Document:

exv10w2

 

Exhibit 10.2

DESCRIPTION OF COMPENSATION ARRANGEMENT WITH ERIC HERR

     In his role as Chairman of the Board, Eric Herr will receive cash compensation of $37,500 per
quarter. Mr. Herr may elect to receive up to 100% of such payments in the form of restricted stock
grants, which are subject to vesting restrictions that lapse over time. In addition, Mr. Herr will
receive a one-time grant of an option to purchase 25,000 shares of Class A common stock, which
vests as to all of the shares on the first anniversary of the date of grant and Mr. Herr remains
eligible to receive an automatic option as of the date of the 2007 annual meeting of stockholders
to purchase 6,000 shares of Class A common stock, which vests as to all of the shares on the first
anniversary of the date of grant. Mr. Herr does not receive cash compensation for attending
meetings of the Board of Directors.<PAGE>

                                                                    Exhibit 10.1

                                LICENSE AGREEMENT

            THIS LICENSE AGREEMENT (together with the attached Exhibits the
            "AGREEMENT") is effective as of the 24th day of January, 2007 (the
            "EFFECTIVE DATE"), between BIOLASE TECHNOLOGY, Inc. (hereinafter
            along with its AFFILIATES, referred to as "BIOLASE"), located at 4
            Cromwell, Irvine, California 92618 and The Procter & Gamble Company
            (hereinafter along with its AFFILIATES, referred to as "P&G")
            located at One Procter & Gamble Plaza, Cincinnati, Ohio 45202. P&G
            and BIOLASE may each be referred to as a "PARTY" and collectively as
            the "PARTIES".

            Whereas, P&G is engaged in the business of developing,
            manufacturing, marketing, distributing, selling and supporting a
            range of consumer products;

            Whereas, BIOLASE is the owner or has certain rights in certain
            patents and technology as is more particularly set out in Exhibits A
            and B; and further, as is more particularly set out in Exhibit C
            (once Exhibit C is populated according to Section 6.2.1.1);

            Whereas, P&G and BIOLASE entered into a Letter Agreement (the
            "LETTER") dated June 28th, 2006 setting forth the general terms and
            conditions for this AGREEMENT;

            Whereas, P&G wishes to obtain, and BIOLASE is willing to grant to
            P&G, an exclusive license to the BIOLASE IP (as defined in Section
            1.2) and BIOLASE TECHNOLOGY (as defined in Section 1.5) according to
            the terms and conditions of this AGREEMENT;

            Whereas, BIOLASE will retain certain rights to the BIOLASE PATENTS
            and BIOLASE TECHNOLOGY according to the terms and conditions of this
            AGREEMENT;

            Now, therefore, in consideration of the foregoing and other mutual
            promises hereinafter set forth and for other good and valuable
            consideration, the PARTIES hereto agree as follows:

1.    DEFINITIONS

      1.1.  "AFFILIATE" means any corporation, limited liability company or
            other legal entity which directly or indirectly controls, is
            controlled by, or is under common control with P&G or BIOLASE,
            including any successor or assign of such an entity. "CONTROL", with
            respect to an AFFILIATE, shall mean the direct or indirect ownership
            of at least fifty percent (50%) of (i) the income, (ii) the
            outstanding shares on a fully diluted basis or other voting rights
            of the subject entity to elect directors, or if not meeting the
            preceding, any entity owned or controlled by or owning or
            controlling at the maximum control or ownership right permitted in
            the country where such entity exists, or (iii) such other
            arrangement as constitutes the direct or indirect ability to direct
            the management, affairs or actions of such entity.

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      1.2.  "BIOLASE INTELLECTUAL PROPERTY" (BIOLASE IP) means all present and
            future: inventions, whether or not patentable; BIOLASE PATENTS;
            copyrights; trade secrets; and any other rights or information or
            materials within the P&G FIELDS OF USE, whether confidential or not,
            owned by BIOLASE or in which BIOLASE has a transferable or
            LICENSABLE INTEREST.

      1.3.  "BIOLASE PATENTS" means those present and future patents and patent
            applications within the P&G FIELDS OF USE or within the BIOLASE
            TECHNOLOGY or the BIOLASE RETAINED FIELD to the extent permitted
            under Section 2.4 of this AGREEMENT, including but not limited to:
            i) the patents listed in Exhibits A, B, and C, and any parent
            applications, continuations, continuations-in-part, divisionals,
            re-exams, reissues thereof, ii) any subsequent patents or patent
            applications having applicability in the P&G FIELDS OF USE in which
            BIOLASE has ownership or has a transferable or LICENSABLE INTEREST,
            and iii) any foreign equivalents of the foregoing

      1.4.  "BIOLASE RETAINED FIELD" means any and all fields of use and
            products which are (a) currently, meaning as of the EFFECTIVE DATE,
            marketed by BIOLASE; and (b) other fields of use and products
            intended to be used primarily in [*  *  *  *  *  *  *  *  *  *  *  *
            *  *  *  *  *  *  *  *  * ]. BIOLASE shall also retain all rights to
            the BIOLASE IP and BIOLASE TECHNOLOGY that are outside the P&G
            FIELDS OF USE. BIOLASE shall also retain and acquire all rights to
            products that are declined by P&G or revert to BIOLASE as provided
            herein.

            The BIOLASE RETAINED FIELD also includes any and all fields of use
            which are primarily administered by a [*  *  *  *  *  *  *  *  *  *
            *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
            *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
            *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
            *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  * ]

            The BIOLASE RETAINED FIELD also includes products, methods,
            applications and services directly or indirectly using [*  *  *  *
            *  *  *  *  *  *  *  *  *  *  *  *  * ]: (i) [*  *  *  * ]; (ii) [*
            *  *  *  *  * ]; (iii) [*  *  *  *  *  *  *  *  *  *  *  *  * ]; (v)
            [*  *  * ]; (vi) [*  * ]; (vii) [*  *  *  * ] and (viii) [*  * ].
            The BIOLASE RETAINED FIELD is applicable to products and methods [*
            *  *  *  *  * ]. For the avoidance of doubt, products, methods,
            applications and services within the PRIMARY P&G FIELD OF USE that
            relate to "(ii)", "(iii)", "(iv)", "(v)", "(vi)", and "(vii)" herein
            are

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            not part of the BIOLASE RETAINED FIELD and are specifically included
            in the PRIMARY P&G FIELD OF USE.

            For the avoidance of doubt, the BIOLASE RETAINED FIELD includes the
            Waterlase, the Waterlase MD, the DioLase Plus, the LaserSmile, the
            Oculase, all related consumables, accessories and related products,
            methods and all future generations and product line extensions of
            the aforementioned products.

            The BIOLASE RETAINED FIELD specifically excludes the PRIMARY P&G
            FIELD OF USE, as defined below.

      1.5.  "BIOLASE TECHNOLOGY" means any present or future information or
            materials, whether confidential or not, in the possession of
            BIOLASE, including know-how, developments, concepts, technical
            knowledge, expertise, skill, practice, analytical methodology,
            clinical data, manufacturing knowledge, drawings, specifications,
            processes, techniques, samples, specimens, prototypes, designs,
            research and development results, safety and efficacy data, and
            other technical and scientific information reasonably useful or
            helpful to P&G for the development and marketing of product(s)
            within the P&G FIELDS OF USE.

      1.6.  "[* * * ] FIELD OF USE" shall mean only those [* * ] products that
            are in the form of a [* * ] and which, but for a license from
            BIOLASE, would infringe a valid and enforceable claim of the BIOLASE
            [* * * ] Patents attached hereto as Exhibit B (such products
            hereinafter "[* * * ] PRODUCTS"). For the avoidance of doubt, [* * *
            ] Products shall not include any [* * ] devices or products that are
            not in the form of a [* * ], and specifically shall not include [* *
            * * * * * * * * * * ].

      1.7.  "IMPROVEMENTS" shall mean any and all technology or intellectual
            property rights in and to any update, modification, customization,
            translation, upgrade, improvement, enhancement and/or derivative
            work whether or not developed under a JDA or SERVICES agreement
            between the PARTIES.

      1.8.  "LICENSABLE INTEREST" shall mean any licensable interest, whether or
            not royalty-bearing, that exists prior to the EFFECTIVE DATE, or
            that is licensed by BIOLASE from any third party after the EFFECTIVE
            DATE.

      1.9.  [*  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
             *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
             *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
             *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  * ].

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      1.10. "PRODUCT" shall mean any method, system, product, device or machine
            (or component thereof), accessory, consumable, composition,
            compound, ingredient, application, formulation, material, or
            combinations thereof in the P&G FIELDS OF USE, or within the BIOLASE
            RETAINED FIELD to the extent permitted under Section 2.4 of this
            AGREEMENT, and which, but for the right and license granted herein,
            would infringe or cause the inducement of an infringement or
            contribute to or induce the infringement of one or more valid and
            enforceable claims of one or more BIOLASE PATENTS.

            1.10.1. For the avoidance of doubt, any accessory, component,
                  consumable, or [*  *  * ] composition that would contribute to
                  or induce the infringement of one or more valid and
                  enforceable claims of a BIOLASE PATENT shall be considered a
                  PRODUCT hereunder. For example, if a valid and enforceable
                  granted BIOLASE PATENT claim reads upon the [*  *  *  *  *  *
                  *  *  * ] (and no valid and enforceable claims cover [*  *  *
                  *  *  * ], [*  *  *  *  *  *  * ] are PRODUCTS hereunder to
                  the extent [*  *  *  * *  *  *  *  *  *  * ] induces or
                  contributes to the infringement of the granted, valid and
                  enforceable BIOLASE PATENT claim. For example, if a valid and
                  enforceable granted BIOLASE PATENT claim reads upon the [*  *
                  *  *  *  *  *  *  *  *  *  * ] (and no valid and enforceable
                  claims read upon the [*  *  *  *  *  *  *  *  * ]), [*  *  *
                  *  *  *  *  *  *  *  *  *  *  *  *  * ].

            1.10.2. However, if the valid and enforceable granted BIOLASE PATENT
                  claim reads upon the [*  *  *  *  *  *  *  *  *  *  *  *  *  *
                  *  *  *  *  *  * ]. Further, if [*  *  *  *  *  *  *  *  *  *
                  *  *  *  * ]. For example, if the valid and enforceable
                  granted BIOLASE PATENT claim reads upon the [*  *  *  *  *  *
                  *  *  *  * ] and does not read upon a [*  *], then the [*  * ]
                  is not a PRODUCT. Further, if the [*  *  *  *  *  *  *  *  * ]
                  and the [*  *  * ], the [*  * ] is still not a PRODUCT.

      1.11. "P&G FIELDS OF USE" means, being applicable to [*  *  * ], any and
            all fields of use, including the PRIMARY P&G FIELD OF USE, and
            applications relating to or associated with [* * ] product [* * * *
            *  *  *  *  *  *  *  *  *  *  *  * ] including, but not limited to,
            those [*  * ] product categories listed in attached Exhibit D. The
            P&G FIELDS OF USE excludes the BIOLASE RETAINED FIELD. The P&G
            FIELDS OF USE also excludes the [*  *  *  * ] FIELD OF USE, unless
            P&G exercises its option to add the [*  *  * ] FIELD OF USE to the
            PRIMARY P&G FIELD OF USE.

      1.12. "PRIMARY P&G FIELD OF USE" means [*  *  * ] products intended for
            [*  *  * ] use, [*  *  *  *  *  *  *  *  *  * ],

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            including any products which are distributed through [*  *  *  *  *]
            for use by a [*  *  *  *  *  *  * ]. Such [*  *  * ] products
            include, but are not limited to, any and all products that may
            provide one or more of the following benefits, either on a stand-
            alone basis or as a combination: [*  *  *  *  *  *  *  *  *  *  *  *
            *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
            *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
            *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
            *  *  *  * ], the whole PRIMARY P&G FIELD OF USE [*  *  *  *  *  *].
            The PRIMARY P&G FIELD OF USE specifically excludes the BIOLASE
            RETAINED FIELD. The PRIMARY P&G FIELD OF USE also excludes the [*  *
            * ] FIELD OF USE, unless P&G exercises its option to add the [*  *
            * ] FIELD OF USE to the PRIMARY P&G FIELD OF USE.

      1.13."QUARTER" means any one of the following four (4) time periods within
            a calendar year: i) January, February, and March ("JFM"); ii) April,
            May, and June ("AMJ"); iii) July, August and September ("JAS"); and
            iv) October, November, and December ("OND").

2.    LICENSE GRANTS

      2.1.  LICENSE GRANT TO P&G. BIOLASE hereby grants to P&G an exclusive
            (even as to BIOLASE), worldwide, transferable, right and license
            under all BIOLASE IP and BIOLASE TECHNOLOGY within the P&G FIELDS OF
            USE, with rights to sub-license, to make and have made, use, import,
            export, sell, have sold, and offer for sale PRODUCTS anywhere in the
            world.

      2.2.  OPTION TO [*  *  *  * ] FIELD OF USE. P&G has the option to add the
            [*  * ] FIELD OF USE to the PRIMARY P&G FIELD OF USE for [ *  *  *
            *] after the EFFECTIVE DATE of the AGREEMENT or for [*  *  *  * ]
            after the effective date of the LETTER, whichever is sooner, by
            either:

                  i)    the payment of a one time sum of [*  *  * ] ($[*  *
                  * ]); or

                  ii)   providing a written plan regarding [*  *  *  *  * ] of a
                        [*  *  * ] PRODUCT that is acceptable to BIOLASE, the
                        acceptability of which shall not be unreasonably
                        withheld or delayed, together with a notice of P&G's
                        agreement to pay BIOLASE a) a quarterly sum of [* * * *
                        *  *  * ] ($[*  *  * ]) (each payment a "[*  * ]
                        QUARTERLY PAYMENT"), and b) a royalty rate of [*  *  *
                        *  *  *  *  *  *  * ], on [*  *  * ] PRODUCTS in
                        accordance with the royalty provision of this AGREEMENT.
                        The first [*  *

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<PAGE>

                         * ] QUARTERLY PAYMENT shall be due at the end of the
                        QUARTER in which P&G receives written notice from
                        BIOLASE accepting P&G's written plan for [*  *  *  *
                        *]. Each successive [*  *  * ] QUARTERLY PAYMENT shall
                        be due on the last day of the subject QUARTER. The [*  *
                        *  *  * ] QUARTERLY PAYMENTS shall cease upon the [*  *
                        *  * ] distribution of a [*  *  * ] PRODUCT in one of
                        the United States, Canada, or all or a portion of
                        Eastern or Western Europe. [*  *  *  *  * ] of all the
                        [*  *  *  *  * ] QUARTERLY PAYMENTS shall be treated as
                        prepaid royalties to be deducted from any subsequent
                        ROYALTY - PAYMENTS owed under this AGREEMENT.

