This Guaranty and the rights, remedies, representations and
obligations of the parties hereto are subject to the terms and
conditions of that certain Intercreditor Agreement between Hercules
Technology Growth Capital, Inc. and each of
Iroquois Capital LP, Cranshire Capital, L.P., Portside Growth and
Opportunity Fund and Rockmore Investment Master Fund
Ltd
. dated as of September 28, 2007.
GUARANTY
THIS
GUARANTY, dated as of September 28, 2007 (this “
Guaranty ”),
made by Diomed, Inc., a Delaware corporation (the “
Guarantor ”),
in favor of the holders (the “
Holders ”)
of the Amended and Restated Variable Rate Secured Subordinated
Convertible Debentures due October 2008 (the “
Debentures ”)
issued by Diomed Holdings, Inc., a Delaware corporation
(“
Borrower ”).
W
I
T
N
E
S
S
E
T
H :
WHEREAS,
Grantor is a subsidiary of Borrower and, as such, will benefit
by virtue of the financial accommodations extended to Borrower
by the Holders; and;
WHEREAS,
in order to induce the Holders to enter into the Debentures
and any other instruments, documents or agreements, as amended
from time to time, now or hereafter securing Borrower’s
indebtedness to the Holders arising under the Debentures
(collectively, the “
Security Instruments ”)
and the other Loan Documents (defined below) and to extend the
financial accommodations to the Borrower pursuant to the
Debentures, and in consideration thereof, the Guarantor has agreed
to a guaranty of the Guaranteed Obligations (defined below) as set
forth herein. This Guaranty, the Guarantor Pledge and Security
Agreement, the Security Instruments, together with the Debenture
and any and all amendments and modifications thereof, are
individually referred to as a “
Loan Document ”
and collectively referred to as the “
Loan Documents .”
NOW,
THEREFORE, in consideration of the foregoing, the Guarantor
hereby agrees as follows:
SECTION
1.
Definitions .
Reference is hereby made to the Debentures for a statement of the
terms thereof. All terms used in this Guaranty which are defined in
the Debentures and not otherwise defined herein shall have the same
meanings herein as set forth therein. In addition, the following
terms shall have the meanings specified below, such meanings to be
applicable equally to both the singular and the plural forms of
such terms:
“
Bankruptcy Code ”
means the United States Bankruptcy Code, as in effect from time to
time.
“
Collateral ”
shall have the meaning assigned to the term
“Collateral” in Guarantor Pledge and Security
Agreement.
“
Guarantor Pledge and Security Agreement ”
means the Pledge and Security Agreement made by Guarantor in favor
of the Holders, substantially in the form of Exhibit A, securing
the Guaranteed Obligations and delivered to the
Holders.
“
Insolvency Proceeding ”
means any proceeding commenced by or against any Person under any
provision of the Bankruptcy Code or under any other bankruptcy or
insolvency law, assignments for the benefit of creditors, formal or
informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or
other similar relief.
“
Lien ”
means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or
charge of any kind, whether voluntarily incurred or arising by
operation of law or otherwise, against any property, any
conditional sale or other title retention agreement, and any lease
in the nature of a security interest.
“
Person ”
means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, other entity
or government.
SECTION
2.
Guaranty .
The Guarantor hereby (a) unconditionally and irrevocably guarantees
the punctual payment, as and when due and payable, by stated
maturity or otherwise, of all obligations of Borrower now or
hereafter existing under any Loan Document, whether for principal,
interest (including, without limitation, all interest that accrues
after the commencement of any Insolvency Proceeding, whether or not
a claim for post-filing interest is allowed in such proceeding),
fees, premiums, commissions, reimbursements of expenses,
indemnifications or otherwise (such obligations, to the extent not
paid by the Borrower, being hereinafter referred to as the
“
Guaranteed Obligations ”),
and (b) agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by the Holders in enforcing any
rights under this Guaranty (the “
Guaranty Expenses ”).
Without limiting the generality of the foregoing, the
Guarantor’s liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by
the Borrower to the Holders under any Loan Document but for the
fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding
involving the Borrower.
SECTION
3.
Guaranty Absolute; Continuing Guaranty; Assignments
.
(a)
The
Guarantor guarantees that the Guaranteed Obligations will be
paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Holders with respect thereto. The
obligations of the Guarantor under this Guaranty are
independent of the Guaranteed Obligations, and a separate
action or actions may be brought and prosecuted against the
Guarantor to enforce such obligations, irrespective of whether
any action is brought against the Borrower or whether the
Borrower is joined in any such action or actions. The
liability of the Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and
the Guarantor hereby irrevocably waives, to the fullest extent
permitted by applicable law, any defenses it may now or
hereafter have in any way relating to, any or all of the
following:
(i)
any
lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(ii)
any
change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or
any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any
increase in the Guaranteed Obligations resulting from the
extension of additional credit to the Borrower or
otherwise;
(iii)
any
taking, exchange, release or non-perfection of any Collateral,
or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the
Guaranteed Obligations;
(iv)
any
change, restructuring or termination of the corporate, limited
liability company or partnership structure or existence of the
Borrower; or
(v)
any
other circumstance (including any statute of limitations) or
any existence of or reliance on any representation by any
Holder that might otherwise constitute a defense available to,
or a discharge of, the Borrower or any other guarantor or
surety, other than payment in full of the Guaranteed
Obligations.
