Document:

10% SENIOR FIXED RATE SECURED BOND

 Exhibit 10.6 
 DATED 
 October 31, 2006 
  

 STOCKERYALE (UK) LIMITED

 INSTRUMENT CONSTITUTING US$4,750,000 10% SENIOR FIXED
RATE SECURED BOND 

 CONTENTS 
 CLAUSE 
  

					
	 1.
	 	 Interpretation
	  	1
	 2.
	 	 Constitution of the Bonds
	  	2
	 3.
	 	 Redemption of Bonds
	  	4
	 4.
	 	 Undertaking
	  	5
	 5.
	 	 Certificates
	  	5
	 6.
	 	 Security
	  	5
	 7.
	 	 The company’s powers
	  	5
	 8.
	 	 This instrument
	  	6
	 9.
	 	 Set-off
	  	6
	 10.
	 	 Meetings
	  	6
	 11.
	 	 Third party rights
	  	6
	 12.
	 	 Governing law and jurisdiction
	  	7

 SCHEDULE 
  

							
	 SCHEDULE 1
	  	 CERTIFICATE
	  	8
			
	 Part 1.
	  	Certificate	  	8
			
	 Part 2.
	  	Redemption notice: notice of exercise of redemption rights	  	9
			
	 Part 3.
	  	The conditions	  	10
	 1.
	  	Interest	  	10
	 2.
	  	Redemption	  	10
	 3.
	  	Payments	  	11
	 4.
	  	Miscellaneous	  	11
			
	 SCHEDULE 2
	  	 THE REGISTER
	  	13
	 1.
	  	Register	  	13
	 2.
	  	Transfers and transmission	  	13
	 3.
	  	Notices	  	15
	 4.
	  	Replacement of certificates	  	15
			
	 SCHEDULE 3
	  	 MEETINGS OF BONDHOLDERS
	  	16

 THIS INSTRUMENT is made on October 31, 2006 by STOCKERYALE (UK) LIMITED, a corporation organized under
the laws of England and Wales (Company Registration Number 05965205) (“the Company”) 
 BACKGROUND 
  

	(A)	The Company has, by resolution of a duly appointed committee of its board of directors passed on October 31, 2006, created US$4,750,000 of 10% Senior Fixed Rate Secured Bonds
and determined to constitute them in the following manner. 

 AGREED TERMS 
  

	1.	INTERPRETATION 

  

	1.1	The definitions and rules of interpretation in this clause apply in this instrument. 

 Articles: the articles of association from time to time of the Company. 
 Bonds: the Senior
Fixed Rate Secured Bonds of the Company constituted by this instrument, and references to any Bonds as outstanding mean that they are in issue, unredeemed and uncancelled. 
 Bondholders: the one or several persons from time to time entered in the Register as the holders of the Bonds, and any references to a
holder’s Bonds mean Bonds in respect of which he is so registered. 
 Business Day: any day (except Saturdays and Sundays)
when clearing banks are open for business in London. 
 Certificates: the certificates in respect of Bonds. 
 Conditions: the conditions referred to in clause 2 and set out in Schedule 1. 
 Directors: the board of directors of the Company from time to time, or a duly authorised committee of that board. 
 Extraordinary Resolution: a resolution passed at a meeting of the Bondholders (duly convened and held in accordance with the provisions of
Schedule 3) by a majority consisting of not less than three-quarters of the persons voting upon a show of hands and, if a poll is demanded, by a majority consisting of not less than three-quarters of the votes given on the poll. 
 Interest Date and Interest Period: have the meanings given in Condition 1.1. 
 Redemption Notice: a notice substantially in the form set out in Schedule 1. 
 Register: the register of the Bonds (provisions relating to which are set out in Schedule 2). 
 Security: the charge over the 200 shares held by the Company and StockerYale, Inc. in Photonic Products Limited, such charge to be in the Agreed
Form. 
  

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	1.2	Any phrase introduced by the terms including, include or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding
those terms. 

  

	1.3	The schedules to this instrument form part of (and are incorporated into) this instrument. 

  

	1.4	A person includes an individual, corporation, partnership, limited partnership, limited liability company and any other unincorporated body. 

  

	1.5	Words in the singular include the plural and in the plural include the singular. 

  

	1.6	A reference to a clause or a schedule is (unless expressly stated otherwise) a reference to a clause of, or schedule to, this instrument. 

  

	1.7	Clause and schedule headings do not affect the interpretation of this instrument. 

  

	1.8	A reference to one gender includes a reference to the other gender. 

  

	1.9	A reference to a document being “in the agreed form” (or similar language) shall be a reference to a document a copy of which is attached hereto and initialled by the
Company secretary for identification. 

  

	1.10	Expressions defined in the Companies Act 1985 shall be read as if defined in that way in this clause. 

  

	2.	CONSTITUTION OF THE BONDS 

  

	2.1	The principal amount of the Bonds constituted by this instrument is limited to US$4,750,000. The Bonds may be issued in denominations of any amount and shall be transferable in
whole or (in amounts and integral multiples of US$50,000) in part, as provided in Schedule 2. 

  

	2.2	This instrument shall operate for the benefit of all Bondholders, each of whom may sue for the performance or observance of its provisions in his own right so far as his holding of
Bonds is concerned, and for all persons claiming through or under them. The Company shall comply with the terms of the Bonds and the Conditions, and the Bonds shall be held subject to the Conditions. The Conditions and Schedules shall be deemed to
be incorporated in this instrument and shall be binding on the Company, the Bondholders and all persons claiming through or under them. 

  

 2 

	2.3	Until such time as his Bonds are redeemed or repurchased in accordance with the provisions of this instrument, the Company shall pay to each Bondholder interest (without deduction
or withholding for any taxes) on the principal amount of his outstanding Bonds in lawful money of the United States of America and in immediately available funds, at such rate, at such intervals and in such manner as is provided in the Conditions.

  

	2.4	Bonds may be issued whenever, to whomever and on whatever terms and conditions the Directors please. When issued, and while they are outstanding, the Bonds shall be senior secured
obligations of the Company, senior in priority to all of the Company’s unsecured indebtedness and entitled to the benefits of the Security with respect to all obligations in connection with the Bonds. 

  

	2.5	No application shall be made to any investment exchange (whether in Great Britain or elsewhere) for permission to deal in, or for an official or other listing or quotation, in
respect of the Bonds. 

  

	2.6	All payments under the Bonds shall be made without set-off or counterclaim and be free and clear and without any deduction or withholding for any taxes or fees of any nature
whatever, unless the obligation to make such deduction or withholding is imposed by law. The Company shall pay and save the holder of the Bonds harmless from all liabilities with respect to or resulting from any delay or omission to make any such
deduction or withholding required by law. 

  

	2.7	Principal and interest shall be paid in immediately available funds in lawful money of the United States of America as set forth in Schedule A attached hereto.

  

	2.8	No reference herein to the Security shall impair the obligation of the Company, which is absolute and unconditional, to pay all amounts under the Bonds strictly in accordance with
their terms. 

  

	2.9	The Company agrees to pay on demand all costs of collection, including reasonable attorneys’ fees, incurred by the holder in enforcing the obligations of the Company under the
Bonds. 

  

	2.10	No delay or omission on the part of the holder in exercising any right under the Bonds or the Security shall operate as a waiver of such right or of any other right of such holder,
nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any future occasion. The Company and every indorser or guarantor of the Bonds regardless of the time, order or place of
signing waives presentment, demand, protest and notices of every kind and assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of collateral, and to the addition or release
of any other party or person primarily or secondarily liable. 

  

 3 

	3.	REDEMPTION OF BONDS 

  

	3.1	All amounts owing with respect to the Bonds not previously repaid or repurchased by the Company shall be repaid at par in immediately available funds, together with accrued interest
(without deduction or withholding for any taxes), on October 31, 2011. 

