Exhibit 99.3
NEITHER THE SECURITIES
EVIDENCED BY THIS
CERTIFICATE
NOR THE SECURITIES FOR
WHICH THESE SECURITIES MAY BE EXERCISED (COLLECTIVELY, THE "SECURITIES") HAVE
BEEN REGISTERED
UNDER THE SECURITIES
ACT OF 1933, AS
AMENDED (THE "ACT"),
OR
UNDER THE SECURITIES
OR "BLUE SKY" LAWS OF ANY STATE (THE "SECURITIES LAWS").
THE SECURITIES
MAY NOT BE SOLD,
OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF (1) REGISTRATION AND
QUALIFICATION UNDER
THE ACT AND APPLICABLE
SECURITIES
LAWS, OR (2) AN OPINION OF COUNSEL
AND/OR
OTHER EVIDENCE REASONABLY SATISFACTORY TO THE ISSUER THAT
SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED.
THIS WARRANT IS NOT TRANSFERABLE.
DGSE COMPANIES, INC.
WARRANT TO PURCHASE 96,951 SHARES
OF COMMON STOCK
Warrant No. 1
Date of Original Issuance: January 6, 2007
This
certifies that Silvano DiGenova, an individual resident of the State
of California, or his
heirs, legatees or
executors (the
"Holder"), for
value
received, shall have
the right and obligation to purchase from DGSE Companies,
Inc., a Nevada
corporation (the "Company"), having a place of business at
2817
Forest Lane, Dallas,
Texas 75234,
Ninety-Six
Thousand Nine Hundred
Fifty-One
(96,951) fully
paid and nonassessable shares, as such number and class of
security may be adjusted as provided herein (as so adjusted,
the "Shares"),
of
the Company's common stock, par value $0.01 per share ("Common
Stock"), for cash
at a price of $0.01 per share, as such price may be adjusted as
provided herein
(as so adjusted, the
"Exercise Price"),
at the effective time
(if any) of the
acquisition (the
"Acquisition")
of Superior Galleries, Inc., a Delaware
corporation
("Superior"), by the
Company (such time,
the "Effective
Time");
provided that Holder's
obligation to purchase the Shares from the Company, and
the Company's
obligations
to sell the Shares to
the Holder,
shall cease and
expire (whether or not
the Effective Time has
occurred) at 5:00 p.m.
(Pacific
time) on the earlier to occur of (i) eighteen months after the date
hereof, and
(ii) the termination of that certain Amended and Restated
Agreement and Plan
of
Merger and
Reorganization, made
and entered
into as of the date of
original
issuance hereof,
by and among the
Company, DGSE Merger Corp., a Delaware
corporation,
Superior Galleries,
Inc., a Delaware corporation, and the
stockholder agent
(such earliest date,
the "Expiration
Date"). The Exercise
Price and the number of shares purchasable hereunder are subject to
adjustment
as provided in Section 4 of this Warrant.
This
warrant to purchase
Common Stock (this "Warrant") is being issued
pursuant to that certain Securities Exchange Agreement, made and
entered into as
of the date of original issuance hereof (the "Securities
Exchange Agreement"),
by and between the Company and the Holder, in consideration for the exchange
of
355,000 shares of common stock of Superior (the "Exchanged
Shares").
This
Warrant is subject to the following terms and conditions:
1.
Term. This Warrant shall be deemed to be automatically exercised
for all
of the Shares at the Effective Time (for avoidance of doubt,
without the giving
-1-
<PAGE>
of any notice or the
taking of any other action on the part of Holder or
the
Company). Holder
acknowledges
and agrees that the
exercise of this Warrant is
conditioned upon the
consummation of the
Acquisition
prior to the
Expiration
Date, and that if the Acquisition does not occur prior to the
Expiration Date,
this Warrant
shall expire and be of no force or
effect without
having been
exercised.
2.
Exercise; Issuance Of Certificates; Payment For Shares. Upon the
exercise hereof, Holder shall promptly surrender to the Company at
its principal
office (or at such
other location as the Company may advise the Holder in
writing) this Warrant and, if applicable, shall deliver to the
Company therewith
payment in cash or by
check of the
aggregate Exercise Price for all of the
Shares determined in accordance with the provisions hereof. The Company agrees
that the Shares
purchased under this Warrant shall be and are deemed to be
issued to the Holder
hereof as the record
owner of such Shares as of the close
of business on the date on which this Warrant shall have been
surrendered to the
Company together with any required payment made for such Shares.
