EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is dated as of
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May 30, 1997, and is being made and entered into by and among AVERY
COMMUNICATIONS, INC., a Delaware corporation ("ACI"), and THE FRANKLIN HOLDING
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CORPORATION (DELAWARE), a Delaware corporation (the "Holder"), with reference to
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the following RECITALS:
R E C I T A L S:
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A. For the convenience of the parties, certain capitalized words and
phrases used herein are defined or referred to in Section 3.1.
B. To provide the Holder with greater liquidity in the future with
respect to the Registrable Stock, the Holder wishes to have certain registration
rights and ACI wishes to grant such rights to the Holder.
NOW, THEREFORE, in consideration of the recitals and of the respective
covenants, representations, warranties and agreements herein contained, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1
REGISTRATION RIGHTS
SECTION 1.1 DEMAND REGISTRATION.
1.1.1 REQUEST FOR REGISTRATION. At any time after April 1,
1998, until the Expiration Date, Holder may make a written request (the
"Demand Notice") for registration under the Securities Act (a "Demand
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Registration") of all or part of Holder's Demand Registrable Stock,
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subject to the conditions of this Agreement. The Demand Notice will
specify the number of shares of Demand Registrable Stock proposed to be
sold and will also specify the intended method of disposition thereof.
Subject to Section 1.1.4 hereof, ACI will include in the Demand
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Registration all Demand Registrable Stock specified in the Demand
Notice. The Demand Registration shall be on such appropriate
registration form of the Commission as ACI shall determine.
1.1.2 LIMITATION ON DEMAND REGISTRATION. ACI shall not be
obligated to effect more than one Demand Registration under this
Section 1.1.2.
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Notwithstanding any provision of this Agreement to the
contrary, ACI shall not be obligated to honor any Demand Notice
requesting a Demand Registration, or otherwise cause a Demand
Registration to become effective, hereunder if (i) the Demand Notice is
delivered to ACI during the period commencing 90 days before the
estimated effective date of a registration statement pursuant to which
ACI proposes to offer shares of any class of equity securities of ACI
in an underwritten offering and ending 180 days after
the closing date of any such offering. If ACI determines not to proceed
with such proposed offering, ACI shall promptly notify the Holder who
made the Demand Notice that (i) ACI's proposed offering has been
cancelled and (ii) ACI will file the Demand Registration as soon as
practicable as requested by the Holder who delivered the Demand Notice.
1.1.3 EFFECTIVE REGISTRATION AND EXPENSES. Upon receipt of a
Demand Notice, ACI will (i) take appropriate action, on a reasonable,
timely basis, to prepare and file a registration statement covering the
Demand Registrable Stock requested to be included in the Demand
Registration (subject to Section 1.1.4 below) and (ii) use its
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commercially reasonable efforts to cause the Demand Registration to
become effective under the Securities Act. A registration will not
count as a Demand Registration unless a registration statement with
respect thereto has become effective (unless the Holders whose Demand
Registrable Stock are included in such Demand Registration withdraw
their shares of Demand Registrable Stock, in which case such demand
shall count as the Demand Registration). ACI will pay all Registration
Expenses in connection with the Demand Registration.
1.1.4 PRIORITY ON DEMAND REGISTRATIONS. In the event the
offering of shares pursuant to a Demand Registration shall be in the
form of an underwritten offering by or through one or more
underwriters, and the managing underwriter or underwriters of such
underwritten offering advise ACI in writing that, in their opinion, the
number of Demand Registrable Stock and any other securities requested
to be included in such offering is sufficiently large to affect
materially and adversely the success of such offering (a "Material
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Adverse Effect"), ACI shall include in such registration the aggregate
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number of shares of Demand Registrable Stock which in the opinion of
such managing underwriter or underwriters can be sold without any such
Material Adverse Effect. Other securities requested to be included in
such offering shall only be included if (i) all shares of Demand
Registrable Stock are included and (ii) the inclusion of such other
securities will not result in a Material Adverse Effect.
SECTION 1.2 INCIDENTAL REGISTRATION.
