EXHIBIT 10.4


                          REGISTRATION RIGHTS AGREEMENT

      This Registration  Rights Agreement (this "Agreement") is made and entered
into as of  _____________  ___,  2006,  by and among  Diomed  Holdings,  Inc., a
Delaware  corporation (the "Company"),  and the purchasers signatory hereto (the
"Purchasers").

      This  Agreement is made  pursuant to the  Securities  Purchase  Agreement,
dated  as of  ______________  ___,  2006,  by and  among  the  Company  and  the
Purchasers (the "Purchase Agreement").

      NOW, THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby  acknowledged,  the Company and the  Purchasers,
intending to be legally bound, hereby agree as follows:

1.    Definitions.

      Capitalized  terms used and not otherwise  defined herein that are defined
in the  Purchase  Agreement  shall  have the  meanings  given  such terms in the
Purchase  Agreement.  As used in this Agreement,  the following terms shall have
the following meanings:

            "Advice" shall have the meaning set forth in Section 6(d).

            "AMEX" shall have the meaning set forth in Section 2(b).

            "Effectiveness Date" means, with respect to the initial Registration
      Statement required to be filed hereunder, the 120th calendar day following
      the date hereof.

            "Effectiveness  Period"  shall have the meaning set forth in Section
      2(a).

            "Event" shall have the meaning set forth in Section 2(b).

            "Event Date" shall have the meaning set forth in Section 2(b).

            "Filing  Date"  means,  with  respect  to the  initial  Registration
      Statement  required  hereunder,  the 45th  calendar day following the date
      hereof.

            "Holder" or "Holders"  means the holder or holders,  as the case may
      be, from time to time, of Registrable Securities.

            "Indemnified  Party"  shall  have the  meaning  set forth in Section
      5(c).

            "Indemnifying  Party"  shall have the  meaning  set forth in Section
      5(c).



<PAGE>

            "Inspectors" shall have the meaning set forth in Section 3(i).

            "Losses" shall have the meaning set forth in Section 5(a).

            "NASD" shall have the meaning set forth in Section 3(h).

            "National Market" shall have the meaning set forth in Section 2(b).

            "NYSE" shall have the meaning set forth in Section 2(b).

            "Prospectus"  means  the  prospectus  included  in the  Registration
      Statement (including,  without limitation,  a prospectus that includes any
      information  previously  omitted  from a  prospectus  filed  as part of an
      effective  registration  statement in reliance upon Rule 430A  promulgated
      under the  Securities Act or any  preliminary  prospectus if used prior to
      the date of the Registration Statement), as amended or supplemented by any
      prospectus  supplement,  with  respect to the terms of the offering of any
      portion  of  the  Registrable   Securities  covered  by  the  Registration
      Statement,  and all other  amendments and  supplements to the  Prospectus,
      including  post-effective  amendments,  and all material  incorporated  by
      reference or deemed to be incorporated by reference in such Prospectus.

            "Records" shall have the meaning set forth in Section 3(i).

            "Registrable Securities" means (i) all of the shares of Common Stock
      issuable  upon  exchange  in full of the 2006  Preferred  Stock,  (ii) all
      Warrant  Shares,  (iii) any  securities  issued or issuable upon any stock
      split,  dividend or other distribution  recapitalization  or similar event
      with respect to the foregoing and (iv) any additional  shares  issuable in
      connection with any antidilution provisions in the Par Warrants.

            "Registration   Statement"  means  the   registration   statement(s)
      required  to  be  filed  hereunder  (including,  without  limitation,  any
      registration  statement  required to be filed under  Section 2(d) hereof),
      including the Prospectus,  amendments and supplements to such registration
      statement or Prospectus, including pre- and post-effective amendments, all
      exhibits thereto, and all material  incorporated by reference or deemed to
      be incorporated by reference in the registration statement.

            "Registration  Trigger  Date"  shall have the  meaning  set forth in
      Section 3(b).

            "Rule 415" means Rule 415 promulgated by the Commission  pursuant to
      the Securities  Act, as such rule may be amended from time to time, or any
      similar rule or  regulation  hereafter  adopted by the  Commission  having
      substantially the same purpose and effect as such rule.

            "Rule 424" means Rule 424 promulgated by the Commission  pursuant to
      the Securities  Act, as such rule may be amended from time to time, or any
      similar rule or  regulation  hereafter  adopted by the  Commission  having
      substantially the same purpose and effect as such rule.


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<PAGE>

            "Selling Holder  Questionnaire"  shall have the meaning set forth in
      Section 3(a).

            "Small Cap Market" shall have the meaning set forth in Section 2(b).

            "Warrant  Shares"  means the shares of Common  Stock  issuable  upon
      exercise of the Par Warrants.

2.    Resale Registration.

      (a) The Company  shall  prepare  promptly and file with the  Commission as
soon  as  practicable,  but  in  no  event  after  the  Filing  Date,  a  resale
Registration Statement covering the resale of the Registrable Securities on such
Filing Date for an offering to be made on a  continuous  basis  pursuant to Rule
415. The Registration  Statement shall be on Form SB-2 (except if the Company is
not then  eligible to register  for resale the  Registrable  Securities  on Form
SB-2, in which case such  registration  shall be on another  appropriate form in
accordance  herewith)  and  shall  contain  (unless  otherwise  directed  by the
Holders)  substantially  the "Plan of Distribution"  attached hereto as Annex A.
Subject to the terms of this  Agreement,  the Company shall use its best efforts
to  cause  the  Registration  Statement  to  be  declared  effective  under  the
Securities Act as soon as practicable  within 90 days from the Closing Date, but
in any event prior to the applicable  Effectiveness Date, and shall use its best
efforts to keep such  Registration  Statement  continuously  effective under the
Securities Act until all  Registrable  Securities  covered by such  Registration
Statement have been sold or may be sold without volume restrictions  pursuant to
Rule 144(k) as determined by the Company  Counsel  pursuant to a written opinion
letter to such effect,  addressed and acceptable to the Company's transfer agent
and  the  affected  Holders  (the  "Effectiveness  Period").  Such  Registration
Statement  (including  any amendments or  supplements  thereto and  prospectuses
contained therein and all documents incorporated by reference therein) (A) shall
comply in all material  respects with the requirements of the Securities Act and
the rules and regulations of the Commission promulgated thereunder and (B) shall
not contain any untrue  statement of a material fact or omit to state a material
fact required to be stated therein,  or necessary to make the statements therein
not  misleading.  The financial  statements of the Company  included in any such
Registration  Statement or incorporated by reference therein (x) shall comply as
to form in all material respects with the applicable accounting requirements and
the published  rules and  regulations of the Commission  applicable with respect
thereto,  (y) shall be  prepared  in  accordance  with U.S.  generally  accepted
accounting principles,  consistently applied during the periods involved (except
as may be otherwise indicated in such financial  statements or the notes thereto
or, in the case of  unaudited  interim  statements,  to the extent  they may not
include  footnotes  or may be condensed  on summary  statements)  and (z) fairly
present in all material  respects  the  consolidated  financial  position of the
Company  and its  consolidated  subsidiaries  as of the  dates  thereof  and the
consolidated  results of their  operations  and cash flows for the periods  then
ended  (subject,  in the case of unaudited  statements,  to immaterial  year-end
adjustments).  The Registration Statement shall include the Plan of Distribution
substantially in the form of Annex A. At the time of effectiveness,  the Company
shall  ensure  that such  Registration  Statement  covers  at least  125% of the
Registrable  Securities  issuable upon full exchange of the 2006 Preferred Stock
(without  giving  effect  to  any  Limitations  on  Ownership),   including,  if
necessary,   by  filing  an  amendment  prior  to  the  effective  date  of  the
Registration  Statement to increase the number of Registrable Securities covered
thereby.  The Registration  Statement filed  hereunder,  to the extent allowable
under the Securities Act and the Rules  promulgated  thereunder  (including Rule
416),   shall  state  that  such   Registration   Statement   also  covers  such
indeterminate number of additional shares of Common Stock as may become issuable
upon  exchange of the 2006  Preferred  Stock and exercise of the Par Warrants to
prevent  dilution  resulting  from  stock  splits,  stock  dividends  or similar
transactions.  The  Registration  Statement  (and each  amendment or  supplement
thereto,  and each request for acceleration of  effectiveness  thereof) shall be
provided  to the  Holders  and  their  counsel  prior  to its  filing  or  other
submission,  and shall be subject to the  reasonable  approval  of the  Holders,
provided,  that such approval  shall be deemed to have been given if the Company
or its counsel shall not have received  comments by the Holders or their counsel
prior to 4:00 p.m.  (Eastern  Standard  Time) on the business day  following the
transmission  of any such  Registration  Statement,  amendment or  supplement or
request for acceleration (other than the initial Registration  Statement,  as to
which such period shall be three business days).  The Company shall  immediately
notify the  Holders  via  facsimile  of the  effectiveness  of the  Registration
Statement  on  the  same  day  that  the  Company   receives   notification   of
effectiveness  from the Commission.  Failure to so notify the Holders within one
Trading Day of such notification shall be deemed an Event under Section 2(b).


