Document:

TCMD EX 10-2

		

			Exhibit 10.2

		

		

			 

		

		

			Execution Version

		

		
			WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT
		

		
			This Waiver and Second Amendment to Credit Agreement (this “Amendment”) is entered into as of March 25, 2019,  by and among (a) Tactile Systems Technology, Inc., a Delaware corporation (dba Tactile Medical) (“Borrower”), (b) the Lenders who are party to this Amendment and the Lenders who may become a party to this Amendment pursuant to the terms of the Credit Agreement (defined below) (collectively, the “Lenders”), and (c) Wells Fargo Bank, National Association, a national banking association, as Administrative Agent for the Lenders (“Agent”).  This Amendment is consented and agreed to by the Guarantors.
		

		
			RECITALS
		

			
	
			
				 A.
			Borrower, Lenders and Agent are parties to that certain Credit Agreement dated as of August 3, 2018, as amended by that certain First Amendment to Credit Agreement dated February 12, 2019  (as the same may be further amended, restated or modified from time to time, the “Loan Agreement”).  Capitalized terms used but not defined in this Amendment have the meanings given to such terms in the Loan Agreement.  

			
	
			
				 B.
			Borrower has requested that Lenders and Agent permit certain amendments and modifications to the Loan Agreement.  

			
	
			
				 C.
			Lenders and Agent have agreed to such modifications, but only upon the terms and conditions outlined in this Amendment.

		
			TERMS OF AGREEMENT
		

		
			In consideration of the mutual covenants herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Borrower, Lenders and Agent hereby agree as follows: 
		

			
	
			
				 1.
			Waiver of Certain Defaults.  

			
	
			
				 (a)
			The Borrower acknowledges that it failed to comply with Section 8.1(c) of the Credit Agreement by failing to provide, within sixty (60) days after the end of Fiscal Year 2018, a business plan and operating and capital budget of Borrower and its Subsidiaries for the ensuing three fiscal years (the “Current Default”).

			
	
			
				 (b)
			Upon the date on which this Amendment becomes effective and subject to the other terms and conditions of this Amendment, Agent and Lenders waive the Current Default (the “Waived Defaults”).

			
	
			
				 (c)
			The waiver set forth in subsection (b) above is limited to the express terms thereof, and nothing herein shall be deemed a waiver by Agent or Lenders with respect to any other term, condition, representation, or covenant applicable to the Borrower under the Credit Agreement or any of the other agreements, documents, or instruments executed and delivered in connection therewith, or of the covenants described therein.  The waiver set forth herein shall not be deemed to be a course of action upon which the Borrower may rely in the future, and the Borrower hereby expressly waives any claim to such effect.  Agent and Lenders reserve the right to exercise any rights and remedies available to them in connection with any present or future Events of Default 

		 

 

	with respect to the Credit Agreement or any other provision of any Loan Document that do not relate to or result from the Waived Defaults.    

			
	
			
				 2.
			Amendment and Restatement of Section 8.1(c).   Section 8.1(c) of the Loan Agreement is amended and restated in its entirety as follows:

		
			(c)Annual Business Plan and Budget.  As soon as practicable and in any event within sixty  (60) days after the end of each Fiscal Year, a business plan and operating and capital budget of the Borrower and its Subsidiaries for the ensuing one fiscal year, such plan to be prepared in accordance with GAAP and to include, on a quarterly basis, the following: a quarterly operating and capital budget, a projected income statement, statement of cash flows and balance sheet, calculations demonstrating projected compliance with the financial covenants set forth in Section 9.15, accompanied by a certificate from a Responsible Officer of the Borrower to the effect that such budget contains good faith estimates (utilizing assumptions believed to be reasonable at the time of delivery of such budget) of the financial condition and operations of the Borrower and its Subsidiaries for such period.
		