  

	3.2	Notwithstanding any other provisions of this instrument, each Bondholder shall be entitled to demand immediate redemption of all amounts owing with respect to his outstanding Bonds
at par together with accrued interest (without deduction or withholding for any taxes) on them in any of the following events: 

  

	 	(a)	the Company fails to pay when due any principal, interest or other obligation payable on any of his Bonds when due; or 

  

	 	(b)	the occurrence of any event of default under the Security; or 

  

	 	(c)	the failure at any time of the pledge of the collateral under the Security to be a first priority perfected security interest free and clear of all liens, security interests or
other encumbrances of any nature; or 

  

	 	(d)	an order is made or an effective resolution is passed for the winding up of the Company, or the Company stops or threatens to stop payment of its debts, or the Company ceases or
threatens to cease to carry on its business; or 

  

	 	(e)	proceedings are initiated against the Company under any applicable liquidation, insolvency, composition, reorganisation or other similar laws including, for the avoidance of doubt,
presentation to the court of an application for an administration order, or if the Company initiates or consents to judicial proceedings relating to itself under any applicable liquidation, insolvency, composition, reorganisation or other similar
laws or makes a conveyance or assignment for the benefit of its creditors generally; or 

  

	 	(f)	a receiver, administrative receiver or similar official is appointed in respect of the whole or a substantial part of the undertaking and assets of the Company; or

  

	 	(g)	any distress or execution (or other similar process) is levied upon or enforced against all or a substantial part of the assets or property of the Company; or

  

	 	(h)	any process or event with an effect analogous to any of those referred to in clause 3.2(a) to clause 3.2(g) (inclusive) happens to the Company in a jurisdiction outside England and
Wales; or 

  

	 	(i)	 The Company makes default for more than 14 days (after notification to the Company of any such default has been received from any Bondholder) in the performance of,
observance of or compliance with any undertakings contained in this instrument other than those specified in this clause 3.2, 

  

 4 

	 	 
provided, that, solely with respect to matters described in this clause 3.2(i), a written demand specifying the event is received by the Company while
the event is continuing. 

  

	3.3	All Bonds repaid or purchased pursuant to any of the provisions of this instrument shall be automatically and immediately cancelled and shall not be re-issued.

  

	4.	UNDERTAKING 

 From and after the date
of this instrument, and so long as any amount is payable by the Company in respect of the Bonds, the Company undertakes to duly perform and observe its obligations under this instrument so that the provisions of this instrument shall inure for the
benefit of all Bondholders. 
  

	5.	CERTIFICATES 

 The Certificates shall
be issued under the Seal of the Company (or executed by the Company in any other manner authorised by the Companies Act 1985) and shall be in the form or substantially the form set out in Schedule 1. Each shall refer to this Instrument and bear a
denoting number and have the Conditions endorsed on it or attached to it, together with a form of Redemption Notice in the form (or substantially in the form) set out in that schedule. 
  

	6.	SECURITY 

 Concurrent with the
execution by the Company of the Bonds hereunder, it has granted the Security to The Eureka Interactive Fund Limited (“Eureka”) to secure all obligations in connection with the Bonds. Eureka shall act as security trustee for all
Bondholders. The Company covenants with each Bondholder to observe and perform all the provisions of the Security for so long as any Bond is outstanding. 
  

	7.	THE COMPANY’S POWERS 

 Without prejudice to all other powers of the Company, however arising, nothing in this instrument shall prevent (save insofar as any such actions are
prevented under the Security) the Company from: 
  

	 	(a)	exercising its borrowing powers in any way upon such terms as to interest, redemption and otherwise as the Directors think fit, provided that the Bonds shall rank senior in priority
and right of repayment to any other indebtedness of the Company; or 

  

	 	(b)	 disposing of, granting security over or dealing in any other way with any of its business and assets in whole or in part, other than the collateral under the
Security, so long as the Security shall remain a first priority, perfected 

  

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security interest in the collateral thereunder, free and clear of all liens, security interests and other encumbrances; or 

  

	 	(c)	procuring or permitting any of its subsidiaries to exercise such subsidiaries’ borrowing powers in any way, or to dispose of, grant security over or deal in any other way with
any of such subsidiaries’ business or assets in whole or in part, or to change the nature of such subsidiaries’ business in any way (in each of the foregoing cases, other than Photonic Products Limited.) 

  

	8.	THIS INSTRUMENT 

  

	8.1	Subject to clause 8.2, the Company may from time to time (by deed expressed to be supplemental to this instrument) amend any provisions of this instrument (including the Conditions)
solely if the amendment is previously sanctioned by an Extraordinary Resolution. 

  

	8.2	No modification to this instrument and no modification, abrogation or compromise of the rights of the Bondholders shall be permitted which would have the effect of decreasing the
liability of the Company in respect of the Bonds without an Extraordinary Resolution. 

  

	8.3	The Company shall at all times allow any holder of outstanding Bonds to inspect a copy of this instrument during normal business hours on reasonable notice and (provided the
Company’s reasonable expenses in doing so are paid) shall on request supply any Bondholder as soon as reasonably practicable with a copy of this instrument. 

  

	9.	SET-OFF 

 Every
Bondholder shall be recognised by the Company as entitled to his Bonds free from any equity, defence, set-off or cross-claim on the part of the Company against the original, or any intermediate holder, of his Bonds. 
  

	10.	MEETINGS 

 Any meeting of Bondholders
shall (subject to the provisions contained in Schedule 3) be convened, conducted and held in all respects as nearly as possible in the same way as is provided in the Articles for general meetings of the Company. 
  

	11.	THIRD PARTY RIGHTS 

 Nothing in this instrument is intended to confer on any person any right to enforce any term of this instrument which that person would not have but for the Contracts (Rights of Third Parties) Act 1999. 
  

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	12.	GOVERNING LAW AND JURISDICTION 

  

	12.1	This instrument and the Bonds shall be governed by and construed in accordance with the laws of England. 

  

	12.2	The courts of England shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with this instrument. Accordingly, any proceedings relating to
or in connection with this instrument or the Bonds may be brought in such courts. 

 This instrument has been
entered into on the date stated at the beginning of it. 
  

 7 

 Schedule 1 Certificate 
 Part 1. Certificate 
 No [CERTIFICATE NUMBER] 
 StockerYale (UK) Limited (Company) 
 Issue of US$4,750,000 10% Senior Fixed Rate Secured Bonds. 
 Issued pursuant to the memorandum and articles of association of the Company and created by a resolution of the board of directors passed on October 31, 2006. 
 This is to certify that The Eureka Interactive Fund Limited and its successors and assigns is the registered holder of US$4,750,000 of the above-mentioned 10% Senior
Fixed Rate Secured Bonds constituted by an instrument dated October 31, 2006 (Instrument). Such Bonds are issued with the benefit of, and subject to, the provisions contained in the Instrument and the conditions endorsed on this
certificate. 
 Interest calculated in accordance with Condition 1 is payable on the Bonds represented by this Certificate monthly beginning in November 2006
as set forth in Schedule A. 
 Issued this day of [DATE]. 
 The common seal of StockerYale (UK) Limited was affixed to this deed in the presence of: [COMMON SEAL] 
 [SIGNATURE] Director 
 Please note: 
 The Bonds are senior secured obligations of the Company, senior in priority to all of the Company’s
unsecured indebtedness and entitled to the benefits of the Security with respect to all obligations in connection with the Bonds. 
 The Bonds are transferable and repayable in whole or in part (in amounts and integral multiples of US$50,000). 
 No transfer of any part of the
Bonds represented by this certificate shall be registered unless it is accompanied by this certificate, which must be surrendered before any transfer (whether for all or some only of the Bonds) can be registered and a new certificate issued in
exchange. 
 The definitions and rules of interpretation in the Instrument apply in this certificate. 
  

 8 

 Part 2. Redemption notice: notice of exercise of redemption rights 
 To: The directors of StockerYale (UK) Limited 
 I, the registered holder of the Bonds represented by this Certificate, give notice of my desire to exercise my right to require repayment by the Company of the whole/US$ of the principal amount of such Bonds in accordance with the
Conditions, together with accrued interest (without withholding or deduction for any taxes), on the Interest Date (as defined in the Conditions) next following the date of this notice. 
 I authorise the despatch of: 
  

	 	(a)	wire transfer of immediately available funds payable in my favour in respect of the principal moneys and interest due to me in accordance with the attached wire transfer
instructions; and 

  

	 	(b)	(in the case of a redemption of part of the principal moneys represented by this Certificate) either this Certificate duly endorsed with a memorandum of the amount and date of the
redemption, or a fresh Certificate in my/our name(s) for the balance of the principal moneys not repayable on this occasion to: 

  

			
		
	 (Name)
	 	  
		
	 (Address)
	 	  
	
	  
	
	  
	
	 Signature(s) of Bondholder(s)

	
	  
	
	  

 In the case of joint holdings, all Bondholders must sign. In the case of a corporation, this form must either be
under the common seal or under the hand of some officer or attorney of the corporation duly authorised on their behalf. 
 Dated this day of [DATE] 
  

	*	Delete or complete as appropriate. If this space is left blank, the notice shall be treated as a request for repayment of the whole of the principal amount of Bonds represented by
this Certificate. 

  

 9 

 Part 3. The conditions 
  

	1.	INTEREST 

  

	1.1	Until the Bonds are repaid in full in accordance with the provisions of the instrument or these Conditions, the Company shall pay to the Bondholders appearing on the Register
interest (less any applicable taxes) on the principal amount of the Bonds in arrears in immediately available funds in lawful money of the United States of America as set forth in Schedule A. 

  

	1.2	Interest on the Bonds shall accrue daily and be calculated on the basis of a 360-day year and shall be payable at the rate of 10% per year, subject to Section 1.3 below
(such rate, as applicable, the Interest Rate). 