1.2.1 PIGGYBACK RIGHTS OF HOLDER. If at any time or times from
and after the date hereof, ACI intends to file prior to the Expiration
Date a Registration Statement on Form S-1, S-2 or S-3 (or other
appropriate form) for the registration of Common Stock with the
Commission (other than a (i) Registration Statement on Form S-4 (or any
successor form) relating to a corporate reorganization or other
transaction under Rule 145, (ii) Registration Statement relating to
securities issued pursuant to, or interests in, an employee benefit
plan for the employees of ACI or its affiliates or (iii) Registration
Statement on a form which does not permit the inclusion of securities
sold in a secondary offering), then ACI shall notify the Holder at
least 30 days prior to each such filing of ACI's intention to file such
a Registration Statement. Such notice shall state the amount and type
of securities proposed to be registered thereby. Upon the written
request of the Holder (a "Holder Request") given within 20 days after
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receipt of any such notice stating the number of shares of Registrable
Stock to be disposed of by the Holder and the intended method of
disposition, ACI will use reasonable efforts to cause the aggregate of
the Registrable Stock designated in the Holder Requests to be included
in such
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registration so as to permit the disposition (in accordance with the
methods specified in the Holder Request(s)) by the Holder of the
Registrable Stock so registered, subject to the reductions specified in
Sections 1.2.2 and 1.2.3, as applicable. The Holder shall be entitled,
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subject to such reductions, to participate in an unlimited number of
such registrations.
1.2.2 REDUCTIONS OF REGISTRABLE STOCK TO BE INCLUDED. If the
registration proposed by ACI involves an underwritten offering of the
Common Stock, whether or not for sale for the account of ACI, to be
distributed (on a best efforts or firm commitment basis) by or through
one or more underwriters, and the managing underwriter of such
underwritten offering shall advise ACI in writing that, in its opinion,
the registration of all or a specified portion of Registrable Stock
concurrently with the Common Stock will adversely affect the
distribution of such Common Stock by such underwriters, then ACI may
require, by written notice to the Holder, that the distribution of all
or a specified portion of the Registrable Stock be excluded from such
registration in accordance with Section 1.7.
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1.2.3 WITHDRAWALS. ACI may in its discretion withdraw any
Registration Statement filed pursuant to this Section 1.2 subsequent to
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its filing and prior to its effective date without liability to the
Holder, other than to pay expenses pursuant to Section 1.4.
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SECTION 1.3 INDEMNITY.
(a) ACI will, and hereby does, indemnify and hold harmless, to
the extent permitted by law, each Holder, its partners,
representatives, shareholders, officers and directors, if any, and each
Person, if any, who controls the Holder within the meaning of Section
15 of the Securities Act, against all losses, claims, damages,
liabilities (or proceedings in respect thereof) and expenses (under the
Securities Act or common law or otherwise), joint or several, resulting
from any untrue or misleading statement or alleged untrue or misleading
statement of a material fact contained in any Registration Statement
(as declared effective) or prospectus filed under Rule 424(b) under the
Securities Act (and as amended or supplemented if ACI shall have
furnished any amendments or supplements thereto) or any preliminary
prospectus or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as:
(i) such losses, claims, damages, liabilities (or
proceedings in respect thereof) or expenses are caused by any
untrue statement or alleged untrue statement made in reliance
on or in conformity with any information furnished in writing
to ACI by the Holder expressly for use therein; or
(ii) in the case of any registration that is not an
underwritten offering, such losses, claims, damages,
liabilities (or proceedings in respect thereof) or expenses
result from the Holder selling Registrable Stock to a Person
asserting the existence of an untrue or misleading statement
or alleged untrue statement or
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omission or alleged omission in a preliminary prospectus and
to whom there was not given or sent, at or prior to the
written confirmation of the sale of the Registrable Stock, a
copy of the final prospectus or the final prospectus as then
amended or supplemented but only if such statement or omission
was corrected in such final prospectus or amended or
supplemented final prospectus prior to such written
confirmation and the Holder was given notice, prior to such
written confirmation, of the availability of, or that ACI was
preparing, such final prospectus or amended or supplemented
final prospectus.
If the offering pursuant to any Registration Statement provided for
under this Agreement is made through underwriters, no action or failure
to act on the part of such underwriters (whether or not such
underwriter is an Affiliate of any Holder) shall affect ACI's
obligations to indemnify the Holder or any other Person pursuant to the
preceding sentence. It is agreed that the indemnity agreement contained
in this Section 13 (a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability, or action if such settlement
is effected without the consent of ACI (which consent has not been
unreasonably withheld).
