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EXHIBIT 10.3

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

                          COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                              DIOMED HOLDINGS, INC.

                  THIS COMMON STOCK PURCHASE  WARRANT (the "WARRANT")  certifies
that, for value received,  _____________ (the "HOLDER"),  is entitled,  upon the
terms and subject to the limitations on exercise and the conditions  hereinafter
set forth, at any time on or after the date hereof (the "INITIAL EXERCISE DATE")
and on or prior to the close of  business  on the five year  anniversary  of the
Initial Exercise Date (the "TERMINATION DATE") but not thereafter,  to subscribe
for and  purchase  from  Diomed  Holdings,  Inc.,  a Delaware  corporation  (the
"Company"),  up to ______  shares (the "WARRANT  SHARES") of Common  Stock,  par
value $0.001 per share, of the Company (the "COMMON STOCK").  The purchase price
of one share of Common Stock (the "EXERCISE  PRICE") under this Warrant shall be
$2.10, subject to adjustment hereunder.

         SECTION  1.  DEFINITIONS.  Capitalized  terms  used  and not  otherwise
defined  herein shall have the  meanings  set forth in that  certain  Securities
Purchase Agreement (the "PURCHASE  AGREEMENT"),  dated September 28, 2004, among
the Company and the purchasers signatory thereto.

         SECTION 2. EXERCISE.

                  a)  EXERCISE  OF  WARRANT.  Exercise  of the  purchase  rights
         represented  by this  Warrant  may be made at any  time or  times on or
         after the Initial  Exercise Date and on or before the Termination  Date
         by  delivery to the Company of a duly  executed  facsimile  copy of the
         Notice of Exercise Form annexed  hereto (or such other office or agency
         of  the  Company  as it may  designate  by  notice  in  writing  to the
         registered  Holder at the address of such Holder appearing on the books
         of the Company);  PROVIDED,  HOWEVER, within 5 Trading Days of the date
         said Notice of Exercise is delivered  to the Company,  the Holder shall

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         have surrendered this Warrant to the Company and the Company shall have
         received payment of the aggregate  Exercise Price of the shares thereby
         purchased by wire transfer or cashier's  check drawn on a United States
         bank.

                  b) EXERCISE PRICE.  The Exercise Price of each share of Common
         Stock  under  this  Warrant  shall  be  $2.10,  subject  to  adjustment
         hereunder.

                  c) CASHLESS  EXERCISE.  If at any time after one year from the
         date of issuance of this  Warrant  there is no  effective  Registration
         Statement  registering  the resale of the Warrant Shares by the Holder,
         then  this  Warrant  may also be  exercised  at such time by means of a
         "cashless  exercise" in which the Holder shall be entitled to receive a
         certificate  for the number of  Warrant  Shares  equal to the  quotient
         obtained by dividing [(A-B) (X)] by (A), where:

                   (A) =  the VWAP on the Trading Day immediately  preceding the
                          date of such election;

                   (B) =  the Exercise Price of this Warrant, as adjusted; and

                   (X) =  the number of Warrant Shares  issuable upon exercise
                          of this Warrant in  accordance  with the terms of this
                          Warrant  by means  of a cash  exercise  rather  than a
                          cashless exercise.

                           d) RESTRICTIONS.

                           a. HOLDER'S  RESTRICTIONS.  The Holder shall not have
                  the right to exercise any portion of this Warrant, pursuant to
                  Section  2(a) or  otherwise,  to the extent that after  giving
                  effect to such issuance after exercise,  the Holder  (together
                  with the Holder's affiliates),  as set forth on the applicable
                  Notice of Exercise,  would beneficially own in excess of 4.99%
                  of the  number  of  shares  of the  Common  Stock  outstanding
                  immediately after giving effect to such issuance. For purposes
                  of the  foregoing  sentence,  the  number  of shares of Common
                  Stock  beneficially  owned by the  Holder  and its  affiliates
                  shall  include the number of shares of Common  Stock  issuable
                  upon  exercise  of this  Warrant  with  respect  to which  the
                  determination  of such  sentence  is  being  made,  but  shall
                  exclude  the number of shares of Common  Stock  which would be
                  issuable  upon (A)  exercise  of the  remaining,  nonexercised
                  portion of this  Warrant  beneficially  owned by the Holder or
                  any of its  affiliates  and (B) exercise or  conversion of the
                  unexercised or nonconverted portion of any other securities of
                  the  Company  (including,   without   limitation,   any  other
                  Debentures or Warrants)  subject to a limitation on conversion
                  or  exercise  analogous  to the  limitation  contained  herein
                  beneficially  owned by the  Holder  or any of its  affiliates.
                  Except as set forth in the preceding sentence, for purposes of
                  this Section 2(d), beneficial ownership shall be calculated in
                  accordance  with Section  13(d) of the Exchange  Act, it being
                  acknowledged by Holder that the Company is not representing to
                  Holder that such  calculation  is in  compliance  with Section
                  13(d) of the Exchange Act and Holder is solely responsible for
                  any schedules required to be filed in accordance therewith. To
                  the extent that the limitation  contained in this Section 2(d)
                  applies,   the   determination  of  whether  this  Warrant  is
                  exercisable  (in  relation  to other  securities  owned by the
                  Holder) and of which a portion of this Warrant is  exercisable

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                  shall  be in the  sole  discretion  of  such  Holder,  and the
                  submission of a Notice of Exercise  shall be deemed to be such
                  Holder's  determination of whether this Warrant is exercisable
                  (in relation to other  securities owned by such Holder) and of
                  which  portion of this  Warrant is  exercisable,  in each case
                  subject  to  such  aggregate  percentage  limitation,  and the
                  Company  shall have no  obligation  to verify or  confirm  the
                  accuracy of such  determination.  For purposes of this Section
                  2(d),  in  determining  the  number of  outstanding  shares of
                  Common Stock, the Holder may rely on the number of outstanding
                  shares of Common Stock as reflected in (x) the Company's  most
                  recent Form 10-QSB or Form  10-KSB,  as the case may be, (y) a
                  more  recent  public  announcement  by the  Company or (z) any
                  other notice by the Company or the  Company's  Transfer  Agent
                  setting   forth  the   number   of  shares  of  Common   Stock
                  outstanding.  Upon the written or oral  request of the Holder,
                  the Company  shall within two Trading Days confirm  orally and
                  in writing to the Holder the number of shares of Common  Stock
                  then  outstanding.  In any case,  the  number  of  outstanding
                  shares of Common Stock shall be determined after giving effect
                  to the  conversion  or exercise of  securities of the Company,
                  including this Warrant,  by the Holder or its affiliates since
                  the date as of which  such  number  of  outstanding  shares of
                  Common Stock was reported.

                           b. Unless Shareholder  Approval has been obtained and
                  deemed  effective in accordance with the rules and regulations
                  of the Trading Market, the Company shall not make any issuance
                  whatsoever of Common Stock or Common Stock  Equivalents to the
                  extent such issuance  would  otherwise  cause an adjustment of
                  the  Conversion  Price of the Debentures or the Exercise Price
                  of the  Warrants,  or the  exercise  price of any Common Stock
                  Equivalents  issued pursuant to the transactions  contemplated
                  by  Sections   2.3(a)(iii)   and  2.3(b)(v)  in  the  Purchase
                  Agreement,  below the  applicable  Floor Prices (as defined in
                  the Debentures and Warrants).  The Holder shall be entitled to
                  obtain  injunctive  relief against the Company to preclude any
                  such issuance,  which remedy shall be in addition to any right
                  to  collect  damages  and the  Company  expressly  waives  any
                  requirement that any court require the Holder to post any bond
                  in connection therewith.

         e)       MECHANICS OF EXERCISE.

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                           i.  AUTHORIZATION  OF  WARRANT  SHARES.  The  Company
                  covenants that all Warrant Shares which may be issued upon the
                  exercise of the purchase  rights  represented  by this Warrant
                  will, upon exercise of the purchase rights represented by this
                  Warrant,  be duly authorized,  validly issued,  fully paid and
                  nonassessable  and free from all taxes,  liens and  charges in
                  respect of the issue  thereof  (other than taxes in respect of
                  any transfer occurring contemporaneously with such issue). The
                  Company  covenants  that  during  the  period  the  Warrant is
                  outstanding,  it will reserve from its authorized and unissued
                  Common Stock a sufficient  number of shares to provide for the
                  issuance  of the  Warrant  Shares  upon  the  exercise  of any
                  purchase  rights  under  this  Warrant.  The  Company  further
                  covenants  that its issuance of this Warrant shall  constitute
                  full  authority  to its officers who are charged with the duty
                  of  executing  stock  certificates  to  execute  and issue the
                  necessary   certificates  for  the  Warrant  Shares  upon  the
                  exercise  of the  purchase  rights  under  this  Warrant.  The
                  Company  will  take  all  such  reasonable  action  as  may be
                  necessary to assure that such Warrant  Shares may be issued as
                  provided  herein  without  violation of any  applicable law or
                  regulation,  or of any requirements of the Trading Market upon
                  which the Common Stock may be listed.

                           ii.   DELIVERY   OF   CERTIFICATES   UPON   EXERCISE.
                  Certificates for shares purchased hereunder shall be delivered
                  to the Holder  within 3 Trading  Days from the delivery to the
                  Company  of the Notice of  Exercise  Form,  surrender  of this
                  Warrant and  payment of the  aggregate  Exercise  Price as set
                  forth above  ("WARRANT  SHARE  DELIVERY  DATE").  This Warrant
                  shall  be  deemed  to have  been  exercised  on the  date  the
                  Exercise Price is received by the Company.  The Warrant Shares
                  shall be deemed to have been  issued,  and Holder or any other
                  person so  designated  to be named  therein shall be deemed to
                  have  become  a  holder  of  record  of  such  shares  for all
                  purposes,  as of the date the  Warrant has been  exercised  by
                  delivery to the Company of the Notice of Exercise  form and by
                  payment  to the  Company of the  Exercise  Price and all taxes
                  required to be paid by the Holder, if any, pursuant to Section
                  2(e)(vii)  prior to the  issuance  of such  shares,  have been
                  paid.