  

	1.3	If the Company fails to pay any Bondholder any amount (whether principal or interest) due on his Bonds on the date on which such amount is expressed to be due and payable pursuant
to these Conditions, the Company shall (without prejudice to all other rights and remedies of the Bondholder in respect of such failure) pay to that Bondholder compound interest at a rate which is 3% per annum higher than the rate which applies
(or would apply if it were principal) in accordance with Condition 1.2 on such overdue amount from the date of such failure up to the date of actual payment (after as well as before judgment), calculated and accruing on a daily basis for so long as
the amount remains unpaid. 

  

	2.	REDEMPTION 

  

	2.1	Unless previously purchased or redeemed as provided below, all amounts owing in connection with the Bonds shall be repaid at par together with all accrued interest (without any
withholding or deduction with respect to any taxes) on October 31, 2011. 

  

	2.2	The Company may at any time purchase the Bonds by private treaty, by tender (available to all Bondholders alike) or by any other means at any price agreed to by such Bondholders.

  

	2.3	All Bonds redeemed or purchased by the Company in accordance with the Conditions shall be cancelled and the Company shall not be at liberty to keep them subsisting for the purposes
of re-issue, to re-issue them or to issue any other Bonds in their place. 

  

	2.4	 Interest on any Bonds becoming liable to redemption shall cease to accrue as from the due date for redemption of such Bonds unless the Company (having become
obliged to do so) fails to make payment in full of such redemption moneys and any accrued interest, in which event interest shall continue to accrue at the rate specified in 

  

 10 

	 	 
Condition 1.3 on the amount which remains unpaid until actual payment in full of such redemption moneys and accrued interest is made.

  

	2.5	In the case of redemption of part only of a Bondholder’s Bonds, the relevant Certificate(s) shall be either endorsed with a memorandum of the nominal amount of the Bonds so
redeemed and the date of such redemption, or cancelled and (without charge) replaced by a fresh Certificate for the balance of the principal moneys not then repayable. 

  

	2.6	The Company shall not be obliged to make any payment to any Bondholder by way of redemption of his Bonds except insofar as it receives his Certificate(s) (or, if lost, an indemnity
in a form reasonably acceptable to the Company) together with the Redemption Notice duly completed. If any Bondholder fails or refuses to deliver up the Certificate for his Bonds to the Company at its registered office at the time for their
redemption, or fails or refuses to accept payment of the redemption moneys or any accrued interest payable in respect of them, the moneys payable to such Bondholder shall be set aside by the Company and paid into a separate bank deposit account.
Such setting aside shall be deemed for all the purposes of these Conditions to be a payment to such Bondholder and the Company shall, by doing so, be discharged from all obligations in connection with such Bonds. If the Company places those moneys
on deposit at a bank, the Company shall not be responsible for the safe custody of such moneys or for interest on them except such interest (if any) as the moneys may earn whilst on deposit (less any expenses incurred by the Company in connection
with them). 

  

	3.	PAYMENTS 

  

	3.1	Payment of principal and interest for the time being owing on the Bonds shall be made in immediately available funds in lawful money of the United States of America by wire transfer
to the account specified by the holder of such Bonds, in accordance with such holder’s instructions. 

  

	3.2	Whenever any payment (including interest) due on any Note becomes due on a day which is not a business day, payment shall be made on the next succeeding business day, but (in the
case of interest) no adjustment shall be made to the amount of interest payable and the Bondholder shall not be entitled to any other payment in respect of any such delay. 

  

	4.	MISCELLANEOUS 

  

	4.1	So long as the Bonds remain in issue, the Company shall send to each Bondholder a copy of every notice, circular, accounts or other document required by law to be sent by the
Company generally to the holders of its ordinary share capital at the same time as they are sent to such shareholders. 

  

 11 

	4.2	Any amounts unclaimed, set aside or retained in accordance with these Conditions in respect of any Note may (without constituting the Company a trustee in relation to them) be
deposited or invested by the Company as the Directors see fit until they are validly claimed (the claimant having provided the Company with such evidence of his entitlement as the Directors may require) and, if not so claimed within 12 years of
first falling due for payment by the Company, shall then belong to the Company to the exclusion of all further claims by, under or through any Bondholder. 

  

 12 

 Schedule 2 The register 
  

	1.	REGISTER 

  

	1.1	The Company shall keep the Register at its registered office or (subject to the provisions of section 190 of the Companies Act 1985) at the offices of the Registrar of the Company
in one or more books and enter in the Register: 

  

	 	(a)	the issue and all transfers and changes of ownership of the Bonds, including the names and addresses of the Bondholders for the time being of the Bonds; 

  

	 	(b)	the amount of the Bonds held by every registered holder and the principal moneys paid up on them; 

  

	 	(c)	the first date or dates of issue of the Bonds and the date on which the name of every such registered holder is entered in respect of the Bonds standing in his name; and

  

	 	(d)	the serial number of each Certificate issued and the date of its issue. 

 Any change of name or address on the part of any Bondholder shall immediately be notified to the Company and, on receipt, the Register shall be altered accordingly. The Bondholders or any of them and any person
authorised in writing by any of them shall be at liberty at all reasonable times during office hours to inspect the Register and to take copies of it or of extracts from it. The Register may nevertheless be closed by the Company for such periods and
at such times as the Company may think fit, provided that it is not closed for more than 30 days in any one year. 
  

	1.2	The Company shall recognise the registered holder of any Bonds as the absolute owner of them and shall not be bound to take notice or see to the execution of any trust (whether
express, implied or constructive) to which any Note may be subject. The receipt of the Bondholder for the time being of any Bonds, or (in the case of joint Bondholders) the receipt of any of them, of the interest from time to time accruing due in
respect of the Bonds, or for any other moneys payable in respect of them, shall be a good discharge to the Company notwithstanding any notice it may have (whether express or otherwise) of the right, title, interest or claim of any other person to or
in such Bonds, interest or moneys. No notice of any trust (express, implied or constructive) shall be entered on the Register in respect of any Bonds. 

  

	2.	TRANSFERS AND TRANSMISSION 

  

	2.1	The Bonds are transferable in whole or (in amounts and integral multiples of US$ 50,000) in part by instrument in writing in the usual common form or such other form as the
Directors may approve. 

  

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	2.2	Every such instrument of transfer shall be signed by the transferor, or (where the transferor is a corporation) given under its common seal, or executed in any other manner
authorised by the Companies Act 1985. The transferor shall be deemed to remain the owner of the Bonds to be transferred until the name of the transferee is entered in the Register in respect of them. 

  

	2.3	Every instrument of transfer shall be lodged for registration at the place where the Register is kept for the time being, and shall be accompanied by the Certificate for the Bonds
to be transferred and such other evidence, if any, as the Company may require to prove the title of the transferor or his right to transfer the Bonds (and, if such instrument is executed by some other person on his behalf, the authority of that
person to do so). Where some only of the Bonds comprised in a Certificate are transferred, the Certificate shall be cancelled and a single new Certificate for the balance of such Bonds issued in lieu without charge. Except as provided in this
instrument, every instrument of transfer completed and lodged in accordance with this instrument shall be entered in the Register and the name of the transferee shall be entered in the Register as the new holder of the Bonds transferred to him.

  

	2.4	All instruments of transfer which are registered shall be retained by the Company. 

  

	2.5	No transfer of Bonds shall be registered when the Register is closed. In addition, the Directors may in their absolute discretion refuse to register the transfer of any Bonds if:

  

	 	(a)	it is not in favour of four or fewer transferees; or 

  

	 	(b)	it is in favour of a minor, bankrupt or person of mental ill-health; or 

  

	 	(c)	in the Directors’ opinion, registration of the transfer would contravene the law in any jurisdiction. 

 If the Directors refuse to register a transfer they shall, within two months after the date on which the transfer was lodged, send the transferee(s)
notice of the refusal. 
  

	2.6	The executors or administrators of a deceased Bondholder (not being one of several joint Bondholders) and, in the case of the death of one or more of several joint Bondholders, the
survivor or survivors of them, shall be the only persons recognised by the Company as having any title to such Bonds. 

  

	2.7	 Any person becoming entitled to Bonds in consequence of the death or bankruptcy of the holder of such Bonds may, upon producing such evidence of his capacity or of
his title as the Company deems sufficient, be registered himself as the holder of such Bonds or (subject to the preceding paragraphs as to transfer) may transfer such Bonds. The Company may retain the interest payable upon any Bonds which any

  

 14 

	 	 
person is entitled to transfer under this condition until such person is registered as holder or shall duly transfer the Bonds. 

 

	2.8	No fee shall be charged by the Company in respect of the registration of any instrument of transfer, or other document relating to or affecting the title to any Bonds, or otherwise
for making any entry in the Register affecting title to any Bonds. 

