Document:

June 12, 2006

James A. Wylie, Jr.
President and Chief Executive Officer
Diomed Holdings, Inc.
One Dundee Park
Andover, MA 01810

Dear Jim:

This letter will confirm the agreement ("Agreement") under which Musket Research
Associates,  Inc.,  a  Massachusetts  corporation  ("MRA")  is engaged by Diomed
Holdings,  Inc., or any affiliate of Diomed Holdings,  Inc. (collectively "DIO",
"Diomed" or the "Company") to assist the Company as described below.

1. Engagement

1.1. Diomed hereby engages and retains MRA as a nonexclusive  finder/advisor  in
connection with a proposed private placement to MRA Contacts (as defined herein)
and  other  investors  in the  aggregate  amount  of at least  $7.5  million  in
equity-related  securities such as common stock or preferred stock  exchangeable
for DIO common stock and warrants to purchase DIO common  stock,  or pursuant to
such other terms and  conditions  as the Company may approve (the  "Placement").
MRA hereby  represents  and warrants to the Company that MRA 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.

2. Services

2.1. MRA's services hereunder shall include the following:

      (a) Analyze the financial  performance  and projections of the Company and
provide advice regarding the appropriate financing structure for the Placement;

      (b) Assist in the  development  of  presentation  materials  for  investor
solicitations. MRA will only send materials approved by the Company or otherwise
already in the public domain to prospective investors;

      (c) Contact qualified  investors and send the necessary documents directly
or through  Diomed.  Documents  sent by the  Company at MRA's  request  shall be
accompanied  by a cover letter  and/or  business card from MRA, or, if these are
not available, a specific reference to the introduction by MRA;

      (d) After appropriate  screening by MRA, in consultation with the Company,
schedule  meetings  and  accompany  Diomed   representatives   to  meetings  (or
participate  in  telephonic  conferences)  with  interested  parties  and  other
advisors  to the  Company as  reasonably  requested  by the  Company as often as
scheduling allows;

<PAGE>

      (e) Assist the Company in negotiating the restructure of certain covenants
in  the  outstanding   preferred  stock  to  permit  its   reclassification   to
stockholders' equity; and

      (f) Assist the Company in the negotiation of the definitive  documentation
pertaining to the  Placement,  manage  ongoing  discussions  and  coordinate the
execution  and delivery of definitive  Placement  documents and the purchase and
sale of DIO securities to MRA Contacts pursuant to the Placement.

2.2.  MRA  acknowledges  and agrees  that the  Placement  offering  will be made
pursuant to the private offering  exemption from registration under Section 4(2)
of the Securities Act of 1933 and Rule 506 promulgated thereunder,  and that DIO
securities are to be offered and sold only to "accredited investors" (as defined
in the SEC's Regulation D) who also satisfy any applicable  securities laws. MRA
will not make any general solicitation in connection with the Placement and will
conduct its obligations  hereunder in a manner  consistent with the requirements
of Rule 506. Before each closing,  DIO will validate the  "accredited  investor"
status  of each MRA  Contact  with  assistance  from  MRA,  via the  traditional
suitability questionnaire, copies of which will be provided to MRA upon request

2.3. The potential investors to be contacted by MRA are subject to acceptance by
DIO in its sole and absolute discretion,  and DIO is under no obligation to sell
any of its  securities  to such parties or to any persons.  MRA is and shall for
all purposes be deemed to be an independent  contractor and shall have no right,
power  or  authority  to  create  any  obligations  on  behalf  of DIO.  Without
limitation of the generality of the foregoing,  Diomed shall retain in its Board
of Directors  full  discretion as to the terms and  conditions of the Placement,
whether or not to consummate  the Placement and whether to accept any investment
by any  particular  investor  (including  any  MRA  Contact)  in the  Placement.
However,  DIO will keep MRA informed of any developments,  positive or negative,
that would be  presumed  to be  relevant  to the  successful  completion  of the
Placement.

