Document:

<PAGE>

THIS LICENCE AGREEMENT DATED THE            DAY OF              2000 BETWEEN
WILLIAM M. KELLY of Birchfield House, Carrigaline, Co. Cork (hereinafter called
"Licensor") of the One Part AND CORKOPT LIMITED an Irish company of Unit 12,
Penrose Wharf, Cork, (hereinafter called "Licensee") of the Other Part.

WHEREAS Licensor has developed in Ireland an invention entitled "Bonding of
optoelectronic semiconductor devices" which invention is patented under patent
no.S621,350.

WHEREAS, Licensor has agreed to grant Licensee an exclusive licence to use said
invention which is the subject of Patent number

IT IS HEREBY AGREED AS FOLLOWS:

1. DEFINITIONS

In this Licence Agreement the following words and expressions shall have the
following meanings:

"Application"       means any Application for Letters Patent filed in respect
                    of the Invention including the application, details of
                    which are set out in Schedule One hereto. "Applications"
                    shall be construed accordingly.

 "Patent"           means Patent no. S62,350 and any further Patent granted
                    pursuant to any Application. "Patents"  shall be construed
                    accordingly.

 "Invention"        means the claimed subject matter of patent no. S62,350 and
                    any further Applications made in connection therewith.
                    "Inventions" shall be construed accordingly.

"Product"           means goods manufactured using the Invention. "Products"
                    shall be construed accordingly.

"Net Invoice Price" means the sales price at the time of the subject sale of
                    the Product excluding all taxes.

"Territory"         means the territory as defined in  Schedule Three hereto.

"Operative Date"    means the date of execution hereof.

"Year of this
 Licence Agreement" means the period of twelve (12) months first commencing on
                    the Operative Date or any anniversary of the Operative
                    Date.

                                       1

<PAGE>

 2. GRANT OF LICENCE
2.1      Licensor hereby grants to the Licensee subject to the terms and
         conditions of this Licence Agreement an exclusive Licence to use the
         Invention in the Territory in such manner as the Licensee sees fit
         under each and every Patent as may be granted for the term of this
         Licence Agreement.

2.2      The Licensee is hereby authorised to exercise all rights conferred by
         this Agreement as and from the Operative Date and upon and subject to
         the terms and conditions which would apply if letters patent had
         already been granted upon any Application and the Licence in respect
         thereof had been executed.

2.3      On the granting of any Patent Licensor undertakes on the request of
         Licensee to execute a formal licence or several formal licences
         (hereinafter referred to as a "Formal Licence" or "Formal Licences")
         as the case may require, substantially in the form set forth in the
         Schedule Two hereto. Any such Formal Licence shall be subject to the
         terms of this Licence Agreement so far as they are capable of applying
         thereto. The terms of any such Formal Licence are also to be treated
         as incorporated into this Licence Agreement whether or not, or until,
         such Formal Licence is formally granted.

3. SUB-CONTRACTING
Nothing in this Licence Agreement shall restrict the right of Licensee to enter
into any sub-contract which permits any sub contractor to use the Invention
provided that if any confidential Information as defined in Clause 5 hereof is
disclosed Licensee shall take all reasonable steps to safeguard the
confidential nature of such Confidential Information.

4. ROYALTY
In each Year of this Licence Agreement, Licensee shall pay to Licensor as a
royalty the sum of $40,000 payable monthly in arrears commencing on the
Operative Date, subject to the Licensee deducting therefrom Irish Withholding
Tax (if applicable) at the rate prevailing from time to time and furnishing to
the Licensor certificates in respect of such deduction.

5.  CONFIDENTIAL TREATMENT OF INFORMATION
5.1      Save as provided at Clause 3 hereof Licensee agrees to keep strictly
         secret and confidential during the term of any Patent and for two (2)
         years thereafter, all and any information, acquired from Licensor
         pursuant to this Licence Agreement except where disclosure or use of
         such information (herein referred to as "Confidential Information") is
         expressly permitted by Licensor, or where such Confidential
         Information has come into the public domain other than due to an
         unauthorised act of Licensee.

                                       2

<PAGE>

5.2      Licensee agrees during the term of any Patent and for two (2) years
         thereafter to use such Confidential Information solely and exclusively
         in the exercise of the rights granted pursuant to this Licence
         Agreement. The obligation undertaken by Licensee pursuant to this
         section, shall survive any expiration or termination of this Licence
         Agreement.

6. ASSIGNMENT
On condition that the Licensee continues to remain directly liable to discharge
the royalty fees payable hereunder, the Licensee shall be entitled to
sub-licence, mortgage or otherwise charge or convey, any rights accruing to
Licensee under this Licence Agreement, with the prior written consent of
Licensor, same not to be unreasonably withheld.

7. DISCLAIMERS OF WARRANTY AND LIABILITY
7.1      Licensor states that, to the best of its knowledge the rights licensed
         hereunder do not infringe the rights of any third party.

7.2      Licensor does not warrant that the use of the Invention by Licensee
         will not infringe any rights of third Parties in any country of the
         Territory.

7.3      Licensor does not warrant that any Patent shall be granted.

9. IMPROVEMENTS
9.1      Where either Party makes any improvement on the Invention, that Party
         shall own all legal and beneficial rights and interests in any said
         improvement on the Invention.

9.2      The Parties shall jointly and severally own all legal and beneficial
         rights and interests in any improvement on the Invention made jointly
         by the Parties.

9.3      Where either Party makes any improvement on the Invention, that Party
         shall forthwith on the discovery thereof disclose said improvement on
         the Invention to, and permit the use of said improvement on the
         Invention by the other Party and the other party shall treat such
         information as confidential.

10. TERMINATION
If the royalties due hereunder have not been paid within 14 days of the time
allowed by this Licence Agreement (in relation to which time shall be of the
essence) or if Licensee shall commit or allow to be committed a breach of any
of the other covenants, promises or

                                       3

<PAGE>

undertakings herein contained and on its part to be performed or observed and
shall not have remedied such breach within thirty (30) days after notice is
given to Licensee by Licensor requiring such remedy or if Licensee shall have
an Examiner appointed or a receiver appointed of the whole or any part of its
assets or an order is made or a resolution passed for winding up of Licensee
unless such order is part of a scheme for reconstruction or amalgamation of
Licensee then Licensor may forthwith terminate this Licence Agreement without
being required to give any or any further notice in advance of such
termination but such termination shall be without prejudice to the remedy of
Licensor to sue for and recover any royalties then due and to pursue any
remedy in respect of any previous breach of any of the covenants or
agreements contained in this Licence Agreement. The Licensee shall have the
right to terminate this Licence on giving to the Licensor 3 months prior
written notice.

