Exhibit 10.98

 

BUSINESS LOAN AGREEMENT

 

Borrower:

Collectors Universe, Inc.
1921 E Alton Ave
Santa Ana, CA 92705-5836

Lender:

ZB, N.A. dba California Bank & Trust
Irvine Commercial
1900 Main Street, Suite #200
Irvine, CA 92614

 

 

THIS BUSINESS LOAN AGREEMENT dated September 15, 2017, is made and executed
between Collectors Universe, Inc. ("Borrower") and ZB, N.A. dba California Bank
& Trust ("Lender") on the following terms and conditions. Borrower has received
prior commercial loans from Lender or has applied to Lender for a commercial
loan or loans or other financial accommodations, including those which may be
described on any exhibit or schedule attached to this Agreement. Borrower
understands and agrees that: (A) in granting, renewing, or extending any Loan,
Lender is relying upon Borrower's representations, warranties, and agreements as
set forth in this Agreement; (B) the granting, renewing, or extending of any
Loan by Lender at all times shall be subject to Lender's sole judgment and
discretion; and (C) all such Loans shall be and remain subject to the terms and
conditions of this Agreement.

 

TERM. This Agreement shall be effective as of September 15, 2017, and shall
continue in full force and effect until such time as all of Borrower's Loans in
favor of Lender have been paid in full, including principal, interest, costs,
expenses, attorneys' fees, and other fees and charges, or until such time as the
parties may agree in writing to terminate this Agreement.

 

ADVANCE AUTHORITY. The following person or persons are authorized to request
advances and authorize payments under the line of credit until Lender receives
from Borrower, at Lender's address shown above, written notice of revocation of
such authority: Joseph Wallace, CFO of Collectors Universe, Inc.

 

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents.

 

Loan Documents. Borrower shall provide to Lender the following documents for the
Loan: (1) the Note; (2) together with all such Related Documents as Lender may
require for the Loan; all in form and substance satisfactory to Lender and
Lender's counsel.

 

Borrower's Authorization. Borrower shall have provided in form and substance
satisfactory to Lender properly certified resolutions, duly authorizing the
execution and delivery of this Agreement, the Note and the Related Documents. In
addition, Borrower shall have provided such other resolutions, authorizations,
documents and instruments as Lender or its counsel, may require.

 

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified in this
Agreement or any Related Document.

 

Representations and Warranties. The representations and warranties set forth in
this Agreement, in the Related Documents, and in any document or certificate
delivered to Lender under this Agreement are true and correct.

 

No Event of Default. There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under this Agreement or
under any Related Document.

 

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:

 

Organization. Borrower is a corporation for profit which is, and at all times
shall be, duly organized, validly existing, and in good standing under and by
virtue of the laws of the State of Delaware. Borrower is duly authorized to
transact business in all other states in which Borrower is doing business,
having obtained all necessary filings, governmental licenses and approvals for
each state in which Borrower is doing business. Specifically, Borrower is, and
at all times shall be, duly qualified as a foreign corporation in all states in
which the failure to so qualify would have a material adverse effect on its
business or financial condition. Borrower has the full power and authority to
own its properties and to transact the business in which it is presently engaged
or presently proposes to engage. Borrower maintains an office at 1921 E Alton
Ave, Santa Ana, CA 92705-5836. Unless Borrower has designated otherwise in
writing, the principal office is the office at which Borrower keeps its books
and records including its records concerning the Collateral. Borrower will
notify Lender prior to any change in the location of Borrower's state of
organization or any change in Borrower's name. Borrower shall do all things
necessary to preserve and to keep in full force and effect its existence, rights
and privileges, and shall comply with all regulations, rules, ordinances,
statutes, orders and decrees of any governmental or quasi-governmental authority
or court applicable to Borrower and Borrower's business activities.

