Document:

fs80913ex4i_mphase.htm

Exhibit 4.1

mPHASE TECHNOLOGIES, INC.

2001 STOCK INCENTIVE PLAN

AS RESTATED AND AMENDED

1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS

    mPhase Technologies, Inc., a New Jersey corporation (the "COMPANY"), hereby establishes the mPhase Technologies, Inc. 2001 Stock Incentive Plan (the "PLAN"). The purpose of the Plan is to promote the long-term growth and profitability of the Company by (i) providing key people with incentives toimprove stockholder value and to contribute to the growth and financial success of the Company, and (ii) enabling the Company to attract, retain and reward the best-available persons.

 

    The Plan is the continuation of the mPhase Technologies, Inc. AmendedLong-Term Stock Incentive Plan (the "PRIOR PLAN"), which is hereby merged andrestated as set forth herein. The provisions of the Prior Plan shall continue to control with respect to any options granted and outstanding thereunder that are intended to qualify as "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code to the extent necessary to preserve such status.

 

    The Plan permits the granting of stock options (including incentive stockoptions qualifying under Code section 422 and nonqualified stock options), stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards, other stock-based awards, or any combination of the foregoing.

2. DEFINITIONS

    Under this Plan, except where the context otherwise indicates, the following definitions apply:

 

    (a) "AFFILIATE" shall mean any entity, whether now or hereafter existing,which controls, is controlled by, or is under common control with, the Company (including, but not limited to, joint ventures, limited liability companies, and partnerships). For this purpose, "control" shall mean ownership of 50% or more of the total combined voting power or value of all classes of stock or interests of the entity.

 

    (b) "AWARD" shall mean any stock option, stock appreciation right, stockaward, phantom stock award, performance award, or other stock-based awardgranted under the Plan or the Prior Plan.

 

    (c) "BOARD" shall mean the Board of Directors of the Company.

 

    (d) "CHANGE IN CONTROL" means: (i) the acquisition (other than from theCompany) by any Person, as defined in this Section 2(d), of the beneficialownership (within the meaning of Rule 13d-3 promulgated under the SecuritiesExchange Act of 1934, as amended) of 50% or more of (A) the then outstandingshares of the securities of the Company, or (B) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the "COMPANY VOTING STOCK"); (ii) the closing of a sale or other conveyance of all or substantially all of the assets of the Company; or (iii) the effective time of any merger, share exchange, consolidation, or other business combination of the Company if immediately after such transaction persons who hold a majority of the outstanding voting securities entitled tovote generally in the election of directors of the surviving entity (or theentity owning 100% of such surviving entity) are not persons who, immediatelyprior to such transaction, held the Company Voting Stock; provided, however,that a Change in Control shall not include a public offering of capital stock of stock of the Company. For purposes of this Section 2(d), a "PERSON" means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, other than employee benefit plans sponsored or maintained by the Company and corporations controlled by the Company.

  

  

  

 

    (e) "CODE" shall mean the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

    (f) "COMMON STOCK" shall mean shares of common stock of the Company, par value of $0.01 per share.

    (g) "FAIR MARKET VALUE" shall mean, with respect to a share of the Company's Common Stock for any purpose on a particular date, the value determined by the Administrator in good faith. However, if the Common Stock is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and listed for trading on a national exchange or market, "FAIR MARKET VALUE" shall mean, as applicable, (i) either the closing price or the average of the high and low sale price on the relevant date, as determined in the Administrator's discretion, quoted on the New York Stock Exchange, the American Stock Exchange, or the Nasdaq National Market; (ii) the last sale price on the relevant date quoted on the Nasdaq Small Cap Market; (iii) the average of the high bid and low asked prices on the relevant date quoted on the Nasdaq OTC Bulletin Board Service or by the National Quotation Bureau, Inc. or a comparable service as determined in the Administrator's discretion; or (iv) if the Common Stock is not quoted by any of the above, the average of the closing bid and asked prices on the relevant date furnished by a professional market maker for the Common Stock,or by such other source, selected by the Administrator. If no public trading of the Common Stock occurs on the relevant date, then Fair Market Value shall be determined as of the next preceding date on which trading of the Common Stock does occur. For all purposes under this Plan, the term "relevant date" as used in this Section 2(g) shall mean either the date as of which Fair Market Value is to be determined or the next preceding date on which public trading of the Common Stock occurs, as determined in the Administrator's discretion.