            2.2.1.A written plan shall be considered reasonably acceptable, but
                  reasonable acceptability is not limited to, if the written
                  plan can be implemented within a commercially reasonable
                  period time, and it includes the planned commercial launch of
                  a product in at least one of the United States, Canada, or all
                  or a portion of Western or Eastern Europe.

            2.2.2.In the event that P&G exercises its option to add the [*  *
                  * ] FIELD OF USE to the PRIMARY P&G FIELD OF USE, then the
                  [*  *  *  *  * ] FIELD OF USE shall be treated as if
                  originally included within the exclusive rights and
                  obligations from BIOLASE to P&G under this AGREEMENT.

            2.2.3.If P&G does not exercise its option to add the [*  *  * ]
                  FIELD OF USE to the P&G FIELDS OF USE within the time period
                  specified, the option will expire, and the [*  *  * ] FIELD OF
                  USE will be part of the BIOLASE RETAINED FIELD.

      2.3.  REVERSION OF CERTAIN RIGHTS TO BIOLASE WITHIN P&G FIELDS OF USE
            (EXCLUDING THE PRIMARY P&G FIELD OF USE). Unless otherwise agreed to
            between the PARTIES, if, [*  * ] has lapsed from the EFFECTIVE DATE
            of this AGREEMENT or [*  *  *  * ] has lapsed from the effective
            date of the LETTER, whichever is sooner, and P&G has not:

                  (i)   initiated development of; or

                  (ii)  provided a plan to BIOLASE to develop (either itself or
                        via a licensee or via some other relationship with a
                        third party)

            products utilizing BIOLASE IP or BIOLASE TECHNOLOGY in one or more
            of the P&G consumer product categories included within the P&G
            FIELDS OF USE (excluding the PRIMARY P&G FIELD OF USE), then BIOLASE
            may terminate P&G's exclusive license to BIOLASE IP and BIOLASE
            TECHNOLOGY in those particular P&G consumer product categories as
            follows: BIOLASE may provide P&G with written notice of its intent
            to terminate such exclusive license and if P&G fails to provide
            BIOLASE with a plan to initiate development within [* * * ]of such
            notice from BIOLASE, P&G's exclusive license in the identified P&G
            consumer product category(ies) (excluding the PRIMARY P&G FIELD OF
            USE) will be terminated and removed from P&G's FIELDS OF USE.

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<PAGE>

            2.3.1.In the event P&G satisfies the requirements of "(i)" or "(ii)"
                  of this Reversion of Certain Rights Section, P&G will retain
                  its exclusive rights to said BIOLASE IP and BIOLASE TECHNOLOGY
                  within said P&G consumer product category for a period [* * *
                  ] beginning upon the satisfaction by P&G of 2.3(i) or 2.3(ii).
                  However, if after said [* *  * ] time period, P&G has not
                  implemented a [*  *  *  *  * ] distribution of a PRODUCT in
                  said P&G consumer product category, but is actively developing
                  or attempting to commercialize within said P&G product
                  category, then P&G, in its sole discretion, may (a) pay
                  BIOLASE a QUARTERLY sum of [* * * * ] ($[* * * ]) (each
                  payment a "SECONDARY QUARTERLY PAYMENT") or (b) allow the
                  BIOLASE IP and BIOLASE TECHNOLOGY to revert to BIOLASE, and
                  owe nothing further to BIOLASE for the BIOLASE IP and BIOLASE
                  TECHNOLOGY with respect to such PRODUCT in said P&G consumer
                  product category. If P&G elects to pay BIOLASE SECONDARY
                  QUARTERLY PAYMENTS, the first SECONDARY QUARTERLY PAYMENT
                  shall be due at the end of the QUARTER in which P&G receives
                  written notice from BIOLASE accepting P&G's written plan for
                  [*  *  *  *  * ]. Each successive SECONDARY QUARTERLY PAYMENT
                  shall be due on the last day of the subject QUARTER. The
                  SECONDARY QUARTERLY PAYMENTS shall cease upon the [*  *  *  *]
                  distribution of a PRODUCT in said product category in one of
                  the United States, Canada, or all or a portion of Eastern or
                  Western Europe. [*  *  *  *  *] of all the SECONDARY QUARTERLY
                  PAYMENTS shall be treated as pre-paid royalties that shall be
                  treated as prepaid royalties [*  *  *  *  *  *  *  *  *  *  *
                  *  *  *  * ]. P&G may terminate the SECONDARY QUARTERLY
                  PAYMENTS at any time for any reason, in which event exclusive
                  rights under the BIOLASE IP and BIOLASE TECHNOLOGY relating to
                  said P&G consumer product category shall revert to BIOLASE.

            2.3.2.For the sake of clarity, P&G's exclusive rights in the PRIMARY
                  P&G FIELD OF USE of use are not subject to reversion to
                  BIOLASE.

            2.3.3.A written plan shall be considered reasonably acceptable to
                  both PARTIES, but reasonable acceptability is not limited to,
                  if the written plan is commercially reasonable and can be
                  implemented within a commercially reasonable time period, and
                  it includes the planned commercial launch of a product in at
                  least one of the United States, Canada, or all or a portion of
                  Western or Eastern Europe.

      2.4.  POTENTIAL LICENSES TO P&G WITHIN BIOLASE RETAINED FIELD.

            2.4.1.For the time period encompassing [*  *  * ] from the Effective
                  Date of this AGREEMENT or [*  *  * ] from the effective date
                  of the LETTER, whichever time period ends sooner, BIOLASE will
                  offer P&G the right of first refusal to develop [* * ]
                  products within the following BIOLASE RETAINED FIELD
                  categories: (i) [*  *  *  *  *  * ] (ii) [*  *  *  *  *  *  *
                  * ]; (iii) [*  *  *  *  *  *  *  *  * ]; (iv) [*  *  *  * ];
                  (v) [*  *  * ]; (vi) [*  *  * ]; (vii) [*  *  *  *  * ]; and
                  (viii) [*  *  *  * ].

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      2.5.  DECISION MAKING. Within (i) the P&G FIELDS OF USE (including the [*
            * * ] FIELD OF USE if P&G exercises its option to add the [* * * * *
            ] FIELD OF USE to the PRIMARY P&G FIELD OF USE), (ii) P&G consumer
            product categories in the P&G FIELDS OF USE that have not reverted
            back to BIOLASE, and (iii) BIOLASE RETAINED FIELD categories offered
            to, and accepted by P&G under Section 2.4.1, P&G shall have the full
            and unrestricted right, but not the obligation, to make any and all
            decisions, in its sole discretion, surrounding its use of any
            BIOLASE TECHNOLOGY and/or BIOLASE IP, including, without limitation,
            the development, testing, marketing, manufacture, sourcing,
            packaging, sale, distribution, marketing and pricing of any products
            whatsoever in the P&G FIELDS OF USE, as well as whether or not to
            launch, market, promote, distribute and sell, or continue to sell,
            any Product whatsoever. In addition, P&G shall remain free to work
            with, contract with, subcontract with, conduct research and
            development with, or work for any third party and other third party
            researchers, developers, manufacturers, suppliers, etc. regarding
            any products or PRODUCTS, subject to all confidentiality obligations
            owed to BIOLASE.

      2.6.  CONVERSION TO NON-EXCLUSIVE LICENSE. Excluding the [* *  *  * ]
            FIELD OF USE, P&G may, in its sole discretion, convert, at any time
            after [*  *  * ] from the EFFECTIVE DATE of this AGREEMENT, its
            exclusive license(s) under this AGREEMENT to non-exclusive
            license(s), in which case P&G will no longer be obligated to pay the
            FIRST or SECOND PRODUCT SHIPMENT PAYMENTS, or QUARTERLY PAYMENTS;
            however, P&G will not be entitled to a refund of any payments
            previously paid.

            2.6.1.In the event the exclusive license is converted to a
                  non-exclusive license, the royalty rates shall remain as
                  agreed to herein (at [*  *  * ]). However, if BIOLASE enters
                  into a nonexclusive license with a third party at more
                  favorable terms than that granted to P&G, BIOLASE shall offer
                  the same terms to P&G, which P&G may accept at its sole
                  discretion. For example, if BIOLASE grants a third party
                  rights at a lower royalty rate than that applicable to P&G,
                  P&G shall be offered the opportunity to convert its royalty
                  rate to the lower royalty rate granted to such third party,
                  with such lower rate to take effect upon execution of such
                  third party agreement.

3.    TECHNOLOGY TRANSFER

      3.1.  LICENSED BIOLASE TECHNOLOGY AND BIOLASE IP RELATED TO THE PRIMARY
            P&G FIELD OF USE. Upon reasonable written (including electronically)
            request by P&G, BIOLASE shall share or transfer to P&G, relevant
            aspects of the BIOLASE TECHNOLOGY and BIOLASE IP licensed to P&G in
            the PRIMARY P&G FIELD OF USE, including, the patent applications for
            the BIOLASE PATENTS in Exhibits A (and Exhibit B in the event P&G
            exercises its option to add the [*  *  * ] FIELD OF

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<PAGE>

            USE to the PRIMARY P&G FIELD OF USE) and related patent prosecution
            information, including conception and reduction to practice
            information, and will reasonably make available to P&G for
            consultation those BIOLASE employees with substantive knowledge
            regarding the application of BIOLASE TECHNOLOGY and BIOLASE IP in
            the PRIMARY P&G FIELD OF USE; provided, however, that BIOLASE will
            not be required to provide more than [*  *  *  * ] of such
            consultation time per quarter to P&G and no more than [*  *  *  *  *
            *  * ] in [*  * ] consecutive calendar quarters. P&G and BIOLASE
            will appoint technical and patent liaisons who will serve as
            designated points of contact to develop and coordinate a timely
            process that is not overly burdensome for BIOLASE to effectuate said
            sharing of BIOLASE TECHNOLOGY and BIOLASE IP in the event P&G
            provides BIOLASE with a reasonable written request hereunder.

            In the event that such consultation leads P&G to determine that
            direct involvement of BIOLASE employees and R&D resources will be
            beneficial to the development of products using the BIOLASE
            TECHNOLOGY, P&G and BIOLASE may also enter into a joint development
            agreement ("JDA"), or other agreement, pursuant to which BIOLASE
            shall provide P&G with the specified testing, research, development,
            prototyping, production, manufacturing services or other assistance
            requested by P&G, to test, develop, produce and manufacture
            prototype PRODUCTS and such other products using the BIOLASE
            TECHNOLOGY as P&G may request ("SERVICES").

            As applicable, the PARTIES will meet at least annually to review
            progress on specific development projects within the P&G FIELDS OF
            USE.

      3.2.  LICENSED BIOLASE TECHNOLOGY AND BIOLASE IP IN P&G FIELDS OF USE
            (EXCLUDING THE PRIMARY P&G FIELD OF USE). Upon reasonable written
            request from P&G, BIOLASE will share the information reasonably
            necessary for P&G to determine whether P&G has an interest in
            developing and commercializing a BIOLASE TECHNOLOGY or BIOLASE IP
            within the P&G FIELDS OF USE (excluding the PRIMARY P&G FIELD OF
            USE). Should P&G have an interest in evaluating or commercializing
            BIOLASE TECHNOLOGY or BIOLASE IP disclosed under this Section 3.2,
            BIOLASE shall disclose information to P&G which is reasonably
            related to P&G's interest (including development and manufacturing
            information), within a commercially reasonable period of time of
            P&G's request to BIOLASE.

4.    PAYMENTS

      4.1.  QUARTERLY PAYMENTS TO BIOLASE UNTIL SHIPMENT OF A FIRST PRODUCT. P&G
            shall pay BIOLASE a QUARTERLY sum of [*  *  *  *  *  *  * ] ($[*  *
            * ]) (each payment a "QUARTERLY PAYMENT"). The first QUARTERLY
            PAYMENT shall be due at [*  *  *  *  * ] in which the EFFECTIVE DATE
            of this AGREEMENT occurs or [*  *  *  *  *  * ] from the effective
            date of the LETTER, whichever is sooner. Each successive QUARTERLY
            PAYMENT shall be due on the [*  *  *  *  *  *  *  * ] (See Section
            4.4.1). QUARTERLY PAYMENTS shall cease upon [*

                                                                               9
<PAGE>

            *  * ] distribution in the United States of the first Product. [*  *
            * ] of each QUARTERLY PAYMENT is payment for services provided by
            BIOLASE to P&G. [*  *  *  *  * ] of each Quarterly Payment shall be
            treated as pre-paid royalties [*  *  *  *  *  *  *  *  *  *  *  *
            * ]). Payments made under this Section 4.1 are non-refundable except
            as otherwise provided herein.

      4.2.  MILESTONE PAYMENTS FOR FIRST PRODUCT AND SECOND PRODUCT

            4.2.1. FIRST PRODUCT SHIPMENT PAYMENT. P&G shall pay BIOLASE a
                  product launch milestone payment in the amount of [*  *  *  *]
                  ($[*  *  * ]) on the terms and subject to the conditions set
                  forth here below (the "FIRST PRODUCT SHIPMENT PAYMENT").

                  4.2.1.1. The FIRST PRODUCT SHIPMENT PAYMENT shall be due when
                        the first PRODUCT covered by one or more valid and
                        enforceable claims of one or more United States BIOLASE
                        PATENT(S) is first shipped for [*  *  *  * ]
                        distribution in the United States.

                  4.2.1.2. Payments made under this Section 4.2.1 are
                        non-refundable except as otherwise provided herein. For
                        the sake of clarity, BIOLASE shall be entitled to only
                        one FIRST PRODUCT SHIPMENT PAYMENT and under no
                        circumstance shall there be another FIRST PRODUCT
                        SHIPMENT PAYMENT.

            4.2.2. SECOND PRODUCT SHIPMENT PAYMENT. P&G shall pay BIOLASE a
                  second product launch milestone payment in the amount of [*  *
                  *  *  * ] ($[*  *  * ]) on the terms and subject to the
                  conditions set forth here below (the "SECOND PRODUCT SHIPMENT
                  PAYMENT").

