UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 10)*
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)
December 14, 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 0
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8. Shared Voting Power 476,900 (includes 80,625 shares that
Number of the Reporting Person has the right to
Shares acquire)
Beneficially ---------------------------------------
Owned by Each ---------------------------------------------------------------
Reporting 9. Sole Dispositive Power 0
Person With: ------------------------------------
---------------------------------------------------------------
10. Shared Dispositive Power 476,900 (includes 80,625 shares
that the Reporting Person has
the right to acquire)
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
476,900 (includes 80,625 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) |X|
13. Percent of Class Represented by Amount in Row (11) 29.2%
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14. Type of Reporting Person (See Instructions)
IA/HC
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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 and PF
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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
-----------------------------------------
---------------------------------------------------------------
8. Shared Voting Power 476,900 (includes 80,625 shares that
Number of the Reporting Person has the right to
Shares acquire)
Beneficially ---------------------------------------
Owned by Each ---------------------------------------------------------------
Reporting 9. Sole Dispositive Power 0
Person With: ------------------------------------
---------------------------------------------------------------
10. Shared Dispositive Power 476,900 (includes 80,625 shares
that the Reporting Person has
the right to acquire)
----------------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
476,900 (includes 80,625 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) 29.2%
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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 and PF
-------------------------------------
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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 476,900 (includes 80,625 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 476,900 (includes 80,625 shares
that the Reporting Person has
the right to acquire)
----------------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
476,900 (includes 80,625 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) |X|
13. Percent of Class Represented by Amount in Row (11) 29.2%
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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 and PF
-------------------------------------
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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 476,900 (includes 80,625 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 476,900 (includes 80,625 shares
that the Reporting Person has
the right to acquire)
----------------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
476,900 (includes 80,625 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) |X|
13. Percent of Class Represented by Amount in Row (11) 29.2%
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14. Type of Reporting Person (See Instructions)
IN
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Page 5 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).
Teresa Lynne Silverstein
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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 and PF
-------------------------------------
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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 476,900 (includes 80,625 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 476,900 (includes 80,625 shares
that the Reporting Person has
the right to acquire)
----------------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 476,900
(includes 80,625 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) |X|
13. Percent of Class Represented by Amount in Row (11) 29.2%
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14. Type of Reporting Person (See Instructions)
IN
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Page 6 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"), and Teresa Lynne Silverstein
("Silverstein") pursuant to Rule 13d-2 of the Securities Exchange Act of 1934,
as amended, hereby file this Amendment No. 10 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, August 26, 2004 and
September 30, 2004. Adviser, Ault, the Glazers and Silverstein 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 100 Wilshire Boulevard,
15th Floor, Suite 1500, Santa Monica, California 90401.
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
Name: Teresa Lynne Silverstein
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 indirect
as a result of Adviser's discretionary authority to buy, sell and vote shares of
such Common Stock for certain private investment fund clients (the "Investment
Fund Clients") for which it also acts as general partner. 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, except to the extent of Ault's direct
pecuniary interest in
Page 7 of 13 pages
certain of the shares of Common Stock.
The Glazers are non-managing members of Adviser. The Glazers are being included
in this Statement as a result of their ownership percentage in certain of the
Investment Fund Client, their purchases 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, Ault and Silverstein, of a group
that beneficially owns all of the Common Stock that is the subject of this
Statement.
Silverstein is the chief executive officer of Adviser. Silverstein's beneficial
ownership of the Common Stock that is the subject of this Statement is indirect
as a result of Silverstein's control of Adviser, except to the extent of
Silverstein direct pecuniary interest in certain of the share of Common Stock.
Item 3. Source and amount of Funds or other Consideration
The aggregate amount of funds used by Adviser to purchase shares of FCC Common
Stock was approximately $3,050,000. This amount includes $1,075,000 used to
purchase 10,750 shares of Preferred Stock that are convertible into 80,625
shares of Common Stock. Such amount was derived from the Investment Fund Clients
and from private funds of the Reporting Persons.
