UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 9, 2010

 

 

ENDOLOGIX, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   000-28440   68-0328265

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

11 Studebaker, Irvine, CA   92618
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (949) 595-7200

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

Amendment to Securities Purchase Agreement

On December 9, 2010, Endologix, Inc., a Delaware corporation (the “Company”), entered into an amendment (the “Amendment”) to the Securities Purchase Agreement (the “Purchase Agreement”), dated as of October 27, 2010, by and between the Company and Essex Woodlands Health Ventures Fund VII, L.P. (“Essex Woodlands Fund VII”).

The Amendment amends the terms of the board designation right set forth in Section 7 of the Purchase Agreement (the “Board Designation Right”) to provide that, at the closing of the transactions contemplated by the Purchase Agreement and the Merger Agreement (as defined below), Essex Woodlands Fund VII shall have the right to designate (i) one individual to be nominated to the Company’s Board of Directors (the “Board”), to serve as a Class II director, subject to certain additional limitations and requirements described in the Amendment, and (ii) one individual who may be present and participate in a non-voting capacity at all meetings of the Board or any committee thereof, including any telephonic meetings, subject to certain additional limitations and requirements described in the Amendment. In addition, effective as of the date on which the Company first issues additional shares of its common stock as a result of the achievement of certain performance milestones set forth in the Merger Agreement, Essex Woodlands Fund VII shall have the right to designate one additional individual to be nominated to the Board, to serve as a Class I director, subject to certain additional limitations and requirements described in the Amendment.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by this reference.

Employment Agreement with Robert D. Mitchell

On December 10, 2010, the Company entered into an Employment Agreement with Robert D. Mitchell (the “Employment Agreement”), pursuant to which Mr. Mitchell will serve as President, Global Strategic Initiatives, of the Company, commencing on such date. Under the terms of the Employment Agreement, Mr. Mitchell will receive an annual base salary of $350,000 and will be eligible to receive a fiscal 2010 performance bonus of up to $140,000 and fiscal 2011 and 2012 performance bonuses of 45% of his base salary, each based upon achievement of certain performance goals and objectives. In addition, Mr. Mitchell will receive 350,000 shares of restricted common stock, which will vest (i) with respect to 200,000 shares if the Company achieves the OUS Milestone (as defined in the Merger Agreement) within 24 months of the date on which the Generation 3 Product (as defined in the Merger Agreement) obtains CE Mark approval from its European Union notified body, (ii) with respect to 50,000 shares if the Company enrolls the first patient in the United States under the investigational device exemption approval process for the Generation 3 Product within 24 months of the closing of the transactions contemplated by the Merger Agreement and (iii) with respect to the remaining shares if the Company achieves the PMA Milestone (as defined in the Merger Agreement). In connection with his expatriate assignment in Europe, Mr. Mitchell will also be entitled to receive certain perquisites which will include a housing allowance, a car allowance and a travel allowance. Mr. Mitchell is also eligible to receive health, life and disability insurance and to participate in such other benefit programs offered generally by the Company to its other senior executives. In addition, Mr. Mitchell will be reimbursed for all normal and customary business expenses incurred by him in respect of his services to the Company.

The Employment Agreement provides that if the Company terminates Mr. Mitchell’s employment without “cause” or he resigns for “good reason”, Mr. Mitchell will be entitled to receive (i) the portion of his then current base salary which has accrued through the date of termination, (ii) any payments for unused vacation and reimbursement expenses, which are due, accrued or payable, (iii) a severance payment in an amount equal to six-months of his then current base salary, (iv) to the extent not already vested, all of his options to purchase shares of the Company’s common stock and restricted stock will vest by an additional six months, (v) a prorated payment equal to the target bonus amount for which he would be eligible for the year in which such termination or resignation occurred and (vi) continuation of certain insurance benefits for six months.

In the event Mr. Mitchell is terminated or resigns for “good reason” in connection with a change in control of the Company, Mr. Mitchell will be entitled to receive (i) the portion of his then current base salary which has accrued through the date of termination, (ii) any payments for unused vacation and reimbursement expenses, which are due, accrued or payable, (iii) a severance payment in an amount equal to 12 months of his then current base salary, (iv) to the extent not already vested, all of his options to purchase shares of the Company’s common stock and restricted stock will accelerate and automatically vest, (v) a prorated payment equal to the target bonus amount for which he would be eligible for the year in which such termination or resignation occurred and (vi) continuation of certain insurance benefits for 12 months.

The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is attached hereto as Exhibit 10.2 and incorporated herein by this reference.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

On December 10, 2010, the Company completed the merger (the “Merger”) of Nepal Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), with and into Nellix, Inc., a Delaware corporation (“Nellix”), pursuant to the terms of the Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated as of October 27, 2010, by and among the Company, Nellix, Merger Sub, certain of Nellix’s stockholders named therein and Essex Woodlands Health Ventures, Inc., a Delaware corporation (“Essex Woodlands”), as representative of the Nellix stockholders. As a result of the Merger, Nellix is a wholly-owned subsidiary of the Company.

Upon the closing of the Merger, and in accordance with the terms of the Merger Agreement, the Company issued an aggregate of 2,855,227 unregistered shares of its common stock (the “Closing Merger Shares”) to the stockholders of Nellix in exchange for the shares of Nellix common stock and preferred stock outstanding immediately prior to the closing of the Merger, other than dissenting shares. The Company also delivered an aggregate of 264,214 Closing Merger Shares to Wells Fargo Bank N.A., in its capacity as escrow agent, to secure the Company’s rights, and the rights of certain of its affiliates and representatives, to indemnification as provided in the Merger Agreement. In addition, the Company may be required to issue to the Nellix stockholders as contingent consideration additional shares of the Company’s common stock upon the Company’s achievement of certain performance milestones set forth in the Merger Agreement.

A copy of the press release announcing the consummation of the Merger is attached hereto as Exhibit 99.1.

 

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth in Item 2.01 with respect to the issuance of the Closing Merger Shares in accordance with the terms of the Merger Agreement is hereby incorporated by reference into this Item 3.02.

Concurrent with the closing of the Merger, and in accordance with the terms of the Purchase Agreement, the Company issued and sold to Essex Woodlands Fund VII, and Essex Woodlands Fund VII purchased from the Company, an aggregate of 3,170,577 shares of the Company’s common stock (the “Private Placement Shares”), at purchase price of $4.731 per share, resulting in gross proceeds to the Company of $15,000,000.