                  4.2.2.1. The SECOND PRODUCT SHIPMENT PAYMENT shall be due when
                        the second PRODUCT covered by one or more valid and
                        enforceable claims of one or more United States BIOLASE
                        PATENT(S) is first shipped for [*  *  *  *  * ]
                        distribution in the United States.

                  4.2.2.2. The SECOND PRODUCT SHIPMENT PAYMENT shall be treated
                        as prepaid royalties [*  *  *  *  *  *  *  *  *  *  *  *
                        *  *  * ]. The second PRODUCT shall not include
                        cosmetic changes or minor improvements (refreshes) which
                        do not fundamentally change the benefit delivered by the
                        first PRODUCT. The second PRODUCT is one that is largely
                        unique and different from the first PRODUCT. For the
                        avoidance of doubt, some non-limiting examples of a
                        PRODUCT that does not differ significantly from the
                        first PRODUCT are PRODUCTS that incorporate only
                        packaging changes; artwork changes; bonus packs;
                        marketing promotions; changes to the size, color or
                        shape of the PRODUCT; the addition or elimination of
                        minor [* * * ], and combinations thereof. Payments made
                        under this Section 4.2.2 are non-refundable except as
                        otherwise provided herein. For the sake of clarity,
                        BIOLASE shall be entitled to only one SECOND PRODUCT
                        SHIPMENT

                                                                              10
<PAGE>

                        PAYMENT and under no circumstance shall there be another
                        Second PRODUCT SHIPMENT PAYMENT. For the sake of clarity
                        and to serve as an example, if a first PRODUCT is a [*
                        * ], the second Product may or may not be a [*  *  * ].
                        Further, if a first PRODUCT is a [*  * ] and a second
                        PRODUCT is a [*  *  * ], the [*  * ] will be a second
                        PRODUCT.

            4.2.3. For the sake of clarity, in no circumstance will there be a
                  third product shipment payment.

      4.3.  ROYALTY PAYMENTS ON PRODUCT SALES

            4.3.1. P&G will make royalty payments (the "ROYALTY PAYMENTS") to
                  BIOLASE based on the NOS of such PRODUCTS. The ROYALTY PAYMENT
                  shall be equal to the [*  *  *  *  *  *  *  * ]. ROYALTY
                  PAYMENTS may be reduced by [*  *  *  *  *  *  *  *  *  *  *
                  * ].

            4.3.2. The royalty rate shall be [* ] if the PRODUCT is in a [*  *
                  *] product category where [*  *  *  *  *  *  *  *  *  *  * ]
                  (see Exhibit D for a non-exhaustive list). For the avoidance
                  of doubt, a [*  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
                  * ] shall be considered a product category where [*  *  *  *
                  *  *  *  *  *  * ] and shall be only subject to a [* ] royalty
                  in the event a royalty is applicable. The royalty rate shall
                  be [* ] if the PRODUCT is in a product category where [*  *  *
                  *  *  *  *  *  *  *  * ]. [*  *  *  * * * * * * * ] which [* *
                  * * ] shall not trigger a [* * ] royalty. Further, using [*  *
                  *  *  *  *  *  *  *  *  *  *  *  * ] shall not trigger a [*  *
                  ] royalty. For the avoidance of doubt, [*  *  *  *  *  *  *  *
                  * ], but only [*  *  * ], then a [*  *  *  * ] or [*  * ] that
                  [*  * ] would be considered a product in a category where [*
                  *  *  *  *  *  *  *  *  *  *  *].

            4.3.3. The amount of ROYALTY PAYMENTS due shall be calculated on [*
                  *  * ] basis from the date of [*  *  *  * ] of PRODUCT in such
                  [*  * ]. ROYALTY PAYMENTS shall only be due for sales in those
                  [*  * ] where commercial sale of a PRODUCT (as defined in
                  Section 1.10) is covered by one or more [*  *  *  *  *  *  * ]
                  claims covering said PRODUCT. ROYALTY PAYMENTS shall be paid
                  on a QUARTERLY basis and shall be due on the [* * ] of the
                  subject QUARTER. P&G may elect to combine ROYALTY PAYMENTS
                  into a single payment mechanism (e.g., a single wire
                  transfer).

            4.3.4. P&G Sublicenses to Third Parties

                                                                              11
<PAGE>

          4.3.4.1. P&G Sublicenses Comprising Only BIOLASE PATENTS. To the
               extent that P&G would have owed ROYALTY PAYMENTS for a PRODUCT
               under this AGREEMENT, sub-licenses (comprising only BIOLASE
               PATENTS) from P&G to third parties will bear [*  * ] royalty rate
               [ *  *  *  *  *  ]. [ *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
                 *  *  *  *  *  *  *  *  *  *  *].

          4.3.4.2. P&G Sublicenses Comprising BIOLASE PATENTS and P&G
               Intellectual Property. In the event P&G enters any agreement with
               a third party that includes P&G intellectual property and a grant
               under BIOLASE PATENTS as part of that agreement, wherein said
               grant to such third party to sell products under BIOLASE PATENTS
               and said sale would have been subject to ROYALTY PAYMENTS by P&G
               to BIOLASE if P&G were selling such products, P&G and BIOLASE
               shall mutually agree to [*  *  *  *  *  *  *  * *  *  *  *  *  *
               *  *  *  *  *  *  *  *  *  *  *  *  *  *  * ], and P&G shall pay
               [ *  *  * ] to BIOLASE. For example, if P&G elected to license a
               third party rights under both BIOLASE PATENTS and P&G
               intellectual property, and [*  *  *  *  *] obligated the third
               party to pay P&G an [* *] to maintain such license then BIOLASE
               would receive [*  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
               *  *].

               4.3.4.2.1. The [*  *  *] under this Section 4.3.4.2 shall be [*
                    *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *
                    *  *  *  *  *  *]. It is foreseeable that BIOLASE, only as
                    applicable to this Section 4.3.4.2 may receive [*  *]
                    compensation, according to the [*  *  *  *  *  *  *  *  *
                    *  *  *  *  *], for BIOLASE PATENTS than they otherwise
                    would have under this Agreement. In no event, however,
                    shall the [*  *  *] owed to BIOLASE exceed the equivalent
                    of a [*  * ] ROYALTY PAYMENT, as would otherwise be
                    applicable under this Agreement.

          4.3.5. P&G shall deliver to BIOLASE a written report of all NOS of
               PRODUCTS, [*  * ] in all countries where royalty payments are due
               on Products sold, the applicable royalty rate, the amount of
               earned royalty, and the calculation of the ROYALTY PAYMENT due to
               Biolase after deduction of the current total amount of payments
               hereunder that [*  *  *  * ]. Said royalty report shall be
               delivered by P&G within [*  *  *  *  *] of the last day of the
               Quarter in which they are earned.

          4.3.6. P&G shall keep accurate and complete records for Products
               marketed pursuant to this AGREEMENT of: (i) its calculation of
               NOS for Products (as defined herein); and (ii) all royalties paid
               and payable hereunder (hereinafter such

                                                                              12
<PAGE>

               reports shall collectively be referred to as "SALES AND ROYALTY
               RECORDS"). Such Sales and Royalty Records will be kept with
               sufficient detail to enable an independent auditor to verify such
               figures and to calculate NOS and total royalties paid and payable
               hereunder and shall be retained for the TERM and for at least
               [* * * ] subsequent to expiration of the TERM or termination.

          4.3.7. All payments due to BIOLASE under this Article shall be made in
               U.S. Dollars via wire transfer to an account designated by
               BIOLASE. P&G shall notify BIOLASE as indicated below prior to
               sending any such wire transfers.

          4.3.8. Any SALES AND ROYALTY REPORT(S) and notification of any wire
               transfer(s) shall be delivered to: BIOLASE TECHNOLOGY, Inc., 4
               Cromwell, Irvine CA 92618, attention Richard Harrison, Chief
               Financial Officer and Secretary, or to his designee or successor.

          4.3.9. At any time prior to the expiration of [*  *  *] following the
               end of any calendar year, BIOLASE shall have the right to audit
               P&G's SALES AND ROYALTY RECORDS RELATIVE to this AGREEMENT, said
               auditor being independent, having no past relationship with
               BIOLASE. The purpose of such audit shall be to verify the
               calculation of gross sales for such year, NOS for such year and
               the royalties paid and payable hereunder for such year. BIOLASE
               shall provide at least [*  *  *  *  *] advance written notice
               before each such audit. P&G shall cooperate in such audit by
               allowing BIOLASE access (during P&G's normal business hours at
               the locations where such SALES AND ROYALTY RECORDS are kept)
               solely to P&G's SALES AND ROYALTY RECORDS. Upon request by P&G,
               the BIOLASE auditor may be required, as a condition of being
               granted access to P&G's SALES AND ROYALTY RECORDS hereunder, to
               agree to maintain any information reviewed (including, but not
               limited to the Auditor's Reports (defined in Section 4.3.11)
               submitted to the PARTIES pursuant to 4.3.11 below) in confidence.
               Notwithstanding anything herein to the contrary, BIOLASE may only
               cause an audit once in any calendar year and only once with
               respect to each calendar year.

          4.3.10.At the conclusion of the auditor's audit pursuant to Section
               4.3.9 above, the auditor shall submit a written report (herein
               "AUDITOR'S REPORT") to the PARTIES setting forth the auditor's
               findings with respect to the correct gross sales, NOS and total
               royalties paid and payable for the quarter(s) in question. If the
               AUDITOR'S REPORT results in findings as to gross sales, NOS or
               royalties which are different from those originally reported or
               paid by P&G, then the AUDITOR'S REPORT shall include a
               reconciliation of the original figures with those found to be
               correct by the auditor and the source of such difference(s). The
               Auditor's Report and its content shall be treated as confidential
               pursuant to Section 11. If there is no challenge to the AUDITOR'S
               REPORT within [*  *  *] after receipt of the report by P&G, and
               it shows an underpayment of royalties, then P&G shall pay to
               BIOLASE within [*  * ] of expiration of the [*  * ] challenge
               period an amount sufficient to remedy the amount of any under
               reporting

                                                                              13
<PAGE>

               or underpayment of royalties found by the auditor plus interest
               calculated at the then current prime rate from the date such
               payment is due. If the AUDITOR'S REPORT shows an overpayment of
               royalties, such overpayment shall be creditable against any
               future royalties payable in subsequent royalty periods. The cost
               and expense of any audit conducted hereunder shall be borne by
               BIOLASE unless the AUDITOR'S REPORT finds an error in BIOLASE's
               favor of at least [*  *  * ] of the royalties originally paid by
               P&G, in which case P&G shall bear such cost and expense, subject
               to the outcome of the audit dispute resolution process specified
               in following section.

          4.3.11.The PARTIES agree to work together with the auditor in good
               faith to resolve any disputes arising out of or relating to the
               numbers verified and the results reported in an AUDITOR'S REPORT
               in a timely, professional and non-adversarial manner. If the
               PARTIES and the auditor cannot so resolve a dispute, then either
               Party may submit such dispute for binding arbitration
               (hereinafter referred to as "ROYALTY ARBITRATION") to a panel of
               three (3) arbitrators. Such Royalty Arbitration shall be
               conducted in Cincinnati, Ohio, if brought by BIOLASE and in
               Irvine, California if brought by P&G. The arbitrators shall be
               selected and the arbitration shall be conducted in accordance
               with the Commercial Arbitration Rules of the American Arbitration
               Association except that the only issue for arbitration in the
               ROYALTY ARBITRATION shall be the accuracy of the reporting and
               calculation of the values for gross sales, NOS, and royalties
               paid and payable hereunder. The arbitrators shall not have power
               to add to, subtract from or modify any of the terms or conditions
               of this AGREEMENT. Any award rendered in such arbitration may be
               enforced by either PARTY in the courts of the State of New York,
               to whose jurisdiction each PARTY hereby irrevocably consents and
               submits for such purpose. Each PARTY shall bear its own expense
               associated with the ROYALTY ARBITRATION. The losing party shall
               bear the cost of the arbitration itself and will also be required
               to pay the other party's attorneys' fees associated with the
               ROYALTY ARBITRATION. In the event that the outcome of the
               arbitration is such that there is not a clear losing party, then
               the PARTIES agree to share the costs for the arbitration in a
               manner consistent with the decision of the arbitrators.

          4.3.12.WITHHOLDING. If a law or regulation of any country in which
               PRODUCTS are sold requires withholding of taxes of any type,
               levies or other charges with respect to any amounts payable
               hereunder to BIOLASE, P&G shall promptly pay such tax, levy or
               charge for and on behalf of BIOLASE to the proper governmental
               authority, and shall promptly furnish BIOLASE with receipt of
               such payment. P&G shall have the right to deduct any such tax,
               levy or charge actually paid from payment due BIOLASE or be
               promptly reimbursed by BIOLASE if no further payments are due
               BIOLASE. P&G agrees to assist BIOLASE in claiming exemption from
               such deductions or withholdings under double taxation or similar
               agreement or treaty from time to time in force and shall use
               reasonable efforts to minimize the amount required to be so
               withheld or deducted.

                                                                              14
<PAGE>

     4.4. PAYMENT DUE DATES. Except for the payment of first QUARTERLY PAYMENT
          due [*  * ] the EFFECTIVE DATE of this AGREEMENT (the "INITIAL
          QUARTERLY PAYMENT"), any payment, including but not limited to any
          QUARTERLY PAYMENT, ROYALTY PAYMENTS, FIRST PRODUCT SHIPMENT PAYMENT,
          SECOND PRODUCT SHIPMENT PAYMENT, etc., due under this AGREEMENT shall
          be paid within [*  *] days of its due date. In the event the payor
          does not make the payment in full by the [*  *  * ] day after the due
          date, the payee shall be entitled to interest in the amount of the
          then current [*  *  *  *  *  *] on any unpaid amount, from the [*  *]
          following the due date until such time as the payor pays the payee
          the amount owed.

          4.4.1. The INITIAL QUARTERLY PAYMENT shall be paid within [*  *  * ]
               after the EFFECTIVE DATE of this AGREEMENT. For the avoidance of
               doubt, if the EFFECTIVE DATE of this AGREEMENT is January 24,
               2007, then the INITIAL QUARTERLY PAYMENT shall be paid on or
               before [*  *  * ] and the next QUARTERLY PAYMENT shall be paid on
               or before [*  *  * * ], and still further, the third QUARTERLY
               PAYMENT shall be paid on or before [*  *  * ]. In the event the
               payor does not make the INITIAL QUARTERLY PAYMENT in full by the
               [*  *  * ] after execution of this AGREEMENT, the payee shall be
               entitled to interest in the amount of the then current prime rate
               plus [*  *  *] on any unpaid amount, from the [*  *  *  *]
               following the EFFECTIVE DATE of this AGREEMENT until such time
               as the payor pays the payee the amount owed.

          4.4.2. Any QUARTERLY PAYMENT that accrues after the beginning of a
               QUARTER shall be pro-rated to deduct a portion of the QUARTERLY
               PAYMENT associated with the period of time between the beginning
               of the QUARTER and the accrual date of the payment within the
               QUARTER.

5.   INTELLECTUAL PROPERTY OWNERSHIP

     5.1. BACKGROUND INTELLECTUAL PROPERTY. All IP developed, conceived or
          reduced to practice prior to the EFFECTIVE DATE of this AGREEMENT
          shall continue to be owned by the respective PARTY that developed,
          conceived or reduced it to practice.

     5.2. OWNERSHIP BY P&G. All Improvements made solely by P&G shall be owned
          and retained by P&G, including IMPROVEMENTS to BIOLASE TECHNOLOGY
          invented or developed solely by P&G. Further, IMPROVEMENTS made solely
          by P&G, including patent applications comprising only such
          IMPROVEMENTS, are not subject to this AGREEMENT.

     5.3. OWNERSHIP BY BIOLASE. BIOLASE shall continue to own BIOLASE TECHNOLOGY
          and BIOLASE IP and, except as set forth herein, no other rights or
          licenses to the BIOLASE TECHNOLOGY or BIOLASE IP shall be granted to
          P&G, and BIOLASE shall own any IMPROVEMENTS to the BIOLASE TECHNOLOGY
          that it solely develops, conceives or reduces to practice, provided,
          however, that such IMPROVEMENTS shall be licensed to P&G in accordance
          with the terms of this AGREEMENT.

                                                                              15
<PAGE>

          5.3.1. While P&G has the right to file on BIOLASE IMPROVEMENTS (e.g.,
               continuations-in-part under Exhibit A) under Section 6.1 below,
               it is understood that BIOLASE shall retain ownership of said
               BIOLASE IMPROVEMENTS and said BIOLASE PATENTS.

     5.4. JOINT OWNERSHIP. The PARTIES shall jointly own any IP that is jointly
          conceived under this AGREEMENT. Any jointly owned IP shall be licensed
          to P&G by BIOLASE in accordance with the terms of this AGREEMENT.

          5.4.1. Pursuant to Section 3.1 above, the PARTIES may agree to enter
               into a JDA or SERVICES agreement. Terms and conditions for a JDA
               or SERVICES agreement shall be agreed to at the time P&G and
               BIOLASE mutually agree to enter into such an arrangement.

6.   PREPARATION AND PROSECUTION OF PATENT APPLICATIONS AND PATENT COSTS

          6.1  LICENSED BIOLASE PATENTS OF EXHIBITS A AND B. Upon the Effective
               Date of this AGREEMENT and written notification from P&G, P&G
               will have the right, but not the obligation, to take control of
               the BIOLASE PATENTS listed in Exhibit A (and Exhibit B, if P&G
               exercises its option to add the [*  *  *] FIELD OF USE to the
               PRIMARY P&G FIELD OF USE) and patent applications comprising
               BIOLASE IMPROVEMENTS in the PRIMARY P&G FIELD OF USE and
               P&G/BIOLASE joint IMPROVEMENTS to the BIOLASE TECHNOLOGY in the
               PRIMARY P&G FIELD OF USE. P&G's right to take control as
               discussed above in this Section 6.1 shall mean to have sole
               responsibility and decision making authority for the preparation,
               filing (including the filing of continuations,
               continuations-in-part, divisionals, reissues, and
               reexaminations), prosecution, and maintenance of the BIOLASE
               PATENTS listed in Exhibit A (and Exhibit B, if P&G exercises its
               option to add the [*  * ] FIELD OF USE to the PRIMARY P&G FIELD
               OF USE). P&G will pay all costs and expenses associated with said
               control in the event and to the extent P&G exercises its right to
               take control of one or more BIOLASE PATENTS hereunder. BIOLASE
               will cooperate with P&G, including giving P&G power of attorney
               and changing the correspondence address to P&G's address.

               6.1.1 In the event that P&G takes control of a BIOLASE PATENT and
                    decides not to prosecute or maintain said BIOLASE PATENT in
                    any particular country (including the United States),
                    BIOLASE may take back control of that patent or application
                    in which event BIOLASE shall be responsible for all costs
                    and expenses associated with the said BIOLASE PATENT,
                    including costs and expenses associated with the prosecution
                    and maintenance of said patent.

                    6.1.1.1 In the event P&G elects not to prosecute or maintain
                         a BIOLASE PATENT that P&G has taken control of, P&G
                         will provide BIOLASE with at least [*  *

                                                                              16
<PAGE>

                         *] advance written notice of such decision. P&G's
                         written notice will be done in a good faith manner
                         which reasonably provides BIOLASE with at least [*
                         * *] to continue with prosecution or maintenance
                         of that BIOLASE PATENT. In the event that BIOLASE
                         takes control of a BIOLASE PATENT under Sections
                         6.1.1 or 6.1.2, such change in control will have
                         no effect on P&G's payment obligations under
                         Section 4 and said BIOLASE PATENT shall continue
                         to be licensed to P&G pursuant to the license
                         grant of Section 2.

                    6.1.1.2 P&G will only be responsible for the costs and
                         expenses incurred from the time of control of a BIOLASE
                         PATENT is taken by P&G to the sooner of (a) [*  *  *
                         *] or (b) the lapse of [*  *  *] from the time of
                         notice to BIOLASE that P&G will not continue to
                         prosecute or maintain particular BIOLASE PATENT(S).

               6.1.2 [*   *   *   *   *  *   *  *  *  *  *  *  *  *  *  *  *  *
                    *  *  *  *  *  *  *  *  *  *  *   *  *  *  *  *  *  *  *  *
                    *  *  *  *  *  *  *  *   *  *  *  *  *  *  *  *  *  *  *  *
                    *  *  *  *  *  *  *  *   *].BIOLASE will have control and be
                    responsible for all costs associated with any filings made
                    by BIOLASE under this Section 6.1.2. Any filings made by
                    BIOLASE under this Section 6.1.2 shall be subject to the
                    license granted to P&G under Section 2 of this AGREEMENT.

               6.1.3 For the applications or patents which P&G controls or has
                    taken control of under this AGREEMENT, P&G shall notify
                    BIOLASE of all written and oral communications to and from
                    any patent office(s) (including, filings, official actions,
                    responses to official actions, etc.) in the same manner
                    outlined by Section 6.2.2.1 and BIOLASE shall have the right
                    to provide P&G with comments on matters relevant to all
                    fields outside of the PRIMARY P&G FIELD OF USE and P&G shall
                    consider in good faith said BIOLASE comment(s) in the same
                    manner outlined by 6.2.2.

               6.1.4 INTERFERENCES, OPPOSITIONS, AND SIMILAR PROCEEDINGS. For
                    BIOLASE PATENTS controlled by P&G, P&G also may, in its

                                                                              17
<PAGE>

                    sole discretion, elect to undertake or defend any
                    interference, reexamination, opposition or similar procedure
                    with respect to said BIOLASE PATENTS. P&G shall be
                    responsible for all costs and expenses associated with said
                    proceedings. If P&G does not elect to undertake or defend
                    any interference, reexamination, opposition or similar
                    procedure, BIOLASE may elect to do so at BIOLASE's expense.

     6.2  LICENSED BIOLASE PATENTS RELATED TO THE P&G FIELD OF USE.

               6.2.1 BIOLASE shall provide to P&G a written update, at least [*
                    *   *], starting from the EFFECTIVE DATE of this AGREEMENT,
                    of the BIOLASE PATENTS in Exhibits A, Exhibit B (if P&G
                    exercises its option to add the [*   *   *   *] FIELD OF USE
                    to the PRIMARY P&G FIELD OF USE), and Exhibit C (if any
                    consumer product categories in the P&G FIELDS OF USE remain
                    after [*   * ] from the EFFECTIVE of this AGREEMENT or if
                    P&G accepts any BIOLASE RETAINED FIELD CATEGORIES offered by
                    BIOLASE)

                    6.2.1.1 Exhibit C is to be populated by BIOLASE [*   *   * ]
                         from the EFFECTIVE DATE of this AGREEMENT so long as at
                         least one consumer product category in the P&G FIELDS
                         OF USE remains after [*   *   *] from the EFFECTIVE of
                         this AGREEMENT, or so long as P&G accepts at least one
                         (1) BIOLASE RETAINED FIELD category offered by BIOLASE.
                         Exhibit C shall remain unpopulated upon execution of
                         this AGREEMENT.

               6.2.2 For all BIOLASE PATENTS in Exhibits A, B, or C under the
                    control of BIOLASE, P&G shall have the ability to provide
                    BIOLASE with comments relevant to the P&G FIELD OF USE and
                    these comments will be considered in good faith by BIOLASE.
                    P&G comments may include, but are not limited to, claim and
                    specification amendments, submission of prior art, claim
                    additions and deletions, and arguments responsive to
                    official communications from a patent office related
                    thereto.

                    6.2.2.1 For BIOLASE PATENTS in Exhibits A, B, or C under the
                         control of BIOLASE, copies of official written
                         communications from a patent office shall be provided
                         to P&G as soon as reasonably possible, but in no event
                         greater than [*   *   *   *] after receipt by BIOLASE.
                         Additionally, all papers prepared by BIOLASE for filing
                         in a patent office shall be provided
                                                                              18
<PAGE>

                         to P&G within a reasonable period of time to allow for
                         P&G comment and incorporation thereof by BIOLASE, as
                         applicable. Each PARTY shall be responsible for its
                         own attorney's fees and other costs incurred in
                         reviewing filings and official communications, and
                         making, reviewing, discussing, and incorporating
                         comments. Copies of official written communications to
                         a PATENT office shall be provided to P&G as soon as
                         reasonably possible, but in no event greater than
                        [*  *   *] after submission by BIOLASE

                    6.2.2.2 In the event that BIOLASE decides not to prosecute
                         or maintain a BIOLASE PATENT in Exhibits A or B (for
                         those BIOLASE PATENTS in Exhibits A or B which BIOLASE
                         maintains or takes control of) or Exhibit C in any
                         particular country (including the United States), P&G
                         may take control of that particular application or
                         PATENT and elect to pay all costs and expenses
                         associated with control, including prosecution and
                         maintenance of the BIOLASE PATENTS. BIOLASE shall
                         provide P&G with at least [*   *   * ] advanced written
                         notice of such decision not to prosecute or maintain a
                         BIOLASE PATENT in Exhibit A. B, or C as applicable.
                         BIOLASE's written notice will be done in a good faith
                         manner which provides P&G with at least [*   *   * ] to
                         continue with prosecution or maintenance of that
                         BIOLASE PATENT. P&G may discontinue its prosecution or
                         maintenance of a BIOLASE PATENT under this Section
                         6.2.2.2 at any time acting in its sole discretion.

          6.2.3 INTERFERENCES, OPPOSITIONS, AND SIMILAR PROCEEDINGS. For BIOLASE
               PATENTS of Exhibit A that remain controlled by BIOLASE, BIOLASE
               shall notify P&G of all written and oral communications to and
               from any patent office(s) concerning any reexamination,
               reissuance, interference, opposition or similar proceedings in
               the same manner outlined by Section 6.2.2.1 and P&G shall have
               the right to comment on matters relevant to the PRIMARY P&G FIELD
               OF USE and BIOLASE shall consider in good faith said P&G
               comment(s) in the same manner outlined by Section 6.2.2.

                                                                              19
<PAGE>

     6.3  COOPERATION. P&G and BIOLASE agree to fully cooperate regarding the
          execution of any documents necessary or desirable to prepare,
          prosecute, or maintain any patents under Section 6.

7.   INFRINGEMENT BY THIRD PARTIES

     7.1  NOTIFICATION. Both BIOLASE and P&G agree to notify each other in
          writing should either PARTY become aware of a possible infringement of
          the BIOLASE PATENTS that relates to the P&G FIELDS OF USE.

     7.2. THIRD PARTY INFRINGEMENT IN P&G FIELDS OF USE (EXCLUDING THE P&G
     PRIMARY FIELD OF USE).

          7.2.1. If P&G provides BIOLASE with evidence of infringement of one of
          the BIOLASE PATENTS listed in or to be listed in Exhibit C in the P&G
          FIELDS OF USE other than the P&G PRIMARY FIELD OF USE, and if P&G has
          initiated development or provided a plan as described above in Section
          2.3, then P&G may by written notice request BIOLASE to take steps to
          terminate the infringement. If BIOLASE does not, within [*  * ] of
          receipt of such notice, take appropriate action against the alleged
          infringement, then:

               7.2.1.1 Upon written notice to BIOLASE, P&G shall have the right,
               but not the obligation, as exclusive licensee to institute such
               action in its own name as it deems appropriate to terminate said
               infringement through negotiation, litigation, and/or alternative
               dispute resolution at P&G's expense. As exclusive licensee, P&G
               shall have the power at its expense to institute, prosecute and
               settle, including by granting the infringing party a sublicense,
               suits for infringement of the BIOLASE PATENTS listed in or to be
               listed in Exhibit C under this Section 7.2.1.1 after said [* *  *
               ] period, and if required by law, BIOLASE will join as a party
               plaintiff in such suits at P&G's expense.

               7.2.1.2. P&G shall have the right to select and control counsel
               in any action initiated by P&G under Section 7.2.1.1.

          7.2.2. Any recovery awarded or received in connection with any
          negotiation, settlement or suit under this Section 7.2. in excess of
          litigation costs shall belong solely to P&G except as provided under
          Section 4.3.4.

                                                                              20
<PAGE>

     7.3. THIRD PARTY INFRINGEMENT IN PRIMARY P&G FIELD OF USE.

          7.3.1 As exclusive licensee in the PRIMARY P&G FIELD OF USE, P&G shall
          have sole decision making authority regarding enforcement of the
          BIOLASE PATENTS listed or belonging in Exhibit A (and Exhibit B, if
          P&G exercises its option to add the [*  *  * ] FIELD OF USE to the
          PRIMARY P&G FIELD OF USE). P&G shall have the right, but not the
          obligation, to file, prosecute and settle any such claims at its sole
          discretion. P&G shall retain any proceeds paid by a third party as a
          result of the enforcement of the BIOLASE PATENTS within the PRIMARY
          P&G FIELD OF USE except as provided under Section 4.3.4. BIOLASE
          agrees to cooperate with P&G with the enforcement of any claim within
          the PRIMARY P&G FIELDS OF USE and agrees to join, at P&G's expense,
          any such action as a party plaintiff to the extent required by law.

