EXHIBIT 10.3


NEITHER THIS SECURITY NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT IF SO REQUIRED BY THE  COMPANY.  THIS  SECURITY  AND THE  SECURITIES
ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                              Diomed Holdings, Inc.

      THIS COMMON STOCK PURCHASE  WARRANT (the  "Warrant")  certifies  that, for
value received,  _____________ (the "Holder"),  is entitled,  upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after the date hereof (the "Initial  Exercise Date") and on or
prior to the close of  business on earlier of (i) the five year  anniversary  of
the Initial  Exercise  Date and (ii) such earlier  date as the warrant  shall no
longer be  exercisable  pursuant  to the  terms  hereof  (in  either  case,  the
"Termination  Date"),  but not  thereafter,  to subscribe  for and purchase from
Diomed Holdings,  Inc., a Delaware  corporation  (the  "Company"),  up to ______
shares (the "Warrant  Shares") of Common Stock,  par value $0.001 per share,  of
the Company (the  "Common  Stock").  The  purchase  price of one share of Common
Stock (the  "Exercise  Price")  under this Warrant  shall be $0.001,  subject to
adjustment hereunder.

      Section 1.  Definitions.  Capitalized terms used and not otherwise defined
herein shall have the meanings  set forth in that  certain  Securities  Purchase
Agreement (the "Purchase  Agreement"),  dated July [__],  2006, by and among the
Company and the purchasers signatory thereto.

      Section 2. Exercise.

                  (a) Exercise of Warrant. Subject to the provisions hereof,
         including, without limitation, the restrictions set forth in Section
         2(d), exercise of the purchase rights represented by this Warrant may
         be made, in whole or in part, at any time or times on or after the
         Initial Exercise Date and on or before the Termination Date by delivery
         to the Company of a duly executed facsimile copy of the Notice of
         Exercise Form annexed hereto (or such other office or agency of the
         Company as it may designate by notice in writing to the registered
         Holder at the address of the Holder appearing on the books of the
         Company); provided, that within three Trading Days of the date said
         Notice of Exercise is delivered to the Company, the Holder shall have
         surrendered this Warrant to the Company and the Company shall have
         received payment of the aggregate Exercise Price of the shares thereby
         purchased by wire transfer or cashier's check drawn on a United States
         bank for the Warrant Shares specified in the Notice of Exercise Form
         duly executed by the Holder.

<PAGE>

            (b) Exercise Price. The Exercise Price of each share of Common Stock
      under this Warrant shall be $0.001, subject to adjustment hereunder.

            (c) Intentionally Omitted.

            (d) Restrictions on Holder's Ownership. The Company shall not effect
      the exercise of this  Warrant,  and the Holder shall not have the right to
      exercise  this  Warrant,  to the extent that after  giving  effect to such
      exercise,  the  Holder  (together  with  the  Holder's  affiliates)  would
      beneficially  own in excess of  [4.99][9.99](1)%  of the  shares of Common
      Stock outstanding  immediately  after giving effect to such exercise.  For
      purposes of the  preceding  sentence,  the  aggregate  number of shares of
      Common Stock  beneficially  owned by the Holder and its  affiliates  shall
      include the number of shares of Common  Stock  issuable  upon  exercise of
      this Warrant with respect to which the  determination  of such sentence is
      being  made,  but shall  exclude  shares of Common  Stock  which  would be
      issuable upon (i) exercise of the remaining,  unexercised  portion of this
      Warrant  beneficially  owned by the  Holder  and its  affiliates  and (ii)
      exercise or conversion of the  unexercised or  unconverted  portion of any
      other securities of the Company  beneficially  owned by the Holder and its
      affiliates  (including,  without  limitation,  any  convertible  notes  or
      warrants)  subject to a limitation on conversion or exercise  analogous to
      the  limitation  contained  herein.  For  purposes of this  Section  2(d),
      beneficial  ownership shall be calculated in accordance with Section 13(d)
      of the Exchange Act, it being  acknowledged by the Holder that the Company
      is not  representing to the Holder that such  calculation is in compliance
      with  Section  13(d)  of  the  Exchange  Act  and  the  Holder  is  solely
      responsible  for  any  schedules   required  to  be  filed  in  accordance
      therewith.  To the extent that the  limitation  contained  in this Section
      2(d) applies, the submission of a Notice of Exercise shall be deemed to be
      the Holder's  determination  of whether this  Warrant is  exercisable  (in
      relation to other  securities  of the Company  owned by the Holder) and of
      which portion of this Warrant is exercisable, in each case subject to such
      aggregate  percentage  limitation.  For purposes of this Section  2(d), in
      determining the number of outstanding  shares of Common Stock,  the Holder
      may rely on the number of outstanding  shares of Common Stock as reflected
      in (x) the Company's  most recent Form 10-QSB or Form 10-KSB,  as the case
      may be, (y) a more recent  public  announcement  by the Company or (z) any
      other notice by the Company or the Company's  Transfer Agent setting forth
      the number of shares of Common Stock outstanding. Upon the written or oral
      request of the Holder,  the Company  shall within two Trading Days confirm
      orally and in  writing to the Holder the number of shares of Common  Stock
      then outstanding.  In any case, the number of outstanding shares of Common
      Stock  shall be  determined  after  giving  effect  to the  conversion  or
      exercise of securities  of the Company,  including  this  Warrant,  by the
      Holder  or its  affiliates  since  the date as of  which  such  number  of
      outstanding shares of Common Stock was reported.  The Holder may waive, or
      modify, amend or delete the limitation contained in this Section 2(d) only
      by delivery to the Company of written notice at least  sixty-one (61) days
      prior  to  the  effective  date  of  such  notice.   [Notwithstanding  the
      foregoing, in no event shall the Holder exercise this Warrant to purchase,
      and in no event  shall the Company  issue to the Holder,  shares of Common
      Stock upon exercise of this Warrant to the extent that such exercise would
      result in the Holder and its affiliates together  beneficially owning more
      than 9.99% of the then outstanding shares of Common Stock](2).