The Company offered and sold the Closing Merger Shares and the Private Placement Shares in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended (the “Securities Act”). Essex Woodlands Fund VII and the other stockholders of Nellix gave representations to the Company regarding their financial sophistication, access to information regarding the Company and certain other matters to support the Company’s reasonable belief that it could rely upon exemptions from registration pursuant to Section 4(2) of the Securities Act with respect to the offer and sale of the Closing Merger Shares and the Private Placement Shares. The Closing Merger Shares and the Private Placement Shares have not been registered under the Securities Act, and until so registered the Closing Merger Shares and the Private Placement Shares may not be offered or sold in the United States absent registration or availability of an applicable exemption from registration. The registration rights provisions contained in the Merger Agreement and the Purchase Agreement require the Company to prepare and file with the Securities and Exchange Commission a registration statement on Form S-3 for the purpose of registering for resale the Closing Merger Shares and the Private Placement Shares.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In accordance with the terms of the Board Designation Right and the Amended and Restated Bylaws of the Company, as amended, the Board appointed Guido J. Neels to serve on the Board as a Class II director, effective December 10, 2010. Mr. Neels is a managing director of Essex Woodlands and an affiliate of Essex Woodlands Fund VII. Following Mr. Neels’ appointment, Class II consists of three directors whose terms of office expire at the 2012 annual meeting of stockholders. To date, Mr. Neels has not been appointed to serve on any committees of the Board. Mr. Neels will not receive any compensation for his service on the Board or any committee thereof; however, Mr. Neels will receive reimbursement for certain travel expenses and other out-of-pocket costs related thereto.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Effective upon the closing of the Merger, the Board amended and restated Article III, Section 1 of the Company’s Amended and Restated Bylaws to increase the fixed number of directors of the whole Board from eight to nine.

A copy of the Company’s Amended and Restated Bylaws, as amended, is attached hereto as Exhibit 3.1 and incorporated herein by reference.

 

Item 5.07 Submission of Matters to a Vote of Security Holders.

On December 9, 2010, the Company held a Special Meeting of Stockholders (the “Special Meeting”) to consider and vote on (i) a proposal to approve the issuance of shares of the Company’s common stock pursuant to the Merger Agreement and the Purchase Agreement and (ii) a proposal to adjourn the Special Meeting to a later time or date, if necessary or appropriate, to permit further solicitation of proxies if there were insufficient votes at the time of the Special Meeting in favor of the proposal to approve the issuance of shares of the Company’s common stock pursuant to the Merger Agreement and the Purchase Agreement.

A total of 49,014,355 shares of the Company’s common stock were entitled to vote as of November 5, 2010, the record date for the Special Meeting, of which 35,194,087 were present in person or by proxy at the Special Meeting, constituting a quorum.

Set forth below is information concerning each matter submitted to a vote at the Special Meeting.

Proposal No. 1

The stockholders approved the issuance of shares of the Company’s common stock pursuant to the Merger Agreement and the Purchase Agreement. The results of the vote on this proposal were:

 

Votes For

 

Votes Against

 

Abstain

 

Broker Non-Votes

35,082,859   43,360   67,868   0

Proposal No. 2

The stockholders approved the adjournment of the Special Meeting to a later time or date, if necessary or appropriate. The results of the vote on this proposal were:

 

Votes For

 

Votes Against

 

Abstain

 

Broker Non-Votes

34,047,872   1,066,667   79,548   0

Adjournment of the Special Meeting to a later time or date was not necessary or appropriate because there were sufficient votes at the time of the Special Meeting to approve the issuance of shares of the Company’s common stock pursuant to the Merger Agreement and the Purchase Agreement.

 

Item 9.01 Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired.

The financial statements required by this Item are not being filed with this Current Report on Form 8-K. Such financial statements will be filed by an amendment to this Current Report on Form 8-K not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

 

(b) Pro Forma Financial Information.

The pro forma financial information required by this Item is not being filed with this Current Report on Form 8-K. Such pro forma financial information will be filed by an amendment to this Current Report on Form 8-K not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

 

(d) Exhibits.

 

Exhibit

Number

  

Description

  3.1    Amended and Restated Bylaws of Endologix, Inc., as amended.
10.1    Amendment to Securities Purchase Agreement, dated as of December 9, 2010, by and between Endologix and Essex Woodlands Health Ventures Fund VII, L.P.
10.2    Employment Agreement, dated as of December 10, 2010, by and between Endologix and Robert D. Mitchell.
99.1    Press Release, dated December 13, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      ENDOLOGIX, INC.
Date: December 14, 2010      

/ S /    R OBERT J. K RIST        

      Robert J. Krist
      Chief Financial Officer

EXHIBIT INDEX

 

Exhibit

Number

  

Description

  3.1    Amended and Restated Bylaws of Endologix, Inc., as amended.
10.1    Amendment to Securities Purchase Agreement, dated as of December 9, 2010, by and between Endologix and Essex Woodlands Health Ventures Fund VII, L.P.
10.2    Employment Agreement, dated as of December 10, 2010, by and between Endologix and Robert D. Mitchell.
99.1    Press Release, dated December 13, 2010.

Exhibit 3.1

AMENDED AND RESTATED

BYLAWS

OF

RADIANCE MEDICAL SYSTEMS, INC.

ARTICLE I

OFFICES

Section 1. The registered office shall be in the City of Dover, County of Kent, State of Delaware.

Section 2. The corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. All meetings of the stockholders for the election of directors shall be held at such place as may be fixed from time to time by the Board of Directors, or at such other place either within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2. Annual meetings of stockholders, commencing with the year 1996, shall be held at such date and time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which they shall elect directors by a plurality vote and transact such other business as may properly be brought before the meeting.

Section 3. At the direction of the Board of Directors, the President or the Secretary of the corporation, written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting.

Section 4. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the president and shall be called by the president or secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of stockholders owning not less than fifty percent (50%) of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting.

Section 6. At the direction of the Board of Directors, the President or the Secretary, written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not fewer than ten (10) nor more than sixty (60) days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 7. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 8. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted that might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 9. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 10. Unless otherwise provided in the certificate of incorporation and subject to Article VI, Section 5 each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three (3) years from its date, unless the proxy provides for a longer period.

