UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)*
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)
July 20, 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 13 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 369,484
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Number of ---------------------------------------------------------------
Shares 8. Shared Voting Power 0
Beneficially ---------------------------------------
Owned by Each ---------------------------------------------------------------
Reporting 9. Sole Dispositive Power 369,484
Person With: ------------------------------------
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10. Shared Dispositive Power 0
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 369,484
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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) 36.2%
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14. Type of Reporting Person (See Instructions)
IA
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Page 2 of 13 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 369,484
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Number of ---------------------------------------------------------------
Shares 8. Shared Voting Power 0
Beneficially ---------------------------------------
Owned by Each ---------------------------------------------------------------
Reporting 9. Sole Dispositive Power 369,484
Person With: ------------------------------------
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10. Shared Dispositive Power 0
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 369,484
-----------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) |_|
13. Percent of Class Represented by Amount in Row (11) 36.2%
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14. Type of Reporting Person (See Instructions)
IN/HC
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Page 3 of 13 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
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Number of ---------------------------------------------------------------
Shares 8. Shared Voting Power 369,484
Beneficially ---------------------------------------
Owned by Each ---------------------------------------------------------------
Reporting 9. Sole Dispositive Power 0
Person With: ------------------------------------
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10. Shared Dispositive Power 369,484
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 369,484
-----------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) |_|
13. Percent of Class Represented by Amount in Row (11) 36.2%
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14. Type of Reporting Person (See Instructions)
IN
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Page 4 of 13 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).
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
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Number of ---------------------------------------------------------------
Shares 8. Shared Voting Power 369,484
Beneficially ---------------------------------------
Owned by Each ---------------------------------------------------------------
Reporting 9. Sole Dispositive Power 0
Person With: ------------------------------------
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10. Shared Dispositive Power 369,484
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 369,484
-----------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) |_|
13. Percent of Class Represented by Amount in Row (11) 36.2%
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14. Type of Reporting Person (See Instructions)
IN
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Page 5 of 13 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. 6 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, and June 23, 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.
The address of 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 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.
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 $1,870,094.49. Such amount was derived from advisory
client accounts.
Page 6 of 13 Pages
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.
(a) In connection with the LOU, Adviser and the Glazers have entered into
agreements (the "Stockholder's Agreements") with each of the following
stockholders of FCC: Stephen L. Brown, Jonathan A. Marshall, Copley Fund Inc., a
Florida corporation, and Edward Sheldon (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 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 all of the remaining outstanding
shares of Series A Preferred Stock at the same price per share following the
Stockholders' Meeting. Following their purchases of the shares of Series A
Preferred Stock from the Stockholders, the Glazers will own a majority of the
outstanding shares of FCC's Preferred Stock, par value $1.00 per share, (the
"Preferred Stock"), and will be entitled, pursuant to the provisions of FCC's
certificate of incorporation, to elect 2 of the 5 members of FCC's board of
directors. 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 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.
Page 7 of 13 Pages
(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 of 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 has been filed as an
exhibit 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 July 21, 2004, the Reporting Persons directly or indirectly
beneficially owned 369,484 shares, or 36.2%, of the Common Stock. The percentage
of Common Stock owned, as reported in this Statement, is based on 1,020,100
shares of Common Stock outstanding as of May 14, 2004, as reported by FCC in its
Form 10-Q filed on May 17, 2004.
(1) Adviser owned 369,484 shares (36.2%)
(2) Ault owned 369,484 shares (36.2%)
(3) Louis Glazer owned 369,484 shares (36.2%)
(4) Melanie Glazer owned 369,484 shares (36.2%)
(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.
Page 8 of 13 Pages
(c) Below is a list of transactions in since June 30, 2004, the most recent
filing on Schedule 13D.
-------------------------- ------------- ---------------- ---------- ---------------------
Party Date Amount Bought Price Where & How Effected
(Sold) per Share
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 12,134 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 5,042 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 4,347 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 2,608 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 869 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 974 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 405 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 349 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 209 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 70 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 849 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 353 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 304 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 183 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
Adviser 7/20/04 61 $4.32 Pursuant to Stock
Purchase Agreement
-------------------------- ------------- ---------------- ---------- ---------------------
(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.
Page 9 of 13 Pages
Item 7. Material to Be Filed as Exhibits
Exhibit A: Joint Filing Agreement Pursuant to Rule 13d-1
Exhibit B: Stock Purchase Agreement
Page 10 of 13 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: July 21, 2004
Ault Glazer & Company Investment
Management LLC
/s/ Milton C. Ault, III
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Milton C. Ault, III, Managing Member
Milton C. Ault, III
/s/ Milton C. Ault, III
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Louis Glazer, M.D.
