exv10w1






Exhibit 10.1




[LETTERHEAD OF HENRY SCHEIN, INC.]




February 27, 2009




Mr. David M. Mulder

Chief Financial 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. (“HSI”) 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.	 	As a fundamental condition precedent to HSI entering into this letter agreement,
Biolase has informed HSI that it is taking actions to reduce its operating expenses to such
a level as to reach profitability, based on **** Biolase sales revenue of $**** on an
on-going basis, to be adjusted as minimums increase.
	 
	 	2.	 	Subject to Section 1 above, HSI agrees to make a firm minimum purchase commitment of
Waterlase Turbo MD (a Waterlase MD with an associated turbo handpiece kit) and Ezlase base
units and any other laser units (including the **** and ****) offered during the Term and
their related future iterations and their auxiliary components and accessories (the
“Lasers”) during the period commencing on the date hereof to March 31, 2010 (the “New
Initial Term”) and Non-Laser Products (as defined below) in the aggregate amount of $42.7
million (“**** Level”), to be purchased as follows: (i) $**** comprised of Waterlase Turbo
MD lasers and Turbo upgrade kits, which such purchase shall occur no later than March 2,
2009, (ii) commencing on March 15, 2009, (26) semi-monthly purchases of any Biolase
products during the New Initial Term for purchases of not less than $**** per semi-monthly
period (of which $**** will be Lasers and $**** will be non-Laser products, including
disposable products, warranty sales, training and replacement parts, etc. collectively
“Non-laser Products”), each such purchase to occur on the 15th and the last day of each
consecutive month (e.g, March 15, 2009, March 31, 2009, April 15, 2009, April 30, 2009,
etc.); and (iii) HSI agrees to make purchases of any Biolase products in the aggregate
amount of $**** (the “Initial International Purchase”) with regard to distribution of
products in the United Kingdom, Belgium, Luxembourg, Netherlands, Australia, New Zealand,
Austria, Spain, and Germany or elsewhere in the world. The Initial International Purchase
shall occur no later than March 2, 2009. With respect to all purchases in this Section 2
made in February of 2009, HSI shall pay Biolase all of the purchase price on March 2, 2009
in respect of







 




			
	****	 	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.




 









 











	 		 	(i) and (iii) above ($**** in the aggregate). Other payments in respect of purchases
hereunder shall be due upon receipt, of the applicable products. These purchases may be
purchased by HSI through HSI’s divisions or subsidiaries in the United States or Canada or
elsewhere in the world. Biolase will make the products available to HSI and, in accordance
with the parties’ standard business practice, promptly supply HSI with any products so
ordered. HSI and its affiliates, under the Agreement or any related agreements for the sale
of Biolase products anywhere in the world, shall have no product purchase obligations other
than as set forth herein. Notwithstanding anything contained herein to the contrary,
purchases by HSI of **** shall not be part of the purchases set forth in (i) through (iii)
above.
	 
	 	3.	 	With respect to **** Waterlase C-100 ****, Biolase and HSI agree to work together in
good faith to reach agreement upon a strategy for **** Waterlase C-100 **** no later than
April 15, 2009, with an agreed upon **** no later than ****.
	 
	 	4.	 	If sales exceed HSI targeted levels of $**** in Lasers of such year, ****% of such
excess sales of Lasers will be **** and ****% will be **** Lasers ****; provided, however,
that the parties will negotiate in good faith such percentages if ****.
	 
	 	5.	 	During the New Initial Term, Biolase shall exclusively sell its products through HSI in
the Territory, and shall not sell such products directly or through other distributors, and
HSI shall have the right to distribute the products through third-party distributors if it
so elects, provided that such third-party distributors sell to end-users permitted under
the Agreement “Territory” shall be defined as the United States, United Kingdom, Belgium,
Luxembourg, Netherlands, Canada, Spain, Germany, Austria, Australia, and New Zealand,
Subject to Biolase’s contractual obligations in respect of sales in markets governed by
existing distribution agreements in effect as of the date hereof, HSI shall have the right
to exclusively sell in other countries throughout the world. Biolase will consider in good
faith extending exclusivity in certain specific markets **** based upon HSI’s performance
in such markets.
	 
	 	6.	 	HSI may, at its option, extend this letter agreement for two additional one-year terms,
upon written notice given on or before February 1, 2010 or February 1, 2011 (for second
renewal) given by Schein to Biolase prior to the expiration of the New Initial Term (or the
then expiring additional one-year term, as the case may be); provided that HSI may only be
permitted to exercise an option to extend the then current term if it shall agree in
writing to purchase from Biolase a minimum aggregate amount of products purchased during
such additional term equal to (i) (for the first renewal term) the **** (a) $**** and (b)
**** of the amount of products actually sold by Biolase to HSI during the New Initial Term







 




