Contract
This
Guarantor Pledge and Security Agreement 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
Xxxxxxxx Investment Master Fund Ltd
dated as of September 28, 2007.
GUARANTOR
PLEDGE AND SECURITY AGREEMENT
GUARANTOR
PLEDGE AND SECURITY AGREEMENT, dated as of September 28, 2007, made by Diomed,
Inc., a Delaware corporation (“Grantor”),
in
favor of Iroquois Capital LP, Cranshire Capital, L.P., Portside Growth and
Opportunity Fund and Xxxxxxxx Investment Master Fund Ltd (together, with their
successors and assigns, 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”).
WITNESSETH:
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,
Grantor, has executed and delivered to the Holders a guaranty dated the date
hereof (as amended, restated, supplemented or otherwise modified from time
to
time, the “Guaranty”)
guaranteeing all obligations under the Debentures;
WHEREAS,
the Guaranty contemplates the execution and delivery by Grantor to the Holders
of a security agreement providing for the grant to the Holders of a security
interest in all assets of Grantor;
NOW,
THEREFORE, in consideration of the premises and the agreements herein and in
order to induce the Holders to extend financial accommodations to Borrower,
Grantor hereby agrees for the benefit of the Holders as follows:
SECTION
1. Definitions.
(a) Reference
is hereby made to the Guaranty and the Debentures for a statement of the terms
thereof. All terms used in this Agreement which are defined in the Debentures,
the Guaranty or in Article 9 of the Uniform Commercial Code (the “Code”)
currently in effect in the State of New York and which are not otherwise defined
herein shall have the same meanings herein as set forth therein.
(b) The
following terms shall have the respective meanings provided for in the Code:
“Accounts”, “Cash Proceeds”, “Chattel Paper”, “Commercial Tort Claim”, “Deposit
Account”, “Documents”, “Equipment”, “Fixtures”, “General Intangibles”, “Goods”,
“Instruments”, “Inventory”, “Investment Property”, “Letter-of-Credit Rights”,
“Noncash Proceeds”, “Proceeds”, “Promissory Notes”, “Record”, and “Supporting
Obligations”.
(c) As
used
in this Agreement, the following terms shall have the respective meanings
indicated below, such meanings to be applicable equally to both the singular
and
plural forms of such terms:
“777
Patent Litigation”
means
litigation relating to the Grantor and Borrower’s patent infringement case
against AngioDynamics, Inc, and Vascular Solutions, Inc. relating to ‘777
patent, Civil Action No. 04-10019NMG and Civil Action No. 04-10444NMG, filed
in
the United States District Court for the District of Massachusetts.
“Capital
Stock”
means
(a) with respect to any Person that is a corporation, any and all shares,
interests, participations or other equivalents (however designated and whether
or not voting) of corporate stock, and (b) with respect to any Person that
is
not a corporation, any and all partnership, membership or other equity interests
of such Person.
“Copyright
Licenses”
means
all licenses, contracts or other agreements, whether written or oral, naming
Grantor as licensee or licensor and providing for the grant of any right to
use
or sell any works covered by any copyright.
“Copyrights”
means
all domestic and foreign copyrights, whether registered or unregistered,
including, without limitation, all copyright rights throughout the universe
(whether now or hereafter arising) in any and all media (whether now or
hereafter developed), in and to all original works of authorship fixed in any
tangible medium of expression (including computer software and internet website
content) now owned or hereafter owned, acquired or used by Grantor, all
applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States or
any
other country or any political subdivision thereof), all reissues, divisions,
continuations, continuations in part and extensions or renewals thereof, the
right to recover for all past, present and future infringements thereof, and
all
other rights of any kind whatsoever accruing thereunder or pertaining
thereto.
“Intellectual
Property”
means
all Copyrights, Trademarks, Patents and Other Intellectual Property, including
those described in Schedule
I
hereto.
“Licenses”
means
the Copyright Licenses, the Trademark Licenses and the Patent
Licenses.
“Other
Intellectual Property”
means
all trade secrets, ideas, inventions and improvements, concepts, methods,
techniques, processes, proprietary information, technology, know-how, formulae,
design detail, drawings, all Software, computer software (including object
and
source code, data and related documentation), rights of publicity and other
general intangibles of like nature, now existing or hereafter acquired, owned,
developed or used by Grantor.
