AGREEMENT

1

DIOMED LIMITED (in administration) (registered number 02338196) whose registered office is at 2000 Cambridge Research Park, Ely Road, Waterbeach, Cambridge, CB25 9TE (“ the Vendor ”) acting by its administrator STEVEN LAW of Ensors, Cardinal House, 46 St Nicholas Street, Ipswich IP1 1TT (“ the Administrator ”);

2

THE ADMINISTRATOR (who is entering into this Agreement as agent of the Vendor and without personal liability); and

3

ANGIODYNAMICS, INC. a Delaware Corporation, the registered office of which is at 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware, U.S.A. (“ the Purchaser ”).

1

The Vendor has for some time carried on the business of manufacture of medical and orthopaedic equipment.

2

The Administrator was appointed Administrator of the Vendor on 14 March 2008 by its board of directors in accordance with paragraph 22 of Schedule B1 of the Insolvency Act 1986.

3

The Vendor acting by the Administrator has agreed to sell to the Purchaser and the Purchaser has agreed to purchase such right, title and interest (if any) as the Vendor may have in its assets upon the terms and subject to the conditions contained in this Agreement.

4

The Purchaser enters into this Agreement having made such inspection of the assets of the Vendor as it thinks fit and in full knowledge and acceptance of the terms of this Agreement.

1

DEFINITION AND INTERPRETATION

1.1

In this Agreement, and in the Background to it, the following terms shall have the following meanings:

1.1.1

“ the Assets ” the assets of the Vendor agreed to be sold pursuant to clause 2;

1.1.2

“ the Book Debts ” all sums of money owing or which become owing to the Vendor on or after the Transfer Date in respect of goods sold or services rendered on or before the Transfer Date;

1.1.3

“ the Business ” the business of the Vendor referred to in Background paragraph 1;

1.1.4

“ the Chattels ” the plant and machinery, office equipment, fixtures and fittings and any other chattels (including any motor vehicles) believed to be owned by the Vendor at the Transfer Date;

1.1.5

“ the Contracts ” the benefit (subject to the burden) of:

1.1.5.1

the contracts placed with the Vendor by customers and with distributors up to and including the Transfer Date which remain in whole or part uncompleted at the Transfer Date; and

1.1.5.2

the orders placed by the Vendor up to and including the Transfer Date to the extent that the goods or services ordered have not been delivered to the Vendor or performed by the Transfer Date;

but excluding any such contracts which are listed in Schedule 4 (“ the Excluded Contracts ”)

1.1.6

“ Excluded Assets ” all those assets of the Vendor listed in Schedule 3;

1.1.7

“ the Goodwill ” the goodwill of the Vendor in relation to the Business together with the exclusive right (so far only as the Vendor can confer it) for the Purchaser to represent itself as carrying on the Business in succession to the Vendor and to trade under the name “Diomed”;

1.1.8

“ the Intellectual Property ” all industrial and intellectual property rights believed to be owned by the Vendor at the Transfer Date including without limitation patents, trade marks and/or service marks (whether registered or unregistered), designs whether registered or unregistered, topography rights, database rights and copyright and any applications for any of the foregoing in any part of the world and the copyright in all

drawings, plans, specifications, designs and computer software owned by the Vendor and used in or for the purpose of the Business, internet domain names and all know-how and confidential information so owned and used, including (but not limited to) all that details of which (where known) are listed in Schedule 1;

1.1.9

“ the Premises ” the leasehold interest of the Vendor in the premises at 2000 Cambridge Research Park, Ely Road, Waterbeach, Cambridge details of which are set out in Schedule 2;

1.1.10

“ the Regulations ” the Transfer of Undertakings (Protection of Employment) Regulations 2006;

1.1.11

“ the Stock ” all stocks of products, supplies, consumables, raw materials and finished goods and work in progress wherever situate at close of business on the Transfer Date and used in the Business and believed to be owned by the Vendor at the Transfer Date;

1.1.12

“ the Transfer Date ” means the date upon which the conditions precedent set out in clause 4.2 of this Agreement have been fulfilled; and

1.1.13

“ US Sale Agreement ” means the sale and purchase agreement in the agreed form or in such other form as the US Bankruptcy Court may stipulate pursuant to the terms of which, inter alia, the Purchaser shall acquire for the sum of USD 8,000,000 the business and assets of: (a) Diomed Inc. (in Chapter 11), the parent company of the Vendor; and (b) the business and assets of Diomed Holdings Inc. (in Chapter 11), the parent company of Diomed Inc.