               7.3.1.1 P&G agrees that it will use reasonable efforts to consult
               with BIOLASE prior to the initiation of any action by P&G under
               Section 7.3.1. For the avoidance of doubt, said consultation
               under this Section 7.3.1.1 shall not impair P&G's right to, in
               its sole discretion, institute an action in its own name under
               Section 7.3.1 to terminate an infringement in the PRIMARY P&G
               FIELD OF USE.

               7.3.1.2. P&G shall have the right to control and to select
               counsel in any action initiated by P&G under Section 7.3.1.

               7.3.1.3 Any recovery awarded or received in connection with any
               negotiation, settlement, or suit under this Section 7.3.1 in
               excess of litigation costs shall belong solely to P&G except as
               provided under Section 4.3.4.

     7.4. THIRD PARTY INFRINGEMENT IN BIOLASE RETAINED FIELD. BIOLASE will have
     sole control and discretion regarding how to proceed in the event that a
     third party is infringing one of the BIOLASE PATENTS in the BIOLASE
     RETAINED FIELD and any recovery or settlement awarded or received in
     connection with such action shall be solely retained by BIOLASE.

     7.5. PROSECUTION OF THIRD PARTY INFRINGEMENT IN OTHER PARTY'S FIELD OF USE.

               7.5.1. To the extent that P&G is permitted to exploit a specific
               Product application in the BIOLASE RETAINED FIELD pursuant to
               Section 2.4 and a third party is infringing one of the BIOLASE
               PATENTS in connection with such Product application, such
               infringement shall be treated as if it had taken place in P&G
               FIELDS OF USE (excluding the PRIMARY P&G FIELD OF USE) in
               accordance with Section 7.2.

     7.6. DECLARATORY JUDGMENTS.

               7.6.1. If a declaratory judgment action alleging invalidity,
               unenforceability or non-infringement of any of the BIOLASE
               PATENTS

                                                                              21
<PAGE>

            is brought against P&G or if a declaratory judgment action alleging
            invalidity, unenforceability or non-infringement of any of the
            BIOLASE PATENTS is brought against BIOLASE for a BIOLASE PATENT
            under which P&G is paying BIOLASE a royalty, P&G may elect, in its
            sole discretion, to have sole control of the action, including, but
            not limited to, selection and control of counsel and the defense and
            settlement of the action, and if P&G so elects it shall bear all the
            costs of the action and shall defend against such declaratory
            judgment action. P&G shall keep BIOLASE reasonably informed of the
            progress of the legal action. P&G may not agree to invalidity,
            unenforceability, or non-infringement of a BIOLASE PATENT or any
            claim thereof without BIOLASE'S prior written consent, which may be
            not be unreasonably withheld.

            7.6.2. Except as set forth in Section 7.6.1, if a declaratory
            judgment action alleging invalidity, unenforceability or
            non-infringement of any of the BIOLASE PATENTS is brought against
            BIOLASE, BIOLASE shall have sole control of the action, including,
            but not limited to, selection and control of counsel and the defense
            and settlement of the action.

            7.6.3. Except as set forth in Section 7.6.1, if a declaratory
            judgment action alleging invalidity, unenforceability or
            non-infringement of any of the BIOLASE PATENTS is brought against
            both PARTIES, BIOLASE shall have sole control of the action,
            including, but not limited to, selection and control of counsel and
            the defense and settlement of the action.

      7.7. COOPERATION. Each Party shall fully cooperate with the other PARTY,
      at said other PARTY'S expense, in support of any action initiated by said
      other PARTY under Section 7, including using commercially reasonable
      efforts to have its employees testify when requested and to make available
      relevant records, papers, information, samples, specimens, and the like.

8. ALLEGED INFRINGEMENT OF THE PARTIES

      8.1. ALLEGED INFRINGEMENT BY P&G IN P&G FIELDS OF USE OR FOR A SPECIFIC
      PRODUCT APPLICATION UNDER SECTION 2.4.

            8.1.1. If P&G, any of its AFFILIATES or sublicensees, distributors
            or other customers are approached by or sued by a third party
            concerning an allegation of patent infringement for the development,
            manufacture, use, distribution or sale of a product within the P&G
            FIELDS OF USE, including the PRIMARY P&G FIELD OF USE, for a product
            incorporating BIOLASE TECHNOLOGY, or for a specific product
            application under Section 2.4, P&G will promptly, within reason,
            notify BIOLASE upon its receiving written notice of such allegation.
            P&G shall be entitled to solely control all aspects of the defense
            or mitigation of any such allegations, including but not limited to,
            selection and control of counsel, negotiation, litigation strategy
            development and execution, and settlement.

                                                                              22

<PAGE>

            8.1.2. In the event P&G is a party to a legal action pursuant to
            Section 8.1.1, BIOLASE shall fully cooperate with and supply all
            assistance reasonably requested by P&G, including by using
            commercially reasonable efforts to have its employees testify when
            requested and to make available relevant records, papers,
            information, samples, specimens, and the like. P&G shall bear the
            reasonable expenses incurred by BIOLASE in providing assistance and
            cooperation as requested by P&G pursuant to this Section 8.1.2.

            8.1.3. P&G shall keep BIOLASE reasonably informed of the progress of
            the legal action, and BIOLASE shall be entitled to be represented by
            counsel in connection with such legal action at its own expense.

            8.1.4. P&G shall have the sole right to settle any claims under this
            Section 8.1.

            8.1.5. In the event P&G settles any claim under Section 8.1.4., P&G
            agrees that it will not take any action that would (i) compromise
            any of BIOLASE's assets, including but not limited to the BIOLASE
            PATENTS, BIOLASE IP, BIOLASE TECHNOLOGY and (ii) obligate BIOLASE to
            a third party in any way. For the avoidance of doubt, nothing in
            this Section 8.1.5 shall be interpreted to reduce, diminish, or
            extinguish any rights granted to P&G under this AGREEMENT.

9. REPRESENTATIONS AND WARRANTIES

      9.1. OF BOTH PARTIES. Each PARTY represents and warrants to the other
      PARTY that, as of the EFFECTIVE DATE of this AGREEMENT:

            9.1.1. The execution, delivery and performance of this AGREEMENT
                   and the consummation by the warranting PARTY of the
                   transactions contemplated hereby have been duly authorized by
                   all necessary corporate action of the warranting PARTY, as
                   appropriate.

            9.1.2.  This AGREEMENT has been duly executed and delivered by the
                   warranting PARTY, and constitutes a valid and legally binding
                   obligation of the warranting PARTY enforceable against such
                   PARTY in accordance with its terms, subject to the effect of
                   any applicable bankruptcy, insolvency, reorganization,
                   moratorium or similar laws affecting creditors' rights and
                   remedies generally, and subject, as to enforceability, to the
                   general principles of equity (regardless of whether
                   enforcement is considered in a proceeding in equity or at
                   law).
                                                                              23

<PAGE>

         9.1.3.   The warranting PARTY has not and will not enter into any
                  agreement, the terms and conditions of which, would be
                  inconsistent or in derogation with any of the terms and
                  conditions hereof.

         9.1.4.   The warranting PARTY is duly organized and validly existing
                  under the laws of the jurisdiction of its organization, and
                  has full power, authority and legal right to execute, deliver
                  and perform this AGREEMENT, and has taken all necessary action
                  to authorize the execution, delivery and performance of this
                  AGREEMENT.

         9.1.5.   The warranting PARTY is not subject to any judgment, order,
                  injunction, decree or award of any court, administrative
                  agency or governmental body that would or might interfere with
                  its performance of any of its material obligations hereunder.

9.2.OF BIOLASE. BIOLASE hereby covenants, represents, and warrants to P&G, that
to BIOLASE's knowledge:

         9.2.1    There are no claims, liens, mortgages, licenses, commitments,
                  obligations, or encumbrances of any kind concerning the
                  BIOLASE IP that would affect the ability of BIOLASE to grant
                  the rights and perform the obligations contemplated by this
                  AGREEMENT.

         9.2.2.   Any granted, or allowed claims, of the BIOLASE PATENTS are
                  valid and enforceable and there are no actions or prior art
                  that would affect the validity or enforceability of any
                  granted, or allowed claims, of the BIOLASE PATENTS, including,
                  but not limited to, any reexamination requests, opposition
                  proceedings, certificates of correction, or reissuance
                  requests. BIOLASE's knowledge applies to all agents and
                  employees of BIOLASE, as well as, agents and attorneys
                  preparing and prosecuting BIOLASE PATENTS (not including P&G
                  agents and P&G attorneys).

         9.2.3.   BIOLASE owns all right, title, and interest in the BIOLASE IP.

         9.2.4.   BIOLASE has made a reasonable effort to populate Exhibits A,
                  B, and C (once Exhibit C is populated [*   *   * ] after the
                  EFFECTIVE DATE of this AGREEMENT), such that attached Exhibits
                  A, B, and C (once Exhibit C is populated [*   * ] after the
                  EFFECTIVE DATE of this AGREEMENT) of this AGREEMENT contain a
                  true and complete list of all of the BIOLASE PATENTS,
                  including BIOLASE PATENTS that BIOLASE has a LICENSABLE
                  INTEREST or transferable interest in. It is understood that,
                  despite a reasonable effort to populate Exhibits A, B, and C
                  (once Exhibit C is populated [*   * ] after the EFFECTIVE DATE
                  of this AGREEMENT), Exhibits A, B, or C may not be a true and
                  complete list of all BIOLASE PATENTS. However, upon
                  realization of any error, correction will be made within a
                  reasonable period.

                                                                              24
<PAGE>

         9.2.5.   BIOLASE PATENTS and BIOLASE TECHNOLOGY related thereto, listed
                  in attached Exhibits A, B, and C (once Exhibit C is populated
                  [*  *   *] after the EFFECTIVE DATE of this AGREEMENT) are not
                  subject to any contractual obligations in the P&G FIELDS OF
                  USE, including existing or expectant licenses.

         9.2.6.   As of the EFFECTIVE DATE, BIOLASE does not, directly or
                  indirectly, make, presently have made, use, import, export,
                  sell, presently have sold, or offer for sale, anywhere in the
                  world, a [*** **] or a [*  *  *], or a [*  *  *  *  *  *  *  *
                  *  *  *].

9.3. BIOLASE hereby covenants, represents, and warrants to P&G, throughout the
term of this AGREEMENT, BIOLASE will, as far as it is reasonably practicable to
do so, cause its employees who are employed to do research, development, or
other inventive work, to disclose to it inventions within the scope of this
AGREEMENT and to assign to BIOLASE rights in such inventions such that P&G shall
receive, by virtue of this AGREEMENT, the license(s) agreed to be granted to it,
it being understood that if due care and diligence are used, any inadvertent
failure to comply with this Section 9.3 shall not constitute a breach of this
AGREEMENT.

9.4. EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT,
NOTHING CONTAINED IN THIS AGREEMENT WILL BE CONSTRUED AS:

         9.4.1    A WARRANTY OR REPRESENTATION BY EITHER PARTY AS TO THE
                  VALIDITY, ENFORCEABILITY, OR SCOPE OF ANY PATENT;

         9.4.2.   A WARRANTY OR REPRESENTATION THAT ANY MANUFACTURE, SALE, OFFER
                  FOR SALE, LEASE, IMPORT, USE OR OTHER DISPOSITION OF ANY
                  PRODUCTS HEREUNDER WILL BE FREE FROM INFRINGEMENT OF PATENT,
                  COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD
                  PARTIES;

         9.4.3.   A WARRANTY OR REPRESENTATION BY EITHER PARTY WITH RESPECT TO
                  THEIR ENFORCEMENT OF ANY PATENT INCLUDING THE PROSECUTION,
                  DEFENSE OR CONDUCT OF ANY ACTION OR SUIT CONCERNING
                  INFRINGEMENT OF ANY SUCH PATENT.

                                                                              25
<PAGE>

      9.5.  NO OTHER REPRESENTATIONS AND WARRANTIES. Neither Party makes any
            representations or warranties other than as expressly set forth in
            this Section 9.

10.   TERM AND TERMINATION

      10.1. TERM. Unless otherwise terminated as provided herein, the AGREEMENT
            shall be effective up to and including the date of expiration of the
            last to expire BIOLASE PATENT in Exhibits A, B and C.

      10.2. TERMINATION

                  10.2.1.  TERMINATION FOR AN UNCURED MATERIAL BREACH. Failure
                           by either PARTY to comply with any of the material
                           obligations contained in this AGREEMENT (the
                           "BREACHING PARTY") shall entitle the other PARTY (the
                           "NON-BREACHING PARTY") to give to the BREACHING PARTY
                           notice, pursuant to Section 12.1, specifying the
                           nature of the breach and requiring it to cure such
                           breach. In the event the PARTIES are unable to
                           resolve the matter, the PARTIES may enter an
                           arbitration, pursuant to Section 12.2. In the event
                           that the BREACHING PARTY is found, pursuant to
                           Section 12.2, to have committed a MATERIAL BREACH and
                           said MATERIAL BREACH BECOMES AN UNCURED MATERIAL
                           BREACH, the NON-BREACHING PARTY may terminate this
                           AGREEMENT.

                  10.2.3.  TERMINATION BY MUTUAL CONSENT. This AGREEMENT may be
                           terminated by mutual written consent of the PARTIES
                           and rights hereunder divided as the PARTIES agree in
                           writing.

                  10.2.4.  TERMINATION IN EVENT OF CHANGE IN CONTROL OF BIOLASE.
                           Pursuant to Section 10.4 below, P&G may terminate
                           this AGREEMENT in the event of a CHANGE IN CONTROL of
                           BIOLASE.

