Document:

Exhibit 10.1 

Biolase, Inc.

4 Cromwell

Irvine, California 92618

January 30, 2015

Frederick D. Furry

c/o Biolase, Inc. 

4 Cromwell

Irvine, California  92618

 

		
	
Re:
	
Transition Arrangement

 

Dear Fred:

The purpose of this letter is to confirm the circumstances of your employment with Biolase, Inc. (the “Company”) over an interim period, as we have discussed recently.  Our intent is to facilitate the Company’s orderly transition to a new Chief Financial Officer, and to provide you with a monetary severance payment (the “Transition Success Payment”), in exchange for your cooperation in this transition.

 

We plan to continue your employment as Chief Financial Officer at your current base salary and benefits through and including January 31, 2015.  During that period of time, you will be transitioning your duties and responsibilities to others, as directed by the Company, and you will use your best efforts to ensure a smooth, amicable, and orderly transition.  Although our plan is to continue your employment through January 31, 2015, your employment status until that time will remain “at will,” which means that either you or the Company may end your employment at any time for any reason.

 

Provided that you remain employed by the Company on January 31, 2015 and you have performed your transitional duties to the Company’s reasonable satisfaction, (i) you will receive a Transition Success Payment equal to three (3) additional months of compensation at your current base salary level, (ii) the Company will agree to extend the period to exercise your vested stock options ninety (90) days in addition to the ninety (90) day period afforded employees separated without cause under the Company’s 2002 Stock Incentive Plan, as amended (for a total period of one hundred and eighty (180) days to exercise your stock options that have vested on or before January 31, 2015, and (iii) the Company will arrange and pay for the reasonable cost of outplacement services of the Company’s choosing, not to exceed $20,000.00.  The payments set forth in (i) above will be payable following your separation with the Company, and in accordance with the normal payroll cycle, less all normal payroll deductions.

 

If your employment ends for any reason before January 31, 2015 (unless by mutual agreement between you and the Company), you will not be eligible for the Transition Success Payment.  Your receipt of the Transition Success Payment shall be entirely conditional upon 

 

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your execution and non-revocation of the Separation Agreement with Release of All Claims, which is set forth on Exhibit A attached hereto.

 

Please sign below to indicate your acceptance of this agreement.

 

We thank you for your hard work, dedication, and contribution to the Company, and we look forward to a mutually satisfactory transition.

 

Very truly yours,

/s/ Jeffrey M. Nugent

 

Jeffrey M. Nugent 

President and Chief Executive Officer 

 

 

ACCEPTED AND AGREED:

 

 

/s/ Frederick D. Furry

Frederick D. Furry

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EXHIBIT A

SEPARATION AGREEMENT WITH

GENERAL RELEASE OF ALL CLAIMS

 

This Separation Agreement With General Release of All Claims (“Agreement”) is entered into by and between Frederick D. Furry (“Mr. Furry”), and Biolase, Inc., a Delaware corporation (“the Company”), and is intended by the parties hereto to settle fully and finally any claims that Mr. Furry may have against the Company and all obligations of the Company to Mr. Furry except as set forth in and incorporated into this Agreement.

	
a.
	
Employment Separation.  Mr. Furry’s employment with the Company will be terminated effective January 31, 2015 (the “Separation Date”).  From and after the Separation Date, Mr. Furry shall no longer be employed by, or act in any capacity for, the Company.

	
b.
	
Termination Pay.  Mr. Furry acknowledges that he has been paid his base salary and accrued but unused vacation through the Separation Date  (“Termination Pay”).  Mr. Furry shall submit expense reimbursement requests with suitable documentation within thirty (30) days, and the Company shall promptly process such requests in accordance with its expense reimbursement policies.

	
c.
	
