SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549


                                 --------------------

                                     FORM 10-QSB




(Mark one)
[x]    Quarterly Report under section 13 or 15(d) of the Securities
       Exchange Act of 1934

                       For the quarter ended June 30, 1999

[ ]    Transition Report under section 13 or 15(d) of the Securities
       Exchange Act of 1934

                          Commission File No. 0-27908

                      Semiconductor Laser International Corporation
  ------------------------------------------------------------------------
       (Exact Name of Small Business Issuer as Specified in its Charter)

             Delaware                                      16-1494566
----------------------------------------              -------------------
(State or other Jurisdiction of                         (I.R.S. Employer
Incorporation or Organization)                         Identification No.)

15 Link Drive, Binghamton, New York                          13904
----------------------------------------              -------------------
(Address of principal executive offices)                   (Zip code)

Registrant's telephone number, including area code: (607) 722-3800

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for a shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

               Yes    [x]                        No    [ ]

     As of July 12, 1999 there were outstanding 12,884,632 shares of the issuers
common stock, par value $.01 per share.

Transitional Small Business Disclosure Format

               Yes    [ ]                        No    [x]

<PAGE>
                                       1

                         Part I. Financial Information

Item 1. Financial Statements


                   Semiconductor Laser International Corporation

                                   Balance Sheet
<TABLE>
<CAPTION>

                                                   December 31,      June 30,
                                                       1998            1999
                                                                    (unaudited)
                                                   ------------     ------------
<S>                                               <C>              <C>
Assets
Current assets
  Cash                                            $    112,695     $  1,490,641
  Accounts Receivable, net of allowance for
   doubtful accounts of $560,645 and $560,645,
   respectively                                        296,193          240,464
  Inventory                                            333,806          330,253
  Prepaid expenses and other assets                    180,853          154,990
                                                   ------------     ------------
                  Total current assets                 923,547        2,216,348

Property, plant and equipment, net                   2,691,926        2,636,844
Deposits and other assets                              123,957          149,828
                                                   ------------     ------------
                  Total assets                    $  3,739,430     $  5,003,020
                                                   ============     ============

Liabilities and Shareholders' Equity
Current liabilities
  Accounts payable                                $  1,127,589     $  1,016,303
  Notes payable ( Line of Credit )                     550,000        1,000,000
  Accrued expenses and other liabilities               164,235          148,013
  Current portion of long-term debt                     37,170           42,308
                                                   ------------     ------------
                  Total current liabilities          1,878,994        2,206,624

Long-term debt                                         765,687          736,042
Accrued royalty payments                               100,000          100,000
                                                   ------------     ------------
                  Total liabilities                  2,744,681        3,042,666
                                                   ------------     ------------
Commitments and contingencies (Notes 2 and 5)

Shareholders' Equity
Preferred stock, $.01 par value, 1,000,000 shares
  authorized; 1,000,000 issued and outstanding at
  December 31, 1998 and June 30, 1999                    -              10,000
Common stock, $.01 par value, 20,000,000 shares
 authorized, 10,039,552 issued and outstanding
 at December 31, 1998, and 12,884,632 issued
 and outstanding at June 30, 1999                      100,396          128,846
Common Stock Issuable                                   41,073             -
Treasury stock                                        (248,241)        (248,241)
Additional paid-in capital                          18,061,560       21,078,810
Accumulated deficit                                (16,960,039)     (19,009,061)
                                                   ------------     ------------
                  Total Shareholders' Equity           994,749        1,960,354
                                                   ------------     ------------
                  Total liabilities and
                    Shareholders' Equity          $  3,739,430     $  5,003,020
                                                   ============     ============
</TABLE>

                  See accompanying notes to financial statements

<PAGE>
                                       2

                          Semiconductor Laser International Corporation

                                       Statement of Operations
<TABLE>
<CAPTION>

                                 Three Months Ended               Six Months Ended
                                      June 30,                        June 30,
                                1998             1999            1998            1999
                             (unaudited)      (unaudited)    (unaudited)      (unaudited)
                             -----------      -----------    -----------     ------------

<S>                          <C>              <C>            <C>             <C>
Net sales                    $   517,224      $   363,003    $   774,906     $   661,548

Cost of sales                   (784,511)        (687,050)    (1,436,944)     (1,350,936)
                               ----------        ---------    -----------     -----------
                                (267,287)        (324,047)      (662,038)       (689,388)

Operating expenses:

R & D Expenses                      -                -             7,273           1,738
Sales and marketing expenses     176,172          133,354        303,446         196,574
General and admin.expenses       558,218          596,920      1,068,524       1,167,724
                               ----------       ----------    -----------     -----------
       Loss from operations    1,001,677        1,054,321      2,041,281       2,055,424

Interest income                   15,156            6,097         32,010           6,402
                               ----------       ----------    -----------     -----------
         Net loss            $   986,521      $ 1,048,224    $ 2,009,271     $ 2,049,022
                               ==========       ==========    ===========     ===========

Net loss per share              ($0.11)          ($0.09)        ($0.23)         ($0.17)
                               ==========       ==========    ===========     ===========
Weighted average shares
 outstanding                    8,788,453       12,397,465      8,590,104      11,814,995
                               ==========       ==========    ===========     ===========
</TABLE>
                  See accompanying notes to financial statements

<PAGE>
                                       3

                  Semiconductor Laser International Corporation

                            Statement of Cash Flows

<TABLE>
<CAPTION>
                                                        Six Months Ended
                                                            June 30,
                                                      1998            1999
                                                   (unaudited)     (unaudited)
                                                   -----------     -----------
<S>                                                <C>             <C>
Cash flows from operating activities:
Net loss                                           $(2,009,271)    $(2,049,022)
Adjustments to reconcile net loss to
  net cash used in operating
  activities:
   Depreciation and amortization                       101,509         103,980
   Amortization of deferred expenses                      -              9,404
Change in assets and liabilities:
   (Increase)decrease in accounts
     receivable, net                                  (305,502)         55,279
   (Increase)decrease in inventory                    (162,686)          3,553
   Decrease in prepaid expenses
     and other assets                                   65,360          25,863
   (Increase)decrease in deposits
     and other assets                                  273,776         (25,871)
   Increase(decrease) in accounts
     payable                                            88,666        (111,286)
   Increase(decrease) in accrued
     expenses and other liabilities                   (102,038)        (16,222)
                                                   -----------     -----------
Net cash used in operating activities               (2,050,186)     (2,003,872)
                                                   -----------     -----------
Cash flows from investing activities:
Purchase of property, plant and
   equipment                                          (151,140)        (49,364)
                                                   -----------     -----------
Net cash used for investing activities                (151,140)        (49,364)
                                                   -----------     -----------
Cash flows from financing activities
Proceeds from short-term debt                          300,000         450,000
Payments on long-term debt                             (18,044)        (24,507)
Issuance of warrants                                     -              31,500
Issuance of stock, net of expenses                   1,044,345       2,974,189
                                                   -----------     -----------
Net cash provided by financing activities            1,326,301       3,431,182
                                                   -----------     -----------
Net (decrease) increase in cash                       (875,025)      1,377,946
Cash at beginning of period                          1,934,574         112,695
                                                   -----------     -----------
Cash at end of period                              $ 1,059,549     $ 1,490,641
                                                   ===========     ===========

</TABLE>


                  See accompanying notes to financial statements

<PAGE>
                                        4

                  Semiconductor Laser International Corporation


                          Notes to Financial Statements
                                  June 30, 1999
                                   (Unaudited)


1. Organization

   Semiconductor Laser International Corporation (the"Company") was
   incorporated in New York State in September 1993 (inception) and,
   subsequently,  reincorporated  in Delaware in September 1997, to produce high
   power  semiconductor  diode laser  wafers and bars  ("HPDLs"),  and to market
   these products worldwide.

   The Company's primary activities since incorporation,  as a development stage
   enterprise,  had  been  research  and  development,  business  and  financial
   planning,  raising capital and constructing  and equipping its  manufacturing
   facility.  The Company had previously  relied on facilities  provided through
   the Wright  Cooperative  Research and Development  Agreement  (CRDA) with the
   U.S. Air Force for the  development  and quality control testing of its HPDLs
   The CRDA expired in September 1996. The Company has since completed the
   construction of its manufacturing  facility in Binghamton, New York, where it
   is conducting all activities.

   Effective April 1, 1997, the Company ceased operating as a development  stage
   enterprise as it began commercial production of its products.

2. Financial Resources and Liquidity

   The Company has incurred net losses from  inception  (September 21, 1993) and
   had at June 30,  1999 an  accumulated  deficit of  $19,009,061  and working
   capital of $9,724.  Such losses have resulted primarily from a lack of
   adequate sales revenue to generate net profits. Subsequently, the Company has
   operated  with the proceeds from the Company's  initial  public  offering and
   private equity  financing (see Note 5). The Company expects that its cash and
   working  capital   requirements  will  continue  to  be  significant  as  its
   operations  expand.  The Company  expects that such cash and working  capital
   requirements  will be satisfied  through a combination  of revenue growth and
   additional private equity financing.

   There is no assurance, however, that the Company will be able to obtain funds
   to  support  its  operations.  As a result of the  foregoing,  there  remains
   substantial doubt as to the Company's ability to continue as a going concern.
   In the past the Company has been able to raise the capital necessary ($21.0
   million inception to date) but there can be no assurance that the Company
   will be able to raise additional capital.  If the Company achieves cash
   breakeven by the end of 1999, then its cash needs would be minimized or
   eliminated.  However, based upon past performance there can be no assurance
   that this will happen.  The accompanying financial statements do not include
   any adjustments that might result from the outcome of this uncertainty.


3. Basis of Presentation

   The  accompanying  unaudited  financial  statements have been prepared by the
   Company.  Certain information and footnote  disclosures  normally included in
   financial   statements   prepared  in  conformity  with  generally   accepted
   accounting  principles have been condensed or omitted.  In the opinion of the
   Company's  management,   the  disclosures  made  are  adequate  to  make  the
   information  presented not misleading,  and the financial  statements contain
   all adjustments necessary to present fairly the financial position as of June
   30,  1999 and the  results  of  operations  and cash flows for the six months
   ended June 30, 1999 and 1998.  The results of  operations  for the six months
   ended  June 30,  1999 are not  necessarily  indicative  of the  results to be
   expected for the full year.

<PAGE>
                                       5

4. Summary of Significant Accounting Policies

   Use of estimates

   The preparation of financial statements in conformity with generally accepted
   accounting  principles  requires management to make estimates and assumptions
   that affect the reported  amount of assets and  liabilities and disclosure of
   contingent assets and liabilities as of the date of the financial  statements
   and the reported  amounts of revenue and expenses  during the period.  Actual
   results could differ from those estimates.

   Inventory

   Inventory,  primarily  consisting of raw materials, is valued at the lower of
   cost or market. Cost is determined by the first in, first out (FIFO) method.

   Depreciation and amortization

   Property, plant and equipment are recorded at cost and depreciated  over the
   assets'   estimated   useful  lives  ranging  from  three  to  twenty  years.
   Depreciation  is  computed  using  the  straight-line  method  for  financial
   reporting and the modified  accelerated  cost recovery  system for income tax
   purposes.  Expenditures  for major renewals and  betterments  that extend the
   useful lives of property,  plant and equipment are capitalized.  Expenditures
   for maintenance and repairs are charged to expense as incurred.

   Intangible  assets are  amortized  using the  straight-line  method over five
   years.

   Impairment of long-lived assets

   Assessments  of the  recoverability  of long-lived  assets are conducted when
   events or  circumstances  occur that indicate that the carrying  value of the
   asset may not be  recoverable.  The measurement of impairment is based on the
   ability to recover  such  carrying  value from the future  undiscounted  cash
   flows of related operations.

