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Exhibit 1
AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT
This Amendment No. 1 to the Securities Purchase Agreement (the
"Amendment"), dated April 28, 1999, between Semiconductor Laser International
Corporation, a Delaware corporation (the "Company") and bmp Mobility AG Venture
Capital, a German stock corporation ("bmp") amends the Securities Purchase
Agreement, dated as of February 5, 1999, between the Company and bmp (the
Securities Purchase Agreement is referred to herein as the "Securities Purchase
Agreement").
R E C I T A L S:
WHEREAS, pursuant to the Securities Purchase Agreement, bmp has
purchased 2,000,000 newly issued shares of the Company's common stock (the
"Common Stock"), $.01 par value per share, at a price of $0.375 per share, for
an aggregate purchase price of $750,000, and bmp has agreed, subject to the
conditions contained therein, to purchase from the Company not less than 650,000
and not more than 1,000,000 shares of the Company's Series B Convertible
Preferred Stock (the "Series B Stock"), $.01 par value per share, each such
share convertible into five shares of Common Stock, for an aggregate purchase
price of not less than $1,300,000 USD and not more than $2,000,000 USD.
WHEREAS, the Company and bmp have agreed to amend the Securities
Purchase Agreement to reflect bmp's agreement to fund the second stage of the
investment contemplated therein by purchasing the full 1,000,000 shares of
Series B Stock for an aggregate purchase price of $2,000,000 USD, the Company's
agreement to retain an affiliate of bmp, namely bmp Management Consultants GmbH
("bmp Consultants"), as a consultant following the closing of the second stage
of bmp's investment and certain other matters.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Pursuant to Section 2.2(b) of the Securities Purchase Agreement, bmp
agrees to purchase 1,000,000 shares of the Series B Stock from the Company for
an aggregate purchase price of $2,000,000 USD (the "$2,000,000 Purchase"), such
purchase to occur in monthly installments as follows:
(i) bmp shall purchase 232,500 shares of Series B Stock from the
Company on or before April 30, 1999 for a purchase price of
$465,000 USD (the "April Installment");
(ii) bmp shall purchase 192,500 shares of Series B Stock from the
Company on or before May 31, 1999 for a purchase price of
$385,000 USD (the "May Installment"); and
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(iii) bmp shall purchase 575,000 shares of Series B Stock from the
Company on or before June 30, 1999 for a purchase price of
$1,150,000 USD (the "June Installment");
provided, however, that upon satisfaction of the Nasdaq Conditions (as
hereinafter defined) and the conditions contained in (i), (ii) and (iv) of
Section 4 of this Amendment, the unpaid portion of the total $2,000,000 USD
aggregate purchase price shall be immediately due and payable (the "Final
Installment") upon issuance of the shares of Series B Stock yet to be issued
hereunder.
2. The purchase of 232,500 shares of Series B Stock from the Company on
or before April 30, 1999 and payment of the April Installment shall be subject
to (i) all of the conditions precedent to the Second Closing set forth in
Section 9.4 of the Securities Purchase Agreement excluding the condition
cantained in Section 9.4(F) thereof and (ii) the execution and delivery of the
Consulting Agreement referred to in Section 6 of this Amendment.
3. The purchase of 192,500 shares of Series B Stock from the Company on
or before May 31, 1999 and payment of the May Installment shall be subject to
receipt of the items set forth in Section 4.3 of the Securities Purchase
Agreement.
4. The purchase of 575,000 shares of Series B Stock from the Company on
or before June 30, 1999 and payment of the June Installment shall be subject to
(i) the condition contained in Section 9.4(f) of the Securities Purchase
Agreement (ii) receipt of the items set forth in Section 4.3 of the Securities
Purchase Agreement, (iii) satisfaction of the Nasdaq Conditions (as defined in
Section 5 of this Amendment) and (iv) the execution and delivery of the
Warrant Agreement referred to in Section 7 of this Amendment. If the Nasdaq
Conditions are not satisfied on or prior to June 30, 1999, the June Installment
shall be canceled and bmp shall only be obligated to pay the Final Installment
subject to the conditions listed in clauses (i), (ii), (iii), and (iv) of the
previous sentence of this Section 4.
5. In order to provide that the convertible feature of the Series B
Stock into Common Stock shall not be exercisable unless (x) permitted by the
applicable rules and regulations of the Nasdaq SmallCap Market on which the
Common Stock is listed or traded (whether because the Company has obtained
requisite shareholder approval or otherwise) or (y) the Company's securities are
not then listed on the Nasdaq SmallCap Market (the conditions contained in
clauses (x) and (y) of this sentence are referred to herein as the "Nasdaq
Conditions"), the definition of "Certificate of Designations" in Section 1 of
the Securities Purchase Agreement is hereby deleted in its entirety and replaced
with the following:
"Certificate of Designations" means the Certificate of Designations
of the Series B Preferred Stock, substantially in the form of Exhibit A to
Amendment No. 1 to Securities Purchase Agreement.
6. The Company hereby retains bmp Consultants as a consultant, pursuant
to the terms and conditions set forth in that certain Consulting Agreement,
dated as of the date hereof, between the Company and bmp Consultants, annexed
hereto as Exhibit B.
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7. Effective as of and subject to the funding of the June Installment
or the Final Installment, as the case may be, and as consideration for bmp's
agreement to fund the full amount of the $2,000,000 Purchase, the Company agrees
to issue to bmp warrants to purchase an aggregate of 500,000 shares of the
Common Stock, at an exercise price of $0.50 per share, pursuant to the terms and
conditions set forth in that certain Warrant Agreement annexed hereto as Exhibit
C. Such warrant issuance shall be subject to the satisfaction of the Nasdaq
Conditions.
8. Effective as of and subject to the funding of the June Installment
or the Final Installment, as the case may be, if (i) the Company shall
consummate a transaction (a "Transaction") within twenty four (24) months
following payment of the June Installment or the Final Installment, as the case
may be, involving the raising of debt or equity capital in a private placement,
and (ii) the Transaction involves an institution introduced to the Company by
bmp, other than existing shareholders of the Company, then the Company shall pay
bmp, as compensation for such introduction, an amount equal to 5% of the net
proceeds of the Transaction, which amount shall be payable in cash on the
closing date of the Transaction to an account designated by bmp by wire transfer
in immediately available funds; provided, however, that the fee specified above
shall not be payable if the Company consummates the Transaction solely with
persons and entities that were identified by the Company or another third party
without any prior introduction to the Company by bmp. bmp shall be deemed to
have introduced a person or entity to the Company if (1) the Company has no
prior knowledge of the interest in the proposed Transaction by such person or
entity and (2) bmp provides an introduction to a specific representative of such
person or entity who is in a position to effect the Transaction.
9. Except as specifically amended by this Amendment, all the provisions
of the Securities Purchase Agreement shall continue in full force and effect.
After the date hereof, any reference to the Securities Purchase Agreement shall
mean the Securities Purchase Agreement as amended hereby.
10. This Amendment is effective as of this 27th day of April, 1999.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
SEMICONDUCTOR LASER INTERNATIONAL
CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President & Chief Executive Officer
bmp MOBILITY AG VENTURE CAPITAL,
a German stock corporation
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: CEO
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EXHIBIT A
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES B CONVERTIBLE
PREFERRED STOCK
OF
SEMICONDUCTOR LASER INTERNATIONAL CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
SEMICONDUCTOR LASER INTERNATIONAL CORPORATION, a corporation organized
and existing under the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY THAT:
Pursuant to authority conferred upon the Board of Directors (the
"Board") by the Certificate of Incorporation of the Corporation, as amended to
date (the "Certificate of Incorporation") and pursuant to the provisions of
Section 151 of the Delaware General Corporation Law, the Board, at a meeting
held on February 2, 1999, adopted the following resolution providing for the
voting powers, designations, preferences and rights, and the qualifications,
limitations and restrictions of the Series B Convertible Preferred Stock.
