Document:

Exhibit 10.20

 

TACTILE SYSTEMS TECHNOLOGY, INC.

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is entered into effective             ,        (the “Effective Date”) by and between TACTILE SYSTEMS TECHNOLOGY, INC., a Delaware corporation (the “Company”), and            , a resident of             (“Executive”).

 

BACKGROUND

 

A.                                    The Company and Executive have been parties to an Employment Agreement, dated              (the “Prior Agreement”).

 

B.                                    The Company desires to employ Executive on the terms and conditions set forth in this Agreement.

 

C.                                    The Executive desires to be employed by the Company on the terms and conditions set forth in this Agreement.

 

D.                                    This Agreement shall govern the employment relationship between the Executive and the Company from and after the Effective Date hereof, and supersedes and negates any previous agreements or understandings, whether written or oral, with respect to such relationship, including without limitation the Prior Agreement.

 

AGREEMENT

 

In consideration of the foregoing premises and the respective agreements of the Company and Executive set forth below, the Company and Executive, intending to be legally bound, agree as follows:

 

1.                                      EMPLOYMENT. The term of Executive’s employment under this Agreement shall commence as of the Effective Date and continue until terminated in accordance with Section 10 hereof (the “Term”).

 

2.                                      POSITION AND DUTIES.

 

(a)                                 Position with the Company.  During the Term, Executive will serve as the Company’s                  and will perform such duties and responsibilities as the Company’s Chief Executive Officer will assign to Executive from time to time.

 

(b)                                 Performance of Duties and Responsibilities.  Executive will serve the Company faithfully and to the best of Executive’s ability and will devote Executive’s full time, attention and efforts to the business of the Company during Executive’s employment with the Company.  Executive will report to the Company’s Chief Executive Officer.  During Executive’s employment hereunder, Executive will not accept other employment or engage in other material business activity, except as approved in writing by the Company’s Board of Directors (the “Board”).

 

 

3.                                      COMPENSATION.  While Executive is employed by the Company during the Term, and in exchange for Executive fulfilling Executive’s duties and responsibilities as set forth in this Agreement, the Company will provide Executive the compensation and benefits set forth in this Section 3.

 

(a)                                 Base Salary.  The Company will pay to Executive an annual base salary of $        , less deductions and withholdings, which base salary will be paid in accordance with the Company’s normal payroll policies and procedures.  During each year after the first year of Executive’s employment hereunder, the Compensation Committee of the Board (the “Committee”) may review and increase Executive’s base salary in its sole discretion.

 

(b)                                 Bonus.  For each calendar year Executive is employed by the Company, Executive shall be eligible for an annual target bonus in an amount of    % of Executive’s base salary earned during such calendar year, based upon and subject to criteria set by the Committee from time to time.  In order to earn and receive payment of an annual bonus, Executive must be an employee of the Company on the date the bonus is paid by the Company, provided, however, that if Executive’s employment is terminated by the Company other than for Cause (as herein defined) or by Executive for Good Reason (as herein defined) and the Termination Date (as defined herein) is after the completion of a calendar year but before the annual bonus for such calendar year has been paid to Executive, then Executive will earn and receive payment of an annual bonus for such prior calendar year in accordance with the bonus plan in effect for such year. In any case, any annual bonus earned under this Section 3(b) will be paid not later than March 15 immediately following the calendar year to which the bonus relates.

 

(c)                                  Equity Awards.  During the Term, Executive shall be eligible to receive one or more equity-based incentive awards at the discretion of the Committee.  The terms of such awards, if any, shall be determined in the sole discretion of the Committee, including the types of awards, the number of securities covered by each award, the vesting conditions applicable to each award, and the manner in which awards are to be paid or settled.  Nothing herein shall obligate the Company to make an equity award to Executive at any time.

 

(d)                                 Employee Benefits.  Executive shall be entitled to participate in all employee benefit plans and programs of the Company to the extent that Executive meets the eligibility requirements for each individual plan or program.  The Company provides no assurance as to the adoption or continuance of any particular employee benefit plan or program, and Executive’s participation in any such plan or program will be subject to the provisions, rules and regulations applicable thereto.

 

(e)                                  Expenses.  The Company will reimburse Executive for all reasonable and necessary out-of-pocket business, travel and entertainment expenses incurred by Executive in the performance of the duties and responsibilities hereunder, subject to the Company’s normal policies and procedures for expense verification and documentation.

 

(f)                                   Paid Time Off.  Executive shall be entitled to paid time off (“PTO”) of    days per year.  PTO days shall be taken at such times so as not to disrupt the operations of the Company, as approved by the Company’s Chief Executive Officer.  Any accrued and unused

 

 

PTO upon termination of employment will not be paid out pursuant to the Company’s standard policies addressing PTO.

 

4.                                      AFFILIATED ENTITIES.  As used in this Agreement, “Affiliates” includes the Company and each corporation, partnership, or other entity which controls the Company, is controlled by the Company, OR is under common control with the Company (in each case “control” meaning the direct or indirect ownership of 50% or more of all outstanding equity interests).

 

5.                                      CONFIDENTIAL INFORMATION.  Except as permitted by the Company, Executive will not at any time divulge, furnish or make accessible to anyone or use in any way other than in the ordinary course of the business of the Company or its Affiliates, any confidential, proprietary or secret knowledge or information of the Company or its Affiliates that Executive has acquired or will acquire about the Company or its Affiliates, whether developed by Executive or by others, concerning (i) any trade secrets, (ii) any confidential, proprietary or secret designs, programs, processes, formulae, plans, devices or material (whether or not patented or patentable) directly or indirectly useful in any aspect of the business of the Company or of its Affiliates, (iii) any customer or supplier lists, (iv) any confidential, proprietary or secret development or research work, (v) any strategic or other business, marketing or sales plans, (vi) any financial data or plans, or (viii) any other confidential or proprietary information or secret aspects of the business of the Company or of its Affiliates.  Executive acknowledges that the above-described knowledge and information constitutes a unique and valuable asset of the Company and represents a substantial investment of time and expense by the Company, and that any disclosure or other use of such knowledge or information other than for the sole benefit of the Company or its Affiliates would be wrongful and would cause irreparable harm to the Company.  Executive will refrain from intentionally committing any acts that would materially reduce the value of such knowledge or information to the Company or its Affiliates.  The foregoing obligations of confidentiality shall not apply to any knowledge or information that (i) is now or subsequently becomes generally publicly known, other than as a direct or indirect result of the breach of this Agreement, (ii) is independently made available to Executive in good faith by a third party who has not violated a confidential relationship with the Company or its Affiliates, or (iii) is required to be disclosed by law or legal process.  Executive understands and agrees that Executive’s obligations under this Agreement to maintain the confidentiality of the Company’s confidential information are in addition to any obligations of Executive under applicable statutory or common law.

 

6.                                      VENTURES.  If, during Executive’s employment with the Company, Executive is engaged in or provides input into the planning or implementing of any project, program or venture involving the Company, all rights in such project, program or venture belong to the Company.  Except as approved in writing by the Board, Executive will not be entitled to any interest in any such project, program or venture or to any commission, finder’s fee or other compensation in connection therewith.  Executive will have no interest, direct or indirect, in any customer or supplier that conducts business with the Company.