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<PAGE>

      (b) If:  (i) the  Registration  Statement  is not filed on or prior to the
Filing  Date,  (ii) the  Registration  Statement  filed or  required to be filed
hereunder is not declared effective by the Commission by the Effectiveness Date,
(iii) during the Effectiveness Period the Registration  Statement ceases for any
reason to remain  continuously  effective as to all  Registrable  Securities for
which it is  required to be  effective,  or the  Holders  are not  permitted  to
utilize the  Prospectus  therein to resell such  Registrable  Securities  for 20
consecutive Trading Days or more than an aggregate of 30 Trading Days during any
12-month period (which need not be consecutive Trading Days), or (iv) the Common
Stock is not listed or included for quotation on the Nasdaq  Capital Market (the
"SmallCap Market"),  the Nasdaq National Market (the "National Market"), the New
York Stock  Exchange (the "NYSE") or the American Stock Exchange (the "AMEX") at
any time after the  Effectiveness  Date  hereunder  (any such  failure or breach
being referred to as an "Event", and for purposes of clauses (i), (ii) and (iv),
the date on which such Event occurs, or for purposes of clause (iii) the date on
which such 20 or 30  calendar  day period,  as  applicable,  is  exceeded  being
referred to as the "Event  Date"),  in addition to any other  rights the Holders
may have  hereunder or under  applicable  law, until such date as the applicable
Event is cured but subject to the Liquidated  Damages Cap, the Company shall pay
each Holder an amount in cash equal to 3.0% per month of the aggregate  purchase
price paid by such Holder pursuant to the Purchase Agreement for any Registrable
Securities  then held by such Holder (which remedy shall not be exclusive of any
other remedies available at law or in equity),  on demand by the Holder, as full
liquidated damages and not as a penalty (including, for this purpose, any shares
of 2006 Preferred  Stock that have been exchanged  into  Underlying  Shares then
held by such  Holder as if such shares of 2006  Preferred  Stock had not been so
exchanged). The liquidated damages pursuant to the terms hereof shall apply on a
daily  pro-rata  basis for any portion of a month prior to the cure of an Event.
For the  avoidance of doubt,  liquidated  damages as  described  above shall not
accrue or be paid to any Holder after the  Liquidated  Damages Cap applicable to
such Holder has been reached.


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<PAGE>

      (c)  The  initial  number  of  Registrable   Securities  included  in  any
Registration  Statement and any increase in the number of Registrable Securities
included  therein shall be allocated pro rata among the Purchasers  based on the
number  of  Registrable  Securities  held  by each  Purchaser  at the  time  the
Registration Statement covering such initial number of Registrable Securities or
increase thereof is declared  effective by the Commission.  If a Purchaser sells
or otherwise transfers any of such Purchaser's  Registrable Securities to one or
more of the other Purchasers, each transferee Purchaser shall be allocated a pro
rata  portion  of  the  number  of  Registrable   Securities  included  in  such
Registration  Statement for such  transferor  Purchaser at the time of transfer.
Any shares of Common  Stock  included in a  Registration  Statement  that remain
allocated  to any  Purchaser  which  ceases to hold any  Registrable  Securities
covered by such  Registration  Statement  shall be  allocated  to the  remaining
Purchasers,  pro rata based on the number of Registrable Securities then held by
such Purchasers which are covered by the Registration Statement.

      (d) In the event  that the SEC does not permit  the  Warrant  Shares to be
registered  in the same  Registration  Statement  as the shares of Common  Stock
issuable upon exchange of the 2006  Preferred  Stock,  the Company shall prepare
and file with the Commission as soon as  practicable,  and in any event no later
than the first issuance by the Company of any Par Warrants, an additional resale
Registration  Statement  covering the resale of the Warrant Shares issuable upon
exercise  of any and all Par  Warrants  that the  Company may issue from time to
time.

3.    Registration Procedures.

      In connection with the Company's registration  obligations hereunder,  the
Company shall:

      (a) Cause its officers and  directors and its counsel to, and use its best
efforts to cause its  independent  certified  public  accountants to, respond to
such inquiries as shall be necessary,  in the  reasonable  opinion of respective
counsel  to conduct a  "reasonable  investigation,"  within  the  meaning of the
Securities  Act.  Each  Holder  agrees to  furnish  to the  Company a  completed
Questionnaire  in the form  attached  to this  Agreement  as Annex B (a "Selling
Holder Questionnaire") not less than two Trading Days prior to the Filing Date.

      (b) The Company  shall permit a single firm of counsel  designated  by the
Purchasers to review any Registration  Statement  required to be filed hereunder
and all amendments and supplements  thereto a reasonable period of time prior to
its filing with the Commission and not file any document in a form to which such
counsel reasonably objects.

      (c) (i) Prepare and file with the Commission  such  amendments,  including
post-effective amendments, to the Registration Statement and the Prospectus used
in connection  therewith as may be necessary to keep the Registration  Statement
continuously  effective  as to the  applicable  Registrable  Securities  for the
Effectiveness  Period;  (ii)  cause the  related  Prospectus  to be  amended  or
supplemented by any required Prospectus supplement (subject to the terms of this
Agreement),  and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably  possible to any comments  received from
the  Commission  with respect to the  Registration  Statement  or any  amendment
thereto,  and as promptly as  reasonably  possible  provide the Holders true and
complete copies of all correspondence from and to the Commission relating to the
Registration  Statement;  (iv) comply with the  provisions of the Securities Act
and  the  Exchange  Act  with  respect  to the  disposition  of all  Registrable
Securities covered by the Registration Statement during the applicable period in
accordance (subject to the terms of this Agreement) with the intended methods of
disposition by the Holders thereof set forth in the Registration Statement as so
amended  or  in  the  Prospectus  as so  supplemented  and  (v)  submit  to  the
Commission,  before the close of business on the second business day immediately
following the business day on which the Company  learns  (either by telephone or
in writing) that no review of such  Registration  Statement  will be made by the
Commission or that the staff of the Commission  has no further  comments on such
Registration  Statement,  as the case may be, a request for  acceleration of the
effectiveness  of such  Registration  Statement  to a time  and  date as soon as
practicable.


