Preferred Stockholder Agreement and Consent, dated as of September 28, 2007, between Diomed Holdings, Inc. and each holder of Preferred Stock

a.

consents to the Financing and the Refinancing, including, without limitation, (i) the incurrence by the Company of indebtedness pursuant to the Financing and Refinancing and to the grant of any and all security interests by the Company and its subsidiaries as are required to be granted in their assets pursuant to the Financing and the Refinancing and (ii) the repayment and prepayment of the indebtedness arising out of the Financing and Refinancing as required or permitted under the terms and conditions of the Financing and Refinancing;

b.

agrees that the issuance of the warrants proposed to be issued to Hercules pursuant to the terms of the Financing and the change in conversion price of the Debentures pursuant to the terms of the Refinancing (and the equivalent change to the warrants issued to those persons who purchased the Debentures) will not result in any antidilution adjustment to the Preferred Stock and further waives (i) any and all rights and benefits which might otherwise arise under the Company’s Certificate of Incorporation or the 2006 Purchase Agreement pursuant to an antidilution adjustment as a result of the Financing or Refinancing and (ii) any right to any notice of any change in the conversion or exercise price of any other outstanding security of the Company arising from the Financing or Refinancing beyond the notice provided by this Agreement and Consent;

c.

agrees that notwithstanding the consideration to be delivered by the Company pursuant to Section 2 below, the rights of the Holder to vote the shares of the Preferred Stock owned by it pursuant to Section 2(a) of Section 2A of ARTICLE FIFTH of the Certificate of Incorporation shall be determined on the basis that the Exchange Rate remains $1.15;

d.

agrees that notwithstanding the terms and conditions of this Agreement and Consent, the Financing and the Refinancing, no Dividend Commencement Event (as defined in Section 1 of Section 2A of the Certificate of Incorporation) has occurred and no Dividends have become due and payable;

e.

agrees that neither the Financing nor the Refinancing shall be deemed to be a “Subsequent Financing” as defined in the 2006 Purchase Agreement and therefore that the 2006 Purchase Agreement does not afford to the Holder any participation rights in the Financing or the Refinancing; and

f.

consents to the issuance of the warrants proposed to be issued to Hercules pursuant to the terms of the Financing for purposes of Section 4.27(j) of the 2006 Purchase Agreement.

NAME OF INVESTOR:

NUMBER SHARES PREFERRED STOCK HELD:

By:

(Signature of authorized person above)

Name and Title:

DIOMED HOLDINGS, INC.

By:

David Swank, Chief Financial Officer

Interest Rate (1)

Deferred Interest Charge (2)

(1)

Wall Street Journal Prime, which surveys large US banks and publishes the consensus prime rate. As of the date of this Document, Prime is 8.25%.

One time payment due at maturity and calculated against funds borrowed.

Hercules Technology Growth Capital, Inc. and any affiliate or transferee.('Hercules” or 'Lender”).

Diomed Holdings, Inc. and its subsidiaries. ('Diomed” or 'Borrower”).

September 26, 2007.

Best efforts to close by October 2, 2007.

The commitment is available as follows:

Tranche A: $6.0 million of Loan Commitment is funded at closing.

Tranche B: Remaining $4.0 million will be available at Borrower’s option beginning January 31, 2008 and will remain available through March 30, 2008.

The proceeds of the Loan will be used for general corporate purposes.

Through June 1, 2008.

Beginning on July 1, 2008, Borrower shall repay Principal on a schedule comprised of twenty-four equal monthly principal and interest payments.

July 1, 2010.

The Loan will be secured by a perfected first position lien on all of the borrower's assets, including Intellectual Property (“IP”). This lien will allow for licensing in the normal course of business.

A warrant (the “Warrant”) will be issued by Borrower to Lender to purchase $100,000 worth of shares of common stock at an Exercise Price of $0.70.

Borrower shall grant to Lender the option to invest up to $1.0 million in a subsequent institutional equity financing on the same terms, conditions, and pricing offered to the investors in such subsequent equity financing. This option to invest does not apply to equity transactions with strategic partners or regular shelf registered offerings.

Borrower shall remit the following cash payments to Lender:

1) $200,000 at Loan Closing.

2) $900,000 on June 30, 2008

3) Borrower shall remit a cash payment to Lender in an amount equal to 1.00% of any gross consideration paid for the acquisition of the business of Diomed Holdings and its operating subsidiaries.

No financial ratio covenants.

Borrower will furnish to Lender monthly and quarterly financial statements, annual audited financial statements and all materials provided to the shareholders along with other financial information Lender reasonably requests or generally provided to other Holders of the common stock.

Borrower shall pay the invoiced expenses, including UCC searches, filing costs, and other miscellaneous expenses, and reasonable fees of counsel (in-house and outside) applicable to drafting, negotiating and/or finalizing the Loan.

A Commitment Fee of 2.0% of the Commitment Amount is required in order for Lender to commence the due diligence process. In the event that the transaction is not approved, the Commitment Fee shall be returned in its entirety to Borrower (minus due diligence expenses). In the event of approval, the Commitment Fee will be applied in its entirety as a Facility Fee and towards the Lender’s non-legal transaction costs and due diligence expenses {Paid}.

Parag Shah

R. Bryan Jadot

Sr. Managing Director & Group Head, Life Sciences

Principal, Life Sciences

Hercules Technology Growth Capital, Inc.

Hercules Technology Growth Capital, Inc.

By:

Name:

Title:

Diomed Holdings, Inc.

$7 Million Variable Rate Convertible Debentures due October 2008

(the “Debentures”), of which approximately $3.7 million are issued and outstanding.

Except as modified by definitive documentation and further to this term sheet, all original terms of the Debentures and associated documents shall remain in effect.

The Conversion Price will be $0.70 per share.

The coupon will be the greater of (i) 6-month LIBOR plus 5.00% and (ii) 10%, per annum on the unpaid/unconverted principal balance payable quarterly in cash.

The Debentures shall be secured obligations of the Company, subordinate to the new debentures issued by the Company in favor of Hercules.

The Investor(s) and its affiliates will agree not to trade in the Company’s Common Stock until the earlier of (i) the announcement of the Closing of this transaction, or (ii) termination of discussions between the Investor(s) and the Company regarding this transaction.

The Company shall pay up to $5,000 to the Investor(s) (individually) for outside legal expenses reasonably incurred in relation to documentation of this restructuring.

The definitive documentation shall contain such additional and supplementary provisions, including without limitation representations, warranties, covenants, agreements, payments, options and remedies, as are appropriate to preserve and protect economic benefits intended to be conveyed to the Company and to the Investor(s) pursuant hereto.