			
	****	 	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.




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	 	 	 	(adjusted pro rata for 12 months); provided, however, that if HSI shall not have **** of
Lasers by $**** from the **** as of ****, measured ****, then HSI shall only be required to
purchase the **** (A) $**** or (B) **** of the amount of products actually sold by Biolase to
HSI during the New Initial Term (adjusted pro rata for 12 months), and (ii) (for the second
renewal term) the greater of (x) **** of the commitment for the prior renewal term and (y)
**** of the amount of products actually sold by Biolase to HSI during the first renewal term;
provided, however, that if HSI shall not have **** of Lasers by $**** from the **** as ****,
measured at ****, then HSI shall only be required to purchase the greater of (X) **** of the
commitment for the prior renewal term and (Y) **** of the amount of products actually sold by
Biolase to HSI during the first renewal term. The New Initial Term, together renewal terms,
if any, with shall be the “Term” of the Agreement and all covenants and provisions
restricting HSI or its affiliates, anywhere in the world under this Agreement or any related
agreement, including in respect of selling competing products, shall have no force or effect
upon the termination of this Agreement or expiry of Term. The parties will cooperate to
maximize sales of Biolase products after the expiry or termination of the Agreement.
	 
	 	7.	 	With respect to existing Waterlase MD and Ezlase inventory, subject to applicable law
(e.g. export laws), HSI agrees to use commercially reasonable efforts and to work in good
faith to **** through new international markets, among other places, with a **** Lasers by
a ****, through sales of Lasers in international markets.
	 
	 	8.	 	The cost of the Waterlase Turbo MD systems to HSI will be $**** in the United States
and Canada, and Biolase will **** on the warranty applicable to the Laser products from
**** to HSI. The cost of the current Ezlase system to HSI will **** be $**** for the United
States and Canada. For the avoidance of doubt, HSI shall determine the end-user customer
pricing.
	 
	 	9.	 	Upon the launch of the new turbo handpiece (expected to be the date hereof), Biolase
will upgrade HSI’s existing inventory with new turbo handpieces and related hardware and
software and HSI will purchase turbo handpieces as follows: solely with respect to HSI’s
existing on-hand inventory, for the payment of $****, Biolase will provide Schein with one
turbo handpiece kit and the related turbo handpiece software (turbo handpiece software to
be installed by HSI technicians during end-user installation) for each unit of existing
inventory. The stand-alone turbo handpiece upgrade kit for sale to the existing installed
base upgrade shall be priced to HSI at $**** per upgrade kit. The upgrade kits will be
completed in approximately **** days of such launch.







 




			
	****	 	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.




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	 	10.	 	HSI will assume the following functions that Biolase had previously performed
under the Agreement:






	 	a.	 	Support at certain trade shows, as determined by the parties
	 
	 	b.	 	Notwithstanding the foregoing, Biolase agrees to provide “over the shoulder”
demonstrations during the New Initial Term (and during each additional renewal term).
	 
	 	c.	 	HSI will use all reasonable efforts to secure the services of ****  to serve as a “luminary/trainer” in respect of the products.
	 
	 	d.	 	HSI will provide facilities appropriate for the purpose of providing WCLI seminar
programs, and will provide full related support expenses, including but limited to
honorariums for luminaries, accommodations for luminaries, travel for luminaries, and food
for participants (total estimated costs to be ($****-$****), with an estimated cost of
$**** per seminar program)
	 
	 	e.	 	Both parties shall endeavor to improve sales and to agree upon further
marketing efforts to accelerate sales and increase productivity.






	 	11.	 	In countries in which HSI distributes the Biolase products but does not have
exclusivity, Biolase will not offer the products to other distributors, wholesalers or
other similar entities on terms and conditions more favorable than those provided to HSI,
without also making any such more favorable terms or conditions available to HSI.
	 
	 	12.	 	HSI will continue to provide Level 1 service and Biolase will continue to provide all
the services it currently performs, including Level 2 service.
	 
	 	13.	 	To secure the $**** payment, Biolase will agree to enter into a security agreement to
be provided by HSI following the execution of this letter agreement containing those terms
and conditions customary and ordinary for such purpose, and will consent to the filing of
the related UCC or UCCs to effect a security interest for the benefit of HSI in Biolase’s
inventory, equipment and other tangible assets; provided that HSI shall agree to release
such security upon receipt of the products deliverable in respect of such $**** payment.
	 
	 	14.	 	In any country in which Biolase does not currently sell its products (a “New
Territory”), if Biolase determines to sell its products in such New Territory through the
distribution channel, HSI shall have the first right to sell such products on terms and
conditions to be agreed upon by the parties; provided that if the parties do not so agree
in good faith within fifteen (15) days upon notice to HSI, Biolase may utilize another
distributor in such New Territory provided that such distributor is not offered terms and
conditions more favorable to those offered to HSI.
	 
	 	15.	 	All amounts herein reference U.S. dollars. This letter agreement 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







 




			
	****	 	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.




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	 	 	 	confirmed in all respects, and shall remain in full force and effect. Should there be any
conflict between the teens and conditions contained in this letter agreement and the
Agreement, the terms and conditions of this letter agreement shall govern and control.




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




Regards,




	 	 	 	 	 
	 	 	 
	 	/s/ Brian S. Watson
 	 
	 	Vice President, Strategic and Business Planning 

Henry Schein, Inc. 	 
	 	 	 
	 
	 	 	 
	 	/s/ 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.






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