11. DURATION
11.1     Subject to the provisions for termination hereinbefore contained, this
         Licence Agreement shall operate from the Operative Date and shall
         continue in force for a period of three (3) years.

11.2     On expiration of this Licence Agreement Licensor may on request enter
         into a further licence agreement on terms and for a period to be
         agreed, provided that no such further Licence Agreement shall continue
         for any period which shall expire later than one (1) day prior to the
         date on which any Patent shall expire.

12. PATENTS AND APPLICATIONS
Licensee shall during the life of this Licence Agreement pay all costs and fees
payable in respect of the Applications and do all such acts and things as may
be necessary to maintain and keep on foot the Patents save that Licensee shall
not be bound to apply for or continue to prosecute any Application for any
extension of the term of any Patent.

13. INFRINGEMENT
If any infringement action, proceeding or claim of any kind is threatened or
instituted against Licensee resulting from the exercise of any rights granted
under this Licence Agreement Licensee shall take timely steps to defend such
action, proceeding or claims and shall promptly notify Licensor. Licensor shall
not be obliged to defend Licensee against any such action proceeding or claim.
Licensee shall defend such actions at its own expense. At the request of
Licensor, Licensee shall permit Licensor to intervene or appear in connection
with any action proceeding or claim at the sole expense of Licensor. The rights
of Licensor under

                                       4

<PAGE>

this Licence Agreement shall in no way be affected by any adverse decision in
or with respect to any such action, proceeding or claim.

14. COUNTRIES IN WHICH PATENT APPLICATIONS ARE FILED
Licensor shall decide in which countries, if any, any further Applications are
to be filed. Each and every further Application for a Patent for the Invention
so filed shall be notified to Licensee by Licensor and each such further
Application for a Patent for the Invention shall be deemed to be included in
Schedule One on the date on which it is filed.

15.  FORCE MAJEURE
In the event that either Party is delayed or hindered in the performance of its
obligations hereunder by force majeure this Licence Agreement shall remain in
suspense until the cause thereof has ceased to delay or hinder. For the purpose
of this Licence Agreement, but not by way of limitation, force majeure shall
mean any cause beyond the reasonable control of the Party liable to perform
unless conclusive evidence to the contrary is provided and shall include
strikes, riots and sabotage, acts of war, acts of piracy, destruction of
essential equipment by fire, explosion, storm, flood earthquake or other
natural disaster, compliance with economic, trade or political sanctions,
failure of power supplies or transport facilities.

16. SEVERABILITY
In the event any provision of this Licence Agreement is declared invalid or
unenforceable or becomes unlawful in its operation or any part thereof, such
provision shall not affect the rights and duties of the Parties with regard to
the remaining provisions of this Licence Agreement which shall continue as
binding.

17. OUTSTANDING ROYALTY ON TERMINATION
On the expiration or sooner termination of this Licence Agreement, Licensee
shall pay to Licensor within thirty days (30) of the date of such expiration
or sooner termination all royalties outstanding on the date of such expiration
or sooner termination.

18. ARBITRATION
If any dispute or difference of any kind whatsoever arises or occurs between
the Parties in relation to any thing or matter arising under or out of or in
connection with this Licence Agreement the Parties shall appoint an
arbitrator and submit such dispute or difference to such arbitrator whose
award shall be binding. If the Parties fail to agree on the appointment of an
arbitrator within one (1) calendar  month of the date on which such dispute
or difference arises or occurs either Party may, on

                                       5

<PAGE>

giving one (1) calendar months notice to the other Party, refer such dispute
or difference to arbitration under the Arbitration Rules of the Chartered
Institute of Arbitrators - Irish Branch.

19. GOVERNING LAW
This Licence Agreement shall be governed by and construed in accordance with
Irish Law. The Parties hereby agree that the Courts of Law in Ireland shall
have exclusive jurisdiction in any action in respect hereof, and that in the
event of such proceeding being commenced service of documents at such address
as is the address for the time being of the addressee by prepaid registered
post, shall be deemed good service.

20. WHOLE AGREEMENT
This Agreement supercedes all prior representations, arrangements,
understandings and agreements between the parties hereto relating to the
subject matter hereof, and sets forth the entire, complete and exclusive
agreement and understanding between the parties relating to the subject
matter hereof for the avoidance of doubt including but by no means limited
to Licence Agreement dated 1st day of September 1994 and made between the
Licensor t/a Barbican Consultants Limited and the Licensee (the "Previous
Licence"). The Previous Licence together with all right and entitlements
which may have accrued or which may be due to accrue to either party
thereunder is hereby terminated.

                                  SCHEDULE ONE

PATENT APPLICATION

(i)      [             ] Patent No.
         Entitled: Bonding of optoelectronic semiconductor devices.
         Date Filed:
         Date Granted:
         Grantee:

                                       6

<PAGE>

                                  SCHEDULE TWO

BY THIS LICENCE WILLIAM M. KELLY HEREBY GRANTS to CORKOPT LIMITED an Irish
company in respect of the following Letters Patent of which it is the
proprietor that is to say, Irish Patent No.        (hereinafter called the
"Patent") full and exclusive Licence and authority to make, use and sell
Products embodying the Invention claimed in the specification of the Patent
to the intent that such Licence shall endure from the date hereof SUCH
LICENCE being SUBJECT TO and with the benefit of an Agreement dated the
day of            2000 and made between the Parties.

                                 SCHEDULE THREE

For the purposes of this Licence Agreement the Territory is each and every
country in the World. SAVE AND EXCEPT all countries on the continent of Africa
(but including in the Territory the Republic of South Africa).

IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be
executed, intending that it shall be legally binding upon them their successors
and assigns

                                       7

<PAGE>

SIGNED BY
WILLIAM M. KELLY
IN THE PRESENCE OF:-

SIGNED FOR AND ON
BEHALF OF
CORKOPT LIMITED
IN THE PRESENCE OF:-

                                       8

<PAGE>

          DATED THE     DAY OF

          PATENT  LICENCE AGREEMENT

          Ronan Daly Jermyn
          Solicitors
          12, South Mall
          Cork
          TF/Corkopt/9367/Patent Licence Agreement - 26th May 2000

<PAGE>

THIS AGREEMENT made the                 day of               2000 BETWEEN
ANNE KELLY of Birchfield House, Carrigaline, Co. Cork (hereinafter called
the "Vendor") of the one part and STOCKER & YALE a Massachusetts corporation
with a principal place of business located at 32 Hampshire Road, Salem,
New Hampshire, USA (hereinafter called the "Purchaser").

NOW IS IT HEREBY AGREED AS FOLLOWS:

1.       DEFINITIONS

1.1      In this Agreement, unless the context otherwise requires, the following
         words and expressions shall have the following meanings:

         "Company" means Corkopt Limited, a company registered in Ireland under
         registration number 218133.