                           iii. DELIVERY OF NEW WARRANTS UPON EXERCISE.  If this
                  Warrant shall have been  exercised in part, the Company shall,
                  at the time of delivery  of the  certificate  or  certificates
                  representing  Warrant Shares,  deliver to Holder a new Warrant
                  evidencing  the rights of Holder to purchase  the  unpurchased
                  Warrant  Shares called for by this Warrant,  which new Warrant
                  shall in all other respects be identical with this Warrant.

                           iv.  RESCISSION  RIGHTS.  If  the  Company  fails  to
                  deliver  to  the   Holder  a   certificate   or   certificates
                  representing  the Warrant Shares pursuant to this Section 2(e)
                  by the Warrant Share Delivery Date,  then the Holder will have
                  the right to rescind such exercise.

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                           v.  BUY-IN  COMPENSATION.  In  addition  to any other
                  rights  available  to the  Holder,  if the  Company  fails  to
                  deliver  to  the   Holder  a   certificate   or   certificates
                  representing  the Warrant Shares pursuant to an exercise on or
                  before the Warrant Share Delivery Date, and if after such date
                  the Holder is required  by its broker to purchase  (in an open
                  market  transaction  or  otherwise)  shares of Common Stock to
                  deliver in satisfaction of a sale by the Holder of the Warrant
                  Shares  which  the  Holder  anticipated  receiving  upon  such
                  exercise (a "BUY-IN"),  then the Company shall (1) pay in cash
                  to the  Holder  the  amount  by which (x) the  Holder's  total
                  purchase price (including brokerage  commissions,  if any) for
                  the shares of Common Stock so purchased exceeds (y) the amount
                  obtained by multiplying  (A) the number of Warrant Shares that
                  the  Company  was   required  to  deliver  to  the  Holder  in
                  connection  with the  exercise at issue times (B) the price at
                  which the sell order giving rise to such  purchase  obligation
                  was  executed,  and (2) at the  option of the  Holder,  either
                  reinstate the portion of the Warrant and equivalent  number of
                  Warrant  Shares for which  such  exercise  was not  honored or
                  deliver to the  Holder  the  number of shares of Common  Stock
                  that would have been  issued had the Company  timely  complied
                  with its  exercise  and delivery  obligations  hereunder.  For
                  example,  if the Holder  purchases Common Stock having a total
                  purchase price of $11,000 to cover a Buy-In with respect to an
                  attempted exercise of shares of Common Stock with an aggregate
                  sale price giving rise to such purchase obligation of $10,000,
                  under  clause (1) of the  immediately  preceding  sentence the
                  Company shall be required to pay the Holder $1,000. The Holder
                  shall  provide  the  Company  written  notice  indicating  the
                  amounts  payable  to the  Holder  in  respect  of the  Buy-In,
                  together  with  applicable  confirmations  and other  evidence
                  reasonably  requested  by the  Company.  Nothing  herein shall
                  limit a Holder's right to pursue any other remedies  available
                  to it  hereunder,  at  law  or in  equity  including,  without
                  limitation, a decree of specific performance and/or injunctive
                  relief with respect to the Company's failure to timely deliver
                  certificates representing shares of Common Stock upon exercise
                  of the Warrant as required pursuant to the terms hereof.

                           vi. NO  FRACTIONAL  SHARES OR  SCRIP.  No  fractional
                  shares or scrip representing fractional shares shall be issued
                  upon the  exercise of this  Warrant.  As to any  fraction of a
                  share which  Holder  would  otherwise  be entitled to purchase
                  upon such exercise, the Company shall pay a cash adjustment in
                  respect  of such  final  fraction  in an amount  equal to such
                  fraction multiplied by the Exercise Price.

                           vii.  CHARGES,   TAXES  AND  EXPENSES.   Issuance  of
                  certificates  for Warrant  Shares shall be made without charge
                  to  the  Holder  for  any  issue  or  transfer  tax  or  other
                  incidental   expense  in  respect  of  the  issuance  of  such
                  certificate,  all of which taxes and expenses shall be paid by

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                  the Company, and such certificates shall be issued in the name
                  of the Holder or in such name or names as may be  directed  by
                  the Holder; PROVIDED,  HOWEVER, that in the event certificates
                  for  Warrant  Shares are to be issued in a name other than the
                  name of the Holder, this Warrant when surrendered for exercise
                  shall be accompanied by the  Assignment  Form attached  hereto
                  duly executed by the Holder; and the Company may require, as a
                  condition  thereto,   the  payment  of  a  sum  sufficient  to
                  reimburse it for any transfer tax incidental thereto.

                           viii.  CLOSING OF BOOKS.  The Company  will not close
                  its stockholder  books or records in any manner which prevents
                  the timely  exercise  of this  Warrant,  pursuant to the terms
                  hereof.

         SECTION 3. CERTAIN ADJUSTMENTS.

                  a) STOCK  DIVIDENDS  AND SPLITS.  If the Company,  at any time
         while  this  Warrant  is  outstanding:  (A)  pays a stock  dividend  or
         otherwise make a distribution or  distributions on shares of its Common
         Stock or any other equity or equity  equivalent  securities  payable in
         shares  of Common  Stock  (which,  for  avoidance  of doubt,  shall not
         include any shares of Common  Stock  issued by the Company  pursuant to
         this Warrant), (B) subdivides outstanding shares of Common Stock into a
         larger  number of shares,  (C)  combines  (including  by way of reverse
         stock split)  outstanding  shares of Common Stock into a smaller number
         of shares,  or (D) issues by  reclassification  of shares of the Common
         Stock any shares of capital stock of the Company, then in each case the
         Exercise Price shall be multiplied by a fraction of which the numerator
         shall be the  number  of shares of  Common  Stock  (excluding  treasury
         shares,  if  any)  outstanding  before  such  event  and of  which  the
         denominator  shall be the number of shares of Common Stock  outstanding
         after such event,  and the number of shares  issuable  upon exercise of
         this Warrant shall be  proportionately  adjusted.  Any adjustment  made
         pursuant to this Section 3(a) shall become effective  immediately after
         the record  date for the  determination  of  stockholders  entitled  to
         receive  such  dividend  or  distribution  and shall  become  effective
         immediately  after  the  effective  date in the case of a  subdivision,
         combination or re-classification.

                  b) SUBSEQUENT  EQUITY SALES.  If the Company or any Subsidiary
         thereof, as applicable,  at any time while this Warrant is outstanding,
         shall offer, sell, grant any option to purchase or offer, sell or grant
         any right to reprice its securities,  or otherwise  dispose of or issue
         (or announce any offer,  sale, grant or any option to purchase or other
         disposition) any Common Stock or Common Stock Equivalents entitling any
         Person to acquire  shares of Common  Stock,  at an effective  price per
         share less than the then  Exercise  Price (such lower price,  the "BASE
         SHARE PRICE" and such issuances  collectively,  a "DILUTIVE ISSUANCE"),
         as  adjusted  hereunder  (if the holder of the  Common  Stock or Common
         Stock Equivalents so issued shall at any time,  whether by operation of
         purchase price  adjustments,  reset  provisions,  floating  conversion,
         exercise or exchange prices or otherwise,  or due to warrants,  options
         or rights per share which is issued in connection  with such  issuance,
         be entitled to receive shares of Common Stock at an effective price per
         share which is less than the Exercise  Price,  such  issuance  shall be
         deemed to have occurred for less than the Exercise  Price),  then,  the
         Exercise  Price  shall be  reduced  to  equal  the  Base  Share  Price;
         PROVIDED,  HOWEVER,  prior to the date the Company obtains  Shareholder
         Approval in accordance  with the rules and  regulations  of the Trading
         Market,  in no event shall the  Exercise  Price be adjusted  under this
         Section 3(b) to less than $1.91,  subject to adjustment for reverse and
         forward stock splits,  stock  dividends,  stock  combinations and other
         similar  transactions  of the Common Stock that occur after the date of

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         this  Agreement  (the "FLOOR  PRICE").  Such  adjustment  shall be made
         whenever such Common Stock or Common Stock Equivalents are issued.  The
         Company shall notify the Holder in writing,  no later than the business
         day  following  the  issuance  of any  Common  Stock  or  Common  Stock
         Equivalents subject to this section,  indicating therein the applicable
         issuance  price,  or  of  applicable   reset  price,   exchange  price,
         conversion  price and  other  pricing  terms.  The  provisions  of this
         Section 3(b) shall not apply with respect to an Exempt Issuance.

                  c) PRO RATA  DISTRIBUTIONS.  If the Company, at any time prior
         to the  Termination  Date,  shall  distribute  to all holders of Common
         Stock  (and  not  to  Holders  of  the   Warrants)   evidences  of  its
         indebtedness  or  assets  or rights or  warrants  to  subscribe  for or
         purchase  any  security  other than the Common  Stock  (which  shall be
         subject to Section  3(b)),  then in each such case the  Exercise  Price
         shall  be  adjusted  by  multiplying   the  Exercise  Price  in  effect
         immediately  prior  to the  record  date  fixed  for  determination  of
         stockholders  entitled to receive  such  distribution  by a fraction of
         which the  denominator  shall be the VWAP  determined  as of the record
         date mentioned  above, and of which the numerator shall be such VWAP on
         such  record  date less the then per share  fair  market  value at such
         record date of the  portion of such assets or evidence of  indebtedness
         so distributed  applicable to one outstanding share of the Common Stock
         as determined  by the Board of Directors in good faith.  In either case
         the  adjustments  shall be  described  in a  statement  provided to the
         Holders  of the  portion  of assets or  evidences  of  indebtedness  so
         distributed  or such  subscription  rights  applicable  to one share of
         Common  Stock.   Such  adjustment  shall  be  made  whenever  any  such
         distribution is made and shall become effective  immediately  after the
         record date mentioned above.

                  d) CALCULATIONS.  All calculations  under this Section 3 shall
         be made to the nearest cent or the nearest  1/100th of a share,  as the
         case may be. For  purposes  of this  Section 3, the number of shares of
         Common  Stock  outstanding  as of a given  date shall be the sum of the
         number of shares of Common Stock (excluding  treasury  shares,  if any)
         outstanding.

                  e) NOTICE TO HOLDERS.

