**PROMISSORY NOTE**

 
| $250,000.00 |   |   | May 31, 2002 |
|-------------|--------|--------|--------------|

 

FOR VALUERECEIVED, Mark W. Blodgett, an individual (the “Borrower”), hereby promises topay to the order of StockerYale, Inc., a Massachusetts corporation (the“Lender”), the principal sum of  twohundred and fifty thousand dollars ($250,000.00) (the “Principal”), togetherwith interest on the unpaid Principal accruing at a rate per annum equal to4.5%.

 

## **A.            ­Payment of Principal andInterest.  All Principal and accruedand interest shall be due and payable on demand (the “Maturity Date”).  All payments made by the Borrower to theLender under this Note shall be made in lawful tender of the United States andshall be credited first to the accrued interest and the remainder shall beapplied to Principal.**

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## **B.            ­Events of Default; Remedies.  In the event that there occurs an assignmentfor the benefit of creditors or commencement of any proceeding under anyinsolvency law by or against the Borrower, (an “Event of Default”), allPrincipal and interest shall, at any time, at the option of the Lender,forthwith become due and payable notwithstanding the stated term and MaturityDate.**

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## **C.            ­Prepayment.  This Note may be prepaid in whole or in partwithout penalty.**

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## **D.            ­Fees and Expenses.  Borrower agrees to pay all charges (includingreasonable attorney’s fees) of Lender in connection with the collection and/orenforcement of this Note, whether or not suit is brought against Borrower.**

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## **E.             ­Waivers of Certain Rights.  The Borrower hereby waives presentment,demand, notice and protest, and acceptance, endorsement, performance, defaultor enforcement of this Note, assents to any and all extensions or postponementsof the time of payment or any other indulgence, to the addition or release ofany other party or person primarily or secondarily liable, and generally waivesall suretyship defenses and defenses in the nature thereof.**

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## **F.             ­No Waiver.  The failure of Lender at any time toexercise any option or right hereunder shall not constitute a waiver ofLender’s right to exercise such option or right at any other time.**

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## **G.            ­Notices and Demands.  Any notice or demand which, by any provisionof this Note, except as otherwise provided herein, is required or provided tobe given shall be deemed to have been sufficiently given or served and receivedfor all purposes three days after being sent by certified or registered mail,postage and charges prepaid, return receipt requested, or by express deliveryproviding receipt of delivery.**

 

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## **H.            ­Assignability.  This Note shall be binding upon and inure tothe benefit of the successors of each of the parties hereto, but it shall notbe assignable by the Borrower.  TheLender may assign or otherwise transfer this Note to any other person or entity,and such other person or entity shall thereupon become vested, to the extentset forth in the agreement evidencing such assignment or transfer, with all therights in respect thereof granted to the Lender herein.**

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## **I.              ­Governing Law; Severability.  This Note shall be governed by, construed,and enforced in accordance with the laws of the Commonwealth ofMassachusetts.  If any provision of thisNote is held to be invalid or unenforceable by a court of competent jurisdiction,the other provisions of this Note shall remain in full force and effect.**

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## **J.             ­Maximum Rate of Interest.  All agreements between the Borrower and theLender are hereby expressly limited so that in no contingency or eventwhatsoever, whether by reason of acceleration of maturity of the indebtednessevidenced hereby or otherwise, shall the amount paid or agreed to be paid tothe Lender for the use, forbearance or detention of the indebtedness evidencedhereby exceed the maximum permissible under applicable law.  As used herein, the term “applicable law”shall mean the law in effect as of the date hereof, provided, however, that inthe event there is a change in the law which results in a higher permissiblerate of interest, then this Note shall be governed by such new law as of itseffective date.  If, from anycircumstance whatsoever, fulfillment of any provision hereof at the timeperformance of such provision shall be due, shall involve transcending thelimit of validity prescribed by law, then the obligation to be fulfilled shallautomatically be reduced to the limit of such validity, and if from anycircumstances the Lender should ever receive as interest an amount which wouldexceed the highest lawful rate, such amount which would be excessive interestshall be applied to the reduction of the Principal balance evidenced hereby andnot to the payment of interest.**

 

This Note shall take effect as an instrument under seal.

 
| Witness: | /s/ Mark W.  Blodgett |                         | Borrower;  Mark w. Blodgett |
|----------|-----------------------|------------------------------|-----------------------------|
|     | Mark W.  Blodgett     |                         |
|     |                  |
|     |                  |
|     | Lender:               | /s/ Francis  J. O’Brien |                        |
|     |                  | Francis J.  O’Brien     |
|     |                  | Chief  Financial Officer     |
|          |                       |                              |                             |  |  |  |

 

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