		
			 
		

			
	
			
				 3.
			Representations and Warranties.  Borrower represents and warrants as follows:

			
	
			
				 (a)
			All warranties and representations made under the Loan Agreement and the other Loan Documents are true and correct in all material respects as of the date hereof (without duplication of any materiality qualifier contained therein), except to the extent such representation or warranty expressly relates to an earlier date (in which case, such representations and warranties were true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date).

			
	
			
				 (b)
			The execution and delivery by Borrower and Guarantor of this Amendment (i) are and will be within Borrower’s and Guarantor’s organizational powers; (ii) have been authorized by all necessary organizational action; (iii) are not and will not require any Governmental Approval or violate any Applicable Law relating to any Credit Party or any Subsidiary thereof where the failure to obtain such Governmental Approval or such violation could reasonably be expected to have a Material Adverse Effect; (iv) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument evidencing Indebtedness or a payment obligation in excess of the Threshold Amount to which such Person is a party or by which any of its properties may be bound or any Governmental Approval relating to such Person, which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; or (v) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by such Person other than Permitted Liens.  

			
	
			
				 (c)
			This Amendment will be valid, binding and enforceable against Borrower and Guarantor in accordance with its respective terms.

			
	
			
				 (d)
			Other than with respect to the Waived Defaults, no Default or Event of Default has occurred under the Loan Agreement or any of the other Loan Documents.

			
	
			
				 4.
			Guaranties.  All guaranties of the Obligations remain in full force and effect, and all Guarantors hereby (a) consent to the modifications and changes in terms to the Loan Agreement described herein; and (b) reaffirm their guaranty obligations described in such guaranties.  

		
			

		 

		

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				 5.
			Release and Waiver of Claims.  For purposes of this section, the term Lenders and Agents specifically include each of Lender’s and Agent’s predecessors, successors, affiliates, and all of their past, present and future officers, trustees, directors, members, agents, contractors, employees, consultants, attorneys, assigns, insurers, stockholders, and representatives, and each of them (whether or not any of the same were acting within or without the scope of employment or engagement).  The release and waiver of claims of this section is to be construed broadly in favor of Lenders and Agent and against Borrower and Guarantor.  Borrower and Guarantor hereby jointly and severally affirm that they do not have any defense, claim, offset, counterclaim or other claim or action (whether known or unknown) against Lenders or Agent including, but not limited to, with respect to the Loans, the Loan Agreement or the Loan Documents, or arising out of negotiations prior to and/or contemporaneous with the execution of this Amendment, and that even if such claim, action, defense, offset or counterclaim exists or might exist on the date hereof (whether known or unknown), Borrower and Guarantor hereby knowingly and jointly and severally forever waive, release and relinquish the same.  Borrower and Guarantor acknowledge that the relationship between Borrower and Guarantor, on the one hand, and Lenders and Agent, on the other hand, has been solely a borrower-lender relationship, that Lenders and Agent have not exercised control over Borrower, Guarantor or any of their respective operations, and that Borrower and Guarantor are not acting under any duress or coercion in connection with the execution of this Amendment.  Borrower and Guarantor represent and warrant that they have obtained the advice of independent legal counsel, or have had the opportunity to obtain their own legal counsel and have knowingly declined to obtain such legal counsel, with respect to their execution of this Amendment and the matters set forth herein.  

			
	
			
				 6.
			Effectiveness of Prior Documents.  Except as specifically amended hereby, the Loan Agreement and the other Loan Documents shall remain in full force and effect in accordance with their respective terms.  All covenants, warranties and representations contained in the Loan Agreement and the other Loan Documents are hereby reconfirmed as of the date hereof.  All Collateral previously provided to secure the Loan Agreement and the Loan Documents continues as security, and Borrower and Guarantor reaffirm all of their obligations under any Loan Document to which it is a party.  This is an amendment, not a novation.

			
	
			
				 7.
			Reimbursement of Agent’s Expenses.  Borrower hereby agrees to reimburse Agent for all reasonable and documented out of pocket costs and expenses relating to this Amendment.  Borrower hereby authorizes Agent, at its option, to debit any account of Borrower held with the Lenders for the payment of such fees, costs and expenses.  

