This Guaranty and the rights, remedies, representations and obligations of the
parties hereto are subject to the terms and conditions of that certain
Intercreditor Agreement between Hercules Technology Growth Capital, Inc. and
each of Iroquois Capital LP, Cranshire Capital, L.P., Portside Growth and
Opportunity Fund and Rockmore Investment Master Fund Ltd. dated as of September
28, 2007.
 
GUARANTY
 
THIS GUARANTY, dated as of September 28, 2007 (this “Guaranty”), made by Diomed,
Inc., a Delaware corporation (the “Guarantor”), in favor of the holders (the
“Holders”) of the Amended and Restated Variable Rate Secured Subordinated
Convertible Debentures due October 2008 (the “Debentures”) issued by Diomed
Holdings, Inc., a Delaware corporation (“Borrower”).
 
WITNESSETH:
 
WHEREAS, Grantor is a subsidiary of Borrower and, as such, will benefit by
virtue of the financial accommodations extended to Borrower by the Holders; and;
 
WHEREAS, in order to induce the Holders to enter into the Debentures and any
other instruments, documents or agreements, as amended from time to time, now or
hereafter securing Borrower’s indebtedness to the Holders arising under the
Debentures (collectively, the “Security Instruments”) and the other Loan
Documents (defined below) and to extend the financial accommodations to the
Borrower pursuant to the Debentures, and in consideration thereof, the Guarantor
has agreed to a guaranty of the Guaranteed Obligations (defined below) as set
forth herein. This Guaranty, the Guarantor Pledge and Security Agreement, the
Security Instruments, together with the Debenture and any and all amendments and
modifications thereof, are individually referred to as a “Loan Document” and
collectively referred to as the “Loan Documents.”
 
NOW, THEREFORE, in consideration of the foregoing, the Guarantor hereby agrees
as follows:
 
SECTION 1. Definitions. Reference is hereby made to the Debentures for a
statement of the terms thereof. All terms used in this Guaranty which are
defined in the Debentures and not otherwise defined herein shall have the same
meanings herein as set forth therein. In addition, the following terms shall
have the meanings specified below, such meanings to be applicable equally to
both the singular and the plural forms of such terms:
 

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“Bankruptcy Code” means the United States Bankruptcy Code, as in effect from
time to time.
 
“Collateral” shall have the meaning assigned to the term “Collateral” in
Guarantor Pledge and Security Agreement.
 
“Guarantor Pledge and Security Agreement” means the Pledge and Security
Agreement made by Guarantor in favor of the Holders, substantially in the form
of Exhibit A, securing the Guaranteed Obligations and delivered to the Holders.
 
“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other bankruptcy or
insolvency law, assignments for the benefit of creditors, formal or informal
moratoria, compositions, extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar 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.
 
“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, other entity or government.
 
SECTION 2. Guaranty. The Guarantor hereby (a) unconditionally and irrevocably
guarantees the punctual payment, as and when due and payable, by stated maturity
or otherwise, of all obligations of Borrower now or hereafter existing under any
Loan Document, whether for principal, interest (including, without limitation,
all interest that accrues after the commencement of any Insolvency Proceeding,
whether or not a claim for post-filing interest is allowed in such proceeding),
fees, premiums, commissions, reimbursements of expenses, indemnifications or
otherwise (such obligations, to the extent not paid by the Borrower, being
hereinafter referred to as the “Guaranteed Obligations”), and (b) agrees to pay
any and all expenses (including reasonable counsel fees and expenses) incurred
by the Holders in enforcing any rights under this Guaranty (the “Guaranty
Expenses”). Without limiting the generality of the foregoing, the Guarantor’s
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by the Borrower to the Holders under any Loan
Document but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Borrower.
 
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SECTION 3. Guaranty Absolute; Continuing Guaranty; Assignments.
 
(a) The Guarantor guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Holders with respect thereto.
The obligations of the Guarantor under this Guaranty are independent of the
Guaranteed Obligations, and a separate action or actions may be brought and
prosecuted against the Guarantor to enforce such obligations, irrespective of
whether any action is brought against the Borrower or whether the Borrower is
joined in any such action or actions. The liability of the Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional irrespective of, and
the Guarantor hereby irrevocably waives, to the fullest extent permitted by
applicable law, any defenses it may now or hereafter have in any way relating
to, any or all of the following:
 
(i) any lack of validity or enforceability of any Loan Document or any agreement
or instrument relating thereto;
 
(ii) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations, or any other amendment or waiver
of or any consent to departure from any Loan Document, including, without
limitation, any increase in the Guaranteed Obligations resulting from the
extension of additional credit to the Borrower or otherwise;
 
(iii) any taking, exchange, release or non-perfection of any Collateral, or any
taking, release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;
 
(iv) any change, restructuring or termination of the corporate, limited
liability company or partnership structure or existence of the Borrower; or
 
(v) any other circumstance (including any statute of limitations) or any
existence of or reliance on any representation by any Holder that might
otherwise constitute a defense available to, or a discharge of, the Borrower or
any other guarantor or surety, other than payment in full of the Guaranteed
Obligations.
 