“Patent
Licenses”
means
all licenses, contracts or other agreements, whether written or oral, naming
Grantor as licensee or licensor and providing for the grant of any right to
manufacture, use or sell any invention covered by any Patent.
“Patents”
means
all domestic and foreign letters patent, design patents, utility patents,
industrial designs, inventions, improvements, trade secrets, ideas, concepts,
methods, techniques, processes, proprietary information, technology, know how,
formulae, rights of publicity and other general intangibles of like nature,
now
existing or hereafter acquired, all applications, registrations and recordings
thereof (including, without limitation, applications, registrations and
recordings in the United States Patent and Trademark Office, or in any similar
office or agency of the United States or any other country or any political
subdivision thereof), all reissues, divisions, continuations, continuations
in
part and extensions or renewals thereof, all income, royalties, damages and
payments now or hereafter due and/or payable for past or future infringements
thereof, the right to xxx for past, present and future infringements thereof,
and all rights corresponding thereto throughout the world.
“Pledged
Interests”
means
the Pledged Shares and all security entitlements therein.
“Pledged
Shares”
means
(a) the shares of Capital Stock including those described in Schedule
II
hereto,
whether or not evidenced or represented by any stock certificate, certificated
security or other Instrument, issued by the Person described in such
Schedule
II
(the
“Pledged
Issuer”),
(b)
any other shares of Capital Stock of the Pledged Issuer at any time and from
time to time acquired by Grantor, whether or not evidenced or represented by
any
stock certificate, certificated security or other Instrument, and (c) the
certificates representing such shares of Capital Stock, all options and other
rights, contractual or otherwise, in respect thereof and all dividends,
distributions, cash, Instruments, Investment Property, financial assets,
securities, Capital Stock, other equity interests, stock options and commodity
contracts, notes, debentures, bonds, promissory notes or other evidences of
indebtedness and all other property (including, but not limited to, any stock
dividend and any distribution in connection with a stock split) from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such Capital Stock.
“Software”
means
any computer programs and computer systems (including
all databases, compilations, tool sets, compilers, higher level or proprietary
languages, related documentation and materials, whether in source code, object
code or human readable form)
sold,
marketed, distributed, licensed or maintained by each Grantor, and any computer
programs necessary for the conduct of the business of each Grantor.
“Trademark
Licenses”
means
all licenses, contracts or other agreements, whether written or oral, naming
Grantor as licensor or licensee and providing for the grant of any right
concerning any Trademark, together with any goodwill connected with and
symbolized by any such trademark licenses, contracts or agreements and the
right
to prepare for sale or lease and sell or lease any and all Inventory now or
hereafter owned by Grantor and now or hereafter covered by such
licenses.
“Trademarks”
means
all domestic and foreign trademarks, service marks, collective marks,
certification marks, trade names, business names, d/b/a’s, Internet domain
names, trade styles, designs, logos and other source or business identifiers
and
all general intangibles of like nature, now or hereafter owned, adopted,
acquired or used by Grantor, all applications, registrations and recordings
thereof (including, without limitation, applications, registrations and
recordings in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state thereof or any other country
or
any political subdivision thereof), all reissues, extensions or renewals
thereof, together with all product lines and goodwill of the business symbolized
by such marks and all customer lists, formulae and other Records of Grantor
relating to the distribution of products and services in connection with which
any of such marks are used, all rights corresponding thereto throughout the
world, the right to recover for all past, present and future infringements
thereof, and all other rights of any kind whatsoever accruing thereunder or
pertaining thereto.
SECTION
2. Pledge
and Grant of Security Interest.