                           i.  ADJUSTMENT  TO  EXERCISE   PRICE.   Whenever  the
                  Exercise  Price is adjusted  pursuant  to this  Section 3, the
                  Company shall  promptly  mail to each Holder a notice  setting
                  forth the  Exercise  Price after such  adjustment  and setting
                  forth  a  brief   statement  of  the  facts   requiring   such
                  adjustment.  If the Company  issues a variable rate  security,
                  despite the prohibition thereon in the Purchase Agreement, the
                  Company  shall be deemed to have issued Common Stock or Common
                  Stock  Equivalents  at  the  lowest  possible   conversion  or
                  exercise  price at which such  securities  may be converted or
                  exercised  in the  case of a  Variable  Rate  Transaction  (as
                  defined in the  Purchase  Agreement),  or the lowest  possible
                  adjustment price in the case of an MFN Transaction (as defined
                  in the Purchase Agreement.

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                           ii.  NOTICE TO ALLOW  EXERCISE BY HOLDER.  If (A) the
                  Company shall  declare a dividend (or any other  distribution)
                  on the Common  Stock;  (B) the Company shall declare a special
                  nonrecurring  cash  dividend on or a redemption  of the Common
                  Stock;  (C) the Company  shall  authorize  the granting to all
                  holders of the Common  Stock  rights or warrants to  subscribe
                  for or purchase any shares of capital stock of any class or of
                  any  rights;  (D)  the  approval  of any  stockholders  of the
                  Company   shall   be   required   in   connection   with   any
                  reclassification  of the Common Stock,  any  consolidation  or
                  merger to which the  Company is a party,  any sale or transfer
                  of all or substantially  all of the assets of the Company,  of
                  any  compulsory  share  exchange  whereby the Common  Stock is
                  converted  into other  securities,  cash or property;  (E) the
                  Company  shall   authorize   the   voluntary  or   involuntary
                  dissolution,  liquidation  or winding up of the affairs of the
                  Company;  then,  in each case,  the Company  shall cause to be
                  mailed to the Holder at its last  addresses as it shall appear
                  upon the Warrant Register of the Company, at least 20 calendar
                  days  prior  to  the  applicable   record  or  effective  date
                  hereinafter  specified, a notice stating (x) the date on which
                  a record  is to be taken  for the  purpose  of such  dividend,
                  distribution,  redemption,  rights or warrants, or if a record
                  is not to be taken,  the date as of which the  holders  of the
                  Common  Stock  of  record  to be  entitled  to such  dividend,
                  distributions,  redemption,  rights  or  warrants  are  to  be
                  determined  or (y) the  date on which  such  reclassification,
                  consolidation,  merger,  sale,  transfer or share  exchange is
                  expected  to become  effective  or  close,  and the date as of
                  which it is  expected  that  holders  of the  Common  Stock of
                  record  shall be  entitled  to  exchange  their  shares of the
                  Common   Stock  for   securities,   cash  or  other   property
                  deliverable upon such reclassification, consolidation, merger,
                  sale, transfer or share exchange;  PROVIDED,  that the failure
                  to mail such  notice or any defect  therein or in the  mailing
                  thereof shall not affect the validity of the corporate  action
                  required  to be  specified  in  such  notice.  The  Holder  is
                  entitled to exercise  this  Warrant  during the 20-day  period
                  commencing  the date of such notice to the  effective  date of
                  the event triggering such notice.

         f)  FUNDAMENTAL  TRANSACTION.  If, at any time  while  this  Warrant is
outstanding,  (A) the Company effects any merger or consolidation of the Company
with  or into  another  Person,  (B)  the  Company  effects  any  sale of all or
substantially all of its assets in one or a series of related transactions,  (C)
any tender offer or exchange offer (whether by the Company or another Person) is
completed  pursuant to which  holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (D) the Company
effects  any  reclassification  of the  Common  Stock  or any  compulsory  share
exchange  pursuant to which the Common Stock is  effectively  converted  into or
exchanged  for  other  securities,  cash  or  property  (in  any  such  case,  a
"FUNDAMENTAL  TRANSACTION"),  then,  upon  any  subsequent  conversion  of  this
Warrant, the Holder shall have the right to receive, for each Warrant Share that
would have been issuable upon such exercise absent such Fundamental Transaction,
at the option of the Holder,  (a) upon exercise of this  Warrant,  the number of
shares of Common  Stock of the  successor  or  acquiring  corporation  or of the

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Company,  if  it is  the  surviving  corporation,  and  Alternate  Consideration
receivable upon or as a result of such reorganization, reclassification, merger,
consolidation  or  disposition  of assets by a Holder of the number of shares of
Common Stock for which this  Warrant is  exercisable  immediately  prior to such
event or (b) cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes  option pricing formula (the "ALTERNATE  CONSIDERATION").
For purposes of any such exercise, the determination of the Exercise Price shall
be appropriately adjusted to apply to such Alternate  Consideration based on the
amount of  Alternate  Consideration  issuable  in respect of one share of Common
Stock in such  Fundamental  Transaction,  and the Company  shall  apportion  the
Exercise  Price  among  the  Alternate  Consideration  in  a  reasonable  manner
reflecting  the relative  value of any  different  components  of the  Alternate
Consideration.  If  holders  of Common  Stock  are  given  any  choice as to the
securities,  cash or property to be received in a Fundamental Transaction,  then
the Holder shall be given the same choice as to the Alternate  Consideration  it
receives  upon  any  exercise  of  this  Warrant   following  such   Fundamental
Transaction. To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or  surviving  entity in such  Fundamental  Transaction
shall issue to the Holder a new warrant consistent with the foregoing provisions
and  evidencing  the Holder's  right to exercise  such  warrant  into  Alternate
Consideration.  The  terms of any  agreement  pursuant  to  which a  Fundamental
Transaction  is effected  shall  include terms  requiring any such  successor or
surviving  entity  to  comply  with the  provisions  of this  paragraph  (f) and
insuring that this Warrant (or any such replacement  security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

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

         h) VOLUNTARY  ADJUSTMENT BY COMPANY. The Company may at any time during
the term of this Warrant  reduce the then current  Exercise  Price to any amount
and for any period of time deemed  appropriate  by the Board of Directors of the
Company.

SECTION 4. TRANSFER OF WARRANT.

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

                                       9
<PAGE>

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

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

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

SECTION 5. MISCELLANEOUS.

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

                                       10
<PAGE>

         b) NO RIGHTS AS  SHAREHOLDER  UNTIL  EXERCISE.  This  Warrant  does not
entitle the Holder to any voting rights or other rights as a shareholder  of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate  Exercise  Price (or by means of a cashless  exercise),
the  Warrant  Shares  so  purchased  shall be and be deemed to be issued to such
Holder as the record  owner of such  shares as of the close of  business  on the
later of the date of such surrender or payment.

         c) LOSS,  THEFT,  DESTRUCTION  OR  MUTILATION  OF WARRANT.  The Company
covenants that upon receipt by the Company of evidence  reasonably  satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate  relating  to the  Warrant  Shares,  and in case of  loss,  theft or
destruction,  of indemnity or security reasonably  satisfactory to it (which, in
the case of the  Warrant,  shall not include the posting of any bond),  and upon
surrender and cancellation of such Warrant or stock  certificate,  if mutilated,
the Company  will make and deliver a new  Warrant or stock  certificate  of like
tenor  and  dated  as of such  cancellation,  in lieu of such  Warrant  or stock
certificate.

         d) SATURDAYS,  SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for
the  taking of any action or the  expiration  of any right  required  or granted
herein shall be a Saturday,  Sunday or a legal holiday,  then such action may be
taken or such right may be exercised on the next  succeeding day not a Saturday,
Sunday or legal holiday.

         e) AUTHORIZED SHARES.

                  The  Company  covenants  that during the period the Warrant is
         outstanding,  it will reserve from its authorized  and unissued  Common
         Stock a sufficient  number of shares to provide for the issuance of the
         Warrant  Shares upon the  exercise of any  purchase  rights  under this
         Warrant.  The  Company  further  covenants  that its  issuance  of this
         Warrant shall constitute full authority to its officers who are charged
         with the duty of executing stock  certificates to execute and issue the
         necessary  certificates for the Warrant Shares upon the exercise of the
         purchase  rights  under this  Warrant.  The Company  will take all such
         reasonable  action  as may be  necessary  to assure  that such  Warrant
         Shares  may be issued  as  provided  herein  without  violation  of any
         applicable law or  regulation,  or of any  requirements  of the Trading
         Market upon which the Common Stock may be listed.

                  Except  and to the  extent as waived  or  consented  to by the
         Holder,  the  Company  shall  not by  any  action,  including,  without
         limitation,  amending its certificate of  incorporation  or through any
         reorganization, transfer of assets, consolidation, merger, dissolution,
         issue or sale of securities  or any other  voluntary  action,  avoid or
         seek to avoid the observance or performance of any of the terms of this
         Warrant, but will at all times in good faith assist in the carrying out
         of all such  terms  and in the  taking  of all such  actions  as may be
         necessary or  appropriate  to protect the rights of Holder as set forth
         in this Warrant against impairment.  Without limiting the generality of
         the  foregoing,  the Company will (a) not increase the par value of any
         Warrant  Shares above the amount  payable  therefor  upon such exercise
         immediately  prior to such  increase  in par  value,  (b) take all such
         action as may be necessary or appropriate in order that the Company may
         validly and legally issue fully paid and  nonassessable  Warrant Shares
         upon the exercise of this Warrant, and (c) use commercially  reasonable
         efforts to obtain all such authorizations,  exemptions or consents from
         any  public  regulatory  body  having  jurisdiction  thereof  as may be
         necessary to enable the Company to perform its  obligations  under this
         Warrant.