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This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Holder or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as
though such payment had not been made.
 
(b) This Guaranty is a continuing guaranty and shall remain in full force and
effect until the later of (i) the payment in full of the Guaranteed Obligations
and all Guaranty Expenses and (ii) the Maturity Date.
 
SECTION 4. Demand on the Guarantor. If (a) the Borrower fails to make any
payment under the Loan Documents when due, or (b) an Event of Default or a
Guaranty Default has occurred, the Holders may make written demand on the
Guarantor under this Guaranty for payment of the Guaranteed Obligations, which
shall be paid by the Guarantor, in a single payment calculated as of the date of
actual payment thereof, to the Holders within 5 days after receipt of such
written demand therefor.
 
SECTION 5. Waivers. The Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice (except as provided by Section 4 hereof) with
respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that the Holders exhaust any right or take any action against the
Borrower or any other Person or any Collateral. The Guarantor waives all
set-offs and counterclaims and presentment, protest, notice, filing of claims
with a court in the event of any Insolvency Proceeding with respect to the
Borrower or any other Person, demand or action on delinquency in respect of the
Guaranteed Obligations or any part thereof. The Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated herein and that the waiver set forth in this Section 5 is knowingly
made in contemplation of such benefits. The Guarantor hereby waives any right to
revoke this Guaranty, and acknowledges that this Guaranty is continuing in
nature and applies to all Guaranteed Obligations, whether existing now or in the
future.
 
SECTION 6. Subrogation. The Guarantor will not exercise any rights that it may
now or hereafter acquire against the Borrower or any other guarantor that arise
from the existence, payment, performance or enforcement of the Guarantor’s
obligations under this Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Holders against the Borrower
or any other guarantor or any Collateral, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from the Borrower or any other
guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security solely on account of such claim, remedy or
right, unless and until all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full and the Debentures
shall have been terminated. If any amount shall be paid to the Guarantor in
violation of the immediately preceding sentence at any time prior to the later
of the date on which all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full and the Debentures
shall have been terminated, such amount shall be held in trust for the benefit
of the Holders and shall forthwith be paid to the Holders, to be credited and
applied to the Guaranteed Obligations and all other amounts payable under this
Guaranty, whether matured or unmatured, in accordance with the terms of this
Guaranty and the Debentures, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter arising.
 
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SECTION 7. Representations and Warranties; No Event of Default. The following
statements shall be true and correct: (i) the representations and warranties of
the Guarantor herein and in each certificate or other writing delivered by the
Guarantor to the Holders pursuant hereto are true and correct and (ii) no Event
of Default shall have occurred and be continuing or would result from this
Guaranty becoming effective in accordance with its terms.
 
SECTION 8. Delivery of Documents. The Holders shall have received the following,
each in form and substance satisfactory to the Holders:
 
(i) a counterpart to this Guaranty that bears the signature of the Guarantor;
 
(ii) a copy of the resolutions of the Guarantor, certified as of the date
hereof, authorizing the execution, delivery and performance by the Guarantor of
this Guaranty;
 
(iii) a certificate of an authorized officer of the Guarantor, certifying the
names and true signatures of the representatives of the Guarantor authorized to
sign this Guaranty together with evidence of the incumbency of such authorized
officers;
 
(iv) a certificate of the appropriate official(s) of the jurisdiction of
organization and each jurisdiction of foreign qualification, if any, of the
Guarantor certifying as to the subsistence in good standing of, and the payment
of taxes by, the Guarantor in such jurisdiction; and
 
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(v) a true and complete copy of the charter documents of the Guarantor certified
as of a recent date not more than 30 days prior to the date hereof by an
appropriate official of the jurisdiction of organization of the Guarantor which
shall set forth the same complete name of the Guarantor as is set forth herein
and the organizational number of the Guarantor, if an organizational number is
issued in such jurisdiction.
 