1.2

The headings to the clauses of this Agreement are for convenience only and shall not affect the construction of this Agreement.

1.3

In this Agreement unless the context otherwise requires:

1.3.1

references to this Agreement include the Schedules and appendices (if any);

1.3.2

references to clauses and Schedules are to be construed as references to the clauses of and Schedules to this Agreement;

1.3.3

references to the singular shall include the plural and vice versa;

1.3.4

references to any gender shall include the others;

1.3.5

all references to a statutory provision shall be construed as including references to any statutory modification, consolidation or re-enactment (whether before or after today’s date) for the time being in force, all statutory instruments or orders made pursuant to it and any statutory provisions of which it is a consolidation, re-enactment or modification.

2

SALE OF ASSETS

2.1

Subject as provided in this Agreement the Vendor shall sell and the Purchaser shall purchase with effect from close of business on the Transfer Date such right, title and interest (if any) as the Vendor may have in and to:

2.1.1

the Chattels;

2.1.2

the benefit (subject to the burden) of the Contracts;

2.1.3

the Goodwill;

2.1.4

the Intellectual Property; and

2.1.5

the Stock;

to the intent that with effect from the Transfer Date the Purchaser shall be enabled to carry on and continue the Business as a going concern in succession to and to the exclusion of the Vendor.

2.2

If the Purchaser shall wish to use the name “Diomed” in its corporate or trading name it shall only do so in compliance with Section 216 of the Insolvency Act 1986 and Chapter 22 of Part 4 of the Insolvency Rules. The Purchaser shall not give any notice under paragraph (1) of Rule 4.228 of the Insolvency Rules without first having obtained the approval of the Administrator (which shall not be unreasonably withheld or delayed) to the wording of such notice who shall on request supply a list incorporating all the names and addresses of creditors of the Vendor known to the Administrator.

2.3

There shall be excluded from the sale and purchase under this Agreement all Excluded Assets.

3

PRICE

3.1

The price for the sale and purchase of the Assets shall be US$3,000,000 (“ Purchase Price ”) which shall be payable in cash on the Transfer Date.

4

COMPLETION AND CONDITIONS PRECEDENT

4.1

Completion of the sale and purchase of the Assets shall take place on the next working day after the Transfer Date (subject to the payment of the Purchase Price by the Purchaser to the Administrator’s solicitors without deduction counterclaim set off or any other withholding whatsoever) at the offices of the Vendor’s solicitors or otherwise as the parties shall agree when the Vendor shall deliver to the Purchaser:

4.1.1

possession of those of the Assets title to which is capable of passing by delivery;

4.1.2

an assignment of the Intellectual Property and Goodwill in the agreed form, duly executed by the Vendor and the Administrator; and

4.1.3

all documents comprising or relating to the Intellectual Property in the possession of or under the control of the Vendor or the Administrator.

4.2

Completion of this Agreement is subject to, and conditional upon:

4.2.1

all due diligence being carried out to the satisfaction of the Purchaser (which the Purchaser shall be deemed to have been carried out to its satisfaction unless the Purchaser notifies the Administrator in writing that it is not satisfied with its due diligence within 21 days of the date of this Agreement); and

4.2.2

the entry of an order of the United States Bankruptcy Court for the District of Massachusetts authorising Diomed Holdings Inc. and Diomed Inc. to sell to the Purchaser substantially all their respective businesses and assets upon the terms of the US Sale Agreement (“ the Order ”) as required under Chapter 11 of the US Bankruptcy Code.

4.3

The Purchaser may, subject always to the payment of the Purchase Price, waive any of the conditions in clause 4.2 by notice in writing to the Administrator.