                                       11
<PAGE>

                  Before  taking any action which would result in an  adjustment
         in the number of Warrant  Shares for which this Warrant is  exercisable
         or  in  the  Exercise   Price,   the  Company  shall  obtain  all  such
         authorizations or exemptions  thereof,  or consents thereto,  as may be
         necessary from any public regulatory body or bodies having jurisdiction
         thereof.

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

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

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

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

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

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

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

                                       12
<PAGE>

         m) AMENDMENT. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Holder.

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

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

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

                                       13
<PAGE>

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

Dated:  September __, 2004

DIOMED HOLDINGS, INC.

By:__________________________________________
     Name:
     Title:

                                       14
<PAGE>

                               NOTICE OF EXERCISE

To:      Diomed Holdings, Inc.

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

         (2)Payment shall take the form of (check applicable box):

                  [ ] in lawful money of the United States; or

                  [ ] the  cancellation  of such number of Warrant  Shares as is
                  necessary,  in  accordance  with  the  formula  set  forth  in
                  subsection  2(c), to exercise this Warrant with respect to the
                  maximum number of Warrant Shares  purchasable  pursuant to the
                  cashless exercise procedure set forth in subsection 2(c).

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

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

The Warrant Shares shall be delivered to the following:

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

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

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

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

                            [PURCHASER]

                            By: ______________________________
                                  Name:
                                  Title:

                            Dated:  ________________________

                                       15
<PAGE>

                                 ASSIGNMENT FORM

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

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

_____________________________________________________ whose address is

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

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

                Dated:  ______________, _______

                Holder's Signature:       _____________________________

                Holder's Address:_____________________________

Signature Guaranteed:  ___________________________________________

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

                                       16EXHIBIT 10.4

                          REGISTRATION RIGHTS AGREEMENT

         This  Registration  Rights  Agreement  (this  "AGREEMENT")  is made and
entered into as of September  28, 2004 among Diomed  Holdings,  Inc., a Delaware
corporation  (the  "COMPANY"),  and the purchasers  signatory  hereto (each such
purchaser  is a  "PURCHASER"  and all such  purchasers  are,  collectively,  the
"PURCHASERS").

               This  Agreement  is  made  pursuant  to the  Securities  Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the
"PURCHASE AGREEMENT").

               The Company and the Purchasers hereby agree as follows:

        1. DEFINITIONS

               CAPITALIZED  TERMS USED AND NOT OTHERWISE DEFINED HEREIN THAT ARE
DEFINED IN THE PURCHASE  AGREEMENT  SHALL HAVE THE MEANINGS  GIVEN SUCH TERMS IN
THE PURCHASE  AGREEMENT.  As used in this  Agreement,  the following terms shall
have the following meanings:

                  "ADVICE" shall have the meaning set forth in Section 6(d).

                  "EFFECTIVENESS  DATE"  means,  with  respect  to  the  initial
         Registration  Statement  required  to  be  filed  hereunder,  the  90th
         calendar day following  the date hereof (the 120th  calendar day in the
         case of a review by the Commission) and, with respect to any additional
         Registration Statements which may be required pursuant to Section 3(c),
         the 90th  calendar day  following  the date on which the Company  first
         knows,   or  reasonably   should  have  known,   that  such  additional
         Registration Statement is required hereunder; PROVIDED, HOWEVER, in the
         event the Company is notified by the  Commission  that one of the above
         Registration Statements will not be reviewed or is no longer subject to
         further  review  and  comments,  the  Effectiveness  Date  as  to  such
         Registration  Statement  shall be the fifth  Trading Day  following the
         date on which the  Company is so  notified  if such date  precedes  the
         dates required above.

                  "EFFECTIVENESS  PERIOD"  shall have the  meaning  set forth in
         Section 2(a).

                  "EVENT" shall have the meaning set forth in Section 2(b).

                  "EVENT DATE" shall have the meaning set forth in Section 2(b).

                  "FILING DATE" means, with respect to the initial  Registration
         Statement required hereunder,  the 30th calendar day following the date
         hereof and,  with  respect to any  additional  Registration  Statements
         which may be required  pursuant to Section 3(c), the 30th day following
         the date on which the Company first knows,  or  reasonably  should have
         known  that  such   additional   Registration   Statement  is  required
         hereunder.

<PAGE>

                  "HOLDER" or "HOLDERS" means the holder or holders, as the case
         may be, from time to time of Registrable Securities.

                  "INDEMNIFIED  PARTY"  shall  have  the  meaning  set  forth in
         Section 5(c).

                  "INDEMNIFYING  PARTY"  shall  have the  meaning  set  forth in
         Section 5(c).

                  "LOSSES" shall have the meaning set forth in Section 5(a).

                  "PROCEEDING" means an action,  claim,  suit,  investigation or
         proceeding (including,  without limitation, an investigation or partial
         proceeding, such as a deposition), whether commenced or threatened.

                   "PROSPECTUS" means the prospectus  included in a Registration
         Statement  (including,  without limitation,  a prospectus that includes
         any information  previously  omitted from a prospectus filed as part of
         an  effective   registration  statement  in  reliance  upon  Rule  430A
         promulgated  under the Securities  Act), as amended or  supplemented by
         any prospectus supplement, with respect to the terms of the offering of
         any portion of the  Registrable  Securities  covered by a  Registration
         Statement,  and all other amendments and supplements to the Prospectus,
         including post-effective  amendments,  and all material incorporated by
         reference or deemed to be incorporated by reference in such Prospectus.

                   "REGISTRABLE  SECURITIES"  means  (i)  all of the  shares  of
         Common Stock issuable upon conversion in full of the  Debentures,  (ii)
         all  shares  issuable  as  interest  on  the  Debentures  assuming  all
         permissible  interest  payments  are made in shares of Common Stock and
         the Debentures are held until maturity,  (iii) all Warrant Shares, (iv)
         any  securities  issued or issuable  upon any stock split,  dividend or
         other  distribution  recapitalization  or similar event with respect to
         the foregoing and (v) any additional shares issuable in connection with
         any anti-dilution provisions in the Debentures or the Warrants.

                  "REGISTRATION  STATEMENT"  means the  registration  statements
         required  to  be  filed  hereunder  and  any  additional   registration
         statements  contemplated by Section 3(c),  including (in each case) the
         Prospectus,  amendments and supplements to such registration  statement
         or  Prospectus,  including  pre-  and  post-effective  amendments,  all
         exhibits thereto, and all material  incorporated by reference or deemed
         to be incorporated by reference in such registration statement.

                  "RULE  415"  means  Rule  415  promulgated  by the  Commission
         pursuant to the  Securities  Act, as such Rule may be amended from time
         to time,  or any similar rule or  regulation  hereafter  adopted by the
         Commission  having  substantially  the same  purpose and effect as such
         Rule.

                  "RULE  424"  means  Rule  424  promulgated  by the  Commission
         pursuant to the  Securities  Act, as such Rule may be amended from time
         to time,  or any similar rule or  regulation  hereafter  adopted by the
         Commission  having  substantially  the same  purpose and effect as such
         Rule.

                                       2
<PAGE>

        2.        RESALE REGISTRATION

         (a) On or prior to each Filing Date, the Company shall prepare and file
with the Commission a resale Registration  Statement covering the resale of 125%
of the Registrable  Securities on such Filing Date for an offering to be made on
a continuous basis pursuant to Rule 415. The Registration  Statement shall be on
Form SB-2 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form SB-2, in which case such registration shall be on
another  appropriate  form in accordance  herewith)  and shall  contain  (unless
otherwise  directed by the  Holders)  substantially  the "Plan of  Distribution"
attached hereto as ANNEX A. Subject to the terms of this Agreement,  the Company
shall use its best  efforts to cause the  Registration  Statement to be declared
effective  under the  Securities  Act as promptly  as possible  after the filing
thereof, but in any event prior to the applicable  Effectiveness Date, and shall
use its best efforts to keep such Registration  Statement continuously effective
under the  Securities  Act  until all  Registrable  Securities  covered  by such
Registration Statement have been sold or may be sold without volume restrictions
pursuant to Rule 144(k) as determined by the counsel to the Company  pursuant to
a written  opinion  letter  to such  effect,  addressed  and  acceptable  to the
Company's transfer agent and the affected Holders (the "EFFECTIVENESS  Period").
The  Company  shall  immediately   notify  the  Holders  via  facsimile  of  the
effectiveness  of the  Registration  Statement  on the same day that the Company
receives  notification of the effectiveness  from the Commission.  Failure to so
notify the Holder within 1 Trading Day of such  notification  shall be deemed an
Event under Section 2(b).