Item 4. Purpose of Transaction
In May 2004, Adviser began purchasing blocks of FCC Common Stock in the open
market on behalf of the Investment Fund Clients. As a result of these purchases,
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 appointed Ault to FCC's
board of directors on June 23, 2004.
On July 16, 2004, in connection with the Restructuring Plan, Ault, the Glazers
and certain of the Investment Fund Clients entered into a Stock Purchase
Agreement (the "Common Stock Purchase Agreement") with Stephen L. Brown, Spencer
L. Brown and Maggie L. Brown (collectively, the "Common Stockholders") the
whereby, on July 20, 2004, Ault, the Glazers and such Investment Fund Clients
purchased an aggregate of 28,757 shares of FCC Common Stock from the Common
Stockholders at a price of $4.32 per share.
On September 16, 2004, the Glazers and certain of the Investment Fund Clients
entered into preferred stock purchase agreements (collectively, the "Original
Preferred Stock Purchase Agreements") with Jonathan A. Marshall, Copley Fund
Inc., a Florida corporation, and Edward Sheldon (collectively, the "First Group
of Preferred Stockholders"), pursuant to which the Glazers and such Investment
Fund Clients purchased all of the shares of Preferred Stock held by the First
Group of Preferred Stockholders.
On October 22, 2004, pursuant to the terms of the LOU, FCC held a special
meeting of its stockholders (the "Stockholders' Meeting") for the purposes of
approving certain actions in connection with the Restructuring Plan. At the
Stockholders' Meeting, the stockholders of FCC, among other things, elected
Louis Glazer and the other nominees proposed by Adviser, including Herbert
Langsam, Alice Campbell and Lytle Brown III, to serve on FCC's board of
directors.
On December 1, 2004, the Glazers and certain of the Investment Fund Clients
entered into preferred stock purchase agreements (collectively, the "New
Preferred Stock Purchase Agreements" and, collectively with the Original
Preferred Stock Purchase Agreements, the "Preferred Stock Purchase Agreements")
with Gerry M. Ritterman, Mark Rattner, John Nebens and Meg Nebens, Daniel S.
Kampel, Leslie Murdock, Wendy S. Brown and Hiram Lazar (collectively, the
"Second Group of Preferred Stockholders"), pursuant to which, on December 14,
2004, the Glazers and such Investment Fund Clients purchased all of the shares
of Preferred Stock held by the Second Group of Preferred Stockholders. Copies of
the New Preferred Stock Purchase Agreements are filed as Exhibits B, C, D, E, F,
G and H to this Statement.
Page 8 of 13 pages
As a result of the purchases of the Preferred Stock from the Preferred
Stockholders, the Reporting Persons own approximately 98.2% 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.
(a) 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) None.
(d) None.
(e) None.
(f) None.
(g) None.
(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 description of the LOU is qualified in its entirety by reference
to the LOU, which was previously filed as exhibits to Amendment No. 5 to this
Schedule 13D, filed with the SEC on June 30, 2004, and which is hereby
incorporated herein 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, and which is hereby
incorporated herein by reference. The preceding descriptions of the Original
Preferred Stock Purchase Agreements are qualified in their entireties by
reference to the Preferred Stock Purchase Agreements, which were filed as
exhibits to Amendment No. 9 to this Statement, filed with the SEC on September
30, 2004, and which are hereby incorporated herein by reference. The preceding
descriptions of the New Preferred Stock Purchase Agreements are qualified in
their entireties by reference to the New Preferred Stock Purchase Agreements,
which are filed as exhibits 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 December 14, 2004, the Reporting Persons directly or indirectly
beneficially owned 476,900 shares, or 29.2%, of the Common Stock, including
80,625 shares of Common Stock issuable upon conversion of 10,750 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 1,632,875 shares of Common Stock outstanding as
of December 21, 2004. This as-adjusted total reflects 1,046,350 shares of Common
Stock actually outstanding as of September 30, 2004 (as reported by FCC in its
quarterly report on Form 10-Q filed with the SEC on November 15, 2004), plus
505,900 shares of Common Stock issued as of December 21, 2004 in connection with
a private placement by
Page 9 of 13 pages
FCC of shares of FCC Common Stock and warrants to purchase FCC Common Stock (as
reported by FCC in its current reports on Form 8-K filed with the SEC on
November 9, 2004, November 19, 2004, December 8, 2004 and December 27, 2004),
plus 80,625 shares of Common Stock issuable upon conversion of the shares of
Preferred Stock directly or indirectly beneficially owned by the Reporting
Persons.
