Exhibit 2.6
TERMINATION AND RELEASE AGREEMENT
THIS TERMINATION AND RELEASE AGREEMENT is made and entered into as of
________, 2007 (this "Agreement"), by and among (i) DGSE Companies, Inc., a
Nevada corporation (together with its successors and permitted assigns,
"Parent"), (ii) DGSE Merger Corp., a Delaware corporation and a direct
wholly-owned subsidiary of Parent (together with its successors and permitted
assigns, "Merger Sub"), (iii) Superior Galleries, Inc., a Delaware corporation
(f/k/a Tangible Asset Galleries, Inc., a Nevada corporation) (together with its
predecessors and successors, the "Company" or "Superior"), (iv) Stanford
International Bank Ltd., a company organized under the laws of Antigua and
Barbuda (together with its successors, "SIBL"), (v) Stanford Financial Group
Company, a corporation organized under the laws of the State of Florida
(together with its successors, "SFG"), and (vi) Stanford Venture Capital
Holdings, Inc., a corporation organized under the laws of the State of Delaware
(together with its successors, "SVCH", and, together with SIBL and SFG, the
"Stanford Parties"). Capitalized terms used but not defined herein shall have
the respective meanings ascribed thereto in that certain Amended and Restated
Agreement and Plan of Merger and Reorganization, made and entered into as of
January 6, 2007 (the "Merger Agreement"), by and among Parent, Merger Sub,
Superior, and the stockholder agent.
R E C I T A L S
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WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the
Company have approved and declared advisable the Merger Agreement and the merger
of Merger Sub with and into the Company (the "Merger"), with the Company being
the surviving corporation;
WHEREAS, SIBL is a key stockholder of Superior, SFG is the primary lender
to Superior, and SVCH is a consultant to Superior;
WHEREAS, Parent has requested various Parties to terminate various
Contracts in place among various of them and Superior as a condition to Parent
consummating the Merger; and
WHEREAS, each Stanford Party desires to execute and deliver this Agreement
to induce Parent and Merger Sub to consummate the Merger and the other
Transactions; and
WHEREAS, the execution and delivery of this Agreement by the Stanford
Parties and the Company is a condition precedent to Parent and Merger Sub
consummating the Merger and the other Transactions.
A G R E E M E N T
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NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto (collectively, the "Parties"), intending to be
legally bound, hereby agree as follows as of the Effective Time:
Section 1. Release.
(a) Release. Each of the Stanford Parties, on behalf of itself and its
Affiliates (all of the foregoing, individually, a "Releasor", and, collectively,
the "Releasors"), hereby irrevocably and forever releases and discharges Parent,
the Company and Merger Sub, and each of their respective individual, joint or
mutual, past, present and future stockholders, Affiliates, controlling persons,
directors, officers, managers, employees, consultants, contractors, agents,
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financial, banking and legal advisors and other representatives, and the
respective successors and assigns of each of them, (all of the foregoing,
individually, a "Releasee" and, collectively, the "Releasees") from any and all
claims, demands, actions, orders, obligations, contracts, debts, and Liabilities
whatsoever, whether absolute or contingent, matured or unmatured, disputed or
undisputed, secured or unsecured, conditional or unconditional, accrued or
unaccrued, liquidated or unliquidated, vested or unvested, joint or several, due
or to become due, executory, determined, determinable or otherwise, both at law
and in equity, (collectively, "Claims") which any Stanford Party or any other
Releasor now has, has ever had or may hereafter have against the respective
Releasees arising contemporaneously with or prior to the Effective Time or on
account of or arising out of any matter, cause or event occurring, whether in
any Stanford Party's or any other Releasor's capacity as a direct or indirect
stockholder of the Company, as a beneficial owner or record holder of any Equity
Interests of the Company, as an consultant or adviser to the Company or in any
other capacity or due to any relationship with the Company or any of its
Subsidiaries, contemporaneously with or prior to the Effective Time, including
(a) any dissenter's, appraisal or similar rights under applicable Law, (b) any
rights to bring any lawsuit or claim action against any Person in the name or on
behalf of the Company or Merger Sub, (c) any right pursuant to any Contract or
any Releasee's Organizational Documents, (d) any claim pursuant to the
Securities Act, Exchange Act, the SEC Rules or other securities or "blue sky"
Laws, (e) any rights to indemnification or reimbursement from any Releasee,
whether pursuant to their respective Organizational Documents or pursuant to any
Contracts, applicable Law or otherwise, and whether or not relating to claims
pending on, or asserted after, the Closing Date; provided, however, that nothing
contained herein shall operate to release: (i) any indebtedness, together with
interest thereon, of the Company under the Stanford LOC; (ii) any obligations or
Liabilities of the Surviving Corporation under the Amended and Restated Stanford
LOC; (iii) any obligations or Liabilities of Parent under the limited guaranty
and security agreement entered into in connection with the Amended and Restated
Stanford LOC; (iv) any contractual Liabilities of Parent or Merger Sub under the
Merger Agreement or any Related Agreement; or (v) any statutory or regulatory
Liabilities of Parent or Merger Sub under the Securities Act, Exchange Act or
the SEC Rules in connection with the Merger and other Transactions.