    (h) "GRANT AGREEMENT" shall mean a written document memorializing the terms and conditions of an Award granted pursuant to the Plan and shall incorporate the terms of the Plan.

3. ADMINISTRATION

    (a)  ADMINISTRATION OF THE PLAN.  The Plan shall be administered by the Board or by such committee or committees as may be appointed by the Board from time to time (the Board, committee or committees hereinafter referred to as the "Administrator").

    (b)  POWERS OF THE ADMINISTRATOR.  The Administrator shall have all the powers vested in it by the terms of the Plan, such powers to include authority, in its sole and absolute discretion, to grant Awards under the Plan, prescribe Grant Agreements evidencing such Awards and establish programs for granting Awards.

  

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    The Administrator shall have full power and authority to take all otherActions necessary to carry out the purpose and intent of the Plan, including,but not limited to, the authority to: (i) determine the eligible persons towhom, and the time or times at which Awards shall be granted; (ii) determine the types of Awards to be granted; (iii) determine the number of shares to becovered by or used for reference purposes for each Award; (iv) impose suchterms, limitations, restrictions and conditions upon any such Award as theAdministrator shall deem appropriate; (v) modify, amend, extend or renewoutstanding Awards, or accept the surrender of outstanding Awards and substitute new Awards (provided however, that, except as provided in Section 7(d) of the Plan, any modification that would materially adversely affect any outstanding Award shall not be made without the consent of the holder); (vi) accelerate or otherwise change the time in which an Award may be exercised or becomes payable and to waive or accelerate the lapse, in whole or in part, of any restriction or condition with respect to such Award, including, but not limited to, any restriction or condition with respect to the vesting or exercisability of an Award following termination of any grantee's employment or other relationship with the Company; and (vii) establish objectives and conditions, if any, for earning Awards and determining whether Awards will be paid after the end of a performance period.

    The Administrator shall have full power and authority, in its sole andabsolute discretion, to administer and interpret the Plan and to adopt andinterpret such rules, regulations, agreements, guidelines and instruments forthe administration of the Plan and for the conduct of its business as the

Administrator deems necessary or advisable.

    (c)  NON-UNIFORM DETERMINATIONS.  The Administrator's determinations under the Plan (including without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Grant Agreements evidencing such Awards) need not be uniform and may be made by the Administrator selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.

    (d)  LIMITED LIABILITY.  To the maximum extent permitted by law, no member of the Administrator shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder.

    (e)  INDEMNIFICATION.  To the maximum extent permitted by law and by theCompany's charter and by-laws, the members of the Administrator shall beindemnified by the Company in respect of all their activities under the Plan.

    (f)  EFFECT OF ADMINISTRATOR'S DECISION.  All actions taken and decisionsand determinations made by the Administrator on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrator's sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Company, its stockholders, any participants in the Plan and any other employee, consultant, or director of the Company, and their respective successors in interest.

  

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4. SHARES AVAILABLE FOR THE PLAN

    Subject to adjustments as provided in Section 7(d) of the Plan, the shares of Common Stock that may be issued with respect to Awards granted under the Plan shall not exceed an aggregate of 1,500,000,000 shares of Common Stock, in addition to the shares authorized for issuance under the Prior Plan but not issued thereunder before the Prior Plan is merged into this Plan. The Company shall reserve such number of shares, and shall continue to reserve the number of shares remaining under the Prior Plan, for Awards under the Plan, subject to adjustments as provided in Section 7(d) of the Plan. If any Award, or portion of an Award, under the Plan expires or terminates unexercised, becomes unexercisable or is forfeited or otherwise terminated, surrendered or canceled as to any shares, or if any shares of Common Stock are surrendered to the Company in connection with any Award (whether or not such surrendered shares were acquired pursuant to any Award), or if any shares are withheld by the Company, the shares subject to such Award and the surrendered and withheld shares shall thereafter be available for further Awards under the Plan; provided, however, that any such shares that are surrendered to or withheld by the Company in connection with any Award or that are otherwise forfeited after issuance shall not be available for purchase pursuant to incentive stock options intended to qualify under Code section 422.