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(1)   Applicable  percentage as set forth in the Securities  Purchase  Agreement
      for each Holder.

                                       2
<PAGE>


            (e) Mechanics of Exercise.

                  (i)  Authorization  of Warrant  Shares;  Listing.  The Company
            covenants  that all  Warrant  Shares  which may be  issued  upon the
            exercise of the purchase  rights  represented  by this Warrant will,
            upon exercise of the purchase rights represented by this Warrant, be
            duly authorized,  validly issued,  fully paid and  nonassessable and
            free from all  taxes,  liens and  charges  in  respect  of the issue
            thereof  (other  than  taxes in respect  of any  transfer  occurring
            contemporaneously  with such  issue).  The  Company  covenants  that
            during the period the Warrant is  outstanding,  it will reserve from
            its  authorized  and unissued  Common  Stock a sufficient  number of
            shares to provide for the  issuance  of the Warrant  Shares upon the
            exercise of any purchase  rights under this Warrant  (without giving
            effect to the  restrictions  in Section 2(d)).  The Company  further
            covenants  that its issuance of this Warrant shall  constitute  full
            authority to its officers who are charged with the duty of executing
            stock  certificates to execute and issue the necessary  certificates
            for the Warrant  Shares upon the  exercise  of the  purchase  rights
            under this Warrant. The Company will take all such reasonable action
            as may be necessary to assure that such Warrant Shares may be issued
            as  provided  herein  without  violation  of any  applicable  law or
            regulation,  or of any requirements of the Trading Market upon which
            the Common Stock may be listed.  The Company shall  promptly  secure
            the listing or quotation of the shares of Common Stock issuable upon
            exercise of this Warrant upon each national  securities  exchange or
            automated or electronic  quotation system, if any, upon which shares
            of Common Stock are then listed or quoted or become listed or quoted
            (subject  to  official  notice of  issuance  upon  exercise  of this
            Warrant) and shall  maintain,  so long as any other shares of Common
            Stock shall be so listed or quoted, such listing or quotation of all
            shares of Common Stock from time to time  issuable upon the exercise
            of this  Warrant;  and the  Company  shall  so  list  or  apply  for
            quotation  on each  national  securities  exchange or  automated  or
            electronic  quotation system, as the case may be, and shall maintain
            such listing or quotation  of, any other shares of capital  stock of
            the Company  issuable  upon the  exercise of this  Warrant if and so
            long as any  shares of the same  class  shall be listed or quoted on
            such  national   securities  exchange  or  automated  or  electronic
            quotation  system.  The  Company  shall,  on or  before  the date of
            issuance of any  Warrant  Shares,  take such  actions as the Company
            shall  reasonably  determine  are  necessary  to qualify the Warrant
            Shares for, or obtain  exemption for the Warrant Shares for, sale to
            the holder of this Warrant upon the exercise hereof under applicable
            securities  or "blue sky" laws of the  states of the United  States,
            and shall provide evidence of any such action so taken to the holder
            of this  Warrant  prior to such date;  provided,  however,  that the
            Company  shall  not be  required  in  connection  therewith  or as a
            condition  thereto to (i) qualify to do business in any jurisdiction
            where it would not  otherwise  be  required  to qualify but for this
            provision,  (ii)  subject  itself to  general  taxation  in any such
            jurisdiction  or (iii) file a general  consent to service of process
            in any such jurisdiction.