 

7.                                      NONCOMPETITION AND NONSOLICITATION COVENANTS.

 

(a)                                 Agreement Not to Compete.  During the Restricted Period (defined below), Executive will not, directly or indirectly, engage in any business, in the United States or in any

 

 

other location in which the Company is then doing business, for the development, sale, service, or distribution of medical devices to treat lymphedema patients or any other business that is competitive with the then-current businesses of the Company or its Affiliates, including without limitation as a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association, consultant or otherwise.  Ownership by Executive, as a passive investment, of less than 2.5% of the outstanding shares of capital stock of any corporation listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a breach of this Section 7(a).  Notwithstanding the foregoing, Executive’s direct or indirect engagement in a business whose sole purpose is the development, sale, service, or distribution of compression garments (but not pumps or other devices) to treat lymphedema patients or other patients shall not constitute a breach of this Section 7(a).

 

(b)                                 Agreement Not to Solicit or Hire Employees or Contractors. During Executive’s employment with the Company or any Affiliates and for a period of twelve (12) consecutive months from and after the termination of Executive’s employment, whether such termination is with or without cause, or whether such termination is at the instance of Executive or the Company, Executive will not, directly or indirectly, solicit, hire or engage any person who is then an employee or contractor of the Company or who was an employee of the Company at any time during the six (6) month period immediately preceding Executive’s termination of employment, in any manner or capacity, including without limitation as a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association, consultant or otherwise, or otherwise directly or indirectly request, advise or induce any then current employee or contractor of the Company to terminate or otherwise adversely change its relationship with the Company.

 

(c)                                  Agreement Not to Solicit Others. During Executive’s employment with the Company or any Affiliates and for a period of twelve (12) consecutive months from and after the termination of Executive’s employment, whether such termination is with or without cause, or whether such termination is at the instance of Executive or the Company, Executive will not, directly or indirectly, solicit, request, advise or induce any then current customer, supplier or other business contact of the Company to cancel, curtail or otherwise adversely change its relationship with the Company, in any manner or capacity, including without limitation as a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association, consultant or otherwise.

 

(d)                                 Restricted Period.  For purposes of this Agreement “Restricted Period” is defined as follows.

 

(i)                                     If (x) Executive’s employment is terminated by the Company without Cause (defined below) or by Executive for Good Reason (defined below), and (y) Executive signs a release of claims as provided for in Section 11(g), then the Restricted Period shall be the period during Executive’s employment with the Company or any Affiliates and for a period of      (  ) consecutive months from and after the termination of Executive’s employment; provided that the Company may in its sole discretion elect to extend the Restricted Period by an additional six (6) months by providing Executive at least thirty (30) days’ notice of such extension and the

 

 

payments and reimbursements provided for in Section 11(a)(iii) of this Agreement.

 

(ii)                                  If Executive’s employment is terminated by the Company or by Executive under any conditions other than as provided for in Section 7(d)(i), then the Restricted Period shall be the period during Executive’s employment with the Company or any Affiliates and for a period of twelve (12) consecutive months from and after the termination of Executive’s employment.

 

(e)                                  Acknowledgment.  Executive hereby acknowledges that the provisions of this Section 7 are reasonable and necessary to protect the legitimate interests of the Company and that any violation of this Section 7 by Executive will cause substantial and irreparable harm to the Company to such an extent that monetary damages alone would be an inadequate remedy therefor.  Executive represents and warrants that Executive is not subject to any other agreements prohibiting the performance of Executive’s obligations under this Agreement, including any non-competition agreement.

 

(f)                                   Blue Pencil Doctrine.  If the duration of, the scope of or any business activity covered by any provision of this Section 7 is in excess of what is determined to be valid and enforceable under applicable law, such provision will be construed to cover only that duration, scope or activity that is determined to be valid and enforceable.  Executive hereby acknowledges that this Section 7 will be given the construction which renders its provisions valid and enforceable to the maximum extent, not exceeding its express terms, possible under applicable law.

 

8.                                      PATENTS, COPYRIGHTS AND RELATED MATTERS.

 

(a)                                 Disclosure and Assignment.  Executive must immediately disclose to the Company any and all improvements and inventions that Executive may conceive and/or reduce to practice individually or jointly or commonly with others while Executive is employed with the Company or any of its Affiliates with respect to (i) any methods, processes or apparatus concerned with the development, use or production of any type of products, goods or services sold or used by the Company or its Affiliates, and (ii) any type of products, goods or services sold or used by the Company or its Affiliates.  Any such improvements and inventions will be the sole and exclusive property of the Company and Executive hereby immediately assigns, transfers and sets over to the Company Executive’s entire right, title and interest in and to any and all of such improvement and inventions as are specified in this Section 8(a), and in and to any and all applications for letters patent that may be filed on such inventions, and in and to any and all letters patent that may issue, or be issued, upon such applications.  In connection therewith and for no additional compensation therefor, but at no expense to Executive, Executive will sign any and all instruments deemed necessary by the Company for:

 

(i)                                     the filing and prosecution of any applications for letters patent of the United States or of any foreign country that the Company may desire to file upon such inventions as are specified in this Section 8(a);

 

 

(ii)                                  the filing and prosecution of any divisional, continuation, continuation-in-part or reissue applications that the Company may desire to file upon such applications for letters patent; and

 

(iii)                               the reviving, re-examining or renewing of any of such applications for letters patent.

 

This Section 8(a) will not apply to any invention for which no equipment, supplies, facilities, confidential, proprietary or secret knowledge or information, or other trade secret information of the Company was used and that was developed entirely on Executive’s own time, and (i) that does not relate (A) directly to the business of the Company, or (B) to the Company’s actual or demonstrably anticipated research or development, or (ii) that does not result from any work performed by Executive for the Company.

 

(b)                                 Copyrightable Material.  All right, title and interest in all copyrightable material that Executive shall conceive or originate individually or jointly or commonly with others, and that arise in connection with Executive’s services hereunder or knowledge of confidential and proprietary information of the Company, will be the property of the Company and are hereby assigned by Executive to the Company of its Affiliates, along with ownership of any and all copyrights in the copyrightable material. Where applicable, works of authorship created by Executive relating to the Company or its Affiliates and arising out of Executive’s knowledge of confidential and proprietary information of the Company shall be considered “works made for hire,” as defined in the U.S. Copyright Act, as amended.

 

(c)                                  Remedies.                                        Executive acknowledges that it would be difficult to fully compensate the Company for monetary damages resulting from any breach by Executive of this Section 8.  Accordingly, in the event of any actual or threatened breach of any such provisions, the Company will, in addition to any other remedies it may have, be entitled to injunctive and other equitable relief to enforce such provisions, and such relief may be granted without the necessity of proving actual monetary damages.

 

9.                                      RETURN OF RECORDS AND PROPERTY.  Upon termination of Executive’s employment or at any time upon the Company’s request, Executive will promptly deliver to the Company any and all Company and Affiliate records and any and all Company and Affiliate property in Executive’s possession or under Executive’s control, including without limitation manuals, books, blank forms, documents, letters, memoranda, notes, notebooks, reports, printouts, computer disks, computer tapes, source codes, data, tables or calculations and all copies thereof, documents that in whole or in part contain any trade secrets or confidential, proprietary or other secret information of the Company or its Affiliates and all copies thereof, and keys, access cards, access codes, passwords, credit cards, personal computers, telephones and other electronic equipment belonging to the Company or its Affiliates.

