STOCKERYALE INC
FORM OF REGISTRATION RIGHTS AGREEMENT
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>formof_regrightsagreement.htm
<DESCRIPTION>FORM OF REGISTRATION RIGHTS AGREEMENT
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<title>Form of Registration Rights Agreement</title>
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<P ALIGN=CENTER><b><FONT FACE="Arial" SIZE=2>REGISTRATION RIGHTS
AGREEMENT </FONT></b></P>

                  <font face="Arial" size="2">This Registration Rights Agreement (this "Agreement") is made and entered into as of
December __, 2004, by and between  StockerYale,  Inc., a Massachusetts  corporation  (the  "Company"),  and Laurus Master Fund,  Ltd., a Cayman Islands
company (the "Purchaser").

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement is being entered into in connection with a Securities Purchase Agreement dated
as of the date hereof between the Purchaser and the Company (the &#147;Purchase
Agreement&#148;) and pursuant to the Note and Warrant. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and the Purchaser hereby agree as follows: </FONT></P>

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     <P><FONT FACE="Arial" SIZE=2>1.&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Definitions</b>. Capitalized terms used and not otherwise defined herein that are
          defined in the Purchase Agreement shall have the meanings given such terms in
          the Purchase Agreement. As used in this Agreement, the following terms shall
          have the following meanings:</FONT></P>


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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Effectiveness
Date</i>&#148; means the 90th day following the date hereof. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Effectiveness Period</i>&#148;
shall have the meaning set forth in Section 2(a). </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Filing
Date</i>&#148; means, with respect to the Registration Statement required to be filed
hereunder, the 30th day following the date hereof. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Holder</i>&#148;
or &#147;<i>Holders</i>&#148; means the Purchaser or any of its affiliates or transferees to the
extent any of them hold Registrable Securities. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Indemnified
Party</i>&#148; shall have the meaning set forth in Section 5(c). </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Indemnifying
Party</i>&#148; shall have the meaning set forth in Section 5(c). </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Losses</i>&#148; shall
have the meaning set forth in Section 5(a). </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Note</i>&#148;
means the convertible promissory note issued on the date hereof. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Proceeding</i>&#148;
means an action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced or
threatened. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Prospectus</i>&#148;
means the prospectus included in a Registration Statement (including, without limitation,
a prospectus that includes any information previously omitted from a prospectus filed as
part of an effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act of 1933, as amended (the &#147;Securities Act&#148;)), as amended or
supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by the Registration Statement, and all
other amendments and supplements to the Prospectus, including post-effective amendments,
and all material incorporated by reference or deemed to be incorporated by reference in
such Prospectus. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Registrable
Securities</i>&#148; means the shares of Common Stock issued upon the conversion of the Note
and issuable upon exercise of the Warrant. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Registration
Statement</i>&#148; means the registration statement required to be filed hereunder, including
the Prospectus, amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such registration
statement. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Rule
144&#148;</i> means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Rule
415</i>&#148; means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Rule
424</i>&#148; means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule. </FONT></P>

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<P><FONT FACE="Arial" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<i>Warrant</i>&#148;
means the Common Stock purchase warrant issued pursuant to the Purchase Agreement. </FONT></P>
     <P><FONT FACE="Arial" SIZE=2>2.&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Registration</b>.</FONT></P>


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     <blockquote>
     <P><FONT FACE="Arial" SIZE=2>(a)&nbsp;&nbsp;&nbsp;&nbsp;
          On or prior to the Filing Date, the Company shall prepare and file with the
          Commission a Registration Statement covering the resale of the Registrable
          Securities in an offering to be made on a continuous basis pursuant to Rule 415.
          The Registration Statement shall be on Form S-3 (except if the Company is not
          then eligible to register for resale the Registrable Securities on Form S-3, in
          which case such registration shall be on another appropriate form in accordance
          herewith). The Company shall use its reasonable commercial efforts to cause the
          Registration Statement to be declared effective under the Securities Act as
          promptly as possible after the filing thereof, but in any event no later than
          the Effectiveness Date, and shall use its reasonable commercial efforts to keep
          the Registration Statement continuously effective under the Securities Act until
          the date which is the earliest date of when (i) all Registrable Securities have
          been sold, (ii) all Registrable Securities may be sold immediately without
          registration under the Securities Act and without volume restrictions pursuant
          to Rule 144(k), as determined by the counsel to the Company pursuant to a
          written opinion letter to such effect, addressed and acceptable to the
          Company&#146;s transfer agent and the affected Holders, (iii) four years after
          the Closing Date; or (iv) six months after the latest exercise period of the
          Warrant (the &#147;Effectiveness Period&#148;).</FONT></P>


