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EXHIBIT 10.8
SECOND AMENDMENT TO STOCK PURCHASE AGREEMENT
This is the second amendment (the "Amendment"), dated February 8, 2000,
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 Stock Purchase Agreement,
dated August 30, 1999, as amended by the Amendment to Stock Purchase Agreement,
dated September 14, 1999 (the "Agreement"), 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 Agreement.
WHEREAS, pursuant to the terms of the Agreement, the Investor has
purchased and the Company has issued and sold shares of Common Stock through the
Early Put for an Investment Amount of $2,000,000;
WHEREAS, the Company and the Investor wish to amend further the
Agreement to provide for the Investor to purchase and the Company to issue and
sell additional shares of Common Stock through the February Put, as defined
below, for an Investment Amount of $1,500,000; and
NOW, THEREFORE, the parties agree as follows:
1. Section 1.27 of the Agreement is amended and restated in its entirety to
read as follows:
"Outstanding" when used with reference to Common Stock or Capital Shares
(collectively the "Shares"), shall mean, at any date as of which the number
of such Shares is to be determined, all issued and outstanding Shares, and
shall include all such Shares issuable in respect of outstanding scrip or
any certificates representing fractional interests in such Shares;
provided, however, that "Outstanding" shall not refer to any such Shares
then directly or indirectly owned or held by or for the account of the
Company.
2. Section 1.31 of the Agreement is amended and restated in its entirety to
read as follows:
"Put" shall mean the Early Put, the February Put and each occasion the
Company elects to exercise its right to require the Investor to purchase a
discretionary amount of the Company's Common Stock, subject to the terms
and conditions of this Agreement.
3. Section 1.38 of the Agreement is amended and restated in its entirety to
read as follows:
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated August 30, 1999, as amended by the Amendment to
Registration Rights Agreement, dated September 14, 1999, and as further
amended by the Second Amendment to Registration Rights Agreement, dated the
date hereof, by and between the Investor and the Company.
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4. Section 1.50 of the Agreement is amended and restated in its entirety to
read as follows:
"Warrants" shall mean the Early Put Warrant, the February Put Warrant and
the Incentive Warrant.
5. Section 1.51 of the Agreement is amended and restated in its entirety to
read as follows:
"Warrant Shares" shall mean the Early Put Warrant Shares, the February Put
Warrant Shares and the Incentive Warrant Shares.
6. Section 2.1(c) of the Agreement is amended and restated in its entirety to
read as follows:
(c) Early Put, February Put. The Company shall issue and sell and the
Investor shall purchase, (i) on the Subscription Date, shares of the Common
Stock for an Investment Amount of $1,000,000 at the Purchase Price on the
Subscription Date, (ii) on September 14, 1999, shares of the Common Stock
for an Investment Amount of $1,000,000 at the Purchase Price on the
Subscription Date (the transactions described in clauses (i) and (ii) are
collectively referred to as the "Early Put," and all shares described in
clauses (i) and (ii) are collectively referred to herein as the "Early Put
Shares") and (iii) on February 8, 2000, 841,515 shares of the Common Stock
for an Investment Amount of $1,500,000 at the Purchase Price of $1.7825 per
share (the "February Put," and all such shares are referred to as the
"February Put Shares"). For the purpose only of the Early Put and the
February Put, the Investor waives the requirements of Section 2.2, and the
conditions set forth in paragraphs (a), (b), (i), (j), (k) and (m) of
Section 7.2 hereof. Notwithstanding anything to the contrary set forth
herein, for the purposes of Section 2.3, a Put Notice shall be deemed to
have been delivered with respect to the February Put with an Investment
Amount indicated thereon of $1,500,000, and the Closing Date for the
February Put shall be February 8, 2000 (the "February Put Closing Date").
The Company's independent counsel shall deliver to the Investor on the
February Put Closing Date an opinion relating to the February Put in the
form of Exhibit D.
7. Section 2.1(d) of the Agreement is amended and restated in its entirety to
read as follows:
(d) Early Put Warrants, February Put Warrants. In addition to the
Incentive Warrant (as defined hereinafter), (i) on the Subscription Date,
the Company shall issue to the Investor an Early Put Warrant with an
exercise price of $0.01 for each share of Common Stock, and (ii) on
February 8, 2000, the Company shall issue to the Investor a warrant in the
form of Exhibit G hereto (the "February Put Warrant"), with an exercise
price of $0.01 for each share of Common stock (such shares of Common Stock
issued or issuable pursuant to the exercise of the February Put Warrant
being the "February Put Warrant Shares").