(b) In connection with any Registration Statement in which the
Holder is participating, the Holder will indemnify and hold harmless,
to the extent permitted by law, ACI, its officers, directors, partners,
legal counsel, and accountants, and each underwriter, if any, of ACI
Securities covered by such Registration Statement, and each Person, if
any, who controls ACI or any such underwriter within the meaning of
Section 15 of the Securities Act, and each of the Other Stockholders,
and each of their respective officers, directors, and partners, and
each Person controlling any of the Other Stockholders against any
losses, claims, damages, liabilities (or proceedings in respect
thereof) and expenses (under the Securities Act or common law or
otherwise) resulting from any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission of a
material fact required to be stated in the Registration Statement (as
declared effective) or prospectus filed under Rule 424(b) under the
Securities Act or preliminary prospectus or any amendment thereof or
supplement thereto, or necessary to make the statements therein not
misleading, but only to the extent that:
(i) such untrue statement is made in reliance on
or in conformity with any information furnished in writing by
the Holder expressly for use therein; or
(ii) in the case of any registration that is not
an underwritten offering, such losses, claims, damages,
liabilities (or proceedings in respect thereof) or expenses
resulting from the Holder selling Registrable Stock to a
Person asserting the existence of an untrue statement or
alleged untrue statement or omission or alleged omission in a
preliminary prospectus and to whom there was not given or
sent, at or prior to the written confirmation of the sale of
the Registrable Stock, a copy of the final prospectus or of
the final prospectus as then amended or supplemented but only
if such statement or omission was corrected in such final
prospectus or amended or supplemented final prospectus prior
to such written confirmation and the Holder was given notice,
prior to such written confirmation,
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of the availability of, or that ACI was preparing, such final
prospectus or amended or supplemented final prospectus;
provided, however, that the obligations of the Holder hereunder shall
not apply to amounts paid in settlement of any such claims, losses,
damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of the Holder (which consent
has not been unreasonably withheld); and, provided further, that the
Holder's obligations under this Section 1.3.(b) shall be limited to an
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amount equal to the net proceeds to the Holder of the Registrable Stock
sold pursuant to such Registration Statement.
(c) Any Person entitled to indemnification under the
provisions of Section 1.3.(a) or (b) shall (i) give prompt notice to
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the indemnifying party of any claim with respect to which it seeks
indemnification, and (ii) unless in the opinion of counsel reasonably
satisfactory to the indemnifying party a conflict of interest between
such indemnified and indemnifying parties may exist in respect of such
claim, permit such indemnifying party to assume the defense of such
claim, with counsel reasonably satisfactory to the indemnified party
(who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party); and if such defense is so assumed,
such indemnifying party shall not enter into any settlement without the
consent of the indemnified party if such settlement attributes
liability to the indemnified party and such indemnifying party shall
not be subject to any liability for any settlement made without its
consent (which shall not be unreasonably withheld); and any
underwriting agreement entered into with respect to any Registration
Statement provided for under this Agreement shall so provide. In the
event an indemnifying party shall not be entitled, or elects not, to
assume the defense of a claim, such indemnifying party shall not be
obligated to pay the fees and expenses of more than one counsel or firm
of counsel for all parties indemnified by such indemnifying party in
respect of such claim. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of a
participating Holder, its officers, directors or any Person, if any,
who controls the Holder as aforesaid, and shall survive the transfer of
such securities by the Holder.
(d) If for any reason the foregoing indemnity is unavailable,
then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the
other or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified
party than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the
other but also the relative fault of the indemnifying party and the
indemnified party as well as any other relevant equitable
considerations. Notwithstanding the foregoing, no Holder shall be
required to contribute any amount in excess of the amount the Holder
would have been required to pay to an indemnified party if the
indemnity under Section 1.3.(a) or (b), as applicable, was
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available. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the
parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) An indemnifying party shall make payments of all amounts
required to be made pursuant to the foregoing provisions of this
Section 1.3 to or for the account of the indemnified party from time to
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time promptly upon receipt of bills or invoices relating thereto or
when otherwise due and payable.
(f) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
SECTION 1.4 REGISTRATION PROCEDURES.