Section 11. To be properly brought before an annual meeting or special meeting, nominations for the election of director or other business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors, (b) otherwise properly brought before the meeting by or at the direction of the board of directors, or (c) otherwise properly brought before the meeting by a stockholder. For such nominations or other business to be considered properly brought before the meeting by a stockholder, such stockholder must have given timely notice and in proper form of such stockholder’s intent to bring such business before such meeting. To be timely, such stockholder’s notice must be delivered or mailed to and received by the secretary of the corporation not less than 90 days prior to the meeting; provided, however, that in the event that less than 100 days notice or prior public disclosure of the date of the

 

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meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. To be in proper form, a stockholder’s notice to the secretary shall set forth:

(i) the name and address of the stockholder who intends to make the nominations or propose the business, and, as the case may be, the name and address of the person or persons to be nominated or the nature of the business to be proposed;

(ii) a representation that the stockholder is a holder of record of stock of the corporation entitled to vote at such meeting and, if applicable, intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice or introduce the business specified in the notice;

(iii) if applicable, a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder;

(iv) such other information regarding each nominee or each matter of business to be proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had the nominee been nominated, or intended to be nominated, or the matter been proposed, or intended to be proposed by the board of directors; and

(v) if applicable, the consent of each nominee to serve as director of the corporation if so elected.

The chairman of the meeting may refuse to acknowledge the nomination of any person or the proposal of any business not made in compliance with the foregoing procedure.

Section 12. The stockholders of the Corporation may not take action by written consent without a meeting but must take any such actions at a duly called annual or special meeting.

ARTICLE III

DIRECTORS

Section 1. The number of directors which shall constitute the whole Board shall be fixed by resolution of the Board of Directors, with the number fixed at eight (8). Each director shall be elected by the stockholders at the annual meeting and shall hold office until the next annual meeting and until his successor is elected and qualified, or until his earlier death, resignation or removal. Directors need not be stockholders of the corporation.

Section 2. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified or until his earlier resignation or removal. If there are no directors in office, then an election of directors may be held in the manner provided by statute.

 

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Section 3. The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 4. The Board of Directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

Section 5. The first meeting of each newly elected Board of Directors shall be held at such time and place as shall be the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected Board of Directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver fixed by the vote of signed by all of the directors.

Section 6. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 7. Special meetings of the board may be called by the President on forty-eight (48) hours notice to each director either personally, or by telephone, telegram or facsimile; special meetings shall be called by the President or Secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director, in which case special meetings shall be called by the President or Secretary in like manner and on like notice on the written request of the sole director. A written waiver of notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

Section 8. At all meetings of the board a majority of the total number of directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 9. Unless otherwise restricted by the certificate of incorporation of these bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 10. Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

 

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COMMITTEES OF DIRECTORS

Section 11. The Board of Directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the Delaware General Corporation Law to be submitted to stockholders for approval or (ii) adopting, amending or repealing any by-law of the Corporation. Each committee which may be established by the Board of Directors pursuant to these By-Laws may fix its own rules and procedures. Notice of meetings of committees, other than regular meetings provided for by the rules, shall be given to committee members.

Section 12. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

COMPENSATION OF DIRECTORS

Section 13. Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 14. Unless otherwise restricted by the certificate of incorporation or bylaw, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors.

 

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ARTICLE IV

NOTICES

Section 1. Whenever, under the provisions of the statutes or of the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice (except as provided in Section 7 of Article III of these Bylaws), but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telephone, telegram or facsimile.

Section 2. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

OFFICERS

Section 1. The officers of the corporation shall be chosen by the Board of Directors and shall be a President, Chief Financial Officer and a Secretary. The Board of Directors may elect from among its members a Chairman of the Board and a Vice Chairman of the Board. The Board of Directors may also choose one or more Vice Presidents, Assistant Secretaries, Treasurers and Assistant Treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these bylaws otherwise provide.

Section 2. The Board of Directors at its first meeting after each annual meeting of stockholders shall choose a President, a Chief Financial Officer, and a Secretary and may choose Vice Presidents.

Section 3. The Board of Directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.

Section 4. The salaries of all officers of the corporation shall be fixed by the Board of Directors. The salaries of agents of the corporation shall, unless fixed by the Board of Directors, be fixed by the President or any Vice-President of the corporation.

Section 5. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors.

 

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THE CHAIRMAN OF THE BOARD

Section 6. The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he shall be present. He/she shall have and may exercise such powers as are, from time to time, assigned to him by the Board and as may be provided by law.

Section 7. In the absence of the Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he shall be present. He shall have and may exercise such powers as are, from time to time, assigned to him by the Board and as may be provided by law.

THE PRESIDENT AND VICE-PRESIDENTS

Section 8. The President shall be the chief executive officer of the corporation; and in the absence of the Chairman and Vice Chairman of the Board he/she shall preside at all meetings of the stockholders and the Board of Directors; he/she shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect.

Section 9. The President or any Vice President shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation.

Section 10. In the absence of the President or in the event of his inability or refusal to act, the Vice-President, if any, (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice-Presidents shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 11. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He/she shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he/she shall be. He/she shall have custody of the corporate seal of the corporation and he/she, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.

Section 12. The Assistant Secretary, or if there be more than one, the Assistant secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

 

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THE CHIEF FINANCIAL OFFICER, TREASURERS

AND ASSISTANT TREASURERS

Section 13. The Chief Financial Officer of the corporation shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors.

Section 14. He/she shall disburse the funds of the corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Chief Financial Officer and of the financial condition of the corporation.

Section 15. If required by the Board of Directors, he/she shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his/her office and for the restoration to the corporation, in case of his/her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his/her control belonging to the corporation.

Section 16. The Treasurer, or Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the Chief Financial Officer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Chief Financial Officer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

ARTICLE VI

CERTIFICATE OF STOCK

Section 1. Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by, the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice-President and the Chief Financial Officer, Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation, certifying the number of shares owned by him/her in the corporation.

Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefor, and the amount paid thereon shall be specified.

 

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If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2. Any of or all the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he/she were such officer, transfer agent or registrar at the date of issue.

LOST CERTIFICATES

Section 3. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his/her legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

FIXING RECORD DATE

Section 5. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

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REGISTERED STOCKHOLDERS

Section 6. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VII

GENERAL PROVISIONS

DIVIDENDS

Section 1. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Section 2. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

CHECKS

Section 3. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

FISCAL YEAR

Section 4. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

SEAL

Section 5. The Board of Directors may adopt a corporate seal having inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

 

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ARTICLE VIII

INDEMNIFICATION

Section 1. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she, or a person of which he or she is the representative, is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary or agent of another corporation or of a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do so unless prohibited from doing so by the General Corporation Law of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment) against all expense, liability and loss including attorneys’ fees actually and reasonably incurred by such person in connection with such proceeding, and such indemnification shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article VIII shall be a contract right and shall include the right to require the corporation, from time to time, to advance any necessary and reasonable amounts for the preparation and/or conduct of the defense incurred in defending any such proceeding in advance of its final disposition unless otherwise determined by the board of directors in the specific case and upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall be ultimately determined that he or she is not entitled to be indemnified by the corporation. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers.

Section 2. The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article VIII shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the certificate of incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

Section 3. The corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article VIII.