(b) No Actions. Upon the Closing, each Stanford Party irrevocably
covenants to refrain, and to cause its Affiliates to refrain, from, directly or
indirectly, asserting any claim or demand, or commencing, instituting or causing
to be commenced, any Action of any kind against any Releasee, based upon any
matter purported to be released by Section 1(a).
(c) Indemnity. Without in any way limiting any of the rights and
remedies otherwise available to any Releasee, the Stanford Parties shall jointly
and severally indemnify and hold harmless each Releasee from and against all
Losses, Liabilities, Claims, damages (including incidental and consequential
damages) or expense (including costs of investigation and defense and reasonable
attorney fees), whether or not involving third party claims, arising directly or
indirectly from or in connection with (i) the assertion by or on behalf of any
Stanford Party or any Releasor of any claim or other matter sought to be
released pursuant to Section 1(a), (ii) the assertion by any third party of any
Claim or demand against any Releasee which Claim or demand arises directly or
indirectly from, or in connection with, any assertion by or on behalf of any
Stanford Party or any other Releasor against such third party of any Claims or
other matters sought to be released pursuant to Section 1(a), or (iii) the
breach by any Stanford Releasor of the terms of Section 1(b).
(d) Unknown Claims. It is the intention of the Parties that the release
provisions in Section 1(a) and Section 1(b) shall be effective as a bar to each
and every Claim, demand and action specified in Section 1(a) and Section 1(b).
In furtherance of this intention, each Stanford Party hereby waives and
relinquishes all rights and benefits under Section 1542 of the Civil Code of the
State of California, and any and all statutes of other jurisdictions to the same
or similar effect. Section 1542 of the Civil Code of the State of California
provides:
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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MIGHT HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR.
Each Stanford Party acknowledges that it may, after execution of this Agreement,
discover facts different from or in addition to those now known or believed to
be true with respect to such claims, demands or action, and agrees that the
release provisions in Section 1(a) and Section 1(b) shall be and remain in full
force and effective in all respects notwithstanding any such differences or
additional facts.
Section 2. Terminations. Without limitation of Section 1, the Parties agree
as follows:
(a) Consulting Agreement. SVCH and the Company hereby covenant and
agree (i) to terminate that certain Consulting Agreement, dated January 31, 2003
(as Amended from time to time, the "Consulting Agreement"), by and between the
Company and SVCH, in its entirety, including, notwithstanding anything to the
contrary in the Consulting Agreement, Sections 4 and 7 thereof, except for the
confidentiality obligations set forth in Sections 5(b), 5(c) and 5(d) thereof,
which shall survive, and (ii) that neither SVCH nor the Company has any
Liabilities to the other of them under the Consulting Agreement. SVCH hereby
warrants that it has complied with its obligations under Section 5 of the
Consulting Agreement.
Section 3. Representations. Each Party hereby represents and warrants to
each other Party that:
(a) It has the full power, capacity, authority and right to execute and
deliver this Agreement and to perform its obligations hereunder, and under the
Merger Agreement as affected hereby.
(b) This Agreement has been duly authorized by all necessary action and
constitutes such Party's valid and binding agreement, enforceable against such
Party in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(c) No approval, authorization, consent or filing (other than any
obligation to file certain information pursuant to the Securities Exchange Act
of 1934, as amended, and the regulations promulgated thereunder) is required in
connection with its execution, delivery and performance of this Agreement which
has not heretofore been obtained or made.
Section 4. Effectiveness. Notwithstanding any provision hereof to the
contrary, it is the intention of the Parties that this Agreement shall become
effective at the Effective Time, and the terms and provisions of Section 1 and
Section 2 shall apply as of the Effective Time. If the Merger Agreement is
terminated prior to the consummation of the Merger, the covenants contained
herein shall be deemed abandoned and this Agreement shall forthwith become null
and void and without force or effect.
Section 5. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties. Each of the Parties hereby acknowledges, represents and warrants
that (i) it has read and fully understood this Agreement and the implications
and consequences thereof; (ii) it has been represented in the preparation,
negotiation, and execution of this Agreement by legal counsel of its own choice,
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or it has made a voluntary and informed decision to decline to seek such
counsel; and (iii) it is fully aware of the legal and binding effect of this
Agreement.
Section 6. Miscellaneous. The terms and provisions of Section 1.3 and
Article X of the Merger Agreement are hereby incorporated by reference herein
and shall apply to this Agreement mutatis mutandis, as if expressly set forth
herein.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
DGSE COMPANIES, INC.
By:
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Dr. L.S. Smith
Chairman and Chief Executive Officer
DGSE MERGER CORP.
By: /s/ William H. Oyster
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William H. Oyster
Chief Executive Officer
SUPERIOR GALLERIES, INC.
By:
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Silvano DiGenova
Chief Executive Officer
STANFORD INTERNATIONAL BANK LTD.
By:
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James M. Davis
Chief Financial Officer
STANFORD FINANCIAL GROUP COMPANY
By:
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James M. Davis
Chief Financial Officer
STANFORD VENTURE CAPITAL HOLDINGS, INC.
By:
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James M. Davis
Chief Financial Officer