DIOMED HOLDINGS, INC.

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

                         CERTIFICATE OF DESIGNATIONS OF
                      CLASS A CONVERTIBLE PREFERRED STOCK,
                           PAR VALUE $0.001 PER SHARE

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

           Pursuant to Section 78.1955 of the Nevada Revised Statutes

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


IT IS HEREBY CERTIFIED that:

       1. The name of the  company  (hereinafter  called the  "CORPORATION")  is
Diomed Holdings, Inc., a corporation organized and now existing under the Nevada
Revised Statutes.

       2. The Articles of  Incorporation  of the  Corporation  (the "ARTICLES OF
INCORPORATION")  authorizes the issuance of Five Million  (5,000,000)  shares of
preferred  stock,  par value  $0.001  per share  (the  "PREFERRED  STOCK"),  and
expressly  vests in the Board of Directors of the  Corporation  the authority to
issue any or all of said shares by  resolution or  resolutions  and to establish
the designation and number of shares to be issued.

       3. The Board of Directors of the  Corporation,  pursuant to the authority
expressly  vested in it as aforesaid,  and pursuant to the provisions of Section
78.1955 of the Nevada  Revised  Statutes,  has adopted the  resolution set forth
below to create a series of Preferred Stock.  Pursuant to Section  78.1955,  the
approval of the Corporation's shareholders was not required.

       RESOLVED,  THAT Four Million Three Hundred Thousand (4,300,000) shares of
the Five Million  (5,000,000) shares of Preferred Stock of the Corporation which
are  authorized  shares  as of the  date of this  certificate  shall  hereby  be
designated Class A Convertible  Preferred Stock, par value $0.001 per share (the
"CERTIFICATE"), and shall possess the rights and preferences set forth below:

       1.  DIVIDENDS.  The holders of the  Corporation's  common  stock shall be
entitled, when and if declared by the board of directors of the corporation (the
"BOARD OF DIRECTORS"),  to cash dividends and  distributions out of funds of the
corporation legally available for that purpose  (collectively,  "DISTRIBUTIONS")
PRO RATA and PARI PASSU with the holders of the Corporation's  common stock, par
value   $0.001   per  share  (the   "COMMON   STOCK")   such  that,   until  the
Recapitalization   occurs,   the  Distributions   payable  on  each  issued  and
outstanding  share of the Preferred Stock are four times the amount paid on each
issued and outstanding share of the Common Stock, and all Distributions shall be
declared, paid and set aside ratably on the

<PAGE>



foregoing  basis among the holders of the Preferred Stock and the holders of the
Common Stock in proportion to the issued and outstanding shares of the Preferred
Stock and the Common Stock held by them.


2.       VOTING.
         ------

       (a) The holders of the Preferred Stock shall each be entitled to vote the
number of votes  equal to the  number of shares of the  Common  Stock into which
such shares are to be converted  pursuant to this Section 4 of this Certificate.
Except as expressly set forth in this Section 2 of this Certificate,  any matter
as to which the holders of Common Stock are  entitled to vote shall  require the
affirmative  vote of the  holders  of a majority  of the issued and  outstanding
shares of Preferred Stock, voting as one class.

       (b) The  affirmative  vote of the holders of a majority of the issued and
outstanding  shares of the Preferred Stock voting as a separate class,  shall be
required to change the powers,  preferences  or special  rights of the shares of
the Preferred Stock in relation to the shares of the Common Stock.


3.       LIQUIDATION.
         -----------

       (a) Upon the  occurrence  of a  Liquidating  Event (as  defined  below in
Section 3(c) of this Certificate), whether voluntary or involuntary, the holders
of the Preferred  Stock and the Common Stock of all classes shall be entitled to
receive, PRO RATA and PARI PASSU out of the assets of the Corporation  available
for  distribution  to its  stockholders  or from the net  proceeds  from a sale,
lease,  exchange or other  disposition of the assets of the  Corporation (in any
such case, the  "PROCEEDS"),  as applicable,  as follows:  the entire assets and
funds of the Corporation legally available for distribution shall be distributed
ratably among the holders of the Preferred Stock and the Common Stock such that,
until the  Recapitalization  occurs, that the Proceeds distributed on account of
each issued and outstanding share of the Preferred Stock shall be four times the
amount distributed on account of each issued and outstanding share of the Common
Stock in proportion to the issued and outstanding  shares of the Preferred Stock
and the Common Stock held by them.

