UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 9)*
Franklin Capital Corporation
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(Name of Issuer)
Common Stock, $1.00 par value
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(Title of Class Securities)
35252P105
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(CUSIP Number)
Lynne Silverstein (310) 752-1442
Ault Glazer & Company Investment Management LLC,
100 Wilshire Blvd, 15th Floor, Santa Monica, CA 90401
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
September 16, 2004
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. |_|
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosure provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 12 pages
CUSIP No. 35252P105 SCHEDULE 13D
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1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Ault Glazer & Company Investment Management LLC
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) |_|
(b) |X|
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3. SEC Use Only
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4. Source of Funds (See Instructions) OO
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items
2(d) or 2(e) |_|
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6. Citizenship or Place of Organization Delaware
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7. Sole Voting Power 549,159 (includes 42,375 shares that
the Reporting Person has the right to
acquire)
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Number of ---------------------------------------------------------------
Shares 8. Shared Voting Power 0
Beneficially ---------------------------------------
Owned by Each ---------------------------------------------------------------
Reporting 9. Sole Dispositive Power 549,159 (includes 42,375 shares
Person With: that the Reporting Person has
the right to acquire)
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10. Shared Dispositive Power 0
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 549,159
(includes 42,375 shares that the Reporting Person has the right to acquire)
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) |_|
13. Percent of Class Represented by Amount in Row (11) 50.4% (based on an
as-adjusted total number of outstanding shares of Common Stock that includes
42,375 shares issuable upon conversion of 5,650 shares of Preferred Stock).
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14. Type of Reporting Person (See Instructions)
IA
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Page 2 of 12 Pages
CUSIP No. 35252P105 SCHEDULE 13D
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1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Milton C. Ault, III
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) |_|
(b) |X|
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3. SEC Use Only
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4. Source of Funds (See Instructions) OO
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items
2(d) or 2(e) |_|
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6. Citizenship or Place of Organization USA
-----------------------------------
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7. Sole Voting Power 549,159 (includes 42,375 shares that
the Reporting Person has the right to
acquire)
-----------------------------------------
Number of ---------------------------------------------------------------
Shares 8. Shared Voting Power 0
Beneficially ---------------------------------------
Owned by Each ---------------------------------------------------------------
Reporting 9. Sole Dispositive Power 549,159 (includes 42,375 shares
Person With: that the Reporting Person has
the right to acquire)
------------------------------------
---------------------------------------------------------------
10. Shared Dispositive Power 0
----------------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 549,159
(includes 42,375 shares that the Reporting Person has the right to acquire)
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) |_|
13. Percent of Class Represented by Amount in Row (11) 50.4% (based on an
as-adjusted total number of outstanding shares of Common Stock that includes
42,375 shares issuable upon conversion of 5,650 shares of Preferred Stock).
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14. Type of Reporting Person (See Instructions)
IN/HC
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Page 3 of 12 Pages
CUSIP No. 35252P105 SCHEDULE 13D
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1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Louis Glazer, M.D.
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) |_|
(b) |X|
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3. SEC Use Only
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4. Source of Funds (See Instructions) OO
-------------------------------------
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items
2(d) or 2(e) |_|
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6. Citizenship or Place of Organization USA
-----------------------------------
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7. Sole Voting Power 0
-----------------------------------------
Number of ---------------------------------------------------------------
Shares 8. Shared Voting Power 549,159 (includes 42,375 shares that
Beneficially the Reporting Person has the right
Owned by Each to acquire)
Reporting ---------------------------------------
Person With: ---------------------------------------------------------------
9. Sole Dispositive Power 0
------------------------------------
---------------------------------------------------------------
10. Shared Dispositive Power 549,159 (includes 42,375 shares
that the Reporting Person has
the right to acquire)
----------------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 549,159
(includes 42,375 shares that the Reporting Person has the right to acquire)
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) |_|
13. Percent of Class Represented by Amount in Row (11) 50.4% (based on an
as-adjusted total number of outstanding shares of Common Stock that includes
42,375 shares issuable upon conversion of 5,650 shares of Preferred Stock).
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14. Type of Reporting Person (See Instructions)
IN
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Page 4 of 12 Pages
CUSIP No. 35252P105 SCHEDULE 13D
---------
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Melanie Glazer
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) |_|
(b) |X|
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3. SEC Use Only
-----------------------------------------------------------
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4. Source of Funds (See Instructions) OO
-------------------------------------
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items
2(d) or 2(e) |_|
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6. Citizenship or Place of Organization USA
-----------------------------------
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7. Sole Voting Power 0
-----------------------------------------
Number of ---------------------------------------------------------------
Shares 8. Shared Voting Power 549,159 (includes 42,375 shares that
Beneficially the Reporting Person has the right
Owned by Each to acquire)
Reporting ---------------------------------------
Person With: ---------------------------------------------------------------
9. Sole Dispositive Power 0
------------------------------------
---------------------------------------------------------------
10. Shared Dispositive Power 549,159 (includes 42,375 shares
that the Reporting Person has
the right to acquire)
----------------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 549,159
(includes 42,375 shares that the Reporting Person has the right to acquire)
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) |_|
13. Percent of Class Represented by Amount in Row (11) 50.4% (based on an
as-adjusted total number of outstanding shares of Common Stock that includes
42,375 shares issuable upon conversion of 5,650 shares of Preferred Stock).
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14. Type of Reporting Person (See Instructions)
IN
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Page 5 of 12 Pages
Ault Glazer & Company Investment Management LLC, a Delaware limited
liability company ("Adviser"), Milton C. Ault, III ("Ault"), Louis Glazer and
Melanie Glazer (together, the "Glazers") pursuant to Rule 13d-2 of the
Securities Exchange Act of 1934, as amended, hereby file this Amendment No. 9 to
Schedule 13D (the "Statement") to amend the original Schedule 13D filed with the
Securities and Exchange Commission on May 18, 2004, as amended on May 18, 2004,
May 26, 2004, June 2, 2004, June 23, 2004, July 23, 2004, August 5, 2004 and
August 26, 2004. Adviser, Ault and the Glazers are collectively referred to
herein as the "Reporting Persons".