/s/ Louis Glazer, M.D.
------------------------------------
Melanie Glazer
/s/ Melanie Glazer
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Page 11 of 13 Pages
EXHIBIT A
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Joint Filing Agreement Pursuant to Rule 13d-1
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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.
Dated: July 21, 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
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Page 12 of 13 Pages
EXHIBIT B
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Stock Purchase Agreement
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Page 13 of 13 Pages
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered into on
July 16, 2004 (the "Effective Date"), by and among the individuals listed on
Exhibit A hereto under the heading "Sellers" (each, a "Seller" and collectively,
the "Sellers") and the entities listed on Exhibit A hereto under the heading
"Purchasers" (each, a "Purchaser" and collectively, the "Purchasers").
RECITALS
WHEREAS, the Sellers desire to sell to the Purchasers, and the
Purchasers desire to purchase from the Sellers, an aggregate of 28,757 shares of
Common Stock, par value $1.00 per share (the "Shares") of Franklin Capital
Corporation, a Delaware corporation (the "Company"), 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), each Seller shall sell
to the appropriate Purchasers, and each Purchaser shall purchase from the
appropriate Sellers, that number of Shares set forth opposite each such Seller's
and Purchaser's name on Exhibit B hereto, at a price of $4.32 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 each appropriate Seller, by wire transfer of immediately available
funds to such Seller's account (as designated by such Seller), the amount of the
aggregate Purchase Price for the Shares being purchased by such Purchaser from
such Seller, as set forth on Exhibit B hereto; (ii) each Seller shall deliver to
ChaseMellon Shareholder Services, L.L.C., as transfer agent for the Shares (the
"Transfer Agent"), the original stock certificate(s) representing the Shares
being sold by such Seller; and (iii) the Sellers shall deliver to the Transfer
Agent (a) a stock power in the form attached hereto as Exhibit C, executed by
each of the Sellers in favor of the appropriate Purchasers and (b) a letter in
the form attached hereto as Exhibit D, executed by each of the Sellers,
instructing the Transfer Agent to transfer the Shares standing in the name of
each Seller on the books of the Company to the appropriate Purchasers. As soon
as practicable following the Closing, the Transfer Agent shall deliver to each
of the Purchasers one or more stock certificate(s) representing the Shares
purchased by each such Purchaser.
2. 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 Sellers 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.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. In connection with such
Seller's sale of Shares pursuant to this Agreement, each Seller, severally and
not jointly, represents and warrants to the appropriate Purchasers (as set forth
on Exhibit B hereto) 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.
4. MISCELLANEOUS.
4.1 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.
4.2 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.
4.3 Amendment and Waiver. This Agreement may be amended or modified
only upon the written consent of the Sellers and the Purchasers.
4.4 Entire Agreement. This Agreement, together with that certain letter
agreement among the parties hereto dated as of July 16, 2004, constitute the
full and entire understanding and agreement between the parties with regard to
the subject matter hereof.
4.5 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.
SELLERS: PURCHASERS:
First Tennessee Bank, National Association,
Account Co-Trustee Lynnette T. Morris Trust
FBO Melanie Morris Glazer, Created
12/15/99, Account No. 5001052
/s/ Stephen L. Brown By: /s/ Milton C. Ault III
------------------------------------- ---------------------------------
Stephen L. Brown Milton C. Ault III
Investment Adviser
Zealous Partners, LLC
/s/ Spencer L. Brown By: /s/ Milton C. Ault III
------------------------------------- ---------------------------------
Spencer L. Brown Milton C. Ault III
Investment Adviser
Zealous Trading Partners, LP
/s/ Spencer L. Brown By: /s/ Milton C. Ault III
------------------------------------- ---------------------------------
Spencer L. Brown U/G/M Maggie L. Brown Milton C. Ault III
Investment Adviser
Zodiac Investments, L.P.
By: /s/ Milton C. Ault III
----------------------------------
Milton C. Ault III
Investment Adviser
Milton C. Ault III and Kristine Louise Larson
Joint Account with Right of Survivorship
By: /s/ Milton C. Ault III
----------------------------------
Milton C. Ault III
Investment Adviser
EXHIBIT A
SELLERS:
Stephen L. Brown
Spencer L. Brown
Maggie L. Brown
PURCHASERS:
First Tennessee Bank, National Association, Account Co-Trustee Lynnette T.
Morris Trust FBO Melanie Morris Glazer, Created 12/15/99, Account No.
5001052
Zealous Partners, LLC
Zealous Trading Partners, LP
Zodiac Investments, L.P.