Section 4. Persons who are not covered by the foregoing provisions of this Article VIII and who are or were employees, fiduciaries or agents of the corporation, or who are or were serving at the request of the corporation as directors, officers, employees, fiduciaries or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors.

 

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Section 5. The provisions of this Article VIII shall be deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article VIII and the relevant provisions of the General Corporation Law of Delaware or other applicable law are in effect, and any repeal or modification of this Article VIII or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing.

ARTICLE IX

AMENDMENTS

Section 1. These bylaws may be altered, amended or repealed or new bylaws may be adopted by the stockholders or by the Board of Directors, when such power is conferred upon the Board of Directors by the certificate of incorporation, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new bylaws be contained in the notice of such special meeting. If the power to adopt, amend or repeal bylaws is conferred upon the Board of Directors by the certificate or incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal bylaws.

 

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CERTIFICATE OF AMENDMENT

OF THE AMENDED AND RESTATED BYLAWS

OF

ENDOLOGIX, INC.

The undersigned, who is the duly elected and acting Secretary of Endologix, Inc., a Delaware corporation (the “ Corporation ”), does hereby certify, as follows:

1. Section 1 of Article III of the Amended and Restated Bylaws of the Corporation was amended and restated, by resolution of the Board of Directors of the Corporation, effective as of December 10, 2010, to read in its entirety as follows:

“Section 1. The number of directors which shall constitute the whole Board shall be fixed by resolution of the Board of Directors, with the number fixed at nine (9). Each director shall be elected by the stockholders at the annual meeting and shall hold office until the next annual meeting and until his successor is elected and qualified, or until his earlier death, resignation or removal. Directors need not be stockholders of the corporation.”

2. The foregoing amendment to the Amended and Restated Bylaws of the Corporation has not been modified, amended, rescinded, or revoked and remains in full force and effect on the date hereof.

[Remainder of page intentionally left blank; Signature page follows]

IN WITNESS WHEREOF, I have hereunto subscribed my name on this 10th day of December 2010.

 

/s/ Robert J. Krist

Robert J. Krist, Secretary

Exhibit 10.1

AMENDMENT TO SECURITIES PURCHASE AGREEMENT

This AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this “ Amendment ”), is made and entered into as of December 9, 2010 by and among Endologix, Inc., a Delaware corporation (the “ Company ”), and Essex Woodlands Health Ventures Fund VII, L.P. (the “ Investor ”). The Company and the Investor are referred to herein collectively as the “ Parties ” and each individually as a “ Party .”

RECITALS

A. The Parties are parties to that certain Securities Purchase Agreement, dated as of October 27, 2010 (the “ Securities Purchase Agreement ”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Securities Purchase Agreement.

B. Pursuant to Section 11(c) of the Securities Purchase Agreement, the Securities Purchase Agreement may only be amended by a written agreement of the Company and the Investor.

C. The Company and the Investor desire to amend the Securities Purchase Agreement in the manner set forth in this Amendment.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:

1. Section 7 of the Securities Purchase Agreement is hereby amended and restated to read in its entirety as follows:

“7. Board of Directors Designation Right . The Company hereby grants to the Investor a board designation right (the “ Board Designation Right ”) as follows:

 

  (a) Initial Rights .

(i) At the Closing, the Investor shall have the right to designate one (1) individual (such individual, an “ Investor Designee ”) to be nominated to the Company’s Board of Directors, provided that such individual shall have provided the Nominating and Governance Committee of the Company’s Board of Directors (the “ Nominating Committee ”) such information as the Nominating Committee customarily requests pursuant to its charter as in effect on the date hereof to determine that such individual meets the director independence requirements under Rule 5605 of the Listing Rules of the Nasdaq Stock Market, and is not otherwise disqualified by applicable Nasdaq Stock Market or SEC rules or regulations from service on the Company’s Board of Directors. Upon submission and verification of such information, such Investor Designee will be recommended to the Board of Directors to serve as a Class II member of the Board of Directors of the Company following the Closing, and shall be so elected by the Board of Directors in accordance with the Company’s Bylaws (a “ Designated Director ”) to serve until the next annual meeting of stockholders at which Class II directors are elected.

(ii) Thereafter, during the period commencing on the Closing Date and continuing until the date upon which the Company first issues Contingent Merger Shares in accordance with the terms and conditions of the Merger Agreement (the “ Contingent Share Issuance Date ”), for so long as the Investor and its Affiliates continue to hold, in the aggregate, at least sixty-five percent (65%) of the Purchased Shares and the Closing Merger Shares issued to the Investor, the Investor shall have the right from time to time to designate one (1) Investor Designee as a nominee for election (or re-election) as a director of the Company at subsequent annual meetings of the Company’s stockholders at which Class II directors are elected; provided , that at no time shall the Board of Directors as constituted pursuant to this Section 7(a) include more than one (1) Designated Director; and provided further , that such Investor Designee shall have complied with the process of the Nominating Committee as set forth in Section 7(a)(i) .

(iii) In addition, during the period commencing on the Closing Date and continuing for such time as the Investor is permitted to designate only one (1) Investor Designee hereunder, the Investor shall have the right to designate one (1) individual to be present and participate in a non-voting capacity at all meetings of the Company’s Board of Directors or any committee thereof, including any telephonic meetings (such individual, the “ Board Observer ”). Any materials that are sent by the Company to the members of the Company’s Board of Directors in their capacity as such shall be sent to the Board Observer simultaneously by means reasonably designed to ensure timely receipt by the Board Observer, and the Company will give the Board Observer notice of such meetings, by the same means as such notices are delivered to the members of the Company’s Board of Directors and at the same time as notice is provided or delivered to the Company’s Board of Directors; provided , that the Board Observer agrees to hold in confidence and trust, to act in a fiduciary manner with respect to and not to disclose any information provided to or learned by the Board Observer acting in such capacity, whether in connection with the Board Observer’s attendance at meetings of the Company’s Board of Directors, in connection with the receipt of materials delivered to the Company’s Board of Directors or otherwise. Notwithstanding the provisions of this Section 7(a)(iii) , the Company reserves the right to exclude the Board Observer from any meeting of a committee of the Company’s Board of Directors for any reason whatsoever, to exclude the Board Observer from any meeting of the Company’s Board of Directors, or a portion thereof, and to redact portions of any materials delivered to the Board Observer where and to the extent that the Company reasonably believes that withholding such information or excluding the Board Observer from attending such meeting of the Company’s Board of Directors, or a portion thereof, is reasonably necessary: (A) to preserve attorney-client, work product or similar privilege between the Company and its counsel with respect to any matter; (B) to comply with the terms and conditions of confidentiality agreements between the Company and any third parties; or (C) because the Company’s Board of Directors has determined that there exists, with respect to the subject of such deliberation or such information, an actual or potential conflict of interest between the Investor and the Company. Further, the members of the Company’s Board of Directors shall be entitled to hold executive sessions which the Board Observer may not be invited to attend. The Board Observer shall use the same degree of care to protect the Company’s confidential and proprietary information as the Investor uses to protect its confidential and proprietary information of like nature, but in no circumstances with less than reasonable care. The Company shall reimburse the Investor for all reasonable expenses incurred by the Board Observer in attending meetings of the Company’s Board of Directors, or any committee thereof.