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(2)   To be included in warrants  issued to SDS Capital  Group SPC,  Ltd. or its
      affiliates.


                                       3
<PAGE>

                  (ii) Delivery of Certificates Upon Exercise. The Company shall
            instruct  its transfer  agent to deliver to the Holder  certificates
            for shares  purchased  hereunder  within two  Trading  Days from the
            delivery to the Company of the Notice of Exercise Form, surrender of
            this  Warrant and  payment of the  aggregate  Exercise  Price as set
            forth above ("Warrant Share Delivery  Date").  This Warrant shall be
            deemed to have been  exercised  as of the close of  business  on the
            date the Notice of  Exercise  form and the  payment of the  Exercise
            Price is  received by the Company or, if such date is not a business
            day, on the next  succeeding  business  day, and the Warrant  Shares
            shall be  deemed to have been  issued,  and the  Holder or any other
            person so  designated  to be named  therein  shall be deemed to have
            become a holder of record of such  shares  for all  purposes,  as of
            such date.

                  (iii) Delivery of New Warrants Upon Exercise.  If this Warrant
            shall have been  exercised in part,  the Company  shall,  as soon as
            practicable  after the transfer  agent's delivery of the certificate
            or certificates representing Warrant Shares, deliver to the Holder a
            new  Warrant  evidencing  the rights of the Holder to  purchase  the
            unpurchased  Warrant  Shares called for by this  Warrant,  which new
            Warrant shall in all other respects be identical with this Warrant.

                  (iv)  Exercise  Default.  If,  at any  time,  a holder of this
            Warrant  submits this  Warrant,  a Notice of Exercise and payment to
            the Company of the  Exercise  Price for each of the  Warrant  Shares
            specified in the Notice of Exercise,  and the Company  fails for any
            reason to deliver,  on or prior to the fourth business day following
            the Warrant  Share  Delivery Date for such  exercise,  the number of
            shares of Common  Stock to which the  Holder is  entitled  upon such
            exercise (an "Exercise Default"), then:


                                       4
<PAGE>

                        (A)  the  Company  shall  pay  to  the  Holder  payments
                  ("Exercise  Default  Payments") for an Exercise Default in the
                  amount of (i) (N/365),  multiplied by (ii) the amount by which
                  the Market Price of the Common Stock on the date the Notice of
                  Exercise giving rise to the Exercise Default is transmitted in
                  accordance with the terms hereof (the "Exercise Default Date")
                  exceeds the Exercise Price in respect of such Warrant  Shares,
                  multiplied  by (iii) the number of shares of Common  Stock the
                  Company  failed  to  so  deliver  in  such  Exercise  Default,
                  multiplied  by (iv) R,  where N equals the number of days from
                  the Exercise Default Date to the date that the Company effects
                  the full  exercise  of this  Warrant  which  gave  rise to the
                  Exercise  Default  and R equals  the  lower of 0.18  (eighteen
                  percent) and the highest  interest rate per annum permitted by
                  applicable law, expressed as a decimal; and

                        (B)  if  the  Holder   purchases   (in  an  open  market
                  transaction  or  otherwise)  shares  of  Common  Stock to make
                  delivery in satisfaction of a sale by the Holder of the shares
                  of  Common  Stock  (the  "Sold   Shares")   which  the  Holder
                  anticipated  receiving  upon  exercise  of this  Warrant,  the
                  Company  shall  pay  the  Holder,  in  addition  to any  other
                  remedies  available to the Holder, the amount by which (x) the
                  Holder's   total   purchase   price    (including    brokerage
                  commissions, if any) for the unlegended shares of Common Stock
                  so  purchased  exceeds  (y) the net  proceeds  received by the
                  Holder from the sale of the Sold Shares.

