Document:

Common Stock Purchase Warrant by StockerYale, Inc. to Laurus Master Fund, Ltd.

 EXHIBIT 10.9 
  
 THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO STOCKERYALE, INC. THAT SUCH REGISTRATION IS NOT REQUIRED. 
  
 Right to Purchase 150,000 Shares of 
 Common Stock of StockerYale, Inc. (subject

 to adjustment as provided herein) 
  
 COMMON STOCK PURCHASE WARRANT 
  

			
	No. 1	 	Issue Date: July 13, 2005

  
 STOCKERYALE, INC., a
corporation organized under the laws of the State of Massachusetts (the “Company”), hereby certifies that, for value received, LAURUS MASTER FUND, LTD., or assigns (the “Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company from and after the Issue Date of this Warrant and at any time or from time to time before 5:00 p.m., New York time, through July 13, 2012, (the “Expiration Date”), up to 150,000 fully
paid and nonassessable shares of Common Stock (as hereinafter defined), $.001 par value, of the Company, at the Exercise Price (as defined below). The number and character of such shares of Common Stock and the Exercise Price are subject to
adjustment as provided herein. 
  
 As used herein the following
terms, unless the context otherwise requires, have the following respective meanings: 
  
 (a) The term “Company” shall include StockerYale, Inc. and any corporation which shall succeed or assume the obligations of StockerYale, Inc. hereunder. 
  
 (b) The term “Common Stock” includes (i) the Company’s Common
Stock, par value $.001 per share, and (ii) any other securities into which or for which any of the securities described in (i) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

  
 (c) The term “Other Securities” refers to any stock
(other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise. 

 (d) The term “Exercise Price” shall mean $0.80 per share of Common Stock subject to this
Warrant. 
  
 1. Exercise of Warrant. 
  
 1. 1 Number of Shares Issuable upon Exercise. From and after the date
hereof through and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, by delivery of an original or fax copy of the exercise notice attached hereto as Exhibit A (the
“Exercise Notice”), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. 
  
 1.2 Fair Market Value. Fair Market Value of a share of Common Stock as of a particular date (the “Determination Date”) shall mean:

  
 (a) If the Company’s Common Stock is traded on an
exchange or is quoted on the National or SmallCap Market of The Nasdaq Stock Market, Inc.(“Nasdaq”), then the closing or last sale price, respectively, reported for the last business day immediately preceding the Determination Date.

  
 (b) If the Company’s Common Stock is not traded on an
exchange or on the Nasdaq but is traded on the NASD OTC Bulletin Board or BBX Exchange, then the mean of the average of the closing bid and asked prices reported for the last business day immediately preceding the Determination Date. 
  
 (c) Except as provided in clause (d) below, if the Company’s Common
Stock is not publicly traded, then as the Holder and the Company agree or in the absence of agreement by arbitration in accordance with the rules then in effect of the American Arbitration Association, before a single arbitrator to be chosen from a
panel of persons qualified by education and training to pass on the matter to be decided. 
  
 (d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s charter, then all amounts to be
payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter,
assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of the Warrant are outstanding at the Determination Date. 
  
 2. Procedure for Exercise. 
  

2.1 Delivery of Stock Certificates, etc., on Exercise. The Company agrees that the shares of Common Stock purchased upon exercise of this
Warrant shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. As soon as practicable
after the exercise of this Warrant in full or in 

  

 2 

 
part, and in any event within 3 business days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause
to be issued in the name of and delivered to the Holder, or as such Holder (upon payment by such holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly
and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such holder would otherwise be entitled, cash equal
to such fraction multiplied by the then Fair Market Value of one full share, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1
or otherwise. 
  
 2.2 Exercise. 
  
 (a) Payment may be made either in (i) cash or by certified or official bank
check payable to the order of the Company equal to the applicable aggregate Exercise Price, (ii) by delivery of the Warrant, Common Stock and/or Common Stock receivable upon exercise of the Warrant in accordance with Section (b) below, or (iii) by a
combination of any of the foregoing methods, for the number of Common Shares specified in such form (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the holder per the
terms of this Warrant) and the Holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein. 
  