 

 

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BUSINESS LOAN AGREEMENT

(Continued)
Page 2

 

Assumed Business Names. Borrower has filed or recorded all documents or filings
required by law relating to all assumed business names used by Borrower.
Excluding the name of Borrower, the following is a complete list of all assumed
business names under which Borrower does business:

 

Borrower

Assumed Business Name

Filing Location

Date

Collectors Universe, Inc.

PCGS

Orange County, CA

11-22-2016

Collectors Universe, Inc.

Professional Sports Authenticators

Orange County, CA

11-22-2016

Collectors Universe, Inc.

Professional Stamp Experts

Orange County, CA

11-22-2016

Collectors Universe, Inc.

PSA/DNA Authentication Services

Orange County, CA

11-22-2016

 

Authorization. Borrower's execution, delivery, and performance of this Agreement
and all the Related Documents have been duly authorized by all necessary action
by Borrower and do not conflict with, result in a violation of, or constitute a
default under (1) any provision of (a) Borrower's articles of incorporation or
organization, or bylaws, or (b) any agreement or other instrument binding upon
Borrower or (2) any law, governmental regulation, court decree, or order
applicable to Borrower or to Borrower's properties.

 

Financial Information. Each of Borrower's financial statements supplied to
Lender truly and completely disclosed Borrower's financial condition as of the
date of the statement, and there has been no material adverse change in
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed in such financial statements.

 

Legal Effect. This Agreement constitutes, and any instrument or agreement
Borrower is required to give under this Agreement when delivered will constitute
legal, valid, and binding obligations of Borrower enforceable against Borrower
in accordance with their respective terms.

 

Properties. Except as contemplated by this Agreement or as previously disclosed
in Borrower's financial statements or in writing to Lender and as accepted by
Lender, and except for property tax liens for taxes not presently due and
payable, Borrower owns and has good title to all of Borrower's properties free
and clear of all Security Interests, and has not executed any security documents
or financing statements relating to such properties. All of Borrower's
properties are titled in Borrower's legal name, and Borrower has not used or
filed a financing statement under any other name for at least the last five (5)
years.

 

Hazardous Substances. Except as disclosed to and acknowledged by Lender in
writing, Borrower represents and warrants that: (1) During the period of
Borrower's ownership of the Collateral, there has been no use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any
Hazardous Substance by any person on, under, about or from any of the
Collateral. (2) Borrower has no knowledge of, or reason to believe that there
has been (a) any breach or violation of any Environmental Laws; (b) any use,
generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance on, under, about or from the Collateral by
any prior owners or occupants of any of the Collateral; or (c) any actual or
threatened litigation or claims of any kind by any person relating to such
matters. (3) Neither Borrower nor any tenant, contractor, agent or other
authorized user of any of the Collateral shall use, generate, manufacture,
store, treat, dispose of or release any Hazardous Substance on, under, about or
from any of the Collateral; and any such activity shall be conducted in
compliance with all applicable federal, state, and local laws, regulations, and
ordinances, including without limitation all Environmental Laws. Borrower
authorizes Lender and its agents to enter upon the Collateral to make such
inspections and tests as Lender may deem appropriate to determine compliance of
the Collateral with this section of the Agreement. Any inspections or tests made
by Lender shall be at Borrower's expense and for Lender's purposes only and
shall not be construed to create any responsibility or liability on the part of
Lender to Borrower or to any other person. The representations and warranties
contained herein are based on Borrower's due diligence in investigating the
Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1)
releases and waives any future claims against Lender for indemnity or
contribution in the event Borrower becomes liable for cleanup or other costs
under any such laws, and (2) agrees to indemnify, defend, and hold harmless
Lender against any and all claims, losses, liabilities, damages, penalties, and
expenses which Lender may directly or indirectly sustain or suffer resulting
from a breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened release of a
hazardous waste or substance on the Collateral. The provisions of this section
of the Agreement, including the obligation to indemnify and defend, shall
survive the payment of the Indebtedness and the termination, expiration or
satisfaction of this Agreement and shall not be affected by Lender's acquisition
of any interest in any of the Collateral, whether by foreclosure or otherwise.