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     <P><FONT FACE="Arial" SIZE=2>(b)&nbsp;&nbsp;&nbsp;&nbsp;
          If: (i) any Registration Statement is not filed on or prior to the Filing Date;
          (ii) a Registration Statement filed hereunder is not declared effective by the
          Commission by the Effectiveness Date; (iii) after a Registration Statement is
          filed with and declared effective by the Commission, such Registration Statement
          ceases to be effective (by suspension or otherwise) as to all Registrable
          Securities to which it is required to relate at any time prior to the expiration
          of the Effectiveness Period (without being succeeded as promptly as practicable
          by an additional registration statement filed and declared effective), for a
          period of time which shall exceed 60 days in the aggregate per year or more than
          30 consecutive calendar days (defined as a period of 365 days commencing on the
          date the Registration Statement is declared effective); or (iv) the Common Stock
          is not listed or quoted, or is suspended from trading on any Trading Market for
          a period of three (3) consecutive Trading Days (provided the Company shall not
          have been able to cure such trading suspension within 30 days of the notice
          thereof or list the Common Stock on any of the NASD OTC Bulletin Board, BBX
          Exchange, NASDAQ SmallCap Market, the Nasdaq National Market, American Stock
          Exchange or New York Stock Exchange (the &#147;Trading Market&#148;))(any such
          failure or breach being referred to as an &#147;Event,&#148; and for purposes of
          clause (i) or (ii) the date on which such Event occurs, or for purposes of
          clause (iii) the date which such 60 day or 30 consecutive day period (as the
          case may be) is exceeded, or for purposes of clause (iv) the date on which such
          three (3) Trading Day period is exceeded, being referred to as &#147;Event
          Date&#148;), then until the applicable Event is cured, the Company shall pay to
          each Holder an amount in cash, as liquidated damages and not as a penalty, equal
          to 1.0% for each thirty (30) day period (prorated on a daily basis for partial
          periods) of the original principal amount of the Note. Such liquidation damages
          shall be paid not less than each thirty (30) days during an Event and within
          three (3) business days following the date on which such Event has been cured by
          the Company. 3. Registration Procedures. If and whenever the Company is required
          by the provisions hereof to effect the registration of the Registrable
          Securities under the Act, the Company will, as expeditiously as possible:</FONT></P>