(a) Whenever the Holder has properly requested that any
Registrable Stock be registered pursuant to Sections 1.1 or 1.2, ACI
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will use reasonable efforts to effect the registration in furtherance
of the sale of the Registrable Stock in accordance with the intended
method of disposition thereof, and in connection with any such request
ACI will:
(i) prepare and file with the Commission such
amendments and supplements to such Registration Statement and
the prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective for
such period (not to exceed 90 days) as will terminate when all
Registrable Stock covered by such Registration Statement have
been sold and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by
such Registration Statement during such period in accordance
with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement;
(ii) furnish to each seller of Registrable Stock such
number of copies of such Registration Statement, each
amendment and supplement thereto (in each case including all
exhibits thereto), the prospectus included in such
Registration Statement (including each preliminary
prospectus), each amendment and supplement thereto and such
other documents as such seller may reasonably request in order
to facilitate the disposition of the Registrable Stock owned
by such seller;
(iii) use reasonable efforts to register or qualify
the Registrable Stock under such other applicable securities
or blue sky laws of such jurisdictions as any
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seller reasonably requests and do any and all other acts and
things which may be reasonably necessary or advisable to
enable such seller to consummate the disposition in such
jurisdictions of the Registrable Stock owned by such seller;
provided, however, that ACI will not be required to (A)
qualify generally to do business or subject itself to taxation
in any jurisdiction where it would not otherwise be required
to qualify or be subject but for this subparagraph (iii), or
(B) consent to general service of process in any such
jurisdiction;
(iv) use reasonable efforts to cause the Registrable
Stock covered by such Registration Statement to be registered
with or approved by such other Governmental Authorities as may
be reasonably necessary by virtue of the business and
operations of ACI to enable the seller or sellers thereof to
consummate the disposition of the Registrable Stock;
(v) (A) notify each seller of the Registrable Stock,
at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such
Registration Statement contains an untrue statement of a
material fact or omits to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading, and (B) prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the
purchasers of the Registrable Stock, such prospectus will not
contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(vi) (A) use reasonable efforts to cause all
Registrable Stock to be listed on each securities exchange or
stock market on which the Common Stock is then listed or
quoted, and (B) unless the same already exists, provide a
transfer agent, registrar and CUSIP number for all Registrable
Stock not later than the effective date of the Registration
Statement;
(vii) make available for inspection at the offices of
ACI during regular business hours by any seller of Registrable
Stock, any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney,
accountant or other agent retained by any such seller or
underwriter, such financial and other records, pertinent
corporate documents and properties of ACI as shall be
reasonably requested by them and be necessary to enable them
to exercise its due diligence responsibility; and
(viii) use its reasonable efforts to otherwise comply
with all applicable rules and regulations of the Commission.
(b) In connection with any registration effected pursuant to
Sections 1.1 or 1.2, that the Holder has requested that its securities
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be registered pursuant to such Registration Statement shall provide to
ACI such information as may be reasonably requested by ACI
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to be required for inclusion in such Registration Statement pursuant to
the Securities Act and the rules and regulations thereunder.
(c) Holder agrees by acquisition of the Registrable Stock and
the registration rights thereunder that, upon receipt of any notice
from ACI of the happening of any event of the kind described in Section
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1.4(a)(v), the Holder will forthwith discontinue disposition of
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Registrable Stock pursuant to the Registration Statement covering the
Registrable Stock until the Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by such Section
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1.4(a)(v), and, if so directed by ACI, the Holder will deliver to ACI
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(at ACI's expense) all copies, other than permanent file copies then in
the Holder's possession, of the prospectus covering the Registrable
Stock current at the time of receipt of such notice. In the event ACI
shall give any such notice, the period mentioned in Section 1.4(a)(i)
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shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section
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1.4(a)(v) to and including the date when each seller of Registrable
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Stock covered by such Registration Statement shall have received the
copies of the supplemented or amended prospectus contemplated by such
Section 1.4(a)(v).
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SECTION 1.5 EXPENSES. All Registration Expenses incurred in effecting
any registration, qualifications or compliance pursuant to this Agreement, shall
be borne by ACI. All Selling Expenses relating to Registrable Stock so
registered shall be borne by the Holder, according to the quantity of
Registrable Stock included in such registration along with any other expenses in
connection with the registration required to be borne by the Holder of the
Registrable Stock.