			
	
			
				 8.
			No Waiver of Defaults; Warranties.  The execution of this Amendment shall not be deemed to be a waiver of any Default or Event of Default under the Loan Agreement or Loan Documents, whether or not known and whether or not existing on the date of this Amendment.  Lenders and Agent expressly reserve all of their rights and remedies under the Loan Agreement and Loan Documents with respect to any existing or future Defaults or Events of Default under the Loan Agreement or other Loan Documents, including this Amendment. All agreements, representations and warranties made herein shall survive the execution of this Amendment.

			
	
			
				 9.
			Counterparts.  This Amendment may be signed in any number of counterparts, each of which shall be considered an original, but when taken together shall constitute one document.

			
	
			
				 10.
			Final Expression.  This written Amendment is a final expression of the agreement between Lenders, Agent, Borrower and Guarantor relating to the subject matter hereof, and this written agreement may not be contradicted by evidence of any alleged oral agreement.

		
			

		 

		

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				 11.
			Governing Law.  The governing law, submission to jurisdiction, waiver of venue, service of process and waiver of jury trial provisions set forth in Sections 12.5 and 12.6 of the Loan Agreement are incorporated herein by reference and apply to this Amendment.

		
			 
		

		
			[Signature Page to Follow]
		

		
			 
		

		
			

		 

		

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			IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and year first above written.
		

		
			BORROWER:
		

		
			TACTILE SYSTEMS TECHNOLOGY, INC.
		

		
			 
		

		
			 
		

		
			By: /s/ Brent Moen
Name: Brent Moen
Title: CFO
		

		
			 
		

		
			 
		

		
			Consented and Agreed to By:
		

		
			 
		

		
			GUARANTOR:
		

		
			 
		

		
			SWELLING SOLUTIONS, INC.
		

		
			 
		

		
			 
		

		
			By: /s/ Brent Moen
Name: Brent Moen
Title: CFO
		

		
			

		 

		

			[Borrower and Guarantor Signature Page to Waiver and Second Amendment to Credit Agreement]

		

 

		

		
			AGENT AND LENDERS:
		

		
			WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swingline Lender, Issuing Lender and Lender
		

		
			 
		

		
			 
		

		
			By: /s/ Monique Dubisky
Name: Monique Dubisky
Title: Director
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		 

		

			[Lenders and Agent Signature Page to Waiver and Second Amendment to Credit Agreement]TCMD EX 10-3

		
			Exhibit 10.3
		

		
			 
		

		
			TACTILE SYSTEMS TECHNOLOGY, INC.
		

		
			2016 EQUITY INCENTIVE PLAN
		

		
			 
		

		
			Restricted Stock Unit Award Agreement
		

		
			 
		

		
			 
		

		
			Tactile Systems Technology, Inc. (the “Company”), pursuant to its 2016 Equity Incentive Plan (the “Plan”), hereby grants an award of Restricted Stock Units to you, the Participant named below.  The terms and conditions of this Award are set forth in this Restricted Stock Unit Award Agreement (the “Agreement”), consisting of this cover page and the Terms and Conditions on the following pages, and in the Plan document, a copy of which has been provided to you.  Any capitalized term that is not defined in this Agreement shall have the meaning set forth in the Plan as it currently exists or as it is amended in the future.
		

		
			 
		

		
			Name:    
		

		
			 
		

		
			Grant Date:  
		

		
			 
		

		
			Number of Restricted Stock Units:    
		

		
			 
		

		
			Vesting Schedule:    
		

		
			 
		

		
			 
		

		
			 
		

		
			By signing below or otherwise evidencing your acceptance of this Agreement in a manner approved by the Company, you agree to all of the terms and conditions contained in this Agreement and in the Plan document.  You acknowledge that you have received and reviewed these documents and that they set forth the entire agreement between you and the Company regarding the grant to you of the number of Restricted Stock Units specified in the table above.
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			[SIGNATURE]
		

		
			 
		

		
			______________________________
		

		
			Chief Executive Officer
		

		
			

		 

		

			 

		

		

			 

		

 

Tactile Systems Technology, Inc.
		

