of this Agreement which cannot be resolved by good faith negotiation between the parties shall first be submitted for non-binding mediation. If
complete agreement cannot be reached within 60 days after the date of submission to mediation, any remaining issues will be submitted to the American Arbitration Association to be resolved by final and binding arbitration under the its National
Rules for the Resolution of Employment Disputes and California Law. BY ENTERING INTO THIS AGREEMENT, EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE IS WAIVING EXECUTIVE’S RIGHT TO JURY TRIAL OF ANY DISPUTE COVERED BY THIS AGREEMENT.

  

	14.	The following notice is provided in accordance with the provisions of Federal Law: 

 You have up to [21 days] [45 days] [NOTE USE “45” IF TERMINATION IS IN CONNECTION WITH A “REDUCTION IN FORCE” FOR ADEA
PURPOSES.] from the date this General Release and Agreement is given to you in which to accept its terms, although you may accept it any time within that [21-day period] [45-day period] [NOTE USE “45-day period” IF TERMINATION IS IN
CONNECTION WITH A

  

 4 

 
“REDUCTION IN FORCE” FOR ADEA PURPOSES.]. You are advised to consult with an attorney regarding this Agreement. You have the right to revoke your acceptance of this Agreement at any
time within seven days from the date you sign it, and this Agreement will not become effective and enforceable until this seven-day revocation period has expired. To revoke your acceptance, you must send a written notice of revocation to Verigy
Ltd., Attention: Vice President and General Counsel, by 5:00 p.m. on or before the seventh day after you sign this Agreement. 
 EXECUTIVE
FURTHER STATES THAT EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT WITH THE ATTORNEY OF EXECUTIVE’S CHOICE, THAT EXECUTIVE HAS CAREFULLY READ THIS AGREEMENT, THAT EXECUTIVE HAS HAD AMPLE TIME TO REFLECT UPON AND CONSIDER ITS CONSEQUENCES, THAT
EXECUTIVE FULLY UNDERSTANDS ITS FINAL AND BINDING EFFECT, THAT THE ONLY PROMISES MADE TO EXECUTIVE TO SIGN THIS AGREEMENT ARE THOSE STATED ABOVE OR IN THE SEVERANCE AGREEMENT, AND THAT EXECUTIVE IS SIGNING THIS AGREEMENT VOLUNTARILY. 

[SIGNATURE PAGE FOLLOWS] 
  

 5 

 IN WITNESS WHEREOF, this Agreement has been executed in duplicate originals on the dates
indicated below, and shall become effective as indicated above. 
  

									
	Verigy Ltd.,	 		 	EXECUTIVE
	a Singapore corporation	 		 		 	
			
	  
	 		 	  

	(Signature of Authorized Signatory)	 		 	Keith L. Barnes
				
	  
	 		 	 Date:
	 	  

	(Print Name & Title of Signatory)	 		 		 	
					
	Date:	 	  
	 		 		 	

  

 6Credit Agreement

 Exhibit 10.16 
 CREDIT AGREEMENT 
 THIS CREDIT AGREEMENT (this
“Agreement”) is entered into as of October 30, 2009, by and between ENDOLOGIX, INC. (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”). 
 RECITALS 
 Borrower has requested that Bank extend or
continue credit to Borrower as described below, and Bank has agreed to provide such credit to Borrower on the terms and conditions contained herein. 
 NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree as follows: 
 ARTICLE I 
 CREDIT TERMS 
 SECTION 1.1 LINE OF CREDIT. 
 (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 April 30, 2012, not to exceed at any time the aggregate principal amount of Ten Million Dollars ($10,000,000) (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 (the “Line of Credit Note”), all terms of which are incorporated herein by
this reference. 
 (b) Limitation 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 an aggregate of Ten Million Dollars ($10,000,000). 
 (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 Five Hundred Thousand Dollars ($500,000). The form and substance of
each Letter of Credit shall be subject to approval by Bank, in its sole discretion. No Letter of Credit shall have an expiration date subsequent to the maturity date of the Line of Credit. 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. 
  

 1 

 (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 Seven Hundred Fifty Thousand Dollars ($750,000), 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. 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. 
 (e) Borrowing and Repayment. Borrower
may from time to time during the term of the Line of Credit borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions contained herein or in the Line of Credit Note; provided
however, that the total outstanding borrowings under the Line of Credit shall not at any time exceed the maximum principal amount available thereunder, as set forth above. 
 SECTION 1.2 INTEREST/FEES. 
 (a) The outstanding principal balance of each credit subject hereto shall bear interest, and the amount of each drawing paid under any Letter of Credit shall bear interest from the date such drawing is
paid to the date such amount is fully repaid by Borrower, at the rate of interest set forth in the Line of Credit Note. 
 (b)
Computation and Payment. Interest shall be computed on the basis of a 360-day year, actual days elapsed. Interest shall be payable at the times and place set forth in each promissory note or other instrument or document required hereby.