 

10.                               TERMINATION OF EMPLOYMENT.

 

(a)                                 Executive’s employment with the Company will terminate immediately upon:

 

 

(i)                                     Executive’s receipt of written notice from the Company of the termination of Executive’s employment, effective as of the date indicated in such notice;

 

(ii)                                  the Company’s receipt of Executive’s written resignation from the Company, effective as of the date indicated in such resignation;

 

(iii)                               Executive’s Disability (as defined below); or

 

(iv)                              Executive’s death.

 

(b)                                 The date upon which Executive’s termination of employment with the Company occurs is the “Termination Date.” For purposes of Section 11(a) of this Agreement only, the Termination Date shall mean the date on which a “separation from service” has occurred for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (the “Code.”)

 

(c)                                  Immediately upon termination of Executive’s employment with the Company for any reason, Executive shall resign all positions then held as an Executive of the Company and any Affiliates of the Company.

 

(d)                                 Following termination of Executive’s employment with the Company for any reason, Executive shall cooperate with the Company in the transition of Executive’s duties and responsibilities hereunder to the extent reasonably requested by the Board; provided that Executive will be fairly compensated to the extent such cooperation requires more than an incidental amount of time and effort on Executive’s part, and further that Executive will not be required to incur any out-of-pocket expenses in doing so.

 

11.                               PAYMENTS UPON TERMINATION OF EMPLOYMENT.

 

(a)                                 Subject to Section 11(g) of this Agreement, if Executive’s employment with the Company is terminated by the Company without Cause or by Executive for Good Reason, then, in addition to paying Executive’s earned and accrued base salary, accrued but unpaid expense reimbursements and benefits through the Termination Date, the Company will provide to Executive the following payments:

 

(i)                                     Separation Pay.  The Company will pay to Executive an amount equal to Executive’s then current base salary for a period of       (  ) months plus an amount equal to    % of Executive’s then current target bonus, with such sum, less applicable withholdings, payable in equal installments in accordance with the Company’s regular payroll schedule commencing with the first normal payroll date of the Company following the Termination Date and continuing for        (  ) months thereafter, provided that any installments that would have been paid during the sixty (60) day period immediately following the Termination Date shall be held by the Company until the first payroll date occurring more than sixty (60) days after the Termination Date.

 

 

(ii)                                  Value of Accrued and Unused PTO.  The Company will pay to Executive the value of Executive’s accrued and unused PTO as of the Termination Date (based on Executive’s base salary as of the Termination Date), less applicable withholdings, payable in a lump sum on the Company’s first payroll date occurring more than sixty (60) days after the Termination Date.

 

(iii)                               Continued Benefits. If Executive is eligible for and takes all steps necessary to continue Executive’s group health insurance coverage with the Company following the Termination Date, the Company will pay for the portion of the premium costs for such coverage that the Company would pay if Executive remained employed by the Company, at the same level of coverage that was in effect as of the Termination Date, for a period of        (  ) consecutive months after the Termination Date (or until Executive receives group health or dental coverage from another employer, if earlier).

 

(iv)                              Restricted Period Extension Payments.  If the Company elects to extend the Restricted Period for six (6) additional months as provided for in Section 7(d)(i), then the Company will (A) pay to Executive an amount equal to the monthly amount payable to Executive under Section 11(a)(i), with such additional amounts payable to Executive in installments in accordance with the Company’s regular payroll schedule commencing on the first normal payroll date of the Company following the nine (9) month anniversary of the Termination Date and continuing for six (6) months thereafter, and (B) extend for six (6) additional months (after the end of the nine (9) month period identified in Section 11(a)(iii)) the period during which it will pay a portion of the premium costs for group health insurance coverage as provided in, and subject to the same conditions of, Section 11(a)(iii).

 

(v)                                 Accelerated Vesting of Equity.  In addition to the payments identified above in Sections 11(a)(i)-(iv), if Executive’s employment with the Company is terminated by the Company without Cause or by Executive for Good Reason, then, subject to Section 11(g) of this Agreement and notwithstanding any language in any equity plan or applicable equity award agreement to the contrary, upon the expiration of the all rescission periods provided by law with respect to the release of claims described in Section 11(g), any equity awards issued to Executive that have any portion of such award unvested as of the Termination Date (each an “Award”) will vest as to the number of shares, options or other securities (the “Securities”)  calculated as follows (rounded up to the nearest whole share):

 

Additional Securities Vested = (Number of Securities Issued Under Award x ((Number of Days between Date of Grant of Award and Termination Date) / (Number of Days between Date of Grant of Award and Final

 

 

Vesting Date of Award))) — Number of Securities Vested Under Award as of the Termination Date.

 

(b)           If Executive’s employment with the Company is terminated for any of the following reasons:

 

(i)                                     Executive’s abandonment of Executive’s employment or Executive’s resignation for any reason other than Good Reason;

 

(ii)                                  termination of Executive’s employment by the Company for Cause; or

 

(iii)          Executive’s death or Disability.

 

then the Company will pay Executive or Executive’s estate, as the case may be, Executive’s earned and accrued base salary, accrued but unpaid expense reimbursements and benefits through the Termination Date.

 

(c)           “Cause” hereunder means:

 

(i)                                     an act or acts of dishonesty undertaken by Executive and intended to result in personal gain or enrichment of Executive or others at the expense of the Company;

 

(ii)                                  unlawful conduct or gross misconduct by Executive that, in either event, is injurious to the Company;

 

(iii)                               the conviction of Executive of a felony; or

 

(iv)                              material breach of any terms or conditions of this Agreement by Executive which breach has not been cured by Executive within 15 days after written notice thereof to Executive from the Company.

 

For the purposes of Sections 11(c)(ii) and (iv), no act or failure to act on Executive’s part shall be considered “Cause” if done by Executive pursuant to specific authorization evidenced by a resolution duly adopted by the Board or pursuant to specific advice given by counsel for the Company, unless such specific authorization or advice results in whole or in part from material misrepresentations or omissions of Executive.

 

(d)           “Disability” hereunder means the inability of Executive to perform on a full-time basis the duties and responsibilities of Executive’s employment with the Company by reason of Executive’s illness or other physical or mental impairment or condition, if such inability continues for an uninterrupted period of 90 days or more during any 180-day period.  A period of inability is “uninterrupted” unless and until Executive returns to full-time work for a continuous period of at least 30 days.

 

(e)           “Good Reason” hereunder means the occurrence of any of the following events without Executive’s consent:

 

 

(i)                                     the assignment of Executive to a position with responsibilities or duties of a materially lesser status or degree than the position specified in Section 2(a);

 

(ii)                                  material breach of any terms or conditions of this Agreement by the Company not caused by Executive;

 

(iii)                               the requirement by the Company that Executive relocate out of the Minneapolis/St. Paul Metropolitan area.

 

For the purposes of Section 11(e), “Good Reason” shall not exist unless Executive has first provided written notice to the Company of the occurrence of one or more of the conditions under clauses (i) through (iii) above within ninety (90) days of the condition’s initial occurrence,  such condition is not fully remedied by the Company within thirty (30) days after the Company’s receipt of written notice from Executive, and the Termination Date occurs no later than one hundred and thirty (130) days after the condition’s initial occurrence.

