June 30, 2006

Mr. David B. Swank
Chief Financial Officer
Diomed Holdings, Inc.
One Dundee Park
P.O. Box 97 Andover, MA 01810

Dear David:

      Roth  Capital  Partners,  LLC  ("we,"  "us" or "RCP") is pleased to act as
financial advisor and co-placement agent for Diomed Holdings, Inc. ("you" or the
"Company") in connection with your proposed private placement.  The terms of our
engagement  are set  forth  below in this  letter  (this  "Agreement").  We look
forward to working with you.

1.    The Offering.

            (a) The Company currently  anticipates  raising between $7.5 and $10
      million  involving  the  sale  in a  private  placement  financing  of the
      Company's   equity  or   equity-linked   securities  (the  "Offering")  to
      institutional  investors (the  "Investors").  Of the funds to be raised in
      the Offering,  the Company anticipates that certain amounts will be raised
      from (a)  Investors  previously  introduced to the Company by RCP and with
      which  RCP has  substantial  prior  relationships,  the names of which are
      listed on the attached Schedule A (the "Existing RCP Investors"), pursuant
      to the  exercise  of certain  participation  rights  that are held by such
      Existing  RCP  Investors,  and (b)  after  the time at which  the  Company
      provides written consent to approach such investors  generally,  Investors
      with  which  RCP  has  substantial   prior   relationships   but  are  not
      stockholders of the Company (the "New RCP Investors").  In addition, it is
      possible  that certain  stockholders  of the Company may exercise  certain
      "MFN Rights"  under which they will exchange  their current  investment in
      the Company for securities to be issued in the Offering.  The actual terms
      of the Offering will depend on market  conditions,  and will be subject to
      negotiation between the Company and prospective Investors.

            (b) Although we cannot  guarantee  you that we will be able to raise
      new capital, we will conduct the offering on a "best efforts" basis.

            (c) In turn,  during  the term of our  engagement,  you agree not to
      engage any other  financial  advisor,  placement  agent or finder to raise
      capital  (including debt) for you, except for Musket Research  Associates,
      Inc. ("MRA").

            (d) We will not approach any New RCP Investor  without the Company's
      prior written consent as to the identity of the New RCP Investor.

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Diomed, Inc.
Page 2

            (e) We will  provide  feedback  to the  Board  of  Directors  of the
      Company  with respect to our views as to the terms and  conditions  of the
      financing   and  how  such  terms  and   conditions   compare  with  other
      transactions   with  which  we  are  familiar  in  the  current  financing
      environment  for companies  comparable to the Company.  The foregoing will
      not be a "fairness opinion" but rather will informal advice be provided to
      assist  the Board of  Directors  in making its own  determination,  in the
      business judgment of the Board of Directors,  of whether  consummating the
      Offering is, or such Offering terms and conditions are,  acceptable to the
      Company


2.    Fees and Expenses.

            (a)  Contemporaneously  with the consummation of the Offering,  such
      that all of the funds to be raised in connection  therewith have been paid
      to the Company  (the  "Proceeds"),  the Company will pay us a fee equal to
      (i)  cash  equal  to six  percent  (6%) of the  amount  raised  by us from
      Existing  RCP  Investors  and New RCP  Investors  and  (ii)  common  stock
      purchase  warrants  equal in number to five  percent (5%) of the number of
      common  share  equivalents  purchased by New RCP  Investors,  in each case
      exclusive of any  participation  in the exchange  under any existing  "MFN
      Rights."  Such fee shall  constitute  the complete  and full  compensation
      payable to us and our agents arising from the Offering and the sale by the
      Company of  securities  thereunder  to the  Investors  (including  the RCP
      Investors and all other Investors), and neither the Company nor any of its
      agents,  successors or assigns shall be entitled to any additional payment
      whatsoever hereunder,  including in the event that the Company enters into
      any subsequent financing transaction of any nature with any one or more of
      the Investors (including the RCP Investors and all other Investors) in the
      Offering.