 (b) Notwithstanding any provisions herein to the contrary, if the Fair Market
Value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value (as determined below) of
this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Exercise Notice in which event the Company shall issue to the Holder a number of shares of
Common Stock computed using the following formula: 
  
 X=Y
(A-B) 
             A 
  

					
	Where	  	X=	  	the number of shares of Common Stock to be issued to the Holder
			
	 	  	Y=	  	the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such
calculation)
			
	 	  	A=	  	the Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation)
			
	 	  	B=	  	Exercise Price (as adjusted to the date of such calculation)

  

 3 

 3. Effect of Reorganization, etc.; Adjustment of Exercise Price. 
  
 3.1 Reorganization, Consolidation, Merger, etc. In case at any time
or from time to time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Warrant, on the exercise hereof as
provided in Section 1 at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other Securities) issuable on such
exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be,
if such Holder had so exercised this Warrant, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4. 
  
 3.2 Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the
Company, prior to such dissolution, shall at its expense deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of the Warrant after the effective date of such
dissolution pursuant to Section 3.1 to a bank or trust company having its principal office in New York, NY, as trustee for the Holder of the Warrant. 
  
 3.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property receivable on the exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any such stock or other securities, including, in the case of any such transfer,
the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4. In the event this Warrant does not continue in full
force and effect after the consummation of the transactions described in this Section 3, then only in such event will the Company’s securities and property (including cash, where applicable) receivable by the holders of the Warrant be delivered
to the Trustee as contemplated by Section 3.2. 
  
 4.
Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common
Stock, or (c) combine its outstanding shares of the Common Stock into a 

  

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smaller number of shares of the Common Stock, then, in each such event, the Exercise Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Exercise Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Exercise Price then in effect. The Exercise Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event
or events described herein in this Section 4. The number of shares of Common Stock that the holder of this Warrant shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be increased to a number determined by
multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Exercise Price that would otherwise (but for the provisions
of this Section 4) be in effect, and (b) the denominator is the Exercise Price in effect on the date of such exercise. 
  
 5. Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on
the exercise of the Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate
setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of
Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to
the holder of the Warrant and any Warrant agent of the Company (appointed pursuant to Section 11 hereof). 
  
 6. Reservation of Stock, etc., Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant. 
  
 7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a “Transferor”) with respect to any or all of the Shares. On the surrender for exchange of this Warrant, with the Transferor’s endorsement in the form of Exhibit B attached hereto
(the “Transferor Endorsement Form”) and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, a legal opinion from the
Transferor’s counsel that such transfer is exempt from the registration requirements of applicable securities laws, the Company at its expense but with payment by the 

  

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Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of
the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or
faces of the Warrant so surrendered by the Transferor. 
  
 8.
Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an
indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor. 
  
 9. Registration Rights.
The Holder of this Warrant has been granted certain registration rights by the Company. These registration rights are set forth in a Registration Rights Agreement entered into by the Company and the Holder at or prior to the issue date of
this Warrant. 
  
 10. Maximum Exercise. The Holder shall
not be entitled to exercise this Warrant on an exercise date, in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its
affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant with respect to which the determination of this proviso is being made on an exercise date, which would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock of the Company on such date. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to aggregate exercises which would result in the issuance of more than 4.99%. The
restriction described in this paragraph may be revoked upon 75 days prior notice from the Holder to the Company and is automatically null and void upon an event of default under any of the Secured Convertible Notes previously issued by the Company
to the Holder. Notwithstanding the foregoing, to the extent required by the Nasdaq Marketplace Rules, at no time may the Holder exercise all or part of this Warrant to acquire a number of shares of Common Stock that, together with any shares of
Common Stock acquired upon conversion of all or any part of any Secured Convertible Notes issued by the Company to the Holder prior to the date hereof or the interest payable thereon, would in the aggregate exceed 19.99% of the outstanding shares of
the Company’s Common Stock, determined as of the date hereof, without first obtaining stockholder approval of such issuance of Common Stock (the “Conversion Limitations”). In obtaining stockholder approval, stockholders shall
not be entitled to vote shares of Common Stock acquired upon exercise of this Warrant and/or conversion of any Secured Convertible Notes on such matter. In the event such approval is so required, then the Company shall (i) within fifteen (15) days
following notice by the Holder to convert an amount in excess of the Conversion Limitations file proxy materials relating to such stockholder approval with the Securities and Exchange Commission and (ii) use its best efforts to obtain as promptly as
possible such stockholder approval. 
  