            The  Exercise  Default  Payments  to Holder  shall be subject to the
            Liquidated Damages Cap (as defined in the Purchase  Agreement).  The
            accrued  Exercise Default Payment for each calendar month be paid in
            cash and  shall be made to the  Holder by the fifth day of the month
            following  the month in which it has accrued.  Nothing  herein shall
            limit the Holder's  right to pursue actual damages for the Company's
            failure to  maintain a  sufficient  number of  authorized  shares of
            Common  Stock  as  required  pursuant  to  the  terms  hereof  or to
            otherwise issue shares of Common Stock upon exercise of this Warrant
            in accordance  with the terms hereof,  and the Holder shall have the
            right  to  pursue  all  remedies  available  at  law  or  in  equity
            (including  a  decree  of  specific  performance  and/or  injunctive
            relief).

                  (v) No Fractional  Shares or Scrip.  No  fractional  shares or
            scrip  representing  fractional  shares  shall  be  issued  upon the
            exercise of this  Warrant.  As to any  fraction of a share which the
            Holder would  otherwise be entitled to purchase upon such  exercise,
            the  Company  shall pay a cash  adjustment  in respect of such final
            fraction in an amount equal to such fraction  multiplied by the VWAP
            on the Trading Day on which this Warrant is exercised.


                                       5
<PAGE>

                  (vi)  Closing  of  Books.  The  Company  will  not  close  its
            stockholder books or records in any manner which prevents the timely
            exercise of this Warrant, pursuant to the terms hereof.

      (f)   Registrable   Securities.   The  Warrant  Shares  are   "Registrable
Securities"  within the meaning of that certain  Registration  Rights  Agreement
between the Company and the Purchasers  dated  [________],  2006, and the Holder
shall have  certain  registration  and other  rights with respect to the Warrant
Shares as set forth therein.

Section 3. Certain Adjustments.

      (a) Stock  Dividends  and Splits.  If the Company,  at any time while this
Warrant  is  outstanding:  (A)  pays a  stock  dividend  or  otherwise  makes  a
distribution or  distributions on shares of its Common Stock or any other equity
or equity equivalent  securities  payable in shares of Common Stock (which,  for
avoidance  of doubt,  shall not include any shares of Common Stock issued by the
Company pursuant to this Warrant),  (B) subdivides  outstanding shares of Common
Stock into a larger number of shares, (C) combines  (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares,
(D)  issues by  reclassification  of shares of the  Common  Stock any  shares of
capital  stock of the Company or (E) takes any similar  action having the effect
of  increasing or  decreasing  the number of shares of Common Stock  outstanding
immediately  prior to the taking  effect of such  action,  then in each case the
Exercise  Price shall be  multiplied  by a fraction:  (i) the numerator of which
shall be the number of shares of Common Stock  (excluding  treasury  shares,  if
any)  outstanding  before such event and (ii) the  denominator of which shall be
the  number of shares of Common  Stock  outstanding  after such  event,  and the
number of shares  issuable upon exercise of this Warrant  (without giving effect
to  the  restrictions  contained  in  Section  2(d))  shall  be  proportionately
adjusted.  Any  adjustment  made  pursuant  to this  Section  3(a) shall  become
effective   immediately   after  the  record  date  for  the   determination  of
stockholders  entitled to receive such dividend or distribution and shall become
effective  immediately  after the effective  date in the case of a  subdivision,
combination or re-classification.

      (b)  Distributions.  If,  at any time this  Warrant  is  outstanding,  the
Company  declares or makes any  distribution of its assets (or rights to acquire
its assets) pro rata to the record holders of any class of Common Stock, whether
as a partial  liquidating  dividend,  by way of return of capital or  otherwise,
(including any dividend or distribution to the Company's stockholders in cash or
shares (or rights to acquire  shares) of capital stock of a subsidiary  (i.e., a
spin-off))  (a  "Distribution"),  then the Holder  shall be  entitled,  upon any
exercise of this Warrant after the date of record for  determining  stockholders
entitled to such  Distribution (or if no such record is taken, the date on which
such  Distribution  is declared  or made),  to receive the amount of such assets
which would have been payable to the Holder with  respect to the Warrant  Shares
issuable upon such exercise (without giving effect to the restrictions contained
in Section  2(d)) had the Holder been the holder of such  Warrant  Shares on the
record date for the determination of stockholders  entitled to such Distribution
(or if no such record is taken, the date on which such  Distribution is declared
or made).