<PAGE>
                                       6

   Revenue recognition

   Revenue  recognition is based on the terms of the underlying sales agreements
   (purchase orders or contracts).  Revenues for fixed price milestone contracts
   are recognized  upon the  completion and billing of the milestone.  Customers
   entering  into  long-term  contracts  with  the  Company  include  the U.  S.
   Government,  prime or subcontractors for which the U.S. Government may be the
   end customer and other domestic end-users.

   Warranty Costs

   The Company  provides for the  recognition of the potential for rework to its
   products by establishing a warranty reserve based on an historic  analysis of
   past experience.

   Research and development

   Research and development costs are expensed as incurred.

   Supplemental Cash Flow Disclosures

   Common Stock was issued to Company vendors in February and May, 1999 to
   satisfy payable obligations.  A total of 135,147 shares of Common Stock were
   issued to satisfy $50,023 of accounts payable.

   Income taxes

   The Company follows the asset and liability method for deferred income taxes.
   This method  provides that deferred tax assets and  liabilities  are recorded
   using currently enacted tax rates applied to the differences  between the tax
   bases of assets and  liabilities  and their  carrying  values  for  financial
   statement purposes.  A valuation allowance is recorded when it is more likely
   than not that deferred tax assets will not be realized.

   Net loss per share

   Net loss per share is computed  using the weighted  average  number of common
   shares outstanding.

   As of June 30,  1999,  the Company had  outstanding  warrants  and options to
   purchase  3,446,334 and 170,730 shares of common stock,  respectively,  which
   are not included in the  calculation of earnings per share for the six months
   ended June 30, 1999, and would not be included in such calculation due to the
   anti-dilutive nature of these instruments.


<PAGE>
                                       7

5. Commitment, Contingencies and Other Matters

   Operating Leases

   In October 1996, the Company entered into a master  equipment lease agreement
   with FINOVA Technology Finance,  Inc. ("FINOVA").  The agreement provided for
   the sale  and  ultimate  leaseback  by the  Company  of up to  $3,500,000  of
   equipment,  furnishings and fixtures.  As part of the  consideration  for the
   agreement,  the Company  issued a warrant  certificate  for 58,334  warrants,
   entitling  FINOVA  to  purchase  a  corresponding  number  of  shares  of the
   Company's  common stock at $5.00 per share.  The warrants could not have been
   assigned,  sold,  transferred or otherwise  disposed of prior to February 27,
   1998. The warrants are currently  exercisable.  The warrants have been valued
   at $167,710,  the fair market value of the Company's  warrants at the date of
   issuance and such value is being amortized over the term of the lease.

   Rent expense under  non-cancellable  operating  leases,  including the FINOVA
   leases,  was  $555,233 for the six months  ended June  30,1999.  Rent expense
   under  non-cancellable  operating  leases,  including the FINOVA leases,  was
   $556,212 for the six months ended June 30, 1998.

   Future minimum payments under non-cancellable operating leases, including the
   FINOVA lease agreement, at June 30, 1999, are as follows:

<TABLE>
<CAPTION>

                                 Year ending
                                 December 31,      Commitment
                                -------------     -------------
<S>                                 <C>            <C>
                                    1999(1)        $  515,102(1)
                                    2000            1,088,460
                                    2001              124,741
                                                  -------------
                                                   $1,728,303
                                                  =============
           (1) Six months

</TABLE>

   Litigation/Investigation

   The Company is currently engaged in litigation with a former employee who the
   Company sought action  against  relative to a breach of  confidentiality  and
   defamation of  character.  The former  employee has responded  with a counter
   claim  alleging  defamation of character and is seeking  $500,000 in damages.
   The litigation is presently in the discovery  stage. The Company believes the
   counter claim is without merit and is vigorously  defending such action.  The
   Company  further  believes that the ultimate  outcome of such action will not
   have a material impact on the financial condition or results of operations of
   the Company.

   Since April 1998,  the Company has been  responding to informal  requests for
   information from the Securities and Exchange Commission.  In August 1998, the
   Company  learned that in June 1998,  the Commission had issued a formal order
   of  investigation to determine  whether  violations of certain aspects of the
   federal securities laws had occurred in connection with the Company. Pursuant
   to this formal order of investigation, the Company and certain of its current
   and former  officers  and  directors  have  produced  documents  pursuant  to
   subpoenas from the Northeast  Regional Office of the Commission.  The Company
   is  not  able  to  speculate  as  to  the  specific  subject  matter  of  the
   investigation on the Company.  There can be no assurance as to the timeliness
   of the completion of the investigation or as to the final result thereof, and
   no assurance can be given that the final result of the investigation will not
   have a material  adverse  effect on the Company.  The Company has  cooperated
   with  the  investigation,  and will  continue  to  respond  to  requests  for
   information in connection with the investigation if received.

   In August 1998, the Company learned that the United States  Attorney's Office
   for the Southern District of New York is investigating  whether violations of
   securities  laws  have  occurred  in  connection  with the  Company's  public
   disclosures.  The  Company  has  cooperated  with the  investigation  and has
   responded  to  a  grand  jury  subpoena   issued  in   connection   with  the
   investigation.  There  can  be no  assurance  as to  the  timeliness  of  the
   completion of the  investigation  or as to the final result  thereof,  and no
   assurance  can be given that the final result of the  investigation  will not
   have a material  adverse  effect on the  Company or its  current  management.
   Management believes that there are meritorious  defenses to the issues raised
   by this investigation and intends to defend this matter vigorously.

   The Company is currently engaged in litigation with Newport Corporation, a
   vendor who is seeking to recover $100,508 for goods allegedly sold to the
   Company.  Based on losses sustained by the Company as a result of previously
   supplied defective equipment from this vendor, the Company's counterclaim
   exceeds the amount sued for by Newport Corporation.  The Company believes
   that the ultimate outcome of the action will not have a material impact on
   the financial condition or results of operations of the Company.

 <PAGE>
                                       8

 Financing

   The Company entered into the Securities  Purchase  Agreement (the "Securities
   Purchase  Agreement"),  dated as of February 5, 1999, between the Company and
   bmp, as amended by Amendment  No. 1 to  Securities  Purchase  Agreement  (the
   "Amendment"),  dated as of April 28,  1999,  between the Company and bmp (the
   Securities  Purchase  Agreement,  as amended by the Amendment is  hereinafter
   referred to as the "Amended Purchase Agreement").

   Pursuant to the terms of the  Securities  Purchase  Agreement,  bmp agreed to
   make a two stage  equity  investment  in the  Company  in an  amount  ranging
   between  $2,050,000  and  $2,750,000.  The first stage of the  investment was
   consummated on February 8, 1999 by the parties,  and bmp purchased  2,000,000
   newly issued  shares of the  Company's  Common  Stock at a purchase  price of
   $0.375  per  share  for an  aggregate  purchase  price of  $750,000.  bmp had
   previously  purchased  367,650  shares  of  the  Company's  Common  Stock  in
   unrelated open market  transactions.  In the second stage of the  investment,
   bmp agreed to purchase a minimum of 650,000 and a maximum of 1,000,000  newly
   issued  shares of  non-voting  Series B Stock of the Company (such minimum or
   maximum  number of shares to  constitute  all of the issued  and  outstanding
   shares of Series B Stock) at a purchase  price of $2.00 per  share,  or $0.40
   per share of Common Stock into which the Series B Stock is convertible, for a
   minimum  aggregate  purchase  price of  $1,300,000  and a  maximum  aggregate
   purchase  price  of  $2,000,000,  subject  to  the  satisfaction  of  certain
   conditions contained in the Securities Purchase Agreement.

   Pursuant to the  Amendment,  bmp agreed to purchase  the maximum of 1,000,000
   newly  issued  shares of Series B Stock as contemplated by the Securities
   Purchase Agreement for an aggregate purchase price of $2,000,000, to be paid
   in several installments.  On April 29, 1999, bmp purchased 232,500 shares of
   Series B Stock for a purchase price of $465,000 (the "April  Installment"),
   on May 31, 1999 bmp purchased 192,500 shares of Series B Stock for a purchase
   price of $385,000 (the "May  Installment") and on June 26, 1999, bmp
   purchased 575,000 shares of Series B Stock for a purchase price of $1,150,000
   (the "June Installment").

   The shares of common stock issued to bmp contain certain demand and piggyback
   registration  rights and the preferred  stock contains  certain  antidilution
   rights.

   In  connection  with the  Amendment,  the Company  entered  into a consulting
   agreement (the "Consulting  Agreement"),  dated as of April 28, 1999, between
   the Company and bmp Management Consultants GmbH ("bmp Consultants"), a German
   limited  liability  corporation  wholly  owned by bmp AG  Venture  Capital  &
   Network Management, the parent company of bmp, providing for the retention of
   bmp Consultants as strategic and financial consultants to the Company, for an
   aggregate  consulting fee of $200,000.  The $200,000 aggregate consulting fee
   is payable as follows:  (i) six  monthly  installments  of $15,000  beginning
   immediately  following the funding of the April  Installment  and ending five
   months  following such funding date,  (ii) $50,000  payable at the closing of
   the June Installment and (iii) six monthly installments  beginning six months
   following  the  funding of the April  Installment  and ending  eleven  months
   following such funding date. As of June 30, 1999, bmp Consultants had been
   paid $24,480.

   In connection with the Amendment, on June 26, 1999, the Company issued to bmp
   a five year warrant to purchase an aggregate of 500,000 shares of Common
   Stock, at an exercise price of $0.50 per share (the "bmp Warrant").  The
   shares issuable upon exercise of the bmp warrant contain certain demand and
   piggyback registration rights. In addition, bmp is eligible to receive a
   finder's fee(the "Finder's Fee") in the amount of 5% of the net proceeds of
   any transaction involving the raising of debt or equity capital in a private
   placement from a source introduced to the Company by bmp consummated by the
   Company within 24 months following payment of the June Installment.

   In conjunction with the Securities Purchase Agreement, on February 16, 1999,
   the Company issued to BSB Bank & Trust Company, warrants to purchase an
   aggregate  of 500,000  shares of the  Company's  common  stock at an exercise
   price of $0.575 per share.  The warrants  expire on February  16,  2004,  and
   contain certain registration rights. The value of the warrants has been
   reflected as deferred financing costs in the Company's financial statements
   and will be amortized over the period commencing from date of issue to
   May 31, 2000.

   The Company is in the process of completing a private placement of Common
   Stock with certain accredited investors introduced to the Company by a
   funding source referred to the Company by bmp.  As of July 31, 1999,
   2,979,256 shares of Common Stock have been subscribed for but not yet issued
   at an aggregate purchase price of $1,117,221.  The Company will receive
   $1,061,122 net of Finder's fees. Of such amount, $266,225 has been received
   representing payment for 709,933 shares through June 30, 1999.  The shares of
   Common Stock issued in this private placement contain certain piggyback
   registration rights.

<PAGE>
                                       9

Item 2.  Managements Discussion and Analysis of Plan of Operation

Certain statements in this Report under the caption "Management's Discussion and
Analysis and Plan of  Operation"  and  elsewhere  constitute  or may  constitute
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995 (the "Litigation Reform Act"), including,  without
limitation,  statements regarding future cash requirements.  The Company desires
to avail itself of certain "safe harbor" provisions of the Litigation Reform Act
and is  therefore  including  this  special note to enable the Company to do so.
Such forward-looking  statements involve known and unknown risks,  uncertainties
and  other  factors  which  may  cause  the  actual   results,   performance  or
achievements of the Company,  or industry  results,  to be materially  different
from any future results,  performance,  or achievements  expressed or implied by
such  forward-looking  statements.  Such  factors  include,  among  others,  the
following:  inability  to  obtain  additional  financing  on  acceptable  terms;
manufacturing  delays due to equipment or technical problems;  delays in product
development;  costs  associated  with  and  outcome  of  pending  investigations
described elsewhere herein; failure to receive or delays in receiving regulatory
approval;  lack of  enforceability  of patents  and  proprietary  rights;
general economic and business conditions; industry capacity; industry trends;
demographic changes; competition; material  costs  and  availability;  the  loss
of any significant customers; changes in business strategy or development plans;
quality of management; availability, terms and deployment of capital; business
abilities and judgment of personnel;  availability of qualified personnel;
changes in, or the failure to comply with, government regulations; and other
factors referenced in this report.