 (c) Commitment Fee. Borrower shall pay to Bank a non-refundable commitment fee for the Line of Credit equal to Forty
Thousand Dollars ($40,000), which fee shall be due and payable in full on October 30, 2009. 
 (d) Unused Commitment
Fee. Borrower shall pay to Bank a fee equal to one fifth of one percent (0.20%) per annum (computed on the basis of a 360-day year, actual days elapsed) on the average daily unused amount of the Line of Credit, which fee shall be calculated on a
yearly basis by Bank and shall be due and payable by Borrower in arrears within ten (10) days after each billing is sent by Bank. 
 (e) Letter of Credit Fees. Borrower shall pay to Bank (i) fees upon the issuance of each Letter of Credit equal to one and one quarter percent (1.25%) per annum (computed on the basis of a 360-day year, actual days elapsed)
of the face amount thereof, and (ii) fees upon the payment or negotiation of each drawing under any Letter of Credit and fees upon the occurrence of any other activity with respect to any Letter of Credit (including without limitation, the
transfer, amendment or cancellation of any Letter of Credit) determined in accordance with Bank’s standard fees and charges then in effect for such activity. Notwithstanding the foregoing, with respect to any Letters of Credit that are cash
secured to the satisfaction of Bank such Letter of Credit Fee shall be reduced to three quarters of one percent (0.75%). 
  

 2 

 SECTION 1.3 COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect all
principal, interest and fees due under each credit subject hereto by charging Borrower’s deposit account number 4828785279 with Bank, or any other deposit account maintained by Borrower with Bank, for the full amount thereof. Should there be
insufficient funds in any such deposit account to pay all such sums when due, the full amount of such deficiency shall be immediately due and payable by Borrower. 
 SECTION 1.4 COLLATERAL. 
 As security for all Indebtedness and other obligations of Borrower to Bank, Borrower has granted to Bank security interests in all Borrower’s personal property, as more fully described in that
certain Security Agreement between Borrower and Bank dated as of the date hereof. 
 The foregoing shall be evidenced by and
subject to the terms of such security agreements, financing statements, deeds or mortgages, and other documents as Bank shall reasonably require, all in form and substance satisfactory to Bank. Borrower shall pay to Bank immediately upon demand the
full amount of all charges, costs and expenses (to include fees paid to third parties and all allocated costs of Bank personnel), expended or incurred by Bank in connection with any of the foregoing security, including without limitation, filing and
recording fees and costs of appraisals, audits and title insurance. 
 SECTION 1.5 SUBORDINATION OF DEBT. All
indebtedness and other obligations of Borrower to any other party shall be subordinated in right of repayment to all indebtedness and other obligations of Borrower to Bank, as evidenced by and subject to the terms of subordination agreements in form
and substance satisfactory to Bank. 
 ARTICLE II 
 REPRESENTATIONS AND WARRANTIES 
 Borrower makes the
following representations and warranties to Bank, which representations and warranties shall survive the execution of this Agreement and shall continue in full force and effect until the full and final payment, and satisfaction and discharge, of all
obligations of Borrower to Bank subject to this Agreement. 
 SECTION 2.1 LEGAL STATUS. Borrower is a
corporation, duly organized and existing and in good standing under the laws of Delaware, and is qualified or licensed to do business (and is in good standing as a foreign corporation, if applicable) in all jurisdictions in which such qualification
or licensing is required or in which the failure to so qualify or to be so licensed could reasonably be expected to have a material adverse effect on Borrower. 
 SECTION 2.2 AUTHORIZATION AND VALIDITY. This Agreement and each promissory note, contract, instrument and other document
required hereby or at any time hereafter delivered to Bank in connection herewith (collectively, the “Loan Documents”) have been duly authorized, and upon their execution and delivery in accordance with the provisions hereof will
constitute legal, valid and binding agreements and obligations of Borrower or the party which executes the same, enforceable in accordance with their respective terms. 
  