                                       6
<PAGE>

      (c) Convertible Securities and Purchase Rights. If, at any time while this
Warrant is outstanding, the Company issues pro rata to the record holders of any
class of Common Stock any securities or other  instruments which are convertible
into or exercisable or exchangeable for Common Stock ("Convertible  Securities")
or options,  warrants or other rights to purchase or subscribe  for Common Stock
or Convertible  Securities ("Purchase Rights"),  whether or not such Convertible
Securities  or  Purchase  Rights are  immediately  convertible,  exercisable  or
exchangeable,  then the Holder  shall be  entitled,  upon any  exercise  of this
Warrant  after the date of  record  for  determining  stockholders  entitled  to
receive such Convertible  Securities or Purchase Rights (or if no such record is
taken,  the date on which such  Convertible  Securities  or Purchase  Rights are
issued),  to receive the aggregate number of Convertible  Securities or Purchase
Rights which the Holder would have received  with respect to the Warrant  Shares
issuable upon such exercise (without giving effect to the limitations  contained
in Section  2(d)) had the Holder been the holder of such  Warrant  Shares on the
record date for the  determination  of  stockholders  entitled  to receive  such
Convertible  Securities or Purchase  Rights (or if no such record is taken,  the
date on which such  Convertible  Securities or Purchase Rights were issued).  If
the right to  exercise or convert any such  Convertible  Securities  or Purchase
Rights would expire in accordance with their terms prior to the exercise of this
Warrant, then the terms of such Convertible  Securities or Purchase Rights shall
provide that such exercise or  conversion  right shall remain in effect until 30
days after the date the Holder receives such Convertible  Securities or Purchase
Rights pursuant to the exercise hereof.

      (d) Calculations.  For purposes of this Section 3, the number of shares of
Common  Stock  outstanding  as of a given date shall be the sum of the number of
shares of Common Stock (excluding treasury shares, if any) outstanding.

      (e) Adjustment in Number of Shares.  Upon each  adjustment of the Exercise
Price  pursuant  to the  provisions  of this  Section 3, the number of shares of
Common Stock  issuable upon exercise of this Warrant at each such Exercise Price
shall be adjusted by  multiplying a number equal to the Exercise Price in effect
immediately  prior to such  adjustment  by the number of shares of Common  Stock
issuable upon exercise of this Warrant at such Exercise Price  immediately prior
to such adjustment and dividing the product so obtained by the adjusted Exercise
Price.

      (f) Notice to Holders.

                  (i) Adjustment to Exercise Price.  Whenever the Exercise Price
            is adjusted  pursuant to this Section 3, the Company shall  promptly
            mail to each Holder notice  setting  forth the Exercise  Price after
            such  adjustment  and setting  forth a brief  statement of the facts
            requiring such adjustment.


                                       7
<PAGE>

                  (ii)  Notice  to  Allow  Exercise  by the  Holder.  If (A) the
            Company shall declare a dividend (or any other  distribution) on the
            Common Stock;  (B) the Company shall declare a special  nonrecurring
            cash  dividend  on or a  redemption  of the  Common  Stock;  (C) the
            Company  shall  authorize  the granting to all holders of the Common
            Stock rights or warrants to subscribe  for or purchase any shares of
            capital stock of any class or of any rights; (D) the approval of any
            stockholders of the Company shall be required in connection with any
            reclassification of the Common Stock, any consolidation or merger to
            which  the  Company  is a  party,  any  sale or  transfer  of all or
            substantially  all of the assets of the Company,  of any  compulsory
            share  exchange  whereby the Common  Stock is  converted  into other
            securities,  cash or property;  (E) the Company shall  authorize the
            voluntary or involuntary  dissolution,  liquidation or winding up of
            the affairs of the Company;  then,  in each case,  the Company shall
            cause to be mailed to the  Holder  at its last  address  as it shall
            appear  upon the  Warrant  Register  of the  Company,  at least  ten
            business  days  prior to the  applicable  record or  effective  date
            hereinafter  specified,  a  notice  stating  (x) the date on which a
            record  is  to  be  taken  for  the   purpose   of  such   dividend,
            distribution,  redemption, rights or warrants, or if a record is not
            to be taken, the date as of which the holders of the Common Stock of
            record to be entitled to such dividend,  distributions,  redemption,
            rights or  warrants  are to be  determined  or (y) the date on which
            such  reclassification,  consolidation,  merger,  sale,  transfer or
            share  exchange is expected to become  effective  or close,  and the
            date as of which it is expected  that holders of the Common Stock of
            record  shall be  entitled to  exchange  their  shares of the Common
            Stock for securities,  cash or other property  deliverable upon such
            reclassification,  consolidation,  merger,  sale,  transfer or share
            exchange;  provided,  that the  failure  to mail such  notice or any
            defect  therein  or in the  mailing  thereof  shall not  affect  the
            validity of the  corporate  action  required to be specified in such
            notice.  The Holder is entitled to exercise this Warrant  during the
            ten  business day period  commencing  the date of such notice to the
            effective date of the event triggering such notice.