 

(f)            In the event of termination of Executive’s employment, the sole obligation of the Company to pay post-termination severance and benefits under this Agreement will be its obligation to make the payments called for by Sections 11(a) or 11(b) hereof, as the case may be, and the Company will have no other obligation to Executive, except as otherwise provided by law, under the terms of any other applicable agreement between Executive and the Company or under the terms of any employee benefit plans or programs then maintained by the Company in which Executive participates.

 

(g)           Notwithstanding the foregoing provisions of this Section 11, the Company will not be obligated to make any payments under Section 11(a) hereof unless Executive has signed a release of claims in favor of the Company and its Affiliates in a form to be prescribed by the Company, all applicable consideration and rescission periods provided by law shall have expired, and Executive is in strict compliance with the terms of this Agreement as of the dates of such payments.

 

12.          MISCELLANEOUS.

 

(a)           Governing Law.  All matters relating to the interpretation, construction, application, validity and enforcement of this Agreement will be governed by the laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule, whether of the State of Minnesota or any other jurisdiction, that would cause the application of laws of any jurisdiction other than the State of Minnesota.

 

(b)           Jurisdiction and Venue.  Executive and the Company consent to jurisdiction of the courts of the State of Minnesota and/or the federal courts, District of Minnesota, for the purpose of resolving all issues of law, equity, or fact, arising out of or in connection with this Agreement.  Any action involving claims of a breach of this Agreement must be brought in such courts.  Each party consents to personal jurisdiction over such party in the state and/or federal courts of Minnesota and hereby waives any defense of lack of personal jurisdiction.  Venue, for the purpose of all such suits, will be in Hennepin County, State of Minnesota.

 

 

(c)           Entire Agreement.  This Agreement contains the entire agreement of the parties relating to Executive’s employment with the Company and supersedes all prior agreements and understandings with respect to such subject matter, including without limitation the Prior Agreement, and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement that are not set forth herein; provided, however, that nothing in this Agreement is intended to supersede, replace or modify the terms of the Company’s 2016 Equity Incentive Plan or any equity award agreements issued to Executive under the Company’s 2016 Equity Incentive Plan, each of which shall remain in full force and effect in accordance with their terms.

 

(d)           Code Section 409A.            This Agreement is intended to be exempt from or comply with the requirements of Section 409A(a)(2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly.   To the extent such potential payments or benefits could become subject to additional tax under such Code Section 409A, the parties shall cooperate to amend this Agreement with the goal of giving Executive the economic benefits described herein in a manner that does not result in such tax being imposed.  Each payment or benefit made pursuant to Section 11(a) of this Agreement shall be deemed to be a separate payment for purposes of Code Section 409A.  In addition, payments or benefits pursuant to Section 11(a) shall be exempt from the requirements of Code Section 409A to the maximum extent possible as “short-term deferrals” pursuant to Treasury Regulation Section 1.409A-1(b)(4), as involuntary separation pay pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), and/or under any other exemption that may be applicable, and this Agreement shall be construed accordingly.  To the extent that any amounts payable under this Agreement are required to be delayed under Code Section 409A, such amounts are intended to be and should be considered for purposes of Code Section 409A as separate payments from the amounts that are not required to be delayed.  Notwithstanding anything herein to the contrary, if Executive is considered a “specified employee” (as defined in Treasury Regulation Section 1.409A-1(i)) as of the Termination Date, then no payments of deferred compensation subject to Code Section 409A and payable due to Executive’s separation from service shall be made under this Agreement before the first business day that is six (6) months after the Termination Date (or upon Executive’s death, if earlier) (the “Specified Period”).  Any deferred compensation payments that would otherwise be required to be made to Executive during the Specified Period will be accumulated by the Company and paid to Executive on the first day after the end of the Specified Period.  The foregoing restriction on the payment of amounts to Executive during the Specified Period will not apply to the payment of employment taxes.  In the event that the interpretation or requirements of Code Section 409A change during the Term, the parties agree to amend this Agreement, only as necessary, to comply with any such change, if and to the extent such an amendment is permitted by Code Section 409A.

 

(e)           Code Section 280G.  Notwithstanding anything in this Agreement to the contrary, if any payment or other benefit hereunder, together with any other payments or benefits that Executive has the right to receive from the Company or any corporation which is a member of an “affiliated group” (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then, such payments and benefits will be reduced to

 

 

the largest amount as, in the sole judgment of the Company, will result in no portion of such payments or benefits being subject to the excise tax imposed by Section 4999 of the Code.

 

(f)            Amendments.  No amendment or modification of this Agreement will be deemed effective unless made in writing and signed by the parties hereto.

 

(g)           No Waiver.  No term or condition of this Agreement will be deemed to have been waived, except by a statement in writing signed by the party against whom enforcement of the waiver is sought.  Any written waiver will not be deemed a continuing waiver unless specifically stated, will operate only as to the specific term or condition waived and will not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

(h)           Assignment.  This Agreement will not be assignable, in whole or in part, by either party without the prior written consent of the other party, except that the Company may, without the consent of Executive, assign its rights and obligations under this Agreement (1) to an Affiliate or (2) to any corporation or other person or business entity to which the Company may sell or transfer all or substantially all of its assets; provided, however, that the Company’s  assignment of rights may only take place if the assignee accepts and agrees to all of the obligations to Executive  under this Agreement.   After any such assignment by the Company, the Company will be discharged from all further liability hereunder and such assignee will thereafter be deemed to be “the Company” for purposes of all terms and conditions of this Agreement, including this Section 12. For the avoidance of doubt, in the event of Executive’s death, all payments and obligations to Executive shall be paid to Executive’s estate.

 

(i)            Counterparts.  This Agreement may be executed by facsimile signature and in any number of counterparts, and such counterparts executed and delivered, each as an original, will constitute but one and the same instrument.

 

(j)            Severability.  Subject to Section 7(f) hereof, to the extent that any portion of any provision of this Agreement is held invalid or unenforceable, it will be considered deleted herefrom and the remainder of such provision and of this Agreement will be unaffected and will continue in full force and effect.

 

(k)           Captions and Headings.  The captions and paragraph headings used in this Agreement are for convenience of reference only and will not affect the construction or interpretation of this Agreement or any of the provisions hereof.

 

 

Executive and the Company have executed this Agreement effective as of the Effective Date set forth in the first paragraph.

