Document:

EX 10.8

    DEBENTURE
      HOLDER AGREEMENT AND CONSENT

     

    This
      Agreement and Consent is made as of the 28th day of September, 2007, between
      Diomed Holdings, Inc. (the “Company”),
      a
      Delaware corporation, and the undersigned (the “Holder”),
      who
      is the registered holder of (a) certain Variable Rate Convertible
      Debentures due October 2008 (the “2004
      Debentures”)
      of the
      Company, which are convertible into shares of the Company's common stock, par
      value $0.001 per share (the "Common
      Stock")
      (the
      "Existing
      Conversion Shares"),
      and,
      if applicable, (b) warrants (the “Warrants”)
      to
      purchase Common Stock, issued by the Company pursuant to the Securities Purchase
      Agreement, dated September 28, 2004, between the Company and the Purchasers
      of 2004 Debentures and Warrants named therein (the “2004
      Purchase Agreement”).
      Capitalized terms used herein and not otherwise defined herein shall have the
      respective meanings ascribed to them in the 2004 Purchase
      Agreement.

     

    WHEREAS,
      the Company proposes to enter into a Loan Agreement with Hercules Technology
      Growth Capital, Inc. or an affiliate thereof (“Hercules”),
      pursuant to which Hercules will loan to the Company on a secured basis up to
      the
      aggregate principal amount of $10,000,000 on the terms and conditions described
      in the Term Sheet annexed hereto as Exhibit
      A
      and as
      the Company and Hercules shall agree in the definitive documentation related
      thereto (the “Financing”).
      

     

    WHEREAS,
      Hercules requires the consent of the holders of the 2004 Debentures as a
      condition to the Financing.

     

    WHEREAS,
      the Company and the Holder shall amend and restate such Holder's 2004 Debenture
      for Variable Rate Secured Subordinated Convertible Debenture (the “Secured
      2004 Debenture”),
      substantially in the form of Exhibit
      B
      attached
      to this Agreement and Consent, which shall be convertible into Common Stock
      (the
      "Conversion
      Shares"),
      attached to which Secured 2004 Debenture, and incorporated by reference therein,
      is the Intercreditor Agreement to be entered into among the Holder, each other
      holder of the 2004 Debentures, Hercules and the Company (the “Intercreditor
      Agreement”),
      all
      in consideration for the agreement of the Holder as set forth herein and in
      exchange for the existing 2004 Debenture held by the Holder and the other
      holders of 2004 Debentures.

     

    WHEREAS,
      the amendment and restatement of the 2004 Debentures for the Secured 2004
      Debentures is being made in reliance upon the exemption from registration
      provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the
      "Securities
      Act").

     

    WHEREAS,
      concurrently herewith, the Company has also requested consents from the other
      Holders of 2004 Debentures pursuant to consents in form and substance identical
      to this Agreement (the "Other
      Agreements").

     

    NOW,
      THEREFORE, and in consideration of the mutual promises set forth in this
      Agreement and Consent, the Holder (for itself and on behalf of all subsequent
      holders of the Secured 2004 Debenture held by it), and the Company hereby agree
      as follows: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1. The
      Company hereby agrees that:

     

    (a) Contemporaneously
      with the closing of the Financing (the date of such closing, the "Closing
      Date"),
      and
      upon the execution of the Intercreditor Agreement by all parties thereto and
      the
      delivery by the Holder of the 2004 Debentures held by it, the Company will
      deliver to the Holder (i) the Secured 2004 Debenture, reflecting the security
      interest granted to the Holder and the Other Holders (as defined in Section
      5(b)
      of this Agreement and Consent), and the reduced Conversion Price of $0.70,
      having a principal amount equal to the outstanding principal amount of the
      2004
      Debenture held by the Holder as of the date of this Agreement and Consent,
      (ii)
      a fully executed security agreement in the form attached hereto as Exhibit
      C
      (the
      "Security
      Agreement")
      and
      (iii) a fully executed subsidiary guaranty in the form attached hereto as
Exhibit
      D
      (the
      "Guaranty"),
      such
      delivery to be in exchange for such 2004 Debenture.

     

    (b) Contemporaneously
      with the closing of the Financing, the Company will file on behalf of the Holder
      and the Other Holders a financing statement on Form UCC-1 with the Secretary
      of
      State of the State of Delaware.

     

    (c) By
      operation of the provisions of Section 3(b) of the Warrants, as a result of
      the
      issuance of the Secured 2004 Debentures, the Exercise Price of the Warrants
      shall be reduced to $0.70.

     

    (d) Contemporaneously
      with the closing of the Financing, the Company will pay or reimburse the Holder
      the reasonable costs and expenses of its outside counsel [Inserted in Agreement
      and Consent of the Holders other than Portside Growth and Opportunity Fund:,
      in
      an amount not to exceed $5,000], to advise the Holder in connection with the
      negotiation and execution of this Agreement and Consent.

     

    (e) If
      Hercules exercises its right to withhold its consent pursuant to the
      Intercreditor Agreement to the repayment of the Secured 2004 Debentures when
      due
      in accordance with their terms, then the Company will immediately repay the
      indebtedness incurred in the Financing to Hercules so long as the Company has
      received any payment (whether through payment of a judgment, settlement or
      otherwise) of at least $10 million in connection with the judgment in favor
      of
      the Company ordered by the U.S. District Court for the District of Massachusetts
      in the Company’s patent infringement litigation against AngioDynamics, Inc. and
      Vascular Solutions, Inc. (the “’777
      Patent Litigation”)
      [Inserted in Agreement and Consent of the Holders other than Rockmore Investment
      Master Fund Ltd. and if so directed by the Holder, repay the Holder's Secured
      2004 Debentures as soon thereafter as is reasonably practicable].

     

    (f) The
      Company represents and warrants to the Holder as set forth in Section 3.1 of
      the
      2004 Purchase Agreement as if such representations and warranties were made
      as
      of the date hereof and set forth in their entirety in this Agreement and
      Consent, except for those matters described in the Disclosure Schedule to this
      Agreement and Consent (the “Disclosure
      Schedule”).
      Such
      representations and warranties to the transactions thereunder and the securities
      issued thereby are hereby deemed for purposes of this Agreement and Consent
      to
      be references to the transactions hereunder and the issuance of the securities
      hereby, references therein to "Closing Date" being deemed references to the
      Closing Date as defined in Section 1(a) above, and references to "the date
      hereof" being deemed references to the date of this Agreement and
      Consent.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (g) The
      Company represents and warrants to the Holder that after giving effect to the
      terms of this Agreement and Consent, no Event of Default (as defined in the
      Secured 2004 Debentures) shall have occurred and be continuing as of the date
      hereof.

     

    (h) For
      the
      purposes of Rule 144, the Company acknowledges that the holding period of (i)
      the Secured 2004 Debentures (including the corresponding Conversion Shares)
      may
      be tacked onto the holding period of the 2004 Debentures, and the Company agrees
      not to take a position contrary to this Section 1(h). The Company’s
      representation, covenant and agreement set forth in this Section 1(h) shall
      be
      subject in all respects to Rule 144 and other applicable securities laws, as
      may
      be in effect from time to time.

     

    (i) The
‘777
      Patent Litigation is currently on appeal by the defendants with the judgment
      therein under bond. The Company has no current knowledge of any facts or
      circumstances (except for any filings under Chapter 11 of the United States
      Bankruptcy Code which may be made or any court delays and other circumstances
      beyond the Company’s reasonable control in connection with the ‘777 Patent
      Litigation) that would (i) preclude the appeal from being decided by the Court
      on or prior to June 30, 2008 or (ii) assuming the appeal is unsuccessful,
      preclude the Company from collecting the full judgment awarded in the ‘777
      Patent Litigation on or prior to June 30, 2008 (other than the existence of
      a
      security interest in the proceeds of the judgment in the ‘777 Patent Litigation
      granted by the Company to Hercules pursuant to the Financing, the proceeds
      of
      which, in the case of collection thereof by Hercules, would be applied to reduce
      or retire the Company’s indebtedness to Hercules under the Financing). The
      Holder agrees that it has not relied upon the foregoing representation as an
      inducement to enter into this Agreement and Consent and agrees that the
      Company’s other representations and warranties, agreements and covenants
      contained herein constitute full and adequate consideration for the Holder’s
      execution, delivery and performance of this Agreement and Consent. 

     

    2. In
      connection with the Financing, notwithstanding anything to the contrary in
      the
      2004 Purchase Agreement or the 2004 Debentures, the Holder hereby
      irrevocably:

     

    (a) waives
      the covenants set forth in Sections 7(a) and 7(d) of the 2004 Debenture to
      the
      extent that they may relate to the Financing; 

     

    (b) consents
      to the incurrence by the Company of indebtedness pursuant to the Financing
      and
      to the grant of such security interests as are required to be granted to
      Hercules in the assets of the Company and its subsidiaries pursuant to the
      Financing as described in the Term Sheet and to the subordinated security
      interests to be granted to the Other Holders;

     

    (c) agrees
      that neither the Company’s issuance of the warrants proposed to be issued to
      Hercules, when issued on the terms described in the Term Sheet, nor the
      Company’s issuance of additional shares to the holders of its 2006 Preferred
      Stock, par value $0.001 per share, upon the conversion thereof in an amount
      that
      would have been issued had the conversion price thereof been $0.70 per share,
      will result in an antidilution adjustment to the conversion price of the Secured
      2004 Debentures or exercise price of the Warrants; 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (d) agrees
      that the Financing shall not be deemed to be a “Subsequent Financing” as defined
      in the 2004 Purchase Agreement and therefore that the 2004 Purchase Agreement
      does not afford to the Holder any participation rights in the Financing; and
      

     

    (e) agrees
      that neither the Holder nor its affiliates will trade in the Company’s Common
      Stock until the earlier of (i) the Company’s public announcement of the closing
      of the Financing, (ii) termination of negotiations between the Holder and the
      Company regarding the Financing and (iii) 30 days after the date
      hereof.

