EXHIBIT 7.4
AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This is an amendment (the "Amendment"), dated September 14, 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
the Investor and any Warrant Shares which have not previously
been registered. The aggregate number of shares to be
registered under the 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.
IN WITNESS WHEREOF, this Amendment has been entered into on the day and
year first herein written.
CRESCENT INTERNATIONAL LIMITED
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: Crescent MD
FRANKLIN TELECOMMUNICATIONS CORP.
By: /s/ Xxx Xxxxxxx
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Name: Xxx Xxxxxxx
Title: VP CFO