 

	
 
    	
TACTILE   SYSTEMS TECHNOLOGY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[NAME]Exhibit 10.21

	
  

  	
  *002800000014248*
  CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL Principal $2,000,000.00
  Loan Date 05-11-2016 Maturity 05-11-2017 Loan No 14248 Call / Coll 5200
  Account 102727-1 Officer 120 Initials References in the boxes above are for
  Lender's use only and do not limit the applicability of this document to any
  particular loan or item. Any item above containing "'" has been
  omitted due to text length limitations. Lender: Venture Bank Corporation:
  Tactile Systems Technology, Inc. Bloomington Office 1331 Tyler Street
  Northeast, Suite 200 4470 W. 78th Street Circle, Suite #100 Minneapolis, MN
  55413 Bloomington, MN 55435 I, THE UNDERSIGNED, DO HEREBY CERTIFY THAT: THE
  CORPORATION'S EXISTENCE. The complete and correct name of the Corporation is
  Tactile Systems Technology, Inc. ("Corporation"). The Corporation
  is a corporation for profit which is, and at all times shall be, duly
  organized, validly existing, and in good standing under and by virtue of the
  laws of the State of Delaware. The Corporation is duly authorized to transact
  business in the State of Minnesota and all other states in which the
  Corporation is doing business, having obtained all necessary filings,
  governmental licenses and approvals for each state in which the Corporation
  is doing business. Specifically, the Corporation is, and at all times shall
  be, duly qualified as a foreign corporation in all states in which the
  failure to so qualify would have a material adverse effect on its business or
  financial condition. The Corporation has the full power and authority to own
  its properties and to transact the business in which it is presently engaged
  or presently proposes to engage. The Corporation maintains an office at 1331
  Tyler Street Northeast, Suite 200, Minneapolis, MN 55413. Unless the
  Corporation has designated otherwise in writing, the principal office is the
  office at which the Corporation keeps its books and records. The Corporation
  will notify Lender prior to any change in the location of the Corporation's
  state of organization or any change in the Corporation's name. The
  Corporation shall do all things necessary to preserve and to keep in full
  force and effect its existence, rights and privileges, and shall comply with
  all regulations, rules, ordinances, statutes, orders and decrees of any
  governmental or quasi-governmental authority or court applicable to the
  Corporation and the Corporation's business activities. RESOLUTIONS ADOPTED.
  At a meeting of the Directors of the Corporation, or if the Corporation is a
  close corporation having no Board of Directors then at a meeting of the
  Corporation's shareholders, duly called and held on May 11, 2016, at which a
  quorum was present and voting, or by other duly authorized action in lieu of
  a meeting, the resolutions set forth in this Resolution were adopted.
  OFFICER. The following named person is an officer of Tactile Systems
  Technology, Inc.: NAMES TITLES AUTHORIZED ACTUAL SIGNATURES Robert Folkes COO
  Y X (Seal) ACTIONS AUTHORIZED. The authorized person listed above may enter
  into any agreements of any nature with Lender, and those agreements will bind
  the Corporation. Specifically, but without limitation, the authorized person
  is authorized, empowered, and directed to do the following for and on behalf
  of the Corporation: Borrow Money. To borrow, as a cosigner or otherwise, from
  time to time from Lender, on such terms as may be agreed upon between the
  Corporation and Lender, such sum or sums of money as in his or her judgment
  should be borrowed, without limitation. Execute Notes. To execute and deliver
  to Lender the promissory note or notes, or other evidence of the
  Corporation's credit accommodations, on Lender's forms, at such rates of
  interest and on such terms as may be agreed upon, evidencing the sums of
  money so borrowed or any of the Corporation's indebtedness to Lender, and
  also to execute and deliver to Lender one or more renewals, extensions,
  modifications, refinancings, consolidations, or substitutions for one or more
  of the notes, any portion of the notes, or any other evidence of credit
  accommodations. Grant Security. To mortgage, pledge, transfer, endorse,
  hypothecate, or otherwise encumber and deliver to Lender any property now or
  hereafter belonging to the Corporation or in which the Corporation now or
  hereafter may have an interest, including without limitation all of the
  Corporation's real property and all of the Corporation's personal property
  (tangible or intangible), as security for the payment of any loans or credit
  accommodations so obtained, any promissory notes so executed (including any
  amendments to or modifications, renewals, and extensions of such promissory
  notes), or any other or further indebtedness of the Corporation to Lender at
  any time owing, however the same may be evidenced. Such property may be
  mortgaged, pledged, transferred, endorsed, hypothecated or encumbered at the
  time such loans are obtained or such indebtedness is incurred, or at any
  other time or times, and may be either in addition to or in lieu of any
  property theretofore mortgaged, pledged, transferred, endorsed, hypothecated
  or encumbered. Execute Security Documents. To execute and deliver to Lender
  the forms of mortgage, deed of trust, pledge agreement, hypothecation agreement,
  and other security agreements and financing statements which Lender may
  require and which shall evidence the terms and conditions under and pursuant
  to which such liens and encumbrances, or any of them, are given; and also to
  execute and deliver to Lender any other written instruments, any chattel
  paper, or any other collateral, of any kind or nature, which Lender may deem
  necessary or proper in connection with or pertaining to the giving of the
  liens and encumbrances. Negotiate Items. To draw, endorse, and discount with
  Lender all drafts, trade acceptances, promissory notes, or other evidences of
  indebtedness payable to or belonging to the Corporation or in which the
  Corporation may have an interest, and either to receive cash for the same or
  to cause such proceeds to be credited to the Corporation's account with
  Lender, or to cause such other disposition of the proceeds derived therefrom
  as he or she may deem advisable. Further Acts. In the case of lines of
  credit, to designate additional or alternate individuals as being authorized
  to request advances under such lines, and in all cases, to do and perform
  such other acts and things, to pay any and all fees and costs, and to execute
  and deliver such other documents and agreements as the officer may in his or
  her discretion deem reasonably necessary or proper in order to carry into
  effect the provisions of this Resolution.

  

 

	
  

  	
  CORPORATE
  RESOLUTION TO BORROW / GRANT COLLATERAL Loan No: 14248 (Continued) Page 2
  ASSUMED BUSINESS NAMES. The Corporation has filed or recorded all documents
  or filings required by law relating to all assumed business names used by the
  Corporation. Excluding the name of the Corporation, the following is a
  complete list of all assumed business names under which the Corporation does
  business: Assumed Business Name Filing Location Date Tactile Systems MN
  Secretary of State 01-30-1995 NOTICES TO LENDER. The Corporation will
  promptly notify Lender in writing at Lender's address shown above (or such
  other addresses as Lender may designate from time to time) prior to any (A)
  change in the Corporation's name; (B) change in the Corporation's assumed
  business name(s); (C) change in the management of the Corporation; (D) change
  in the authorized signer(s); (E) change in the Corporation's principal office
  address; (F) change in the Corporation's state of organization; (G)
  conversion of the Corporation to a new or different type of business entity;
  or (H) change in any other aspect of the Corporation that directly or
  indirectly relates to any agreements between the Corporation and Lender. No
  change in the Corporation's name or state of organization will take effect
  until after Lender has received notice. CERTIFICATION CONCERNING OFFICERS AND
  RESOLUTIONS. The officer named above is duly elected, appointed, or employed
  by or for the Corporation, as the case may be, and occupies the position set
  opposite his or her respective name. This Resolution now stands of record on
  the books of the Corporation, is in full force and effect, and has not been
  modified or revoked in any manner whatsoever. NO CORPORATE SEAL. The
  Corporation has no corporate seal, and therefore, no seal is affixed to this
  Resolution. CONTINUING VALIDITY. Any and all acts authorized pursuant to this
  Resolution and performed prior to the passage of this Resolution are hereby
  ratified and approved. This Resolution shall be continuing, shall remain in
  full force and effect and Lender may rely on it until written notice of its
  revocation shall have been delivered to and received by Lender at Lender's
  address shown above (or such addresses as Lender may designate from time to
  time). Any such notice shall not affect any of the Corporation's agreements
  or commitments in effect at the time notice is given. IN TESTIMONY WHEREOF, I
  have hereunto set my hand and attest that the signature set opposite the name
  listed above is his or her genuine signature. I have read all the provisions
  of this Resolution, and I personally and on behalf of the Corporation certify
  that all statements and representations made in this Resolution are true and
  correct. This Corporate Resolution to Borrow / Grant Collateral is dated May
  11, 2016. THIS RESOLUTION IS DELIVERED UNDER SEAL AND IT IS INTENDED THAT THIS
  RESOLUTION IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT
  ACCORDING TO LAW. CERTIFIED TO AND ATTESTED BY: X Robert Folkes, COO of
  Tactile Systems Technology, Inc. (Seal) NOTE: If the officer signing this
  Resolution is designated by the foregoing document as one of the officers
  authorized to act on the Corporation's behalf, it is advisable to have this
  Resolution signed by at least one non-authorized officer of the Corporation.
  LaserPro, Ver. 16.1.10.003 Cop, D+H USA Corporation 1997, 2016. All Rights
  Reserved. - DE/MN C:\APPS\CFI\CFI\LPL\C10.FC TR-7313 PR-72 

