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Exhibit 10.6
FORBEARANCE AGREEMENT
THIS
FORBEARANCE AGREEMENT
("Forbearance
Agreement") made as of
this 6th
day of January, 2007,
between SUPERIOR GALLERIES, INC., a Delaware corporation
(the "Borrower") and STANFORD INTERNATIONAL BANK LTD., a company
organized under
the laws of Antigua (the "Lender").
W I T N E S S E T H :
WHEREAS, pursuant to a
Commercial Loan and Security Agreement originally
dated October 1, 2003, as amended as of March 29, 2005 and as
further amended on
April 7, 2006,
Stanford Financial
Group Company ("SFG")
has provided
certain
credit facilities to Borrower (the "Loan Agreement"). On November 30, 2004, the
Lender was assigned all of SFG's right, title and interest in the
Loan Agreement
and the promissory note issued thereunder.
WHEREAS, pursuant to the Loan Agreement, Borrower has executed that
certain
Commercial Note
originally
dated March 29, 2005 in the principal amount of
$10,850,000 (as the
same now exists or may
hereafter be amended, restated,
replaced, renewed,
extended,
supplemented,
substituted or otherwise modified,
collectively, the "Note"); and
WHEREAS, the Borrower hereby acknowledges, confirms and agrees that it is
in default
of its obligations under the Loan Agreement and the Note and it
continues to be unable to perform its obligations thereunder, which defaults
continue to exist
and which Lender has suffered to exist (the "Existing
Defaults"), and as a result of the Existing Defaults, the Lender is
entitled, as
of the date hereof, to exercise any and all of its rights and
remedies under the
Loan Agreement,
the Note, applicable law or otherwise to
realize upon certain
collateral (the
"Collateral") and to
collect the
obligations owing to
Lender
under the Loan Agreement and the Note; and
WHEREAS, in connection
with the transactions
contemplated by that certain
Amended and Restated
Agreement and Plan of Merger and Reorganization, of even
date herewith, by and
among DGSE Companies,
Inc., a Nevada
corporation, DGSE
Merger Corp.,
a Delaware corporation, the Borrower and the Lender, as
stockholder agent (the "Merger Agreement"), the Borrower has requested that
the
Lender forbear
for a limited
period of time from
exercising
its rights and
remedies under the Loan Agreement and the Note; and
WHEREAS, the Lender has advised the Borrower that the Lender will
not waive
the Existing Defaults
and desires to
preserve the rights and remedies arising
under the Loan Agreement and the Note as a result of the existence and
continuance of the Existing Defaults; and
WHEREAS, subject to
the terms and conditions set forth herein, Lender has
agreed to accommodate the request of the Borrower to forbear from
exercising the
rights and remedies of
the Lender under the Loan Agreement and the Note for a
limited period of time.
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NOW
THEREFORE, in
consideration of the
mutual covenants
contained herein
and other good and valuable consideration, the receipt and sufficiency of
which
are hereby
acknowledged,
the parties agree that the foregoing preliminary
statements are true and correct and further agree as follows:
AGREEMENT
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1.
Recitals. Each party
hereto agrees that the foregoing recitals are true
and correct and are hereby incorporated herein by this
reference.
2.
Acknowledgment of Outstanding Obligations. Borrower hereby
acknowledges,
confirms and agrees that as of the date hereof, the Borrower is indebted to
the
Lender in the
aggregate principal
amount of $8,732,987.96, plus accrued and
unpaid interest and plus all costs, fees, commissions, expenses and other sums
and charges
due and owing to the
Lender under the Note, including, without
limitation, all costs
and expenses
(including attorneys'
fees and expenses)
incurred by Lender
(all of the foregoing
is collectively referred to as the
"Existing Debt"). The Borrower hereby acknowledges, confirms and agrees that as
of the date hereof,
the Existing
Debt is due and owing
by the Borrower to the
Lender without
offset, defense or counterclaim of any kind, nature or
description whatsoever.
3.
Binding Effect of Note. The Borrower hereby acknowledges, confirms and
agrees that: (a) the Loan Agreement, the Note and each of the loan
documents to
which Borrower is a
party has been duly
executed and delivered
to the Lender,
and is in full force
and effect as of the date hereof; (b) the covenants,
agreements and
obligations of Borrower contained in or incurred under the
Loan
Agreement, the Note
and each of the loan documents constitutes the legal, valid
and binding
obligations of
Borrower, are
enforceable
against Borrower, in
accordance with the respective terms and conditions thereof, and
Borrower has no
valid offset, defense
or counterclaim to the
enforcement of such
obligations;
and (c) Lender is and shall be entitled to the rights,
remedies and benefits
provided for in the
Loan Agreement,
the Note and each of the loan
documents
pursuant to
applicable
law, subject to the terms and conditions of this
Forbearance Agreement.
4.
Acknowledgment
of Liens and Secur