  

	3.	NOTICES 

  

	3.1	Any notice may be given to any Bondholder by sending it by first-class post in a pre-paid letter addressed to such Bondholder at his registered address. In the case of joint
Bondholders, a notice given to the Bondholder whose name stands first on the Register in respect of such Bonds shall be sufficient notice to all the joint Bondholders. 

  

	3.2	Any notice given by post shall be deemed to have been served on the day following the day on which it was posted, and in proving such service, it shall be sufficient to prove that
the envelope containing the notice was properly addressed, stamped and posted. 

  

	3.3	A person entitled to any Bonds in consequence of the death or bankruptcy of a Bondholder or otherwise by operation of law shall be entitled, upon producing to the Company such
evidence as the Company may reasonably require to show his title to the Bonds, and upon giving the Company an address within the United Kingdom for the service of notices, to have served upon or delivered to him at such address any notice or
document to which the Bondholder would have been entitled, and such service or delivery shall for all purposes be deemed a sufficient service or delivery of such notice or document on all persons interested (whether jointly with or as claiming
through or under him) in such Bonds. Otherwise, any notice or document delivered or sent by post to, or left at the address of, any Bondholder in pursuance of these provisions shall, notwithstanding that such Bondholder be then dead, bankrupt or in
liquidation, and whether or not the Company has notice of his death, bankruptcy or liquidation, be deemed to have been duly served or delivered in respect of any Bonds registered in the name of such Bondholder as sole or first-named joint holder.

  

	4.	REPLACEMENT OF CERTIFICATES 

 Should any Certificate be lost, stolen, mutilated, defaced or destroyed, it may be replaced at the registered office of the Company upon payment by the claimant of the Company’s expenses in connection with
replacing it and on such terms as to evidence, indemnity, security or otherwise as the Company may reasonably require. Mutilated or defaced Certificates shall be surrendered before replacements are issued. 
  

 15 

 Schedule 3 Meetings of Bondholders 
  

	1.	The Company may at any time convene a meeting within the United Kingdom of the Bondholders and, in addition, shall do so upon a request in writing (specifying the business of the
meeting in reasonable detail) signed by the Bondholders of not less than one-tenth in nominal value of the outstanding Bonds. 

  

	2.	At least 14 days’ notice (exclusive of the day on which the notice is served, or deemed to be served, and of the day for which notice is given) of every meeting shall be given
to the Bondholders. The notice shall specify the place, date and time of the meeting and the general nature of the business to be transacted, but it shall not be necessary to specify in the notice the terms of any resolution to be proposed. The
accidental omission to give notice to, or the non-receipt of notice by, any of the Bondholders shall not invalidate the proceedings at any such meeting. 

  

	3.	A Director, or a Bondholder nominated by the Company for such purpose, shall be entitled to take the chair at every such meeting and, if no such nomination is made or if at any
meeting the person nominated is not present within 15 minutes after the time appointed for holding the meeting, the Bondholders present shall choose one of their number present to be chairman. The Directors, the secretary and the solicitors of the
Company, and any other person authorised in that behalf by the Directors, may attend and speak at any such meeting. 

  

	4.	At any such meeting convened for any purpose other than the passing of an Extraordinary Resolution, persons holding or representing by proxy one-tenth in nominal value of the Bonds
for the time being outstanding shall form a quorum for the transaction of business. At any meeting convened for the purpose of passing an Extraordinary Resolution, persons holding or representing by proxy a clear majority in nominal value of the
outstanding Bonds (at least two in number) shall form a quorum. No business (other than the choosing of a chairman) shall be transacted at any meeting unless the requisite quorum be present at the commencement of business. 

 

	5.	If, within 15 minutes from the time appointed for any meeting of the Bondholders, a quorum is not present the meeting shall, if convened upon the requisition of the Bondholders, be
dissolved. In any other case it shall stand adjourned to such day and time (being not less than seven days later) and to such place as may be appointed by the chairman. At such adjourned meeting, the Bondholder or Bondholders present in person or by
proxy and entitled to vote (regardless of the nominal value of the outstanding Bonds held by them) shall form a quorum, and shall have power to pass an Extraordinary Resolution or other resolution, and to decide upon all matters which could properly
have been disposed of at the meeting from which the adjournment took place. 

  

 16 

	6.	Notice of any adjourned meeting at which an Extraordinary Resolution is to be submitted shall be given in the manner provided in this instrument and shall state that the Bondholders
present in person or by proxy at the adjourned meeting will form a quorum. 

  

	7.	The chairman may, with the consent of any meeting at which a quorum is present (and shall, if so directed by the meeting), adjourn the meeting from time to time and from place to
place, but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place. 

  

	8.	At any meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands) a poll is
demanded by the chairman or by one or more Bondholders present in person or by proxy and holding or representing at least one-twentieth in nominal value of the outstanding Bonds. Unless a poll is so demanded, a declaration by the chairman that a
resolution has been carried, carried unanimously or by a particular majority, not carried by a particular majority or lost shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or
against such resolution. 

  

	9.	If a poll is duly demanded, it shall be taken in such manner as the chairman may reasonably direct and the result of a poll shall be deemed to be the resolution of the meeting at
which the poll was demanded. 

  

	10.	In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded
shall be entitled to a casting vote in addition to the vote or votes (if any) to which he may be entitled as a Bondholder. 

  

	11.	A poll demanded on an election of a chairman or on a question of adjournment shall be taken immediately. A poll demanded on any other question shall be taken at such time and place
as the chairman reasonably directs. 

  

	12.	The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded. The demand for
a poll may be withdrawn. 

  

	13.	On a show of hands every Bondholder, who (being an individual) is present in person or (being a corporation) is present by its duly authorised representative or by one of its
officers as its proxy, shall have one vote. On a poll every Bondholder, who is present in person or by proxy, shall have one vote for every $US 1.00 nominal value of outstanding Bonds of which he is the holder. 

  

 17 

	14.	On a poll, votes may be given either personally or by proxy and a Bondholder entitled to more than one vote need not (if he votes) use all his votes or cast all the votes he uses in
the same way. 

  

	15.	In the case of joint registered Bondholders, the vote of the senior who tenders a vote (whether in person or by proxy and whether on a show of hands or on a poll) shall be accepted
to the exclusion of the votes of the other joint holders and, for this purpose, seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding. 

  

	16.	The instrument appointing a proxy shall be in the usual common form, or such other form as the Company may approve, and shall be in writing under the hand of the appointor or of his
attorney duly authorised in writing or (if the appointor is a corporation) either under its common seal or under the hand of an officer or attorney duly authorised. Such instrument shall be deemed to confer authority to demand or join in demanding a
poll and (unless it states otherwise) to vote as the proxy sees fit on any resolution, amendment or other business properly put to the meeting or meetings for which the instrument is given. 

  

	17.	A person appointed to act as a proxy need not be a Bondholder. 

  

	18.	The instrument appointing a proxy, and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority, shall be
deposited at the registered office of the Company or such other place as the Company shall reasonably direct not less than 48 hours before the time appointed for holding the meeting or adjourned meeting or for the taking of the poll at which the
person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiration of 12 months from the date named in it as the date of its
execution. 

  

	19.	A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of
the authority under which the proxy was executed, provided that no intimation in writing of such death, insanity or revocation has been received by the Company before the commencement of the meeting, adjourned meeting or taking of the poll at which
the proxy is used. 

  

 18 

	20.	No modification, variation or abrogation of the terms, conditions and provisions contained in this instrument, or the rights of the Bondholders, shall be made by the Company unless
a meeting of the Bondholders has assented to any such modification, variation or abrogation by Extraordinary Resolution. The Bondholders shall, in addition to all other powers, have the following powers exercisable by Extraordinary Resolution:

  

	 	(a)	power to sanction any proposals for any modification, variation, abrogation or compromise of, or arrangement in respect of, the rights of the Bondholders against the Company,
whether such rights arise under this instrument or otherwise; 

  

	 	(b)	power to sanction any scheme or proposal for the exchange or sale of the Bonds for, or the conversion of the Bonds into or the cancellation of the Bonds in consideration of, shares,
stock, Bonds, bonds, debentures, debenture stock and/or other obligations and/or other securities of the Company or any other company formed or to be formed, or for, into or in consideration of cash, or partly for, into or in consideration of any
such shares, stock, Bonds, bonds, debentures, debenture stock and/or other obligations and/or securities and partly for or into or in consideration of cash; 

  

	 	(c)	power to assent to any modification of the provisions contained in this instrument, including the Conditions, which is proposed by the Company; and 

  

	 	(d)	power to modify the date fixed for final redemption of the Bonds, to reduce or cancel the principal payable on the Bonds, or to reduce the amount payable or modify the method of
calculating the amount payable, or modify the date or dates for payment in respect of, any interest on the Bonds, 

 provided
always that no modification to this instrument and no modification, abrogation or compromise of the rights of the Bondholders which would have the effect of increasing the liability of the Company or the Guarantor in respect of the Bonds, or which
would be prejudicial to the rights of the Guarantor against, or to the security interests granted to the Guarantor by, the Company shall be made without the written consent of the Guarantor having first been given. 
  