Item 1. Security and Issuer
This Statement relates to the Common Stock, $1.00 par value (the "Common
Stock"), issued by Franklin Capital Corporation ("FCC"), a Delaware corporation,
including shares of Common Stock issuable upon conversion of shares of FCC's
Series A Convertible Preferred Stock, $1.00 par value (the "Preferred Stock").
The principal executive offices of FCC are located at 450 Park Avenue, 29th
Floor, New York, New York 10022.
Item 2. Identity and Background
The Reporting Persons are as follows:
Name: Ault Glazer & Company Investment Management LLC
Place of Organization: Delaware
Principal Business: Investment Adviser
Address: 100 Wilshire Blvd., 15th Floor, Santa Monica, CA 90401
Criminal Proceedings: None
Applicable Civil, Judicial or Administrative Proceedings: None
Name: Milton C. Ault, III
Address: 100 Wilshire Blvd., 15th Floor, Santa Monica, CA 90401
Criminal Proceedings: None
Applicable Civil, Judicial or Administrative Proceedings: None
Citizenship: United States
Name: Louis Glazer, M.D.
Address: 100 Wilshire Blvd., 15th Floor, Santa Monica, CA 90401
Criminal Proceedings: None
Applicable Civil, Judicial or Administrative Proceedings: None
Citizenship: United States
Name: Melanie Glazer
Address: 100 Wilshire Blvd., 15th Floor, Santa Monica, CA 90401
Criminal Proceedings: None
Applicable Civil, Judicial or Administrative Proceedings: None
Citizenship: United States
Ault is the controlling and managing member of Adviser. Adviser's beneficial
ownership of the Common Stock that is the subject of this Statement is direct as
a result of Adviser's discretionary authority to buy, sell and vote shares of
such Common Stock for its investment advisory clients. Ault's beneficial
ownership of the Common Stock that is the subject of this Statement is indirect
as a result of Ault's control of Adviser.
The Glazers are non-managing members of Adviser. The Glazers are being included
in this Statement as a result of their purchase of shares of Preferred Stock
that are convertible into shares of Common Stock and due to the fact that, as a
result of certain of the transactions described in Item 4 of this Statement,
they may be deemed to be members, together with Adviser and Ault, of a group
that beneficially owns all of the Common Stock that is the subject of this
Statement.
Page 6 of 12 pages
Item 3. Source and amount of Funds or other Consideration
The aggregate amount of funds used by Adviser to purchase FCC shares of Common
Stock was approximately $3,324,501.63. This amount includes $565,000 used to
purchase 5,650 shares of Preferred Stock that are convertible into 42,375 shares
of Common Stock. Such amount was derived from advisory client accounts and from
private funds of the Reporting Persons.
Item 4. Purpose of Transaction
On June 23, 2004, Adviser and FCC entered into a Letter of Understanding (the
"LOU") intended to confirm the mutual understanding and agreements of FCC and
Adviser with respect to the initial steps of a proposed restructuring and
recapitalization plan for FCC (the "Restructuring Plan") designed to maximize
the value of FCC for the benefit of stockholders. Pursuant to the terms of the
LOU and in connection with the Restructuring Plan, FCC has appointed Ault to
FCC's board of directors and has agreed, in part, to prepare and file such
preliminary and definitive proxy statements, and to take all other actions, as
are required to call a special meeting of its stockholders (the "Stockholders'
Meeting") for the purposes of approving certain actions, which are described in
more detail below, in connection with the Restructuring Plan.
On July 16, 2004, in connection with the Restructuring Plan, certain of
Adviser's investment advisory clients, and Stephen L. Brown, Spencer L. Brown
and Maggie L. Brown, entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement") whereby, on July 20, 2004, Adviser's investment advisory
clients purchased an aggregate of 28,757 shares of FCC Common Stock at a price
of $4.32 per share.
On September 16, various investment funds and trusts controlled by Adviser, Ault
and the Glazers, entered into a preferred stock purchase agreement
(collectively, the "Preferred Stock Purchase Agreements") with each Jonathan A.
Marshall, Copley Fund Inc., a Florida corporation, and Edward Sheldon
(collectively, the "Preferred Stockholders"), pursuant to which such investment
funds and trusts purchased all of the shares of Preferred Stock held by the
Preferred Stockholders. As a result of the purchases of the Preferred Stock from
the Preferred Stockholders, the Reporting Persons directly or indirectly
beneficially owns or controls a majority of the outstanding shares of Preferred
Stock and are entitled, pursuant to the provisions of FCC's certificate of
incorporation, to elect 2 of the 5 members of FCC's board of directors. Copies
of the Preferred Stock Purchase Agreements are filed as Exhibits B, C and D to
this Statement.
(a) In connection with the LOU, Adviser and the Glazers have entered into
agreements (the "Stockholder's Agreements") with Stephen L. Brown and each of
the Preferred Stockholders (each, a "Stockholder"). Pursuant to the
Stockholder's Agreements, each Stockholder agreed to: (i) vote, and to grant an
irrevocable proxy with respect to, all of the shares of FCC capital stock held
by such Stockholder in favor of the matters recommended by the FCC board of
directors at the Stockholders' Meeting; and (ii) sell all of such Stockholder's
shares of Series A Convertible Preferred Stock, par value $1.00, of FCC (the
"Series A Preferred Stock") to the Glazers (or their designees) prior to the
Stockholders' Meeting for a price per share of $100. The Glazers have also
agreed, pursuant to the Stockholder's Agreements, to offer to buy (or cause
their designees to buy) all of the remaining outstanding shares of Series A
Preferred Stock at the same price per share following the Stockholders' Meeting.