         "Completion" means completion under clause 9 of this Agreement.

         "Contract Date" means the date of this Agreement.

         "Completion Date" means the date of completion of the Sale of the
         Shares being the date on which the share certificates for the Shares
         are delivered to the Purchaser.

         "Latest Completion Date" means the 30th day of June 2000.

         "Issued Share Capital" means the entire issued share capital of the
         Company comprising the following: 31, 312 "A" ordinary shares of
         (pound)1 each, 36,534 "C" ordinary shares of (pound)1 each, 10,000
         redeemable preference shares of (pound)1 each, BUT EXCLUDING the
         297,000 "B" ordinary shares of (pound)1 each issued under the Business
         Expansion Scheme.

         "Shares" means 293 "A" ordinary shares of IR(pound)1 each in the share
         capital of the Company registered in the name of the Vendor.

         "Warranties" means the warranties to be given by the Vendor as set out
         in the Schedule hereto.

1.2      Words denoting the singular shall include the
         plural and vice versa. Words denoting any gender shall include all
         genders and words denoting persons shall include corporations.

2.       SALE AND PURCHASE

Subject to clause 3 below, the Vendor shall sell as beneficial owner and the
Purchaser shall purchase the Shares free from all liens, charges and
encumbrances and with all rights now or hereafter attaching thereto with effect
from completion.

<PAGE>

3.       CONDITION PRECEDENT

The within sale is subject to the Purchaser on or prior to the Completion Date
acquiring all of the Issued Share Capital. If the Purchaser has not acquired the
entirety of the Issued Share Capital by the Latest Completion Date, the
Purchaser may by notice in writing rescind the within Agreement which shall then
be at an end.

4.       PURCHASE PRICE

4.1      In consideration for the transfer of the Shares, the Purchaser will
         issue to the Vendor 587 Shares of the Purchaser's common stock
         (hereinafter called "the Allotment Shares"), subject to the adjustment
         referred to at subclause 4.2, on the Completion Date.

4.2      At completion, the following adjustments shall be made to the number
         of the Allotment Shares.

         If the average closing price of the Purchaser's Common Stock as quoted
         on the Nasdaq market for the five business days preceding the Contract
         Date and for the avoidance of doubt not including the date of signing
         of this Agreement (hereinafter called the "Completion Price") is less
         than $35 per share, then the number of shares comprised in the
         Allotment Shares will be increased to the number derived from dividing
         $2,194,202 by 75% of the Completion Price. If the Closing Price is
         greater than $48 per share, the number of shares comprising the
         Allotment Shares will be decreased to the number derived from dividing
         $2,194,202 by 75% of the Completion Price.

5.       REPRESENTATIONS AND WARRANTIES OF PURCHASER.
          As a material inducement to the Vendor to enter this Agreement and
         sell the Shares, the Purchaser hereby represents and warrants to the
         Vendor as follows:

5.1      Organization; Power. The Purchaser is a Company duly incorporated and
         validly existing under the laws of the State of Massachusetts, and has
         all requisite corporate power and authority to enter into this
         Agreement and perform its obligations hereunder.

5.2      Authorization. The execution, delivery, and performance by the
         Purchaser of this Agreement and all other agreements contemplated
         hereby to which the Purchaser is a party have been duly and validly
         authorized by all necessary corporate action of the Purchaser, and this
         Agreement and each such other agreement, when executed and delivered by
         the parties thereto, will constitute the legal, valid, and binding
         obligation of the Purchaser enforceable against it in accordance with
         its terms, except as enforceability may be limited by applicable
         bankruptcy, insolvency, and similar statutes affecting creditors'
         rights generally and judicial limits on equitable remedies.

5.3      No Conflict with Other Instruments or Agreements. The execution,
         delivery, and performance by the Purchaser of this Agreement and all
         other agreements contemplated hereby to which the Purchaser is a party
         will not result in a breach or violation of, or constitute a default
         under, its Articles of Incorporation or Bylaws or any material
         agreement to which the Purchaser is a party or by which the Purchaser
         is bound.

5.4      Governmental Authorities.

         (i) the Purchaser is not required to submit any notice, report, or
         other filing with any governmental or regulatory authority in
         connection with the execution and delivery by the Purchaser of this
         Agreement and the consummation of the purchase and

<PAGE>

         (ii) no consent, approval, or authorization of any governmental or
         regulatory authority is required to be obtained by the Purchaser or any
         affiliate in connection with the Purchaser's execution, delivery, and
         performance of this Agreement and the consummation of this purchase.

5.5      Litigation. There are no actions, suits, proceedings, or governmental
         investigations or inquiries pending or, to the knowledge of the
         Purchaser, threatened against the Purchaser or its properties, assets,
         operations, or businesses that might delay, prevent, or hinder the
         consummation of this purchase.

5.6      Tax Liability. To the extent the Purchaser deems necessary, the
         Purchaser has reviewed with the Purchaser's own tax advisors the
         federal, state, local and foreign tax consequences of this investment
         and the transactions contemplated by this Agreement. The Purchaser
         relies solely on such advisors and not on any statements or
         representations of the Company or any of its agents. The Purchaser
         understands that the Purchaser (and not the Company) shall be
         responsible for the Purchaser's own tax liability that may arise as a
         result of this investment or the transactions contemplated by this
         Agreement.

5.7      Disclosure. To the Purchasers knowledge this agreement when taken a
         whole does not contain any untrue statement of a material fact
         concerning the Purchaser or omit to state a material fact necessary in
         order to make the statements concerning the Purchaser contained herein
         not misleading.

5.8      Litigation. There are no actions, suits, proceedings or investigations
         pending against the Purchaser or the Purchaser's properties before any
         court or governmental agency (nor, to the Purchaser's knowledge, is
         there any threat thereof) which would impair in any way the Purchaser's
         ability to enter into and fully perform the Purchaser's commitments and
         obligations under this Agreement or the transactions contemplated
         hereby.

5.9      Compliance with Other Instruments. The execution, delivery and
         performance of and compliance with this Agreement, and the issuance of
         shares will not result in any material violation of, or conflict with,
         or constitute a material default under, any Purchaser's articles of
         incorporation or bylaws or any of the Purchaser's material agreements
         nor result in the creation of any mortgage, pledge, lien, encumbrance
         or charge against any of the assets or properties of the Company or the
         Shares.

5.10     No Brokers or Finders Fees. The Purchaser has not, and will not, incur,
         directly or indirectly, as a result of any action taken by the
         Purchaser, any liability for brokerage or finders' fees or agents'
         commissions or any similar charges in connection with this Agreement.