 

  (b) Additional Rights .

(i) At the Contingent Share Issuance Date, the Investor shall have the right to designate one (1) additional Investor Designee to be nominated to the Company’s Board of Directors, provided that such Investor Designee has complied with the process of the Nominating Committee set forth in Section 7(a)(i) ; provided , however , that if and when such right is granted, such right is consistent with the Nasdaq Stock Market’s voting rights rule and related policies then in effect. Upon compliance with the process of the Nominating Committee set forth in Section 7(a)(i) , such Investor Designee will be recommended to the Board of Directors to serve as a Class I member of the Board of Directors of the Company following the Contingent Share Issuance Date, and shall be so elected by the Board of Directors in accordance with the Company’s Bylaws to serve until the next annual meeting of stockholders at which Class I directors are elected.

(ii) Thereafter, for so long as the Investor and its Affiliates continue to hold, in the aggregate, at least sixty-five percent (65%) of the Purchased Shares, the Closing Merger Shares issued to the Investor and the Contingent Merger Shares issued to the Investor on the Contingent Share Issuance Date, the Investor shall have the right from time to time to designate up to two (2) Investor Designees in the aggregate as nominees for election (or re-election) as directors of the Company at subsequent annual meetings of the Company’s stockholders at which Class II directors and Class I directors, respectively, are elected; provided , however , that if and when such right is granted, such right is consistent with the Nasdaq Stock Market’s voting rights rule and related policies then in effect; provided further , that at no time shall the Board of Directors as constituted pursuant to this Section 7(b) include more than two (2) Designated Directors; and provided further , that such Investor Designees have complied with the process of the Nominating Committee as set forth in Section 7(a)(i) .

(iii) The rights set forth in this Section 7(b) shall terminate, expire and be of no further force or effect on and after the first date on which the Investor and its Affiliates cease to hold, in the aggregate, at least sixty-five percent (65%) of the Purchased Shares, the Closing Merger Shares issued to the Investor and the Contingent Merger Shares issued to the Investor on the Contingent Share Issuance Date; provided , however , that for such time as the Investor and its Affiliates continue to hold, in the aggregate, at least sixty-five percent (65%) of the Purchased Shares and the Closing Merger Shares issued to the Investor, the Investor shall continue to have the rights set forth in Section 7(a) hereof.

(c) The Investor Designees designated by the Investor pursuant to Sections 7(a) and 7(b) hereof shall be subject to the Nominating Committee procedure set forth in Section 7(a)(i) , and shall serve in the respective classes of directors set forth in Sections 7(a) and 7(b) hereof.

(d) At any meeting of the Company’s stockholders held for the purpose of electing directors of the Company, the Board of Directors shall recommend that the Company’s stockholders vote for the election of each Investor Designee selected as a nominee for election (or re-election) to the Board of Directors at such meeting.

(e) The Company shall fill any vacancies that may arise upon the resignation, removal, death or disability of any Designated Director with a new Investor Designee designated in accordance with Sections 7(a) , 7(b) and 7(c) above.

(f) The Board Designation Right shall terminate, expire and be of no further force or effect on and after the first date on which the Investor and its Affiliates cease to hold, in the aggregate, at least sixty-five percent (65%) of the Purchased Shares and the Closing Merger Shares issued to the Investor.”

2. The Securities Purchase Agreement, as amended herein, shall remain in full force and effect as so amended.

3. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

IN WITNESS WHEREOF, the Parties have executed this Amendment to Securities Purchase Agreement as of the date first above written.

 

THE COMPANY:
ENDOLOGIX, INC.
By:  

/s/ John McDermott

Name:   John McDermott
Title:   President and Chief Executive Officer
THE INVESTOR:
ESSEX WOODLANDS HEALTH VENTURES FUND VII, L.P.
By:   Essex Woodlands Health Ventures VII, L.P.,
  Its General Partner
By:   Essex Woodlands Health Ventures VII, LLC,
  Its General Partner
By:  

/s/ Immanual Thangaraj

Name:   Immanuel Thangaraj
Title:   Manager

[Signature Page to Amendment to Securities Purchase Agreement]

Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of December 10, 2010, by and between ENDOLOGIX, INC., a Delaware corporation (the “Company”), and Bob Mitchell, an individual (the “Executive”).

R E C I T A L

The Company desires to employ Executive in the capacity hereinafter stated, and the Executive desires to enter into the employ of the Company in that capacity pursuant to the terms and conditions set forth herein.

A G R E E M E N T

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the Company and the Executive, intending to be legally bound, hereby agree as follows:

1. Employment . The Company hereby agrees to employ the Executive as the President, Strategic Global Initiatives of the Company, reporting to the Chief Executive Officer of the Company, and the Executive accepts such employment and agrees to devote substantially all his business time and efforts and skills on such reasonable duties as shall be assigned to him by the Company commensurate with such position. Notwithstanding the foregoing, Executive may participate in the business activities listed on Exhibit A, to the extent (i) they do not interfere with the performance of services for the Company, and (ii) that such other businesses do not compete with the Company.

2. Stock Options, Restricted Stock Acceleration . Notwithstanding any provisions of the Company’s option or stock incentive plan, or of the Executive’s stock option or restricted stock agreements, in the event of a “Corporate Transaction” or “Change in Control,” as defined below, during the period of the Executive’s employment with the Company, all of the Executive’s stock options shall vest in full and all rights of the Company to repurchase restricted stock of the Executive shall terminate.

For purposes hereof, “Change in Control” shall mean a change in ownership or control of the Company effected through the acquisition (other than in a public offering), directly or indirectly, by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s stockholders which the Board does not recommend such stockholders to accept.

For purposes hereof, “Corporate Transaction” shall mean either of the following stockholder-approved transactions to which the Company is a party:

(a) A merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction; or

(b) The sale, transfer or other disposition of all or substantially all of the Company’s assets; provided, that such transaction does not constitute a transfer to a related party under Treasury Regulation §1.409A-3(i)(5)(vii)(B).

