Exhibit 10.5





EXHIBIT 10.5



DISTRIBUTION AND SUPPLY AGREEMENT




This Distribution and Supply Agreement (this “Agreement”) is entered into as of
September 23, 2010 with an effective date as of August 30, 2010 (the “Effective Date”) by
and between Biolase Technology, Inc. and its subsidiaries (collectively, “Biolase”) and
Henry Schein, Inc. and its subsidiaries (collectively, “HSI”).



WHEREAS, Biolase and HSI are parties to that certain License and Distribution Agreement dated
as of August 8, 2006, as amended on April 1, 2007, February 29, 2008, April 7, 2008, December 23,
2008, February 27, 2009, September 10, 2009, January 31, 2010, February 16, 2010, March 9, 2010 and
August 13, 2010 (the “Original Agreement”), pursuant to which HSI was an exclusive
distributor of Biolase products in the United States and Canada;



WHEREAS, the parties desire to enter into this Agreement, pursuant to which, among other
things, (a) Biolase will have the right to sell Products in all territories, except in certain
territories where HSI will have the exclusive right to sell Products (as defined below), (b)
Biolase will retain distribution rights in territories where it has existing exclusive distribution
relationships (referred to herein as the “Biolase Retained Territories”), and HSI shall have no
distribution rights in the Biolase Retained Territories, and (c) HSI will have (i) exclusive rights
in certain territories specified herein, (ii) non-exclusive rights in North America (as defined
below), and (iii) non-exclusive rights in all other territories which are not Biolase Retained
Territories, in each case to distribute the Products subject to the terms and conditions set forth
herein;



WHEREAS, contemporaneously with the entry into this Agreement, HSI will deliver to Biolase new
purchase orders for **** of Products (of which **** will be for **** and **** will be for Products
(other than consumables, parts, training or warranties)) and **** for consumable Products, in each
case on the terms and conditions set forth herein; and



WHEREAS, in connection with the entry into this Agreement, Biolase and HSI have agreed to
amend, restate and supersede the Original Agreement, such that neither party shall have any rights,
remedies or obligations thereunder, other than as set forth herein.



NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:



1. Termination. Subject to Section 4.4, effective as of the Effective Date, the Original Agreement
(and all outstanding purchase orders provided thereunder or
otherwise) shall hereby, automatically and without any further action by any of the parties, be
terminated and be of no further force and effect and no party thereto shall have any rights,
remedies or obligations thereunder. It is agreed and understood that the terms of this Agreement
shall apply to all Products and services purchased or distributed by HSI prior to the Effective
Date.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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. Appointment and Term.



2.1. Subject to the terms and conditions of this Agreement, Biolase hereby appoints HSI as its
exclusive distributor, in the territories listed on Schedule 2.1 (collectively, “HSI
Exclusive Territories”), of the products listed on Exhibit A and **** (collectively,
“Products”) and HSI hereby accepts such appointment. During the Exclusivity Negotiation
Period (as defined below), the parties will use their best efforts to agree upon commercially
reasonable performance criteria for each HSI Exclusive Territory, to become effective no earlier
than the expiration of the Exclusivity Negotiation Period. If the parties are not able to agree to
such performance criteria for any HSI Exclusive Territory despite their best effort to do so prior
to the expiration of the applicable Exclusivity Negotiation Period, or if HSI does not satisfy such
performance criteria in any HSI Exclusive Territory, then such HSI Exclusive Territory will become
an HSI Non-Exclusive Territory (as defined below) under this Agreement. “Exclusivity
Negotiation Period” means ****.



2.2. Subject to the terms and conditions of this Agreement, Biolase hereby appoints HSI as its
non-exclusive distributor of the Products in North America and those other territories that are not
(i) Biolase Retained Territories or (ii) HSI Exclusive Territories (collectively, the “HSI
Non-Exclusive Territories” and together with the HSI Exclusive Territories, the “HSI
Distribution Territory”), and HSI hereby accepts such appointment. Except for North America,
HSI’s right to distribute Products in any Non-Exclusive Territory is subject to the right of
Biolase to appoint an exclusive distributor in such territory pursuant to Section 2.4(ii) below.
“North America” means, collectively, the United States and its territories and possessions,
Puerto Rico and Canada. For the avoidance of doubt, the parties acknowledge and agree that Puerto
Rico is, as of the date hereof, an HSI Exclusive Territory, and notwithstanding its inclusion in
the term North America, will not be an HSI Non-Exclusive Territory unless and until it becomes an
HSI Non-Exclusive Territory pursuant to Section 2.1.