         (b) If: (i) a  Registration  Statement  is not filed on or prior to its
Filing Date, or (ii) the Company fails to file with the Commission a request for
acceleration in accordance  with Rule 461 promulgated  under the Securities Act,
within five Trading Days of the date that the Company is notified  (orally or in
writing,  whichever is earlier) by the Commission that a Registration  Statement
will not be "reviewed," or not subject to further review,  or (iii) prior to its
Effectiveness  Date,  the Company  fails to file a  pre-effective  amendment and
otherwise  respond in writing to comments  made by the  Commission in respect of
such  Registration  Statement  within 10  calendar  days  after the  receipt  of
comments by or notice from the  Commission  that such  amendment  is required in
order  for a  Registration  Statement  to  be  declared  effective,  or  (iv)  a
Registration  Statement  filed or required to be filed hereunder is not declared
effective  by the  Commission  by its  Effectiveness  Date,  or  (v)  after  the
Effectiveness  Date, the Company ceases for any reason to maintain the requisite
approval  of the  applicable  Trading  Market for the  continued  listing of the
Common Stock and the Warrant  Shares,  or (vi) after the  Effectiveness  Date, a
Registration Statement ceases for any reason to remain continuously effective as
to all Registrable  Securities for which it is required to be effective,  or the
Holders  are not  permitted  to utilize  the  Prospectus  therein to resell such
Registrable  Securities  for 10  consecutive  Trading  Days but no more  than an
aggregate  of 20 Trading  Days  during any  12-month  period  (which need not be
consecutive  Trading  Days) (any such failure or breach being  referred to as an
"EVENT",  and for  purposes  of clause  (i),  (iv) or (v) the date on which such
Event occurs, or for purposes of clause (ii) the date on which such five Trading
Day period is  exceeded,  or for purposes of clause (iii) the date which such 10
calendar  day period is  exceeded,  or for  purposes  of clause (vi) the date on
which such 10 or 15  calendar  day period,  as  applicable,  is  exceeded  being
referred to as "EVENT  DATE"),  then in addition to any other rights the Holders

                                       3
<PAGE>

may have hereunder or under  applicable law, on each such Event Date and on each
monthly  anniversary of each such Event Date (if the applicable  Event shall not
have been cured by such date) until the applicable  Event is cured,  the Company
shall pay to each Holder an amount in cash,  as partial  liquidated  damages and
not as a penalty,  equal to 1.5% of the  aggregate  purchase  price paid by such
Holder pursuant to the Purchase  Agreement for any  Registrable  Securities then
held by such Holder. If the Company fails to pay any partial  liquidated damages
pursuant to this Section in full within seven days after the date  payable,  the
Company  will pay  interest  thereon at a rate of 18% per annum (or such  lesser
maximum  amount that is permitted to be paid by  applicable  law) to the Holder,
accruing daily from the date such partial  liquidated damages are due until such
amounts,  plus  all  such  interest  thereon,  are  paid in  full.  The  partial
liquidated  damages pursuant to the terms hereof shall apply on a daily pro-rata
basis for any portion of a month prior to the cure of an Event.

        3. REGISTRATION PROCEDURES

         In connection with the Company's  registration  obligations  hereunder,
the Company shall:

         (a) Not  less  than  two  Trading  Days  prior  to the  filing  of each
Registration  Statement or any related Prospectus or any amendment or supplement
thereto  (including  any  document  that would be  incorporated  or deemed to be
incorporated  therein by  reference),  the  Company  shall,  (i) furnish to each
Holder copies of all such documents proposed to be filed, which documents (other
than those  incorporated  or deemed to be  incorporated  by  reference)  will be
subject  to the  review  of such  Holders,  and  (ii)  cause  its  officers  and
directors,  counsel and independent  certified public  accountants to respond to
such inquiries as shall be necessary,  in the  reasonable  opinion of respective
counsel  to  conduct  a  reasonable  investigation  within  the  meaning  of the
Securities  Act. The Company  shall not file the  Registration  Statement or any
such Prospectus or any amendments or supplements thereto to which the Holders of
a majority of the Registrable  Securities shall reasonably object in good faith,
provided  that,  the Company is notified of such  objection  in writing no later
than 2 Trading  Days after the  Holders  have been so  furnished  copies of such
documents.   Each   Holder   agrees  to  furnish  to  the  Company  a  completed
Questionnaire  in the form  attached  to this  Agreement  as Annex B (a "SELLING
HOLDER  QUESTIONNAIRE")  not less than two Trading Days prior to the Filing Date
or by the end of the fourth  Trading Day following the date on which such Holder
receives draft materials in accordance with this Section.

         (b) (i) Prepare and file with the Commission such amendments, including
post-effective  amendments,  to a Registration Statement and the Prospectus used
in  connection  therewith as may be necessary to keep a  Registration  Statement
continuously  effective  as to the  applicable  Registrable  Securities  for the
Effectiveness  Period and prepare and file with the Commission  such  additional
Registration Statements in order to register for resale under the Securities Act
all of the  Registrable  Securities;  (ii) cause the  related  Prospectus  to be
amended or supplemented by any required  Prospectus  supplement  (subject to the
terms of this Agreement), and as so supplemented or amended to be filed pursuant
to Rule 424;  (iii) respond as promptly as  reasonably  possible to any comments
received from the  Commission  with respect to a  Registration  Statement or any
amendment  thereto and as promptly as  reasonably  possible  provide the Holders
true and  complete  copies  of all  correspondence  from  and to the  Commission

                                       4
<PAGE>

relating to a Registration  Statement;  and (iv) comply in all material respects
with the  provisions of the  Securities Act and the Exchange Act with respect to
the  disposition  of  all  Registrable  Securities  covered  by  a  Registration
Statement  during the applicable  period in accordance  (subject to the terms of
this Agreement) with the intended  methods of disposition by the Holders thereof
set forth in such Registration  Statement as so amended or in such Prospectus as
so supplemented.

         (c) If during  the  Effectiveness  Period,  the  number of  Registrable
Securities  at any time exceeds 90% of the number of shares of Common Stock then
registered in a Registration  Statement,  then the Company shall file as soon as
reasonably  practicable but in any case prior to the applicable  Filing Date, an
additional Registration Statement covering the resale by the Holders of not less
than 125% of the number of such Registrable Securities.

         (d) Notify the  Holders of  Registrable  Securities  to be sold  (which
notice shall, pursuant to clauses (ii) through (vi) hereof, be accompanied by an
instruction  to suspend the use of the  Prospectus  until the requisite  changes
have been made) as promptly as reasonably  possible  (and, in the case of (i)(A)
below,  not less than five Trading Days prior to such filing) and (if  requested
by any such Person) confirm such notice in writing no later than one Trading Day
following  the day (i)(A) when a  Prospectus  or any  Prospectus  supplement  or
post-effective  amendment to a  Registration  Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration  Statement and whenever the Commission  comments in writing on
such Registration  Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders);  and (C) with
respect to a Registration  Statement or any post-effective  amendment,  when the
same has become  effective;  (ii) of any request by the  Commission or any other
Federal or state  governmental  authority  for  amendments or  supplements  to a
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission or any other federal or state governmental  authority
of any stop order  suspending  the  effectiveness  of a  Registration  Statement
covering  any or all of the  Registrable  Securities  or the  initiation  of any
Proceedings  for  that  purpose;  (iv)  of the  receipt  by the  Company  of any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction,  or the  initiation  or  threatening  of any  Proceeding  for such
purpose;  (v) of the  occurrence  of any event or passage of time that makes the
financial  statements  included  in  a  Registration  Statement  ineligible  for
inclusion  therein  or  any  statement  made  in  a  Registration  Statement  or
Prospectus or any document  incorporated or deemed to be incorporated therein by
reference  untrue in any material  respect or that  requires any  revisions to a
Registration Statement,  Prospectus or other documents so that, in the case of a
Registration  Statement  or the  Prospectus,  as the  case  may be,  it will not
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the  circumstances  under which they were made, not misleading;  and
(vi) the  occurrence  or existence  of any pending  corporate  development  with
respect to the Company that the Company  believes  may be material and that,  in
the  determination  of the  Company,  makes it not in the best  interest  of the
Company  to  allow  continued  availability  of the  Registration  Statement  or

                                       5
<PAGE>

Prospectus;  provided  that  any  and  all  of  such  information  shall  remain
confidential  to each Holder until such  information  otherwise  becomes public,
unless  disclosure  by  a  Holder  is  required  by  law;   PROVIDED,   FURTHER,
notwithstanding  each Holder's agreement to keep such information  confidential,
the Holders  make no  acknowledgement  that any such  information  is  material,
non-public information.

         (e) Use its best  efforts  to avoid the  issuance  of,  or, if  issued,
obtain  the  withdrawal  of (i) any  order  suspending  the  effectiveness  of a
Registration  Statement,  or  (ii)  any  suspension  of  the  qualification  (or
exemption from  qualification) of any of the Registrable  Securities for sale in
any jurisdiction, at the earliest practicable moment.

         (f) Furnish to each Holder, without charge, at least one conformed copy
of each  such  Registration  Statement  and each  amendment  thereto,  including
financial statements and schedules,  all documents  incorporated or deemed to be
incorporated  therein by reference to the extent  requested by such Person,  and
all exhibits to the extent requested by such Person  (including those previously
furnished  or  incorporated  by  reference)  promptly  after the  filing of such
documents with the Commission.

         (g) Promptly deliver to each Holder,  without charge, as many copies of
the Prospectus or  Prospectuses  (including  each form of  prospectus)  and each
amendment  or  supplement  thereto as such  Persons  may  reasonably  request in
connection with resales by the Holder of Registrable Securities.  Subject to the
terms  of  this  Agreement,  the  Company  hereby  consents  to the  use of such
Prospectus  and each  amendment  or  supplement  thereto by each of the  selling
Holders in connection with the offering and sale of the  Registrable  Securities
covered by such Prospectus and any amendment or supplement thereto, except after
the giving of any notice pursuant to Section 3(d).

         (h) Prior to any resale of Registrable  Securities by a Holder, use its
commercially  reasonable  efforts to register or qualify or  cooperate  with the
selling  Holders  in  connection  with the  registration  or  qualification  (or
exemption from the registration or qualification) of such Registrable Securities
for the  resale  by the  Holder  under the  securities  or Blue Sky laws of such
jurisdictions  within the United  States as any Holder  reasonably  requests  in
writing,  to keep each  registration or qualification  (or exemption  therefrom)
effective  during the  Effectiveness  Period and to do any and all other acts or
things reasonably  necessary to enable the disposition in such  jurisdictions of
the Registrable  Securities  covered by each Registration  Statement;  provided,
that the Company  shall not be required to qualify  generally  to do business in
any jurisdiction  where it is not then so qualified,  subject the Company to any
material tax in any such jurisdiction  where it is not then so subject or file a
general consent to service of process in any such jurisdiction.

         (i)  If  requested  by the  Holders,  cooperate  with  the  Holders  to
facilitate  the timely  preparation  and delivery of  certificates  representing
Registrable   Securities  to  be  delivered  to  a  transferee   pursuant  to  a
Registration  Statement,  which  certificates  shall  be  free,  to  the  extent
permitted by the Purchase Agreement,  of all restrictive  legends, and to enable
such Registrable  Securities to be in such  denominations and registered in such
names as any such Holders may request.