    Subject to adjustments as provided in Section 7(d) of the Plan, the maximum number of shares of Common Stock subject to Awards of any combination that may be gamed during any one fiscal year of the Company to any one individual under this Plan shall be limited to 500,000,000 shares. Such per-individual limit shall not be adjusted to effect a restoration of shares of Common Stock with respect to which the related Award is terminated, surrendered or cancelled.

5. PARTICIPATION

    Participation in the Plan shall be open to all employees, officers, and directors of, and other individuals providing bona fide services to or for, the Company, or of any Affiliate of the Company, as may be selected by the Administrator from time to time.

6. AWARDS

    The Administrator, in its sole discretion, establishes the terms of allAwards granted under the Plan. Awards may be granted individually or in tandem with other types of Awards. All Awards are subject to the terms and conditions provided in the Grant Agreement. The Administrator may permit or require a recipient of an Award to defer such individual's receipt of the payment of cash or the delivery of Common Stock that would otherwise be due to such individual by virtue of the exercise of, payment of, or lapse or waiver of restrictions respecting, any Award. If any such payment deferral is required or permitted, the Administrator shall, in its sole discretion, establish rules and proceduresfor such payment deferrals.

    (a)  STOCK OPTIONS.  The Administrator may from time to time grant toeligible participants Awards of incentive stock options as that term is defined in Code section 422 or nonqualified stock options; provided, however, that Awards of incentive stock options shall be limited to employees of the Company or of any current or hereafter existing "parent corporation" or "subsidiary corporation," as defined in Code sections 424(e) and (f), respectively, of the Company. Options intended to qualify as incentive stock options under Code section 422 must have an exercise price at least equal to Fair Market Value as of the date of grant, but nonqualified stock options may be granted with an exercise price less than Fair Market Value. No stock option shall be an incentive stock option unless so designated by the Administrator at the time of grant or in the Grant Agreement evidencing such stock option.

  

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    (b)  STOCK APPRECIATION RIGHTS.  The Administrator may from time to timegrant to eligible participants Awards of Stock Appreciation Rights ("SAR"). An SAR entitles the grantee to receive, subject to the provisions of the Plan and the Grant Agreement, a payment having an aggregate value equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one share of Common Stock over (B) the base price per share specified in the Grant Agreement, times (ii) the number of shares specified by the SAR, or portion thereof, which is exercised. Payment by the Company of the amount receivable upon any exercise of an SAR may be made by the delivery of Common Stock or cash, or any combination of Common Stock and cash, as determined in the sole discretion of the Administrator. If upon settlement of the exercise of an SAR a grantee is to receive a portion of such payment in shares of Common Stock, the number of shares shall be determined by dividing such portion by the Fair Market Value of a share of Common Stock on the exercise date. No fractional shares shall be used for such payment and the Administrator shall determine whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall

be eliminated.

    (c)  STOCK AWARDS.  The Administrator may from time to time grant restricted or unrestricted stock Awards to eligible participants in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as it shall determine. A stock Award may be paid in Common Stock, in cash, or in a combination of Common Stock and cash, as determined in the sole discretion of the Administrator.

    (d)  PHANTOM STOCK.  The Administrator may from time to time grant Awards to eligible participants denominated in stock-equivalent units ("PHANTOM STOCK") in such amounts and on such terms and conditions as it shall determine. Phantom stock units granted to a participant shall be credited to a bookkeeping reserve account solely for accounting purposes and shall not require a segregation of any of the Company's assets. An Award of phantom stock may be settled in Common Stock, in cash, or in a combination of Common Stock and cash, as determined in the sole discretion of the Administrator. Except as otherwise provided in the applicable Grant Agreement, the grantee shall not have the rights of a stockholder with respect to any shares of Common Stock represented by a phantom stock unit solely as a result of the grant of a phantom stock unit to the grantee.