3.    Term of Engagement.

            (a) The term of our  engagement  will be the  later of  thirty  days
      commencing  on the day this  Agreement  is signed by  Company  or upon the
      close of the Offering.  However, either party may terminate our engagement
      at  any  time  upon  5 days  written  notice  to  the  other  party.  Upon
      termination,  we will be  entitled  to  collect  all fees  earned (if any)
      through the date of termination.

4.    Representations and Warranties.

            (a) We hereby  represent  and warrant to the  Company  that RCP is a
      duly-licensed  broker-dealer  and  has  all  requisite  approvals,  power,
      licenses and  registrations as are required to provide its services to the
      Company as set forth herein.

            (b) You agree that, in connection with the Offering,  you will enter
      into subscription, registration rights and other customary agreements, and
      that your counsel will supply an opinion letter on the transaction, all of
      which  will  be in  form  and  substance  reasonably  acceptable  to,  and
      addressed to, us and the Investors.

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Diomed, Inc.
Page 3

            (c) You further  agree that we may rely upon,  and are a third party
      beneficiary  of,  the   representations   and  warranties  and  applicable
      covenants, set forth in any agreements with Investors in the Offering.


      5. Diligence;  Information.  In connection  with RCP's  activities on your
      behalf,  you will  furnish RCP with all  financial  and other  information
      regarding  the Company that RCP  reasonably  believes  appropriate  to its
      assignment  (all such  information  so furnished  by the Company,  whether
      furnished  before or after the date of this  Agreement,  being referred to
      herein as the "Information"). The Company will provide RCP with reasonable
      access to the officers,  directors,  employees,  independent  accountants,
      legal  counsel and other  advisors and  consultants  of the  Company.  You
      recognize  and  agree  that RCP (i) will  use and  rely  primarily  on the
      Information and  information  available from generally  recognized  public
      sources in performing the services  contemplated by this Agreement without
      independently  verifying the Information or such other  information,  (ii)
      does not assume responsibility for the accuracy of the Information or such
      other  information,  and (iii) will not make an appraisal of any assets or
      liabilities owned or controlled by the Company or its market  competitors.
      We will maintain the  confidentiality  of the Information  and, unless and
      until such  information  shall have been made  publicly  available  by the
      Company or by others without breach of a confidentiality  agreement, shall
      disclose the Information  only as authorized by the Company or as required
      by law or by  order of a  governmental  authority  or  court of  competent
      jurisdiction.  If we are legally required to make disclosure of any of the
      Information,  we will give notice to the Company prior to such disclosure,
      to the extent that we can practically do so.


      The foregoing paragraph shall not apply to information that:

      (i)   at the time of disclosure by the Company is, or thereafter  becomes,
            generally  available to the public or within the industries in which
            the  Company or its  affiliates  conduct  business,  other than as a
            direct  result  of a  breach  by us of our  obligations  under  this
            Agreement;

      (ii)  prior to or at the time of disclosure by the Company, was already in
            the possession of, or conceived by, us or any of our affiliates,  or
            could have been  developed  by them from  information  then in their
            possession, by the application of other information or techniques in
            their possession, generally available to the public, or available to
            us or our  affiliates  other  than from the  Company  (including  as
            previously provided to us by the Company);

      (iii) at the time of disclosure by the Company or thereafter,  is obtained
            by us or any of our affiliates  from a third party who we reasonably
            believe to be in possession of the  information  not in violation of
            any contractual,  legal or fiduciary  obligation to the Company with
            respect to that information; or

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Diomed, Inc.
Page 4

      (iv)  is independently developed by us or our affiliates.

      Nothing in this  Agreement  shall be construed to limit the ability of RCP
      or its affiliates to pursue, investigate, analyze, invest in, or engage in
      investment banking,  financial advisory or any other business relationship
      with entities other than the Company,  notwithstanding  that such entities
      may be engaged in a business which is similar to or  competitive  with the
      business of the Company,  and notwithstanding  that such entities may have
      actual  or  potential  operations,   products,   services,  plans,  ideas,
      customers or supplies  similar or identical to the Company's,  or may have
      been identified by the Company as potential merger or acquisition  targets
      or potential candidates for some other business  combination,  cooperation
      or  relationship.  The Company  expressly  acknowledges and agrees that it
      does not claim  any  proprietary  interest  in the  identity  of any other
      entity in its  industry or  otherwise,  and that the  identity of any such
      entity is not confidential information.