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<PAGE>

      (d) In the event  the  number of  shares  available  under a  Registration
Statement filed pursuant to this Agreement is, for any three consecutive trading
days (the last of such  three  trading  days  being  the  "Registration  Trigger
Date"),  insufficient to cover 125% of the Registrable Securities then issued or
issuable upon exchange of the 2006 Preferred Stock (without giving effect to any
Limitations on Ownership  applicable to the 2006 Preferred  Stock and/or the Par
Warrants,  the  Company  shall  provide  each  Holder  written  notice  of  such
Registration  Trigger Date within three business days thereafter and shall amend
the Registration  Statement,  or file a new Registration Statement (on the short
form available  therefor,  if  applicable),  or both, so as to cover 125% of the
Registrable  Securities  issued or issuable upon exchange of the 2006  Preferred
Stock  (without  giving  effect  to  any  Limitations  on  Ownership)  as of the
Registration  Trigger  Date, in each case,  as soon as  practicable,  but in any
event within 15 days after the Registration Trigger Date.

      (e) Notify the Holders of Registrable  Securities to be sold (which notice
shall,  pursuant to clauses  (ii)  through (vi)  hereof,  be  accompanied  by an
instruction  to suspend the use of the  Prospectus  until the requisite  changes
have been made) as promptly as reasonably  practicable,  and in any event within
one (1) Trading Day and (if requested by any such Holder) confirm such notice in
writing  no later  than one  Trading  Day  following  the day:  (i)(A)  when the
Prospectus  or any  Prospectus  supplement  or  post-effective  amendment to the
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a "review" of the  Registration  Statement and
whenever the Commission  comments in writing on the Registration  Statement (the
Company shall provide true and complete copies thereof and all written responses
thereto, as promptly as reasonably  possible,  to each of the Holders);  and (C)
with respect to the Registration Statement or any post-effective amendment, when
the same has become  effective;  (ii) of any  request by the  Commission  or any
other federal or state  governmental  authority for amendments or supplements to
the Registration Statement or Prospectus or for additional information; (iii) of
the  issuance  by the  Commission  or any other  federal  or state  governmental
authority of any stop order  suspending the  effectiveness  of the  Registration
Statement covering any or all of the Registrable Securities or the initiation of
any  Proceedings  for that  purpose;  (iv) of the  receipt by the Company of any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction,  or the  initiation  or  threatening  of any  Proceeding  for such
purpose;  (v) of the  occurrence  of any event or passage of time that makes the
financial  statements  included in the  Registration  Statement  ineligible  for
inclusion  therein  or any  statement  made  in the  Registration  Statement  or
Prospectus or any document  incorporated or deemed to be incorporated therein by
reference  untrue in any material  respect or that requires any revisions to the
Registration  Statement,  Prospectus or other  documents so that, in the case of
the  Registration  Statement or the Prospectus,  as the case may be, it will not
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the  circumstances  under which they were made, not misleading;  and
(vi) the  occurrence  or existence  of any pending  corporate  development  with
respect to the Company that the Company  believes  may be material and that,  in
the determination of the Company,  makes it contrary to the best interest of the
Company  to  allow  continued  availability  of the  Registration  Statement  or
Prospectus;  provided  that  any  and  all  of  such  information  shall  remain
confidential  to each Holder until such  information  otherwise  becomes public,
unless  disclosure  by a Holder is  required  by law;  provided,  further,  that
notwithstanding  each Holder's agreement to keep such information  confidential,
the Holders  make no  acknowledgement  that any such  information  is  material,
non-public information.


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<PAGE>

      (f) Use its best efforts to avoid the  issuance of, or, if issued,  obtain
the withdrawal of (i) any order suspending the effectiveness of the Registration
Statement,  or (ii) any  suspension  of the  qualification  (or  exemption  from
qualification)   of  any  of  the   Registrable   Securities  for  sale  in  any
jurisdiction, at the earliest practicable moment. The Company shall use its best
efforts to notify each Holder who holds  Registrable  Securities being sold (or,
in the event of an  underwritten  offering,  the managing  underwriters)  of the
issuance  of such order and the  resolution  thereof  (and if such  Registration
Statement  is  supplemented  or amended,  deliver  such number of copies of such
supplement or amendment to each Holder as such Holder may reasonably request).

      (g) Furnish to each Holder, without charge, at least one conformed copy of
each such Registration Statement and each amendment thereto, including financial
statements  and  schedules,   all  documents   incorporated   or  deemed  to  be
incorporated  therein by reference to the extent  requested by such Holder,  and
all exhibits to the extent requested by such Holder  (including those previously
furnished  or  incorporated  by  reference)  promptly  after the  filing of such
documents with the Commission.

      (h) Promptly deliver to each Holder, without charge, as many copies of the
Prospectus  or  Prospectuses  (including  each  form  of  prospectus)  and  each
amendment  or  supplement  thereto  as such  Holder  may  reasonably  request in
connection with resales by the Holder of Registrable Securities.  Subject to the
terms  of  this  Agreement,  the  Company  hereby  consents  to the  use of such
Prospectus  and each  amendment  or  supplement  thereto by each of the  selling
Holders in connection with the offering and sale of the  Registrable  Securities
covered by such Prospectus and any amendment or supplement thereto, except after
the giving of any notice pursuant to Section 3(e).

      (i) Prior to any resale of  Registrable  Securities  by a Holder,  use its
best efforts to register or qualify the Registrable Securities for the resale by
the Holder under the  securities or Blue Sky laws of such  jurisdictions  within
the United  States as any Holder  reasonably  requests in writing,  to keep each
registration or  qualification  (or exemption  therefrom)  effective  during the
Effectiveness  Period  and to do any and all  other  acts or  things  reasonably
necessary to enable the  disposition in such  jurisdictions  of the  Registrable
Securities covered by each Registration  Statement;  provided,  that the Company
shall not be required to qualify  generally  to do business in any  jurisdiction
where it is not then so  qualified,  subject the Company to any  material tax in
any such jurisdiction  where it is not then so subject or file a general consent
to service of process in any such jurisdiction.


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<PAGE>

      (j) If requested by the Holders,  cooperate with the Holders to facilitate
the timely  preparation  and delivery of certificates  representing  Registrable
Securities  to  be  delivered  to a  transferee  pursuant  to  the  Registration
Statement,  which  certificates  shall be free,  to the extent  permitted by the
Purchase Agreement,  of all restrictive  legends, and to enable such Registrable
Securities to be in such  denominations and registered in such names as any such
Holders may request.

      (k)  Without  limiting  the  generality  of the  foregoing,  within  three
business  days  after  any  Registration  Statement  that  includes  Registrable
Securities  is declared  effective  by the SEC,  the  Company  shall cause legal
counsel  selected  by the  Company  to  deliver  to the  transfer  agent for the
Registrable  Securities (with copies to any Holder whose Registrable  Securities
are included in such Registration Statement),  an opinion of such counsel in the
form attached hereto as Exhibit A.