       (b) VALUATION.  If any asset  distributed to holders of the Corporation's
common stock upon the occurrence of any  Liquidating  Event consists of property
other than cash or securities, the value of such distribution shall be deemed to
be the fair market value thereof at the time of such distribution, as determined
in good faith by the Board of Directors. Any securities to be delivered pursuant
to this Section 3 shall be valued as follows:


              (i)   Securities  not  subject   to  investment  letter  or  other
       similar restrictions on free  marketability  covered by Section  3(b)(ii)
       of  this  Certificate shall  be valued  by the Board  of Directors at the
       Market Price (as defined below in Section 3(d) of this Certificate); and

              (ii)  Securities subject to investment letter or other
       restrictions  on  free  marketability  (other than  restrictions  arising
       solely  by  virtue  of  a stockholder's  status as an affiliate or former
       affiliate) shall be valued by the Board of Directors

                                       2
<PAGE>


              at an  appropriate  discount from the Market Price,  as reasonably
              determined by the Board of Directors in good faith, to reflect the
              adjusted fair market value thereof.


       (c)  LIQUIDATING  EVENT.  Any of the  following  shall  be  considered  a
"LIQUIDATING EVENT" and shall entitle the holders of the Preferred Stock and the
Common Stock to receive promptly after the Corporation's realization thereof, in
cash,  securities or other property,  those amounts specified in Section 3(a) of
this Certificate and valued as provided in Section 3(b) of this Certificate:

              (i) any liquidation, dissolution or winding up of the Corporation;
       or

              (ii) any sale,  lease, exchange or other  disposition  of  all  or
       substantially all the Corporation's assets.

       (d) As used herein,  "MARKET  PRICE" of any security means the average of
the  closing  prices  of  such  security's  sales  on the  principal  securities
exchanges  on which such  security  may at the time be listed,  or, if there has
been no sales on any such  exchange  on any day,  the average of the highest bid
and lowest asked prices on all such  exchanges at the end of such day, or, if on
any day such security is not so listed,  the average of the  representative  bid
and asked prices quoted in the NASDAQ System as of 4:00 p.m., New York time, or,
if on any day such security is not quoted in the NASDAQ  System,  the average of
the  highest  bid  and  lowest   asked  prices  on  such  day  in  the  domestic
over-the-counter   market  as  reported  by  the  National   Quotation   Bureau,
Incorporated,  or any similar successor origination,  in each such case averaged
over a period  of five days  consisting  of the day prior to the day as of which
Market Price is being determined and the four consecutive business days prior to
such day. If at any time such security is not listed on any securities  exchange
or quoted in the NASDAQ System or the over-the-counter  market, the Market Price
shall  be the fair  value  thereof  determined  in good  faith  by the  Board of
Directors.


       4. CONVERSION OF SHARES OF THE PREFERRED  STOCK.  Shares of the Preferred
Stock shall  automatically  convert into shares of the Common Stock on the basis
set  forth  in,  and  subject  to the  limitations  of,  this  Section 4 of this
Certificate:


       (a)    CONVERSION RATIO.

              (i)  Subject  to and in  compliance  with the  provisions  of this
       Section  4, each one (1) share of the  Preferred  Stock (or any  fraction
       thereof)  shall be converted  into four (4) fully paid and  nonassessable
       shares (calculated as to each conversion to the nearest one-thousandth of
       a share) of the Common Stock.  The ratio of 1:4, as adjusted  pursuant to
       the  Section  4(a)(ii)  of  this  Certificate,  is  referred  to  as  the
       "PREFERRED CONVERSION RATIO."