      6.  Indemnification and Contribution.  The Company agrees to indemnify RCP
      and its controlling persons, representatives and agents in accordance with
      the  indemnification   provisions  set  forth  in  Appendix  I,  which  is
      incorporated  herein  by  this  reference.  These  provisions  will  apply
      regardless  of  whether  the  proposed  Offering  is  consummated  or this
      Agreement is terminated.

      7. Other RCP Engagements.  Nothing in this Agreement shall be construed to
      limit  the  ability  of RCP  or its  affiliates  to  pursue,  investigate,
      analyze, invest in, or engage in investment banking, financial advisory or
      any other  business  relationship  with  entities  other than the Company,
      notwithstanding  that such entities may be engaged in a business  which is
      similar  to  or  competitive  with  the  business  of  the  Company,   and
      notwithstanding   that  such   entities   may  have  actual  or  potential
      operations,  products,  services,  plans,  ideas,  customers  or  supplies
      similar or identical to the Company's,  or may have been identified by the
      Company as potential merger or acquisition targets or potential candidates
      for some other  business  combination,  cooperation or  relationship.  The
      Company  expressly  acknowledges  and  agrees  that it does not  claim any
      proprietary  interest in the  identity of any other entity in its industry
      or otherwise, and that the identity of any such entity is not confidential
      information.

      8. Other  Finders and  Placement  Agents.  You represent and warrant that,
      with the  exception  of MRA,  there is no other  person or entity  that is
      entitled  to a  finder's  fee or  any  type  of  brokerage  commission  in
      connection with the Offering as a result of any agreement or understanding
      with the Company.

      9.  Governing  Law. This  Agreement  shall be governed by and construed in
      accordance  with the laws of the State of New York applicable to contracts
      executed and to be wholly  performed  therein without giving effect to its
      conflicts of laws principles or rules.  The Company and RCP agree that any
      dispute  concerning  this  Agreement  shall be  resolved  through  binding
      arbitration  conducted by a panel of three arbitrators,  one chosen by the
      Company,  one  chosen by RCP and the third  chosen by the two  arbitrators
      selected by the parties,  pursuant to the commercial  arbitration rules of
      the American Arbitration  Association.  If the parties are unable to reach
      agreement on the  arbitration  panel,  the  arbitrators  will be appointed
      pursuant to the applicable  commercial  rules of the American  Arbitration
      Association.  Arbitration  will be venued in New York County,  in the City
      and State of New York.

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Diomed, Inc.
Page 5

      10. Announcement of Offering. If the Offering is consummated,  RCP may, at
      its expense,  place an  announcement in such newspapers and periodicals as
      RCP may  desire,  provided,  that the  Company  shall have given its prior
      approval  of each such  announcement  as to its  content  and  form,  such
      approval not to be unreasonably withheld.

      11. Advice to the Board. The Company acknowledges that any advice given by
      us to you  (including  without  limitation  such  advice  as may be  given
      pursuant  to section  1(e)  hereof) is solely for  benefit  and use of the
      Board  of  Directors  of the  Company  and  may not be  used,  reproduced,
      disseminated, quoted or referred to, without our prior written consent. If
      disclosure  of our advice is required by law or in your view is  necessary
      for the defense of any proceeding,  then,  notwithstanding  the foregoing,
      you  may  disclose  such  advice  so  long  as you  shall,  prior  to such
      disclosure,  afford us the opportunity to review in advance the portion of
      such  disclosure  which  mentions us or our advice and to approve the form
      thereof, such approval not to be unreasonably withheld by us.

      12.  Entire  Agreement.   This  Agreement  (including  any  schedules  and
      appendices  hereto)  constitutes the entire agreement  between the parties
      and  supersedes   and  cancels  any  and  all  prior  or   contemporaneous
      arrangements, understandings and agreements, written or oral, between them
      relating to the subject matter hereof.