3. Termination .

3.1 Termination by the Company for Cause . Any of the following acts or omissions shall constitute grounds for the Company to terminate the Executive’s employment pursuant to this Agreement for “cause”:

(a) Willful misconduct by Executive causing material harm to the Company but only if Executive shall not have discontinued such misconduct within 30 days after receiving written notice from the Company describing the misconduct and stating that the Company will consider the continuation of such misconduct as cause for termination of this Agreement;

(b) Any material act or omission by the Executive involving gross negligence in the performance of the Executive’s duties to, or material deviation from any of the policies or directives of, the Company, other than a deviation taken in good faith by the Executive for the benefit of the Company;

(c) Any illegal act by the Executive which materially and adversely affects the business of the Company, provided that the Company may suspend the Executive with pay while any allegation of such illegal act is investigated; or

(d) Any felony committed by Executive, as evidenced by conviction thereof, provided that the Company may suspend the Executive with pay while any allegation of such felonious act is investigated.

Termination by the Company for cause shall be accomplished by written notice to the Executive and, in the event of a termination pursuant to Sections 3.1(a), 3.1(b), and/or 3.1(c) above, shall be preceded by a written notice providing a reasonable opportunity for the Executive to correct his conduct.

3.2 Termination for Death or Disability . In addition to termination for cause pursuant to Section 3.1 hereof, the Executive’s employment pursuant to this Agreement shall be immediately terminated without notice by the Company (i) upon the death of the Executive or (ii) upon the Executive becoming totally disabled. For purposes of this Agreement, the term “totally disabled” means an inability of Executive, due to a physical or mental illness, injury or impairment, to perform a substantial portion of his duties for a period of one hundred eighty (180) or more consecutive days, as determined by a competent physician selected by the Company’s Board of Directors and reasonably agreed to by the Executive, following such one hundred eighty (180) day period.

3.3 Termination for Good Reason . Executive’s employment pursuant to this Agreement may be terminated by the Executive for “good reason” if the Executive voluntarily terminates his employment as a result of any of the following:

(a) Without the Executive’s prior written consent, a material reduction in his then current Base Salary;

 

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(b) Without the Executive’s prior written consent, a material reduction in the Executive’s authority, duties, or responsibilities; or

(c) Without Executive’s prior written consent, a material change in the geographic location of Executive’s principal place of employment, other than a relocation from Europe to California.

In order for any of the foregoing conditions or events to constitute “good reason” under this Agreement, all of the following must occur: (i) the Executive must provide written notice to the Company of the occurrence of any of the foregoing events or conditions within ninety (90) days of the occurrence of such event or condition; (ii) the Company or any surviving entity shall have failed to cure such event or condition within the succeeding thirty (30) day period after the Company’s receipt of written notice of such event or condition from the Executive; and (iii) the Executive’s termination of employment following such thirty (30) day cure period must occur no later than the date that is two (2) years following the initial occurrence of one of the foregoing events or conditions

3.4 Termination Without Cause . The Company may terminate this Agreement, and the employment of the Executive under this Agreement, without cause, at any time upon at least thirty (30) days’ prior written notice to the Executive. This Section 3.4 shall not apply to a termination of the Executive by the Company as a result of a “Corporate Transaction” or “Change in Control,” but, instead, the provisions of Section 3.5 below shall apply.

3.5 Termination Due to Corporate Transaction or Change in Control . The Company may terminate this Agreement and the employment of the Executive under this Agreement, upon at least thirty (30) days’ prior written notice to the Executive in the event of a “Corporate Transaction” or “Change in Control,” as defined in Section 2, during the period of the Executive’s employment. Provided that subsections (i) through (iii) of Section 3.3 are satisfied, the Executive may terminate this Agreement and the employment of the Executive under this Agreement following the occurrence of a “Corporate Transaction” or “Change in Control,” as defined in Section 2, during the period of Executive’s employment if any of the following occur as a result of the “Corporate Transaction” or “Change in Control”: (i) a material reduction in Executive’s current Base Salary, or (ii) a material reduction in the Executive’s authority, duties, or responsibilities, or (iii) a material change in the geographic location of Executive’s principal place of employment, other than a relocation from Europe to California.

3.6 Payments Upon Removal or Termination .

(a) If, during the term of this Agreement, the Executive resigns for one of the reasons stated in Section 3.3, or if the Company terminates Executive’s employment pursuant to Section 3.4 above, the Executive shall be entitled to the following compensation: (i) the portion of his then current Base Salary which has accrued through his date of termination; (ii) any payments for unused vacation and reimbursement expenses, which are due, accrued or payable at the date of Executive’s termination; (iii) severance payment in an amount equal to six-months of Executive’s then-current Base Salary (the “Severance Amount”); and (iv) to the extent not already vested under Section 2 or otherwise all of Executive’s options to purchase shares of the Company’s common stock and restricted stock shall vest by six additional months and such options shall otherwise be exercisable in accordance with their terms. In addition, in such event, Executive shall be entitled to (a) a prorated payment equal to the target bonus amount for which Executive would be eligible for the year in which such resignation or termination occurred to be paid in lump sum within sixty (60)

 

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days after the Executive’s date of termination, and (b) continuation of the insurance benefits set forth in Exhibit B, for six-months. The payments provided by this paragraph 3.6(a) shall be Executive’s complete and exclusive remedy for any such termination.

(b) If, during the term of this Agreement, the Company terminates Executive’s employment pursuant to Section 3.5 above or the Executive terminates his employment pursuant to Section 3.5 above, the Executive shall be entitled to the following compensation: (i) the portion of his then current Base Salary which has accrued through his date of termination, (ii) any payments for unused vacation and reimbursement expenses, which are due, accrued or payable at the date of Executive’s termination, (iii) severance payment in an amount equal to twelve-months of Executive’s then-current Base Salary (the “Severance Amount”); and (iv) to the extent not already vested under Section 2 or otherwise all of Executive’s options to purchase shares of the Company’s common stock and restricted stock shall accelerate and automatically vest, and such options shall otherwise be exercisable in accordance with their terms. In addition, in such event Executive shall be entitled to (a) a prorated payment equal to the target bonus amount for which Executive would be eligible for the year in which such resignation or termination occurred to be paid in lump sum within sixty (60) days after the Executive’s date of termination, and (b) continuation of the insurance benefits set forth in Exhibit A, for twelve-months. The payments provided by this paragraph 3.6(b) shall be Executive’s complete and exclusive remedy for any such termination.