SECTION 9. Representations and Warranties. The Guarantor hereby represents and
warrants as follows:
 
(a) The Guarantor (i) is a corporation, duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation as set
forth on the first page hereof, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and to
execute and deliver this Guaranty and to consummate the transactions
contemplated hereby and (iii) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the properties owned or
leased by it or in which the transaction of its business makes such
qualification necessary.
 
(b) The execution, delivery and performance by the Guarantor of this Guaranty
(i) have been duly authorized by all necessary action, (ii) do not and will not
contravene its certificate of incorporation or by-laws, or any applicable law or
any material contractual restriction binding on or otherwise affecting it or its
properties, (iii) do not and will not result in or require the creation of any
Lien (other than pursuant to any Loan Document) upon or with respect to any of
its properties, and (iv) do not and will not result in any default,
noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of
any permit, license, authorization or approval which is necessary to the conduct
of its business.
 
(c) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority is required in connection with the due
execution, delivery and performance by the Guarantor of this Guaranty.
 
(d) This Guaranty is a legal, valid and binding obligation of the Guarantor,
enforceable against it in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws and general principles affecting the enforcement of creditor’s rights
generally.
 
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(e) There is no pending or, to the knowledge of the Guarantor, threatened, in
writing, action, suit or proceeding affecting it or to which any of its
properties is subject, before any court or other governmental authority or any
arbitrator that (i) if adversely determined, which could reasonably be expected
to result in a material adverse effect or (ii) relates to this Guaranty or any
transaction contemplated hereby.
 
(f) The Guarantor (i) has read and understands the terms and conditions of the
Debentures and the other Loan Documents, and (ii) now has independent means of
obtaining information concerning the affairs, financial condition and business
of the Borrower, and has no need of, or right to obtain from the Holders, any
credit or other information concerning the affairs, financial condition or
business of the Borrower that may come under the control of the Holders.
 
(g)  The Guarantor hereby acknowledges and agrees that the Holders have extended
credit to the Borrower in reliance upon (i) the obligations of the Guarantor
hereunder.
 
SECTION 10. Covenants. The Guarantor hereby covenants and agrees as follows:
 
(a) The Guarantor shall (i) maintain and preserve in full force and effect its
existence and (ii) comply in all respects with all requirements of law
applicable in respect of the conduct of its business and the ownership and
operation of its properties, except to the extent that the failure to so comply
could not reasonably be expected to result in a material adverse effect.
 
(b) The Guarantor shall not enter into any agreement or any amendment or
modification of any organizational document or any other agreement, instrument
(i) that restricts the ability of the Guarantor to use its assets to pay its
obligations hereunder or (ii) that would otherwise adversely affect the rights
of the Holders hereunder.
 
SECTION 11. Guaranty Defaults. Each of the following events shall constitute a
“Guaranty Default” hereunder:
 
(a) If the Guarantor fails to perform, keep, or observe any term, provision,
condition, covenant, or agreement contained in this Guaranty or the Guarantor
Pledge and Security Agreement;
 
(b) There shall be a period of 5 days after any material portion of the
Guarantor’s assets is attached, seized, subjected to a writ or distress warrant,
levied upon, or comes into the possession of any third Person;
 
(c) If an Insolvency Proceeding is commenced by the Guarantor;
 
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(d) If an Insolvency Proceeding is commenced against the Guarantor, and any of
the following events occur: (i) the Guarantor consents to the institution of the
Insolvency Proceeding against it, (ii) the petition commencing the Insolvency
Proceeding is not timely controverted, (iii) the petition commencing the
Insolvency Proceeding is not dismissed within 60 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
the Holders (including any agent, successor or assign) shall be relieved of
their obligation to extend credit under the Debentures, (iv) an interim trustee
is appointed to take possession of all or any substantial portion of the
properties or assets of, or to operate all or any substantial portion of the
business of, the Guarantor, or (e) an order for relief shall have been entered
therein;
 
(e) If the Guarantor is enjoined, restrained, or in any way prevented by court
order from continuing to conduct all or any material part of its business
affairs;
 
(f) If a notice of Lien, levy, or assessment is filed of record with respect to
the Guarantor’s assets by the United States or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental
agency, or if any taxes or debts owing at any time hereafter to any one or more
of such entities becomes a Lien, whether choate or otherwise, upon the
Guarantor’s assets to secure an aggregate amount in excess of $250,000 and the
same is not paid on or before the payment date thereof;
 
(g) If a judgment or other claim for an amount in excess of $250,000 becomes a
Lien or encumbrance upon any material portion of the Guarantor’s properties or
assets;
 
(h) If any material misstatement or misrepresentation exists now or hereafter in
any warranty, representation, statement, or record made to the Holders by the
Guarantor, or any officer, employee, agent, or director of the Guarantor;
 