     

    (f) agrees
      that until the Holder is notified by the Company that the American Stock
      Exchange has approved the listing of the additional shares of Common Stock
      issuable upon conversion of the Secured 2004 Debenture which are not already
      listed with the American Stock Exchange on behalf of the Holder, the Holder
      shall not exercise its right to convert more than 66 2/3% of the principal
      amount of the Secured 2004 Debenture.

     

    3. Covenants.

     

    (a) Disclosure
      of Transactions and Other Material Information.
      On or
      before 8:30 a.m., New York City time, on the first Business Day immediately
      following the Closing Date, the Company shall issue a press release and file
      a
      Current Report on Form 8-K describing the terms of the transactions contemplated
      by this Agreement and Consent and the Financing in the form required by the
      Exchange Act and attaching the material Transaction Documents not previously
      filed (including, without limitation, the form of this Agreement and Consent
      and
      the form of the Secured 2004 Debentures) (including all attachments, the
      "8-K
      Filing").
      From
      and after the filing of the 8-K Filing with the Commission, the Holder shall
      not
      be in possession of any material, nonpublic information received from the
      Company, any of its Subsidiaries or any of its respective officers, directors,
      employees or agents, that is not disclosed in the 8-K Filing. The Company shall
      not, and shall cause each of its Subsidiaries and its and each of their
      respective officers, directors, employees and agents, not to, provide the Holder
      with any material, nonpublic information regarding the Company or any of its
      Subsidiaries from and after the filing of the 8-K Filing with the Commission
      without the express written consent of the Holder. Without the prior written
      consent of the Holder, neither the Company nor any of its Subsidiaries or
      affiliates shall disclose the name of the Holder in any filing, announcement,
      release or otherwise other than in connection with the Registration Statement,
      as contemplated pursuant to
      the
      Registration Rights Agreement,
      unless
      such disclosure is required by law, regulation or the Principal
      Market.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (b) On
      or
      before 5:30 p.m., New York City time, on the first Business Day following the
      date of this Agreement and Consent, the Company shall file an additional listing
      application with the American Stock Exchange (the “Amex
      Listing Application”)
      covering the approximately 1.7 million shares of Common Stock issuable upon
      conversion of the Secured 2004 Debentures which are not already listed with
      the
      American Stock Exchange, and the Company shall use its reasonable best efforts
      to cause the Amex Listing Application to be approved as soon as is reasonably
      practicable. On or before 9:30 a.m., New York City time, on the first Business
      Day following the date that the Company is notified in writing by the American
      Stock Exchange that the Amex Listing Application has been approved, the Company
      shall provide written notice of such approval to the Holder by facsimile or
      email.

    

    (c) Within
      five (5) calendar days of the Closing Date the Holder shall have received the
      opinion of the Company's counsel, McGuireWoods LLP, containing opinions
      regarding this Agreement and Consent and the Secured 2004 Debentures,
      substantially in the form set forth in Exhibit
      E,
      with
      customary assumptions, exceptions and exclusions consistent with those included
      in the legal opinion delivered to Hercules on the Closing Date, but for
      distinctions arising from differences in applicable law.

    

    (d) The
      Company shall take all actions reasonably requested by the Holder to permit
      the
      Holder to sell the Conversion Shares without restriction pursuant to Rule 144(k)
      of the Securities Act.

    

    4. Amendment
      to Transaction Documents. Each
      of
      the Transaction Documents are hereby amended as follows:

     

    (a) All
      references to "Debentures" shall be amended to include additionally the Secured
      2004 Debentures as defined in this Agreement and Consent.

     

    (b) All
      references to "Conversion Shares" shall be amended to include additionally
      the
      Conversion Shares as defined in this Agreement and Consent.

     

    (c) The
      defined term "Transaction Documents" is hereby amended to include this Agreement
      and Consent, the Intercreditor Agreement, the Security Agreement and the
      Guaranty.

     

    5. Miscellaneous.

     

    (a) No
      Other Changes.
      All
      other terms and conditions of the 2004 Purchase Agreement shall remain in full
      force and effect.

     

    (b) Effectiveness;
      Other Agreements.
      This
      Agreement and Consent shall be effective at the Closing following the execution
      by each of the other holders of 2004 Debentures who are party to the 2004
      Purchase Agreement with the Company (the “Other
      Holders”)
      of the
      Other Agreements with substantially the same effect as this Agreement and
      Consent (with such adjustments as are necessary to reference the specific
      Company securities held by the Other Holders), provided,
      that
      this Agreement and Consent shall be null and void if the Closing Date does
      not
      occur on or before October 15, 2007. In connection with this Agreement and
      Consent, the Company represents and warrants that none of the terms offered
      to
      Other Holders is more favorable to such Other Holder than those of the Holder
      and this Agreement and Consent shall be, without any further action by the
      Holder or the Company, deemed amended and modified in an economically and
      legally equivalent manner such that the Holder shall receive the benefit of
      the
      more favorable terms contained in the Other Agreements.  The Company
      agrees, at its expense, to take such other actions (such as entering into
      amendments to this Agreement and Consent) as the Holder may reasonably request
      to further effectuate the foregoing. Notwithstanding the foregoing, to the
      extent that the Company and any Other Holder enters into a transaction similar
      to the one contemplated hereby pursuant to an Other Agreement, all such matters
      are solely in the control of the Company, not the action or decision of the
      Holder, and would be solely for the convenience of the Company and not because
      it was required or requested to do so by the Holder or any such other third
      party holder.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (c) Disclosure
      of Financing Status.
      The
      Company shall promptly public disclose to the Holder (i) the termination or
      cessation of any discussions in which the Company may be involved with respect
      to the Financing and (ii) the status of any such discussions if the consummation
      of the closing of the Financing or the termination or cessation of any such
      discussions has not been publicly disclosed on or prior to the 30th day after
      the date hereof.

     

    (d) Holder
      Independence.
      The
      Company acknowledges and agrees that nothing contained herein and no action
      taken by the Holder pursuant hereto or in connection herewith shall be deemed
      to
      constitute the Holder and any Other Holder or other third party holder of the
      Company’s securities as a partnership, an association, a joint venture or any
      other kind of group or entity, or create a presumption that the Holder or any
      Other Holder or other such third party holders are in any way acting in concert
      or as a group or entity with respect to such obligations or the transactions
      contemplated hereby or any other matters. The Company further acknowledges
      and
      agrees that the Holder is not acting in concert or as a group with any Other
      Holder or other third party holders of the Company’s securities with respect to
      such obligations or the transactions contemplated by this Agreement and Consent.
      The decision of the Holder to enter into this Agreement and Consent and to
      consummate the transaction contemplated hereby has been made by the Holder
      independently of any Other Holder or other third party holder of the Company’s
      securities. The Company hereby confirms that the Holder has independently
      participated with the Company in the negotiation of the transaction contemplated
      hereby with the advice of its own counsel and advisors. The Holder shall be
      entitled to independently protect and enforce its rights under this Agreement
      and Consent, and it shall not be necessary for any such other third party holder
      to be joined as an additional party in any proceeding for such purpose.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the undersigned have signed this Agreement and Consent as
      of
      the date and year set forth above.

     

    
      	
              NAME
                OF DEBENTURE HOLDER:

            	 
	 	 
	 	
              By:

            	 
	 	 	
              (Signature
                of authorized person above) 

            
	 	 	
              Name:
                

            	 
	 	 	
              Title:

            	 
	 	 	 	 
	 	
              DIOMED
                HOLDINGS, INC.

            
	 	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                

            	
              David
                Swank 

            
	 	 	
              Title:
                

            	
              Chief
                Financial Officer

            

    

     

    
      Signature
        Page

      Debenture
        Holder Agreement and Consent

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A - HERCULES TERM SHEET

     

    Below
      is a summary of the principal business considerations

    related
      to our growth capital financing loan proposal.

     

    
      	
              Commitment
                Amount:

            	 	
              $

            	
              10,000,000

            	 
	
              Interest
                Rate (1)

            	 	 	
              Prime
                + 3.20

            	
              %

            
	
              Deferred
                Interest Charge (2)

            	 	 	
              9.50

            	
              %

            

    

     

    
      	 	
              (1)

            	
              Wall
                Street Journal Prime, which surveys large US banks and publishes
                the
                consensus prime rate. As of the date of this Document,
                Prime is 8.25%.

            

    

     

    
      	
            	(2)	
              One
                time payment due at maturity and calculated against funds
                borrowed.

            

    

    

    
      	
              Lender:

            	
              Hercules
                Technology Growth Capital, Inc. and any affiliate or transferee.
                ('Hercules”
                or 'Lender”).

            
	 	 
	
              Borrower:

            	
              Diomed
                Holdings, Inc. and its subsidiaries. ('Diomed” or
                'Borrower”).

            
	 	 
	
              Term
                Sheet Expiration:

            	
              September
                26, 2007.

            
	 	 
	
              Loan
                Closing:

            	
              Best
                efforts to close by October 2, 2007.

            
	 	 
	
              Availability
                Period:

            	
              The
                commitment is available as follows:

            
	 	 
	 	
              Tranche
                A: $6.0
                million of Loan Commitment is funded at closing.

            
	 	 
	 	
              Tranche
                B:
                Remaining $4.0 million will be available at Borrower’s option beginning
                January 31, 2008 and will remain available through March 30,
                2008.

            
	 	 
	
              Use
                of Proceeds:

            	
              The
                proceeds of the Loan will be used for general corporate
                purposes.

