Exhibit 10.3

UNCONDITIONAL GUARANTY

(Corporate)

For and in consideration of the loan by COMERICA BANK (“Bank”) to Biolase
Technology, Inc. (“Borrower”), which loan is made pursuant to a Loan and
Security Agreement between Borrower and Bank dated as of September 28, 2006 (as
amended from time to time the “Agreement”), and acknowledging that Bank would
not enter into the Agreement without the benefit of this Guaranty, the
undersigned guarantor (“Guarantor”) hereby unconditionally and irrevocably
guarantees the prompt and complete payment of all amounts that Borrower owes to
Bank and performance by Borrower of the Agreement in strict accordance with its
terms.

1. If Borrower does not perform its obligations in strict accordance with the
Agreements, Guarantor shall, upon five (5) days written notice, pay all amounts
due thereunder (including, without limitation, all principal, interest, and
fees) and otherwise to proceed to complete the same and satisfy all of
Borrower’s obligations under the Agreements.

2. If there is more than one guarantor, the obligations hereunder are joint and
several, and whether or not there is more than one Guarantor, the obligations
hereunder are independent of the obligations of Borrower, and a separate action
or actions may be brought and prosecuted against Guarantor whether action is
brought against Borrower or whether Borrower be joined in any such action or
actions. Guarantor waives the benefit of any statute of limitations affecting
its liability hereunder or the enforcement thereof, to the extent permitted by
law. Guarantor’s liability under this Guaranty is not conditioned or contingent
upon the genuineness, validity, regularity or enforceability of the Agreements.

3. Guarantor authorizes Bank, without notice or demand and without affecting its
liability hereunder, from time to time to (a) renew, extend, or otherwise change
the terms of the Agreements or any part thereof; (b) take and hold security for
the payment of this Guaranty or the Agreements, and exchange, enforce, waive and
release any such security; and (c) apply such security and direct the order or
manner of sale thereof as Bank in its sole discretion may determine.

4. Guarantor waives any right to require Bank to (a) proceed against Borrower or
any other person; (b) proceed against or exhaust any security held from
Borrower; or (c) pursue any other remedy in Bank’s power whatsoever. Bank may,
at its election, exercise or decline or fail to exercise any right or remedy it
may have against Borrower or any security held by Bank, including without
limitation the right to foreclose upon any such security by judicial or
nonjudicial sale, without affecting or impairing in any way the liability of
Guarantor hereunder. Guarantor waives any defense arising by reason of any
disability or other defense of Borrower or by reason of the cessation from any
cause whatsoever of the liability of Borrower other than payment and performance
of the obligations under the Agreement. Guarantor waives any setoff, defense or
counterclaim that Borrower may have against Bank. Guarantor waives any defense
arising out of the absence, impairment or loss of any right of reimbursement or
subrogation or any other rights against Borrower. Until all of the amounts that
Borrower owes to Bank under the Agreement have been paid in full, Guarantor
shall have no right of subrogation or reimbursement for claims arising out of or
in connection with this Guaranty, contribution or

 

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other rights against Borrower, and Guarantor waives any right to enforce any
remedy that Bank now has or may hereafter have against Borrower. Guarantor
waives all rights to participate in any security now or hereafter held by Bank.
Guarantor waives all presentments, demands for performance, notices of
nonperformance (except as set forth in Section 1 of this Guaranty), protests,
notices of protest, notices of dishonor, and notices of acceptance of this
Guaranty and of the existence, creation, or incurring of new or additional
indebtedness. Guarantor assumes the responsibility for being and keeping itself
informed of the financial condition of Borrower and of all other circumstances
bearing upon the risk of nonpayment of any indebtedness or nonperformance of any
obligation of Borrower, warrants to Bank that it will keep so informed, and
agrees that absent a request for particular information by Guarantor, Bank shall
have no duty to advise Guarantor of information known to Bank regarding such
condition or any such circumstances. Guarantor waives the benefits of California
Civil Code sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850, 2899 and
3433.

5. Guarantor acknowledges that, to the extent Guarantor has or may have certain
rights of subrogation or reimbursement against Borrower for claims arising out
of this Guaranty, those rights may be impaired or destroyed if Bank elects to
proceed against any real property security of Borrower by non-judicial
foreclosure. That impairment or destruction could, under certain judicial cases
and based on equitable principles of estoppel, give rise to a defense by
Guarantor against its obligations under this Guaranty. Guarantor waives that
defense and any others arising from Bank’s election to pursue non-judicial
foreclosure. Without limiting the generality of the foregoing, Guarantor waives
any and all benefits and defenses under California Code of Civil Procedure
Sections 580a, 580b, 580d and 726, to the extent they are applicable.