 3 

 SECTION 2.3 NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law or regulation, or contravene any provision of the Certificate of Incorporation or By-Laws of Borrower, or result in any breach of or default under any contract,
obligation, indenture or other instrument to which Borrower is a party or by which Borrower may be bound. 
 SECTION 2.4 LITIGATION. Except as disclosed in Schedule 2.4 hereof, there are no pending, or to the best of Borrower’s knowledge threatened, actions, claims, investigations, suits or proceedings by or before any governmental authority,
arbitrator, court or administrative agency which could reasonably be expected to have a material adverse effect on the financial condition or operation of Borrower other than those disclosed by Borrower to Bank in writing prior to the date hereof
or, in the case of any subsequent extension, prior to such date (and approved in writing by Bank, such approval not to be unreasonably withheld). 
 SECTION 2.5 CORRECTNESS OF FINANCIAL STATEMENT. The annual financial statement of Borrower dated December 31, 2008, and all interim financial statements delivered to Bank since said date, true copies
of which have been delivered by Borrower to Bank prior to the date hereof, (a) are complete and correct and present fairly the financial condition of Borrower, (b) disclose all liabilities of Borrower that are required to be reflected or
reserved against under generally accepted accounting principles, whether liquidated or unliquidated, fixed or contingent, and (c) have been prepared in accordance with generally accepted accounting principles consistently applied. Since the
dates of such financial statements there has been no material adverse change in the financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a security interest in or otherwise encumbered any of its assets or properties except
in favor of Bank or as otherwise permitted by Bank in writing. 
 SECTION 2.6 INCOME TAX RETURNS. Borrower has
no knowledge of any pending assessments or adjustments of its income tax payable with respect to any year. 
 SECTION 2.7 NO SUBORDINATION. There is no agreement, indenture, contract or instrument to which Borrower is a party or by which Borrower may be bound that requires the subordination in right of payment of any of Borrower’s obligations
subject to this Agreement to any other obligation of Borrower. 
 SECTION 2.8 PERMITS, FRANCHISES. Borrower
possesses, and will hereafter possess, all permits, consents, approvals, franchises and licenses required and rights to all trademarks, trade names, patents, and fictitious names, if any, necessary to enable it to conduct the business in which it is
now engaged in compliance with applicable law. 
 SECTION 2.9 ERISA. Borrower is in compliance in all material
respects with all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended or recodified from time to time (“ERISA”); Borrower has not violated any

  

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provision of any defined employee pension benefit plan (as defined in ERISA) maintained or contributed to by Borrower (each, a “Plan”); no Reportable Event as defined in ERISA has
occurred and is continuing with respect to any Plan initiated by Borrower; Borrower has met its minimum funding requirements under ERISA with respect to each Plan; and each Plan will be able to fulfill its benefit obligations as they come due in
accordance with the Plan documents and under generally accepted accounting principles. 
 SECTION 2.10 OTHER
OBLIGATIONS. Borrower is not in default on any obligation for borrowed money, any purchase money obligation or any other material lease, commitment, contract, instrument or obligation. 
 SECTION 2.11 ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank in writing prior to the date hereof, Borrower is
in compliance in all material respects with all applicable federal or state environmental, hazardous waste, health and safety statutes, and any rules or regulations adopted pursuant thereto, which govern or affect any of Borrower’s operations
and/or properties, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act of 1976,
and the Federal Toxic Substances Control Act, as any of the same may be amended, modified or supplemented from time to time. None of the operations of Borrower is the subject of any federal or state investigation evaluating whether any remedial
action involving a material expenditure is needed to respond to a release of any toxic or hazardous waste or substance into the environment. Borrower has no material contingent liability in connection with any release of any toxic or hazardous waste
or substance into the environment. 
 ARTICLE III 
 CONDITIONS 
 SECTION 3.1 CONDITIONS OF
INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any credit contemplated by this Agreement is subject to the fulfillment to Bank’s satisfaction of all of the following conditions: 
 (a) Approval of Bank Counsel. All legal matters incidental to the extension of credit by Bank shall be satisfactory to Bank’s
counsel. 
 (b) Documentation. Bank shall have received, in form and substance satisfactory to Bank, each of the
following, duly executed: 
 (i) This Agreement and each promissory note or other instrument or document required
hereby, including the Line of Credit Note; 
 (ii) Certificate of Incumbency; 
 (iii) Corporate Resolution: Borrowing; 
 (iv) Security Agreement; 
  

 5 

 (v) Subject to Section 4.10, deposit and securities account control
agreements for any accounts maintained outside of Bank; 
 (vi) an audit of the Collateral, the results of which
shall be satisfactory to Bank; and 
 (vii) Such other documents as Bank may reasonably require under any other
Section of this Agreement. 
 (c) Financial Condition. There shall have been no material adverse change, as determined by
Bank, in the financial condition or business of Borrower, nor any material decline, as determined by Bank, in the market value of any collateral required hereunder or a substantial or material portion of the assets of Borrower. 
 (d) Insurance. Borrower shall have delivered to Bank evidence of insurance coverage on all Borrower’s property, in form,
substance, amounts, covering risks and issued by companies satisfactory to Bank, and where required by Bank, with loss payable endorsements in favor of Bank, including without limitation, policies of fire and extended coverage insurance covering all
real property collateral required hereby, with replacement cost and mortgagee loss payable endorsements, and such policies of insurance against specific hazards affecting any such real property as may be required by governmental regulation or Bank.