              (ii)  SUBDIVISION  OR  COMBINATION  OF THE  COMMON  STOCK.  If the
       Corporation  at any time or from time to time  shall  declare  or pay any
       dividend  on the  shares of the  Common  Stock  payable  in shares of the
       Common Stock or in any right to acquire  shares of the Common  Stock,  or
       shall effect a subdivision of the outstanding  shares of the Common Stock
       into a greater  number of shares of the shares of any class of the Common
       Stock  (by  stock  split,  reclassification  or

                                       3
<PAGE>

              otherwise), or if the outstanding shares of the Common Stock shall
              be combined or  consolidated,  by  reclassification  or otherwise,
              into a lesser  number  of  shares of the  Common  Stock,  then the
              Preferred  Conversion  Ratio in effect  immediately  prior to such
              event shall, concurrently with the effectiveness of such event, be
              proportionately decreased or increased, as appropriate,  such that
              each share of the Preferred  Stock is converted  into those shares
              of the Common Stock that represent the economic  equivalent of the
              shares of the Common Stock into which each share of the  Preferred
              Stock  was  convertible   immediately   prior  to  such  dividend,
              subdivision, combination or reclassification.


              (b) AUTOMATIC  CONVERSION.  All of the  outstanding  shares of the
       Preferred  Stock shall  automatically  convert  into shares of the Common
       Stock in accordance with the following Sections 4(c) through 4(n) of this
       Certificate.

              (c) SHARES  ISSUED IN MERGER.  If and to the extent that shares of
       the  Preferred  Stock are held by the Initial  Holder to whom such shares
       were issued as part of the Merger  Consideration  Shares,  such shares of
       the Preferred  Stock shall convert into shares of the Common Stock at the
       following rate:

                     (i) on the date which is the last day of the  second  Month
              (the "BENCHMARK MONTH") after the Registration Effectiveness Date,
              5% of the  shares of the  Preferred  Stock  issued to the  Initial
              Holder as his  portion of the Merger  Consideration  Shares  shall
              automatically,  and without any action on the part of such Initial
              Holder,  convert into the Conversion  Share Amount for such shares
              of the Preferred Stock;

                     (ii) subject to the following clause (iii), on the last day
              of each Month after the  Benchmark  Month  until the  twenty-third
              Month after the  Effective  Time Month,  an  additional  5% of the
              shares of the Preferred  Stock issued to the Initial Holder as his
              portion of the Merger Consideration Shares shall automatically and
              without  any action on the part of such  Initial  Holder,  convert
              into the Conversion Share Amount of the Preferred Stock; and

                     (iii)  in all  events,  and  whether  or not  the  SEC  has
              declared the Resale Registration Statement effective,  on the last
              day  of the  Month  that  is the  twenty-fourth  Month  after  the
              Effective  Time  Month,  the  balance of the  Preferred  Stock not
              theretofore  converted  into  shares  of the  Common  Stock  shall
              automatically  and  without  any  action on the part of the holder
              thereof  be  converted  into the  Conversion  Share  Amount of the
              shares of the Preferred Stock so held at such date.

The provisions of this Section 4(c) shall also apply to shares of the Preferred
Stock distributed to any holder as the Penalty Amount; PROVIDED, that if any of
the Conversion Dates have occurred prior to the distribution of the Penalty
Amount, then the shares of the Penalty Amount distributed to each such holder
shall convert into shares of the Common Stock as if the shares of the Penalty
Amount had been distributed to such holder as of the Effective Time and such
holder had continuously held such shares through the actual date of distribution
to such holder.

                                       4


<PAGE>

       (d) SHARES HELD BY TRANSFEREES OF INITIAL HOLDERS.  No Transferee  Holder
shall have any greater  right as to the  conversion  of the shares of  Preferred
Stock that he holds than the Transferor  Holder would have had if the Transferor
Holder had not transferred such shares.  The rate and amount at which any shares
of the  Preferred  Stock at the time held by a  Transferee  Holder  convert into
shares of the Common Stock shall be determined as follows:

              (i) for all purposes of all  computations  under this Section 4(d)
       of this Certificate,  on each Conversion Date all shares of the Preferred
       Stock held by Transferor Holder and all Related  Transferee Holders shall
       be aggregated  and the Conversion  Share Amount  determined in accordance
       therewith shall be allocated among the Transferor  Holder and the Related
       Transferee  Holders in proportion  to the number of the  Preferred  Stock
       held by the Transferor Holder and all of the Related  Transferee  Holders
       as of the date of determination  before giving effect to such conversion.
       To the extent so permitted by the foregoing,  on each Conversion Date the
       shares  of  the  Preferred  Stock  held  by  a  Transferee  Holder  shall
       automatically  and  without  any  action  on the part of such  Transferee
       Holder  convert  into the  Conversion  Share Amount of such shares of the
       Preferred Stock;