8. Section 2.4 of the Agreement is amended and restated in its entirety to
read as follows:
Section 2.4 Termination of Agreement and Investment Obligation. The
Company shall have the right to terminate this Agreement at any time upon
thirty
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(30) days' written notice to the Investor. The Investor shall have the
right to immediately terminate this Agreement (including with respect to
any Put, notice of which has been given but the applicable Closing Date has
not yet occurred) in accordance with Section 6.12 or in the event that: (i)
the Registration Statement with respect to Registrable Securities relating
to the Early Put is not effective within ninety-seven (97) days following
the Subscription Date, (ii) a Registration Statement with respect to
Registrable Securities relating to the February Put is not effective by
June 7, 2000, (iii) there shall occur any stop order or suspension of the
effectiveness of the Registration Statement for an aggregate of thirty (30)
Trading Days during the Commitment Period and (iv) the Company shall at any
time fail to comply with the requirements of Section 6.2, 6.3, 6.4, 6.5,
6.6, 6.8 or 6.9.
9. The preamble to Article IV of the Agreement is amended and restated in its
entirety to read as follows:
The Company represents and warrants to the Investor that on the
Subscription Date, each Effective Date, the February Put Closing Date and
each subsequent Closing Date:
10. Section 7.2(a) of the Agreement is amended and restated in its entirety to
read as follows:
(a) Registration of the Registrable Securities with the SEC. As set
forth in the Registration Rights Agreement, the Company shall have filed
with the SEC either:
(i) a Registration Statement covering the resale of the
Registrable Securities relating to the Early Put that shall
have been declared effective by the SEC in no event later
than ninety-seven (97) days after the Subscription Date, a
Registration Statement covering the resale of Registrable
Securities relating to the February Put that shall have been
declared effective by the SEC in no event later than June 7,
2000, and a Registration Statement covering the resale of
Registrable Securities relating to all subsequent Puts that
shall have been declared effective by the SEC prior to any
subsequent Put; or
(ii) a Combined Registration Statement (as defined in the
Registration Rights Agreement) that shall have been declared
effective by the SEC in no event later than ninety-seven (97)
days after the Subscription Date.
11. Section 7.2(b) of the Agreement is amended and restated in its entirety to
read as follows:
(b) Effective Registration Statement. As set forth in the Registration
Rights Agreement, the Registration Statement(s) shall have previously
become effective and shall remain effective on each Condition Satisfaction
Date and (i) neither the Company nor the Investor shall have received
notice that the SEC has
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issued or intends to issue a stop order with respect to a Registration
Statement or that the SEC otherwise has suspended or withdrawn the
effectiveness of a Registration Statement, either temporarily or
permanently, or intends or has threatened to do so (unless the SEC's
concerns have been addressed and the Investor is reasonably satisfied that
the SEC no longer is considering or intends to take such action), (ii) no
other suspension of the use or withdrawal of the effectiveness of such
Registration Statement or related prospectus shall exist, (iii) with
respect to each Put subsequent to the February Put, the Company shall have
notified the Investor in accordance with Section 6.8 that each Registration
Statement covering the Registrable Securities relating to the Early Put and
the February Put have been declared effective by the SEC, and (iv) at least
30 days shall have elapsed since the Initial Registration Statement (as
defined in the Registration Rights Agreement) has been declared effective
by the SEC.
12. Copies of any notices, demands, requests, consents, approvals and other
communications required to be sent to Xxxxxx & Xxxxx LLP pursuant to
Section 10.4 shall instead be sent to Xxxxxxxx Chance Xxxxxx & Xxxxx LLP,
000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Xxxx Xxxxx,
Esq./Xxxx X. Xxxxxxxxx, Esq., Telephone: (000) 000-0000, Facsimile: (212)
878-8375
IN WITNESS WHEREOF, this Amendment has been entered into on the day and
year first herein written.
CRESCENT INTERNATIONAL LIMITED
By: /s/ Xxx Xxxx /s/ Maxi Brezzi
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Name: Xxx Xxxx Maxi Brezzi
Title:
FRANKLIN TELECOMMUNICATIONS CORP.
By: /s/ Xxx Xxxxxxx
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Name: Xxx Xxxxxxx
Title: VP - CFO
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