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 11. Warrant Agent. The Company may, by written notice to the Holder of this Warrant, appoint an
agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 
  
 12. Transfer on the Company’s Books. Until this Warrant is transferred on the books of the Company, the Company may treat the registered
Holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 
  
 13. Notices, etc. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such holder or, until any such Holder furnishes to the Company an address, then to, and at the address of, the last Holder of this Warrant who
has so furnished an address to the Company. 
  
 14.
Voluntary Adjustment by the Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

  
 15. Miscellaneous. This Warrant and any term
hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought concerning the transactions contemplated by this Warrant shall be brought only in the state courts of New York or in the federal
courts located in the state of New York; provided, however, that the Holder may choose to waive this provision and bring an action outside the state of New York. The individuals executing this Warrant on behalf of the Company agree to submit to the
jurisdiction of such courts and waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Warrant is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms
hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. The Company acknowledges that legal counsel participated in the preparation of this Warrant and,
therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Warrant to favor any party against the other party. 
  

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 IN WITNESS WHEREOF, the Company has executed this Warrant under seal as of the date first written above.

  

			
	 STOCKERYALE, INC.

		
	By:	 	 /s/ Mark W. Blodgett

	 	 	Mark W. Blodgett
	 	 	President and CEO

  

	
	 Witness:

	
	

  
  

 8 

 Exhibit A 
  

FORM OF SUBSCRIPTION 
  
 (To be signed only on exercise of Warrant) 
  
 TO: StockerYale, Inc. 
  
 The undersigned, pursuant to the provisions set forth in the attached Warrant (No.            ), hereby irrevocably elects to purchase (check
applicable box): 
  
  ̈                shares of the Common Stock covered by such Warrant; or 
  
  ̈   the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2. 
  
 The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Warrant, which
is $             . Such payment takes the form of (check applicable box or boxes): 
  
  ̈  
$             in lawful money of the United States; and/or              the cancellation of such portion of the
attached Warrant as is exercisable for a total of              shares of Common Stock (using a Fair Market Value of
$             per share for purposes of this calculation); and/or 
  
  ̈   the cancellation of such number of shares of Common
Stock as is necessary, in accordance with the formula set forth in Section 2, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchaseable pursuant to the cashless exercise procedure set forth in Section 2.

  
 The undersigned requests that the certificates for such shares be issued in
the name of, and delivered to              whose address is 
                                       
                                        
                                        
                                        
                                        
          . 
  
 The
undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended
(the “Securities Act”) or pursuant to an exemption from registration under the Securities Act. 
  

							
	Dated:                     	 	Signature:
                                        
                    
	 	 	 	 	 (Signature must conform to name of holder
 as
specified on the face of the warrant)

  

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 Exhibit B 
  

FORM OF TRANSFEROR ENDORSEMENT 
  
 (To be signed only on transfer of Warrant) 
  
 For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the
right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of StockerYale, Inc. to which the within Warrant relates specified under the headings “Percentage Transferred” and “Number
Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of StockerYale, Inc. with full power of substitution in the premises. 
  

