Document:

EXHIBIT 10.17

                             SHARES ESCROW AGREEMENT

         ESCROW AGREEMENT, dated as of March 23, 2001, by and among the parties
listed on Annex A hereto (collectively, the "Shareholders"), Olympus Capital,
Inc., a Florida corporation ("Olympus Capital"), as Shareholders'
Representative, Christian Mahe de Berdouare (the "Depositing Party"), and L. Van
Stillman (the "Escrow Agent").

                              W I T N E S S E T H:

         WHEREAS, the parties hereto, other than the Escrow Agent and the
Shareholders' Representative, have entered into a certain Exchange Agreement
dated as of March 23, 2001 (the "Underlying Agreement"), and pursuant thereto
the Depositing Party is required to deposit the Deposited Shares (as defined
below) to be held in escrow; and

         WHEREAS, the Escrow Agent is willing to serve as escrow agent and hold
the Deposited Shares in accordance with the terms and conditions hereof;

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

         1. This is to confirm that the Depositing Party has delivered the stock
certificates listed on Annex B and duly executed stock powers in blank (the
"Deposited Shares") to the Escrow Agent:

         2. The Escrow Agent shall release from escrow hereunder and deliver the
Deposited Shares as follows:

            a. Within three (3) business days following receipt by the Escrow
Agent of a Shares Release Certificate duly executed by the Shareholders'
Representative substantially in the form of Exhibit A hereto in accordance with
instructions set forth therein;

            b. Within three (3) business days following receipt by the Escrow
Agent of a Final Shares Release Notice duly executed by the Depositing Party and
the Shareholders' Representative and substantially in the form of Exhibit B
hereto in accordance with instructions set forth therein;

            c. Within three (3) business days of the receipt of an original of
the Note dated March 23, 2001 issued by Chicken Kitchen Corporation in favor on
the Shareholders' Representative (or endorsed to the Depositing Party) marked
"PAID IN FULL" which original shall be returned to the Depositing Party together
with the Deposited Shares; or

            d. Within three (3) business days after receipt by the Escrow Agent
of (i) a copy of a final judgment or order of a court of competent jurisdiction,
certified by the clerk of such court or other appropriate official, the
Deposited Shares

<PAGE>

shall be delivered as set forth in such judgment or order and (ii) an opinion of
counsel, acceptable to the Escrow Agent, to the party to whom the Deposited
Shares are to be delivered to the effect that such judgment or order is final
within the meaning of this Agreement. A judgment or order under this Agreement
shall be deemed to be final at the expiration of the time within which to take
an appeal therefrom and no appeal has been taken prior to such time, or until
the entry of a judgment or order from which no appeal may be taken.

         3. Until the Deposited Shares are released and delivered in accordance
with Section 2 hereof, the Escrow Agent shall promptly forward any and all
dividends and other distributions in respect of the Deposited Shares, received
by the Escrow Agreement, to Christian Mahe de Berdouare.

         4. The Escrow Agent shall be entitled to rely upon, and shall be fully
protected from all liability, loss, cost, damage or expense in acting or
omitting to act pursuant to, any instruction, order, judgment, certification,
affidavit, demand, notice, opinion, instrument or other writing delivered to it
hereunder without being required to determine the authenticity of such document,
the correctness of any fact stated therein, the propriety of the service thereof
or the capacity, identity or authority of any party purporting to sign or
deliver such document.

         5. The duties of the Escrow Agent are only as herein specifically
provided, and are purely ministerial in nature. The Escrow Agent shall neither
be responsible for or under, nor chargeable with knowledge of, the terms and
conditions of any other agreement, instrument or document in connection
herewith, including, without limitation, the Underlying Agreement, and shall be
required to act in respect of the Deposited Shares only as provided in this
Agreement. This Agreement sets forth all the obligations of the Escrow Agent
with respect to any and all matters pertinent to the escrow contemplated
hereunder and no additional obligations of the Escrow Agent shall be implied
from the terms of this Agreement or any other agreement. The Escrow Agent shall
incur no liability in connection with the discharge of its obligations under
this Agreement or otherwise in connection therewith, except such liability as
may arise from the willful misconduct of the Escrow Agent.