3. Cash Fees and Placement Warrants

3.1. DIO agrees to pay or to issue to MRA at any closing of a Placement finder's
fees (the  "Finder's  Fees")  of: (i) six  percent  (6%) of the  aggregate  cash
proceeds  received by DIO from MRA Contacts,  as defined below,  and (ii) common
stock  purchase  warrants  (the  "Placement  Warrants")  equal in number to five
percent  (5%) of the  number  of  common  share  equivalents  that are  actually
purchased  by MRA  Contacts  in the  Placement.  Common  share  equivalents  for
convertible  preferred stock or convertible debt will be based on the conversion
price at the  time of  purchase.  Consideration  paid by  Edwin  Snape,  PhD/New
England  Partners (and  affiliates)  or existing  investors  that exchange their
existing  positions  for new  securities  will not be  subject  to or  result in
Finder's Fees. The Placement  Warrants will have terms identical with the common
stock purchase warrants issued to MRA Contacts in the Placement. If there are no
common stock placement warrants issued to investors in the Placement,  the terms
of the  Placement  Warrant will  conform to those in the warrants  issued in the
October 2005 PIPE financing to MRA. The shares underlying the Placement Warrants
will be included in the registration statement covering the shares issued in the
Placement for which they were earned.

Additionally,  DIO  agrees  to pay  MRA a cash  fee of six  percent  (6%) of any
aggregate cash proceeds received by DIO within twelve12 months of the closing of
the  Placement in  connection  with any  payments,  equity  purchases or warrant
exercises by MRA Contacts resulting from rights,  obligations,  contingencies or
issuances negotiated as part of the Placement.  The closing of a Placement shall
be any date when the  investors in the  Placement  deliver funds in exchange for
the  debt  or  equity   instrument,   including  such   investments   that  were
contractually  obligated as part of the Placement but dependent upon shareholder
approval.

<PAGE>

Such fees described in this Section 3.1. shall  constitute the complete and full
compensation  payable to MRA and its agents  arising from the  Placement and the
sale by DIO of securities thereunder to the MRA Contacts and any other investors
in the Placement,  and neither MRA nor any of its agents,  successors or assigns
shall be entitled to any  additional  payment  whatsoever  hereunder,  except as
provided for under of Sections 3.3 , 4.1, or 6.1 below.

3.2.  "MRA  Contacts" are defined as  prospective  investors who are persons (a)
identified by MRA and approved by the Company as  prospective  investors and who
are listed on the Schedule A hereto,  (b) are  contacted by MRA relative to this
Placement,  (c)  with  whom  members  of the  Company's  management  have  had a
telephone  conversation  or a  face-to-face  meeting or (d) who  participate  as
investors in the Placement. MRA Contacts will be updated on Schedule A, which is
hereby incorporated by reference,  from time to time with the written consent of
the Company, such consent to not be unreasonably withheld. DIO acknowledges that
Funds affiliated with North Sound,  SDS Capital Group and ProMed  Management are
preapproved on Schedule A.

3.3. The Company will inform MRA promptly if it engages any  additional  finders
in  connection  with  the  Placement,   including  in  such  notice  a  complete
description of any fee agreement  with such  additional  finder.  If the Company
agrees to pay fees in excess of those  described in this  Agreement for services
similar to those being provided by MRA  hereunder,  then the fees payable to MRA
will  be  increased  to the  same  level,  if  requested  by  MRA,  in its  sole
discretion.

3.4. All  payments of the Finders  Fees and of unpaid  expenses due to MRA under
this Agreement will be made within 10 days of the consummation of the Placement.
Cash and equity will be payable  directly to or registered in the name of Musket
Research Associates, Inc., unless otherwise specified by MRA.

4. Expenses

4.1.  Whether  or not the  Placement  contemplated  herein is  consummated,  the
Company will reimburse MRA for its reasonable out-of-pocket expenses incurred in
connection  with this  prospective  financing,  provided such expenses have been
approved  in advance by DIO,  such  approval  to not be  unreasonably  withheld,
subject to a ceiling of $25,000.  A  non-refundable  retainer  of $5,000  toward
these  expenses  will be paid at the  time  of the  signing  of this  Agreement.
DIO-approved  expenses  incurred  by MRA prior to  closing of the  Placement  or
earlier  termination of the Agreement will be submitted for reimbursement by DIO
and, should be paid within two weeks of receipt.