Milton C. Ault III and Kristine Louise Larson Joint Account with Right of
Survivorship
EXHIBIT B
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Seller Purchaser Number of Shares Aggregate
Sold/Purchased Purchase Price
-----------------------------------------------------------------------------------------------------------------------
Stephen L. Brown First Tennessee Bank, National Association, 12,134 $52,418.88
Account Co-Trustee Lynnette T. Morris Trust
FBO Melanie Morris Glazer, Created 12/15/99,
Account No. 5001052
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Zealous Partners, LLC 5,042 $21,781.44
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Zealous Trading Partners, L.P. 4,347 $18,779.04
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Zodiac Investments, L.P. 2,608 $11,266.56
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Milton C. Ault and Kristine Louise Larson 869 $3,754.08
Joint Account with Right of Survivorship
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Subtotal: 25,000 $108,000.00
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Spencer L. Brown First Tennessee Bank, National Association, 974 $4,207.68
Account Co-Trustee Lynnette T. Morris Trust
FBO Melanie Morris Glazer, Created 12/15/99,
Account No. 5001052
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Zealous Partners, LLC 405 $1,749.60
-----------------------------------------------------------------------------------------------
Zealous Trading Partners, L.P. 349 $1,507.68
-----------------------------------------------------------------------------------------------
Zodiac Investments, L.P. 209 $902.88
-----------------------------------------------------------------------------------------------
Milton C. Ault and Kristine Louise Larson 70 $302.40
Joint Account with Right of Survivorship
-----------------------------------------------------------------------------------------------------------------------
Subtotal: 2,007 $8,670.24
-----------------------------------------------------------------------------------------------------------------------
Maggie L. Brown First Tennessee Bank, National Association, 849 $3,667.68
Account Co-Trustee Lynnette T. Morris Trust
FBO Melanie Morris Glazer, Created 12/15/99,
Account No. 5001052
-----------------------------------------------------------------------------------------------
Zealous Partners, LLC 353 $1,524.96
-----------------------------------------------------------------------------------------------
Zealous Trading Partners, L.P. 304 $1,313.28
-----------------------------------------------------------------------------------------------
Zodiac Investments, L.P. 183 $790.56
-----------------------------------------------------------------------------------------------
Milton C. Ault and Kristine Louise Larson 61 $263.52
Joint Account with Right of Survivorship
-----------------------------------------------------------------------------------------------------------------------
Subtotal: 1,750 $7,560.00
-----------------------------------------------------------------------------------------------------------------------
TOTAL 28,757 $124,230.24
-----------------------------------------------------------------------------------------------------------------------
EXHIBIT C
STOCK POWER
For value received, each of the undersigned parties (each, a "Seller"),
does hereby sell, assign and transfer unto each party listed opposite such
Seller's name under the heading "Purchaser" on Schedule 1 hereto that number of
shares of Common Stock, par value $1.00 (the "Common Stock"), 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 the stock certificates herewith (as indicated on Schedule 1
hereto) and does hereby irrevocably constitute and appoint ChaseMellon
Shareholder Services, L.L.C. as Seller's attorney to transfer such shares of
Common Stock on the books of the Company with full power of substitution in the
premises.
Dated: July 16, 2004
SELLERS:
/s/ Stephen L. Brown
-------------------------------
Stephen L. Brown
/s/ Spencer L. Brown
-------------------------------
Spencer L. Brown
/s/ Spencer L. Brown
-------------------------------
Spencer L. Brown U/G/M Maggie L. Brown
Schedule 1
----------------------------------------------------------------------------------------------------------------------
Seller Purchaser Number of Shares To Be Certificate
Transferred Nos.
----------------------------------------------------------------------------------------------------------------------
Stephen L. Brown First Tennessee Bank, National Association, 12,134 CU 14569
Account Co-Trustee Lynnette T. Morris Trust CU 14570
FBO Melanie Morris Glazer, Created 12/15/99, CU 16108
Account No. 5001052
--------------------------------------------------------------------------------------------
Zealous Partners, LLC 5,042
--------------------------------------------------------------------------------------------
Zealous Trading Partners, L.P. 4,347
--------------------------------------------------------------------------------------------
Zodiac Investments, L.P. 2,608
--------------------------------------------------------------------------------------------
Milton C. Ault and Kristine Louise Larson 869
Joint Account with Right of Survivorship
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Spencer L. Brown First Tennessee Bank, National Association, 974 CU 14579
Account Co-Trustee Lynnette T. Morris Trust CU 15558
FBO Melanie Morris Glazer, Created 12/15/99,
Account No. 5001052
--------------------------------------------------------------------------------------------
Zealous Partners, LLC 405
--------------------------------------------------------------------------------------------
Zealous Trading Partners, L.P. 349
--------------------------------------------------------------------------------------------
Zodiac Investments, L.P. 209
--------------------------------------------------------------------------------------------
Milton C. Ault and Kristine Louise Larson 70
Joint Account with Right of Survivorship
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Maggie L. Brown First Tennessee Bank, National Association, 849 CU 14608
Account Co-Trustee Lynnette T. Morris Trust CU 15557
FBO Melanie Morris Glazer, Created 12/15/99, CU 16113
Account No. 5001052
--------------------------------------------------------------------------------------------
Zealous Partners, LLC 353
--------------------------------------------------------------------------------------------
Zealous Trading Partners, L.P. 304
--------------------------------------------------------------------------------------------
Zodiac Investments, L.P. 183
--------------------------------------------------------------------------------------------
Milton C. Ault and Kristine Louise Larson 61
Joint Account with Right of Survivorship
----------------------------------------------------------------------------------------------------------------------
EXHIBIT D
INSTRUCTION LETTER TO TRANSFER AGENT
July 16, 2004
ChaseMellon Shareholder Services, L.L.C.