Subject to the
escrow provisions
of Section
6, certificates for the Shares so purchased,
together with any
other securities
or property to which
the Holder hereof
is
entitled upon such exercise, shall be delivered to the Holder
by the Company at
the Company's expense within five (5) business days after the
rights represented
by this Warrant have
been so exercised.
Each stock
certificate
so delivered
shall be in such denominations of Common Stock as may be reasonably
requested by
the Holder and shall
be registered
in the name of the
Holder or his
nominee.
Notwithstanding anything to the contrary set forth herein, this
Warrant may only
be exercised in its
entirety for the total number of Shares subject to this
Warrant.
3.
Shares To Be Fully Paid; Reservation Of Shares.
The Company
covenants
and agrees that all Shares which may be issued upon the
exercise of the
rights
represented by this Warrant will, upon issuance, be duly authorized, validly
issued, fully paid and
nonassessable and free from all preemptive rights of any
stockholder and free
of all taxes, liens
and charges with respect to the issue
thereof (subject to
the escrow provisions
of Section 6). The
Company further
covenants and agrees that, until the expiration or earlier
termination of
this
Warrant, the Company
shall at all times have authorized and reserved,
for the
purpose of issue or transfer upon exercise of the subscription
rights evidenced
by this Warrant, a sufficient number of Shares of authorized but
unissued Common
Stock, or other securities and property, when and as required to
provide for the
exercise of the rights
evidenced by this
Warrant. The Company
shall take all
such action as may be
necessary to assure that such Shares may be issued as
provided herein without violation of any applicable law or
regulation, or of any
requirements of any domestic securities exchange upon which the
Common Stock may
be listed; provided, however, that the Company shall not be
required to effect a
registration or
qualification under
federal or State
securities or "blue sky"
laws with respect to such exercise.
4.
Adjustment to the Shares.
4.1 Stock Dividends, Splits, etc. If the Company (i) declares or
pays a
dividend on its Shares
payable in shares of Common Stock or other securities,
(ii) subdivides
(including by means of a split) the outstanding Shares into a
greater amount of
shares of Common Stock or other securities, (iii) combines
(including by means of a reverse split) or consolidates
the outstanding
Shares
into a lesser amount
of shares of Common Stock or other securities; then, in
each such case, the
number of Shares for which this Warrant may be exercised
shall be adjusted so that upon exercise the Holder shall
receive, without cost
to Holder, the total
number and kind of
securities to which
Holder would have
been entitled
had Holder owned the Shares of record as of the date such
dividend, subdivision, split, combination or consolidation
occurred.
4.2
Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution or other event that
results in a change
-2-
<PAGE>
to all of the outstanding shares of Common Stock or other
securities for
which
this Warrant is then
exercisable, the
number and class of securities issuable
upon exercise of this Warrant shall be adjusted so that Holder
shall be entitled
to receive,
upon exercise of this Warrant, the total number and kind of
securities and
property to which
Holder would have been entitled had Holder
owned the Shares of
record as of the date of such reclassification, exchange,
substitution or other event. Upon surrender of this Warrant,
the Company or its
successor shall
promptly issue to Holder a new warrant evidencing the right to
acquire such new securities or other property. The new warrant
shall provide for
adjustments which
shall be as nearly
equivalent as may be
practicable to the
adjustments provided
for in this
Section 4 including, without limitation,
adjustments to the
Exercise Price and to
the number of
securities or property
issuable upon exercise of the new warrant.
4.3 Subdivision or
Combination of Shares.
If the Company shall at any
time combine or consolidate the Shares, by reclassification or
otherwise, into a
lesser number of shares, the Exercise Price shall be
proportionately
increased.
If the Company shall at any time subdivide the Shares, by reclassification or
otherwise, into a
greater number of shares, the Exercise Price shall be
proportionately decreased.
4.4 Successive
Adjustments.
The provisions of this Section 4 shall
similarly apply to successive dividends, splits, reclassifications, exchanges,
substitutions, combinations or other events.
4.5 Notices of Change.
Within 10 business days after any adjustment in
the number or class of the Shares subject to this Warrant and of the Exercise
Price, the Company shall give written notice thereof to Holder,
setting forth in
reasonable detail the calculation of such adjustment.
5.
Issue Tax. The
issuance of certificates evidencing Shares upon the
exercise of this Warrant shall be made without charge to Holder for any issue
tax (other than any
applicable
income taxes) in respect thereof; provided,
however, that the
Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and
delivery of any
certificate in