2.3. Subsidiaries of HSI may, at the direction of HSI, exercise any of the rights, or assume
any of the duties, of HSI hereunder, provided that HSI shall be responsible for the performance of,
and the adherence to this Agreement by, any such subsidiaries. In addition, outside of North
America, and subject to applicable regulatory requirements, HSI shall have the right to appoint
third party sub-distributors, agents or resellers, provided that, HSI shall be responsible to
ensure that any such sub-distributors, agents and resellers agree to adhere to the performance
requirements and other terms and conditions consistent with this Agreement. Within North America,
and
subject to applicable regulatory requirements, HSI shall have the right to appoint Authorized
Agents (as defined below), subject to written approval from Biolase (which approval shall not be
unreasonably withheld, conditioned or delayed), provided that, HSI shall be
responsible to ensure that any such Authorized Agents agree to adhere to the performance
requirements and other terms and conditions consistent with this Agreement. No Authorized Agent
appointed by HSI pursuant to this Section 2.3 shall have the right to sell Products in Biolase
Retained Territories. For the purposes of this Agreement, “Authorized Agent” means a third
party (including a sub-distributor, agent or reseller) engaged by HSI that satisfies the following
criteria: ****. HSI agrees to use its commercially reasonable efforts to enforce its rights and
remedies against any Authorized Agent who breaches its obligations under clause (i) above.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


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2.4. The rights granted to HSI in this Section 2 above are subject to the restrictions in the
following subsections 2.4(i), 2.4(ii) and 2.4(iii).



(i) HSI shall not have the right to distribute any Products in territories that are, as of the
date hereof, the subject of an exclusive distribution agreement between Biolase and any third party
distributor entered into prior to the date hereof (any such territory, a “Biolase Retained
Territory,” and each such distribution agreement, a “Biolase Retained Territory
Distribution Agreement”). A list of each of the Biolase Retained Territory Distribution
Agreements, and the Biolase Retained Territories associated therewith, are set forth on
Schedule 2.4 hereto. Biolase hereby represents and warrants to HSI that Schedule
2.4 sets forth a true, complete and correct list of all of the Biolase Retained Territory
Distribution Agreements to which Biolase is a party. For purposes of clarification, HSI shall not
have any right to distribute Products in any of the Biolase Retained Territories; provided,
however, that (a) if Biolase does not deliver to HSI, within sixty (60) days of the
Effective Date, a written confirmation signed by Biolase and each third party distributor in each
of the territories marked on Schedule 2.4 with an asterisk that such distributor is an exclusive
distributor within such territory, then each such territory shall automatically become an HSI
Non-Exclusive Territory under this Agreement, and (b) if at any time during the Term Biolase grants
distribution rights in any Biolase Retained Territory to more than one distributor, then such
Biolase Retained Territory shall automatically become an HSI Non-Exclusive Territory under this
Agreement, with or without notice to HSI, but Biolase agrees to give prompt written notice to HSI
of such event.



(ii) Biolase shall ****. If, after **** (the “Non-Exclusivity Date”), Biolase desires
to **** Biolase may ****, subject to the following conditions: ****. If HSI notifies Biolase ****.
If HSI does not so notify Biolase ****, then Biolase ****. Upon the occurrence of a ****, the
****shall not apply in ****. Each party agrees that this Section 2.4(ii) and the terms set forth
herein are confidential and may not be disclosed by either party. “****” means . “****” means
****. This Section 2.4(ii) shall ****.



(iii) At the request of HSI, Biolase shall promptly deliver to HSI’s outside
counsel (as directed by HSI), on a confidential basis, a **** with the terms of this
Agreement.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


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2.5. Notwithstanding the foregoing, ****



2.6. The initial term of this Agreement shall be from the date hereof through **** (the
“Initial Term”), which shall thereafter automatically renew for successive one year terms
(“Renewal Terms”) unless either party gives written notice to the other of its intent not
to renew this Agreement **** Initial Term or a Renewal Term, as applicable, or unless otherwise
terminated in accordance with this Agreement. Notwithstanding the foregoing, HSI’s distribution
rights in all territories other than North America shall terminate on ****. The Initial Term and
all Renewal Terms are collectively referred to as the “Term”.



3. Pricing.




3.1. Subject to Section 3.3, Biolase agrees ****. All prices are expressed in U.S. dollars
and are exclusive of any sales or excise taxes. Biolase may decrease the prices for the Products
at any time and will promptly notify HSI of any price decrease. ****.




3.2. If and when Biolase ****) (the “****”), Biolase shall ****. Biolase shall ****.



3.3. Notwithstanding anything in this Agreement to the contrary, Biolase shall at all times
during the Term provide the Products to HSI at ****.




3.4. ****.



(i) If at any time during the Term the **** such ****, provided, however, that
(i) the **** shall not **** in the aggregate and (ii) Biolase may **** for any Applicable Quarter
by **** in the form of ****.




(ii) ****



(iii) For purposes of this Agreement, (i) “****” shall mean, as to ****. If the parties are
not able to agree on ****, Biolase and HSI shall promptly **** and to determine the ****, which
determination shall be final and binding on Biolase and HSI.



(iv) **** following the **** of Biolase during the Term (each such ****, the “Applicable
****”), each party shall deliver to the other party a notice containing the **** for such
Applicable **** (“****”). If either party objects to **** by delivering written notice of such
objection ****, then Biolase and HSI shall use their reasonable, good faith efforts to resolve such
dispute ****. If a resolution is reached, such resolution shall be in writing, signed by Biolase
and HSI, shall be final and binding on Biolase and HSI, and shall conclusively determine ****. If
no resolution can be reached ****, Biolase and HSI shall promptly select an independent accounting
firm that has no preexisting
relationship with either Biolase or HSI (the “Accounting Firm”) to arbitrate the
dispute, to review the **** and to determine the **** in accordance with the terms and conditions
of this Agreement (with instructions to such Accounting Firm that the determination shall be made
****), which determination shall be final and binding on Biolase and HSI.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


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3.5. Upon ****, each party shall provide to the other party’s attorney and/or accountants
access to such books and records during regular business hours as may reasonably be required to
verify ****, provided that any person participating in**** shall (to the extent
such person is not otherwise bound to protect the confidentiality of such books and records by
applicable codes of conduct or professional responsibility) agree to keep confidential all
information disclosed in connection therewith, and provided further that,
**** the business of the party providing access. In connection with this Section 3.5, neither
party shall be required to **** to the other party’s attorney or accountants.