WHEREAS, the Certificate of Incorporation provides for two classes
of shares known as common stock, $.01 par value per share (the "Common Stock"),
and preferred stock, $.01 par value per share (the "Preferred Stock"); and
WHEREAS, the Board is authorized by the Certificate of Incorporation
to provide for the issuance of the shares of Preferred Stock in one or more
series and, by filing a certificate pursuant to the applicable law of the State
of Delaware, to establish from time to time the number of shares to be included
in any such series and to fix the voting powers, designations, preferences and
rights of the shares of any such series and the qualifications, limitations and
restrictions thereof.
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XXX, XXXXXXXXX, XX IT RESOLVED, that the Board deems it advisable
to, and hereby does, designate a Series B Convertible Preferred Stock and fixes
and determines the voting powers, designations, preferences and rights, and the
qualifications, limitations and restrictions relating to the Series B
Convertible Preferred Stock as follows:
1. Designation. The shares of such series of Preferred Stock
individually and in the aggregate shall be designated "Series B Convertible
Preferred Stock" (referred to herein as the "Series B Stock").
2. Authorized Number. The number of shares constituting the Series B
Stock shall be one million (1,000,000). The number of authorized shares of
Series B Stock may be reduced by further resolution of the Board of Directors of
the Company and by the filing of a certificate pursuant to the provisions of the
Section 151(g) of the General Corporation Law of the State of Delaware stating
that such reduction has been so authorized (but not below the number of shares
of Series B Stock then outstanding) but the number of authorized shares of
Series B Stock shall not be increased.
3. Ranking. The Series B Stock shall rank as to dividends pari passu
with the Common Stock of the Corporation. The Series B Stock shall rank as to
liquidation, dissolution or winding up, senior and prior to the Common Stock of
the Corporation and to all other classes or series of stock issued by the
Corporation, except as otherwise approved by the affirmative vote or consent of
the holders of shares of Series B Stock pursuant to Section 8(b) hereof. (All
equity securities of the Corporation with respect to which the Series B Stock
ranks senior and prior with respect to liquidation, dissolution and winding up,
including the Common Stock, are collectively referred to herein as "Junior
Securities" and all equity securities of the Corporation with which the Series B
Stock ranks on a parity, with respect to dividends, are collectively referred to
herein as "Parity Securities.")
4. Dividends. The holders of shares of Series B Stock shall be entitled
to share, equally and ratably in any dividends declared by the Board on the
Common Stock, whether payable in cash, shares of Common Stock (or fractions
thereof) or property. The pro rata entitlement to such dividends of each share
of Series B Stock shall be computed on the basis of the conversion rate then in
effect (as defined in Section 6 hereof).
5. Liquidation.
a. Liquidation Preference. Upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
the shares of Series B Stock shall be entitled to receive and to be paid out of
the assets of the Corporation available for distribution to its stockholders,
before any distribution or payment is made upon any Junior Securities, to be
paid an amount equal to (i) $1.00 per share of Series B Stock, representing the
liquidation preference per share of the Series B Stock (as adjusted for any
combinations, divisions or similar recapitalizations affecting the shares of
Series B Stock) (the "Liquidation Payments"). If upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the assets to be
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distributed among the holders of Series B Stock and the Parity Securities shall
be insufficient to permit payment in full to both the holders of Series B Stock
of the Liquidation Payments and to the holders of the Parity Securities any
applicable liquidation payments, then the entire assets of the Corporation shall
be distributed ratably among such holders in proportion to the full respective
distributive amounts to which they are entitled.
b. Remaining Assets. Upon any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, after the holders of
Series B Stock shall have been paid in full the Liquidation Payments, the
remaining assets of the Corporation shall be distributed ratably per share to
the holders of the Series B Stock and the other Parity Securities. The pro rata
entitlement of each share of Series B Stock in any such distribution shall be
computed on the basis of the conversion rate then in effect.
c. Notice of Liquidation. Written notice of a liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
stating a payment date, the amount of the Liquidation Payments and the place
where said Liquidation Payments shall be payable, shall be given by mail,
postage prepaid, not less than 30 days prior to the payment date stated therein,
to each holder of record of Series B Stock at his post office address as shown
by the records of the Corporation.
d. Fractional Shares. The Liquidation Payments with respect to each
outstanding fractional share of Series B Stock shall be equal to a ratably
proportionate amount of the Liquidation Payments with respect to each
outstanding share of Series B Stock.
e. Certain Actions not Liquidation. Neither the sale, lease or
exchange (for cash, stock, securities or other consideration) of all or
substantially all of the property and assets of the Corporation, nor the merger
or consolidation of the Corporation with or into any other corporation, nor the
merger or consolidation of any other corporation with or into the Corporation,
shall be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this paragraph 5.
6. Conversion.
The holders of the Series B Stock shall have the following
conversion rights:
a. Conversion. Each share of Series B Stock shall be convertible at
any time, at the option of the holder of record thereof, subject to the
limitations on conversion set forth in paragraph (f) below, into fully paid and
nonassessable shares of Common Stock at the "conversion rate" (as defined in
paragraph (b) below) then in effect upon surrender to the Corporation or its
transfer agent of the certificate or certificates representing the Series B
Stock to be converted, as provided below, or if the holder notifies the
Corporation or its transfer agent that such certificate or certificates have
been lost, stolen or destroyed, upon the execution and delivery of an agreement
satisfactory to the Corporation to indemnify the Corporation from any losses
incurred by it in connection therewith.
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b. Basis For Conversion; Converted Shares. The basis for any
conversion under this Section 6 shall be the "conversion rate" in effect at the
time of conversion, which for the purposes hereof shall mean the number of
shares of Common Stock issuable for each share of Series B Stock surrendered for
conversion under this Section 6. Initially, the conversion rate shall be 5.0,
i.e., 5.0 shares of Common Stock for each share of Series B Stock being
converted. Such conversion rate shall be subject to adjustment as provided in
Section 7 below. If any fractional interest in a share of Common Stock would be
deliverable upon conversion of Series B Stock, then such fractional share shall
be disregarded if less than one half a share, or if more than one-half a share,
the number of shares issuable upon conversion shall be rounded out to the next
full share. Any shares of Series B Stock which have been converted shall be
canceled and the certificates representing shares of Series B Stock so converted
shall represent the right to receive such number of shares of Common Stock into
which such shares of Series B Stock are convertible. The Board of Directors of
the Corporation shall at all times reserve a sufficient number of authorized but
unissued shares of Common Stock to be issued in satisfaction of the conversion
rights and privileges aforesaid.
c. Mechanics of Conversion. In the case of a conversion, before any
holder of Series B Stock shall be entitled to convert the same into shares of
Common Stock, it shall surrender the certificate or certificates for such shares
of Series B Stock, duly endorsed, at the office of the Corporation or its
transfer agent for the Series B Stock, and shall give written notice to the
Corporation of the election to convert the same and shall state therein the name
or names in which the certificate or certificates for shares of Common Stock are
to be issued. The Corporation shall, as soon as practicable thereafter, issue
and deliver at such office to such holder of Series B Stock, or to the nominee
or nominees of such holder, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled as aforesaid. A
certificate or certificates will be issued for the remaining shares of Series B
Stock in any case in which fewer than all of the shares of Series B Stock
represented by a certificate are converted.