SECTION 1.6 LIMITATION ON REGISTRATION. Notwithstanding the foregoing,
under no circumstances will ACI be obligated to cause any registration effected
pursuant to this Agreement to remain effective after the Expiration Date or to
include any Registrable Stock in a Registration Statement which becomes
effective after the Expiration Date.
SECTION 1.7 ALLOCATION OF REGISTRATION OPPORTUNITIES. In any
circumstance in which the Registrable Stock and other shares of ACI Common Stock
(including shares of Common Stock issued or issuable upon conversion of shares
of any currently unissued series of preferred stock of ACI) with registration
rights (the "Other Shares") requested to be included in a registration on behalf
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of the Holder or other selling stockholders ("Other Stockholders") cannot be so
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included as a result of limitations of the aggregate number of shares of
Registrable Stock and Other Shares that may be so included, other than as
provided in Section 1.1.4 and Section 1.2.2, the number of shares of Registrable
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Stock and Other Shares that may be so included shall be allocated among the
Holder and Other Stockholders requesting inclusion of shares pro rata on the
basis of the number of shares of Registrable Stock and Other Shares that would
be held by the Holder and Other Stockholders, assuming conversion; provided,
however, that such allocation shall not operate to reduce the aggregate number
of shares of Registrable Stock and Other Shares to be included in such
registration. If the Holder or any Other Stockholder does not request inclusion
of the maximum number of shares of Registrable Stock and Other Shares allocated
to such Person pursuant to the above-described procedure, the remaining portion
of any such Person's allocation shall be reallocated among those requesting
Holder and Other Stockholders whose allocations did not satisfy their requests
pro rata on the basis of the number of shares of
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Registrable Stock and Other Shares which would be held by the Holder and Other
Stockholders, assuming conversion, and this procedure shall be repeated until
all of the shares of Registrable Stock and Other Shares which may be included in
the registration on behalf of the Holder and Other Stockholders have been so
allocated.
SECTION 1.8 DELAY OF REGISTRATION. No Holder shall have any right to
take any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Article 1.
ARTICLE 2
UNDERWRITTEN OFFERINGS
SECTION 2.1 UNDERWRITING ARRANGEMENTS. If ACI or holders of securities
initially requesting or demanding such registration have determined to enter
into an underwriting agreement in connection therewith, all shares constituting
Registrable Stock to be included in such registration shall be subject to such
underwriting agreement and no Person may participate in such registration unless
such Person agrees to sell such Person's securities on the basis provided in the
underwriting arrangements approved by such Persons so determining to enter
therein and completes and executes all questionnaires, indemnities, underwriting
agreements and other reasonable documents which must be executed under the terms
of such underwriting arrangements.
If requested by the underwriters for any underwritten offering of
Registrable Stock, ACI will enter into an underwriting agreement that shall
contain such representations and warranties by ACI and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions.
SECTION 2.2 SELECTION OF UNDERWRITERS. If ACI at any time proposes to
register any ACI Securities for sale for its own account and such securities are
to be distributed by or through one or more underwriters, the selection of the
underwriter(s), including, without limitation, the managing underwriter(s),
shall be made by ACI.
SECTION 2.3 HOLDBACK AGREEMENTS. Notwithstanding any other provision of
the Agreement, if any registration pursuant to this Agreement shall be in
connection with an underwritten public offering, each Holder agrees, if so
required by the managing underwriter, not to effect any public sale or
distribution of Registrable Stock (other than as part of such underwritten
public offering) within 30 days prior to the effective date of such Registration
Statement or 180 days after the effective date of such Registration Statement.
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ARTICLE 3
DEFINITIONS AND CONSTRUCTION
SECTION 3.1 DEFINITION OF CERTAIN TERMS.
Except as otherwise expressly provided or unless the context otherwise
requires, the terms defined in this Section 3.1, whenever used in this
Agreement, shall have the respective meanings assigned to them in this Section
for all purposes of this Agreement, and include the plural as well as the
singular.
As used herein, the following terms have the following meanings:
ACI: as defined in the first paragraph of this Agreement.
ACI SECURITIES: securities issued by ACI.
AGREEMENT: this instrument as originally executed, or as it may be from
time to time supplemented or amended by one or more supplements or
amendments hereto entered pursuant to the applicable provisions hereof.