4. Orders; Shipping and Payment Terms; Prepayments.




4.1. HSI shall order Products from Biolase by submitting a purchase order indicating the
desired quantity and delivery location. Biolase shall promptly acknowledge HSI’s purchase orders
and inform HSI of scheduled delivery dates, and if applicable, back order status.



4.2. All shipments of Products (including drop shipments directly from Biolase to HSI’s
customers) shall be shipped by Biolase, FOB Biolase’s manufacturing facility, with risk of loss and
title to the Products (except for warranty claims) to pass to HSI (or HSI’s customers in the case
of drop shipments) upon delivery by Biolase to the shipping carrier at its facility.



4.3. Amounts payable under purchase orders shall be due and payable ****. Notwithstanding the
foregoing, Biolase may, at its option, require amounts payable under a purchase order to be due and
payable ****, in which case the amounts payable under such purchase order shall be subject to a
****. Biolase’s option shall be exercised by delivery of a written notice to HSI on or prior to
the date the applicable invoice is issued. All payments shall be made in U.S. dollars. No invoice
may be issued prior to Biolase’s shipment of the Products ordered.




4.4. Existing Pre-Paid Advances; New Pre-Paid Advance.



(i) The parties agree that this Agreement (i) amends and restates in its entirety each of (x)
the letter agreement dated February 16, 2010 (as amended or otherwise modified prior to the date
hereof, the “February Letter”), between the HSI and Biolase, and (y) the letter agreement
and March 9, 2010 (as amended or otherwise modified prior to the date hereof, the “March
Letter”), between the HSI and Biolase (collectively, the February Letter and the March Letter
are referred to as the “Existing 
Agreements”), and (ii) continues the obligations of Biolase thereunder. The Existing
Agreements shall no longer be in effect other than as modified herein. This Agreement does not
constitute a novation.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


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(ii) HSI and Biolase hereby acknowledge and agree that ****.




(iii) Subject to the terms and conditions of this Agreement, HSI agrees to ****.



(iv) If (i) Biolase fails to deliver Products in accordance with this Agreement under the ****
Purchase Order on or prior to the delivery date(s) set forth below in Section 4.5 (or ****), and
****, or (ii) any Event of Default (as defined in the Amended and Restated Security Agreement,
defined below) occurs, then the outstanding balance under the Total Advances shall be refunded by
Biolase to HSI, which payment shall be immediately due and payable to HSI in cash without any
action or notice required by HSI.



4.5. Subject to Section 10.1, Biolase agrees to deliver Products as soon as commercially
practicable after receipt of a purchase order from HSI, but in no event later than the date set
forth on such purchase order. On the date hereof, HSI will deliver purchase orders to Biolase as
follows (the “Effective Date Purchase Orders”): (i) ****. The satisfaction and fulfillment
of the Effective Date Purchase Orders are subject to the terms and conditions set forth in the
Amended and Restated Security Agreement, dated as of the date hereof, between HSI and Biolase (the
“Amended and Restated Security Agreement”). ****.




4.6. All Products shall have standard warranties for **** . ****.



5. Product Discontinuance. Biolase agrees to notify HSI **** Biolase intends to discontinue the
distribution or sale of any Products, and ****. Notwithstanding its receipt of such notice, HSI
may continue to sell such discontinued Products until its inventory is depleted.



6. Purchase Modification. HSI may modify, without charge, any of the **** of Products (other than
consumables, parts, training and warranties) to be delivered by Biolase prior to **** under the
**** Purchase Order for other Products (other than consumables, parts, training or warranties), by
providing Biolase with notice of such modification electronically, by facsimile or by mail on or
prior to ****.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


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7. Support of Products.



7.1. Biolase and its distributors **** will provide HSI and HSI’s existing and future end-user
customers (including the ****) (the “Customers”), with such technical support, educational
programs, product literature, training, upgrades (including without limitation, software upgrades,
and any upgrades or modifications to HSI
inventory intended to be sold by HSI in any HSI Distribution Territory which HSI determines is
reasonably necessary in order to sell such Product in any such HSI Distribution Territory,
including reconfiguring software and adding documentation for such HSI Distribution Territory),
replacement parts and Product warranties on the Products, including without limitation, those
services set forth on Schedule 7.1 (“Support Services”) as is necessary for HSI and
its Customers to effectively market, sell and use, as applicable, the Products. Notwithstanding
the foregoing, with respect to its obligation to provide Support Services for the ****, Biolase
shall not be required to provide Support Services to any party other than HSI or its Customers.
Biolase shall, at HSI’s request, upgrade any Products in HSI’s inventory to make it saleable, and
will charge HSI ****; provided that, if ****, then Biolase ****. Such Support
Services shall be provided by Biolase to HSI and its Customers ****.