4.4

Provided that the relevant condition has not previously been waived and payment of the Purchase Price made under clause 4.3, the Administrator may terminate this Agreement forthwith upon:

4.4.1

receiving notice from the Purchaser that it is not satisfied with its due diligence as provided for in clause 4.2.1; and/or

4.4.2

the US Bankruptcy Court not entering the Order within 65 days of the date of this Agreement

without in either case the Administrator having any liabilities whatsoever to the Purchaser in respect of the termination of this Agreement.

5

BOOK DEBTS

5.1

The Vendor shall continue to collect the Book Debts and may take legal proceedings for recovering such debts and money without having given prior notice to the Purchaser.

5.2

If the Purchaser shall receive any sums in respect of the Book Debts it shall forthwith pay to the Administrator such sums received by the Purchaser. If the Vendor or Administrator shall receive any sums in respect of debts due to the Purchaser they shall forthwith pay such sums received to the Purchaser. Where a debtor owes money both to the Vendor and the Purchaser it shall be assumed that, unless the debtor makes a specific appropriation to the contrary or it is apparent from such payment that it is in respect of a debt due to the Purchaser, any monies received by either the Vendor or the Purchaser from such debtor are paid first in respect of the debts due to the Vendor and secondly in respect of debts due to the Purchaser.

6

EMPLOYEES

6.1

It is believed by the parties that the transfer hereby effected is a “ relevant transfer ” within the meaning of the Regulations.

6.2

The Vendor shall comply with its duties under Regulation 11 (Notification of Employee Liability Information) and (subject to the Purchaser complying with Regulation 13(4)) Regulation 13 (Duty to inform and consult representatives).

6.3

Where any amount is agreed or found to be payable by any court or tribunal of competent jurisdiction (a “ Claim ”), in respect of any liability arising under or in relation to any contract of employment with any employee of the Vendor and which contract or liability is transferred to the Purchaser under the Regulations (excluding, for the avoidance of doubt, any liability which does not transfer to the Purchaser by virtue of Regulation 8), the Purchaser shall be solely responsible for paying that Claim and the Purchaser shall indemnify and keep the Vendor and/or the Administrators fully indemnified in respect of any Claim and all and any other liabilities whatsoever that may arise under the Regulations.

7

CONTRACTS

7.1

The Purchaser shall carry out and discharge the Contracts with effect from the Transfer Date and shall at all times keep the Vendor and the Administrator indemnified against all actions, claims, costs, proceedings and demands in respect of the Contracts insofar as they relate to the period from the Transfer Date.

7.2

Insofar as the benefit of the Contracts cannot effectively be transferred by the Vendor to the Purchaser except by way of an agreement of novation or with the consent to the assignment from the person, firm or company concerned:

7.2.1

the Vendor and the Purchaser shall (at the Purchaser’s expense including without limitation the Vendor’s and the Administrator’s reasonable legal costs on a full indemnity basis) co-operate in procuring the Contracts to be novated or assigned as soon as reasonably practicable;

7.2.2

in the case of any assignment as aforesaid the Purchaser shall undertake to indemnify the Vendor and the Administrator against all actions, costs, claims, liabilities and expenses arising by reason of or in connection with the non-performance or the defective or negligent performance by the Purchaser of the Contracts following such assignments;

7.2.3

unless and until any such Contracts shall be novated or assigned the Purchaser shall for its own benefit and to the extent that such Contract

permits perform on behalf of the Vendor or the Administrator (as the case may be) (but at the Purchaser’s expense) all the obligations of the Vendor and the Administrator thereunder with effect from the Transfer Date and indemnify the Vendor and the Administrator against all actions, costs, proceedings, claims, demands and expenses on a full indemnity basis which may be incurred by the Vendor or the Administrator as a result of any act or neglect, default or omission on the part of the Purchaser to conform or comply with any such obligations of the Vendor or the Administrator;

7.2.4

the Vendor shall be under no obligation to enter into or execute a novation agreement or assignment in respect of the Contracts which is not in a form reasonably approved by the Administrator’s solicitors and the Purchaser shall accept the form and execute such novation agreement or assignment if it is approved by the Administrator’s solicitors and is in a form reasonably acceptable to the Purchaser’s solicitors.

7.3

The Purchaser may elect by notice in wr