 SECTION 3.2 CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank to make each extension of credit
requested by Borrower hereunder shall be subject to the fulfillment to Bank’s satisfaction of each of the following conditions: 
 (a) Compliance. The representations and warranties contained herein and in each of the other Loan Documents shall be true on and as of the date of the signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and warranties had been made on and as of each such date, and on each such date, no Event of Default as defined herein, and no condition, event or act which with the giving of
notice or the passage of time or both would constitute such an Event of Default, shall have occurred and be continuing or shall exist. 
 (b) Documentation. Bank shall have received all additional documents which may be required in connection with such extension of credit. 
 ARTICLE IV 
 AFFIRMATIVE COVENANTS 
 Borrower covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct
or contingent, liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in writing:

 SECTION 4.1 PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees or other liabilities due under
any of the Loan Documents at the times and place and in the manner specified therein, and immediately upon demand by Bank, the amount by which the outstanding principal balance of any credit subject hereto at any time exceeds any limitation on
borrowings applicable thereto. 
  

 6 

 SECTION 4.2 ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied, and permit any representative of Bank, at any reasonable time, to inspect, audit and examine such books and records, to make copies of the same, and to inspect the
properties of Borrower. 
 SECTION 4.3 FINANCIAL STATEMENTS. Provide to Bank all of the following, in form and
detail satisfactory to Bank: 
 (a) not later than seventy-five (75) days after and as of the end of each fiscal year, cpa
audited financial statements of Borrower; 
 (b) not later than forty-five (45) days after and as of the end of each
calendar quarter, financial statements of Borrower, prepared by Borrower; 
 (c) contemporaneously with each annual and
quarterly financial statement of Borrower required hereby, a certificate of the president or chief financial officer of Borrower that said financial statements are accurate and that there exists no Event of Default nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute an Event of Default; 
 (d) not later than sixty
(60) days after the end of each fiscal year, financial projections approved by Borrower’s board of directors; 
 (e)
not later than forty-five (45) days after and as of the end of each calendar quarter, a report of the dollar amount and location of Borrower’s inventory with third parties (including sales representatives and hospitals), in form and
content reasonably acceptable to Bank and generally prepared by Borrower in the ordinary course of business; and 
 (f) from
time to time such other information as Bank may reasonably request. 
 For purposes of this Section 4.3, any financial statements that have
been included in an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission’s Electronic Data Gathering Analysis & Retrieval system (or any successor system) shall be deemed
delivered. 
 SECTION 4.4 COMPLIANCE. Preserve and maintain all licenses, permits, governmental approvals,
rights, privileges and franchises necessary for the conduct of its business; and comply with the provisions of all documents pursuant to which Borrower is organized and/or which govern Borrower’s continued existence and with the requirements of
all laws, rules, regulations and orders of any governmental authority applicable to Borrower and/or its business. 
 SECTION 4.5 INSURANCE. Maintain and keep in force, for each business in which Borrower is engaged, insurance of the types and in amounts customarily carried in similar lines of business, including but not limited to fire, extended coverage,
public liability, flood, property damage and workers’ compensation, with all such insurance carried with companies and in amounts satisfactory to Bank, and deliver to Bank from time to time at Bank’s request schedules setting forth all
insurance then in effect. 
  

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 SECTION 4.6 FACILITIES. Keep all properties useful or necessary to
Borrower’s business in good repair and condition, and from time to time make necessary repairs, renewals and replacements thereto so that such properties shall be fully and efficiently preserved and maintained. 
 SECTION 4.7 TAXES AND OTHER LIABILITIES. Pay and discharge when due any and all indebtedness, obligations, assessments and
taxes, both real or personal, including without limitation federal and state income taxes and state and local property taxes and assessments, except (a) such as Borrower may in good faith contest or as to which a bona fide dispute may arise,
and (b) for which Borrower has made provision, to Bank’s satisfaction, for eventual payment thereof in the event Borrower is obligated to make such payment. 
 SECTION 4.8 LITIGATION. Promptly give notice in writing to Bank of any litigation pending or threatened against Borrower
with a claim in excess of One Hundred Thousand Dollars ($100,000). 
 SECTION 4.9 FINANCIAL CONDITION. Maintain
Borrower’s financial condition as follows using generally accepted accounting principles consistently applied and used consistently with prior practices (except to the extent modified by the definitions herein): 
 (a) Modified Quick Ratio greater than (i) 1.75 to 1.0 at all times from October 30, 2009 through October 30, 2010 and
(ii) 2.00 to 1.0 at all times thereafter, with “Modified Quick Ratio” defined as (I) the aggregate of Borrower’s unrestricted cash and receivables convertible into cash divided by (II) total current liabilities plus, to the
extent not already included therein, all indebtedness owing from Borrower to Bank. 
 (b) Tangible Net Worth at all times
greater than (i) Twenty Three Million Dollars ($23,000,000) plus (ii) fifty percent (50%) of any proceeds received by Borrower from the sale of its equity securities (other than sales under the Borrower’s equity incentive plans)
after October 30, 2009, plus (iii) after Borrower achieves two (2) consecutive quarters of profitability, fifty percent (50%) of Borrower’s quarterly net profit, with “Tangible Net Worth” defined as the aggregate
of total stockholders’ equity less any intangible assets and less any loans or advances to, or investments in, any related entities or individuals. 
 SECTION 4.10 ACCOUNTS. Borrower shall maintain its primary operating and other deposit accounts and securities accounts with Bank which accounts shall represent at least eighty percent (80%) of the
dollar value of Borrower’s accounts at all financial institutions. Notwithstanding the foregoing, (i) Borrower shall maintain no less than One Million Dollars ($1,000,000) on deposit with Bank and Bank’s Affiliates as of the date of
this Agreement; and (ii) Borrower shall transfer the balance of its accounts (in accordance with the preceding paragraph) to Bank by November 16, 2009. Borrower shall provide Bank five (5) days

