Document:

CHANGE
      IN
      CONTROL SEVERANCE AGREEMENT

    (this
      “Agreement”)
      dated
      February 2, 2007 between Diomed Holdings, Inc.,

    a
      Delaware corporation (the “Company”),
      and

    John
      Welch (the “Executive”).

    

    WHEREAS,
      the Executive is a skilled and dedicated employee of the Company who has
      important management responsibilities and talents that benefit the
      Company;

     

    WHEREAS,
      the Executive and the Company are parties to an existing letter agreement,
      dated
      as of September 9, 2002, as amended as of February 15, 2005 (the “Existing
      Agreement”),
      that
      governs the Executive’s employment with the Company;

     

    WHEREAS,
      the Board of Directors of the Company (the “Board”)
      considers it essential to the best interests of the Company and its shareholders
      to assure that the Company and its subsidiaries will have the continued
      dedication of the Executive, notwithstanding the possibility, threat or
      occurrence of a Change in Control (as defined below); and

     

    WHEREAS,
      the Board believes that it is imperative to diminish the distraction of the
      Executive by virtue of the uncertainties and risks created by the circumstances
      surrounding a Change in Control and to ensure the Executive’s full attention to
      the Company and its subsidiaries during such a period of
      uncertainty;

     

    NOW,
      THEREFORE, in consideration of the mutual agreements, provisions and covenants
      contained herein, and intending to be legally bound hereby, the parties hereto
      agree as follows:

     

    SECTION
      1. Definitions.
      For
      purposes of this Agreement, the following terms shall have the meanings set
      forth below:

     

    (a) “280G
      Gross-Up Payment”
shall
      have the meaning set forth in Section 5(a).

     

    (b) “Accounting
      Firm”
shall
      have the meaning set forth in Section 5(b).

     

    (c) “Accrued
      Rights”
shall
      have the meaning set forth in Section 4(a)(v).

     

    (d) “Affiliate(s)”
means,
      with respect to any specified Person, any other Person that, directly or
      indirectly, through one or more intermediaries, controls, is controlled by,
      or
      is under common control with such specified Person.

     

    (e) “Annual
      Base Salary”
shall
      mean the Executive’s annual rate of base salary in effect immediately prior to
      the Termination Date.

     

    
      
        
        

      

      
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    (f) “Cause”
means
      the occurrence of any one of the following:

     

    (i)
      the
      Executive is convicted of, or pleads guilty or nolo
      contendere
      to,
      (A) a misdemeanor that involves moral turpitude or that involves
      misappropriation of the assets of the Company or a Subsidiary or (B) a
      felony;

     

    (ii)
      the
      Executive commits one or more acts or omissions constituting fraud or other
      willful misconduct that have a materially detrimental effect on the
      Company;

     

    (iii)
      the
      Executive continually and willfully fails, for at least 14 days following
      written notice from the Company, to perform substantially the Executive’s
      employment duties (other than as a result of incapacity due to physical or
      mental illness or after delivery by the Executive of a Notice of Termination
      for
      Good Reason); or

     

    (iv)
      the
      Executive commits a violation of any of the Company’s policies (including the
      Company’s Code of Business Conduct and Ethics, as in effect from time to time)
      that is materially detrimental to the best interests of the
      Company.

     

    (g) “Change
      in Control”
means
      (a) sale of all or substantially all of the Company’s assets, including the
      assets of its Subsidiaries taken as a whole, (b) any merger, consolidation,
      or
      other business combination transaction of the Company with or into another
      corporation, entity, or person, other than a transaction in which the holders
      of
      at least a majority of the shares of voting capital stock of the Company
      outstanding immediately prior to such transaction continue to hold (either
      by
      such shares remaining outstanding or by their being converted into shares of
      voting capital stock of the surviving entity) a majority of the total voting
      power represented by the shares of voting capital stock of the Company (or
      the
      surviving entity) outstanding immediately after such transaction, (c) the direct
      or indirect acquisition (including by way of a tender or exchange offer) by
      any
      person, or persons acting as a group, of beneficial ownership or a right to
      acquire beneficial ownership of shares representing a majority of the voting
      power of the then outstanding shares of capital stock of the Company, (d) a
      contested election of Directors, as a result of which or in connection with
      which the persons who were Directors before such election or their nominees
      cease to constitute a majority of the Board or (e) a dissolution or liquidation
      of the Company.

     

    (h) “Change
      in Control Date”
means
      the date on which a Change in Control occurs (if any).

     

    (i) “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, and the
      regulations promulgated thereunder.

     

    (j) “Disability”
shall
      have the meaning set forth in Section 4(b)(ii).

     

    (k) “Effective
      Date”
shall
      have the meaning set forth in Section 2.

     

    (l) “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended from time to time, or any
      successor statute thereto.

     

    (m) “Excise
      Tax”
means
      the excise tax imposed by Section 4999 of the Code, together with any
      interest or penalties imposed with respect to such tax.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (n) “Good
      Reason”
means,
      without the Executive’s express written consent, the occurrence of any one or
      more of the following:

     

    (i) any
      reduction in the authority, duties, titles or responsibilities held by the
      Executive immediately prior to the Change in Control Date or any assignment
      to
      the Executive of duties or responsibilities that are inconsistent with the
      Executive’s status, offices, titles and reporting relationships as in effect
      immediately prior to the Change in Control Date, but excluding for this purpose
      a reduction or assignment that is remedied by the Company within 30 business
      days after receipt of notice thereof given by the Executive;

     

    (ii) any
      reduction in the annual base salary, annual bonus, annual incentive opportunity,
      long term incentive opportunity or other compensation or benefits of the
      Executive as in effect immediately prior to the Change in Control Date, other
      than a reduction that is remedied by the Company within 30 business days after
      receipt of notice thereof given by the Executive;

     

    (iii) any
      change of the Executive’s principal place of employment to a location more than
      50 miles from the Executive’s principal place of employment immediately prior to
      the Change in Control Date (other than a change that is remedied within 30
      business days after receipt of notice thereof given by the
      Executive);

     

    (iv) any
      failure of the Company to pay the Executive any compensation when due (other
      than a failure that is remedied within 30 business days after receipt of written
      notice thereof given by the Executive);

     

    (v) delivery
      by the Company or any Subsidiary of a written notice to the Executive of the
      intent to terminate the Executive’s employment for any reason, other than Cause
      or Disability, in each case in accordance with this Agreement, regardless of
      whether such termination is intended to become effective during or after the
      Protection Period; or

     

    (vi) any
      failure by the Company to comply with and satisfy the requirements of Section
      10(c) (other than a failure that is remedied within 30 business days after
      receipt of written notice thereof given by the Executive).

     

    The
      Executive’s right to terminate employment for Good Reason shall not be affected
      by the Executive’s incapacity due to physical or mental illness. A termination
      of employment by the Executive for Good Reason for purposes of this Agreement
      shall be effectuated by giving the Company written notice (“Notice
      of Termination for Good Reason”)
      of the
      termination setting forth in reasonable detail the specific conduct of the
      Company that constitutes Good Reason and the specific provisions of this
      Agreement on
      which
      the Executive relied. Unless the parties agree otherwise, a termination of
      employment by the Executive for Good Reason shall be effective on the 30th
      day
      following the date when the Notice of Termination for Good Reason is given,
      unless the Company elects to treat such termination as effective as of an
      earlier date; provided,
      however,
      that so
      long as an event that constitutes Good Reason occurs during the Protection
      Period, for purposes of the payments, benefits and other entitlements set forth
      herein, the termination of the Executive’s employment pursuant thereto shall be
      deemed to occur during the Protection Period. If the Executive continues to
      provide services to the Company after one of the events giving rise to Good
      Reason has occurred, the Executive shall not be deemed to have consented to
      such
      event or to have waived the Executive’s right to terminate his or her employment
      for Good Reason in connection with such event. In all cases, the Executive
      shall
      give the Company five days written notice after the occurrence of any event
      that
      constitutes Good Reason.

     

    
      
        
        

      

      
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    (o) “Notice
      of Termination for Good Reason”
shall
      have the meaning set forth in Section 1(n).

     

    (p) “Payment”
means
      any payment, benefit or distribution (or combination thereof) by the Company,
      any of its Affiliates or any trust established by the Company or its Affiliates,
      to or for the benefit of the Executive, whether paid, payable, distributed,
      distributable or provided pursuant to this Agreement or otherwise, including
      any
      payment, benefit or other right that constitutes a “parachute payment” within
      the meaning of Section 280G of the Code.

     

    (q) “Person”
means
      a
“person” as such term is used in Section 13(d) of the Exchange Act.

     

    (r) “Protection
      Period”
means
      the period commencing on the Change in Control Date and ending on the
      540th
      day
      thereafter.

     

    (s) “Qualifying
      Termination”
means
      any termination of the Executive’s employment (i) by the Company, other than for
      Cause, death or Disability, that is effective (or with respect to which the
      Executive is given written notice) during the Protection Period or (ii) by
      the Executive for Good Reason during the Protection Period.

     

    (t) “Section 409A
      Tax”
shall
      have the meaning set forth in Section 6.

     

    (u) “Subsidiary”
means
      any entity in which the Company, directly or indirectly, possesses 50% or more
      of the total combined voting power of all classes of its stock.

     

    (v) “Successor”
shall
      have the meaning set forth in Section 10(c).

     

    (w) “Termination
      Date”
means
      the date (if any) on which the termination of the Executive’s employment, in
      accordance with the terms of this Agreement, is effective.

     

    (x) “Underpayment”
shall
      have the meaning set forth in Section 5(b).

     

    SECTION
      2. Effectiveness
      and Term.
      This
      Agreement shall become effective as of the date hereof (the “Effective
      Date”)
      and
      shall remain in effect until the second anniversary of the Effective Date.
      Notwithstanding the foregoing, in the event of a Change in Control during the
      term of this Agreement, this Agreement shall not thereafter terminate, and
      the
      term hereof shall be extended, until the Company and its Subsidiaries have
      performed all their obligations hereunder with no future performance being
      possible; provided,
      that
      this Agreement shall only be effective with respect to the first Change in
      Control that occurs during the term of this Agreement.

     

    
      
        
        

      

      
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    SECTION
      3. Impact
      of a Change in Control on Equity Compensation Awards.
      Effective as of any Change in Control Date during the term of this Agreement,
      notwithstanding any provision to the contrary in any of the Company’s
      equity-based, equity-related or other long-term incentive compensation plans,
      practices, policies and programs (including the Company’s 1998 Stock Option
      Plan, 2001 Stock Option Plan and 2003 Omnibus Incentive Plan) or any award
      agreements thereunder, (a) all outstanding stock options, stock
      appreciation rights, restricted shares and similar rights and awards then held
      by the Executive that are unexercisable or otherwise unvested shall
      automatically become fully vested and immediately exercisable, as the case
      may
      be, (b) all outstanding equity-based, equity-related and other long-term
      incentive awards then held by the Executive that are subject to
      performance-based vesting criteria shall automatically become fully vested
      and
      earned at a deemed performance level equal to the maximum performance level
      with
      respect to such awards and (c) all other outstanding equity-based,
      equity-related and long-term incentive awards, to the extent not covered by
      the
      foregoing clause (a) or (b), then held by the Executive that are unvested
      or subject to restrictions or forfeiture shall automatically become fully vested
      and all restrictions and forfeiture provisions related thereto shall
      lapse.

     

    SECTION
      4. Termination
      of Employment.
      

     

    (a)
      Qualifying
      Termination.
      Subject
      to Section 4(a)(v), in the event of a Qualifying Termination, the Executive
      shall be entitled to the following payments and benefits:

     

    (i) 
      Severance
      Pay.
      The
      Company shall pay the Executive an amount equal to one and one-half (1.5) (the
      “Multiple”)
      times
      the Executive’s Annual Base Salary (without regard to any reduction giving rise
      to Good Reason) in a lump-sum payment payable on the tenth business day after
      the date the release described in Section 4(a)(v) becomes effective and
      irrevocable (the “Release
      Effective Date”);
      provided,
      that
      such amount shall be paid in lieu of, and the Executive hereby waives the right
      to receive, any other cash severance payment relating to salary or bonus
      continuation, or any other severance payments or benefits, the Executive is
      otherwise eligible to receive upon termination of employment under any severance
      plan, practice, policy or program of the Company or any Subsidiary or under
      any
      agreement between the Company and the Executive.

     

    (ii) 
      Prorated
      Annual Bonus.
      The
      Company shall pay the Executive an amount equal to the product of (A) the
      Executive’s target annual bonus for the year in which the Termination Date
      occurs (assuming all individual and business criteria are met at target levels)
      and (B) a fraction, the numerator of which is the number of days in
      the
      current
      fiscal year through the Termination Date, and the denominator of which is 365,
      in a lump-sum payment on the tenth business day after the Release Effective
      Date.

