EX-10.1






AMENDMENT NO. 2 TO FORBEARANCE AGREEMENT




This Amendment No. 2 to Forbearance Agreement (this “Amendment”) is made as of June 3, 2014
(“Amendment Effective Date”) between Comerica Bank, a Texas banking association (the
“Bank”) and Biolase, Inc., a Delaware corporation (“Borrower”).



A. Borrower and Bank entered into a Forbearance Agreement dated April 10, 2014, as amended by
Amendment No. 1 to Forbearance Agreement dated May 5, 2014 (“Forbearance Agreement”) in
order to (1) govern and amend the terms and conditions of certain loans made by Bank to Borrower
pursuant to the Loan Agreement, the Borrower Agreement, and the Letter Agreement (as each is
defined in the Forbearance Agreement) and (2) provide terms and conditions on which Bank would
forbear from enforcing its remedies under the Loan Documents (as defined in the Forbearance
Agreement) due to the occurrence of certain events of default. In this Amendment, capitalized
terms that are used without separate definition shall have the meanings given to them in the Loan
Agreement or the Forbearance Agreement, as the case may be.



B. As of June 3, 2014, Borrower owed Bank the sum of:




(1) under the Domestic Line of Credit, a principal amount of $1,684,980.67 (not including,
to the extent applicable, any contingent obligations, e.g. those arising out of any undrawn
letters of credit issued by Bank for Borrower’s benefit) and accrued and unpaid interest in
the amount of $461.49; plus




(2) under the Export Line of Credit, a principal amount of $1,890,683.70 (not including, to
the extent applicable, any contingent obligations) and accrued and unpaid interest in the
amount of $495.58; plus




(3) any overdrafts in any bank accounts of Borrower at Bank; plus




(4) legal fees and costs and all other outstanding amounts and costs of enforcement due
under the Loan Agreement and the other Loan Documents.



The foregoing amounts, plus accruing interest and costs to the Amendment Effective Date and
accrued and accruing attorney fees and costs are collectively referred to in this Amendment as the
“Existing Debt”.



C. In addition to the Events of Default specifically identified in the Forbearance Agreement, a new
Event of Default has occurred and exists under the Loan Documents as follows (collectively with all
previously identified Events of Default, the “Cumulative Defaults”) as follows:




(1) The Domestic Line of Credit and the Export Line of Credit became due and payable in full
on June 1, 2014, and Borrower has not paid those obligations in full.



Borrower has not cured and Bank has not waived the Cumulative Defaults.



D. The Cumulative Defaults entitle Bank immediately to enforce all the remedies set forth in the
Loan Agreement and the Loan Documents. Borrower has asked Bank to forbear from exercising those
remedies as a result of the Cumulative Defaults and to extend the maturity dates for the Domestic
Line of Credit and the Export Line of Credit, and Bank has agreed, subject to the terms of this
Agreement, provided Borrower enters into and complies with this Amendment.



Accordingly, Borrower and Bank agree as follows:



1. Existing Debt. Borrower acknowledges and agrees that the amount of the Existing Debt as
of the Amendment Effective Date is as set forth above.



2. Extension of Forbearance Period. The Forbearance Period (as defined in Section 4 of the
Forbearance Agreement) is hereby extended to the earliest of (i) August 1, 2014, (ii) such date
that there shall occur any further Event of Default, or (iii) any date on which Bank terminates the
forbearance under the Forbearance Agreement pursuant to its terms.



3. Amendment to Loan Agreement. The Loan Agreement is amended as follows:




(a) The term “Revolving Maturity Date” (as defined therein) is amended to be August 1, 2014.




(b) In the Prime Referenced Rate Addendum to Loan and Security Agreement dated May 7, 2013,
that is an addendum to the Loan Agreement, the term “Applicable Margin” (as set forth in
paragraph 1(a) thereof) is amended to be Two and One-half percent (2.50%) per annum.



4. Amendment of Export Note. Upon execution of this Agreement, Borrower shall execute and
deliver to Bank an Amendment No. 2 to the Export Note.



5. Amendment of Borrower Agreement. The Borrower Agreement is amended to provide that the
“Final Disbursement Date” (as defined therein) is amended to be August 1, 2014.