(c) All payments required to be made by the Company to the Executive pursuant to this Section 3 shall be paid on a regular basis in accordance with the Company’s normal payroll procedures and policies as in effect as of the date of Executive’s termination, including, without limitation, the Severance Amount which shall be paid in equal installments on the Company’s regular payroll dates in accordance with the Company’s normal payroll procedures and policies over the number of months immediately succeeding the date of termination that is equal to the number of months of Base Salary payable as the Severance Amount. For purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), the Executive’s right to receive the installment payments of the Severance Amount shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment shall at all times be considered a separate and distinct payment. Amounts payable to Executive under subsections (a)(ii) and (b)(ii) of this Section 3.6, as a reimbursement of expenses, shall be made in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv) and be paid on or before the last day of Executive’s taxable year following the taxable year in which Executive incurred the expenses. If the Company terminates the Executive’s employment pursuant to Sections 3.1 or 3.2, or if the Executive voluntarily resigns (except as provided in Section 3.3 or Section 3.5), then the Executive shall be entitled to only the compensation set forth in items (i) and (ii) of Section 3.6(a).

(d) To the extent that any or all of the payments and benefits provided for in this Agreement constitute “parachute payments” within the meaning of Section 280G of the Code and, but for this paragraph, would be subject to the excise tax imposed by Section 4999 of the Code, then at the Executive’s election:

(i) The Executive shall receive all such payments and benefits the Executive is entitled to receive hereunder, and any liability for taxes pursuant to the above shall be the liability solely of the Executive; or

 

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(ii) The aggregate amount of such payments and benefits shall be reduced such that the present value thereof (as determined under the Code and applicable regulations) is equal to 2.99 times the Executive’s “base amount” (as defined in Section 280G of the Code).

The determination of any reduction or increase of any payment or benefits under this paragraph pursuant to the foregoing provision shall be made by a nationally recognized public accounting firm chosen by the Company in good faith, and such determination shall be conclusive and binding on the Company and the Executive.

4. Section 409A .

4.1 Payment Delay . Notwithstanding anything herein to the contrary, to the extent any payments to Executive pursuant to Section 3 are treated as non-qualified deferred compensation subject to Section 409A of the Code, then (i) no amount shall be payable pursuant to such section unless Executive’s termination of employment constitutes a “separation from service” with the Company (as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto) (a “Separation from Service”), and (ii) if Executive, at the time of his Separation from Service, is determined by the Company to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code and the Company determines that delayed commencement of any portion of the termination benefits payable to Executive pursuant to this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code (any such delayed commencement, a “Payment Delay”), then such portion of the Executive’s termination benefits described in Section 3 shall not be provided to Executive prior to the earlier of (A) the expiration of the six-month period measured from the date of the Executive’s Separation from Service, (B) the date of the Executive’s death, or (C) such earlier date as is permitted under Section 409A. Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) deferral period, all payments deferred pursuant to a Payment Delay shall be paid in a lump sum to Executive within 30 days following such expiration, and any remaining payments due under the Agreement shall be paid as otherwise provided herein. The determination of whether Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall made by the Company in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including without limitation Treasury Regulation Section 1.409A-1(i) and any successor provision thereto).

4.2 Exceptions to Payment Delay . Notwithstanding Section 4.1, to the maximum extent permitted by applicable law, amounts payable to Executive pursuant to Section 3 shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9) (with respect to separation pay plans) or Treasury Regulation Section 1.409A-1(b)(4) (with respect to short-term deferrals). Accordingly, the severance payments provided for in Section 3 are not intended to provide for any deferral of compensation subject to Section 409A of the Code to the extent (i) the severance payments payable pursuant to Section 3, by their terms and determined as of the date of Executive’s Separation from Service, may not be made later than the 15 th day of the third calendar month following the later of (A) the end of the Company’s fiscal year in which Executive’s Separation from Service occurs or (B) the end of the calendar year in which Executive’s Separation from Service occurs, or (ii) (A) such severance payments do not exceed an amount equal to two times the lesser of (1) the amount of Executive’s annualized compensation based upon Executive’s annual rate of pay for the calendar year immediately preceding the calendar year in which Executive’s Separation from Service occurs (adjusted for any increase during the calendar year in which such Separation from

 

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Service occurs that would be expected to continue indefinitely had Executive remained employed with the Company) or (2) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) for the calendar year in which Executive’s Separation from Service occurs, and (B) such severance payments shall be completed no later than December 31 of the second calendar year following the calendar year in which Executive’s Separation from Service occurs.

4.3 Interpretation . To the extent the payments and benefits under this Agreement are subject to Section 409A of the Code, this Agreement shall be interpreted, construed and administered in a manner that satisfies the requirements of Sections 409A(a)(2), (3) and (4) of the Code and the Treasury Regulations thereunder (and any applicable transition relief under Section 409A of the Code).

5. Assignment . This Agreement shall not be assignable, in whole or in part, by either party without the written consent of the other party, except that the Company may, without the consent of the Executive, assign its rights and obligations under this Agreement to an Affiliate or to any corporation, firm or other business entity (i) with or into which the Company may merge or consolidate, or (ii) to which the Company may sell or transfer all or substantially all of its assets. After any such assignment by the Company, the Company shall be discharged from all further liability hereunder and such assignee shall thereafter be deemed to be the Company for the purposes of all provisions of this Agreement including this Section 5.

6. Successors . This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts are still payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate.

7. Miscellaneous .

7.1 Governing Law . This Agreement is made under and shall be governed by and construed in accordance with the laws of the State of California.

7.2 Prior Agreements . This Agreement contains the entire agreement of the parties relating to the subject matter hereof and supersedes all prior agreements and understanding with respect to such subject matter, including that certain Employment Agreement by and between the Company and Executive (the “Prior Employment Agreement”), and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement which are not set forth herein. In addition, upon the execution of this Agreement, the Prior Employment Agreement shall automatically terminate and become null and void and of no force and effect without any further action by the parties thereto, and any rights or claims that Executive may have with respect to his employment shall be governed by this Agreement.

7.3 Arbitration . In the event of any controversy, claim or dispute between the parties hereto arising out of or relating to this Agreement, the matter shall be determined by arbitration, which shall take place in Orange County, California, under the rules of the American Arbitration Association. The arbitrator shall be a retired Superior Court judge mutually agreeable to the parties and if the parties cannot agree such person shall be chosen in accordance with the rules of

 

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the American Arbitration Association. The arbitrator shall be bound by applicable legal precedent in reaching his or her decision. Any judgment upon such award may be entered in any court having jurisdiction thereof. Any decision or award of such arbitrator shall be final and binding upon the parties and shall not be appealable. The parties hereby consent to the jurisdiction of such arbitrator and of any court having jurisdiction to enter judgment upon and enforce any action taken by such arbitrator. The fees payable to the American Arbitration Association and the arbitrator shall be paid by the Company.