(1) Adviser owned 476,900 shares (29.2%)
(2) Ault owned 476,900 shares (29.2%)
(3) Louis Glazer owned 476,900 shares (29.2%)
(4) Melanie Glazer owned 476,900 shares (29.2%)
(5) Silverstein owned 476,900 shares (29.2%)
(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.
(c) Below is a list of transactions in since September 30, 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 12/14/04 Preferred Stock 1,400 $100 Private Purchase
(convertible into
Common Stock)
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Adviser 12/14/04 Preferred Stock 100 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 12/14/04 Preferred Stock 1,000 $100 Private Purchase
(convertible into
Common Stock)
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Adviser 12/14/04 Preferred Stock 500 $100 Private Purchase
(convertible into
Common Stock)
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Adviser 12/14/04 Preferred Stock 500 $100 Private Purchase
(convertible into
Common Stock)
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Adviser 12/14/04 Preferred Stock 500 $100 Private Purchase
(convertible into
Common Stock)
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Adviser 12/14/04 Preferred Stock 500 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 12/14/04 Preferred Stock 250 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 12/14/04 Preferred Stock 250 $100 Private Purchase
(convertible into
Common Stock)
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The Glazers 12/14/04 Preferred Stock 100 $100 Private Purchase
(convertible into
Common Stock)
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Page 10 of 13 pages
(d) Not Applicable.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Client Accounts of Adviser
In addition to its role as discretionary investment advisor for the Investment
Fund Clients referenced in this Statement, Adviser acts as a passive investment
advisor for certain additional client accounts of Advisor (the "Client
Accounts") that beneficially own shares of FCC Common Stock. Previously, the
Reporting Persons reported shares of FCC Common Stock held by these Client
Accounts as being indirectly beneficially owned by one or more of the Reporting
Persons. However, Adviser's agreement with these Client Accounts clearly
specifies that Advisor has no authority to direct the buying, selling or voting
of any of the shares of FCC Common Stock held by such Client Accounts. As a
result, the Reporting Persons specifically disclaim beneficial ownership of all
shares of FCC Common Stock held by the Client Accounts and have not reported
such shares of FCC Common Stock as being directly or indirectly beneficially
owned by any of the Reporting Persons for purposes of this Statement.
Letter of Understanding
See Item 4 of this Statement for a description of the LOU.
Common Stock Purchase Agreement
See Item 4 of this Statement for a description of the Common Stock Purchase
Agreement.
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 Gerry M. Ritterman
Exhibit C: Preferred Stock Purchase Agreement with Mark Rattner
Exhibit D: Preferred Stock Purchase Agreement with John and Meg Nebens
Exhibit E: Preferred Stock Purchase Agreement with Daniel S. Kampel
Exhibit F: Preferred Stock Purchase Agreement with Leslie Murdock
Exhibit G: Preferred Stock Purchase Agreement with Wendy S. Brown
Exhibit H: Preferred Stock Purchase Agreement with Hiram Lazar
Page 11 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: January 20, 2005
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
-----------------------------------------------
Teresa Lynne Silverstein
/s/ Teresa Lynne Silverstein
-----------------------------------------------
Page 12 of 13 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: January 20, 2005
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
-----------------------------------------------
Teresa Lynne Silverstein
/s/ Teresa Lynne Silverstein
-----------------------------------------------
Page 13 of 13 pages
EXHIBIT B
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on December 1, 2004 (the "Effective Date"), by and among Gerry M. Ritterman
(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, 1,500 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.
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 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.
3. 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 the Shares, 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 constitutes 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.