d. Issue Taxes. The Corporation shall pay all issue taxes, if any,
incurred in respect of the issue of shares of Common Stock on conversion. If a
holder of shares surrendered for conversion specifies that the shares of Common
Stock to be issued on conversion are to be issued in a name or names other than
the name or names in which such surrendered shares stand, the Corporation shall
not be required to pay any transfer or other taxes incurred by reason of the
issuance of such shares of Common Stock to the name of another, and if the
appropriate transfer taxes shall not have been paid to the Corporation or the
transfer agent for the Series B Stock at the time of surrender of the shares
involved, the shares of Common Stock issued upon conversion thereof may be
registered in the name or names in which the surrendered shares were registered,
despite the instructions to the contrary.
e. Rights of Holders of Shares. Each conversion of shares of Series
B Stock shall be deemed to have been made as of the close of business on the
applicable conversion date so that the rights of the holder of shares of such
Series B Stock shall, to the extent of such conversion, cease at such time and
the person or persons entitled to receive shares of the Common Stock upon
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conversion of the shares of Series B Stock shall be treated for all purposes as
having become the record holder or holders of the Common Stock at such time.
f. Limitations on Conversions. The conversion of shares of Series B
Stock shall be subject to the following limitations (each of which limitations
shall be applied independently):
i. Nasdaq Cap Amount. Unless (x) permitted by the applicable rules
and regulations of The Nasdaq SmallCap Market on which the Common Stock is
listed or traded (whether because the Corporation has obtained requisite
shareholder approval or otherwise) or (y) the Corporation's securities are not
then listed on The Nasdaq SmallCap Market (the conditions contained in clauses
(x) and (y) of this sentence are referred to herein as the "Nasdaq Conditions"),
in no event shall the total number of shares of Common Stock issued upon
conversion of the Series B Stock purchased by the holders exceed the maximum
number of shares of Common Stock that the Corporation can so issue without the
approval of its common stockholders pursuant to Rule 4310(c)(25)(H)(i)(d) of the
Nasdaq SmallCap Market; provided that prior to such shareholder approval, the
total number of shares of Common Stock issued upon conversion of the Series B
Stock, taken together with such shares of Common Stock purchased pursuant to
Section 2.2(a) of that certain Securities Purchase Agreement, dated as of
February 5, 1999, between the Corporation and bmp Mobility AG Venture Capital,
shall not exceed 18% of the Corporation's outstanding Common Stock (the "Nasdaq
Cap Amount") The Nasdaq Cap Amount shall be allocated pro rata among the holders
of Series B Stock as set forth in subparagraph (ii) hereof. No prior inability
to convert shares of Series B Stock pursuant to this subparagraph (i) shall have
any effect on the applicability of the provisions of this subparagraph (i) with
respect to any subsequent determination of convertibility.
ii. Allocations of Initial Cap Amounts. The Nasdaq Cap Amount
(including voting restrictions, if any) shall be allocated pro rata among the
holders of Series B Stock based on the number of shares of Series B Stock
registered in the name of such holder.
iii. Non-conversion Notice. If at any time any shares of Series B
Stock are not convertible into Common Stock as a result of this Section 6(f),
the Corporation shall, upon the request of any holder, provide within three
business days a certificate of the Chief Financial Officer or the Corporation to
such holder of such Series B Stock stating the number of such holder's shares of
Series B Stock that may be converted into Common Stock. In the event that any
shares of Series B Stock that were intended to be converted into Common Stock
are determined not to be convertible, the Corporation, at the written request of
the holder, will return such shares of Series B Stock to the holder thereof.
iv. Within ten (10) days of such date upon which one of the Nasdaq
Conditions is satisfied, the Corporation shall, having obtained the written
consent of the holders of not less than a majority of the then outstanding
shares of Series B Stock in accordance with section 8 hereof, file a Certificate
of Amendment to this Certificate of Designations, Preferences and Rights to
delete the provisions relating to "Limitations on Conversions" set forth in this
Section 6(f).
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7. Adjustment of Conversion Price and Conversion Rate. The number and
kind of securities issuable upon the conversion of the Series B Stock, the
conversion price and the conversion rate shall be subject to adjustment from
time to time in accordance with the following provisions:
a. Distributions Combinations and Subdivisions of Capital Stock. If
at any time the outstanding shares of Common Stock of the Corporation shall be
subdivided into a greater or combined into a lesser number of shares (whether
with the same or a different par value or without par value), including, without
limitation, through a reverse stock split, the conversion rate shall be
proportionately increased or decreased.
b. Distributions in Respect of Capital Stock. If the Corporation
shall distribute by way of dividend or otherwise upon its shares of Common Stock
any cash, securities or property (excluding cash dividends paid out of earnings
or surplus), then upon conversion of shares of Series B Stock occurring after
such distribution date, the holder of the Series B Stock will be entitled to
receive the number of shares of the Common Stock of the Corporation then
deliverable pursuant to the terms hereof, and, in addition, the cash, securities
or property which such holder would have received by way of such dividends or
other distributions if such holder had been the record holder of the number of
shares of such Common Stock, which would have been deliverable upon the exercise
of such holder's conversion right if such conversion had been effected
immediately prior to the record date for such distribution of cash, securities
or property.
c. Recapitalization, Reclassification and Succession. If any
recapitalization of the Corporation or reclassification of shares of Common
Stock of the Corporation or any merger or consolidation of the Corporation into
or with a corporation or other business entity shall be effected, then the
holder of the Series B Stock shall thereafter have the right to receive the kind
and number of shares of stock or other securities or other property of the
Corporation which the holder of Series B Stock would have been entitled to
receive if the holder had held the Common Stock issuable upon conversion of his
Series B Stock immediately prior to such recapitalization, reclassification,
merger or consolidation.
d. Fractional Shares. In the event that the application of the
provisions of this Section 7 would result in the issuance of a fraction of a
share of Common Stock of the Corporation, or a number of full shares plus a
fraction of a share of such Common Stock, then such fractional share shall be
disregarded if less than one-half a share, or, if more than one-half of a share,
the number of shares issuable upon such exchange shall be rounded out to the
next full share.
e. Issuance of Additional Shares of Capital Stock. If the
Corporation shall issue any additional shares of Common Stock or Common Stock
equivalents (other than as provided in the foregoing subsections (a) through (d)
of this Section) for no consideration or for a consideration per share less than
Fair Market Value (as defined below) (or, in the case of a Common Stock
equivalent, if the exercise price or conversion price shall be less than Fair
Market Value) in effect on the date of and immediately prior to the issue of
such additional shares of Common Stock or Common Stock equivalents, then and in
such event, the Corporation shall cause notice of such issuance to be mailed
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to each holder of shares of Series B Stock at its then registered address by
first-class mail, postage prepaid, and an equitable adjustment as determined by
the Board in good faith shall be made to the conversion rate as soon as
practicable and retroactive to such issue date in order to prevent dilution
resulting from such below market issuance of the relative equity interest in the
Corporation represented by shares of Series B Stock then outstanding compared to
the total capital stock of the Corporation (including the Series B Stock)
outstanding immediately prior to such issuance; provided, however, that this
provision shall not apply to (i) the issue of up to 500,000 Warrants,
convertible into 500,000 shares of Common Stock in connection with the
Corporation's contemplated amendment to its $1,000,000 secured line of credit
(the "Line of Credit") maintained by BSB Bank & Trust Company ("BSB"); (ii) the
issuance of shares upon exercise or conversion of a Common Stock equivalent, as
long as the exercise price or conversion price on the date of issuance of such
Common Stock equivalent was in excess of Fair Market Value, and (iii) the
issuance of Common Stock to a person that is not an Affiliate of the Corporation
in a private placement at a discount to market not to exceed twenty five percent
(25%) to reflect an illiquidity discount.