5. Public Disclosures; Press Releases

5.1.  Concurrently with its execution and delivery of this Agreement,  MRA shall
execute  and  deliver  to the  Company  a  counterpart  of  the  Confidentiality
Agreement attached hereto as Exhibit 2 (the  "Confidentiality  Agreement").  The
Company  represents  that,  except  for  the  details  related  to the  proposed
Placement and for certain  information  related to its financial  performance in
the current quarter, it has disclosed no confidential  information to MRA. After
the  Company  publicly   discloses  the  existence  and  details  regarding  the
Placement,  the Company will list MRA as a participating  placement agent in any
description of this financing it issues  directly (i.e.  press release) and will
use its own  discretion to list MRA similarly in any further  communications  it
makes to the investment  community regarding this financing.  MRA will not issue
any  independent  press  release  regarding  its  relationship  with  DIO or any
financing  that may result  therefrom  without the prior  approval of DIO,  such
approval to not be unreasonably  withheld.  After the Company publicly discloses
the Placement, MRA will be allowed to list DIO and the amounts MRA raised in any
Placement for DIO in its general deal summaries without any further consent from
or notification of Diomed.

<PAGE>

6. Termination

6.1. This Agreement shall  automatically  terminate upon the consummation of the
Placement.  This  Agreement  may  also be  terminated  by DIO or MRA at any time
without  cause,  upon 10 days written  notice to that effect by the other party,
provided,  however,  that,  MRA shall still be entitled to the fees described in
Section  3  above,  in the  event  that,  at any  time  within  180  days  after
termination of this engagement,  a financing,  loan,  credit facility,  or other
investment is consummated by DIO with an MRA Contact listed on Schedule A at the
time of  termination.  Any  expenses  incurred by MRA prior to such  termination
notice and owed under  Section 4 above will be paid within two weeks of receipt.
The  provisions  of  the  Indemnification   Agreement  and  the  Confidentiality
Agreement shall also survive the termination of this Agreement.

7. Indemnification

7.1. The Company agrees to indemnify MRA under the terms set forth in Exhibit 1,
which is incorporated herein by reference.

8. Governing Law

8.1 This  Agreement  shall be governed by and construed in  accordance  with the
laws of the Commonwealth of Massachusetts  applicable to contracts  executed and
to be wholly  performed  therein  without giving effect to its conflicts of laws
principles or rules. The Company and MRA 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 MRA and the third
chosen  by  the  two  arbitrators  selected  by  the  parties,  pursuant  to the
commercial  arbitration rules of the American  Arbitration  Association.  In the
event that 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 the city of
Boston in the Commonwealth of Massachusetts.

9. Agreement

9.1.  This  Agreement  (together  with  the  Indemnification  Agreement  and the
Confidentiality  Agreement)  constitutes  the entire and complete  understanding
with respect to the subject matter hereof and supersedes any prior discussion or
agreement  between  the  parties  with  respect  hereto.  No  provision  of this
Agreement may be waived or amended except in a written instrument signed, in the
case of an  amendment,  by Diomed  and MRA or,  in the case of a waiver,  by the
party against whom enforcement of such waiver is sought.

<PAGE>

Sincerely,

David B. Musket
President
Musket Research Associates, Inc.
                                     Agreed and Accepted:

                                     -------------------------------------------
                                     David B. Swank                      Date
                                     Chief Financial Officer
                                     Diomed Holdings, Inc.

<PAGE>

                           EXHIBIT 1: Indemnification

Diomed  Holdings,  Inc.  ("DIO")  agrees to indemnify and hold  harmless  Musket
Research Associates, Inc. ("MRA") and each of MRA's officers, directors, agents,
employees and  controlling  persons (within the meaning of each of Section 20 of
the  Securities  Exchange  Act  of  1934,  as  amended,  and  Section  15 of the
Securities Act of 1933, as amended) (each of the foregoing, including MRA, being
hereinafter  referred  to as an  "Indemnified  Person")  to the  fullest  extent
permitted by law from and against any and all losses, claims, damages,  expenses
(including  reasonable fees and disbursements for counsel),  actions  (including
shareholder derivative actions), proceedings,  investigations (whether formal or
informal, or in tort, contract or otherwise),  inquiries or threats thereof (all
of the foregoing being hereinafter  referred to as  "Liabilities"),  based upon,
relating  to or arising out of MRA's  engagement  hereunder  or any  Indemnified
Person's role therein including, without limitation, any liabilities relating to
or  arising  out of the  engagement  by DIO of any other  financial  advisor  or
investment banker;  provided,  however,  that DIO shall not be liable under this
paragraph to the extent that it is finally  judicially  determined by a court of
competent   jurisdiction  that  such  Liabilities   resulted  from  the  willful
misconduct or gross  negligence of any  Indemnified  Person.  In connection with
DIO's  obligation  to indemnify  for  expenses as set forth  above,  DIO further
agrees to  advance  or  reimburse  each  Indemnified  Person  for such  expenses
(including reasonable fees for counsel) as they are incurred by such Indemnified
Person:  provided,  however,  that  if  any  Indemnified  Person  is  reimbursed
hereunder for any expenses,  such reimbursement of expenses shall be refunded by
the  Indemnified  Person who received  such expenses to the extent it is finally
judicially determined by a court of competent  jurisdiction that the Liabilities
in question  resulted from the willful  misconduct  or gross  negligence of such
Indemnified Person.