Overpeck Centre
85 Challenger Road
Ridgefield Park, NJ 07660
Re: Transfer of Shares of Franklin Capital Corporation
Ladies and Gentlemen:
Reference is made to that certain Stock Purchase Agreement, dated as of the date
hereof (the "Purchase Agreement"), by and between the undersigned parties (each,
a "Seller" and collectively, the "Sellers") and purchasers listed in the
Purchase Agreement (the "Purchasers"). Pursuant to the Purchase Agreement, each
undersigned Seller has agreed to transfer to Purchaser listed opposite such
Seller's name under the heading "Purchaser" on Schedule 1 hereto that number of
shares of Common 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 undersigned Seller on the books of the
Company. A stock power for the contemplated transfer of the Shares by each of
the Sellers to the appropriate Purchasers is also provided herewith.
Accordingly, each of the undersigned Sellers hereby directs you to issue a
certificate representing that number of Shares transferred to each appropriate
Purchaser, in accordance with Schedule 1 hereto. In connection with such
transfers, the Sellers further direct you that each new certificate evidencing
Shares shall bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
EFFECT, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
Sincerely,
SELLERS:
/s/ Stephen L. Brown
-----------------------------------------
Stephen L. Brown
/s/ Spencer L. Brown
-----------------------------------------
Spencer L. Brown
/s/ Spencer L. Brown
-----------------------------------------
Spencer L. Brown U/G/M Maggie L. Brown
Schedule 1
----------------------------------------------------------------------------------------------------------------------
Seller Purchaser Number of Shares To Be Certificate
Transferred Nos.
----------------------------------------------------------------------------------------------------------------------
Stephen L. Brown First Tennessee Bank, National Association, 12,134 CU 14569
Account Co-Trustee Lynnette T. Morris Trust CU 14570
FBO Melanie Morris Glazer, Created 12/15/99, CU 16108
Account No. 5001052
--------------------------------------------------------------------------------------------
Zealous Partners, LLC 5,042
--------------------------------------------------------------------------------------------
Zealous Trading Partners, L.P. 4,347
--------------------------------------------------------------------------------------------
Zodiac Investments, L.P. 2,608
--------------------------------------------------------------------------------------------
Milton C. Ault and Kristine Louise Larson 869
Joint Account with Right of Survivorship
----------------------------------------------------------------------------------------------------------------------
-------------------------- ------------------------------------------------ -------------------------- ---------------
Spencer L. Brown First Tennessee Bank, National Association, 974 CU 14579
Account Co-Trustee Lynnette T. Morris Trust CU 15558
FBO Melanie Morris Glazer, Created 12/15/99,
Account No. 5001052
--------------------------------------------------------------------------------------------
Zealous Partners, LLC 405
--------------------------------------------------------------------------------------------
Zealous Trading Partners, L.P. 349
--------------------------------------------------------------------------------------------
Zodiac Investments, L.P. 209
--------------------------------------------------------------------------------------------
Milton C. Ault and Kristine Louise Larson 70
Joint Account with Right of Survivorship
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Maggie L. Brown First Tennessee Bank, National Association, 849 CU 14608
Account Co-Trustee Lynnette T. Morris Trust CU 15557
FBO Melanie Morris Glazer, Created 12/15/99, CU 16113
Account No. 5001052
--------------------------------------------------------------------------------------------
Zealous Partners, LLC 353
--------------------------------------------------------------------------------------------
Zealous Trading Partners, L.P. 304
--------------------------------------------------------------------------------------------
Zodiac Investments, L.P. 183
--------------------------------------------------------------------------------------------
Milton C. Ault and Kristine Louise Larson 61
Joint Account with Right of Survivorship
----------------------------------------------------------------------------------------------------------------------