Exhibit 10.3

THIRD AMENDMENT TO LEASE

I.PARTIES AND DATE.

This Third Amendment to Lease (the "Amendment") dated March 16, 2015, is by and
between THE IRVINE COMPANY LLC, a Delaware limited liability company
(“Landlord”), and BIOLASE, INC. (formerly known as Biolase Technology, Inc.), a
Delaware corporation (“Tenant”).

II.RECITALS.

On January 10, 2006, Landlord and Tenant entered into a lease for space in a
building located at 4 Cromwell, Irvine, California (“Premises”), which lease was
amended by a First Amendment to Lease dated September 24, 2009 and by a Second
Amendment to Lease dated January 4, 2011.  The foregoing lease, as so amended,
is hereinafter referred to as the “Lease”.

Landlord and Tenant each desire to modify the Lease to extend the Lease Term, to
adjust the Basic Rent and to make such other modifications as are set forth in
"III. MODIFICATIONS" next below.

III.MODIFICATIONS.

A.  Basic Lease Provisions.  The Basic Lease Provisions are hereby amended as
follows:

1.

Item 5 is hereby deleted in its entirety and substituted therefor shall be the
following:

“5.  Lease Term:  The Term of this Lease shall expire at midnight on

April 30, 2020.”

2.Item 6 is hereby amended by adding the following:

“Commencing May 1, 2015, the Basic Rent shall be Forty Five Thousand Five
Hundred Twenty Dollars ($45,520.00) per month, based on $.80 per rentable square
foot.

Commencing May 1, 2016, the Basic Rent shall be Forty Seven Thousand Seven
Hundred Ninety-Six Dollars ($47,796.00) per month, based on $.84 per rentable
square foot.

Commencing May 1, 2017, the Basic Rent shall be Fifty Thousand Seventy Two
Dollars ($50,072.00) per month, based on $.88 per rentable square foot.

Commencing May 1, 2018, the Basic Rent shall be Fifty Two Thousand Three Hundred
Forty-Eight Dollars ($52,348.00) per month, based on $.92 per rentable square
foot.

Commencing May 1, 2019, the Basic Rent shall be Fifty Four Thousand Six Hundred
Twenty-Four Dollars ($54,624.00) per month, based on $.96 per rentable square
foot.”

B.  Parking.  Section 6.4 of the Lease is hereby amended to provide that Tenant
shall not assign or sublet any of the parking spaces, either voluntarily or by
operation of law, without the prior written consent of Landlord, except in
connection with an authorized assignment of the Lease or subletting of the
Premises.

 

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C.  Brokers.  Article XVIII of the Lease is amended to provide that the parties
recognize the following parties as the brokers who negotiated this Amendment,
and agree that Landlord shall be responsible for payment of brokerage
commissions to such brokers pursuant to its separate agreements with such
brokers: Irvine Realty Company (“Landlord’s Broker”) is the agent of Landlord
exclusively and CBRE Brokerage Services (“Tenant’s Broker”) is the agent of
Tenant exclusively.  By the execution of this Amendment, each of Landlord and
Tenant hereby acknowledge and confirm (a) receipt of a copy of a Disclosure
Regarding Real Estate Agency Relationship conforming to the requirements of
California Civil Code 2079.16, and (b) the agency relationships specified
herein, which acknowledgement and confirmation is expressly made for the benefit
of Tenant’s Broker.  If there is no Tenant’s Broker so identified herein, then
such acknowledgement and confirmation is expressly made for the benefit of
Landlord’s Broker.  By the execution of this Amendment, Landlord and Tenant are
executing the confirmation of the agency relationships set forth herein. The
warranty and indemnity provisions of Article XVIII of the Lease, as amended
hereby, shall be binding and enforceable in connection with the negotiation of
this Amendment.

D.  Acceptance of Premises; Tenant Improvements.  Tenant acknowledges that the
lease of the Premises pursuant to this Amendment shall be on an “as-is” basis
without further obligation on Landlord’s part as to improvements whatsoever,
except that Landlord hereby agrees to complete the Tenant Improvements for the
Premises in accordance with the provisions of Exhibit X, Work Letter, attached
hereto.  The foregoing shall not affect any pre-existing obligations under any
representations and warranties expressly made by Landlord pursuant to the Lease,
but any such representations and warranties shall not be deemed re-made pursuant
to this Amendment.

