Exhibit 10.3


 


SECOND AMENDMENT TO SHARE EXCHANGE AGREEMENT


 


SECOND AMENDMENT TO SHARE EXCHANGE AGREEMENT (this “Amendment”),
dated  as of March 31, 2004, by and
among SCL VENTURES, LTD., a British Virgin Islands company having an address at
515 East Olas Boulevard, Suite 1350, Fort Lauderdale, FL 33301 (“SCL”), LASER
RECORDING SYSTEMS, INC., a New Jersey corporation having an address at 1395 New
York Avenue, Huntington Station, NY 11746 (“Laser” or the “Company”), certain
shareholders of SCL signatory hereto (“SCL Signatory Shareholders”), and
certain shareholders of Laser signatory hereto (the “Laser Signatory
Shareholders”).


 


WHEREAS, SCL, Laser, the SCL Signatory Shareholders and the Laser
Signatory Shareholders entered into that certain Share Exchange Agreement,
dated as of May 20, 2003, and that certain Amendment to Share Exchange
Agreement, dated November 30, 2003 (together, the “Exchange Agreement”);


 


WHEREAS, as consideration for agreeing to certain restrictions on
transfer of their shares pursuant to Section 10.9 of the Exchange
Agreement, the Laser Signatory Shareholders were to be granted limited
preemptive rights which were unintentionally omitted from the Exchange
Agreement; and


 


WHEREAS, SCL, Laser, the SCL Signatory Shareholders and the Laser
Signatory Shareholders wish to amend the Exchange Agreement to provide for the
previously agreed upon limited preemptive rights for the Laser Signatory
Shareholders and to amend certain other provisions of the Exchange Agreement as
provided herein.


 


NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties, intending to be legally
bound, agree as follows:


 


1.                                       Limited Preemptive Rights. 
The Exchange Agreement shall be amended by adding the following
Section 10.10:


 


“10.10.  The Laser Signatory Shareholders are hereby
granted limited preemptive rights as follows:


 


(a)                                  Preemptive
Rights.  Each Laser Signatory
Shareholder shall have the right, on the terms set forth below, to purchase
such Laser Signatory Shareholder’s Pro Rata Share of New Securities which Laser
may, after the Closing, from time to time, propose to sell and issue for cash
or other consideration to officers, directors and others holding 5% or more of
post-exchange shares of Laser (“Insiders”) in the event such sale
and issuance is at a price per share that is below the average closing sales
price of Laser common stock for the thirty (30) days prior to such sale and
issuance (the “Preemptive
Rights”).


 


(b)                                 Notice.  In the event Laser proposes to undertake an
issuance of New Securities, it shall give the Laser Signatory Shareholders
written notice of its intention, describing the type of New Securities, the
consideration and the general terms upon which Laser proposes to issue the
same.  Each such Laser Signatory
Shareholder shall have 7 days from the date of receipt of any such notice to
agree to purchase its Pro Rata Share as of such date of such New Securities for
the cash or cash equivalent consideration and upon


 

















 


the general terms specified in the notice by giving written notice to
Laser and stating therein the quantity of New Securities to be purchased.


 


(c)                                  Limitations.  Notwithstanding the provisions of
Section 10.10(a) above, the Preemptive Rights hereby granted to the Laser
Signatory Shareholders are subject to the following restrictions:


 


(i)                                     The Preemptive
Rights shall not be effective as long as the Laser Signatory Shareholders or
their designees comprise  a majority of
Laser’s board of directors; and


 


(ii)                                  the Preemptive Rights
of any Laser Signatory Shareholder shall terminate upon expiration or
termination as to such Laser  Signatory
Shareholder of the lock-up provisions contained in Section 10.9 of this
Agreement.


 


For purposes of this Section 10.10, the term “New Securities” shall mean any authorized
but unissued equity securities of Laser and all rights, options or warrants to
purchase securities of Laser of any type whatsoever that are, or may become,
convertible into equity securities of Laser; provided, however, that the term “New Securities” does not include:


 


(i)                                     equity securities
issued pursuant to stock dividends, stock splits or similar transactions;


 


(ii)                                  equity securities
issued pursuant to the acquisition of another corporation or entity (not owned
or controlled by Insiders) by Laser or any of its subsidiaries by merger,
acquisition of equity interest, purchase of all or substantially all of the
assets, reorganization or other transactions whereby Laser or any of its
subsidiaries shall become the owner of or have the right to vote more than
fifty percent (50%) of the voting power of such corporation or entity;


 


(iii)                               grants of compensatory
options, warrants or restricted securities, or equity securities issued
pursuant to compensatory grants of options, warrants or restricted securities
to Insiders at a purchase price greater than or equal to 80% of the average
closing sales price of Laser common stock for the thirty (30) days prior to
such issuance;


 


(iv)                              equity securities issued
to financial institutions as consideration for or in connection with any
commercial credit arrangements, equipment financings or similar transactions
obtained by Laser;


 


(v)                                 equity securities
issuable upon exercise of options or warrants issued by Laser or SCL and  outstanding as of the date hereof; or


 


(vi)                              equity securities issued
to SCL, to shareholders of SCL, or to consultants and finders pursuant to or as
contemplated by this Agreement, or to the Fund as contemplated by
Section 4.4 of this Agreement, but only to the extent that such issuances,
when aggregated with prior issuances pursuant to or as


 

















 


contemplated by this Agreement, do not exceed 80,833,333 shares of
Laser Common.


