Document:

biol-ex105_188.htm

 

	
 
	
 
	
 
	
 
	
Exhibit 10.5

	
DocuSign Envelope ID: 09AA0FC5-7A91-44F0-96D5-EE07D9889BB8
	
 
	
Doc # L-01-1032454-01

	
 
	
 
	
 
	
 
	
 

	
 
	
SBA Loan #2089847810
	
 
	
 
	
Application #3600228534
	
 

 

	

	
U.S. Small Business Administration

NOTE

(SECURED DISASTER LOANS)
	
Date: 05.22.2020

	
Loan Amount: $150,000.00

	
Annual Interest Rate: 3.75%

		
	
SBA Loan # 2089847810
	
Application #3600228534

	
 
	
1.
	
PROMISE TO PAY: In return for a loan, Borrower promises to pay to the order of SBA the amount of  one hundred and fifty thousand  and 00/100 Dollars ($150,000.00), interest on the unpaid principal balance, and all other amounts required by this Note.

	
 
	
2.
	
DEFINITIONS: A) “Collateral” means any property taken as security for payment of this Note or any guarantee of this Note. B) “Guarantor” means each person or entity that signs a guarantee of payment of this Note. C) “Loan Documents” means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.

	
 
	
3.
	
PAYMENT TERMS: Borrower must make all payments at the place SBA designates. Borrower may prepay this Note in part or in full at any time, without notice or penalty. Borrower must pay principal and interest payments of $731.00 every month beginning Twelve (12) months from the date of the Note. SBA will apply each installment payment first to pay interest accrued to the day SBA receives the payment and will then apply any remaining balance to reduce principal. All remaining principal and accrued interest is due and payable Thirty (30) years from the date of the Note.

	
 
	
4.
	
DEFAULT: Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower: A) Fails to comply with any provision of this Note, the Loan Authorization and Agreement, or other Loan Documents; B) Defaults on any other SBA loan; C) Sells or otherwise transfers, or does not preserve or account to SBA’s satisfaction for, any of the Collateral or its proceeds; D) Does not disclose, or anyone acting on their behalf does not disclose, any material fact to SBA; E) Makes, or anyone acting on their behalf makes, a materially false or misleading representation to SBA; F) Defaults on any loan or agreement with another creditor, if SBA believes the default may materially affect Borrower’s ability to pay this Note; G) Fails to pay any taxes when due; H) Becomes the subject of a proceeding under any bankruptcy or insolvency law; I) Has a receiver or liquidator appointed for any part of their business or property; J) Makes an assignment for the benefit of creditors; K) Has any adverse change in financial condition or business operation that SBA believes may materially affect Borrower’s ability to pay this Note; L) Dies; M) Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without SBA’s prior written consent; or, N) Becomes the subject of a civil or criminal action that SBA believes may materially affect Borrower’s ability to pay this Note.

	
 
	
5.
	
SBA’S RIGHTS IF THERE IS A DEFAULT: Without notice or demand and without giving up any of its rights, SBA may: A) Require immediate payment of all amounts owing under this Note; B) Have recourse to collect all amounts owing from any Borrower or Guarantor (if any); C) File suit and obtain judgment; D) Take possession of any Collateral; or E) Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

Page 2 of 3

 

	
DocuSign Envelope ID: 09AA0FC5-7A91-44F0-96D5-EE07D9889BB8
	
 
	
Doc # L-01-1032454-01

	
 
	
 
	
 
	
 
	
 

	
 
	
SBA Loan #2089847810
	
 
	
 
	
Application #3600228534
	
 

	
 
	
6.
	
SBA’S GENERAL POWERS: Without notice and without Borrower’s consent, SBA may: A) Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses; B) Collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs. If SBA incurs such expenses, it may demand immediate reimbursement from Borrower or add the expenses to the principal balance; C) Release anyone obligated to pay this Note; D) Compromise, release, renew, extend or substitute any of the Collateral; and E) Take any action necessary to protect the Collateral or collect amounts owing on this Note.

	
 
	
7.
	
FEDERAL LAW APPLIES: When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.

	
 
	
8.
	
GENERAL PROVISIONS: A) All individuals and entities signing this Note are jointly and severally liable. B) Borrower waives all suretyship defenses. C) Borrower must sign all documents required at any time to comply with the Loan Documents and to enable SBA to acquire, perfect, or maintain SBA’s liens on Collateral. D) SBA may exercise any of its rights separately or together, as many times and in any order it chooses. SBA may delay or forgo enforcing any of its rights without giving up any of them. E) Borrower may not use an oral statement of SBA to contradict or alter the written terms of this Note. F) If any part of this Note is unenforceable, all other parts remain in effect. G) To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that SBA did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale. H) SBA may sell or otherwise transfer this Note.