                                       6
<PAGE>

(j) Upon the occurrence of any event contemplated by this Section 3, as promptly
as reasonably possible under the circumstances taking into account the Company's
good  faith  assessment  of any  adverse  consequences  to the  Company  and its
stockholders of the premature  disclosure of such event, prepare a supplement or
amendment,  including a post-effective amendment, to a Registration Statement or
a supplement to the related Prospectus or any document incorporated or deemed to
be incorporated  therein by reference,  and file any other required  document so
that,  as  thereafter  delivered,  neither  a  Registration  Statement  nor such
Prospectus will contain an untrue  statement of a material fact or omit to state
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.  If the Company  notifies the Holders in accordance with clauses
(ii)  through  (v) of Section  3(d) above to suspend  the use of any  Prospectus
until the requisite  changes to such Prospectus have been made, then the Holders
shall suspend use of such  Prospectus.  The Company will use its best efforts to
ensure  that  the  use of  the  Prospectus  may be  resumed  as  promptly  as is
practicable.  The Company  shall be  entitled  to exercise  its right under this
Section  3(j) to  suspend  the  availability  of a  Registration  Statement  and
Prospectus,  subject to the payment of partial  liquidated  damages  pursuant to
Section 2(b),  for a period not to exceed 60 days (which need not be consecutive
days) in any 12 month period.

         (k) Comply with all applicable rules and regulations of the Commission.

         (l) The  Company  may  require  each  selling  Holder to furnish to the
Company a  certified  statement  as to the  number  of  shares  of Common  Stock
beneficially owned by such Holder and, if required by the Commission, the person
thereof  that has voting and  dispositive  control  over the Shares.  During any
periods  that the  Company  is unable  to meet its  obligations  hereunder  with
respect to the  registration  of the Registrable  Securities  solely because any
Holder  fails to furnish  such  information  within  three  Trading  Days of the
Company's  request,  any liquidated damages that are accruing at such time as to
such Holder only shall be tolled and any Event that may  otherwise  occur solely
because of such delay  shall be  suspended  as to such Holder  only,  until such
information is delivered to the Company.

        4.  REGISTRATION  EXPENSES.  All  fees  and  expenses  incident  to  the
performance  of or compliance  with this Agreement by the Company shall be borne
by the Company  whether or not any  Registrable  Securities are sold pursuant to
the Registration  Statement.  The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including,  without  limitation,  fees and expenses (A) with respect to filings
required  to be made with the Trading  Market on which the Common  Stock is then
listed for trading,  and (B) in compliance with applicable  state  securities or
Blue Sky laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection with
Blue  Sky  qualifications  or  exemptions  of  the  Registrable  Securities  and
determination  of the eligibility of the  Registrable  Securities for investment
under the laws of such jurisdictions as requested by the Holders), (ii) printing
expenses (including,  without limitation,  expenses of printing certificates for
Registrable  Securities and of  photocopying),  (iii)  messenger,  telephone and
delivery expenses,  (iv) fees and disbursements of counsel for the Company,  (v)
Securities Act liability  insurance,  if the Company so desires such  insurance,
and (vi) fees and  expenses  of all other  Persons  retained  by the  Company in
connection  with  the  consummation  of the  transactions  contemplated  by this

                                       7
<PAGE>

Agreement. In addition, the Company shall be responsible for all of its internal
expenses  incurred  in  connection  with the  consummation  of the  transactions
contemplated by this Agreement (including,  without limitation, all salaries and
expenses of its officers and employees  performing legal or accounting  duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the  Registrable  Securities on any  securities  exchange as
required hereunder.  In no event shall the Company be responsible for any broker
or similar  commissions or, except to the extent provided for in the Transaction
Documents, any legal fees or other costs of the Holders.

        5. INDEMNIFICATION

         (a) INDEMNIFICATION BY THE COMPANY. The Company shall,  notwithstanding
any termination of this Agreement,  indemnify and hold harmless each Holder, the
officers,  directors,  agents,  brokers  (including  brokers  who offer and sell
Registrable  Securities  as  principal as a result of a pledge or any failure to
perform under a margin call of Common Stock),  investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the  Securities  Act or Section  20 of the  Exchange  Act) and the
officers,  directors,  agents and employees of each such controlling  Person, to
the fullest  extent  permitted by  applicable  law, from and against any and all
losses,  claims,  damages,  liabilities,  costs (including,  without limitation,
reasonable attorneys' fees) and expenses (collectively,  "LOSSES"), as incurred,
arising  out of or  relating  to any untrue or  alleged  untrue  statement  of a
material fact contained in a Registration Statement,  any Prospectus or any form
of prospectus or in any  amendment or supplement  thereto or in any  preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein  (in the case of any  Prospectus  or form of  prospectus  or
supplement  thereto,  in light of the circumstances  under which they were made)
not  misleading,  except to the extent,  but only to the  extent,  that (i) such
untrue statements or omissions are based solely upon information  regarding such
Holder  furnished  in writing to the  Company by such Holder  expressly  for use
therein,  or to the extent that such information  relates to such Holder or such
Holder's  proposed  method of  distribution  of  Registrable  Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in a
Registration  Statement,  such  Prospectus  or such form of Prospectus or in any
amendment  or  supplement  thereto  (it being  understood  that the  Holder  has
approved  Annex A hereto for this  purpose) or (ii) in the case of an occurrence
of an event of the type  specified  in  Section  3(d)(ii)-(vi),  the use by such
Holder of an outdated or  defective  Prospectus  after the Company has  notified
such Holder in writing that the Prospectus is outdated or defective and prior to
the  receipt by such  Holder of the Advice  contemplated  in Section  6(d).  The
Company  shall  notify  the  Holders  promptly  of the  institution,  threat  or
assertion of any Proceeding  arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware.

         (b)  INDEMNIFICATION BY HOLDERS.  Each Holder shall,  severally and not
jointly,  indemnify  and hold  harmless the Company,  its  directors,  officers,
agents and employees,  each Person who controls the Company  (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents or employees of such controlling  Persons,  to the
fullest  extent  permitted by applicable  law,  from and against all Losses,  as
incurred,  to the extent  arising out of or based solely upon: (x) such Holder's
failure to comply with the prospectus  delivery  requirements  of the Securities
Act or (y) any untrue or alleged  untrue  statement of a material fact contained

                                       8
<PAGE>

in any Registration Statement, any Prospectus,  or any form of prospectus, or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or  relating  to any  omission  or alleged  omission  of a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading (i) to the extent, but only to the extent, that such untrue statement
or omission is  contained  in any  information  so  furnished in writing by such
Holder to the Company specifically for inclusion in such Registration  Statement
or such  Prospectus  or (ii) to the extent  that (1) such untrue  statements  or
omissions are based solely upon  information  regarding such Holder furnished in
writing to the  Company by such  Holder  expressly  for use  therein,  or to the
extent that such  information  relates to such Holder or such Holder's  proposed
method of distribution of Registrable  Securities and was reviewed and expressly
approved  in  writing  by such  Holder  expressly  for  use in the  Registration
Statement (it being  understood  that the Holder has approved Annex A hereto for
this purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement  thereto or (2) in the case of an  occurrence of an event of the type
specified  in Section  3(d)(ii)-(vi),  the use by such  Holder of an outdated or
defective  Prospectus after the Company has notified such Holder in writing that
the  Prospectus is outdated or defective and prior to the receipt by such Holder
of the Advice  contemplated  in Section 6(d). In no event shall the liability of
any selling Holder  hereunder be greater in amount than the dollar amount of the
gross  proceeds  received  by such  Holder  upon  the  sale  of the  Registrable
Securities giving rise to such indemnification obligation.

         (c) CONDUCT OF INDEMNIFICATION  PROCEEDINGS. If any Proceeding shall be
brought or asserted  against  any Person  entitled to  indemnity  hereunder  (an
"INDEMNIFIED  PArty"),  such Indemnified  Party shall promptly notify the Person
from whom  indemnity is sought (the  "INDEMNIFYING  PARTY") in writing,  and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel  reasonably  satisfactory to the Indemnified Party and
the  payment  of all fees and  expenses  incurred  in  connection  with  defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve  the  Indemnifying  Party of its  obligations  or  liabilities
pursuant  to this  Agreement,  except  (and only) to the extent that it shall be
finally determined by a court of competent  jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have prejudiced
the Indemnifying Party.

         An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof,  but the fees and
expenses of such counsel  shall be at the expense of such  Indemnified  Party or
Parties  unless:  (1) the  Indemnifying  Party has agreed in writing to pay such
fees and  expenses;  (2) the  Indemnifying  Party shall have failed  promptly to
assume  the  defense  of  such  Proceeding  and  to  employ  counsel  reasonably
satisfactory to such Indemnified Party in any such Proceeding;  or (3) the named
parties to any such Proceeding  (including any impleaded  parties)  include both
such Indemnified  Party and the Indemnifying  Party, and such Indemnified  Party
shall reasonably believe that a material conflict of interest is likely to exist
if  the  same  counsel  were  to  represent  such  Indemnified   Party  and  the
Indemnifying  Party (in which  case,  if such  Indemnified  Party  notifies  the
Indemnifying  Party in writing that it elects to employ separate  counsel at the
expense of the Indemnifying  Party,  the  Indemnifying  Party shall not have the
right to assume the defense  thereof and the reasonable fees and expenses of one
separate  counsel  shall  be at the  expense  of the  Indemnifying  Party).  The
Indemnifying Party shall not be liable for any settlement of any such Proceeding

                                       9
<PAGE>

effected  without its written  consent,  which consent shall not be unreasonably
withheld.  No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any  Indemnified  Party is a party,  unless  such  settlement  includes an
unconditional  release of such  Indemnified  Party from all  liability on claims
that are the subject matter of such Proceeding.