      (l) Upon the  occurrence of any event  contemplated  by this Section 3, as
promptly as reasonably possible under the circumstances  taking into account the
Company's good faith  assessment of any adverse  consequences to the Company and
its stockholders of the premature disclosure of such event, prepare a supplement
or  amendment,   including  a  post-effective  amendment,  to  the  Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated  therein by reference,  and file any other required
document so that, as thereafter  delivered,  neither the Registration  Statement
nor such Prospectus will contain an untrue  statement of a material fact or omit
to state a material fact required to be stated  therein or necessary to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.  If the Company  notifies the Holders in accordance with clauses
(ii)  through  (v) of Section  3(e) above to suspend  the use of any  Prospectus
until the requisite  changes to such Prospectus have been made, then the Holders
shall suspend use of such  Prospectus.  The Company will use its best efforts to
ensure  that  the  use of  the  Prospectus  may be  resumed  as  promptly  as is
practicable.  The Company  shall be  entitled  to exercise  its right under this
Section  3(l) to  suspend  the  availability  of a  Registration  Statement  and
Prospectus,  subject to the payment of partial  liquidated  damages  pursuant to
Section 2(b), for a period not to exceed 15  consecutive  days or 60 days (which
need not be consecutive days) in any 12 month period.

      (m) The Company  shall use its best  efforts to promptly  cause all of the
Registrable  Securities  covered by any  Registration  Statement to be listed or
designated for quotation on the SmallCap Market,  the National Market, the NYSE,
the AMEX or any other national securities exchange or automated quotation system
and on each  additional  national  securities  exchange or  automated  quotation
system on which securities of the same class or series issued by the Company are
then listed or quoted,  if any, if the listing or quotation of such  Registrable
Securities  is then  permitted  under the rules of such  exchange  or  automated
quotation  system,  and in any event,  without  limiting the  generality  of the
foregoing,  to arrange for or  maintain  at least two market  makers to register
with the National  Association of Securities Dealers,  Inc. (the "NASD") as such
with respect to the Registrable Securities.


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<PAGE>

      (n) Comply with all applicable rules and regulations of the Commission.

      (o) The Company shall make  generally  available to the Holders as soon as
practicable,  but in no event  later  than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering a twelve-month  period beginning not
later than the first day of the  Company's  fiscal  quarter next  following  the
effective date of the Registration Statement. The Company will be deemed to have
complied with its obligations under this Section 3(o) upon the Company's filing,
on an appropriate form, the appropriate report of the Company as required by the
Exchange Act of 1934, and the rules and regulations  thereunder,  or any similar
successor statute.

      (p) At the request of any Holder,  the Company shall prepare and file with
the  Commission  such  amendments  (including  post-effective   amendments)  and
supplements to any Registration Statement required to be filed hereunder and the
prospectus  used  in  connection  with  such  Registration  Statement  as may be
necessary  in  order  to  change  the  plan of  distribution  set  forth in such
Registration Statement.

      (q) The Company shall make  available  for  inspection by (i) each Holder,
(ii)  any  underwriter   participating  in  any  disposition   pursuant  to  any
Registration Statement,  (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Holders, and (iv) one firm of attorneys retained
by  all  such  underwriters  (collectively,   the  "Inspectors")  all  pertinent
financial and other records, and pertinent corporate documents and properties of
the  Company  (collectively,  the  "Records"),  as  shall be  reasonably  deemed
necessary  by each  Inspector  to enable  such  Inspector  to  exercise  its due
diligence  responsibility,  and  cause the  Company's  officers,  directors  and
employees to supply all information  which any Inspector may reasonably  request
for purposes of such due diligence; provided, however, that each Inspector shall
hold in confidence and shall not make any disclosure (except to a Holder) of any
Record or other  information  which the Company  determines  in good faith to be
confidential,  and of which determination the Inspectors are so notified, unless
(A)  the  disclosure  of such  Records  is  necessary  to  avoid  or  correct  a
misstatement or omission in any Registration Statement,  (B) the release of such
Records  is  ordered  pursuant  to a  subpoena  or other  order  from a court or
government  body  of  competent  jurisdiction,  or (C) the  information  in such
Records has been made generally available to the public other than by disclosure
in violation of this or any other  agreement.  Nothing herein shall be deemed to
limit any Holder's  ability to sell  Registrable  Securities in a manner that is
otherwise consistent with applicable laws and regulations.

      (r) In the case of an underwritten public offering,  at the request of any
Holder,  the  Company  shall  furnish,  on  the  date  of  effectiveness  of the
Registration  Statement  (i) an  opinion,  dated as of such date,  from  counsel
representing  the Company  addressed  to any such Holder and in form,  scope and
substance as is customarily given in an underwritten  public offering and (ii) a
letter,  dated  such  date,  from the  Company's  independent  certified  public
accountants  in form  and  substance  as is  customarily  given  by  independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and any such Holder.


                                       9
<PAGE>

      (s) At the option of the Company,  require each selling  Holder to furnish
to the Company a certified  statement as to the number of shares of Common Stock
beneficially   owned  by  such  Holder  and  the  person(s)  having  voting  and
dispositive  control  over the shares.  During any  periods  that the Company is
unable to meet its obligations hereunder with respect to the registration of the
Registrable   Securities  solely  because  any  Holder  fails  to  furnish  such
information  within  three  (3)  Trading  Days  of the  Company's  request,  any
liquidated  damages  that are  accruing at such time shall be tolled (only as to
such Holder) and any Event that may otherwise occur solely because of such delay
shall be suspended (only as to such Holder), until such information is delivered
to the Company.

      (t) The Company  shall hold in confidence  and not make any  disclosure of
information concerning a Holder provided to the Company unless (i) disclosure of
such  information is necessary to comply with federal or state  securities laws,
(ii) the  disclosure  of such  information  is  necessary  to avoid or correct a
misstatement  or omission  in any  Registration  Statement  that  includes  such
Holder's  Registrable  Securities,  (iii) the  release  of such  information  is
ordered pursuant to a subpoena or other order from a court or governmental  body
of  competent  jurisdiction,  (iv)  such  information  has been  made  generally
available  to the public  other than by  disclosure  in violation of this or any
other agreement, or (v) such Holder consents to the form and content of any such
disclosure.  The Company shall, upon learning that disclosure of any information
concerning a Holder is sought in or by a court or governmental body of competent
jurisdiction or through other means,  give prompt notice to such Holder prior to
making such disclosure,  and cooperate with the Holder, at the Holder's expense,
in taking appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.


4. Registration  Expenses.  All fees and expenses incident to the performance of
or compliance  with this  Agreement by the Company shall be borne by the Company
whether or not any Registrable  Securities are sold pursuant to the Registration
Statement.  The fees and expenses  referred to in the foregoing  sentence  shall
include,  without  limitation,  (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with the  Trading  Market  on which the  Common  Stock is then  listed  for
trading, and (B) in compliance with applicable state securities or Blue Sky laws
reasonably agreed to by the Company in writing  (including,  without limitation,
fees and  disbursements  of counsel for the Company in connection  with Blue Sky
qualifications or exemptions of the Registrable  Securities and determination of
the eligibility of the Registrable  Securities for investment  under the laws of
such  jurisdictions  as  requested  by  the  Holders),  (ii)  printing  expenses
(including,   without   limitation,   expenses  of  printing   certificates  for
Registrable  Securities and of  photocopying),  (iii)  messenger,  telephone and
delivery expenses,  (iv) fees and disbursements of counsel for the Company,  (v)
Securities Act liability  insurance,  if the Company so desires such  insurance,
and (vi) fees and  expenses  of all other  Persons  retained  by the  Company in
connection  with  the  consummation  of the  transactions  contemplated  by this
Agreement. In addition, the Company shall be responsible for all of its internal
expenses  incurred  in  connection  with the  consummation  of the  transactions
contemplated by this Agreement (including,  without limitation, all salaries and
expenses of its officers and employees  performing legal or accounting  duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the  Registrable  Securities on any  securities  exchange as
required hereunder.  In no event shall the Company be responsible for any broker
or similar  commissions or, except to the extent provided for in the Transaction
Documents, any legal fees or other costs of the Holders.


