VIVEVE MEDICAL, INC. (NASDAQ:VIVE) Files An 8-K Entry into a Material Definitive Agreement

Item1.01 Entry Into a Material Definitive Agreement.

On May 22, 2017, Viveve Medical, Inc. (the Company) entered into
a Term Loan Agreement (the Loan Agreement) with CRG Servicing LLC
(CRG), as administrative agent and collateral agent, the lenders
named on Schedule 1 to the Loan Agreement (the Lenders) and
Viveve, Inc., as subsidiary guarantor. to the Loan Agreement, the
Company may initially borrow $20.0 million from the Lenders
subject to certain conditions, which borrowing must occur within
twenty (20) days of the effective date of the Loan Agreement. The
Company may borrow up to an additional $10.0 million in
increments of $5,000,000, contingent upon achievement of certain
conditions including both satisfying (a)minimum net revenue
amounts from the Companys products of at least $16,000,000 during
any consecutive twelve (12) month period ending on or prior to
June 30, 2018 and (b)minimum average market capitalization of at
least $60,000,000 for the thirty (30) consecutive days prior to
the notice of borrowing for the second borrowing.

The Company intends to use a portion of the initial loan proceeds
to repay all of the amounts owed by the Company under its
existing Loan and Security Agreement with Western Alliance Bank
dated June 20, 2016, as amended (the Prior Agreement). Upon the
repayment of all amounts owed by the Company under the Prior
Agreement, including a prepayment fee and a final payment fee,
all commitments and obligations (other than contingent
indemnification obligations) under the Prior Agreement will be
terminated and all security interests granted by the Company to
the lenders under the Prior Agreement will be released. The
Company intends to use the remainder of the initial loan proceeds
(after deducting loan origination costs and other fees and
expenses incurred in connection with the incurrence of the loan),
plus any additional amounts that may be borrowed in the future,
for general corporate purposes and working capital.

The Loan Agreement has a six-year term with four years (through
March31, 2021) of interest-only payments after which quarterly
principal and interest payments will be due through the March 31,
2023 maturity date. Amounts borrowed under the Loan Agreement
accrue interest at an annual fixed rate of 12.50%, 4.0% of which
may, at the election of the Company, be deferred during the
interest-only period by adding such amount to the principal loan
amount each quarter (PIK Loans). The Company is also required to
pay the Lenders a final payment fee upon repayment of the Loans
in full.

The Company may prepay all or a portion of the outstanding
principal and accrued unpaid interest under the Loan Agreement at
any time upon prior notice to the Lenders subject to a prepayment
fee during the first five years of the term of each loan (which
reduces each year) and no prepayment fee thereafter. In certain
circumstances, including a change of control and certain asset
sales or licensing transactions, the Company is required to
prepay all or a portion of the loan, including the applicable
prepayment premium of on the amount of the outstanding principal
to be prepaid.

As security for its obligations under the Loan Agreement, on the
funding date of the initial borrowing, the Company will enter
into security agreements with Viveve, Inc. and CRG (the Security
Agreements), whereby the Company will grant to CRG, as collateral
agent for the Lenders, a lien on substantially all of its assets,
including intellectual property.

The Loan Agreement requires the Company to maintain cash and cash
equivalents of $2.0 million and, each year through the end of
2022, to meet a minimum total annual revenue threshold. In the
event that the Company does not meet the minimum total annual
revenue threshold for a particular year, then the Company can
retroactively cure the shortfall by either issuing additional
equity in exchange for cash or incurring certain additional
permitted indebtedness, in each case, in an amount equal to 2.0x
the shortfall. Any such amounts shall be applied to prepay the
loans. The Loan Agreement also contains customary affirmative and
negative covenants for a credit facility of this size and type,
including covenants that limit or restrict the Companys ability
to, among other things, incur indebtedness, grant liens, merge or
consolidate, dispose of assets, make investments, make
acquisitions, enter into transactions with affiliates, pay
dividends or make distributions, license intellectual property
rights on an exclusive basis or repurchase stock, in each case
subject to customary exceptions.

The Loan Agreement includes customary events of default that
include, among other things, non-payment, inaccuracy of
representations and warranties, covenant breaches, a material
adverse change (as defined in the Loan Agreement), cross default
to material indebtedness or material agreements, bankruptcy and
insolvency, material judgments, a change of control, certain
ERISA-related events and certain injunctions applicable to the
sale of the Companys products. The occurrence and continuance of
an event of default could result in the acceleration of the
obligations under the Loan Agreement. Under certain
circumstances, a default interest rate of an additional 4.00%per
annum will apply on all outstanding obligations during the
existence of an event of default under the Loan Agreement.