6.       CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER AND THE VENDOR

6.1      Each and every obligation of the Vendor under this Agreement is subject
         to the satisfaction, at or before the Completion Date, of each of the
         following conditions:

         i.       Representations and Warranties; performance. Each of the
                  representations and warranties made by the Purchaser herein
                  will be true and correct in all material respects as of the

<PAGE>

                  Completion Date with the same effect as though made at that
                  time except for changes contemplated, permitted or required by
                  this Agreement; the Purchaser will have performed and complied
                  with all agreements, covenants and conditions required by this
                  Agreement to be performed and complied with by it prior to the
                  Completion Date; and the Vendor will have received at the
                  Closing a certificate of the Purchaser signed by the President
                  and the Chief Financial Officer of the Purchaser stating that
                  each of the representations and warranties made by the
                  Purchaser herein is true and correct in all material respects
                  as of the Closing except for changes contemplated, permitted
                  or required by this Agreement and that the Purchaser has
                  performed and complied with all agreements, covenants and
                  conditions required by this Agreement to be performed and
                  complied with by it prior to the Closing.

        ii.       No Proceeding or Litigation. No action, suit, or proceeding
                  before any court (other than suits seeking monetary damages
                  only and in the aggregate sum of less than $10,000) and any
                  governmental or regulatory authority will have been commenced
                  and be continuing, and no investigation by any governmental or
                  regulatory authority will have been commenced and be
                  continuing, and no action, investigation, suit, or proceeding
                  will be threatened at the time of Closing, against the Vendor,
                  the Company, or the Purchaser or any of their affiliates,
                  associates, officers, or directors, seeking to restrain,
                  prevent, or change this purchase, questioning the validity or
                  legality of this purchase, or seeking damages in connection
                  with this purchase.

       iii.       Corporate Action. The Purchaser will have furnished to the
                  Vendor a copy, certified by the Secretary or an Assistant
                  Secretary of the Purchaser, of the resolutions of the
                  Purchaser authorizing the execution, delivery, and performance
                  of this Agreement.

6.2      Each and every obligation of the Purchaser under this Agreement is
         subject to the satisfaction at or before the Completion Date of each of
         the following conditions:

         i.        Representations and Warrants; performance. Each of the
                   representations and warranties made by the Vendor herein
                   will be true and correct in all material respects as of the
                   Completion Date with the same effect as though made at that
                   time except for changes contemplated, permitted or required
                   by this Agreement; the Vendor will have performed and
                   complied with all agreements, covenants and conditions
                   required by this Agreement to be performed and complied
                   with by it prior to the Closing; and the Purchaser will have
                   received at the closing the Warranties executed under the
                   seal of the Vendor and the Vendor has performed and
                   complied with all agreements, covenants and conditions
                   required by this Agreement to be performed and complied
                   with by it prior to the Closing.

        ii.        No Proceeding or Litigation. No action, suit, or proceeding
                   before any court and any governmental or regulatory
                   authority will have been commenced and be continuing, and
                   no investigation by any governmental or regulatory
                   authority will have been commenced and be continuing, and
                   no action, investigation, suit, or proceeding will be
                   threatened at the time of Closing, against the Vendor,
                   the Company, or the Purchaser or any of their affiliates,
                   associates, officers, or directors, seeking to restrain,
                   prevent, or change this purchase, questioning the
                   validity or legality of this purchase, or seeking damages
                   in connection with this purchase.

<PAGE>

7.       SECURITIES

7.1      The Vendor is acquiring the Purchasers Common Stock for investment for
         the Vendors own account, not as a nominee or agent, and not with the
         view to, or for resale in connection with, any distribution thereof.
         The Vendor understands that the Purchaser's Common Stock has not been,
         and will not be, registered under the Securities Act of 1933 (the
         "Securities Act") or the securities laws of any state by reason of a
         specific exemption from the registration provisions of the Securities
         Act and the applicable state securities laws, the availability of which
         depends upon, among other things, the bona fide nature of the
         investment intent and the accuracy of the Vendors' representations as
         expressed herein. The Vendor is acquiring the Shares without
         expectation, desire, or need for resale and not with the view toward
         distribution, resale, subdivision or fractionalization of the Shares.
         The jurisdiction of residence of theVendor is the Republic of Ireland
         and the offer and sale of the Purchaser's Common Stock to such Vendor
         will take place in such jurisdiction. The Vendor is knowledgeable and
         experienced in making of investments of the type involved in the
         acquisition of the Purchaser's Common Stock pursuant to this Agreement
         and is able to bear the economic risk of loss of its investment in
         Purchaser. The Vendor has received and reviewed a copy of Purchaser's
         most recent Annual Report on Form 10-K and a proxy statement and has
         been granted the opportunity to ask such questions regarding the
         Purchaser's affairs either directly or through its authorized
         representative as deemed necessary in respect of the Vendor's decision
         to acquire Purchaser Common Stock pursuant to this Agreement.

7.2      The Vendor understands that the Purchaser's Common Stock cannot be
         resold in a transaction to which the Securities Act and state
         securities laws apply unless (i) subsequently registered under the
         Securities Act and applicable state securities laws of (ii) exemptions
         from such registrations are available. The Purchaser is aware of the
         provisions of Rule 144 promulgated under the Securities Act which
         permit limited resale of shares purchased in a private transaction
         subject to the satisfaction of certain conditions.

7.3      The Vendor understand that the certificates for the Purchaser's Common
         Stock will bear a legend substantially similar to the following:

         THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933. THE COMPANY WILL NOT TRANSFER THIS CERTIFICATE UNLESS (i) THERE
         IS AN EFFECTIVE REGISTRATION COVERING THE SHARES REPRESENTED BY THIS
         CERTIFICATE UNDER THE SECURITIES ACT OF 1933 AND ALL APPLICABLE STATE
         SECURITIES LAWS, (ii) IT FIRST RECEIVES A LETTER FROM AN ATTORNEY,
         ACCEPTABLE TO THE BOARD OF DIRECTORS OR ITS AGENTS, STATING THAT IN THE
         OPINION OF THE ATTORNEY THE PROPOSED TRANSFER IS EXEMPT FROM
         REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND UNDER ALL APPLICABLE
         STATE SECURITIES LAWS OR (iii) THE TRANSFER IS MADE PURSUANT TO RULE
         144 UNDER THE SECURITIES ACT OF 1933.

8.       VENDORS UNDERTAKING

         For the purpose of assuring to the Purchaser the full benefit of the
         business and goodwill of the Company the Vendor undertakes with the
         Purchaser that for the period of two years after Completion

<PAGE>

         the Vendor will not carry on or be engaged in competition with the
         business of the Company either on his own behalf of in conjunction
         with or on behalf of any other person, firm or body corporate. The
         Business of the Company means the manufacture of illumination products
         including but not limited to light emitting diodes (LED), lasers,
         fibre optics and fluorescent illuminators used in industrial
         inspection applications.