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       <blockquote>
     <P><FONT FACE="Arial" SIZE=2>(a)&nbsp;&nbsp;&nbsp;&nbsp;
          prepare and file with the SEC a registration statement with respect to such
          securities, promptly as possible respond to any comments received from the SEC
          and use its best efforts to cause such registration statement to become and
          remain effective for the period of the distribution contemplated thereby
          (determined as herein provided), and promptly provide to the Purchaser copies of
          all filings and SEC letters of comment; (b) prepare and file with the SEC such
          amendments and supplements to such registration statement and the prospectus
          used in connection therewith as may be necessary to comply with the provisions
          of the Securities Act with respect to the disposition of all securities covered
          by the registration statement and to keep such registration statement effective
          until the expiration of the Effectiveness Period; (c) furnish to the Purchaser
          such number of copies of the registration statement and the prospectus included
          therein (including each preliminary prospectus) as the Purchaser reasonably may
          request to facilitate the public sale or disposition of the securities covered
          by such registration statement; (d) use its commercially reasonable efforts to
          register or qualify the Purchaser&#146;s Registrable Securities covered by such
          registration statement under the securities or &#147;blue sky&#148; laws of such
          jurisdictions as the Purchaser, provided, however, that the Company shall not
          for any such purpose be required to qualify generally to transact business as a
          foreign corporation in any jurisdiction where it is not so qualified or to
          consent to general service of process in any such jurisdiction; (e) list the
          Registrable Securities covered by such registration statement with any
          securities exchange on which the Common Stock of the Company is then listed; (f)
          immediately notify the Purchaser at any time when a prospectus relating thereto
          is required to be delivered under the Securities Act, of the happening of any
          event of which the Company has knowledge as a result of which the prospectus
          contained in such registration statement, as then in effect, includes an untrue
          statement of a material fact or omits to state a material fact required to be
          stated therein or necessary to make the statements therein not misleading in
          light of the circumstances then existing; and (g) make available on reasonable
          notice for inspection during normal business hours by the Purchaser and any
          attorney, accountant or other agent retained by the Purchaser, all publicly
          available, non-confidential financial and other records, pertinent corporate
          documents and properties of the Company, and cause the Company&#146;s officers,
          directors and employees to supply all publicly available, non-confidential
          information reasonably requested by the attorney, accountant or agent of the
          Purchaser for the purpose of effecting the registration of the Registrable
          Securities pursuant to this Agreement. 4. Registration Expenses. All expenses
          relating to the Company&#146;s compliance with Sections 2 and 3 hereof,
          including, without limitation, all registration and filing fees, printing
          expenses, fees and disbursements of counsel and independent public accountants
          for the Company, fees and expenses (including reasonable counsel fees) incurred
          in connection with complying with state securities or &#147;blue sky&#148; laws,
          fees of the NASD, transfer taxes, fees of transfer agents and registrars,
          reasonable fees of, and reasonable disbursements incurred by, one counsel for
          the Holders, and costs of insurance are called &#147;Registration
          Expenses&#148;. All selling commissions applicable to the sale of Registrable
          Securities, including any fees and disbursements of any special counsel to the
          Holders beyond those included in Registration Expenses, are called &#147;Selling
          Expenses&#148; and are the responsibility of the sellers. The Company shall be
          responsible for all Registration Expenses.</FONT></P>
       </blockquote>
</blockquote>
     <P><FONT FACE="Arial" SIZE=2>5.&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Indemnification</b>.</FONT></P>


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     <blockquote>
     <P><FONT FACE="Arial" SIZE=2>(a)&nbsp;&nbsp;&nbsp;&nbsp;
          In the event of a registration of any Registrable Securities under the
          Securities Act pursuant to this Agreement, the Company will indemnify and hold
          harmless the Purchaser, and its officers, directors and each other person, if
          any, who controls the Purchaser within the meaning of the Securities Act,
          against any losses, claims, damages or liabilities, joint or several, to which
          the Purchaser, or such persons may become subject under the Securities Act or
          otherwise, insofar as such losses, claims, damages or liabilities (or actions in
          respect thereof) arise out of or are based upon any untrue statement or alleged
          untrue statement of any material fact contained in any registration statement
          under which such Registrable Securities were registered under the Securities Act
          pursuant to this Agreement, any preliminary prospectus or final prospectus
          contained therein, or any amendment or supplement thereof, or arise out of or
          are based upon the omission or alleged omission to state therein a material fact
          required to be stated therein or necessary to make the statements therein not
          misleading, and will reimburse the Purchaser, and each such person for any
          reasonable legal or other expenses incurred by them in connection with
          investigating or defending any such loss, claim, damage, liability or action;
          provided, however, that the Company will not be liable in any such case if and
          to the extent that any such loss, claim, damage or liability (i) arises out of
          or is based upon an untrue statement or alleged untrue statement or omission or
          alleged omission so made in conformity with information furnished by the
          Purchaser or any such person in writing specifically for use in any such
          document, or (ii) contained in a Registration Statement or Prospectus if a
          corrected version of the Registration Statement or Prospectus was delivered to
          the Purchaser on a timely basis.</FONT></P>