              (ii) on the last day of the Month that is the twenty-fourth  Month
       after the Effective  Time Month,  the balance of the Preferred  Stock not
       theretofore converted into shares of the Common Stock shall automatically
       and  without  any action on the part of the holder  thereof be  converted
       into the  Conversion  Share Amount of the shares of the  Preferred  Stock
       held by such Transferee Holder at such date; and

              (iii) to facilitate  the  foregoing  provisions,  the  Corporation
       shall not be obligated to record any transfer of shares of the  Preferred
       Stock on its books and  records  unless the  Transferor  Holder  (and any
       Transferee Holder that intends to transfer shares of the Preferred Stock)
       shall  have  first  provided  the  Corporation   with   information  that
       identifies  any   Transferee   Holder  to  whom  the  shares  are  to  be
       transferred,  the mailing address of each such Transferee  Holder and the
       number of shares of the Preferred  Stock to be  transferred  to each such
       Transferee   Holder.   The  Corporation  shall  maintain  records  as  to
       Transferor Holders and Related Transferee Holders.

       (e) SHARES  ISSUED UPON  EXERCISE OF OPTIONS OR  WARRANTS.  If and to the
extent that shares of the Preferred  Stock are held by a person who has obtained
such shares upon the exercise of stock options or common stock purchase warrants
that became the  obligations  of the  Corporation  as part of the  Merger,  such
shares of the  Preferred  Stock shall convert into shares of the Common Stock at
the same rate and in the same amounts as conversion would have occurred had such
shares of the  Preferred  Stock been issued to such person as part of the Merger
Consideration  Shares.  If any  options  or  warrants,  as the case may be,  are
exercised on a date which is after the Conversion Date referred to in clause (i)
of Section 4(c) of this Certificate,  then on the last day of the Month in which
such  exercise  occurs  shares of the  Preferred  Stock  issued on the  exercise
thereof  shall  automatically  and without any action on the part of such person
convert into that  Conversion  Share  Amount which is the sum of all  Conversion
Share  Amounts

                                       5


<PAGE>


into which such shares of the Preferred Stock would have been converted had they
initially been acquired as part of the Merger Consideration Shares.


       (f) POSTPONEMENT OF CONVERSION.  If at any time or times prior to the end
of the twelfth  month after the  Effective  Time Month,  the Board of  Directors
shall determine that the Corporation  shall offer shares of the Common Stock (or
any security  convertible  into shares of the Common Stock or any security  upon
the  exercise of which shares of the Common Stock may be acquired) to the public
or otherwise  for purposes of raising  funds or acquiring  other  entities,  the
Corporation  may direct by written notice to all holders of the Preferred  Stock
that further  conversion of those shares of the Preferred Stock that have not as
of such date converted into shares of the Common Stock be postponed for a period
of time determined in good faith by the Board of Directors;  PROVIDED, that this
provision  shall in no event postpone any permitted  date for conversion  beyond
the last day of the  twenty-fourth  Month after the Effective Time Month. At the
expiration of the period determined by the Board of Directors, conversion of the
shares of the Preferred  Stock shall resume at the rate and in the amounts to be
set by the  Board of  Directors  in its sole  discretion,  which  rate and which
amounts shall not, however,  exceed two times the rates and amounts respectively
set forth in clauses (i),  (ii) and (iii) of Section  4(c) of this  Certificate,
without any additional  accumulation  to account for conversion  that would have
occurred but for the operation of this Section 4(f).