         Subject  to the  terms  of this  Agreement,  all  reasonable  fees  and
expenses of the Indemnified Party (including reasonable fees and expenses to the
extent  incurred in connection  with  investigating  or preparing to defend such
Proceeding in a manner not inconsistent  with this Section) shall be paid to the
Indemnified  Party,  as  incurred,  within ten  Trading  Days of written  notice
thereof to the Indemnifying  Party;  provided,  that the Indemnified Party shall
promptly  reimburse  the  Indemnifying  Party for that  portion of such fees and
expenses  applicable  to such  actions for which such  Indemnified  Party is not
entitled to indemnification hereunder, determined based upon the relative faults
of the parties.

         (d) CONTRIBUTION.  If a claim for indemnification under Section 5(a) or
5(b) is  unavailable  to an  Indemnified  Party (by  reason of public  policy or
otherwise),   then  each  Indemnifying  Party,  in  lieu  of  indemnifying  such
Indemnified  Party,  shall  contribute  to the  amount  paid or  payable by such
Indemnified  Party  as a  result  of  such  Losses,  in  such  proportion  as is
appropriate  to  reflect  the  relative  fault  of the  Indemnifying  Party  and
Indemnified  Party in connection with the actions,  statements or omissions that
resulted in such Losses as well as any other relevant equitable  considerations.
The relative fault of such  Indemnifying  Party and  Indemnified  Party shall be
determined by reference to, among other things,  whether any action in question,
including any untrue or alleged untrue  statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information  supplied by, such Indemnifying  Party or Indemnified Party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent  such  action,  statement  or  omission.  The amount  paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the  limitations set forth in this  Agreement,  any reasonable  attorneys' or
other reasonable fees or expenses  incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the  indemnification  provided for in this Section was  available to
such party in accordance with its terms.

         The parties  hereto  agree that it would not be just and  equitable  if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
gross proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has  otherwise  been  required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder.

                                       10
<PAGE>

         The indemnity and contribution agreements contained in this Section are
in  addition  to any  liability  that the  Indemnifying  Parties may have to the
Indemnified Parties.

        6. MISCELLANEOUS

         (a)  REMEDIES.  In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific  performance of its rights under this  Agreement.  The Company and each
Holder agree that monetary damages would not provide  adequate  compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement  and  hereby  further  agrees  that,  in the event of any  action  for
specific  performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

         (b) NO PIGGYBACK ON REGISTRATIONS. Except as set forth on SCHEDULE 6(B)
attached hereto, neither the Company nor any of its security holders (other than
the Holders in such  capacity  pursuant  hereto) may include  securities  of the
Company in the Registration Statement other than the Registrable Securities. The
Company  shall  not file any other  registration  statements  until the  initial
Registration   Statement   required  hereunder  is  declared  effective  by  the
Commission,  provided that this SECTION 6(B) shall not prohibit the Company from
filing amendments to registration statements already filed.

         (c)  COMPLIANCE.  Each Holder  covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it  in  connection  with  sales  of  Registrable   Securities  pursuant  to  the
Registration Statement.

         (d) DISCONTINUED DISPOSITION.  Each Holder agrees by its acquisition of
such  Registrable  Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind  described in Section 3(d),  such Holder
will forthwith  discontinue  disposition of such Registrable  Securities under a
Registration  Statement  until  such  Holder's  receipt  of  the  copies  of the
supplemented  Prospectus and/or amended Registration  Statement,  or until it is
advised in writing (the  "ADVICE") by the Company that the use of the applicable
Prospectus  may be resumed,  and, in either  case,  has  received  copies of any
additional  or  supplemental  filings  that are  incorporated  or  deemed  to be
incorporated  by reference in such  Prospectus or  Registration  Statement.  The
Company will use its best efforts to ensure that the use of the  Prospectus  may
be resumed as promptly as it  practicable.  The Company agrees and  acknowledges
that any  periods  during  which  the  Holder is  required  to  discontinue  the
disposition  of the  Registrable  Securities  hereunder  shall be subject to the
provisions of Section 2(b).

         (e) PIGGY-BACK  REGISTRATIONS.  If at any time during the Effectiveness
Period  there is not an  effective  Registration  Statement  covering all of the
Registrable  Securities and the Company shall determine to prepare and file with
the  Commission  a  registration  statement  relating to an offering for its own
account or the account of others under the  Securities  Act of any of its equity
securities,  other than on Form S-4 or Form S-8 (each as  promulgated  under the
Securities Act) or their then  equivalents  relating to equity  securities to be
issued solely in connection  with any  acquisition  of any entity or business or
equity securities issuable in connection with the stock option or other employee
benefit  plans,  then the Company shall send to each Holder a written  notice of
such  determination  and, if within  fifteen days after the date of such notice,

                                       11
<PAGE>

any such Holder shall so request in writing,  the Company  shall include in such
registration  statement  all or any  part of such  Registrable  Securities  such
holder  requests to be  registered;  provided,  that,  the Company  shall not be
required to register any  Registrable  Securities  pursuant to this Section 6(e)
that are  eligible  for resale  pursuant  to Rule 144(k)  promulgated  under the
Securities  Act  or  that  are  the  subject  of a then  effective  Registration
Statement.

         (f) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence,  may not be amended,  modified or supplemented,
and waivers or  consents to  departures  from the  provisions  hereof may not be
given,  unless the same shall be in writing  and signed by the  Company and each
Holder  of the then  outstanding  Registrable  Securities.  Notwithstanding  the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates  exclusively to the rights of Holders and that does not
directly  or  indirectly  affect  the  rights of other  Holders  may be given by
Holders of all of the  Registrable  Securities  to which such  waiver or consent
relates;  PROVIDED,  HOWEVER,  that the  provisions  of this sentence may not be
amended,  modified,  or supplemented except in accordance with the provisions of
the immediately preceding sentence.

         (g) NOTICES.  Any and all notices or other communications or deliveries
required or permitted to be provided  hereunder  shall be delivered as set forth
in the Purchase Agreement.

         (h) SUCCESSORS AND ASSIGNS.  This Agreement  shall inure to the benefit
of and be  binding  upon the  successors  and  permitted  assigns of each of the
parties  and shall  inure to the  benefit of each  Holder.  The  Company may not
assign its rights or obligations  hereunder without the prior written consent of
all of the Holders of the then-outstanding  Registrable Securities.  Each Holder
may assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.

         (i) NO  INCONSISTENT  AGREEMENTS.  Neither  the  Company nor any of its
subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its  subsidiaries,  on or  after  the  date of this  Agreement,  enter  into any
agreement  with  respect  to its  securities,  that  would  have the  effect  of
impairing  the rights  granted to the  Holders in this  Agreement  or  otherwise
conflicts  with the  provisions  hereof.  Except as set forth on Schedule  6(b),
neither the Company nor any of its subsidiaries has previously  entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.

         (j) EXECUTION AND  COUNTERPARTS.  This Agreement may be executed in any
number of counterparts,  each of which when so executed shall be deemed to be an
original  and, all of which taken  together  shall  constitute  one and the same
Agreement.   In  the  event  that  any   signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  binding  obligation of the
party  executing  (or on whose behalf such  signature is executed) the same with
the same  force and  effect as if such  facsimile  signature  were the  original
thereof.

                                       12
<PAGE>

         (k) GOVERNING LAW. All questions concerning the construction, validity,
enforcement  and  interpretation  of this Agreement shall be determined with the
provisions of the Purchase Agreement.

         (l) CUMULATIVE  REMEDIES.  The remedies  provided herein are cumulative
and not exclusive of any remedies provided by law.

         (m) SEVERABILITY.  If any term,  provision,  covenant or restriction of
this  Agreement  is held by a court of  competent  jurisdiction  to be  invalid,
illegal,  void  or  unenforceable,  the  remainder  of  the  terms,  provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  commercially  reasonable  efforts to find and employ an
alternative  means to achieve the same or substantially  the same result as that
contemplated  by such term,  provision,  covenant or  restriction.  It is hereby
stipulated  and declared to be the intention of the parties that they would have
executed the remaining terms,  provisions,  covenants and  restrictions  without
including any of such that may be hereafter declared invalid,  illegal,  void or
unenforceable.

         (n) HEADINGS.  The headings in this  Agreement are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

         (o)  INDEPENDENT  NATURE  OF  HOLDERS'   OBLIGATIONS  AND  RIGHTS.  The
obligations  of each  Holder  hereunder  are  several  and not  joint  with  the
obligations of any other Holder hereunder, and no Holder shall be responsible in
any way for the  performance of the  obligations of any other Holder  hereunder.
Nothing contained herein or in any other agreement or document  delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto,  shall be
deemed to  constitute  the Holders as a  partnership,  an  association,  a joint
venture or any other kind of entity,  or create a  presumption  that the Holders
are in any way  acting  in  concert  with  respect  to such  obligations  or the
transactions  contemplated by this  Agreement.  Each Holder shall be entitled to
protect and enforce its rights,  including without limitation the rights arising
out of this Agreement,  and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose.

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

                                       13
<PAGE>

         IN WITNESS WHEREOF,  the parties have executed this Registration Rights
Agreement as of the date first written above.

                       DIOMED HOLDINGS, INC.