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Diomed, Inc.
Page 6


      We look forward to working with you toward the  successful  conclusion  of
this engagement, and developing a long-term relationship with the Company.


Very truly yours,

ROTH CAPITAL PARTNERS, LLC


By:
    ----------------------------------------------------------
         Christopher D. Jennings

         Managing Director


Confirmed and accepted as of this 30 day of June, 2006:

DIOMED, INC.

By:
    ----------------------------------------
         David B. Swank

         Chief Financial Officer



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Diomed, Inc.
Page 7


                                   APPENDIX I


                        INDEMNIFICATION AND CONTRIBUTION

      The Company  agrees to indemnify and hold harmless RCP and its  affiliates
(as defined in Rule 405 under the  Securities Act of 1933, as amended) and their
respective directors,  officers,  employees, agents and controlling persons (RCP
and each such person being an "Indemnified  Party") from and against all losses,
claims,  damages and liabilities (or actions,  including shareholder actions, in
respect thereof),  joint or several,  to which such Indemnified Party may become
subject  under any  applicable  federal or state law,  or  otherwise,  which are
related to or result from the  performance  by RCP of the services  that are the
subject of this Agreement and will promptly  reimburse any Indemnified Party for
all reasonable expenses (including reasonable counsel fees and expenses) as they
are incurred in connection with the investigation of, preparation for or defense
arising from any  threatened or pending claim,  whether or not such  Indemnified
Party is a party  and  whether  or not  such  claim,  action  or  proceeding  is
initiated  or  brought by the  Company.  The  Company  will not be liable to any
Indemnified  Party  under  the  foregoing   indemnification   and  reimbursement
provisions,  (i) for any settlement by an Indemnified Party effected without its
prior written consent (not to be unreasonably  withheld);  or (ii) to the extent
that any loss,  claim,  damage or liability is found in a final,  non-appealable
judgment by a court of competent  jurisdiction  to have resulted  primarily from
RCP's willful  misconduct or gross  negligence.  The Company also agrees that no
Indemnified  Party shall have any  liability  (whether  direct or  indirect,  in
contract  or tort or  otherwise)  to the  Company  or its  security  holders  or
creditors related to or arising out of the engagement of RCP pursuant to, or the
performance by RCP of the services contemplated by, this Agreement except to the
extent  that  any  loss,  claim,  damage  or  liability  is  found  in a  final,
non-appealable  judgment by a court of competent  jurisdiction  to have resulted
primarily  from RCP's willful  misconduct or gross  negligence in performing the
services that are the subject of this Agreement.

      Promptly after receipt by an Indemnified  Party of notice of any intention
or  threat  to  commence  an  action,  suit  or  proceeding  or  notice  of  the
commencement of any action, suit or proceeding,  such Indemnified Party will, if
a claim in respect  thereof is to be made against the Company  pursuant  hereto,
promptly  notify the Company in writing of the same.  In case any such action is
brought against any Indemnified  Party and such  Indemnified  Party notifies the
Company of the commencement thereof, the Company may elect to assume the defense
thereof, with counsel reasonably  satisfactory to such Indemnified Party, and an
Indemnified  Party may employ  counsel to participate in the defense of any such
action provided, that the employment of such counsel shall be at the Indemnified
Party's  own  expense,  unless  (i) the  employment  of such  counsel  has  been
authorized in writing by the Company,  (ii) the Indemnified Party has reasonably
concluded (based upon advice of counsel to the Indemnified Party) that there may
be  legal  defenses  available  to it or  other  Indemnified  Parties  that  are
different  from or in  addition to those  available  to the  Company,  or that a
conflict  or  potential  conflict  exists  (based  upon advice of counsel to the
Indemnified  Party) between the Indemnified  Party and the Company that makes it
impossible or inadvisable for counsel to the  Indemnifying  Party to conduct the
defense of both the Company and the Indemnified Party (in which case the Company
will not have the right to direct the  defense  of such  action on behalf of the
Indemnified  Party),  or (iii)  the  Company  has not in fact  employed  counsel
reasonably  satisfactory to the Indemnified  Party to assume the defense of such
action within a reasonable  time after receiving  notice of the action,  suit or
proceeding,  in each of which cases the reasonable fees, disbursements and other
charges  of  such  counsel  will be at the  expense  of the  Company;  provided,
further, that in no event shall the Company be required to pay fees and expenses
for more than one firm of attorneys representing  Indemnified Parties unless the
defense  of one  Indemnified  Party is unique or  separate  from that of another
Indemnified  Party subject to the same claim or action.  Any failure or delay by
an Indemnified  Party to give the notice referred to in this paragraph shall not
affect such Indemnified Party's right to be indemnified hereunder, except to the
extent  that  such  failure  or delay  causes  actual  harm to the  Company,  or
prejudices  its ability to defend such action,  suit or  proceeding on behalf of
such Indemnified Party.