         6. The Escrow Agent may consult with counsel of its choice, which may
include attorneys in the firm of L. Van Stillman, P.A., and shall not be liable
for any action taken or omitted to be taken by the Escrow Agent in accordance
with the advice of such counsel.

         7. The Escrow Agent shall not be bound by any modification,
cancellation or rescission of this Agreement unless in writing and signed by the
Escrow Agent.

         8. The Escrow Agent is acting as a stakeholder only with respect to the
Deposited Shares. If any dispute arises as to whether the Escrow Agent is
obligated to deliver the Deposited Shares or as to whom the Deposited Shares are
to be delivered,

<PAGE>

the Escrow Agent shall not be required to make any delivery, but in such event
the Escrow Agent may hold the Deposited Shares until receipt by the Escrow Agent
of instructions in writing, signed by all parties which have, or claim to have,
an interest in the Deposited Shares, directing the disposition of the Deposited
Shares, or in the absence of such authorization, the Escrow Agent may hold the
Deposited Shares until receipt of a certified copy of a final judgment of a
court of competent jurisdiction providing for the disposition of the Deposited
Shares. The Escrow Agent may require, as a condition to the disposition of the
Deposited Shares pursuant to written instructions, indemnification and/or
opinions of counsel, in form and substance satisfactory to the Escrow Agent,
from each party providing such instructions. If such written instructions,
indemnification and opinions are not received, or proceedings for such
determination are not commenced, within thirty (30) days after receipt by the
Escrow Agent of notice of any such dispute and diligently continued, or if the
Escrow Agent is uncertain as to which party or parties are entitled to the
Deposited Shares, the Escrow Agent may either (i) hold the Deposited Shares
until receipt of (x) such written instructions and indemnification or (y) a
certified copy of a final judgment of a court of competent jurisdiction
providing for the disposition of the Deposited Shares, or (ii) deposit the
Deposited Shares in the registry of a court of competent jurisdiction; provided,
however, that notwithstanding the foregoing, the Escrow Agent may, but shall not
be required to, institute legal proceedings of any kind.

         9. The Shareholders, jointly and severally, agree to reimburse the
Escrow Agent on demand for, and to indemnify and hold the Escrow Agent harmless
against and with respect to, any and all loss, liability, damage, or expense
(including, without limitation, attorneys' fees and costs) that the Escrow Agent
may suffer or incur in connection with the entering into of this Agreement and
performance of its obligations under this Agreement or otherwise in connection
therewith, except to the extent such loss, liability, damage or expense arises
from the willful misconduct of the Escrow Agent. Without in any way limiting the
foregoing, the Escrow Agent shall be reimbursed for the cost of all legal fees
and costs incurred by it in acting as the Escrow Agent hereunder (which may
include fees and costs of legal services provided by attorneys in the firm of L.
Van Stillman, P.A., based on the normal hourly rates in effect at the time
services are rendered.

         10. The Escrow Agent and any successor escrow agent may at any time
resign as such by delivering the Deposited Shares to either (i) any successor
escrow agent designated in writing by the Shareholders' Representative and the
Depositing Party, or (ii) any court having competent jurisdiction. Upon its
resignation and delivery of the Deposited Shares as set forth in this paragraph,
the Escrow Agent shall be discharged of, and from, any and all further
obligations arising in connection with the escrow contemplated by this
Agreement.

         11. The Escrow Agent shall have the right to represent any party hereto
in any dispute between the parties hereto with respect to the Deposited Shares
or otherwise.

<PAGE>

         12. This Agreement shall inure to the benefit of, and be binding upon,
the parties hereto and their respective successors and assigns. Nothing in this
Agreement, express or implied, shall give to anyone, other than the parties
hereto and their respective permitted successors and assigns, any benefit, or
any legal or equitable right, remedy or claim, under or in respect of this
Agreement or the escrow contemplated hereby.