            
	 	 
	
              Interest-only
                Period:

            	
              Through
                June 1, 2008.

            
	 	 
	
              Amortization:

            	
              Beginning
                on July 1, 2008, Borrower shall repay Principal on a schedule comprised
                of twenty-four equal monthly principal and interest
                payments.

            
	 	 
	 	 
	
              Maturity:

            	
              July
                1, 2010.

            
	 	 
	
              Collateral:
                

            	
              The
                Loan will be secured by a perfected first position lien on all of
                the
                borrower's assets, including Intellectual Property (“IP”). This lien will
                allow for licensing in the normal course of business.

            
	 	 
	
              Warrant:
                

            	
              A
                warrant (the “Warrant”) will be issued by Borrower to Lender to purchase
                $100,000 worth of shares of common stock at an Exercise Price of
                $0.70.

            
	 	 
	
              Option
                to invest:

            	
              Borrower
                shall grant to Lender the option to invest up to $1.0 million in
                a
                subsequent institutional equity financing on the same terms, conditions,
                and pricing offered to the investors in such subsequent equity
                financing. This option to invest does not apply to equity transactions
                with strategic partners or regular shelf registered
                offerings.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Success
                Fee:

            	
              Borrower
                shall remit the following cash payments to Lender:

            
	 	 
	 	
              1)

            	
              $200,000
                at Loan Closing.

            
	 	
              2)

            	
              $900,000
                on June 30, 2008

            
	 	
              3)

            	
              Borrower
                shall remit a cash payment to Lender in an amount equal to 1.00%
                of any
                gross consideration paid for the acquisition of the business of Diomed
                Holdings and its operating subsidiaries.

            
	 	 	 
	
              Financial
                Covenants:

            	
              No
                financial ratio covenants.

            
	 	 
	
              Reporting
                Requirements:

            	
              Borrower
                will furnish to Lender monthly and quarterly financial statements,
                annual
                audited financial statements and all materials provided to the
                shareholders along with other financial information Lender reasonably
                requests or generally provided to other Holders of the common
                stock.

            
	 	 
	
              Expenses:
                

            	
              Borrower
                shall pay the invoiced expenses, including UCC searches, filing costs,
                and
                other miscellaneous expenses, and reasonable fees of counsel (in-house
                and
                outside) applicable to drafting, negotiating and/or finalizing the
                Loan.

            
	 	 
	
              Commitment
                Fee: 

               

            	
              A
                Commitment Fee of 2.0% of the Commitment Amount is required in order for
                Lender to commence the due diligence process. In the event that the
                transaction is not approved, the Commitment Fee shall be returned
                in its
                entirety to Borrower (minus due diligence expenses). In the event
                of
                approval, the Commitment Fee will be applied in its entirety as a
                Facility
                Fee and towards the Lender’s non-legal transaction costs and due diligence
                expenses {Paid}.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    In
      consideration of the time, cost and expense devoted, and to be devoted, by
      the
      Lender in connection with
      the
      transaction contemplated by this proposal, Borrower agrees that until Loan
      Closing (the “Exclusive Period”) it will not (a) solicit or entertain any
      proposal, (b) negotiate with any other person, or
      (c)
      provide any information with respect to Borrower to any person who might be
      expected to propose
      alternate financing, or Commitment Fee will be deemed earned in
      full.

     

    The
      proposed terms and conditions are provided for discussion purposes only and
      do
      not represent an agreement
      or commitment to lend, provided however that the terms entitled and associated
      with “Expenses”,
      “Commitment Fee” and “Exclusive Period” shall be binding obligations of the
      parties hereto.
      The actual terms and conditions upon which the Lender may agree to extend credit
      to the Borrower are subject to satisfactory completion of due diligence,
      internal credit approvals, satisfactory review of documentation and such other
      terms and conditions as may be determined by Lender and which would be contained
      in definitive legal documents for the loan contemplated hereby.

     

    If
      the
      basic terms are acceptable, please fax an executed copy of this letter to
      866-468-8916 and wire payment
      of the Commitment Fee. This
      offer will expire at 5PM (ET) on September 26, 2007 unless
      accepted
      by Borrower or extended by Lender. We look forward to your response. Please
      feel
      free to call us at 617-261-6553 (work) or 617-877-9663 (cell).

     

    We
      appreciate your consideration of this proposal. We look forward to the
      opportunity to work together and establish a long-term strategic relationship
      with you and Diomed, Inc.

     

    Sincerely,

     

    
      	
              Parag
                Shah

            	
              R.
                Bryan Jadot

            
	
              Sr.
                Managing Director & Group Head, Life Sciences

            	
              Principal,
                Life Sciences

            
	
              Hercules
                Technology Growth Capital, Inc.

            	
              Hercules
                Technology Growth Capital, Inc.

            

    

     

    AGREED
      AND ACCEPTED this _____ day of ____________________ 2007

     

    Diomed,
      Inc.

     

    
      	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      B
      - FORM OF SECURED 2004 DEBENTURE

    (See
      attached)

    

    EXHIBIT
      C - FORM OF SECURITY AGREEMENT

    (See
      attached)

    

    EXHIBIT
      D - FORM OF SUBSIDIARY GUARANTY

    (See
      attached)

    

    EXHIBIT
      E - FORM OF LEGAL OPINION

    

    Based
      on
      and subject to the foregoing and the other exclusions, qualifications,
      limitations, and assumptions set forth in this opinion letter, we are of the
      opinion that:

    

    1.
       Organizational
      Status.
      Based
      solely on the Good Standing Certificates, each [Obligor] is in good standing
      under the laws of the State of Delaware and Diomed, Inc. is in good standing
      as
      a foreign corporation under the laws of the commonwealth of Massachusetts.
      As of
      the date set forth in the respective Good Standing Certificate and based solely
      on the respective Charter, each [Obligor] is validly existing under the laws
      of
      the State of Delaware as of the date set forth in such Charter. 

     

    2.
       Power
      and Authority.
      Each
      [Obligor] has the corporate power and authority to execute, deliver, and perform
      the terms and provisions of each Subject Document to which it is party and
      has
      taken all necessary organizational action to authorize the execution, delivery,
      and performance thereof.

     

    3.
       Execution,
      Validity, and Enforceability.
      Each
      [Obligor] has duly executed and delivered each Subject Document to which it
      is
      party, and each such Subject Document constitutes the valid, binding, and
      enforceable obligation of such [Obligor].

     

    4.
       Noncontravention.
      Neither
      the execution, delivery, and performance by each [Obligor] of any Subject
      Document to which it is a party, nor the compliance by each [Obligor] with
      the
      terms and provisions thereof: (a)
      violates
      any present law, statute, or regulation of the State of New York or the United
      States (including Regulations T, U and X of the Board of Governors of the
      Federal Reserve System) that, in each case, is applicable to such [Obligor];
      (b) violates
      any provision of the Governing Documents of
      such
      [Obligor]; or (c)
      results
      in any breach of any of the terms of, or constitutes a default under, any of
      the
      Reviewed Agreements or results in the creation or imposition of any lien,
      security interest, or other encumbrance (except as contemplated or otherwise
      permitted by the Subject Documents) upon any assets of such [Obligor] pursuant
      to the terms of any of the Reviewed Agreements.

     

    5.
       Governmental
      Approvals.
      No
      consent, approval, or authorization of, or filing with, any governmental
      authority of the State of New York or the United States that, in each case,
      is
      applicable to each [Obligor] is required for: (a) the due execution, delivery,
      and performance by such [Obligor] of any Subject Document to which it is a
      party, or (b) the validity, binding effect, or enforceability of any Subject
      Document to which such [Obligor] is a party, except (i) in each case, as have
      previously been made or obtained, (ii) filings and recordings that are necessary
      to perfect the liens and security interests granted under the Subject Documents
      (including the filing of financing statements under the Uniform Commercial
      Code), and (iii) consents, approvals, authorizations, or filings as may be
      required to be obtained or made by the [Holder] as a result of their involvement
      in the transactions contemplated by the Subject Documents.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.
       UCC
      Matters.
      After
      giving effect to the making of the loans or other extensions of credit on the
      date hereof as contemplated by the Loan Agreement:

     

    (a) the
      Subject Documents are effective to create an attached security interest (the
      “Article 9 Security Interest”) under Article 9 in favor of the [Holder] in that
      portion of the personal property included within the term “Collateral” (as
      defined in the Loan Agreement) in which a security interest can be granted
      under
      Article 9 (collectively, the “Article 9 Collateral”);

     

    (b) and
      upon
      filing the Financing Statement with the UCC Filing Office and the acceptance
      for
      filing thereof, with the appropriate filing fee tendered, the [Holder] will
      have
      a perfected security interest in those items of the Article 9 Collateral in
      which a security interest may be perfected under Article 9 by the filing of
      a
      financing statement with the UCC Filing Office; 

     

    (c) and
      upon
      the execution by all parties thereto and delivery of the Account Control
      Agreements, such Account Control Agreements are effective under the New York
      UCC
      to create a valid, perfected security interest in favor of the [Holder] in
      the
      deposit accounts described in such Account Control Agreements; and

     

    (d) after
      giving effect to the delivery by the [Obligor]s to the [Holder] in pledge,
      within the State of New York and pursuant to the Pledge Agreement, of each
      of
      the stock certificates representing the shares of capital stock of Diomed Inc.,
      Diomed PDT, Inc. and Diomed Acquisition Corp. (the “Pledged Shares”) to the
      [Holder], together with properly completed and effective stock powers endorsing
      the Pledged Shares and duly executed by the [Obligor] in blank, and assuming
      the
      continued possession of such Pledged Shares and of such stock powers by the
      [Holder] within the State of New York, the [Holder] shall acquire a valid
      security interest in all right, title and interest of the [Obligor] in the
      Pledged Shares pursuant to the Pledge Agreement, to the extent that a security
      interest therein may be created pursuant to Division 9 of the New York UCC,
      and
      such security interest will be perfected, with the consequences of perfection
      by
      control with respect to the Pledged Shares accorded by the New York
      UCC.