  

 

	
  

  	
  *09600000014248*
  CHANGE IN TERMS AGREEMENT Principal $2,000,000.00 Loan Date 05-11-2016
  Maturity 05-11-2017 Loan No 14248 Call / Coll 5200 Account 102727-1 Officer
  120 Initials References in the boxes above are for Lender's use only and do
  not limit the applicability of this document to any particular loan or item.
  Any item above containing "m" has been omitted due to text length
  limitations. Borrower: Tactile Systems Technology, Inc. 1331 Tyler Street
  Northeast, Suite 200 Minneapolis, MN 55413 Lender: Venture Bank Bloomington
  Office 4470 W. 78th Street Circle, Suite #100 Bloomington, MN 55435 Principal
  Amount: $2,000,000.00 Date of Agreement: May 11, 2016 DESCRIPTION OF EXISTING
  INDEBTEDNESS. Promissory Note #14248 dated 5/11/2014 in the original amount
  of $2,000,000.00 from Borrower to Lender. DESCRIPTION OF COLLATERAL. All
  Business Assets per Commercial Security Agreement dated 5/11/2014.
  DESCRIPTION OF CHANGE IN TERMS. Extend maturity date to 5/11/2017. PROMISE TO
  PAY. Tactile Systems Technology, Inc. ("Borrower") promises to pay
  to Venture Bank ("Lender"), or order, in lawful money of the United
  States of America, the principal amount of Two Million & 00/100 Dollars
  ($2,000,000.00) or so much as may be outstanding, together with interest on
  the unpaid outstanding principal balance of each advance. Interest shall be
  calculated from the date of each advance until repayment of each advance.
  PAYMENT. Borrower will pay this loan in one payment of all outstanding
  principal plus all accrued unpaid interest on May 11, 2017. In addition,
  Borrower will pay regular monthly payments of all accrued unpaid interest due
  as of each payment date, beginning June 11, 2016, with all subsequent
  interest payments to be due on the same day of each month after that. Unless
  otherwise agreed or required by applicable law, payments will be applied
  first to any accrued unpaid interest; then to principal; then to any unpaid
  collection costs; and then to any late charges. Borrower will pay Lender at
  Lender's address shown above or at such other place as Lender may designate
  in writing. VARIABLE INTEREST RATE. The interest rate on this loan is subject
  to change from time to time based on changes in an independent index which is
  the Prime rate of interest as published each business day by the Wall Street
  Journal (the "Index"). The Index is not necessarily the lowest rate
  charged by Lender on its loans. If the Index becomes unavailable during the
  term of this loan, Lender may designate a substitute index after notifying
  Borrower. Lender will tell Borrower the current Index rate upon Borrower's
  request. The interest rate change will not occur more often than each day.
  Borrower understands that Lender may make loans based on other rates as well.
  The Index currently is 3.500% per annum. Interest on the unpaid principal
  balance of this loan will be calculated as described in the "INTEREST
  CALCULATION METHOD" paragraph using a rate equal to the Index, rounded
  to the nearest percent, adjusted if necessary for any minimum and maximum
  rate limitations described below, resulting in an initial rate of 3.500% per
  annum based on a year of 360 days. NOTICE: Under no circumstances will the
  interest rate on this loan be less than 3.250% per annum or more than the
  maximum rate allowed by applicable law. INTEREST CALCULATION METHOD. Interest
  on this loan is computed on a 365/360 basis; that is, by applying the ratio
  of the interest rate over a year of 360 days, multiplied by the outstanding
  principal balance, multiplied by the actual number of days the principal
  balance is outstanding. All interest payable under this loan is computed
  using this method. This calculation method results in a higher effective
  interest rate than the numeric interest rate stated in the loan documents.
  PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
  charges are earned fully as of the date of the loan and will not be subject
  to refund upon early payment (whether voluntary or as a result of default),
  except as otherwise required by law. Except for the foregoing, Borrower may
  pay without penalty all or a portion of the amount owed earlier than it is
  due. Early payments will not, unless agreed to by Lender in writing, relieve
  Borrower of Borrower's obligation to continue to make payments of accrued
  unpaid interest. Rather, early payments will reduce the principal balance
  due. Borrower agrees not to send Lender payments marked "paid in
  full", "without recourse", or similar language. If Borrower
  sends such a payment, Lender may accept it without losing any of Lender's
  rights under this Agreement, and Borrower will remain obligated to pay any
  further amount owed to Lender. All written communications concerning disputed
  amounts, including any check or other payment instrument that indicates that
  the payment constitutes "payment in full" of the amount owed or
  that is tendered with other conditions or limitations or as full satisfaction
  of a disputed amount must be mailed or delivered to: Venture Bank, P.O. Box
  9180 Minneapolis, MN 55480-9180. LATE CHARGE. If a payment is 10 days or more
  late, Borrower will be charged 5.000% of the unpaid portion of the regularly
  scheduled payment or $50.00, whichever is greater. INTEREST AFTER DEFAULT.
  Upon default, including failure to pay upon final maturity, the interest rate
  on this loan shall be increased by adding an additional 6.000 percentage
  point margin ("Default Rate Margin"). The Default Rate Margin shall
  also apply to each succeeding interest rate change that would have applied
  had there been no default. However, in no event will the interest rate exceed
  the maximum interest rate limitations under applicable law. DEFAULT. Each of
  the following shall constitute an Event of Default under this Agreement:
  Payment Default. Borrower fails to make any payment when due under the
  Indebtedness. Other Defaults. Borrower fails to comply with or to perform any
  other term, obligation, covenant or condition contained in this Agreement or
  in any of the Related Documents or to comply with or to perform any term,
  obligation, covenant or condition contained in any other agreement between
  Lender and Borrower. False Statements. Any warranty, representation or
  statement made or furnished to Lender by Borrower or on Borrower's behalf
  under this Agreement or the Related Documents is false or misleading in any
  material respect, either now or at the time made or furnished or becomes
  false or misleading at any time thereafter. Insolvency. The dissolution or
  termination of Borrower's existence as a going business, the insolvency of
  Borrower, the appointment of a receiver for any part of Borrower's property,
  any assignment for the benefit of creditors, any type of creditor workout, or
  the commencement of any proceeding under any bankruptcy or insolvency laws by
  or against Borrower.