6. Second Forbearance Fee. In consideration of Bank’s execution of this Agreement,
Borrower shall pay Bank a fee equal to $30,000.00 (the “Third Forbearance Fee”) of which
(a) $15,000.00 is payable on the Amendment Effective Date, and (b) $15,000.00 is payable on August
1, 2014, except that if all of the Obligations (as defined in the Loan Agreement) have been paid in
full prior to that date, payment of this portion of the Third Forbearance Fee will be waived. The
Third Forbearance Fee shall be fully earned as of the Amendment Effective Date and nonrefundable
when paid. The Third Forbearance Fee includes the fee to be paid to Ex Im Bank in connection with
this Amendment.



7. Representations and Warranties. Borrower hereby represents and warrants that,




(a) Except as expressly modified in this Amendment, the representations, warranties, and
covenants set forth in the Loan Agreement and the Forbearance Agreement and in the Loan
Documents, as defined in the Forbearance Agreement, remain true and correct, continue to be
satisfied in all respects, and are legal, valid and binding obligations with the same force
and effect as if entirely restated in this Amendment.




(b) No Event of Default or failure of condition has occurred or exists, or would exist with
notice or lapse of time or both under any of the Loan Documents, other than the Cumulative
Defaults.




(c) The forbearance period granted pursuant to the terms of this Amendment is reasonable and
is based upon the projections of Borrower.




(d) All representations and warranties of Borrower in this Agreement and the Loan Documents
are true and correct as of the date hereof, and shall survive the execution of this
Agreement.




(e) When executed, this Amendment will be a duly authorized, legal, valid, and binding
obligation of Borrower enforceable in accordance with its terms.




(f) All of Borrower’ deposit accounts (including operating and payroll accounts) and
investment accounts are maintained with Bank except as set forth in the Forbearance
Agreement.



8. Conditions Precedent. The effectiveness of this Amendment is subject to Bank’s receipt
of all of the following (each in form and substance satisfactory to Bank in all respects):




(a) this Agreement, the documents listed on attached Schedule 8(a), and such other
agreements and instruments reasonably requested by Bank pursuant hereto (including such
documents as are necessary to create and perfect Bank’s interest in the Collateral), each
duly executed by Borrower;




(b) a Reaffirmation of Guaranties by the Guarantors in the form attached to this Agreement;




(c) payment of all Bank Expenses incurred through the date of this Agreement;




(d) payment of the Second Extension Fee; and




(e) such other documents and completion of such other matters as Bank may reasonably deem
necessary or appropriate.



9. Approval of Ex Im Bank. Borrower acknowledges that Ex Im Bank needs to approve the
extension of the Maturity Date under the Export Note, the corresponding extension of the Final
Disbursement Date, and any further advances under the Export Line of Credit notwithstanding the
Cumulative Defaults. If Ex Im Bank declines to approve the extensions to the Maturity Date and the
Final Disbursement Date, Bank may, but is not obligated to, terminate the period of forbearance.



10. No Other Changes. Except as specifically provided in this Amendment, it does not vary
the terms and provisions of the Loan Agreement, the Forbearance Agreement, or any of the Loan
Documents. This Amendment shall not impair the rights, remedies, and security given in and by the
Loan Agreement, the Forbearance Agreement, or any of the Loan Documents. The terms of this
Amendment shall control any conflict between its terms and those of the Loan Agreement, the
Forbearance Agreement, or any of the Loan Documents.



11. Ratification. Except for the modifications under this Amendment, the parties ratify
and confirm the Loan Agreement, the Forbearance Agreement, or any of the Loan Documents and agree
that they remain in full force and effect.



12. Further Modification; No Reliance. This Amendment may be altered or modified only by
written instrument duly executed by Borrower and Bank. In executing this Amendment, Borrower is
not relying on any promise or commitment of Bank that is not in writing signed by Bank.