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     <P><FONT FACE="Arial" SIZE=2>(b)&nbsp;&nbsp;&nbsp;&nbsp;
          In the event of a registration of the Registrable Securities under the
          Securities Act pursuant to this Agreement, the Purchaser will indemnify and hold
          harmless the Company, and its officers, directors and each other person, if any,
          who controls the Company within the meaning of the Securities Act, against all
          losses, claims, damages or liabilities, joint or several, to which the Company
          or such persons may become subject under the Securities Act or otherwise,
          insofar as such losses, claims, damages or liabilities (or actions in respect
          thereof) arise out of or are based upon any untrue statement or alleged untrue
          statement of any material fact which was made in conformity with information
          furnished in writing by the Purchaser to the Company specifically for use in
          (and such information is contained in) the registration statement under which
          such Registrable Securities were registered under the Securities Act pursuant to
          this Agreement, any preliminary prospectus or final prospectus contained
          therein, or any amendment or supplement thereof, or arise out of or are based
          upon the omission or alleged omission to state therein a material fact required
          to be stated therein or necessary to make the statements therein not misleading,
          and will reimburse the Company and each such person for any reasonable legal or
          other expenses incurred by them in connection with investigating or defending
          any such loss, claim, damage, liability or action. Notwithstanding the
          provisions of this paragraph, the Purchaser shall not be required to indemnify
          any person or entity in excess of the amount of the aggregate proceeds received
          by the Purchaser of Registrable Securities in connection with any such
          registration under the Securities Act.</FONT></P>


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     <P><FONT FACE="Arial" SIZE=2>(c)&nbsp;&nbsp;&nbsp;&nbsp;
          Promptly after receipt by an indemnified party hereunder of notice of the
          commencement of any action, such indemnified party shall, if a claim in respect
          thereof is to be made against the indemnifying party hereunder, notify the
          indemnifying party in writing thereof, but the omission so to notify the
          indemnifying party shall not relieve it from any liability which it may have to
          such indemnified party other than under this Section 5(c) and shall only relieve
          it from any liability which it may have to such indemnified party under this
          Section 5(c) if and to the extent the indemnifying party is prejudiced by such
          omission. In case any such action shall be brought against any indemnified party
          and it shall notify the indemnifying party of the commencement thereof, the
          indemnifying party shall be entitled to participate in and, to the extent it
          shall wish, to assume and undertake the defense thereof with counsel
          satisfactory to such indemnified party, and, after notice from the indemnifying
          party to such indemnified party of its election so to assume and undertake the
          defense thereof, the indemnifying party shall not be liable to such indemnified
          party under this Section 5(c) for any legal expenses subsequently incurred by
          such indemnified party in connection with the defense thereof; if the
          indemnified party retains its own counsel, then the indemnified party shall pay
          all fees, costs and expenses of such counsel, provided, however, that, if the
          defendants in any such action include both the indemnified party and the
          indemnifying party and the indemnified party shall have reasonably concluded
          that there may be reasonable defenses available to it which are different from
          or additional to those available to the indemnifying party or if the interests
          of the indemnified party reasonably may be deemed to conflict with the interests
          of the indemnifying party, the indemnified parties shall have the right to
          select one separate counsel and to assume such legal defenses and otherwise to
          participate in the defense of such action, with the reasonable expenses and fees
          of such separate counsel and other expenses related to such participation to be
          reimbursed by the indemnifying party as incurred. (d) In order to provide for
          just and equitable contribution in the event of joint liability under the
          Securities Act in any case in which either (i) the Purchaser, or any controlling
          person of the Purchaser, makes a claim for indemnification pursuant to this
          Section 5(c) but it is judicially determined (by the entry of a final judgment
          or decree by a court of competent jurisdiction and the expiration of time to
          appeal or the denial of the last right of appeal) that such indemnification may
          not be enforced in such case notwithstanding the fact that this Section 5(c)
          provides for indemnification in such case, or (ii) contribution under the
          Securities Act may be required on the part of the Purchaser or controlling
          person of the Purchaser in circumstances for which indemnification is provided
          under this Section 5(c); then, and in each such case, the Company and the
          Purchaser will contribute to the aggregate losses, claims, damages or
          liabilities to which they may be subject (after contribution from others) in
          such proportion so that the Purchaser is responsible only for the portion
          represented by the percentage that the public offering price of its securities
          offered by the registration statement bears to the public offering price of all
          securities offered by such registration statement, provided, however, that, in
          any such case, (A) the Purchaser will not be required to contribute any amount
          in excess of the public offering price of all such securities offered by it
          pursuant to such registration statement; and (B) no person or entity guilty of
          fraudulent misrepresentation (within the meaning of Section 10(f) of the
          Securities Act) will be entitled to contribution from any person or entity who
          was not guilty of such fraudulent misrepresentation.</FONT></P>
</blockquote>
     <P><FONT FACE="Arial" SIZE=2>6.&nbsp;&nbsp;&nbsp;&nbsp; <b>Intentionally
     Omitted</b>. </FONT></P>