     

    7.
       Common
      Stock.
      The
      shares of Holdings Common Stock, par value $0.001 per share (the “Common
      Stock”), issuable upon conversion of the Secured 2004 Debentures have been duly
      authorized, free from preemptive rights, and, based solely on instructions
      addressed to Holdings’ Common Stock transfer agent, Continental Stock Transfer
      and Trust Co., reserved for issuance upon such exercise. When issued and so
      delivered to [Holder] in accordance with the terms of the Secured 2004
      Debentures, such shares will be validity issued, fully paid and
      non-assessable.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.
       Exemption
      from Registration.
      The
      offer and sale of the Secured 2004 Debentures pursuant to the Agreement and
      Consent and the issuance of the Conversion Shares thereunder in accordance
      with
      the Secured 2004 Debentures constitute and will constitute transactions exempt
      from the registration requirements of Section 5 of the Securities Act of 1933,
      as amended. 

     

    9.
       Eligibility
      for Resale under Rule 144(k).
      The
      resale of Conversion Shares by the [Holder] shall be exempt from the
      registration requirements of Section 5 of the Securities Act of 1933, as
      amended, pursuant to Rule 144(k) promulgated thereunder, assuming that the
      [Holder] is not, and for the three-month period preceding the date of such
      resale has not been, an affiliate of the [Company] within the meaning of
      paragraph (a)(1) of Rule 144 under the Securities Act.

     

    10.
       Proceedings.
      To our
      knowledge, there is no outstanding judgment, action, suit, or proceeding pending
      or threatened in writing against either [Obligor] before any court, governmental
      agency, or arbitrator that challenges the legality, validity, binding effect,
      or
      enforceability of any Subject Document to which such [Obligor] is a
      party.

     

    11.
      Investment
      Company Act.
      Each
      [Obligor] is not an “investment company” or a company “controlled by” an
“investment company” within the meaning of the Investment Company Act of 1940,
      as amended.EX 10.9

    INTERCREDITOR
      AGREEMENT

     

    THIS
      INTERCREDITOR AGREEMENT
      (this
“Agreement”),
      dated
      as of September 28, 2007, (the “Effective
      Date”),
      by
      and between Hercules
      Technology Growth Capital, Inc. (“Senior
      Creditor”)
      and
      each of Iroquois
      Capital LP, Cranshire Capital, L.P., Portside Growth and Opportunity Fund and
      Rockmore Investment Master Fund Ltd.
      (together, the “Subordinated
      Creditor”).
      Capitalized terms used but not otherwise defined herein shall have the meanings
      given them in Section 1 below.

     

    RECITALS

     

    A. Senior
      Creditor and each of Diomed Holdings, Inc. and Diomed, Inc., each a Delaware
      corporation (together, the “Borrower”),
      have
      entered into that certain Loan and Security Agreement dated as of September
      28,
      2007 (as the same may be amended, restated, or otherwise modified from time
      to
      time, the “Senior
      Creditor Agreement”).
      The
      funds advanced to or owed by Borrower under the Senior Creditor Agreement shall
      be referred to collectively herein as the “Senior
      Loans.”
To
      secure the Senior Loans, Borrower granted to Senior Creditor under the Senior
      Creditor Agreement a security interest in all of Borrower’s personal property
      assets. The making of the Senior Loans and the granting of the security interest
      in all of Borrower’s personal property assets are hereinafter referred to as the
“Senior
      Transactions”.

     

    B. Prior
      to
      the date hereof, Diomed Holdings, Inc. issued one or more Variable Rate
      Convertible Debentures (the “Existing
      Debenture”)
      to the
      Subordinated Creditor.

     

    C. The
      Existing Debenture prohibits the consummation of the Senior Transactions.

     

    D. The
      Subordinated Creditor is willing to permit the Borrower to enter into the Senior
      Transactions, subject to, among other things, the execution and delivery of
      an
      amendment to the Variable Rate Convertible Debenture, pursuant to which, among
      other things, the Subordinated Creditor shall receive a security interest in
      substantially all of the Borrower’s personal property assets.

     

    E. Subordinated
      Creditor and Senior Creditor desire to establish and agree upon their respective
      rights, priorities and interests governing their respective relationships with
      Borrower and any collateral for the loans granted pursuant to the Subordinated
      Loan Documents and the Senior Loan Documents at all times on and after the
      Effective Date.

     

    AGREEMENT

     

    NOW,
      THEREFORE, in consideration of the foregoing, Senior Creditor and Subordinated
      Creditor hereby agree as follows:

     

    
      	1.	
              DEFINITIONS;
                EFFECTIVENESS

            

    

     

    As
      used
      herein, the following terms shall have the following meanings:

     

    “Availability
      Period”
has
      the
      meaning set forth in the Senior Creditor Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Insolvency
      Proceeding”
is
      any
      proceeding by or against any Person under the United States Bankruptcy Code,
      or
      any other bankruptcy or insolvency law, including assignments for the benefit
      of
      creditors, compositions, extensions generally with its creditors, or proceedings
      seeking reorganization, arrangement, or other 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, and the filing of any financing statement (other than
      a
      precautionary financing statement with respect to a lease that is not in the
      nature of a security interest) under the UCC or comparable law of any
      jurisdiction.

     

    “Lien
      Enforcement Action”
means
      (a) any action by Senior Creditor to foreclose on the Lien of such Person in
      any
      Collateral, (b) any action by Senior Creditor to take possession of, sell or
      otherwise realize (judicially or non-judicially) upon any Collateral (including,
      without limitation, by setoff or notification of account debtors), and/or (c)
      the commencement by Senior Creditor of any legal proceedings against the
      Borrower or with respect to any Collateral to facilitate the actions described
      in (a) or (b) above.

     

    “Permitted
      Subordinated Debt Payments”
means
      payments of interest on the Subordinated Debt due and payable in accordance
      with
      the terms of the Subordinated Loan Documents as in effect on the date hereof
      or
      as modified in accordance with the terms of this Agreement (for the avoidance
      of
      doubt, the Subordinated Creditor may receive payment of or reimbursement for
      reasonable fees and expenses of counsel to the Subordinated Creditor incurred
      in
      connection with the negotiation, documentation and closing of the transactions
      contemplated hereby).

     

    “Person”
means
      any individual, sole proprietorship, partnership, joint venture, trust,
      unincorporated organization, association, corporation, limited liability
      company, institution, other entity or government.

     

    “Remedies
      Notice”
has
      the
      meaning set forth in Section 9(b).

     

    
      “Reorganization
        Securities”
means
        (a) any common equity securities and any other equity securities that do
        not
        contain a mandatory redemption provision, put right or any other such similar
        right or require dividends (other than dividends paid in kind) to be paid
        on a
        date prior to the date that all Senior Debt is due or paid in full in cash
        and
        (b) any securities of the Borrower that are distributed to any Subordinated
        Creditor in respect of the Subordinated Debt and that (i) are subordinated
        in
        right of payment to the Senior Debt (or any debt or equity securities issued
        in
        substitution of all or any portion of the Senior Debt) to at least the same
        extent as the Subordinated Debt is subordinated to the Senior Debt hereunder
        and
        (ii) do not have any terms, and are not subject to or entitled to the benefit
        of
        any agreement or instrument that has terms, that are more advantageous to
        the
        Subordinated Creditors or that are more burdensome to the issuer of or other
        obligor on such debt or equity securities than are, in either case, the terms
        of
        the Senior Debt (or any debt or equity securities issued in substitution
        for all
        or any portion of the Senior Debt). Additionally, “Reorganization Subordinated
        Securities”, shall include (A) any equity securities and/or debt securities
        which are distributed pursuant to a plan of reorganization accepted by the
        class
        of Senior Debt so long as such equity or debt securities are distributed
        both on
        account of the Senior Debt and the Subordinated Debt and so long as such
        equity
        or debt securities are subject to the provisions of this Agreement and the
        terms
        of this Agreement will apply with like effect to such securities, and (B)
        any
        equity securities and/or debt securities deemed in writing by Senior Creditor
        to
        constitute Reorganization Securities.

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Senior
      Creditor Warrants”
means
      any and all warrants issued by a Borrower to the Senior Creditor.

     

    “Senior
      Debt”
      means
      any and all indebtedness and obligations (including, without limitation,
      principal, premium (if any), interest, fees, charges, expenses, costs,
      professional fees and expenses, and reimbursement and indemnity obligations)
      at
      any time or from time to time owing from Borrower to Senior Creditor under
      the
      Senior Loan Documents or otherwise, including but not limited to such amounts
      as
      may accrue or be incurred before or after default or workout or the commencement
      of any liquidation, dissolution, bankruptcy, receivership, or reorganization
      case by or against Borrower; provided,
      however,
      the
      aggregate outstanding principal amount of Loans constituting Senior Debt shall
      not exceed at any one time outstanding, (a) the greater of (i) $6,600,000 and
      (ii) the sum of (A) $6,600,000 and (B) 110% of the Term Loan Advances (not
      to
      exceed $4,400,000) made during the Availability Period) minus
      (b)
the
      amount of all payments and prepayments of principal made with respect to such
      Loans.

     

    “Senior
      Default Notice”
means
      a
      written notice from Senior Creditor to Subordinated Creditor that a Senior
      Payment Default has occurred.