IV.GENERAL.

A.  Effect of Amendments.  The Lease shall remain in full force and effect and
unmodified except to the extent that it is modified by this Amendment.

B.  Entire Agreement.  This Amendment embodies the entire understanding between
Landlord and Tenant with respect to the modifications set forth in "III.
MODIFICATIONS" above and can be changed only by a writing signed by Landlord and
Tenant.

C.  Defined Terms.  All words commencing with initial capital letters in this
Amendment and defined in the Lease shall have the same meaning in this Amendment
as in the Lease, unless they are otherwise defined in this Amendment.

D.  Corporate and Partnership Authority.  If Tenant is a corporation or
partnership, or is comprised of either or both of them, each individual
executing this Amendment for the corporation or partnership represents that he
or she is duly authorized to execute and deliver this Amendment on behalf of the
corporation or partnership and that this Amendment is binding upon the
corporation or partnership in accordance with its terms.

E.  Counterparts; Digital Signatures.  If this Amendment is executed in
counterparts, each is hereby declared to be an original; all, however, shall
constitute but one and the same amendment.  In any action or proceeding, any
photographic, photostatic, or other copy of this Amendment may be introduced
into evidence without foundation. The parties agree to accept a digital image
(including but not limited to an image in the form of a PDF, JPEG, GIF file, or
other e-signature) of this Amendment, if applicable, reflecting the execution of
one or both of the parties, as a true and correct original.

F. Certified Access Specialist.  As of the date of this Amendment, there has
been no inspection of the Building and Project by a Certified Access Specialist
as referenced in Section 1938 of the California Civil Code.

 

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V.EXECUTION.

 

Landlord and Tenant executed this Amendment on the date as set forth in "I.
PARTIES AND DATE." above.

 

 

LANDLORD:

 

TENANT:

 

 

 

THE IRVINE COMPANY LLC

 

BIOLASE, INC.

a Delaware limited liability company

 

a Delaware corporation

 

 

 

 

By /s/ Steven M. Case

 

By /s/ Brendan O’Connell

Steven M. Case, Executive Vice President

 

Name: Brendan O’Connell

Office Properties

 

Title: VP Finance / Corporate Controller

 

 

 

 

 

By /s/ Michael T. Bennett

 

By /s/ David Dreyer

Michael T. Bennett, Senior Vice President

 

Name: David Dreyer

Operations, Office Properties

 

Title: Chief Financial Officer

 

 

 

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EXHIBIT X

INDUSTRIAL WORK LETTER

DOLLAR ALLOWANCE

[PREAPPROVED PRELIMINARY PLAN]

The tenant improvement work to be contracted for by Landlord hereunder ("Tenant
Improvement Work") shall consist of the design and construction of all tenant
improvements ("Tenant Improvements”), including work in place as of the date
hereof, required for the Premises pursuant to the approved final Working
Drawings and Specifications (as hereinafter defined).  All of the Tenant
Improvement Work shall be performed by a contractor selected by Landlord and in
accordance with the procedures and requirements set forth below.

I.ARCHITECTURAL AND CONSTRUCTION PROCEDURES.

A.  Prior to the execution of this Lease, Tenant and Landlord have approved a
detailed plan for the Tenant Improvements prepared by H. Hendy Associates, dated
December 16, 2014 (“Preliminary Plan”), and (ii) an estimate prepared by Casco
Contractors, dated January 5, 2014 of the cost to complete the Tenant
Improvements in accordance with the Preliminary Plan (“Preliminary Cost
Estimate”).  To the extent applicable, the build-out of the Tenant Improvements
shall include Landlord’s building standard tenant improvements, materials and
specifications for the Project (“Building Standard Improvements”), except for
those additions or variations to Building Standard Improvements expressly
approved by Landlord and noted on the Preliminary Plan (any such addition or
variation from the Standard Improvements shall be referred to herein as a
“Non-Standard Improvement”)