    (e)  PERFORMANCE AWARDS.  The Administrator may, in its discretion, grant performance awards which become payable on account of attainment of one or more performance goals established by the Administrator. Performance awards may be paid by the delivery of Common Stock or cash, or any combination of Common Stock and cash, as determined in the sole discretion of the Administrator. Performance goals established by the Administrator may be based on the Company's or an Affiliate's operating income or one or more other business criteria selected by the Administrator that apply to an individual or group of individuals, a business unit, or the Company or an Affiliate as a whole, over such performance period as the Administrator may designate.

  

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    (f)  OTHER STOCK-BASED AWARDS.  The Administrator may from time to time grant other stock-based awards to eligible participants in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as it shall determine. Other stock-based awards may be denominated in cash, in Common Stock or other securities, in stock-equivalent units, in stock appreciation units, in securities or debentures convertible into Common Stock, or in any combination of the foregoing and may be paid in Common Stock or other securities, in cash, or in a combination of Common Stock or other securities and cash, all as determined in the sole discretion of the Administrator.

7. MISCELLANEOUS

    (a)  WITHHOLDING OF TAXES.  Grantees and holders of Awards shall pay to the Company or its Affiliate, or make provision satisfactory to the Administrator for payment of, any taxes required to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. The Company or its Affiliate may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the grantee or holder of an Award. In the event that payment to the Company or its Affiliate of such tax obligations is made in shares of Common Stock, such shares shall be valued at Fair Market Value on the applicable date for such purposes.

    (b)  LOANS.  The Company or its Affiliate may make or guarantee loans to grantees to assist grantees in exercising Awards and satisfying any withholding

tax obligations.

    (c)  TRANSFERABILITY.  Except as otherwise determined by the Administrator, and in any event in the case of an incentive stock option or a stock appreciation right granted with respect to an incentive stock option, no Award granted under the Plan shall be transferable by a grantee otherwise than by will or the laws of descent and distribution. Unless otherwise determined by the Administrator in accord with the provisions of the immediately preceding sentence, an Award may be exercised during the lifetime of the grantee, only by the grantee or, during the period the grantee is under a legal disability, by the grantee's guardian or legal representative.

    (d)  ADJUSTMENTS FOR CORPORATE TRANSACTIONS AND OTHER EVENTS.

        (i)  STOCK DIVIDEND, STOCK SPLIT AND REVERSE STOCK SPLIT.  In the event of a stock dividend of, or stock split or reverse stock split affecting, the Common Stock, (A) the maximum number of shares of such Common Stock as to which Awards may be granted under this Plan, as provided in Section 4 of the Plan and the maximum number of shares with respect to which Awards may be granted during any one fiscal year of the Company to any individual, and (B) the number of shares covered by and the exercise price and other terms of outstanding Awards, shall, without further action of the Board, be adjusted to reflect such event. The Administrator may make adjustments, in its discretion, to address the treatment of fractional shares and fractional cents that arise with respect to outstanding Awards as a result of the stock dividend, stock split or reverse stock split.

  

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        (ii)  NON-CHANGES IN CONTROL TRANSACTIONS.  Except with respect to the transactions set forth in Section 7(d)(i), in the event of any change affecting the Common Stock, the Company or its capitalization, by reason of    a spin-off, split-up, dividend, recapitalization, merger, consolidation or   share exchange, the Administrator, shall make (A) appropriate adjustments tothe maximum number and kind of shares reserved for issuance or with respectto which Awards may be granted under the Plan, in the aggregate and withrespect to any individual during any one fiscal year of the Company, asprovided in Section 4 of the Plan; and (B) appropriate adjustments inoutstanding Awards, including but not limited to modifying the number, kindand price of securities subject to Awards.