In addition, subject to availability at prices deemed favorable, the Reporting
Persons may acquire additional shares of Common Stock of FCC from time to time
in the open market, in privately negotiated transactions or otherwise. The
Reporting Persons may also dispose of shares of Common Stock of FCC from time to
time in the open market, in privately negotiated transactions or otherwise.
(b) None.
(c) At the Stockholders' Meeting, the stockholders of FCC will be asked, in
part, to approve the sale by FCC of all of the shares of capital stock of
Excelsior Radio Networks, Inc. beneficially owned by FCC.
(d) Pursuant to the terms of the LOU, the authorized number of directors
constituting FCC's board of directors has been increased from 4 directors to 5
directors, and Ault has been appointed to fill the vacancy created by the
increase in the authorized number of directors. At the Stockholders' Meeting,
the
Page 7 of 12 pages
stockholders of FCC will be asked, in part, to: (i) approve the amendment and
restatement of FCC's certificate of incorporation in order to, among other
things, classify the FCC board of directors into 3 separate classes; and (ii)
elect a new slate of directors.
(e) At the Stockholders' Meeting, the stockholders of FCC will be asked, in
part, to approve the amendment and restatement of FCC's certificate of
incorporation in order to, among other things: (i) increase the authorized
number of shares of Common Stock from 5,000,000 shares to 50,000,000 shares; and
(ii) increase the authorized number of shares of Preferred Stock from 5,000,000
shares to 10,000,000 shares. The stockholders of FCC will also be asked, in
part, to approve the issuance by FCC of capital stock of FCC and warrants to
purchase capital stock of FCC upon terms that are (i) approved by a majority of
FCC's board of directors consistent with its fiduciary duties; (ii) consistent
with prevailing market conditions at the time of such issuance; and (iii)
consistent with the plan set forth in the LOU.
(f) None.
(g) Pursuant to the terms of the LOU, certain provisions of FCC's bylaws
concerning the indemnification of persons serving as directors and officers of
FCC have been amended by the FCC board of directors. In addition, at the
Stockholders' Meeting, the stockholders of FCC will be asked, in part, to
approve the amendment and restatement of FCC's certificate of incorporation in
order to, among other things: (i) increase the authorized number of shares of
Common Stock from 5,000,000 shares to 50,000,000 shares; (ii) increase the
authorized number of shares of Preferred Stock from 5,000,000 shares to
10,000,000 shares; (iii) provide for the exculpation of director liability to
the fullest extent permitted by law; and (iv) provide for the classification of
FCC's board of directors into three classes.
(h) None.
(i) None.
(j) None.
Although the foregoing represents the range of activities presently contemplated
by the Reporting Persons with respect to FCC and the Common Stock, it should be
noted that the possible activities of the Reporting Persons are subject to
change at any time.
The preceding descriptions of the LOU and the Stockholder's Agreements are
qualified in their entireties by reference to the LOU and the Stockholder's
Agreements, which were previously filed as exhibits to Amendment No. 5 to this
Schedule 13D, filed with the SEC on June 30, 2004, and are hereby incorporated
by reference. The preceding description of the Stock Purchase Agreement is
qualified in its entirety by reference to the Stock Purchase Agreement which was
previously filed as an exhibit to Amendment No. 6 to this Schedule 13D, filed
with the SEC on July 23, 2004. The preceding descriptions of the Preferred Stock
Purchase Agreements are qualified in their entireties by reference to the
Preferred Stock Purchase Agreements, which are filed as Exhibits B, C and D to
this Statement.
Except as set forth above, the Reporting Persons have no present plans or
intentions that relate to or that would result in any of the transactions
described in clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) As of September 16, 2004, the Reporting Persons directly or indirectly
beneficially owned 549,159 shares, or 50.4%, of the Common Stock, including
42,375 shares of Common Stock issuable upon conversion of 5,650 shares of
Preferred Stock directly or indirectly beneficially owned by the Reporting
Persons. The percentage of Common Stock owned, as reported in this Statement, is
based on an as-adjusted total of 1,088,725 shares of Common Stock outstanding as
of July 30, 2004. This as-adjusted total reflects 1,046,350 shares of Common
Stock actually outstanding as of July 30, 2004 (as reported by FCC in its
preliminary proxy statement on Schedule 14A filed with the SEC on July 30,
2004), plus 42,375 shares of Common Stock issuable upon conversion of the shares
of Preferred Stock directly or indirectly beneficially owned by the Reporting
Persons.
Page 8 of 12 pages
(1) Adviser owned 549,159 shares (50.4%)
(2) Ault owned 549,159 shares (50.4%)
(3) Louis Glazer owned 549,159 shares (50.4%)
(4) Melanie Glazer owned 549,159 shares (50.4%)
(b) The responses of the Reporting Persons to Items 7 through 11 of the
portions of the cover page of this Schedule 13D which relate to beneficial
ownership of shares of the Common Stock are incorporated herein by reference.
(c) Below is a list of transactions in since August 26, 2004, the most
recent filing on Schedule 13D.