Overview

The Company was  considered a  development  stage  company  until April 1, 1997.
During 1997,  the Company  began the  commercialization  of many of its proposed
products. Since its inception in 1993, the Company had been engaged primarily in
research and development,  business and financial  planning,  recruitment of key
management and technical  personnel,  raising capital to fund operations and the
development of its HPDL product prototypes.  The Company has since completed the
construction and equipping of the first phase of its manufacturing  facility and
has begun the  commercialization  of its  products and the  generation  of sales
revenues. The Company is seeking to increase sales in order to fully utilize its
production   capacity.   Increasing  sales  levels  and  higher  utilization  of
production capacity are critical to the Company's  financial success.  Financial
resources  and liquidity  during this period of growth are of utmost  importance
and concern to the Company.  Recent events including cash flow problems have
placed considerable strain on Company management, financial, manufacturing and
other resources.

The manufacture of  semiconductor  lasers such as those sold by the Company is a
highly complex and precise process,  requiring production in a highly controlled
and clean  environment  with the  utilization  of materials  free of defects and
contamination.  These factors have a significant impact on production yields and
product  reliability  which in turn affect operating results and future customer
acceptance. The Company as well as other semiconductor laser manufacturers have,
from time to time, experienced technical production problems which have resulted
in adverse financial consequences.  No assurance can be given that the Company's
systems,  procedures,  procurement  efforts and production process are such that
these problems will not be experienced in the future.

Since the onset of commercial  production,  the Company,  on occasion,  has been
unable to  manufacture  certain  products in  quantities  sufficient to meet the
demands  of its  existing  customer  base and that of new  customers  based upon
equipment  and/or other technical  problems arising at various points during the
production process.  Previous problems with fiber coupling subcontractors have
been corrected.  At this time the Company is experiencing problems with its
clean room HVAC which has been unable to maintain necessary humidity levels for
the last two weeks in July.  This has caused some delays in shipments of product
to certain customers.  The Company has hired a new HVAC company to fix the
problem.  To date solutions have been presented and necessary modifications to
the existing equipment have begun.  However, there can be no assurance that
these fixes will definitely correct the problems.  If these problems are not
corrected, the Company could sustain additional periods of time when certain
humidity critical tasks cannot be performed leading to delays in production.

The Company entered into a licensing agreement with Northwestern University (the
"Northwestern  License") on September 1, 1996. The  Northwestern  License is for
the exclusive rights to produce,  market and sell aluminum-free  HPDLs worldwide
using certain patents and knowhow, as defined in the Northwestern License, owned
by Northwestern  University.  Under the terms of the Northwestern  License,  the
rights  expire upon the  expiration of the patents or ten years from the date of
the first commercial sale in countries where no patent rights exist. The Company
also has the right to  terminate  the  Northwestern  License  after three years.
Northwestern  University  has the right to terminate  the  Northwestern  License
after three years, subject to certain exceptions, if  the Company does not have
the licensed product, based on the technology, available for sale. On June 14,
1999, the Company received notice from Northwestern University that it has
failed to comply with certain milestones concerning the production and sale of
the licensed products under the Northwestern License.  Northwestern University
has advised the Company that it intends to terminate the Northwestern License as
of September 10, 1999 if the Company has not provided evidence by such date that
it has or will fulfill its obligations to comply with these milestones.  The
Company intends to defend its rights under the Northwestern License vigorously
and, if necessary, will submit any dispute that may exist to binding arbitration
as contemplated by the Northwestern License.

In consideration for the Northwestern License, the Company paid Northwestern
University a non-refundable license fee of $21,000 plus $10,000 of the Company's
unregistered common stock (1,231 shares). In addition, the Company issued 1,500
shares of unregistered common stock, valued at $2,586.  These amounts have been
charged to research and development expense.  Royalties are also payable for
sales derived from this technology, based on net sales volume on a sliding scale
from 4% to 1%.

The Company has been engaged in the development of aluminum-free HPDLs for
almost three years and has expended significant resources on such development
efforts.  The Company has developed and is currently testing in its laboratories
one and two watt single chip aluminum-free diodes which it anticipates will be
ready for shipment to customers very shortly.  Of course, technical difficulties
and reliability issues, which are not now anticipated, could delay large scale
production of the product.

The Company  received  notice from The Nasdaq Stock  Market that its  securities
were delisted from The Nasdaq SmallCap Market, effective as of the close of
business on May 26, 1999. The Nasdaq Stock Market based its determination on the
Company's failure to meet the minimum bid price requirement for its common stock
and the  minimum  net  tangible  assets  requirement  set forth under the Nasdaq
Marketplace  Rules.  The Company's  securities  are currently  quoted on the
NASDAQ OTC Bulletin Board(Symbol SLIC) and are also traded over the Berliner
Freiverkehr, an electronic quotation system in Germany similar to the OTC
Bulletin Board.  The delisting of the Company's Common Stock could cause the
market  price of the Common Stock to decline and could make it much more
difficult to buy or sell the Common Stock on the open market.

<PAGE>
                                       10

Results of Operations

Three months ended June 30, 1999, compared to three months ended June 30, 1998.

Sales were  $363,003  for the three  months  ended June 30,  1999 as compared to
$517,224 for the same period in the prior year. The decrease in sales is the
result of decreased government contract and commercial revenue.  The decrease in
commercial revenue was caused by fewer orders received.

Cost of sales for the three months ended June 30,1999 decreased approximately
$97,000 as a result of the decrease in product sales.  This reduction was in
direct labor and materials.  However, as a substantial portion of the Company's
manufacturing costs are fixed in nature and sales were insufficient to cover its
fixed costs, the Company experienced negative gross margin.

There were no research and development costs recorded for the second quarter of
1998 or 1999 as operating expenses.  The Company has engaged in considerable R &
D efforts which have been expensed as cost of goods sold as incurred.

Sales and  Marketing  expenses  decreased  approximately  $43,000  for the three
months ended June 30, 1999 as compared to the same period in 1998 primarily
due to decreased advertising costs offset in part by costs of catalogues and
trade show expenses.

General and  administrative  expenses  increased  approximately  $39,000 for the
three months ended June 30, 1999 as compared to the same period in the prior
year primarily as a result of increases in utilities expense, amortization
expense(as a result of BSB warrants issued in 1999) and warranty expense.  Loan
interest expense increased in the second quarter of 1999 as compared to the
second quarter of 1998 due to the draw down on the line of credit of the full
$1 million in availability.

Interest  income  decreased for the three months ended June 30, 1999 as compared
to the three  months  ended June 30,  1998,  as a result of lower cash  balances
available for investment.


Six months ended June 30, 1999, as compared to the six months ended June 30,
1998.

Sales for the six months ended June 30, 1999 decreased approximately $113,000
over the same period in the prior year primarily as a result of reduced
government contract revenue.

Cost of sales for the six months  ended June 30, 1999,  decreased  approximately
$986,000  over the six months ended June 30,  1998, as a result of reduced costs
associated with decreased sales. These reductions were in labor and materials.
However, as a substantial portion of the Company's manufacturing costs are fixed
in nature and sales were insufficient to cover its fixed costs, it experienced
negative gross margin.

During the six months ended June 30, 1999, the Company has engaged in
considerable R & D efforts which have been expensed as cost of goods sold as
incurred.  Research and development recorded as operating expenses were $1,738
for the first six months ended June 30, 1999 as compared to $7,273 for the same
period in 1998.

Sales and marketing expense decreased  approximately $107,000 for the six months
ended June 30, 1999 as compared to the six months ended June 30, 1998 primarily
as a result of decreased costs associated with  advertising  partially offset by
an increase in trade show expense and the cost of catalogs.

General and administrative  expenses increased approximately $99,000 for the six
months ended June 30, 1999 as compared to the same period in the prior year
primarily   as  a  result  of  increases  in  legal  fees  related  to  the  SEC
investigation,  increased  litigation,  patent  activity  and general  corporate
matters partially offset by decreases in contract labor costs.  Loan interest
expense increased in the first half of 1999 compared to the first half of 1998
due to the full utilization of the $1 million line of credit in 1999.

Interest  income  decreased  as a result of lower cash  balances  available  for
investment.


Liquidity and Capital Resources

The  Company's  cash and cash  equivalents  at June 30, 1999 were  $1,490,641 as
compared to $112,695 at December 31, 1998, a net increase of $1,377,946  for the
six months ended June 30, 1999. The increase is the result of $2,003,872 used in
operating  activities,  $49,364  used in  investing  activities  and  $3,431,182
provided by financing activities.


<PAGE>
                                       11

The $3,431,182 provided by financing activities was derived from the issuance of
2,709,933 shares of common stock which provided $974,189(net of legal
expenses and fees),  1,000,000  shares of Series B Convertible  Preferred  Stock
which  provided  $2,000,000 and 500,000  warrants which provided  $31,500 and an
increase in the availability under the line of credit(See "Financing" under Note
5 in the Notes to the Financial  Statements).  The Company drew down on the line
by borrowing  $300,000 in the month of March and $150,000 in the month of April.
The aforementioned were offset by payments on the long-term debt.

The Company has a  $1,000,000  secured  line of credit with BSB for  purposes of
providing working capital.  The line of credit bears interest at prime plus 2.5%
on the used portion and matures May 31, 2000. At June 30, 1999, the Company  had
the full  $1,000,000  outstanding  under  this Line of  Credit.

The Company has entered into the Securities Purchase Agreement, dated as of
February 5, 1999, between the Company and bmp, as amended by Amendment  No. 1 to
the Securities Purchase Agreement, dated as of April 28, 1999, between the
Company and bmp.

Pursuant to the terms of the  Securities  Purchase  Agreement,  bmp agreed to
make a two stage  equity  investment  in the  Company  in an  amount  ranging
between  $2,050,000  and  $2,750,000.  The first stage of the  investment was
consummated on February 8, 1999 by the parties,  and bmp purchased  2,000,000
newly issued  shares of the  Company's  Common  Stock at a purchase  price of
$0.375  per  share  for an  aggregate  purchase  price of  $750,000.  bmp had
previously  purchased  367,650  shares  of  the  Company's  Common  Stock  in
unrelated open market  transactions.  In the second stage of the  investment,
bmp agreed to purchase a minimum of 650,000 and a maximum of 1,000,000  newly
issued  shares of  non-voting  Series B Stock of the Company (such minimum or
maximum  number of shares to  constitute  all of the issued  and  outstanding
shares of Series B Stock) at a purchase  price of $2.00 per  share,  or $0.40
per share of Common Stock into which the Series B Stock is convertible, for a
minimum  aggregate  purchase  price of  $1,300,000  and a  maximum  aggregate
purchase  price  of  $2,000,000,  subject  to  the  satisfaction  of  certain
conditions contained in the Securities Purchase Agreement.

Pursuant to the  Amendment,  bmp agreed to purchase  the maximum of 1,000,000
newly  issued  shares of Series B Stock as contemplated by the Securities
Purchase Agreement for an aggregate purchase price of $2,000,000, to be paid
in several installments.  On April 29, 1999, bmp purchased 232,500 shares of
Series B Stock for a purchase price of $465,000, on May 31, 1999 bmp purchased
192,500 shares of Series B Stock for a purchase price of $385,000 and on
June 26, 1999, bmp purchased 575,000 shares of Series B Stock for a purchase
price of $1,150,000.