10.3. CERTAIN EFFECTS OF TERMINATION.

                  10.3.1.  TERMINATION BY BIOLASE FOR P&G UNCURED MATERIAL
                           BREACH. Effective upon a termination by BIOLASE in
                           accordance with Section 10.2.1 above, the following
                           shall occur:

                                10.3.1.1. Except for Section 10.3.1.3, P&G's
                                licenses under the BIOLASE PATENTS and BIOLASE
                                TECHNOLOGY shall automatically be deemed to have
                                terminated and all rights thereunder shall
                                automatically be deemed to have reverted to
                                BIOLASE;

                                10.3.1.2. P&G shall destroy all copies of
                                BIOLASE CONFIDENTIAL INFORMATION provided by
                                BIOLASE to P&G hereunder. Notwithstanding the
                                foregoing, and provided

                                                                              26
<PAGE>

                                P&G fulfills its obligations specified in this
                                AGREEMENT with respect to such materials, P&G's
                                counsel may continue to retain solely for
                                archival purposes a single copy of BIOLASE's
                                CONFIDENTIAL INFORMATION and any other materials
                                provided by BIOLASE.

                                10.3.1.3. P&G shall retain a non-exclusive,
                                worldwide license to import, offer for sale, or
                                sell any remaining PRODUCTS that had been
                                manufactured up to the date of termination of
                                this AGREEMENT. This non-exclusive license shall
                                automatically terminate upon [* *  *  *  *  *  *
                                  *  *  *  *  *  *  ] or [* *  * * *] of the
                                termination of this AGREEMENT, whichever is
                                sooner. P&G shall owe BIOLASE a royalty under
                                Section 4.3 for the sales of said PRODUCTS under
                                this Section 10.3.1.3.

                10.3.2. TERMINATION BY P&G FOR UNCURED MATERIAL BREACH BY
                BIOLASE. If P&G terminates this AGREEMENT for a MATERIAL BREACH
                in accordance with Section 10.2.1 above, BIOLASE, at P&G's
                request, shall refund all prior payments received by BIOLASE
                from P&G, insofar as they specifically pertain to the UNCURED
                MATERIAL BREACH for the term including the [*  * ] preceding and
                up to the time of the UNCURED MATERIAL BREACH. Said refund shall
                include, but is not limited to FIRST or SECOND PRODUCT SHIPMENT
                PAYMENT(S), QUARTERLY PAYMENTS, ROYALTY PAYMENTS, and the
                PAYMENT made under the LETTER. If P&G elects to receive a refund
                of prior payments and the PARTIES are unable to agree on the
                amount to be refunded with respect to a UNCURED MATERIAL BREACH,
                either PARTY shall submit such dispute to be settled by
                arbitration in accordance with Section 12. However, if BIOLASE
                commits an UNCURED MATERIAL BREACH, P&G may alternatively elect
                to retain its exclusive license(s) without the obligation to pay
                FIRST or SECOND PRODUCT SHIPMENT PAYMENT(S), QUARTERLY PAYMENTS,
                ROYALTY PAYMENTS, or any other monies whatsoever, however, if
                P&G retains its exclusive license(s), it will not be entitled to
                a refund of monies previously paid.

                10.4. CHANGE IN CONTROL OF BIOLASE . BIOLASE shall promptly
                notify P&G of any CHANGE IN CONTROL as the term is defined in
                10.4.2, of BIOLASE or a BIOLASE AFFILIATE that is primarily
                responsible for undertaking the obligations under this
                AGREEMENT. If the CHANGE IN CONTROL event involves a direct
                competitor to P&G in the P&G PRIMARY FIELD OF USE, P&G will no
                longer have any obligation to share or to disclose information
                to BIOLASE regarding the development of products; P&G's ability
                to convert to a non-exclusive license pursuant to 2.6 shall no
                longer be subject to any time limitation on

                                                                              27
<PAGE>

                when such conversion can occur and BIOLASE shall also take all
                actions necessary to prevent disclosure of P&G CONFIDENTIAL
                INFORMATION to the party involved in the CHANGE IN CONTROL
                event, excepting information provided to BIOLASE pursuant to
                Section 4.3. Further upon a CHANGE IN CONTROL event involving a
                direct competitor to P&G in the P&G PRIMARY FIELD OF USE, P&G
                may elect to terminate, modify or continue under this AGREEMENT
                as defined in this Section 10.4.

                        10.4.1. If the CHANGE IN CONTROL event involves a direct
                competitor to P&G in the P&G PRIMARY FIELD OF USE, P&G may
                elect, without consequence, as provided below:

                                (i)     P&G may elect to terminate any research,
                                        development or manufacturing activity
                                        that BIOLASE may have been conducting
                                        for P&G under this AGREEMENT or a
                                        separate agreement relating to this
                                        AGREEMENT.

                                (ii)    P&G may elect to continue under this
                                        AGREEMENT, including any research,
                                        development or manufacturing activity
                                        that BIOLASE may have been conducting
                                        for P&G under this AGREEMENT or a
                                        separate agreement related to this
                                        AGREEMENT, in which case P&G may request
                                        in writing that BIOLASE or the parent of
                                        the entity acquiring control of BIOLASE
                                        agree to commit in writing, within [* *
                                          * ] after receipt of such request, to
                                        continue to perform the specified
                                        BIOLASE activity, to otherwise agree to
                                        be bound by the provisions of this
                                        AGREEMENT, and to agree to commit in
                                        writing to duly and timely pay, perform
                                        and discharge all of the obligations of
                                        BIOLASE under this AGREEMENT.

                                (iii)   P&G may elect to terminate this
                                        AGREEMENT and a determination pursuant
                                        to Exhibit E will be made of the
                                        PURCHASE PRICE of the BIOLASE PATENTS
                                        licensed to P&G in the PRIMARY P&G FIELD
                                        OF USE under this AGREEMENT, which
                                        patents are listed on Exhibit A (and on
                                        Exhibit B if P&G has exercised its
                                        option to add the [* * * * ] FIELD OF
                                        USE to the PRIMARY P&G FIELD OF USE),
                                        and within [*** * * ] following such
                                        PURCHASE

                                                                              28
<PAGE>

                                        Price determination P&G will make the
                                        further election, in writing, either to
                                        (a) purchase BIOLASE PATENTS, or (b)
                                        rescind its election to purchase BIOLASE
                                        PATENTS. If P&G shall elect to purchase
                                        the BIOLASE PATENTS, the AGREEMENT shall
                                        terminate except for certain surviving
                                        obligations. P&G shall be obligated to
                                        grant back limited rights to BIOLASE
                                        under the acquired BIOLASE PATENTS if
                                        such patents cover products outside the
                                        P&G FIELD OF USE.

                10.4.2  CHANGE IN CONTROL. For purposes of this AGREEMENT, a
                        "CHANGE IN CONTROL" of BIOLASE shall be deemed to have
                        occurred in the event of (i) a merger, combination,
                        reorganization or consolidation of BIOLASE with or into
                        another corporation with respect to which less than a
                        majority of the outstanding voting power of the
                        surviving or consolidated corporation is held by
                        shareholders of BIOLASE immediately prior to such event,
                        (ii) the sale of all or substantially all of the
                        properties and assets of BIOLASE and its subsidiaries,
                        or (iii) the accumulation or acquisition by any
                        individual, firm, corporation, or entity (other than any
                        profit sharing or other employee benefit plan of BIOLASE
                        or any Affiliate, or any employee or group of employees
                        or former officers an/or directors of BIOLASE or its
                        Affiliates) of beneficial ownership, directly or
                        indirectly, of securities of BIOLASE representing more
                        than fifty percent (50%) of the combined voting power of
                        BIOLASE's then outstanding voting securities.

        10.5 RIGHT OF FIRST NEGOTIATION. If BIOLASE elects to seek a buyer for
any BIOLASE PATENT set out in Exhibit A (and Exhibit B in the event P&G
exercises its option to add the [** * *] FIELD OF USE to the PRIMARY P&G FIELD
OF USE) licensed hereunder to P&G, P&G shall have a [* *] right of first
negotiation with respect to a potential purchase by P&G of such BIOLASE PATENT.
In the event the PARTIES do not enter into a binding agreement with respect to
such purchase within the [* *] period or in the event BIOLASE receives a binding
unsolicited offer, BIOLASE will have sole discretion to pursue offers and sale
to other parties. It is understood that BIOLASE may license, or may have
licensed, other parties in fields outside of fields licensed to P&G under this
AGREEMENT, and that BIOLASE PATENTS may be so encumbered when first offered to
P&G under this Section 10.5.

      10.6 TERMINATION NOT SOLE REMEDY. Termination is not the sole remedy under
      this AGREEMENT and, whether or not termination is affected, all other
      remedies will remain available except as agreed to otherwise herein.

                                                                              29
<PAGE>

      10.7. SURVIVAL OF CERTAIN OBLIGATIONS. Section 11 shall survive any
            termination, in whole or in part, of this AGREEMENT. The termination
            of this AGREEMENT will not relieve either PARTY of any liability it
            may have to the other PARTY arising out of or relating to acts or
            omissions occurring prior to termination.

11. CONFIDENTIALITY

      11.1. During the term of this AGREEMENT, both PARTIES may be exposed to
            certain information of the other Party, not generally known to the
            public and related to this AGREEMENT, which has been identified by
            the DISCLOSING PARTY (the "DISCLOSING PARTY") at the time of
            disclosure as being confidential by means of an appropriate marking,
            or, if disclosed orally or visually, shall be confirmed in writing
            as confidential within [* * * ] of the oral or visual disclosure
            (collectively the "CONFIDENTIAL INFORMATION"). The PARTY receiving
            the CONFIDENTIAL INFORMATION (the "RECEIVING PARTY") shall keep the
            DISCLOSING PARTY's CONFIDENTIAL INFORMATION in confidence for a
            period of [* * *] from disclosure, using measures no less protective
            than the RECEIVING PARTY takes to protect its own CONFIDENTIAL
            INFORMATION of like nature, which in no event will be less than a
            reasonable standard of care. The RECEIVING PARTY shall not use, copy
            or disclose the CONFIDENTIAL INFORMATION to any third party, nor
            permit any of its personnel to use, copy or disclose the
            CONFIDENTIAL INFORMATION for any purpose not specifically
            contemplated by this AGREEMENT. For the avoidance of doubt, it is
            understood by the PARTIES that disclosure of CONFIDENTIAL
            INFORMATION by P&G to suppliers, contract manufacturers, testing
            organizations or consumer testing, or consultants for the purposes
            of market testing, product development or manufacture within the P&G
            FIELDS OF USE or for a specific product application under Section
            2.4 constitute purposes specifically contemplated by this AGREEMENT.

                  11.1.1.  EXCEPTIONS. The obligations in Section 11.1 shall not
                           preclude the RECEIVING PARTY from using or disclosing
                           the same or similar information which may be the same
                           as the DISCLOSING PARTY's CONFIDENTIAL INFORMATION to
                           the extent that such same or similar information (i)
                           was or later becomes, through no act or omission on
                           the part of the RECEIVING PARTY, generally available
                           to or available to the public; (ii) was rightfully in
                           the possession of the RECEIVING PARTY at the time of
                           disclosure by the DISCLOSING PARTY, as established by
                           relevant documentary evidence, without restriction as
                           to use or disclosure; (iii) is hereafter acquired by
                           the RECEIVING PARTY from a third party who, in
                           providing such information, does not

                                                                              30
<PAGE>

                           breach an obligation or confidence of the other PARTY
                           and provides such information without restriction as
                           to use or disclosure; or (vi) is independently
                           conceived, created, or developed by the RECEIVING
                           PARTY without use of or access to the other PARTY's
                           CONFIDENTIAL INFORMATION, as established by relevant
                           documentary evidence. The provisions of Section 11
                           will not restrict a PARTY from disclosing the other
                           PARTY's CONFIDENTIAL INFORMATION to the extent
                           required by any law or regulation; provided that the
                           PARTY required to make such a disclosure uses
                           reasonable efforts to give the other PARTY reasonable
                           advance notice of such required disclosure in order
                           to enable the other PARTY to prevent or limit such
                           disclosure.

12. DISPUTE RESOLUTION

         12.1.    NOTICE AND NEGOTIATION. In the event of any dispute or
                  disagreement arising out of this AGREEMENT, the PARTIES shall
                  attempt to resolve the matter by submitting it for resolution
                  to the President or Chief Executive Officer of BIOLASE and the
                  appropriate Vice President or General Manager of Research and
                  Development of P&G. If these representatives are unable to
                  resolve such dispute to the satisfaction of both BIOLASE and
                  P&G within [* *  *  ] after the date on which the dispute was
                  submitted to such representative(s), the dispute shall be
                  subject to the process described in Section 12.2 below.

         12.2.    ARBITRATION. P&G and BIOLASE will attempt to settle any claim,
                  controversy or deadlock through consultation and negotiation
                  in good faith and a spirit of mutual cooperation pursuant to
                  Section 12.1 above. If such attempt fails, the PARTIES agree
                  to submit to binding arbitration that will be governed by the
                  rules and procedures of the American Arbitration Association,
                  with the requirement that the decision being issued by a
                  written decision and opinion signed by an independent
                  three-person panel. Such arbitration shall take place in the
                  State of New York. Judgment upon the award of the arbitrator
                  may be entered in any court having jurisdiction thereof. In
                  the event the arbitration involves a claimed material breach
                  of the AGREEMENT, the alleged breach shall become a MATERIAL
                  BREACH upon a decision by the arbitration panel that a
                  MATERIAL BREACH has occurred. A breaching PARTY shall have [*
                  *  *] to cure a MATERIAL BREACH as outlined in the written
                  decision and opinion of the three-person panel of this Section
                  12.2. If the MATERIAL BREACH is not cured within [*  *  *], it
                  shall become an UNCURED MATERIAL BREACH. If the binding
                  arbitration involves a patent issue, at least a majority of
                  the arbiters, in addition to other certifications and/or
                  qualifications, will be licensed patent attorneys.

                           12.2.1.  Any payment required under the terms of
                                    Sections 12.2 shall be made in USD to the
                                    bank designated by the PARTY to be paid
                                    hereunder.