	
 
	
9.
	
MISUSE OF LOAN FUNDS: Anyone who wrongfully misapplies any proceeds of the loan will be civilly liable to SBA for one and one- half times the proceeds disbursed, in addition to other remedies allowed by law.

	
 
	
10.
	
BORROWER’S NAME(S) AND SIGNATURE(S): By signing below, each individual or entity acknowledges and accepts personal obligation and full liability under the Note as Borrower.

 

 

	
 
	
 
	
Biolase, Inc.
	
 

	
 
	
 
	
/s/ John Beaver
	
 

	
 
	
 
	
John Beaver, Owner/Officer
	
 

 

Page 3 of 3biol-ex108_190.htm

Exhibit 10.8

 

SIXTH AMENDMENT TO 

CREDIT AGREEMENT 

 

THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of August 12, 2020, is entered into by and among BIOLASE, INC., a Delaware corporation (“Borrower”), each of the undersigned financial institutions (individually each a “Lender” and collectively “Lenders”) and SWK FUNDING LLC, a Delaware limited liability company, in its capacity as administrative agent for the other Lenders (in such capacity, “Agent”).

RECITALS

WHEREAS, Borrower, Agent and Lenders entered into that certain Credit Agreement dated as of November 9, 2018 (as heretofore amended and as the same may be further amended, modified or restated from time to time, being hereinafter referred to as the “Credit Agreement”); and

WHEREAS,  Borrower, Agent and Lenders have agreed to amend certain provisions of the Credit Agreement as more fully set forth herein. 

AGREEMENT

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

1.1Capitalized terms used in this Amendment are defined in the Credit Agreement, as amended hereby, unless otherwise stated.

ARTICLE II

Amendments to Credit Agreement

2.1Amendments to Section 1.1.Effective as of the date hereof, Section 1.1 of the Credit Agreement is hereby amended and restated as follows:

(a)The definition of “Interest Only Extension Conditions” is deleted in its entirety. 

(b)The definition of “Term Loan Maturity Date” is amended and restated to read as follows:

“Term Loan Maturity Date means May 9, 2024.”

 

[Biolase] Sixth Amendment

#77639673

 

2.2Amendments to Section 2.9.1(b) of the Credit Agreement.  Effective as of the date hereof, Section 2.9.1(b) of the Credit Agreement is hereby amended as follows:

(a)Clause (iv) is amended and restated to read as follows:

“(iv)FOURTH, as it relates to each Payment Date on or after the Payment Date occurring in May 2022 to the payment of all principal of the Loans, pro rata based on each Lender’s Pro Rata Term Loan Share, up to an aggregate amount of $700,000 on any such Payment Date;”

(b)The last paragaph containce in uSection 2.9.1(b) is amended and restated to read as follows:

“In the event that the amounts distributed under this clause (b) on any Payment Date are insufficient for payment of the amounts set forth in clauses (i) through (iii) above for such Payment Date, Borrower shall pay an amount equal to the extent of such insufficiency within five (5) Business Days (or such longer period as Agent may agree in its sole discretion) of request by Agent.  For the avoidance of doubt, at all times prior to the Payment Date in May 2022, Borrower shall only be required to pay Revenue-Based Payments to the extent of amounts owing under clauses (i), (ii), and (iii) above on each such Payment Date prior to the Payment Date in May 2022.”

2.3Amendments to Section 7.13.  Effective as of the date hereof, Section 7.13 of the Credit Agreement is hereby amended and restated to read as follows:

“7.13Financial Covenants.

7.13.1Consolidated Unencumbered Liquid Assets.

(i) Not permit the Consolidated Unencumbered Liquid Assets as of any date of determination prior to December 31, 2020 to be less than $7,500,000, and (ii) not permit the Consolidated Unencumbered Liquid Assets as of any date of determination on or after January 1, 2021 to be less than $3,000,000.

7.13.2Minimum Aggregate Revenue.  

Not permit Aggregate Revenue for the consecutive month period ending on the last Business Day of any Fiscal Quarter set forth in the table below (designated by “Q” in the table below) to be less than the applicable amount set forth in the table below for such period. 

 

 

 

 

	
Minimum LTM Aggregate Revenue as of the end of:

	
Three (3) month period ending Q1 2021
	
$7,000,000

	
Six (6) month period ending Q2 2021
	
$15,000,000

	
Nine (9) month period ending Q3 2021
	
$24,000,000

	
Twelve (12) month period ending Q4 2021 
	
$34,000,000

	
Twelve (12) month period ending Q1 2022 
	
$36,000,000

	
Twelve (12) month period ending Q2 2022 
	
$37,000,000

	
Twelve (12) month period ending Q3 2022 
	
$38,000,000

	
Twelve (12) month period ending Q4 2022 and each Fiscal Quarter thereafter
	
$40,000,000

 

7.13.3Minimum EBITDA.  

