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Exhibit 10.7
TERMINATION AND RELEASE AGREEMENT
THIS
TERMINATION
AND RELEASE
AGREEMENT is made and entered into as of
January 6, 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) Silvano A.
DiGenova, an
individual resident of the State of California (together with his
heirs and legatees,
"DiGenova"),
(v) solely with
respect to Section
3(b) and
Section 3(c), Stanford
International Bank,
Ltd., a company organized under the
laws of Antigua and Barbuda (together with its successors,
"SIBL"), (vi)
solely
with respect to Section 3(b), Stanford Financial Group Company,
a corporation
organized under the laws of the State of Florida (together with its successors,
"SFG"), and (vii)
solely with respect to Section 3(a), Section 3(b) and Section
3(c), 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 the date hereof (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 and
DiGenova are key
stockholders of
Superior, SFG is
the
primary lender to
Superior, DiGenova is a principal
executive officer and a
director of 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;
WHEREAS, DiGenova and
each Stanford
Party desires to
execute and deliver
this Agreement to
induce Parent,
Merger Sub and the
Company to enter into the
Merger Agreement and consummate the Merger and the other
Transactions; and
WHEREAS, the
execution and delivery of this Agreement by DiGenova,
the
Stanford Parties and
the Company is a condition precedent to Parent and Merger
Sub entering into the Merger Agreement.
A G R E E M E N T
-----------------
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.
Resignations.
Effective at the Effective Resignation Time (as
defined below),
DiGenova hereby
resigns, voluntarily and without cause, as
a
director of the Company Board, from all offices of the Company
held by him, and
as an employee of the Company. The Company hereby accepts such
resignations.
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Section 2.
Release.
(a) Definitions. The
following terms, whenever used in this Agreement,
shall have the meanings ascribed to them below:
"Immediate Family"
means, with respect to any individual, such
individual's (i)
children,
stepchildren,
grandchildren,
parents,
stepparents,
grandparents, spouse,
former spouses, siblings, nieces,
nephews, or current or
former mothers-in-law,
fathers-in-law, sons-in-law,
daughters-in-law, brothers-in-law or sisters-in-law, including in
each case
by
adoption, and (ii) any other individual sharing such individual's
household (other than a tenant or employee).
"Improper Conduct"
means, with respect to any Person, acts taken, or
omissions made, by such Person (i) other than in good faith, (ii)
which are
clearly
inconsistent with,
or outside the scope of, such Person's
employment, offices
and duties, or (iii)
which involve (A)
breach of any
fiduciary duties, (B)
ultra vires acts, (C) breach of any Contract of such
Person with
the Company or any of its subsidiaries, including any
employment agreement, confidentiality agreement or assignment of
inventions
agreement, (D) gross
negligence, reckless
conduct or willful
misconduct,
(E)
fraud or material misrepresentation, (F) material, reckless or
willful
violation of applicable Law,
(G) self-dealing or
any conflicting
interest
transaction, including
a transaction with any member of such Person's
Affiliates or Immediate Family, or (H) knowledge, or reckless
disregard for
the
fact, that any of the representations and warranties made by the
Company in the Merger
Agreement on the date
hereof (as
modified by the
Superior Disclosure
Schedules),
contain, on the date hereof, any untrue
statement of a material fact, or omit to state, on the date hereof, any
material fact
necessary in order to make the statements, representations
and
certifications
contained in Article IV of the Merger
Agreement,
in
light of the
circumstances under
which they are made, not misleading,
without properly reporting such untrue statement or material fact
to Parent
in
writing prior to the date hereof.
(b) Release by DiGenova. DiGenova, on behalf of himself and each
member
of his Immediate Family, and their respective heirs,
legatees, successors and
assigns (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,
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 DiGenova or any other
Releasor now
has or has ever had against the respective Releasees arising contemporaneously
with or prior to the date hereof or on account of or arising
out of any matter,
cause or event occurring, whether in DiGenova'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 officer, employee,
director, 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 date hereof, 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
Parent, 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
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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 date hereof, and (F) any claims arising out of his
employment with the
Company or the
termination of such
employment,
including
claims for severance,
termination,
separation, "golden
parachute" or
similar
payments; provided,
however, that nothing contained herein shall operate to
release any of the following Claims: (i) any contractual Liabilities of Parent
or Merger Sub under the Merger Agreement or any Related Agreement; (ii) any
statutory Liabilities
of Parent under the Securities Act, Exchange Act or the
SEC Rules in connection with that certain Securities Exchange Agreement, made
and entered into as of the date hereof (the "Securities Exchange
Agreement"), by
and between Parent and DiGenova; (iii) any claims for
indemnification from
the
Company by DiGenova in
his capacity as an
officer or director of the Company,
but only to the extent such claims are not based on Improper
Conduct; and (iv)
any claims
that may not be
released as a matter of public policy or other
applicable Law. Without limiting the generality of the foregoing,
DIGENOVA ALSO
SPECIFICALLY AGREES
AND ACKNOWLEDGES HE IS
WAIVING ANY RIGHT TO RECOVERY BASED
ON STATE OR FEDERAL
SEX, PREGNANCY,
RACE, COLOR, NATIONAL ORIGIN, MARITAL
STATUS, RELIGION,
VETERAN STATUS, DISABILITY, SEXUAL ORIENTATION, MEDICAL
CONDITION OR OTHER
ANTI-DISCRIMINATION
LAWS, INCLUDING UNDER TITLE VII, THE
AMERICANS WITH
DISABILITIES ACT AND
THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING
ACT, ALL AS
AMENDED, WHETHER SUCH CLAIM BE BASED UPON AN ACTION FILED BY
EMPLOYEE OR BY A
GOVERNMENTAL
AGENCY; provided that this release does not
release claims that cannot be released as a matter of law.
