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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 Security
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