     

    “Senior
      Loan Documents”
      means
      the Senior Creditor Agreement and any security agreement, pledge agreement,
      promissory note, UCC financing statement, account control agreement or any
      other
      agreement, instrument or document, excluding the Senior Creditor Warrants,
      executed by Borrower pursuant to or in connection with the Senior Debt or the
      Senior Creditor Agreement including, for the avoidance of doubt, any Loan
      Document (as defined in the Senior Creditor Agreement), as any of the foregoing
      may from time to time be amended, modified, supplemented, extended, renewed,
      restated or replaced.

     

    “Senior
      Payment Default”
means
      an Event of Default exists by reason of either (i) Borrower’s failure to pay a
      monetary obligation constituting Senior Debt (including by virtue of
      acceleration or otherwise), or (ii) the commencement of any Insolvency
      Proceeding by or against Borrower has occurred and is continuing under the
      Senior Credit Agreement.

     

    “Standstill
      Period”
has
      the
      meaning set forth in Section 2.

     

    “Subordinated
      Creditor Warrants”
means
      any and all warrants issued by a Borrower to a Subordinated
      Creditor.

     

    “Subordinated
      Debt”
      means
      any and all indebtedness and obligations (including, without limitation,
      principal, premium (if any), interest, fees, charges, expenses, costs,
      professional fees and expenses, and reimbursement obligations) at any time
      or
      from time to time owing from Borrower to Subordinated Creditor (or the
      affiliates or subsidiaries of Subordinated Creditor) under the Subordinated
      Loan
      Documents, including but not limited to such amounts as may accrue or be
      incurred before or after default or workout or the commencement of any
      liquidation, dissolution, bankruptcy, receivership, or reorganization case
      by or
      against Borrower.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Subordinated
      Loan Documents”
      means
      that certain Securities Purchase Agreement entered into between Subordinated
      Creditor and Diomed Holdings, Inc. dated as of September 28, 2004, each Variable
      Rate Convertible Debenture entered into between a Subordinated Creditor and
      Diomed Holdings, Inc. and any financing statement, other agreement, instrument
      or document, other than the Subordinated Creditor Warrants, executed by Borrower
      pursuant to or in connection therewith, as the same may from time to time be
      amended, modified, supplemented, extended, renewed, restated or
      replaced.

     

    “Term
      Loan Advances”
has
      the
      meaning set forth in the Senior Creditor Agreement (as in effect on the date
      hereof).

     

    Unless
      otherwise specified, all references in this Agreement to a “Section” shall refer
      to the corresponding Section in or to this Agreement. Other capitalized terms
      used herein and not otherwise defined herein shall have the meaning given such
      terms in the Uniform Commercial Code as in effect in the State of California,
      as
      in effect from time to time (the “UCC”)
      or in
      the Senior Loan Documents.

     

    
      	2.	
              SUBORDINATION

            

    

    

      (a) On
        the
        terms and conditions set forth below, Subordinated Creditor’s right to payment
        and performance of the Subordinated Debt and any and all liens and security
        interests securing the Subordinated Debt are hereby subordinated to Senior
        Creditor’s right to full payment and performance of the Senior Debt and all
        liens and security interests securing the Senior Debt. The Subordinated Creditor
        shall not ask, demand, sue for, take or receive from Borrower, by setoff
        or in
        any other manner, the whole or any part of any monies which may now or hereafter
        be owing by Borrower to Subordinated Creditor, or be owing by any other person
        to Subordinated Creditor under a guaranty or similar instrument, on account
        of
        the Subordinated Debt, nor any collateral security for any of the foregoing,
        including, without limitation, any personal property collateral granted to
        Subordinated Creditor pursuant to the Subordinated Loan Documents, unless
        and
        until the Senior Debt shall have been fully paid in cash and all commitments
        to
        extend credit under the Senior Creditor Agreement shall have been terminated
        (the temporary reduction of outstanding obligations, liabilities and
        indebtedness of Borrower to Senior Creditor not being deemed to constitute
        full
        payment or satisfaction thereof), provided
        that (i)
        the Subordinated Creditor may receive Reorganization Securities, (ii) the
        Subordinated Creditor may exercise the Subordinated Creditor Warrants in
        accordance with terms thereof, (iii) the Subordinated Creditor may be granted
        a
        subordinate security interest in the Collateral in accordance with the terms
        of
clause
        (c)
        below pursuant to the Subordinated Loan Documents as in effect on the date
        hereof, and (iv) the Subordinated Creditor may file lawsuits solely to prevent
        the running of any applicable statute of limitations or other similar
        restrictions on claims with respect to the Subordinated Debt and so long
        as the
        adjudication of such lawsuit and any remedies granted as a result therefore
        shall be otherwise subject to the terms of this Agreement in all
        respects.

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (b) Notwithstanding
      clause
      (a)
      above,
      the Borrower shall be permitted to pay, and the Subordinated Creditor shall
      be
      permitted to receive, any Permitted Subordinated Debt Payment so long as at
      the
      time of such payment, or after giving effect thereto, no Senior Payment Default
      exists, and such Senior Payment Default shall not have been cured or waived.
      The
      Borrower shall not be permitted to prepay or repay the Subordinated Debt without
      the written consent of the Senior Creditor.

     

    (c) Any
      existing security interest in or lien on any property of Borrower in favor
      of
      Subordinated Creditor shall be, and hereby are agreed to be, junior and
      subordinated to the security interests and liens securing the Senior Debt.
      If
      any lien shall be created or shall arise in favor of Subordinated Creditor,
      whether by operation of law or otherwise, in or on any property of Borrower
      or
      any of its subsidiaries or affiliates to secure all or any portion of the
      Subordinated Debt, then the liens granted by Borrower in any such property
      in
      favor of Senior Creditor to secure the Senior Debt shall in all respects be
      first and senior liens, superior to such liens that may be created or arise,
      and
      superior to any security interest or lien that may exist on the date hereof,
      in
      either case which liens are in favor of Subordinated Creditor securing the
      Subordinated Debt notwithstanding (i) the date, manner or order of creation,
      attachment or perfection of any such security interests or liens, (ii) the
      provisions of the UCC or any other applicable statutes or court decisions that
      would provide otherwise in the absence of this Agreement, (iii) the provisions
      of any contract between Subordinated Creditor, on the one hand, and Borrower
      or
      any subsidiary or affiliate thereof, on the other, and (iv) whether
      Subordinated Creditor or any agent or bailee thereof holds possession of any
      part any such collateral. In the event Subordinated Creditor shall have or
      obtain possession of any such property or shall, in contravention of this
      Agreement, foreclose upon or enforce its security interest or lien upon any
      such
      property, whether by self-help, judicial action or otherwise, then (A) all
      such
      property shall be immediately delivered to Senior Creditor or, if not
      deliverable, all cash or non-cash proceeds and profits of such property shall
      be
      paid over to Senior Creditor, without any deduction or offset, and (B) until
      duly delivered or paid to Senior Creditor, any such property or cash or non-cash
      proceeds and profits of such property shall be held in trust for the benefit
      of
      Senior Creditor, in the case of each of clause (A) and clause (B), unless and
      until all of the Senior Debt shall have been paid in cash in full and all
      commitments to extend credit under the Senior Creditor Agreement shall have
      been
      terminated.

     

    (d)
       A
      copy of
      this Agreement may be filed as a financing statement in any Uniform Commercial
      Code recording office.

     

    (e) The
      subordination contained in this Agreement is intended to define the rights
      and
      duties of Subordinated Creditor and Senior Creditor; it is not intended that
      any
      third party (including Borrower or any of its subsidiaries or affiliates, any
      bankruptcy trustee, receiver, or debtor-in-possession) shall benefit from it.
      If
      the effect of the subordination contained in this Agreement would be to give
      any
      third party a priority status to which that party would not otherwise be
      entitled, then that provision shall, to the extent necessary to avoid that
      priority, be given no effect and the rights and priorities of Senior Creditor
      and Subordinated Creditor shall be determined in accordance with applicable
      law
      and this Agreement.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
      anything to the contrary in this Section 2, upon the earliest to occur of (i)
      acceleration of the Senior Debt, (ii) the occurrence of an Insolvency Proceeding
      involving Borrower, (iii) notice by the Subordinated Creditor to the Senior
      Creditor that an Event of Default in payment of the Subordinated Debt has
      occurred and is continuing and for a period of 150 days thereafter (the
“Standstill
      Period”),
      or
      (iv) the filing by the Senior Creditor of a complaint commencing judicial
      foreclosure against all or substantially all of the Collateral or other judicial
      enforcement of the terms and provisions of the applicable Senior Loan Documents,
      upon 5 Business Days prior written notice to the Senior Creditor, the
      Subordinated Creditor may accelerate the Subordinated Obligations, provided
      that any
      payment or distribution received by the Subordinated Creditor (other than
      Reorganization Securities) shall be received
      in trust for the benefit of the Senior Creditor and shall be forthwith paid
      over
      to the Senior Creditor, for the benefit of the Senior Creditor.
      Nothing
      herein shall limit or impair the right of the (x) Subordinated Creditor to
      bid
      for or purchase Collateral at any private or judicial foreclosure upon such
      Collateral initiated by Senior Creditor (so long as, if in the event,
      Subordinated Creditor “credit bids”, all or a portion of, the Subordinated Debt
      in such private or judicial sale, the Senior Creditor shall be entitled to
      receive in cash that portion of the Subordinated Debt that is “credit bid” in
      such private or judicial sale by the Subordinated Creditor), (y) Subordinated
      Creditor to join (but not control) any foreclosure or other judicial lien
      enforcement proceeding with respect to the Collateral initiated by Senior
      Creditor, so long as it does not delay or interfere in any material respect
      with
      the exercise by Senior Creditor of its rights as provided in this Agreement
      and
      (z) Subordinated Creditor to receive any remaining proceeds of Collateral after
      satisfaction and payment in full in cash of all Senior Debt.