       (g) SUBSTITUTION OF PROVISIONS GOVERNING  CONVERTIBILITY.  If at any time
or time prior to the end of the  twenty-fourth  month after the  Effective  Time
Month, the Board of Directors shall enter into a definitive  agreement providing
for a business  combination with a party whose equity  securities are registered
under the Exchange Act or otherwise are publicly  traded and is not an Affiliate
of the  Corporation,  the  Board  of  Directors  may  determine  that  upon  the
consummation  of such business  combination  the provisions of this Section 4 of
this  Certificate  that  determine  the rate and amounts at which  shares of the
Preferred  Stock  convert  into shares of the Common Stock shall  terminate  and
shall be replaced by other  provisions  governing  the rate and amounts at which
shares of the Preferred  Stock (or shares into which such shares are convertible
or  exchangeable)  convert into shares of the Common Stock (or shares into which
such shares are convertible or exchangeable) as long as:


              (i)    the Board of Directors and the  Corporation's  stockholders
       approve the business combination;

              (ii)   the new  provisions  apply  equally  to all  shares  of the
       Preferred Stock at the time outstanding; and

              (iii)  the new  provisions  are in substance not less favorable to
       the holders of the Preferred Stock than the existing provisions governing
       the rate and amount at which shares of the Preferred Stock convert.

       (h)   DISCRETIONARY    TERMINATION   OF   RESTRICTIONS   ON   CONVERSION.
Notwithstanding the provisions of Section 4(c) of this Certificate,  at any time
after  the  later  of (i) the end of the  third  Month  after  the  Registration
Effectiveness  Date and (ii) the end of the twelfth  month  after the  Effective
Time Month,  the Board of Directors may in its sole  discretion  accelerate  the
rate or increase the amounts at which shares of the Preferred Stock convert into

                                       6

<PAGE>


shares of the Common Stock; PROVIDED, that such acceleration shall apply equally
to all shares of the  Preferred  Stock then  outstanding.  Without  limiting the
foregoing,  the Board of Directors may provide that  acceleration of rate and/or
amount will occur if the Corporation meets performance  objective  designated by
the Board of Directors.


       (i)  DETERMINATIONS BY THE CORPORATION.  In determining  Conversion Share
Amounts,  the determination of the Corporation  shall be final,  absent manifest
error.   All   Conversion   Share  Amounts  shall  be  rounded  to  the  nearest
one-thousandth of a share.

       (j) CONVERSION PROCEDURE.

              (i) Each  conversion  of shares of the  Preferred  Stock  shall be
       deemed to have been  effected  as of the close of business on the date on
       which such shares of the Preferred  Stock are  converted  pursuant to the
       terms of Section 4 of this  Certificate.  At the time any such conversion
       has  occurred,  the  rights of the holder of the  shares  converted  as a
       holder of shares of the  Preferred  Stock shall cease,  and the person or
       persons  such shares of the  Preferred  Stock shall  become the holder or
       holders  of record of the  shares of the  Common  Stock  into  which such
       shares of the Preferred Stock were converted.

              (ii) Subject to the  provisions of Section 5 of this  Certificate,
       each holder of the Preferred Stock that holds certificated  shares of the
       Preferred  Stock  may  at  its  option  at  any  time  deposit  with  the
       Corporation or the Corporation's  transfer agent one or more certificates
       representing  shares of the  Preferred  Stock  with  irrevocable  written
       instructions to such transfer agent (with signature medallion guaranteed)
       to issue to such holder on each and every date on which conversion occurs
       pursuant  to  clauses  (i),  (ii)  and  (iii)  of  Section  3(d)  of this
       Certificate   share    certificates    respectively    representing   the
       corresponding  Conversion Share Amounts and deliver such  certificates to
       such  depositing  holder at its  address on the  Corporation's  books and
       records.  In  addition,  any  holder of the  Preferred  Stock who has not
       elected  to so  deposit  its  shares  of the  Preferred  Stock  with  the
       Corporation's  transfer  agent  may at any  time  and  from  time to time
       deliver to the Corporation or its transfer agent one or more certificates
       representing  shares of the  Preferred  Stock  with  irrevocable  written
       instructions  (with  signature  medallion  guaranteed)  to  issue to such
       holder share  certificates  reflecting  any  conversions to shares of the
       Common  Stock that have  theretofore  occurred,  if in either  such case,
       within 10 business days after conversion of shares of the Preferred Stock
       has occurred,  if a properly  executed  deposit request has been made, or
       within 10 business days after the  Corporation  or its transfer agent has
       received a properly signed  conversion  request,  the  Corporation  shall
       deliver to the converting holder:


                     (A) a certificate or certificates  representing  the number
              of  shares  of  the  Common  Stock  issuable  by  reason  of  such
              conversion consistent with Section 4 of this Certificate; and

                                       7

<PAGE>


                     (B) if a holder has  requested  conversion,  a  certificate
              representing   any  shares  of  the  Preferred  Stock  which  were
              represented by the  certificate or  certificates  delivered to the
              Corporation in connection  with such conversion but which have not
              converted.