The term "Fair Market Value" means the higher of (a) the Market
Price on the date of issuance of Common Stock or Common Stock equivalent or (b)
the average closing sales price per share of Common Stock for the ten (10)
trading days immediately preceding the date of issuance of Common Stock or
Common Stock equivalents; provided, however, that, in the case of the issuance
of shares of Common Stock or Common Stock equivalents for consideration other
than cash, the Board shall determine in good faith the value of such shares of
Common Stock or Common Stock equivalents.
The term "Market Price" means, with respect to the shares of Common
Stock issuable upon conversion of the Series B Stock, (a) if the shares are
listed or admitted for trading on any national securities exchange or included
in The Nasdaq National Market or Nasdaq SmallCap Market, the last reported sales
price as reported on such exchange or market; (b) if the shares are not listed
or admitted for trading on any national securities exchange or included in The
Nasdaq National Market or Nasdaq SmallCap Market, the average of the last
reported closing bid and asked quotation for the shares as reported on NASDAQ or
a similar service if NASDAQ is not reporting such information; (c) if the shares
are not listed or admitted for trading on any national securities exchange or
included in The Nasdaq National Market or Nasdaq SmallCap Market or quoted by
NASDAQ or a similar service, the average of the last reported bid and asked
quotation for the shares as quoted by a market maker in the shares (or if there
is more than one market maker, the bid and asked quotation shall be obtained
from two market makers and the average of the lowest bid and highest asked
quotation). In the absence of any available public quotations for the Common
Stock, the Board of Directors of the Company shall determine in good faith the
fair value of the Common Stock, which determination shall be set forth in a
certificate by the Secretary of the Company.
The term "Affiliate" means any Person (i) which, directly or
indirectly, through one or more intermediaries controls, or is controlled by, or
is under common control with, another Person, (ii) which beneficially owns or
holds 20% or more of any class of the outstanding Voting Stock of such other
Person or (iii) which is a relative or spouse of such Person, or any relative of
such spouse, who has the same home as such Person. The term "control" means the
possession,
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directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of Voting
Stock, by contract or otherwise.
The term "Person" means any individual, entity or group, including,
without limitation, any corporation, limited liability company, limited or
general partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
The term "Voting Stock" means any class or classes of capital stock
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to vote for the election of directors, managers or
trustees of any Person (irrespective of whether or not at the time capital stock
of any class or classes will have, or might have, voting power by the reason of
the happening of any contingency).
f. Corporation to Prevent Dilution. If any event or condition occurs as
to which other provisions of this Section 7 are not strictly applicable or if
strictly applied would not fairly protect the exercise of conversion rights
hereunder in accordance with the essential intent and principles of such
provisions, or which might materially and adversely affect the conversion rights
of the holder of Series B Stock under any provisions hereof, then the Board of
Directors shall in good faith make an adjustment in the application and
interpretation of such provisions, in accordance with such essential intent and
principles, so as to protect such rights as aforesaid, and any adjustment
necessary with respect to the conversion rate or the nature or kind of
securities issuable upon conversion hereunder so as to preserve without dilution
the rights of such holder; provided, however, that in no event shall any such
adjustment (other than a reverse stock split or the like) have the effect of
decreasing the conversion rate as otherwise determined pursuant to this
Certificate.
g. Valid Issuance. All shares of Common Stock which may be issued in
connection with the conversion provisions set forth herein shall, upon issuance
by the Corporation, be validly issued, fully paid and nonassessable, free from
preemptive rights and free from all taxes, liens or charges with respect thereto
created or imposed by the Corporation.
h. Other Provisions Applicable to Adjustment Under this Section. The
following provisions shall be applicable to the adjustments in Conversion Price
as provided in this Section 7:
i. Treasury Shares. The number of shares of Common Stock at
any time outstanding shall not include any shares thereof then directly
or indirectly owned or held by or for the account of the Corporation.
ii. Minimum Adjustment. No adjustment of the conversion rate
shall be made if the amount of any such adjustment would be an amount
less than five percent (5%) of the conversion rate then in effect, but
any such amount shall be carried forward and an adjustment in respect
thereof shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any
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other amount or amounts so carried forward, shall aggregate an increase
or decrease of five percent (5%) or more.
8. Voting Rights.
a. General. Holders of Series B Stock shall be entitled to notice of
all meetings of the Corporation's stockholders but shall not be entitled to vote
except in respect of such matters as to which they are entitled to vote as a
class under the Delaware General Corporation Law and except as provided herein.
In connection with the foregoing,
i. Amendment. The Corporation shall not, without the approval by
vote or written consent of the holders of not less than a majority of the then
outstanding shares of Series B Stock, voting as a separate class, amend, alter
or repeal any of the provisions of the Certificate of Incorporation or the
Certificate of Designation creating this Series B Stock which would alter or
change the powers, preferences or special rights of the shares of Series B Stock
so as to affect them adversely, including, but not limited to, increasing or
decreasing the par value of the Series B Stock.
ii. Right to Designate Directors. If the convertible feature of the
Series B Stock into Common Stock is not exercisable by July 31, 1999 because
neither of the Nasdaq Conditions has been satisfied, then the number of
directors constituting the Board of Directors shall, without further action, be
increased by such number as is equal to one more than the number of directors
constituting the Board at such time (i.e., if such Board is constituted by four
(4) directors then the number of directors shall be increased by five (5), for a
total of nine directors), and the holders of a majority of the outstanding
shares of Series B Stock shall have, in addition to the other voting rights set
forth herein, the exclusive right, voting together as a single class, to elect
the directors necessary to fill the vacancies created by such increase in the
size of the Board (the "Additional Directors"). Additional Directors shall
continue as directors and such additional voting right shall continue until such
time as one of the Nasdaq Conditions is satisfied, at which time such Additional
Directors shall cease to be directors and such additional voting right of the
holders of shares of Series B Stock shall terminate.
iii. Procedures. The foregoing rights of holders of shares of Series
B Stock to take any action as provided in this Section 8 may be exercised at any
annual meeting of stockholders or at a special meeting of stockholders held for
such purpose as hereinafter provided or at any adjournment thereof, or by the
written consent, delivered to the Secretary of the Corporation, of the holders
of the minimum number of shares of Series B Stock required to take such action.
So long as such right to vote continues (and unless such right has been
exercised by written consent of the minimum number of shares required to take
such action), the Chairman of the Board of Directors may call, and upon the
written request of holders of record of 20% of the outstanding shares of Series
B Stock, addressed to the Secretary of the Corporation at the principal office
of the Corporation, shall call, a special meeting of the holders of shares
entitled to vote as provided herein. The Corporation shall use its best efforts
to hold such meeting within 60 days after delivery of such request to the
Secretary, at the place and upon the notice provided by law and in the Bylaws
for the holding of meetings of stockholders.
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iv. Additional Director Vacancies and Removals. Each Additional
Director elected pursuant to Subsection 8c hereof shall serve until the annual
meeting for the year in which his or her term expires and until his or her
successor shall be elected and shall qualify, unless such Additional Director's
term of office shall have terminated pursuant to the provisions of Subsection c
hereof, as the case may be. In case any vacancy shall occur among the Additional
Directors elected pursuant to Subsection 8c hereof, such vacancy may be filled
for the unexpired portion of the term by vote of the remaining Additional
Director or Additional Directors theretofore elected by such holders (or such
Additional Director's or Additional Directors' successor in office), if any. If
any such vacancy is not so filled within 20 days after the creation thereof or
if all of the Additional Directors so elected shall cease to serve as directors
before their term shall expire, the holders of the shares of Series B Stock then
outstanding and entitled to vote for such director pursuant to the provisions of
Subsection 8c hereof, as the case may be, may elect successors to hold office
for the unexpired terms of any vacant directorships, by written consent as
herein provided, or at a special meeting of such holders called as provided
herein. The holders of a majority of the shares of Series B Stock entitled to
vote for Additional Directors pursuant to Subsection 8c hereof, as the case may
be, shall have the right to remove with or without cause at any time and replace
any Additional Directors such holders have elected pursuant to such section, by
written consent as herein provided, or at a special meeting of such holders
called as provided herein.