9.       COMPLETION

9.1      Completion shall take place at the offices of Ronan Daly Jermyn
         Solicitors, 12 South Mall, Cork on the Completion Date and all matters
         set out at subclauses 9.2 and 9.3 shall be effected.

9.2      The Purchaser shall furnish on completion:

         i.        Original share/stock certificates in relation to the
                   Allotment Shares registered in the name of the Vendor.

        ii.        Certificate of Purchaser pursuant to clause 6.1.2 and,

       iii.        Certified copy Resolution of Purchaser pursuant to
                   clause 6.1.3.

9.3      The Vendor shall deliver to the Purchaser:

         i.        Duly completed and signed share transfer accompanied by the
                   relative share certificate in respect of the Shares in
                   favour of the Purchaser.

        ii.        The Warranties executed under the seal of the Vendor.

       iii.        The resignation of the Vendor as Director of the Company
                   together with the written acknowledgement that he/she has
                   no claim whatsoever against the Company.

10.      AGREEMENT

This Agreement constitutes the whole agreement between the parties hereto
relating to its subject matter and no variations hereof shall be effective
unless in writing.

11.      CLAUSE HEADINGS

The clause headings in this Agreement are for the convenience of the parties
only and shall not affect its interpretation.

12.      GOVERNING LAW

The construction, validity and performance of this Agreement shall be governed
by the laws of Ireland.

<PAGE>

                                    SCHEDULE

Warranties

1.       The Vendor is the sole beneficial owner of the Shares and the Purchaser
         on Completion will have good and marketable title to the Shares and the
         Shares are free from all liens, charges and encumbrances.

2.       There are no agreements or arrangements in force, other than this
         Agreement which grant to any person the right to call for the transfer
         of the Shares.

SIGNED by the Vendor
in the presence of:

SIGNED for and on behalf
of the Purchaser in the
presence of:

<PAGE>

                      Dated the           day of       2000

                                     ANNE KELLY
                                      (VENDOR)

                                         AND

                                  STOCKER & YALE INC.
                                      (PURCHASER)

                                       AGREEMENT

                                  Ronan Daly Jermyn
                                  Solicitors
                                  12 South Mall
                                  Cork
                                  Ref: Corkopt 9367/000530 Kelly Agreement

<PAGE>

THIS AGREEMENT made the day of 2000 BETWEEN UNIVERSITY COLLEGE CORK -
NATIONAL UNIVERSITY OF IRELAND, CORK (formerly known as University College
Cork) of Western Road, Cork (hereinafter called the "Vendor") of the one part
and STOCKER & YALE INC. a Massachusetts corporation with a principal place of
business located at 32 Hampshire Road, Salem, New Hampshire, USA (hereinafter
called the "Purchaser").

NOW IS IT HEREBY AGREED AS FOLLOWS:

1.       DEFINITIONS

1.1      In this Agreement, unless the context otherwise requires, the following
         words and expressions shall have the following meanings:

         "Company" means Corkopt Limited, a company registered in Ireland under
         registration number 218133.

         "Completion" means completion under clause 9 of this Agreement.

         "Contract Date" means the date of this Agreement.

         "Completion Date" means the date of completion of the Sale of the
         Shares being the date on which the share certificates for the Shares
         are delivered to the Purchaser.

         "Latest Completion Date" means the 30th June 2000.

         "Issued Share Capital" means the entire issued share capital of the
         Company comprising the following: 31, 312 "A" ordinary shares of
         (pound)1 each, 36,534 "C" ordinary shares of (pound)1 each, 10,000
         redeemable preference shares of (pound)1 each, BUT EXCLUDING the
         297,000 "B" ordinary shares of (pound)1 each issued under the Business
         Expansion Scheme.

         "Shares" means 2,051 "A" ordinary shares of IR(pound)1 each in the
         share capital of the Company registered in the name of the Vendor.

         "Warranties" means the warranties to be given by the Vendor as set out
         in the Schedule hereto.

1.2      Words denoting the singular shall include the plural and vice versa.
         Words denoting any gender shall include all genders and words denoting
         persons shall include corporations.

2.       SALE AND PURCHASE

Subject to clause 3 below, the Vendor shall sell as beneficial owner and the
Purchaser shall purchase the Shares free from all liens, charges and
encumbrances and with all rights now or hereafter attaching thereto with
effect from completion.

<PAGE>

3.       CONDITION PRECEDENT

The within sale is subject to the Purchaser on or prior to the Completion
Date acquiring all of the Issued Share Capital. If the Purchaser has not
acquired the entirety of the Issued Share Capital by the Latest Completion
Date, the Purchaser may by notice in writing rescind the within Agreement
which shall then be at an end.

4.       PURCHASE PRICE

4.1      In consideration for the transfer of the Shares, the Purchaser will
         issue to the Vendor 4,106 Shares of the Purchaser's common stock
         (hereinafter called "the Allotment Shares"), subject to the adjustment
         referred to at subclause 4.2, on the Completion Date.

4.2      At completion, the following adjustments shall be made to the number
         of the Allotment Shares.

         If the average closing price of the Purchaser's Common Stock as quoted
         on the Nasdaq market for the five business days preceding the Contract
         Date and for the avoidance of doubt not including the date of signing
         of this Agreement (hereinafter called the "Completion Price") is less
         than $35 per share, then the number of shares comprised in the
         Allotment Shares will be increased to the number derived from dividing
         $2,194,202 by 75% of the Completion Price. If the Closing Price is
         greater than $48 per share, the number of shares comprising the
         Allotment Shares will be decreased to the number derived from dividing
         $2,194,202 by 75% of the Completion Price.

5.       REPRESENTATIONS AND WARRANTIES OF PURCHASER

         As a material inducement to the Vendor to enter this Agreement and sell
         the Shares, the Purchaser hereby represents and warrants to the Vendor
         as follows:

5.1      Organization; Power. The Purchaser is a Company duly incorporated and
         validly existing under the laws of the State of Massachusetts, and has
         all requisite corporate power and authority to enter into this
         Agreement and perform its obligations hereunder.

5.2      Authorization. The execution, delivery, and performance by the
         Purchaser of this Agreement and all other agreements contemplated
         hereby to which the Purchaser is a party have been duly and validly
         authorized by all necessary corporate action of the Purchaser, and this
         Agreement and each such other agreement, when executed and delivered by
         the parties thereto, will constitute the legal, valid, and binding
         obligation of the Purchaser enforceable against it in accordance with
         its terms, except as enforceability may be limited by applicable
         bankruptcy, insolvency, and similar statutes affecting creditors'
         rights generally and judicial limits on equitable remedies.