B.  Within 5 business days following any request from Landlord or Landlord’s
architect, Tenant shall provide in writing to Landlord or Landlord's architect
all specifications and information requested by Landlord for the preparation of
final construction documents and costing, including without limitation Tenant's
final selection of paint and floor finishes, complete specifications and
locations (including electrical, load and HVAC requirements) of Tenant's
equipment, and details of all Non-Standard Improvements (as defined above) which
have been approved by Landlord as part of the Preliminary Plan (collectively,
"Programming Information").  Tenant understands that final construction
documents for the Tenant Improvements shall be predicated on the Programming
Information, and accordingly that such information must be accurate and complete
and that any defects or problems due to incomplete or inaccurate Programming
Information shall be the responsibility of the Tenant and that the Landlord
shall have no obligation or liability for such defects or problems arising from
any incomplete or inaccurate Programming Information.  

C.  Following receipt of the Programming Information, Landlord's architect and
engineers shall prepare and deliver to Tenant working drawings and
specifications for the Tenant Improvements based on the approved Preliminary
Plan ("Working Drawings and Specifications"), and Landlord's contractor shall
prepare a final construction cost estimate ("Final Cost Estimate") for the
Tenant Improvements in conformity with the Working Drawings and
Specifications.  Tenant shall have 5 business days from the receipt thereof to
approve or disapprove the Working Drawings and Specifications and the Final Cost
Estimate.  Tenant shall not unreasonably withhold or delay its approval, and any
disapproval or requested modification shall be limited to items not consistent
with the approved Preliminary Plan or Preliminary Cost Estimate.  Should Tenant
disapprove the Working Drawings and Specifications or the Final Cost Estimate,
such disapproval shall be accompanied by specific reasons for disapproval and a
detailed list of requested revisions.  Any revision requested by Tenant and
accepted by Landlord, shall be incorporated into a revised set of Working
Drawings and Specifications and the Final Cost Estimate, and Tenant shall
approve same in writing within 5 business days of receipt without further
revision.  

D.  In the event that Tenant requests in writing a revision to the Working
Drawings and Specifications ("Change"), and Landlord so approves such Change as
provided in the Section next below, Landlord shall advise Tenant by written
change order as soon as is practical of any increase in the Completion Cost such
Change would cause.  Tenant shall approve or disapprove such change order, if
any, in writing within 2 business days following Tenant's receipt of such change
order.  If Tenant approves any such change order, Landlord, at its election, may
either (i) require as a condition to the effectiveness of such change order that
Tenant pay the increase in the Completion Cost attributable to such change order
concurrently with delivery of Tenant’s approval of the change order, or (ii)
defer Tenant’s payment of such increase until the date 10 business days after
delivery of invoices for same, provided however, that the Tenant Contribution
must in any event be paid in full prior to Tenant’s commencing occupancy of the
Premises.  If Tenant disapproves any such change order, Tenant shall nonetheless
be responsible for the reasonable architectural and/or planning fees incurred in
preparing such change order.  Landlord shall have no obligation to interrupt or
modify the Tenant Improvement Work pending Tenant's approval of a change order,
but if Tenant fails to timely approve a change order, Landlord may (but shall
not be required to) suspend the applicable Tenant Improvement Work.

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E.  Landlord agrees that it shall not unreasonably withhold its consent to
Tenant's requested Changes, provided that such consent may be withheld in all
events if the requested Change (i) is of a lesser quality than the Tenant
Improvements previously approved by Landlord, (ii) fails to conform to
applicable governmental requirements, (iii) would result in the Premises
requiring building services beyond the level Landlord has agreed to provide
Tenant under this Lease, (iv) would delay construction of the Tenant
Improvements, (v) interferes in any manner with the proper functioning of, or
Landlord’s access to, any mechanical, electrical, plumbing or HVAC systems,
facilities or equipment in or serving the Building,  or (vi) would have an
adverse aesthetic impact to the Premises or would cause additional expenses to
Landlord in reletting the Premises.  

