RECITALS

                                                                  Exhibit 10.1


                   AMENDMENT NO. 2 TO LETTER OF UNDERSTANDING

           THIS AMENDMENT NO. 2 TO LETTER OF UNDERSTANDING (this "AMENDMENT") is
made and entered into as of September 30, 2004, by and between FRANKLIN CAPITAL
CORPORATION, a Delaware corporation ("FRANKLIN"), and XXXX XXXXXX & COMPANY
INVESTMENT MANAGEMENT LLC, a Delaware limited liability company ("XXXX XXXXXX").
Capitalized terms used but not defined herein shall have the meanings given to
them in the XXX (as defined below).

                                    RECITALS

           WHEREAS, Franklin and Xxxx Xxxxxx are parties to that certain Letter
of Understanding, dated as of June 23, 2004, as amended on August 26, 2004 (the
"XXX"), and desire to amend the XXX as set forth in this Amendment.

           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:

                                    AMENDMENT

          1.   AMENDMENT OF XXX.

               1.1 Section 3.4 of the XXX shall be amended and restated in its
entirety to read as follows:

                    "3.4 EXPENSES. The parties hereto acknowledge and agree that
               each party shall be responsible for and pay all of its own
               expenses incurred in connection with the matters contemplated by
               this XXX."

               1.2 The reference to "November 31, 2004" in clause (iii) of the
first sentence of Section 5 shall be deleted and replaced with a reference to
"November 30, 2004".

          2.   MISCELLANEOUS.

               2.1 NO OTHER AMENDMENT. Except as specifically amended by this
Amendment, the terms and conditions of the XXX shall remain unchanged and in
full force and effect.

               2.2 COUNTERPARTS. This Amendment may be executed in counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.



               IN WITNESS WHEREOF, the parties have duly executed and delivered
this AMENDMENT NO. 2 TO LETTER OF UNDERSTANDING as of the date first written
above.

                              FRANKLIN CAPITAL CORPORATION

                              /s/ Xxxxxxx X. Xxxxx
                              --------------------------------------------------
                              XXXXXXX X. XXXXX
                              Chairman and Chief Executive Officer



                              XXXX XXXXXX & COMPANY INVESTMENT MANAGEMENT LLC

                              /s/ Xxxxxx "Xxxx" Xxxx III
                              --------------------------------------------------
                              XXXXXX "XXXX" XXXX III
                              Managing Partner