In connection with the first installment of the bmp investment, BSB agreed to
increase the amount available under the Line of Credit to $1,000,000, to extend
the maturity date thereof until June 30, 1999 and to further extend the maturity
of the Line of Credit until May 31, 2000 upon the investment by bmp in the
Company of an additional $1.3 million dollars, subject to the absence of any
material adverse change in the business.  BSB waived the requirement that the
Company maintain the balance of the Line of Credit within its collateral base
formula until the earlier of June 30, 1999 or the date that the Company was in
receipt of funds equaling an additional $1.3 million arising out of the final
installments of the bmp investment.  Upon funding by bmp of the full amount of
the final installments of the investment,  BSB extended the maturity date of the
Line of Credit until May 31, 2000.  The  Company issued warrants to purchase an
aggregate  of 500,000  shares of Common  Stock to BSB, at an  exercise  price of
$0.575 per share, in consideration  for the modifications to the Line of Credit.
The warrants expire in 2004 and contain certain registration rights.

The Company is in the process of completing a private placement of Common
Stock with certain accredited investors introduced to the Company by a
funding source referred to the Company by bmp.  As of July 31, 1999,
2,979,256 shares of Common Stock have been subscribed for but not yet issued
at an aggregate purchase price of $1,117,221.  The Company will receive
$1,061,122 net of finder's fees. Of such amount, $266,225 had been received
representing payment for 709,933 shares through June 30, 1999.  The shares of
Common Stock issued in this private placement contain certain piggyback
registration rights.


<PAGE>
                                       12

The Company has incurred net losses from inception  (September 21, 1993) and has
an  accumulated  deficit  at June 30,  1999 of  $19,009,061.  Such  losses  have
resulted from the Company's  activities as a development  stage company and have
been  financed  primarily  out of proceeds  from the  Company's  initial  public
offering and private  equity  financing.  The Company  expects that its cash and
working capital  requirements  will continue to be significant as its operations
expand.  Potential  sources for such cash and working capital  requirements  are
revenue growth and additional  private equity financing.  It is anticipated that
the Company will continue to incur losses for the  immediate  future until it is
able to achieve profitable operations or to generate sales sufficient to support
its operations.

The need to raise equity capital at current stock prices is likely to result in
substantial dilution to shareholders and could result in a change of control.
The Company's current business plan requires additional capital infusion by the
end of this fiscal year and subsequent infusions until such time as the
Company's sales are sufficient to provide internally generated and sustainable
cash flows.  However, achieving positive cash flow is dependent upon sales
levels which the Company has not historically achieved.  The Company is
currently seeking to raise additional equity capital through a private
placement.  Without an additional equity infusion, the Company estimates it
would have sufficient cash flow to operate at least through the end of the
current fiscal year and perhaps beyond.

There can be no  assurance  that the Company  will be able to obtain  additional
financing,  including any institutional financing,  when needed, on commercially
reasonable terms or at all.

<PAGE>
                                       13


                          PART II. - OTHER INFORMATION

Item 1. Legal Proceedings.

     The Company is involved in litigation  described in Note 5 in the financial
     statements.


Item 2. Changes in Securities and Use of Proceeds.

     None


Item 3. Defaults Upon Senior Securities.

     None


Item 4. Submission of Matters to a Vote of Security Holders.

     The  Company  held its 1999 Annual  Meeting of  Stockholders  (the  "Annual
     Meeting") on June 11, 1999. As of the record date of April 15, 1999,  there
     were 12,150,832  shares of the Company's  Common Stock eligible to vote. Of
     these shares,  8,221,470  (67.7%) were  represented  either in person or by
     proxy at the Annual Meeting.  At the Annual  Meeting,  Geoffrey T. Burnham,
     Susan M.  Burnham,  George  W.  Hippisley,  Roger D.  O'Brien  and Edwin B.
     Spievack were elected directors of the Company. The number of shares of the
     Company's  Common Stock voted in favor of the election of Messrs.  Burnham,
     Hippisley, O'Brien and Spievack and Ms. Burnham were 8,030,305,  8,030,305,
     8,030,305,  8,030,305 and 8,030,305,  respectively,  and the number of such
     shares  withheld  were  191,165,  191,165,  191,165,  191,165 and  191,165,
     respectively.  At the Annual Meeting, the Company's stockholders also voted
     to ratify the selection of PricewaterhouseCoopers LLP as independent public
     accountants  for the fiscal year ending  December 31,  1999.  The number of
     shares of the Company's  Common Stock voted in favor of the ratification of
     appointment  of  accountants  was  8,100,916,  the  number of shares of the
     Company's  Common Stock voted  against was 100,620 and the number of shares
     of the Company's Common Stock abstaining was 19,934.  The Company initially
     proposed to consider  and vote upon a proposal to approve an  amendment  to
     the Certificate of  Incorporation  of the Company to effect a reverse stock
     split of the  Company's  Common  Stock such that every  seven (7) shares of
     Common Stock  outstanding on the effective date of such reverse stock split
     would be  converted  into one (1) share of Common  Stock and a proposal  to
     approve the issuance of an  aggregate  of 5,500,000  shares of Common Stock
     issuable (x) upon the  conversion of the  Company's  Series B Stock and (y)
     upon exercise of the bmp warrant. The reverse stock split proposal was part
     of the  Company's  two-step  plan to  reattain  compliance  with the NASDAQ
     SmallCap  Market  continued  listing  requirements.  In light of the NASDAQ
     decision  to delist the Company's Common Stock, the Board of Directors
     determined  that it was not in the best  interest  of the Company to effect
     such  stock  split  and  withdrew  the  proposal,  as  contemplated  by the
     Company's  Proxy  Statement.  The approval of the Common Stock issuance was
     also withdrawn by the Board of Directors,  as contemplated by the Company's
     Proxy Statement,  because the Company was delisted from the NASDAQ Smallcap
     Market and it was no longer necessary.

Item 5. Other Information.

     None


Item 6. Exhibits and Reports on Form 8-K.

         (a)   Exhibits.

               10.1  Common Stock Purchase Warrant, dated June 26,1999,
                     issued to bmp

               10.2  Form of Securities Purchase Agreement

               10.3  Form of Registration Rights Agreement
                     (Exhibit A to Form of Securities Purchase Agreement)

               10.4  Promissory Note from BSB Bank & Trust

               27.1  Financial Data Schedule

         (b) Reports on Form 8-K.

                     None

<PAGE>
                                         14

                                 SIGNATURES

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


                    Semiconductor Laser International Corporation
                    ---------------------------------------------
                                     (Registrant)



Date: August 16, 1999                 By:/s/ Geoffrey T Burnham
                                       ----------------------------
                                        Geoffrey T. Burnham
                                          Chairman of the Board, President
                                          and Chief Executive Officer
                                          (principal executive officer)

      August 16, 1999                 By:/s/ Leonard E. Lundberg
                                        ----------------------------
                                        Leonard E. Lundberg
                                          Chief Financial Officer,
                                          Principal Financial Officer
                                          And Principal Accounting Officer

[TYPE]    EX-10.1

                    FORM OF COMMON STOCK PURCHASE WARRANT

                         Void after June 26, 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 15 Link Drive, Binghamton,  New York
13904,  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 June 26,
1999 and before 5:00 P.M.,  New York City time, on June 26, 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:

(a)The term  "Company"  includes  the Company  and any  corporation  which shall
succeed to or assume the obligations of the Company hereunder.

(b)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).

(c)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.

(d)The "Original Issue Date" is June 26, 1999, the date as of which this Warrant
was first issued.

(e)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.

(f)The term  "Purchase  Price per share" shall be the then  applicable  exercise
price for one share of Common Stock.

(g)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.

(h)The term  "Securities  Act" means the  Securities  of Act of 1933 as the same
shall be in effect at the time.

     1.     Registration, etc.

1.1 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.

     2. 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.

     3.     Exercise of Warrant; Partial Exercise; Exercise by Surrender.

3.1  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.

3.2 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 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.

3.3 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.

3.4  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.

     4.  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-assess  able
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
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.

     5.   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

(a)other or additional stock or other securities or property (other than cash)
by way of dividend, or

(b)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

(c)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.

     6.  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.

     7.     Other Adjustments.
7.1 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.  7.2 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.

7.3 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.

7.4 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.
     8.  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.
     9. 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 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
(a)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 (b)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 (c)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.
     11.  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.
     12. 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 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.
     13.  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.
     14.   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.
     15. 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.
     16. 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:  (a)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;  (b)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
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 (c)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.
     17. 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.
     18.  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.
     19. Executed Expiration. The right to exercise this Warrant shall expire at
5:00 P.M., New York City time, on June 26, 2004.
     20.  Assignability.  This Warrant is fully assignable,  in whole but not in
part, at any time, subject to applicable securities laws.

Dated: June 26, 1999 SEMICONDUCTOR LASER INTERNATIONAL CORPORATION


By:
   /s/ Geoffrey T. Burnham
   -----------------------
Geoffrey T. Burnham
President

[Corporate Seal]

Witness:
   /s/ Leonard E. Lundberg
   -----------------------


                            FORM OF SUBSCRIPTION

                  (To be signed only upon exercise of Warrant)

To:  SEMICONDUCTOR LASER INTERNATIONAL CORPORATION
     15 Link Drive
     Binghamton, NY  13904

     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.


                             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 June 26, 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

[TYPE]    EX-10.2

                  FORM OF SECURITIES PURCHASE AGREEMENT


     This SECURITIES  PURCHASE  AGREEMENT (the  "Agreement") is made and entered
into as of _________ __, 1999 by and between  Semiconductor  Laser International
Corporation, a Delaware corporation whose principal place of business is 15 Link
Drive,  Binghamton,  New  York  13904  (the  "Company"),  and the  purchaser  or
purchasers set forth on Schedule 1 hereto  (individually,  "each  Purchaser" and
collectively,  the  "Purchaser"),  with its  address as set forth on  Schedule 1
hereto.

     WHEREAS,  the Company is desirous of selling, and the Purchaser is desirous
of  acquiring,  the number of shares set forth opposite its name on Schedule 1
hereto (the "Shares") of the common stock, par value $.01 per
share (the  "Common  Stock"),  of the  Company,  on the terms and subject to the
conditions hereinafter set forth.

     NOW,  THEREFORE,  in  consideration  of the  promises  and  of  the  mutual
obligations  hereinafter  set  forth,  and for  such  other  good  and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Purchaser hereby agree as follows:


                                   ARTICLE I
                    PURCHASE AND SALE OF THE SHARES; CLOSINGS

     Section  1.01  Purchase  and Sale of the  Shares.  Subject to the terms and
conditions set forth in this Agreement,  the Company agrees to issue and sell to
each Purchaser at the Closing,  and each  Purchaser  agrees to purchase from the
Company at the  Closing,  the number of Shares  set forth  opposite  its name on
Schedule 1 hereto, for a purchase price of thirty seven and one half cents
($.375) per share or an aggregate purchase price set forth opposite its name on
Schedule 1 hereto (the "Purchase Price").

     Section  1.02  Closing.  The  sale  of the  Shares  by the  Company  to the
Purchaser  shall take place on the date  hereof at the offices of the Company or
at such  other  place and time as may be agreed  upon by the  Purchaser  and the
Company  (the  "Closing").  At the  Closing,  the Company  shall  deliver to the
Purchaser  certificates  evidencing the Shares  against  payment of the Purchase
Price for the Shares,  by certified or official  bank check or wire  transfer of
immediately available funds to an account designated by the Company.



                                  ARTICLE II
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The  Company  hereby  represents  and  warrants  to, and agrees  with,  the
Purchaser, as of the date hereof and as of the date of each Closing, as follows:

     Section  2.01  Incorporation  and  Corporate  Existence.  The  Company is a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the  State  of  Delaware  and  has all  necessary  corporate  power  and
authority to own, operate or lease the properties and assets now owned, operated
or leased by the Company and to carry on the business of the  Company,  as it is
now being conducted.