Severance Payments; Extension of Exercise Period; Outplacement.  In consideration for the promises contained herein, Biolase agrees to pay Mr. Furry, subject to his performance of the terms and conditions set forth in this Agreement, severance compensation equal to three (3) months of Mr. Furry’s base salary as in effect as of the date of this Agreement, less all applicable withholding and deductions.  The foregoing severance compensation shall be payable in equal installments commencing on a date that is within ten (10) business days following the non-revocation and expiration of the seven (7) day revocation period identified below, and ending on the two (2) month anniversary of such date, and will be made in accordance with the Company’s standard payroll practices and procedures. In addition, the Company will agree to extend the period to exercise Mr. Furry’s vested stock options ninety (90) days, in addition to the ninety (90) day period afforded employees separated without cause under the Company’s 2002 Stock Incentive Plan, as amended (for a total period of one hundred and eighty (180) days to exercise Mr. Furry’s stock options that have vested on or before the Separation Date.  Finally, the Company will arrange and directly pay the reasonable cost of outplacement services of the Company’s choosing for Mr. Furry, in the event 

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Mr. Furry elects to use such a service within thirty (30) days of the Separation Date, not to exceed $20,000.00.

	
d.
	
COBRA Benefits.  Mr. Furry shall be entitled to receive continuation healthcare benefits for herself and his eligible dependents as provided under COBRA upon his election of such coverage.  

	
e.
	
Vested Retirement Benefits.  Nothing in this Agreement shall limit, expand upon, or alter in any way any vested retirement benefits that Mr. Furry has or is entitled to receive under any Company sponsored 401(k) or other retirement plan to which Mr. Furry may have been entitled to participate by virtue of his employment.  Mr. Furry’s rights and obligations shall continue to be governed by the terms of such plans, as they presently exist or as they may permissibly be amended, and shall be based upon his Separation Date.

	
f.
	
No Other Payments.  Other than whatever is specifically provided for in this Agreement, Mr. Furry acknowledges that there are no other sums or benefits of any nature whatsoever due and owing to him, other than whatever ongoing or future payments are provided for in this Agreement.  In consideration for this Agreement, Mr. Furry specifically waives any claim that he may have to any past, present, or future compensation of any nature whatsoever arising out of his prior employment with the Company.

	
g.
	
Confirmation Of Payment Of Wages.   Mr. Furry acknowledges that he has been paid all wages due and owing to him from the Company, including all minimum wages, overtime compensation, commissions, bonuses, waiting-time penalties, and liquidated damages.  Accordingly, Mr. Furry understands that the release provisions below release and discharge the Company from any and all claims that he may have against the Company for unpaid wages and other compensation including, but not limited to, any claims for unpaid wages, salary, bonuses, commissions, stock, stock options, vacation pay, holiday pay, sick or disability pay, fringe benefits, expense reimbursements, severance pay, or any other form of compensation.

	
h.
	
Biolase Proprietary Information. As a material inducement to Biolase to enter into this Agreement, Mr. Furry covenants and represents that (i) he has complied with the terms and conditions of the Biolase Proprietary Information Agreement at all times during his employment with Biolase; and (ii) he will continue to comply with such terms for the periods specified therein.  The terms of the Biolase Proprietary Agreement are incorporated into this Agreement by reference and made a part hereof. 

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i.
	
Continuing Obligations of Mr. Furry.   To the extent that Mr. Furry has come into contact with confidential or trade secret information concerning the Company and its operations or concerning the Company’s customers, prospective customers, or projects, Mr. Furry will continue to protect the confidentiality of such information.  In addition, Mr. Furry represents and warrants that, he has returned to the Company and has not copied or duplicated in any manner whatsoever, all tangible and intangible property (including, without limitation, all computer hardware, whether portable or stationary, and software), books, records, documents and reports owned by, or pertaining to the business of, the Company or any of the Company’s existing or prospective clients that was in Mr. Furry’s possession or under Mr. Furry’s direct or indirect control as of the Separation Date.  If Mr. Furry shall come into possession of any property (tangible or intangible), books, records, documents or reports of the type described above after the Separation Date, Mr. Furry will promptly return them to the Company.

	
j.
	