      (g)  Fundamental  Transaction.  If,  at any time  while  this  Warrant  is
outstanding,  (A) the Company  effects a Change of Control (as defined  below in
this  Section  3(h)),  (B) there shall  occur any  liquidation,  dissolution  or
winding up of the Company  (other than a  transaction  constituting  a Change of
Control),  (C) any tender  offer or  exchange  offer  (whether by the Company or
another  Person) is  completed  pursuant  to which  holders of Common  Stock are
permitted  to tender or  exchange  their  shares for other  securities,  cash or
property (other than a transaction constituting a Change of Control), or (D) the
Company effects any reclassification of the Common Stock or any compulsory share
exchange  pursuant to which the Common Stock is  effectively  converted  into or
exchanged for other securities,  cash or property (any such case, a "Fundamental
Transaction"),  then the  Holder  shall  have the  right  to  receive,  upon the
consummation  of such  Fundamental  Transaction,  such  cash,  shares  of stock,
securities  and/or other property as would have been issued or payable  pursuant
to the Fundamental  Transaction in exchange for the Warrant Shares issuable upon
exercise of this Warrant as if this Warrant had been exercised immediately prior
to the consummation of the Fundamental Transaction (without giving effect to the
limitations  on  ownership  contained  in Section  2(d)).  For  purposes of this
Warrant,  "Change  of  Control"  shall  mean the  occurrence  of  either  of the
following events:


                                       8
<PAGE>

                  (i) the  Company  shall  sell,  convey  or  dispose  of all or
            substantially  all of its  assets  in one  or a  series  of  related
            transactions   (the   presentation  of  any  such   transaction  for
            stockholder approval being conclusive evidence that such transaction
            involves the sale of all or  substantially  all of the assets of the
            Company); or

                  (ii) the Company shall merge or  consolidate  with or into, or
            engage in any other business  combination  with, any other person or
            entity,  in any case,  as a result of which the  Company  is not the
            surviving entity.

      (h)  Exempt  Issuance.  Notwithstanding  the  foregoing,  no  adjustments,
Alternate  Consideration  nor notices  shall be made,  paid or issued under this
Section 3 in respect of an Exempt Issuance.

      (i)  Voluntary  Adjustment  by the  Company.  The  Company may at any time
during the term of this Warrant  reduce the then current  Exercise  Price to any
amount and for any period of time deemed  appropriate by the Board of Directors,
in its good faith judgment.

Section 4. Transfer of Warrant.

      (a) Transferability.  Subject to compliance with any applicable securities
laws and the  conditions  set forth in Sections  4(d) and 5(a) hereof and to the
provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights
hereunder are transferable,  in whole or in part, upon surrender of this Warrant
at the principal  office of the Company,  together with a written  assignment of
this Warrant  substantially  in the form  attached  hereto duly  executed by the
Holder or its agent or attorney and funds  sufficient to pay any transfer  taxes
payable upon the making of such transfer.  Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the  denomination or  denominations
specified in such  instrument of  assignment,  and shall issue to the assignor a
new Warrant  evidencing  the portion of this Warrant not so  assigned,  and this
Warrant shall promptly be cancelled.  A Warrant,  if properly  assigned,  may be
exercised by a new holder for the purchase of Warrant  Shares  without  having a
new Warrant issued.

      (b) New  Warrants.  This  Warrant  may be divided or  combined  with other
Warrants  upon  presentation  hereof at the  aforesaid  office  of the  Company,
together with a written notice  specifying the names and  denominations in which
new  Warrants  are to be issued,  signed by the Holder or its agent or attorney.
Subject  to  compliance  with  Section  4(a),  as to any  transfer  which may be
involved in such division or combination,  the Company shall execute and deliver
a new Warrant or Warrants in exchange  for the Warrant or Warrants to be divided
or combined in accordance with such notice.