 

Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against Borrower
is pending or threatened, and no other event has occurred which may materially
adversely affect Borrower's financial condition or properties, other than
litigation, claims, or other events, if any, that have been disclosed to and
acknowledged by Lender in writing.

 

Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and
reports that are or were required to be filed, have been filed, and all taxes,
assessments and other governmental charges have been paid in full, except those
presently being or to be contested by Borrower in good faith in the ordinary
course of business and for which adequate reserves have been provided.

 

 

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BUSINESS LOAN AGREEMENT

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Lien Priority. Unless otherwise previously disclosed to Lender in writing,
Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the
Collateral directly or indirectly securing repayment of Borrower's Loan and
Note, that would be prior or that may in any way be superior to Lender's
Security Interests and rights in and to such Collateral.

 

Binding Effect. This Agreement, the Note, all Security Agreements (if any), and
all Related Documents are binding upon the signers thereof, as well as upon
their successors, representatives and assigns, and are legally enforceable in
accordance with their respective terms.

 

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will:

 

Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all
material adverse changes in Borrower's financial condition, and (2) all existing
and all threatened litigation, claims, investigations, administrative
proceedings or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial condition
of any Guarantor.

 

Financial Records. Maintain its books and records in accordance with GAAP,
applied on a consistent basis, and permit Lender to examine and audit Borrower's
books and records at all reasonable times.

 

Financial Statements. Furnish Lender with the following:

 

Additional Requirements.

 

Annual Financial Statement. As soon as available, but in no event later than
ninety (90) days after the end of each fiscal year, Borrower's balance sheet and
income statement for the year ended, audited by a certified public accountant
satisfactory to Lender.

 

Interim Financial Statement. As soon as available, but in no event later than
forty five (45) days after the end of each quarter, Borrower's balance sheet and
income statement for the period ended, prepared by Borrower.

 

Projections. As soon as available, but in no event later than thirty (30) days
after the end of each fiscal year, Borrower's balance sheet and income statement
projection for the year ended.

 

All financial reports required to be provided under this Agreement shall be
prepared in accordance with GAAP, applied on a consistent basis, and certified
by Borrower as being true and correct.

 

Additional Information. Furnish such additional information and statements, as
Lender may request from time to time.

 

Financial Covenants and Ratios. Comply with the following covenants and ratios:

 

Additional Requirements.

 

Debt Service Coverage Ratio. Maintain a minimum Debt Service Coverage Ratio of
1.50 to 1.00. Debt Service Coverage Ratio means, for any period, the ratio of
(a) earnings before interest, income tax expense, depreciation, and amortization
minus the sum of tax expense paid in cash (or, if applicable, cash distributions
to equity holders to pay income tax expense attributable solely to their equity
interests in Borrower), dividends or other distributions paid in cash, and loans
or advances to, investments in, or receivables from (i) any affiliate of
Borrower or (ii) any third-party if such loan, advance, investment or receivable
is outside Borrower’s ordinary course of business to (b) the sum of interest
expense paid in cash, prior period current maturities of long term debt and
capital lease obligations, all calculated for the Borrower (and its subsidiaries
on a consolidated basis). This ratio will be measured as of the end of each
fiscal quarter.

 

Except as provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance with
generally accepted accounting principles, applied on a consistent basis, and
certified by Borrower as being true and correct.

 

Insurance. Maintain fire and other risk insurance, public liability insurance,
and such other insurance as Lender may require with respect to Borrower's
properties and operations, in form, amounts, coverages and with insurance
companies acceptable to Lender. Borrower, upon request of Lender, will deliver
to Lender from time to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that coverages will not be
cancelled or diminished without at least ten (10) days prior written notice to
Lender. Each insurance policy also shall include an endorsement providing that
coverage in favor of Lender will not be impaired in any way by any act, omission
or default of Borrower or any other person. In connection with all policies
covering assets in which Lender holds or is offered a security interest for the
Loans, Borrower will provide Lender with such lender's loss payable or other
endorsements as Lender may require.