7.2. Biolase shall use ****, any **** which HSI, in its reasonable discretion, ****
(“****”). Biolase hereby covenants and agrees that it will **** for **** prior to ****.



7.3. On or prior to ****, HSI will provide Biolase with a preliminary marketing plan prepared
in good faith, in such detail and with such assumptions as HSI reasonably believes are necessary
for such plan to be meaningful. The parties expressly acknowledge that delivery of such plan does
not impose any further or new obligations on, nor grant any further rights to, HSI and the failure
by HSI to successfully carry out the marketing plan, or any changes made thereto by HSI, shall not
be a breach of this Agreement.



8. Termination.




8.1. A party may terminate this Agreement, effective immediately upon delivery to the other
party of written notice to such effect, in any of the following circumstances:



(i) the other party dissolves, ceases doing business, or sells or transfers all or
substantially all of its assets;



(ii) the other party (A) makes an assignment for the benefit of its creditors, (B) institutes
a proceeding as a debtor under any law relating to insolvency or bankruptcy, (C) fails to have
discharged within 45 days any involuntary proceedings brought against it under any insolvency or
bankruptcy law, (D) becomes insolvent or (E) generally does not pay its debts as they become due;



(iii) the other party commits theft or embezzlement or obtains funds or property under false
pretenses; or



(iv) the other party fails to remedy any breach or default in the performance of the terms of
this Agreement (but only if such breach or default is capable of remedy) within **** after its
receipt of a written notice of such breach or
default; provided, however, that, with respect to any breach or
default of ****, such cure period shall be **** (but only if such breach or default is capable of
remedy).





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


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8.2. Biolase shall honor all orders for Product that HSI placed prior to the effective date of
termination or expiration of this Agreement. Termination shall not affect the rights or
obligations of either party accrued as of the effective date of such termination or that may arise
subsequently with respect to transactions initiated or completed prior to the effective date of
such termination. The confidentiality and indemnification provisions of this Agreement shall
survive the termination or expiration of this Agreement. In addition, in the event of termination
or expiration of this Agreement, HSI shall have the right to sell any remaining Products delivered
to HSI.



9. Treatment of Confidential Information; Nondisparage.




9.1. Neither party will use (except to undertake the activities contemplated by this
Agreement), publish or otherwise disclose any information related to the other party that is
acquired by such party in connection with the performance of this Agreement unless required by law,
regulation or legal process. During the Term and for a ****, neither party will disclose, reveal
or use any Confidential Information concerning the other party or its respective clients,
affiliates or business partners without the prior written consent of the disclosing party;
provided, however, that the confidentiality obligations hereunder shall survive indefinitely with
respect to, if applicable, customer lists and customer identifying data of HSI. HSI and Biolase
each agrees it shall not knowingly utilize any material Confidential Information of the other party
to encourage, assist, or induce its employees or any third party to negatively interfere with or
impede each party’s respective sales efforts. A violation of this Section 9.1 shall constitute a
breach of this Agreement.



9.2. “Confidential Information” means all data and information of any type or form
(whether visual, written, oral, electronic, photographic or otherwise) of a proprietary or
confidential nature and not generally known to the public that is disclosed (either intentionally
or unintentionally) by a party hereto or one of its affiliates or representatives to the other
party hereto or one of its affiliates or representatives, regardless of whether such information is
marked or indicated as being confidential. Confidential Information includes, but is not limited
to, all information of a financial, business, marketing, organizational, legal or technological
nature, including patents, copyrights, proprietary software, computer algorithms, trade secrets,
inventions and other intellectual property, financial statements and other financial data, customer
and supplier lists, marketing plans, sales projections and forecasts, cost information, product
designs, engineering and technical data, models, prototypes and other information relating to
business practices, current and future acquisitions, research and development, manufacturing,
production, operations and the like. Confidential Information also includes information of or
relating to third parties that is disclosed by the disclosing party to the receiving party.
Confidential Information shall
not, however, include any information that, as shown by competent proof, (i) is publicly known
or generally available in the public domain prior to the time of disclosure by the disclosing party
to the receiving party, (ii) becomes publicly known or generally available in the public domain
after disclosure by the disclosing party to the receiving party through no action or inaction of
the receiving party, (iii) is already in the possession of the receiving party at the time of
disclosure by the disclosing party as shown by the receiving party’s written records existing
immediately prior to the time of such disclosure, (iv) is obtained by the receiving party from a
third party that may lawfully disclose such information without breaching any obligation of
confidentiality applicable to such third party or (v) is independently developed by the receiving
party without use of or reference to the disclosing party’s Confidential Information, as shown by
the receiving party’s independent contemporaneous written records.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


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9.3. All Confidential Information provided hereunder will be and remain the property of the
disclosing party and, upon termination of this Agreement, will be promptly returned to the
disclosing party or destroyed upon the disclosing party’s written request.