In connection with the Loan Agreement, on the funding date of the
initial borrowing, the Company will issue to the Lenders or their
designees one or more warrants to purchase shares of the Companys
common stock equal to an aggregate of 1.00% of the shares then
outstanding (the Warrants). The Warrants will be exercisable at
any time prior to ten years following the issue date at a price
per share equal to 125% of the trailing 30-day average per share
stock price as of the issue date, with customary provisions for
assumption or exchange upon a change of control or a sale of all
or substantially all of the assets of the Company. The exercise
of the Warrants could have a dilutive effect to the Companys
common stock to the extent that the market price per share of the
Companys common stock, as measured under the terms of the
Warrants, exceeds the exercise price of the Warrants.

The foregoing description of the Loan Agreement, the Security
Agreements and the Warrants is only a summary of their material
terms and does not purport to be complete. A copy of the Loan
Agreement is attached as Exhibit 10.1 to this Current Report on
Form 8-K and is incorporated herein by reference. Copies of the
Security Agreements and form of Warrant will be filed on a
Current Report on Form 8-K after execution. The Loan Agreement is
not intended to be a source of factual, business or operational
information about the Company or its subsidiaries. The
representations, warranties and covenants contained in the Loan
Agreement were made only for purposes of such agreement and as of
specific dates, were solely for the benefit of the parties to
such agreement, and may be subject to limitations agreed upon by
the parties, including being qualified by disclosures for the
purpose of allocating contractual risk between the parties
instead of establishing matters as facts; and may be subject to
standards of materiality applicable to the contracting parties
that differ from those applicable to investors or security
holders. Accordingly, investors should not rely on the
representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or
condition of the parties.

Item1.02. Termination of a Material Agreement

The information set forth above in Item1.01 relating to the Prior
Agreement is incorporated herein by reference.

Item2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.

The information set forth in Item1.01 above with respect to the
Loan Agreement is incorporated herein by reference.

Item3.02 Unregistered Sale of Equity
Securities.

The information set forth in Item 1.01 above with respect to the
Warrants is incorporated herein by reference.

The Company expects to enter into the Warrants with the Lenders
or their designees in reliance on the exemption from registration
provided by Section4(a)(2)of the Securities Act of 1933, as
amended (the Securities Act). The Company expects to rely on this
exemption from registration based in part on representations made
by the Lenders (or their designees). The Warrants and the shares
of the Companys common stock issuable upon exercise of the
Warrants, if any, will not been registered under the Securities
Act and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.

Item 7.01 Regulation FD
Disclosure.

On May 23, 2017, the Company issued a press release regarding the
Loan Agreement and certain agreements and transactions related
thereto.A copy of the press release is furnished as Exhibit99.1
to this report. The information in Item 7.01 of this Current
Report on Form8-K and Exhibit99.1 attached hereto shall not be
deemed filed for purposes of Section18 of the Securities Exchange
Act of 1934, as amended, nor shall it be deemed incorporated by
reference in any filing under the Securities Act, except as shall
be expressly set forth by specific reference in such filing.

Item9.01 Financial Statements and Exhibits.

(d) Exhibits.

About VIVEVE MEDICAL, INC. (NASDAQ:VIVE)

Viveve Medical, Inc., formerly PLC Systems, Inc., designs, develops, manufactures and markets medical devices for the non-invasive treatment of vaginal laxity. The Company’s Viveve Treatment is a non-invasive solution for vaginal laxity that is performed in approximately 30 minutes, in a physician’s office. The Viveve System uses monopolar radiofrequency (RF) energy to generate low temperature heat. The vaginal mucosa is simultaneously cooled while this non-ablative heat is delivered into the submucosal layer. The RF energy stimulates the formation of collagen and causes the collagen fibers to remodel thereby tightening the submucosal tissue of the vaginal introitus. The RF stimulation causes subtle alterations in the collagen that can renew the tissue and further tighten the vaginal tissue over the next 1 to 3 months following treatment (the Viveve Treatment) and lead to increased sexual function.

VIVEVE MEDICAL, INC. (NASDAQ:VIVE) Recent Trading Information

VIVEVE MEDICAL, INC. (NASDAQ:VIVE) closed its last trading session down -0.34 at 7.05 with 181,095 shares trading hands.