         13. All notices required under the terms and provisions of this
Agreement shall be in writing, and any such notice may be given by United States
mail, courier service or facsimile (confirmed by telephone or in writing in the
case of notice by facsimile) or any other customary means of communication, and
any such notice shall be effective when delivered, or if mailed, three (3) days
after deposit in the United States mail with proper postage for ordinary mail
prepaid, to the addresses set forth on Schedule N.

         14. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Florida. All actions against the Escrow
Agent arising under or relating to this Agreement shall be brought against the
Escrow Agent exclusively in the appropriate court in the State of Florida,
County of Dade. Each of the parties hereto agree to submit to personal
jurisdiction and to waive any objection as to venue in the State of Florida,
County of Dade. Service of process on any party hereto in any action arising out
of or relating to this Agreement shall be effective if mailed to such party as
set forth in the immediately preceding paragraph.

         15. TO THE FULL EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ESCROW AGENT ENTERING INTO THIS
AGREEMENT.

         16. This Agreement may be executed in two or more separate
counterparts, each of which shall be an original and all of which, together,
shall constitute one agreement.

         17. All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the
parties hereto taken within context may require.

         18. The rights of the Escrow Agent contained in this Agreement,
including without limitation the right to indemnification, shall survive the
resignation of the Escrow Agent and the termination of the escrow contemplated
hereunder.

                            [signature pages follow]
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.

                          CHICKEN KITCHEN CORPORATION

                          By:/s/ Christian Mahe de Berdouare
                                ----------------------------------------
                               Name: Christian Mahe de Berdouare
                                    ------------------------------------
                               Title Chairman, President & CEO
                               -----------------------------------------

                          Christian Mahe de Berdouare
                          -----------------------------------------------------
                          Christian Mahe de Berdouare

<PAGE>

                                        AGRICOLA COCO BONH, S.A.

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        AZUCAR, LTD.

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        BARRAS INVESTMENT

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        ----------------------------------------
                                        William Beckman

                                        C.A. OPORTUNIDAD, S.A.

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        ----------------------------------------
                                        Kristy Cash

<PAGE>
                                        CASTLE CREEK VALLEY RANCH
                                        PARTNERSHIP DBPP

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        ----------------------------------------
                                        Charles Devine

                                        ----------------------------------------
                                        Jimmy Dean Dowda

                                        EDWARDS CAPITAL CORPORATION

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        MATTHEW HOLSTEIN PENSION PLAN

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        HASSAN ABDUL, S.A.

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

<PAGE>

                                        ----------------------------------------
                                        Phillip Holstein

                                        ----------------------------------------
                                        Bruce Knox

                                        ----------------------------------------
                                        Ed Leinster

                                        ----------------------------------------
                                        Frederick A. Lenz

                                        ----------------------------------------
                                        Michael M. Louis, Jr.

                                        ----------------------------------------
                                        David Mallen

                                        ----------------------------------------
                                        John T. Mitchell

                                        NOSTRADAMUS, S.A.

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

<PAGE>

                                        ----------------------------------------
                                        Richard M. Peck

                                        ----------------------------------------
                                        Barry Seidman

                                        ----------------------------------------
                                        James Skalko

                                        ----------------------------------------
                                        Joseph Sloves

                                        ----------------------------------------
                                        Dominick Vicari

                                        WORLD CAPITAL FUNDING, L.L.C.