Furry Complete Release.  Mr. Furry, on behalf of herself, his heirs and assigns, fully and forever releases and discharges the Company and, as the case may be, each of its respective employees, shareholders, officers, directors, agents, attorneys, predecessors, successors, assigns, and affiliated corporations or organizations, whether previously or hereafter affiliated in any manner (collectively, the “Released Company Parties”), to the fullest extent permitted by law, from any and all claims, demands, causes of action, charges of discrimination, obligations, damages, attorneys’ fees, costs and liabilities of any nature whatsoever, including all claims of race, sex, national origin, religion, handicap and age discrimination under any federal or state statute, whether or not now known, suspected or claimed, which Mr. Furry ever had, now has, or may claim to have as of the date of this Agreement against the Released Company Parties.  

	
k.
	
General Nature of Release.  The Release set forth above is a general release of all claims, demands, causes of action, obligations, damages, and liabilities of any nature whatsoever that are described in the Release and is intended to encompass all known and unknown, foreseen and unforeseen claims which Mr. Furry may have against the Released Company Parties, except that Mr. Furry does not release any claims that may not be released herein as a matter of law, including but not limited to claims for indemnity under Labor Code Section 2802, claims that may be adjudicated before the California Workers’ Compensation Appeals Board, claims for vested benefits or any claims for enforcement of any other provision of this Agreement.  This Release specifically includes, without limiting the generality of the foregoing, any claims against any Released Company Party occurring before the effective date of this Agreement and arising out 

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of or related to alleged violations of any federal or state employment discrimination laws, including, but not limited to, the California Fair Employment and Housing Act; the Age Discrimination In Employment Act; the Older Workers Benefit Protection Act; Title VII of the Civil Rights Act of 1964; the Americans With Disabilities Act; the National Labor Relations Act; the Equal Pay Act; the Employee Retirement Income Security Act of 1974; as well as claims arising out of or related to violations of the provisions of the California Government Code; the California Business & Professions Code, including Business & Professions Code Section 17200 et seq.; state and federal wage and hour laws; breach of contract; fraud; misrepresentation; common counts; unfair competition; unfair business practices; negligence; defamation; infliction of emotional distress; invasion of privacy; assault; battery; false imprisonment; wrongful termination; and any other state or federal law, rule, or regulation.  Mr. Furry acknowledges that his separation and the consideration offered hereunder were based on an individual determination and were not offered in conjunction with any group termination or group severance program and waives any claim to the contrary, and further acknowledges that he does not presently believe he has suffered any work-related injury or illness.  

	
l.
	
Release of Unknown Claims.  It is the intention of Mr. Furry to release both known and unknown claims of any nature whatsoever.  This includes, without limitation, claims, which Mr. Furry does not know or suspect to exist in his favor at the time of executing this release, even though such claims, if known by him would have materially affected his settlement with the Company.  Accordingly, Mr. Furry expressly waives all rights under Section 1542 of the Civil Code of the State of California, which reads as follows:

“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.”

	
m.
	
Non-Disparagement; Neutral Reference.  Mr. Furry agrees during the term of this Agreement and for a period of ten (10) years thereafter, he shall not, in any communication with any person or entity, including any actual or potential customer, client, investor, vendor, or business partner of the Company, or any third party media outlet, make any derogatory or disparaging or critical negative statements – orally, written or otherwise – against the Company, or any of its directors, officers, agents, employees, contractors, or affiliated persons or entities.  Mr. Furry also agrees that unless compelled by valid legal process he will not give or offer to provide 

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any statements, testimony or the like in connection with any claim, action, or demand (being contemplated or) brought against the Company which concerns the Company, his employment or the cessation of his employment with the Company, the Company’s business practices, its customers and/or prospective customers, its products, and/or any other aspect of the Company’s business, its directors, officers, agents, employees, contractors, or affiliated persons or entities.  Further, Mr. Furry agrees that if he agrees that should he be called as a witness or to provide testimony in any case, action, and/or proceeding concerning the Company, he and/or his counsel will contact either the President and Chief Executive Officer or the Secretary of the Company immediately, but in no event later than ten (10) days before he is to be deposed or to testify as a witness, so that the Company can take whatever precautionary measures it deems necessary to protect from disclosure any of its proprietary and/or confidential information and/or documents.  Biolase, for its part, agrees that Mr. Furry shall direct any employment inquiries to the Company’s President and Chief Executive Officer and that in response to any inquiry so directed the Company will confirm Mr. Furry’s title, dates of employment, and final salary.  Mr. Furry’s entry into this Agreement constitutes his authorization for the Company to provide the foregoing information in response to any employment inquiry.

	
n.
	