  

 8 

 
prior written notice before establishing any account at or with any bank or financial institution other than Bank. For each such account that Borrower at any time maintains, Borrower shall cause
the applicable bank or financial institution at or with which any such account is maintained to execute and deliver an account control agreement with respect to such account to perfect Bank’s lien in such account which control agreement may not
be terminated without the prior written consent of Bank. 
 SECTION 4.11 NOTICE TO BANK. Promptly (but in no
event more than five (5) days after the occurrence of each such event or matter) give written notice to Bank in reasonable detail of: (a) the occurrence of any Event of Default, or any condition, event or act which with the giving of
notice or the passage of time or both would constitute an Event of Default; (b) any change in the name or the organizational structure of Borrower; (c) the occurrence and nature of any Reportable Event or Prohibited Transaction, each as
defined in ERISA, or any funding deficiency with respect to any Plan; or (d) any termination or cancellation of any insurance policy which Borrower is required to maintain, or any uninsured or partially uninsured loss through liability or
property damage, or through fire, theft or any other cause affecting Borrower’s property in excess of an aggregate of One Hundred Thousand Dollars ($100,000). 
 ARTICLE V 
 NEGATIVE COVENANTS 
 Borrower further covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether
direct or contingent, liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower will not without Bank’s prior written
consent: 
 SECTION 5.1 USE OF FUNDS. Use any of the proceeds of any credit extended hereunder except for the
purposes stated in Article I hereof. 
 SECTION 5.2 CAPITAL EXPENDITURES. Make any additional investment in
fixed assets in excess of (i) Five Hundred Thousand Dollars ($500,000) in fiscal year 2009; (ii) One Million Five Hundred Thousand Dollars ($1,500,000), in the aggregate, for fiscal years 2010 and 2011; and (ii) One Million Five
Hundred Thousand Dollars ($1,500,000) in fiscal year 2012. 
 SECTION 5.3 LEASE EXPENDITURES. Incur operating
lease expense in any calendar year in excess of an aggregate of Two Hundred Fifty Thousand Dollars ($250,000). 
 SECTION 5.4 OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings, loans or advances, whether secured or unsecured, matured or unmatured, liquidated or unliquidated, joint or
several, except (a) the liabilities of Borrower to Bank, (b) trade payables incurred in the ordinary course of business and (c) any other liabilities of Borrower existing as of, and disclosed to Bank prior to, the date hereof.

  