SELLER: PURCHASERS:
FIRST TENNESSEE BK NATL ASSOC A/C
MELVILLE C LYNNETTE P MORRIS TUA
DTD 12/20/86 FBO MELANIE M GLAZER
A/C 5001080
/s/ Gerry M. Ritterman By:/s/ Melanie Glazer
------------------------------ ------------------------------
Gerry M. Ritterman Melanie Glazer
ZEALOUS INCOME PARTNERS LP A/C OF
CORR B/D STROME SEC
By:/s/ Milton "Todd" Ault III
------------------------------
Name: Milton "Todd" Ault III
----------------------------
Title: Managing Member
---------------------------
EXHIBIT A
----------------------------------------------------- --------------------- ---------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
----------------------------------------------------- --------------------- ---------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILLE C 1,400 $140,000
LYNNETTE P MORRIS TUA DTD 12/20/86 FBO MELANIE M
GLAZER A/C 5001080
----------------------------------------------------- --------------------- ---------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME
SEC 100 $10,000
----------------------------------------------------- --------------------- ---------------------
TOTALS: 1,500 $150,000
----------------------------------------------------- --------------------- ---------------------
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: December 1, 2004
SELLER:
/s/ Gerry M. Ritterman
-----------------------------------------
Gerry M. Ritterman
Schedule 1
---------------------------------------------------------------- ----------------------
Purchaser Number of
Shares Purchased
---------------------------------------------------------------- ----------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILLE C LYNNETTE P MORRIS 1,400
TUA DTD 12/20/86 FBO MELANIE M GLAZER A/C 5001080
---------------------------------------------------------------- ----------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME SEC 100
---------------------------------------------------------------- ----------------------
TOTALS: 1,500
---------------------------------------------------------------- ----------------------
EXHIBIT C
INSTRUCTION LETTER TO TRANSFER AGENT
December 1, 2004
Franklin Capital Corporation
100 Wilshire Boulevard, 15th Floor, Suite 1500
Santa Monica, California 90401
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:
/s/ Gerry M. Ritterman
-----------------------------------------
Gerry M. Ritterman
Schedule 1
---------------------------------------------------------------- ----------------------
Purchaser Number of
Shares Purchased
---------------------------------------------------------------- ----------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILLE C LYNNETTE P MORRIS 1,400
TUA DTD 12/20/86 FBO MELANIE M GLAZER A/C 5001080
---------------------------------------------------------------- ----------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME SEC 100
---------------------------------------------------------------- ----------------------
TOTALS: 1,500
---------------------------------------------------------------- ----------------------
Please confirm your agreement and acceptance of the foregoing by signing
below where indicated and returning a signed copy to the undersigned.
Very truly yours,
/s/ Gerry M. Ritterman
---------------------------
Gerry M. Ritterman
Confirmed and agreed to this
1st day of December 2004:
THE PURCHASERS:
FIRST TENNESSEE BK NATL ASSOC A/C MELVILLE C
LYNNETTE P MORRIS TUA DTD 12/20/86 FBO MELANIE
M GLAZER A/C 5001080
By:/s/ Melanie Glazer
---------------------------------------------
Melanie Glazer
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D
STROME SEC
By:/s/ Milton "Todd" Ault III
---------------------------------------------
Name: Milton "Todd" Ault III
-------------------------------------------
Title: Managing Member
------------------------------------------
EXHIBIT C
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on December 1, 2004 (the "Effective Date"), by and among Mark E. Rattner
(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, 2,000 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.
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 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.
3. 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 the Shares, 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 constitutes 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.
SELLER: PURCHASERS:
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
/s/ Mark E. Rattner By:/s/ Melanie Glazer
------------------------------------ ------------------------------------
Mark E. Rattner Melanie Glazer
ZEALOUS INCOME PARTNERS LP A/C OF CORR
B/D STROME SEC
By:/s/ Milton "Todd" Ault III
------------------------------------
Name: Milton "Todd" Ault III
----------------------------------
Title: Managing Member
---------------------------------
ZODIAC INVESTMENT PARTNERS, L.P.