	21.	An Extraordinary Resolution shall be binding upon all the Bondholders (whether or not present at the meeting passing such Extraordinary Resolution) and each of the Bondholders shall
be bound to give effect to it accordingly. The passing of any such resolution shall be conclusive evidence that the circumstances justify passing it (the intention being that it shall rest with the meeting to determine without appeal whether or not
the circumstances justify passing it). 

  

	22.	Subject always to compliance with the proviso to paragraph 20 of this Schedule 3 a resolution in writing signed by the holders of 95% in nominal amount of the outstanding Bonds who
are for the time being entitled to receive notice of meetings shall for all purposes be as valid and effectual as an Extraordinary Resolution. Such resolution in writing may be contained in one document or in several documents in like form, each
signed by one or more Bondholders. 

  

	23.	 Minutes of all resolutions and proceedings at every meeting of Bondholders shall be made and duly entered in books to be from time to time provided for that purpose
by 

  

 19 

					
	Executed as a deed by STOCKERYALE (UK) LIMITED acting by its two directors, Mark Blodgett and Marianne Molleur.	 		 	 /s/ Mark Blodgett

	 		 	 Director

	 		 	  
 /s/ Marianne Molleur

		 		 	 Director/SecretaryCHARGE OVER SHARES

 Exhibit 10.7 
 OCTOBER 31, 2006 
 (1) STOCKERYALE (UK) LIMITED 
 (2) STOCKERYALE, INC. 
 and

 (3) THE EUREKA INTERACTIVE FUND LIMITED 
  

 CHARGE OVER SHARES 
  

 THIS DEED is made on: October 31, 2006 
  

	1.	STOCKERYALE (UK) LIMITED, a company incorporated in England and Wales (company number 05965205) whose registered office is at 4th Floor, Mitre House, 177 Regent Street, London W1B 4JN (“SYUK”); 

  

	2.	STOCKERYALE, INC., a Massachusetts corporation whose principal place of business is at 32 Hampshire Rd., Salem, New Hampshire 03079 (“SYI” and together with
SYUK, the “Chargors”); and 

  

	3.	THE EUREKA INTERACTIVE FUND LIMITED, a company incorporated in the Cayman Islands under registration number 93858 whose registered office is at Harbour Centre, 2nd Floor, North Church Street, PO Box 896, George Town, Grand Cayman, Cayman Islands (the “Chargee”).

 BACKGROUND 
 The Chargee has advanced
sums to SYUK under the terms of a bond of today’s date (the “Bond”). As a condition of the Bond, SYUK and SYI are required to enter into this deed creating security over the Charged Securities in favour of the Chargee.

 The parties agree as follows: 
  

	1	INTERPRETATION 

  

	1.1	In this deed the following definitions apply: 

  

			
	“Acquisition Agreement”	  	The agreement made on the 31st of October 2006 among SYUK,
SYI and certain persons specified therein for the acquisition by the Chargors of the Shares;
		
	“Authorized Contribution	  	The contribution by SYI to SYUK of all of its right, title and interest in and to the Charged Securities held by SYI, which shall be consummated immediately after the closing of the
transactions under the Acquisition Agreement;
		
	“Bond”	  	The bond instrument of even date creating $4,750,000 of 10% Senior Fixed Rate Secured Bonds issued by SYUK;
		
	“Business Day”	  	any day other than a Saturday or Sunday on which banks in general are open for the transaction of normal banking business in the City of London;
		
	“Charged Securities”	  	the Shares, all other shares, all rights and benefits held by or owing to the Chargors whether arising under or pursuant to the Acquisition Agreement or otherwise and other assets and rights
at any time and from time to time the subject of this security, provided, however, that in the case of Charged Securities pledged by SYI only, Charged Securities shall include only shares, rights and benefits issued by the Company;

  

 2 

			
	“Company”	  	Photonic Products Limited (Company number 3110900);
		
	“Demand”	  	has the meaning given to it in clause 2.1;
		
	“Enforcement Event”	  	has the meaning given to it in paragraph 1.3 of Schedule 4;
		
	“Receiver”	  	has the meaning given to it in paragraph 2.1 of Schedule 4;
		
	“Secured Liabilities”	  	has the meaning given to it in clause 2.2;
		
	“Security Interest”	  	any debenture, mortgage, charge, pledge, lien, assignment, hypothecation, right of set-off, title retention, attachment, levy, tax, security interests and encumbrance of every kind and nature
or other arrangement or agreement the effect of which is the creation of security; and
		
	“Shares”	  	Two hundred (200) shares in the Company which comprise all of the Company’s issued and outstanding capital stock on the date hereof.

  

	1.2	Headings 

 The index and headings are included for
convenience only and shall not affect the interpretation or construction of this deed. 
  

	1.3	References 

 In this deed, unless the context
requires otherwise, any reference to: 
  

	 	1.3.1 	each Chargor or the Chargee respectively includes its successors in title and assigns and this deed shall be enforceable notwithstanding any change in the constitution of each
Chargor or the Chargee respectively its absorption in or amalgamation with any other person or the acquisition of all or part of its undertaking by any other person; 

  

	 	1.3.2 	a party or the parties is to a party or the parties (as the case may be) to this deed; 

  

	 	1.3.3 	a recital is to the relevant statement about the background to this deed made above under the heading “Background”; any reference to a clause or a Schedule is to a clause
of or schedule to this deed (as the case may be) and references made in a Schedule to paragraphs are to paragraphs of that Schedule; 

  

	 	1.3.4 	this deed includes the Schedules, which form part of this deed for all purposes; 

  

	 	1.3.5 	a statute or statutory provisions include any consolidation, re-enactment, modification or replacement of the same and any subordinate legislation in force under the same from time
to time; 

  

 3 

	 	1.3.6 	the masculine, feminine or neuter gender respectively includes the other genders, references to the singular include the plural (and vice versa) and references to persons include
firms, corporations and unincorporated associations; 

  

	 	1.3.7 	a document is to that document as varied, supplemented or replaced from time to time; 

  

	 	1.3.8 	this security is to this deed and includes each separate or independent stipulation or agreement in this deed and the security created by, pursuant to or supplemental to it.

  

	1.4	Terms Defined in the Bond 

 Words and expressions
defined in the Bond and not defined in this deed shall have the same meaning in this deed as in the Bond. 
  

	1.5	This Document is a deed 

 This document is the deed
of the Chargors, even if it has not been duly executed by the Chargee or has been duly executed by the Chargee but not as a deed. 
  

	2	COVENANT TO PAY 

  

	2.1	Payment on Demand 

 Each Chargor covenants with the
Chargee that it will on demand pay and discharge the Secured Liabilities when due to the Chargee (a “Demand”). 
  

	2.2	Meaning of Secured Liabilities 

 In this security,
“the Secured Liabilities” means all moneys at any time and from time to time due or owing by the Chargors to the Chargee and all other actual or contingent liabilities at any time and from time to time incurred by the Chargors to
the Chargee, including (without limitation) all moneys due or owing under the Bond or in any other manner (whether incurred by each Chargor alone or jointly), together in each case with interest and costs of collection (including, without
limitation, reasonable attorneys’ fees), and irrespective of the allowability, allowance or disallowance of any or all of the Secured Liabilities in any proceeding commenced by or against either Chargor under any bankruptcy or insolvency law,
including, without limitation, obligations or indebtedness of either Chargor for post-petition interest, fees, costs and charges that would have accrued or been added to the Secured Liabilities but for the commencement of such a proceeding. Interest
on the Secured Liabilities shall be calculated to the date of payment at the rates and upon the terms set out in the Bond. 
  

	3	CHARGING CLAUSE 

 The payment and discharge of the
Secured Liabilities shall be secured in the manner and to the extent specified in Schedule 1. 
  

	4	COVENANTS 

 Each Chargor covenants with the Chargee
as set out in Schedule 2 and warrants and represents to the Chargee as set out in Schedule 3. 
  

	5	POWERS OF THE CHARGEE AND A RECEIVER 

 The Chargee
and a Receiver shall have the powers set out in Schedule 4. 
  

 4 

	6	CONTINUING SECURITY 

  

	6.1	Continuing Security 

 This security is a continuing
security and shall secure the ultimate balance of the Secured Liabilities notwithstanding intermediate payment or discharge of the whole or part of the Secured Liabilities to the Chargee and also notwithstanding liquidation or other incapacity of
either Chargor, or any change in the constitution or name of either Chargor or any other matter or thing. 
  