                                       10
<PAGE>

5.    Indemnification.

      (a) Indemnification by the Company. The Company shall, notwithstanding any
termination  of this  Agreement,  indemnify and hold  harmless each Holder,  the
officers,  directors,  agents, members, partners, brokers (including brokers who
offer and sell  Registrable  Securities  as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees of each of them,  each Person who controls any such Holder (within
the meaning of Section 15 of the  Securities  Act or Section 20 of the  Exchange
Act) and the officers,  directors, agents and employees of each such controlling
Person,  to the fullest extent permitted by applicable law, from and against any
joint or several and all losses, claims, damages, liabilities, costs (including,
without  limitation,  reasonable  attorneys'  fees) and expenses  (collectively,
"Losses"),  as  incurred,  arising  out of or  relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus or any form of  prospectus or in any amendment or supplement  thereto
or in any preliminary prospectus,  or arising out of or relating to any omission
or  alleged  omission  of a  material  fact  required  to be stated  therein  or
necessary to make the statements  therein (in the case of any Prospectus or form
of prospectus or supplement  thereto,  in light of the circumstances under which
they were made) not  misleading,  or any  violation or alleged  violation by the
Company of the  Securities  Act, the  Exchange Act or any other law  (including,
without  limitation,  any state securities law), rule or regulation  relating to
the offer or sale of the Registrable  Securities except to the extent,  but only
to the extent,  that (i) such untrue  statements  or omissions  are based solely
upon  information  regarding such Holder  furnished in writing to the Company by
such Holder  expressly for use therein,  or to the extent that such  information
relates to such  Holder or such  Holder's  proposed  method of  distribution  of
Registrable  Securities  and was reviewed and  expressly  approved in writing by
such Holder expressly for use in the Registration Statement,  such Prospectus or
such form of  Prospectus  or in any  amendment or  supplement  thereto (it being
understood that the Holder has approved Annex A hereto for this purpose) or (ii)
in the  case of an  occurrence  of an event of the  type  specified  in  Section
3(c)(ii)  through  (vi),  the use by such  Holder of an  outdated  or  defective
Prospectus  after the  Company  has  notified  such  Holder in writing  that the
Prospectus is outdated or defective and Holder has  acknowledge  receipt of such
notice and prior to the  receipt by such  Holder of the Advice  contemplated  in
Section 6(d). The Company shall notify the Holders  promptly of the institution,
threat or assertion of any  Proceeding  arising from or in  connection  with the
transactions contemplated by this Agreement of which the Company is aware.

      (b)  Indemnification  by  Holders.  In  connection  with any  Registration
Statement in which a Holder is participating,  each Holder shall,  severally and
not jointly,  indemnify and hold harmless the Company, its directors,  officers,
agents and employees,  each Person who controls the Company  (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents or employees of such controlling  Persons,  to the
fullest  extent  permitted by applicable  law,  from and against all Losses,  as
incurred,  to the extent  arising out of or based solely upon: (x) such Holder's
failure to comply with the prospectus  delivery  requirements  of the Securities
Act or (y) any untrue or alleged  untrue  statement of a material fact contained
in any Registration Statement,  any Prospectus or any form of prospectus,  or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or  relating  to any  omission  or alleged  omission  of a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading (i) to the extent that such untrue statement or omission is contained
in any  information  so  furnished  in  writing  by such  Holder to the  Company
specifically for inclusion in such Registration  Statement or such Prospectus or
(ii) to the extent that (A) such untrue statements or omissions are based solely
upon  information  regarding such Holder  furnished in writing to the Company by
such Holder  expressly for use therein,  or to the extent that such  information
relates to such  Holder or such  Holder's  proposed  method of  distribution  of
Registrable  Securities  and was reviewed and  expressly  approved in writing by
such Holder expressly for use in the Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose),  such  Prospectus
or such form of Prospectus  or in any amendment or supplement  thereto or (B) in
the case of an occurrence of an event of the type specified in Section  3(c)(ii)
through  (vi),  the use by such Holder of an outdated  or  defective  Prospectus
after the Company has  notified  such Holder in writing that the  Prospectus  is
outdated  or  defective  and prior to the  receipt by such  Holder of the Advice
contemplated  in Section  6(d).  In no event shall the  liability of any selling
Holder  hereunder  be  greater  than the  dollar  amount of the  gross  proceeds
received by such Holder upon the sale of the Registrable  Securities giving rise
to such indemnification obligation.


                                       11
<PAGE>

      (c) Conduct of  Indemnification  Proceedings.  If any Proceeding  shall be
brought or asserted  against  any Person  entitled to  indemnity  hereunder  (an
"Indemnified  Party"),  such Indemnified  Party shall promptly notify the Person
from whom  indemnity is sought (the  "Indemnifying  Party") in writing,  and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel  reasonably  satisfactory to the Indemnified Party and
the  payment  of all fees and  expenses  incurred  in  connection  with  defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve  the  Indemnifying  Party of its  obligations  or  liabilities
pursuant  to this  Agreement,  except  (and only) to the extent that it shall be
finally determined by a court of competent  jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have prejudiced
the Indemnifying Party.

      An Indemnified  Party shall have the right to employ  separate  counsel in
any such Proceeding and to participate in the defense thereof,  but the fees and
expenses of such counsel  shall be at the expense of such  Indemnified  Party or
Parties  unless:  (1) the  Indemnifying  Party has agreed in writing to pay such
fees and  expenses;  (2) the  Indemnifying  Party shall have failed  promptly to
assume  the  defense  of  such  Proceeding  and  to  employ  counsel  reasonably
satisfactory to such Indemnified Party in any such Proceeding;  or (3) the named
parties to any such Proceeding  (including any impleaded  parties)  include both
such Indemnified  Party and the Indemnifying  Party, and such Indemnified  Party
shall  reasonably  believe  that it  would be  inappropriate  due to  actual  or
potential  conflicts  of interest  that are likely to exist if the same  counsel
were to represent such Indemnified  Party and the  Indemnifying  Party (in which
case, if such Indemnified Party notifies the Indemnifying  Party in writing that
it elects to employ separate counsel at the expense of the  Indemnifying  Party,
the  Indemnifying  Party shall not have the right to assume the defense  thereof
and the  reasonable  fees and expenses of one separate  counsel  shall be at the
expense of the Indemnifying  Party).  The Indemnifying Party shall not be liable
for any settlement of any such Proceeding  effected without its written consent,
which consent shall not be unreasonably  withheld.  No Indemnifying Party shall,
without  the  prior  written  consent  of  the  Indemnified  Party,  effect  any
settlement of any pending  Proceeding in respect of which any Indemnified  Party
is a party,  unless such settlement  includes an  unconditional  release of such
Indemnified  Party from all  liability on claims that are the subject  matter of
such Proceeding.