  

 

	
  

  	
  CHANGE IN TERMS
  AGREEMENT Loan No: 14248 (Continued) Page 2 Creditor or Forfeiture
  Proceedings. Commencement of foreclosure or forfeiture proceedings, whether
  by judicial proceeding, self-help, repossession or any other method, by any
  creditor of Borrower or by any governmental agency against any collateral
  securing the Indebtedness. This includes a garnishment of any of Borrower's
  accounts, including deposit accounts, with Lender. However, this Event of
  Default shall not apply if there is a good faith dispute by Borrower as to
  the validity or reasonableness of the claim which is the basis of the
  creditor or forfeiture proceeding and if Borrower gives Lender written notice
  of the creditor or forfeiture proceeding and deposits with Lender monies or a
  surety bond for the creditor or forfeiture proceeding, in an amount
  determined by Lender, in its sole discretion, as being an adequate reserve or
  bond for the dispute. Events Affecting Guarantor. Any of the preceding events
  occurs with respect to any guarantor, endorser, surety, or accommodation
  party of any of the Indebtedness or any guarantor, endorser, surety, or
  accommodation party dies or becomes incompetent, or revokes or disputes the
  validity of, or liability under, any Guaranty of the Indebtedness evidenced
  by this Note. Change In Ownership. Any change in ownership of twenty-five
  percent (25%) or more of the common stock of Borrower. Adverse Change. A material
  adverse change occurs in Borrower's financial condition, or Lender believes
  the prospect of payment or performance of the Indebtedness is impaired.
  Insecurity. Lender in good faith believes itself insecure. Cure Provisions.
  If any default, other than a default in payment, is curable and if Borrower
  has not been given a notice of a breach of the same provision of this
  Agreement within the preceding twelve (12) months, it may be cured if
  Borrower, after Lender sends written notice to Borrower demanding cure of
  such default: (1) cures the default within fifteen (15) days; or (2) if the
  cure requires more than fifteen (15) days, immediately initiates steps which
  Lender deems in Lender's sole discretion to be sufficient to cure the default
  and thereafter continues and completes all reasonable and necessary steps
  sufficient to produce compliance as soon as reasonably practical. LENDER'S
  RIGHTS. Upon default, Lender may declare the entire unpaid principal balance
  under this Agreement and all accrued unpaid interest immediately due, and
  then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may
  hire or pay someone else to help collect this Agreement if Borrower does not
  pay. Borrower will pay Lender that amount. This includes, subject to any limits
  under applicable law, Lender's reasonable attorneys' fees and Lender's legal
  expenses, whether or not there is a lawsuit, including reasonable attorneys'
  fees, expenses for bankruptcy proceedings (including efforts to modify or
  vacate any automatic stay or injunction), and appeals. If not prohibited by
  applicable law, Borrower also will pay any court costs, in addition to all
  other sums provided by law. GOVERNING LAW. This Agreement will be governed by
  federal law applicable to Lender and, to the extent not preempted by federal
  law, the laws of the State of Minnesota without regard to its conflicts of
  law provisions. This Agreement has been accepted by Lender in the State of
  Minnesota. DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $32.00
  if Borrower makes a payment on Borrower's loan and the check or preauthorized
  charge with which Borrower pays is later dishonored. RIGHT OF SETOFF. To the
  extent permitted by applicable law, Lender reserves a right of setoff in all
  Borrower's accounts with Lender (whether checking, savings, or some other
  account). This includes all accounts Borrower holds jointly with someone else
  and all accounts Borrower may open in the future. However, this does not
  include any IRA or Keogh accounts, or any trust accounts for which setoff
  would be prohibited by law. Borrower authorizes Lender, to the extent
  permitted by applicable law, to charge or setoff all sums owing on the
  indebtedness against any and all such accounts, and, at Lender's option, to
  administratively freeze all such accounts to allow Lender to protect Lender's
  charge and setoff rights provided in this paragraph. COLLATERAL. Borrower
  acknowledges this Agreement is secured by All Business Assets per Commercial
  Security Agreement dated 5/11/2014. LINE OF CREDIT. This Agreement evidences
  a revolving line of credit. Advances under this Agreement, as well as
  directions for payment from Borrower's accounts, may be requested orally or
  in writing by Borrower or by an authorized person. Lender may, but need not,
  require that all oral requests be confirmed in writing. Borrower agrees to be
  liable for all sums either: (A) advanced in accordance with the instructions
  of an authorized person or (B) credited to any of Borrower's accounts with
  Lender. The unpaid principal balance owing on this Agreement at any time may
  be evidenced by endorsements on this Agreement or by Lender's internal
  records, including daily computer print-outs. Lender will have no obligation
  to advance funds under this Agreement if: (A) Borrower or any guarantor is in
  default under the terms of this Agreement or any agreement that Borrower or
  any guarantor has with Lender, including any agreement made in connection
  with the signing of this Agreement; (B) Borrower or any guarantor ceases
  doing business or is insolvent; (C) any guarantor seeks, claims or otherwise
  attempts to limit, modify or revoke such guarantor's guarantee of this
  Agreement or any other loan with Lender; (D) Borrower has applied funds
  provided pursuant to this Agreement for purposes other than those authorized
  by Lender; or (E) Lender in good faith believes itself insecure. CONTINUING
  VALIDITY. Except as expressly changed by this Agreement, the terms of the
  original obligation or obligations, including all agreements evidenced or
  securing the obligation(s), remain unchanged and in full force and effect.
  Consent by Lender to this Agreement does not waive Lender's right to strict
  performance of the obligation(s) as changed, nor obligate Lender to make any
  future change in terms. Nothing in this Agreement will constitute a
  satisfaction of the obligation(s). It is the intention of Lender to retain as
  liable parties all makers and endorsers of the original obligation(s),
  including accommodation parties, unless a party is expressly released by Lender
  in writing. Any maker or endorser, including accommodation makers, will not
  be released by virtue of this Agreement. If any person who signed the
  original obligation does not sign this Agreement below, then all persons
  signing below acknowledge that this Agreement is given conditionally, based
  on the representation to Lender that the non-signing party consents to the
  changes and provisions of this Agreement or otherwise will not be released by
  it. This waiver applies not only to any initial extension, modification or
  release, but also to all such subsequent actions. LOAN AGREEMENT. A document
  titled, "Business Loan Agreement (Asset Based)", is attached to
  this Promissory Note. SUCCESSORS AND ASSIGNS. Subject to any limitations
  stated in this Agreement on transfer of Borrower's interest, this Agreement
  shall be binding upon and inure to the benefit of the parties, their
  successors and assigns. If ownership of the Collateral becomes vested in a
  person other than Borrower, Lender, without notice to Borrower, may deal with
  Borrower's successors with reference to this Agreement and the Indebtedness
  by way of forbearance or extension without releasing Borrower from the
  obligations of this Agreement or liability under the Indebtedness.
  MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,
  this fact will not affect the rest of the Agreement. Lender may delay or
  forgo enforcing any of its rights or remedies under this Agreement without
  losing them. In addition, Lender shall have all the rights and remedies
  provided in the related documents or available at law, in equity, or
  otherwise. Except as may be prohibited by applicable law, all of Lender's
  rights and remedies shall be cumulative and may be exercised singularly or
  concurrently. Election by Lender to pursue any remedy shall not exclude
  pursuit of any other remedy, and an election to make expenditures or to take
  action to perform an obligation of Borrower shall not affect Lender's right
  to declare a default and to exercise its rights and remedies. Borrower and
  any other person who signs, guarantees or