					
	Transferees	 	Percentage Transferred	 	Number Transferred

  

	
	Dated:
                                
	_________________________________________________________________
	(Signature must conform to name of holder as specified on the face of the Warrant)
	
	Signed in the presence
of:                                       
                                        
 
	(Name)
                                        
                                        
                            
	(Address)
                                        
                                        
                        
	(City, State, Zip)
                                        
                                        
            
	
	ACCEPTED AND AGREED:
	
	[TRANSFEREE]
                                        
                                        
                
	(Name)
                                        
                                        
                                
	(Address)
                                        
                                        
                            
	(City, State, Zip)
                                        
                                        
                

  

 10Amendment and Waiver between StockerYale, Inc. and Smithfield Fiduciary LLC

 Exhibit 10.10 
  
 AMENDMENT AND WAIVER 
  

This Amendment and Waiver (the “Amendment and Waiver”) is entered into by and between StockerYale, Inc., a Massachusetts corporation
(the “Borrower”), and Smithfield Fiduciary LLC (“Smithfield”) and is effective as of August 10, 2005. 
  
 WHEREAS, the Borrower issued a Secured Convertible Note to Smithfield on June 10, 2004 in the aggregate principal amount of $500,000 (the
“June 2004 Note”) payable on June 30, 2007 (the “June Note Maturity Date”); 
  
 WHEREAS, the Borrower issued a Secured Convertible Note to Smithfield on December 8, 2004 in the aggregate principal amount of $500,000 (the
“December 2004 Note”, together with the June 2004 Note, the “Notes”) payable on December 8, 2007 (the “December Note Maturity Date”); 
  
 WHEREAS, pursuant to Section 2.1 of each of the respective Notes, the Borrower is obligated to repay to Smithfield
1/32nd of the principal amount (the “Monthly Principal Amount”) of each Note together with interest
accrued thereon on the first business day of each consecutive calendar month starting 120 days following the date of each Note; 
  
 WHEREAS, in July 2005, the Borrower and Smithfield agreed to defer the payment of the Monthly Principal Amount due and payable under each Note for the
month of July 2005 until the respective maturity dates of each Note, with such amount to be included with the final payment due with respect to each Note on each Note’s Maturity Date (the “July Deferral”); 
  
 WHEREAS, in connection with the July Deferral, the Borrower issued (i) a
warrant to Laurus Master Fund, Ltd. (the “Laurus Warrant”), which party also agreed to defer the due date for certain principal amounts due under certain promissory notes, to purchase 150,000 shares of the Borrower’s common
stock (the “Common Stock”) for an exercise price of $0.80 per share, and (ii) a warrant (the “Smithfield Warrant”) to Smithfield to purchase 18,621 shares of Common Stock for an exercise price of $0.80 per share;

  
 WHEREAS, in connection with the issuance of the Laurus Warrant
and the Smithfield Warrant, Smithfield waived, solely with respect to the issuance of the Laurus Warrant and the Smithfield Warrant, the provisions of Section 3.7C of each of the respective Notes with respect to the adjustment of the conversion
price set forth in each Note; 
  
 WHEREAS, in connection with the
issuance of the Laurus Warrant and the Smithfield Warrant, the parties entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Borrower (i) agreed to register for resale on a
registration statement to be filed with the Securities and Exchange Commission the Common Stock issued or issuable upon exercise of the respective warrants, and (ii) granted the parties certain piggyback registration rights (the “Piggyback
Registration Rights”); 

 WHEREAS, the Borrower wishes to defer the payment of the Monthly Principal Amount due and payable under
each of the Notes for the months of August and September 2005 until the respective maturity dates of each Note and Smithfield wishes to allow the Borrower to defer payment of such Monthly Principal Amounts due for the months of August and September
2005 and furthermore to allocate and include such amounts with the final payments due with respect to each Note on each Note’s respective Maturity Date, as is more fully described in Sections 1, 2 and 3 below (collectively, the “August
Deferral”); 
  
 WHEREAS, in connection with the August
Deferral, the Borrower has agreed to issue 23,684 newly issued shares of Common Stock to Smithfield (the “August Shares”), with Piggyback Registration Rights to be granted to Smithfield with respect to such shares; 
  
 WHEREAS, in connection with the August Deferral, each of Laurus and
Smithfield has indicated a willingness to terminate all of the Borrower’s obligations to file a registration statement pursuant to Section 2 of the Registration Rights Agreement, but such parties are not willing to waive their Piggyback
Registration Rights thereunder with respect to such securities; and 
  