9. No Reissuance of Series B Stock. No share or shares of Series B
Stock acquired by the Corporation by reason of purchase, conversion or otherwise
shall be reissued, and all such shares of Series B Stock shall be canceled,
retired and eliminated from the shares of Series B Stock which the Corporation
shall be authorized to issue. Upon the filing of a certificate with the
Secretary of State of the State of Delaware as contemplated by paragraph 2
hereof, any such shares of Series B Stock acquired by the Corporation shall have
the status of authorized and unissued shares of Preferred Stock issuable in
undesignated Series and may be redesignated and reissued in any series other
than as Series B Stock.
10. Exclusion of Other Rights. Except as may otherwise be required by
law, shares of Series B Stock shall not have any voting powers, designations,
preferences and rights, other than those specifically set forth herein (as may
be amended from time to time) and in the Certificate of Incorporation.
11. Registered Holders. A holder of Series B Stock registered on the
Corporation's stock transfer books as the owner of shares of Series B Stock
shall be treated as the owner of such shares for all purposes. All notices and
all payments required to be mailed to a holder of shares of Series B Stock shall
be mailed to such holder's registered address on the Corporation's stock
transfer books, and all dividend and redemption payments to a holder of shares
of Series B Stock made hereunder shall be deemed to be paid in compliance hereof
on the date such payments are deposited into the mail addressed to such holder
at his registered address on the Corporation's stock transfer books.
12. Headings of Subdivisions. The headings of the various subdivisions
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
X-00
00
00. Severability of Provisions. If any right, preference or limitation
of the Series B Stock set forth herein (as may be amended) from time to time is
invalid, unlawful or incapable of being enforced by reason of any rule of law or
public policy, such right, preference or limitation (including, without
limitation, the dividend rate) shall be enforced to the maximum extent permitted
by law and all other rights, preferences and limitations set forth herein (as so
amended) which can be given effect without the invalid, unlawful or
unenforceable right, preference or limitation shall, nevertheless, remain in
full force and effect, and no right, preference or limitation herein set forth
shall be deemed dependent upon any other such right, preference or limitation
unless so expressed herein.
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IN WITNESS WHEREOF, the undersigned has executed this
Certificate this 27th day of April, 1999.
SEMICONDUCTOR LASER INTERNATIONAL
CORPORATION
By: __________________________
Xxxxxxxx X. Xxxxxxx
President & Chief Executive Officer
17
Exhibit B
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into as
of April 28, 1999, by and between Semiconductor Laser International Corporation,
a Delaware corporation (the "Company"), and bmp Management Consultants GmbH, a
German limited liability corporation ("bmp Consultants").
WHEREAS, in connection with certain financial and strategic planning to
be undertaken by the Company, including the creation of a strategic business
plan and the identification of appropriate sources of capital for the Company,
the Company agrees to retain bmp Consultants as a consultant, and bmp
Consultants agrees to become a consultant to the Company, on the terms and
subject to the conditions hereinafter contained;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, each intending to be legally bound, do hereby agree as follows:
1. Duties; Compensation.
1.1 Duties. The Company hereby retains bmp Consultants, effective May
3, 1999, as a consultant to assist the Company, from time to time as shall be
mutually agreed to by the Company and bmp Consultants, with its financial and
strategic planning. The services to be provided by bmp Consultants in this
regard shall include, but are not limited to, the following:
(a) the identification and description of production and management
processes of the Company focusing primarily on supplier, distribution, and sales
management;
(b) creation and development of a detailed strategic business plan
and catalogue to improve the Company's management, focusing primarily on
supplier, distribution, and sales management;
(c) implementation and control of the strategic business plan and
catalogue;
(d) enhancement of the Company's reputation in the laser industry
and the financial community;
(e) identification and introduction of the Company to strategic
partners and investors in Europe;
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(f) development and improvement of the Company's relationship with
strategic partners in Europe; and
(g) identification and facilitation of investments in the Company
on the Berliner Freiverkehr.
1.2 Compensation. As compensation for bmp Consultants' consulting
services hereunder, the Company hereby agrees to pay bmp Consultants an amount
equal to a maximum of $200,000 USD in the aggregate, based upon per diem
consulting rate of $1,500 USD for a regular consultant and $2,000 USD for a
senior consultant or partner of bmp Consultants or any of its affiliates. Such
$200,000 USD maximum consulting fee shall be inclusive of any travel or other
related expenses. bmp Consultants shall provide the Company with a monthly
report regarding the status of bmp Consultants' consulting services, the days
billed and any additional related expenses. Each payment by the Company for bmp
Consultants' consulting services shall be counted against the $200,000 USD
maximum and shall be payable as follows:
(a) Six monthly installments of $15,000 USD commencing immediately
following the funding of the April Installment (as defined in Amendment No. 1 to
Securities Purchase Agreement, dated as of the date hereof, between the Company
and bmp Mobility AG Venture Capital ("bmp")) and ending five months following
such funding date;
(b) $50,000 USD payable at the closing of the Final Installment;
and
(c) Six monthly installments of $10,000 USD commencing six months
following the funding of the April Installment and ending twelve months
following such funding date.
1.3 Relationship to the Company. bmp Consultants shall have no power or
authority, express or implied, to enter into any contract or commitment,
including any agreement with respect to any transaction to raise debt or equity
("Transaction") on behalf of the Company. In addition, nothing contained herein
shall be construed in any manner that would deem bmp Consultants or any of its
employees to be an employee of the Company.
2. Confidentiality. bmp Consultants shall not disclose to any third party, other
than its representatives, agents, advisors, counsel, accountants or potential
participants in any Transaction (collectively, "Representatives"), any
non-public information about the Company or any Transaction, including, but not
limited to, any strategic business plan, except (i) as may be required by court
order, subpoena or governmental authority or (ii) with the prior written consent
of the other party hereto. The parties hereto agree that the remedy at law for
any breach of the requirements of this Section 2 will be inadequate and that any
breach would cause such immediate and permanent damage as would be impossible to
ascertain, and, therefore, the parties hereto agree and consent that in the
event of any breach of this subsection, in addition to any and all other legal
and equitable remedies available for such breach, including a recovery of
damages, the non-breaching parties shall be entitled to obtain preliminary or
permanent injunctive relief without the necessity of proving
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actual damage by reason of such breach and, to the extent permissible under
applicable law, a temporary restraining order may be granted immediately on
commencement of such action.
3. Termination. This Agreement shall be terminated, (i) without further
obligation of the Company, upon any breach by bmp of its installment payment
obligations under Section 1 of Amendment No. 1 to Securities Purchase Agreement,
dated as of the date hereof, between the Company and bmp and (ii) at any time at
the option of bmp Consultants. This Agreement may also be terminated at any time
by mutual consent of bmp Consultants and the Company. Upon the termination of
this Agreement, this Agreement shall forthwith become null and void, other than
the agreements set forth in Sections 2, 3 and 4 hereof.
4. Miscellaneous.
4.2 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. None of the parties hereto shall assign any rights or delegate any
duties hereunder without the prior written consent of the other party.