	6.2	Security Additional to Other Rights 

 This security
is in addition to (and shall not merge with, otherwise prejudice or affect or be prejudiced or affected by) any other right, remedy, guarantee, indemnity or Security Interest which may be or have been created in favour of the Chargee in respect of
the Secured Liabilities. Accordingly, this security may be enforced notwithstanding the existence or invalidity of all or any of the same and also notwithstanding the Chargee at any time exchanging, releasing, varying, abstaining from perfecting or
enforcing or otherwise dealing or omitting to deal with all or any of the same. 
  

	6.3	The Chargors’ Liability Not Discharged 

 The
liability of the Chargors under this security shall not be discharged, reduced, impaired or affected by: 
  

	 	6.3.1 	any present or future bill, note, right, remedy, guarantee, indemnity or Security Interest held by or available to the Chargee being or becoming wholly or in part void, voidable or
unenforceable on any ground whatsoever or by the Chargee at any time or from time to time exchanging, releasing, varying, abstaining from perfecting or enforcing or otherwise dealing or omitting to deal with all or any of the same; or

  

	 	6.3.2 	the Chargee compounding with, discharging, releasing or varying the liability of or granting any time, indulgence or concession to the Chargors or any other person or renewing,
determining, varying or increasing any bill, promissory note or other negotiable instrument, accommodation, facility or transaction in any manner whatsoever or concurring in, accepting or varying any payment from the Chargors or any other person or
company; or 

  

	 	6.3.3 	any act or omission which would not have discharged, impaired or affected the liability of either Chargor to the Chargee had it been primary obligor or by anything done or omitted
which but for this provision might operate to discharge, reduce, impair or affect that liability. 

  

	7	THIRD PARTY PROTECTION 

 No purchaser, mortgagee or
other person dealing with the Chargors or a Receiver shall be concerned: 
  

	7.1	to enquire whether any of the Secured Liabilities have become due or payable or remain unpaid or undischarged or whether the power which either Chargor is purporting to exercise has
become exercisable; or 

  

	7.2	to see to the application of any money paid to either Chargor. 

  

 5 

	8	COSTS AND EXPENSES 

 Each Chargor jointly and
severally covenants with the Chargee to indemnify the Chargee and any Receiver fully (and in the case of legal costs and expenses on a solicitor and own client basis) on demand against all costs, expenses, liabilities, claims, demands, actions or
proceedings of any kind incurred by (or made or brought against) it or him (or any manager or agent appointed by it or him): 
  

	8.1	as a result of any failure by either Chargor to perform any of its obligations under this security; 

  

	8.2	in the exercise (or purported exercise) of any of the powers or rights conferred by this security; or 

  

	8.3	in respect of any other matter or thing done or omitted relating to the Charged Securities. 

  

	9	PAYMENTS; NO DEDUCTIONS 

  

	9.1	Making of Payments 

 All payments to be made by the
Chargors under this security shall be made no later than noon on the due date for payment to the Chargee’s account at such office or bank as it may notify to the Chargors from time to time in immediately available funds in lawful currency of
the United States of America. 
  

	9.2	Payments Due on Non-Business Days 

 If any payment
by the Chargors is due on a non-Business Day, the due date for payment shall instead be the next Business Day unless that is in the next calendar month, in which case, it shall be the preceding Business Day. During any extension of the due date of
payment, interest shall be payable on the amount due at the rate payable on that amount on the original due date. 
  

	9.3	Payments to be made in Full 

 All payments made or
to be made by the Chargors under this security shall be made in full, without any deduction, withholding, set-off or counterclaim on account of any taxes or of any claim the Chargors may have against the Chargee. 
  

	9.4	Deductions Required by Law 

 If either Chargor is
compelled by law to make payment subject to any deduction or withholding in respect of tax, then it shall account for the same to the relevant authority as and when required by law, and shall pay to the Chargee all necessary additional amounts to
ensure receipt and retention (free from any liability) by the Chargee of the full amount which it would have received had the payment not been subject to the deduction or withholding and shall promptly provide to the Chargee a certificate of
deduction and such tax receipts and other documents as the Chargee may require. 
  

	9.5	Application of Insufficient Payments 

 If on any day
the Chargee receives a payment insufficient to meet all amounts then due and payable by a Chargor under this security, then the Chargee may apply such payment against those amounts in the order it thinks fit (overriding any application specified by
a Chargor). 
  

 6 

	10	SEVERABILITY 

 If any part of any provision of this
security shall be invalid or unenforceable, then the remainder of such provision and all other provisions of this security shall remain valid and enforceable. 
  

	11	AMENDMENTS, WAIVERS AND RIGHTS 

  

	11.1	Waivers and Releases 

 No delay in exercising or
non-exercise by the Chargee of any of its rights under or in connection with this security shall operate as a release or waiver of that right. Rather, any such waiver or release must be specifically granted in writing signed by an authorised
signatory of the Chargee and shall: 
  

	 	11.1.1	 be confined to the specific circumstances in which it is given; 

  

	 	11.1.2	 not affect any other enforcement of the same or any other right; and 

  

	 	11.1.3	 (unless it is expressed to be irrevocable) be revocable at any time in writing. 

  

	11.2	Chargee’s Rights Cumulative 

 The rights and
remedies of the Chargee under this security are cumulative and not exclusive of any rights or remedies of the Chargee under the general law. The Chargee may exercise each of its rights as often as it thinks necessary. 
  

	11.3	Voting Rights and Dividends 

 Unless an Enforcement
Event has occurred, provided the Chargors together remain the registered owner of the Shares: 
  

	 	11.3.1 	all voting and other rights (including the right to receive dividends) attaching to any of the Charged Securities will continue to be exercised by the Chargors for so long as they
remain their registered owner and provided that the Chargors shall not exercise any voting or other rights in a way which is likely to prejudice the value of the Charged Securities or otherwise jeopardise the security constituted by this deed; and

  

	 	11.3.2 	the Chargors shall be free to deal with all the dividends, distributions and interest and other monies paid thereon. 

  

	11.4 	At any time after the occurrence of an Enforcement Event: 

  

	 	11.4.1 	the Chargee may in the name of the Chargors or otherwise and without any further consent or authority on the part of either Chargor exercise all voting and other rights attaching to
the Charged Securities and any rights attaching to the Charged Securities to nominate or remove a director as if the Chargee were the sole beneficial owner of the Charged Securities; 

  

	 	11.4.2 	all derivative assets shall, if required by either Chargor as nominee, be held on trust or to be paid or transferred to the Chargee; and 

  

	 	11.4.3 	each Chargor shall, and shall procure that its nominees shall, accept short notice for and attend any meeting of the holders of any of the Charged Securities, appoint proxies and
exercise voting and other rights and powers exercisable by the holders of the Charged Securities as the Chargee may direct from time to time. 

  

 7 

	12	ASSIGNMENT 

  

	12.1	Chargee’s Right to Assign 

 The Chargee may
assign all or any of its rights under this security subject to the prior notification of the Chargors but without obtaining their further consent. Any assignee or successor in title of the Chargee shall be treated for all purposes as if it had been
an original party to this security in addition to the Chargee. 
  

	12.2	Waiver of Confidentiality Rights 

 Notwithstanding
any confidentiality obligation imposed on the Chargee by law, it may disclose to any assignee, proposed assignee or person with whom from time to time they have entered (or wish to enter into) an agreement in connection with this security such
information about the Chargors as it thinks fit. Each Chargor irrevocably waives all rights of confidentiality in respect of such disclosure. 
  

	13	LAW AND JURISDICTION 

 The parties to this deed
irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction over any claim or matter arising under or in connection with this deed and that accordingly any proceedings in respect of any such claim or matter may be
brought in such courts. 
  

	14	NOTICES 

 All notices, demands and other
communications made by the Chargee relating to this security may (without prejudice to any other effective mode of making the same) be delivered or sent to each Chargor at its registered office from time to time or such other address in England and
Wales of which the Chargee has received no less than 15 Business Days’ prior written actual notice from such Chargor and shall take effect: 
  

	 	14.1	if delivered, upon delivery; 

  

	 	14.2	if posted, at the earlier of the time of delivery and (if posted in the United Kingdom by first class registered post) 10.00am on the second Business Day after posting;

  

	 	14.3	if sent by facsimile, when a complete and legible copy of the communication, whether that sent by facsimile or a hard copy sent by post or delivered by hand, has been received at
the appropriate address, 

 provided that if any communication would otherwise become effective on a non-Business Day or after
5.00pm on a Business Day, it shall instead become effective at 10.00am on the next Business Day. Section 196 of the Law of Property Act 1925 shall not apply to this deed. 
 IN WITNESS of which this document has been duly executed as a deed and delivered on the date stated at the beginning of this document 
  

 8 

 SCHEDULE 1 
 THE CHARGE 
 As security for the Secured Liabilities, the Chargors with full title guarantee charge to the Chargee by
way of first priority fixed charge, senior to any other charge or encumbrance: 
  

	 	1.	the Charged Securities, together with all allotments, accretions, offers, rights, benefits and advantages whatsoever at any time accruing, offered or arising (including without
limitation any dividends or other distributions declared from time to time) in respect of or incidental to the Charged Securities and all stocks, shares, rights, money or property accruing thereto or offered at any time by way of conversion,
redemption, bonus, preference, option or otherwise in respect of the same; and 

  

	 	2.	all rights and benefits of the Chargors arising under or pursuant to the Acquisition Agreement including the right to enforce the same as if the Chargee were a party to the
Acquisition Agreement. 