F.  All Standard Tenant Improvements and Non-Standard Improvements shall become
the property of Landlord and shall be surrendered with the Premises at the end
of the expiration or sooner termination of this Lease, except that Landlord
shall have the right, by notice to Tenant given at the time of Tenant’s election
of any “Alternate” shown on the approved Preliminary Plan or at the time of
Landlord’s approval of any Change,  to require Tenant either: (i) to remove all
or any of such Alternate(s) which are elected by Tenant, and all or any of the
Tenant Improvements approved by way of such Change(s) requested by Tenant, to
repair any damage to the Premises or the Common Area arising from such removal,
and to replace any Non-Standard Improvements approved by way of such Change with
the applicable Building Standard, or (ii) to reimburse Landlord for the
reasonable cost of such removal, repair and replacement upon demand.  Any such
removals, repairs and replacements by Tenant shall be completed by the
Expiration Date or sooner termination of this Lease.  It is understood and
agreed, however, that Tenant shall not be required to remove or replace any
Tenant Improvements shown in the Preliminary Plan.

G.  It is understood that all or a portion of the Tenant Improvements may be
done during Tenant’s occupancy of the Premises.  In this regard, Tenant agrees
to assume any risk of injury, loss or damage to Tenant to the extent not the
result of Landlord’s negligence or willful misconduct.  While Landlord agrees to
employ construction practices reasonably intended to minimize disruptions to the
operation of Tenant’s business in the Premises, Tenant acknowledges and agrees
that some disruptions may occur during the course of construction of the Tenant
Improvements, and in no event shall rent abate as the result of the construction
of the Tenant Improvements.  Tenant shall pay for and cause Tenant’s furniture
and other equipment to be moved as necessary (including disconnecting and
reconnecting computers and telecommunications cabling equipment) so as to
facilitate the Tenant Improvements Work.

H.  It is further understood and agreed that the Tenant Improvements shall be
substantially completed not later than December 31, 2015 to be eligible for
funding by Landlord, and that Landlord shall not be obligated to fund any
portion of the Landlord’s Contribution towards the Tenant Improvements commenced
after such date.

I.  Tenant hereby designates Brendan O’Connell (“Tenant’s Construction
Representative”), Telephone No. (949) 361-1200, Email: boconnell@biolase.net, as
its representative, agent and attorney-in-fact for all matters related to the
Tenant Improvement Work, including but not by way of limitation, for purposes of
receiving notices, approving submittals and issuing requests for Changes, and
Landlord shall be entitled to rely upon authorizations and directives of such
person(s) as if given directly by Tenant.  The foregoing authorization is
intended to provide assurance to Landlord that it may rely upon the directives
and decision making of the Tenant’s Construction Representative with respect to
the Tenant Improvement Work and is not  intended to limit or reduce Landlord’s
right to reasonably rely upon any decisions or directives given by other
officers or representatives of Tenant.   Any notices or submittals to, or
requests of, Tenant related to this Work Letter and/or the Tenant Improvement
Work may be sent to Tenant’s Construction Representative at the email address
above provided. Tenant may amend the designation of its Tenant’s Construction
Representative(s) at any time upon delivery of written notice to Landlord.

II.COST OF TENANT IMPROVEMENTS

A.  Landlord shall complete, or cause to be completed, the Tenant Improvements,
at the construction cost shown in the Final Cost Estimate (subject to increases
for Landlord approved Changes and as otherwise provided in this Work Letter), in
accordance with final Working Drawings and Specifications approved by both
Landlord and Tenant.  

B.  Landlord shall pay up to $398,300.00, based on $7.00 per rentable square
foot of the Premises ("Landlord's Maximum Contribution"), of the final
“Completion Cost” (as defined below).  Tenant acknowledges that the Landlord's
Maximum Contribution is intended only as the maximum amount Landlord will pay
toward approved Tenant Improvements, and any partitions, modular office
stations, fixtures, cabling, furniture and equipment requested by Tenant are in
no event subject to payment as part of Landlord’s Contribution.  In the event
the Completion Cost of the Tenant Improvement Work is less than the Landlord’s
Maximum Contribution, Landlord’s actual contribution toward the Completion Cost
("Landlord's Contribution") shall equal such lesser amount, and Tenant shall
have no right to receive any credit, refund or allowance of any kind for any
unused portion of the Landlord's Maximum Contribution nor shall Tenant be
allowed to make revisions to an approved Preliminary Plan, Working Drawings and
Specifications or request a Change in an effort to apply any unused portion of
Landlord's Maximum Contribution.