Each  Indemnified  Party shall,  upon the service of a summons or other  initial
legal  process upon it in any action or suit  instituted  against it or upon its
receipt of written  notification  of the  commencement of any  investigation  or
inquiry  of, or  proceeding  against,  it or upon its  receipt of other  written
notification of the assertion  against it of any  Liabilities,  such Indemnified
Party will promptly give written notice  (hereinafter  the "Notice")  thereof to
DIO  (provided  that delay in giving  such  notice  shall not relieve DIO of its
indemnification  obligations hereunder except to the extent, if at all, that DIO
shall have been  prejudiced  thereby).  DIO shall be  entitled,  if it so elects
within  fifteen  days after  receipt of the  Notice,  by giving  written  notice
(hereinafter  the  "Defense  Notice") to the  Indemnified  Party,  to assume the
entire  defense  of such  Liabilities,  in which  event  such  defense  shall be
conducted  at the  expense  of DIO  by  counsel  chosen  by DIO  and  reasonably
satisfactory  to  the  Indemnified  Party;   provided,   however,  that  if  the
Indemnified  Party reasonably  determines (i) that there may be conflict between
the positions of DIO and the Indemnified Party in conducting the defense of such
Liabilities  or  (ii)  that  there  may  be  legal  defenses  available  to  the
Indemnified  Party different from or in addition to those available to DIO, then
one counsel for the  Indemnified  Party shall be entitled to participate in such
defenses,  or conduct the defense to the extent  reasonably  determined  by such
counsel to be necessary to protect the interests of the Indemnified  Party,  and
such  participation  in or separate  conduct of such defense shall be covered by
the indemnification by DIO hereunder.  In any event, any Indemnified Party shall
retain the right to participate in the defense of any Liabilities  with separate
counsel,  where the  defense  of such  Liabilities  has been  assumed  by DIO in
accordance with the provisions hereof and the circumstances described in clauses
(i) or (ii) of the above  proviso are not  present,  but the  Indemnified  Party
shall  bear  and be  solely  responsible  for  its own  costs  and  expenses  in
connection with any such participation.

If the  indemnification  or  reimbursement  provided  for  hereunder  is finally
judicially determined by a court of competent  jurisdiction to be unavailable to
an Indemnified Person in respect to any Liabilities (other than as a consequence
of a final judicial determination by such a court of willful misconduct or gross
negligence of such Indemnified Person), then DIO agrees, in lieu of indemnifying
such  Indemnified  Person,  to  contribute to the amount paid or payable by such
Indemnified  Person as a result of such Liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received, or sought to be received,
by DIO on the one hand and by such  Indemnified  Person  on the  other  from the
transaction in connection with which MRA has been engaged,  or (ii) if (but only
if) the  allocation  provided in clause (i) of this sentence is not permitted by
applicable  law, in such  proportion as is  appropriate  to reflect not only the
relative  benefits referred to in such clause (i) but also the relative fault of
DIO and of such Indemnified Person:  provided,  however,  that in no event shall
the aggregate amount  contributed by the Indemnified Person exceed the amount of
fees  actually  received by his or its  affiliate  or employer  pursuant to such
engagement.  The relative  benefits  received or sought to be received by DIO on
the  one  hand  and by MRA  on the  other  shall  be  deemed  to be in the  same
proportion as (i) the gross proceeds raised in the transactions  subject to this
Agreement bears to (ii) the fees paid or payable to MRA hereunder, including the
value of any warrants or other securities issued to MRA.