  

 9 

 SCHEDULE 2 
 COVENANTS 
  

	1	NO DISPOSALS OR SECURITY INTERESTS 

 Neither Chargor
shall without the express prior written consent of the Chargee: 
  

	1.1	except for the Authorized Contribution, which the Chargors shall consummate on the date hereof, sell, transfer or otherwise deal in any way with any of the Charged Securities or
permit any person other than such Chargor to be registered as holder of any of them; or 

  

	1.2	assign or in any other way deal with any of its rights arising under the Acquisition Agreement nor waive any rights it may have under the Acquisition Agreement; or

  

	1.3	create (or permit to continue or to be created) or suffer to subsist any Security Interest over any of the Charged Securities (whether ranking in priority to, pari passu with or
subsequent to this security), except (i) the Security Interest created hereunder to secure the Secured Liabilities, and (ii) a security interest in favor of Laurus Master Fund, Ltd., which security interest shall be subordinate to the
security interest hereby granted to The Eureka Interactive Fund Limited. 

  

	2	DEPOSIT AND REGISTRATION 

  

	2.1	Each Chargor shall transfer (or ensure that there are transferred) all or any of the Charged Securities into the name of the Chargee. The Charged Securities shall be held at the
sole expense, risk and responsibility of the Chargors. 

  

	2.2	Each Chargor shall deposit (or ensure that there are deposited) with the Chargee and permit the Chargee to hold and retain (i) all stock and share certificates and documents of
title relating to the Charged Securities, (ii) transfers of the Charged Securities duly completed in favour of the Chargee or otherwise as it may direct and (iii) such other documents as the Chargee may from time to time require for
perfecting its title to the Charged Securities (duly executed by or signed on behalf of the registered holder) or for vesting or enabling it to vest the same in itself or its nominees or in any purchaser, to the intent that the Chargee may at any
time without notice present them for registration from and after the occurrence of an Enforcement Event. 

  

	2.3	Without prejudice to paragraph 2.2 the Chargors shall hold to the order of the Chargee (or ensure that there are so held) all documents of title and related documents from time to
time relating to the Charged Securities. 

  

	3	ISSUE OF SHARES 

 The Chargors shall procure that no
shares or other securities in or of the Company will be issued or allotted and no agreement, option or arrangement to make or call for such issue or allotment will be made or granted without the Chargee’s express prior written consent.

  

	4	RESTRICTIONS 

 The Chargors shall not, unless the
express prior written consent of the Chargee has been obtained: 
  

	4.1	in any way modify the rights attached to any of the Shares; 

  

	4.2	increase, consolidate, sub-divide or reduce the share capital of the Company; 

  

 10 

	4.3	alter the memorandum or articles of association of the Company; 

  

	4.4	enact a purchase of own shares or reduce the share capital of or in the Company; or 

  

	4.5	take any step to place the Company in liquidation or pass any resolution to wind the Company up. 

  

	5	CALLS AND NOTICES 

 The Chargors shall: 

 

	5.1	duly and promptly pay (or ensure that there are paid) all calls, instalments or other payments which may be made or become due from them under the Agreement as and when the same
become due from time to time; and 

  

	5.2	provide the Chargee with a copy of any report, accounts, circular, notice or other item sent or provided to it (or to any person on its behalf) in connection with its holding of the
Charged Securities or any of them immediately upon receipt thereof. 

  

	6	NO PREJUDICE 

 The Chargors shall not do or permit
or suffer to be done anything (insofar as it is within the power of the Chargors) which may in any way depreciate, jeopardise or otherwise prejudice the value of the Charged Securities and will immediately inform the Chargee of any such matter.

  

	7	FURTHER ASSURANCE 

 The Chargors shall promptly and
at their own expense execute and do all such assurances, acts and things the Chargee may require for perfecting or protecting this security over the Charged Securities or any of them or for facilitating the realisation of the same and in the proper
exercise of all powers, authorities and discretions vested in the Chargee. 
  

	8	INDEMNITY 

 The Chargors shall indemnify and keep
indemnified the Chargee from and against all actions, proceedings, costs, claims and demands occasioned by any breach of any of the covenants on the part of the Chargors contained in this security and if the Chargors fail to take any action required
of them in this Schedule then the Chargee may (without prejudice to any other right it may have) take such action (including but not limited to the action so required but not taken by the Chargors) on the Chargors’ behalf as it thinks fit and
the Chargors shall indemnify the Chargee against any costs and expenses incurred in doing so in accordance with clause 8. 
  

	9	WAIVERS OF PRE-EMPTION RIGHTS 

 The Chargors shall
ensure that they and all shareholders of the Company (if any) from time to time shall enter into waivers in a form satisfactory to the Chargee of all pre-emption rights and restrictions in the articles of association of the Company from time to time
or otherwise which may in any respect vary, restrict or affect the exercise of any rights which may arise in connection with the enforcement of this security or the transfer of the Charged Securities to the Chargee or such other person as the
Chargee may so direct. 
  

 11 

 SCHEDULE 3 
 WARRANTIES 
  

	1	TITLE 

  

	1.1	Each Chargor warrants and represents that with regard to the Shares: 

  

	 	1.1.1 	such Chargor is the sole beneficial legal owner of the shares held by it and holds the same with full title guarantee free from any Security Interest; 

  

	 	1.1.2 	they are fully paid; 

  

	 	1.1.3 	there are no moneys or liabilities outstanding or payable in respect of them or any of them; 

  

	 	1.1.4 	such Chargor is lawfully entitled to create this security over them in favour of the Chargee; 

  

	 	1.1.5 	together they constitute the whole of the issued share capital of the Company; and 

  

	 	1.1.6 	they are fully transferable to the Chargee or such other person as the Chargee shall direct without restriction and without prejudice to the generality of the foregoing in respect
of the pre-emption rights or restrictions in the articles of association of the Company all appropriate waivers have been obtained in respect of these from all other shareholders of the Company (if any), which are unconditional and irrevocable and
legally binding and enforceable. 

  

	1.2	Each Chargor further warrants and represents that save for paragraph 1.1.5, all sub-paragraphs of 1.1.1 to 1.1.4 and 1.1.6 of paragraph 1.1 will be true and accurate with regard to
securities which become Charged Securities after the execution of this deed, as at the date on which they become Charged Securities. 

  

	2	OTHER SECURITY 

 Each Chargor warrants and
represents that it has not taken or received and undertakes not to take or receive the benefit of any security (from the Company or any other person) extending to its liabilities under this security. 
  

 12 

 SCHEDULE 4 
 POWERS OF THE CHARGEE AND A RECEIVER 
  

	1	ENFORCEMENT 

  

	1.1	Disapplication of sections 93(1) and 103 

 Neither
section 93 nor section 103 of the Law of Property Act 1925 shall apply to this security. 
  

	1.2	Security enforceable on demand 

 This security shall
become enforceable in the event of a Demand being made following the occurrence of an Enforcement Event. The Chargee may at any time after that enforce all or any part of this security as it thinks fit. In particular (but without limitation), it may
without further notice exercise in relation to the Charged Securities: 
  

	 	1.2.1 	the power of sale and all other powers conferred on mortgagees by the Law of Property Act 1925 (or otherwise by law) as extended, varied or amended by this security; and

  

	 	1.2.2 	(without first appointing a Receiver) any or all of the powers, authorities and discretions which are conferred by this security (whether expressly or by implication) upon a
Receiver. 

 All dividends, interest or other payments received or receivable in respect of any of the Charged Securities
(whether before or after any Demand) may be applied by the Chargee as though they were proceeds of sale. 
  

	1.3	An Enforcement Event shall be deemed to have occurred if: 

  

	 	1.3.1 	either Chargor or the Company is deemed unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986 or commences negotiations with any one or more of its
creditors; 

  

	 	1.3.2 	either Chargor or the Company takes any corporate action or other steps or legal proceedings are commenced for its or their winding up, dissolution or reorganisation or appointment
of a receiver, administrator, trustee or similar officer of it or them; or 

  

	 	1.3.3 	either Chargor shall repudiate, purport to revoke or fail to perform any of its covenants or obligations under this Charge over Shares or the Bond, as applicable (after passage of
applicable cure period, if any); or 

  

	 	1.3.4 	either Chargor shall fail to perform any of its covenants or obligations under that certain letter agreement dated as of the date hereof by and among Laurus Master Fund, Ltd., SYI,
SYUK, Stockeryale Canada Inc. and Lasiris Holdings, Inc.; or 

  

	 	1.3.5 	an event allowing for immediate redemption shall have occurred under Section 3.2 of the Bond. 