        (iii)  CHANGE IN CONTROL TRANSACTIONS.  In the event of any transaction resulting in a Change of Control of the Company, outstanding stock options and SARs under this Plan will vest immediately upon the effective time of such Change of Control unless provision is made in connection with the transaction for the continuation or assumption of such Awards by, or for the substitution of the equivalent awards of, the surviving or successor entity or a parent thereof.

        (iv)  POOLING OF INTEREST TRANSACTIONS.  In connection with any business combination authorized by the Board, the Administrator may, to the extent not in contravention with any other provision hereof, make necessary

adjustments to the Plan to facilitate the compliance of such transaction with requirements for treatment as a pooling of interests for accounting purposes under generally accepted accounting principles.

        (v)  UNUSUAL OR NONRECURRING EVENTS.  The Administrator is authorized to make, in its discretion and without the consent of holders of Awards, adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the  Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

    (e)  SUBSTITUTION OF AWARDS IN MERGERS AND ACQUISITIONS.  Awards maybegranted under the Plan from time to time in substitution for awards held byemployees, officers, consultants or directors of entities who become or areabout to become employees, officers, consultants or directors of the Company or an Affiliate as the result of a merger or consolidation of the employing entity with the Company or an Affiliate, or the acquisition by the Company or an Affiliate of the assets or stock of the employing entity. The terms andconditions of any substitute Awards so granted may vary from the terms andconditions set forth herein to the extent that the Administrator deemsappropriate at the time of grant to conform the substitute Awards to theprovisions of the awards for which they are substituted.

    (f)  OTHER AGREEMENTS.  As a condition precedent to the grant of any Award under the Plan, the exercise pursuant to such an Award, or to the delivery of certificates for shares issued pursuant to any Award, the Administrator may require the grantee or the grantee's successor or permitted transferee, as the case may be, to become a party to a stock restriction agreement, shareholders' agreement, voting trust agreement or other agreements regarding the Common Stock of the Company in such forms) as the Administrator may determine from time to time.

  

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    (g)  TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN.  The Board may terminate, amend or modify the Plan or any portion thereof at any time.

    (h)  NON-GUARANTEE OF EMPLOYMENT OR SERVICE.  Nothing in the Plan or in any Grant Agreement thereunder shall confer any right on an individual to continue in the service of the Company or shall interfere in any way with the right of the Company to terminate such service at any time with or without cause or notice and whether or not such termination results in (i) the failure of any Award to vest; (ii) the forfeiture of any unvested or vested portion of any Award; and/or (iii) any other adverse effect on the individual's interests under the Plan.

    (i)  COMPLIANCE WITH SECURITIES LAWS; LISTING AND REGISTRATION.  If at any time the Administrator determines that the delivery of Common Stock under the Plan is or may be unlawful under the laws of any applicable jurisdiction, or federal or state securities laws, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator determines that such delivery is lawful. The Company shall have no obligation to effect any registration or qualification of the Common Stock under federal or state laws.

    The Company may require that a grantee, as a condition to exercise of anAward, and as a condition to the delivery of any share certificate, make suchwritten representations (including representations to the effect that suchperson will not dispose of the Common Stock so acquired in violation of federal or state securities laws) and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company to issue the Common Stock in compliance with applicable federal and state securities laws. The stock certificates for any shares of Common Stock issued pursuant to this Plan may bear a legend restricting transferability of the shares of Common Stock unless such shares are registered or an exemption from registration is available under the Securities Act of 1933, as amended, and applicable state securities laws.

    (j)  NO TRUST OR FUND CREATED.  Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a grantee or any other person. To the extent that any grantee or other person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.

    (k)  GOVERNING LAW.  The validity, construction and effect of the Plan, of Grant Agreements entered into pursuant to the Plan, and of any rules,regulations, determinations or decisions made by the Administrator relating to the Plan or such Grant Agreements, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with applicable federal laws and the laws of the State of New Jersey, without regard to its conflict of laws principles.