                                       12
<PAGE>

      Subject to the terms of this  Agreement,  all reasonable fees and expenses
of the Indemnified  Party (including  reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such Proceeding
in a manner not inconsistent with this Section) shall be paid to the Indemnified
Party,  as incurred,  within ten Trading Days of written  notice  thereof to the
Indemnifying  Party;  provided,   that  the  Indemnified  Party  shall  promptly
reimburse  the  Indemnifying  Party for that  portion of such fees and  expenses
applicable to such actions for which such  Indemnified  Party is not entitled to
indemnification  hereunder,  determined  based upon the  relative  faults of the
parties.

      (d)  Contribution.  If a claim for  indemnification  under Section 5(a) or
5(b) is  unavailable  to an  Indemnified  Party (by  reason of public  policy or
otherwise),   then  each  Indemnifying  Party,  in  lieu  of  indemnifying  such
Indemnified  Party,  shall  contribute  to the  amount  paid or  payable by such
Indemnified  Party  as a  result  of  such  Losses,  in  such  proportion  as is
appropriate  to  reflect  the  relative  fault  of the  Indemnifying  Party  and
Indemnified  Party in connection with the actions,  statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations ,
provided,  however,  (a) no contribution shall be made under circumstances where
the  maker  would  not have  been  liable  for  indemnification  under the fault
standards  set forth in Section 5(a) or 5(b),  as the case may be, (b) no person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the  Securities  Act)  shall be  entitled  to  contribution  from any  seller of
Registrable Securities who was not guilty of such fraudulent  misrepresentation.
The relative fault of such  Indemnifying  Party and  Indemnified  Party shall be
determined by reference to, among other things,  whether any action in question,
including any untrue or alleged untrue  statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information  supplied by, such Indemnifying  Party or Indemnified Party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent  such  action,  statement  or  omission.  The amount  paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the  limitations set forth in this  Agreement,  any reasonable  attorneys' or
other reasonable fees or expenses  incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the  indemnification  provided for in this Section was  available to
such party in accordance with its terms.

      The  parties  hereto  agree  that it would  not be just and  equitable  if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
net proceeds  actually  received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has  otherwise  been  required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.


                                       13
<PAGE>

      The indemnity and contribution agreements contained in this Section are in
addition  to any  liability  that  the  Indemnifying  Parties  may  have  to the
Indemnified Parties.

6.    Miscellaneous.

      (a) Remedies.  In the event of a breach by the Company or by a Holder,  of
any of their  obligations under this Agreement,  each Holder or the Company,  as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific  performance of its rights under this  Agreement.  The Company and each
Holder agree that monetary damages would not provide  adequate  compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement  and  hereby  further  agrees  that,  in the event of any  action  for
specific  performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

      (b) No Piggyback on Registrations  by the Company.  Except as set forth on
Schedule  6(b)  attached  hereto,  neither the  Company nor any of its  security
holders  (other than the Holders in such capacity  pursuant  hereto) may include
securities  of  the  Company  in  the  Registration  Statement  other  than  the
Registrable  Securities.  The  Company  shall  not file any  other  registration
statements  until the  initial  Registration  Statement  required  hereunder  is
declared effective by the Commission,  provided that this Section 6(b) shall not
prohibit the Company from filing amendments to registration  statements  already
filed.

      (c) Compliance.  Each Holder covenants and agrees that it will comply with
the prospectus  delivery  requirements of the Securities Act as applicable to it
in connection with sales of Registrable  Securities pursuant to the Registration
Statement.

      (d)  Discontinued  Disposition.  Each Holder agrees by its  acquisition of
such  Registrable  Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind  described in Section 3(c),  such Holder
will forthwith discontinue  disposition of such Registrable Securities under the
Registration  Statement  until  such  Holder's  receipt  of  the  copies  of the
supplemented  Prospectus and/or amended Registration  Statement,  or until it is
advised in writing (the  "Advice") by the Company that the use of the applicable
Prospectus  may be resumed,  and, in either  case,  has  received  copies of any
additional  or  supplemental  filings  that are  incorporated  or  deemed  to be
incorporated  by reference in such  Prospectus or  Registration  Statement.  The
Company will use its best efforts to ensure that the use of the  Prospectus  may
be resumed as promptly as it  practicable.  The Company agrees and  acknowledges
that any  periods  during  which  the  Holder is  required  to  discontinue  the
disposition  of the  Registrable  Securities  hereunder  shall be subject to the
provisions of Section 2(b).


                                       14
<PAGE>

      (e)  Piggy-Back  Registrations  by the Holders.  If at any time during the
Effectiveness Period there is not an effective  Registration  Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the  Commission a registration  statement  relating to an offering for
its own account or the account of others under the  Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents  relating to equity  securities to
be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the stock option or other employee
benefit  plans,  then the Company shall send to each Holder a written  notice of
such  determination  and, if within  fifteen days after the date of such notice,
any such Holder shall so request in writing,  the Company  shall include in such
registration  statement  all or any  part of such  Registrable  Securities  such
holder  requests to be  registered;  provided,  that,  the Company  shall not be
required to register any  Registrable  Securities  pursuant to this Section 6(e)
that are  eligible  for resale  pursuant  to Rule 144(k)  promulgated  under the
Securities  Act  or  that  are  the  subject  of a then  effective  Registration
Statement.

      (f) Amendments and Waivers.  The provisions of this  Agreement,  including
the provisions of this sentence,  may not be amended,  modified or supplemented,
and waivers or  consents to  departures  from the  provisions  hereof may not be
given,  unless the same shall be in writing  and signed by the  Company and each
Holder  of the then  outstanding  Registrable  Securities.  Notwithstanding  the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates  exclusively to the rights of Holders and that does not
directly  or  indirectly  affect  the  rights of other  Holders  may be given by
Holders of all of the  Registrable  Securities  to which such  waiver or consent
relates;  provided,  however,  that the  provisions  of this sentence may not be
amended,  modified,  or supplemented except in accordance with the provisions of
the immediately preceding sentence.

      (g) Notices.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder  shall be delivered as set forth
in the Purchase Agreement.

      (h) Successors and Assigns.  This Agreement  shall inure to the benefit of
and be binding upon the successors and permitted  assigns of each of the parties
and shall  inure to the benefit of each  Holder.  The Company may not assign its
rights or obligations  hereunder without the prior written consent of all of the
Holders of the then-outstanding  Registrable Securities.  Each Holder may assign
their respective  rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.

      (i)  No  Inconsistent  Agreements.  Neither  the  Company  nor  any of its
subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its  subsidiaries,  on or  after  the  date of this  Agreement,  enter  into any
agreement  with  respect  to its  securities,  that  would  have the  effect  of
impairing  the rights  granted to the  Holders in this  Agreement  or  otherwise
conflicts  with the  provisions  hereof.  Except as set forth on Schedule  6(b),
neither the Company nor any of its subsidiaries has previously  entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.

      (j)  Execution  and  Counterparts.  This  Agreement may be executed in any
number of counterparts,  each of which when so executed shall be deemed to be an
original  and, all of which taken  together  shall  constitute  one and the same
Agreement.   In  the  event  that  any   signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  binding  obligation of the
party  executing  (or on whose behalf such  signature is executed) the same with
the same  force and  effect as if such  facsimile  signature  were the  original
thereof.


                                       15
<PAGE>

      (k) Governing Law. All questions  concerning the  construction,  validity,
enforcement  and  interpretation  of this Agreement shall be determined with the
provisions of the Purchase Agreement.