     Section 2.02 Authority.  The Company has all necessary  corporate power and
authority  to  execute  and  deliver  this   Agreement  and  to  consummate  the
transactions  contemplated hereby. The Company has taken all necessary corporate
action to  authorize  the  execution,  delivery  and  performance  by it of this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly  executed  and  delivered  by the Company  and,  and  assuming due
execution  and  delivery  of the  Agreement  by the  Purchaser,  this  Agreement
constitutes a legal,  valid and binding  obligation  of the Company  enforceable
against the Company in accordance  with its terms,  subject to the effect of any
applicable   bankruptcy,   reorganization,    insolvency   (including,   without
limitation,  all laws relating to fraudulent  transfers),  moratorium or similar
laws  affecting  creditors'  rights  and  remedies  generally,  subject,  as  to
enforceability,  to the effect of general  principles of equity  (regardless  of
whether such  enforceability  is considered in a proceeding in equity or at law)
and  subject  to the  effect  of  applicable  securities  laws as to  rights  to
indemnification.

     Section  2.03  Consents  and  Approvals;  No Conflict.  The  execution  and
delivery of this  Agreement by the Company do not, and the  performance  of this
Agreement  by  the  Company   will  not  (i)  require  any  consent,   approval,
authorization  or other  action  by,  or filing  with or  notification  to,  any
governmental  or  regulatory  authority,  except  where  failure to obtain  such
consent,  approval,   authorization  or  action,  or  to  make  such  filing  or
notification,  would not prevent the Company from performing any of its material
obligations under this Agreement and would not have a material adverse effect on
the  Company;  (ii)  conflict  with or  violate  the  charter  or by-laws of the
Company;  or (iii)  conflict with or violate any law, rule,  regulation,  order,
writ,  judgment,  injunction,  decree,  determination or award applicable to the
Company,  except as would not  prevent the Company  from  performing  any of its
material  obligations under this Agreement and would not have a material adverse
effect on the Company.

     Section  2.04  Absence  of  Litigation.  No claim,  action,  proceeding  or
investigation is pending,  or to the best knowledge of the Company,  threatened,
which  seeks  to  delay  or  prevent  the   consummation  of  the   transactions
contemplated  hereby or which would be reasonably  likely to adversely affect or
restrict the  Company's  ability to  consummate  the  transactions  contemplated
hereby.

     Section 2.05 Brokers. No broker, finder or investment banker is entitled to
any  brokerage,  finders  or other  fee or  commission  in  connection  with the
transactions  contemplated by this Agreement based upon  arrangements made by or
on behalf of the Company.

     Section  2.06  Company  SEC  Documents.  The  Company  has  filed  with the
Commission,  and has  heretofore  made  available  to the  Purchaser,  true  and
complete  copies of its Annual Report on Form 10-KSB for the year ended December
31, 1998,  its  quarterly  report on Form 10-QSB for the quarter ended March 31,
1999, and its definitive proxy statement dated May 18, 1999  (collectively,  the
"Company  SEC  Documents").  As of  their  respective  dates,  the  Company  SEC
Documents  did not contain any untrue  statement  of a material  fact or omit to
state a material  fact  required to be stated  therein or  necessary in order to
make the statements  therein, in the light of the circumstances under which they
were made, not misleading.


                               ARTICLE III
                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     Each  Purchaser  hereby  represents  and warrants to, and agrees with,  the
Company as to itself, as of the date hereof and as of each Closing, as follows:

     Section 3.01 Authority. The Purchaser has all necessary power and authority
to execute and deliver this  Agreement,  to purchase the Shares from the Company
and to consummate the transactions  contemplated hereby. This Agreement has been
duly   executed  and   delivered  by  the   Purchaser   and,  and  assuming  due
authorization,  execution  and delivery of the  Agreement  by the Company,  this
Agreement  constitutes  a legal,  valid and binding  obligation of the Purchaser
enforceable  against the Purchaser in accordance with its terms,  subject to the
effect of any  applicable  bankruptcy,  reorganization,  insolvency  (including,
without limitation,  all laws relating to fraudulent  transfers),  moratorium or
similar laws affecting creditors' rights and remedies generally,  subject, as to
enforceability,  to the effect of general  principles of equity  (regardless  of
whether such  enforceability  is considered in a proceeding in equity or at law)
and  subject  to the  effect  of  applicable  securities  laws as to  rights  to
indemnification.

     Section  3.02  Consents  and  Approvals;  No Conflict.  The  execution  and
delivery of this Agreement by the Purchaser do not, and the  performance of this
Agreement  by  the  Purchaser  will  not  (i)  require  any  consent,  approval,
authorization  or other  action  by,  or filing  with or  notification  to,  any
governmental  or regulatory  authority,  except where the failure to obtain such
consent,  approval,   authorization  or  action,  or  to  make  such  filing  or
notification,  would  not  prevent  the  Purchaser  from  performing  any of its
material  obligations under this Agreement;  or (ii) except as would not prevent
the  Purchaser  from  performing  any of its  material  obligations  under  this
Agreement,  conflict with or violate any law,  rule,  regulation,  order,  writ,
judgment,   injunction,   decree,  determination  or  award  applicable  to  the
Purchaser.

     Section  3.03  Absence  of  Litigation.  No claim,  action,  proceeding  or
investigation is pending, or to the best knowledge of the Purchaser, threatened,
which  seeks  to  delay  or  prevent  the   consummation  of  the   transactions
contemplated  hereby or which would be reasonably  likely to adversely affect or
restrict the  Purchaser's  ability to consummate the  transactions  contemplated
hereby.

     Section 3.04     Investment Purpose; Legend; Private Placement.

          (a) The  Purchaser is acquiring  the Shares  solely for the purpose of
investment and not with a view to, or for offer or sale in connection  with, any
distribution thereof.

          (b) The  Purchaser  acknowledges  that the Shares  are not  registered
under the  Securities Act and that none of the Shares may be transferred or sold
except pursuant to the registration provisions of the Securities Act or pursuant
to an applicable  exemption  therefrom and subject to state  securities laws and
regulations,  as applicable.  The Purchaser  acknowledges  that the certificates
evidencing the Shares shall contain a legend substantially as follows:

THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AND SUCH  SECURITIES MAY NOT BE SOLD,  ENCUMBERED OR
OTHERWISE  TRANSFERRED  EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT
UNDER SUCH ACT OR AN EXEMPTION FROM SUCH  REGISTRATION  REQUIREMENT,  AND, IF AN
EXEMPTION  SHALL BE  APPLICABLE,  THE HOLDER SHALL HAVE  DELIVERED AN OPINION OF
COUNSEL  ACCEPTABLE TO THE COMPANY (WHICH  ACCEPTANCE  SHALL NOT BE UNREASONABLY
WITHHELD) THAT SUCH REGISTRATION IS NOT REQUIRED.

          (c) The Purchaser acknowledges that the Shares involve a great deal of
risk and that there is a limited or no market for the Shares.  The  Purchaser is
able to (i) bear the economic risk of the investment in the Company, (ii) afford
a complete loss of such investment,  and (iii) hold  indefinitely the Shares. In
reaching  an informed  decision  to invest in the  Company,  the  Purchaser  has
sufficient  information to evaluate the merits and risks of an investment in the
Shares of the Company.  In that  connection,  (x) the Purchaser has received the
Company SEC Documents and (y)  representatives of the Company have (A) fully and
satisfactorily  answered any questions which duly authorized  representatives of
the  Purchaser  desired to ask  concerning  the Company,  and (B)  furnished the
Purchaser with any additional  information or documents  requested to verify the
accuracy of or supplement any information  previously  delivered to or discussed
with duly authorized representatives of the Purchaser.

          (d) The  address  of the  Purchaser  set forth on  Schedule  1 of this
Agreement is the true and correct address of the Purchaser and the Purchaser has
no present intention of becoming a resident or domiciliary of any other state or
jurisdiction.

     Section 3.05 Accredited Investor. The Purchaser is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated  under the Securities
Act because (please check as appropriate):

     [   ](a)      the Purchaser is an individual whose net worth, either
individually or with his spouse, exceeds $1,000,000 on the date hereof;

[ ](b) the Purchaser is an individual whose individual  income exceeded $200,000
in each of the two previous years or whose joint income with his spouse exceeded
$300,000 in each of the three previous years,  and has a reasonable  expectation
of reaching the same income level in the current year;

[ ](c) the  Purchaser  is a  corporation,  partnership  or New  York or  similar
business  trust,  not formed for the specific  purpose of acquiring  the Shares,
with total assets in excess of $5,000,000; or

[ ](d) the investor hereby  certifies that it is an accredited  investor because
it is an entity in which each of the equity  owners  qualifies as an  accredited
investor under items (a), (b) or (c) above.

     Section 3.06 Brokers. No broker, finder or investment banker is entitled to
any  brokerage,  finders  or other  fee or  commission  in  connection  with the
transactions  contemplated by this Agreement based upon  arrangements made by or
on behalf of the Purchaser.

     Section 3.07     No General Solicitation.  The Shares were not offered or
sold by any form of general solicitation or general advertising.


                                   ARTICLE IV
                               REGISTRATION RIGHTS

     Section 4.01  Piggy-Back  Registration.  Each Purchaser  shall have certain
piggy-back  registration rights as set forth in that certain Registration Rights
Agreement,  dated as of the date hereof,  between the Company and the Purchaser,
attached hereto as Exhibit A.

<PAGE>

                                   ARTICLE V
                                 MISCELLANEOUS

     Section  5.01  Expenses.  Each  Purchaser  hereby  agrees that all fees and
expenses  incurred by such Purchaser in connection  with this Agreement shall be
borne  by such  Purchaser,  and the  Company  hereby  agrees  that  all fees and
expenses  incurred by the Company  shall be borne by the  Company,  in each case
including  without  limitation all fees and expenses of such party's counsel and
accountants.

     Section  5.02  Public  Announcements.  Except  as  required  by  law,  each
Purchaser  agrees  not to make  any  public  announcements  in  respect  of this
Agreement or the transactions  contemplated herein or otherwise communicate with
any news media without prior notification to the other party.

     Section   5.03   Survival   of   Representations   and   Warranties.    All
representations and warranties  contained herein shall survive the execution and
delivery of this Agreement,  the Closings and any investigation at any time made
by or on behalf of either party hereto.

     Section  5.04  Entire  Agreement.  This  Agreement  constitutes  the entire
agreement  between the parties  hereto with respect to the subject matter hereof
and supersedes any prior oral or written agreement between the parties.

     Section 5.05 No Third-Party  Beneficiaries;  Assignment.  This Agreement is
for the sole benefit of and binding upon the parties hereto and their  permitted
successors and assigns and nothing herein, express or implied, is intended to or
shall  confer  upon any other  person or entity  any legal or  equitable  right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
This  Agreement  shall be binding upon the parties  hereto and their  respective
successors and assigns,  and shall inure to the benefit of and be enforceable by
the parties hereof and their respective successors and assigns.

     Section 5.06     Amendment.  This Agreement may be amended or modified
only by an instrument in writing signed by the Company and the Purchaser.

     Section 5.07  Counterparts.  This  Agreement may be executed in one or more
counterparts,  each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.

     Section 5.08 Gender and Number; Headings.  Whenever used in this Agreement,
the singular number shall include the plural,  the plural the singular,  and the
use of any gender shall be applicable to all genders.  The headings contained in
this  Agreement are for reference  purposes only and shall not affect in any way
the meaning or interpretation of this Agreement

     Section 5.09 Governing Law; Jurisdiction.  This Agreement shall be governed
by, and construed in accordance  with, the laws of the State of New York without
giving effect to the  principles  of conflicts of laws thereof.  The Company and
each  Purchaser  hereby  consent to the  jurisdiction  of the state and  federal
courts of the State of New York for all disputes arising under this Agreement.