No Other Actions.  Mr. Furry represents and covenants that he has not filed or lodged any complaints or charges against any of the Released Company Parties with any local, state, or federal agency or court.  

	
o.
	
Risk of Different Facts.  The parties to this Agreement acknowledge that they may hereafter discover facts different from or in addition to those they now know or believe to be true, and they expressly agree to assume the risk of the possible discovery of additional or different facts, and agree that this Agreement shall be and remain effective in all respects regardless of such additional or different facts.

	
p.
	
Non-Admission of Liability.  This Agreement is a severance agreement designed, among other things, to provide additional compensation and benefits to Mr. Furry that he would not otherwise receive.  This Agreement shall not in any way be construed as an admission of liability by any of the parties to this Agreement. 

	
q.
	
Strict Confidentiality.   As a material inducement to the Company to enter into this Agreement, Mr. Furry represents and promises that all terms and conditions of this Agreement, including the amount of the consideration referred to above shall be and remain confidential.  In the event any disclosure concerning this Agreement or the circumstances relating thereto may appear to be required by valid legal process, Mr. 

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Furry shall notify the Company in writing as soon as reasonably possible in advance of the threatened disclosure and provide any affected party or persons a reasonable opportunity to contest or oppose such disclosure.

	
r.
	
No Future Actions.  Mr. Furry covenants and agrees never to commence, aid in any way, prosecute or cause to be commenced or prosecuted any action or other proceeding based upon any claims, demands, causes of action, obligations, damages or liabilities which are the subject of this Agreement; provided however, that Mr. Furry does not relinquish any protected rights he may have to file a charge, testify, assist or participate in any manner in an investigation, hearing or proceeding conducted by the Equal Employment Opportunity Commission, the Office of Federal Contract Compliance, or any similar state human rights agency.  However, Mr. Furry may not recover additional compensation or damages as a result of such participation.

	
s.
	
Twenty-One Day Consideration Period.  This Agreement was originally given to Mr. Furry on the Separation Date.  Mr. Furry shall have twenty-one (21) days to consider this Agreement; provided however, that if Mr. Furry chooses to sign this Agreement before the end of this twenty-one (21)-day period, Mr. Furry acknowledges that he does so knowingly and voluntarily and waives any claim that to the effect that he was not given the full twenty-one (21) days to consider whether to sign this Agreement or did not use the entire period of time available to consider this Agreement or to consult with an attorney.

	
t.
	
Seven Day Revocation Period.  Following execution of this Agreement, Mr. Furry shall have seven (7) days to revoke this Agreement.  To be effective, the revocation must be in writing and signed by Mr. Furry and must be delivered to and received by the Company, before 5 p.m. of the 7th day.  This Agreement shall become effective on the eighth (8th) day.  Any revocation shall be in writing and shall be effective upon timely receipt by the Company by: Jeffrey M. Nugent, President and Chief Executive Officer, Biolase, Inc., 4 Cromwell, Irvine, California, 92618.

	
u.
	
Non-Assignment of Claim.  Mr. Furry warrants that he has made no assignment and will make no assignment of any claim, chose in action, right of action, or any right of any kind whatsoever, embodied in this Agreement and referred to herein, and that no other person or entity of any kind (other than as expressly mentioned above) had or has any interest in any of the demands, obligations, actions, causes of action, debts, liabilities, rights, contracts, damages, attorneys’ fees, costs, expenses, losses or claims referred to herein. 