                       By:    /S/  JAMES A. WYLIE, JR.
                            --------------------------
                            Name:  James A. Wylie, Jr.
                            Title:    Chief Executive Officer

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       14
<PAGE>

                     [SIGNATURE PAGE OF HOLDERS TO DIO RRA]

Name of Investing Entity: __________________________
Signature of Authorized Signatory of Investing Entity:_________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________

                           [SIGNATURE PAGES CONTINUE]

                                       15
<PAGE>

                              PLAN OF DISTRIBUTION

         Each Selling  Stockholder  (the "SELLING  STOCKHOLDERS")  of the common
stock ("COMMON  STOCK") of Diomed  Holdings,  Inc., a Delaware  corporation (the
"COMPANY") and any of their pledgees,  assignees and successors-in-interest may,
from  time to time,  sell  any or all of their  shares  of  Common  Stock on the
Trading Market or any other stock exchange,  market or trading facility on which
the shares are traded or in private transactions. These sales may be at fixed or
negotiated  prices.  A  Selling  Stockholder  may  use  any  one or  more of the
following methods when selling shares:

         o        ordinary brokerage  transactions and transactions in which the
                  broker-dealer solicits purchasers;

         o        block trades in which the  broker-dealer  will attempt to sell
                  the shares as agent but may  position  and resell a portion of
                  the block as principal to facilitate the transaction;

         o        purchases by a  broker-dealer  as principal  and resale by the
                  broker-dealer for its account;

         o        an exchange  distribution  in accordance with the rules of the
                  applicable exchange;

         o        privately negotiated transactions;

         o        settlement  of short sales entered into after the date of this
                  prospectus;

         o        broker-dealers may agree with the Selling Stockholders to sell
                  a specified  number of such shares at a  stipulated  price per
                  share;

         o        a combination of any such methods of sale;

         o        through the writing or  settlement of options or other hedging
                  transactions,   whether   through  an  options   exchange   or
                  otherwise; or

         o        any other method permitted pursuant to applicable law.

         The Selling  Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), if available,  rather
than under this prospectus.

         Broker-dealers  engaged by the  Selling  Stockholders  may  arrange for
other  brokers-dealers  to  participate  in sales.  Broker-dealers  may  receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares,  from the purchaser) in amounts to be
negotiated.  Each  Selling  Stockholder  does not expect these  commissions  and
discounts  relating  to its sales of shares to exceed what is  customary  in the
types of transactions involved.

                                       16
<PAGE>

         In connection  with the sale of our common stock or interests  therein,
the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions,  which may in turn engage in short sales of the
common stock in the course of hedging the  positions  they  assume.  The Selling
Stockholders  may also sell shares of our common  stock short and deliver  these
securities  to close out their  short  positions,  or loan or pledge  the common
stock to  broker-dealers  that in turn may sell these  securities.  The  Selling
Stockholders   may  also  enter   into   option  or  other   transactions   with
broker-dealers  or other  financial  institutions or the creation of one or more
derivative  securities which require the delivery to such broker-dealer or other
financial  institution of shares offered by this  prospectus,  which shares such
broker-dealer  or  other  financial  institution  may  resell  pursuant  to this
prospectus (as supplemented or amended to reflect such transaction).

         The  Selling  Stockholders  and any  broker-dealers  or agents that are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker-dealers  or agents  and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions or discounts under the Securities Act. Each Selling  Stockholder has
informed  the  Company  that it does not have any  agreement  or  understanding,
directly or indirectly, with any person to distribute the Common Stock.

         The Company is required to pay certain  fees and  expenses  incurred by
the Company incident to the  registration of the shares.  The Company has agreed
to indemnify the Selling  Stockholders against certain losses,  claims,  damages
and liabilities, including liabilities under the Securities Act.

         Because Selling Stockholders may be deemed to be "underwriters"  within
the  meaning of the  Securities  Act,  they will be  subject  to the  prospectus
delivery requirements of the Securities Act. In addition, any securities covered
by this  prospectus  which  qualify  for sale  pursuant  to Rule 144  under  the
Securities  Act may be sold under Rule 144  rather  than under this  prospectus.
Each  Selling  Stockholder  has advised us that they have not  entered  into any
agreements, understandings or arrangements with any underwriter or broker-dealer
regarding the sale of the resale shares. There is no underwriter or coordinating
broker acting in  connection  with the proposed sale of the resale shares by the
Selling Stockholders.

         We agreed to keep this  prospectus  effective  until the earlier of (i)
the date on which the shares may be resold by the Selling  Stockholders  without
registration  and  without  regard to any volume  limitations  by reason of Rule
144(e) under the  Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold  pursuant to the  prospectus  or Rule 144 under the
Securities  Act or any other rule of similar  effect.  The resale shares will be
sold only through  registered or licensed  brokers or dealers if required  under
applicable  state securities  laws. In addition,  in certain states,  the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable  state or an exemption  from the  registration  or  qualification
requirement is available and is complied with.

         Under  applicable  rules and  regulations  under the Exchange  Act, any
person engaged in the  distribution of the resale shares may not  simultaneously
engage in market making activities with respect to our common stock for a period
of two business days prior to the commencement of the distribution. In addition,
the  Selling  Stockholders  will be  subject  to  applicable  provisions  of the

                                       17
<PAGE>

Exchange Act and the rules and regulations  thereunder,  including Regulation M,
which may limit the timing of purchases  and sales of shares of our common stock
by the Selling  Stockholders  or any other  person.  We will make copies of this
prospectus  available to the Selling  Stockholders and have informed them of the
need to deliver a copy of this  prospectus to each  purchaser at or prior to the
time of the sale.

                                       18
<PAGE>

                                                                         ANNEX B

                              DIOMED HOLDINGS, INC.

                 SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

         The undersigned  beneficial owner of common stock, par value $0.001 per
share (the "COMMON  STOCK"),  of Diomed Holdings,  Inc., a Delaware  corporation
(the "COMPANY"), (the "REGISTRABLE SECURITIES") understands that the Company has
filed or  intends  to file with the  Securities  and  Exchange  Commission  (the
"COMMISSION")  a  registration   statement  on  Form  SB-2  (the   "REGISTRATION
STATEMENT") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "SECURITIES  ACT"), of the Registrable  Securities,  in
accordance  with the terms of the  Registration  Rights  Agreement,  dated as of
September ___, 2004 (the "REGISTRATION RIGHTS AGREEMENT"), among the Company and
the Purchasers  named therein.  A copy of the  Registration  Rights Agreement is
available  from the Company  upon  request at the address set forth  below.  All
capitalized  terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.

         Certain  legal  consequences  arise  from  being  named  as  a  selling
securityholder  in  the  Registration  Statement  and  the  related  prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel  regarding the consequences of being
named  or not  being  named  as a  selling  securityholder  in the  Registration
Statement and the related prospectus.

                                     NOTICE

         The  undersigned  beneficial  owner (the "SELLING  SECURITYHOLDER")  of
Registrable Securities hereby elects to include the Registrable Securities owned
by it and listed below in Item 3 (unless otherwise  specified under such Item 3)
in the Registration Statement.

                                       19
<PAGE>

The  undersigned  hereby  provides the following  information to the Company and
represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1.       NAME.

         (a)      Full Legal Name of Selling Securityholder

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

         (b)      Full Legal Name of  Registered  Holder (if not the same as (a)
                  above) through which  Registrable  Securities Listed in Item 3
                  below are held:

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

         (c)      Full Legal  Name of  Natural  Control  Person  (which  means a
                  natural  person  who  directly  you  indirectly  alone or with
                  others has power to vote or dispose of the securities  covered
                  by the questionnaire):

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

2.  ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:

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

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

--------------------------------------------------------------------------------
Telephone:
          ----------------------------------------------------------------------
Fax:
Contact Person:
          ----------------------------------------------------------------------

3.  BENEFICIAL OWNERSHIP OF REGISTRABLE SECURITIES:

         (a) Type and Principal  Amount of Registrable  Securities  beneficially
owned:

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

                                       20
<PAGE>

4.  BROKER-DEALER STATUS:

         (a) Are you a broker-dealer?

                                            Yes [ ]     No [ ]

         Note:    If yes, the  Commission's  staff has indicated  that you
                  should be identified  as an  underwriter  in the Registration
                  Statement.

         (b) Are you an affiliate of a broker-dealer?

                                            Yes [ ]     No [ ]

         (c)      If you are an  affiliate  of a  broker-dealer,  do you certify
                  that you bought the  Registrable  Securities  in the  ordinary
                  course of  business,  and at the time of the  purchase  of the
                  Registrable  Securities to be resold, you had no agreements or
                  understandings,  directly  or  indirectly,  with any person to
                  distribute the Registrable Securities?

                                            Yes [ ]     No [ ]

         Note:    If no, the  Commission's  staff has  indicated  that you
                  should be identified  as an  underwriter  in the Registration
                  Statement.

5. BENEFICIAL  OWNERSHIP OF OTHER SECURITIES OF THE COMPANY OWNED BY THE SELLING
   SECURITYHOLDER.

         Except as set forth  below in this Item 5, the  undersigned  is not the
         beneficial or registered  owner of any  securities of the Company other
         than the Registrable Securities listed above in Item 3.

         (a)  Type and  Amount  of Other  Securities  beneficially  owned by the
              Selling Securityholder:

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

                                       21
<PAGE>

6.  RELATIONSHIPS WITH THE COMPANY:

         Except as set  forth  below,  neither  the  undersigned  nor any of its
         affiliates,  officers, directors or principal equity holders (owners of
         5% of more of the equity  securities of the  undersigned)  has held any
         position or office or has had any other material  relationship with the
         Company  (or its  predecessors  or  affiliates)  during  the past three
         years.

         State any exceptions here:

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

         The   undersigned   agrees  to  promptly  notify  the  Company  of  any
inaccuracies  or  changes  in the  information  provided  herein  that may occur
subsequent  to the date  hereof  at any time  while the  Registration  Statement
remains effective.

         By signing  below,  the  undersigned  consents to the disclosure of the
information  contained  herein  in its  answers  to  Items 1  through  6 and the
inclusion of such  information  in the  Registration  Statement  and the related
prospectus.  The undersigned  understands  that such  information will be relied
upon by the Company in  connection  with the  preparation  or  amendment  of the
Registration Statement and the related prospectus.

         IN WITNESS WHEREOF the undersigned, by authority duly given, has caused
this Notice and  Questionnaire  to be executed and delivered either in person or
by its duly authorized agent.

Dated:                             Beneficial Owner:
       -------------------------                   -----------------------------

                                   By:
                                      -----------------------------------------
                                      Name:
                                      Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED  NOTICE AND  QUESTIONNAIRE,  AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

                                       22

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