     <P><FONT FACE="Arial" SIZE=2>7.&nbsp;&nbsp;&nbsp;&nbsp; <b>Miscellaneous.</b></FONT></P>


<blockquote>


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     <P><FONT FACE="Arial" SIZE=2>(a)&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Remedies</b>. In the event of a breach by the Company or by a Holder, of any of
          their obligations under this Agreement, each Holder or the Company, as the case
          may be, in addition to being entitled to exercise all rights granted by law and
          under this Agreement, including recovery of damages, will be entitled to
          specific performance of its rights under this Agreement; provided, however, so
          long as the Holder shall have received liquidated damages in accordance with the
          terms of Section 2(b) hereof, then the Holder shall not be entitled to specific
          performance of its rights under Section 2(b) arising from the occurrence of an
          Event specifically relating to the payment of such liquidated damages.</FONT></P>


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     <P><FONT FACE="Arial" SIZE=2>(b)&nbsp;&nbsp;&nbsp;&nbsp;
          <b>No Piggyback on Registrations</b>. Except as and to the extent specified in Schedule
          7(b) hereto, neither the Company nor any of its security holders (other than the
          Holders in such capacity pursuant hereto) may include securities of the Company
          in the Registration Statement other than the Registrable Securities, and the
          Company shall not after the date hereof enter into any agreement providing any
          such right for inclusion of shares in the Registration Statement to any of its
          security holders. Except as and to the extent specified in Schedule 7(b) hereto,
          the Company has not previously entered into any agreement granting any
          registration rights with respect to any of its securities to any Person that has
          not been fully satisfied. (c) Compliance. Each Holder covenants and agrees that
          it will comply with the prospectus delivery requirements of the Securities Act
          as applicable to it in connection with sales of Registrable Securities pursuant
          to the Registration Statement. (d) Discontinued Disposition. Each Holder agrees
          by its acquisition of such Registrable Securities that, upon receipt of a notice
          from the Company of the occurrence of a Discontinuation Event, such Holder will
          forthwith discontinue disposition of such Registrable Securities under the
          Registration Statement until such Holder&#146;s receipt of the copies of the
          supplemented Prospectus and/or amended Registration Statement or until it is
          advised in writing (the &#147;Advice&#148;) by the Company that the use of the
          applicable Prospectus may be resumed, and, in either case, has received copies
          of any additional or supplemental filings that are incorporated or deemed to be
          incorporated by reference in such Prospectus or Registration Statement. The
          Company may provide appropriate stop-transfer orders to enforce the provisions
          of this paragraph. For purposes of this Section 7(d), a &#147;Discontinuation
          Event&#148; shall mean when the Commission notifies the Company whether there
          will be a &#147;review&#148; of such Registration Statement and whenever the
          Commission comments in writing on such Registration Statement (the Company shall
          provide true and complete copies thereof and all written responses thereto to
          each of the Holders); (iii) any request by the Commission or any other Federal
          or state governmental authority for amendments or supplements to the
          Registration Statement or Prospectus or for additional information; (iv) the
          issuance by the Commission of any stop order suspending the effectiveness of the
          Registration Statement covering any or all of the Registrable Securities or the
          initiation of any Proceedings for that purpose; (v) the receipt by the Company
          of any notification with respect to the suspension of the qualification or
          exemption from qualification of any of the Registrable Securities for sale in
          any jurisdiction, or the initiation or threatening of any Proceeding for such
          purpose; and (vi) the occurrence of any event or passage of time that makes the
          financial statements included in the Registration Statement ineligible for
          inclusion therein or any statement made in the Registration Statement or
          Prospectus or any document incorporated or deemed to be incorporated therein by
          reference untrue in any material respect or that requires any revisions to the
          Registration Statement, Prospectus or other documents so that, in the case of
          the Registration Statement or the Prospectus, as the case may be, it will not
          contain any untrue statement of a material fact or omit to state any material
          fact required to be stated therein or necessary to make the statements therein,
          in light of the circumstances under which they were made, not misleading.</FONT></P>