 9 

 SECTION 5.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge or consolidate,
or permit any of its subsidiaries to merge or consolidate, with or into any other business organization (other than mergers or consolidations of a subsidiary into another subsidiary or into Borrower), or acquire, or permit any of its subsidiaries to
acquire, all or substantially all of the capital stock or property of another person except where (a) each of the following conditions is applicable: (i) the cash consideration paid in connection with such transactions (including
assumption of liabilities) does not in the aggregate exceed $250,000 during any fiscal year, (ii) no Event of Default has occurred, is continuing or would exist after giving effect to such transactions, (iii) such transactions do not
result in a change in control (as contemplated in Section 6.1(i) below), and (iv) Borrower is the surviving entity; or (b) the obligations of Borrower hereunder and under the other Loan Documents are repaid in full concurrently with
the closing of any merger or consolidation of Borrower in which Borrower is not the surviving entity; nor sell, lease, transfer or otherwise dispose of all or a substantial or material portion of Borrower’s assets except in the ordinary course
of its business (including non-exclusive licenses and similar arrangements for the use of Borrower’s property in the ordinary course of business). Notwithstanding the foregoing, Borrower may in-license intellectual property, at an expense to
Borrower not to exceed $500,000 during any fiscal year, except as otherwise consented to in writing by Bank from time to time, such consent not to be unreasonably withheld. 
 SECTION 5.6 GUARANTIES. Guarantee or become liable in any way as surety, endorser (other than as endorser of negotiable
instruments for deposit or collection in the ordinary course of business), accommodation endorser or otherwise for, nor pledge or hypothecate any assets of Borrower as security for, any liabilities or obligations of any other person or entity,
except any of the foregoing in favor of Bank. 
 SECTION 5.7 LOANS, ADVANCES, INVESTMENTS. Make any loans or
advances to or investments in any person or entity, except any of the foregoing existing as of, and disclosed to Bank prior to, the date hereof. 
 SECTION 5.8 DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or distribution either in cash, stock or any other property on Borrower’s stock now or hereafter outstanding, nor redeem, retire,
repurchase or otherwise acquire any shares of any class of Borrower’s stock now or hereafter outstanding. 
 SECTION 5.9 PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a security interest in, or lien upon, all or any portion of Borrower’s assets now owned or hereafter acquired, except any of the foregoing in favor of Bank or
which is existing as of, and disclosed to Bank in writing prior to, the date hereof 
  

 10 

 ARTICLE VI 
 EVENTS OF DEFAULT 
 SECTION 6.1 The
occurrence of any of the following shall constitute an “Event of Default” under this Agreement: 
 (a) Borrower shall
fail to pay when due any principal, interest, fees or other amounts payable under any of the Loan Documents; provided that, it shall not constitute an Event of Default if Borrower shall have sufficient funds on deposit with Bank to satisfy any
payment when due but Bank fails or refuses to debit such account for such amount. 
 (b) Any financial statement or certificate
furnished to Bank in connection with, or any representation or warranty made by Borrower or any other party under this Agreement or any other Loan Document shall prove to be incorrect, false or misleading in any material respect when furnished or
made. 
 (c) Any default in the performance of or compliance with any obligation, agreement or other provision contained herein
or in any other Loan Document (other than those specifically described as an “Event of Default” in this section 6.1), and with respect to any such default that by its nature can be cured, such default shall continue for a period of twenty
(20) days from its occurrence. 
 (d) Any default in the payment or performance of any obligation, or any defined event of
default, under the terms of any contract, instrument or document (other than any of the Loan Documents) pursuant to which Borrower, any guarantor hereunder or any general partner or joint venturer in Borrower if a partnership or joint venture (with
each such guarantor, general partner and/or joint venturer referred to herein as a “Third Party Obligor”) has incurred any debt or other liability to any person or entity, including Bank, in excess of $100,000 in the aggregate. 

(e) Borrower or any Third Party Obligor shall become insolvent, or shall suffer or consent to or apply for the appointment of a receiver,
trustee, custodian or liquidator of itself or any of its property, or shall generally fail to pay its debts as they become due, or shall make a general assignment for the benefit of creditors; Borrower or any Third Party Obligor shall file a
voluntary petition in bankruptcy, or seeking reorganization, in order to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or recodified from time to
time (“Bankruptcy Code”), or under any state or federal law granting relief to debtors, whether now or hereafter in effect; or Borrower or any Third Party Obligor shall file an answer admitting the jurisdiction of the court and the
material allegations of any involuntary petition; or Borrower or any Third Party Obligor shall be adjudicated a bankrupt, or an order for relief shall be entered against Borrower or any Third Party Obligor by any court of competent jurisdiction
under the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors. 
 (f) 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. 
  