6. If Borrower becomes insolvent or is adjudicated bankrupt or files a petition
for reorganization, arrangement, composition or similar relief under any present
or future provision of the United States Bankruptcy Code, or if such a petition
is filed against Borrower, and in any such proceeding some or all of any
indebtedness or obligations under the Agreements are terminated or rejected or
any obligation of Borrower is modified or abrogated, or if Borrower’s
obligations are otherwise avoided for any reason, Guarantor agrees that
Guarantor’s liability hereunder shall not thereby be affected or modified and
such liability shall continue in full force and effect as if no such action or
proceeding had occurred. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if any payment must be returned by Bank upon the
insolvency, bankruptcy or reorganization of Borrower, Guarantor, any other
guarantor, or otherwise, as though such payment had not been made.

7. Any indebtedness of Borrower now or hereafter held by Guarantor other than
intercompany indebtedness in an aggregate amount not to exceed $500,000, is
hereby subordinated to any indebtedness of Borrower to Bank; and such
indebtedness of Borrower to Guarantor shall be collected, enforced and received
by Guarantor as trustee for Bank and be paid over to Bank on account of the
indebtedness of Borrower to Bank but without reducing or affecting in any manner
the liability of Guarantor under the other provisions of this Guaranty.

8. Guarantor agrees to pay a reasonable attorneys’ fee and all other costs and
expenses which may be incurred by Bank in the enforcement of this Guaranty. No
terms or provisions of this Guaranty may be changed, waived, revoked or amended
without Bank’s prior written consent. Should any provision of this Guaranty be
determined by a court of competent

 

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jurisdiction to be unenforceable, all of the other provisions shall remain
effective. This Guaranty, together with any agreements (including without
limitation any security agreements or any pledge agreements) executed in
connection with this Guaranty, embodies the entire agreement among the parties
hereto with respect to the matters set forth herein, and supersedes all prior
agreements among the parties with respect to the matters set forth herein. No
course of prior dealing among the parties, no usage of trade, and no parol or
extrinsic evidence of any nature shall be used to supplement, modify or vary any
of the terms hereof. There are no conditions to the full effectiveness of this
Guaranty other than execution by Borrower and Bank of the Agreement. Bank may
assign this Guaranty without in any way affecting Guarantor’s liability under it
in conjunction with any permitted assignment by Bank of the Agreement. This
Guaranty shall inure to the benefit of Bank and its successors and assigns. This
Guaranty is in addition to the guaranties of any other guarantors and any and
all other guaranties of Borrower’s indebtedness or liabilities to Bank.

9. Guarantor represents and warrants to Bank that (i) Guarantor has taken all
necessary and appropriate action to authorize the execution, delivery and
performance of this Guaranty, (ii) execution, delivery and performance of this
Guaranty do not conflict with or result in a breach of or constitute a default
under Guarantor’s Articles / Certificate of Incorporation or Bylaws or other
organizational documents or agreements to which it is party or by which it is
bound, and (iii) this Guaranty constitutes a valid and binding obligation,
enforceable against Guarantor in accordance with its terms.

10. Guarantor covenants and agrees that Guarantor shall do all of the following:

10.1 Guarantor shall maintain its corporate existence, remain in good standing
in Delaware, and continue to qualify in each jurisdiction in which the failure
to so qualify would be reasonably expected to have a material adverse effect on
the financial condition, operations or business of Guarantor. Guarantor shall
maintain in force all licenses, approvals and agreements, the loss of which
would be reasonably expected to have a material adverse effect on its financial
condition, operations or business.

10.2 Guarantor shall comply with all statutes, laws, ordinances, directives,
orders, and government rules and regulations to which it is subject if
non-compliance with such laws would be reasonably expected to materially
adversely affect the financial condition, operations or business of Guarantor.

10.3 At any time and from time to time Guarantor shall execute and deliver such
further instruments and take such further action as may reasonably be requested
by Bank to effect the purposes of this Agreement.

10.4 Guarantor shall not transfer, assign, encumber or otherwise dispose of any
shares of capital stock or other equity interest Guarantor may now have or
hereafter acquire in Borrower.

11. This Guaranty shall be governed by the laws of the State of California,
without regard to conflicts of laws principles. GUARANTOR WAIVES ANY RIGHT TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF

 

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THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. Jurisdiction shall lie in the State of California.

12. REFERENCE PROVISION.

The parties prefer that any dispute between them be resolved in litigation
subject to a Jury Trial Waiver as set forth in Section 11 of this Agreement, but
the availability of that process is in doubt because of the opinion of the
California Court of Appeal in Grafton Partners LP v. Superior Court, 9 Cal.
Rptr. 3d 511. This Reference Provision will be applicable until the California
Supreme Court completes its review of that case, and will continue to be
applicable if either that court or a California Court of Appeal publishes a
decision holding that a pre-dispute Jury Trial Waiver provision similar to that
contained in the Loan Documents is invalid or unenforceable. Delay in requesting
appointment of a referee pending review of any such decision, or participation
in litigation pending review, will not be deemed a waiver of this Reference
Provision.