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In addition to the Landlord’s Maximum Contribution, Landlord shall make
available to Tenant an amount not to exceed $284,500.00 (the “Landlord’s
Amortizing Contribution”), based on $5.00 per rentable square foot of the
Premises, to be utilized towards the Completion Cost. Tenant shall elect in
writing whether or not to use the Landlord’s Amortizing Contribution prior to
the commencement of the Tenant Improvement Work. The Landlord’s Amortizing
Contribution shall be subject to the limitations and restrictions provided in
this Work Letter for applications of the Landlord’s Contribution; provided,
however, that  any portion of the Landlord’s Amortizing Contribution funded by
Landlord towards the Completion Cost shall be amortized over the 60-month Term
of the Lease as extended by this Amendment using an interest factor of 7% per
annum, and the Basic Rent payable during the 60 months of the Lease Term as
extended by this Amendment shall be increased by said amortized payments,
retroactive to May 1, 2015. Upon request by Landlord, the amount of such rental
adjustment shall be memorialized on a form provided by Landlord.  In the event
that the amount of the rental adjustment is finally determined subsequent to May
1, 2015, Tenant shall promptly pay to Landlord a lump sum amount equal to the
total accrued sums owing due to the retroactive adjustment. 

C.  Tenant shall pay any costs due to inaccurate or incomplete Programming
Information and the amount, if any, by which aggregate Completion Cost for the
Tenant Improvement Work exceeds the Landlord’s Maximum Contribution and
Landlord’s Amortizing Contribution that Tenant elects to utilize.  The amounts
to be paid by Tenant for the Tenant Improvements pursuant to this Section II.C.
are sometimes cumulatively referred to herein as the “Tenant’s Contribution”.

D.  The “Completion Cost” shall mean all costs of Landlord in completing the
Tenant Improvements in accordance with the approved Working Drawings and
Specifications and with any approved Changes thereto, including but not limited
to the following costs:  (i) payments made to architects, engineers,
contractors, subcontractors and other third party consultants in the performance
of the work, (ii) permit fees and other sums paid to governmental agencies, and
(iii) costs of all materials incorporated into the work or used in connection
with the work.  The Completion Cost shall also include a construction management
fee to be paid to Landlord or to Landlord's management agent in the amount of
three percent (3%) of the Completion Cost.  Unless expressly authorized in
writing by Landlord, the Completion Cost shall not include (and no portion of
the Landlord Contribution shall be paid for) any costs incurred by Tenant,
including without limitation, any costs for space planners, managers, advisors
or consultants retained by Tenant in connection with the Tenant Improvements.

E.  Prior to start of construction of the Tenant Improvements, Tenant shall pay
to Landlord in full the amount of the Tenant's Contribution set forth in the
approved Preliminary Cost Estimate or in the Final Cost Estimate (once approved
by Tenant).  If the actual Completion Cost of the Tenant Improvements is greater
than the Final Cost Estimate because of Changes, modifications or extras not
reflected on the approved Working Drawings and Specifications, then Tenant shall
pay all such additional costs within 10 business days after written demand for
same.  The balance of any sums not otherwise paid by Tenant shall be due and
payable on or before the commencement of construction.  If Tenant defaults in
the payment of any sums due under this Work Letter, Landlord shall (in addition
to all other remedies) have the same rights as in the case of Tenant's failure
to pay rent under the Lease, including, without limitation, the right to
terminate this Lease and recover damages from Tenant and/or to charge a late
payment fee and to collect interest on delinquent payments, and Landlord may
(but shall not be required to) suspend the Tenant Improvement Work following
such default.

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