  

	1.4	Neither the Chargee nor Receiver Liable to Account 

 Neither the Chargee nor any Receiver shall be liable as a mortgagee in possession to account in relation to any of the Charged Securities (except to the extent of actual receipts) for any loss upon realisation or for any other default or
omission for which it or he would otherwise be liable as such a mortgagee, and shall not be liable for any failure to make or call 

  

 13 

 
for any payment or repayment, to accept or notify the Chargors of any offer or for any other loss of any nature in connection with the Charged Securities.

  

	2	APPOINTMENT OF A RECEIVER 

  

	2.1	Appointment 

 At any time after this security shall
have become enforceable, if either Chargor so requests in writing or if a petition is presented for an administration order to be made under the Insolvency Act 1986 in respect of a Chargor, the Chargee may (without further notice to such Chargor)
appoint in writing (signed by the Chargee) any one or more persons to be a receiver and/or manager of the Charged Securities (a “Receiver”). Any Receiver so appointed shall (subject to the terms of the instrument of his appointment)
have the powers referred to or set out in this security. In the case of joint Receivers, each may (unless the Chargee otherwise directs) exercise any and all of those powers independently of the other Receiver or Receivers. 
  

	2.2	Receiver’s Powers 

 Any Receiver so appointed
shall (subject to the terms of the instrument of his appointment) have: 
  

	 	2.2.1 	power to sell or otherwise dispose of the Charged Securities. Any such disposal or other dealing may be effected in such manner and on such terms as he may think fit for
consideration consisting of cash, debentures or other obligations, shares or other valuable consideration and any such consideration may be payable in a lump sum or by instalments spread over such period as he may think fit;

  

	 	2.2.2 	all powers conferred on receivers by statute, including those set out in Schedule 1 of the Insolvency Act 1986 even if he is not an administrative receiver as defined in that Act;
and 

  

	 	2.2.3 	power to do all other such acts and things as he may consider desirable or necessary for realising all or any part of the Charged Securities and all such powers and authorities as
he would be capable of exercising if he were the absolute beneficial owner of them. 

  

	2.3	No Restriction on Powers of the Receiver 

 The
powers referred to in paragraph 2.2 shall not be subject to any restrictions contained in the Law of Property Act 1925 and shall continue notwithstanding any liquidation of either Chargor. In the case of joint Receivers, each may (unless the Chargee
otherwise directs) exercise any and all of those powers independently of the other Receiver or Receivers. 
  

	2.4	Receiver’s Remuneration 

 The Chargee may from
time to time fix the remuneration of any Receiver appointed by it without being limited by the maximum rate specified in section 109(6) of the Law of Property Act 1925. The Chargee may also (subject to any necessary approval from the Court) end the
appointment of any such Receiver by notice in writing (signed as in paragraph 2.1) and appoint under paragraph 2.1 a replacement for any Receiver whose appointment ends for any reason. 
  

 14 

	2.5	Receiver Agent of the Chargors 

 Any Receiver shall
be the agent of each Chargor (so that each Chargor shall be solely responsible for his debts, defaults and remuneration), except that if such Chargor goes into liquidation, any Receiver will after that act as a principal (and not as the agent of the
Chargee). 
  

	3	APPROPRIATION OF RECEIPTS 

  

	3.1	Application of Moneys Received 

 Subject to
paragraph 3.2, any moneys received by the Chargee or any Receiver after the occurrence of an Enforcement Event under the powers conferred by this security shall (subject to the payment of any claims having priority to this security but in
substitution for section 109(8) of the Law of Property Act 1925) be applied in the following order of priority: 
  

	 	3.1.1 	in discharging the remuneration of any Receiver and all costs, charges and expenses of and incidental to his appointment, together with interest on such remuneration, costs, charges
and expenses at the Interest Rate; then 

  

	 	3.1.2 	in or towards payment or discharge of (or provision of cash cover for) the rest of the Secured Liabilities in such manner or order as the Chargee may decide in its absolute
discretion (such decision overriding any appropriation by the Chargors); then 

  

	 	3.1.3 	in payment of the surplus (if any) to the Chargors or any other person entitled to it. 

  

	3.2	Suspense Account 

 Any moneys received by the
Chargee or any Receiver under the powers conferred by this security may, at the discretion of the Chargee, be placed in a suspense account (before or after any appropriation under paragraph 3.1) and kept there for so long as the Chargee thinks fit.

  

	3.3	Realisation Account 

 If any Secured Liabilities
remain outstanding (whether or not then due and payable) following any appropriation made by the Chargee pursuant to paragraph 3.1, the Chargee shall place the balance of any amounts received following exercise of their powers under this security to
the credit of an account (the “Realisations Account”) to be opened in the name of the Chargors and designated as such, and the Chargors shall create a fixed charge in favour of the Chargee, in a form satisfactory to the Chargee,
over the moneys from time to time standing to the credit of the Realisations Account as security for the Secured Liabilities. 
  

	4	DELEGATION AND APPOINTMENT OF ATTORNEYS 

  

	4.1	The Chargee may Delegate 

 The Chargee may at any
time and from time to time delegate to any person or persons all or any of the powers, authorities and discretions which are exercisable by it under this security. Any such delegation may be made by power of attorney or in any other manner, upon
such terms (including power to sub-delegate) and subject to such regulations as the Chargee may think fit. The Chargee shall not in any way be liable or responsible to either Chargor for any loss or damage arising from any act, default, omission or
misconduct on the part of any such delegate or sub-delegate. 
  

 15 

	4.2	Appointment as Attorney 

 Each Chargor by way of
security irrevocably appoints the Chargee, every Receiver and every delegate or sub-delegate appointed pursuant to paragraph 4.1 separately to be its attorney on its behalf, in its name and as its act or deed: 
  

	 	4.2.1 	to execute and do all such assurances, acts and things as either Chargor is required to execute and do under the Agreement (including without limitation to execute in favour of the
Chargee or its nominees any document required by the Chargee under paragraph 7 of Schedule 2); and 

  

	 	4.2.2 	to seal and deliver and otherwise perfect or do any deed, assurance, agreement, instrument, act or thing which it or he may deem proper or desirable in or for the purpose of
exercising any of the powers, authorities and discretions conferred by this security or by law on the Chargee or any Receiver. 

 Each Chargor by this deed ratifies and confirms and agrees to ratify and confirm anything which any such attorney may do in the proper and lawful exercise or purported exercise of all or any of the powers, authorities and discretions
referred to in this paragraph 4.2. 
  

	5	RELEASES CONDITIONAL 

 Conditional Release

 Any release, settlement, discharge, re-assignment or arrangement (in this paragraph 5 a “release”) given or made by
the Chargee on the faith of any assurance, security or payment shall be conditional upon that assurance, security or payment not being avoided, reduced or ordered to be repaid under any enactment relating to liquidation, bankruptcy or insolvency. If
such avoidance or reduction occurs or such order is made, the release given by the Chargee shall not prejudice the right of the Chargee to enforce this security in respect of the Secured Liabilities and as between the Chargors and the Chargee this
security shall (notwithstanding the release) be deemed to have remained at all times held by the Chargee as security for the Secured Liabilities. 
  

 16 

					
	 Signed as a deed by STOCKERYALE
 (UK) LIMITED acting by its two
 directors
	  	)	  	
	  		  	
	  	)	  	
		  		  	
		  	)	  	 /s/ Mark Blodgett

		  		  	
		  	)	  	 Director

		  		  	
		  	)	  	
		  		  	
		  		  	 /s/ Marianne Molleur

		  		  	 Director/Secretary

					
	 Signed as a deed by
 STOCKERYALE,
INC. acting by its
 Chief Executive Officer and Chief
 Financial Officer
	  	)	  	
	  		  	
	  	)	  	
	  		  	
		  	)	  	 /s/ Mark Blodgett

		  		  	
		  	)	  	 Chief Executive Officer

		  		  	
		  	)	  	
		  		  	
		  		  	 /s/ Marianne Molleur

		  		  	 Chief Financial Officer and Sr. Vice President

					
	 Signed as a deed by The Eureka
 Interactive Fund Limited acting by a
 director and its secretary/two directors
	  	)	  	
	  		  	
	  	)	  	
		  		  	
		  	)	  	 /s/ Linburgh Martin

		  		  	
		  	)	  	 Director

		  		  	
		  	)	  	
		  		  	
		  		  	  
		  		  	 Director/Secretary

 Charge Over Shares

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