              (iii) The issuance of certificates  for shares of the Common Stock
       upon  conversion  of  shares  of  the  Preferred  Stock  pursuant  to the
       foregoing clause (ii) shall be made without charge to the holders of such
       shares of the Preferred Stock for any issuance tax in respect thereof (so
       long as such  certificates are issued in the name of the record holder of
       such  shares  of the  Preferred  Stock)  or other  cost  incurred  by the
       Corporation in connection with such  conversion and the related  issuance
       of shares of the  Common  Stock.  Upon  conversion  of each  share of the
       Preferred  Stock,  the  Corporation  shall  take all such  actions as are
       necessary in order to ensure that the shares of the Common Stock issuable
       with respect to such conversion  shall be validly issued,  fully paid and
       nonassessable, free and clear of all taxes (other than any taxes relating
       to  any  dividends  paid  with  respect  thereto),   liens,  charges  and
       encumbrances with respect to the issuance thereof.

              (iv) The  Corporation  shall  not  close  its  books  against  the
       transfer of Common Stock of any class issued or issuable upon  conversion
       of shares of the Preferred Stock in any manner which  interferes with the
       timely  conversion of Stock.  The Corporation  shall assist and cooperate
       with any holder of such shares required to make any governmental  filings
       or obtain any  governmental  approval prior to or in connection  with any
       conversion  of such  shares  hereunder  (including,  without  limitation,
       making any filings required to be made by the Corporation). Shares of the
       Preferred Stock that have been converted shall be cancelled and shall not
       be held in treasury or otherwise be available for reissuance.

       (k) EXTRAORDINARY  EVENT.  Prior to the consummation of any Extraordinary
Event,  subject to the  provisions  of  Section  4(g) of this  Certificate,  the
Corporation shall make appropriate provisions to ensure that each of the holders
of the shares of the Preferred Stock shall  thereafter have the right to acquire
and  receive,  in lieu of or in  addition  to (as the case may be) the shares of
Common Stock  immediately  theretofore  receivable  upon the  conversion of such
holder's  Preferred  Stock,  such shares of stock,  securities or assets as such
holder would have received in connection with such  Extraordinary  Event if such
holder had converted  its shares of Preferred  Stock  immediately  prior to such
Extraordinary  Event.  In each such case,  subject to the  provisions of Section
4(g) of this Certificate, the Corporation shall also make appropriate provisions
to ensure that the  provisions of this Section 4 shall  thereafter be applicable
to the  shares  of the  Preferred  Stock  (including,  in the  case of any  such
consolidation, merger or sale in which the successor entity or purchasing entity
is  other  than  the  Corporation,  an  immediate  adjustment  of the  Preferred
Conversion Ratio reflecting the terms of such consolidation, merger or sale, and
a corresponding immediate adjustment in the number of shares of the Common Stock
acquirable and  receivable  upon  conversion of shares of the Preferred  Stock).
Subject to the provisions of Section 4(g) of this  Certificate,  the Corporation
shall not effect  any  Extraordinary  Event,  unless  prior to the  consummation
thereof,  the successor  entity (if other than the  Corporation)  resulting from
such  consolidation  or merger or the entity  purchasing  such assets assumes in
writing the obligation to deliver to each such holder such shares of stock,

                                       8
<PAGE>



securities  or assets as, in  accordance  with the  foregoing  provisions,  such
holder may be entitled to acquire. As used herein,  "EXTRAORDINARY  EVENT" means
the  occurrence  or   consummation   of  a  transaction  or  series  of  related
transactions resulting in: (i) a merger,  consolidation,  sale or reorganization
in  which  the  Corporation  or any of its  subsidiaries  is not  the  surviving
corporation;  or (ii) a sale, lease or exchange,  directly or indirectly, of all
or substantially  all of the property and assets of the Corporation,  whether or
not in the ordinary course of business.