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        ----------------------------------------
                                        Arnold A. Zousmer
<PAGE>

                                        OLYMPUS CAPITAL, INC., as Shareholders'
                                        Representative,

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        ----------------------------------------
                                        L. Van Stillman, as Escrow Agent

<PAGE>

                                     Annex A

Agricola Coco Bonh, S.A.
Azucar, Ltd.
Barras Investments
William Beckman
C.A. Opportunidad
Kristy Cash
Castle Creek Valley Ranch
  Partnership DBPP
Charles Devine
Jimmy Dean Dowda
Edwards Capital Corporation
Hassan Abdul, S.A.
Matthew Holstein Pension Plan
Phillip Holstein
Bruce Knox
Ed Leinster
Frederick A. Lenz
Michael M. Louis, Jr.
David Mallen
John T. Mitchell
Nostradamus, S.A.
Richard M. Peck
Barry Seidman
James Skalko
Joseph Sloves
Dominick Vicari
World Capital Funding, L.L.C.
Arnold A. Zousmer

<PAGE>
                                     Annex B

                                Deposited Shares

--------------------------------------------------------------------------------
     Issuer         Class of Stock          Stock Certificate        Number
                                               Certificate             of
                                                Number(s)            Shares
--------------------------------------------------------------------------------
Chicken Kitchen     Class A                       1913               500,000
Corporation         Common Stock
--------------------------------------------------------------------------------

<PAGE>
                                   Schedule N

CHICKEN KITCHEN CORPORATION
Address:    770 Ponce de Leon Blvd.
            Suite 200
            Coral Gables, FL 33134

Christian Mahe De Berdouare
Address:    5750 N. Bay Road
            Miami Beach, FL 33140
            Fax: (305)866-9739

AGRICOLA COCO BONH, S.A.
Address:    c/o Mr. Jose Antonio Gomez, President
            Apartado 1474-C.P. 1000
            San Jose, Costa Rica
            Fax: 011-506-258-3744

AZUCAR, LTD.
Address:    c/o Mr. Jose Antonio Gomez, President
            Apartado 1474-C.P. 1000
            San Jose, Costa Rica
            Fax: 011-506-258-3744

BARRAS INVESTMENTS
Address:    Martastrasse 137
            Postfach 8040
            Zurich, Switzerland
            Fax: 011-411-451-3035

William Beckman
Address:    c/o GRC Vanderweil Engineers, Inc.
            1055 Maitland Center Commons Blvd. Maitland, FL
            32751
            Fax: (407)660-1655

C.A. Oportunidad S.A.
Address:    c/o Mr. Jose Antonio Gomez, President
            Apartado 1474-C.P. 1000
            San Jose, Costa Rica
            Fax:  (506) 258-3995

Kristy Cash
Address:    2180 Dover Street
            Lakewood, Colorado 80215
            Fax: (303) 232-3082

CASTLE CREEK VALLEY RANCH PARTNERSHIP DBPP
Address:    P.O. Box 2747
            Aspen, Colorado  81612
            Fax: ( 970) 920-9361

<PAGE>

Charles Devine
Address:    1433 Oakfield Drive
            Brandon, FL  33511
            Fax: (813) 689-0435

Jimmy Dean Dowda
Address:    8052 Cherry Lake Road
            Groveland, FL 33476
            Fax: (354) 429-9172

EDWARDS CAPITAL CORPORATION
Address:    ATTN:  Mr. W.J. Matthews, President
            P.O. Box 1044
            Grand Cayman, Cayman Islands BW1
            Fax: (345) 949-7325

MATTHEW HOLSTEIN PENSION PLAN
Address:    P.O. Box 2747
            Aspen, Colorado 81612
            Fax: (970) 544-0374

Hassan Abdul, S.A.
Address:    c/o Mr. Jose Antonio Gomez, President
            Apartado 1474-C.P. 1000
            San Jose, Costa Rica
            Fax: 011-506-258-3744

Bruce Knox
Address:    c/o Knox Nursery
            4349 N. Hiawassee Road
            Orlando, Florida 32818
            Fax: (407) 290-1702

Ed Leinster
Address:    c/o Faith Williams
            2788 D Curry Ford Road
            Orlando, Florida 32806
            Fax: (407) 894-8435

Frederick A. Lenz
Address:    113 Hathaway Drive
            Altamonte Springs, Florida 32701
            Fax: (407) 831-6106

