License and Distribution Agreement

1.

As a fundamental condition precedent to HSI entering into this letter agreement, Biolase has informed HSI that it is taking actions to reduce its operating expenses to such a level as to reach profitability, based on **** Biolase sales revenue of $**** on an on-going basis, to be adjusted as minimums increase.

2.

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

(i) and (iii) above ($**** in the aggregate). Other payments in respect of purchases hereunder shall be due upon receipt, of the applicable products. These purchases may be purchased by HSI through HSI’s divisions or subsidiaries in the United States or Canada or elsewhere in the world. Biolase will make the products available to HSI and, in accordance with the parties’ standard business practice, promptly supply HSI with any products so ordered. HSI and its affiliates, under the Agreement or any related agreements for the sale of Biolase products anywhere in the world, shall have no product purchase obligations other than as set forth herein. Notwithstanding anything contained herein to the contrary, purchases by HSI of **** shall not be part of the purchases set forth in (i) through (iii) above.

3.

With respect to **** Waterlase C-100 ****, Biolase and HSI agree to work together in good faith to reach agreement upon a strategy for **** Waterlase C-100 **** no later than April 15, 2009, with an agreed upon **** no later than ****.

4.

If sales exceed HSI targeted levels of $**** in Lasers of such year, ****% of such excess sales of Lasers will be **** and ****% will be **** Lasers ****; provided, however, that the parties will negotiate in good faith such percentages if ****.

5.

During the New Initial Term, Biolase shall exclusively sell its products through HSI in the Territory, and shall not sell such products directly or through other distributors, and HSI shall have the right to distribute the products through third-party distributors if it so elects, provided that such third-party distributors sell to end-users permitted under the Agreement “Territory” shall be defined as the United States, United Kingdom, Belgium, Luxembourg, Netherlands, Canada, Spain, Germany, Austria, Australia, and New Zealand, Subject to Biolase’s contractual obligations in respect of sales in markets governed by existing distribution agreements in effect as of the date hereof, HSI shall have the right to exclusively sell in other countries throughout the world. Biolase will consider in good faith extending exclusivity in certain specific markets **** based upon HSI’s performance in such markets.

6.

HSI may, at its option, extend this letter agreement for two additional one-year terms, upon written notice given on or before February 1, 2010 or February 1, 2011 (for second renewal) given by Schein to Biolase prior to the expiration of the New Initial Term (or the then expiring additional one-year term, as the case may be); provided that HSI may only be permitted to exercise an option to extend the then current term i