SILK ROAD MEDICAL INC: Entering into a Material Definitive Agreement, Terminating a Material Definitive Agreement, Creating a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, financial statements and supporting documents (Form 8-K)

Section 1.01 Entering into a Material Definitive Agreement.

On May 27, 2022, Silk Road Medical, Inc.a Delaware company (the “Company”), has entered into a loan and guarantee agreement (the “Loan Agreement”) between Oxford Finance LLC, as collateral agent (“Agent”), the lenders who are sometimes parties thereto and the Company. The loan agreement provides for a $225.0 million loan facility, consisting of a $25.0 million secured revolving credit facility and a $200.0 million secured term loan facility. Term loans are available in three tranches. The Company borrowed the first $75.0 million
tranche of term loans at closing. A second installment of $75.0 million term loans are available through December 31, 2024. A third installment of $50.0 million
would be available through December 31, 2024 so long as, at the time of the draw, the Company has consolidated rolling 12-month revenue equal to at least 90% of the sum of the term loans outstanding plus the amount of any third tranche term loan requested. Loan proceeds may be used by the Company for working capital and general corporate purposes. From May 27, 2022there were no outstanding revolving loans and $75.0 million in outstanding term loans under the loan agreement.

At the request of the Company, the revolving credit facility will change from $25.0 million at $50.0 million. Revolving loans are available subject to a borrowing base equal to 85% of eligible receivables plus 50% of eligible inventory, to the lesser of 40% of the borrowing base or $10.0 million in the case of eligible inventory. The revolving facility will be made available to the Company once the Agent has completed its initial collateral audit.

Revolving loans and term loans mature on May 1, 2027. The principal amount of outstanding revolving loans, together with accrued and unpaid interest, is due on the due date. Term loans begin to be amortized in equal monthly installments from July 1, 2026. However, if the Company realizes specified consolidated revenues over the last twelve months, the Company may exercise its option to extend the first amortization date of the term loans until July 1, 2027. This choice can be made at the earliest June 30, 2023 and no later than thirty (30) days before July 1, 2026. If the Company exercises this option, the maturity date of the revolving loans and term loans will be
May 1, 2028.

The Revolving Loans bear interest at the greater of 1 month SOFR and 0.85% (the “Index Rate”), plus a margin of 3.00%. Term loans bear interest at the index rate plus a margin of 5.00%. The index rate is capped at 2.50% for the purposes of the loan agreement. Interest on revolving loans and term loans is payable monthly in arrears. The Company may borrow, prepay and re-borrow revolving credits without premium or penalty. Term loans once repaid or prepaid cannot be re-borrowed. Term loans may be prepaid in whole or in part in installments of $10.0 million. The Company is required to pay a prepayment charge of 3.0% for prepayments of Term Loans made in the first year after closing, 2.0% for prepayments of Term Loans made in the second year after at closing, 1.0% for term loan prepayments made in the third year after closing and no prepayment charge thereafter. On the earlier of the prepayment or maturity of the term loans, the Company is required to pay a fee of 5.0% of the aggregate original principal amount of the funded term loans, which fee increases to 6.75% if the Company exercises its option to extend the amortization date and maturity date. The Company is also required to pay other fees customary for a loan facility of this size and type.

The obligations of the Company under the Loan Agreement are secured by substantially all of the assets of the Company and will be secured by its future subsidiaries, subject to certain exceptions in the case of foreign subsidiaries. At the closing date, there were no guarantors.

The loan agreement requires the company to maintain consolidated revenue for 12 consecutive months of at least 75% of the outstanding principal amount of the term loans, measured on the last day of each fiscal quarter; or if the revenue target is not met, the Company must have maintained unrestricted cash and cash equivalents (net of outstanding revolving loans) subject to control agreements in favor of the Agent equal to at minus 50% of the outstanding principal amount of term loans. In addition, the Loan Agreement contains customary affirmative and negative covenants, including covenants limiting the Company’s and its subsidiaries’ ability to, among other things, dispose of assets, effect certain mergers, incur debt, to grant privileges, to pay dividends and distributions on their capital. shares, make investments and acquisitions and enter into transactions with affiliated companies, in each case subject to the customary exceptions for a loan facility of this size and type.

Events of default under the Loan Agreement include, but are not limited to, defaults in payment, material misrepresentation, breach of covenants, cross defaults with certain other material debts, events of bankruptcy and insolvency and lapses in judgement. The occurrence of an event of default could result in the acceleration of the Company’s obligations under the Loan Agreement, the termination of the lender’s commitments, a 5% increase in the applicable interest rate and the exercise by the lender other rights and remedies provided under the loan agreement.

The foregoing description of the Loan Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Loan Agreement, which is attached hereto as Schedule 10.1 and is incorporated herein by reference.


Section 1.02 Termination of a Material Definitive Agreement.

On May 27, 2022in connection with the Company’s entering into the Loan Agreement referred to in item 1.01 of this current Form 8-K Report, the Company has terminated its Loan and Security Agreement, dated October 29, 2020 (as amended, restated, modified or otherwise supplemented from time to time, the “Terminated Loan Agreement”), by and between the Company and Stifel Bank. From
May 27, 2022there was $49.0 million in term loans and no outstanding revolving loans under the terminated loan agreement.

The terms and conditions of the terminated loan agreement were disclosed in the company’s 8-K filed on October 29, 2020which descriptions are incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information relating to the loan agreement set out in point 1.01 above is incorporated herein by reference.

Section 9.01. Financial statements and supporting documents.

(d) Exhibits.

Part # Description

  10.1  †       Loan and Security Agreement, dated as of May 27, 2022, among
              Oxford Finance LLC, as collateral agent, the lenders from time to
              time party thereto and Silk Road Medical, Inc  .

† Portions of this exhibit have been omitted in accordance with SK Rule 601(b)(10).

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