4.3 Governing Law. This Agreement shall be construed in accordance
with, and governed by, the internal laws of the Republic of Germany, without
giving effect to the principles of conflict of laws thereof.
4.4 Entire Agreement. This Agreement sets forth the entire
understanding and agreement of the parties with respect to this subject matter
and supersedes any and all prior understandings, negotiations or agreements
among the parties hereto, both written and oral, with respect to such subject
matter.
4.5 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and all of which together shall constitute
a single agreement.
4.6 Severability. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, in whole or in part, the validity of the
remaining provisions shall not be affected and the remaining portion of any
provision held to be invalid, illegal or unenforceable shall in no way be
affected, prejudiced or disturbed thereby.
4.7 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person or entity other than the parties hereto and
their respective successors and permitted assigns.
4.8 Amendment and Modification. This Agreement may be amended or
modified only by written agreement executed by the parties hereto.
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20
4.9 Waiver. At any time prior to the termination of this Agreement,
each of the parties hereto may (i) extend the time for the performance of any of
the obligations or other acts of any other party hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto, or (iii) waive compliance with any of the
covenants, agreements or conditions contained herein. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in a written instrument signed by the party granting such waiver. Such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or future failure.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
SEMICONDUCTOR LASER INTERNATIONAL
CORPORATION
By:__________________________________________
Name: Xxxxxxxx X. Xxxxxxx
Title: President, Chief Executive Officer
and Chairman of the Board
bmp MANAGEMENT CONSULTANTS GmbH
By:__________________________________________
Name:
Title:
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22
Exhibit C
FORM OF COMMON STOCK PURCHASE WARRANT
Void after [Final Installment Date] __, 2004
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THIS WARRANT AND SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. THIS WARRANT AND SUCH SHARES MAY NOT BE
TRANSFERRED EXCEPT UPON CONDITIONS SPECIFIED IN THIS WARRANT, AND NO TRANSFER OF
THIS WARRANT OR SUCH SHARES SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH
CONDITIONS SHALL HAVE BEEN COMPLIED WITH.
-----------------
COMMON STOCK PURCHASE WARRANT
SEMICONDUCTOR LASER INTERNATIONAL CORPORATION, a Delaware
corporation (the "Company"), having its principal office at 00 Xxxx Xxxxx,
Xxxxxxxxxx, Xxx Xxxx 00000, hereby certifies that, for value received, bmp
MOBILITY AG VENTURE CAPITAL ("bmp"), or assigns, is entitled, subject to the
terms set forth below, to purchase from the Company at any time on or from time
to time after [Final Installment Date] __, 1999 and before 5:00 P.M., New York
City time, on [Final Installment Date] __, 2004, Five Hundred Thousand (500,000)
fully paid and non-assessable shares of Common Stock of the Company, at the
price per share (the "Purchase Price") of Fifty Cents ($0.50 USD). The number
and character of such shares of Common Stock and the Purchase Price are subject
to adjustment as provided herein.
This Warrant is one of the Common Stock Purchase Warrants (the
"Warrants") originally issued as of the Original Issue Date (as defined below)
and evidencing the right to purchase an aggregate of Five Hundred Thousand
(500,000) shares of Common Stock of the Company, subject to adjustment as
provided herein.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(1) The term "Company" includes the Company and any
corporation which shall succeed to or assume the
obligations of the Company hereunder.
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23
(2) The term "Common Stock" includes all stock of any
class or classes (however designated) of the Company,
authorized upon the Original Issue Date or
thereafter, the holders of which shall have the
right, without limitation as to amount, either to all
or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends
and distributions on any shares entitled to
preference, and the holders of which shall
ordinarily, in the absence of contingencies, be
entitled to vote for the election of a majority of
directors of the Company (even though the right so to
vote has been suspended by the happening of such a
contingency).
(3) The term "Series B Convertible Preferred Stock" shall
mean the Company's "Series B Convertible Preferred
Stock" as authorized by the Company's Certificate of
Incorporation as amended through the Original Issue
Date.
(4) The "Original Issue Date" is [Final Installment Date]
__, 1999, the date as of which this Warrant was first
issued.
(5) 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 this Warrant at any time shall be
entitled to receive, or shall have received, upon the
exercise of this 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 6 or otherwise.
(6) The term "Purchase Price per share" shall be the then
applicable exercise price for one share of Common
Stock.
(7) The terms "registered" and "registration" refer to a
registration effected by filing a registration
statement in accordance with the Securities Act, to
permit the disposition of Common Stock (or Other
Securities) issued or issuable upon the exercise of
this Warrant, and any post-effective amendments and
supplements filed or required to be filed to permit
any such disposition.
(8) The term "Securities Act" means the Securities of Act
of 1933 as the same shall be in effect at the time.
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2. REGISTRATION, ETC.
2.1 This Warrant, the shares of Common Stock issuable upon
exercise thereof and the Other Securities shall be Registrable
Securities (as defined in the Registration Rights Agreement,
dated as of February 5, 1999, between the Company and bmp, the
"Registration Rights Agreement") and shall have such
registration rights as provided in the Registration Rights
Agreement.
3. SALE OR EXERCISE WITHOUT REGISTRATION. If, at the time of any
exercise, transfer or surrender for exchange of this Warrant or of Common Stock
(or Other Securities) previously issued upon the exercise of this Warrant, this
Warrant or Common Stock (or Other Securities) shall not be registered under the
Securities Act, the Company may require, as a condition of allowing such
exercise, transfer or exchange, that the record owner or transferee of this
Warrant or Common Stock (or Other Securities), as the case may be, furnish to
the Company a satisfactory opinion of counsel to the effect that such exercise,
transfer or exchange may be made without registration under the Securities Act,
provided that the disposition thereof shall at all times be within the control
of such record owner or transferee, as the case may be, and provided further
that nothing contained in this section 2 shall relieve the Company from
complying with any request for registration pursuant to section 1 hereof. The
first holder of this Warrant represents to the Company that it is acquiring this
Warrant for investment and not with a view to the distribution thereof.
4. EXERCISE OF WARRANT; PARTIAL EXERCISE; EXERCISE BY SURRENDER.
4.1 EXERCISE IN FULL. Subject to the provisions hereof, this
Warrant may be exercised in full by the record owner hereof by
surrender of this Warrant, with the form of subscription at
the end hereof duly executed by such record owner, to the
Company at its principal office accompanied by payment, in
cash or by certified or official bank check payable to the
order of the Company, in the amount obtained by multiplying
the number of shares of Common Stock called for on the face of
this Warrant (without giving effect to any adjustment therein)
by the Purchase Price.
4.2 PARTIAL EXERCISE. Subject to the provisions hereof, this
Warrant may be exercised in part by surrender of this Warrant
in the manner and at the place provided in subsection 3.1
except that the amount payable by the record owner upon any
partial exercise shall be the amount obtained by multiplying
(a) the number of shares of Common Stock (without giving
effect to any adjustment therein) designated by the record
owner in the subscription at the end hereof by (b) the
Purchase Price. Upon any such partial exercise, the Company at
its expense will forthwith issue and deliver to or upon the
order of the record owner hereof a new Warrant or Warrants of
like tenor, in the name of the record owner hereof or as
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such record owner (upon payment by such record owner of any
applicable transfer taxes) may request, calling in the
aggregate on the face or faces thereof for the number of
shares of Common Stock equal (without giving effect to any
adjustment therein) to the number of such shares called for on
the face of this Warrant minus the number of such shares
designated by the record owner in the subscription at the end
hereof.