     

    (iii) 
      Continued
      Welfare Benefits.
      The
      Company shall continue to provide for a number of years equal to the Multiple
      health, welfare and fringe benefits to the Executive and the Executive’s spouse
      and dependents (in each case, provided in an applicable plan) at least equal
      to
      the levels of benefits provided by the Company and its Subsidiaries immediately
      prior to the Change in Control Date. Nothing in this Section 4(a)(iii)
      shall operate to reduce, or be construed as reducing, the Executive’s group
      health plan continuation rights under the Consolidated Omnibus Budget
      Reconciliation Act of 1985, as amended, in any manner.

     

    
      
        
        

      

      
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    (iv) 
      Accrued
      Rights.
      The
      Executive shall be entitled to (A) payments of any unpaid annual base
      salary or other amount earned or accrued through the Termination Date and for
      reimbursement of any unreimbursed business expenses incurred through the
      Termination Date, (B) the full amount of the Executive’s annual bonus for
      the fiscal year immediately prior to the fiscal year in which the Termination
      Date occurs in the event that the annual bonus for such prior fiscal year has
      not been paid to the Executive by the Termination Date and (C) any vested
      payments or benefits explicitly set forth in any other written agreements or
      benefit plans in which the Executive participates (except for other severance
      payments and benefits waived under Section 4(a)(i)) (the rights to such
      payments, the “Accrued
      Rights”).

     

    (v) 
      Release
      of Claims.
      Notwithstanding any provision of this Agreement to the contrary, the Company
      shall not be obligated to make any payments or provide any benefits described
      in
      this Section 4(a), other than payments or benefits in respect of the
      Accrued Rights, unless and until such time as the Executive has executed and
      delivered a Separation Agreement and Release substantially in the form of
      Exhibit A hereto, which may be modified to comply with applicable laws to
      the extent necessary to obtain a general release of claims, except that no
      such
      modification may affect the Executive’s rights to any payments or benefits under
      this Agreement or impose any additional restriction or limitation on the
      activities of the Executive following termination of employment beyond the
      general release of claims, and such release has become effective and irrevocable
      in accordance with its terms.

     

    (b) 
      Non-Qualifying
      Termination.
      (i) In the event of any termination of the Executive’s employment other
      than a Qualifying Termination (including a termination of employment as a result
      of death or Disability), the Executive shall not be entitled to any additional
      payments or benefits from the Company under this Section 4, other than
      payments or benefits with respect to the Accrued Rights.

     

    (ii) 
      For purposes of this Agreement, the Executive shall be deemed to have a
“Disability”
in
      the
      event of the Executive’s absence for a period of 180
      consecutive business days as a result of incapacity due to a physical or mental
      condition, illness or injury which is determined to be total and permanent
      by a
      physician mutually acceptable to the Company and the Executive or the
      Executive’s legal representative (such acceptance not to be unreasonably
      withheld) after such physician has completed an examination of the Executive.
      The Executive agrees to make himself available for such examination upon the
      reasonable request of the Company, and the Company shall be responsible for
      the
      cost of such examination.

     

    
      
        
        

      

      
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    SECTION
      5. Certain
      Additional Payments by the Company.
      

     

    (a)
       Notwithstanding anything in this Agreement to the contrary and except as
      set forth below, in the event it shall be determined that any Payment that
      is
      paid or payable to or for the benefit of the Executive during the term of this
      Agreement would be subject to the Excise Tax, the Executive shall be entitled
      to
      receive an additional payment (a “280G
      Gross-Up Payment”)
      in an
      amount such that, after payment by the Executive of all taxes (and any interest
      or penalties imposed with respect to such taxes), including any income and
      employment taxes and Excise Taxes imposed upon the 280G Gross-Up Payment, the
      Executive retains an amount of the 280G Gross-Up Payment equal to the Excise
      Tax
      imposed upon such Payments. The Company’s obligation to make 280G Gross-Up
      Payments under this Section 5 shall not be conditioned upon the Executive’s
      termination of employment and shall survive and apply after the Executive’s
      termination of employment. At the time of any Payment during the period of
      this
      Agreement’s effectiveness, the Company shall provide the Executive a written
      description of the application of the Excise Tax (if any) to such
      Payment.

     

    (b)
       Subject to the provisions of Section 5(c), all determinations
      required to be made under this Section 5, including whether and when a 280G
      Gross-Up Payment is required, the amount of such 280G Gross-Up Payment and
      the
      assumptions to be utilized in arriving at such determination, shall be made in
      accordance with the terms of this Section 5 by a nationally recognized
      certified public accounting firm that shall be designated by the Company (other
      than the Company’s regular auditor) (the “Accounting
      Firm”).
      The
      Accounting Firm shall provide detailed supporting calculations both to the
      Company and the Executive within 15 business days of the receipt of notice
      from
      the Executive that there has been a Payment or such earlier time as is requested
      by the Company. For purposes of determining the amount of any 280G Gross-Up
      Payment, the Executive shall be deemed to pay Federal income tax at the highest
      marginal rate applicable to individuals in the calendar year in which any such
      280G Gross-Up Payment is to be made and deemed to pay state and local income
      taxes at the highest marginal rates applicable to individuals in the
      jurisdictions in which the Executive is subject to tax in the calendar year
      in
      which any such 280G Gross-Up Payment is to be made, net of the maximum reduction
      in Federal income taxes that can be obtained from deduction of state and local
      taxes, taking into account limitations applicable to individuals subject to
      Federal income tax at the highest marginal rate. All fees and expenses of the
      Accounting Firm shall be borne solely by the Company. Any 280G Gross-Up Payment,
      as determined pursuant to this Section 5, shall be paid by the Company to
      the Executive within five business days of the receipt of the Accounting Firm’s
      determination. If the Accounting Firm determines that no Excise Tax is payable
      by the Executive, it shall so indicate to the Executive in writing. Any
      determination by the Accounting Firm shall be binding
      upon the Company and the Executive. As a result of the uncertainty in the
      application of the Excise Tax, at the time of the initial determination by
      the
      Accounting Firm hereunder, it is possible that the amount of the 280G Gross-Up
      Payment determined by the Accounting Firm to be due to the Executive, consistent
      with the calculations required to be made hereunder, will be lower than the
      amount actually due, including any interest and penalties (an “Underpayment”).
      In
      the event the Company exhausts its remedies pursuant to Section 5(c) and the
      Executive thereafter is required to make a payment of any Excise Tax, the
      Accounting Firm shall determine the amount of the Underpayment that has occurred
      and any such Underpayment shall be paid by the Company to the Executive within
      five business days of the receipt of the Accounting Firm’s
      determination.

     

    
      
        
        

      

      
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    (c) 
      The Executive shall notify the Company in writing of any written claim by the
      Internal Revenue Service that, if successful, would require the payment by
      the
      Company of a 280G Gross-Up Payment. Such notification shall be given as soon
      as
      practicable, but no later than ten business days after the Executive is informed
      in writing of such claim. Failure to give timely notice shall not prejudice
      the
      Executive’s right to 280G Gross-Up Payments and rights of indemnity under this
      Section 5. The Executive shall apprise the Company of the nature of such
      claim and the date on which such claim is requested to be paid. The Executive
      shall not pay such claim prior to the expiration of the 30-day period following
      the date on which the Executive gives such notice to the Company (or such
      shorter period ending on the date that any payment of taxes with respect to
      such
      claim is due). If the Company notifies the Executive in writing prior to the
      expiration of such period that the Company desires to contest such claim, the
      Executive shall (i) give the Company any information reasonably requested
      by the Company relating to such claim, (ii) take such action in connection
      with contesting such claim as the Company shall reasonably request in writing
      from time to time, including accepting legal representation with respect to
      such
      claim by an attorney reasonably selected by the Company, (iii) cooperate
      with the Company in good faith in order effectively to contest such claim and
      (iv) permit the Company to participate in any proceedings relating to such
      claim; provided,
      that
      the Company shall bear and pay directly all costs and expenses (including
      additional income taxes, interest and penalties) incurred in connection with
      such contest, and shall indemnify and hold the Executive harmless, on an
      after-tax basis, for any Excise Tax or income tax (including interest or
      penalties) imposed as a result of such representation and payment of costs
      and
      expenses. Without limitation on the foregoing provisions of this
      Section 5(c), the Company shall control all proceedings taken in connection
      with such contest, and, at its sole discretion, may pursue or forgo any and
      all
      administrative appeals, proceedings, hearings and conferences with the
      applicable taxing authority in respect of such claim and may, at its sole
      discretion, either direct the Executive to pay the tax claimed and sue for
      a
      refund or contest the claim in any permissible manner, and the Executive agrees
      to prosecute such contest to a determination before any administrative tribunal,
      in a court of initial jurisdiction and in one or more appellate courts, as
      the
      Company shall determine; provided,
      however,
      that
      (A) if the Company directs the Executive to pay such claim and sue for a
      refund, the Company shall advance the amount of such payment to the Executive,
      on an interest-free basis, and shall indemnify and hold the Executive harmless,
      on an after-tax basis, from any Excise Tax or income tax (including interest
      or
      penalties) imposed
      with respect to such advance or with respect to any imputed income in connection
      with such advance and (B) if such contest results in any extension of the
      statute of limitations relating to payment of taxes for the taxable year of
      the
      Executive with respect to which such contested amount is claimed to be due,
      such
      extension must be limited solely to such contested amount. Furthermore, the
      Company’s control of the contest shall be limited to issues with respect to
      which the 280G Gross-Up Payment would be payable hereunder, and the Executive
      shall be entitled to settle or contest, as the case may be, any other issue
      raised by the Internal Revenue Service or any other taxing
      authority.

     

    
      
        
        

      

      
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    (d)
       If, after the receipt by the Executive of an amount advanced by the
      Company pursuant to Section 5(c), the Executive becomes entitled to receive
      any refund with respect to such claim, the Executive shall (subject to the
      Company’s complying with the requirements of Section 5(c)) promptly pay to
      the Company the amount of such refund received (together with any interest
      paid
      or credited thereon after taxes applicable thereto). If, after the receipt
      by
      the Executive of an amount advanced by the Company pursuant to
      Section 5(c), a determination is made that the Executive shall not be
      entitled to any refund with respect to such claim and the Company does not
      notify the Executive in writing of its intent to contest such denial of refund
      prior to the expiration of the 30-day period after such determination, then
      such
      advance shall be forgiven and shall not be required to be repaid and the amount
      of such advance shall offset, to the extent thereof, the amount of 280G Gross-Up
      Payment required to be paid.

     

    SECTION
      6. Section 409A.
      It is
      the intention of the Company and the Executive that the provisions of this
      Agreement comply with Section 409A of the Code, and all provisions of this
      Agreement shall be construed and interpreted in a manner consistent with
      Section 409A of the Code. To the extent necessary to avoid imposition of
      any additional tax or interest penalties under Section 409A (such tax and
      interest penalties, a “Section 409A
      Tax”),
      notwithstanding the timing of payment provided in any other Section of this
      Agreement, the timing of any payment, distribution or benefit pursuant to this
      Agreement shall be subject to a six-month delay in a manner consistent with
      Section 409A(a)(2)(B)(i) of the Code; provided,
      that
      (a) the Executive shall be credited with interest in respect of such
      payment, distribution or benefit during such six-month period at the rate set
      forth in Section 12 and (b) if the Executive dies during such
      six-month period, any such delayed payments shall not be further delayed, and
      shall be immediately payable to the Executive’s devisee, legatee or other
      designee or, should there be no such designee, to the Executive’s estate in
      accordance with the applicable provisions of this Agreement. From and after
      the
      Effective Date and for the remainder of the term of this Agreement, (i) the
      Company shall administer and operate this Agreement in compliance with
      Section 409A of the Code and any rules, regulations or other guidance
      promulgated thereunder as in effect from time to time and (ii) in the event
      that the Company determines that any provision of this Agreement or any such
      plan or arrangement does not comply with Section 409A of the Code or any
      such rules, regulations or guidance and that the Executive may become subject
      to
      a Section 409A Tax, the Company and the Executive shall negotiate in good
      faith to amend or modify such provision to avoid the application of such
      Section 409A Tax; provided,
      that
      such amendment or modification shall not (and the Executive shall not be
      obligated to consent
      to any
      such amendment or modification that would) reduce the economic value to the
      Executive of such provision.

     

    SECTION
      7. No
      Mitigation or Offset; Enforcement of this Agreement.
      