		
			2016 Equity Incentive Plan
		

		
			Restricted Stock Unit Award Agreement
		

		
			 
		

		
			Terms and Conditions
		

		
			 
		

		
			1.Grant of Restricted Stock Units.  The Company hereby confirms the grant to you, as of the Grant Date and subject to the terms and conditions in this Agreement and the Plan, of the number of Restricted Stock Units specified on the cover page of this Agreement (the “Units”).  Each Unit represents the right to receive one Share of the Company’s common stock.  The Units granted to you will be credited to an account in your name maintained by the Company.  This account shall be unfunded and maintained for book-keeping purposes only, with the Units simply representing an unfunded and unsecured obligation of the Company.    
		

		
			 
		

		
			2.Restrictions Applicable to Units.  Neither this Award nor the Units subject to this Award may be sold, assigned, transferred, exchanged or encumbered other than by will or the laws of descent and distribution.  Any attempted transfer in violation of this Section 2 shall be of no effect and shall result in the forfeiture of all Units.  The Units and your right to receive Shares in settlement of the Units under this Agreement shall be subject to forfeiture as provided in Section 4 until satisfaction of the vesting conditions set forth in Section 3.
		

		
			 
		

		
			3.Vesting of Units.  
		

		
			 
		

			
	
			
				 (a)
			Scheduled Vesting.  If you remain a Service Provider continuously from the Grant Date specified on the cover page of this Agreement, then the Units will vest in the numbers and on the dates specified in the Vesting Schedule on the cover page of this Agreement.  

		
			 
		

			
	
			
				 (b)
			Accelerated Vesting.  Notwithstanding Section 3(a):

		
			 
		

			
	
			
				 (1)
			Death or Disability.  If your Service terminates prior to the final scheduled vesting date due to your death or Disability, all of the unvested Units shall vest as of such termination date.

		
			 
		

			
	
			
				 (2)
			Change in Control.   If  and to the extent this Award is continued, assumed or replaced in connection with a Change in Control, and if within one year after the Change in Control you experience an involuntary termination of Service for reasons other than Cause, or you terminate your Service for Good Reason (as defined below), then all of the unvested Units shall vest as of such termination date.  In addition, vesting of the Units may be accelerated during the term of the Award under the circumstances described in Sections 12(b) and 12(c) of the Plan.

		
			 
		

		
			(3)Definition of “Good Reason.”  “Good Reason” shall, if you have an employment agreement with the Company, have the meaning set forth in your employment agreement.  If you do not have an employment agreement with the Company, “Good Reason” means the existence of one or more of the following conditions without your written consent, so long as you provided written notice to the Company of the existence of the condition not later than 90 days after the initial existence of the condition, the condition has not been remedied by the Company within 

		 

 

30 days after its receipt of such notice and your Service terminates no later than 130 days after the condition’s initial occurrence: (i) any material, adverse change in your duties, responsibilities, or authority; (ii) a material reduction in your base salary or bonus opportunity that is not part of a general reduction applicable to employees in the same classification or grade as you; or (iii) a geographical relocation of your principal office location by more than 50 miles.
		

		
			 
		

		
			4.Effect of Termination of Service.  Except as otherwise provided in accordance with Section 3(b), if you cease to be a Service Provider, you will forfeit all unvested Units.    
		