Not permit the EBITDA of Borrower and its Subsidiaries for the consecutive month period ending on the last Business Day of any Fiscal Quarter set forth in the table below (designated by “Q” in the table below) to be less than the applicable amount set forth in the table below for such period. 

	
Minimum LTM EBITDA as of the end of:

	
Three (3) month period ending Q1 2021
	
-($2,000,000)

	
Six (6) month period ending Q2 2021
	
-($2,500,000)

	
Nine (9) month period ending Q3 2021
	
-($2,500,000)

	
Twelve (12) month period ending Q4 2021 
	
-($2,000,000)

	
Twelve (12) month period ending Q1 2022 
	
-($1,000,000)

	
Twelve (12) month period ending Q2 2022 
	
-($1,000,000)

	
Twelve (12) month period ending Q3 2022 
	
-($1,000,000)

	
Twelve (12) month period ending Q4 2022 and each Fiscal Quarter thereafter
	
$1

 

 

 

 

ARTICLE III

Conditions Precedent 

3.1Conditions Precedent.  The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent in a manner satisfactory to Agent, unless specifically waived in writing by Agent in its sole discretion:

(A).Agent shall have received (i) this Amendment duly executed by Borrower and (ii) that certain Third Consolidated, Amended and Restated Warrant to Purchase Stock executed by Borrower in favor of Agent.

(B).The representations and warranties contained herein and in the Credit Agreement and the other Loan Documents, as each is amended hereby, shall be true and correct as of the date hereof, as if made on the date hereof, except for such representations and warranties as are by their express terms limited to a specific date.

(C).Agent shall have received payment, for the benefit of Lenders, of (i) a principal payment of the Term Loan in an amount not less than $700,000 (for the avoidance of doubt, no prepayment fee shall be applicable in relation to such principal payment, provided, however, that such prepaid principal amount shall still be included in the calculation of the Exit Fee due pursuant to Section 2.7(b) of the Credit Agreement), and (ii) an amendment fee in the amount of $25,000, which shall be deemed fully-earned and non-refundable as of the date hereof

(D).No Default or Event of Default (other than the Specified Non-Compliance Items) under the Credit Agreement, as amended hereby, shall have occurred and be continuing, unless such Default or Event of Default has been otherwise specifically waived in writing by Agent.

ARTICLE IV

Limited Waiver, Ratifications, Representations and Warranties

4.1Limited Waiver.  

(a)Borrower was in non-compliance with the requirements of Sections 7.13.2 and 7.13.3 for the applicable periods ending June 30, 2020, which failures constitute Events of Default under Section 8.1.4 of the Credit Agreement (the “Specified Non-Compliance Items”).  Agent, on behalf of itself and the Lenders, hereby waives the Specified Non-Compliance Items effective as of the date hereof.

(b)Except as specifically set forth above in relation to the Specified Non-Compliance Items, nothing contained in this Amendment or any other communication between Agent, any Lender, Borrower or any other Loan Party shall be a waiver of any past, present or future non-compliance, violation, Default or Event of Default of Borrower under the Credit Agreement or any Loan Document.  Except as specifically set forth above in relation to the Specified Non-Compliance Items, Agent and each Lender hereby 

 

 

 

expressly reserves any rights, privileges and remedies under the Credit Agreement and each Loan Document that Lender may have with respect to any non-compliance, violation, Default or Event of Default, and any failure by Agent or any Lender to exercise any right, privilege or remedy as a result of the violations set forth above shall not directly or indirectly in any way whatsoever either (i) impair, prejudice or otherwise adversely affect the rights of Agent or any Lender, except as set forth herein, at any time to exercise any right, privilege or remedy in connection with the Credit Agreement or any Loan Document, (ii) amend or alter any provision of the Credit Agreement or any Loan Document or any other contract or instrument or (iii) constitute any course of dealing or other basis for altering any obligation of Borrower or any rights, privilege or remedy of Agent or any Lender under the Credit Agreement or any Loan Document or any other contract or instrument.  Nothing in this Amendment shall be construed to be a consent by Agent or any Lender to any prior, existing or future violations of the Credit Agreement or any Loan Document.

4.2Ratifications.  The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and the other Loan Documents, and, except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement and the other Loan Documents are ratified and confirmed and shall continue in full force and effect.  Borrower, Lenders and Agent agree that the Credit Agreement and the other Loan Documents, as amended hereby, shall continue to be legal, valid, binding and enforceable in accordance with their respective terms.  Borrower agrees that this Amendment is not intended to and shall not cause a novation with respect to any or all of the Obligations.