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     <P><FONT FACE="Arial" SIZE=2>(e)&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Piggy-Back Registrations</b>. If at any time during the Effectiveness Period there
          is not an effective Registration Statement covering all of the Registrable
          Securities and the Company shall determine to prepare and file with the
          Commission a registration statement relating to an offering for its own account
          or the account of others under the Securities Act of any of its equity
          securities, other than on Form S-4 or Form S-8 (each as promulgated under the
          Securities Act) or their then equivalents relating to equity securities to be
          issued solely in connection with any acquisition of any entity or business or
          equity securities issuable in connection with stock option or other employee
          benefit plans, then the Company shall send to each Holder written notice of such
          determination and, if within fifteen days after receipt of such notice, any such
          Holder shall so request in writing, the Company shall include in such
          registration statement all or any part of such Registrable Securities such
          holder requests to be registered, subject to customary underwriter cutbacks
          applicable to all holders of registration rights and subject to the consent of
          any selling stockholder(s) under such registration statement.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Default" -->
     <P><FONT FACE="Arial" SIZE=2>(f)&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Amendments and Waivers</b>. The provisions of this Agreement, including the
          provisions of this sentence, may not be amended, modified or supplemented, and
          waivers or consents to departures from the provisions hereof may not be given,
          unless the same shall be in writing and signed by the Company and the Holders of
          the then outstanding Registrable Securities. Notwithstanding the foregoing, a
          waiver or consent to depart from the provisions hereof with respect to a matter
          that relates exclusively to the rights of certain Holders and that does not
          directly or indirectly affect the rights of other Holders may be given by
          Holders of at least a majority of the Registrable Securities to which such
          waiver or consent relates; provided, however, that the provisions of this
          sentence may not be amended, modified, or supplemented except in accordance with
          the provisions of the immediately preceding sentence. (g) Notices. Any notice or
          request hereunder may be given to the Company or Purchaser at the respective
          addresses set forth below or as may hereafter be specified in a notice
          designated as a change of address under this Section 7(g). Any notice or request
          hereunder shall be given by registered or certified mail, return receipt
          requested, hand delivery, overnight mail or telecopy (confirmed by mail).
          Notices and requests shall be, in the case of those by hand delivery, deemed to
          have been given when delivered to any officer of the party to whom it is
          addressed, in the case of those by mail or overnight mail, deemed to have been
          given when deposited in the mail or with the overnight mail carrier, and, in the
          case of a telecopy, when confirmed. The address for such notices and
          communications shall be as follows:</FONT></P>
</blockquote>
<div align="center">
  <center>
  <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse"  width="75%" id="AutoNumber1">
    <tr>
      <td width="38%" valign="top"><font face="Arial" size="2">If to the
      Company: </font></td>
      <td width="62%" valign="top"><font face="Arial" size="2">StockerYale, Inc.<br>
32 Hampshire Road<br>
Salem, NH&nbsp; 03079<br>
Attention:&nbsp; Mark W. Blodgett<br>
Facsimile:&nbsp; (603) 898-8851</font></td>
    </tr>
    <tr>
      <td width="38%" valign="top">&nbsp;</td>
      <td width="62%" valign="top">&nbsp;</td>
    </tr>
    <tr>
      <td width="38%" valign="top"><font face="Arial" size="2">With a copy
to:</font></td>
      <td width="62%" valign="top"><font face="Arial" size="2">Goodwin Procter LLP<br>
      Stuart M. Cable, P.C.<br>
      53 State Street<br>
      Boston, MA&nbsp; 02109<br>
Facsimile:&nbsp; (617) 523-1231</font></td>
    </tr>
    <tr>
      <td width="38%" valign="top">&nbsp;</td>
      <td width="62%" valign="top">&nbsp;</td>
    </tr>
    <tr>
      <td width="38%" valign="top"><font face="Arial" size="2">If to a
      Purchaser: </font></td>
      <td width="62%" valign="top"><font face="Arial" size="2">To the address
      set forth under <br>
such Purchaser name on the<br>
signature pages hereto.</font></td>
    </tr>
    <tr>
      <td width="38%" valign="top">&nbsp;</td>
      <td width="62%" valign="top">&nbsp;</td>
    </tr>
    <tr>
      <td width="38%" valign="top"><font face="Arial" size="2">If to any
other Person<BR> who is then the registered Holder:</font></td>
      <td width="62%" valign="top"><font face="Arial" size="2">To the address of such Holder as it<br>
appears in the stock transfer books<br>
of the Company or such other address <br>
      as may be designated in writing hereafter, <br>
      in the same manner, by such Person. </font></td>
    </tr>
  </table>
  </center>
</div>

