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Item 1.01. Entry into a Material Definitive Agreement
On October
19, 2022, Shockwave Medical, Inc. (the “Company”) entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, the several lenders from time to time party thereto (the “Lenders”), Wells Fargo Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”), Wells Fargo Bank, National Association, as swingline lender and an issuing lender, Wells Fargo Securities, LLC and Silicon Valley Bank, as joint lead arrangers and joint bookrunners, and Silicon Valley Bank, as syndication agent. The Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $175,000,000, and replaces the Company’s Loan and Security Agreement, dated as of February
26, 2018 (as amended by the First Amendment to the Loan and Security Agreement, dated as of February 11, 2020, the “SVB Credit Agreement”), by and between the Company and Silicon Valley Bank, pursuant to which the Company had a term loan facility in an aggregate principal amount of $16,500,000.
Concurrently with entering into the Credit Agreement, the Company prepaid in full all outstanding amounts under the term loan under the SVB Credit Agreement and terminated the credit facility under the SVB Credit Agreement. The
Company continues to have letters of credit issued by Silicon Valley Bank in the face amount of $1.7 million outstanding, which under the terms of the Credit Agreement, are deemed to have been issued pursuant to the Credit Agreement.
Pursuant to the terms of the Credit Agreement, revolving loans may be borrowed, repaid and reborrowed until the maturity date, which will be the earliest to occur of (i) October 19, 2027, (ii) the date of termination of the entire Revolving Credit Commitment (as defined in the Credit Agreement) as a result of the reduction, at the Company’s request, of the entire Revolving Credit Commitment to zero and (iii) the date of termination of the Revolving Credit Commitment pursuant to notice delivered by the Administrative Agent to the
Company upon the occurrence and during the continuance of an Event of Default (as defined in the Credit Agreement), at which time all amounts borrowed must be repaid. Revolving loans may be prepaid and revolving loan commitments may be permanently reduced by the Company in whole or in part, without penalty or premium.
As of October 20, 2022, the Company had an aggregate of $25 million of revolving loans outstanding under the Credit Agreement.
Subject to the terms and conditions set forth in the Credit Agreement, the Company
will have the right to request increases to the Revolving Credit Commitment in an amount not to exceed the greater of (x) $100 million and (y) the Company’s consolidated EBITDA for the four quarter period most recently ended prior to the date of such increase.
Revolving loans under the Credit Agreement will bear interest, at the Company’s option, at a rate equal to either (i) a floating rate per annum equal to the base rate plus a margin ranging from 0.00% to 1.00% depending on the Company’s Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) or (ii) the applicable secured overnight financing rate (“SOFR”), plus
a margin ranging from 1.00% to 2.00%, depending on the Company’s Consolidated Total Net Leverage Ratio. Swingline loans under the Credit Agreement will bear interest at a floating rate per annum equal to the base rate plus a margin ranging from 0.00% to 1.00% depending on the Company’s Consolidated Total Net Leverage Ratio. Upon the occurrence and during the continuance of an event of default under the Credit Agreement, the applicable interest rates are increased by 2.0% per annum and all accrued and unpaid interest will be due and payable on demand of the Administrative Agent. The base rate is defined as the highest of (i) the Administrative Agent’s announced prime rate, (ii) the federal funds rate plus 0.50% and (iii) the applicable SOFR for a one-month
tenor in effect on such day plus 1.00%. Loans based on the base rate will be made only to domestic borrowers and denominated in U.S. Dollars.
Under the Credit Agreement, the Company will pay to the Administrative Agent, for the account of each revolving Lender, a commitment fee on a quarterly basis based on amounts committed but unused under the revolving facility ranging from 0.20% to 0.30% per annum, depending on the Company’s Consolidated Total Net Leverage Ratio. The Company is also obligated under the Credit Agreement to pay the Administrative Agent and the Lenders fees customary for credit facilities of this size and type.
Under
the Credit Agreement, the Company must comply with a maximum Consolidated Total Net Leverage Ratio financial covenant, tested quarterly, which requires the Company not to exceed a maximum leverage ratio of 3.50:1.00, subject to a step-up to 4.00:1.00 at the election of the Company for four quarters following certain material acquisitions, as more fully described in the Credit Agreement. The Credit Agreement also includes customary affirmative and restrictive covenants, including covenants relating to the incurrence of additional debt or liens, investments, transactions with affiliates, delivery of financial statements, payment of taxes, maintenance of insurance, dispositions of property, and mergers and acquisitions,
among other customary covenants. The Credit Agreement also restricts the Company from paying dividends or making distributions or payments on its capital stock subject to limited exceptions. The Credit Agreement also includes customary
representations and warranties, events of default and termination provisions. The occurrence of an event of default could result in the acceleration of the obligations under the Credit Agreement.
Certain of the Lenders and their respective affiliates have provided, and in the future may provide, financial,
banking and related services to the Company. These parties have received, and in the future may receive, compensation from the Company for these services.
The foregoing summary and description of the provisions of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, a copy of which is filed as Exhibit 10.1 with this Current Report on Form 8-K and is incorporated herein by reference.
Item
1.02. Termination of a Material Definitive Agreement
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.02.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of an Registrant
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