(i) If there is a loss, suspension or revocation of, or failure to renew, any
license or permit now held or hereafter acquired by the Guarantor and such loss,
suspension, revocation or failure to renew could reasonably be expected result
in a material impairment in the guarantor’s ability to perform their obligations
under this Guaranty;
 
(j) If the obligation of the Guarantor under this Guaranty is limited or
terminated by operation of law or by the Guarantor hereunder; or
 
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(k) If any material provision of this Guaranty shall at any time for any reason
be declared to be null and void, or the validity or enforceability thereof shall
be contested by the Guarantor or any other Person, or a proceeding shall be
commenced by the Guarantor or any other Person, or by any governmental authority
having jurisdiction over the Guarantor, seeking to establish the invalidity or
unenforceability hereof, or the Guarantor shall deny that it has any liability
or obligation purported to be created hereunder;
 
then, and in such event, the Holders shall have the rights and remedies set
forth in Section 4 of this Guaranty and the other Loan Documents.
 
SECTION 12. Right of Set-off. Upon the occurrence and during the continuance of
any Event of Default or any Guaranty Default, the Holders may, and are hereby
authorized to, at any time and from time to time, without notice to the
Guarantor (any such notice being expressly waived by the Guarantor) and to the
fullest extent permitted by law, set-off and apply any indebtedness at any time
owing by the Holders to or for the credit or the account of the Guarantor
against any and all obligations of the Guarantor now or hereafter existing under
this Guaranty or any other Loan Document, irrespective of whether or not the
Holders shall have made any demand under this Guaranty or any other Loan
Document and although such obligations may be contingent or unmatured. The
Holders agree to provide prompt written notice to the Guarantor after any such
set-off and application made by such Holder, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Holders under this Section 12 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Holders may have under this Guaranty or any other Loan Document, at law or
otherwise.
 
SECTION 13. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be mailed (by certified mail, postage
prepaid and return receipt requested), telecopied or delivered by hand, Federal
Express or other reputable overnight courier, if to the Guarantor, to it at its
address set forth on the signature page hereto, and if to the Holders, to them
at their address set forth in the Debentures; or as to any such Person, at such
other address as shall be designated by such Person in a written notice to such
other Person complying as to delivery with the terms of this Section 13. All
such notices and other communications shall be effective, (a) if mailed
(certified mail, postage prepaid and return receipt requested), when received or
3 days after deposited in the mails, whichever occurs first, (b) if telecopied,
when transmitted and confirmation received, or (c) if delivered by hand, Federal
Express or other reputable overnight courier, upon delivery.
 
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SECTION 14. CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE . ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE GUARANTOR HEREBY IRREVOCABLY ACCEPTS IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE GUARANTOR HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF
STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF
ANY SUCH ACTION OR PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT ITS ADDRESS FOR NOTICES AS SET FORTH ON THE SIGNATURE
PAGE HERETO OR TO THE SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH SERVICE
TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING. THE GUARANTOR AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE HOLDERS TO SERVICE
OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS
OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY OTHER JURISDICTION. THE
GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS GUARANTY.
 
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SECTION 15. WAIVER OF JURY TRIAL, ETC . THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING THIS PLEDGE AGREEMENT, ANY LOAN DOCUMENT OR ANY
AMENDMENT, MODIFICATION OR OTHER DOCUMENT NOW OR HEREAFTER DELIVERED IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION,
PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY
THE HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS GUARANTY AND AGREES THAT ANY SUCH
ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
 
SECTION 16. Taxes.
 
(a) All payments made by the Guarantor hereunder shall be made without set-off,
counterclaim, deduction or other defense. All such payments shall be made free
and clear of and without deduction for any present or future taxes. If the
Guarantor shall be required to deduct or to withhold any taxes from or in
respect of any amount payable hereunder,
 
(i) the amount so payable shall be increased to the extent necessary so that
after making all required deductions and withholdings (including taxes on
amounts payable to the Holders pursuant to this sentence) the Holders receive an
amount equal to the sum they would have received had no such deduction or
withholding been made,
 
(ii) the Guarantor shall make such deduction or withholding,
 
(iii) the Guarantor shall pay the full amount deducted or withheld to the
relevant taxation authority in accordance with applicable law, and
 
(iv) as promptly as possible thereafter, the Guarantor shall send the Holders an
official receipt (or, if an official receipt is not available, such other
documentation as shall be satisfactory to the Holders) showing payment. In
addition, the Guarantor agrees to pay any present or future taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, recordation or filing of, or otherwise with
respect to, this Guaranty.
 