As
collateral security for the payment, performance and observance of all of the
Guaranteed Obligations, Grantor hereby pledges and collaterally assigns to
the
Holders, and grants to the Holders a continuing security interest in, all
personal property and Fixtures of Grantor, wherever located and whether now
or
hereafter existing and whether now owned or hereafter acquired, of every kind
and description, tangible or intangible, including, without limitation, the
following (all being collectively referred to herein as the “Collateral”):
(a) all
Accounts;
(b) all
Chattel Paper (whether tangible or electronic);
(c) all
Commercial Tort Claims;
(d) all
Deposit Accounts, all cash, and all other property from time to time deposited
therein or otherwise credited thereto and the monies and property in the
possession or under the control of the Holders or any affiliate, representative,
agent or correspondent of the Holders;
(e) all
Documents;
(f) all
General Intangibles;
(g) all
Goods, including, without limitation, all Equipment, Fixtures and
Inventory;
(h) all
Instruments (including, without limitation, all Promissory Notes);
(i) all
Intellectual Property, and all Licenses;
(j) all
Investment Property;
(k) all
Letter-of-Credit Rights;
(l) all
Pledged Shares;
(m) all
Supporting Obligations;
(n) all
other
tangible and intangible personal property of Grantor (whether or not subject
to
the Code), including, without limitation, all bank and other accounts and all
cash and all investments therein, all proceeds, products, offspring, accessions,
rents, profits, income, benefits, substitutions and replacements of and to
any
of the property of Grantor described in the preceding clauses of this
Section
2
(including, without limitation, any proceeds of insurance thereon and all causes
of action, claims and warranties now or hereafter held by Grantor in respect
of
any of the items listed above), and all books, correspondence, files and other
Records, including, without limitation, all tapes, disks, cards, Software,
data,
computer programs, and instructions for execution by a computer processor
(including the code in such Software, computer programs, or instructions) in
the
possession or under the control of Grantor or any other Person from time to
time
acting for Grantor that at any time evidence or contain information relating
to
any of the property described in the preceding clauses of this Section
2
or are
otherwise necessary or helpful in the collection or realization
thereof;
and
(o) all
Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of
any
and all of the foregoing Collateral;
in
each
case, howsoever Grantor’s interest therein may arise or appear (whether by
ownership, security interest, claim or otherwise).
SECTION
3. Security
for Guaranteed Obligations.
The
security interest created hereby in the Collateral constitutes continuing
collateral security for all of the following obligations, whether now existing
or hereafter incurred (the “Guaranteed
Obligations”):
(a) the
prompt payment by Grantor, as and when due and payable (on demand, by mandatory
prepayment, by scheduled maturity or otherwise), of all amounts from time to
time owing by it under the Guaranty, whether for principal, interest, fees
or
otherwise (including, without limitation, amounts that but for the operation
of
Section 362 of the Bankruptcy Code would become due), and all amounts from
time
to time owing by the Grantor in respect of the other Loan Documents, in each
case, of every kind, nature and description, direct and indirect, secured and
unsecured, joint and several, absolute or contingent, due or to become due,
now
or hereafter arising and whether now existing or hereafter arising;
and
(b) the
due
performance and observance by Grantor of all of its other obligations from
time
to time existing in respect of the Guaranty and all other Loan Documents to
which it is a party.
Without
limiting the generality of the foregoing, this Agreement secures the payment
of
all amounts that constitute part of the Guaranteed Obligations and would be
owed
by Grantor to the Holders
under
the Guaranty and the other Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Grantor.
SECTION
4. Representations
and Warranties.
Grantor
represents and warrants as follows:
(a) Grantor
(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, and (ii) has all requisite power and authority to conduct its business
as now conducted and as presently contemplated and to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
(b) There
is
no pending or, to the knowledge of Grantor, threatened action, suit, proceeding
or claim before any court or other Governmental Authority or any arbitrator,
or
any order, judgment or award by any court or other Governmental Authority or
arbitrator, that may adversely affect the grant by Grantor, or the perfection,
of the security interest purported to be created hereby in the Collateral,
or
the exercise by Holders of any rights or remedies hereunder.
(c) Grantor
and will be at all times the sole and exclusive owner of the Collateral free
and
clear of any Lien, except for (i) the security interest created by this
Agreement, (ii) the security interests and other encumbrances permitted by
the
Debentures and (iii) sales of assets permitted by the terms of the Guaranty
and
the Debentures. No effective financing statement or other instrument similar
in
effect covering all or any part of the Collateral is on file in any recording
or
filing office, except (x) such as may have been filed in favor of the Holders
relating to this Agreement, and (y) such as may have been filed to perfect
or
protect any security interest or encumbrance permitted by the
Debentures.
(d) The
exercise by and Holder of any of its rights and remedies hereunder will not
contravene law or any contractual restriction binding on or otherwise affecting
Grantor or any of its properties and will not result in or require the creation
of any Lien, security interest or other charge or encumbrance upon or with
respect to any of its properties.