4.3 DEFINITION OF MARKET PRICE. As used herein, the phrase "Market
Price" at any date shall be deemed to be (i) if the principal
trading market for such securities is an exchange, the last
reported sale price, or, in case no such reported sale takes
place on such date, the average of the last reported sale
prices for the last three (3) trading days, in either case as
officially reported on any consolidated tape, (ii) if the
principal market for such securities is the over-the-counter
market, the high bid price on such date as set forth by NASDAQ
or, if the security is not quoted on NASDAQ, the high bid
price as set forth in the National Quotation Bureau sheet
listing such securities for such day. Notwithstanding the
foregoing, if there is no reported closing price or high bid
price, as the case may be, on the date next preceding the
event requiring an adjustment hereunder, then the Market Price
shall be determined as of the latest date prior to such day
for which such closing price or high bid price is available,
or if the securities are not quoted on NASDAQ, as determined
in good faith by resolution of the Board of Directors of the
Company, based on the best information available to it.
4.4 COMPANY TO REAFFIRM OBLIGATIONS. The Company will, at the time
of any exercise of this Warrant, upon the request of the
record owner hereof, acknowledge in writing its continuing
obligation to afford to such record owner any rights
(including, without limitation, any right to registration of
the shares of Common Stock or Other Securities issued upon
such exercise) to which such record owner shall continue to be
entitled after such exercise in accordance with the provisions
of this Warrant, provided that if the record owner of this
Warrant shall fail to make any such request, such failure
shall not affect the continuing obligation of the Company to
afford such record owner any such rights.
5. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within ten (10) 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 record owner hereof, or as such record owner (upon
payment by such record owner of any applicable transfer taxes) may direct, a
certificate or certificates for the number of full paid and non-assessable
shares of Common Stock (or Other Securities) to which such record owner shall be
entitled upon such exercise, plus, in lieu of any fractional share to which such
record owner would otherwise be entitled, cash equal to such fraction multiplied
by the then current market value of one full share, together with any other
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stock or other securities and property (including cash, where applicable) to
which such record owner is entitled upon such exercise pursuant to section 5 or
otherwise.
6. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY, ETC.;
RECLASSIFICATION, ETC. In case at any time or from time to time after the
Original Issue Date the holders of Common Stock (or Other Securities) shall have
received or (on or after the record date fixed for the determination of
stockholders eligible to receive) shall have become entitled to receive without
payment therefor
(1) other or additional stock or other securities or
property (other than cash) by way of dividend, or
(2) any cash paid or payable (including, without
limitation, by way of dividend other than a dividend
payable out of earned surplus of the Company), or
(3) other or additional (or less) stock or other
securities or property (including cash) by way of
spin-off, split-up, recapitalization, combination of
shares or similar corporate rearrangement,
then, and in each such case the record owner of this Warrant, upon the
exercise hereof as provided in section 3, shall be entitled to receive the
amount of stock and other securities and property (including cash in the cases
referred to in subdivisions (b) and (c) of this section 5) which such record
owner would hold on the date of such exercise if on the Original Issue Date he
had been the holder of record of the number of shares of Common Stock called for
on the face of this Warrant and had thereafter, during the period from the
Original Issue Date to and including the date of such exercise, retained such
shares and all such other additional (or less) stock and other securities and
property (including cash in the cases referred to in subdivisions (b) and (c) of
this section 5) receivable by him as aforesaid during such period, giving effect
to all adjustments called for during such period by section 6 and 7 hereof.
7. REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case the
Company after the Original Issue Date shall (a) effect a reorganization, (b)
consolidate or merge with 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, the record owner of this Warrant, upon the exercise hereof as provided in
Section 3 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 be entitled to receive (and the Company shall be entitled to
deliver), in lieu of the Common Stock (or Other Securities) issuable upon such
exercise prior to such consummation or such effective date, the stock and other
securities and property (including cash) to which such record owner would have
been entitled upon such consummation or in connection with such dissolution, as
the case may be, if such record owner had so exercised this Warrant immediately
prior thereto, all subject to further adjustment thereafter as provided in
sections 5 and 7 hereof.
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8. OTHER ADJUSTMENTS.
8.1 GENERAL. In any case to which sections 5 and 6 hereof are not
applicable, where the Company shall issue or sell shares of
its Common Stock after the Original Issue Date and prior to
the expiration of this Warrant either (a) in the case of
securities traded on an exchange, for consideration per share
less than the then current Market Price or (b) in the case of
securities privately placed for sale by the Company other than
the purchase by bmp of the Series B Convertible Preferred
Stock, for a consideration per share less than Seventy-Five
Percent (75%) of the then current Market Price (as such term
is defined above) (hereinafter, the "Lower Exercise Price"),
then the Purchase Price in effect hereunder shall
simultaneously with such issuance or sale be equitably
adjusted by the Board of Directors of the Company in good
faith and/or the number of shares of Common Stock issuable
upon exercise hereof shall be increased, so that the record
owner of this Warrant does not suffer any dilution.
8.2 CONVERTIBLE SECURITIES. In case the Company shall issue or
sell any securities convertible into Common Stock of the
Company ("Convertible Securities") after the date hereof other
than the Series B Convertible Preferred Stock, there shall be
determined the price per share for which Common Stock is
issuable upon the conversion or exchange thereof, such
determination to be made by dividing (a) the total amount
received or receivable by the Company as consideration for the
issue or sale of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable
to the Company upon the conversion or exchange thereof, by (b)
the maximum number of shares of Common Stock of the Company
issuable upon the conversion or exchange of all of such
Convertible Securities.
If the price per share so determined shall be less than the
applicable Purchase Price per share, then such issue or sale shall be deemed to
be an issue or sale for cash (as of the date of issue or sale of such
Convertible Securities) of such maximum number of shares of Common Stock at the
price per share so determined, provided that, if such Convertible Securities
shall by their terms provide for an increase or increases, with the passage of
time, in the amount of additional consideration, if any, to the Company, or in
the rate of exchange, upon the conversion or exchange thereof, the adjusted
Purchase Price per share shall, forthwith upon any such increase becoming
effective, be readjusted to reflect the same, and provided further, that upon
the expiration of such rights of conversion or exchange of such Convertible
Securities, if any thereof shall not have been exercised, the adjusted Purchase
Price per share shall forthwith be readjusted and thereafter be the price which
it would have been had an adjustment been made on the basis that the only shares
of Common Stock so issued or sold were issued or sold upon the conversion or
exchange of such Convertible Securities, and that they were issued or sold for
the consideration actually received by the Company upon such conversion or
exchange, plus the consideration, if any, actually received by the Company for
the issue or sale of all of such Convertible Securities which shall have been
converted or exchanged.
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8.3 RIGHTS AND OPTIONS. In case the Company shall grant any rights
or options to subscribe for, purchase or otherwise acquire
Common Stock , there shall be determined the price per share
for which Common Stock is issuable upon the exercise of such
rights or options, such determination to be made by dividing
(a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of such
rights or options, by (b) the maximum number of shares of
Common Stock of the Company issuable upon the exercise of such
rights or options.
If the price per share so determined shall be less than the
applicable Purchase Price per share, then the granting of such rights or options
shall be deemed to be an issue or sale for cash (as of the date of the granting
of such rights or options) of such maximum number of shares of Common Stock at
the price per share so determined, provided that, if such rights or options
shall by their terms provide for an increase or increases, with the passage of
time, in the amount of additional consideration payable to the Company upon the
exercise thereof, the adjusted Purchase Price per share shall, forthwith upon
any such increase becoming effective, be readjusted to reflect the same, and
provided, further, that upon the expiration of such rights or options, if any
thereof shall not have been exercised, the adjusted Purchase Price per share
shall forthwith be readjusted and thereafter be the price which it would have
been had an adjustment been made on the basis that the only shares of Common
Stock so issued or sold were those issued or sold upon the exercise of such
rights or options and that they were issued or sold for the consideration
actually received (by the Company) upon such exercise, plus the consideration,
if any, actually received by the Company for the granting of all such rights or
options, whether or not exercised.