     

    (a)
       The Company’s obligation to make the payments provided for in this
      Agreement and otherwise to perform its obligations hereunder shall not be
      affected by any set-off, counterclaim, recoupment, defense or other claim,
      right
      or action which the Company may have against the Executive or others. In no
      event shall the Executive be obligated to seek other employment or take any
      other action by way of mitigation of the amounts payable to the Executive under
      any of the provisions of this Agreement and, except as otherwise expressly
      provided for in this Agreement, such amounts shall not be reduced whether or
      not
      the Executive obtains other employment.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b)
       The Company shall reimburse, upon the Executive’s demand, any and all
      reasonable legal fees and expenses that the Executive may incur in good faith
      as
      a result of any contest, dispute or proceeding (regardless of whether formal
      legal proceedings are ever commenced and regardless of the outcome thereof
      and
      including all stages of any contest, dispute or proceeding) by the Company
      against the Executive (or, in the event that the Executive is the prevailing
      party, by the Executive against the Company), with respect to the validity
      or
      enforceability of, or liability under, any provision of this Agreement or any
      guarantee of performance thereof (including as a result of any contest regarding
      the amount of any payment owed pursuant to this Agreement), and shall indemnify
      and hold the Executive harmless, on an after-tax basis, for any tax (including
      Excise Tax) imposed on the Executive as a result of payment by the Company
      of
      such legal fees and expenses.

     

    SECTION
      8. Non-Exclusivity
      of Rights.
      Nothing
      in this Agreement shall prevent or limit the Executive’s Accrued
      Rights.

     

    SECTION
      9. Withholding.
      The
      Company may deduct and withhold from any amounts payable under this Agreement
      such Federal, state, local, foreign or other taxes as are required to be
      withheld pursuant to any applicable law or regulation.

     

    SECTION
      10. Assignment.
      

     

    (a) 
      This Agreement is personal to the Executive and, without the prior written
      consent of the Company, shall not be assignable by the Executive otherwise
      than
      by will or the laws of descent and distribution, and any assignment in violation
      of this Agreement shall be void.

     

    (b) 
      Notwithstanding the foregoing Section 10(a), this Agreement and all rights
      of the Executive hereunder shall inure to the benefit of, and be enforceable
      by,
      the Executive’s personal or legal representatives, executors, administrators,
      successors, heirs, distributees, devisees and legatees. If the Executive should
      die while any amounts would still be payable to him or her hereunder if he
      or
      she had continued to live, all such amounts, unless otherwise provided herein,
      shall be paid in accordance with the terms of this Agreement to the Executive’s
      devisee, legatee or other designee or, should there be no such designee, to
      the
      Executive’s estate.

     

    (c)
       The Company shall require any successor (whether direct or indirect, by
      purchase, merger, consolidation or otherwise) to all or substantially all of
      the
      business or assets of the Company (a “Successor”)
      to
      assume and agree to perform this Agreement in the same manner and to the same
      extent that the Company would have been required to perform it if no such
      succession had taken place. As used in this Agreement and the Separation
      Agreement and Release, (i) the term “Company” shall mean the Company as
      hereinbefore defined and any Successor and any permitted assignee to which
      this
      Agreement is assigned and (ii) the term “Board” shall mean the Board as
      hereinbefore defined and the board of directors or equivalent governing body
      of
      any Successor and any permitted assignee to which this Agreement is
      assigned.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    SECTION
      11. Dispute
      Resolution.
      

     

    (a)
       Except as otherwise specifically provided herein, the Executive and the
      Company each hereby irrevocably submit to the exclusive jurisdiction of any
      state court located within the Commonwealth of Massachusetts over any dispute
      arising out of or relating to this Agreement. Except as otherwise specifically
      provided in this Agreement, the parties undertake not to commence any suit,
      action or proceeding arising out of or relating to this Agreement in a forum
      other than a forum described in this Section 11(a); provided,
      however,
      that
      nothing herein shall preclude the Company or the Executive from bringing any
      suit, action or proceeding in any other court for the purposes of enforcing
      the
      provisions of this Section 11 or enforcing any judgment obtained by the
      Company or the Executive.

     

    (b)
       The agreement of the parties to the forum described in Section 11(a) is
      independent of the law that may be applied in any suit, action or proceeding
      and
      the parties agree to such forum even if such forum may under applicable law
      choose to apply non-forum law. The parties hereby waive, to the fullest extent
      permitted by applicable law, any objection that they now or hereafter have
      to
      personal jurisdiction or to the laying of venue of any such suit, action or
      proceeding brought in an applicable court described in Section 11(a), and
      the parties agree that they shall not attempt to deny or defeat such personal
      jurisdiction by motion or other request for leave from any such court. The
      parties agree that, to the fullest extent permitted by applicable law, a final
      and non-appealable judgment in any suit, action or proceeding brought in any
      applicable court described in Section 11(a) shall be conclusive and binding
      upon
      the parties and may be enforced in any other jurisdiction.

     

    (c)
       The parties hereto irrevocably consent to the service of any and all
      process in any suit, action or proceeding arising out of or relating to this
      Agreement by the mailing of copies of such process to such party at such party’s
      address specified in Section 18.

     

    (d)
       Each party hereto hereby waives, to the fullest extent permitted by
      applicable law, any right it may have to a trial by jury in respect of any
      suit,
      action or proceeding arising out of or relating to this Agreement. Each party
      hereto (i) certifies that no representative, agent or attorney of any other
      party has represented, expressly or otherwise, that such party would not, in
      the
      event of any suit, action or proceeding, seek to enforce the foregoing waiver
      and (ii) acknowledges that it and the other parties hereto
      have
      been induced to enter into this Agreement by, among other things, the mutual
      waiver and certifications in this Section 11(d).

     

    SECTION
      12. Default
      in Payment.
      Any
      payment not made within ten business days after it is due in accordance with
      this Agreement shall thereafter bear interest, compounded annually, at the
      prime
      rate in effect from time to time at Citibank, N.A., or any successor
      thereto.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    SECTION
      13. GOVERNING
      LAW. THIS
      AGREEMENT SHALL BE DEEMED TO BE MADE IN THE STATE OF DELAWARE, AND THE VALIDITY,
      INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT IN ALL RESPECTS
      SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ITS
      PRINCIPLES OF CONFLICTS OF LAW.

     

    SECTION
      14. Amendment;
      No Waiver.
      No
      provision of this Agreement may be amended, modified, waived or discharged
      except by a written document signed by the Executive and a duly authorized
      officer of the Company; provided,
      that
      prior to the Change in Control Date, this Agreement may be amended or modified,
      without the Executive’s consent, through a resolution duly adopted by the Board.
      The failure of a party to insist upon strict adherence to any term of this
      Agreement on any occasion shall not be considered a waiver of such party’s
      rights or deprive such party of the right thereafter to insist upon strict
      adherence to that term or any other term of this Agreement. No failure or delay
      by either party in exercising any right or power hereunder will operate as
      a
      waiver thereof, nor will any single or partial exercise of any such right or
      power, or any abandonment of any steps to enforce such right or power, preclude
      any other or further exercise thereof or the exercise of any other right or
      power. No agreements or representations, oral or otherwise, express or implied,
      with respect to the subject matter hereof have been made by either party, which
      are not set forth expressly in this Agreement.

     

    SECTION
      15. Severability.
      If any
      term or provision of this Agreement is invalid, illegal or incapable of being
      enforced by any applicable law or public policy, all other conditions and
      provisions of this Agreement shall nonetheless remain in full force and effect
      so long as the economic and legal substance of the transactions contemplated
      by
      this Agreement is not affected in any manner materially adverse to any party.
      Upon any such determination that any term or other provision is invalid, illegal
      or incapable of being enforced, the parties hereto shall negotiate in good
      faith
      to modify this Agreement so as to effect the original intent of the parties
      as
      closely as possible in a mutually acceptable manner in order that the
      transactions contemplated hereby be consummated as originally contemplated
      to
      the fullest extent possible.

     

    SECTION
      16. Entire
      Agreement.
      This
      Agreement sets forth the entire agreement of the parties hereto in respect
      of
      the subject matter contained herein and supersedes all prior agreements,
      promises, covenants, arrangements, communications, representations or
      warranties, whether oral or written, by any officer, employee or representative
      of any party hereto, and any prior agreement of the parties hereto in
      respect
      of the subject matter contained herein is hereby terminated and canceled. None
      of the parties shall be liable or bound to any other party in any manner by
      any
      representations and warranties or covenants relating to such subject matter
      except as specifically set forth herein.

     

    SECTION
      17. Survival.
      The
      rights and obligations of the parties under the provisions of this Agreement,
      including Sections 4, 5, 6, 7, 10, 11 and 12, shall survive and remain
      binding and enforceable, notwithstanding the expiration of the Protection Period
      or the term of this Agreement, the termination of the Executive’s employment
      with the Company for any reason or any settlement of the financial rights and
      obligations arising from the Executive’s employment hereunder, to the extent
      necessary to preserve the intended benefits of such provisions.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    SECTION
      18. Claims
      for Benefits.
      A
      Participant may submit a written claim for benefits under the Plan in accordance
      with the terms and conditions set forth in this Section 18.

     

    (a)
      Filing
      of Claims.
      A claim
      for benefits shall be made by filing a written request with a person or
      committee designated by the Company (the “Plan
      Administrator”),
      which
      shall be delivered to the Plan Administrator and accompanied by such
      substantiation of the claim as the Plan Administrator considers necessary and
      reasonable for the type of claim being filed. 

     

    (b)
      Denial
      of Claims.
      If a
      claim is denied in whole or in part, the Participant shall receive a written
      or
      electronic notice explaining the denial of the claim within ninety (90) days
      after the Plan Administrator’s receipt of the claim, unless special
      circumstances exist that require an extension of the time for processing such
      claim. If an extension of time is necessary, the Participant shall be notified
      in writing of the extension and reason for the extension within ninety (90)
      days
      after the Plan Administrator’s receipt of the claim. The written extension
      notification shall also indicate the date by which the Plan Administrator
      expects to render a final decision. A notice of denial of claim shall contain
      the following:

     

    1.  the
      specific reason or reasons for the denial;

     

    2.  reference
      to the specific Plan provisions on which the denial is based;

     

    3.  a
      description of any additional materials or information necessary for such
      Participant to perfect the claim and an explanation of why such material or
      information is necessary; and 

     

    4.  a
      description of the Plan’s review procedures and the time limits applicable to
      such procedures, including a statement of the Participant’s right to bring a
      civil action under Section 502(a) of ERISA following an adverse benefit
      determination on review.

     

    (c)
      Payment
      of Claims.
      The
      full value of a payment made according to the provisions of the Plan satisfies
      that much of the claim and all related claims under the Plan against the Plan
      Administrator and the Company, each of whom, as a condition to a payment from
      it
      or directed by it, may require the Participant, beneficiary, or legal
      representative to execute a receipt and release of the claim in a form
      determined by the person requesting the receipt and release.

     

    (d)
      Request
      for Review of Denied Claims.
      A
      Participant whose claim for benefits has been denied by the Plan Administrator
      may request a review of such denial in accordance with the terms and conditions
      of this Section 18(d).

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (i)
      A
      Participant may file a written request for a review of the denial of a claim
      within sixty (60) days after receiving written notice of the denial. The written
      request should be sent to the Plan Administrator, who will forward it to a
      committee established by the Company to provide review (the “Review
      Committee”).
      The
      Participant may submit written comments, documents, records and other relevant
      information in support of the claim. A Participant shall be provided, upon
      request to the Plan Administrator and without charge, reasonable access to,
      and
      copies of, all documents, records, and other information relevant to the
      Participant’s claim for benefits. A document, record, or other information shall
      be considered relevant if it:

     

    1.  was
      relied upon in denying the claim; 

     

    2.  was
      submitted, considered or generated in the course of processing the claim,
      regardless of whether it was relied upon; 

     

    3.  demonstrates
      compliance with the claims procedures process; or 

     

    4.  constitutes
      a statement of Plan policy or guidance concerning the denied benefit, regardless
      of whether it was relied upon.

     

    Relevant
      information shall not include any documents or records (or portions thereof)
      that would, through their release, violate any other applicable law or
      compromise the confidentiality of certain employee data or business records,
      including, but not limited to, any documents subject to attorney-client
      privilege.

     

    (ii)
      In
      reviewing a denied claim, the Review Committee shall take into consideration
      all
      comments, documents, records, and other information submitted by the Participant
      in support of the claim, without regard to whether such information was
      submitted or considered in the initial benefit determination.

     

    (iii)
      The
      Review Committee will notify the Participant in writing of its decision on
      the
      appeal. Such notification will be in writing in a form designed to be understood
      by the Participant. If the claim is denied in whole or in part on appeal, the
      notification will also contain:

     

    5.  the
      specific reason or reasons for the denial; 

     

    6.  reference
      to the specific Plan provisions on which the determination is
      based;

     

    7.  a
      statement that the Participant is entitled to receive, upon request to the
      Plan
      Administrator and free of charge, reasonable access to, and copies of, all
      documents, records, and other information relevant to the Participant’s claim
      for benefits. A document, record, or other information shall be considered
      relevant if it: 

     

    (a)  was
      relied upon in denying the claim;

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (b)  was
      submitted, considered or generated in the course of processing the claim,
      regardless of whether it was relied upon;

     

    (c)  demonstrates
      compliance with the claims procedures process; or 

     

    (d)  constitutes
      a statement of Plan policy or guidance concerning the denied benefit, regardless
      of whether it was relied upon; and

     

    8.  a
      statement that the Participant has a right to bring an action under
      Section 502(a) of ERISA.