		
			 
		

		
			5.Settlement of Units.  After any Units vest pursuant to Section  3, the Company shall, as soon as practicable (but no later than March 15 of the year following the calendar year in which such Units vest), cause to be issued and delivered to you, or to your designated beneficiary or estate in the event of your death, one Share in payment and settlement of each vested Unit.  Delivery of the Shares shall be effected by the issuance of a stock certificate to you, by an appropriate entry in the stock register maintained by the Company’s transfer agent with a notice of issuance provided to you,  or by the electronic delivery of the Shares to a brokerage account you designate, and shall be subject to the tax withholding provisions of Section 6 and compliance with all applicable legal requirements as provided in Section 17(c) of the Plan, and shall be in complete satisfaction and settlement of such vested Units.  
		

		
			 
		

		
			6.Tax Consequences and Withholding.    No Shares will be delivered to you in settlement of vested Units unless you have made arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may be due as a result of the delivery of the Shares.  You hereby authorize the Company (or any Affiliate) to withhold from payroll or other amounts payable to you any sums required to satisfy such withholding tax obligations, and otherwise agree to satisfy such obligations in accordance with the provisions of Section 14 of the Plan.
		

		
			7.No Shareholder Rights.  The Units subject to this Award do not entitle you to any rights of a shareholder of the Company’s common stock.  You will not have any of the rights of a shareholder of the Company in connection with the grant of Units subject to this Agreement unless and until Shares are issued to you upon settlement of the Units as provided in Section 5.  
		

		
			8.Governing Plan Document.  This Agreement and the Award are subject to all the provisions of the Plan, and to all interpretations, rules and regulations which may, from time to time, be adopted and promulgated by the Committee pursuant to the Plan.  If there is any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan will govern.
		

		
			 
		

		
			9.Choice of Law.  This Agreement will be interpreted and enforced under the laws of the state of Delaware (without regard to its conflicts or choice of law principles).
		

		
			 
		

		
			10.Binding Effect.  This Agreement will be binding in all respects on your heirs, representatives, successors and assigns, and on the successors and assigns of the Company.
		

		
			 
		

		
			11.Section 409A of the Code.  The award of Units as provided in this Agreement and any issuance of Shares or payment pursuant to this Agreement are intended to be exempt from Section 409A of the Code under the short-term deferral exception specified in Treas. Reg. § 1.409A-l(b)(4).
		

		
			 
		

		
			12.Compensation Recovery Policy.  To the extent that any compensation paid or payable pursuant to this Agreement is considered “incentive-based compensation” within the meaning and 

		 

 

subject to the requirements of Section 10D of the Exchange Act, such compensation shall be subject to potential forfeiture or recovery by the Company in accordance with any compensation recovery policy adopted by the Board or any committee thereof in response to the requirements of Section 10D of the Exchange Act and any implementing rules and regulations thereunder adopted by the Securities and Exchange Commission or any national securities exchange on which the Company’s common stock is then listed.  This Agreement may be unilaterally amended by the Company to comply with any such compensation recovery policy.
		

		
			 
		

		
			13.Other Agreements.  You agree that in connection with the settlement of vested Units, you will execute such documents as may be necessary to become a party to any stockholder, voting or similar agreements as the Company may require.
		

		
			 
		

		
			14.Restrictive Legends.  The Company may place a legend or legends on any certificate representing Shares issued in settlement of vested Units summarizing transfer and other restrictions to which the Shares may be subject under applicable securities laws, other provisions of this Agreement, or other agreements contemplated by Section 13 of this Agreement.  You agree that in order to ensure compliance with the restrictions referred to in this Agreement, the Company may issue appropriate “stop transfer” instructions to its transfer agent.
		

		
			15.Electronic Delivery and Acceptance.  The Company may deliver any documents related to this Restricted Stock Unit Award by electronic means and request your acceptance of this Agreement by electronic means.  You hereby consent to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line (and/or voice activated) system established and maintained by the Company or the Company’s third-party stock plan administrator.
		

		
			 
		

		
			By signing the cover page of this Agreement or otherwise accepting this Agreement in a manner approved by the Company, you agree to all the terms and conditions described above and in the Plan document.

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