By:/s/ Milton "Todd" Ault III
------------------------------------
Name: Milton "Todd" Ault III
----------------------------------
Title: Managing Member
---------------------------------
EXHIBIT A
-----------------------------------------------------------------------------------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
-----------------------------------------------------------------------------------------------
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 1,000 $100,000
-----------------------------------------------------------------------------------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME
SEC 500 $50,000
-----------------------------------------------------------------------------------------------
ZODIAC INVESTMENT PARTNERS, L.P. 500 $50,000
-----------------------------------------------------------------------------------------------
TOTALS: 2,000 $200,000
-----------------------------------------------------------------------------------------------
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: December 1, 2004
SELLER:
/s/ Mark E. Rattner
-----------------------------------------
Mark E. Rattner
Schedule 1
-----------------------------------------------------------------------------------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
-----------------------------------------------------------------------------------------------
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 1,000 $100,000
-----------------------------------------------------------------------------------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME
SEC 500 $50,000
-----------------------------------------------------------------------------------------------
ZODIAC INVESTMENT PARTNERS, L.P. 500 $50,000
-----------------------------------------------------------------------------------------------
TOTALS: 2,000 $200,000
-----------------------------------------------------------------------------------------------
EXHIBIT C
INSTRUCTION LETTER TO TRANSFER AGENT
December 1, 2004
Franklin Capital Corporation
100 Wilshire Boulevard, 15th Floor, Suite 1500
Santa Monica, California 90401
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:
/s/ Mark E. Rattner
-----------------------------------------
Mark E. Rattner
Schedule 1
-----------------------------------------------------------------------------------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
-----------------------------------------------------------------------------------------------
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 1,000 $100,000
-----------------------------------------------------------------------------------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME
SEC 500 $50,000
-----------------------------------------------------------------------------------------------
ZODIAC INVESTMENT PARTNERS, L.P. 500 $50,000
-----------------------------------------------------------------------------------------------
TOTALS: 2,000 $200,000
-----------------------------------------------------------------------------------------------
EXHIBIT D
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on December 1, 2004 (the "Effective Date"), by and among John Nebens and
Meg Nebens (collectively, 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.
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 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.
3. 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 the Shares, 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 constitutes 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.
SELLER: PURCHASERS:
ZEALOUS INCOME PARTNERS LP A/C OF
CORR B/D STROME SEC
/s/ John Nebens By:/s/ Milton "Todd" Ault III
--------------------------------- ------------------------------
John Nebens
Name: Milton "Todd" Ault III
----------------------------
Title: Managing Member
---------------------------
/s/ Meg Nebens
---------------------------------
Meg Nebens
EXHIBIT A
----------------------------------------------------- --------------------- ---------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
----------------------------------------------------- --------------------- ---------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME 500 $50,000
SEC
----------------------------------------------------- --------------------- ---------------------
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 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: December 1, 2004
SELLER:
/s/ John Nebens
-----------------------------------------
John Nebens
/s/ Meg Nebens
-----------------------------------------
Meg Nebens
Schedule 1
---------------------------------------------------------------- ----------------------
Purchaser Number of
Shares Purchased
---------------------------------------------------------------- ----------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME SEC 500
---------------------------------------------------------------- ----------------------
TOTALS: 500
---------------------------------------------------------------- ----------------------
EXHIBIT C
INSTRUCTION LETTER TO TRANSFER AGENT
December 1, 2004
Franklin Capital Corporation
100 Wilshire Boulevard, 15th Floor, Suite 1500
Santa Monica, California 90401
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:
/s/ John Nebens
-----------------------------------------
John Nebens
/s/ Meg Nebens
-----------------------------------------
Meg Nebens
Schedule 1
---------------------------------------------------------------- ----------------------
Purchaser Number of
Shares Purchased
---------------------------------------------------------------- ----------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME SEC 500
---------------------------------------------------------------- ----------------------
TOTALS: 500
---------------------------------------------------------------- ----------------------
EXHIBIT E
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on December 1, 2004 (the "Effective Date"), by and among Daniel S. Kampel
(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.
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 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.
3. 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 the Shares, 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 constitutes 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.