<blockquote>
<P ALIGN=LEFT><FONT FACE="Arial" SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-Arial" FSL="Workstation" -->

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
     <P><FONT FACE="Arial" SIZE=2>(h)&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Successors and Assigns</b>. This Agreement shall inure to the benefit of and be
          binding upon the successors and permitted assigns of each of the parties and
          shall inure to the benefit of each Holder. The Company may not assign its rights
          or obligations hereunder without the prior written consent of each Holder. Each
          Holder may assign their respective rights hereunder in the manner and to the
          Persons as permitted under the Note.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
     <P><FONT FACE="Arial" SIZE=2>(i)&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Execution and Counterparts</b>. This Agreement may be executed in any number of
          counterparts, each of which when so executed shall be deemed to be an original
          and, all of which taken together shall constitute one and the same Agreement. In
          the event that any signature is delivered by facsimile transmission, such
          signature shall create a valid binding obligation of the party executing (or on
          whose behalf such signature is executed) the same with the same force and effect
          as if such facsimile signature were the original thereof.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
     <P><FONT FACE="Arial" SIZE=2>(j)&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Governing Law</b>. All questions concerning the construction, validity, enforcement
          and interpretation of this Agreement shall be governed by and construed and
          enforced in accordance with the internal laws of the State of New York, without
          regard to the principles of conflicts of law thereof. Each party agrees that all
          Proceedings concerning the interpretations, enforcement and defense of the
          transactions contemplated by this Agreement shall be commenced exclusively in
          the state and federal courts sitting in the City of New York, Borough of
          Manhattan. Each party hereto hereby irrevocably submits to the exclusive
          jurisdiction of the state and federal courts sitting in the City of New York,
          Borough of Manhattan for the adjudication of any dispute hereunder or in
          connection herewith or with any transaction contemplated hereby or discussed
          herein, and hereby irrevocably waives, and agrees not to assert in any
          Proceeding, any claim that it is not personally subject to the jurisdiction of
          any such court, that such Proceeding is improper. Each party hereto hereby
          irrevocably waives personal service of process and consents to process being
          served in any such Proceeding by mailing a copy thereof via registered or
          certified mail or overnight delivery (with evidence of delivery) to such party
          at the address in effect for notices to it under this Agreement and agrees that
          such service shall constitute good and sufficient service of process and notice
          thereof. Nothing contained herein shall be deemed to limit in any way any right
          to serve process in any manner permitted by law. Each party hereto hereby
          irrevocably waives, to the fullest extent permitted by applicable law, any and
          all right to trial by jury in any legal proceeding arising out of or relating to
          this Agreement or the transactions contemplated hereby. If either party shall
          commence a Proceeding to enforce any provisions of a Transaction Document, then
          the prevailing party in such Proceeding shall be reimbursed by the other party
          for its reasonable attorneys fees and other costs and expenses incurred with the
          investigation, preparation and prosecution of such Proceeding.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Workstation" -->
     <P><FONT FACE="Arial" SIZE=2>(k)&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Cumulative Remedies</b>. The remedies provided herein are cumulative and not
          exclusive of any remedies provided by law. (l) Severability. If any term,
          provision, covenant or restriction of this Agreement is held by a court of
          competent jurisdiction to be invalid, illegal, void or unenforceable, the
          remainder of the terms, provisions, covenants and restrictions set forth herein
          shall remain in full force and effect and shall in no way be affected, impaired
          or invalidated, and the parties hereto shall use their reasonable efforts to
          find and employ an alternative means to achieve the same or substantially the
          same result as that contemplated by such term, provision, covenant or
          restriction. It is hereby stipulated and declared to be the intention of the
          parties that they would have executed the remaining terms, provisions, covenants
          and restrictions without including any of such that may be hereafter declared
          invalid, illegal, void or unenforceable.</FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- Arial" FSL="Default" -->
     <P><FONT FACE="Arial" SIZE=2>(m)&nbsp;&nbsp;&nbsp;&nbsp;
          <b>Headings</b>. The headings in this Agreement are for convenience of reference only
          and shall not limit or otherwise affect the meaning hereof.</FONT></P>