     

    
      	3.	
              ASSIGNMENT
                OF SUBORDINATED DEBT

            

    

     

    Subordinated
      Creditor hereby covenants to Senior Creditor that prior to the termination
      of
      this Agreement in accordance with Section 8, the entire Subordinated Debt
      created in favor of Subordinated Creditor shall continue to be owing only to
      Subordinated Creditor, and any collateral security therefor (including, without
      limitation, any collateral security granted to Subordinated Creditor pursuant
      to
      the Subordinated Loan Documents) shall continue to be held solely for the
      benefit of Subordinated Creditor, unless assigned pursuant to an assignment
      in
      which the assignee agrees in writing to be bound by all of the terms and
      provisions of this Agreement. Any promissory note issued pursuant to the
      Subordinated Loan Documents shall be legended to expressly state that it is
      subject to this Agreement.

     

    
      	4.	
              SENIOR
                CREDITOR’S PRIORITY

            

    

     

    In
      the
      event of any distribution, division, or application, partial or complete,
      voluntary or involuntary, by operation of law or otherwise, of all or any part
      of the property of Borrower or any of its subsidiaries or affiliates or the
      proceeds thereof to the creditors of Borrower or any of its subsidiaries or
      affiliates, or the readjustment of the Senior Debt and the Subordinated Debt,
      whether by reason of liquidation, bankruptcy, arrangement, receivership,
      assignment for the benefit of creditors or any other action or proceeding
      involving the readjustment of all or any part of the Senior Debt or the
      Subordinated Debt, or the application of the property of Borrower or any of
      its
      subsidiaries or affiliates to the payment or liquidation thereof, or upon the
      dissolution, liquidation, reorganization, or other winding up of Borrower’s or
      any of its subsidiaries’ or affiliates’ business, or upon the sale of all or any
      substantial part of Borrower’s or any of its subsidiaries’ or affiliates’
property (any of the foregoing being hereinafter referred to as an “Insolvency
      Event”),
      then,
      and in any such event, Senior Creditor shall be entitled to receive the payment
      in cash in full of the Senior Debt before Subordinated Creditor shall be
      entitled to receive any payment on account of the Subordinated Debt, and to
      that
      end and in furtherance thereof:

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (a) All
      payments and distributions of any kind or character, whether in cash, property,
      or securities (other than a distribution of Reorganization Securities), in
      respect of the Subordinated Debt to which Subordinated Creditor would be
      entitled if the Subordinated Debt were not subordinated pursuant to this
      Agreement, shall be paid to Senior Creditor and applied in payment of the Senior
      Debt; and

     

    (b) Notwithstanding
      the foregoing, if any payment or distribution of any kind or character, whether
      in cash, properties or securities (other than a distribution of Reorganization
      Securities), shall be received by Subordinated Creditor on account of the
      Subordinated Debt before all of the Senior Debt has been paid, then such payment
      or distribution shall be received by Subordinated Creditor in trust for and
      shall be immediately paid over to Senior Creditor for application to the
      payments of amounts due on the Senior Debt until the Senior Debt shall have
      been
      paid in cash in full.

     

    
      	5.	
              GRANT
                OF AUTHORITY

            

    

     

    In
      the
      event of the occurrence of an Insolvency Event, and to enable Senior Creditor
      to
      enforce its rights hereunder in any of the aforesaid actions or proceedings,
      Senior Creditor is hereby irrevocably authorized and empowered, in Senior
      Creditor’s discretion, as follows:

     

    (a) Senior
      Creditor is hereby irrevocably authorized and empowered (in its own name or
      in
      the name of Subordinated Creditor or otherwise), but shall have no obligation,
      (i) to demand, sue for, collect and receive every payment or distribution
      referred to in Section 4, and give acquittance therefor and
      (ii) (if Subordinated Creditor has failed to file claims or proofs of
      claim on or before ten (10) days prior to the last date such claims or
      proofs of claim may be filed pursuant to law or the order of any court
      exercising jurisdiction over such proceeding) to file claims and proofs of
      claim. The Subordinated
      Creditor will take such reasonable action as the Senior Creditor may reasonably
      request to enable the Senior Creditor to
      enforce
      any claim
      or
      proof of claim
      filed by
      the Senior Creditor in accordance with clause
      (ii)
      above.

     

    (b) To
      the
      extent that payments or distributions on account of the Subordinated Debt are
      made in property or securities other than cash, Subordinated Creditor authorizes
      Senior Creditor to sell or dispose of such property or securities (other than
      a
      distribution of Reorganization Securities) on such terms as are commercially
      reasonable in the situation in question. Following full payment in cash of
      the
      Senior Debt and the termination of all commitments related thereto, Senior
      Creditor shall remit to the Subordinated Creditor (with all necessary
      endorsements), to the extent of Subordinated Creditor’s interest therein, all
      payments and distributions of cash, property, or securities paid to and held
      by
      Senior Creditor in excess of the allowed amount of the Senior Debt.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	6.	
              PAYMENTS
                RECEIVED BY SUBORDINATED
                CREDITOR

            

    

     

    Should
      any payment, distribution, or security (other than a distribution of
      Reorganization Securities) be received by the Subordinated Creditor upon or
      with
      respect to the Subordinated Debt in contravention of this Agreement or other
      than those amounts discussed in Section 2, prior to termination of this
      Agreement in accordance with Section 8, Subordinated Creditor shall receive
      and
      hold the same in trust for the benefit of Senior Creditor and shall immediately
      deliver the same to Senior Creditor in precisely the form received (except
      for
      the endorsement or assignment of Subordinated Creditor where necessary) for
      application to the Senior Debt (and the permanent reduction thereof), and,
      until
      so delivered, the same shall be held in trust by such Subordinated Creditor
      for
      the benefit of Senior Creditor; provided
      that
      notwithstanding anything to the contrary contained in this Agreement, the
      Subordinated Creditor may (i) receive and retain Conversion Shares (as defined
      in the Subordinated Loan Documents) and Reorganization Securities and (ii)
      exercise the Subordinated Creditor Warrants in accordance with the terms
      thereof.

     

    
      	7.	
              FURTHER
                ASSURANCES; COOPERATION; NO
                OFFSET

            

    

     

    Subordinated
      Creditor agrees to cooperate with Senior Creditor and to take all actions that
      Senior Creditor may reasonably require to enable Senior Creditor to realize
      the
      full benefits of this Agreement. Subordinated Creditor agrees not to offset
      any
      amounts owing to Borrower against the Subordinated Debt, but shall pay all
      such
      amounts in accordance with their terms.

     

    
      	8.	
              TERMINATION
                OR AMENDMENT OF AGREEMENT; NO
                AMENDMENTS

            

    

     

    This
      Agreement shall be effective upon its execution by each of Senior Creditor
      and
      Subordinated Creditor. After the Effective Date, this Agreement shall remain
      in
      effect and shall not be revoked or amended by Subordinated Creditor, except
      with
      the prior written consent of the Senior Creditor. Senior Creditor and
      Subordinated Creditor agree that no amendment hereto shall be binding upon
      Borrower unless Borrower shall have received notice of such amendment. Subject
      to Section 12, this Agreement shall terminate upon the date on which the Senior
      Debt has been paid in cash in full and all commitments to extend credit under
      the Senior Creditor Agreement has been terminated. No amendment of the
      Subordinated Loan Documents shall directly or indirectly modify the provisions
      of this Agreement in any manner which might terminate or impair the
      subordination of the Subordinated Debt or the subordination of the security
      interest or lien that Subordinated Creditor may have in any property of
      Borrower. By
      way of
      example, the Subordinated Loan Documents shall not be amended to (i) increase
      the rate of interest with respect to the Subordinated Debt, (ii) increase the
      principal amount of the Subordinated Debt, (iii) accelerate the payment of
      the
      principal or interest or any other portion of the Subordinated Debt or (iv)
      increase the warrants or other equity issued to Subordinated Creditor in
      consideration of the funding of the Subordinated Debt.
      No
      amendment of the Senior Loan Documents shall directly or indirectly (a) increase
      the interest rate applicable to any of the Senior Debt by more than 2.0%
      (excluding increases resulting from the accrual of interest at the default
      rate), (b) extend the scheduled maturity of the Senior Debt, (c) add any
      additional restrictions or limitations with respect to the payment of the
      Subordinated Debt, (d) modify (or have the effect of modification of) any
      prepayment provisions thereof, or (e) change (to earlier dates) any dates upon
      which payments of principal or interest are due thereon.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	9.	
              ADDITIONAL
                AGREEMENTS

            

    

     

    (a) Senior
      Creditor may administer and manage its credit and other relationships with
      Borrower in its own best interest, without notice to or consent of Subordinated
      Creditor. Subject to the limitations contained in Section
      8
      hereof,
      at any time and from time to time, Senior Creditor may enter into any amendment
      or agreement with Borrower as Senior Creditor may deem proper, including without
      limitation extending the time of payment of or renewing or otherwise altering
      the terms of all or any of the obligations constituting Senior Debt or affecting
      the collateral security for, supporting or underlying any or all of the Senior
      Debt, and may exchange, sell, release, surrender or otherwise deal with any
      such
      collateral without in any way thereby impairing or affecting this Agreement,
      and
      all such additional agreements and amendments shall be Senior Loan Documents
      evidencing the Senior Debt; provided,
      that
      neither this Section 9 nor any provision of such agreements shall affect the
      limitations contained in the definitions of “Senior Creditor” or “Senior Debt”;
provided
      further
      that any
      sale or other disposition of the Collateral shall be conducted in a commercially
      reasonable manner and the proceeds of Collateral shall be applied to the
      permanent reduction of the indebtedness constituting Senior Debt. 