9.4. HSI covenants and agrees that HSI and its subsidiaries, Affiliates, agents, and employees
(the “HSI Parties”) shall not ****, directly or indirectly, say or do anything disparaging
about, or take any action injurious to the business interests or reputation of Biolase or its
subsidiaries, Affiliates, agents, and employees (the “Biolase Parties”), including, without
limitation, any disparagement of any of their products or services. HSI covenants and agrees that
the HSI Parties shall not **** encourage, assist or induce others to say or do anything disparaging
about, or take any action injurious to the business interests or reputation of the Biolase Parties,
including, without limitation, any disparagement of any of their products or services. Biolase
covenants and agrees that the Biolase Parties shall not ****, directly or indirectly, say or do
anything disparaging about, or take any action injurious to the business interests or reputation of
the HSI Parties, including, without limitation, any disparagement of any of their products or
services. Biolase covenants and agrees that the Biolase Parties shall not during the Term
encourage, assist or induce others to say or do anything disparaging about, or take any action
injurious to the business interests or reputation of the HSI Parties, including, without
limitation, any disparagement of any of their products or services.



9.5. During ****, HSI and Biolase each agree to use commercially reasonable best efforts (a)
not to solicit for employment, (b) not to hire for employment, and (c) not to engage as an
independent contractor or consultant, any employee of the other party who acted in such capacity
during the Term of this Agreement and, as to a particular HSI or Biolase employee whose employment
is **** (and including any former employees of Biolase as may be agreed to in writing by HSI), ****
of such employee’s service with HSI or Biolase, as the case may be. During the Term, Biolase
agrees to promptly notify HSI in writing, but in any event, **** the separation of service of any
Biolase employee, and HSI’s obligations hereunder shall relate only to those Biolase employees
as to whom HSI received such written notice. The notice required from Biolase pursuant to this
Section 9.5 shall be delivered **** by e-mail addressed to ****, or such other person(s) as HSI may
designate from time to time, shall clearly state that such notice is being delivered pursuant to
this Section 9.5 of this Agreement and shall be followed by a confirmation copy sent to HSI within
5 days of such email notification by certified mail to the addresses set forth in Section 12.6.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


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10. ****.




10.1. Biolase’s obligation to supply Products to third parties shall at all times be subject
to the condition that Biolase is able to **** and any **** (collectively, “****”). In the event
that Biolase is at any time during the Term **** pursuant to the terms of this Agreement for any
reason whatsoever, Biolase shall use its commercially reasonable efforts to **** such **** as soon
as such ****; provided, however, that (i) ****.



10.2. Pursuant to the terms and conditions of this Agreement, during the Term, HSI may make
available financial services offered or arranged by HSI or its affiliates to HSI prospective
purchasers of Products in connection with the sale of Products or otherwise (“HSI Financial
Services”). Nothing herein shall be construed as limiting HSI’s or its affiliates’ rights to
provide HSI Financial Services for or on behalf of any other person, and nothing herein shall be
construed as limiting Biolase’s rights to offer or provide to its customers financial services of
any other person.




10.3. ****



11. Prospective Customers.




11.1. If at any time HSI provides Biolase information about a prospective sale by HSI,
including in connection with a request for Biolase assistance in connection with prospective sales
of Products, Biolase shall not, directly or indirectly, encourage any such prospective customer of
HSI to purchase or otherwise acquire any Products from any third party (other than HSI), including,
without limitation, directly from Biolase or any of its affiliates, rather than purchasing such
Products from HSI.



11.2. Biolase shall not solicit any Customer for the sale of any ****, or sell any **** to any
Customer, for **** each of (a) **** and (b) the ****. For purposes of this Section 11.2, “****”
means ***** with respect to any Product.



11.3. If at any time Biolase would like to request HSI’s assistance in connection with a
prospective sale of Products, Biolase shall ****, or ****, and such request shall clearly state
that it is being delivered pursuant to this Section 11.3 of this Agreement. If, and only if, HSI
agrees in writing to provide such assistance, then Biolase may provide information about the
prospective customer in order to permit HSI to provide such assistance and HSI shall not, directly
or indirectly, encourage any such prospective
customer of Biolase to purchase or otherwise acquire any Products from any third party (other
than Biolase), including, without limitation, directly from HSI or any of its affiliates, rather
than purchasing such Products from Biolase. For the purposes of clarification, Biolase shall not
provide ****, or ****.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


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12. Other Matters.




12.1. Representations and Warranties of Biolase. Biolase hereby represents and
warrants to HSI that (i) it is the exclusive legal and beneficial owner, free and clear of any
liens, encumbrances, or claims of third parties (other than the existing security interests in
favor of MidCap Financial, LLC and HSI), of all right, title and interest in and to the Products
and all intellectual property rights incorporated therein or used in connection with the
manufacture, marketing or sale of such Products (“Intellectual Property Rights”), (ii) it has the
right to permit HSI’s, HSI’s affiliates and/or HSI’S customer’s use of the Intellectual Property
Rights, (iii) it is the exclusive legal and beneficial owner of the trademarks, service marks,
names, and designs owned by Supplier (the “Marks”) and used in connection with the
Products, free and clear of any liens, encumbrances, or claims of third parties (other than the
existing security interests in favor of MidCap Financial, LLC and HSI), and has the right to
license the Marks to HSI as provided in this Agreement, (iv) HSI’s use of the Marks in accordance
with this Agreement does not, and is not reasonably likely to, infringe or violate the trademark or
trade dress rights of any third party in the HSI Distribution Territory, (v) the Products do not,
in whole or in part, infringe upon, violate or misappropriate the rights of any person or entity,
including, but not limited to, any patents, copyrights, trademark rights, trade secrets or any
other proprietary rights, (vi) except as disclosed in Biolase’s filings with U.S. Securities and
Exchange Commission there is no claim, action, litigation, proceeding or investigation before any
court or administrative agency pending or threatened against or with respect to the Products, (vii)
except as set forth on Schedule 12.1, Biolase has not received any third party cease or
desist notification, licensing notice, or patent notification with respect to the Products, (viii)
nothing contained in any marketing, advertising or educational materials produced by or for the
Biolase in connection with marketing, advertising or educating persons concerning the Products
infringes, violates or misappropriates any intellectual property right of any third party (for the
sake of clarity, it is specified that this representation and warranty also applies to materials
produced by HSI at the direction of the Biolase), and (ix) the distribution by HSI of the Products
in the packaging provided by or approved by the Biolase, as contemplated by this Agreement shall
not infringe or violate the trademark or trade dress rights of any third party in the HSI
Distribution Territory.