      (l) Cumulative  Remedies.  The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

      (m) Severability.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent  jurisdiction to be invalid,  illegal,
void or  unenforceable,  the remainder of the terms,  provisions,  covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected,  impaired or  invalidated,  and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially  the same result as that  contemplated by such
term, provision,  covenant or restriction.  It is hereby stipulated and declared
to be the  intention of the parties that they would have  executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

      (n)  Headings.  The  headings in this  Agreement  are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

      (o) Independent Nature of Holders' Obligations and Rights. The obligations
of each Holder  hereunder are several and not joint with the  obligations of any
other Holder  hereunder,  and no Holder shall be  responsible in any way for the
performance of the obligations of any other Holder hereunder.  Nothing contained
herein or in any other  agreement or document  delivered at any closing,  and no
action  taken by any  Holder  pursuant  hereto  or  thereto,  shall be deemed to
constitute the Holders as a partnership,  an association, a joint venture or any
other kind of entity,  or create a  presumption  that the Holders are in any way
acting  in  concert  with  respect  to  such  obligations  or  the  transactions
contemplated  by this  Agreement.  Each Holder  shall be entitled to protect and
enforce its rights,  including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose.


                              ********************
                            [SIGNATURE PAGE FOLLOWS]


                                       16
<PAGE>



      IN WITNESS  WHEREOF,  the parties have executed this  Registration  Rights
Agreement as of the date first written above.


                                        DIOMED HOLDINGS, INC.


                                        By:  ___________________________
                                             Name:  James A. Wylie, Jr.
                                             Title: Chief Executive Officer







                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]


                                       17
<PAGE>


                           [SIGNATURE PAGE OF HOLDERS]


Name of Investing Entity: __________________________


By:  ______________________________________________
         (Signature of Authorized Signatory of Investing Entity)

Name of Authorized Signatory: _________________________

Title of Authorized Signatory: __________________________



                           [SIGNATURE PAGES CONTINUE]



                                       18
<PAGE>


                                                                         Annex A

                              Plan of Distribution

      Each selling stockholder (each "Selling  Stockholder") of the common stock
("Common  Stock")  of  Diomed  Holdings,   Inc.,  a  Delaware  corporation  (the
"Company")  and  any of  their  pledgees,  transferees,  donees,  assignees  and
successors-in-interest  may, from time to time,  sell any or all of their shares
of Common Stock on the market or exchange on which the Common Stock is listed or
quoted for trading (the "Trading Market") or any other stock exchange, market or
trading  facility  on which the shares  are  traded or in private  transactions.
These sales may be at fixed or negotiated prices. A Selling  Stockholder may use
any one or more of the following methods when selling shares:

      o     ordinary  brokerage  transactions  and  transactions  in  which  the
            broker-dealer solicits purchasers;

      o     block  trades in which the  broker-dealer  will  attempt to sell the
            shares as agent but may  position  and resell a portion of the block
            as principal to facilitate the transaction;

      o     "at the market" to or through market makers into an existing  market
            for the shares;

      o     purchases  by  a  broker-dealer  as  principal  and  resale  by  the
            broker-dealer for its account;

      o     an  exchange  distribution  in  accordance  with  the  rules  of the
            applicable exchange;

      o     privately negotiated transactions;

      o     settlement  of  short  sales  entered  into  after  the date of this
            prospectus;

      o     broker-dealers  may agree with the  Selling  Stockholders  to sell a
            specified number of such shares at a stipulated price per share;

      o     a combination of any such methods of sale;

      o     through   transactions  in  options,   swaps  or  other   derivative
            securities, whether exchange-listed or otherwise; or

      o     any other method permitted pursuant to applicable law.

      The Selling  Stockholders  may also sell  shares  under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available,  rather
than under this prospectus.

      Broker-dealers  engaged by the Selling  Stockholders may arrange for other
broker-dealers to participate in sales.  Broker-dealers may receive  commissions
or discounts from the Selling  Stockholders  (or, if any  broker-dealer  acts as
agent  for the  purchaser  of  shares,  from the  purchaser)  in  amounts  to be
negotiated.  Each  Selling  Stockholder  does not expect these  commissions  and
discounts  relating  to its sales of shares to exceed what is  customary  in the
types of transactions involved.


                                       19
<PAGE>

      In  connection  with the sale of Common  Stock or interests  therein,  the
Selling  Stockholders may enter into hedging transactions with broker-dealers or
other  financial  institutions,  which may in turn  engage in short sales of the
common stock in the course of hedging the positions  they assume.  To the extent
permitted by the applicable  rules of the American Stock  Exchange,  the Selling
Stockholders  may also sell  shares  of Common  Stock  short and  deliver  these
securities  to close out their  short  positions,  or loan or pledge  the Common
Stock to  broker-dealers  that in turn may sell these  securities.  The  Selling
Stockholders   may  also  enter   into   option  or  other   transactions   with
broker-dealers  or other  financial  institutions or the creation of one or more
derivative  securities which require the delivery to such broker-dealer or other
financial  institution of shares offered by this  prospectus,  which shares such
broker-dealer  or  other  financial  institution  may  resell  pursuant  to this
prospectus (as supplemented or amended to reflect such transaction).

      The Company is required to pay certain fees and  expenses  incurred by the
Company  incident to the  registration of the shares.  The Company has agreed to
indemnify the Selling Stockholders against certain losses,  claims,  damages and
liabilities, including liabilities under the Securities Act.

      Each  Selling  Stockholder  has advised us that they have not entered into
any  agreements,   understandings   or  arrangements  with  any  underwriter  or
broker-dealer  regarding the sale of the resale shares.  There is no underwriter
or coordinating broker acting in connection with the proposed sale of the resale
shares by the Selling Stockholders.

      We agreed to keep this  prospectus  effective until the earlier of (i) the
date on which  the  shares  may be resold by the  Selling  Stockholders  without
registration  and  without  regard to any volume  limitations  by reason of Rule
144(e) under the  Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold  pursuant to the  prospectus  or Rule 144 under the
Securities  Act or any other rule of similar  effect.  The resale shares will be
sold only through  registered or licensed  brokers or dealers if required  under
applicable  state securities  laws. In addition,  in certain states,  the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable  state or an exemption  from the  registration  or  qualification
requirement is available and is complied with.

      Under applicable rules and regulations  under the Exchange Act, any person
engaged in the distribution of the resale shares may not  simultaneously  engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement of the  distribution.  In addition,  the
Selling  Stockholders  will be subject to applicable  provisions of the Exchange
Act and the rules and regulations thereunder,  including Regulation M, which may
limit the timing of  purchases  and sales of shares of our  common  stock by the
Selling Stockholders or any other person. We will make copies of this prospectus
available to the Selling  Stockholders,  and have  informed  them of the need to
deliver a copy of this  prospectus to each  purchaser at or prior to the time of
the sale.



                                       20
<PAGE>

                                                                         Annex B

Diomed Holdings, Inc.

                 Selling Securityholder Notice and Questionnaire

      The  undersigned  beneficial  owner of common stock,  par value $0.001 per
share (the "Common  Stock"),  of Diomed Holdings,  Inc., a Delaware  corporation
(the "Company"),  understands that the Company has filed or intends to file with
the  Securities  and  Exchange  Commission  (the  "Commission")  a  registration
statement on Form SB-2 (the  "Registration  Statement") for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities
Act"),  of the  Registrable  Securities,  in  accordance  with the  terms of the
Registration Rights Agreement, dated as of September 30, 2005 (the "Registration
Rights  Agreement"),  among the Company and the Purchasers named therein. A copy
of the Registration  Rights Agreement is available from the Company upon request
at the address set forth below.  All  capitalized  terms not  otherwise  defined
herein  shall have the  meanings  ascribed  thereto in the  Registration  Rights
Agreement.

