Exhibit 10.5
HENRY SCHEIN, INC.
March 9, 2010
Mr. David M. Mulder
Chief Executive Officer
Biolase Technology, Inc.
4 Cromwell
Irvine, California 92618
Dear Mr. Mulder:
This letter agreement shall serve to amend that certain License and Distribution
Agreement, by and between Henry Schein, Inc. (“HSIC”) and Biolase Technology,
Inc. (“Biolase”), dated as of August 8, 2006, as amended (the “Agreement”).
As of the date set forth above, the parties hereby agree as follows:

  1.   Distribution **** – All applicable U.S. and Canadian sales (as discussed
below) of Biolase products will ****:

  a.   Henry Schein Clients (being defined as customers of HSIC who are not
Non-HSIC Clients (as defined below)): HSIC will ****.

  b.   Non-HSIC Clients (being defined as ****: solely with respect to ****
sales that occur under this paragraph 1(b) (and not with respect to sales ****),
HSIC’s ****, and the mechanics of **** will be determined mutually and in good
faith by HSIC and Biolase. Biolase will ****. The same proportion of Henry
Schein Clients to Non-HSIC Clients will be used for the Canadian dental market
****. The list for both countries will be reviewed and agreed to by both parties
by March 15, 2010 and used for the entire length of the term. The processing and
shipments made by HSIC to Non-HSIC Clients will be made in the same ****;
provided that after such efforts and if, following thirty (30) days from
delivery, ****. Notwithstanding the foregoing, and only on an exception basis,
if HSIC is **** to customer who is defined ****, such sale shall be governed by
paragraph 1(a) above and treated as ****.

  c.   Notwithstanding anything contained herein to the contrary, Biolase shall
have the right for ****. It is the mutual intent of both parties that this
provision is to be invoked by Biolase ****.

  d.   **** dental products and services will continue to be exclusive to HSIC
in the U.S., Canada, and those other existing international markets where HSIC
currently has exclusivity. Subject to paragraph 1(c) above ****.

      ****   Certain confidential information contained in this document, marked
with four asterisks, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.

 

 

--------------------------------------------------------------------------------

 

  2.   Minimum Purchase Commitment; Non-Laser Equipment Purchases – Commencing
April 15, 2010, HSIC shall make minimum world-wide actual purchase order-issued
purchases (or, at HSIC’s discretion, a prepayment) of $1.5 million per month of
Equipment (“Equipment” being defined as ****) payable one-half on the 15th and
30th of each month for the term of this letter agreement. For the avoidance of
doubt and notwithstanding anything contained herein to the contrary, the amounts
required to purchased pursuant to this paragraph are in addition to, and may not
be offset against, HSIC obligations to the make advance payments as specifically
set forth in that certain letter agreement, dated February 16, 2010, by and
between HSIC and Biolase. All other categories of Biolase dental laser products
and services (“Non-Laser Equipment”) purchased by HSIC for the term will not be
included in the minimum purchase commitment described above.

  3.   ****– HSIC will make ****for ****. The remaining ****. HSIC will make
****equal to ****. The remaining units will ****. The ****under this paragraph
will be in addition to, and exclusive of, the minimum purchase commitment,
minimum equipment purchase prepayments, and Non-Laser Equipment purchases set
forth in Paragraph 2 above. The HSIC purchase price with respect to the
Waterlase MD products per this paragraph shall be ****. The mechanics of the
**** shall be further discussed by the parties’ operational teams after the date
hereof and the parties’ will develop processes for implementing the intent of
this letter agreement. HSIC agrees it shall ****, but in any event not longer
than one weeks’ time following Biolase’s sales of such units, with the specific
process ****to be determined in good faith by HSIC and Biolase.

  4.   Term – one year from the date hereof; provided however, that either HSIC
or Biolase may terminate this agreement for any reason whatsoever upon 60 days’
advance written notice to the other party, and unless otherwise agreed upon in
writing, the parties will have no further purchase obligations upon such
termination. This agreement may be extended by HSIC and Biolase for an
additional six (6) months upon mutual agreement of the parties. For the
avoidance of doubt, HSIC may continue to sell its inventory of Biolase products
after the expiry or termination of this agreement, and Biolase and HSIC shall
reasonably cooperate in such efforts.

