Item 1.01 Entry into a Material Definitive Agreement.
On September 17, 2019, scPharmaceuticals Inc. (the “Company”) entered into a Loan and Security Agreement (the “Loan Agreement”) with Solar
Capital Ltd. (“Solar”) and Silicon Valley Bank (“SVB”, and together with Solar, the “Lenders”). Under the Loan Agreement, the Lenders will extend $20 million to the Company.
The Loan Agreement replaced the Company’s previous $10 million credit facility (the “Original Loan Agreement”) by and between the Company
and the Lenders, dated as of May 23, 2017, as amended. The Original Loan Agreement was repaid in connection with this refinancing.
The Loan
Agreement contains customary representations and warranties, events of default and affirmative and negative covenants, including, among others, covenants that limit or restrict the Company’s ability to, among other things, incur additional
indebtedness, merge or consolidate, make acquisitions, pay dividends or other distributions or repurchase equity, make investments, dispose of assets and enter into certain transactions with affiliates, in each case subject to certain exceptions. As
security for its obligations under the Loan Agreement, the Company granted the Lenders a first priority security interest on substantially all of the Company’s assets, including intellectual property, and subject to certain exceptions.
The facility carries a 48-month term with interest only payments on the term loan for the first 24 months. The Term
Loan will mature in September 2023 and bears an interest rate of 7.95% plus the LIBOR rate (or a comparable replacement rate if LIBOR is no longer available). The Term Loan is subject to mandatory prepayment provisions that require prepayment upon
the occurrence of bankruptcy or an insolvency event.
Additionally, as was in the Original Loan Agreement, the Company entered into an Exit Fee Agreement
with the Lenders, whereby the Company agreed to pay an exit fee in the amount 4% of the loan (the “Exit Fee”) upon the occurrence of an Exit Event (as defined in the Exit Fee Agreement). Notwithstanding the prepayment or termination of the
loan, the Exit Fee will expire 10 years from the Closing Date.
The above description of the Loan Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the Loan Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.