(b) The Guarantor hereby indemnifies and agrees to hold the Holders harmless
from and against taxes (including, without limitation, any taxes imposed by any
jurisdiction on amounts payable under this Section 16) paid by the Holders and
any liability (including penalties, interest and expenses for nonpayment, late
payment or otherwise) arising therefrom or with respect thereto, whether or not
such taxes were correctly or legally asserted. This indemnification shall be
paid within 30 days from the date on which any Holder makes written demand
therefor, which demand shall identify the nature and amount of taxes.
 
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(c) If the Guarantor fails to perform any of its obligations under this
Section 16, the Guarantor shall indemnify the Holders for any taxes, interest or
penalties that may become payable as a result of any such failure. The
obligations of the Guarantor under this Section 16 shall survive the termination
of this Guaranty and the payment of the Guaranteed Obligations and all other
amounts payable hereunder.
 
SECTION 17. Miscellaneous.
 
(a) The Guarantor will make each payment hereunder in lawful money of the United
States of America and in immediately available funds to the Holders, for the
benefit of the Holders, at such address specified by the Holders from time to
time by notice to the Guarantor.
 
(b) No amendment or waiver of any provision of this Guaranty and no consent to
any departure by the Guarantor therefrom shall in any event be effective unless
the same shall be in writing and signed by the Guarantor and the Holders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
 
(c) No failure on the part of the Holders to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right
hereunder or under any Loan Document preclude any other or further exercise
thereof or the exercise of any other right. The rights and remedies of the
Holders provided herein and in the other Loan Documents are cumulative and are
in addition to, and not exclusive of, any rights or remedies provided by law.
The rights of the Holders under any Loan Document against any party thereto are
not conditional or contingent on any attempt by the Holders to exercise any of
their rights under any other Loan Document against such party or against any
other Person.
 
(d) Any provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
 
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(e) This Guaranty shall (i) be binding on the Guarantor and the Holders and
their respective successors and assigns, and (ii) inure, together with all
rights and remedies of the Holders hereunder, to the benefit of and be
enforceable by the Holders, and their respective successors, transferees and
assigns. Without limiting the generality of clause (ii) of the immediately
preceding sentence, any Holder may assign or otherwise transfer its rights and
obligations under the Debentures or any other Loan Document to any other Person
in accordance with the terms of the Debentures, and such other Person shall
thereupon become vested with all of the benefits in respect thereof granted to
the Holders herein or otherwise. The Guarantor agrees that each participant
shall be entitled to the benefits of Section 16 with respect to its
participation in any portion of the Guaranteed Obligations as if it was a
Holder. None of the rights or obligations of the Guarantor hereunder may be
assigned or otherwise transferred without the prior written consent of the
Holders.
 
(f) This Guaranty and the other Loan Documents represent the entire agreement of
the Guarantor and the Holders with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the
Holders relative to the subject matter thereof not expressly set forth or
referred to herein or in the other Loan Documents.
 
(g) This Guaranty may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Guaranty by telecopier or
electronic transmission shall be equally as effective as delivery of an original
executed counterpart of this Guaranty.
 
(h) Section headings herein are included for convenience of reference only and
shall not constitute a part of this Guaranty for any other purpose.
 
(i) THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
 
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed by an
officer thereunto duly authorized, as of the date first above written.
 
13

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GUARANTOR:
 
DIOMED, INC.
     
By:
 
Name:
David B. Swank
Title:
Chief Financial Officer

Address:
One Dundee Park
 
Andover, MA 01810
Attention:
David B. Swank, Chief Financial Officer
Telephone:
978-824-1823
Facsimile:
978-475-8488

HOLDERS:
 
IROQUOIS CAPITAL LP
     
By:
 
Name:
 
Title:
 

Address:
         
Attention:
 
Telephone:
 
Facsimile:
 

 
14

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CRANSHIRE CAPITAL, L.P.
     
By:
 
Name:
 
Title:
 

Address:
         
Attention:
 
Telephone:
 
Facsimile:
 

PORTSIDE GROWTH AND OPPORTUNITY
FUND
     
By:
 
Name:
 
Title:
 

Address:
         
Attention:
 
Telephone:
 
Facsimile:
 

 
15

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ROCKMORE INVESTMENT MASTER FUND
LTD.
   
By:
 
Name:
 
Title:
 

Address:
         
Attention:
 
Telephone:
 
Facsimile:
 

16

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EXHIBIT A

Guarantor Pledge and Security Agreement
 

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