 WHEREAS, in connection with the August Deferral, Smithfield has agreed to unconditionally and irrevocably waive the provisions of Section 3.7C of each of the respective Notes regarding the adjustment of the Conversion Price (as defined in
each Note) but solely with respect to (i) the issuance of the August Shares, (ii) the issuance of securities by the Borrower in its next equity financing or financings (which shall be consummated no later than October 1, 2005) with gross proceeds to
the Borrower not to exceed $2,500,000 in the aggregate (the “PIPE Shares”) and (iii) up to 225,000 shares of Common Stock to be issued to Laurus on or about the date hereof, and Smithfield has further agreed that the Conversion
Price set forth in each of the Notes (as defined in each such Note) shall remain unaffected as a result of the issuance and sale of the August Shares and, the PIPE Shares and up to 225,000 shares of Common Stock to be issued to Laurus on or about
the date hereof. 
  
 NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
  
 I. DEFERRAL OF AUGUST AND SEPTEMBER 2005 PRINCIPAL PAYMENTS; WAIVER OF CERTAIN REGISTRATION RIGHTS; ISSUANCE OF SHARES; WAIVER OF CONVERSION PRICE ADJUSTMENT.

  
 1. June 2004 Note. Smithfield hereby agrees that
the Monthly Principal Amount due in August and September 2005 due from the Borrower to Smithfield under the June 2004 Note is hereby deferred until the June Note Maturity Date at which time the Monthly Principal Amount due in August and September
2005, plus all accrued but unpaid interest thereof (which interest shall continue to accrue through the June Note Maturity Date) shall be paid in full along with the final payment due on such date. Notwithstanding the foregoing, the Borrower shall
be obligated to pay all of the Monthly Interest Amount (as defined in the June 2004 Note) when due. 

 2. December 2004 Note. Smithfield hereby agrees that the Monthly Principal Amount for each of
August and September 2005 due from the Borrower to Smithfield under the December 2004 Note is hereby deferred until the December Note Maturity Date at which time the Monthly Principal Amount due in August and September 2005, plus all accrued but
unpaid interest thereof (which interest shall continue to accrue through the December Note Maturity Date) shall be paid in full along with the final payment due on such date, Notwithstanding the foregoing, the Borrower shall be obligated to pay all
of the Monthly Interest Amount (as defined in the December 2004 Note) when due. 
  
 3. Issuance of August Shares. 
  
 (a) The Borrower hereby agrees to issue to Smithfield, on the date hereof, the August Shares. The Borrower shall deliver to Smithfield an original, newly issued stock certificate evidencing such August Shares within seven (7) business days
after the date hereof. 
  
 (b) This Amendment and Waiver is made
with Smithfield in reliance upon Smithfield’s representation to the Borrower, which by Smithfield’s execution of this Amendment and Waiver, Smithfield hereby confirms, that the August Shares to be acquired by Smithfield will be acquired
for investment for Smithfield’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that Smithfield has no present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Amendment and Waiver, Smithfield further represents that Smithfield does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to
such person or to any third person, with respect to any of the August Shares. Smithfield has not been formed for the specific purpose of acquiring the August Shares. Smithfield agrees and acknowledges that it has had an opportunity to discuss the
Borrower’s business, management, financial affairs and the terms and conditions of the offering of the August Shares with the Borrower’s management. Smithfield understands that the August Shares have not been, and will not be, registered
under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the
investment intent and the accuracy of Smithfield’s representations as expressed herein. Smithfield understands that the August Shares are “restricted securities” under applicable U.S. federal and state securities laws and that,
pursuant to these laws, Smithfield must hold the Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is
available. Smithfield hereby represents and warrants to the Borrower that Smithfield is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. Smithfield acknowledges that the Borrower has no
obligation to register or qualify the August Shares, or the Common Stock into which it may be converted, for resale except as is otherwise set forth in this Amendment and Waiver and the Registration Rights Agreement. Smithfield further acknowledges
that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the August Shares, and on requirements relating to
the Borrower 

 
which are outside of Smithfield’s control, and which the Borrower is under no obligation and may not be able to satisfy. 
  
