DIOMED HOLDINGS INC
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>ex-10_3.txt
<TEXT>

                             UNCONDITIONAL GUARANTY


         For and in consideration of certain loans by SILICON VALLEY BANK, a
California-chartered bank, with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 and with a loan production office located
at One Newton Executive Park, 2221 Washington Street, Suite 200, Newton,
Massachusetts 02462, doing business under the name "Silicon Valley East (the
"Bank") to DIOMED, INC., a Delaware corporation (hereinafter, the "Borrower"),
which loans were made pursuant to a certain Loan and Security Agreement between
Borrower and Bank dated June 8, 2004 as may be amended from time to time
(hereinafter, the "Agreement"), the undersigned guarantor, DIOMED HOLDINGS,
INC., a Delaware corporation with its principal office at One Dundee Park,
Andover, MA 01810 ("Guarantor"), hereby unconditionally and irrevocably
guarantees the prompt and complete payment of all amounts that Borrower owes to
Bank under the Agreement and performance by Borrower of the Agreement and any
other agreements now existing or hereafter arising between Borrower and Bank in
connection with the Agreement, as each may be amended from time to time
(collectively referred to as the "Agreements"), in strict accordance with their
respective terms.

1.       If Borrower does not perform its obligations under the Agreements
         beyond all cure periods, if any, Guarantor will immediately pay all
         amounts due (including, without limitation, all principal, interest,
         and fees) and satisfy all Borrower's obligations under the Agreements.


2.       These obligations are independent of Borrower's obligations and
         separate actions may be brought against Guarantor (whether action is
         brought against Borrower or whether Borrower is joined in the action).
         Guarantor's liability is not contingent on the genuineness or
         enforceability of the Agreements.


3.       Bank may, without notice to Guarantor and without affecting Guarantor's
         obligations under this Guaranty: (a) renew, extend, or otherwise change
         the terms of the Agreements; (b) take security for the payment of this
         Guaranty or the Agreements; (c) exchange, enforce, waive and release
         any security; and (d) apply the security and direct its sale as Bank,
         in its discretion, chooses.


4.       Guarantor waives:


a.       Any right to require Bank to: (i) proceed against Borrower or any other
         person; (ii) proceed against or exhaust any security; or (iii) pursue
         any other remedy. Bank may exercise or not exercise any right or remedy
         it has against Borrower or any security it holds (including the right
         to foreclose by judicial or non-judicial sale) without affecting
         Guarantor's liability.


b.       Any defenses from disability or other defense of Borrower or from the
         cessation of Borrowers liabilities.


c.       Any setoff, defense or counterclaim against Bank.


d.       Any defense from the absence, impairment or loss of any right of
         reimbursement or subrogation or any other rights against Borrower.
         Until Borrower's obligations to Bank in respect of the Agreements, have
         been paid, Guarantor has no right of subrogation or reimbursement or
         subrogation or other rights against Borrower.

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e.       Any right to enforce any remedy that Bank has against Borrower.


f.       Any rights to participate in any security held by Bank.


g.       Any demands for performance, notices of nonperformance or of new or
         additional indebtedness. Guarantor is responsible for being and keeping
         itself informed of Borrower's financial condition. Unless Guarantor
         requests particular information, Bank has no duty to provide
         information to Guarantor.


5.       Guarantor acknowledges that, to the extent Guarantor has or may have
         rights of subrogation or reimbursement against Borrower for claims
         arising out of this Guaranty, those rights may be impaired or destroyed
         if Bank elects to proceed against any real property security of
         Borrower by non-judicial foreclosure. That impairment or destruction
         could, under certain judicial cases and based on equitable principles
         of estoppel, give rise to a defense by Guarantor against its
         obligations under this Guaranty. Guarantor waives that defense and any
         others arising from Bank's election to pursue non-judicial foreclosure.


6.       If Borrower becomes insolvent or is adjudicated bankrupt or files a
         petition for reorganization or similar relief under the United States
         Bankruptcy Code, or if a petition is filed against Borrower and/or any
         obligation under the Agreements is terminated or rejected, or any
         obligation of Borrower is modified or if Borrower's obligations are
         avoided Guarantor's liability will not be affected and its liability
         will continue. If Bank must return any payment because of the
         insolvency, bankruptcy or reorganization of Borrower, Guarantor or any
         other guarantor, this Guaranty will remain effective or be reinstated.