     

    Relevant
      information shall not include any documents or records (or portions thereof)
      that would, through their release, violate any other applicable law or
      compromise the confidentiality of certain employee data or business records,
      including, but not limited to, any documents subject to attorney-client
      privilege.

     

    Such
      notification will be given by the Review Committee within sixty (60) days after
      the complete appeal is received by the Review Committee (or within one hundred
      twenty (120) days if the Review Committee determines special circumstances
      require an extension of time for considering the appeal, and if written notice
      of such extension and circumstances is given to the Participant within the
      initial sixty (60) day period). Such written extension notice shall also
      indicate the date by which the Review Committee expects to render a
      decision.

     

    If
      the
      Participant’s written request for review is received by the Plan Administrator
      more than thirty (30) days before a Review Committee meeting, the Review
      Committee’s decision must be rendered at the next meeting after the request for
      review is received. If special circumstances require an extension of time for
      processing, the Review Committee’s decision must be rendered not later than the
      Review Committee’s third meeting after the request for review is received, and
      written notice of the extension must be furnished to the Participant before
      the
      extension begins. In the case of such regularly scheduled meetings, the
      Participant shall be notified of the review determination as soon as possible,
      but no later than five days after the review determination has been made. If
      notice that a claim has been denied on review is not received by the Participant
      within the time required in this paragraph, the claim is deemed denied on
      review. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    SECTION
      19. Notices.
      All
      notices or other communications required or permitted by this Agreement will
      be
      made in writing and all such notices or communications will be deemed to have
      been duly given when delivered or (unless otherwise specified) mailed by United
      States certified mail, return receipt requested, postage prepaid, addressed
      as
      follows:

     

    
      	
              If
                to the Company:

            	
               

            	
              Diomed
                Holdings, Inc.

              One
                Dundee Park

              Andover,
                MA 01810

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Attention:
                Corporate Secretary

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Fax:
                

            
	
               

            	
               

            	
               

            
	
              If
                to the Executive:

            	
               

            	
              At
                the address for the Executive most recently on file with
                the Company

            

    

     

    or
      to
      such other address as any party may have furnished to the other in writing
      in
      accordance herewith, except that notices of change of address shall be effective
      only upon receipt.

     

    SECTION
      20. Headings
      and References.
      The
      headings of this Agreement are inserted for convenience only and neither
      constitutes a part of this Agreement nor affect in any way the meaning or
      interpretation of this Agreement. When a reference in this Agreement is made
      to
      a Section, such reference shall be to a Section of this Agreement unless
      otherwise indicated.

     

    SECTION
      21. Counterparts.
      This
      Agreement may be executed in one or more counterparts (including via facsimile),
      each of which shall be deemed to be an original, but all of which together
      shall
      constitute one and the same instrument.

     

    SECTION
      22. Interpretation.
      For
      purposes of this Agreement, the words “include” and “including”, and variations
      thereof, shall not be deemed to be terms of limitation but rather shall be
      deemed to be followed by the words “without limitation”.

     

    The
      term
“or” is not exclusive. The word “extent” in the phrase “to the extent” shall
      mean the degree to which a subject or other thing extends, and such phrase
      shall
      not mean simply “if”.

     

    [signature
      page follows]

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, this Agreement has been executed by the parties as of the
      date
      first written above.

    
      	 	 	 
	 	DIOMED
              HOLDINGS,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:
                James
                A. Wylie, Jr.

            
	 	
              Title: President
                and Chief Executive Officer

            

    

     

    
      	 	 	 
	 	JOHN
              WELCH
	 
 	 
 	 
 
	 	       
              	 
	 	
              

              Name: John
                Welch

            

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    SEPARATION
      AGREEMENT AND RELEASE

    

         I. 
      Release.
      For good
      and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the undersigned, with the intention of binding himself/herself,
      his/her heirs, executors, administrators and assigns, does hereby release and
      forever discharge Diomed Holdings, Inc., a Delawere corporation , [to be
      amended, if necessary, to add or identify any additional or other entity that
      may be the Executive’s employer at the time of the Qualifying Termination set
      forth in Section 4 of that certain Change in Control Severance Agreement
      between the Executive and Company] (the “Company”), and its or their parents,
      subsidiaries, affiliates, predecessors, successors, and/or assigns, past,
      present, and future, together with its and their officers, directors,
      executives, agents, employees, and employee benefits plans (and the trustees,
      administrators, fiduciaries and insurers of such plans), past, present, and
      future (collectively, the “Released Parties”), from any and all claims, actions,
      causes of action, demands, rights, damages, debts, accounts, suits, expenses,
      attorneys’ fees and liabilities of whatever kind or nature in law, equity, or
      otherwise, whether now known or unknown (collectively, the “Claims”),
      which
      the undersigned now has, owns or holds, or has at any time heretofore had,
      owned
      or held against any Released Party, from the beginning of time to the date
      of
      the Executive’s execution of this Separation Agreement and Release, including
      without limitation, any Claims arising out of or in any way connected with
      the
      undersigned’s employment relationship with the Company, its subsidiaries,
      predecessors or affiliated entities, or the termination thereof, under any
      Federal, state or local statute, rule, or regulation, or principle of common,
      tort or contract law, including but not limited to, the Family and Medical
      Leave
      Act of 1993, as amended
      (the
“FMLA”),
      29
      U.S.C. §§ 2601 et seq.
      , Title
      VII of the Civil Rights Act of 1964, as amended
      , 42
      U.S.C. §§ 2000e et seq.
      , the
      Age Discrimination in Employment Act of 1967, as amended
      , 29
      U.S.C. §§ 621 et seq.
      , the
      Americans with Disabilities Act of 1990, as amended
      , 42
      U.S.C. §§ 12101 et seq.
      , the
      Worker Adjustment and Retraining Notification Act of 1988, as amended
      , 29
      U.S.C. §§ 2101 et seq.
      , the
      Employee Retirement Income Security Act of 1974, as amended
      , 29
      U.S.C. §§ 1001 et seq.
      , and
      all other Federal, state, or local statutes, regulations or laws; provided,
      however
      , that
      nothing herein shall release the Company of its obligations under that certain
      Change in Control Severance Plan of the Company (including the Accrued Rights
      (as defined therein)). Except as set forth in Section II below, the
      undersigned understands that, as a result of executing this Separation Agreement
      and Release, he/she will not have the right to assert that the Company or any
      other Released Party unlawfully terminated his/her employment or violated any
      of
      his/her rights in connection with his/her employment or otherwise.

     

         The
      undersigned affirms that he/she is not presently party to any Claim, complaint
      or action against any Released Party in any forum or form and that he/she knows
      of no facts which may lead to any Claim, complaint or action being filed against
      any Released Party in any forum by the undersigned or by any agency, group,
      etc.
      The undersigned further affirms that he/she has been paid and/or has received
      all leave (paid
      or
      unpaid), compensation, wages, bonuses, commissions, and/or benefits to which
      he/she may be entitled and that no other leave (paid or unpaid), compensation,
      wages, bonuses, commissions and/or benefits are due to him/her from the Company
      and its subsidiaries, except as specifically provided in this Separation
      Agreement and Release. The undersigned furthermore affirms that he/she has
      no
      known workplace injuries or occupational diseases and has been provided and/or
      has not been denied any leave requested under the FMLA. If any agency or court
      assumes jurisdiction of any such Claim, complaint or action against any Released
      Party on behalf of the undersigned, the undersigned hereby waives any right
      to
      individual monetary or other relief.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

         The
      undersigned further declares and represents that he/she has carefully read
      and
      fully understands the terms of this Separation Agreement and Release and that,
      through this document, he/she is hereby advised to consult with an attorney
      prior to executing this Separation Agreement and Release, that he/she may take
      up to and including 21 days from receipt of this Separation Agreement and
      Release, to consider whether to sign this Separation Agreement and Release,
      that
      he/she may revoke this Separation Agreement and Release within seven calendar
      days after signing it by delivering to the Company written notification of
      revocation (and that this Separation Agreement and Release shall not become
      effective or enforceable until the expiration of such revocation period), and
      that he/she knowingly and voluntarily, of his/her own free will, without any
      duress, being fully informed and after due deliberate action, accepts the terms
      of and signs the same as his own free act.

     

         II. 
      Protected
      Rights.
      The
      Company and the undersigned agree that nothing in this Separation Agreement
      and
      Release is intended to or shall be construed to affect, limit or otherwise
      interfere with any non-waivable right of the undersigned under any Federal,
      state or local law, including the right to file a charge or participate in
      an
      investigation or proceeding conducted by the Equal Employment Opportunity
      Commission (“EEOC”)
      or to
      exercise any other right that cannot be waived under applicable law. The
      undersigned is releasing, however, his/her right to any monetary recovery or
      relief should the EEOC or any other agency pursue Claims on his/her behalf.
      Further, should the EEOC or any other agency obtain monetary relief on his/her
      behalf, the undersigned assigns to the Company all rights to such
      relief.

     

         III.
      Third-Party
      Litigation.
      The
      undersigned agrees to be available to the Company and its affiliates on a
      reasonable basis in connection with any pending or threatened claims, charges
      or
      litigation in which the Company or any of its affiliates is now or may become
      involved, or any other claims or demands made against or upon the Company or
      any
      of its affiliates, regardless of whether or not the undersigned is a named
      defendant in any particular case.

     

         IV. 
      Return
      of Property.
      The
      undersigned shall return to the Company on or before 10 days after termination
      date, all property of the Company in the undersigned’s possession or subject to
      the undersigned’s control, including without limitation any laptop computers,
      keys, credit cards, cellular telephones and files. The undersigned shall not
      alter any of the Company’s records or computer files in any way after
      termination date.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

         V. 
      Confidential
      Information.
      The
      undersigned acknowledges that Confidential Information (as defined below) is
      a
      valuable asset of the Company and that unauthorized disclosure or utilization
      thereof could be detrimental to the Company. The undersigned, therefore, shall
      not, after the term of employment with the Company, disclose in any way or
      to
      any extent, to any person or organization other than the Company, or utilize
      for
      the benefit or profit of the undersigned or any other person or organization
      other than the Company, any Confidential Information, except (a) as may be
      authorized in writing in advance by the Company; (b) is publicly available
      or becomes publicly available other than through a breach of this document
      by
      the undersigned or, based on the undersigned’s knowledge, the breach of this
      document by others; and (c) upon prior notification to the Company, the
      undersigned may be required by law to disclose. “Confidential Information” means
      information disclosed — whether orally or in writing — to the undersigned, or
      otherwise known to the undersigned as a direct or indirect result of his or
      her
      employment by the Company, concerning (i) the Company’s products, patent
      applications, research activities, formulations, processes, protocols,
      procedures, other intellectual properties, machines, services, and all matters
      having to do with the business or operations of the Company, including, but
      not
      limited to, all information of any type related to research, product
      development, manufacturing, quality matters, purchasing, finance, data
      processing, engineering, facilities, marketing, merchandising and selling,
      personnel, organization matters, policy matters, legal and other corporate
      affairs and (ii) information of any type about any third party with which
      the Company is in technical or commercial cooperation, acquired by the
      undersigned, directly or indirectly, in connection with his or her employment
      by
      the Company. Included in the foregoing definition by way of illustration, but
      not limitation, are such items as research projects, findings or reports,
      business plans and projections, formulae, processes, methods of manufacture,
      computer programs, sales, costs, pricing data, regulatory matters, operating
      procedures, information about employees and personnel practices, and lists
      of
      investigators, consultants, suppliers and customers. The undersigned agrees
      not
      to remove any Confidential Information from the Company, not to request that
      others do so on the undersigned’s behalf and to return any Confidential
      Information currently in the undersigned’s possession to the
      Company.

     

         VI. 
      Severability.
      If any
      term or provision of this Separation Agreement and Release is invalid, illegal
      or incapable of being enforced by any applicable law or public policy, all
      other
      conditions and provisions of this Separation Agreement and Release shall
      nonetheless remain in full force and effect so long as the economic and legal
      substance of the transactions contemplated by this Separation Agreement and
      Release is not affected in any manner materially adverse to any
      party.

     

         VII.
      GOVERNING
      LAW. THIS
      SEPARATION AGREEMENT AND RELEASE SHALL BE DEEMED TO BE MADE IN THE STATE OF
      DELAWARE, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF
      THIS
      AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE
      WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.

     

         Effective
      on the eighth calendar day following the date set forth below.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, this Agreement has been executed by the parties as of the
      date
      first written above.

    
      	 	 	 
	 	DIOMED
              HOLDINGS,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name: James
                A. Wylie, Jr.