  

 

	
  

  	
  CHANGE IN TERMS
  AGREEMENT Loan No: 14248 (Continued) Page 3 endorses this Agreement, to the
  extent allowed by law, waive presentment, demand for payment, and notice of
  dishonor. Upon any change in the terms of this Agreement, and unless
  otherwise expressly stated in writing, no party who signs this Agreement,
  whether as maker, guarantor, accommodation maker or endorser, shall be
  released from liability. All such parties agree that Lender may renew or
  extend (repeatedly and for any length of time) this loan or release any party
  or guarantor or collateral; or impair, fail to realize upon or perfect
  Lender's security interest in the collateral; and take any other action
  deemed necessary by Lender without the consent of or notice to anyone. All
  such parties also agree that Lender may modify this loan without the consent
  of or notice to anyone other than the party with whom the modification is
  made. The obligations under this Agreement are joint and several. SECTION
  DISCLOSURE. To the extent not preempted by federal law, this loan is made
  under Minnesota Statutes, Section 334.01. PRIOR TO SIGNING THIS AGREEMENT,
  BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, INCLUDING
  THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE
  AGREEMENT. BORROWER: TACTILE SYSTEM TECHNOLOGY, INC. By: Robert Folkes, COO
  of Tactile Systems Technology, Inc. LENDER: VENTURE BANK X Authorized Signer
  LaserPro, Ver. 16.1.10.003 Copr, D+H USA Corporation 1997, 2016. All Rights
  Reserved. - MN C:\APPS\CFI\CFI\LPL\D20C.FC TR-7313 PR-72 

  

 

 

	
  

  	
  *003450000014248*
  DISBURSEMENT REQUEST AND AUTHORIZATION Principal $2,000,000.00 Loan Date
  05-11-2016 Maturity 05-11-2017 Loan No 14248 Call / Coll 5200 Account
  102727-1 Officer 120 Initials References in the boxes above are for Lender's
  use only and do not limit the applicability of this document to any
  particular loan or item. Any item above containing "***" has been
  omitted due to text length limitations. Borrower: Tactile Systems Technology,
  Inc. 1331 Tyler Street Northeast, Suite 200 Minneapolis, MN 55413 Lender:
  Venture Bank Bloomington Office 4470 W. 78th Street Circle, Suite #100
  Bloomington, MN 55435 LOAN TYPE. This is a Variable Rate Nondisclosable
  Revolving Line of Credit Loan to a Corporation for $2,000,000.00 due on May
  11, 2017. This is a secured renewal loan. PRIMARY PURPOSE OF LOAN. The
  primary purpose of this loan is for: Maintenance of Borrower's Primary
  Residence. Personal, Family or Household Purposes or Personal Investment.
  Agricultural Purposes. Business Purposes. SPECIFIC PURPOSE. The specific
  purpose of this loan is: Working Capital. DISBURSEMENT INSTRUCTIONS. Borrower
  understands that no loan proceeds will be disbursed until all of Lender's
  conditions for making the loan have been satisfied. Please disburse the loan
  proceeds of $2,000,000.00 as follows: Undisbursed Funds: $2,000,000.00 Note
  Principal: $2,000,000.00 CHARGES PAID IN CASH. Borrower has paid or will pay
  in cash as agreed the following charges: Prepaid Finance Charges Paid in
  Cash: $7,500.00 Loan Origination Fee $7,500.00 Other Charges Paid in Cash:
  $921.00 $521.00 Capital Lien Fee $400.00 Loan Documentation Fee Total Charges
  Paid in Cash: $8,421.00 AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender
  automatically to deduct from Borrower's Demand Deposit - Checking account,
  numbered 013193, the amount of any loan payment. If the funds in the account
  are insufficient to cover any payment, Lender shall not be obligated to
  advance funds to cover the payment. At any time and for any reason, Borrower
  or Lender may voluntarily terminate Automatic Payments. FINANCIAL CONDITION.
  BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO LENDER
  THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND THAT THERE HAS
  BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS
  DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
  AUTHORIZATION IS DATED MAY 11, 2016. BORROWER: TACTILE SYSTEMS TECHNOLOGY,
  INC. By: Robert Folkes, COO of Tactile Systems Technology, Inc. LaserPro,
  Ver. 16.1.10.003 Copr, D+H USA Corporation 1997, 2016. All Rights Reserved. -
  MN C:\APPS\CFI\CFI\LPL\120.FC TR-7313 PR-72 

  

 

 

	
  

  	
  *012550000014248*
  ERRORS AND OMISSIONS AGREEMENT Principal $2,000,000.00 Loan Date 05-11-2016
  Maturity 05-11-2017 Loan No 14248 Call / Coll 5200 Account 102727-1 Officer
  120 Initials References in the boxes above are for Lender's use only and do
  not limit the applicability of this document to any particular loan or item.
  Any item above containing """"" has been omitted due
  to text length limitations. Borrower: Tactile Systems Technology, Inc. 1331
  Tyler Street Northeast, Suite 200 Minneapolis, MN 55413 Lender: Venture Bank
  Bloomington Office 4470 W. 78th Street Circle, Suite #100 Bloomington, MN
  55435 LOAN NO.: 14248 The undersigned Borrower for and in consideration of
  the above-referenced Lender funding the closing of this loan agrees, if
  requested by Lender or Closing Agent for Lender, to fully cooperate and
  adjust for clerical errors, any or all loan closing documentation if deemed
  necessary or desirable in the reasonable discretion of Lender to enable
  Lender to sell, convey, seek guaranty or market said loan to any entity,
  including but not limited to an investor, Federal National Mortgage
  Association, Federal Home Loan Mortgage Corporation, Government National
  Mortgage Association, Federal Housing Authority or the Department of Veterans
  Affairs. The undersigned Borrower does hereby so agree and covenant in order
  to assure that this loan documentation executed this date will conform and be
  acceptable in the marketplace in the instance of transfer, sale or conveyance
  by Lender of its interest in and to said loan documentation. DATED effective
  this May 11, 2016 BORROWER: TACTILE SYSTEMS TECHNOLOGY, INC. By: Robert
  Folkes, COO of Tactile Systems Technology, Inc. Sworn to and subscribed before
  me this 5th day of May, 2016 Misty Exkert Notary Public Minnesota My
  commission Expires January 31, 2017 X (Notary Public) My Commission Expires
  January 31, 2017 LaserPro, Ver. 16.1.10.003 Copr, D+H USA Corporation 1997,
  2016. All Rights Reserved. - MN c:\APPS\CFI\CFI\LPL\126.FC TR-7313 PR-72

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