SELLER: PURCHASERS:
ZEALOUS INCOME PARTNERS LP A/C OF CORR
B/D STROME SEC
/s/ Daniel S. Kampel By:/s/ Milton "Todd" Ault III
------------------------------------ ------------------------------------
Daniel S. Kampel
Name: Milton "Todd" Ault III
----------------------------------
Title: Managing Member
---------------------------------
EXHIBIT A
-----------------------------------------------------------------------------------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
-----------------------------------------------------------------------------------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME
SEC 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 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: December 1, 2004
SELLER:
/s/ Daniel S. Kampel
-----------------------------------------
Daniel S. Kampel
Schedule 1
--------------------------------------------------------------------------------
Purchaser Number of
Shares Purchased
--------------------------------------------------------------------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME SEC 500
--------------------------------------------------------------------------------
TOTALS: 500
--------------------------------------------------------------------------------
EXHIBIT C
INSTRUCTION LETTER TO TRANSFER AGENT
December 1, 2004
Franklin Capital Corporation
100 Wilshire Boulevard, 15th Floor, Suite 1500
Santa Monica, California 90401
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:
/s/ Daniel S. Kampel
-----------------------------------------
Daniel S. Kampel
Schedule 1
--------------------------------------------------------------------------------
Purchaser Number of
Shares Purchased
--------------------------------------------------------------------------------
ZEALOUS INCOME PARTNERS LP A/C OF CORR B/D STROME SEC 500
--------------------------------------------------------------------------------
TOTALS: 500
--------------------------------------------------------------------------------
EXHIBIT F
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on December 1, 2004 (the "Effective Date"), by and among Leslie Murdock
(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, 250 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.
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 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.
3. 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 the Shares, 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 constitutes 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.
SELLER: PURCHASERS:
FIRST TENNESSEE BK NATL ASSOC A/C
MELVILE C LYNETTE P MORRIS TR DTD
1/30/87 FBO MELANIE M GLAZER A/C
5001081
/s/ Leslie Murdock By: /s/ Melanie Glazer
------------------------------------ ------------------------------
Leslie Murdock Melanie Glazer
EXHIBIT A
----------------------------------------------------- --------------------- ---------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
----------------------------------------------------- --------------------- ---------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILE C LYNETTE 250 $25,000
P MORRIS TR DTD 1/30/87 FBO MELANIE M GLAZER A/C
5001081
----------------------------------------------------- --------------------- ---------------------
TOTALS: 250 $25,000
----------------------------------------------------- --------------------- ---------------------
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: December 1, 2004
SELLER:
/s/ Leslie Murdock
-----------------------------------------
Leslie Murdock
Schedule 1
---------------------------------------------------------------- ----------------------
Purchaser Number of
Shares Purchased
---------------------------------------------------------------- ----------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILE C LYNETTE P MORRIS 250
TR DTD 1/30/87 FBO MELANIE M GLAZER A/C 5001081
---------------------------------------------------------------- ----------------------
TOTALS: 250
---------------------------------------------------------------- ----------------------
EXHIBIT C
INSTRUCTION LETTER TO TRANSFER AGENT
December 1, 2004
Franklin Capital Corporation
100 Wilshire Boulevard, 15th Floor, Suite 1500
Santa Monica, California 90401
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:
/s/ Leslie Murdock
-----------------------------------------
Leslie Murdock
Schedule 1
---------------------------------------------------------------- ----------------------
Purchaser Number of
Shares Purchased
---------------------------------------------------------------- ----------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILE C LYNETTE P MORRIS 250
TR DTD 1/30/87 FBO MELANIE M GLAZER A/C 5001081
---------------------------------------------------------------- ----------------------
TOTALS: 250
---------------------------------------------------------------- ----------------------
EXHIBIT G
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on December 1, 2004 (the "Effective Date"), by and among Wendy S. Brown
(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, 250 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.
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 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.
3. 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 the Shares, 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 constitutes 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.