      Certain   legal   consequences   arise  from  being  named  as  a  selling
securityholder  in  the  Registration  Statement  and  the  related  prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel  regarding the consequences of being
named  or not  being  named  as a  selling  securityholder  in the  Registration
Statement and the related prospectus.

                                     NOTICE

      The  undersigned  beneficial  owner  (the  "Selling   Securityholder")  of
Registrable Securities hereby elects to include the Registrable Securities owned
by it and listed below in Item 3 (unless otherwise  specified under such Item 3)
in the Registration Statement.



                                       21
<PAGE>


The  undersigned  hereby  provides the following  information to the Company and
represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1.       Name.

         (a) Full Legal Name of Selling Securityholder:


                  --------------------------------------------------------------


         (b)      Full Legal Name of Registered Holder (if not the same as (a)
                  above) through which Registrable Securities listed in Item 3
                  below are held:


                  --------------------------------------------------------------


         (c)      Full legal name of natural control person (which means a
                  natural person who directly you indirectly alone or with
                  others has power to vote or dispose of the securities covered
                  by this Questionnaire):


                  --------------------------------------------------------------


2.       Address for Notices to Selling Securityholder:


--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


--------------------------------------------------------------------------------

Telephone:
          ----------------------------------------------------------------------

Fax:
     ---------------------------------------------------------------------------

Contact Person:
                ----------------------------------------------------------------

3.       Beneficial Ownership of Registrable Securities:

         (a)      Type  and   principal   amount   of   Registrable   Securities
                  beneficially owned:


                  --------------------------------------------------------------

                  --------------------------------------------------------------

                  --------------------------------------------------------------


                                       22
<PAGE>


4.       Broker-Dealer Status:

         (a)      Are you a broker-dealer?

                                 Yes [_] No [_]

         Note:    If yes, the  Commission's  staff has indicated that you should
                  be identified as an underwriter in the Registration Statement.

         (b)      Are you an affiliate of a broker-dealer?

                                 Yes [_] No [_]

         (c)      If you are an  affiliate  of a  broker-dealer,  do you certify
                  that you bought the  Registrable  Securities  in the  ordinary
                  course of  business,  and at the time of the  purchase  of the
                  Registrable  Securities to be resold, you had no agreements or
                  understandings,  directly  or  indirectly,  with any person to
                  distribute the Registrable Securities?

                                 Yes [_] No [_]

         Note:    If no, the Commission's staff has indicated that you should be
                  identified as an underwriter in the Registration Statement.

5.       Beneficial  Ownership of Other  Securities  of the Company Owned by the
         Selling Securityholder.

         Except as set forth  below in this Item 5, the  undersigned  is not the
         beneficial or registered  owner of any  securities of the Company other
         than the Registrable Securities listed above in Item 3.

         State the type and Amount of Other Securities beneficially owned by the
         Selling Securityholder:


                  --------------------------------------------------------------

                  --------------------------------------------------------------



                                       23
<PAGE>



6.       Relationships with the Company:

         Except as set  forth  below,  neither  the  undersigned  nor any of its
         affiliates,  officers, directors or principal equity holders (owners of
         5% of more of the equity  securities of the  undersigned)  has held any
         position or office or has had any other material  relationship with the
         Company  (or its  predecessors  or  affiliates)  during  the past three
         years.

         State any exceptions here:


                  --------------------------------------------------------------

                  --------------------------------------------------------------

         The   undersigned   agrees  to  promptly  notify  the  Company  of  any
inaccuracies  or  changes  in the  information  provided  herein  that may occur
subsequent  to the date  hereof  at any time  while the  Registration  Statement
remains effective.

         By signing  below,  the  undersigned  consents to the disclosure of the
information  contained  herein  in its  answers  to  Items 1  through  6 and the
inclusion of such  information  in the  Registration  Statement  and the related
prospectus.  The undersigned  understands  that such  information will be relied
upon by the Company in  connection  with the  preparation  or  amendment  of the
Registration Statement and the related prospectus.

         IN WITNESS WHEREOF the undersigned, by authority duly given, has caused
this Notice and  Questionnaire  to be executed and delivered either in person or
by its duly authorized agent.


Dated:                          Beneficial Owner:
       ----------------------                    -------------------------------


                                By:
                                    --------------------------------------------
                                    Name:
                                    Title:


PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

         Diomed Holdings, Inc.
         1 Dundee Park
         Andover, MA  01810
         Attn:  Christopher Geberth, Vice President, Finance
         Fax 978-475-8488


                                       24
<PAGE>


                                                                   Schedule 6(b)


                         Outstanding Registration Rights


See Schedule 3.1(g) and Schedule 3.1(v) of the Company's  Disclosure Schedule to
the Purchase  Agreement,  which are hereby incorporated by this reference in its
entirety.



                                       25
<PAGE>


                                                                       EXHIBIT A


[Date]

[Transfer Agent]


RE: [NAME OF COMPANY]

Ladies and Gentlemen:

We are counsel to Diomed Holdings,  Inc., a corporation organized under the laws
of the State of Delaware (the  "Company"),  and we understand that the investors
identified  on the  attached  Schedule  of  Investors  (each,  a  "Holder")  has
purchased from the Company shares of 2006 Preferred Stock that are  exchangeable
into  shares of the  Company's  common  stock,  par value  $0.001 per share (the
"Common  Stock").  Pursuant  to a  Registration  Rights  Agreement,  dated as of
________________  ____,  2006,  by and among  the  Company  and the  signatories
thereto  (the  "Registration  Rights  Agreement"),  the Company  agreed with the
Holder, among other things, to register the Registrable Securities (as that term
is defined in the  Registration  Rights  Agreement)  under the Securities Act of
1933,  as  amended  (the  "Securities  Act"),  upon the  terms  provided  in the
Registration  Rights  Agreement.  In connection  with the Company's  obligations
under the  Registration  Rights  Agreement,  on  [_____________  ___, ____], the
Company   filed  a   Registration   Statement  on  Form  S-___  (File  No.  333-
_____________)  (the "Registration  Statement") with the Securities and Exchange
Commission (the "SEC") relating to the Registrable  Securities,  which names the
Holder as a selling  stockholder  thereunder.  The  Registration  Statement  was
declared effective by the SEC on _____________, ____.

In connection with the foregoing, we advise you that a member of the SEC's staff
has advised us by telephone that the SEC has entered into an order declaring the
Registration   Statement   effective  under  the  Securities  Act  at  [time  of
effectiveness]  on  [date of  effectiveness],  and we have no  knowledge,  after
telephonic  inquiry  of a  member  of the  SEC's  staff,  that  any  stop  order
suspending its  effectiveness  has been issued or that any  proceedings for that
purpose are pending before, or threatened by, the SEC.

Based on the foregoing,  we are of the opinion that the  Registrable  Securities
are available for resale under the Securities  Act pursuant to the  Registration
Statement.

Very truly yours,


[NAME OF COUNSEL]

cc:   The Holders identified on the attached Schedule of Investors


                                       26
<PAGE>


                              Schedule of Investors

[List of  Purchasers  as  included  in the  Registration  Statement  schedule of
Selling Stockholders]




                                       27