4.3Representations and Warranties.  Borrower hereby represents and warrants to Agent and Lenders that (a) the execution, delivery and performance of this Amendment, any and all other Loan Documents executed and/or delivered in connection herewith have been authorized by all requisite action (as applicable) on the part of Borrower and will not violate the organizational documents of Borrower; (b) Borrower’s directors and/or managers have authorized the execution, delivery and performance of this Amendment any and all other Loan Documents executed and/or delivered in connection herewith; (c) the representations and warranties contained in the Credit Agreement, as amended hereby, and any other Loan Document are true and correct on and as of the date hereof and on and as of the date of execution hereof as though made on and as of each such date (except to the extent such representations and warranties expressly relate to an earlier date); (d) except as it relates to the Specified Non-Compliance Items, no Default or Event of Default under the Credit Agreement, as amended hereby, has occurred and is continuing; (e) Loan Parties are in full compliance in all material respects with all covenants and agreements contained in the Credit Agreement and the other Loan Documents, as amended hereby; and (f) except as disclosed to Agent, no Loan Party has amended its organizational documents since the date of the Credit Agreement. 

 

 

 

ARTICLE V

Miscellaneous Provisions

5.1Survival of Representations and Warranties.   All representations and warranties made in the Credit Agreement or any other Loan Document, including, without limitation, any document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by Agent or any Lender or any closing shall affect the representations and warranties or the right of Agent and each Lender to rely upon them.

5.2Reference to Credit Agreement.  Each of the Credit Agreement and the other Loan Documents, and any and all other Loan Documents, documents or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Credit Agreement, as amended hereby, are hereby amended so that any reference in the Credit Agreement and such other Loan Documents to the Credit Agreement shall mean a reference to the Credit Agreement, as amended hereby.

5.3Expenses of Agent.  As provided in the Credit Agreement, Borrower agrees to pay on demand all costs and expenses incurred by Agent, or its Affiliates, in connection with the preparation, negotiation, and execution of this Amendment and the other Loan Documents executed pursuant hereto and any and all amendments, modifications, and supplements thereto, including, without limitation, the reasonable fees and costs of legal counsel, and all costs and expenses incurred by Agent and each Lender in connection with the enforcement or preservation of any rights under the Credit Agreement, as amended hereby, or any other Loan Documents, including, without, limitation, the reasonable fees and costs of legal counsel.  

5.4Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

5.5Successors and Assigns.  This Amendment is binding upon and shall inure to the benefit of Agent and each Lender and Borrower and their respective successors and assigns, except that no Loan Party may assign or transfer any of its rights or obligations hereunder without the prior written consent of Agent.

5.6Counterparts.  This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument.  This Amendment may be executed by facsimile or electronic (.pdf) transmission, which facsimile or electronic (.pdf) signatures shall be considered original executed counterparts for purposes of this Section 5.6, and each party to this Amendment agrees that it will be bound by its own facsimile or electronic (.pdf) signature and that it accepts the facsimile or electronic (.pdf) signature of each other party to this Amendment.

 

 

 

5.7Effect of Waiver.  No consent or waiver, express or implied, by Agent to or for any breach of or deviation from any covenant or condition by Borrower shall be deemed a consent to or waiver of any other breach of the same or any other covenant, condition or duty.

5.8Headings.  The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

5.9Applicable Law.  THE TERMS AND PROVISIONS OF SECTIONS 10.17 (GOVERNING LAW) AND 10.18 (FORUM SELECTION; CONSENT TO JURISDICTION) OF THE CREDIT AGREEMENT ARE HEREBY INCORPORATED HEREIN BY REFERENCE, AND SHALL APPLY TO THIS AMENDMENT MUTATIS MUTANDIS AS IF FULLY SET FORTH HEREIN.  

5.10Final Agreement.  THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED.  THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.  NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY Borrower AND AGENT.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

IN WITNESS WHEREOF, this Amendment has been executed and is effective as of the date first written above.

 

	
BORROWER:

	
 

	
BIOLASE., INC.,

	
a Delaware corporation

	
 
	
 
	
 

	
 
	
 
	
 

	
By:
	
/s/ John Beaver

	
Name:
	
John Beaver

	
Title:
	
COO & CFO

 

 

 

 

	
AGENT AND LENDER:

	
 

	
SWK FUNDING LLC,

	
as Agent and a Lender

	
 
	
 
	
 

	
 
	
 
	
 

	
By:
	
SWK Holdings Corporation,

	
 
	
its sole Manager

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By:
	
/s/ Winston Black

	
 
	
Name:
	
Winston Black

	
 
	
Title:
	
Chief Executive Officer and President

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