            
	 	Title: President
              and Chief Executive Officer

    

     

    
      	 	 	 
	 	
              [EXECUTIVE]

            
	 
 	 
 	 
 
	 	        
              	 
	 	
              
[name]

    

     

    
      
        
        

      

      
        21CHANGE
      IN
      CONTROL SEVERANCE AGREEMENT

    (this
      “Agreement”)
      dated
      February 2, 2007 between Diomed Holdings, Inc.,

    a
      Delaware corporation (the “Company”),
      and

    William
      D. Allan (the “Executive”).

     

    WHEREAS,
      the Executive is a skilled and dedicated employee of the Company who has
      important management responsibilities and talents that benefit the
      Company;

     

    WHEREAS,
      the Executive and the Company are parties to an existing letter agreement,
      dated
      as of October 5, 2006 (the “Existing
      Agreement”),
      that
      governs the Executive’s employment with the Company;

     

    WHEREAS,
      the Board of Directors of the Company (the “Board”)
      considers it essential to the best interests of the Company and its shareholders
      to assure that the Company and its subsidiaries will have the continued
      dedication of the Executive, notwithstanding the possibility, threat or
      occurrence of a Change in Control (as defined below); and

     

    WHEREAS,
      the Board believes that it is imperative to diminish the distraction of the
      Executive by virtue of the uncertainties and risks created by the circumstances
      surrounding a Change in Control and to ensure the Executive’s full attention to
      the Company and its subsidiaries during such a period of
      uncertainty;

     

    NOW,
      THEREFORE, in consideration of the mutual agreements, provisions and covenants
      contained herein, and intending to be legally bound hereby, the parties hereto
      agree as follows:

     

    SECTION
      1. Definitions.
      For
      purposes of this Agreement, the following terms shall have the meanings set
      forth below:

     

    (a) ”280G
      Gross-Up Payment”
shall
      have the meaning set forth in Section 5(a).

     

    (b) ”Accounting
      Firm”
shall
      have the meaning set forth in Section 5(b).

     

    (c) ”Accrued
      Rights”
shall
      have the meaning set forth in Section 4(a)(v).

     

    (d) ”Affiliate(s)”
means,
      with respect to any specified Person, any other Person that, directly or
      indirectly, through one or more intermediaries, controls, is controlled by,
      or
      is under common control with such specified Person.

     

    (e) ”Annual
      Base Salary”
shall
      mean the Executive’s annual rate of base salary in effect immediately prior to
      the Termination Date.

     

    (f) ”Cause”
means
      the occurrence of any one of the following:

     

    (i)
      the
      Executive is convicted of, or pleads guilty or nolo
      contendere
      to,
      (A) a misdemeanor that involves moral turpitude or that involves
      misappropriation of the assets of the Company or a Subsidiary or (B) a
      felony;

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (ii)
      the
      Executive commits one or more acts or omissions constituting fraud or other
      willful misconduct that have a materially detrimental effect on the
      Company;

     

    (iii)
      the
      Executive continually and willfully fails, for at least 14 days following
      written notice from the Company, to perform substantially the Executive’s
      employment duties (other than as a result of incapacity due to physical or
      mental illness or after delivery by the Executive of a Notice of Termination
      for
      Good Reason); or

     

    (iv)
      the
      Executive commits a violation of any of the Company’s policies (including the
      Company’s Code of Business Conduct and Ethics, as in effect from time to time)
      that is materially detrimental to the best interests of the
      Company.

     

    (g) ”Change
      in Control”
means
      (a) sale of all or substantially all of the Company’s assets, including the
      assets of its Subsidiaries taken as a whole, (b) any merger, consolidation,
      or
      other business combination transaction of the Company with or into another
      corporation, entity, or person, other than a transaction in which the holders
      of
      at least a majority of the shares of voting capital stock of the Company
      outstanding immediately prior to such transaction continue to hold (either
      by
      such shares remaining outstanding or by their being converted into shares of
      voting capital stock of the surviving entity) a majority of the total voting
      power represented by the shares of voting capital stock of the Company (or
      the
      surviving entity) outstanding immediately after such transaction, (c) the direct
      or indirect acquisition (including by way of a tender or exchange offer) by
      any
      person, or persons acting as a group, of beneficial ownership or a right to
      acquire beneficial ownership of shares representing a majority of the voting
      power of the then outstanding shares of capital stock of the Company, (d) a
      contested election of Directors, as a result of which or in connection with
      which the persons who were Directors before such election or their nominees
      cease to constitute a majority of the Board or (e) a dissolution or liquidation
      of the Company.

     

    (h) ”Change
      in Control Date”
means
      the date on which a Change in Control occurs (if any).

     

    (i) ”Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, and the
      regulations promulgated thereunder.

     

    (j) ”Disability”
shall
      have the meaning set forth in Section 4(b)(ii).

     

    (k) ”Effective
      Date”
shall
      have the meaning set forth in Section 2.

     

    (l) ”Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended from time to time, or any
      successor statute thereto.

     

    (m) ”Excise
      Tax”
means
      the excise tax imposed by Section 4999 of the Code, together with any
      interest or penalties imposed with respect to such tax.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (n) ”Good
      Reason”
means,
      without the Executive’s express written consent, the occurrence of any one or
      more of the following:

     

    (i) any
      reduction in the authority, duties, titles or responsibilities held by the
      Executive immediately prior to the Change in Control Date or any assignment
      to
      the Executive of duties or responsibilities that are inconsistent with the
      Executive’s status, offices, titles and reporting relationships as in effect
      immediately prior to the Change in Control Date, but excluding for this purpose
      a reduction or assignment that is remedied by the Company within 30 business
      days after receipt of notice thereof given by the Executive;

     

    (ii) any
      reduction in the annual base salary, annual bonus, annual incentive opportunity,
      long term incentive opportunity or other compensation or benefits of the
      Executive as in effect immediately prior to the Change in Control Date, other
      than a reduction that is remedied by the Company within 30 business days after
      receipt of notice thereof given by the Executive;

     

    (iii) any
      change of the Executive’s principal place of employment to a location more than
      50 miles from the Executive’s principal place of employment immediately prior to
      the Change in Control Date (other than a change that is remedied within 30
      business days after receipt of notice thereof given by the
      Executive);

     

    (iv) any
      failure of the Company to pay the Executive any compensation when due (other
      than a failure that is remedied within 30 business days after receipt of written
      notice thereof given by the Executive);

     

    (v) delivery
      by the Company or any Subsidiary of a written notice to the Executive of the
      intent to terminate the Executive’s employment for any reason, other than Cause
      or Disability, in each case in accordance with this Agreement, regardless of
      whether such termination is intended to become effective during or after the
      Protection Period; or

     

    (vi) any
      failure by the Company to comply with and satisfy the requirements of Section
      10(c) (other than a failure that is remedied within 30 business days after
      receipt of written notice thereof given by the Executive).

     

    The
      Executive’s right to terminate employment for Good Reason shall not be affected
      by the Executive’s incapacity due to physical or mental illness. A termination
      of employment by the Executive for Good Reason for purposes of this Agreement
      shall be effectuated by giving the Company written notice (“Notice
      of Termination for Good Reason”)
      of the
      termination setting forth in reasonable detail the specific conduct of the
      Company that constitutes Good Reason and the specific provisions of this
      Agreement on
      which
      the Executive relied. Unless the parties agree otherwise, a termination of
      employment by the Executive for Good Reason shall be effective on the 30th
      day
      following the date when the Notice of Termination for Good Reason is given,
      unless the Company elects to treat such termination as effective as of an
      earlier date; provided,
      however,
      that so
      long as an event that constitutes Good Reason occurs during the Protection
      Period, for purposes of the payments, benefits and other entitlements set forth
      herein, the termination of the Executive’s employment pursuant thereto shall be
      deemed to occur during the Protection Period. If the Executive continues to
      provide services to the Company after one of the events giving rise to Good
      Reason has occurred, the Executive shall not be deemed to have consented to
      such
      event or to have waived the Executive’s right to terminate his or her employment
      for Good Reason in connection with such event. In all cases, the Executive
      shall
      give the Company five days written notice after the occurrence of any event
      that
      constitutes Good Reason.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (o) ”Notice
      of Termination for Good Reason”
shall
      have the meaning set forth in Section 1(n).

     

    (p) ”Payment”
means
      any payment, benefit or distribution (or combination thereof) by the Company,
      any of its Affiliates or any trust established by the Company or its Affiliates,
      to or for the benefit of the Executive, whether paid, payable, distributed,
      distributable or provided pursuant to this Agreement or otherwise, including
      any
      payment, benefit or other right that constitutes a “parachute payment” within
      the meaning of Section 280G of the Code.

     

    (q) ”Person”
means
      a
“person” as such term is used in Section 13(d) of the Exchange Act.

     

    (r) ”Protection
      Period”
means
      the period commencing on the Change in Control Date and ending on the
      540th
      day
      thereafter.

     

    (s) ”Qualifying
      Termination”
means
      any termination of the Executive’s employment (i) by the Company, other than for
      Cause, death or Disability, that is effective (or with respect to which the
      Executive is given written notice) during the Protection Period or (ii) by
      the Executive for Good Reason during the Protection Period.

     

    (t) ”Section 409A
      Tax”
shall
      have the meaning set forth in Section 6.

     

    (u) ”Subsidiary”
means
      any entity in which the Company, directly or indirectly, possesses 50% or more
      of the total combined voting power of all classes of its stock.

     

    (v) ”Successor”
shall
      have the meaning set forth in Section 10(c).

     

    (w) ”Termination
      Date”
means
      the date (if any) on which the termination of the Executive’s employment, in
      accordance with the terms of this Agreement, is effective.

     

    (x) ”Underpayment”
shall
      have the meaning set forth in Section 5(b).

     

    SECTION
      2. Effectiveness
      and Term.
      This
      Agreement shall become effective as of the date hereof (the “Effective
      Date”)
      and
      shall remain in effect until the second anniversary of the Effective Date.
      Notwithstanding the foregoing, in the event of a Change in Control during the
      term of this Agreement, this Agreement shall not thereafter terminate, and
      the
      term hereof shall be extended, until the Company and its Subsidiaries have
      performed all their obligations hereunder with no future performance being
      possible; provided,
      that
      this Agreement shall only be effective with respect to the first Change in
      Control that occurs during the term of this Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    SECTION
      3. Impact
      of a Change in Control on Equity Compensation Awards.
      Effective as of any Change in Control Date during the term of this Agreement,
      notwithstanding any provision to the contrary in any of the Company’s
      equity-based, equity-related or other long-term incentive compensation plans,
      practices, policies and programs (including the Company’s 1998 Stock Option
      Plan, 2001 Stock Option Plan and 2003 Omnibus Incentive Plan) or any award
      agreements thereunder, (a) all outstanding stock options, stock
      appreciation rights, restricted shares and similar rights and awards then held
      by the Executive that are unexercisable or otherwise unvested shall
      automatically become fully vested and immediately exercisable, as the case
      may
      be, (b) all outstanding equity-based, equity-related and other long-term
      incentive awards then held by the Executive that are subject to
      performance-based vesting criteria shall automatically become fully vested
      and
      earned at a deemed performance level equal to the maximum performance level
      with
      respect to such awards and (c) all other outstanding equity-based,
      equity-related and long-term incentive awards, to the extent not covered by
      the
      foregoing clause (a) or (b), then held by the Executive that are unvested
      or subject to restrictions or forfeiture shall automatically become fully vested
      and all restrictions and forfeiture provisions related thereto shall
      lapse.

     

    SECTION
      4. Termination
      of Employment.
      

     

    (a)
      Qualifying
      Termination.
      Subject
      to Section 4(a)(v), in the event of a Qualifying Termination, the Executive
      shall be entitled to the following payments and benefits:

     

    (i) 
      Severance
      Pay.
      The
      Company shall pay the Executive an amount equal to one and one-half (1.5) (the
      “Multiple”)
      times
      the Executive’s Annual Base Salary (without regard to any reduction giving rise
      to Good Reason) in a lump-sum payment payable on the tenth business day after
      the date the release described in Section 4(a)(v) becomes effective and
      irrevocable (the “Release
      Effective Date”);
      provided,
      that
      such amount shall be paid in lieu of, and the Executive hereby waives the right
      to receive, any other cash severance payment relating to salary or bonus
      continuation, or any other severance payments or benefits, the Executive is
      otherwise eligible to receive upon termination of employment under any severance
      plan, practice, policy or program of the Company or any Subsidiary or under
      any
      agreement between the Company and the Executive.

     

    (ii) 
      Prorated
      Annual Bonus.
      The
      Company shall pay the Executive an amount equal to the product of (A) the
      Executive’s target annual bonus for the year in which the Termination Date
      occurs (assuming all individual and business criteria are met at target levels)
      and (B) a fraction, the numerator of which is the number of days in
      the
      current
      fiscal year through the Termination Date, and the denominator of which is 365,
      in a lump-sum payment on the tenth business day after the Release Effective
      Date.