7.       Guarantor subordinates any indebtedness of Borrower it holds to Bank;
         and upon the occurrence and during the continuance of an Event of
         Default (as defined in the Agreement) Guarantor will collect, enforce
         and receive payments as Bank's trustee and will pay Bank those payments
         without reducing or affecting its liability under this Guaranty.


8.       Guarantor will pay Bank's reasonable attorneys' fees and other costs
         and expenses incurred enforcing this Guaranty. This Guaranty may not be
         waived, revoked or amended without Bank's prior written consent. If any
         provision of this Guaranty is unenforceable, all other provisions
         remain effective. This Guaranty represents the entire agreement among
         the parties about this guaranty. No prior dealings, no usage of trade,
         and no parol or extrinsic evidence may supplement or vary this
         Guaranty. Bank may assign this Guaranty to a party to which Bank
         assigns the Agreements. This Guaranty benefits Bank, its successors and
         assigns. This Guaranty is in addition to any other guaranties Bank
         obtains.


9.       Guarantor represents and warrants that (i) it has taken all action
         necessary to authorize execute, deliver and perform this Guaranty; (ii)
         execution, delivery and performance of this Guaranty do not conflict
         with any organizational documents or agreements to which it is a party;
         and (iii) this Guaranty is a valid and binding obligation, enforceable
         against Guarantor according to its terms.

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10.      Guarantor will do all of the following:


a.       Maintain its corporate existence, remain in good standing in Delaware
         and continue to qualify in each jurisdiction in which the failure to
         qualify could have a material adverse effect on the financial
         condition, operations or business. Maintain all licenses, approvals,
         and agreements, the loss of which could have a material adverse effect
         on its financial condition, operations or business.


b.       Comply with all statutes and regulations if non-compliance could
         adversely affect its financial condition, operations or business.


c.       Execute other instruments and take action Bank reasonably requests to
         effect the purposes of this Agreement.


11.      Guarantor hereby grants to Bank, a lien, security interest and right of
         setoff as security for all obligations to Bank, whether now existing or
         hereafter arising upon and against all deposits, credits, collateral
         and property, now or hereafter in the possession, custody, safekeeping
         or control of Bank or any entity under the control of Bank or in
         transit to any of them. At any time after the occurrence and during the
         continuance of an Event of Default (as defined in the Agreement),
         without demand or notice, Bank may set off the same or any part thereof
         and apply the same to any liability or obligation of Guarantor even
         though unmatured and regardless of the adequacy of any other collateral
         securing the loan. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS
         RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES
         THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH
         DEPOSITS, CREDITS OR OTHER PROPERTY OF THE GUARANTOR, ARE HEREBY
         KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.


12.      Massachusetts law governs this Guaranty without regard to principles of
         conflicts of law. Guarantor and Bank each submit to the exclusive
         jurisdiction of the State and Federal courts in Massachusetts;
         provided, however, that if for any reason Bank cannot avail itself of
         such courts in the Commonwealth of Massachusetts, Guarantor accepts
         jurisdiction of the courts and venue in Santa Clara County, California.
         NOTWITHSTANDING THE FOREGOING, THE BANK SHALL HAVE THE RIGHT TO BRING
         ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR OR ITS PROPERTY IN THE
         COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS NECESSARY OR
         APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE
         ENFORCE THE BANK'S RIGHTS AGAINST THE GUARANTOR OR ITS PROPERTY.
         GUARANTOR AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM
         OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE
         LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT,
         TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL
         INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY
         HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

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         IN WITNESS WHEREOF, the undersigned Guarantor has executed this
Guaranty as an instrument under seal under the laws of the Commonwealth of
Massachusetts, as of this 8th day of June, 2004.


                               DIOMED HOLDINGS, INC.



                               By:___________________________________
                                   David B. Swank, Chief Financial Officer


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</DOCUMENT>