  5.   Manufacturer’s Suggested Retail Price – Biolase’s MSRP for the Waterlase
MD is $****, $**** for the ezlase, and $**** for iLase.

  6.   Special Financing – Henry Schein Financial Services will continue to
offer, at its discretion, special financing to Biolase clients and pay for 100%
of the cost of doing so. Alternative financing programs are at the option of the
clients and Biolase.

  7.   Additional Bundling Promotions – Such promotions will be offered from
time to time as determined by HSIC management. One example would be ****.
Biolase can also offer special programs at its own cost or as negotiated with
shared cost.

  8.   Luminaries – Both parties support the idea of creating many more
luminaries. Upon mutual agreement by HSIC and Biolase, HSIC would **** for
services rendered in connection with such role. If that program is adopted, the
parties will ****. Current maximum number of new luminaries under this program
is to be ****.

  9.   Inventory –HSIC will have the option to upgrade **** inventory **** at
****. The upgrade orders will ****, but following the ****, upgrades will be
****.

      ****   Certain confidential information contained in this document, marked
with four asterisks, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.

 

2

--------------------------------------------------------------------------------

 

  10.   New Additional Cash Spiff Incentives for HSIC Sales People – For the
term, $**** will be paid on each Waterlase MD sale for sales to HSIC Clients
only. This amount will be allocated to one or more sales persons at the
discretion of the HSIC Regional Manager. For sales to HSIC Clients only, HSIC
FSCs will also receive a $**** additional spiff for each ezlase or iLase sale
made in their territory. Amounts under this paragraph 10 will be 100% funded by
HSIC.

  11.   New Incentives for Regional Managers – For the term, $**** will be paid
on each Waterlase MD sale to HSIC Clients only, provided each HSIC manager
achieves their defined annual target. Amounts under this paragraph 11 will be
100% funded by HSIC.

  12.   New Incentives for HSIC Zone General Managers – For the term, $**** will
be paid on each Waterlase MD sale to HSIC Clients only provided each HSIC
manager achieves **** of their Zone defined annual target. Amounts under this
paragraph 12 will be 100% funded by HSIC.

  13.   Schools – HSIC will work in partnership with Biolase to install systems
into dental schools with the goal of incorporating the effective use of lasers
within the curriculum of the school (e.g., **** ).

  14.   **** – HSIC will continue to support the “Triangle of Success” process
that HSIC and Biolase played a key role in solidifying this past year.

  15.   Outside North America – HSIC will continue to work with Biolase as a
Preferred Vendor Partner and the parties will continue the exclusive rights in
various markets as previously agreed to.

  16.   **** – HSIC will support a Biolase-initiated **** program under certain
circumstances for ****. The program may also be made available to ****. The
overall goal is to ensure these programs are ****. Biolase will do so on limited
live pilot before finalizing a full program.     17.   Biolase **** – Biolase
agrees ****.

  18.   New Forecasts for Purchase Orders – HSIC agrees to provide on the 30th
of each month, a six-month rolling forecast for product category purchases
expected on future purchase orders as specified by both parties.

All amounts herein reference U.S. dollars. This letter agreement extends the
term of the Agreement and amends certain terms and conditions of the Agreement.
All other terms and conditions of the Agreement that are not modified by this
letter agreement are hereby ratified and confirmed in all respects, and shall
remain in full force and effect. Should there be any conflict between the terms
and conditions contained in this letter agreement and the Agreement, the terms
and conditions of this letter agreement shall govern and control.
[SIGNATURES APPEAR ON NEXT PAGE]

      ****   Certain confidential information contained in this document, marked
with four asterisks, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.

 

3

--------------------------------------------------------------------------------

 

Please acknowledge your agreement to the foregoing terms and conditions by
executing this letter agreement.

          Sincerely,
    /s/ Brian S. Watson         Brian S. Watson    Vice President, Strategic and
Business Planning
Henry Schein, Inc.          ACCEPTED AND AGREED:
    /s/ David M. Mulder         David M. Mulder      Chief Financial Officer
Biolase Technology, Inc.     

      ****   Certain confidential information contained in this document, marked
with four asterisks, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.

 

4