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Diomed, Inc.
Page 8

      If the  indemnification  provided for in this  Agreement is for any reason
held  unenforceable by an Indemnified Party, the Company agrees to contribute to
the losses,  claims,  damages and liabilities for which such  indemnification is
held  unenforceable  (i) in such  proportion  as is  appropriate  to reflect the
relative benefits to the Company, on the one hand, and RCP on the other hand, of
the Offering as contemplated whether or not the Offering is consummated or, (ii)
if (but only if) the  allocation  provided  for in clause  (i) is for any reason
unenforceable,  in such  proportion  as is  appropriate  to reflect not only the
relative  benefits  referred to in clause (i) but also the relative fault of the
Company,  on the one hand and  RCP,  on the  other  hand,  as well as any  other
relevant equitable  considerations.  The Company agrees that for the purposes of
this  paragraph the relative  benefits to the Company and RCP of the Offering as
contemplated  shall be deemed to be in the same  proportion that the total value
received or contemplated to be received by the Company or its  shareholders,  as
the case may be, as a result of or in  connection  with the Offering bear to the
fees  paid  or to be paid  to RCP  under  this  Agreement.  Notwithstanding  the
foregoing,  the  Company  expressly  agrees  that RCP shall not be  required  to
contribute  any amount in excess of the amount by which fees paid RCP  hereunder
(excluding reimbursable  expenses),  exceeds the amount of any damages which RCP
has otherwise been required to pay.

      The Company agrees that without RCP's prior written consent, which consent
shall not be unreasonably withheld, it will not settle, compromise or consent to
the  entry of any  judgment  in any  pending  or  threatened  claim,  action  or
proceeding  in  respect  of which  indemnification  could be  sought  under  the
indemnification  provisions  of  this  Agreement  (in  which  RCP or  any  other
Indemnified  Party is an  actual or  potential  party to such  claim,  action or
proceeding),   unless  such  settlement,   compromise  or  consent  includes  an
unconditional  release of each Indemnified  Party from all liability arising out
of such claim, action or proceeding.

      In the event that an Indemnified  Party is requested or required to appear
as a witness in any action  brought by or on behalf of or against the Company in
which such Indemnified Party is not named as a defendant,  the Company agrees to
promptly  reimburse  RCP on a monthly  basis for all expenses  incurred by it in
connection with such  Indemnified  Party's  appearing and preparing to appear as
such  a  witness,  including,   without  limitation,  the  reasonable  fees  and
disbursements of its legal counsel.

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Diomed, Inc.
Page 9


      If  multiple  claims  are  brought  with  respect to at least one of which
indemnification  is permitted  under  applicable law and provided for under this
Agreement,  the  Company  agrees that any  judgment  or arbitral  award shall be
conclusively  deemed  to be  based on  claims  as to  which  indemnification  is
permitted and provided for,  except to the extent the judgment or arbitral award
expressly states that it, or any portion thereof,  is based solely on a claim as
to which indemnification is not available.

      The  provisions  of this  Appendix  I shall  survive  any  termination  or
completion of the engagement provided by this Agreement.