 

 

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BUSINESS LOAN AGREEMENT

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Insurance Reports. Furnish to Lender, upon request of Lender, reports on each
existing insurance policy showing such information as Lender may reasonably
request, including without limitation the following: (1) the name of the
insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties
insured; (5) the then current property values on the basis of which insurance
has been obtained, and the manner of determining those values; and (6) the
expiration date of the policy. In addition, upon request of Lender (however not
more often than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value or
replacement cost of any Collateral. The cost of such appraisal shall be paid by
Borrower.

 

Other Agreements. Comply with all terms and conditions of all other agreements,
whether now or hereafter existing, between Borrower and any other party and
notify Lender immediately in writing of any default in connection with any other
such agreements.

 

Loan Fees, Charges and Expenses. In addition to all other agreed upon fees,
charges, and expenses, pay the following:

 

Unused Commitment Fee. A quarterly, in arrears, 0.25% fee if the average loan
utilization is less than 40%.

 

Loan Proceeds. Use all Loan proceeds solely for Borrower's business operations,
unless specifically consented to the contrary by Lender in writing.

 

Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and
obligations, including without limitation all assessments, taxes, governmental
charges, levies and liens, of every kind and nature, imposed upon Borrower or
its properties, income, or profits, prior to the date on which penalties would
attach, and all lawful claims that, if unpaid, might become a lien or charge
upon any of Borrower's properties, income, or profits. Provided however,
Borrower will not be required to pay and discharge any such assessment, tax,
charge, levy, lien or claim so long as (1) the legality of the same shall be
contested in good faith by appropriate proceedings, and (2) Borrower shall have
established on Borrower's books adequate reserves with respect to such contested
assessment, tax, charge, levy, lien, or claim in accordance with GAAP.

 

Performance. Perform and comply, in a timely manner, with all terms, conditions,
and provisions set forth in this Agreement, in the Related Documents, and in all
other instruments and agreements between Borrower and Lender. Borrower shall
notify Lender immediately in writing of any default in connection with any
agreement.

 

Operations. Maintain executive and management personnel with substantially the
same qualifications and experience as the present executive and management
personnel; provide written notice to Lender of any change in executive and
management personnel; conduct its business affairs in a reasonable and prudent
manner.

 

Environmental Studies. Promptly conduct and complete, at Borrower's expense, all
such investigations, studies, samplings and testings as may be requested by
Lender or any governmental authority relative to any substance, or any waste or
by-product of any substance defined as toxic or a hazardous substance under
applicable federal, state, or local law, rule, regulation, order or directive,
at or affecting any property or any facility owned, leased or used by Borrower.

 

Compliance with Governmental Requirements. Comply with all laws, ordinances, and
regulations, now or hereafter in effect, of all governmental authorities
applicable to the conduct of Borrower's properties, businesses and operations,
and to the use or occupancy of the Collateral, including without limitation, the
Americans With Disabilities Act. Borrower may contest in good faith any such
law, ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Borrower has notified Lender in
writing prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Collateral are not jeopardized. Lender may require Borrower to
post adequate security or a surety bond, reasonably satisfactory to Lender, to
protect Lender's interest.

 

Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records and
to make copies and memoranda of Borrower's books, accounts, and records. If
Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the
generation of such records) in the possession of a third party, Borrower, upon
request of Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of any records
it may request, all at Borrower's expense.

 

Environmental Compliance and Reports. Borrower shall comply in all respects with
any and all Environmental Laws; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on Borrower's part or on the
part of any third party, on property owned and/or occupied by Borrower, any
environmental activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or omission
on Borrower's part in connection with any environmental activity whether or not
there is damage to the environment and/or other natural resources.

 

 

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BUSINESS LOAN AGREEMENT

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Additional Assurances. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, assignments, financing
statements, instruments, documents and other agreements as Lender or its
attorneys may reasonably request to evidence and secure the Loans and to perfect
all Security Interests.

 

Additional Indebtedness. No additional indebtedness (except purchase money)
without prior bank approval.