(e) No
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or any other Person, is required for (i) the grant
by
Grantor, or the perfection, of the security interest purported to be created
hereby in the Collateral or (ii) the exercise by any Holder of any of its rights
and remedies hereunder, except (A) for the filing under the Uniform Commercial
Code as in effect in the applicable jurisdiction of the financing statements
described in Schedule III
hereto.
SECTION
5. Covenants
as to the Collateral.
So long
as any of the Guaranteed Obligations shall remain outstanding and the Guaranty
and the Debentures shall not have terminated, unless each Holder shall otherwise
consent in writing:
(a) Further
Assurances.
Grantor
will at its expense, at any time and from time to time, promptly execute and
deliver all further instruments and documents and take all further action that
may be necessary or desirable or that the Holders may request in order (i)
to
perfect and protect the security interest purported to be created hereby; (ii)
to enable the Holders to exercise and enforce their rights and remedies
hereunder in respect of the Collateral; or (iii) otherwise to effect the
purposes of this Agreement.
(b) Transfers
and Other Liens.
(i) Grantor
will not sell, assign (by operation of law or otherwise), lease, exchange or
otherwise transfer or dispose of any of the Collateral except to the extent
expressly permitted under the terms of the Guaranty, except that
so long
as no Event of Default or a Guaranty Default shall have occurred and be
continuing, the Grantor shall be permitted (x) to sell Inventory in the ordinary
course of business and (y) to collect upon and enforce any judgment in the
777
Patent Litigation so long as all proceeds of any judgment in the 777 Patent
Litigation shall be applied as required by the Loan Documents.
(ii) Grantor
will not create or suffer to exist any Lien, security interest or other charge
or encumbrance upon or with respect to any Collateral, except for (A) the Liens
and security interest created by this Agreement and the other Loan Documents
and
(B) the Liens, security interests and other encumbrances permitted by the
Guaranty and the Debentures.
(c) Inspection
and Reporting.
Grantor
shall permit the Holders or any agents or representatives thereof or such
professionals or other Persons as the Holders may designate to examine and
inspect the books and records of Grantor and take copies and extracts
therefrom.
SECTION
6. Additional
Provisions Concerning the Collateral.
(a) Grantor
hereby authorizes the Holders to file, without the signature of Grantor where
permitted by law, one or more financing or continuation statements, and
amendments thereto, relating to the Collateral.
(b) Grantor
hereby irrevocably appoints each Holder as its attorney-in-fact and proxy,
with
full authority in the place and stead of Grantor and in the name of Grantor
or
otherwise, from time to time in such Holder’s discretion upon the occurrence and
during the continuance of any breach of or default under any Loan Document,
to
take any action and to execute any instrument which such Holder may deem
necessary or advisable to accomplish the purposes of this Agreement (including,
without limitation, (i) to ask, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under
or in respect of any Collateral, and (ii) to file any claims or take any action
or institute any proceedings which such Holder may deem necessary or desirable
for the collection of any Collateral or otherwise to enforce the rights of
such
Holder with respect to any Collateral. This power is coupled with an interest
and is irrevocable until all of the Guaranteed Obligations are paid in full
and
the Guaranty and the Debentures have been terminated.
(c) If
Grantor fails to perform any agreement contained herein, each Holder may itself
perform, or cause performance of, such agreement or obligation, in the name
of
Grantor or such Holder, and the expenses of such Holder incurred in connection
therewith shall be payable by Grantor pursuant to Section 8 hereof and shall
be
secured by the Collateral.
(d) The
powers conferred on the Holders hereunder are solely to protect their interest
in the Collateral and shall not impose any duty upon them to exercise any such
powers. Except for the safe custody of any Collateral in its possession and
the
accounting for moneys actually received by it hereunder, no Holder shall have
any duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.
SECTION
7. Voting
Rights, Dividends, Etc. in Respect of the Pledged Interests.