5.3      No Conflict with Other Instruments or Agreements. The execution,
         delivery, and performance by the Purchaser of this Agreement and all
         other agreements contemplated hereby to which the Purchaser is a party
         will not result in a breach or violation of, or constitute a default
         under, its Articles of Incorporation or Bylaws or any material
         agreement to which the Purchaser is a party or by which the Purchaser
         is bound.

<PAGE>

5.4      Governmental Authorities.

          (i) the Purchaser is not required to submit any notice, report, or
         other filing with any governmental or regulatory authority in
         connection with the execution and delivery by the Purchaser of this
         Agreement and the consummation of the purchase and

         (ii) no consent, approval, or authorization of any governmental or
         regulatory authority is required to be obtained by the Purchaser or any
         affiliate in connection with the Purchaser's execution, delivery, and
         performance of this Agreement and the consummation of this purchase.

5.5      Litigation. There are no actions, suits, proceedings, or governmental
         investigations or inquiries pending or, to the knowledge of the
         Purchaser, threatened against the Purchaser or its properties, assets,
         operations, or businesses that might delay, prevent, or hinder the
         consummation of this purchase.

5.6      Tax Liability. To the extent the Purchaser deems necessary, the
         Purchaser has reviewed with the Purchaser's own tax advisors the
         federal, state, local and foreign tax consequences of this investment
         and the transactions contemplated by this Agreement. The Purchaser
         relies solely on such advisors and not on any statements or
         representations of the Company or any of its agents. The Purchaser
         understands that the Purchaser (and not the Company) shall be
         responsible for the Purchaser's own tax liability that may arise as a
         result of this investment or the transactions contemplated by this
         Agreement.

5.7      Disclosure. To the Purchasers knowledge this agreement when taken a
         whole does not contain any untrue statement of a material fact
         concerning the Purchaser or omit to state a material fact necessary in
         order to make the statements concerning the Purchaser contained herein
         not misleading.

5.8      Litigation. There are no actions, suits, proceedings or investigations
         pending against the Purchaser or the Purchaser's properties before any
         court or governmental agency (nor, to the Purchaser's knowledge, is
         there any threat thereof) which would impair in any way the Purchaser's
         ability to enter into and fully perform the Purchaser's commitments and
         obligations under this Agreement or the transactions contemplated
         hereby.

5.9      Compliance with Other Instruments. The execution, delivery and
         performance of and compliance with this Agreement, and the issuance of
         shares will not result in any material violation of, or conflict with,
         or constitute a material default under, any Purchaser's articles of
         incorporation or bylaws or any of the Purchaser's material agreements
         nor result in the creation of any mortgage, pledge, lien, encumbrance
         or charge against any of the assets or properties of the Company or the
         Shares.

5.10     No Brokers or Finders Fees. The Purchaser has not, and will not, incur,
         directly or indirectly, as a result of any action taken by the
         Purchaser, any liability for brokerage or finders' fees or agents'
         commissions or any similar charges in connection with this Agreement.

6.       CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER AND THE VENDOR

6.1      Each and every obligation of the Vendor under this Agreement is subject
         to the satisfaction, at or before the Completion Date, of each of the
         following conditions:

<PAGE>

         i.       Representations and Warranties; performance. Each of the
                  representations and warranties made by the Purchaser herein
                  will be true and correct in all material respects as of the
                  Completion Date with the same effect as though made at that
                  time except for changes contemplated, permitted or required by
                  this Agreement; the Purchaser will have performed and complied
                  with all agreements, covenants and conditions required by this
                  Agreement to be performed and complied with by it prior to the
                  Completion Date; and the Vendor will have received at the
                  Closing a certificate of the Purchaser signed by the President
                  and the Chief Financial Officer of the Purchaser stating that
                  each of the representations and warranties made by the
                  Purchaser herein is true and correct in all material respects
                  as of the Closing except for changes contemplated, permitted
                  or required by this Agreement and that the Purchaser has
                  performed and complied with all agreements, covenants and
                  conditions required by this Agreement to be performed and
                  complied with by it prior to the Closing.

        ii.       No Proceeding or Litigation. No action, suit, or proceeding
                  before any court (other than suits seeking monetary damages
                  only and in the aggregate sum of less than $10,000) and any
                  governmental or regulatory authority will have been commenced
                  and be continuing, and no investigation by any governmental or
                  regulatory authority will have been commenced and be
                  continuing, and no action, investigation, suit, or proceeding
                  will be threatened at the time of Closing, against the Vendor,
                  the Company, or the Purchaser or any of their affiliates,
                  associates, officers, or directors, seeking to restrain,
                  prevent, or change this purchase, questioning the validity or
                  legality of this purchase, or seeking damages in connection
                  with this purchase.

       iii.       Corporate Action. The Purchaser will have furnished to the
                  Vendor a copy, certified by the Secretary or an Assistant
                  Secretary of the Purchaser, of the resolutions of the
                  Purchaser authorizing the execution, delivery, and performance
                  of this Agreement.

6.2      Each and every obligation of the Purchaser under this Agreement is
         subject to the satisfaction at or before the Completion Date of each of
         the following conditions:

         i.       Representations and Warrants; performance. Each of the
                  representations and warranties made by the Vendor herein will
                  be true and correct in all material respects as of the
                  Completion Date with the same affect as though made at that
                  time except for changes contemplated, permitted or required by
                  this Agreement; the Vendor will have performed and complied
                  with all agreements, covenants and conditions required by this
                  Agreement to be performed and complied with by it prior to the
                  Closing; and the Purchaser will have received at the closing
                  the Warranties executed under the seal of the Vendor and the
                  Vendor has performed and complied with all agreements,
                  covenants and conditions required by this Agreement to be
                  performed and complied with by it prior to the Closing.

        ii.       No Proceeding or Litigation. No action, suit, or proceeding
                  before any court and any governmental or regulatory authority
                  will have been commenced and be continuing, and no
                  investigation by any governmental or regulatory authority will
                  have been commenced and be continuing, and no action,
                  investigation, suit, or proceeding will be threatened at the
                  time of Closing, against the Vendor, the Company, or the
                  Purchaser or any of their affiliates,

<PAGE>

                  associates, officers, or directors, seeking to restrain,
                  prevent, or change this purchase, questioning the validity
                  or legality of this purchase, or seeking damages in
                  connection with this purchase.