COMMISSION: the United States Securities and Exchange Commission and
any successor federal agency having similar powers.
COMMON STOCK: the Common Stock, par value $0.01 per share, of ACI.
DEMAND NOTICE: as defined in Section 1.1.1.
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DEMAND REGISTRATION: as defined in Section 1.1.1.
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DEMAND REGISTRABLE STOCK: collectively, the Holder Original Common
Shares and the Holder Conversion Shares, and all shares of Common Stock
issued by ACI in respect of such Shares.
EXPIRATION DATE: the earlier of (i) eight years from the date hereof,
or (ii) the earliest date on which the Holder may sell shares of
Registrable Stock under Section (k) of Rule 144 (or any successor
provision).
GOVERNMENTAL AUTHORITY: the United States of America, any state or
other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government within any such jurisdiction.
HOLDER: as defined in the first paragraph of this Agreement, and any
Person who (i) subsequently becomes the owner of record of any
Registrable Stock and (ii) enters into an amendment or supplement to
this Agreement pursuant to which such subsequent holder of Registrable
Stock agrees to be bound by each and every provision of this Agreement
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except for the provisions of Section 1.1, it being expressly understood
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and agreed that no subsequent owner of Registrable Stock shall have any
demand registration rights hereunder without the express prior written
consent of ACI.
HOLDER CONVERSION SHARES: all shares of Common Stock issued to Holder
upon conversion of the Holder Preferred Shares.
HOLDER ORIGINAL COMMON SHARES: the 999,997 shares of the Common Stock
purchased by Holder pursuant to the Investment Agreement.
HOLDER PREFERRED SHARES: all shares of ACI's Series D Senior Voting
Cumulative Convertible Redeemable Preferred Stock and Series E Junior
Convertible Redeemable Preferred Stock issued by ACI to Holder pursuant
to the Investment Agreement.
HOLDER REQUEST: as defined in Section 1.2.1.
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HOLDER WARRANT SHARES: all shares of Common Stock received by Holder
from ACI upon exercise of the Warrant.
INVESTMENT AGREEMENT: the Investment Agreement dated as of May 30,
1997, by and between the Holder and ACI.
MATERIAL ADVERSE EFFECT: as defined in Section 1.1.4.
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OPTION AGREEMENT: as defined in the Recitals to this Agreement.
OTHER SHARES: as defined in Section 1.7.
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OTHER STOCKHOLDERS: as defined in Section 1.7.
PERSON: any individual, corporation (including a business trust) joint
stock company, partnership, joint venture, trust, estate, limited
liability company, unincorporated association, unincorporated
organization, Governmental Authority or any other entity.
REGISTER, REGISTERED AND REGISTRATION: refer to a registration effected
by filing a Registration Statement in compliance with the Securities
Act, and the declaration or ordering by the Commission of the
effectiveness of such Registration Statement.
REGISTRABLE STOCK: collectively, the Holder Original Common Shares, the
Holder Conversion Shares and the Holder Warrant Shares, and all shares
of Common Stock issued by ACI in respect of such Shares. Except as used
in Section 1.2, the term "Registrable Stock" shall include all "Demand
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Registrable Stock."
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REGISTRATION EXPENSES: all expenses incurred in effecting any
registration pursuant to this Agreement, including, without limitation,
all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for ACI, blue sky fees
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and expenses, and expenses of any regular or special audits incident to
or required by any such registration, but shall not include Selling
Expenses, fees and disbursements of counsel for the Holder and the
compensation of regular employees of ACI, which shall be paid in any
event by ACI.
REGISTRATION STATEMENT: a registration statement prepared on an
appropriate form promulgated under the Securities Act.
RULE 144: Rule 144 (or any successor provision) under the Securities
Act.
RULE 145: Rule 145 (or any successor provision) under the Securities
Act.
SECURITIES ACT: the Securities Act of 1933.
SELLING EXPENSES: all underwriting discounts, selling commissions and
stock transfer taxes applicable to the sale of Registrable Stock and
fees and disbursements of counsel for any Holder (other than the fees
and disbursements of counsel included in Registration Expenses).
WARRANT: the Warrant to purchase 666,666 shares of Common Stock at an
exercise price of $1.50 per share granted by ACI to the Holder pursuant
to the Investment Agreement.