     

    (b) The
      Senior Creditor will give the Subordinated Creditor 2 Business Days written
      notice of its intent to commence any Lien Enforcement Action with respect to
      the
      Collateral (a “Remedies
      Notice”)

     

    
      	10.	
              SUBROGATION

            

    

     

    If
      cash
      or other property otherwise payable or deliverable to the Subordinated Creditor
      or on account of the Subordinated Debt shall have been applied pursuant to
      this
      Agreement to the payment of the Senior Debt, and if the Senior Debt shall have
      been paid in cash in full and all commitments to extend credit under the Senior
      Creditor Agreement shall have been terminated, then Subordinated Creditor shall
      be subrogated to any rights of Senior Creditor to receive further payments
      or
      distributions applicable to the Senior Debt until the Subordinated Debt shall
      have been fully paid. No such payments or distributions received by the
      Subordinated Creditor by reason of such subrogation shall, as between Borrower
      and its creditors other than Senior Creditor, on the one hand, and Subordinated
      Creditor, on the other hand, be deemed to be a payment by Borrower on account
      of
      the Subordinated Debt owed to Subordinated Creditor. For purposes of this
      Agreement, payments made by the Borrower not in contravention of this Agreement
      to the Subordinated Creditor in respect of the Subordinated Debt with proceeds
      of loans by Senior Creditor to Borrower shall not be construed to constitute
      proceeds of Collateral.

     

    
      	11.	
              SUBORDINATED
                CREDITOR’S WAIVERS AND
                COVENANTS

            

    

     

    (a) Without
      limiting the generality of any other waiver made by Subordinated Creditor in
      this Agreement, Subordinated Creditor hereby expressly waives (i) reliance
      by
      Senior Creditor upon the subordination and other agreements herein provided,
      and
      (ii) any claim that Subordinated Creditor may now or hereafter have against
      Senior Creditor arising out of any and all actions that Senior Creditor, in
      good
      faith, takes or omits to take (A) with respect to the creation, perfection
      or
      continuation of liens in or on any collateral security for the Senior Debt,
      (B)
      with respect to the foreclosure upon, sale, release, or depreciation of, or
      failure to realize upon, any of the collateral security for the Senior Debt,
      (C)
      with respect to the collection of any claim for all or any part of the Senior
      Debt from any account debtor, guarantor or any other third party and (D) with
      respect to the valuation, use, protection or release of any collateral security
      for the Senior Debt.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b) Without
      limiting the generality of any other covenant or agreement made by Subordinated
      Creditor in this Agreement, Subordinated Creditor hereby covenants and agrees
      that (i) Senior Creditor has not made any warranties or representations with
      respect to the due execution, legality, validity, completeness or enforceability
      of the Senior Creditor Agreement or any of the other Senior Loan Documents,
      or
      the collectibility of the Senior Debt; and (ii) Subordinated Creditor will
      not
      interfere with or in any manner oppose a disposition of any collateral security
      for the Senior Debt by Senior Creditor.

     

    
      	12.	
              REINSTATEMENT
                OF SENIOR DEBT

            

    

     

    To
      the
      extent that Senior Creditor receives payments on or in respect of the Senior
      Debt or proceeds of any collateral security for the Senior Debt, which payments
      or proceeds are subsequently invalidated, declared to be fraudulent or
      preferential, set aside or required to be repaid to a trustee, receiver or
      any
      other party under any bankruptcy law, state or federal law, common law, or
      equitable cause, then, to the extent of such payments or proceeds invalidated,
      declared to be fraudulent or preferential, set aside or required to be repaid,
      the Senior Debt, or part thereof, intended to be satisfied shall be revived
      and
      continue in full force and effect as if such payments or proceeds had not been
      received by Senior Creditor. The provisions of this Section 12 shall survive
      termination of this Agreement.

     

    
      	13.	
              NO
                WAIVERS

            

    

     

    Senior
      Creditor shall not be prejudiced in its rights under this Agreement by any
      act
      or failure to act of Borrower or Subordinated Creditor or any noncompliance
      of
      Borrower or Subordinated Creditor with any agreement or obligation, regardless
      of any knowledge thereof which Senior Creditor may have, or with which Senior
      Creditor may be charged; no action permitted hereunder that has been taken
      by
      Senior Creditor shall in any way affect or impair the rights or remedies of
      Senior Creditor in the exercise of any other right or remedy or shall operate
      as
      a waiver thereof; no single or partial exercise by Senior Creditor of any right
      or remedy shall preclude any other or further exercise thereof; and no
      modification or waiver of any of the provisions of this Agreement shall be
      binding upon Senior Creditor, in each case except as expressly set forth in
      a
      writing duly signed and delivered by Senior Creditor.

     

    
      	14.	
              PERFECTION
                OF CERTAIN SECURITY INTERESTS 

            

    

     

    The
      Senior Creditor agrees to hold or control that part of the Collateral that
      is in
      its possession or control (or in the possession or control of its agents or
      bailees) to the extent that possession or control thereof is taken to perfect
      a
      Lien thereon under the UCC or other applicable law (such Collateral being
      referred to as the “Pledged
      or Controlled Collateral”),
      as
      bailee and as a non-fiduciary agent for the Subordinated Creditor, solely for
      the purpose of perfecting the security interest granted under the Subordinated
      Loan Documents, subject to the terms and conditions of this Section. To secure
      the prompt payment and performance of the Subordinated Debt and in addition
      to,
      and separate from, any other grant of a security interest to the Senior
      Creditor, the Borrower hereby grants to the Senior Creditor, as agent for the
      Subordinated Creditor, a security interest in all right, title and interest
      of
      the Borrower in and to all now existing or hereafter acquired deposit accounts
      of the Borrower. The obligations and responsibilities of the Senior Creditor
      to
      the Subordinated Creditor under this Section 14 shall be limited to holding
      or
      controlling the Pledged or Controlled Collateral as a non-fiduciary agent in
      accordance with this Section 14.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	15.	
              PURCHASE
                RIGHT

            

    

     

    At
      any
      time on or after the date that any of the following events has occurred and
      is
      continuing (each a “Purchase
      Event”):
      (i)
      the occurrence of a Senior Payment Default; (ii) the Senior Creditor having
      provided a Remedies Notice; (iii) Senior Creditor has exercised any of its
      enforcement remedies with respect to Borrower or taken any Lien Enforcement
      Action against any Collateral in accordance with the Senior Loan Documents;
      (iv)
      the occurrence of an Insolvency Proceeding involving Borrower; or (v) at any
      time during the Standstill Period.

     

    (a)The
      Subordinated Creditor shall have an option, exercised by delivery of notice
      to
      the Senior Creditor (a “Purchase
      Notice”)
      given
      in accordance with Section 17 and no later than 10 days after a Purchase Event
      to purchase all (but not less than all) of the Senior Debt and assume all
      commitments under the Senior Loan Documents from the Senior Creditor. The
      Purchase Notice shall be irrevocable and shall specify a date for the closing
      of
      the purchase, which shall not be more than 10 Business Days after receipt by
      the
      Senior Creditor of the Purchase Notice. If no Subordinated Creditor exercises
      such right within 5 Business Days after the occurrence of a Purchase Event,
      the
      Senior Creditor shall have no further obligation pursuant to this Section 15
      and
      may take any further actions in their sole discretion in accordance with the
      Senior Loan Documents and this Agreement.

     

    (b)The
      purchase and sale with respect to the Senior Debt and assumption of commitments
      under the Senior Loan Documents provided for in this Section 15 shall have
      closed within 10 Business Days after receipt by the Senior Creditor of the
      Purchase Notice and the Senior Creditor shall have received payment in full
      of
      the Senior Debt and the Subordinated Creditor shall have assumed all commitments
      under the Senior Loan Documents as provided for herein within such 10 Business
      Day period. If more than one Person constituting the Subordinated Creditor
      shall
      have exercised the purchase option, the purchase price shall be divided pro
      rata
      among such persons according to each such Person’s portion of the Subordinated
      Debt outstanding on the date of purchase pursuant to this Section
      15.

     

    (c)On
      the
      date specified by the Subordinated Creditor in the Purchase Notice (which shall
      not be more than 10 Business Days after the receipt by the Senior Creditor
      of
      the Purchase Notice), the Senior Creditor shall sell and assign to the
      Subordinated Creditor and the Subordinated Creditor shall purchase and assume
      from the Senior Creditor, the Senior Debt (including and for the avoidance
      of
      doubt any prepayment fee, early termination fee, end of term charge or any
      other
      fee payable by Borrower and constituting Senior Debt) and all commitments under
      the Senior Loan Documents. The Senior Creditor and the Senior Secured Creditors
      hereby represent and warrant that, as of the date hereof, no approval of any
      court or other regulatory or governmental authority is required for such
      sale.

    
       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

    

    (d)Upon
      the
      date of such purchase and sale, the Subordinated Creditor shall (i) pay to
      the
      Senior Creditor as the purchase price therefor the full amount of all the Senior
      Debt then outstanding and unpaid, and (ii) assume all commitments under the
      Senior Loan Documents pursuant to assignment and assumption documents reasonably
      satisfactory to the Senior Creditor. 

     

    (e)Such
      purchase shall be expressly made without representation or warranty of any
      kind
      by the Senior Creditor as to the Senior Debt or otherwise and without recourse
      to the Senior Creditor, except that the Senior Creditor shall represent and
      warrant: (i) the amount of the Senior Debt being purchased from it, (ii) that
      the Senior Creditor owns the Senior Debt, free and clear of any Liens or
      encumbrances and (iii) the Senior Creditor has the right to assign such Senior
      Debt and the assignment is duly authorized by the Senior Creditor.