 

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Borrower. All such expenses will become a
part of the Indebtedness and, at Lender's option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity.

 

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

 

Indebtedness and Liens. (1) Except for trade debt incurred in the normal course
of business and indebtedness to Lender contemplated by this Agreement, create,
incur or assume indebtedness for borrowed money, including capital leases, (2)
sell, transfer, mortgage, assign, pledge, lease, grant a security interest in,
or encumber any of Borrower's assets (except as allowed as Permitted Liens), or
(3) sell with recourse any of Borrower's accounts, except to Lender.

 

Continuity of Operations. (1) Engage in any business activities substantially
different than those in which Borrower is presently engaged, (2) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
entity, change its name, dissolve or transfer or sell Collateral out of the
ordinary course of business, or (3) pay any dividends on Borrower's stock (other
than dividends payable in its stock), provided, however that notwithstanding the
foregoing, but only so long as no Event of Default has occurred and is
continuing or would result from the payment of dividends, if Borrower is a
"Subchapter S Corporation" (as defined in the Internal Revenue Code of 1986, as
amended), Borrower may pay cash dividends on its stock to its shareholders from
time to time in amounts necessary to enable the shareholders to pay income taxes
and make estimated income tax payments to satisfy their liabilities under
federal and state law which arise solely from their status as Shareholders of a
Subchapter S Corporation because of their ownership of shares of Borrower's
stock, or purchase or retire any of Borrower's outstanding shares or alter or
amend Borrower's capital structure.

 

Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or
assets to any other person, enterprise or entity, (2) purchase, create or
acquire any interest in any other enterprise or entity, or (3) incur any
obligation as surety or guarantor other than in the ordinary course of business.

 

Agreements. Enter into any agreement containing any provisions which would be
violated or breached by the performance of Borrower's obligations under this
Agreement or in connection herewith.

 

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes
incompetent or becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower's financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in
good faith deems itself insecure, even though no Event of Default shall have
occurred.

 

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

 

Payment Default. Borrower fails to make any payment when due under the Loan.

 

Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of the
Related Documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.

 

Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower's or any Grantor's property or Borrower's or
any Grantor's ability to repay the Loans or perform their respective obligations
under this Agreement or any of the Related Documents.

 

 

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BUSINESS LOAN AGREEMENT

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False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower's behalf under this Agreement or the Related
Documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.

 

Insolvency. The dissolution or termination of Borrower's existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.

 

Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any time
and for any reason.

 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the Loan. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to
any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
Guaranty of the Indebtedness.

 

Change in Ownership. Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.

 

Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the Loan
is impaired.

 

Insecurity. Lender in good faith believes itself insecure.

 

Right to Cure. If any default, other than a default on Indebtedness, is curable
and if Borrower or Grantor, as the case may be, has not been given a notice of a
similar default within the preceding twelve (12) months, it may be cured if
Borrower or Grantor, as the case may be, after Lender sends written notice to
Borrower or Grantor, as the case may be, demanding cure of such default: (1)
cure the default within fifteen (15) days; or (2) if the cure requires more than
fifteen (15) days, immediately initiate steps which Lender deems in Lender's
sole discretion to be sufficient to cure the default and thereafter continue and
complete all reasonable and necessary steps sufficient to produce compliance as
soon as reasonably practical.

 

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
further Loan Advances or disbursements), and, at Lender's option, all
Indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Lender's rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.

 

DEPOSIT ACCOUNT SECURITY. Borrower hereby grants a security interest to Lender
in any and all deposit accounts (checking, savings, money market or time) of
Borrower at Lender, now existing or hereinafter opened, to secure the
Indebtedness. This includes all deposit accounts Borrower holds jointly with
someone else.