(c) Release by the Company. Merger Sub and Superior, each on
behalf of
itself and its
predecessors,
successors and assigns, hereby irrevocably and
forever releases and discharges DiGenova, and his successors and assigns,
from
any and all Claims which Merger Sub or Superior, or their respective
predecessors,
successors and assigns, now has or has ever had against
DiGenova
or his heirs, successors and assigns arising contemporaneously with or prior
to
the date hereof or on account of or arising out of any matter, cause or event
occurring in
DiGenova's
capacity as an employee, officer or director of
Superior; provided,
however, that nothing contained herein shall operate to
release (i) any Claims
based on Improper Conduct, (ii) any Claims for money
borrowed from the Company or any subsidiary, (iii) any Claims for the return
of
property of Superior,
the Company or any
subsidiary, (iv) any
Claims under or
arising from any Contract with Superior or any Subsidiary thereof which is not
being terminated
hereby, or (v) any Claims for indemnification pursuant to
Article VIII of the Merger Agreement or the Escrow Agreement
(as defined in the
Merger Agreement) or pursuant to any Transaction Document to which
DiGenova is a
party or signatory.
(d)
No Actions. Upon the
Closing, DiGenova
irrevocably
covenants to
refrain, and to cause
his Affiliates and each member of his Immediate Family 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
2(b); provided
that this Section 2
does not preclude
filing a charge with the
Equal Employment Opportunity Commission. Without limiting the generality of
the
foregoing, DiGenova
hereby agrees not to bring any action or make any claim for
indemnification
against the
Company or Merger Sub or any other
Releasee by
reason of the fact that DiGenova was a director,
officer, manager, employee,
consultant, agent or
other Representative
of the Company or any predecessor
thereto or any of their respective Subsidiaries or Affiliates or was
serving at
the request
of the Company or any such other Person as a partner, member,
manager, trustee,
director, officer,
manager, employee,
consultant, agent
or
other Representative
of another
Entity (whether such claim or action is for
judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses,
expenses or
otherwise and whether such claim is pursuant to any law,
organizational
document, contract
or otherwise) with respect to any Action
brought by
Parent or the Surviving Corporation against DiGenova or his
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successors or assigns (whether such action is pursuant to the
Merger Agreement,
applicable law or
otherwise),
except to the
extent DiGenova proves in such
Action brought by Parent or the Surviving Corporation that DiGenova's acts or
omissions in
respect of which
DiGenova is seeking indemnification did not
constitute Improper Conduct. For avoidance of doubt,
nothing in this
Section 2
shall prevent or limit
the right of Parent or any Releasee to seek indemnity
pursuant to the
provisions of the
Merger Agreement
and Escrow
Agreement in
respect of any
claim or demand brought by DiGenova against Parent or any
Releasee, or otherwise.
(e) Indemnity.
Without in any way limiting any of the rights and
remedies otherwise available to any Releasee, DiGenova shall indemnify,
defend
and hold harmless
each Releasee from and against all Losses, Liabilities,
Claims, damages
(including
incidental and
consequential damages)
or expenses
(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 DiGenova or any
Releasor of any Claim or other matter sought to be released
pursuant to
Section
2(b), (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 DiGenova or any
other Releasor
against such third
party of any Claims or other matters sought to be released
pursuant to
Section 2(b), or (iii) the breach by DiGenova of the terms of
Section 2(d).
(f) Unknown Claims. It is the intention of the Parties that the
release
provisions in Section
2(b) and Section 2(c) shall be effective as a bar to each
and every Claim,
demand and action
specified in Section
2(b) and Section 2(c)
(whether known or unknown). In furtherance of this
intention,
DiGenova 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:
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.
DiGenova acknowledges
that he 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
2(b) and Section
2(c) shall be and
remain in full force
and effective in all respects notwithstanding any such differences
or additional
facts.
Section 3. Terminations. Without limitation of Section 2, the
Parties agree
as follows:
(a) Shareholders'
Agreement.
SVCH, DiGenova and the Company
hereby
consent and agree (i) to terminate that certain Shareholders' Agreement, made
and entered
into as of
April 3, 2002 (as Amended from time to time, the
"Shareholders Agreement"), by and between DiGenova, SVCH and the
Company, in its
entirety, (ii) to
cancel and terminate any Liens or Encumbrance on any Com