       (l) NO IMPAIRMENT.  Except as expressly  provided in Section 4(g) of this
Certificate,  the  Corporation  will not, by  amendment of this  Certificate  or
through  any  reorganization,   transfer  of  assets,   consolidation,   merger,
dissolution,  issue or sale of securities or any other  voluntary  action (other
than actions taken in good faith), avoid the observance or performance of any of
the terms to be observed or performed  hereunder by the  Corporation but will at
all  times in good  faith  assist in  carrying  out all the  provisions  of this
Section 4 and in taking all such action as may be  necessary or  appropriate  in
order to  protect  the  conversion  rights of the  holders  of the shares of the
Preferred Stock against impairment.

       (m) RESERVATION OF COMMON STOCK. The Corporation shall, at all times when
shares of the Preferred Stock shall be  outstanding,  reserve and keep available
out of its  authorized  but unissued  stock,  for the purpose of  effecting  the
conversion of shares of the Preferred Stock,  such number of its duly authorized
shares of the Common  Stock as shall from time to time be  sufficient  to effect
the conversion of all outstanding  shares of the Preferred Stock.  Before taking
any action which would cause the effective  purchase price for the shares of the
Preferred  Stock to be less  than the par value of the  shares of the  Preferred
Stock, the Corporation shall take any corporate action which may, in the opinion
of its  counsel,  be  necessary  in order that the  Corporation  may validly and
legally issue fully paid and  nonassessable  shares of such Common Stock at such
effective purchase price.

       (n) DEFINITIONS.  As used in this Certificate,  the following terms shall
have the following definitions:

       "AFFILIATE"  has the meaning given to "affiliate of an issuer" under Rule
144.

       "AGREEMENT  AND PLAN OF MERGER"  means the  Agreement and Plan of Merger,
dated as of January 29, 2002, by and among this Corporation,  Diomed Acquisition
Corp. and Diomed Inc.

       "CONVERSION  DATES" means the dates  referred to in clauses (i), (ii) and
(iii) of Section 4(c) of this  Certificate on which  conversion of the shares of
Preferred Stock occurs.

       "CONVERSION  SHARE AMOUNT" means the number of shares of the Common Stock
equal to the product of the (i) Preferred Conversion Ratio at the time in effect
and (ii) the number of shares of the Preferred  Stock as to which  conversion is
occurring.  For the avoidance of doubt, if the Preferred Conversion Ratio is 1:4
and the  number of  shares  of the  Preferred  Stock as to which  conversion  is
occurring  is 300,  the  Conversion  Share  Amount is 1,200 shares of the Common
Stock.

       "EFFECTIVE  TIME" has the meaning  given it in the  Agreement and Plan of
Merger.

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<PAGE>


                  "EFFECTIVE TIME MONTH" means the Month and year in which the
Effective Time occurred.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                  "INITIAL HOLDER" means any former stockholder of Diomed, Inc.
to whom the Corporation issued shares of the Preferred Stock upon the Merger.

                  "MERGER" has the meaning giving it in the Agreement and Plan
of Merger.

                  "MERGER CONSIDERATION SHARES" has the meaning given it in the
Agreement and Plan of Merger.

                  "MONTH" means any full calendar month.

                  "PENALTY AMOUNT" has the meaning given it in the Agreement and
Plan of Merger.

                  "RECAPITALIZATION" means the change intended to occur to the
Preferred Stock pursuant to Section 7 of this Certificate.

                  "RELATED TRANSFEREE HOLDERS" means all Transferee Holders to
whom a given Transferor Holder has transferred shares of the Preferred Stock,
directly or indirectly, in one or more transactions.

                  "REGISTRATION EFFECTIVENESS DATE" means the date on which the
SEC first declares the Resale Registration Statement effective.

                  "RESALE REGISTRATION STATEMENT" has the meaning given it in
the Agreement and Plan of Merger.

                  "RULE 144" means Rule 144 promulgated under the Securities
Act, as amended from time to time.

                  "SEC" means the U.S. Securities and Exchange Commission.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.

                  "TRANSFEREE HOLDER" means any person who is the direct or
indirect transferee (whether for value or otherwise) of shares of the Preferred
Stock.

                  "TRANSFEROR HOLDER" means an Initial Holder who transferred
all or part of the shares of the Preferred Stock issued to him.