12.2. Continuing Guaranty. The parties shall be subject to the terms of the
Continuing Guaranty and Indemnification set forth on Exhibit B, which is hereby
incorporated herein and made a part hereof. In the event of a conflict between the terms and
conditions set forth in this Agreement and the terms and conditions set forth on Exhibit B,
the terms and conditions set forth on Exhibit B shall control.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


11









 









12.3. HSI represents and warrants that it is acting on behalf of itself and no other third
parties in connection with the negotiation and execution of this Agreement.



12.4. LIMITATION OF LIABILITY. EXCEPT IN CONNECTION WITH A PARTY’S WILFUL MISCONDUCT
OR GROSS NEGLIGENCE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL, PUNITIVE,
SPECIAL OR CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED TO, LOST PROFITS AND LOSS OF GOODWILL,
ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT (OR ANY DUTY OF COMMON LAW, AND WHETHER OR
NOT OCCASIONED BY THE NEGLIGENCE OF A PARTY OR ITS AFFILIATES), REGARDLESS OF ANY NOTICE OF THE
POSSIBILITY OF SUCH DAMAGES; PROVIDED THAT NOTHING IN THIS SECTION IS INTENDED TO, OR DOES, LIMIT
(A) THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY SET FORTH HEREIN OR (B) EITHER
PARTY’S RIGHT TO CLAIM DIRECT DAMAGES FROM THE OTHER PARTY.



12.5. For purposes of clarification, subject to warranty claims, HSI does not have any right
to return or exchange of any products purchased by it under this Agreement. Upon reasonable
request by Biolase, HSI shall provide, addressed to Biolase (or addressed to Biolase’s independent
auditors) a written confirmation of the immediately preceding sentence, signed by an appropriate
officer of HSI.



12.6. Notices. Except as otherwise provided, all notices given under this Agreement
shall be in writing and shall be deemed to have been duly given upon receipt if delivered by hand
or facsimile transmission with receipt confirmed, three days after mailing by certified or
registered mail, and one day after sending by overnight courier, to the parties’ respective address
indicated on the signature page of this Agreement or such other address as a party specifies in
writing to the other party. All notices given to HSI under this Agreement shall be sent with a
copy to Henry Schein, Inc., 135 Duryea Road, Melville, New York 11747, Attn: General Counsel, Fax
(631) 843-5660. All notices given to Biolase under this Agreement shall be sent with a copy to
Biolase Technology, Inc., 4 Cromwell, Irvine, California 92618, Attn: General Counsel, Fax (949)
340-7379.



12.7. No Joint Venture. Nothing in this Agreement shall be construed to create,
constitute, give effect to or otherwise imply a joint venture, partnership, agency or employment
relationship of any kind between the parties.



12.8. Compliance with Government Contracting Requirements. Biolase and HSI will work
together in good faith to identify mutually beneficial opportunities (as determined in HSI’s sole
discretion) to utilize the services of minority-owned businesses in connection with HSI’s pursuit
of federal, state and local government contracts. Biolase shall comply with laws, regulations and
orders related to government contracting, including without limitation with respect to minority
owned and
disadvantaged businesses (including pursuant to 48 CFR Sections 52.219-8 and 52.219-9), and
equal employment opportunity and affirmative action. Biolase and any Biolase representative
performing this Agreement have not been debarred, suspended or excluded, and are not subject to any
proposed debarment, suspension or exclusion, from participation in the Medicare or Medicaid
programs or any other government program, and have not been convicted of, or have charges pending
regarding, any offenses which may lead to such debarment, suspension or exclusion. Biolase shall
promptly inform HSI if it becomes aware that the provisions of this paragraph become inaccurate in
a material way during the term.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


12









 









12.9. Trademarks. Biolase grants to HSI the limited right to use Biolase’s trademarks
relating to the Products in connection with the marketing of the Products during the Term and for a
period of during any such period thereafter in which HSI has rights to sell Products.



