BIOLASE Announces the Acquisition of the Intellectual Property Portfolio of Diodem LLC

BIOLASE and Diodem Enter Binding Accord to Settle Outstanding Litigation

SAN CLEMENTE, Calif., Dec. 20 /PRNewswire-FirstCall/ — BIOLASE Technology, Inc. (NASDAQ:BLTI) , a medical technology company that develops, manufactures and markets lasers and related products focused on improving dental procedures, today announced the acquisition of the intellectual property portfolio of Diodem LLC. As a result of the acquisition, Diodem will immediately withdraw its patent infringement claims against the Company.

Under the terms of the transaction, BIOLASE will acquire all of the intellectual property portfolio of Diodem LLC, consisting of eight U.S. and international patents of which four were asserted against the Company, for a consideration of &#363.0 million in cash, &#364.5 million in common stock, valued at &#3611.06 per share as of the closing price on December 17, 2004, and 81,037 five-year warrants at a strike price of &#3611.06 per share. The companies have also entered into other terms and details as related to the Binding Letter of Intent.

“The Diodem transaction is very positive for the long-term strength of the Company. We believe the combination of the Diodem patent portfolio along with the large intellectual property portfolio developed by BIOLASE, offers great synergies both from a product development and licensing vantage point. In short, this transaction protects and solidifies our core technology and clears the way for strategic licensing opportunities for BIOLASE both in the U.S. and internationally,” commented Robert E. Grant, President and CEO.

The transaction will become effective upon the execution of a definitive agreement, which is expected to be completed in early January 2005. Under the terms of the Binding Letter of Intent, the Company will not incur any royalty obligations on past or future sales of BIOLASE products. All other terms and conditions of the transaction are confidential.