  

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    (1)  EFFECTIVE DATE; TERMINATION DATE.  The Plan is effective as of the date on which the Plan is adopted by the Board, subject to approval of thestockholders within twelve months before or after such date. No Award shall be granted under the Plan after the close of business on the day immediatelypreceding the tenth anniversary of the effective date of the Plan, or ifearlier, the tenth anniversary of the date this Plan is approved by thestockholders. Subject to other applicable provisions of the Plan, all Awardsmade under the Plan prior to such termination of the Plan shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan   and the terms of such Awards.

Dates Approved by the Board: May 17, 2001, November 23, 2009

                           

Date Approved by the Stockholders:  May 17, 2001, June 29, 2011

                                   

9EX-10.1

AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT

This Amendment No. 3 to Loan and Security Agreement (“Amendment”) is made on September
6, 2013 (“Amendment No. 3 Effective Date”) between Biolase, Inc., a Delaware corporation
(“Borrower”) and Comerica Bank, a Texas banking association (“Bank”).

Borrower and Bank entered into a Loan and Security Agreement dated May 24, 2012, as amended by
Amendment No. 1 to Loan and Security Agreement dated August 6, 2012, and Amendment No. 2 to Loan
and Security Agreement dated May 7, 2013 (“Loan Agreement”) providing terms and conditions
governing certain loans and other credit accommodations extended by Bank to Borrower
(“Obligations”). Borrower and Bank have agreed to amend the terms of the Loan Agreement as
provided in this Amendment.

Accordingly, Borrower and Bank agree as follows:

1. Capitalized Terms. In this Amendment, capitalized terms that are used without separate
definition shall have the meanings given to them in the Loan Agreement.

2. Amendments. The Loan Agreement is amended as follows:

(a) Section 6.7(b) is amended to read in its entirety as follows:

“(b) EBITDA. As of the end of each fiscal quarter, commencing with the
fiscal quarter ending September 30, 2013, an EBITDA of not less than the amount set
forth below for the applicable measurement date, measured in each case for the three
(3) months then-ending:

	 	 	 
	Measurement Date	 	Minimum EBITDA
	September 30, 2013

	 	-$1,000,000.00
	December 31, 2013

	 	+$1,250,000.00
	March 31, 2014 and thereafter

	 	[to be determined as follows]

For each fiscal quarter ending on or after March 31, 2014, Bank shall establish an
EBITDA measurement based upon Borrower’s Board of Directors-approved financial and
business projections and budget, sales projections, and operating plans for the
fiscal year ending December 31, 2014 (“2013 Plan”), which 2014 Plan shall be
delivered to Bank no later than November 30, 2013, and shall be reasonably
satisfactory to Bank.”

(b) The following is added to the Loan Agreement as new Section 6.12:

“6.12 Minimum Equity Event. Borrower shall receive New Equity totaling at
least $5,000,000 as follows:

(a) at least $3,000,000 by September 30, 2013, and

(b) at least an additional $2,000,000 by October 31, 2013.”

(c) The following terms which are defined in Exhibit A are given the following amended
definitions:

“Borrowing Base” means an amount equal to:

(a) Eighty percent (80.0%) of Eligible Accounts plus

(b) the least of the following:

(i) Fifty percent (50.0%) of Eligible Inventory, or

(ii) $1,500,000.00, or

(iii) the amount determined under clause (a);

as each of the foregoing is determined by Bank with reference to the most recent
Borrowing Base Certificate delivered by Borrower.

“Revolving Line” means a Credit Extension of up to Four Million and 00/100 Dollars
($4,000,000.00).

(d) The following term and definition is added to Exhibit A in the appropriate alphabetical
order:

“ “New Equity” means cash proceeds received after September 6, 2013, from the sale
or issuance of Borrower’s equity securities.”

(e) Exhibit D (the form of Borrowing Base Certificate) is amended entirely to be in
the form of attached Amended Exhibit D.

(f) Exhibit E (the form of Compliance Certificate) is amended entirely to be in the
form of attached Amended Exhibit E.