     

    (iii) 
      Continued
      Welfare Benefits.
      The
      Company shall continue to provide for a number of years equal to the Multiple
      health, welfare and fringe benefits to the Executive and the Executive’s spouse
      and dependents (in each case, provided in an applicable plan) at least equal
      to
      the levels of benefits provided by the Company and its Subsidiaries immediately
      prior to the Change in Control Date. Nothing in this Section 4(a)(iii)
      shall operate to reduce, or be construed as reducing, the Executive’s group
      health plan continuation rights under the Consolidated Omnibus Budget
      Reconciliation Act of 1985, as amended, in any manner.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (iv) 
      Accrued
      Rights.
      The
      Executive shall be entitled to (A) payments of any unpaid annual base
      salary or other amount earned or accrued through the Termination Date and for
      reimbursement of any unreimbursed business expenses incurred through the
      Termination Date, (B) the full amount of the Executive’s annual bonus for
      the fiscal year immediately prior to the fiscal year in which the Termination
      Date occurs in the event that the annual bonus for such prior fiscal year has
      not been paid to the Executive by the Termination Date and (C) any vested
      payments or benefits explicitly set forth in any other written agreements or
      benefit plans in which the Executive participates (except for other severance
      payments and benefits waived under Section 4(a)(i)) (the rights to such
      payments, the “Accrued
      Rights”).

     

    (v) 
      Release
      of Claims.
      Notwithstanding any provision of this Agreement to the contrary, the Company
      shall not be obligated to make any payments or provide any benefits described
      in
      this Section 4(a), other than payments or benefits in respect of the
      Accrued Rights, unless and until such time as the Executive has executed and
      delivered a Separation Agreement and Release substantially in the form of
      Exhibit A hereto, which may be modified to comply with applicable laws to
      the extent necessary to obtain a general release of claims, except that no
      such
      modification may affect the Executive’s rights to any payments or benefits under
      this Agreement or impose any additional restriction or limitation on the
      activities of the Executive following termination of employment beyond the
      general release of claims, and such release has become effective and irrevocable
      in accordance with its terms.

     

    (b) 
      Non-Qualifying
      Termination.
      (i) In the event of any termination of the Executive’s employment other
      than a Qualifying Termination (including a termination of employment as a result
      of death or Disability), the Executive shall not be entitled to any additional
      payments or benefits from the Company under this Section 4, other than
      payments or benefits with respect to the Accrued Rights.

     

    (ii) 
      For purposes of this Agreement, the Executive shall be deemed to have a
“Disability”
in
      the
      event of the Executive’s absence for a period of 180
      consecutive business days as a result of incapacity due to a physical or mental
      condition, illness or injury which is determined to be total and permanent
      by a
      physician mutually acceptable to the Company and the Executive or the
      Executive’s legal representative (such acceptance not to be unreasonably
      withheld) after such physician has completed an examination of the Executive.
      The Executive agrees to make himself available for such examination upon the
      reasonable request of the Company, and the Company shall be responsible for
      the
      cost of such examination.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    SECTION
      5. Certain
      Additional Payments by the Company.
      

     

    (a)
       Notwithstanding anything in this Agreement to the contrary and except as
      set forth below, in the event it shall be determined that any Payment that
      is
      paid or payable to or for the benefit of the Executive during the term of this
      Agreement would be subject to the Excise Tax, the Executive shall be entitled
      to
      receive an additional payment (a “280G
      Gross-Up Payment”)
      in an
      amount such that, after payment by the Executive of all taxes (and any interest
      or penalties imposed with respect to such taxes), including any income and
      employment taxes and Excise Taxes imposed upon the 280G Gross-Up Payment, the
      Executive retains an amount of the 280G Gross-Up Payment equal to the Excise
      Tax
      imposed upon such Payments. The Company’s obligation to make 280G Gross-Up
      Payments under this Section 5 shall not be conditioned upon the Executive’s
      termination of employment and shall survive and apply after the Executive’s
      termination of employment. At the time of any Payment during the period of
      this
      Agreement’s effectiveness, the Company shall provide the Executive a written
      description of the application of the Excise Tax (if any) to such
      Payment.

     

    (b)
       Subject to the provisions of Section 5(c), all determinations
      required to be made under this Section 5, including whether and when a 280G
      Gross-Up Payment is required, the amount of such 280G Gross-Up Payment and
      the
      assumptions to be utilized in arriving at such determination, shall be made
      in
      accordance with the terms of this Section 5 by a nationally recognized
      certified public accounting firm that shall be designated by the Company (other
      than the Company’s regular auditor) (the “Accounting
      Firm”).
      The
      Accounting Firm shall provide detailed supporting calculations both to the
      Company and the Executive within 15 business days of the receipt of notice
      from
      the Executive that there has been a Payment or such earlier time as is requested
      by the Company. For purposes of determining the amount of any 280G Gross-Up
      Payment, the Executive shall be deemed to pay Federal income tax at the highest
      marginal rate applicable to individuals in the calendar year in which any such
      280G Gross-Up Payment is to be made and deemed to pay state and local income
      taxes at the highest marginal rates applicable to individuals in the
      jurisdictions in which the Executive is subject to tax in the calendar year
      in
      which any such 280G Gross-Up Payment is to be made, net of the maximum reduction
      in Federal income taxes that can be obtained from deduction of state and local
      taxes, taking into account limitations applicable to individuals subject to
      Federal income tax at the highest marginal rate. All fees and expenses of the
      Accounting Firm shall be borne solely by the Company. Any 280G Gross-Up Payment,
      as determined pursuant to this Section 5, shall be paid by the Company to
      the Executive within five business days of the receipt of the Accounting Firm’s
      determination. If the Accounting Firm determines that no Excise Tax is payable
      by the Executive, it shall so indicate to the Executive in writing. Any
      determination by the Accounting Firm shall be binding
      upon the Company and the Executive. As a result of the uncertainty in the
      application of the Excise Tax, at the time of the initial determination by
      the
      Accounting Firm hereunder, it is possible that the amount of the 280G Gross-Up
      Payment determined by the Accounting Firm to be due to the Executive, consistent
      with the calculations required to be made hereunder, will be lower than the
      amount actually due, including any interest and penalties (an “Underpayment”).
      In
      the event the Company exhausts its remedies pursuant to Section 5(c) and the
      Executive thereafter is required to make a payment of any Excise Tax, the
      Accounting Firm shall determine the amount of the Underpayment that has occurred
      and any such Underpayment shall be paid by the Company to the Executive within
      five business days of the receipt of the Accounting Firm’s
      determination.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (c) 
      The Executive shall notify the Company in writing of any written claim by the
      Internal Revenue Service that, if successful, would require the payment by
      the
      Company of a 280G Gross-Up Payment. Such notification shall be given as soon
      as
      practicable, but no later than ten business days after the Executive is informed
      in writing of such claim. Failure to give timely notice shall not prejudice
      the
      Executive’s right to 280G Gross-Up Payments and rights of indemnity under this
      Section 5. The Executive shall apprise the Company of the nature of such
      claim and the date on which such claim is requested to be paid. The Executive
      shall not pay such claim prior to the expiration of the 30-day period following
      the date on which the Executive gives such notice to the Company (or such
      shorter period ending on the date that any payment of taxes with respect to
      such
      claim is due). If the Company notifies the Executive in writing prior to the
      expiration of such period that the Company desires to contest such claim, the
      Executive shall (i) give the Company any information reasonably requested
      by the Company relating to such claim, (ii) take such action in connection
      with contesting such claim as the Company shall reasonably request in writing
      from time to time, including accepting legal representation with respect to
      such
      claim by an attorney reasonably selected by the Company, (iii) cooperate
      with the Company in good faith in order effectively to contest such claim and
      (iv) permit the Company to participate in any proceedings relating to such
      claim; provided,
      that
      the Company shall bear and pay directly all costs and expenses (including
      additional income taxes, interest and penalties) incurred in connection with
      such contest, and shall indemnify and hold the Executive harmless, on an
      after-tax basis, for any Excise Tax or income tax (including interest or
      penalties) imposed as a result of such representation and payment of costs
      and
      expenses. Without limitation on the foregoing provisions of this
      Section 5(c), the Company shall control all proceedings taken in connection
      with such contest, and, at its sole discretion, may pursue or forgo any and
      all
      administrative appeals, proceedings, hearings and conferences with the
      applicable taxing authority in respect of such claim and may, at its sole
      discretion, either direct the Executive to pay the tax claimed and sue for
      a
      refund or contest the claim in any permissible manner, and the Executive agrees
      to prosecute such contest to a determination before any administrative tribunal,
      in a court of initial jurisdiction and in one or more appellate courts, as
      the
      Company shall determine; provided,
      however,
      that
      (A) if the Company directs the Executive to pay such claim and sue for a
      refund, the Company shall advance the amount of such payment to the Executive,
      on an interest-free basis, and shall indemnify and hold the Executive harmless,
      on an after-tax basis, from any Excise Tax or income tax (including interest
      or
      penalties) imposed
      with respect to such advance or with respect to any imputed income in connection
      with such advance and (B) if such contest results in any extension of the
      statute of limitations relating to payment of taxes for the taxable year of
      the
      Executive with respect to which such contested amount is claimed to be due,
      such
      extension must be limited solely to such contested amount. Furthermore, the
      Company’s control of the contest shall be limited to issues with respect to
      which the 280G Gross-Up Payment would be payable hereunder, and the Executive
      shall be entitled to settle or contest, as the case may be, any other issue
      raised by the Internal Revenue Service or any other taxing
      authority.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (d)
       If, after the receipt by the Executive of an amount advanced by the
      Company pursuant to Section 5(c), the Executive becomes entitled to receive
      any refund with respect to such claim, the Executive shall (subject to the
      Company’s complying with the requirements of Section 5(c)) promptly pay to
      the Company the amount of such refund received (together with any interest
      paid
      or credited thereon after taxes applicable thereto). If, after the receipt
      by
      the Executive of an amount advanced by the Company pursuant to
      Section 5(c), a determination is made that the Executive shall not be
      entitled to any refund with respect to such claim and the Company does not
      notify the Executive in writing of its intent to contest such denial of refund
      prior to the expiration of the 30-day period after such determination, then
      such
      advance shall be forgiven and shall not be required to be repaid and the amount
      of such advance shall offset, to the extent thereof, the amount of 280G Gross-Up
      Payment required to be paid.

     

    SECTION
      6. Section 409A.
      It is
      the intention of the Company and the Executive that the provisions of this
      Agreement comply with Section 409A of the Code, and all provisions of this
      Agreement shall be construed and interpreted in a manner consistent with
      Section 409A of the Code. To the extent necessary to avoid imposition of
      any additional tax or interest penalties under Section 409A (such tax and
      interest penalties, a “Section 409A
      Tax”),
      notwithstanding the timing of payment provided in any other Section of this
      Agreement, the timing of any payment, distribution or benefit pursuant to this
      Agreement shall be subject to a six-month delay in a manner consistent with
      Section 409A(a)(2)(B)(i) of the Code; provided,
      that
      (a) the Executive shall be credited with interest in respect of such
      payment, distribution or benefit during such six-month period at the rate set
      forth in Section 12 and (b) if the Executive dies during such
      six-month period, any such delayed payments shall not be further delayed, and
      shall be immediately payable to the Executive’s devisee, legatee or other
      designee or, should there be no such designee, to the Executive’s estate in
      accordance with the applicable provisions of this Agreement. From and after
      the
      Effective Date and for the remainder of the term of this Agreement, (i) the
      Company shall administer and operate this Agreement in compliance with
      Section 409A of the Code and any rules, regulations or other guidance
      promulgated thereunder as in effect from time to time and (ii) in the event
      that the Company determines that any provision of this Agreement or any such
      plan or arrangement does not comply with Section 409A of the Code or any
      such rules, regulations or guidance and that the Executive may become subject
      to
      a Section 409A Tax, the Company and the Executive shall negotiate in good
      faith to amend or modify such provision to avoid the application of such
      Section 409A Tax; provided,
      that
      such amendment or modification shall not (and the Executive shall not be
      obligated to consent
      to any
      such amendment or modification that would) reduce the economic value to the
      Executive of such provision.

     

    SECTION
      7. No
      Mitigation or Offset; Enforcement of this Agreement.
      

