Exhibit 10.4
To the holders of the Class C Convertible
Preferred Stock (the "Class C Stock"), par
value $0.001 per share, of Diomed
Holdings, Inc. (the "Company"):
Exchange of Class C Preferred Stock
In order for the Company to comply with the terms of the Settlement of
Stipulation reached in Augenbaum v. Diomed Holdings, Inc., filed in the Delaware
Chancery Court on July 28, 2003, each of you severally agrees with the Company
as follows:
1. The Company will authorize the issuance of 20 shares of Class E
Preferred Stock, par value $0.001 per share (the "Class E Stock"). The
Class E Stock will each be preferred in liquidation to the extent that,
before any distribution is made to the holders of the Company Common
Stock, par value $0.001 per share ("Common Stock"), there will be
distributed pro rata to the holders of the issued and outstanding Class
E Stock and Class F Stock the amount of $108,469.00 per share as to
each issued and outstanding share of Class E Stock and $10,072.00 per
share as to each issued and outstanding share of Class F Stock. The
holders of the Common Stock will share in the remainder of the net
liquidation proceeds. The term "liquidation" will mean any liquidation,
dissolution or winding up of the Company, as well as any sale, lease,
exchange or other disposition of all or substantially all of the
Company's assets.
2. On execution of this agreement, you will tender all shares of Class C
Stock to the Company, and the Company will issue to you in exchange, an
equal number of shares of Class E Stock (the "Class E Shares").
3. Following tender of all shares of Class C Stock, the Class C Stock will
be eliminated by the filing of a Certificate of Elimination with the
Delaware Secretary of State.
4. Upon any sale, lease, exchange or other disposition of all or
substantially all of the Company's assets while your Class E Shares are
outstanding, you shall have the right to sell to the Company all of the
Class E Shares you own in exchange for 1,355,862 shares of Common Stock
per share of Class E Stock.
5. Upon the earlier of the approval by the Company's stockholders of the
issuance of the shares of Common stock to be issued under the
investment into the Company (the "Tranch II investment") or
consummation of the Tranch II investment, you shall have the right to
sell to the Company, and the Company shall have the right to purchase
from you, all of your Class E Shares in exchange for 1,355,862 shares
of Common Stock per share of Class E Stock.
6. To exercise any right under Paragraph 4 or 5 above any party shall give
written notice to the other as provided in the First Exchange
Agreement. The closing of any purchase or sale under Paragraph 4 or 5
above will occur at the Company's offices on the fifth business day
after notice is given or deemed given.
7. This letter agreement may be signed in separate counterparts, each of
which shall be one and the same agreement. This letter agreement shall
not be effective unless and until signed by each holder of the Class C
Stock. A facsimile transmission of this signed letter agreement shall
be legal and binding on all parties hereto.
8. This letter agreement represents the final agreement among the parties
hereto and may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the parties or by
prior or contemporaneous written agreements. This letter agreement may
not be amended except by a writing signed by all of the parties hereto.
If any provision of this letter agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of the remainder of
this letter agreement or the validity or enforceability of this letter
agreement in any other jurisdiction.
9. This letter agreement shall be governed by the internal laws of the
State of New York without regard to conflicts of laws principles.
Please indicate your agreement with the foregoing by signing this
letter in the space provided below, at which time this letter shall be a binding
agreement among us.
Yours truly,
DIOMED HOLDINGS, INC.
/s/ JAMES A. WYLIE, JR.
By_________________________
James A. Wylie, Jr.
President and Chief Executive Officer
Accepted and agreed to:
GIBRALT U.S., Inc.
By /s/ JOHNNY CIAMPI
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John Ciampi
Authorized Person
/s/ MORRIS BELZBERG
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Morris Belzberg
/s/ STEVEN SCHRAIBERG
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Steven Shraiberg
/s/ CHARLES DIAMOND
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Charles Diamond