 (c) Smithfield understands that the August Shares may bear the following
legend: 
  
 “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.” 
  
 Certificates evidencing the August Shares shall not be required to contain the legend set forth above or any other legend (i) while a Registration Statement covering the
resale of such August Shares is effective under the Securities Act; provided that the holder thereof covenants that in connection with each sale of such securities, a copy of the final prospectus that forms a part of such Registration Statement will
be delivered in accordance with the provisions of Section 5(b)(2) of the Securities Act, and the rules and regulations promulgated thereunder, or (ii) following any sale of such Securities pursuant to Rule 144 under the Securities Act, or (iii) if
such August Shares are eligible for sale under Rule 144(k) under the Securities Act, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the
Staff of the Securities and Exchange Commission). The Borrower shall cause its counsel to issue the legal opinion to permit the removal of the legend as permitted in the immediately preceding sentence to the Borrower’s transfer agent on the
effective date of the Registration Statement covering the resale of the August Shares. Following the effective date of such Registration Statement or at such earlier time as a legend is no longer required for the August Shares, the Borrower will no
later than three trading days following the delivery by Smithfield to the Borrower or the Borrower’s transfer agent of a legended certificate representing such August Shares, deliver or cause to be delivered to Smithfield a certificate
representing such August Shares that is free from all restrictive and other legends. 
  
 4. Piggyback Registration Rights. The Registration Rights Agreement is hereby amended to terminate all of the Borrower’s obligations to file a registration statement pursuant to Section 2 of the
Registration Rights Agreement. For the avoidance of doubt, all other rights and obligations of the parties arising under the Registration Rights Agreement, including with respect to Piggyback Registration Rights, shall not be affected in any way or
manner by the amendment described in the foregoing sentence. In addition, the definition of “Registrable Shares” (as defined in the Registration Rights Agreement) is hereby amended to mean “the August Shares and the shares of Common
Stock issued or issuable upon exercise of the Warrants.” 
  
 5. Conversion Price. Smithfield hereby unconditionally and irrevocably waives the provisions of Section 3.7C of each of the respective Notes regarding the adjustment of the Conversion Price (as defined in each Note) that would
otherwise be triggered as a result of the 

 
issuance of the August Shares, the PIPE Shares and up to 225,000 shares of Common Stock to be issued to Laurus on or about the date hereof, and Smithfield
hereby agrees that the Conversion Price set forth in each of the Notes (as defined in each such Note) shall remain unaffected as a result of the issuance and sale of the August Shares, the PIPE Shares and up to 225,000 shares of Common Stock to be
issued to Laurus on or about the date hereof. This waiver relates exclusively to the issuance of the August Shares, the PIPE Shares and up to 225,000 shares of Common Stock to be issued to Laurus on or about the date hereof, and shall not apply to
any other subsequent issuances of any Common Stock or other securities by the Borrower. 
  
 II. MISCELLANEOUS. 
  
 1. No Other
Amendments. Except as expressly set forth in this Amendment and Waiver, no other term or provision of any of the Notes is hereby amended or affected in any way, and the Notes shall remain in full force and effect after the date hereof.

  
 2. Governing Law. This Amendment and Waiver shall be
governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. 
  
 3. Facsimile Signatures; Counterparts. This Amendment and Waiver may be executed by facsimile signatures and in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument. 
  
 * * * * * 

 IN WITNESS WHEREOF, the parties hereto have executed this Amendment and Waiver as of the date set forth
in the first paragraph hereof. 
  

			
	 STOCKERYALE, INC.

		
	By:	 	 /s/ Mark W. Blodgett

	 	 	 Mark W. Blodgett

	 	 	 President and CEO

  

			
	 SMITHFIELD FIDUCIARY LLC

		
	By:	 	 /s/ Adam J. Chill

	 Name:
	 	 Adam J. Chill

	 Title:
	 	 Authorized Signatory

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