Exhibit 10.2


                            NEGATIVE PLEDGE AGREEMENT

         This Negative Pledge Agreement is made as of June 8, 2004, by and
between DIOMED, INC., a Delaware corporation ("Borrower") and SILICON VALLEY
BANK, a California-chartered bank, with its principal place of business at 3003
Tasman Drive, Santa Clara, California 95054 and with a loan production office
located at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton,
Massachusetts 02462, doing business under the name "Silicon Valley East
("Bank").

         In connection with, among other documents, the Loan and Security
Agreement (the "Loan Documents") being concurrently executed herewith between
Borrower and Bank, Borrowers agree as follows:

         1. Except for the granting of non-exclusive licenses or sublicenses by
Borrower in the ordinary course of business and except for non-renewals and
other abandonments made in the good faith judgment of the Borrower, Borrower has
not, and shall not, sell, transfer, assign, mortgage, pledge, lease, grant a
security interest in, or encumber any of Borrower's Intellectual Property (as
defined below).

         2. Borrower has not, and shall not, enter into a negative pledge
agreement, or similar agreement, affecting the rights of the Intellectual
Property with any other party.

         3. It shall be an event of default under the Loan Documents between
Borrower and Bank if there is a breach of any term of this Negative Pledge
Agreement.

         4. As used herein,

                  a.       "Intellectual Property" means:

                           (i)      Any and all Copyrights;

                           (ii)     Any and all trade secrets, and any and all
                                    intellectual property rights in computer
                                    software and computer software products now
                                    or hereafter existing, created, acquired or
                                    held;

                           (iii)    Any and all design rights which may be
                                    available to Borrowers now or hereafter
                                    existing, created, acquired or held;

                           (iv)     All Mask Works or similar rights available
                                    for the protection of semiconductor chips;

                           (v)      All Patents;

                           (vi)     Any Trademarks;

                           (vii)    Any and all claims for damages by way of
                                    past, present and future infringements of
                                    any of the rights included above, with the
                                    right, but not the obligation, to sue for
                                    and collect such damages for said use or
                                    infringement of the intellectual property
                                    rights identified above;

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                           (viii)   All licenses or other rights to use any of
                                    the Copyrights, Patents, Trademarks, or Mask
                                    Works and all license fees and royalties
                                    arising from such use to the extent
                                    permitted by such license or rights; and

                           (ix)     All amendments, extensions, renewals and
                                    extensions of any of the Copyrights,
                                    Trademarks, Patents, or Mask Works; and

                           (x)      All proceeds and products of the foregoing,
                                    including without limitation all payments
                                    under insurance or any indemnity or warranty
                                    payable in respect of any of the foregoing.

                     b. "Copyrights" means any and all copyright rights,
           copyright applications, copyright registrations and like protections
           in each work of authorship and derivative work thereof, whether
           published or unpublished and whether or not the same also constitutes
           a trade secret, now or hereafter existing, created, acquired or held.

                     c. "Mask Works" means all mask work or similar rights
           available for the protection of semiconductor chips, now owned or
           hereafter acquired;

                     d. "Patents" means all patents, patent applications and
           like protections including without limitation improvements,
           divisions, continuations, renewals, reissues, extensions and
           continuations-in-part of the same.

                     e. "Trademarks" means any trademark and servicemark rights,
           whether registered or not, applications to register and registrations
           of the same and like protections, and the entire goodwill of the
           business of Borrower connected with and symbolized by such
           trademarks.

           5. Capitalized terms used but not otherwise defined herein shall have
the same meaning as in the Loan Documents.

           6. The laws of the Commonwealth of Massachusetts shall apply to this
Agreement.

           7. This Agreement shall become effective only when it shall have been
executed by Borrower and Bank.

           EXECUTED as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first written above.

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                                          BORROWER:

                                          DIOMED, INC.



                                          By  _______________________________

                                          Name:  David B. Swank
                                          Title:  Chief Financial Officer

                                          BANK:
                                          SILICON VALLEY BANK, D/B/A
                                          SILICON VALLEY BANK



                                          By:  ______________________________

                                          Name:  ____________________________
                                          Title:  ___________________________





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