13. Confirmation of Lien Upon Collateral. Borrower acknowledges and agrees that the
obligations of Borrower under the Loan Agreement, the Forbearance Agreement, or any of the Loan
Documents are secured by the Collateral (as defined in the Loan Agreement). The Collateral is and
shall remain subject to and encumbered by the lien, charge, and encumbrance of the Loan Agreement,
the Forbearance Agreement, or any applicable Loan Document, and nothing herein contained shall
affect or be construed to affect the lien or encumbrance created by the Loan Agreement, the
Forbearance Agreement, or any applicable Loan Document respecting the Collateral, or its priority
over other liens or encumbrances.



14. Successors and Assigns. This Amendment shall inure to the benefit of and be binding
upon the parties and their respective successors and assigns.



15. Release.




(a) Borrower acknowledges that Bank would not enter into this Amendment without Borrower’s
assurance hereunder. Except for the obligations arising hereafter under this Amendment,
Borrower hereby absolutely discharges and releases Ex Im Bank, Bank, any person or entity
that has obtained any interest from Bank under any of the Loan Documents and each of Ex Im
Bank’s, Bank’s and such entity’s former and present partners, stockholders, officers,
directors, employees, successors, assignees, agents and attorneys from any known or unknown
claims which Borrower now has against Bank and/or Ex Im Bank of any nature, including any
claims that Borrower, its successors, counsel, and advisors may in the future discover they
would have now had if they had known facts not now known to them, whether founded in
contract, in tort or pursuant to any other theory of liability, including but not limited to
any claims arising out of or related to any of the Loan Documents or the transactions
contemplated thereby.




(b) Borrower waives the provisions of California Civil Code Section 1542, which states:



A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.




(c) The provisions, waivers and releases set forth in this section are binding upon Borrower
and Borrower’s shareholders, agents, employees, assigns and successors in interest. The
provisions, waivers and releases of this section shall inure to the benefit of Bank and its
agents, employees, officers, directors, assigns and successors in interest.




(d) Borrower warrants and represents that Borrower is the sole and lawful owner of all
right, title and interest in and to all of the claims released hereby and Borrower has not
heretofore voluntarily, by operation of law or otherwise, assigned or transferred or
purported to assign or transfer to any person any such claim or any portion thereof.
Borrower shall indemnify and hold harmless Bank from and against any claim, demand, damage,
debt, liability (including payment of attorneys’ fees and costs actually incurred whether or
not litigation is commenced) based on or arising out of any assignment or transfer.




(e) The provisions of this section shall survive payment in full of the Indebtedness, full
performance of all the terms of this Amendment and the Loan Documents, and/or Bank’s actions
to exercise any remedy available under the Loan Documents or otherwise.



16. Consultation of Counsel. Borrower acknowledges that Borrower has had the opportunity
to be represented by legal counsel of its own choice throughout all of the negotiations that
preceded the execution of this Amendment. Borrower has executed this Agreement after reviewing and
understanding each provision of this Agreement and without reliance upon any promise or
representation of any person or persons acting for or on behalf of Bank. Borrower further
acknowledges that Borrower and its counsel have had adequate opportunity to make whatever
investigation or inquiry they may deem necessary or desirable in connection with the subject matter
of this Amendment prior to the execution hereof and the delivery and acceptance of the
consideration described herein.



17. Expenses. Borrower shall promptly pay all out-of-pocket fees, costs, charges,
expenses, and disbursements of Bank incurred in connection with the preparation, execution, and
delivery of this Amendment, and the other documents contemplated by this Amendment.



18. Counterparts. This Amendment may be executed in one or more counterparts, and by
separate parties on separate counterparts, all of which shall constitute one and the same
agreement.



[end of Amendment; signatures on next page]





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This Amendment No. 2 to Forbearance Agreement is executed and delivered as of the Amendment
Effective Date.



	 	 	 
	Comerica Bank	 	Biolase, Inc.
	By: /s/ David R. Ferree

Name: David R. Ferree

Title: Vice President

	 	By:/s/ Frederick D. Furry

Name: Frederick D. Furry

Title: Chief Financial Officer
	Address for notices:

	 	Address for notices:
	333 West Santa Clara Street

12th Floor, Dept. MC4841

San Jose, CA 95113

Fax: 408-556-5855

	 	4 Cromwell

Irvine, CA 92618

Attn: Federico Pignatelli, Chairman and CEO

FAX: (949) 273-6685






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