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 (g) There shall exist or occur any event or condition that Bank in good faith believes
materially impairs, or is substantially likely materially to impair, the prospect of payment or performance by Borrower, any Third Party Obligor, or the general partner of either if such entity is a partnership, of its material obligations under any
of the Loan Documents. 
 (h) The dissolution or liquidation of Borrower or any Third Party Obligor if a corporation,
partnership, joint venture or other type of entity; or Borrower or any such Third Party Obligor, or any of its directors, stockholders or members, shall take action seeking to effect the dissolution or liquidation of Borrower or such Third Party
Obligor. 
 (i) Any change in control of Borrower or any entity or combination of entities that directly or indirectly control
Borrower, with “control” defined as ownership of an aggregate of fifty percent (50%) or more of the common stock, members’ equity or other ownership interest (other than a limited partnership interest). 
 (j) The sale, transfer, hypothecation, assignment or encumbrance, whether voluntary, involuntary or by operation of law, without Bank’s
prior written consent, of all or any part of or interest in any real property collateral required hereby. 
 SECTION 6.2 REMEDIES. Upon the occurrence of any Event of Default: (a) all indebtedness of Borrower under each of the Loan Documents, any term thereof to the contrary notwithstanding, shall at Bank’s option and without notice
become immediately due and payable without presentment, demand, protest or notice of dishonor, all of which are hereby expressly waived by Borrower; (b) the obligation, if any, of Bank to extend any further credit under any of the Loan
Documents shall immediately cease and terminate; and (c) Bank shall have all rights, powers and remedies available under each of the Loan Documents, or accorded by law, including without limitation the right to resort to any or all security for
any credit subject hereto and to exercise any or all of the rights of a beneficiary or secured party pursuant to applicable law. All rights, powers and remedies of Bank may be exercised at any time by Bank and from time to time after the occurrence
of an Event of Default, are cumulative and not exclusive, and shall be in addition to any other rights, powers or remedies provided by law or equity. 
 ARTICLE VII 
 MISCELLANEOUS 
 SECTION 7.1 NO WAIVER. No delay, failure or discontinuance of Bank in exercising any right, power or remedy under any of the
Loan Documents shall affect or operate as a waiver of such right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise
of any other right, power or remedy. Any waiver, permit, consent or approval of any kind by Bank of any breach of or default under any of the Loan Documents must be in writing and shall be effective only to the extent set forth in such writing.

  

 12 

 SECTION 7.2 NOTICES. All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this Agreement must be in writing delivered to each party at the following address: 
  

			
	BORROWER:	  	ENDOLOGIX, INC.
		  	11 Studebaker
		  	Irvine, CA 92618
		  	Attention: Robert Krist
		  	Phone: 595-7200
		  	bkrist@endologix.com
		
	BANK:	  	WELLS FARGO BANK, NATIONAL ASSOCIATION
		  	2030 Main Street, Suite 900
		  	Irvine, CA 92614
		  	Attn: James Ligman
		  	Phone: 949-251-4122
		  	Fax: 866-967-9265
		  	james.ligman@wellsfargo.com

 or to such other address
as any party may designate by written notice to all other parties. Each such notice, request and demand shall be deemed given or made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon the earlier of the
date of receipt or three (3) days after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy, upon receipt. 
 SECTION 7.3 COSTS, EXPENSES AND ATTORNEYS’ FEES. Borrower shall pay to Bank immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable
attorneys’ fees (to include outside counsel fees and all allocated costs of Bank’s in-house counsel), expended or incurred by Bank in connection with (a) the negotiation and preparation of this Agreement and the other Loan Documents;
Bank’s continued administration hereof and thereof, and the preparation of any amendments and waivers hereto and thereto, (b) the enforcement of Bank’s rights and/or the collection of any amounts which become due to Bank under any of
the Loan Documents, and (c) the prosecution or defense of any action in any way related to any of the Loan Documents, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person)
relating to Borrower or any other person or entity. 
 SECTION 7.4 SUCCESSORS, ASSIGNMENT. This Agreement shall
be binding upon and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of the parties; provided however, that Borrower may not assign or transfer its interests or rights hereunder without
Bank’s prior written consent. Bank reserves the right to sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in, Bank’s rights and benefits under each of the Loan Documents. In connection
therewith, Bank may disclose all documents and information which Bank now has or may hereafter acquire relating to any credit subject hereto, Borrower or its business, any guarantor hereunder or the business of such guarantor, or any collateral
required hereunder. 
  

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 SECTION 7.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan
Documents constitute the entire agreement between Borrower and Bank with respect to each credit subject hereto and supersede all prior negotiations, communications, discussions and correspondence concerning the subject matter hereof. This Agreement
may be amended or modified only in writing signed by each party hereto. 
 SECTION 7.6 NO THIRD PARTY
BENEFICIARIES. This Agreement is made and entered into for the sole protection and benefit of the parties hereto and their respective permitted successors and assigns, and no other person or entity shall be a third party beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement or any other of the Loan Documents to which it is not a party. 
 SECTION 7.7 TIME. Time is of the essence of each and every provision of this Agreement and each other of the Loan Documents. 
 SECTION 7.8 SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or any remaining provisions of this Agreement. 
 SECTION 7.9 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when executed and
delivered shall be deemed to be an original, and all of which when taken together shall constitute one and the same Agreement. 
 SECTION 7.10 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 
 SECTION 7.11 ARBITRATION. 
 (a) Arbitration. The parties hereto agree, upon demand by any party, to submit to binding arbitration all claims, disputes and controversies between or among them (and their respective employees,
officers, directors, attorneys, and other agents), whether in tort, contract or otherwise in any way arising out of or relating to (i) any credit subject hereto, or any of the Loan Documents, and their negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default or termination; or (ii) requests for additional credit. 
 (b) Governing Rules. Any arbitration proceeding will (i) proceed in a location in California selected by the American Arbitration Association (“AAA”); (ii) be governed by the
Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such other administrator as the parties
shall mutually agree upon, in accordance with the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the