 


For purposes of this Section 10.10, the term “Pro Rata
Share” as of any date shall mean, with respect to the outstanding equity
securities of Laser, the ratio of (i) the percentage interest of Laser common
stock owned by a Laser Signatory Shareholder on such date (including any
warrants or options then held by such holder) to (ii) the total percentage
ownership of Laser Common Stock then outstanding held by all holders of Laser
common stock on such date (assuming exercise of any warrants and options then
outstanding).”


 


2.                                       Standstill.  
Section 10.4 of the Exchange Agreement shall be amended adding the
following sentence:


 


“Nothing contained in this Section 10.4 shall prohibit SCL
from offering or issuing additional shares of its equity securities prior to
the Closing.”


 


3.                                       Restriction on Sale of Laser Stock. 
Section 10.9.1 of the Exchange Agreement shall be amended by
changing the lock up period set forth in such Section 10.9.1 from two (2)
years to one (1) year from the date of the Closing.


 


4.                                       Amended Closing Date. 
Section 5.1 of the Exchange Agreement relating to the definition of
the term “Closing Date” is hereby amended to read in its entirety as follows:


 


“5.1   The Closing of the
Exchange shall take place upon five days’ written notice from SCL to Laser, but
no later than July 31, 2004 (the “Closing Date”).”


 


5.                                       Exchange Ratio. 
Section 3.1 of the Exchange Agreement shall be amended by adding
the following sentence:


 


“To the extent that the number of SCL Exchange Shares outstanding
as of the Closing Date is less than 76 million shares and therefore results in
SCL Shareholders holding less than 95% of the Laser Common outstanding
immediately following the Closing, the difference between the number of shares
of Laser Common issued at Closing and 76 million shall be reserved for future
issuance within the following 180 days to SCL Shareholders, finders or consultants
to SCL, or to others, including the Fund in accordance with Section 4.4,
in such amounts and for such consideration as determined by the SCL Signatory
Shareholders.”


 


6.                                       Payment of Fees and Expenses. 
Section 5.2.2 of the Exchange Agreement shall be amended by
deleting the second sentence of such Section 5.2.2 and replacing it with
the following:


 


“SCL agrees to pay all fees, costs and expenses incurred in
connection with the Exchange, including the preparation, assembly and mailing
of the proxy statement and the special meeting of shareholders relating to the
Exchange.”


 


7.                                       Board of Directors. 
Section 8.5.1 of the Exchange Agreement shall be amended by
changing the number of directors in the first sentence of such
Section 8.5.1 from five (5) to three (3) directors.


 


8.                                       Directors and Officers Insurance. 
The Exchange Agreement shall be amended by adding the following
Section 10.11:


 

















 


“10.11.  Directors and
Officers Insurance.  “The parties hereby
agree to use reasonable efforts to obtain a policy of directors and officers
liability insurance in an amount and on terms reasonably satisfactory to each
of the parties.”


 


9.                                       Exchange Agreement. 
All other terms and conditions of the Exchange Agreement shall remain in
full force and effect, as amended hereby.


 


10.                                 Consents. 
SCL and the SCL Signatory Shareholders represent and warrant that the
execution, delivery and performance by SCL of this Amendment has been duly
authorized by action of the Board of Directors of SCL.  Laser and the Laser Signatory Shareholders
represent and warrant that the execution, delivery and performance by Laser of
this Amendment has been duly authorized by action of the Board of Directors of
Laser.


 


11.                                 Capitalized Terms. 
All capitalized terms used but not defined herein shall have the same
meanings as ascribed thereto in the Exchange Agreement.


 


12.                                 Counterparts. 
This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.


 

















 


IN WITNESS WHEREOF, the parties have duly executed this Amendment
as of the date first above written, by signing on the appropriate signature
page hereto.


 


 


	
  SCL VENTURES, LTD.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Mitchell Sepaniak

  	
   

  	
   

  
	
    Mitchell
  Sepaniak

  	
   

  	
   

  
	
    President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCL SIGNATORY SHAREHOLDERS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Mitchell Sepaniak

  	
   

  	
   

  	
  /s/ Jack Chen

  	
   

  
	
   Mitchell
  Sepaniak

  	
   

  	
   Jack Chen

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Norman Rothstein

  	
   

  	
   

  	
   

  
	
   Norman
  Rothstein

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LASER RECORDING SYSTEMS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Carl Lanzisera

  	
   

  	
   

  
	
    Carl
  Lanzisera

  	
   

  	
   

  
	
    Chief
  Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LASER SIGNATORY SHAREHOLDERS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Carl Lanzisera

  	
   

  	
   

  	
  /s/ Carrie Niemiera

  	
   

  
	
   Carl
  Lanzisera

  	
   

  	
   Carrie
  Niemiera

  
	
   

  	
   

  	
   

  
	
  /s/ Harvey Kash

  	
   

  	
   

  	
   

  
	
   Harvey
  Kash