SELLER: PURCHASERS:
FIRST TENNESSEE BK NATL ASSOC A/C
MELVILE C LYNETTE P MORRIS TR DTD
1/30/87 FBO MELANIE M GLAZER A/C
5001081
/s/ Wendy S. Brown By: /s/ Melanie Glazer
------------------------------------ ------------------------------------
Wendy S. Brown Melanie Glazer
EXHIBIT A
-----------------------------------------------------------------------------------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
-----------------------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILE C LYNETTE
P MORRIS TR DTD 1/30/87 FBO MELANIE M GLAZER A/C
5001081 250 $25,000
-----------------------------------------------------------------------------------------------
TOTALS: 250 $25,000
-----------------------------------------------------------------------------------------------
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: December 1, 2004
SELLER:
/s/ Wendy S. Brown
-----------------------------------------
Wendy S. Brown
Schedule 1
--------------------------------------------------------------------------------
Purchaser Number of
Shares Purchased
--------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILE C LYNETTE P MORRIS
TR DTD 1/30/87 FBO MELANIE M GLAZER A/C 5001081 250
--------------------------------------------------------------------------------
TOTALS: 250
--------------------------------------------------------------------------------
EXHIBIT C
INSTRUCTION LETTER TO TRANSFER AGENT
December 1, 2004
Franklin Capital Corporation
100 Wilshire Boulevard, 15th Floor, Suite 1500
Santa Monica, California 90401
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:
/s/ Wendy S. Brown
-----------------------------------------
Wendy S. Brown
Schedule 1
--------------------------------------------------------------------------------
Purchaser Number of
Shares Purchased
--------------------------------------------------------------------------------
FIRST TENNESSEE BK NATL ASSOC A/C MELVILE C LYNETTE P MORRIS
TR DTD 1/30/87 FBO MELANIE M GLAZER A/C 5001081 250
--------------------------------------------------------------------------------
TOTALS: 250
--------------------------------------------------------------------------------
EXHIBIT H
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into on December 1, 2004 (the "Effective Date"), by and among Hiram Lazar (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, 100 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.
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 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.
3. 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 the Shares, 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 constitutes 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.
SELLER: PURCHASERS:
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
/s/ Hiram Lazar By: /s/ Melanie Glazer
------------------------------------ ----------------------------------
Hiram Lazar Melanie Glazer
EXHIBIT A
----------------------------------------------------- --------------------- ---------------------
Purchaser Number of Aggregate
Shares Purchased Purchase Price
----------------------------------------------------- --------------------- ---------------------
1ST TENN BK NA SUCC TTEE U/A MELVILLE C MORRIS 100 $10,000
LYNETTE P MORRIS DTD 8/2/65 FBO MELANIE N MORRIS
A/C 50700010
----------------------------------------------------- --------------------- ---------------------
TOTALS: 100 $10,000
----------------------------------------------------- --------------------- ---------------------
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: December 1, 2004
SELLER:
/s/ Hiram Lazar
-----------------------------------------
Hiram Lazar
Schedule 1
---------------------------------------------------------------- ----------------------
Purchaser Number of
Shares Purchased
---------------------------------------------------------------- ----------------------
1ST TENN BK NA SUCC TTEE U/A MELVILLE C MORRIS LYNETTE P 100
MORRIS DTD 8/2/65 FBO MELANIE N MORRIS A/C 50700010
---------------------------------------------------------------- ----------------------
TOTALS: 100
---------------------------------------------------------------- ----------------------
EXHIBIT C
INSTRUCTION LETTER TO TRANSFER AGENT
December 1, 2004
Franklin Capital Corporation
100 Wilshire Boulevard, 15th Floor, Suite 1500
Santa Monica, California 90401
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:
/s/ Hiram Lazar
-----------------------------------------
Hiram Lazar
Schedule 1
---------------------------------------------------------------- ----------------------
Purchaser Number of
Shares Purchased
---------------------------------------------------------------- ----------------------
1ST TENN BK NA SUCC TTEE U/A MELVILLE C MORRIS LYNETTE P 100
MORRIS DTD 8/2/65 FBO MELANIE N MORRIS A/C 50700010
---------------------------------------------------------------- ----------------------
TOTALS: 100
---------------------------------------------------------------- ----------------------