<PAGE>

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

                                   SEMICONDUCTOR LASER
                                   INTERNATIONAL CORPORATION


                                   By:_____________________________
                                        Name: Geoffrey T. Burnham
                                        Title:President, CEO & Chairman of the
                                        Board



                                   ------------------------------------


                                   By:_____________________________
                                                   Name:
                                                   Title:
<PAGE>

                                     SCHEDULE 1
<TABLE>
<CAPTION>

<S>                                   <C>                   <C>
                                      Number of Shares of   Aggregate Purchase
Name and Address of Investor            Common Stock               Price

_________________________________
_________________________________
Attention:_______________________
Telecopier No.: _________________




                                      ---------------------      $--------------
                                    shares, at a purchase price
                                    of $.375 per share


</TABLE>


[TYPE]    EX-10.3

                                 REGISTRATION RIGHTS AGREEMENT

                                           BETWEEN

                                  --------------------------

                                             AND

                          SEMICONDUCTOR LASER INTERNATIONAL CORPORATION










                               Dated as of ___________ __, 1999


                                   TABLE OF CONTENTS

                                                                     Page No.

ARTICLE 1.
     DEFINITIONS                                                           2
     SECTION 1.1.     Definitions                                          2

ARTICLE 2.
     REGISTRATION RIGHTS                                                   5
     SECTION 2.1.     Piggy-Back Registration                              5
     SECTION 2.2.     Reduction of Offering                                5

ARTICLE 3.
     REGISTRATION PROCEDURES                                               6
     SECTION 3.1.     Filings; Information                                 6
     SECTION 3.2.     Registration Expenses                                9

ARTICLE 4.
     MISCELLANEOUS                                                         9
     SECTION 4.1.     Participation in Underwritten Registrations          9
     SECTION 4.2.     Amendment and Modification                           9
     SECTION 4.3.     Successors and Assigns; Third Party Beneficiaries    9
     SECTION 4.4.     Entire Agreement                                    10
     SECTION 4.5.     Headings                                            10
     SECTION 4.6.     Notices                                             10
     SECTION 4.7.     Governing Law; Forum; Process                       11
     SECTION 4.8.     Consent to Jurisdiction, Waiver of Immunities       11
     SECTION 4.9.     Counterparts                                        11
     SECTION 4.10.    Severability                                        11
     SECTION 4.11.    No Prejudice                                        11
     SECTION 4.12.    Words in Singular and Plural Form                   12

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT


          REGISTRATION  RIGHTS  AGREEMENT,  dated  as  of  _______,  1999  (this
"Agreement"),  between Semiconductor Laser International Corporation, a Delaware
corporation  (the  "Company")  and the  purchaser  or  purchasers  set  forth on
Schedule  1  hereto  (individually,   "each  Purchaser"  and  collectively,  the
"Purchaser"), with its address as set forth on Schedule 1 hereto.

          WHEREAS,  the Company and the Purchaser have entered into a Securities
Purchase  Agreement,  dated as of the date  hereof (the  "Purchase  Agreement"),
pursuant to which the  Purchaser  will acquire the number of shares set forth on
Schedule 1 hereto (the  "Shares") of the common stock, par value $.01 per share
(the "Common Stock"), of the Company, on the terms and subject to the conditions
set forth therein; and

          WHEREAS,  it is a condition  precedent  to the  purchase of the Common
Stock under the Purchase Agreement that the Company provide certain registration
rights to the  Purchaser  with respect to the shares of Common  Stock  purchased
pursuant to the terms of the Purchase Agreement.

          NOW,  THEREFORE,  in consideration  on the foregoing  premises and for
other good and  valuable  consideration,  the  adequacy and receipt of which are
hereby acknowledged, the parties hereto hereby agree as follows:

                                   ARTICLE 1.
                                  DEFINITIONS

          SECTION 1.1.     Definitions.  The following terms shall have the
meanings ascribed to them below:

          "Agreement" means this Agreement, as amended, modified or supplemented
from time to time,  in  accordance  with the  terms  hereof,  together  with any
exhibits, schedules or other attachments thereto.

          "Business  Day" means any day that is not a Saturday,  Sunday or a day
on which  banking  institutions  in New York,  New York and Berlin,  Germany are
authorized  or  obligated by law,  executive  order or  government  decree to be
closed.


          "Commission"   means  the  United  States   Securities   and  Exchange
Commission or any other federal agency at the time  administering the Securities
Act.

          "Common Stock" has the meaning ascribed thereto in the introduction
hereof.

          "Company" has the meaning ascribed thereto in the introduction
hereof.

          "Holder" means any Person who now holds or shall hereafter acquire and
hold Registrable Securities.

          "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  other  agency  or  political
subdivision thereof.

          "Piggy-Back Registration" has the meaning ascribed thereto in
Section 2.1.

          "Prospectus"  means  the  prospectus   included  in  any  Registration
Statement (including without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective  Registration
Statement in reliance upon Rule 430A  promulgated  under the Securities Act), as
amended or supplemented by any prospectus supplement,  with respect to the terms
of the offering of any portion of the  securities  covered by such  Registration
Statement, and all other amendments and supplements to the prospectus, including
post-effective  amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such prospectus.

          "Purchase Agreement" has the meaning ascribed thereto in the
introduction hereof.

          "Purchaser" has the meaning ascribed thereto in the introduction
hereof.

          "Registrable  Securities"  means (i) the shares of Common Stock issued
pursuant to the terms of the  Purchase  Agreement  and (ii) any other  shares of
Common  Stock   acquired  as  a  result  of  stock  splits,   stock   dividends,
reclassifications,  recapitalizations,  or similar events relating to the shares
described  in clauses (i) and (ii) above,  in each case until such time as (x) a
Registration  Statement  covering  such shares of Common Stock has been declared
effective by the  Commission  and such shares of Common Stock have been disposed
of  pursuant to such  effective  Registration  Statement,  or (y) such shares of
Common  Stock  would  be  eligible  for sale  pursuant  to Rule  144  under  the
Securities Act (or any similar provisions then in force),  without regard to the
volume  limitations set forth in Rule 144(e), or (z) such shares of Common Stock
have been otherwise  transferred and the Company has delivered a new certificate
or other  evidence of ownership  for such Common Stock not bearing a restrictive
legend and not subject to any stop transfer or similar restrictive order and all
of such  Common  Stock may be resold by the Person  receiving  such  certificate
without complying with the registration requirements of the Securities Act.

          "Registration  Statement"  means  any  registration  statement  of the
Company  which  covers  any  of  the  Registrable  Securities  pursuant  to  the
provisions  of  this  Agreement,   including  the  Prospectus,   amendments  and
supplements to such registration statement, including post-effective amendments,
all  exhibits and all material  incorporated  by reference in such  registration
statement.

          "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.

          "Selling Holder" means a Holder who is selling Registrable  Securities
pursuant to a Registration Statement under the Securities Act.

          "Underwriter" means a securities dealer who purchases any
Registrable Securities as principal in an underwritten offering and not as
part of such dealer's market-making activities.
<PAGE>

                                 ARTICLE 2.
                             REGISTRATION RIGHTS

          SECTION  2.1.  Piggy-Back  Registration.  If at any time  the  Company
proposes to file a Registration  Statement under the Securities Act with respect
to an  offering  by the Company for its own account or for the account of any of
its respective security holders (other than a Registration Statement on Form S-4
or Form S-8 (or any substitute form that may be adopted by the Commission) or on
any other form  inappropriate  for an  underwritten  public  offering or related
solely to  securities  to be issued  in a merger,  acquisition of the stock or
assets of another  entity or in a similar  transaction),  then the Company shall
give  written  notice  of  such  proposed  filing  to the  Holders  as  soon  as
practicable  (but in no event less than 30 days  before the  anticipated  filing
date), and such notice shall offer such Holders the opportunity to register such
number of Registrable  Securities as each such Holder may request (which request
shall  specify  the  number of  shares  and the type of  Registrable  Securities
intended  to be  disposed of by such Holder and shall also state the firm intent
of  the  Holder  to  offer  Registrable  Securities  for  sale)  (a  "Piggy-Back
Registration").  The Company  shall use its best  efforts to cause the  managing
Underwriter or  Underwriters of a proposed  underwritten  offering to permit the
Registrable Securities requested to be included in a Piggy-Back  Registration on
the same terms and  conditions  as any similar  securities of the Company or any
other  security  holder  included  therein  and to  permit  the  sale  or  other
disposition  of such  Registrable  Securities  in  accordance  with the intended
method of distribution  thereof. Any Holder shall have the right to withdraw its
request  for  inclusion  of  its  Registrable  Securities  in  any  Registration
Statement  pursuant to this Section 2.1 by giving  written notice to the Company
of its request to withdraw.  The Company may withdraw a Piggy-Back  Registration
at any time prior to the time it becomes effective.

          SECTION 2.2.     Reduction of Offering.

          (a) Piggy-Back  Registration.  (i) Notwithstanding  anything contained
herein, if the managing Underwriter or Underwriters of any underwritten offering
described  in Section  2.1 have  informed,  in writing,  the Holders  requesting
inclusion  in such  offering  that it is their  opinion that the total number of
shares which the Company,  Holders and any other Persons  holding  securities of
the same class as the  Registrable  Securities  desiring to  participate in such
registration  intend to include in such  offering is such as to  materially  and
adversely affect the success of such offering, then, the Company will include in
such  registration  (A) first,  all the shares the  Company  offered for its own
account,  if any,  (B)  then,  if  additional  shares  may be  included  in such
registration  without  materially  and  adversely  affecting the success of such
offering,  the shares  offered by the holders of securities as a result of their
exercise of "demand"  registration rights by such holders, if any, and (C) then,
if additional shares may be included in such registration without materially and
adversely  affecting the success of such offering,  the number of shares offered
by such  other  holders  of  securities  of the same  class  as the  Registrable
Securities  whose  piggy-back  registration  rights may not be  reduced  without
violating their  contractual  rights (provided such  contractual  rights were in
existence prior to the date of this Agreement),  (D) then, if additional  shares
may be included in such registration  without materially and adversely affecting
the success of such  offering,  the number of shares  offered by the Holders and
any other holders of securities of the same class as the Registrable  Securities
who have piggy-back  registration  rights not referred to in Section 2.2(c) on a
pro rata basis in proportion to the relative number of Registrable Securities of
the Holders and any other such holders participating in such registration.

               (ii)  If  the  managing   Underwriter  or   Underwriters  of  any
underwritten  offering  described  in Section 2.1 notify the Holders  requesting
inclusion in such  offering that the kind of  securities  that the Holders,  the
Company and any other  Persons  desiring  to  participate  in such  registration
intend to include in such offering is such as to materially and adversely affect
the success of such offering,  (A) the Registrable  Securities to be included in
such  offering  shall be reduced as described in clause (i) above or (B) if such
reduction would, in the judgment of the managing Underwriter or Underwriters, be
insufficient  to  substantially  eliminate  the  material  adverse  effect  that
inclusion of the Registrable  Securities  requested to be included would have on
such offering,  such Registrable  Securities will be entirely excluded from such
offering.

          (b) If, as a result of the  proration  provisions of this Section 2.2,
any Holder  shall not be  entitled to include all  Registrable  Securities  in a
Piggy-Back  Registration  that such Holder has  requested to be  included,  such
Holder may elect to withdraw his request to include  Registrable  Securities  in
such registration without prejudice.

          (c) Holdback Agreements. If any registration of Registrable Securities
shall be in connection with an underwritten public offering,  each Holder agrees
not to effect any public sale or  distribution,  including  any sale pursuant to
Rule 144 under the Securities  Act, of any  Registrable  Securities,  and not to
effect any such public sale or  distribution of any other equity security of the
Company or of any security  convertible  into or exchangeable or exercisable for
any equity  security of the  Company  (in each case,  other than as part of such
underwritten  public offering) during the five (5) days prior to, and during the
one hundred  eighty (180) day period  beginning on, the  effective  date of such
Registration Statement (except as part of such registration).