  

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arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to herein, as applicable, as the “Rules”). If there is any inconsistency between the terms hereof and the Rules, the terms and procedures set forth herein shall control. Any
party who fails or refuses to submit to arbitration following a demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a
waiver by any party that is a bank of the protections afforded to it under 12 U.S.C. §91 or any similar applicable state law. 
 (c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration requirement does not limit the right of any party to (i) foreclose against real or personal property collateral; (ii) exercise self-help
remedies relating to collateral or proceeds of collateral such as setoff or repossession; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment or the appointment of a receiver, before during or after
the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder, including those arising from the exercise of the actions
detailed in sections (i), (ii) and (iii) of this paragraph. 
 (d) Arbitrator Qualifications and Powers. Any
arbitration proceeding in which the amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any dispute in which the
amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of California or a neutral retired judge of the state or federal judiciary of California, in either case with a minimum of ten years experience in the substantive law applicable to the subject matter of the dispute to
be arbitrated. The arbitrator will determine whether or not an issue is arbitratable and will give effect to the statutes of limitation in determining any claim. In any arbitration proceeding the arbitrator will decide (by documents only or with a
hearing at the arbitrator’s discretion) any pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall resolve all disputes in accordance with the
substantive law of California and may grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any award. The arbitrator shall also have the power
to award recovery of all costs and fees, to impose sanctions and to take such other action as the arbitrator deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the California Rules of Civil Procedure
or other applicable law. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief. 
 (e) Discovery. In any arbitration proceeding, discovery will be permitted in accordance with the Rules. All discovery shall be
expressly limited to matters directly relevant to the dispute being arbitrated and must be completed no later than 20 days before the hearing date. Any requests for an extension of the discovery periods, or any discovery disputes, will be subject to
final determination by the arbitrator upon a showing that the request for discovery is essential for the party’s presentation and that no alternative means for obtaining information is available. 
  

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 (f) Class Proceedings and Consolidations. No party hereto shall be entitled to join
or consolidate disputes by or against others in any arbitration, except parties who have executed any Loan Document, or to include in any arbitration any dispute as a representative or member of a class, or to act in any arbitration in the interest
of the general public or in a private attorney general capacity. 
 (g) Payment Of Arbitration Costs And Fees. The
arbitrator shall award all costs and expenses of the arbitration proceeding. 
 (h) Real Property Collateral; Judicial
Reference. Notwithstanding anything herein to the contrary, no dispute shall be submitted to arbitration if the dispute concerns indebtedness secured directly or indirectly, in whole or in part, by any real property unless (i) the holder of
the mortgage, lien or security interest specifically elects in writing to proceed with the arbitration, or (ii) all parties to the arbitration waive any rights or benefits that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the parties, and all mortgages, liens and security interests securing such indebtedness and obligations, shall remain fully valid and enforceable. If any such dispute is not
submitted to arbitration, the dispute shall be referred to a referee in accordance with California Code of Civil Procedure Section 638 et seq., and this general reference agreement is intended to be specifically enforceable in accordance with
said Section 638. A referee with the qualifications required herein for arbitrators shall be selected pursuant to the AAA’s selection procedures. Judgment upon the decision rendered by a referee shall be entered in the court in which such
proceeding was commenced in accordance with California Code of Civil Procedure Sections 644 and 645. 
 (i)
Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding within 180 days of the filing of the dispute with the AAA. No arbitrator or other
party to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its business or by applicable law or regulation. If more than one
agreement for arbitration by or between the parties potentially applies to a dispute, the arbitration provision most directly related to the Loan Documents or the subject matter of the dispute shall control. This arbitration provision shall survive
termination, amendment or expiration of any of the Loan Documents or any relationship between the parties. 
 (j) Small
Claims Court. Notwithstanding anything herein to the contrary, each party retains the right to pursue in Small Claims Court any dispute within that court’s jurisdiction. Further, this arbitration provision shall apply only to disputes in
which either party seeks to recover an amount of money (excluding attorneys’ fees and costs) that exceeds the jurisdictional limit of the Small Claims Court. 
 [Balance of Page Intentionally Left Blank] 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
day and year first written above. 
  

			
	 WELLS FARGO BANK,
 NATIONAL ASSOCIATION

		
	By:	 	 /s/ James Ligman

	Title:	 	 Vice President

	
	ENDOLOGIX, INC.
		
	By:	 	 /s/ Robert J. Krist

	Title:	 	 Chief Financial Officer

 [Signature Page to Credit Agreement]

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