       5.  UNCERTIFICATED  SHARES.  The shares of the  Preferred  Stock shall be
uncertificated shares; PROVIDED, that in accordance with Section 235 of the NGCL
every holder of  uncertificated  shares shall be entitled to have a  certificate
signed by, or in the name of, the

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<PAGE>

Corporation  representing the number of shares owned of record by such holder in
certificate form.


       6. NEGATIVE COVENANTS.  Until the Recapitalization occurs and for so long
as Two Hundred Fifty  Thousand  (250,000)  shares of the Preferred  Stock remain
issued and  outstanding  (appropriately  adjusted  to take  account of any stock
split,  stock  dividend,  combination of shares,  or the like),  the Corporation
shall not, except in connection with the Recapitalization,  without first having
obtained the  affirmative  vote or written consent of the holders of at least 66
2/3% of the shares of the Preferred Stock at the time issued and outstanding to:


       (a) create, authorize or issue any other class or series of capital stock
of the  Corporation  senior  to or on  parity  with the  Preferred  Stock in any
respect, or increase the number of authorized shares of any such class or series
of capital stock,  or increase the authorized  number of shares of the Preferred
Stock;

       (b)  create,  authorize  or issue any  bonds,  notes or other  securities
convertible  into,  exchangeable for, or evidencing the right to purchase shares
of any class or  series  of  capital  stock of the  Corporation  senior to or on
parity with the Preferred Stock in any respect;

       (c) pay a dividend on or  repurchase  any shares of capital  stock of the
Corporation,  other  than as  necessary  to  satisfy  the terms of the  Series A
Preferred  Stock,  or repurchases  of shares of Common Stock issued  pursuant to
stock purchase or stock option plans or subject to stock  repurchase  agreements
under which the  Corporation  has the option to repurchase  such shares upon the
occurrence of certain events, including the termination of employment;

       (d) merge  with or into or  consolidate  with any other  corporation,  or
sell,  lease, or otherwise dispose of all or substantially all of its properties
or assets, or voluntarily liquidate, dissolve or wind up;

       (e) amend or repeal  the  Articles  of  Incorporation  or  By-laws in any
manner that adversely affects the rights of the holders of the Preferred Stock

       (f) reclassify any securities of the  Corporation  that are junior to the
Preferred  Stock  into  securities  that are  senior  to or on  parity  with the
Preferred Stock in any respect;

       (g)  incur  any debt in excess  of  $1,000,000  secured  by assets of the
Corporation or its  subsidiaries  other than debt to a commercial  bank or other
lending  institution  which is  secured  solely by  accounts  receivable  and/or
inventory; or

       (h)  substantially  alter the nature of the  business of the  Corporation
from that carried on as of the date of initial  original  issue of shares of the
Preferred Stock.


       7.  RECAPITALIZATION.  Within 60 days after the initial  adoption of this
Certificate,  the  Corporation  will use its best  efforts to effect a migratory
merger with and into,


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<PAGE>

and thereby become, a corporation formed under the laws of the State of Delaware
("Delco").  The certificate of  incorporation  and by-laws of Delco, and Delco's
certificate  of  designation  of the Preferred  Stock (the "Delco  Certificate")
shall be substantially identical to the articles of incorporation and by-laws of
Parent,  except that (a) the certificate of incorporation of Delco shall provide
for cumulative  voting of its shares of all classes by its  stockholders for the
election of directors  and (b) each holder of the  Preferred  Stock will receive
four shares of Delco's  preferred  stock issued under the Delco  Certificate and
the Delco  Certificate  shall provide that (i) each share of the Preferred Stock
shall convert into one share of Delco's  common  stock,  (ii) the holders of the
Preferred  Stock  shall each have that number of votes as shall equal the number
of shares of the Common  Stock into which each share of the Class A  Convertible
Preferred shall be convertible,  (iii) in the case of Distributions,  each share
of the Preferred Stock shall be entitled to receive  Distributions  equal to the
Distributions entitled to be received by each share of the Common Stock and (iv)
in the case of Proceeds,  each share of the Preferred Stock shall be entitled to
receive Proceeds equal to the Proceeds  entitled to be received on each share of
the Common Stock.

                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Designations as the act and deed of the corporation referenced
above.





                                             -----------------------------
                                             Name: Gerald A. Mulhall
                                             Title: President

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