12.10. Assignment. This Agreement may not be assigned by either party without the
other party’s prior written consent.



12.11. Governing Law. This Agreement shall be governed by the laws of the State of
New York, without reference to conflict of laws principles; provided, however, that
the Federal Arbitration Act of the United States shall govern issues as to arbitrability. Except
as otherwise provided herein, if a dispute arises in connection with or relating to this Agreement
and the parties are unable to resolve it **** through direct negotiations, the dispute shall be
referred to final and binding arbitration to be held in Chicago, Illinois, U.S.A. in accordance
with the rules of the American Arbitration Association then in effect, by a panel of three
arbitrators, with one arbitrator to be selected by each party and the third to be chosen by the two
arbitrators selected by the parties; provided, however, if Biolase becomes a debtor
in a bankruptcy or similar insolvency proceeding, the judge presiding over such proceeding shall
have discretion to hear and determine all disputes arising under this Agreement. The arbitrators
shall make the final determination as to any discovery disputes between the parties and may impose
sanctions in their discretion to enforce compliance with discovery obligations. The award of the
arbitrator(s) shall be final and binding upon the parties hereto and may be enforced by any court
of competent jurisdiction. Each party shall bear their own attorneys’ fees, costs and necessary
disbursements incurred in connection with said arbitration; provided, however, the
successful party prevailing in any such arbitration shall be entitled to recover from the
unsuccessful party the successfully party’s share of the costs and charges of the arbitrators.
Notwithstanding the provisions of this Section, the parties may, in addition to any other remedies
available to it under this Agreement, bring an action in any court of competent jurisdiction for
injunctive relief pending the settlement or arbitration of the dispute and may have entered an
appropriate temporary restraining order or preliminary injunction without being required to post
bond or other security or to offer proof of monetary damages.
The inclusion of this provision shall not be construed to deny appropriate equitable relief in
arbitration in any other situation in which the circumstances justify such relief.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


13









 









12.12. Remedies. Due to the fact that the disclosing party could not be adequately
compensated by money damages in the event of the receiving party’s breach of any of the
confidentiality provisions of this Agreement, the disclosing party shall be entitled, in addition
to any other right or available remedy, to an injunction or other equitable relief restraining such
breach or any threatened breach.



12.13. Entire Agreement; Amendments. This Agreement, including the exhibits attached
hereto, each of which is incorporated herein by reference in its entirety, constitutes the entire
agreement between Biolase and HSI. All prior or contemporaneous agreements, proposals,
understandings and communications between or involving Biolase and HSI, whether oral or written,
including without limitation, the Original Agreement, are superseded by this Agreement. The terms
contained in this Agreement shall supersede any conflicting terms contained in any purchase order,
invoice or other document used or submitted by either party in connection with the purchase of
Products covered by this Agreement. This Agreement may not be amended, nor any obligation waived,
except by a writing signed by both parties.



12.14. No Waiver. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right, power or
privilege hereunder.



12.15. Severability. If any term of this Agreement is held by a court of competent
jurisdiction to be invalid or unenforceable, then this Agreement, including all of the remaining
unaffected terms, shall remain in full force and effect as if such invalid or unenforceable term
had never been included.



12.16. No Publicity. Neither party shall originate any publicity, press releases or
other public announcement relating to any relationship between the parties, this Agreement or the
performance hereof without the other party’s prior written consent; provided, however, that either
party may, without such consent, make any press release or other public announcement as required by
law.



12.17. Section Headings. The headings contained in this Agreement are for convenience
of reference only and are not intended to have any substantive significance in interpreting this
Agreement.



12.18. Facsimile; Counterparts. This Agreement may be executed by facsimile signature
and in any number of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


14









 









Signatures on next page






	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


15









 









IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first written above by their respective duly authorized representatives.



	 	 	 	 	 	 	 	 	 
	Henry Schein, Inc.	 	 	 	Biolase Technology, Inc.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Mark E. Mlotek
	 	 	 	By:
	 	/s/ Federico Pignatelli
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Mark E. Mlotek
	 	 	 	 	 	Name: Federico Pignatelli
	 

	 	Title:   Executive Vice President
	 	 	 	 	 	Title:   Chairman and interim CEO
	 
	 	 	 	 	 	 	 	 
	Address for Notices:	 	 	 	Address for Notices:
	 
	 	 	 	 	 	 	 	 
	 

	 	135 Duryea Road
	 	 	 	 	 	4 Cromwell
	 

	 	Melville, New York 11747
	 	 	 	 	 	Irvine, California 92618
	 

	 	Fax: (631) 843-5660
	 	 	 	 	 	Fax: (949) 340-7379
	 

	 	Attn: General Counsel
	 	 	 	 	 	Attn: General Counsel








	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.





 


 









 







EXHIBIT A




****






	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.





 


 









 







EXHIBIT B




CONTINUING GUARANTY AND INDEMNIFICATION




Biolase Technology, Inc. on behalf of itself and its affiliates (collectively referred to as
“BIOLASE”) hereby guarantees that each article constituting or being part of any shipment or
delivery now or hereafter made to Henry Schein, Inc. or any affiliate thereof (collectively, the
“PRODUCTS”) (collectively, “HSI”) will: (i) at the time of each shipment or delivery be in
compliance with all applicable federal, national, supranational, state, provincial, local or
similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law
(including common law) (hereinafter referred to as “Legal Requirements”), in each region in which
HSI will distribute the Products; and (ii) not be adulterated or misbranded within the meaning of
the U.S Federal Food, Drug and Cosmetic Act (the “Act”), or within the meaning of any Legal
Requirements, nor will any PRODUCT be an article which may not, under the provisions of Sections
405, 505 or 512 of the Act, be introduced into interstate commerce. BIOLASE hereby guarantees that
it has proper legal title to the PRODUCTS and that the PRODUCTS are merchantable and fit for their
intended purpose.