8.4 MINIMUM ADJUSTMENT. No adjustment shall be made under this
Article 7 if the amount of any such adjustment would be an
amount less than five percent (5%) of the Purchase Price then
in effect, but any such amount shall be carried forward and an
adjustment in respect thereof shall be made at the time of and
together with any subsequent adjustment which, together with
such amount and any other amount or amounts so carried
forward, shall aggregate an increase or decrease of five
percent (5%) or more.
9. FURTHER ASSURANCES. The Company will take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable shares of stock upon the exercise of all Warrants
from time to time outstanding.
10. CERTIFICATE OF CHIEF FINANCIAL OFFICER AS TO ADJUSTMENTS. In each
case of any adjustment or readjustment in the shares of Common Stock (or Other
Securities) issuable upon the exercise of this Warrant, the Company at its
expense will promptly cause the Company's Chief Financial Officer to compute
such adjustment or readjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment or readjustment and
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showing in detail the facts upon which such adjustment or readjustment is based,
and the number of shares of Common Stock outstanding or deemed to be
outstanding; provided that if any similar certificate is provided by the
Company's regularly retained auditor to the holder of any other warrant of the
Company, the Company's regularly retained auditor shall provide this certificate
to the record owner of this Warrant. The Company will forthwith mail a copy of
each such certificate to the record owner of this Warrant.
10. NOTICES OF RECORD DATE, ETC.
In the event of
(1) any taking by the Company of a record of the holders
of any class of securities for the purpose of
determining the holders thereof who are entitled to
receive any dividend (other than a cash dividend
payable out of earned surplus of the Company) or
other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of
any class or any other securities or property, or to
receive any other right, or
(2) any capital reorganization of the Company, any
reclassification or recapitalization of the capital
stock of the Company or any transfer of all or
substantially all the assets of the Company to or
consolidation or merger of the Company with or into
any other person, or
(3) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed
to the record owner of this Warrant a notice specifying (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right and (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up. Such
notice shall be mailed at least twenty (20) days prior to date therein
specified.
12. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company will at all times reserve and keep available, solely for issuance and
delivery upon the exercise of this Warrant, all shares of Common Stock (or Other
Securities) from time to time issuable upon the exercise of this Warrant.
13. LISTING ON SECURITIES EXCHANGES; REGISTRATION. If the Company at
any time after the Original Issue Date shall list any Common Stock on any
national securities exchange and shall register such Common Stock under the
Securities Exchange Act of 1934 (as then in
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effect, or any similar statute then in effect), the Company will, at its
expense, to the extent permitted by the rules of such exchange, simultaneously
list on such exchange, upon official notice of issuance upon the exercise of
this Warrant, all shares of Common Stock from time to time issuable upon the
exercise of this Warrant, and maintain such listing of all shares of Common
Stock from time to time issuable upon the exercise of this Warrant, and the
Company will so list on any national securities exchange, will so register and
will maintain such listing of, any Other Securities if and at the time that any
securities of like class or similar type shall be listed on such national
securities exchange by the Company.
14. EXCHANGE OF WARRANTS. Subject to the provisions of section 2
hereof, upon surrender for exchange of this Warrant, properly endorsed, to the
Company, the Company at its own expense will issue and deliver to or upon the
order of the record owner thereof a new Warrant of like tenor, in the name of
such record owner or as such record owner (upon payment by such record owner of
any applicable transfer taxes) may direct, calling in the aggregate on the face
or faces thereof for the number of shares of Common Stock called for on the face
of this Warrant.
15. REPLACEMENT OF WARRANTS. Upon 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, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
16. WARRANT AGENT. The Company may, by written notice to each
record owner of this Warrant, appoint an agent having an office in New York, New
York, for the purpose of issuing Common Stock (or Other Securities) upon the
exercise of this Warrant pursuant to section 3, exchanging this Warrant pursuant
to section 13, and replacing this Warrant pursuant to section 14, 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.
17. NEGOTIABILITY, ETC. This Warrant is issued upon the following
terms, to all of which each holder or owner hereof by the taking hereof consents
and agrees:
(1) subject to the provisions hereof, title to this
Warrant may be transferred, in whole but not in part,
by endorsement (by the holder hereof executing the
form of assignment at the end hereof) and delivery in
the same manner as in the case of a negotiable
instrument transferable by endorsement and delivery;
(2) subject to the foregoing, any person in possession of
this Warrant properly endorsed is authorized to
represent himself as absolute owner hereof and is
empowered to transfer absolute title hereto by
endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner
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waives and renounces all of his equities or rights in
this Warrant in favor of each such bona fide
purchaser and each such bona fide purchaser shall
acquire absolute title hereto and to all rights
represented hereby; and
(3) until this Warrant is transferred on the books of the
Company, the Company may treat the record owner
hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the Company.
18. NOTICES, ETC. All notices and other communications from the
Company to the record owner 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 record owner, or, until an address
is so furnished, to and at the address of the last record owner of this Warrant
who has so furnished an address to the Company.
19. MISCELLANEOUS. This Warrant and any term thereof 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 is being delivered in the State of New
York and shall be construed and enforced in accordance with and governed by the
internal laws of such state. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
20. EXECUTED EXPIRATION. The right to exercise this Warrant shall
expire at 5:00 P.M., New York City time, on [Final Installment Date] __, 2004.
21. ASSIGNABILITY. This Warrant is fully assignable, in whole but
not in part, at any time, subject to applicable securities laws.
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Dated:[Final Installment Date] __, 1999 SEMICONDUCTOR LASER INTERNATIONAL
CORPORATION
By:_______________________________
Xxxxxxxx X. Xxxxxxx
President
[Corporate Seal]
Witness:
____________________________________
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: SEMICONDUCTOR LASER INTERNATIONAL CORPORATION
00 Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
The undersigned, the record owner of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder,* shares of Common Stock of SEMICONDUCTOR LASER
INTERNATIONAL CORPORATION, and herewith make payment of $___________ therefor,
and requests that the certificates for such shares be issued in the name of, and
delivered to,____________________ , whose address is
___________________________.
Dated:______________________
____________________________________________
(Signature must conform in all respects to
name of record owner as specified on the
face of the Warrant
____________________________________________
(Address)
____________
* Insert here the number of shares called for on the face of the Warrant (or, in
the case of a partial exercise, the portion thereof as to which the Warrant is
being exercised), in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or case which,
pursuant to the adjustment provisions of the Warrant, may be deliverable upon
exercise.
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FORM OF ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers
unto _____________________________ the right represented by the within Warrant
to purchase shares of Common Stock of SEMICONDUCTOR LASER INTERNATIONAL
CORPORATION to which the within Warrant relates, and appoints
___________________ as Attorney-in-Fact to transfer such right on the books of
____________________ with full power of substitution in the premises. The
Warrant being transferred hereby is the Common Stock Purchase Warrant initially
issued by SEMICONDUCTOR LASER INTERNATIONAL CORPORATION as of [Final Installment
Date] ___, 1999.
Dated:____________________
______________________________
(Signature must conform in all respects to
name of record owner as specified on the
face of the Warrant)
______________________________
(Address)
________________________________
Signature guaranteed by a Bank or Trust
Company having its principal office in New
York City or by a Member Firm of the New
York or American Stock Exchange
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