Exhibit 10.1
Execution Version
FORBEARANCE AGREEMENT
This FORBEARANCE AGREEMENT (this “Agreement”), dated as of August 31, 2024 is entered into by (i) BIOLASE, INC., a Delaware corporation (“Borrower”), SWK FUNDING LLC, a Delaware limited liability company, as agent (in such capacity “Agent”) and a Lender.
RECITALS
NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
1.01 Capitalized terms used in this Agreement, to the extent not otherwise defined in this Agreement, shall have the same meaning as in the Credit Agreement. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“363 Sale” means a sale under section 363 of the Bankruptcy Code.
“Bankruptcy Code” means Title 11 of the United States Code, as amended.
“Budget” means the cash flow forecast through the week of September 30, 2024 provided by Borrower to Agent in connection with the entering into of this Agreement, attached hereto as Exhibit A.
“Bridge Loans” means Term Loans made by Lenders to Borrower pursuant to this Agreement in an aggregate amount not to exceed two million five hundred thousand dollars
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($2,500,000), which Bridge Loans shall be Term Loans and Obligations under the terms of the Credit Agreement.
“Budget Variance” shall have the meaning specified in Section 5.03 hereof.
“Chapter 11 Case” means a bankruptcy case filed in the United States Bankruptcy Court for the District of Delaware by Borrower.
“DIP Loan” means debtor in possession financing provided by Lenders to Borrower in the Chapter 11 Case.
“DIP Order” means a final, non-appealable order entered in the Bankruptcy Case, approving the DIP Loan, in form and substance satisfactory to Agent and Lenders.
“Existing Default” has the meaning specified in Section 2.01 hereof.
“Forbearance Default” means the occurrence of any of the following at any time during the Forbearance Period: (i) any Event of Default (other than the Existing Default), (ii) the failure of Borrower to comply with any term, condition, or covenant set forth in this Agreement, (iii) the commencement or continuation of any enforcement action against Borrower or any of its property by any creditor of Borrower having a lien on the assets of Borrower, (iv) Borrower shall suffer the appointment of a receiver, trustee, custodian or similar fiduciary, or shall make an assignment for the benefit of creditors, or any petition for an order for relief shall be filed by or against Borrower under the Bankruptcy Code, (v) the commencement of any litigation or other proceeding by Borrower or any of its respective Affiliates against Agent, any Lender or any of its respective Affiliates, or (vi) any halt or termination of the Sale Process.
“Forbearance Funding Conditions” means the Borrower has complied with the following:
“Forbearance Period” means the period commencing at the time when all conditions to
the effectiveness of this Agreement have been satisfied and ending on the earlier to occur of (i) a Forbearance Default and (ii) the Forbearance Termination Date.
“Forbearance Termination Date” means 12:01 a.m. Dallas, Texas time on October 7, 2024, time being of the essence.
“LOI” means the letter of intent by and between the Stalking Horse Bidder and Borrower.
“Milestones” shall have the meaning specified in Section 5.02 hereof.
“Released Parties” shall have the meaning specified in Section 7.10 hereof.
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“Sale Process” shall have the meaning specified in Section 5.02 hereof.
“Stalking Horse Bidder” shall mean PIPStek LLC.
ARTICLE II
EXISTING DEFAULTS
ARTICLE III
FORBEARANCE; CERTAIN AGREEMENTS
“7.13.1 Consolidated Unencumbered Liquid Assets.
Not permit the Consolidated Unencumbered Liquid Assets,
(i) as of any date of determination prior to December 31, 2023, to be less than $1,500,000 and (ii) as of any date of determination on or after December 31, 2023, to be less than $1,000,000.”