                                       9
<PAGE>

      (c) Warrant  Register.  The Company  shall  register  this  Warrant,  upon
records  to be  maintained  by  the  Company  for  that  purpose  (the  "Warrant
Register"),  in the name of the  record  Holder  hereof  from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise  hereof or any  distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.

      (d)  Transfer  Restrictions.  If,  at the  time of the  surrender  of this
Warrant in connection  with any transfer of this  Warrant,  the transfer of this
Warrant shall not be registered pursuant to an effective  registration statement
under the Securities Act and under applicable state securities or blue sky laws,
the Company may require,  as a condition of allowing  such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written  opinion of counsel  (which  opinion  shall be in form,  substance and
scope  customary  for  opinions of counsel in  comparable  transactions)  to the
effect that such transfer may be made without  registration under the Securities
Act and under applicable state securities or blue sky laws, (ii) that the Holder
or transferee  execute and deliver to the Company an  investment  letter in form
and  substance  acceptable  to the Company and (iii) that the  transferee  be an
"accredited investor" as defined in Rule 501(a)(1),  (a)(2),  (a)(3), (a)(7), or
(a)(8) promulgated under the Securities Act or a qualified  institutional  buyer
as defined in Rule 144A(a) under the Securities Act.

Section 5. Miscellaneous.

      (a)  Title to  Warrant.  Prior to the  Termination  Date  and  subject  to
compliance with applicable laws and Section 4 of this Warrant,  this Warrant and
all rights  hereunder  are  transferable,  in whole or in part, at the office or
agency of the  Company by the Holder in person or by duly  authorized  attorney,
upon surrender of this Warrant  together with the Assignment Form annexed hereto
properly  endorsed.  The transferee shall sign an investment  letter in form and
substance reasonably satisfactory to the Company.

      (b) No Rights or Liabilities as a Stockholder Until Exercise. This Warrant
does  not  entitle  the  Holder  to any  voting  rights  or  other  rights  as a
stockholder  of the Company prior to its exercise in  accordance  with the terms
and  restrictions  hereof.  No  provision  of this  Warrant,  in the  absence of
affirmative  action by the holder hereof to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the holder hereof,  shall give
rise to any liability of such holder for the Exercise  Price or as a stockholder
of the  Company,  whether  such  liability  is  asserted  by the  Company  or by
creditors of the Company.

      (c) Loss,  Theft,  Destruction  or  Mutilation  of  Warrant.  The  Company
covenants that upon receipt by the Company of evidence  reasonably  satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate  relating  to the  Warrant  Shares,  and in case of  loss,  theft or
destruction,  of indemnity or security reasonably  satisfactory to it (which, in
the case of the  Warrant,  shall not include the posting of any bond),  and upon
surrender and cancellation of such Warrant or stock  certificate,  if mutilated,
the Company  will make and deliver a new  Warrant or stock  certificate  of like
tenor  and  dated  as of such  cancellation,  in lieu of such  Warrant  or stock
certificate. (d) Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the  expiration of any right required or granted
herein shall be a Saturday,  Sunday or a legal holiday,  then such action may be
taken or such right may be exercised on the next  succeeding day not a Saturday,
Sunday or legal holiday.


                                       10
<PAGE>

      (e) Protection of Holder's  Rights.  Except and to the extent as waived or
consented  to by the  Holder,  the Company  shall not by any action,  including,
without  limitation,  amending its certificate of  incorporation  or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities  or any other  voluntary  action,  avoid or seek to avoid the
observance or performance  of any of the terms of this Warrant,  but will at all
times in good  faith  assist in the  carrying  out of all such  terms and in the
taking of all such  actions as may be necessary  or  appropriate  to protect the
rights of the Holder as set forth in this Warrant  against  impairment.  Without
limiting the generality of the foregoing,  the Company will (i) not increase the
par value of any Warrant  Shares  above the amount  payable  therefor  upon such
exercise  immediately  prior to such  increase in par value,  (ii) take all such
action as may be necessary or  appropriate in order that the Company may validly
and legally issue fully paid and nonassessable  Warrant Shares upon the exercise
of this  Warrant,  and  (iii)  obtain  all such  authorizations,  exemptions  or
consents from any public regulatory body having  jurisdiction  thereof as may be
necessary to enable the Company to perform its  obligations  under this Warrant.
Before  taking any action which would result in an  adjustment  in the number of
Warrant Shares for which this Warrant is  exercisable or in the Exercise  Price,
the Company  shall obtain all such  authorizations  or  exemptions  thereof,  or
consents thereto,  as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.