(a) So
long
as no Event of Default or a Guaranty Default shall have occurred and be
continuing:
(i) Grantor
may exercise any and all voting and other consensual rights pertaining to any
Pledged Interests for any purpose not inconsistent with the terms of this
Agreement or the other Loan Documents;
(ii)Grantor
may receive and retain any and all dividends, interest payments or other
distributions paid in respect of the Pledged Interests to the extent permitted
by the Loan Documents; provided,
however,
that
any and all (A) dividends and interest paid or payable other than in cash
in
respect of, and instruments and other property received, receivable or otherwise
distributed in respect of or in exchange for, any Pledged Interests, (B)
dividends and other distributions paid or payable in cash in respect of any
Pledged Interests in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus
or
paid-in surplus, and (C) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Interests, together with any
dividend, interest payment or other distribution which at the time of such
dividend, interest payment or other distribution was not permitted by the
Loan
Documents, shall be, and shall forthwith be delivered to the Holders to hold
as,
Pledged Interests and shall, if received by Grantor or any of its affiliates
on
behalf of Grantor, be received in trust for the benefit of the Holders, shall
be
segregated from the other property or funds of Grantor or such affiliate,
and
shall be forthwith delivered to the Holders in the exact form received with
any
necessary endorsement and/or appropriate stock powers duly executed in blank,
to
be held by the Holders as Pledged Interests and as further collateral security
for the Secured Obligations; and
(iii) the
Holders will execute and deliver (or cause to be executed and delivered) to
Grantor all such proxies and other instruments as Grantor may reasonably request
for the purpose of enabling Grantor to exercise the voting and other rights
which it is entitled to exercise pursuant to Section 7(a)(i) hereof and to
receive the dividends, interest and/or other distributions which it is
authorized to receive and retain pursuant to Section 7(a)(ii)
hereof.
(b) Upon
the
occurrence and during the continuance of an Event of Default or a Guaranty
Default:
(i) all
rights of Grantor to exercise the voting and other consensual rights which
it
would otherwise be entitled to exercise pursuant to Section 7(a)(i) hereof,
and
to receive the dividends, distributions, interest and other payments which
it
would otherwise be authorized to receive and retain pursuant to Section 7(a)(ii)
hereof, shall cease, and all such rights shall thereupon become vested in the
Holders, who shall thereupon have the sole right to exercise such voting and
other consensual rights and to receive and hold as Pledged Interests such
dividends and interest payments;
(ii) without
limiting the generality of the foregoing, the Holders may at their option
exercise any and all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to any of the Pledged Interests as
if
it were the absolute owner thereof, including, without limitation, the right
to
exchange, in its discretion, any and all of the Pledged Interests upon the
merger, consolidation, reorganization, recapitalization or other adjustment
of
the Pledged Issuer, or upon the exercise by the Pledged Issuer of any right,
privilege or option pertaining to any Pledged Interests, and, in connection
therewith, to deposit and deliver any and all of the Pledged Interests with
any
committee, depository, transfer agent, registrar or other designated agent
upon
such terms and conditions as it may determine; and
(iii) all
dividends, distributions, interest and other payments which are received by
Grantor contrary to the provisions of Section 7(b)(i) hereof shall be received
in trust for the benefit of the Holders, shall be segregated from other funds
of
Grantor, and shall be forthwith paid over to the Holders as Pledged Interests
in
the exact form received with any necessary endorsement and/or appropriate stock
powers duly executed in blank, to be held by the Holders as Pledged Interests
and as further collateral security for the Secured Obligations.
SECTION
8. Remedies
Upon Default.
If any
Event of Default or Guaranty Default shall have occurred and be
continuing:
(a) The
Holders may exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein or otherwise available to them, all of the
rights and remedies of a secured party upon default under the Code (whether
or
not the Code applies to the affected Collateral), and also may (i) take absolute
control of the Collateral, including without limitation, transfer into the
Holders’ name or into the name of their nominee or nominees (to the extent the
Holders have not theretofore done so) and thereafter receive, for their benefit,
all payments made thereon, give all consents, waivers and ratifications in
respect thereof and otherwise act with respect thereto as though they were
the
outright owner thereof, (ii) require Grantor to, and Grantor hereby agrees
that
it will at its expense and upon request of any Holder forthwith, assemble all
or
part of the Collateral as directed by such Holder and make it available to
such
Holder at a place or places to be designated by such Holder which is reasonably
convenient to both parties, and any Holder may enter into and occupy any
premises owned or leased by Grantor where the Collateral of any part thereof
is
located or assembled for a reasonable period in order to effectuate the Holders’
rights and remedies hereunder or under law, without obligation to Grantor in
respect of such occupation, and (iii) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any Holder’s offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other terms as
the Holders may deem commercially reasonable. Grantor agrees that, to the extent
notice of sale shall be required by law, at least 10 days’ notice to Grantor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. The Holders shall not
be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Holders may adjourn any public or private sale from time to
time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
Grantor hereby waives any claims against the Holders arising by reason of the
fact that the price at which the Collateral may have been sold at a private
sale
was less than the price which might have been obtained at a public sale or
was
less than the aggregate amount of the Guaranteed Obligations, even if the
Holders accept the first offer received and does not offer the Collateral to
more than one offeree and waives all rights which Grantor may have to require
that all or any part of the Collateral be marshalled upon any sale (public
or
private) thereof.