Michael M. Louis, Jr.
Address:    5634 Edgewater Drive
            Orlando, Florida 32810
            Fax: (407) 294-9689

David Mallen
Address:    2300 Randall Road
            Winter Park, Florida 32789
            Fax: (407) 843-8591

John T. Mitchell
Address:    5422 Monterrey Club Court
            Windermere, Florida 34786
            Fax: (407)876-7476

<PAGE>

NOSTRADAMUS, S.A.
Address:    c/o Mr. Jose Antonio Gomez, President
            Apartado 1474-C.P. 1000
            Fax: 011-506-258-3744

Richard M. Peck
Address:    1583 E. Silver Star Road, #326
            Ocoee, FL 34761
            Fax: (407) 422-0590

POW WOW, INC.
Address:    136 Vista Oak Drive
            Longwood, FL 32779
            Fax: (407) 333-3191

Barry Seidman
Address:    16631 Avenida Molino Viejo
            P.O. Box 9813
            Rancho Sante Fe, California 92067
            Fax: (858) 759-0336

James Skalko
Address:    136 Vista Oak Drive
            Longwood, FL 32779
            Fax: (407) 333-3191

Joseph Sloves
Address:    0800 Cluny Road
            Aspen, CO 81611
            Fax: (970) 923-6292

Dominick Vicari
Address:    5520 Rockwood Avenue
            Orlando, Florida 32839
            Fax: (407) 339-4476

WORLD CAPITAL FUNDING, L.L.C.
Address:    c/o Mr. Keith Mazer
            1625 Larimer Street, Suite 1903
            Denver, Colorado 80202
            Fax: (303) 620-9199

Arnold A. Zousmer
Address:    P.O. Box 9906
            Rancho Sante Fe, California 92067
            Fax: (858) 756-1464

<PAGE>

OLYMPUS CAPITAL, INC.
Address:   attn: James Spratt
           4828 S. Peninsula Drive
           Ponce Inlet, Florida  32127
           Fax:  (904) 304-6070

L. Van Stillman
Address:   1177 George Bush Boulevard
           Suite 308
           Delray Beach, Florida  33483
           Fax:  (561) 330-9116

<PAGE>
                                    Exhibit A

                           Shares Release Certificate

To:      L. Van Stillman
         1177 George Bush Boulevard
         Suite 308
         Delray Beach, Florida 33483

Re:      Shares Escrow Agreement (the "Escrow Agreement")
         dated as of March 23, 2001, among the Shareholders listed
         therein (the "Shareholders"), Olympus Capital, Inc., as Shareholders'
         Representative, Christian Mahe de Berdouare and L. Van Stillman, as
         Escrow Agent.

Ladies and Gentlemen:

         The undersigned hereby certifies that _______ ($_______) are past due
and payable under that certain Note issued by Chicken Kitchen Corporation on
March 23, 2001 in favor of the Shareholders' Representative in the aggregate
amount of $150,000. Please be advised that the undersigned hereby request the
release and delivery of the Deposited Shares (as such term is defined in the
Escrow Agreement) to the undersigned at __________ [address].

                                        Olympus Capital, Inc.
                                        as Shareholders' Representative,
                                        acting on behalf of all Shareholders.

                                        By:
                                           -------------------------------------
                                           Name:
                                                --------------------------------

cc:  Christian Mahe de Berdouare

                                      A-1

<PAGE>

                                    Exhibit B

                           Final Shares Release Notice

To:      L. Van Stillman
         1177 George Bush Boulevard
         Suite 308
         Delray Beach, Florida 33483

Re:      Shares Escrow Agreement (the "Escrow Agreement")
         dated as of March 23, 2001, among the Shareholders listed
         therein ("Shareholders"), Olympus Capital, Inc., as Shareholders'
         Representative, Christian Mahe de Berdouare and L. Van Stillman,
         as Escrow Agent.

Ladies and Gentlemen:

         Please be advised that the undersigned hereby request the release and
delivery of the Deposited Shares (as such terms is defined in the Escrow
Agreement) to Christian Mahe de Berdouare, at ___________ [address].
[alternative delivery instructions]

                                        ----------------------------------------
                                        Christian Mahe de Berdouare
                                        Date:
                                             -----------------------------------

                                        Olympus Capital, Inc.
                                        as Shareholders' Representative

                                        By:
                                           -------------------------------------
                                           Name:
                                                --------------------------------EXHIBIT 4.1

                       STATEMENT OF RIGHTS AND PREFERENCES

                                       OF

                    SERIES A 10% CONVERTIBLE PREFERRED STOCK

                                       OF

                      FRANKLIN ELECTRONIC PUBLISHERS, INC.

                              ---------------------
                         Pursuant to Section 1522 of the
                      Pennsylvania Business Corporation Law
                              ---------------------

            FRANKLIN ELECTRONIC PUBLISHERS, INC., a Pennsylvania corporation
(the "Corporation"), certifies that pursuant to the authority contained in
Section 5 of its Certificate of Incorporation (the "Certificate of
Incorporation") and in accordance with the provisions of Section 1522 of the
Pennsylvania Business Corporation Law of 1988, the Board of Directors of the
Corporation (the "Board of Directors") by written consent dated as of March 31,
2001, duly adopted the following recitals and resolutions, which resolutions
remain in full force and effect on the date hereof.

            WHEREAS, the Certificate of Incorporation has authorized the
issuance of 10,000,000 shares of Preferred Stock having a par value of $2.50 per
share (the "Preferred Stock"); and

            WHEREAS, the Certificate of Incorporation has vested the Board of
Directors with authority to provide for the issuance of the Preferred Stock in
such series, with such voting rights and such designations, preferences,
qualifications, privileges, limitations, options, conversion rights and other
special rights as shall be stated in the resolutions providing for the issuance
of such shares; and

            WHEREAS, the Board of Directors desires to establish and designate a
series of the Preferred Stock and to fix the voting rights and preferences,
qualifications, privileges, limitations, options, conversion rights and other
special rights of such series.

            NOW, THEREFORE, be it,

            RESOLVED, that the Board of Directors hereby establishes a series of
the Preferred Stock consisting of 7,000 shares, having a par value of $2.50 per
share, to be designated the "Series A 10% Convertible Preferred Stock" (the
"Series A Preferred Stock"); and

<PAGE>

            RESOLVED, that the Corporation is hereby authorized to issue such
shares of Series A Preferred Stock from time to time and for such consideration
and on such terms as the Board of Directors shall determine; and that, subject
to the limitations provided by law and by the Certificate of Incorporation, the
voting rights, preferences, qualifications, privileges, limitations, options,
conversion rights and other special rights of the Series A Preferred Stock shall
be as follows:

            1. Dividend Rights. The holders of shares of Series A Preferred
Stock shall be entitled to receive as dividends the whole number of additional
shares of Series A Preferred Stock of the Corporation equal to 5% of the
outstanding shares of Series A Preferred Stock held by such holder on June 30
and December 31 of each year, commencing on December 31, 2001, without any
further action by the Board of Directors. No fractional shares of Series A
Preferred Stock shall be paid as a dividend, and no cash in lieu of fractional
shares shall be payable. Any shares of Series A Preferred Stock issued as a
dividend with respect to the Series A Preferred Stock will be duly authorized,
validly issued, fully paid and non-assessable. No other dividends shall be
payable on or with respect to the Series A Preferred Stock. The Corporation
shall at all times reserve and keep available from its authorized shares of
Series A Preferred Stock for the sole purpose of payment of dividends pursuant
to the terms hereof, such number of shares of Series A Preferred Stock as shall
from time to time be sufficient for payment of dividends, and shall not issue
any shares of Series A Preferred Stock for any other purpose. The Corporation
shall increase the number of authorized shares of Series A Preferred Stock if
required for the payment of dividends.

            2. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of the shares of Series A Preferred Stock shall be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders, prior and in preference to any distribution of
any of the assets of the Corporation to the holders of any common stock or any
other class or series of capital stock ranking junior to the Series A Preferred
Stock, an amount in cash per outstanding share of the Series A Preferred Stock
equal to $1,000 (the "Series A Liquidation Preference"). If the assets of the
Corporation are not sufficient to pay in full the Series A Liquidation
Preference payable to the holders of outstanding shares of Series A Preferred
Stock and the liquidation preference of all other securities that rank pari
passu with the Series A Preferred Stock, then the holders of all such shares
shall share ratably in such distribution of assets in proportion to the amount
which would be payable on such distribution if the Series A Liquidation
Preference to which the holders of outstanding shares of Series A Preferred
Stock and the liquidation preferences to which the holders of other securities
that rank pari passu with the Series A Preferred Stock are entitled were paid in
full. Upon any such liquidation, dissolution or winding up of the Corporation,
after the holders of Series A Preferred Stock shall have been paid in full their
Series A Liquidation Preference, the holders of shares of Series A Preferred
Stock shall not be entitled to share in any further distribution of assets. For
the purposes of this Section 2, the voluntary sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Corporation or the merger
or consolidation of the Corporation with one or more corporations shall be
deemed to be a liquidation, dissolution or winding up, voluntary or involuntary,
of the Corporation. Written notice of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, stating the payment
date and the place where the

                                       2
<PAGE>

distributable amount shall be payable, shall be given by mail, postage prepaid,
not less than 60 days prior to the payment date stated therein, to the holders
of record of the Series A Preferred Stock at their respective addresses as the
same shall then appear on the books of the Corporation.

            3. Conversion. The holders of the Series A Preferred Stock shall
have conversion rights as follows (the "Conversion Rights"):

               a. Right to Convert. Each share of Series A Preferred Stock shall
be convertible, at the option of the holder thereof, at any time after the date
of issuance thereof into such whole number of fully paid and non-assessable
shares of the Corporation's common stock, no par value (the "Common Stock"), as
is determined by dividing $1,000 by the Conversion Price at the time in effect
(the "Conversion Price"). The initial Conversion Price shall be $5 per share.

               b. Mechanics of Conversion. In order to convert shares of Series
A Preferred Stock into shares of Common Stock, such holder shall surrender the
certificate or certificates for the Series A Preferred Stock, duly endorsed, at
the office of the Corporation and shall give written notice to the Corporation
of the election to convert the same. The Corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Series A Preferred Stock a certificate or certificates for the number of shares
of Common Stock to which such holder shall be entitled as aforesaid. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Series A Preferred Stock
to be converted.

               c. Adjustments of the Conversion Price. If the Corporation, at
any time while shares of Series A Preferred Stock are outstanding, (i) shall pay
a stock dividend or otherwise make a distribution or distributions on the Common
Stock in shares of Common Stock, (ii) subdivide the outstanding shares of Common
Stock into a larger number of shares, or (iii) combine outstanding shares of
Common Stock into a smaller number of shares, then the Conversion Price in
effect prior to the date of any such occurrence shall be adjusted to an amount
equal to the product of (x) the Conversion Price in effect prior to the
occurrence of such event and (y) a fraction of which the numerator shall be the
number of shares of Common Stock outstanding before such event and of which the
denominator shall be the number of shares of Common Stock outstanding after such
event. Any adjustment made pursuant to this Section 3 shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision or a combination.

               d. Conversion Price Reset Provision. If at any time while the
Series A Preferred Stock is outstanding the Corporation sells publicly or
privately (i) shares of its Common Stock (other than any shares of Common Stock
that may be issued pursuant to the Corporation's Restricted Stock Plan), (ii)
securities convertible into shares of its Common Stock, or (iii) options or
warrants (other than options issued to employees, directors or consultants) to
purchase shares of its Common Stock or securities convertible into shares of its
Common Stock (collectively, "Additional Shares of Common Stock") at a sale,
conversion or exercise price per share (the "Issue Price", which Issue Price
shall be computed in accordance with the next

                                       3
<PAGE>

paragraph of this Section 3(d)), as the case may be, less than the Conversion
Price then in effect, the Conversion Price shall be reset to the Issue Price.

               The "Issue Price" received by the Corporation for any issue or
sale (or deemed issue or sale) of securities shall (A) to the extent it consists
of cash, be computed at the gross amount of cash received by the Corporation
before deduction of any reasonable or customary underwriting or similar
commissions, compensation or concessions paid or allowed by the Corporation in
connection with such issue or sale and without deduction of any expenses payable
by the Corporation; (B) to the extent it consists of property other than cash,
be computed at the fair value of that property determined in good faith by the
Corporation's Board of Directors; and (C) if Additional Shares of Common Stock,
convertible securities or rights or options to purchase either Additional Shares
of Common Stock or convertible securities are issued or sold together with other
stock or securities or other assets of the Corporation for a consideration that
covers both, be computed as the portion of the consideration so received that
may be reasonably determined in good faith by the Corporation's Board of
Directors to be allocable to such Additional Shares of Common Stock, convertible
securities or rights or options.

               e. Recapitalizations. If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a subdivision or
combination provided for in Section 3(c) hereof) provision shall be made so that
the holders of the Series A Preferred Stock shall thereafter be entitled to
receive upon conversion of such Series A Preferred Stock the number of shares of
stock or other securities or property of the Corporation or otherwise, to which
a holder of Common Stock deliverable upon conversion would have been entitled on
such recapitalization. In any such case, appropriate adjustment shall be made in
the application of the provisions of this Section 3 with respect to the rights
of the holders of the Series A Preferred Stock after the recapitalization to the
end that the provisions of this Section 3 (including adjustment of the
Conversion Price then in effect and the number of shares purchasable upon
conversion of the Series A Preferred Stock) shall be applicable after that event
as nearly equivalent as may be practicable.

               f. Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 3,
the Corporation shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to each holder of
Series A Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based.

               g. Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Series A Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Preferred Stock.

               h. Notices. Any notice required by the provisions of this Section
3 to be given to the holders of shares of Series A Preferred Stock, shall be
deemed given if deposited in the United States mail, postage prepaid, or
delivered to an express courier, and addressed to each holder of record at his
or its address appearing on the books of the Corporation.

                                       4
<PAGE>

            4. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the right to one vote for each share of Common Stock into which such
Series A Preferred Stock could then be converted, and with respect to such vote,
such holder shall have full voting rights and powers equal to the voting rights
and powers of the holders of Common Stock, and shall be entitled to notice of
any stockholders' meeting in accordance with the bylaws of the Corporation, and
shall be entitled to vote, together with holders of Common Stock, with respect
to any question upon which holders of Common Stock have the right to vote,
except as otherwise provided herein or as required by law.

            5. Redemption by Corporation. The Corporation may, at its option, at
any time subsequent to September 30, 2001, redeem, out of funds legally
available therefor, all but not less than all of the shares of Series A
Preferred Stock then outstanding, upon not less than 60 days' prior notice to
the holders of record of the Series A Preferred Stock to be redeemed, at a per
share redemption price equal to the Series A Liquidation Preference.

            6. Status of Converted Stock. In the event any shares of Series A
Preferred Stock shall be converted pursuant to the terms hereof or otherwise
redeemed or repurchased by the Corporation, the shares so converted, redeemed or
repurchased shall be cancelled and shall revert to the category of authorized
but unissued shares of Preferred Stock by the Corporation.

            IN WITNESS WHEREOF, Franklin Electronic Publishers, Inc. has caused
this Statement to be signed by its Executive Vice President as of this 31st day
of March 2001.

                                    FRANKLIN ELECTRONIC PUBLISHERS, INC.

                                    By:  /s/ Gregory J. Winsky
                                       --------------------------
                                         Gregory J. Winsky
                                         Executive Vice President

                                       5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}]]