SECTION 3.2 RULES OF CONSTRUCTION
(a) "This Agreement" means this instrument as originally
executed or as it may be from time to time supplemented or amended by
one or more supplements or amendments hereto entered pursuant to the
applicable provisions hereof;
(b) "includes" and "including" are not limiting, and, in each
case, shall be construed as if followed by the words "without
limitation," "but not limited to" or words of similar import;
(c) "may not" is prohibitive, and not permissive;
(d) "shall" is mandatory, and not permissive;
(e) "or" is not exclusive [i.e., if a party "may do (a), (b)
or (c)," then the party may do all of, any one of, or any combination
of, (a), (b) or (c)] unless the context expressly provides otherwise;
(f) all references in this instrument to designated Articles,
Sections, Exhibits, and Schedules are to the designated Articles,
Sections, Exhibits, and Schedules of this instrument as originally
executed;
(g) all references herein to constitutions, treaties,
statutes, laws, rules, regulations, ordinances, codes or orders include
any successor thereto or replacement
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thereof, include any amendment, modification or supplements thereof or
thereto from time to time, and, include all rules and regulations
promulgated thereunder or pursuant thereto;
(h) the words "herein," "hereof," "hereto" and "hereunder" and
other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision; and
(i) all terms used herein which are defined in the Securities
Act, the Exchange Act or the rules and regulations promulgated
thereunder have the meanings assigned to them therein unless otherwise
defined herein.
ARTICLE 4
GENERAL PROVISIONS
SECTION 4.1 SEVERABILITY. If any provision of this Agreement, including
any phrase, sentence, clause, Section or subsection is inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
SECTION 4.2 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or (c) sent by next-day or overnight mail or
delivery or (d) sent by telecopy or telegram.
(a) if to ACI, to
Avery Communications, Inc.
190 South LaSalle Street, Suite 1410
Chicago, Illinois 60603
Attention: Patrick J. Haynes, III, Chairman
(b) if to the Holder, to
The Franklin Holding Corporation (Delaware)
450 Park Avenue, 10th Floor
New York, New York 10022
Attention: Stephen L. Brown, Chairman
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the seventh
business day after the mailing thereof, (y) if by
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next-day or overnight mail or delivery, on the day delivered, (z) if by telecopy
or telegram, on the next day following the day on which such telecopy or
telegram was sent, provided that a copy is also sent by certified or registered
mail.
SECTION 4.3 HEADINGS. The headings contained in this Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
SECTION 4.4 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and supersede all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof.
SECTION 4.5 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
SECTION 4.6 GOVERNING LAW. This Agreement shall be governed in all
respects, including as to validity, interpretation and effect, by the internal
laws of the State of Texas, without giving effect to the conflict of laws rules
thereof.
SECTION 4.7 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns.
SECTION 4.8 ASSIGNMENT. This Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
the other parties hereto.
SECTION 4.9 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement
shall confer any rights upon any person or entity other than the parties hereto
and their respective heirs, successors and permitted assigns.
SECTION 4.10 AMENDMENT; WAIVERS, ETC. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party against whom
enforcement of the amendment, modification, discharge or waiver is sought. Any
such waiver shall constitute a waiver only with respect to the specific matter
described in such writing and shall in no way impair the rights of the party
granting such waiver in any other respect or at any other time. Neither the
waiver by any of the parties hereto of a breach of or a default under any of the
provisions of this Agreement, nor the failure by any of the parties, on one or
more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall be construed as a waiver of any
other breach or default of a similar nature, or as a waiver of any of such
provisions, rights or privileges hereunder. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies that any
party may otherwise have at law or in equity. The rights and remedies of any
party based upon, arising out of or otherwise in respect of any inaccuracy or
breach of any representation, warranty, covenant or agreement or failure to
fulfill any condition shall in no way be limited by the fact that the act,
omission, occurrence or other state of facts upon which any claim of any such
inaccuracy or breach is based may also be the subject matter
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of any other representation, warranty, covenant or agreement as to which there
is no inaccuracy or breach.
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REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
AVERY COMMUNICATIONS, INC.
By:________________________________
Thomas M. Lyons, President
HOLDER
THE FRANKLIN HOLDING CORPORATION
(DELAWARE)
By:________________________________
Stephen L. Brown, Chairman
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