(b) Any
cash
held by any Holder as Collateral and all cash proceeds received by the Holders
in respect of any sale of or collection from, or other realization upon, all
or
any part the Collateral may, in the discretion of the Holders, be held by the
Holders as collateral for, and/or then or at any time thereafter applied in
whole or in part by the Holders against, all or any part of the Guaranteed
Obligations.
SECTION
9. Indemnity
and Expenses.
(a) Grantor
agrees to indemnify and hold each Holder harmless from and against any and
all
claims, damages, losses, liabilities, obligations, penalties, costs or expenses
(including, without limitation, legal fees and disbursements of each Holder’s
counsel) to the extent that they arise out of or otherwise result from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting solely and directly from such Holder’s
gross negligence or willful misconduct as determined by a final judgment of
a
court of competent jurisdiction.
(b) Grantor
agrees that upon demand Grantor will pay to each Holder the amount of any and
all costs and expenses, including the reasonable fees and disbursements of
such
Holder’s counsel and of any experts and agents, which such Holder may incur in
connection with (i) the preparation, negotiation, execution, delivery,
recordation, administration, amendment, waiver or other modification or
termination of this Agreement, (ii) the custody, preservation, use or operation
of, or the sale of, collection from, or other realization upon, any Collateral,
(iii) the exercise or enforcement of any of the rights of any Holder hereunder,
or (iv) the failure by Grantor to perform or observe any of the provisions
hereof.
SECTION
10. Notices,
Etc.
All
notices and other communications provided for hereunder shall be in writing
and
shall be mailed (by certified mail, postage prepaid and return receipt
requested), telecopied or delivered by hand, Federal Express or other reputable
overnight courier, if to Grantor, to it in at the address set forth in the
Guaranty, or if to any Holder, to it at its address set forth in the Debentures;
or as to such Person at such other address as shall be designated by such Person
in a written notice to such other Persons complying as to delivery with the
terms of this Section 10. All such notices and other communications shall be
effective (a) if mailed, when received or three (3) days after deposited in
the
mails, whichever occurs first; (b) if telecopied, when transmitted and
confirmation is received; or (c) if delivered by hand, Federal Express or other
reputable overnight courier, upon delivery.
SECTION
11. Miscellaneous.
(a) No
amendment of any provision of this Agreement shall be effective unless it is
in
writing and signed by Grantor and each Holder, and no waiver of any provision
of
this Agreement, and no consent to any departure by Grantor therefrom, shall
be
effective unless it is in writing and signed by each Holder, and then such
waiver or consent shall be effective only in the specific instance and for
the
specific purpose for which given.
(b) No
failure on the part of the Holders to exercise, and no delay in exercising,
any
right hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any
other or further exercise thereof or the exercise of any other right. The rights
and remedies of the Holders
provided
herein and in the other Loan Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law. The rights of
the
Holders under any Loan Document against any party thereto are not conditional
or
contingent on any attempt any Holder to exercise any of its rights under any
other Loan Document against such party or against any other Person.
(c) Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
(d) This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until the payment in full of the
Guaranteed Obligations and the termination of the Guaranty and the Debentures,
and (ii) be binding on Grantor and its successors and assigns and shall inure,
together with all rights and remedies of the Holders hereunder, to the benefit
of the Holders and their permitted successors, transferees and assigns. Without
limiting the generality of clause (ii) of the immediately preceding sentence,
each Holder may assign or otherwise transfer its rights under this Agreement,
the Guaranty and any other Loan Document, to any other Person and such other
Person shall thereupon become vested with all of the benefits in respect thereof
granted to such Holder herein or otherwise. None of the rights or obligations
of
Grantor hereunder may be assigned or otherwise transferred without the prior
written consent of the Holders, and any such assignment or transfer shall be
null and void.