                                                                              31
<PAGE>

13. INDEMNIFICATION

         13.1.    BY P&G. From and after the EFFECTIVE DATE of this AGREEMENT,
                  P&G will indemnify, defend and hold harmless BIOLASE and its
                  AFFILIATES and their respective directors, officers,
                  shareholders, partners, attorneys, accountants, and employees
                  and any agents of the foregoing and any heirs, executors,
                  successors and assigns of any of the foregoing (the "BIOLASE
                  INDEMNIFIED PARTIES") from, against and in respect of any
                  damages, losses, charges, obligations, liabilities, actions,
                  interest, penalties and reasonable costs and expenses
                  (including, without limitation, reasonable attorneys' and
                  experts' fees and expenses incurred to enforce successfully
                  the terms of this AGREEMENT, "BIOLASE LOSSES AND EXPENSES"))
                  imposed on, sustained, incurred or suffered by any of the
                  BIOLASE INDEMNIFIED PARTIES relating to, arising from or
                  otherwise in respect of (i) any breach of, or inaccuracy in, a
                  representation or warranty of P&G hereunder, or (ii) a breach
                  of a covenant or other agreement of P&G hereunder, or (iii)
                  any action brought by a third party against a BIOLASE
                  INDEMNIFIED PARTY arising from or related to P&G's
                  manufacturing, sale, marketing, distribution, or other
                  exploitation of a product covered by the BIOLASE PATENTS
                  and/or the BIOLASE TECHNOLOGY; provided, however, that P&G
                  shall have no obligation to indemnify BIOLASE for any BIOLASE
                  LOSSES AND EXPENSES for which indemnification is sought if (i)
                  such BIOLASE LOSSES AND EXPENSES were also caused by, relate
                  to or involve a breach of, or inaccuracy in, any covenant,
                  obligation, representation or warranty of BIOLASE provided to
                  P&G in this AGREEMENT or (ii) such BIOLASE LOSSES AND EXPENSES
                  result from or arise out of a material action or omission of
                  BIOLASE.

         13.2.    BY BIOLASE. From and after the EFFECTIVE DATE of this
                  AGREEMENT, BIOLASE will indemnify, defend and hold harmless
                  P&G and its AFFILIATES and licensees and their respective
                  directors, officers, shareholders, partners, attorneys,
                  accountants, and employees and any agents of the foregoing and
                  any heirs, executors, successors and assigns of any of the
                  foregoing (the "P&G INDEMNIFIED PARTIES") from, against and in
                  respect of any damages, losses, charges, obligations,
                  liabilities, actions, interest, penalties and reasonable costs
                  and expenses (including, without limitation, reasonable
                  attorneys' and experts' fees and expenses incurred to enforce
                  successfully the terms of this AGREEMENT, "P&G LOSSES AND
                  EXPENSES")) imposed on, sustained, incurred or suffered by any
                  of the P&G INDEMNIFIED PARTIES relating to, arising from or
                  otherwise in respect of (i) any breach of, or inaccuracy in, a
                  representation or warranty of BIOLASE hereunder, or (ii) a
                  breach of a covenant or other agreement of BIOLASE hereunder,
                  or (iii) any action brought by a third party against a P&G
                  INDEMNIFIED PARTY arising from or

                                                                              32
<PAGE>

                  related to BIOLASE's manufacturing, sale, marketing,
                  distribution, or other exploitation of a product covered by
                  the BIOLASE PATENTS and/or the BIOLASE TECHNOLOGY; provided,
                  however, that BIOLASE shall have no obligation to indemnify
                  P&G for any P&G LOSSES AND EXPENSES for which indemnification
                  is sought if (i) such P&G LOSSES AND EXPENSES were also caused
                  by, relate to or involve a breach of, or inaccuracy in, any
                  covenant, obligation, representation or warranty of P&G
                  provided to BIOLASE in this AGREEMENT or (ii) such P&G LOSSES
                  AND EXPENSES result from or arise out of a material action or
                  omission of P&G.

         13.3.    THIRD PARTY CLAIMS. The "Indemnified PARTIES" shall mean the
                  BIOLASE INDEMNIFIED PARTIES and the P&G INDEMNIFIED PARTIES.
                  If a claim by a third party is made against an INDEMNIFIED
                  PARTY hereunder, and if such INDEMNIFIED PARTY intends to seek
                  indemnity with respect thereto under this Section 13, such
                  INDEMNIFIED PARTY will promptly notify BIOLASE, in the case of
                  a P&G INDEMNIFIED PARTY, or P&G, in the case of a BIOLASE
                  INDEMNIFIED PARTY (such PARTY to be notified, the
                  "INDEMNIFYING PARTY") in writing of such claims setting forth
                  such claims in reasonable detail, provided that failure of
                  such INDEMNIFIED PARTY to give prompt notice as provided
                  herein will not relieve the INDEMNIFYING PARTY of any of its
                  obligations hereunder, except to the extent that the
                  INDEMNIFYING PARTY is materially prejudiced by such failure.
                  The INDEMNIFYING PARTY will have [*  *  *  ] after receipt of
                  such notice to undertake, through counsel of its own choosing,
                  subject to the reasonable approval of such INDEMNIFIED PARTY,
                  and at the INDEMNIFYING PARTY'S expense, the settlement or
                  defense thereof, and the INDEMNIFIED PARTY will cooperate with
                  it in connection therewith; provided, however, that the
                  INDEMNIFIED PARTY may participate in such settlement or
                  defense through counsel chosen by such INDEMNIFIED PARTY,
                  provided that the fees and expenses of such counsel will be
                  borne by such INDEMNIFIED PARTY. If the INDEMNIFYING PARTY
                  will assume the defense of a claim, it will not settle such
                  claim without the prior written consent of the INDEMNIFIED
                  PARTY, (a) unless such settlement includes as an unconditional
                  term thereof the giving by the claimant of a release of the
                  INDEMNIFIED PARTY from all liability with respect to such
                  claim or (b) if such settlement involves the imposition of
                  equitable remedies or the imposition of any material
                  obligations on such INDEMNIFIED PARTY other than financial
                  obligations for which such INDEMNIFIED PARTY will be
                  indemnified hereunder. If the INDEMNIFYING PARTY will assume
                  the defense of a claim, the fees of any separate counsel
                  retained by the INDEMNIFIED PARTY will be borne by such
                  INDEMNIFIED PARTY unless there exists a conflict between them
                  as to their respective legal defenses (other than one that is
                  of a monetary nature), in which case the INDEMNIFIED PARTY
                  will be entitled to retain separate counsel, the reasonable
                  fees and expenses of which will be reimbursed by the
                  INDEMNIFYING PARTY. If the

                                                                              33
<PAGE>

                  INDEMNIFYING PARTY does not notify the INDEMNIFIED PARTY
                  within [*  *  *] after the receipt of the INDEMNIFIED PARTY's
                  notice of a claim of indemnity hereunder that it elects to
                  undertake the defense thereof, the INDEMNIFIED PARTY will have
                  the right to contest, settle or compromise the claim but will
                  not thereby waive any right to indemnity therefore pursuant to
                  this AGREEMENT. The indemnification provisions set forth in
                  this Section 13 are the sole and exclusive means of recovery
                  of money damages with respect to the matters covered herein,
                  except for fraud.

                  13.4. LIMITATION ON LOSSES AND EXPENSES. Notwithstanding
                  anything to the contrary contained herein, no INDEMNIFYING
                  PARTY hereunder shall be liable (including liability for
                  negligence or other tortious act or omission) for (a) any loss
                  of profit, loss of contract or loss of goodwill incurred by
                  any INDEMNIFIED PARTY; or (b) any punitive, indirect or
                  consequential damages incurred by any INDEMNIFIED PARTY
                  pursuant to this AGREEMENT (it being understood that any
                  damages described in this Section 13.4 owed by any INDEMNIFIED
                  PARTY to any third party will be considered direct damages,
                  not subject to this Section 13.4).

14. MISCELLANEOUS

         14.1.    CERTAIN INJUNCTIVE RELIEF. Due to the important
                  confidentiality concerns of the PARTIES, and for other
                  reasons, the PARTIES will be irreparably damaged in the event
                  that the provisions of Section 11 are not specifically
                  enforced. In the event of a breach or threatened breach of the
                  terms, covenants and/or conditions of either such Section 11
                  by any of the PARTIES hereto, the other party shall, in
                  addition to any other remedies it may have, be entitled to a
                  temporary or permanent injunction, without showing any actual
                  damage, and/or a decree for specific performance, in
                  accordance with the provisions of such Section 11.

         14.2.    NONCOMPETE. Subject to Section 14.2.1 of this Non-Compete
                  Section 14.2, BIOLASE by itself or through third PARTIES shall
                  not directly or indirectly enter into the research,
                  development, prototyping, testing, manufacture, supply,
                  marketing, distribution, sale, promotion, or commercialization
                  of any compounds, materials, or products in the P&G FIELDS OF
                  USE, including the PRIMARY P&G FIELD OF USE, and the [*  *  *]
                  Field (if P&G exercises its option) by: (i) developing,
                  prototyping, conducting research on, manufacturing, supplying,
                  marketing, selling or distributing any such products or
                  products competing with such products to any third party other
                  than P&G; (ii) licensing any intellectual property to any
                  third party other than P&G for use in connection with the
                  research, development, prototyping, testing, manufacture,
                  supply, marketing, distribution, sale, promotion, or
                  commercialization any such compounds, materials, or products;
                  (iii) consulting with, supplying compounds, materials, or
                  products to, cooperating with or providing services to, any
                  third party other than P&G with respect to the research,
                  development, prototyping, testing, manufacture, supply,
                  marketing,

                                                                              34
<PAGE>

                  distribution, sale, promotion, or commercialization of any
                  such compounds, materials, or products; or (iv) investing in
                  any third party other than P&G, that engages in the research,
                  development, prototyping, testing, manufacture, supply,
                  marketing, distribution, sale, promotion, or commercialization
                  of such products, (collectively, the "Restricted Business");
                  provided, however, that this restriction shall not apply to
                  BIOLASE directly acquiring a non-controlling ownership
                  interest of less than fifty percent (50%) of the equity of a
                  public or private company that engages in a RESTRICTED
                  BUSINESS if BIOLASE acquires such equity stake in such company
                  primarily in exchange for obtaining rights (either via an
                  outright assignment or a license) or access to technology
                  owned by such company and that is unrelated to the Restricted
                  Business and such company's market cap does not exceed [* * *
                  * * *] ($[* * *]). In addition, BIOLASE may acquire a less
                  than [*] equity stake in any publicly traded or private
                  company that derives less than [* *] of its revenues from the
                  Restricted Business.

                           14.2.1.  The time periods of this Non-Compete Section
                                    shall apply to and be effective for/during
                                    the time period that P&G has license rights,
                                    or options thereto (excluding the categories
                                    which revert back to BIOLASE). The terms of
                                    Sections 14.2 and 14.2.1 shall not apply to
                                    (i) categories which have reverted back to
                                    BIOLASE from the P&G FIELDS OF USE, (ii) the
                                    [* * *] Field in the event that P&G does not
                                    exercise its option, and (iii) the BIOLASE
                                    RETAINED FIELD.

         14.3.    ASSIGNMENT. This AGREEMENT and the rights and obligations
                  thereunder, may not be assigned, whether by operation of law
                  or otherwise, or otherwise transferred by either PARTY to a
                  third party, except as authorized in writing by the other
                  PARTY or as expressly set forth in Section 10 with respect to
                  a BIOLASE CHANGE IN CONTROL, except that either PARTY may
                  assign the rights and obligations under the AGREEMENT, in
                  whole or in part, to an AFFILIATE existing as of the EFFECTIVE
                  DATE, or P&G may assign its rights and obligations under this
                  AGREEMENT to a third party in the event P&G divests,
                  transfers, or sells to that third party a portion or its
                  entire business associated with one or more PRODUCTS. Any
                  attempted assignment or delegation except as permitted herein
                  shall be null and void. Any assignee of this AGREEMENT under
                  this Section 14.3 shall covenant to the PARTIES in writing
                  that such assignee agrees to be bound by all the terms and
                  conditions of this AGREEMENT applicable to the assignor.

         14.4.    GOVERNING LAW; VENUE. This AGREEMENT and the PARTIES'
                  respective rights and obligations hereunder will be governed
                  by and construed in accordance with the laws of the State of
                  New York, without giving effect to that body of laws
                  pertaining to conflict of laws, whether common law or
                  statutory.

                                                                              35
<PAGE>

         14.5.    SEVERABILITY. If one or more of the sections, provisions,
                  paragraphs, words, clauses, phrases or sentences contained
                  herein, or the application thereof in any circumstances, is
                  held invalid, illegal or unenforceable in any respect for any
                  reason, the validity, legality and enforceability of any such
                  section, provision, paragraph, word, clause, phrase or
                  sentence in every other respect and of the remaining sections,
                  provisions, paragraphs, words, clauses, phrases or sentences
                  hereof will not be in any way impaired, it being intended that
                  all rights, powers and privileges of the PARTIES hereto will
                  be enforceable to the fullest extent permitted by law.

         14.6.    AMENDMENTS AND WAIVERS. This AGREEMENT may be amended only by
                  a written instrument executed by both PARTIES. Any amendment
                  effected in accordance with the immediately preceding sentence
                  will be binding on all of the PARTIES to this AGREEMENT. No
                  failure or delay by any Party in exercising any right, power
                  or privilege hereunder will operate as a waiver thereof nor
                  will any single or partial exercise thereof preclude any other
                  or further exercise thereof or the exercise of any other
                  right, power or privilege.

         14.7.    ENTIRE AGREEMENT. This AGREEMENT, together with any exhibits,
                  appendixes and attachments hereto, constitutes the complete
                  and exclusive agreement between the PARTIES regarding the
                  subject matter hereof, and supersedes all previous written or
                  verbal agreements relating on this subject matter between the
                  PARTIES, and all previous writings are merged and superseded
                  by this AGREEMENT, including the LETTER, and including the
                  Bilateral CDA executed on June 22nd, 2006 by the PARTIES, the
                  Confidential Disclosure Agreement executed on May 5, 2005 by
                  the PARTIES, and the Amendment to the Confidential Disclosure
                  Agreement executed on June 5, 2006 by the PARTIES. This
                  AGREEMENT may be modified only by a written document signed by
                  all the PARTIES hereto.

         14.8.    BANKRUPTCY. In the event BIOLASE seeks or is involuntarily
                  placed under the protection of the bankruptcy laws, Title XI
                  U.S. Code, and the trustee in bankruptcy rejects this
                  AGREEMENT, P&G hereby elects, pursuant to Section 365(n), to
                  retain all rights granted to it under this AGREEMENT to the
                  extent permitted by law. In the event P&G seeks or is
                  involuntarily placed under the protection of the bankruptcy
                  laws, Title XI U.S. Code, and the trustee in bankruptcy
                  rejects this AGREEMENT, BIOLASE hereby elects, pursuant to
                  Section 365(n), to retain all rights granted to it under this
                  AGREEMENT to the extent permitted by law.

         14.9.    COUNTERPARTS. This AGREEMENT may be executed in one or more
                  counterparts, and by different PARTIES on separate
                  counterparts, each of which will be deemed an original and all
                  of which together will constitute one and the same original.