7.       SECURITIES

7.1      The Vendor is acquiring the Purchasers Common Stock for investment for
         the Vendors own account, not as a nominee or agent, and not with the
         view to, or for resale in connection with, any distribution thereof.
         The Vendor understands that the Purchaser's Common Stock has not been,
         and will not be, registered under the Securities Act of 1933 (the
         "Securities Act") or the securities laws of any state by reason of a
         specific exemption from the registration provisions of the Securities
         Act and the applicable state securities laws, the availability of which
         depends upon, among other things, the bona fide nature of the
         investment intent and the accuracy of the Vendors' representations as
         expressed herein. The Vendor is acquiring the Shares without
         expectation, desire, or need for resale and not with the view toward
         distribution, resale, subdivision or fractionalization of the Shares.
         The jurisdiction of residence of theVendor is the Republic of Ireland
         and the offer and sale of the Purchaser's Common Stock to such Vendor
         will take place in such jurisdiction. The Vendor is knowledgeable and
         experienced in making of investments of the type involved in the
         acquisition of the Purchaser's Common Stock pursuant to this Agreement
         and is able to bear the economic risk of loss of its investment in
         Purchaser. The Vendor has received and reviewed a copy of Purchaser's
         most recent Annual Report on Form 10-K and a proxy statement and has
         been granted the opportunity to ask such questions regarding the
         Purchaser's affairs either directly or through its authorized
         representative as deemed necessary in respect of the Vendor's decision
         to acquire Purchaser Common Stock pursuant to this Agreement.

7.2      The Vendor understands that the Purchaser's Common Stock cannot be
         resold in a transaction to which the Securities Act and state
         securities laws apply unless (i) subsequently registered under the
         Securities Act and applicable state securities laws of (ii) exemptions
         from such registrations are available. The Purchaser is aware of the
         provisions of Rule 144 promulgated under the Securities Act which
         permit limited resale of shares purchased in a private transaction
         subject to the satisfaction of certain conditions.

7.3      The Vendor understand that the certificates for the Purchaser's Common
         Stock will bear a legend substantially similar to the following:

         THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933. THE COMPANY WILL NOT TRANSFER THIS CERTIFICATE UNLESS (i) THERE
         IS AN EFFECTIVE REGISTRATION COVERING THE SHARES REPRESENTED BY THIS
         CERTIFICATE UNDER THE SECURITIES ACT OF 1933 AND ALL APPLICABLE STATE
         SECURITIES LAWS, (ii) IT FIRST RECEIVES A LETTER FROM AN ATTORNEY,
         ACCEPTABLE TO THE BOARD OF DIRECTORS OR ITS AGENTS, STATING THAT IN THE
         OPINION OF THE ATTORNEY THE PROPOSED TRANSFER IS EXEMPT FROM
         REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND UNDER ALL APPLICABLE
         STATE SECURITIES LAWS OR (iii) THE TRANSFER IS MADE PURSUANT TO RULE
         144 UNDER THE SECURITIES ACT OF 1933.

7.4      This Agreement replaces and supercedes all previous agreements,
         understandings and arrangements

<PAGE>

         between the parties hereto including but by no means limited to the
         UCC/NMRC - Corkopt Limited Interaction Agreement dated 19th November
         1997. For the avoidance of doubt the Vendor hereby rescinds the said
         agreement and hereby acknowledges that the Vendor shall henceforth
         have no rights, entitlements or obligations under the terms of the
         said agreement.

9.       COMPLETION

9.1      Completion shall take place at the offices of Ronan Daly Jermyn
         Solicitors, 12 South Mall, Cork on the Completion Date and all matters
         set out at subclauses 9.2 and 9.3 shall be effected.

9.2      The Purchaser shall furnish on completion:

         i.        Original share/stock certificates in relation to the
                   Allotment Shares registered in the name of the Vendor.

        ii.        Certificate of Purchaser pursuant to clause 6.1(b) and,

       iii.        Certified copy Resolution of Purchaser pursuant to
                   clause 6.1(c).

9.3      The Vendor shall deliver to the Purchaser:

         i.  Duly completed and signed share transfer accompanied by the
             relative share certificate in respect of the Shares in favour
             of the Purchaser.

        ii.  The Warranties executed under the seal of the Vendor.

10.      AGREEMENT

This Agreement constitutes the whole agreement between the parties hereto
relating to its subject matter and no variations hereof shall be effective
unless in writing.

11.      CLAUSE HEADINGS

The clause headings in this Agreement are for the convenience of the parties
only and shall not affect its interpretation.

12.      GOVERNING LAW

The construction, validity and performance of this Agreement shall be governed
by the laws of Ireland.

                                    SCHEDULE

Warranties

1.       The Vendor is the sole beneficial owner of the Shares and the Purchaser
         on Completion will have good and marketable title to the Shares and the
         Shares are free from all liens, charges and encumbrances.

<PAGE>

2.       There are no agreements or arrangements in force, other than this
         Agreement which grant to any person the right to call for the transfer
         of the Shares.

SIGNED by the Vendor
in the presence of:

SIGNED for and on behalf
of the Purchaser in the
presence of:

<PAGE>

                                Dated the   day of            2000

                                UNIVERSITY COLLEGE CORK - NATIONAL
                                UNIVERSITY OF IRELAND, CORK

                                        (VENDOR)

                                AND

                                STOCKER & YALE INC
                                                 (PURCHASER)

                                AGREEMENT

                                Ronan Daly Jermyn
                                Solicitors
                                12 South Mall
                                Cork
                                Ref: Corkopt 9367/000530 UCC Agreement

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 8-K
                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         Date of Report (Date of earliest event reported) June 16, 2000

                                StockerYale, Inc.
             (Exact name of registrant as specified in its charter)

<TABLE>
    <S>                              <C>                  <C>
        Massachusetts                 000-27372            04-2114473
   (State or other jurisdiction      (Commission          (IRS Employer
    of incorporation)                 File Number)         Identification No.)
</TABLE>

     32 Hampshire Road, Salem, New Hampshire                  03079
    (Address of principal executive offices)                (Zip Code)

        Registrant's telephone number, including area code (603) 893 8778

                              Stocker & Yale, Inc.
         (Former name or former address, if changed since last report.)

<PAGE>

Item 2.  Acquisition or Disposition of Assets.

