EXHIBIT 10.4
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into as of the
10th day of December, 2004, by and among Franklin Capital Corporation (the
"Company"), and Apex Financial Management Services L.L.C. (the "Consultant").
WITNESSETH:
WHEREAS, Consultant is recognized as an Accounting Consulting Company with an
expertise in private equity; and
WHEREAS, the Company desires to retain Consultant to provide services related to
and in support of efforts in which Consultant has expertise;
NOW, THEREFORE, in consideration of the mutual conditions and promises herein
contained, the parties hereto agree as follows:
1. CONSULTING SERVICES. Consultant shall furnish the Company
professional services that include but are not limited to the
following:
(i) Comprehensive financial support including the preparation of
quarterly and annual financial statements.
(ii) Creation of documents, spreadsheets and analyses to facilitate
the year-end audit and federal tax return preparation by the
Company's external auditors.
(iii) Assistance in any legal proceedings relating to the
performance or nonperformance of any act concerning the activities
of the Company.
(iv) Attendance at meetings as reasonably required.
2. TERM. The term of this Agreement shall begin on December 10, 2004
and shall terminate upon the earlier of: (i) the cessation of the
business of the Company; (ii) the death or substantial disability of
the Consultant's Managing Member, William B. Horne; or (iii) May 10,
2005.
3. EXTENSION AND TERMINATION.
(i) If Consultant shall be terminated by the Company, Consultant
shall be entitled to any amounts due and owing as compensation under
this Agreement to the extent earned, as defined herein, on a
pro-rata basis, plus reimbursement for expenses.
(ii) This Agreement can be terminated by either party on sixty (60)
days written notice provided in accordance with the terms hereof.
4. DISABILITY OR DEATH. Substantially disabled is defined as a period
of thirty (30) consecutive days that William B. Horne is unable, as
a result of any physical, mental or emotional illness, ailment, or
accident to effectively discharge Consultant's duties hereunder. If
William B. Horne shall be substantially disabled as defined herein,
the Company may then immediately upon Notice to the Consultant
terminate this Agreement and the Company's obligation to pay the
Consultant the Compensation hereunder.
5. COMPENSATION. For all services that Consultant renders to the
Company or any of its subsidiaries or affiliates during the term
hereof, the Company will pay Consultant $4,200.00 per month, payable
on the last day of each calendar month. If any month that this
Agreement is in effect consists of less than the entire month, the
amount payable shall be determined by an amount equal to $4,200.00
multiplied by the actual number of days the Agreement is in effect
for that month divided by 30 days. Additionally, at such time as the
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Company is able to issue non-qualified options to its employees and
consultants, the Company will grant Consultant an option for 26,000
shares of the common stock of the Company. Such options will vest
over a two year period at an exercise price equal to the closing
price of the Company's common stock on the date of grant. Specific
terms of the option grant will be detailed in a stock option
agreement executed between the Company and the Consultant.
6. CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY. Each party
acknowledges that all material and information which has or will
come into the possession and knowledge of each in connection with
this Agreement or the performance hereof, consists of confidential
and proprietary data, whose disclosure to or use by third parties
will be damaging. Both parties, therefore, agree to hold such
material and information in strictest confidence, not to make use
thereof other than for the performance of this Agreement, to release
it only to employees requiring such information, and not to release
or disclose it to any other party.
7. ACTS DISCREDITABLE. Consultant shall at all times refer to the
Company in terms that further their business objectives. Consultant
shall not refer to the Company in a manner that damages their
position in the marketplace.
8. EXPENSES. The Company shall be responsible for any and all expenses
which Consultant reasonably incurs in performing the duties assigned
hereunder. The Consultant shall be responsible to provide reasonable
corroboration to the Company of any such expenses.
9. SEVERABLE PROVISIONS. The provisions of this Agreement are
severable, and if any one or more provisions may be determined to be
illegal or otherwise unenforceable, in whole or in part, the
remaining provisions, and any partially enforceable provision to the
extent enforceable in any jurisdiction, shall nevertheless be
binding and enforceable.
10. BINDING AGREEMENT. The rights and obligations of the Company under
this Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Company. The rights,
obligations and duties of Consultant hereunder may not be assigned
or delegated without the Company's prior written consent.
11. RELATIONSHIP OF PARTIES. The Company and Consultant are independent
contractors. Both parties acknowledge and agree that Consultant's
engagement hereunder is not exclusive and that either party may
provide to, or retain from, others similar such services provided
that it does so in a manner that does not otherwise breach this
Agreement. Neither party is, nor shall claim to be, a legal agent,
representative, partner or employee of the other, and neither shall
have the right or authority to contract in the name of the other nor
shall it assume or create any obligations, debts, accounts or
liabilities for the other.
12. NOTICES. Any notices or other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have
been duly given and delivered when delivered in person, two (2) days
after being mailed postage prepaid by certified or registered mail
with return receipt requested, or when delivered by overnight
delivery service or by facsimile to the recipient at the following
address or facsimile number, or to such other address or facsimile
number as to which the other party subsequently shall have been
notified in writing by such recipient:
If to the Company:
Franklin Capital Corporation
100 Wilshire Blvd.
Suite 1500
Santa Monica, CA 90401
Attn: Milton C. Ault, III
Facsimile (310) 752-1481
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If to the Consultant:
Apex Financial Management Services
25946 SE 22nd Place
Sammamish, WA 98075
Attn: William B. Horne
Facsimile (206) 262-0843
13. WAIVER. Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a
waiver of any such provision or provisions as to future violations
thereof, nor prevent that party thereafter from enforcing each and
every other provision of this Agreement. The rights granted the
parties herein are cumulative and the waiver by a party of any
single remedy shall not constitute a waiver of such party's right to
assert all other legal remedies available to him or it under the
circumstances.
14. GOVERNING LAW. This Agreement will be governed by and interpreted in
accordance with the substantive laws of the State of California
without reference to conflicts of law.
15. CAPTIONS AND SECTION HEADINGS. The various captions and section
headings contained in this Agreement are inserted only as a matter
of convenience and in no way define, limit or extend the scope or
intent of any of the provisions of this Agreement.
16. ENTIRE AGREEMENT. With respect to its subject matter, this Agreement
and its Exhibits constitute the entire understanding of the parties
superseding all prior agreements, understandings, negotiations and
discussions between them whether written or oral, and there are no
other understandings, representations, warranties or commitments
with respect thereto. Further, no amendments to this Agreement shall
be effective unless in writing and signed by duly authorized
representative of both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first written above.
FRANKLIN CAPITAL CORPORATION
By: /s/ Milton Ault
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Milton "Todd" Ault III
CEO
APEX FINANCIAL MANAGEMENT SERVICES, L.L.C.
By: /s/ William B. Horne
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William B. Horne
Managing Member
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