</blockquote>
<p align="left">
&nbsp;</p>
<p class="Body1" style="text-align: left">
<font size="2" face="Arial">IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above. </font> </p>
<p style="text-indent: 50%"><font face="Arial" size="2">STOCKERYALE, INC.</font></p>
<p style="text-indent: 50%"><font face="Arial" size="2">By:
<u>/s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u>
</font>
</p>
<div style="text-indent: 50%; margin-top:0in">
<font size="2" face="Arial">Name:
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u>
</font></div>
<div style="text-indent: 50%; margin-top:0in">
<font size="2" face="Arial">Title:
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u>
</font></div>
<p align="center"><font face="Arial" size="2">[REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK<br>
SIGNATURE PAGES OF PURCHASER TO FOLLOW]</font></p>
<hr>
<p>
<font face="Arial" size="2">
<br clear="all" style="page-break-before:always">
&nbsp;</font></p>
<p class="Body1" align="left">
<font face="Arial" size="2">IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above. </font> </p>
<p style="text-indent: 50%"><font face="Arial" size="2">LAURUS
MASTER FUND, LTD.</font></p>
<p style="text-indent: 50%"><font face="Arial"><font size="2">By:&nbsp;
</font>
<u><font size="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u>
</font>
</p>
<p style="text-indent: 50%; margin-top:0in">
<font size="2" face="Arial">Name:
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u>
</font>
<p style="text-indent: 50%; margin-top:0in">
<font size="2" face="Arial">Title:
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u>
</font></p>
<p style="text-indent: 50%"><font face="Arial" size="2">Address
for Notice:</font></p>
<div style="text-indent: 50%"><font face="Arial" size="2">c/o Laurus Capital Management, LLC</font></div>
<div style="text-indent: 50%; margin-top:0in"><font face="Arial" size="2">825 Third Avenue, 14<sup>th</sup> Floor </font></div>
<div style="text-indent: 50%; margin-top:0in"><font face="Arial" size="2">New York, New York 10022</font></div>
<div style="text-indent: 50%; margin-top:0in"><font face="Arial" size="2">Attention:&nbsp; David Grin</font></div>

</body>
</html>

<hr>

</TEXT>
</DOCUMENT>