This
Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be
returned by any Holder or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or
otherwise, all as though such payment had not been
made.
(b)
This
Guaranty is a continuing guaranty and shall remain in full
force and effect until the later of (i) the payment in full of
the Guaranteed Obligations and all Guaranty Expenses and (ii)
the Maturity Date.
SECTION
4.
Demand on the Guarantor .
If (a) the Borrower fails to make any payment under the Loan
Documents when due, or (b) an Event of Default or a Guaranty
Default has occurred, the Holders may make written demand on the
Guarantor under this Guaranty for payment of the Guaranteed
Obligations, which shall be paid by the Guarantor, in a single
payment calculated as of the date of actual payment thereof, to the
Holders within 5 days after receipt of such written demand
therefor.
SECTION
5.
Waivers .
The Guarantor hereby
waives promptness, diligence, notice of acceptance and any other
notice (except as provided by Section 4 hereof) with respect to any
of the Guaranteed Obligations and this Guaranty and any requirement
that the Holders exhaust any right or take any action against the
Borrower or any other Person or any Collateral. The Guarantor
waives all set-offs and counterclaims and presentment, protest,
notice, filing of claims with a court in the event of any
Insolvency Proceeding with respect to the Borrower or any other
Person, demand or action on delinquency in respect of the
Guaranteed Obligations or any part thereof. The Guarantor
acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated herein and that the waiver
set forth in this Section 5 is knowingly made in contemplation
of such benefits. The Guarantor hereby waives any right to revoke
this Guaranty, and acknowledges that this Guaranty is continuing in
nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
SECTION
6.
Subrogation .
The Guarantor will not exercise any rights that it may now or
hereafter acquire against the Borrower or any other guarantor that
arise from the existence, payment, performance or enforcement of
the Guarantor’s obligations under this Guaranty, including,
without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Holders against the
Borrower or any other guarantor or any Collateral, whether or not
such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to
take or receive from the Borrower or any other guarantor, directly
or indirectly, in cash or other property or by set-off or in any
other manner, payment or security solely on account of such claim,
remedy or right, unless and until all of the Guaranteed Obligations
and all other amounts payable under this Guaranty shall have
been paid
in full and
the Debentures shall have been terminated. If any amount shall be
paid to the Guarantor in violation of the immediately preceding
sentence at any time prior to the later of the date on which all of
the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid
in full and
the Debentures shall have been terminated, such amount shall be
held in trust for the benefit of the Holders and shall forthwith be
paid to the Holders, to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of this
Guaranty and the Debentures, or to be held as Collateral for any
Guaranteed Obligations or other amounts payable under this Guaranty
thereafter arising.
SECTION
7.
Representations and Warranties; No Event of Default
.
The following statements shall be true and correct: (i) the
representations and warranties of the Guarantor herein and in each
certificate or other writing delivered by the Guarantor to
the
Holders pursuant
hereto are true and correct and (ii) no Event of Default shall
have occurred and be continuing or would result from this Guaranty
becoming effective in accordance with its terms.
SECTION
8.
Delivery of Documents .
The Holders shall have received the following, each in form and
substance satisfactory to the Holders:
(i)
a
counterpart to this Guaranty that bears the signature of the
Guarantor;
(ii)
a
copy of the resolutions of the Guarantor, certified as of the
date hereof, authorizing the execution, delivery and
performance by the Guarantor of this Guaranty;
(iii)
a
certificate of an authorized officer of the Guarantor,
certifying the names and true signatures of the
representatives of the Guarantor authorized to sign this
Guaranty together with evidence of the incumbency of such
authorized officers;
(iv)
a
certificate of the appropriate official(s) of the jurisdiction
of organization and each jurisdiction of foreign
qualification, if any, of the Guarantor certifying as to the
subsistence in good standing of, and the payment of taxes by,
the Guarantor in such jurisdiction; and
(v)
a
true and complete copy of the charter documents of the
Guarantor certified as of a recent date not more than 30 days
prior to the date hereof by an appropriate official of the
jurisdiction of organization of the Guarantor which shall set
forth the same complete name of the Guarantor as is set forth
herein and the organizational number of the Guarantor, if an
organizational number is issued in such
jurisdiction.
SECTION
9.
Representations and Warranties .
The Guarantor
hereby
represents and warrants as follows:
(a)
The
Guarantor (i)
is a corporation, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation as set forth on the first page hereof, (ii) has
all requisite power and authority to conduct its
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