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v.
	
Successors and Assigns.  This Agreement, and all the terms and provisions hereof, shall be binding upon and shall inure to the benefit of the parties and their respective heirs, legal representatives, successors and assigns.

	
w.
	
Assistance of Counsel.  Mr. Furry acknowledges that he has been advised to consult with counsel of his choosing before entering into this Agreement.  The parties specifically represent that they either have consulted to their satisfaction with their attorneys, or have elected on their own accord not to seek legal counsel, prior to executing this Agreement concerning the terms and conditions of this Agreement.

	
x.
	
Interpretation.  Should any portion, word, clause, phrase, sentence or paragraph of this Agreement be declared void or unenforceable, such portion shall be considered independent and severable from the remainder, the validity of which shall remain unaffected.  Whenever required by the context, as used in this Agreement the singular number shall include the plural, and the masculine gender shall include the feminine and neuter.

	
y.
	
Entire Agreement.  This Agreement constitutes the entire agreement between the parties who have executed it and supersedes any and all other agreements, understandings, negotiations, or discussions, either oral or in writing, express or implied, between the parties to this Agreement.  The parties hereto acknowledge that no representations, inducements, promises, agreements, or warranties, oral or otherwise, have been made by them, or anyone acting on their behalf, which are not embodied in this Agreement, that they have not executed this Agreement in reliance on any such representations, inducements, promise, agreement or warranty, and that no representation, inducement, promise, agreement or warranty not contained in this Agreement, including, but not limited to, any purported supplements, modifications, waivers or terminations of this Agreement shall be valid or binding, unless executed in writing by all of the parties to this Agreement.

	
z.
	
Governing Law.  This Agreement shall be enforced and governed under the laws of the State of California without reference to its choice of law provisions.

	
aa.
	
Knowing and Voluntary Agreement.  This Agreement in all respects has been voluntarily and knowingly executed by the parties hereto. Mr. Furry has been advised that this is an important legal document and that he should consult with an attorney of his choosing prior to entering into this Agreement.  Mr. Furry specifically represents that he has been given an opportunity to consult with counsel and that, to the extent desired, he has consulted with an attorney of his choosing regarding 

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the terms and conditions of this Agreement.  Mr. Furry acknowledges that the Company and its advisors and attorneys have not provided Mr. Furry any legal advice in connection with this Agreement.

	
bb.
	
Counterparts.  This Agreement may be executed in counterparts, and when each party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original, and, when taken together with other signed counterparts, shall constitute one agreement, which shall be binding upon and effective as to all parties.

	
cc.
	
No Waiver.  Failure to insist on compliance of any term, covenant or condition contained in this Agreement shall not be deemed a waiver of that term, covenant, or condition, nor shall any waiver or relinquishment of any right or power contained in this Agreement at any one time or more times be deemed a waiver or relinquishment of any right or power at any other time or times.

	
dd.
	
Arbitration.  Any disputes concerning this Agreement or otherwise arising out of this Agreement or Mr. Furry’s employment or termination that the parties are unable to resolve among them shall be submitted to final and binding arbitration in Orange County, California at and under the rules of the Judicial Arbitration and Mediation Service (“JAMS”); provided that nothing in this provision shall prevent the Company from seeking injunctive relief in any Court of competent jurisdiction.

[CONTINUED ON NEXT PAGE]

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IN WITNESS WHEREOF, the undersigned have executed this Separation Agreement and General Release of All Claims on the date(s) set forth hereinafter.

 

	
Dated: January 31, 2015
	
 
	
By:
	
 /s/ Frederick D. Furry

	
 
	
 
	
 
	
FREDERICK D. FURRY

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
BIOLASE, INC

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
Dated: January 31, 2015
	
 
	
By:
	
 /s/ Jeffrey M. Nugent

	
 
	
 
	
 
	
Jeffrey M. Nugent

	
 
	
 
	
 
	
President and Chief Executive Officer

 

 

11Exhibit 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.

 

 

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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