      (f) Jurisdiction.  All questions  concerning the  construction,  validity,
enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.

      (g) Restrictions. The Holder acknowledges that the Warrant Shares acquired
upon the exercise of this Warrant,  if not  registered,  will have  restrictions
upon resale imposed by state and federal securities laws.

      (h) Nonwaiver  and Expenses.  No course of dealing or any delay or failure
to exercise any right  hereunder  on the part of the Holder  shall  operate as a
waiver of such right or  otherwise  prejudice  the  Holder's  rights,  powers or
remedies,  notwithstanding  all rights  hereunder  terminate on the  Termination
Date. If the Company  willfully and knowingly fails to comply with any provision
of this  Warrant,  which  results in any  material  damages to the  Holder,  the
Company shall pay to the Holder such amounts as shall be sufficient to cover any
costs and expenses  including,  but not limited to, reasonable  attorneys' fees,
including those of appellate  proceedings,  incurred by the Holder in collecting
any amounts due  pursuant  hereto or in otherwise  enforcing  any of its rights,
powers or remedies hereunder.


                                       11
<PAGE>

      (i) Notices.  Any notice,  request or other document required or permitted
to be given or  delivered  to the Holder by the Company  shall be  delivered  in
accordance with the notice provisions of the Purchase Agreement.

      (j) Limitation of Liability.  No provision  hereof,  in the absence of any
affirmative  action by the Holder to exercise  this Warrant or purchase  Warrant
Shares,  and no  enumeration  herein of the rights or  privileges of the Holder,
shall give rise to any  liability  of the Holder for the  purchase  price of any
Common  Stock or as a  stockholder  of the Company,  whether  such  liability is
asserted by the Company or by creditors of the Company.

      (k) Remedies.  The Holder,  in addition to being  entitled to exercise all
rights  granted by law,  including  recovery  of  damages,  will be  entitled to
specific  performance of its rights under this Warrant.  The Company agrees that
monetary  damages  would not be adequate  compensation  for any loss incurred by
reason of a breach by it of the  provisions of this Warrant and hereby agrees to
waive the defense in any action for  specific  performance  that a remedy at law
would be adequate.

      (l) Successors and Assigns.  Subject to applicable  securities  laws, this
Warrant  and the rights and  obligations  evidenced  hereby  shall  inure to the
benefit of and be binding upon the  successors of the Company and the successors
and permitted assigns of the Holder. The provisions of this Warrant are intended
to be for the benefit of all Holders from time to time of this Warrant and shall
be enforceable by any the Holder or holder of Warrant Shares.

      (m)  Amendment.  Subject to Section 2(d),  this Warrant may be modified or
amended or the provisions  hereof waived with the written consent of the Company
and the Holder.

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

      (o) Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.


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

                                       12
<PAGE>



      IN WITNESS WHEREOF,  the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.


Dated:  June [__], 2006

                                        DIOMED HOLDINGS, INC.


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



                                       13
<PAGE>



                               NOTICE OF EXERCISE

TO: Diomed Holdings, Inc.

      (1) The undersigned  hereby elects to purchase  ________ Warrant Shares of
the Company  pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable  transfer  taxes,  if any.  Payment shall take the form of lawful
money of the United States.

      (2) Please issue a certificate or certificates  representing  said Warrant
Shares in the name of the  undersigned  or in such  other  name as is  specified
below:

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


The Warrant Shares shall be delivered to the following:

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

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

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

      (4) Accredited  Investor.  The undersigned is an "accredited  investor" as
defined  in  Regulation  D  promulgated  under the  Securities  Act of 1933,  as
amended.

      (5) Limitations on Ownership.  The undersigned hereby certifies that after
giving  effect to the  exercise of this  Warrant  hereby and the issuance of the
Warrant  Shares  hereunder,  the  undersigned  will not be in  violation  of the
limitations on ownership described in Section 2(d) of this Warrant.

                                        [PURCHASER]


                                        By: ______________________________
                                            Name:
                                            Title:

                                        Dated:  ________________________


<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)



      FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to


_______________________________________________ whose address is

---------------------------------------------------------------.

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

                                        Dated:  ______________, _______


                  Holder's Signature:   _____________________________

                  Holder's Address:     _____________________________

                                        _____________________________

Signature Guaranteed:  ___________________________________________


NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.