<PAGE>

                      EXHIBIT 3: CONFIDENTIALITY AGREEMENT

This Confidentiality Agreement ("Agreement") is made as of June __, 2006 between
Diomed Holdings,  Inc. (the "Company") and Musket Research  Associates,  Inc., a
Massachusetts  corporation (together with its affiliates,  the "Disclosee").  In
consideration of the opportunity to enter into a business  relationship,  and as
an  inducement  for the Company to disclose to  Disclosee  certain  Confidential
Information, the parties hereby agree as follows:

1.  Confidential  Information.   "Confidential   Information"  means  non-public
information  pertaining  to  the  Company,  its  markets,  products,   financial
condition, internal structure and all other information that is expressly marked
"confidential" when disclosed by the Company to Disclosee. By way of example but
without limitation,  Confidential Information includes technical information and
data, knowhow, algorithms,  designs,  specifications,  processes, plans, product
concepts, samples, reports, computer programs, works of authorship,  inventions,
financial  information,  cost and expense  data,  marketing  and customer  data,
vendor data,  and other  information  that is not generally  ascertainable  from
public or published  information or trade  sources.  Disclosee  understands  and
agrees  that  the  Confidential   Information   will  be  material,   non-public
information and that  accordingly,  pursuant to United States  securities  laws,
Disclosee  will  not  be  permitted  to  engage,  directly  or  indirectly,   in
transactions  in  the  Company's   securities  so  long  as  such   Confidential
Information remains non-public.

2. Non-Disclosure and Non-Use. Disclosee shall hold all Confidential Information
in  strict  confidence,  and  shall not use or  disclose,  or permit  the use or
disclosure by any other person, except for the purposes of evaluating whether to
enter into a business  relationship  with the  Company.  Disclosee  may disclose
Confidential  Information  only  to  such of its  officers,  employees,  agents,
consultants and professional  advisors who have a need to know such Confidential
Information to evaluate whether to enter into a business  relationship  with the
Company and who are required to undertake in writing the  obligations  regarding
non-use,  non-disclosure  and  non-trading in accordance  with and in the manner
provided in this Agreement.  If Disclosee or anyone to whom Disclosee  transmits
Confidential  Information  pursuant to this Agreement  becomes legally compelled
(by deposition, interrogatory,  subpoena, civil investigation, demand or similar
process) to disclose any Confidential  Information,  Disclosee shall provide the
Company  with  prompt  written  notice  thereof so that the  Company  may seek a
protective  order or other  appropriate  remedy prior to the  disclosure of such
Confidential Information.

3. Term.  The  obligations  of the  Disclosee  shall  survive  for a period of 2
(years) or until such time as the Confidential  Information  becomes  publically
known and made available through no action or inaction of the Disclosee.

4.  Action for  Breach;  Choice of Law and  Jurisdiction.  The  Company may seek
action upon a breach of  Disclosee's  obligations  hereunder in any court having
proper  jurisdiction.  This  Agreement  shall  be  governed  by  the  law of the
Commonwealth  of  Massachusetts,  without  giving effect to the conflict of laws
provisions  thereof.  Disclosee  irrevocably  submits to the jurisdiction of the
state and federal courts located in Boston, Massachusetts,  and waives any right
to seek to remove  any legal  proceedings  initiated  by the  Company to another
forum, whether on the grounds of inconvenience, hardship or otherwise.

5. Return of  Confidential  Information.  Upon the termination for any reason of
the  discussions  regarding  the proposed  business  relationship,  and upon the
request  of the  Company at any time,  Disclosee  shall  promptly  return to the
Company  all  documents  and  other  tangible   manifestations  of  Confidential
Information.

6. No  Further  Obligation.  Neither  the  Company  nor the  Disclosee  shall be
committed in any way by this Agreement to enter into any particular transaction,
and any future  transaction shall be detailed in a formal agreement with respect
thereto entered into by the Company and Disclosee.

DIOMED HOLDINGS, INC.                                DISCLOSEE

By:____________________________             By:_______________________________
David B. Swank                              Name and Title:  ___________________
Chief Financial OfficerJune 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.

<PAGE>

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.

<PAGE>

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

<PAGE>

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.

<PAGE>

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.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

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

<PAGE>

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.

<PAGE>

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.

<PAGE>

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.

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