Guaranty Agreement for Fiscal 2002 Shortfall between BriteSmile, Inc. and Shareholders

Summary

BriteSmile, Inc. entered into an agreement with certain shareholders—LCO Investments Limited, John L. Reed, and Bradford G. Peters—who committed to purchase company stock if the company’s cash receipts for fiscal 2002 fall short of $5 million. In return, these shareholders receive warrants to buy company stock at a set price. If required to purchase shares, the price will be the lower of $3.76 or 80% of the market price. The agreement also grants registration rights for the shares and warrants. The company covers registration expenses, and shareholders make standard investment representations.

EX-10.37 9 dex1037.txt GUARANTY OF FISCAL 2002 SHORTFALL Exhibit 10.37 Guaranty of Fiscal 2002 Shortfall Summary of Terms ---------------- (March 4, 2002) ISSUER: BriteSmile, Inc. (the "Company"). ------- FINANCIAL OBLIGATION: Written commitment (the "Commitment Letter") to the ----------------- Company's auditor in the form attached hereto as Exhibit A, pursuant to which the undersigned --------- shareholder of the Company agrees under certain circumstances to purchase shares of Company Common Stock (the "Shares") for a portion of the "Shortfall ------ Amount" (i.e. the difference between the Excess Cash Receipts (as defined in the Commitment Letter) and $5,000,000). CONSIDERATION: Consideration to the undersigned shareholder shall be for executing the Commitment Letter and for purchasing the Shares, if required to do so, as follows: . At the time of execution of the Commitment Letter, the Company will issue to each of the undersigned shareholders five year warrants to purchase the restricted Common Stock of the Company at an exercise price of $4.70 per share, in an amount calculated as follows: The maximum percentage of the Shortfall Amount to be covered 100,000 x pursuant to the Commitment Letter --------------------------------- $5,000,000 For example, if one of the undersigned shareholders agrees to cover 25% of the Shortfall Amount, up to a maximum of $1,250,000, then the Company would issue 25,000 (100,000 x 1,250,000/5,000,000) warrants upon signing of the Commitment Letter. . If the undersigned shareholders are required to purchase Shares pursuant to the Commitment Letter, the purchase price per Share will be the lesser of (i) $3.76 or (ii) eighty percent (80%) of the closing bid price of the Company's Common Stock as reported by The Nasdaq Stock Market on the date the Company gives notice to the undersigned shareholders that they are required to purchase Shares pursuant to the Commitment Letter. PIGGYBACK REGISTRATION RIGHTS: The holders of the warrants and the Shares shall be entitled to "piggyback" registration rights on all 1933 Act registrations of the Company (except for registrations relating to employee benefit plans and corporate reorganizations), subject, however, to the right of the Company and its underwriters to reduce the number of shares proposed to be registered pro rata in view of market conditions. Only Common Stock issuable upon exercise of the warrants and Shares issued and outstanding may be registered under the registration rights to be granted in this term sheet. EXPENSES: The Company shall bear the registration expenses (exclusive of underwriting discounts and commissions) of all such piggyback registrations. RESTRICTIONS ON SALE: The undersigned shareholders will make customary investment representations. The undersigned shareholders hereby accept the terms set forth above, subject to the negotiation and execution of definitive agreements. Date: March 4, 2002 LCO Investments Limited By: /s/ A.M. Pilaro Its: Chairman Commitment: 50% of the Shortfall Amount up to a maximum of $2,500,000 Date: March 2, 2002 John L. Reed By: /s/ John L. Reed Its: ___________________________________ Commitment: 10% of the Shortfall Amount up to a maximum of $500,000 Date: March 4, 2002 Bradford G. Peters By: /s/ Bradford G. Peters Its: ___________________________________ Commitment: 20% of the Shortfall Amount up to a maximum of $1,000,000