                                     ARTICLE 3.
                               REGISTRATION PROCEDURES

          SECTION 3.1. Filings; Information. Whenever the Company is required to
effect or cause the registration of the offer and sale of Registrable Securities
pursuant to Section 2.1 hereof,  the Company will use its best efforts to effect
the registration of the offer and the sale of such Registrable  Securities,  and
in connection with any such request:

          (a)  The  Company  will  prepare  and  file  with  the   Commission  a
Registration Statement with respect to the offer and sale of such securities and
use its best efforts to cause such  Registration  Statement to become and remain
effective  until  the  completion  of  the  distribution  contemplated  thereby;
provided,  however,  the Company shall not be required to keep such Registration
Statement  effective  for  more  than  the  period  otherwise  determined  to be
appropriate by the Company.

          (b) The Company will comply with the  provisions of the Securities Act
applicable to it with respect to the disposition of all  Registrable  Securities
covered by such Registration Statement.

          (c) The Company, at least fifteen (15) Business Days prior to filing a
Registration  Statement  or at least ten (10)  Business  Days  prior to filing a
Prospectus  or any amendment or  supplement  to such  Registration  Statement or
Prospectus,  will furnish to each Selling  Holder,  copies of such  Registration
Statement as proposed to be filed,  together with exhibits  thereto  (whether or
not incorporated by reference in such Registration  Statement),  which documents
will be subject to review and approval by each of the foregoing  within five (5)
Business  Days after  delivery  (except  that such  review and  approval  of any
Prospectus  or any amendment or  supplement  to such  Registration  Statement or
Prospectus must be within two (2) Business Days after delivery), and thereafter,
furnish to such  Selling  Holders,  at the  Company's  expense,  such  number of
conformed copies of such Registration  Statement,  each amendment and supplement
thereto (in each case including all exhibits thereto and documents  incorporated
by reference therein),  the Prospectus  included in such Registration  Statement
(including each preliminary  Prospectus) and such other documents or information
as such  Selling  Holders  may  reasonably  request in order to  facilitate  the
disposition of the Registrable Securities.

          (d) On or prior to the date on which  the  Registration  Statement  is
declared effective, use its best efforts to register or qualify such Registrable
Securities under such other securities or "blue sky" laws of such  jurisdictions
as any Selling Holder (but not more than three states),  reasonably requests and
do any and all other acts and things  which may be  necessary  or  advisable  to
enable such Selling Holder to consummate the  disposition in such  jurisdictions
of such  Registrable  Securities  owned  by such  Selling  Holder;  use its best
efforts to keep each such registration or qualification (or exemption therefrom)
effective during the period which the  Registration  Statement is required to be
kept effective;  and use its best efforts to do any and all other acts or things
necessary or advisable to enable the  disposition in such  jurisdictions  of the
Registrable  Securities  covered  by  the  applicable   Registration  Statement;
provided  that the Company  will not be required to (i) qualify  generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for  this  paragraph  (e),  (ii)  subject  itself  to  taxation  in any such
jurisdiction  or  (iii)  consent  to  general  service  of  process  in any such
jurisdiction.

          (e) The Company will notify each Selling Holder, (i) when a Prospectus
or any  Prospectus  supplement or  post-effective  amendment has been filed and,
with respect to a Registration Statement or any post-effective  amendment,  when
the same has become  effective,  (ii) of the issuance by the  Commission  of any
stop order  suspending  the  effectiveness  of a  Registration  Statement or the
initiation or  threatening  of any  proceedings  for that purpose,  (iii) of the
issuance by any state securities commission or other regulatory authority of any
order suspending the qualification or exemption from qualification of any of the
Registrable  Securities  under  state  securities  or  "blue  sky"  laws  or the
initiation of any proceedings for that purpose, and (iv) of the happening of any
event which makes any  statement  made in a  Registration  Statement  or related
Prospectus  or  any  document  incorporated  or  deemed  to be  incorporated  by
reference  therein untrue in a material  respect or which requires the making of
any changes in such Registration Statement, Prospectus or documents so that they
will not contain any untrue  statement  of a material  fact or omit to state any
material fact required to be stated  therein or necessary to make the statements
in the  Registration  Statement and  Prospectus  not  misleading in light of the
circumstances  in  which  they  were  made;  and,  as  promptly  as  practicable
thereafter,  prepare and file with the  Commission  and furnish a supplement  or
amendment to such Prospectus so that, as thereafter deliverable to the buyers of
such  Registrable  Securities,  such  Prospectus  will not  contain  any  untrue
statement of a material fact or omit to state a material fact  necessary to make
the  statements  therein,  in light of the  circumstances  under which they were
made, not misleading,  such amendment to be subject to the Holders' review under
Section 3.1(c).

          The Company may require  each  Selling  Holder to promptly  furnish in
writing to the  Company  such  information  regarding  the  distribution  of the
Registrable  Securities as the Company may from time to time reasonably  request
and such other  information as may be legally  required in connection  with such
registration  including,  without  limitation,  all such  information  as may be
requested by the Commission or the National  Association of Securities  Dealers,
Inc.

          Each Selling  Holder agrees that,  upon receipt of any notice from the
Company of the  happening of any event of the kind  described in Section  3.1(e)
hereof,   such  Selling  Holder  will  forthwith   discontinue   disposition  of
Registrable  Securities  pursuant to the  Registration  Statement  covering such
Registrable  Securities until such Selling Holder's receipt of the copies of the
supplemented or amended Prospectus  contemplated by Section 3.1(e) hereof,  and,
if so directed by the Company,  such Selling  Holder will deliver to the Company
all copies,  other than  permanent  file copies  then in such  Selling  Holder's
possession,  of the most recent Prospectus covering such Registrable  Securities
at the time of receipt of such notice.

          SECTION 3.2. Registration Expenses. The Company shall pay all expenses
incident to the  Company's  performance  of or  compliance  with this  Agreement
including,  without  limitation:  (i) all registration and filing fees, (ii) the
fees and expenses of compliance with securities or blue sky laws (including fees
and  disbursements of counsel in connection with blue sky  qualifications of the
Registrable  Securities),  (iii) all printing,  messenger and delivery expenses,
(iv)  the  Company's  internal  expenses  (including,  without  limitation,  all
salaries  and  expenses  of its  officers  and  employees  performing  legal  or
accounting  duties),  (v) the fees and expenses  incurred in connection with the
listing or quotation, as appropriate,  of the Registrable  Securities,  (vi) the
fees and  disbursements of counsel for the Company and the fees and expenses for
independent  certified public accountants retained by the Company (including the
expenses of any special  audit or cold  comfort  letters) and (vii) the fees and
expenses of any special experts  retained by the Company in connection with such
registration. The Company shall have no obligation to pay any underwriting fees,
discounts or commissions  attributable to the sale of Registrable Securities and
any of the expenses  incurred by Selling  Holders  (including fees of counsel to
the  Selling  Holders)  which are not payable by the  Company,  such costs to be
borne by the Selling Holder or Selling Holders.


                                 ARTICLE 4.
                                MISCELLANEOUS

          SECTION 4.1.  Participation in Underwritten  Registrations.  No Person
may participate in any  underwritten  registration  hereunder unless such Person
(a)  agrees to sell  such  Person's  securities  on the  basis  provided  in any
underwriting  arrangements approved by the Persons entitled hereunder to approve
such arrangements, and (b) completes and executes all questionnaires,  powers of
attorney,  indemnities,  underwriting  agreements and other documents reasonably
required  under  the  terms  of  such   underwriting   arrangements   and  these
registration rights.

          SECTION  4.2.  Amendment  and  Modification.  Any  provision  of  this
Agreement  may be waived,  provided  that such  waiver is set forth in a writing
executed by the party  against  whom the  enforcement  of such waiver is sought.
This  Agreement  may not be amended,  modified or  supplemented  other than by a
written  instrument  signed  by  the  holders  of at  least  a  majority  of the
Registrable Securities. No course of dealing between or among any Persons having
any interest in this  Agreement  will be deemed  effective  to modify,  amend or
discharge any part of this  Agreement or any rights or obligations of any Person
under or by reason of this Agreement.

          SECTION 4.3. Successors and Assigns;  Third Party Beneficiaries.  This
Agreement  and all of the  provisions  hereof shall be binding upon and inure to
the benefit of the parties hereto,  each subsequent  Holder and their respective
successors  and assigns and  executors,  administrators  and heirs.  Holders are
intended third party  beneficiaries  of this Agreement and this Agreement may be
enforced by such Holders.

          SECTION 4.4.  Entire  Agreement.  This Agreement sets forth the entire
agreement and understanding  between the parties as to the subject matter hereof
and merges and supersedes all prior  discussions,  agreements and understandings
of any and every nature among them.
          SECTION 4.5.     Headings.  Subject headings are included for
convenience only and shall not affect the interpretation of any provisions of
this Agreement.

          SECTION 4.6. Notices. Any notice,  demand,  request,  waiver, or other
communication  under this  Agreement  shall be in writing and shall be deemed to
have been duly  given on the date of  service  if  personally  served or sent by
telecopy,  on the  Business Day after notice is delivered to a courier or mailed
by express mail if sent by courier delivery service or express mail for next day
delivery  and on the  third  day  after  mailing  if mailed to the party to whom
notice  is  to be  given,  by  first  class  mail,  registered,  return  receipt
requested, postage prepaid and addressed as follows:

          If to the Company to:

               15 Link Drive
               Binghamton, New York 13904
               Attention: Chief Executive Officer
               Telecopier No.: (607) 722-5045

               with a copy to:

               Swidler Berlin Shereff Friedman, LLP
               919 Third Avenue
               20th Floor
               New York, New York 10022
               Attention: Richard A. Goldberg, Esq.
               Telecopier No.: (212) 758-9526

          If to the Purchaser, to the Notice Address set forth opposite its name
on Schedule 1 hereto.

     SECTION 4.7.     Governing Law; Forum; Process. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York, without regard to any choice-of-law principles thereof.

     SECTION 4.8. Consent to Jurisdiction, Waiver of Immunities. The Company and
the Holders hereby irrevocably  submit to the non-exclusive  jurisdiction of any
court of the State of New York or United  States  federal  court  sitting in the
Borough of Manhattan,  The City of New York, and any appellate court  therefrom,
in any action or  proceeding  arising out of or relating to this  Agreement  and
hereby irrevocably agree that all claims in respect of such action or proceeding
may be  heard  and  determined  in such  court.  The  Company  and  the  Holders
irrevocably  waive,  to the fullest  extent  permitted  by  applicable  law, the
defense  of  an  inconvenient  forum  to  the  maintenance  of  such  action  or
proceeding.

     SECTION 4.9.     Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
taken together shall constitute one and the same agreement.

     SECTION  4.10.  Severability.  In the  event  that  any  one or more of the
immaterial  provisions  contained in this Agreement shall for any reason be held
to be  invalid,  illegal or  unenforceable,  the same shall not affect any other
provision of this  Agreement,  but this Agreement shall be construed in a manner
which, as nearly as possible, reflects the original intent of the parties.

     SECTION 4.11.     No Prejudice.  The terms of this Agreement shall not be
construed in favor of or against any party on account of its participation in
the preparation hereof.

     SECTION 4.12.     Words in Singular and Plural Form.  Words used in the
singular form in this Agreement shall be deemed to import the plural, and vice
versa, as the sense may require.