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ARTICLE IV
CONDITIONS PRECEDENT
ARTICLE V
COVENANTS AND AGREEMENTS
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bonuses, whether in cash, stock, or other remuneration;
ARTICLE VI
RATIFICATIONS, REPRESENTATIONS, WARRANTIES AND OTHER AGREEMENTS
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ARTICLE VII
MISCELLANEOUS PROVISIONS
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UNDER THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS, AND/OR NEGOTIATION OF, OR EXECUTION OF, THIS AGREEMENT. IT IS AGREED THAT THE SCOPE OF THIS RELEASE UNDER THIS PARAGRAPH SHALL INCLUDE ALL CLAIMS, DEMANDS OR CAUSES OF ACTION ARISING IN WHOLE OR PART FROM THE NEGLIGENCE OR STRICT LIABILITY OF AGENT, ANY LENDER, OR ANY OTHER RELEASED PARTY. BORROWER HEREBY COVENANTS AND AGREES NEVER TO INSTITUTE ANY ACTION OR SUIT AT LAW OR IN EQUITY, NOR INSTITUTE, PROSECUTE, OR IN ANY WAY AID IN THE INSTITUTION OR PROSECUTION OF, ANY CLAIM, ACTION OR CAUSE OF ACTION, RIGHTS TO RECOVER DEBTS OR DEMANDS OF ANY NATURE AGAINST ANY OF THE RELEASED PARTIES ARISING OUT OF OR RELATED TO A RELEASED PARTY’S ACTIONS, OMISSIONS, STATEMENTS, REQUESTS OR DEMANDS IN ADMINISTERING, ENFORCING, MONITORING, COLLECTING OR ATTEMPTING TO COLLECT, THE OBLIGATIONS OF BORROWER TO A RELEASED PARTY. BORROWER AGREES TO INDEMNIFY AND HOLD AGENT AND EACH LENDER HARMLESS FROM ANY AND ALL MATTERS RELEASED PURSUANT TO THIS PARAGRAPH. BORROWER ACKNOWLEDGES THAT THE AGREEMENTS IN THIS PARAGRAPH ARE INTENDED TO BE IN FULL SATISFACTION OF ALL OR ANY ALLEGED INJURIES OR DAMAGES TO SUCH BORROWER, ITS SUCCESSORS, AGENTS, ATTORNEYS, OFFICERS, DIRECTORS, ASSIGNS AND PERSONAL AND LEGAL REPRESENTATIVES ARISING IN CONNECTION WITH SUCH MATTERS RELEASED PURSUANT TO THE OTHER PROVISIONS OF THIS PARAGRAPH. BORROWER REPRESENTS AND WARRANTS TO AGENT AND LENDERS THAT IT HAS NOT PURPORTED TO TRANSFER, ASSIGN OR OTHERWISE CONVEY ANY RIGHT, TITLE, OR INTEREST OF BORROWER IN ANY RELEASED MATTER TO ANY OTHER PERSON AND THAT THE FOREGOING CONSTITUTES A FULL AND COMPLETE RELEASE OF BORROWER’S CLAIMS WITH RESPECT TO ALL SUCH MATTERS. THE PROVISIONS OF THIS SECTION 7.10 AND THE REPRESENTATIONS, WARRANTIES, RELEASES, WAIVERS, ACQUITTANCES, DISCHARGES, COVENANTS, AGREEMENTS AND INDEMNIFICATIONS CONTAINED HEREIN (A) CONSTITUTE A MATERIAL CONSIDERATION FOR AND INDUCEMENT TO AGENT AND LENDERS ENTERING INTO THIS AGREEMENT, (B) DO NOT CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY DUTY, OBLIGATION OR LIABILITY OF AGENT OR ANY LENDER TO BORROWER OR ANY OTHER PERSON, (C) DO NOT CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY LIABILITY, WRONGDOING; OR VIOLATION OF ANY OBLIGATION, DUTY OR AGREEMENT OF AGENT OR A LENDER TO BORROWER OR ANY OTHER PERSON, AND (D) SHALL NOT BE USED AS EVIDENCE AGAINST AGENT OR A LENDER BY BORROWER OR ANY OTHER PERSON FOR ANY PURPOSE.
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(a) no failure or delay by Agent or any Lender in exercising any right, power or remedy under this Agreement or under any of the other Loan Documents shall operate as a waiver thereof, (b) no failure or delay by Agent or any Lender to insist upon the strict performance by such Borrower of any term, condition, covenant or agreement or to exercise any right, power or remedy as a result of the breach thereof shall constitute a waiver of any such term, condition, covenant or agreement or of any breach thereof or preclude Agent or any Lender from insisting on the strict performance thereof, and (c) no single or partial exercise of any right, power or remedy of Agent or any Lender shall preclude further exercise of any right, power or remedy. THIS AGREEMENT (AND THE TERMINATION OR EXPIRATION THEREOF) IS NOT TO BE CONSTRUED AS A CURE, WAIVER, OR FORGIVENESS OF ANY EXISTING DEFAULT.
[Remainder of Page Intentionally Blank – Signatures Follow]
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IN WITNESS WHEREOF, this Agreement has been executed on the date first above written, to be effective upon satisfaction of the conditions set forth in this Agreement.
AGENT AND LENDERS:
SWK FUNDING LLC
By: /s/ Joe D Staggs
Name: Joe D Staggs
Title: CEO
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BORROWER:
BIOLASE, INC.
By:/s/ John Beaver
Name: John Beaver
Title: President & CEO
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Schedule I
SALE PROCESS MILESTONES
Not later than the applicable date set forth below (if one is stated, or if none is stated, then Borrower shall generally covenant as follows), Borrower shall cause each of the following to be satisfied (along with evidence of, and deliveries related to, the same to be delivered to Agent):
Borrower and the Stalking Horse Bidder shall execute a purchase and sale agreement, satisfactory to Agent in its sole discretion, no later than September 30, 2024.
The Sale Process will proceed, subject to approval by the Bankruptcy Court, as follows:
During the Sale Process, the Borrower shall concurrently prepare for a voluntary chapter 11 filing under the Bankruptcy Code, with such preparation to include the preparation of a budget for the period of the case and first day orders.
All milestones occurring after the commencement of the Borrower’ bankruptcy proceedings are subject to change by the bankruptcy court to accommodate its own schedule.
For the avoidance of doubt, nothing on this Schedule or otherwise shall constitute the consent or approval of Agent or any Lender to the consummation of any of the transactions described above or contemplated by any of the deliverables contemplated above.
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