3. Representations. Borrower represents and agrees that:

(a) Except as expressly modified in this Amendment, (i) the representations and warranties
set forth in the Loan Agreement and in each of the Loan Documents remain true and correct in
all respects, except to the extent that they expressly speak as of a specific prior date,
and (ii) the covenants set forth in the Loan Agreement 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) When executed, this Amendment will be a duly authorized, legal, valid, and binding
obligation of Borrower enforceable in accordance with its terms, and will not conflict with
or violate any of Borrower’s organization documents or any agreement, instrument, law, or
order to which Borrower or any material portion of its assets is subject or bound.

(c) The corporate resolutions delivered to Bank on or about May 24, 2012 remain in full
force and effect, have not been amended, repealed or rescinded in any respect and may
continue to be relied upon by Bank until written notice to the contrary is received by Bank,
the officers named therein continue to hold those offices, and Borrower continues to be in
good standing under the laws of the State of Delaware.

(d) Except for events or conditions for which Bank has given or is concurrently giving its
written waiver, no Event of Default exists or has occurred and is continuing uncured or
unwaived as of the Effective Date.

4. Conditions Precedent. The effectiveness of this Amendment is subject to Bank’s receipt
of or Borrower’s satisfaction of all of the following:

(a) this Amendment;

(b) execution and delivery by the Guarantors of the Acknowledgement and Consent of
Guarantors as set forth below;

(c) a Warrant for the purchase of 100,000 shares of Borrower’s common stock with a term of
five years and an exercise price set at the average of the closing prices for Borrower’s
common stock on the NASDAQ for the first 10 trading days after the Amendment No. 3 Effective
Date.

(d) payment of a facility fee of $8,000.00 in connection the Revolving Line; and

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

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

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

7. 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. This
Amendment shall not be more strictly construed against any one of the parties as compared to any
other.

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

9. Governing Law. The parties agree that the terms and provisions of this Amendment shall
be governed by and construed in accordance with the internal laws of the State of California,
without regard to principles of conflicts of law.

10. No Defenses. Borrower acknowledges, confirms, and warrants to Bank that as of the date
hereof Borrower has absolutely no defenses, claims, rights of set-off, or counterclaims against
Bank under, arising out of, or in connection with, this Amendment, the Loan Agreement, the Loan
Documents and/or the individual advances under the Indebtedness, or against any of the indebtedness
evidenced or secured thereby.

11. Expenses. Borrower shall promptly pay all reasonable and actually incurred
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.

12. 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—signature page follows]

1

This Amendment No. 3 to Loan and Security Agreement is executed and delivered as of the
Amendment No. 3 Effective Date.

	 	 	 
	Comerica Bank	 	Biolase, Inc.
	By: /s/ Lake T. McGuire

Name: Lake T. McGuire

Title: Vice President

	 	By: /s/ Frederick D. Furry

Name: Frederick D. Furry

Title: Chief Financial Officer

Acknowledgement and Consent of Guarantors

Each of the undersigned has guaranteed the payment and performance of the Obligations by
Borrower pursuant to Guaranty dated May 24, 2012. Each of the undersigned (a) acknowledges and
consents to the execution, delivery and performance of the foregoing Amendment No. 1 to Loan and
Security Agreement, and (b) agrees that (i) its guaranty remains in full force and effect and (ii)
it has absolutely no defenses, claims, rights of set-off, or counterclaims against Bank under,
arising out of, or in connection with, the foregoing Amendment No. 1 to the Loan and Security
Agreement, the Loan Agreement, its guaranty, or the other Loan Documents. Each of the undersigned
further represents that it is in compliance with all of the terms and conditions of its guaranty.

Dated as of September 6, 2013.

	 	 	 
	BL II Acquisition Inc.	 	BL Acquisition Corp.
	By: /s/ Frederick D. Furry

Name: Frederick D. Furry

Title: Chief Financial Officer

	 	By: /s/ Frederick D. Furry

Name: Frederick D. Furry

Title: Chief Financial Officer

2

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