12.1 Mechanics.

(a) Other than (i) nonjudicial foreclosure of security interests in real or
personal property, (ii) the appointment of a receiver or (iii) the exercise of
other provisional remedies (any of which may be initiated pursuant to applicable
law), any controversy, dispute or claim (each, a “Claim”) between the parties
arising out of or relating to this Agreement or any other document, instrument
or agreement between the Bank and the undersigned (collectively in this Section,
the “Loan Documents”), will be resolved by a reference proceeding in California
in accordance with the provisions of Section 638 et seq. of the California Code
of Civil Procedure (“CCP”), or their successor sections, which shall constitute
the exclusive remedy for the resolution of any Claim, including whether the
Claim is subject to the reference proceeding. Except as otherwise provided in
the Loan Documents, venue for the reference proceeding will be in the Superior
Court or Federal District Court in the County or District where venue is
otherwise appropriate under applicable law (the “Court”).

(b) The referee shall be a retired Judge or Justice selected by mutual written
agreement of the parties. If the parties do not agree, the referee shall be
selected by the Presiding Judge of the Court (or his or her representative). A
request for appointment of a referee may be heard on an ex parte or expedited
basis, and the parties agree that irreparable harm would result if ex parte
relief is not granted. The referee shall be appointed to sit with all the powers
provided by law. Each party shall have one peremptory challenge pursuant to CCP
§170.6. Pending appointment of the referee, the Court has power to issue
temporary or provisional remedies.

(c) The parties agree that time is of the essence in conducting the reference
proceedings. Accordingly, the referee shall be requested to (i) set the matter
for a status and trial-setting conference within fifteen (15) days after the
date of selection of the referee, (ii) if practicable, try all issues of law or
fact within ninety (90) days after the date of the conference and (iii) report a
statement of decision within twenty (20) days after the matter has

 

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been submitted for decision. Any decision rendered by the referee will be final,
binding and conclusive, and judgment shall be entered pursuant to CCP §644.

(d) The referee will have power to expand or limit the amount and duration of
discovery. The referee may set or extend discovery deadlines or cutoffs for good
cause, including a party’s failure to provide requested discovery for any reason
whatsoever. Unless otherwise ordered, no party shall be entitled to “priority”
in conducting discovery, depositions may be taken by either party upon seven
(7) days written notice, and all other discovery shall be responded to within
fifteen (15) days after service. All disputes relating to discovery which cannot
be resolved by the parties shall be submitted to the referee whose decision
shall be final and binding.

12.2 Procedures. Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of hearings, the order of presentation of evidence,
and all other questions that arise with respect to the course of the reference
proceeding. All proceedings and hearings conducted before the referee, except
for trial, shall be conducted without a court reporter, except that when any
party so requests, a court reporter will be used at any hearing conducted before
the referee, and the referee will be provided a courtesy copy of the transcript.
The party making such a request shall have the obligation to arrange for and pay
the court reporter. Subject to the referee’s power to award costs to the
prevailing party, the parties will equally share the cost of the referee and the
court reporter at trial.

12.3 Application of Law. The referee shall be required to determine all issues
in accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, provide all temporary
or provisional remedies, enter equitable orders that will be binding on the
parties and rule on any motion which would be authorized in a trial, including
without limitation motions for summary judgment or summary adjudication . The
referee shall issue a decision at the close of the reference proceeding which
disposes of all claims of the parties that are the subject of the reference. The
referee’s decision shall be entered by the Court as a judgment or an order in
the same manner as if the action had been tried by the Court. The parties
reserve the right to appeal from the final judgment or order or from any
appealable decision or order entered by the referee. The parties reserve the
right to findings of fact, conclusions of laws, a written statement of decision,
and the right to move for a new trial or a different judgment, which new trial,
if granted, is also to be a reference proceeding under this provision.

12.4 Repeal. If the enabling legislation which provides for appointment of a
referee is repealed (and no successor statute is enacted), any dispute between
the parties that would otherwise be determined by reference procedure will be
resolved and determined by arbitration. The arbitration will be conducted by a
retired judge or Justice, in accordance with the California Arbitration Act
§1280 through §1294.2 of the CCP as amended from time to time. The limitations
with respect to discovery set forth above shall apply to any such arbitration
proceeding.

 

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12.5 THE PARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS
REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY, AND THAT
THEY ARE IN EFFECT WAIVING THEIR RIGHT TO TRIAL BY JURY IN AGREEING TO THIS
REFERENCE PROVISION. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT)
WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY AND FOR
THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY
DISPUTE BETWEEN THEM WHICH ARISES OUT OF OR IS RELATED TO THIS AGREEMENT OR THE
LOAN DOCUMENTS.

IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as of
this 28th day of September, 2006.

 

BL ACQUISITION II INC. By:      Title:     

 

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ATTACHMENTS

[Attach applicable resolutions]

 

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