(e) Upon
the
satisfaction in full of the Guaranteed Obligations and the termination of the
Guaranty and the Debentures, (i) this Agreement and the security interests
created hereby shall terminate and all rights to the Collateral shall revert
to
Grantor, and (ii) the Holders will, upon Grantor’s request and at Grantor’s
expense promptly, (A) return to Grantor such of the Collateral as shall not
have
been sold or otherwise disposed of or applied pursuant to the terms hereof,
and
(B) execute and deliver to Grantor such documents as Grantor shall
reasonably request to evidence such termination, all without any representation,
warranty or recourse whatsoever.
(f) Any
and
all obligations on the part any Holder under this Agreement shall constitute
the
several (and not joint) obligations of each Holder.
(g) This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York, except as required by mandatory
provisions of law and except to the extent that the validity and perfection
or
the perfection and effect of perfection or non-perfection of the security
interest created hereby or remedies hereunder, in respect of any particular
Collateral are governed by the law of a jurisdiction other than the State of
New
York.
(h) This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one in the same
agreement.
SECTION
12. Submission
to Jurisdiction; Waivers.
Grantor
hereby irrevocably and unconditionally:
(a) Submits
for itself and its property in any action, suit or proceeding relating to this
Agreement, the Guaranty or any other Loan Document to which it is a party,
or
for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York,
the
courts of the United States of America for the Southern District of New York,
and appellate courts thereof;
(b) Agrees
that any such action, suit or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any
such
action, suit or proceeding in any such court or that such action, suit or
proceeding was brought in an inconvenient court and agrees not to plead or
claim
the same;
(c) Irrevocably
consents to the service of any and all process in any such action, suit or
proceeding by the mailing of copies of such process by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to Grantor,
at its address set forth in Section 10 hereof or at such other address of which
the Holders shall have been notified pursuant thereto;
(d) To
the
extent that Grantor has or hereafter may acquire any immunity from jurisdiction
of any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, Grantor hereby irrevocably
waives such immunity in respect of its obligations under this Agreement;
(e) Agrees
that nothing herein shall affect the right of the Holders to effect service
of
process in any other manner permitted by law or shall limit the right to xxx
in
any other jurisdiction; and
(f) Waives
any right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or consequential
damages.
SECTION
13. Jury
Trial Waiver.
THE
GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY
JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING THIS PLEDGE AGREEMENT,
ANY
LOAN DOCUMENT OR ANY AMENDMENT, MODIFICATION OR OTHER DOCUMENT NOW OR HEREAFTER
DELIVERED IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
[Signature
Page Follows]
IN
WITNESS WHEREOF, Grantor has caused this Agreement to be executed and delivered
by its officer thereunto duly authorized as of the date first above
written.
|
GRANTOR:
|
||
|
DIOMED,
INC.
|
||
|
By:
|
||
| Name: | ||
|
|
Title: | |
|
Address:
|
||
|
Attention:
|
||
|
Telephone:
|
||
|
Facsimile:
|
||
|
HOLDERS:
|
||
|
IROQUOIS
CAPITAL LP
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Address:
|
||
|
Attention:
|
||
|
Telephone:
|
||
|
Facsimile:
|
||
|
CRANSHIRE
CAPITAL, L.P.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Address:
|
||
|
Attention:
|
||
|
Telephone:
|
||
|
Facsimile:
|
||
|
PORTSIDE
GROWTH AND OPPORTUNITY FUND
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Address:
|
||
|
Attention:
|
||
|
Telephone:
|
||
|
Facsimile:
|
||
|
XXXXXXXX
INVESTMENT MASTER FUND LTD.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Address:
|
||
|
Attention:
|
||
|
Telephone:
|
||
|
Facsimile:
|
||
SCHEDULE
I
[Intellectual
Property]
SCHEDULE
II
|
Name
of Pledged Issuer
|
Number
of
Shares |
Percentage of
Outstanding Shares |
Class
|
Certificate
Number |
|||||||||
|
Diomed,
Inc.
|
40,000,000
3,500,000
|
100
|
%
|
Common
Preferred
|
1
P-1
|
||||||||
|
Diomed
Acquisition Corporation
|
1,000
|
100
|
%
|
Common
|
1
|
||||||||
|
Diomed
PDT, Inc.
|
100
|
100
|
%
|
Common
|
1
|
||||||||
SCHEDULE
III
|
GRANTOR
|
FILING
OFFICE
|
|||
|
Diomed,
Inc.
|
Delaware
|
