Unconditional Guaranty Agreement between Diomed Holdings, Inc. and Silicon Valley Bank for Diomed, Inc. Loan Obligations

Summary

This agreement is between Diomed Holdings, Inc. (Guarantor) and Silicon Valley Bank (Bank), guaranteeing the repayment and performance of all obligations owed by Diomed, Inc. (Borrower) to the Bank under a loan agreement. If the Borrower fails to meet its obligations, the Guarantor must immediately pay all amounts due and fulfill all terms. The Guarantor waives certain defenses and rights, and the Bank can enforce the guaranty independently. The agreement is governed by Massachusetts law and remains effective even if the Borrower becomes insolvent or bankrupt.

EX-10.3 4 ex-10_3.txt UNCONDITIONAL GUARANTY For and in consideration of certain loans by SILICON VALLEY BANK, a California-chartered bank, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at One Newton Executive Park, 2221 Washington Street, Suite 200, Newton, Massachusetts 02462, doing business under the name "Silicon Valley East (the "Bank") to DIOMED, INC., a Delaware corporation (hereinafter, the "Borrower"), which loans were made pursuant to a certain Loan and Security Agreement between Borrower and Bank dated June 8, 2004 as may be amended from time to time (hereinafter, the "Agreement"), the undersigned guarantor, DIOMED HOLDINGS, INC., a Delaware corporation with its principal office at One Dundee Park, Andover, MA 01810 ("Guarantor"), hereby unconditionally and irrevocably guarantees the prompt and complete payment of all amounts that Borrower owes to Bank under the Agreement and performance by Borrower of the Agreement and any other agreements now existing or hereafter arising between Borrower and Bank in connection with the Agreement, as each may be amended from time to time (collectively referred to as the "Agreements"), in strict accordance with their respective terms. 1. If Borrower does not perform its obligations under the Agreements beyond all cure periods, if any, Guarantor will immediately pay all amounts due (including, without limitation, all principal, interest, and fees) and satisfy all Borrower's obligations under the Agreements. 2. These obligations are independent of Borrower's obligations and separate actions may be brought against Guarantor (whether action is brought against Borrower or whether Borrower is joined in the action). Guarantor's liability is not contingent on the genuineness or enforceability of the Agreements. 3. Bank may, without notice to Guarantor and without affecting Guarantor's obligations under this Guaranty: (a) renew, extend, or otherwise change the terms of the Agreements; (b) take security for the payment of this Guaranty or the Agreements; (c) exchange, enforce, waive and release any security; and (d) apply the security and direct its sale as Bank, in its discretion, chooses. 4. Guarantor waives: a. Any right to require Bank to: (i) proceed against Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Bank may exercise or not exercise any right or remedy it has against Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting Guarantor's liability. b. Any defenses from disability or other defense of Borrower or from the cessation of Borrowers liabilities. c. Any setoff, defense or counterclaim against Bank. d. Any defense from the absence, impairment or loss of any right of reimbursement or subrogation or any other rights against Borrower. Until Borrower's obligations to Bank in respect of the Agreements, have been paid, Guarantor has no right of subrogation or reimbursement or subrogation or other rights against Borrower. 1 e. Any right to enforce any remedy that Bank has against Borrower. f. Any rights to participate in any security held by Bank. g. Any demands for performance, notices of nonperformance or of new or additional indebtedness. Guarantor is responsible for being and keeping itself informed of Borrower's financial condition. Unless Guarantor requests particular information, Bank has no duty to provide information to Guarantor. 5. Guarantor acknowledges that, to the extent Guarantor has or may have rights of subrogation or reimbursement against Borrower for claims arising out of this Guaranty, those rights may be impaired or destroyed if Bank elects to proceed against any real property security of Borrower by non-judicial foreclosure. That impairment or destruction could, under certain judicial cases and based on equitable principles of estoppel, give rise to a defense by Guarantor against its obligations under this Guaranty. Guarantor waives that defense and any others arising from Bank's election to pursue non-judicial foreclosure. 6. If Borrower becomes insolvent or is adjudicated bankrupt or files a petition for reorganization or similar relief under the United States Bankruptcy Code, or if a petition is filed against Borrower and/or any obligation under the Agreements is terminated or rejected, or any obligation of Borrower is modified or if Borrower's obligations are avoided Guarantor's liability will not be affected and its liability will continue. If Bank must return any payment because of the insolvency, bankruptcy or reorganization of Borrower, Guarantor or any other guarantor, this Guaranty will remain effective or be reinstated. 7. Guarantor subordinates any indebtedness of Borrower it holds to Bank; and upon the occurrence and during the continuance of an Event of Default (as defined in the Agreement) Guarantor will collect, enforce and receive payments as Bank's trustee and will pay Bank those payments without reducing or affecting its liability under this Guaranty. 8. Guarantor will pay Bank's reasonable attorneys' fees and other costs and expenses incurred enforcing this Guaranty. This Guaranty may not be waived, revoked or amended without Bank's prior written consent. If any provision of this Guaranty is unenforceable, all other provisions remain effective. This Guaranty represents the entire agreement among the parties about this guaranty. No prior dealings, no usage of trade, and no parol or extrinsic evidence may supplement or vary this Guaranty. Bank may assign this Guaranty to a party to which Bank assigns the Agreements. This Guaranty benefits Bank, its successors and assigns. This Guaranty is in addition to any other guaranties Bank obtains. 9. Guarantor represents and warrants that (i) it has taken all action necessary to authorize execute, deliver and perform this Guaranty; (ii) execution, delivery and performance of this Guaranty do not conflict with any organizational documents or agreements to which it is a party; and (iii) this Guaranty is a valid and binding obligation, enforceable against Guarantor according to its terms. 2 10. Guarantor will do all of the following: a. Maintain its corporate existence, remain in good standing in Delaware and continue to qualify in each jurisdiction in which the failure to qualify could have a material adverse effect on the financial condition, operations or business. Maintain all licenses, approvals, and agreements, the loss of which could have a material adverse effect on its financial condition, operations or business. b. Comply with all statutes and regulations if non-compliance could adversely affect its financial condition, operations or business. c. Execute other instruments and take action Bank reasonably requests to effect the purposes of this Agreement. 11. Guarantor hereby grants to Bank, a lien, security interest and right of setoff as security for all obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control of Bank or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default (as defined in the Agreement), without demand or notice, Bank may set off the same or any part thereof and apply the same to any liability or obligation of Guarantor even though unmatured and regardless of the adequacy of any other collateral securing the loan. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. 12. Massachusetts law governs this Guaranty without regard to principles of conflicts of law. Guarantor and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Massachusetts; provided, however, that if for any reason Bank cannot avail itself of such courts in the Commonwealth of Massachusetts, Guarantor accepts jurisdiction of the courts and venue in Santa Clara County, California. NOTWITHSTANDING THE FOREGOING, THE BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE THE BANK'S RIGHTS AGAINST THE GUARANTOR OR ITS PROPERTY. GUARANTOR AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. 3 IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as an instrument under seal under the laws of the Commonwealth of Massachusetts, as of this 8th day of June, 2004. DIOMED HOLDINGS, INC. By:___________________________________ David B. Swank, Chief Financial Officer 4