         14.10.   NOTICES. Any and all notices required or permitted to be given
                  to a PARTY pursuant to the provisions of this AGREEMENT will
                  be in writing and will be effective and deemed to provide such
                  PARTY sufficient notice under

                                                                              36
<PAGE>

                  this AGREEMENT on the earliest of the following: (i) at the
                  time of personal delivery, if delivery is in person; (ii) at
                  the time of transmission by facsimile, addressed to the other
                  Party at its facsimile number specified herein (or hereafter
                  modified by subsequent notice to the PARTIES hereto), with
                  confirmation of receipt made by both telephone and printed
                  confirmation sheet verifying successful transmission of the
                  facsimile; or (iii) one (1) business day after deposit with an
                  express overnight courier for United States deliveries, or two
                  (2) business days after such deposit for deliveries outside of
                  the United States, with proof of delivery from the courier
                  requested. All notices for delivery outside the United States
                  will be sent by facsimile or by express courier. Notices by
                  facsimile shall be machine verified as received. All notices
                  not delivered personally or by facsimile will be sent with
                  postage and/or other charges prepaid and properly addressed to
                  the PARTY to be notified at the address or facsimile number as
                  follows, or at such other address or facsimile number as such
                  other PARTY may designate by one of the indicated means of
                  notice herein to the other PARTIES hereto as follows:

         if to P&G:

                  The Procter & Gamble Company
                  Two Procter & Gamble Plaza
                  Cincinnati, Ohio 45202
                  Attention: Jeffrey D. Weedman
                  Vice President, External Business Development

            With copies to:

                  [*        *          *]
                  [*                     *           *]
                  [*             *            *]
                  [*        *          *]
                  [*        *          *]
                  [*        *          *]

         if to BIOLASE:

                  BIOLASE TECHNOLOGY, Inc.
                  4 Cromwell, Irvine CA 92618
                  Attention: Richard Harrison
                  Chief Financial Officer

                                                                              37
<PAGE>

         With copies to:

                  Charles K. Ruck, Esq.
                  Latham & Watkins, LLP
                  650 Town Center Drive, 20th Floor
                  Costa Mesa, CA 92626-1925
                  Tel: (714) 540-1235
                  Fax: (714) 755-8290
                  Email: charles.ruck@lw.com

         14.11.   PRESS RELEASES AND PUBLIC DISCLOSURE. Any press releases,
                  public announcements or similar publicity with respect to this
                  AGREEMENT or the transactions contemplated hereby (including,
                  without limitation, standard question and answer responses,
                  scripts for press briefings, and other disclosure) must be
                  approved by both PARTIES in advance with respect to both
                  timing and content of the disclosure, provided that nothing
                  herein will prevent either PARTY or their respective
                  AFFILIATES, upon reasonable notice to the other PARTY, from
                  making public disclosures that are necessary to comply with
                  the requirements of law or any listing agreement with any
                  national securities exchange.

         14.12.   FORCE MAJEURE. Should either Party be prevented from
                  performing its obligations under this AGREEMENT by an event of
                  force majeure, such as an earthquake, typhoon, flood, fire,
                  act of war, act of the public enemy, act of terrorism, act of
                  God or any other unforeseen event the happening and
                  consequences of which are unpreventable and unavoidable, the
                  prevented Party shall notify the other PARTY BY the most
                  expedient means available (fax, telex or express mail being
                  acceptable in any event) without any delay, and within [* * *]
                  thereafter provide detailed information of the events and, if
                  applicable and available, a valid document for evidence issued
                  by the relevant public notary organization explaining the
                  reason for its inability to perform or delay in the
                  performance of all or part of this AGREEMENT. The PARTIES
                  shall discuss in good faith, taking into account the effects
                  of the force majeure and other unforeseen events on the
                  performance of the obligations under this AGREEMENT, whether
                  to (a) exempt the prevented Party from performing part or all
                  of its obligations under this AGREEMENT or (b) delay the
                  performance of the affected obligations under this AGREEMENT.
                  In the absence of any such agreement, no PARTY shall be
                  excused from its performance hereunder once the event of force
                  majeure has subsided.

         14.13.   FURTHER ASSURANCES. Except as otherwise specifically agreed to
                  herein, the PARTIES agree to execute such further
                  documentation and perform such further actions, including the
                  recordation of such documentation with appropriate
                  authorities, as may be reasonably requested by the other PARTY
                  hereto to evidence, effectuate and further the purposes and
                  intents set forth in this AGREEMENT.

                                                                              38
<PAGE>

         14.14.   NO THIRD PARTY BENEFICIARIES. Except for the rights of the
                  INDEMNIFIED PARTIES pursuant to Section 13, nothing in this
                  AGREEMENT, express or implied, is intended to confer upon any
                  Person, other than the PARTIES hereto or their respective
                  successors and permitted assigns, any rights, remedies,
                  benefits, obligations or liabilities of any nature whatsoever
                  under or by reason of this AGREEMENT.

IN WITNESS WHEREOF, the PARTIES hereto caused this AGREEMENT to be duly executed
as of the date first written above.

                      BIOLASE TECHNOLOGY, INC.

                      By:
                         --------------------------------------------
                          Name:  Richard L. Harrison
                          Title: Executive Vice President, CFO & Secretary

                      THE PROCTER & GAMBLE COMPANY

                      By:
                         ---------------------------------------------

                         Name:   Jeffrey D. Weedman
                         Title:  Vice President, External Business Development

                                                                              39
<PAGE>

                                    EXHIBIT A

               BIOLASE PATENTS WITHIN THE PRIMARY P&G FIELD OF USE

U.S. patent and applications listed in this Exhibit A, including any parent
applications, continuations, continuations-in-part, divisionals, re-exams,
reissues, and any foreign equivalents thereof.

<TABLE>
<CAPTION>
                                                                                                   BIOLASE
Country      Status        Application No.         Publication No.          Patent No.             Docket No.            Title
-------    ---------      ----------------       -------------------   ------------------      ------------------     -----------
<S>        <C>            <C>                    <C>                   <C>                     <C>                    <C>
 [**]      [*  *  *]      [*     *      *]                                                     [*      *       *]     [*   *   *]
           [*  *  *]      [*     *      *]                                                                            [*   *   *]
           [*  *  *]                                                                                                  [*   *   *]

 [**]      [*  *  *]      [*     *      *]                                                     [*      *       *]     [*   *   *]
           [*  *  *]      [*     *      *]                                                                            [*   *   *]
           [*  *  *]                                                                                                  [*   *   *]

 [**]      [*  *  *]      [*     *      *]                                                     [*      *       *]     [*   *   *]
           [*  *  *]      [*     *      *]                                                                            [*   *   *]
           [*  *  *]                                                                                                  [*   *   *]

 [**]      [*  *  *]      [*     *      *]                                                                            [*   *   *]
           [*  *  *]      [*     *      *]                                                                            [*   *   *]
           [*  *  *]                                                                                                  [*   *   *]

 [**]      [*  *  *]      [*     *      *]                             [*      *       *]      [*      *       *]     [*   *   *]
                                                                                                                      [*   *   *]
                                                                                                                      [*   *   *]

 [**]      [*  *  *]                             [*      *       *]                                                   [*   *   *]
                                                                                                                      [*   *   *]
                                                                                                                      [*   *   *]

 [**]      [*  *  *]      [*     *      *]                                                                            [*   *   *]
                                                                                                                      [*   *   *]
                                                                                                                      [*   *   *]

 [**]      [*  *  *]      [*     *      *]                             [*      *       *]      [*      *       *]     [*   *   *]
                                                                                                                      [*   *   *]
                                                                                                                      [*   *   *]
</TABLE>

                                                                              40
<PAGE>

<TABLE>
<S>        <C>            <C>                    <C>                   <C>                     <C>                    <C>
 [**]      [*  *  *]                                                   [*      *       *]                             [*   *   *]
                                                                                                                      [*   *   *]
                                                                                                                      [*   *   *]

 [**]      [*  *  *]      [*     *      *]       [*      *       *]                            [*    *    *]          [*   *   *]
                                                 [*  *]                                                               [*   *   *]
                                                                                                                      [*   *   *]

 [**]      [*  *  *]      [*     *      *]                                                     [*    *    *]          [*   *   *]
                                                                                                                      [*   *   *]
                                                                                                                      [*   *   *]

 [**]      [*  *  *]      [*     *      *]       [*      *       *]                            [*      *       *]     [*   *   *]
           [*  *  *]      [* *]                                                                                       [*   *   *]
           [*  *  *]                                                                                                  [*   *   *]

 [**]      [*  *  *]      [*     *      *]                                                     [*      *       *]     [*   *   *]
                          [* *]                                                                                       [*   *   *]
                                                                                                                      [*   *   *]

 [**]      [*  *  *]      [*     *      *]       [*      *       *]                            [*      *       *]     [*   *   *]
                                                                                                                      [*   *   *]
                                                                                                                      [*   *   *]

 [**]      [*  *  *]      [*     *      *]                                                     [*      *       *]     [*   *   *]
                                                                                                                      [*   *   *]
                                                                                                                      [*   *   *]
</TABLE>

                                                                              41
<PAGE>

                                    Exhibit B

                 BIOLASE PATENTS within THE [*  *  *] FIELD OF USE

U.S. patents and applications listed in this Exhibit B, including any parent
applications, continuations, continuations-in-part, divisionals, re-exams,
reissues, and any foreign equivalents thereof, and any other patent or patent
application related to the [*  *  *] Field.

<TABLE>
<CAPTION>
                                                                                                   BIOLASE
Country       Status        Application No.         Publication No.          Patent No.             Docket No.            Title
-------    -----------      ---------------        -------------------   ------------------      ------------------     -----------
<S>        <C>              <C>                    <C>                   <C>                     <C>                    <C>

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
           [*   *   *]      [*     *     *]                                                                             [*   *    *]

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
           [*   *   *]      [*     *     *]                                                                             [*   *    *]

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
           [*   *   *]      [*     *     *]                                                                             [*   *    *]

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
           [*   *   *]      [*     *     *]                                                                             [*   *    *]

[**]       [*   *   *]      [*     *     *]                                [*     *     *]          [*   *   *]         [*   *    *]
                                                                                                                        [*   *    *]

[**]       [*   *   *]      [*     *     *]          [*     *     *]       [*     *     *]          [*   *   *]         [*   *    *]
                                                                                                                        [*   *    *]

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
                                                                                                                        [*   *    *]
                                                                                                                        [*   *    *]

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
                                                                                                                        [*   *    *]

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
                                                                                                                        [*   *    *]

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
                                                                                                                        [*   *    *]

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
                                                                                                                        [*   *    *]
                                                                                                                        [*   *    *]

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
                                                                                                                        [*   *    *]
                                                                                                                        [*   *    *]

[**]       [*   *   *]      [*     *     *]                                                         [*   *   *]         [*   *    *]
                                                                                                                        [*   *    *]
                                                                                                                        [*   *    *]
</TABLE>

                                                                              42
<PAGE>

                                    Exhibit C

     BIOLASE PATENTS within the P&G FIELDS OF USE (excluding the primary P&G
 Field OF USE) and biolase patents within the BIOLASE RETAINED FIELD CATegories
  offered to, and accepted by, P&G under Section 2.4.1 (This exhibit c is not
       meant to expand thE Rights otherwise granted under this agreement)

   (Blank as of EFFECTIVE DATE-BIOLASE to populate [* * *] after the EFFECTIVE
                            DATE of this AGREEMENT)

                                                                              43
<PAGE>

                                    EXHIBIT D

           P&G [*  *  *] PRODUCT CATEGORIES WITHIN P&G FIELDS OF USE

[*   *   *] [Remainder of page redacted]

                                                                              44
<PAGE>

                                    EXHIBIT E
                          PURCHASE PRICE DETERMINATION

         Purchase Price refers to purchase by P&G of the BIOLASE PATENTS and
related interests as shall be the subject of an election by P&G to purchase, and
shall be equal to the PURCHASE PRICE agreed to by the PARTIES or the VALUATION
(as defined herein) of such interest to be purchased under this AGREEMENT,
determined as follows: each PARTY shall [*   *   *   *   *   *   *   *   *   *
  *   *   *   *   *   *   *   *   *   *  *   *   *   *   *   *   *   *   *   *
  *   *   *   *   *   *   *   *   *   *  *   *   *   *   *   *   *   *   *   *
  *   *   *   *   *   *   *   *   *   *  *   *   *   *   *   *   *   *   *   *
  *   *   *   *   *   *   *   *   *   *  *   *   *   *   *   *   *   *   *   *
  *   *   *   *   *   *   *   *   *   *  *   *   *   *   * ](a "VALUATION").

The [*  *  *] will be [*    *    *] VALUATION within [*  *    *] after the
Purchase Date as defined herein. In the event of a PARTY'S failure to [*  *  *
 *  *  *  *  *  *] after the Purchase Date, the VALUATION will be the VALUATION
determined by [*  *  *  *  *  *  *].

If the difference between the lower VALUATION and the higher VALUATION is not
more than [*  *  *] of the higher VALUATION, or if the VALUATIONS are equal, the
final VALUATION shall be the [*  * *  *  *]. If the difference between the
two (2) VALUATIONS is more than [*  *  *] of the higher VALUATION, the FIRMS
[*  *  *  *] and [*  *  *] prepare a VALUATION. The [*  *  *] will not have
access to the VALUATIONS prepared [*  *  *]. The two (2) VALUATIONS that are the
closest in value then shall be [*  *  *], and the resulting [*  *  *] shall be
the final VALUATION.

The purchase of the BIOLASE PATENTS shall thereafter be consummated by payment
of the VALUATION within [*  *  *] after [*  *  *] the VALUATIONS [*  *  *  *  *]
or such later date upon which all necessary regulatory approvals have been
obtained and/or regulatory waiting periods have expired.

Each PARTY shall bear the expense of obtaining the VALUATION [*  *  *  *  * *],
and [*   *    *    *], the expense of obtaining its VALUATION shall be borne
equally by the PARTIES.

Unless otherwise agreed in writing by the PARTIES, the VALUATION for the BIOLASE
PATENTS shall be [*    *    *    *    *    *     *    *     *    *     *    *
*    *     *     *    *    *    *    *    *    *](such date shall be referred to
 as the "Purchase Date").

During the pendency of the option election and VALUATION process, the PARTIES
shall continue to perform their customary activities under this AGREEMENT.

                                                                              45

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]