     

    (a)
       The Company’s obligation to make the payments provided for in this
      Agreement and otherwise to perform its obligations hereunder shall not be
      affected by any set-off, counterclaim, recoupment, defense or other claim,
      right
      or action which the Company may have against the Executive or others. In no
      event shall the Executive be obligated to seek other employment or take any
      other action by way of mitigation of the amounts payable to the Executive under
      any of the provisions of this Agreement and, except as otherwise expressly
      provided for in this Agreement, such amounts shall not be reduced whether or
      not
      the Executive obtains other employment.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b)
       The Company shall reimburse, upon the Executive’s demand, any and all
      reasonable legal fees and expenses that the Executive may incur in good faith
      as
      a result of any contest, dispute or proceeding (regardless of whether formal
      legal proceedings are ever commenced and regardless of the outcome thereof
      and
      including all stages of any contest, dispute or proceeding) by the Company
      against the Executive (or, in the event that the Executive is the prevailing
      party, by the Executive against the Company), with respect to the validity
      or
      enforceability of, or liability under, any provision of this Agreement or any
      guarantee of performance thereof (including as a result of any contest regarding
      the amount of any payment owed pursuant to this Agreement), and shall indemnify
      and hold the Executive harmless, on an after-tax basis, for any tax (including
      Excise Tax) imposed on the Executive as a result of payment by the Company
      of
      such legal fees and expenses.

     

    SECTION
      8. Non-Exclusivity
      of Rights.
      Nothing
      in this Agreement shall prevent or limit the Executive’s Accrued
      Rights.

     

    SECTION
      9. Withholding.
      The
      Company may deduct and withhold from any amounts payable under this Agreement
      such Federal, state, local, foreign or other taxes as are required to be
      withheld pursuant to any applicable law or regulation.

     

    SECTION
      10. Assignment.
      

     

    (a) 
      This Agreement is personal to the Executive and, without the prior written
      consent of the Company, shall not be assignable by the Executive otherwise
      than
      by will or the laws of descent and distribution, and any assignment in violation
      of this Agreement shall be void.

     

    (b) 
      Notwithstanding the foregoing Section 10(a), this Agreement and all rights
      of the Executive hereunder shall inure to the benefit of, and be enforceable
      by,
      the Executive’s personal or legal representatives, executors, administrators,
      successors, heirs, distributees, devisees and legatees. If the Executive should
      die while any amounts would still be payable to him or her hereunder if he
      or
      she had continued to live, all such amounts, unless otherwise provided herein,
      shall be paid in accordance with the terms of this Agreement to the Executive’s
      devisee, legatee or other designee or, should there be no such designee, to
      the
      Executive’s estate.

     

    (c)
       The Company shall require any successor (whether direct or indirect, by
      purchase, merger, consolidation or otherwise) to all or substantially all of
      the
      business or assets of the Company (a “Successor”)
      to
      assume and agree to perform this Agreement in the same manner and to the same
      extent that the Company would have been required to perform it if no such
      succession had taken place. As used in this Agreement and the Separation
      Agreement and Release, (i) the term “Company” shall mean the Company as
      hereinbefore defined and any Successor and any permitted assignee to which
      this
      Agreement is assigned and (ii) the term “Board” shall mean the Board as
      hereinbefore defined and the board of directors or equivalent governing body
      of
      any Successor and any permitted assignee to which this Agreement is
      assigned.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    SECTION
      11. Dispute
      Resolution.
      

     

    (a)
       Except as otherwise specifically provided herein, the Executive and the
      Company each hereby irrevocably submit to the exclusive jurisdiction of any
      state court located within the Commonwealth of Massachusetts over any dispute
      arising out of or relating to this Agreement. Except as otherwise specifically
      provided in this Agreement, the parties undertake not to commence any suit,
      action or proceeding arising out of or relating to this Agreement in a forum
      other than a forum described in this Section 11(a); provided,
      however,
      that
      nothing herein shall preclude the Company or the Executive from bringing any
      suit, action or proceeding in any other court for the purposes of enforcing
      the
      provisions of this Section 11 or enforcing any judgment obtained by the
      Company or the Executive.

     

    (b)
       The agreement of the parties to the forum described in Section 11(a) is
      independent of the law that may be applied in any suit, action or proceeding
      and
      the parties agree to such forum even if such forum may under applicable law
      choose to apply non-forum law. The parties hereby waive, to the fullest extent
      permitted by applicable law, any objection that they now or hereafter have
      to
      personal jurisdiction or to the laying of venue of any such suit, action or
      proceeding brought in an applicable court described in Section 11(a), and
      the parties agree that they shall not attempt to deny or defeat such personal
      jurisdiction by motion or other request for leave from any such court. The
      parties agree that, to the fullest extent permitted by applicable law, a final
      and non-appealable judgment in any suit, action or proceeding brought in any
      applicable court described in Section 11(a) shall be conclusive and binding
      upon
      the parties and may be enforced in any other jurisdiction.

     

    (c)
       The parties hereto irrevocably consent to the service of any and all
      process in any suit, action or proceeding arising out of or relating to this
      Agreement by the mailing of copies of such process to such party at such party’s
      address specified in Section 18.

     

    (d)
       Each party hereto hereby waives, to the fullest extent permitted by
      applicable law, any right it may have to a trial by jury in respect of any
      suit,
      action or proceeding arising out of or relating to this Agreement. Each party
      hereto (i) certifies that no representative, agent or attorney of any other
      party has represented, expressly or otherwise, that such party would not, in
      the
      event of any suit, action or proceeding, seek to enforce the foregoing waiver
      and (ii) acknowledges that it and the other parties hereto
      have
      been induced to enter into this Agreement by, among other things, the mutual
      waiver and certifications in this Section 11(d).

     

    SECTION
      12. Default
      in Payment.
      Any
      payment not made within ten business days after it is due in accordance with
      this Agreement shall thereafter bear interest, compounded annually, at the
      prime
      rate in effect from time to time at Citibank, N.A., or any successor
      thereto.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    SECTION
      13. GOVERNING
      LAW. THIS
      AGREEMENT SHALL BE DEEMED TO BE MADE IN THE STATE OF DELAWARE, AND THE VALIDITY,
      INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT IN ALL RESPECTS
      SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ITS
      PRINCIPLES OF CONFLICTS OF LAW.

     

    SECTION
      14. Amendment;
      No Waiver.
      No
      provision of this Agreement may be amended, modified, waived or discharged
      except by a written document signed by the Executive and a duly authorized
      officer of the Company; provided,
      that
      prior to the Change in Control Date, this Agreement may be amended or modified,
      without the Executive’s consent, through a resolution duly adopted by the Board.
      The failure of a party to insist upon strict adherence to any term of this
      Agreement on any occasion shall not be considered a waiver of such party’s
      rights or deprive such party of the right thereafter to insist upon strict
      adherence to that term or any other term of this Agreement. No failure or delay
      by either party in exercising any right or power hereunder will operate as
      a
      waiver thereof, nor will any single or partial exercise of any such right or
      power, or any abandonment of any steps to enforce such right or power, preclude
      any other or further exercise thereof or the exercise of any other right or
      power. No agreements or representations, oral or otherwise, express or implied,
      with respect to the subject matter hereof have been made by either party, which
      are not set forth expressly in this Agreement.

     

    SECTION
      15. Severability.
      If any
      term or provision of this Agreement is invalid, illegal or incapable of being
      enforced by any applicable law or public policy, all other conditions and
      provisions of this Agreement shall nonetheless remain in full force and effect
      so long as the economic and legal substance of the transactions contemplated
      by
      this Agreement is not affected in any manner materially adverse to any party.
      Upon any such determination that any term or other provision is invalid, illegal
      or incapable of being enforced, the parties hereto shall negotiate in good
      faith
      to modify this Agreement so as to effect the original intent of the parties
      as
      closely as possible in a mutually acceptable manner in order that the
      transactions contemplated hereby be consummated as originally contemplated
      to
      the fullest extent possible.

     

    SECTION
      16. Entire
      Agreement.
      This
      Agreement sets forth the entire agreement of the parties hereto in respect
      of
      the subject matter contained herein and supersedes all prior agreements,
      promises, covenants, arrangements, communications, representations or
      warranties, whether oral or written, by any officer, employee or representative
      of any party hereto, and any prior agreement of the parties hereto in
      respect
      of the subject matter contained herein is hereby terminated and canceled. None
      of the parties shall be liable or bound to any other party in any manner by
      any
      representations and warranties or covenants relating to such subject matter
      except as specifically set forth herein.

     

    SECTION
      17. Survival.
      The
      rights and obligations of the parties under the provisions of this Agreement,
      including Sections 4, 5, 6, 7, 10, 11 and 12, shall survive and remain
      binding and enforceable, notwithstanding the expiration of the Protection Period
      or the term of this Agreement, the termination of the Executive’s employment
      with the Company for any reason or any settlement of the financial rights and
      obligations arising from the Executive’s employment hereunder, to the extent
      necessary to preserve the intended benefits of such provisions.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    SECTION
      18. Claims
      for Benefits.
      A
      Participant may submit a written claim for benefits under the Plan in accordance
      with the terms and conditions set forth in this Section 18.

     

    (a)
      Filing
      of Claims.
      A claim
      for benefits shall be made by filing a written request with a person or
      committee designated by the Company (the “Plan
      Administrator”),
      which
      shall be delivered to the Plan Administrator and accompanied by such
      substantiation of the claim as the Plan Administrator considers necessary and
      reasonable for the type of claim being filed. 

     

    (b)
      Denial
      of Claims.
      If a
      claim is denied in whole or in part, the Participant shall receive a written
      or
      electronic notice explaining the denial of the claim within ninety (90) days
      after the Plan Administrator’s receipt of the claim, unless special
      circumstances exist that require an extension of the time for processing such
      claim. If an extension of time is necessary, the Participant shall be notified
      in writing of the extension and reason for the extension within ninety (90)
      days
      after the Plan Administrator’s receipt of the claim. The written extension
      notification shall also indicate the date by which the Plan Administrator
      expects to render a final decision. A notice of denial of claim shall contain
      the following:

     

    1.  the
      specific reason or reasons for the denial;

     

    2.  reference
      to the specific Plan provisions on which the denial is based;

     

    3.  a
      description of any additional materials or information necessary for such
      Participant to perfect the claim and an explanation of why such material or
      information is necessary; and 

     

    4.  a
      description of the Plan’s review procedures and the time limits applicable to
      such procedures, including a statement of the Participant’s right to bring a
      civil action under Section 502(a) of ERISA following an adverse benefit
      determination on review.

     

    (c)
      Payment
      of Claims.
      The
      full value of a payment made according to the provisions of the Plan satisfies
      that much of the claim and all related claims under the Plan against the Plan
      Administrator and the Company, each of whom, as a condition to a payment from
      it
      or directed by it, may require the Participant, beneficiary, or legal
      representative to execute a receipt and release of the claim in a form
      determined by the person requesting the receipt and release.

     

    (d)
      Request
      for Review of Denied Claims.
      A
      Participant whose claim for benefits has been denied by the Plan Administrator
      may request a review of such denial in accordance with the terms and conditions
      of this Section 18(d).

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (i)
      A
      Participant may file a written request for a review of the denial of a claim
      within sixty (60) days after receiving written notice of the denial. The written
      request should be sent to the Plan Administrator, who will forward it to a
      committee established by the Company to provide review (the “Review
      Committee”).
      The
      Participant may submit written comments, documents, records and other relevant
      information in support of the claim. A Participant shall be provided, upon
      request to the Plan Administrator and without charge, reasonable access to,
      and
      copies of, all documents, records, and other information relevant to the
      Participant’s claim for benefits. A document, record, or other information shall
      be considered relevant if it:

     

    1.  was
      relied upon in denying the claim; 

     

    2.  was
      submitted, considered or generated in the course of processing the claim,
      regardless of whether it was relied upon; 

     

    3.  demonstrates
      compliance with the claims procedures process; or 

     

    4.  constitutes
      a statement of Plan policy or guidance concerning the denied benefit, regardless
      of whether it was relied upon.

     

    Relevant
      information shall not include any documents or records (or portions thereof)
      that would, through their release, violate any other applicable law or
      compromise the confidentiality of certain employee data or business records,
      including, but not limited to, any documents subject to attorney-client
      privilege.

     

    (ii)
      In
      reviewing a denied claim, the Review Committee shall take into consideration
      all
      comments, documents, records, and other information submitted by the Participant
      in support of the claim, without regard to whether such information was
      submitted or considered in the initial benefit determination.

     

    (iii)
      The
      Review Committee will notify the Participant in writing of its decision on
      the
      appeal. Such notification will be in writing in a form designed to be understood
      by the Participant. If the claim is denied in whole or in part on appeal, the
      notification will also contain:

     

    5.  the
      specific reason or reasons for the denial; 

     

    6.  reference
      to the specific Plan provisions on which the determination is
      based;

     

    7.  a
      statement that the Participant is entitled to receive, upon request to the
      Plan
      Administrator and free of charge, reasonable access to, and copies of, all
      documents, records, and other information relevant to the Participant’s claim
      for benefits. A document, record, or other information shall be considered
      relevant if it: 

     

    (a)  was
      relied upon in denying the claim;

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (b)  was
      submitted, considered or generated in the course of processing the claim,
      regardless of whether it was relied upon;

     

    (c)  demonstrates
      compliance with the claims procedures process; or 

     

    (d)  constitutes
      a statement of Plan policy or guidance concerning the denied benefit, regardless
      of whether it was relied upon; and

     

    8.  a
      statement that the Participant has a right to bring an action under
      Section 502(a) of ERISA.