<PAGE>

          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: __________________________________
             Name: Geoffrey T. Burnham
             Title: President & Chief Executive Officer

     --------------------------------------

     By:___________________________________
            Name:
            Title:


     <PAGE>

                                   SCHEDULE 1


<TABLE>
<CAPTION>

<S>                                   <C>                   <C>
                                      Number of Shares of   Aggregate Purchase
Name and Address of Investor             Common Stock               Price

_________________________________
_________________________________
Attention:_______________________
Telecopier No.: _________________




                                      ---------------------      $--------------
                                    shares, at a purchase price
                                    of $.375 per share


</TABLE>

[TYPE]    EX-10.4
<TABLE>
<CAPTION>

                                                   PROMISSORY NOTE

<S>          <C>          <C>         <C>          <C>     <C>            <C>        <C>      <C>
 Principal    Loan Date    Maturity   Loan No      Call    Collateral     Account    Officer  Initials
$1,000,000   06-25-1999   05-31-2000   11543       04A)        IC          5710        141

</TABLE>

References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item above
containing "***" has been omitted due to text length limitations.

Borrower: Semiconductor Laser Int'l. Corp. Lender: BSB Bank & Trust Co.
15 Link Dr.                                      PO Box 1056(58-68 Exchange St.)
Binghamton, NY 139043218                         Binghamton, NY 13902

Principal Amount:$1,000,000.00 Initial Rate: 10.250% Date of Note: June 25, 1999

PROMISE TO PAY. To repay Borrower's loan, Semiconductor Laser International
Corporation ("Borrower") promises to pay to BSB Bank & Trust Company ("Lender"),
or order, in lawful money of the United States of America, the principal amount
of One Million & 00/100 Dollars ($1,000,000.00) or so much as may be
outstanding, together with interest on the unpaid outstanding principal balance
of each advance.  Interest shall be calculated from the date of each advance
until repayment of each advance.

PAYMENT: Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on May 31, 2000.  In addition, Borrower will
pay regular monthly payments of all accrued unpaid interest due as of each
payment date, beginning August 1, 1999, with all subsequent interest payments to
be due on the same day of each month after that.  Unless otherwise agreed or
required by applicable law, payments will be applied first to accrued unpaid
interest, then to principal, and any remaining amount to any unpaid collection
costs and late charges.  The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the annual interest rate over
a year of 360 days, multiplied by the outstanding principal balance, multiplied
by the actual number of days the principal balance is outstanding.  Borrower
will pay Lender at Lender's address shown above or at such other place as Lender
may designate in writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is Lender's Prime Rate (the
"Index").  This is the rate Lender charges, or would charge, on 90-day unsecured
loans to the most creditworthy corporate customers.  This rate may or may not be
the lowest  rate  available  from  Lender at any given  time.  Lender  will tell
Borrower the current  Index rate upon  Borrower's  request.  The  interest  rate
change will not occur more often than each day. Borrower understands that Lender
may make loans based on other rates as well.  The Index  currently is 7.750% per
annum. The interest rate to be applied to the unpaid  principal  balance of this
Note will be at a rate of 2.500 percentage  points over the Index,  resulting in
an initial rate of 10.250% per annum.  NOTICE:  Under no circumstances  will the
interest rate on this Note be more than the maximum rate allowed by applicable
law.

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to by Lender
in  writing,  relieve  Borrower  of  Borrower's  obligation  to continue to make
payments of accrued  unpaid  interest.  Rather,  early  payments will reduce the
principal  balance due. Borrower agrees not to send Lender payments marked "paid
in full",  "without  recourse",  or similar  language.  If Borrower sends such a
payment,  Lender may accept it without losing any of Lender's  rights under this
Note,  and  Borrower  will remain  obligated  to pay any further  amount owed to
Lender. All written  communications  concerning disputed amounts,  including any
check or other payment  instrument  that indicates that the payment  constitutes
"payment in full" of the amount owed or that is tendered  with other  conditions
or limitations or as full  satisfaction  of a disputed  amount must be mailed or
delivered to: BSB BANK & TRUST COMPANY,  P.O. Box 1056 (58-68 Exchange  Street),
Binghamton, NY 13902.

LATE  CHARGE:  If a payment  is 10 days or more late  Borrower  will be  charged
4.000% of the  unpaid  portion  of the  regularly  scheduled  payment or $10.00,
whichever  is greater.  No Late Charge will be payable in the event of a Default
rate of interest is being charged.

INTEREST  AFTER  DEFAULT.  Upon  default,  including  failure  to pay upon final
maturity,  Lender,  at its  option,  may, if  permitted  under  applicable  law,
increase the variable interest rate on this Note to 3.500 percentage points over
the Index.  The  interest  rate will not exceed the maximum  rate  permitted  by
applicable law.

DEFAULT.  Each of the following shall  constitute an event of default ("Event of
Default") under this Note:

     PAYMENT DEFAULT.  Borrower fails to make any payment when due under this
 Note.
     OTHER DEFAULTS. Borrower fails to comply with or to perform any other
term, obligation,  covenant  or  condition  contained  in  this  Note or in any
of the related documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower.
     FALSE  STATEMENTS.  Any  warranty,  representation  or  statement  made  or
furnished to Lender by Borrower or on  Borrower's  behalf under this Note or the
related documents is false or misleading in any material respect,  either now or
at the  time  made or  furnished  or  becomes  false or  misleading  at any time
thereafter.
     INSOLVENCY.  The  dissolution or  termination of Borrower's  existence as a
going  business,  the insolvency of Borrower,  the appointment of a receiver for
any part of Borrower's  property,  any  assignment for the benefit of creditors,
any type of creditor  workout,  or the  commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.
     CREDITOR  OR  FORFEITURE   PROCEEDINGS.   Commencement  of  foreclosure  or
forfeiture proceedings, whether by judicial proceeding,  self-help, repossession
or any other method,  by any creditor of Borrower or by any governmental  agency
against any *Material* collateral securing the loan. This includes a garnishment
of any of Borrower's accounts, including deposit accounts, with Lender. However,
this  Event of  Default  shall not apply if there is a good  faith  dispute by
Borrower as to the validity or reasonableness of the claim which is the basis of
the credits or forfeiture proceeding and if Borrower gives Lender written notice
of the creditor or  forfeiture  proceeding  and deposits with Lender monies or a
surety bond for the creditor or forfeiture  proceeding,  in an amount determined
by Lender, in its sole discretion,  as being an adequate reserve or bond for the
dispute, being an adequate reserve or bond for the dispute.
     EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
to  any  guarantor,  endorser,  surety,  or  accommodation  party  of any of the
indebtedness or any guarantor,  endorser, surety, or accommodation party dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any guaranty of the indebtedness.
     CHANGE IN OWNERSHIP.  Any change in ownership of twenty-five  percent (25%)
or more of the common stock of Borrower.
     ADVERSE CHANGE.  A material  adverse change occurs in Borrower's  financial
condition,  or Lender  believes the prospect of payment or  performance  of this
Note is impaired.

LENDER'S  RIGHTS.  Upon  default,  Lender may  declare  the  entire  unpaid
principal balance on this Note and all accrued unpaid interest  immediately due,
and then Borrower will pay that amount.

ATTORNEY'S  FEES;  EXPENSES.  Borrower agrees to pay all costs and expenses
Lender incurs to collect the loan.  This  includes,  subject to any limits under
applicable law, Lender's reasonable  attorneys' fees and Lender's legal expenses
whether  or not there is a lawsuit,  including  reasonable  attorneys'  fees and
expenses for bankruptcy  proceedings  (including efforts to modify or vacate any
automatic stay or injunction), and appeals. If not prohibited by applicable law,
Borrower  also will pay any court costs,  in addition to all other sums provided
by law.

JURY WAIVER.  Lender and Borrower  hereby waive the right to any jury trial
in any action,  proceeding, or counterclaim brought by either Lender or Borrower
against the other.

GOVERNING LAW. This Note will by governed by,  construed and enforced in
accordance  with federal law and the laws of the State of New York.  This Note
has been accepted by Lender in the State of New York.

RIGHT OF  SETOFF.  In  addition  to  Lender's  right of setoff  arising  by
operation of law,  Borrower grants to Lender a contractual  security interest in
all Borrower's  accounts with Lender (whether checking,  savings,  or some other
account and whether  evidenced by a certificate  of deposit).  This includes all
accounts  Borrower holds jointly with someone else and all accounts Borrower may
open in the future. However, this does not include any IRA or Keogh accounts, or
any  trust  accounts  for  which  the  grant  of a  security  interest  would by
prohibited  by law.  Borrower  authorizes  Lender,  to the extent  permitted  by
applicable law, to charge or setoff all sums owing on the  Indebtedness  against
any and all such accounts.

COLLATERAL.  Borrower  acknowledges this Note is secured by a All Accounts,
Inventory, Equipment  and  General  Intangibles  now owed or acquired  later,
together with all proceeds of collateral.  If there is any inconsistency between
the terms and conditions of the collateral  documents,  the terms and conditions
of this Note shall prevail.

LINE OF CREDIT.  This note evidences a revolving  line of credit.  Advances
under this Note, as well as directions for payment from Borrower's accounts, may
be requested orally or in writing by Borrower or by an authorized person. Lender
may,  but need not,  require  that all oral  requests by  confirmed  in writing.
Borrower  agrees to by liable for all sums either:  (A)  advanced in  accordance
with  the  instructions  of an  authorized  person  or  (B)  credited  to any of
Borrower's accounts with Lender. The unpaid principal balance owing on this Note
at any  time  may be  evidenced  by  endorsements  on this  Note or by  Lender's
internal  records,  including  daily  computer  print-outs.  Lender will have no
obligation  to advance funds under this Note if (A) Borrower or any guarantor is
in default  under the terms of this Note or any  agreement  that Borrower or any
guarantor has with Lender,  including any agreement made in connection  with the
signing of this Note; (B) Borrower or any guarantor  ceases doing business or is
insolvent;  (C) any  guarantor  seeks,  claims or  otherwise  attempts to limit,
modify or revoke such guarantor's  guarantee of this Note or any other loan with
Lender;  or (D) Borrower has applied  funds  provided  pursuant to this Note for
purposes other than those authorized by Lender.

YEAR 2000.  Borrower  warrants and represents that all software utilized in
the  conduct of  Borrower's  business  will have  appropriate  capabilities  and
compatibility for operation to handle calendar dates falling on or after January
1, 2000,  and all  information  pertaining to such calendar  dates,  in the same
manner and with the same functionality as the software does respecting  calendar
dates falling on or before  December 31, 1999.  Further,  Borrower  warrants and
represents that the  data-related  user interface  functions,  data-fields,  and
data-related  program  instructions  and  functions of the software  include the
indication of the century.

BORROWING  BASE.  Availability  of funds under this line of credit shall be
reviewed monthly,  based on company prepared financial statements,  and shall be
limited to the lesser of $1,000,000.00, or an amount representing the sum of 85%
of eligible  accounts  receivable 90 days or less from invoice date, plus 30% of
inventories, with a maximum inventory value eligible accounts receivable 90 days
or less from invoice date,  plus 30% of  inventories,  with a maximum  inventory
value  eligibility of  $250,000.00,  plus available  unrestricted  cash balances
owned by the Borrower.

GENERAL  PROVISIONS.  Lender may delay or forgo enforcing any of its rights
or remedies under this Note without  losing them.  Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment,  demand for payment, and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise  expressly stated in writing,  no party
who signs  this  Note,  whether  as  maker,  guarantor,  accommodation  maker or
endorser,  shall be released from liability.  All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security  interest in the collateral;  and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan  without the consent of or notice to
anyone  other  than  the  party  with  whom the  modification  is  made.  The
obligations under this Note are joint and several.  Note are joint and several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.  BORROWER AGREES TO
THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.


BORROWER:


SEMICONDUCTOR LASER INTERNATIONAL CORPORATION

               /s/ Geoffrey T. Burnham
By:_____________________________________________
       Geoffrey T. Burnham, Pres/CEO of Semiconductor
        Laser International Corporation