7.4 Withholding Taxes . The Company may withhold from any salary and benefits payable under this Agreement all federal, state, city or other taxes or amounts as shall be required to be withheld pursuant to any law or governmental regulation or ruling.

7.5 Amendments . No amendment or modification of this Agreement shall be deemed effective unless made in writing signed by the parties hereto.

7.6 No Waiver . No term or condition of this Agreement shall be deemed to have been waived nor shall there be any estoppel to enforce any provisions of this Agreement, except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

7.7 Severability To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect.

7.8 Counterpart Execution . This Agreement may be executed by facsimile and in counterparts, each of which shall be deemed an original and all of which when taken together shall constitute but one and the same instrument.

7.9 Attorneys’ Fees . Should any legal action or arbitration be required to resolve any dispute over the meaning or enforceability of this Agreement or to enforce the terms of this Agreement, the prevailing party shall be entitled to recover its or his reasonable attorneys fees and costs incurred in such action, in addition to any other relief to which that party may be entitled.

7.10 Notices . Any notice required or permitted to be given hereunder shall be in writing and may be personally served or sent by United States Mail, and shall be deemed to have been given when personally served or two days after having been deposited in the United States Mail, registered mail, return receipt requested, with first class postage prepaid and properly addressed as follows:

 

If to Executive:       

Bob Mitchell

11 Studebaker

Irvine, CA 92618

If to the Company:       

Endologix, Inc.

11 Studebaker

Irvine, CA 92618

Attn: Chief Executive Officer

 

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7.11 Proprietary Information and Inventions Agreement . Executive agrees to sign the Company’s standard form of employee proprietary information and inventions agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year set forth above.

 

“COMPANY”

ENDOLOGIX, INC., a Delaware corporation

/s/ John McDermott

John McDermott
President & Chief Executive Officer
“EXECUTIVE”

/s/ Bob Mitchell

Bob Mitchell

 

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EXHIBIT A

BOB MITCHELL’S PERMITTED ACTIVITIES

1. Service on the Board of Directors of Summit Group Companies and Volcano Capital LLC – anticipated to involve quarterly meetings and occasional telephone calls, all on Executive’s own time.

2. Service as advisor to Vendice Ventures (University of Utah TCO) – anticipated to involve occasional meetings and telephone calls, all on Executive’s own time.

EXHIBIT B

BOB MITCHELL’S BENEFITS

 

  •  

Health Insurance

 

  •  

Dental Insurance

 

  •  

Vision Insurance

 

  •  

Prescription Drug Insurance

 

  •  

Group Life Insurance

 

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Exhibit 99.1

LOGO

 

COMPANY CONTACT :       INVESTOR CONTACTS :
Endologix, Inc.       The Ruth Group
John McDermott, CEO       Nick Laudico (646) 536-7030
(949) 595-7200       Zack Kubow (646) 536-7020
www.endologix.com      

Endologix Completes Acquisition of Nellix

Closes $15 Million Private Placement Offering of Common Stock

IRVINE, Calif. (December 13, 2010) – Endologix, Inc. (NASDAQ: ELGX), developer of minimally invasive treatments for aortic disorders, announced today that it has completed the acquisition of Nellix, Inc. Nellix has developed a revolutionary new device for the treatment of Abdominal Aortic Aneurysms (AAAs) that is expected to address the limitations of existing endovascular aneurysm repair (EVAR) devices and expand the global AAA market. Endologix announced its agreement to acquire Nellix on October 27, 2010.

John McDermott, Endologix President and Chief Executive Officer, said, “The talented team at Nellix has developed a unique technology that has the potential to become the new standard of care for abdominal aneurysm repair. We believe that this acquisition combined with our existing and other new products in development give Endologix the most innovative pipeline of aortic endovascular devices in the industry. We look forward to expanding the EVAR market and providing physicians with more treatment options for their patients.”

In conjunction with the acquisition of Nellix, Endologix completed the previously announced private placement offering of common stock to Essex Woodlands Health Ventures which resulted in net proceeds to Endologix of $15.0 million. Endologix intends to use the proceeds from the private placement to integrate the Nellix technology, to conduct clinical studies, to begin establishing a direct sales force in Europe, to provide working capital and for general corporate purposes.

The private placement was made only to an accredited investor in accordance with Section 4(2) under the Securities Act of 1933 and the rules and regulations promulgated thereunder. The securities sold in the private placement have not been registered under the Securities Act of 1933 or any state securities laws and unless so registered may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933 and applicable state securities laws. In connection with the private placement, Endologix has agreed to file a registration statement to register for resale the common stock issued in the private placement. This announcement is neither an offer to sell nor a solicitation of an offer to buy any of the securities issued in the private placement.

In connection with the acquisition of Nellix, Endologix anticipates that it will issue an aggregate of 540,400 restricted stock awards to certain employees and advisors of the surviving corporation, which will vest in accordance with the respective restricted stock award agreements.

About Endologix, Inc.

Endologix develops and manufactures minimally invasive treatments for aortic disorders. Endologix’s flagship product is the Powerlink® System, which is an endovascular stent graft for the treatment of abdominal aortic aneurysms (AAA). AAA is a weakening of the wall of the aorta, the largest artery in the body, resulting in a balloon-like enlargement. Once AAA develops, it continues to enlarge and, if left untreated, becomes increasingly susceptible to rupture. The overall patient mortality rate for ruptured AAA is approximately 75%, making it a leading cause of death in the U.S. Additional information can be found on Endologix’s Web site at www.endologix.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, regarding, among other things, statements relating to the potential benefits of Endologix’s acquisition of Nellix, including expected operating synergies, the strength of Nellix’s technology and the potential for long-term growth and expanded market share. Endologix intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. These statements are

based on the current estimates and assumptions of Endologix’s management as of the date of this press release and are subject to risks, uncertainties, changes in circumstances and other factors that may cause actual results to differ materially from the forward-looking statements made in this press release. Important factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to, Endologix’s ability to successfully integrate Nellix’s technology with its current and future product offerings, the scope of potential use of Nellix’s technology, the ability to obtain and maintain required U.S. Food and Drug Administration and other regulatory approvals of Nellix’s technology, the scope and validity of intellectual property rights applicable to Nellix’s technology, the ability to build a direct sales and marketing organization in Europe, competition from other companies, Endologix’s ability to successfully market and sell its products, plans for developing new products and entering new markets and additional factors that may affect future results which are detailed in Endologix’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 3, 2010, and in Endologix’s other periodic reports filed with the Securities and Exchange Commission. Endologix undertakes no obligation to revise or update information herein to reflect events or circumstances in the future, even if new information becomes available.