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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
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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. 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 a
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