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EXHIBIT 10.7
AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This is an amendment (the "Amendment"), dated September 15, 1999,
by and between CRESCENT INTERNATIONAL LIMITED (the "Investor"), an entity
organized and existing under the laws of Bermuda, and FRANKLIN
TELECOMMUNICATIONS CORP. (the "Company"), a corporation organized and existing
under the laws of the State of California, to the Registration Rights Agreement
(the "Agreement"), dated August 30, 1999, by and between the Investor and the
Company. All capitalized terms used and not otherwise defined herein shall have
the same meanings as when used in the Stock Purchase Agreement, dated August 30,
1999, by and between the Investor and the Company (the "Purchase Agreement").
WHEREAS, pursuant to the terms of the Purchase Agreement, the
Investor purchased and the Company issued and sold $1,000,000 worth of Common
Stock on the Subscription Date;
WHEREAS, pursuant to the terms of an amendment to the Purchase
Agreement dated as of the date hereof (the "Purchase Agreement Amendment"), the
Investor purchased and the Company issued and sold an additional $1,000,000
worth of Common Stock; and
WHEREAS, the Investor and the Company desire to extend the date
by which the Registrable Securities shall be registered for resale;
NOW, THEREFORE, the parties agree as follows:
1. Section 1.1(a) of the Agreement is amended and restated in its entirety to
read as follows:
a. Filing of Registration Statements. The Company shall register
for resale all Put Shares issued or issuable to the Investor pursuant to
the Stock Purchase Agreement and all Warrant Shares issued or issuable
upon full exercise of the Warrants. Subject to the terms and conditions
of this Agreement, the Company shall effect such registration in the
manner provided in either (i) or (ii) below.
The Company shall file with the SEC either:
(i) on or before September 22, 1999, a registration
statement (the "Initial Registration Statement") on such
form promulgated by the SEC for which the Company
qualifies, that counsel for the Company shall deem
appropriate and which form shall be available for the sale
of the shares of Common Stock purchased by the Investor
through the Early Put (the "Initial Shares"), the
Incentive Warrant Shares and the Early Put Warrant Shares.
The aggregate number of shares to be registered under the
Initial Registration Statement shall be equal to two
hundred percent (200%) of the Initial Shares, plus the
Incentive Warrant Shares. Prior to any subsequent put, the
Company shall file with the SEC a registration statement
(the "Subsequent Registration Statement" and together with
the Initial Registration Statement, the "Registration
Statements") on such form promulgated by the SEC for which
the Company qualifies, that counsel for the Company shall
deem appropriate and which form shall be available for the
sale of the shares of Common Stock to be purchased by
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the Investor and any Warrant Shares which have not
previously been registered. The aggregate number of
shares to be registered under the
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Subsequent Registration Statement shall be equal to 125%
of (X-Y)/Z, where X is the Maximum Commitment Amount, Y is
the Investment Amount of the Early Put and Z is 92% of the
Minimum Bid Price; or
(ii) on or before September 22, 1999, a registration
statement (the "Combined Registration Statement") on such
form promulgated by the SEC for which the Company
qualifies, that counsel for the Company shall deem
appropriate and which form shall be available for the sale
of all Put Shares issued or issuable pursuant to the terms
of the Stock Purchase Agreement and all Warrant Shares
issued or issuable upon full exercise of the Warrants. The
aggregate number of shares to be registered under the
Combined Registration Statement shall be equal to 125% of
(A/B)+C, where A is the Maximum Commitment Amount, B is
92% of the Minimum Bid Price and C is the number of
Incentive Warrant Shares.
2. Section 1.1(b) of the Agreement is amended and restated in its entirety to
read as follows:
b. Effectiveness of the Registration Statements. The Company
shall use its best efforts either: (i) to have the Initial Registration
Statement declared effective by the SEC in no event later than
ninety-seven (97) calendar days after the Subscription Date and to have
the Subsequent Registration Statement declared effective by the SEC in
no event later than 150 calendar days after the Subscription Date, or
(ii) to have the Combined Registration Statement declared effective by
the SEC in on event later than ninety-seven (97) calendar days after the
Subscription Date. The Company shall ensure that all Registration
Statements remain in effect for a period ending 180 days following the
earlier of termination of the Commitment Period and termination of the
Investor's obligations pursuant to Section 2.4 of the Stock Purchase
Agreement; provided that such period shall be extended one day for each
day after the applicable Effective Date, that any Registration Statement
covering shares purchased by the Investor is not effective during the
period such Registration Statement is required to be effective pursuant
to this Agreement; and provided further that the Company shall not be
required to ensure that any Registration Statement covering shares
purchased by the Investor remain in effect for such 180 day period if
the shares registered thereunder shall have become freely tradable
pursuant to Rule 144(k) of the Securities Act or have otherwise been
sold.
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IN WITNESS WHEREOF, this Amendment has been entered into on the day and
year first herein written.
CRESCENT INTERNATIONAL LIMITED
By: /s/ Maxi Brezzi /s/ Xxxx X. Xxx
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Name:
Title:
FRANKLIN TELECOMMUNICATIONS CORP.
By: Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer