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Party Date Type of Shares Amount Price per Where & How
Bought Share Effected
(Sold)
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The Glazers 9/16/04 Preferred Stock 500 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 9/16/04 Preferred Stock 400 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 9/16/04 Preferred Stock 100 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 9/16/04 Preferred Stock 1,510 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 9/16/04 Preferred Stock 700 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 9/16/04 Preferred Stock 600 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 9/16/04 Preferred Stock 100 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 9/16/04 Preferred Stock 700 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 9/16/04 Preferred Stock 40 $100 Private Purchase
(convertible into
Common Stock)
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Adviser 9/16/04 Preferred Stock 1,000 $100 Private Purchase
(convertible into
Common Stock)
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Adviser 8/31/04 Common Stock 100 $12.83 Open market
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Adviser 8/31/04 Common Stock 900 $12.85 Open market
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Adviser 8/31/04 Common Stock 300 $12.90 Open market
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Adviser 8/31/04 Common Stock 300 $12.94 Open market
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Adviser 8/31/04 Common Stock 1,700 $12.95 Open market
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Adviser 8/31/04 Common Stock 100 $12.96 Open market
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Adviser 8/31/04 Common Stock 900 $12.98 Open market
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Page 9 of 12 pages
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Party Date Type of Shares Amount Price per Where & How
Bought Share Effected
(Sold)
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Adviser 8/31/04 Common Stock 1,300 $12.99 Open market
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Adviser 8/31/04 Common Stock 2,300 $13.00 Open market
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Adviser 8/31/04 Common Stock 500 $13.12 Open market
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Adviser 8/31/04 Common Stock 1,000 $13.15 Open market
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Adviser 8/31/04 Common Stock 200 $13.25 Open market
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Adviser 8/31/04 Common Stock 300 $13.28 Open market
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Adviser 8/31/04 Common Stock 700 $13.29 Open market
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Adviser 8/31/04 Common Stock 500 $13.30 Open market
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Adviser 8/31/04 Common Stock 2,800 $13.39 Open market
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Adviser 8/31/04 Common Stock 1,700 $13.40 Open market
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Adviser 8/31/04 Common Stock 100 $13.49 Open market
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Adviser 8/31/04 Common Stock 900 $13.50 Open market
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Adviser 8/31/04 Common Stock 900 $13.70 Open market
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Adviser 8/31/04 Common Stock 500 $13.75 Open market
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(d) Not Applicable.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Stock Purchase Agreement
See Item 4 of this Statement for a description of the Stock Purchase Agreement.
Stockholder's Agreements
See Item 4 of this Statement for a description of the Stockholder's Agreements.
Letter of Understanding
See Item 4 of this Statement for a description of the LOU.
Preferred Stock Purchase Agreements
See Item 4 of this Statement for a description of the LOU.
Item 7. Material to Be Filed as Exhibits
Exhibit A: Joint Filing Agreement Pursuant to Rule 13d-1
Exhibit B: Preferred Stock Purchase Agreement with Jonathan A. Marshall
Exhibit C: Preferred Stock Purchase Agreement with Copley Fund, Inc.
Exhibit D: Preferred Stock Purchase Agreement with Edward Sheldon
Page 10 of 12 pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
Date: September 30, 2004
Ault Glazer & Company Investment
Management LLC
/s/ Milton C. Ault, III
-----------------------------------------------
Milton C. Ault, III, Managing Member
Milton C. Ault, III
/s/ Milton C. Ault, III
-----------------------------------------------
Louis Glazer, M.D.
/s/ Louis Glazer, M.D.
-----------------------------------------------
Melanie Glazer
/s/ Melanie Glazer
-----------------------------------------------
Page 11 of 12 pages
EXHIBIT A
---------
Joint Filing Agreement Pursuant to Rule 13d-1
---------------------------------------------
This agreement is made pursuant to Rule 13d-1(k)(1) under the Securities and
Exchange Act of 1934 (the "Act") by and among the parties listed below, each
referred to herein as a "Joint Filer". The Joint Filers agree that a statement
of beneficial ownership as required by Sections 13(g) or 13(d) of the Act and
the Rules thereunder may be filed on each of their behalf on Schedule 13G or
Schedule 13D, as appropriate, and that said joint filing may thereafter be
amended by further joint filings. The Joint Filers state that they each satisfy
the requirements for making a joint filing under Rule 13d-1.
Date: September 30, 2004
Ault Glazer & Company Investment
Management LLC
/s/ Milton C. Ault, III
-----------------------------------------------
Milton C. Ault, III, Managing Member
Milton C. Ault, III
/s/ Milton C. Ault, III
-----------------------------------------------
Louis Glazer, M.D.
/s/ Louis Glazer, M.D.
-----------------------------------------------
Melanie Glazer
/s/ Melanie Glazer
-----------------------------------------------
Page 12 of 12 pages
Exhibit B
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on September 16, 2004 (the "Effective Date"), by and among JONATHAN A.
MARSHALL (the "Seller") and the entities listed on Exhibit A hereto under the
heading "Purchasers" (each, a "Purchaser" and collectively, the "Purchasers").
RECITALS
WHEREAS, as of the Effective Date, the Seller owns beneficially and of
record, and has the power to vote, 500 shares of Series A Convertible Preferred
Stock, par value $1.00 per share (the "Shares"), of Franklin Capital
Corporation, a Delaware corporation (the "Company"); and
WHEREAS, the Seller desires to sell to the Purchasers, and the
Purchasers desire to purchase from the Seller, the Shares, on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. PURCHASE AND SALE OF THE SHARES.
1.1 Closing. At the Closing (as defined below), the Seller shall sell
to the Purchasers, and each Purchaser shall purchase from the Sellers, that
number of Shares set forth opposite each such Purchaser's name on Exhibit A
hereto, at a price of $100 per share (the "Purchase Price"). The closing of the
sale and purchase of the Shares pursuant to the terms and conditions of this
Agreement (the "Closing") shall occur at 2:00 p.m. California time on the
Effective Date, at the offices of Paul, Hastings, Janofsky & Walker LLP, 3579
Valley Centre Drive, San Diego, CA 92130, or at such other time or place as the
parties may mutually agree.
1.2 Deliveries at Closing. At the Closing: (i) each Purchaser shall
deliver to the Seller, by wire transfer of immediately available funds to the
Seller's account (as designated by the Seller), the amount of the aggregate
Purchase Price for the Shares being purchased by such Purchaser from the Seller,
as set forth on Exhibit A hereto; (ii) the Seller shall deliver to the Company,
as transfer agent for the Shares (the "Transfer Agent"), the original stock
certificate(s) representing the Shares being sold by the Seller; and (iii) the
Seller shall deliver to the Transfer Agent (a) a stock power in the form
attached hereto as Exhibit B, executed by the Seller in favor of the appropriate
Purchasers and (b) a letter in the form attached hereto as Exhibit C, executed
by the Seller, instructing the Transfer Agent to transfer the Shares standing in
the name of the Seller on the books of the Company to the Purchasers.
1. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. In connection with
the Purchasers' purchase of Shares pursuant to this Agreement, each Purchaser,
severally and not jointly, represents and warrants to the Seller that: (i) such
Purchaser is an accredited investor within the meaning of Regulation D under the
Securities Act of 1933, as amended; (ii) such Purchaser has all requisite legal
power and authority to execute and deliver this Agreement and to perform such
Purchaser's obligations hereunder; and (iii) this Agreement constitutes the
valid and binding obligation of such Purchaser.
- 1 -
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. In connection with the
Seller's sale of Shares pursuant to this Agreement, such Seller represents and
warrants to the Purchasers that: (i) such Seller has, and upon the Closing, will
transfer to such Purchasers, good and valid title to that number of Shares
listed opposite such Seller's name on Exhibit B hereto, free and clear of all
liens, encumbrances, equities or claims other than restrictions arising under
securities laws; (ii) such Seller has all requisite legal power and authority to
execute and deliver this Agreement and to perform such Seller's obligations
hereunder; and (iii) this Agreement constitutes the valid and binding obligation
of such Seller.
3. MISCELLANEOUS.
3.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware as such laws are applied to agreements between
Delaware residents entered into and performed entirely in Delaware.
3.2 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
3.3 Amendment and Waiver. This Agreement may be amended or modified
only upon the written consent of the Sellers and the Purchasers.
3.4 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.
3.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
SELLER: PURCHASERS:
ZODIAC INVESTMENT PARTNERS, L.P.
/s/ Jonathan A. Marshall By: /s/ Milton "Todd" Ault III
--------------------------------- --------------------------------------
Jonathan A. Marshall
Name: Milton "Todd" Ault III
--------------------------------------
Title: Managing Member
--------------------------------------
-3-
EXHIBIT A
--------------------------------------------------------------------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
--------------------------------------------------------------------------------
Zodiac Investment Partners, L.P. 500 $50,000
--------------------------------------------------------------------------------
TOTALS: 500 $50,000
--------------------------------------------------------------------------------
EXHIBIT B
STOCK POWER
For value received, the undersigned party (the "Seller") does hereby
sell, assign and transfer unto each party listed under the heading "Purchaser"
on Schedule 1 hereto that number of shares of Series A Convertible Preferred
Stock, par value $1.00 (the "Shares"), of FRANKLIN CAPITAL CORPORATION, a
Delaware corporation (the "Company"), indicated on Schedule 1 hereto and
standing in the name of Seller on the books of the Company represented by one or
more certificate(s) enclosed herewith and does hereby irrevocably constitute and
appoint each officer of the Company, or any of them, as Seller's attorney to
transfer such Shares on the books of the Company with full power of substitution
in the premises.
Dated: September 16, 2004
SELLER:
/a/ Jonathan A. Marshall
--------------------------------------
Jonathan A. Marshall
Schedule 1
--------------------------------------------------------------------------------
Purchaser Number of
Shares Purchased
--------------------------------------------------------------------------------
Zodiac Investment Partners, L.P. 500
--------------------------------------------------------------------------------
TOTALS: 500
--------------------------------------------------------------------------------
EXHIBIT C
INSTRUCTION LETTER TO TRANSFER AGENT
September 16, 2004
Franklin Capital Corporation
450 Park Avenue
New York, New York 10022
Re: Transfer of Shares of Franklin Capital Corporation
Ladies and Gentlemen:
Reference is made to that certain Preferred Stock Purchase Agreement, dated as
of the date hereof (the "Purchase Agreement"), by and between the undersigned
(the "Seller") and the purchasers listed in the Purchase Agreement (the
"Purchasers"). Pursuant to the Purchase Agreement, the Seller has agreed to
transfer to each Purchaser that number of shares of Series A Convertible
Preferred Stock, par value $1.00 (the "Shares"), of FRANKLIN CAPITAL
CORPORATION, a Delaware corporation (the "Company"), indicated on Schedule 1
hereto and standing in the name of the Seller on the books of the Company. A
stock power for the contemplated transfer of the Shares by the Seller to the
Purchasers is also provided herewith. Accordingly, the Seller hereby directs you
to issue a certificate representing that number of Shares transferred to each
Purchaser, in accordance with Schedule 1 hereto.
Sincerely,
SELLER:
/a/ Jonathan A. Marshall
--------------------------------------
Jonathan A. Marshall
Schedule 1
--------------------------------------------------------------------------------
Purchaser Number of
Shares Purchased
--------------------------------------------------------------------------------
Zodiac Investment Partners, L.P. 500
--------------------------------------------------------------------------------
TOTALS: 500
--------------------------------------------------------------------------------
Exhibit C
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on September 16, 2004 (the "Effective Date"), by and among COPLEY FUND INC.
(the "Seller") and the entities listed on Exhibit A hereto under the heading
"Purchasers" (each, a "Purchaser" and collectively, the "Purchasers").
RECITALS
WHEREAS, as of the Effective Date, the Seller owns beneficially and of
record, and has the power to vote, 4,750 shares of Series A Convertible
Preferred Stock, par value $1.00 per share (the "Shares"), of Franklin Capital
Corporation, a Delaware corporation (the "Company"); and
WHEREAS, the Seller desires to sell to the Purchasers, and the
Purchasers desire to purchase from the Seller, the Shares, on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. PURCHASE AND SALE OF THE SHARES.
1.1 Closing. At the Closing (as defined below), the Seller shall sell
to the Purchasers, and each Purchaser shall purchase from the Sellers, that
number of Shares set forth opposite each such Purchaser's name on Exhibit A
hereto, at a price of $100 per share (the "Purchase Price"). The closing of the
sale and purchase of the Shares pursuant to the terms and conditions of this
Agreement (the "Closing") shall occur at 2:00 p.m. California time on the
Effective Date, at the offices of Paul, Hastings, Janofsky & Walker LLP, 3579
Valley Centre Drive, San Diego, CA 92130, or at such other time or place as the
parties may mutually agree.
1.2 Deliveries at Closing. At the Closing: (i) each Purchaser shall
deliver to the Seller, by wire transfer of immediately available funds to the
Seller's account (as designated by the Seller), the amount of the aggregate
Purchase Price for the Shares being purchased by such Purchaser from the Seller,
as set forth on Exhibit A hereto; (ii) the Seller shall deliver to the Company,
as transfer agent for the Shares (the "Transfer Agent"), the original stock
certificate(s) representing the Shares being sold by the Seller; and (iii) the
Seller shall deliver to the Transfer Agent (a) a stock power in the form
attached hereto as Exhibit B, executed by the Seller in favor of the appropriate
Purchasers and (b) a letter in the form attached hereto as Exhibit C, executed
by the Seller, instructing the Transfer Agent to transfer the Shares standing in
the name of the Seller on the books of the Company to the Purchasers.
1. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. In connection with
the Purchasers' purchase of Shares pursuant to this Agreement, each Purchaser,
severally and not jointly, represents and warrants to the Seller that: (i) such
Purchaser is an accredited investor within the meaning of Regulation D under the
Securities Act of 1933, as amended; (ii) such Purchaser has all requisite legal
power and authority to execute and deliver this Agreement and to perform such
Purchaser's obligations hereunder; and (iii) this Agreement constitutes the
valid and binding obligation of such Purchaser.
- 1 -
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. In connection with the
Seller's sale of Shares pursuant to this Agreement, such Seller represents and
warrants to the Purchasers that: (i) such Seller has, and upon the Closing, will
transfer to such Purchasers, good and valid title to that number of Shares
listed opposite such Seller's name on Exhibit B hereto, free and clear of all
liens, encumbrances, equities or claims other than restrictions arising under
securities laws; (ii) such Seller has all requisite legal power and authority to
execute and deliver this Agreement and to perform such Seller's obligations
hereunder; and (iii) this Agreement constitutes the valid and binding obligation
of such Seller.
3. MISCELLANEOUS.
3.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware as such laws are applied to agreements between
Delaware residents entered into and performed entirely in Delaware.
3.2 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
3.3 Amendment and Waiver. This Agreement may be amended or modified
only upon the written consent of the Sellers and the Purchasers.
3.4 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.
3.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
SELLER: PURCHASERS:
COPLEY FUND INC. ZODIAC INVESTMENT PARTNERS, L.P.
By:
----------------------------- -----------------------------
Irving Levine
President Name:
---------------------------
Title:
--------------------------
FIRST TENNESSEE BK NATL ASSOC A/C CO-
TTEE LYNETTE P MORRIS TR FBO MELANIE
MORRIS GLAZER A CREATED 12/15/99 A/C
5001052
By:
-----------------------------
Melanie Glazer
1ST TENN BK NA SUCC TTEE U/A FIRST TENNESSEE BK NATL ASSOC A/C
MELVILLE C MORRIS LYNETTE P MELVILLE C LYNNETTE P MORRIS TUA
MORRIS DTD 8/2/65 FBO MELANIE N DTD 12/20/86 FBO MELANIE M GLAZER A/C
MORRIS A/C 50700010 5001080
By: By:
----------------------------- -----------------------------
Melanie Glazer Melanie Glazer
1ST TENN BK NATL ASSN SUCC TTEE 1ST TENN BK NATL ASSN SUCC TTEE U/A
U/A MELVILLE C MORRIS DTD 6/21/74 MELVILLE C MORRIS DTD 5/15/78 FBO
FBO MELANIE N MORRIS A/C 5070013 MELANIE N MORRIS A/C 5070016
By: By:
----------------------------- -----------------------------
Melanie Glazer Melanie Glazer
FIRST TENNESSEE BK NATL ASSOC A/C ZEALOUS INCOME PARTNERS LP A/C OF
CO-TTEE LYNETTE P MORRIS TR FBO CORR B/D STROME SEC
MELANIE MORRIS GLAZER CREATED
12/15/99GST EXEMPT By:
-----------------------------
Name:
----------------------------
By:
-----------------------------
Melanie Glazer Title:
----------------------------
-3-
EXHIBIT A
----------------------------------------------------------------------------------------------------------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
----------------------------------------------------------------------------------------------------------------------
ZODIAC INVESTMENT PARTNERS, L.P. 100 10,000
----------------------------------------------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C CO-TTEE LYNETTE P MORRIS TR
FBO MELANIE MORRIS GLAZER A CREATED 12/15/99 A/C 5001052 1,510 $151,000
----------------------------------------------------------------------------------------------------------------------
1ST TENN BK NA SUCC TTEE U/A MELVILLE C MORRIS LYNETTE P
MORRIS DTD 8/2/65 FBO MELANIE N MORRIS A/C 50700010 700 $70,000
----------------------------------------------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILLE C LYNNETTE P MORRIS
TUA DTD 12/20/86 FBO MELANIE M GLAZER A/C 5001080 600 $60,000
----------------------------------------------------------------------------------------------------------------------
1ST TENN BK NATL ASSN SUCC TTEE U/A MELVILLE C MORRIS DTD
6/21/74 FBO MELANIE N MORRIS A/C 5070013 100 $10,000
----------------------------------------------------------------------------------------------------------------------
1ST TENN BK NATL ASSN SUCC TTEE U/A MELVILLE C MORRIS DTD
5/15/78 FBO MELANIE N MORRIS A/C 5070016 700 $70,000
----------------------------------------------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C CO-TTEE LYNETTE P MORRIS TR
FBO MELANIE MORRIS GLAZER CREATED 12/15/99 GST EXEMPT 40 $4,000
----------------------------------------------------------------------------------------------------------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME SEC 1,000 $100,000
----------------------------------------------------------------------------------------------------------------------
TOTALS: 4,750 $475,000
----------------------------------------------------------------------------------------------------------------------
EXHIBIT B
STOCK POWER
For value received, the undersigned party (the "Seller") does hereby
sell, assign and transfer unto each party listed under the heading "Purchaser"
on Schedule 1 hereto that number of shares of Series A Convertible Preferred
Stock, par value $1.00 (the "Shares"), of FRANKLIN CAPITAL CORPORATION, a
Delaware corporation (the "Company"), indicated on Schedule 1 hereto and
standing in the name of Seller on the books of the Company represented by one or
more stock certificate(s) enclosed herewith and does hereby irrevocably
constitute and appoint each officer of the Company, or any of them, as Seller's
attorney to transfer such Shares on the books of the Company with full power of
substitution in the premises.
Dated: September 16, 2004
SELLER:
COPLEY FUND INC.
------------------------
Irving Levine
President
Schedule 1
---------------------------------------------------------------------------------------------------------
Purchaser Number of
Shares Purchased
---------------------------------------------------------------------------------------------------------
ZODIAC INVESTMENT PARTNERS, L.P. 100
---------------------------------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C CO-TTEE LYNETTE P MORRIS TR FBO MELANIE
MORRIS GLAZER A CREATED 12/15/99 A/C 5001052 1,510
---------------------------------------------------------------------------------------------------------
1ST TENN BK NA SUCC TTEE U/A MELVILLE C MORRIS LYNETTE P MORRIS DTD 8/2/65
FBO MELANIE N MORRIS A/C 50700010 700
---------------------------------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILLE C LYNNETTE P MORRIS TUA DTD
12/20/86 FBO MELANIE M GLAZER A/C 5001080 600
---------------------------------------------------------------------------------------------------------
1ST TENN BK NATL ASSN SUCC TTEE U/A MELVILLE C MORRIS DTD 6/21/74 FBO
MELANIE N MORRIS A/C 5070013 100
---------------------------------------------------------------------------------------------------------
1ST TENN BK NATL ASSN SUCC TTEE U/A MELVILLE C MORRIS DTD 5/15/78 FBO
MELANIE N MORRIS A/C 5070016 700
---------------------------------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C CO-TTEE LYNETTE P MORRIS TR FBO MELANIE
MORRIS GLAZER CREATED 12/15/99 GST EXEMPT 40
---------------------------------------------------------------------------------------------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME SEC 1,000
---------------------------------------------------------------------------------------------------------
TOTALS: 4,750
---------------------------------------------------------------------------------------------------------
EXHIBIT C
INSTRUCTION LETTER TO TRANSFER AGENT
September 16, 2004
Franklin Capital Corporation
450 Park Avenue
New York, New York 10022
Re: Transfer of Shares of Franklin Capital Corporation
Ladies and Gentlemen:
Reference is made to that certain Preferred Stock Purchase Agreement, dated as
of the date hereof (the "Purchase Agreement"), by and between the undersigned
(the "Seller") and the purchasers listed in the Purchase Agreement (the
"Purchasers"). Pursuant to the Purchase Agreement, the Seller has agreed to
transfer to each Purchaser that number of shares of Series A Convertible
Preferred Stock, par value $1.00 (the "Shares"), of FRANKLIN CAPITAL
CORPORATION, a Delaware corporation (the "Company"), indicated on Schedule 1
hereto and standing in the name of the Seller on the books of the Company. A
stock power for the contemplated transfer of the Shares by the Seller to the
Purchasers is also provided herewith. Accordingly, the Seller hereby directs you
to issue a certificate representing that number of Shares transferred to each
Purchaser, in accordance with Schedule 1 hereto.
Sincerely,
SELLER:
COPLEY FUND INC.
------------------------
Irving Levine
President
Schedule 1
---------------------------------------------------------------------------------------------------------
Purchaser Number of
Shares Purchased
---------------------------------------------------------------------------------------------------------
ZODIAC INVESTMENT PARTNERS, L.P. 100
---------------------------------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C CO-TTEE LYNETTE P MORRIS TR FBO MELANIE
MORRIS GLAZER A CREATED 12/15/99 A/C 5001052 1,510
---------------------------------------------------------------------------------------------------------
1ST TENN BK NA SUCC TTEE U/A MELVILLE C MORRIS LYNETTE P MORRIS DTD 8/2/65
FBO MELANIE N MORRIS A/C 50700010 700
---------------------------------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILLE C LYNNETTE P MORRIS TUA DTD
12/20/86 FBO MELANIE M GLAZER A/C 5001080 600
---------------------------------------------------------------------------------------------------------
1ST TENN BK NATL ASSN SUCC TTEE U/A MELVILLE C MORRIS DTD 6/21/74 FBO
MELANIE N MORRIS A/C 5070013 100
---------------------------------------------------------------------------------------------------------
1ST TENN BK NATL ASSN SUCC TTEE U/A MELVILLE C MORRIS DTD 5/15/78 FBO
MELANIE N MORRIS A/C 5070016 700
---------------------------------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C CO-TTEE LYNETTE P MORRIS TR FBO MELANIE
MORRIS GLAZER CREATED 12/15/99 GST EXEMPT 40
---------------------------------------------------------------------------------------------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME SEC 1,000
---------------------------------------------------------------------------------------------------------
TOTALS: 4,750
---------------------------------------------------------------------------------------------------------
Exhibit D
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on September 16, 2004 (the "Effective Date"), by and among EDWARD SHELDON
(the "Seller") and the entities listed on Exhibit A hereto under the heading
"Purchasers" (each, a "Purchaser" and collectively, the "Purchasers").
RECITALS
WHEREAS, as of the Effective Date, the Seller owns beneficially and of
record, and has the power to vote, 400 shares of Series A Convertible Preferred
Stock, par value $1.00 per share (the "Shares"), of Franklin Capital
Corporation, a Delaware corporation (the "Company"); and
WHEREAS, the Seller desires to sell to the Purchasers, and the
Purchasers desire to purchase from the Seller, the Shares, on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. PURCHASE AND SALE OF THE SHARES.
1.1 Closing. At the Closing (as defined below), the Seller shall sell
to the Purchasers, and each Purchaser shall purchase from the Sellers, that
number of Shares set forth opposite each such Purchaser's name on Exhibit A
hereto, at a price of $100 per share (the "Purchase Price"). The closing of the
sale and purchase of the Shares pursuant to the terms and conditions of this
Agreement (the "Closing") shall occur at 2:00 p.m. California time on the
Effective Date, at the offices of Paul, Hastings, Janofsky & Walker LLP, 3579
Valley Centre Drive, San Diego, CA 92130, or at such other time or place as the
parties may mutually agree.
1.2 Deliveries at Closing. At the Closing: (i) each Purchaser shall
deliver to the Seller, by wire transfer of immediately available funds to the
Seller's account (as designated by the Seller), the amount of the aggregate
Purchase Price for the Shares being purchased by such Purchaser from the Seller,
as set forth on Exhibit A hereto; (ii) the Seller shall deliver to the Company,
as transfer agent for the Shares (the "Transfer Agent"), the original stock
certificate(s) representing the Shares being sold by the Seller; and (iii) the
Seller shall deliver to the Transfer Agent (a) a stock power in the form
attached hereto as Exhibit B, executed by the Seller in favor of the appropriate
Purchasers and (b) a letter in the form attached hereto as Exhibit C, executed
by the Seller, instructing the Transfer Agent to transfer the Shares standing in
the name of the Seller on the books of the Company to the Purchasers.
1. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. In connection with
the Purchasers' purchase of Shares pursuant to this Agreement, each Purchaser,
severally and not jointly, represents and warrants to the Seller that: (i) such
Purchaser is an accredited investor within the meaning of Regulation D under the
Securities Act of 1933, as amended; (ii) such Purchaser has all requisite legal
power and authority to execute and deliver this Agreement and to perform such
Purchaser's obligations hereunder; and (iii) this Agreement constitutes the
valid and binding obligation of such Purchaser.
- 1 -
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. In connection with the
Seller's sale of Shares pursuant to this Agreement, such Seller represents and
warrants to the Purchasers that: (i) such Seller has, and upon the Closing, will
transfer to such Purchasers, good and valid title to that number of Shares
listed opposite such Seller's name on Exhibit B hereto, free and clear of all
liens, encumbrances, equities or claims other than restrictions arising under
securities laws; (ii) such Seller has all requisite legal power and authority to
execute and deliver this Agreement and to perform such Seller's obligations
hereunder; and (iii) this Agreement constitutes the valid and binding obligation
of such Seller.
3. MISCELLANEOUS.
3.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware as such laws are applied to agreements between
Delaware residents entered into and performed entirely in Delaware.
3.2 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
3.3 Amendment and Waiver. This Agreement may be amended or modified
only upon the written consent of the Sellers and the Purchasers.
3.4 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.
3.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
SELLER: PURCHASERS:
ZODIAC INVESTMENT PARTNERS, L.P.
By:
---------------------------------- -----------------------------------
Edward Sheldon
Name:
---------------------------------
Title:
--------------------------------
-3-
EXHIBIT A
--------------------------------------------------------------------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
--------------------------------------------------------------------------------
Zodiac Investment Partners, L.P. 400 $40,000
--------------------------------------------------------------------------------
TOTALS: 400 $40,000
--------------------------------------------------------------------------------
EXHIBIT B
STOCK POWER
For value received, the undersigned party (the "Seller") does hereby
sell, assign and transfer unto each party listed under the heading "Purchaser"
on Schedule 1 hereto that number of shares of Series A Convertible Preferred
Stock, par value $1.00 (the "Shares"), of FRANKLIN CAPITAL CORPORATION, a
Delaware corporation (the "Company"), indicated on Schedule 1 hereto and
standing in the name of Seller on the books of the Company represented by one or
more stock certificate(s) enclosed herewith and does hereby irrevocably
constitute and appoint each officer of the Company, or any of them, as Seller's
attorney to transfer such Shares on the books of the Company with full power of
substitution in the premises.
Dated: September 16, 2004
SELLER:
-----------------------------------
Edward Sheldon
Schedule 1
--------------------------------------------------------------------------------
Purchaser Number of
Shares Purchased
--------------------------------------------------------------------------------
Zodiac Investment Partners, L.P. 400
--------------------------------------------------------------------------------
TOTALS: 400
--------------------------------------------------------------------------------
EXHIBIT C
INSTRUCTION LETTER TO TRANSFER AGENT
September 16, 2004
Franklin Capital Corporation
450 Park Avenue
New York, New York 10022
Re: Transfer of Shares of Franklin Capital Corporation
Ladies and Gentlemen:
Reference is made to that certain Preferred Stock Purchase Agreement, dated as
of the date hereof (the "Purchase Agreement"), by and between the undersigned
(the "Seller") and the purchasers listed in the Purchase Agreement (the
"Purchasers"). Pursuant to the Purchase Agreement, the Seller has agreed to
transfer to each Purchaser that number of shares of Series A Convertible
Preferred Stock, par value $1.00 (the "Shares"), of FRANKLIN CAPITAL
CORPORATION, a Delaware corporation (the "Company"), indicated on Schedule 1
hereto and standing in the name of the Seller on the books of the Company. A
stock power for the contemplated transfer of the Shares by the Seller to the
Purchasers is also provided herewith. Accordingly, the Seller hereby directs you
to issue a certificate representing that number of Shares transferred to each
Purchaser, in accordance with Schedule 1 hereto.
Sincerely,
SELLER:
-----------------------------------
Edward Sheldon
Schedule 1
--------------------------------------------------------------------------------
Purchaser Number of
Shares Purchased
--------------------------------------------------------------------------------
Zodiac Investment Partners, L.P. 400
--------------------------------------------------------------------------------
TOTALS: 400
--------------------------------------------------------------------------------