     

    
      	16.	
              INFORMATION
                CONCERNING BORROWER; CREDIT
                ADMINISTRATION

            

    

     

    Subordinated
      Creditor hereby assumes responsibility for keeping itself informed of the
      financial condition of Borrower, its subsidiaries and affiliates, any and all
      endorsers and any and all guarantors of the Senior Debt and of all other
      circumstances bearing upon the risk of nonpayment of the Senior Debt or the
      Subordinated Debt that diligent inquiry would reveal, and Subordinated Creditor
      hereby agrees that Senior Creditor shall not have any duty to advise the
      Subordinated Creditor of information known to Senior Creditor regarding such
      condition.

     

    
      	17.	
              NOTICES

            

    

     

    Except
      as
      otherwise provided herein, all notices and service of process required,
      contemplated, or permitted hereunder or with respect to the subject matter
      hereof shall be in writing, and shall be deemed to have been validly served,
      given or delivered upon the earlier of: (i) the first Business Day after
      transmission by facsimile or hand delivery or deposit with an overnight express
      service or overnight mail delivery service; or (ii) the third calendar day
      after
      deposit in the United States mails, with proper first class postage prepaid,
      and
      shall be addressed to the party to be notified as follows:

     

    If
      to Senior Creditor:

     

    HERCULES
      TECHNOLOGY GROWTH CAPITAL, INC.

    Legal
      Department

    Attention:
      Chief Legal Officer

    400
      Hamilton Avenue, Suite 310

    Palo
      Alto, CA 94301

    Facsimile:
      650-473-9194

    Telephone:
      650-289-3060

     

    If
      to Subordinated Creditor, to each of:

     

    IROQUOIS
      CAPITAL LP

    400
      Central Avenue, Suite 309

    Northfield,
      IL 60093

    ATTN:
      Joshua Silverman

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    CRANSHIRE
      CAPITAL, L.P.

    666
      Dundee Rd., Suite 1901

    Northbrook,
      IL 60062

    ATTN:
      Mitchell Kopin

    

    PORTSIDE
      GROWTH AND OPPORTUNITY FUND

    c/o
      Ramius Capital Group, LLC (investment adviser)

    666
      Third
      Avenue, 26th Floor

    New
      York,
      NY 10017

    ATTN:
      Jeff Smith

    Telephone:
      Tel. 212-845-7900

    

    ROCKMORE
      INVESTMENT MASTER FUND LTD.

    150
      E
      58th St., 28th Floor

    New
      York,
      NY

    ATTN:
      Bryan Daly

    Telephone:
      212-258-2303

    Facsimile:
      212-258-2315

    

    
      	18.	
              LEGEND. 

            

    

    

    Until
      the
      termination of this Agreement in accordance with Section 8 hereof, the Borrower
      and each Subordinating Creditor will cause to be clearly, conspicuously and
      prominently inserted on the face of each Subordinated Loan Document as well
      as
      any replacements thereof, the following legend (or such other notice reasonably
      acceptable to the Agent) in substantially the form hereof:

    

    “This
      instrument and the rights and obligations evidenced hereby are subordinate
      in
      the manner and to the extent set forth in that certain Intercreditor Agreement
      (as the same may be amended or otherwise modified from time to time pursuant
      to
      the terms thereof, the “Intercreditor Agreement”), dated as of September 28,
      2007, among Hercules Technology Growth Capital, Inc. (the “Senior Creditor”) and
      each of Iroquois Capital LP, Cranshire Capital, L.P., Portside Growth and
      Opportunity Fund and Rockmore Investment Master Fund Ltd. (the “Subordinated
      Creditors”). Each holder of this instrument, by its acceptance hereof,
      irrevocably agrees to be bound by the provisions of the Intercreditor Agreement
      applicable to a “Subordinated Creditor” (as such term is defined in the
      Intercreditor Agreement), as if such holder were an original signatory thereto
      as a Subordinated Creditor for all purposes of the Intercreditor
      Agreement.”

     

    
      	19.	
              SEVERABILITY

            

    

     

    Wherever
      possible, each provision of this Agreement shall be interpreted in such manner
      as to be effective and valid under applicable law, but if any provision of
      this
      Agreement shall be prohibited by or invalid under applicable law, such provision
      shall be ineffective to the extent of such prohibition or invalidity, without
      invalidating the remainder of such provision or the remaining provisions of
      this
      Agreement.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	20.	
              GOVERNING
                LAW

            

    

     

    This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of California without regard to principles of conflict of laws that
      would cause the application of laws of any other jurisdiction.

     

    
      	21.	
              ASSIGNMENT

            

    

     

    This
      Agreement shall be binding upon Subordinated Creditor and its respective
      successors and assigns, and shall inure to the benefit of and be enforceable
      by
      Senior Creditor and its successors and assigns. 

     

    
      
        	22.	
                NO
                  THIRD PARTY
                  BENEFICIARIES

              

      

    

     

    Neither
      the Borrower and its successors and assigns nor any other Persons or entities
      are beneficiaries of any portion of this Agreement and shall not have any rights
      arising under this Agreement or the right to enforce any provision hereof.
      

     

    
      	23.	
              JUDICIAL
                REFERENCE

            

    

     

    Because
      disputes arising in connection with complex financial transactions are most
      quickly and economically resolved by an experienced and expert person and the
      parties wish applicable state and federal laws to apply (rather than arbitration
      rules), the parties desire that their disputes be resolved by a judge applying
      such applicable laws. EACH OF SUBORDINATED CREDITOR AND SENIOR CREDITOR AGREE
      THAT A JUDICIAL REFEREE WILL BE APPOINTED UNDER CALIFORNIA CODE OF CIVIL
      PROCEDURE SECTION 631 TO DETERMINE ANY FACTUAL ISSUES ANY CAUSE OF ACTION,
      CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM
      (COLLECTIVELY, “CLAIMS”)
      ASSERTED BY BORROWER, SUBORDINATED CREDITOR, OR SENIOR CREDITOR AGAINST THE
      OTHER PARTY OR PARTIES TO THIS AGREEMENT. SUBORDINATED CREDITOR AND SENIOR
      CREDITOR SHALL SELECT A SINGLE NEUTRAL REFEREE, WHO SHALL BE A RETIRED STATE
      OR
      FEDERAL JUDGE WITH AT LEAST FIVE YEARS OF JUDICIAL EXPERIENCE IN CIVIL MATTERS.
      IN THE EVENT THAT SUBORDINATED CREDITOR AND SENIOR CREDITOR CANNOT AGREE UPON
      A
      REFEREE, THE REFEREE SHALL BE APPOINTED BY THE COURT. SUBORDINATED CREDITOR
      AND
      SENIOR CREDITOR SHALL EQUALLY BEAR THE FEES AND EXPENSES OF THE REFEREE UNLESS
      THE REFEREE OTHERWISE PROVIDES IN THE STATEMENT OF DECISION. This agreement
      regarding the judicial referee extends to all such claims, including, without
      limitation, claims which involve persons or entities other than Borrower, the
      Subordinated Creditor, and Senior Creditor; claims which arise out of or are
      in
      any way connected to the relationships between or among Borrower, the
      Subordinated Creditor, and Senior Creditor; and any claims for damages, breach
      of contract, specific performance, or any equitable or legal relief of any
      kind.

    
       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

    

    
      	24.	
              COUNTERPARTS

            

    

     

    This
      Agreement and any amendments, waivers, consents or supplements hereto may be
      executed in any number of counterparts, and by different parties hereto in
      separate counterparts, each of which when so executed and delivered shall be
      deemed an original, but all of which counterparts together shall constitute
      but
      one and the same instrument.

     

    Signature
      page follows.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

      
        	 	
                SENIOR
                  CREDITOR:

              
	 	 
	 	
                Hercules
                  Technology Growth Capital, Inc.

              
	 	 
	 	
                Signature:

              	
                 

              
	 	
                Print Name: 

              	K.
                Nicholas Martitsch     
	 	
                Title:

              	
                Associate
                  General Counsel

              

      

    

    

      
        	 	
                SUBORDINATED
                  CREDITORS:

              
	 	 
	 	
                Iroquois
                  Capital LP

              
	 	 
	 	
                Signature:

              	 
	 	
                Print
                  Name:

              
	 	
                Title:

              

      

      

        
          	 	
                  Cranshire
                    Capital, L.P.

                
	 	 
	 	
                  Signature:

                	 
	 	
                  Print
                    Name:

                
	 	
                  Title:

                

        

        

          
            	 	
                    Portside
                      Growth and Opportunity Fund

                  
	 	 
	 	
                    Signature:

                  	 
	 	
                    Print
                      Name:

                  
	 	
                    Title:

                  

          

        

      

    

    

    
      	 	
              Rockmore
                Investment Master Fund Ltd.

            
	 	 
	 	
              Signature:

            	 
	 	
              Print
                Name:

            
	 	
              Title:

            

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    The
      undersigned hereby accepts and consents to the foregoing Agreement and agrees
      to
      be bound by all of the provisions thereof and to recognize all priorities and
      other rights granted by Subordinated Creditor thereby or thereunder to Senior
      Creditor and to pay Senior Creditor in accordance therewith.

     

    BORROWER:

    

      
        	
                Diomed
                  Holdings, Inc.

              	 
	 	 
	
                By:
                  

              	 	 
	
                Name:

              	
                 

              	 
	
                Title:

              	 	 
	
                Diomed,
                  Inc.

              	 
	 	 
	
                By:
                  

              	 	 
	
                Name:
                  

              	 	 
	
                Title:

              	 	 

      

    

     

     

    
      
        
        

      

      
        17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}]]