     

    Relevant
      information shall not include any documents or records (or portions thereof)
      that would, through their release, violate any other applicable law or
      compromise the confidentiality of certain employee data or business records,
      including, but not limited to, any documents subject to attorney-client
      privilege.

     

    Such
      notification will be given by the Review Committee within sixty (60) days after
      the complete appeal is received by the Review Committee (or within one hundred
      twenty (120) days if the Review Committee determines special circumstances
      require an extension of time for considering the appeal, and if written notice
      of such extension and circumstances is given to the Participant within the
      initial sixty (60) day period). Such written extension notice shall also
      indicate the date by which the Review Committee expects to render a
      decision.

     

    If
      the
      Participant’s written request for review is received by the Plan Administrator
      more than thirty (30) days before a Review Committee meeting, the Review
      Committee’s decision must be rendered at the next meeting after the request for
      review is received. If special circumstances require an extension of time for
      processing, the Review Committee’s decision must be rendered not later than the
      Review Committee’s third meeting after the request for review is received, and
      written notice of the extension must be furnished to the Participant before
      the
      extension begins. In the case of such regularly scheduled meetings, the
      Participant shall be notified of the review determination as soon as possible,
      but no later than five days after the review determination has been made. If
      notice that a claim has been denied on review is not received by the Participant
      within the time required in this paragraph, the claim is deemed denied on
      review. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    SECTION
      19. Notices.
      All
      notices or other communications required or permitted by this Agreement will
      be
      made in writing and all such notices or communications will be deemed to have
      been duly given when delivered or (unless otherwise specified) mailed by United
      States certified mail, return receipt requested, postage prepaid, addressed
      as
      follows:

     

    
      	
              If
                to the Company:

            	
               

               

            	
              Diomed
                Holdings, Inc.

              One
                Dundee Park

              Andover,
                MA 01810

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Attention:
                Corporate Secretary

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Fax:
                

            
	
               

            	
               

            	
               

            
	
              If
                to the Executive:

            	
            	
              At
                the address for the Executive most recently on file with
                the Company

            

    

     

    or
      to
      such other address as any party may have furnished to the other in writing
      in
      accordance herewith, except that notices of change of address shall be effective
      only upon receipt.

     

    SECTION
      20. Headings
      and References.
      The
      headings of this Agreement are inserted for convenience only and neither
      constitutes a part of this Agreement nor affect in any way the meaning or
      interpretation of this Agreement. When a reference in this Agreement is made
      to
      a Section, such reference shall be to a Section of this Agreement unless
      otherwise indicated.

     

    SECTION
      21. Counterparts.
      This
      Agreement may be executed in one or more counterparts (including via facsimile),
      each of which shall be deemed to be an original, but all of which together
      shall
      constitute one and the same instrument.

     

    SECTION
      22. Interpretation.
      For
      purposes of this Agreement, the words “include” and “including”, and variations
      thereof, shall not be deemed to be terms of limitation but rather shall be
      deemed to be followed by the words “without limitation”.

     

    The
      term
“or” is not exclusive. The word “extent” in the phrase “to the extent” shall
      mean the degree to which a subject or other thing extends, and such phrase
      shall
      not mean simply “if”.

     

    [signature
      page follows]

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, this Agreement has been executed by the parties as of the
      date
      first written above.

    
      	 	 	 
	 	DIOMED
              HOLDINGS,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name: James
              A. Wylie, Jr.
	 	Title: President
              and Chief Executive Officer 

    

    
    

     

    
      	 	 	 
	 	
              WILLIAM
                D. ALLAN

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name: William
              D. Allan

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    SEPARATION
      AGREEMENT AND RELEASE

    

         I. 
      Release.
      For good
      and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the undersigned, with the intention of binding himself/herself,
      his/her heirs, executors, administrators and assigns, does hereby release and
      forever discharge Diomed Holdings, Inc., a Delaware corporation, [to be amended,
      if necessary, to add or identify any additional or other entity that may be
      the
      Executive’s employer at the time of the Qualifying Termination set forth in
      Section 4 of that certain Change in Control Severance Agreement between the
      Executive and Company] (the “Company”),
      and
      its or their parents, subsidiaries, affiliates, predecessors, successors, and/or
      assigns, past, present, and future, together with its and their officers,
      directors, executives, agents, employees, and employee benefits plans (and
      the
      trustees, administrators, fiduciaries and insurers of such plans), past,
      present, and future (collectively, the “Released
      Parties”),
      from
      any and all claims, actions, causes of action, demands, rights, damages, debts,
      accounts, suits, expenses, attorneys’ fees and liabilities of whatever kind or
      nature in law, equity, or otherwise, whether now known or unknown (collectively,
      the “Claims”),
      which
      the undersigned now has, owns or holds, or has at any time heretofore had,
      owned
      or held against any Released Party, from the beginning of time to the date
      of
      the Executive’s execution of this Separation Agreement and Release, including
      without limitation, any Claims arising out of or in any way connected with
      the
      undersigned’s employment relationship with the Company, its subsidiaries,
      predecessors or affiliated entities, or the termination thereof, under any
      Federal, state or local statute, rule, or regulation, or principle of common,
      tort or contract law, including but not limited to, the Family and Medical
      Leave
      Act of 1993, as amended
      (the
“FMLA”),
      29
      U.S.C. §§ 2601 et seq.,
      Title
      VII of the Civil Rights Act of 1964, as amended,
      42
      U.S.C. §§ 2000e et seq.,
      the Age
      Discrimination in Employment Act of 1967, as amended,
      29
      U.S.C. §§ 621 et seq.,
      the
      Americans with Disabilities Act of 1990, as amended,
      42
      U.S.C. §§ 12101 et seq.,
      the
      Worker Adjustment and Retraining Notification Act of 1988, as amended,
      29
      U.S.C. §§ 2101 et seq.,
      the
      Employee Retirement Income Security Act of 1974, as amended,
      29
      U.S.C. §§ 1001 et seq.,
      and all
      other Federal, state, or local statutes, regulations or laws; provided,
      however,
      that
      nothing herein shall release the Company of its obligations under that certain
      Change in Control Severance Plan of the Company (including the Accrued Rights
      (as defined therein)). Except as set forth in Section II below, the
      undersigned understands that, as a result of executing this Separation Agreement
      and Release, he/she will not have the right to assert that the Company or any
      other Released Party unlawfully terminated his/her employment or violated any
      of
      his/her rights in connection with his/her employment or otherwise.

     

         The
      undersigned affirms that he/she is not presently party to any Claim, complaint
      or action against any Released Party in any forum or form and that he/she knows
      of no facts which may lead to any Claim, complaint or action being filed against
      any Released Party in any forum by the undersigned or by any agency, group,
      etc.
      The undersigned further affirms that he/she has been paid and/or has received
      all leave (paid
      or
      unpaid), compensation, wages, bonuses, commissions, and/or benefits to which
      he/she may be entitled and that no other leave (paid or unpaid), compensation,
      wages, bonuses, commissions and/or benefits are due to him/her from the Company
      and its subsidiaries, except as specifically provided in this Separation
      Agreement and Release. The undersigned furthermore affirms that he/she has
      no
      known workplace injuries or occupational diseases and has been provided and/or
      has not been denied any leave requested under the FMLA. If any agency or court
      assumes jurisdiction of any such Claim, complaint or action against any Released
      Party on behalf of the undersigned, the undersigned hereby waives any right
      to
      individual monetary or other relief.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

         The
      undersigned further declares and represents that he/she has carefully read
      and
      fully understands the terms of this Separation Agreement and Release and that,
      through this document, he/she is hereby advised to consult with an attorney
      prior to executing this Separation Agreement and Release, that he/she may take
      up to and including 21 days from receipt of this Separation Agreement and
      Release, to consider whether to sign this Separation Agreement and Release,
      that
      he/she may revoke this Separation Agreement and Release within seven calendar
      days after signing it by delivering to the Company written notification of
      revocation (and that this Separation Agreement and Release shall not become
      effective or enforceable until the expiration of such revocation period), and
      that he/she knowingly and voluntarily, of his/her own free will, without any
      duress, being fully informed and after due deliberate action, accepts the terms
      of and signs the same as his own free act.

     

         II. 
      Protected
      Rights.
      The
      Company and the undersigned agree that nothing in this Separation Agreement
      and
      Release is intended to or shall be construed to affect, limit or otherwise
      interfere with any non-waivable right of the undersigned under any Federal,
      state or local law, including the right to file a charge or participate in
      an
      investigation or proceeding conducted by the Equal Employment Opportunity
      Commission (“EEOC”)
      or to
      exercise any other right that cannot be waived under applicable law. The
      undersigned is releasing, however, his/her right to any monetary recovery or
      relief should the EEOC or any other agency pursue Claims on his/her behalf.
      Further, should the EEOC or any other agency obtain monetary relief on his/her
      behalf, the undersigned assigns to the Company all rights to such
      relief.

     

         III.
      Third-Party
      Litigation.
      The
      undersigned agrees to be available to the Company and its affiliates on a
      reasonable basis in connection with any pending or threatened claims, charges
      or
      litigation in which the Company or any of its affiliates is now or may become
      involved, or any other claims or demands made against or upon the Company or
      any
      of its affiliates, regardless of whether or not the undersigned is a named
      defendant in any particular case.

     

         IV. Return
      of Property.
      The
      undersigned shall return to the Company on or before 10 days after termination
      date, all property of the Company in the undersigned’s possession or subject to
      the undersigned’s control, including without limitation any laptop computers,
      keys, credit cards, cellular telephones and files. The undersigned shall not
      alter any of the Company’s records or computer files in any way after
      termination date.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

         V.
      Confidential
      Information.
      The
      undersigned acknowledges that Confidential Information (as defined below) is
      a
      valuable asset of the Company and that unauthorized disclosure or utilization
      thereof could be detrimental to the Company. The undersigned, therefore, shall
      not, after the term of employment with the Company, disclose in any way or
      to
      any extent, to any person or organization other than the Company, or utilize
      for
      the benefit or profit of the undersigned or any other person or organization
      other than the Company, any Confidential Information, except (a) as may be
      authorized in writing in advance by the Company; (b) is publicly available
      or becomes publicly available other than through a breach of this document
      by
      the undersigned or, based on the undersigned’s knowledge, the breach of this
      document by others and (c) upon prior notification to the Company, the
      undersigned may be required by law to disclose. “Confidential Information” means
      information disclosed — whether orally or in writing — to the undersigned, or
      otherwise known to the undersigned as a direct or indirect result of his or
      her
      employment by the Company, concerning (i) the Company’s products, patent
      applications, research activities, formulations, processes, protocols,
      procedures, other intellectual properties, machines, services, and all matters
      having to do with the business or operations of the Company, including, but
      not
      limited to, all information of any type related to research, product
      development, manufacturing, quality matters, purchasing, finance, data
      processing, engineering, facilities, marketing, merchandising and selling,
      personnel, organization matters, policy matters, legal and other corporate
      affairs and (ii) information of any type about any third party with which
      the Company is in technical or commercial cooperation, acquired by the
      undersigned, directly or indirectly, in connection with his or her employment
      by
      the Company. Included in the foregoing definition by way of illustration, but
      not limitation, are such items as research projects, findings or reports,
      business plans and projections, formulae, processes, methods of manufacture,
      computer programs, sales, costs, pricing data, regulatory matters, operating
      procedures, information about employees and personnel practices, and lists
      of
      investigators, consultants, suppliers and customers. The undersigned agrees
      not
      to remove any Confidential Information from the Company, not to request that
      others do so on the undersigned’s behalf and to return any Confidential
      Information currently in the undersigned’s possession to the
      Company.

     

         VI. Severability.
      If any
      term or provision of this Separation Agreement and Release is invalid, illegal
      or incapable of being enforced by any applicable law or public policy, all
      other
      conditions and provisions of this Separation Agreement and Release shall
      nonetheless remain in full force and effect so long as the economic and legal
      substance of the transactions contemplated by this Separation Agreement and
      Release is not affected in any manner materially adverse to any
      party.

     

         VII.
      GOVERNING
      LAW. THIS
      SEPARATION AGREEMENT AND RELEASE SHALL BE DEEMED TO BE MADE IN THE STATE OF
      DELAWARE, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF
      THIS
      AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE
      WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.

     

         Effective
      on the eighth calendar day following the date set forth below.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, this Agreement has been executed by the parties as of the
      date
      first written above.

    
      	 	 	 
	 	DIOMED
              HOLDINGS,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
James
              A. Wylie, Jr.
	 	Title: President
              and Chief Executive Officer

    

    
    

     

    
      	 	 	 
	 	[EXECUTIVE]  
	 
 	 
 	 
 
	 	        
              	 
	 	
              
[name]

    

     

    
      
        
        

      

      
        21

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