BIOLASE, at its own expense, shall defend, indemnify and hold HSI harmless for and against any and
all liabilities, losses, damages (including, actual, punitive, enhanced and exemplary damages),
claims (including product liability claims), costs and expenses (including defense costs and
reasonable attorneys’ fees and expenses), interest, awards, judgments and penalties (including
reasonable attorneys’ fees and expenses) suffered or incurred by HSI arising or resulting from:




	 	i.	 	any claim of trademark, trade dress, trade secret, copyright, patent or other
intellectual property infringement or misappropriation, including any claim for willful
infringement against HSI, arising out of HSI’s distribution of the PRODUCTS (except where
HSI has supplied the trademark which is the basis for the claim);







	 	ii.	 	any claim for false advertising, unfair competition, and/or Lanham Act violation
arising out of HSI’s distribution of the PRODUCTS (except where HSI has supplied the
materials which are the basis for the claim);

	 
	 	iii.	 	any alleged or actual use or misuse of the PRODUCTS (other than by HSI);







	 	iv.	 	any breach by BIOLASE of any obligation to HSI, including those contained in related
agreements in respect of distribution, if any;







	 	v.	 	any negligent or willful action or omission of BIOLASE or any of its agents, employees,
representatives, successors or assigns in connection with the manufacture, development,
sale, distribution, storage or dispensing of the PRODUCTS (except to the extent HSI has
made any material modifications to any PRODUCTS in violation of any applicable warranty);
or







	 	vi.	 	any action for the recall or seizure of the PRODUCTS.








	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


 









 









In the event that any claim concerning the PRODUCTS is threatened or brought against HSI, HSI shall
have the right to select counsel to defend against such claim with all reasonable attorneys’ fees
and expenses to be borne and paid by BIOLASE, provided that (i) HSI shall identify the counsel it
intends to use to defend against such claim within a reasonable time, (ii) counsel selected by HSI
is experienced in the relevant area of law (e.g., trademark, copyright, patent etc.) relating to
the claim at issue, and (iii) the attorneys’ fees for which Biolase is responsible for are those
rates normally charged for similar work by attorneys of like skill in the area (for example, as set
forth in the most recent Economic Survey of the American Intellectual Property Law Association).
Nothing herein shall affect Biolase’s obligation to indemnify and hold harmless HSI as set forth
above.



In the event that any claim is threatened or brought against the PRODUCTS, Biolase shall promptly
notify HSI of such claim(s) in writing. Biolase shall consult with HSI to the fullest extent
possible in the defense of the claim(s) and shall not take any substantive action in defense of the
claim without HSI’s approval.



BIOLASE agrees to maintain comprehensive “occurrence” general liability insurance, including
“occurrence” product liability, contractual liability insurance and advertising injury coverage,
with minimum limits of liability of **** and to deliver to HSI a certificate thereof with HSI named
as an additional insured thereon. Such insurance must insure against all products contemplated
under this Agreement. Insurance coverage must be procured from an insurance company bearing an AM
Best Rating of no less than **** or a S&P Rating of no less than ****.



BIOLASE will provide notice to HSI of any regulatory action related to its operations and BIOLASE
shall be responsible, if required by Legal Requirements, for notifying the appropriate federal,
state and local authorities of any customer complaints or other occurrences regarding the PRODUCTS,
evaluating all complaints and responding to HSI in writing on the resolution of any complaints from
HSI for its customers.



If BIOLASE private labels any PRODUCT for HSI, BIOLASE agrees: (a) to make no changes in the
PRODUCT, labeling or packaging of the PRODUCT without HSI’s prior written approval; and (b) to
allow representatives of HSI to enter and inspect BIOLASE’S facilities during normal business hours
and, upon reasonable request, to supply HSI with proper documentation for HSI to determine
BIOLASE’s adherence to quality assurance and regulatory compliance standards.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.



 


 









 









This Agreement shall be continuing and shall be binding upon BIOLASE and his or its successors and
assigns and shall inure to the benefit of HSI, its successors and assigns and to the benefit of its
officers, directors, agents and employees. This Agreement shall supersede any and all prior
agreements or understandings between HSI and BIOLASE regarding the subject matter hereof. Neither
party shall provide any compensation or other benefit to employees of the other party without the
prior written consent of such other party, and each party agrees to promptly disclose to the other
party any financial relationships between itself and any employee of the other party which may give
rise to a conflict of interest between such employee and such other party and neither party shall
represent to any customer or potential
customer that they are providing any such compensation or other benefit, unless the parties
otherwise agree in writing. No right, express or implied, is granted to BIOLASE hereunder to use
in any manner any name, trade name, trademark or service mark of HSI. This Agreement contains
proprietary information and may not be disclosed without prior written approval from HSI. Any
amendments or modifications to this Agreement must be in writing and executed by authorized
representatives of both parties. This Agreement shall be governed by the laws of the State of New
York. This Agreement shall cover all PRODUCTS and shall survive the termination of any
distribution agreement or arrangement between BIOLASE and HSI.





	 	 	 
	****	 	Certain confidential information contained in this document, marked
with four asterisk, 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.