          On June 16, 2000, StockerYale, Inc., formerly Stocker & Yale, Inc.,
(the "Company" or "Registrant") completed the acquisition of CorkOpt Limited
("CorkOpt"). The Company purchased all of the outstanding voting stock of
CorkOpt for a total price of $2,449,983 consisting of $255,798 in cash and
62,691 shares of Company Common Stock. CorkOpt is located in Cork, Ireland
and specializes in the development and manufacture of industrial illumination
products. CorkOpt has four classes of capital stock consisting of: Class A
Shares, which the Company purchased from several stockholders for 62,691
shares of the Company's Common Stock, based on a valuation of $35 per share;
Class B Business Expansion Scheme Shares, which are non-voting shares that
remain outstanding and are redeemable by CorkOpt at a fixed amount not prior
to April 1, 2002 and April 1, 2003, at an aggregate redemption price of IR
L356,400; and Class C Shares and Cumulative Redeemable Preference Shares for
which the Company paid $255,798. The holders of the Class A Shares, consisted
of the founder, Managing Director and principal stockholder, William Kelly,
his wife, University College Cork, and three associates who were active in
the formation of CorkOpt. The holders of the Class B shares consist of
approximately 30 investors including some of the Class A Shareholders, and
the holder of the Class C and Cumulative Redeemable Preference Shares was
Enterprise Ireland, a public entity which promotes business development in
Ireland. The Company used its own cash for the acquisition. The Company
intends to operate CorkOpt as an Irish subsidiary.

Item 7.   Financial Statements, Pro Forma Financial Information and Exhibits

         (c)      EXHIBITS

2.1      Stock Purchase Agreement by and among Stocker & Yale, Inc., CorkOpt
         Ltd., W.M. Kelly, Gary Duffy and Thomas Meade.

2.2      Agreement between University College Cork - National University of
         Ireland, Cork and Stocker & Yale, Inc.

2.3      Agreement between Anne Kelly and Stocker & Yale, Inc.

2.4      Agreement between Gerard Conlon and Stocker & Yale, Inc.

2.5      Agreement between Enterprise Ireland and Stocker & Yale, Inc.

2.6      Deed of Tax Indemnity by and among Stocker & Yale, Inc., CorkOpt Ltd.,
         W.M. Kelly, Gary Duffy and Thomas Meade.

2.7      Deed of Indemnity by Liam Kelly in favour of CorkOpt Ltd., and Stocker
         & Yale, Inc.

10.1     Employment Agreement between CorkOpt Ltd. and W. M. Kelly.

10.2     Assignment of certain inventions by William Kelly to CorkOpt, Ltd.

10.3     License Agreement between William Kelly and CorkOpt Ltd.

SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                                 STOCKERYALE, INC.
                                                 -----------------
                                                 (Registrant)

<PAGE>

Date June 30, 2000                               /GARY B. GODIN/
                                                 -----------------
                                                 Gary B. Godin
                                                 Senior Vice President
                                                 Chief Financial Officer<PAGE>

EXHIBIT 10.1

                            NON-COMPETITION AGREEMENT

         This Agreement (the "Agreement") is made and entered into as of June19,
2000 by and between Stratus Services Group, Inc., a Delaware corporation
("Stratus"), Outsource International, Inc., a Florida corporation ("OSI") and
Outsource International of America, Inc. ("OSIA").

                                    RECITALS:

         OSI and OSIA (hereinafter sometimes collectively referred to as
"Outsource") have agreed to restrict their ability to open up a Tandem business
in Philadelphia and Union Counties in the Commonwealth of Pennsylvania and
Somerset, Middlesex, Passaic, Bergen, Essex, Hudson, Union, Mercer, Monmouth and
Ocean Counties in the State of New Jersey (the "Territory") as hereinafter
provided; and

         NOW THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

         1.       NONCOMPETITION AGREEMENT.

                  1.1 Except as set forth in Section 1.2 below, Outsource agrees
         that without the prior written consent of Stratus, Outsource shall not:

                  (a) for a period from the date of this Agreement and up to and
         including June 19, 2002, engage in a Competitive Business (as hereafter
         defined) or perform services, directly or indirectly, on behalf of
         itself or in connection with any other person, or as an employee,
         proprietor, owner, partner, director, officer, associate, shareholder,
         agent, contractor, employer, or consultant, of any entity, within the
         Territory;

                  (b) for a period from the date of this Agreement and up to and
         including June 19, 2002, (i) have any direct or indirect interest, as a
         disclosed or beneficial owner, in any Competitive Business within the
         Territory; (ii) perform services as a director, officer, manager,
         employee, consultant, representative, agent, independent contractor or
         otherwise for any Competitive Business within the Territory; or (iii)
         have any direct or indirect interest in any entity which is granted or
         is granting franchises or licenses to others to operate a Competitive
         Business within the Territory;

                  (c) for a period from the date of this Agreement and up to and
         including June 19, 2003, solicit or recruit any employee of Stratus or
         its affiliates; and/or directly or indirectly, on behalf of itself or
         any other person, or as an employee, proprietor, consultant, agent,
         contractor, employer, affiliate, partner, owner, officer, director,
         associate, or stockholder of any other person or entity, or in any
         other capacity, solicit, divert, take away or interfere with any of the
         business, customers, clients, contractors, trade or patronage of
         Stratus or its affiliates.

                  1.2 The restrictions contained in Section 1.1 shall also apply
         to the granting of new "Tandem" franchises within the Territory by
         Outsource or any of its affiliates.

                  1.3 In the event that any provisions of Section 1.1 or 1.2
         should be deemed to exceed the time or geographic limitations permitted
         under any applicable law, then such provisions shall

<PAGE>

         be, and hereby is, reformed to the maximum time or geographic
         limitations permitted under such applicable law.

                  1.4 As used herein, the term "Competitive Business" shall mean
         any business operating a temporary industrial staffing business, or any
         other business that provides the same or similar services as are
         customarily offered by Outsource in its "Tandem" businesses.

         2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns, except that neither party may assign its obligations
hereunder without the prior written consent of the other parties hereto. Any
assignment in contravention of this provision shall be void.

         3. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in writing and is signed by the parties hereto. No waiver by any other party
hereto at any time of any breach by any other party hereto of, or compliance
with, any provision of this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions at the same or at any
prior or subsequent time.

         4. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey. The sole venue for any
action arising hereunder shall be Monmouth County, New Jersey.

         5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall constitute an original and all of which
together shall constitute one and the same Agreement. Facsimile signatures
shall have the same effect as original signatures.

         IN WITNESS WHEREOF, the parties have executed and caused this Agreement
to be executed and delivered as of the date first written above.

Witness:
                                    STRATUS SERVICES GROUP, INC.

/s/ J. Todd Raymond                 By: /s/ Joseph J. Raymond
                                        -----------------------------------
                                        Joseph J. Raymond, President & CEO

                                    OUTSOURCE INTERNATIONAL, INC.

/s/ Joseph C. Wasch                 By: /s/ Scott R. Francis
                                        -----------------------------------
                                        Scott R. Francis, Vice President

                                    OUTSOURCE INTERNATIONAL OF
                                    AMERICA, INC.

/s/ Joseph C. Wasch                 By: /s/ Scott R. Francis
                                        -----------------------------------
                                        Scott R. Francis, Vice President

                                       2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}]]