 

JURY WAIVER; JUDICIAL REFERENCE. Borrower and Lender each waive their respective
rights to a trial before a jury in connection with any disputes related to this
Agreement, any of the Related Documents and the transactions contemplated hereby
and thereby. Such disputes include without limitation any claim by Borrower or
Lender, claims brought by Borrower as a class representative on behalf of
others, and claims by a class representative on Borrower's behalf as a class
member (so-called "class action" suits). This provision shall not apply if, at
the time an action is brought, Borrower's loan is funded or maintained in a
state where this jury trial waiver is not permitted by law.

 

 

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BUSINESS LOAN AGREEMENT

(Continued)

Page 7

 

If a jury trial waiver is not permitted by applicable law and a dispute arises
between Borrower and Lender with respect to this Agreement, any of the Related
Documents, the enforcement hereof or thereof or the transactions contemplated
hereby or thereby, either of Borrower or Lender may require that it be resolved
by judicial reference in accordance with California Code of Civil Procedure,
Sections 638, et seq., including without limitation whether the dispute is
subject to a judicial reference proceeding. The referee shall be a retired
judge, agreed upon by the parties, from either the American Arbitration
Association (AAA) or Judicial Arbitration and Mediation Service, Inc. (JAMS). If
the parties cannot agree on the referee, the party who initially selected the
reference procedure shall request a panel of ten retired judges from either AAA
or JAMS, and the court shall select the referee from that panel. The referee
shall be appointed to sit with all of the powers provided by law. The parties
agree that time is of the essence in conducting the judicial reference
proceeding set forth herein. The costs of the judicial reference proceeding,
including the fee for the court reporter, shall be borne equally by the parties
as the costs are incurred, unless otherwise awarded by the referee. The referee
shall hear all pre-trial and post-trial matters (including without limitation
requests for equitable relief), prepare an award with written findings of fact
and conclusions of law and apportion costs as appropriate. The referee shall be
empowered to enter equitable relief as well as legal relief, provide all
temporary or provisional remedies, enter equitable orders that are binding on
the parties and rule on any motion that would be authorized in a trial,
including without limitation motions for summary judgment or summary
adjudication. Judgment upon the award shall be entered in the court in which
such proceeding was commenced and all parties shall have full rights of appeal.
This provision will not be deemed to limit or constrain Lender's right of
offset, to obtain provisional or ancillary remedies, to interplead funds in the
event of a dispute, to exercise any security interest or lien Lender may hold in
property or to comply with legal process involving Borrower's accounts or other
property.

 

INCREASED COSTS. If any change in a law, rule or regulation, or the
interpretation or application thereof, or Lender's compliance with any request,
guideline or directive (whether or not having the force of law) of any
governmental authority (collectively, a "Change in Law") shall (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against or with respect to the assets of, deposits with or for the account of or
credit extended by Lender or (ii) impose on Lender any other condition affecting
this Agreement or the loans hereunder or any letter of credit or participation
therein and the result of any of the foregoing shall be to increase the cost to
Lender of making or maintaining any loan (or its commitment to make any such
loan) or to increase the cost to Lender of issuing or maintaining any letter of
credit or to reduce the amount of any sum received or receivable by Lender
hereunder, then Borrower will pay to Lender such additional amount as will
compensate Lender for such additional costs or reduction. If Lender determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on the capital of Lender or Lender's
holding company from this Agreement or the loans or letters of credit made or
issued by Lender to a level below that which Lender or Lender's holding company
could have achieved but for such Change in Law (taking into consideration
Lender's policies and the policies of Lender's holding company with respect to
capital adequacy), then from time to time Borrower will pay to Lender such
additional amount as will compensate Lender or Lender's holding company for any
such reduction, as set forth in a certificate of Lender describing in reasonable
detail the amount or amounts necessary to compensate Lender or its holding
company. The amounts and description in such certificate shall be conclusive
absent manifest error, and Borrower agrees to pay to Lender the amount shown in
such certificate within ten (10) business days after receipt thereof. Failure or
delay on the part of Lender to demand compensation pursuant to this section
shall not constitute a waiver of Lender's right to demand such compensation.

 

WAIVER OF DEFENSES AND RELEASE OF CLAIMS. The undersigned hereby (i) represents
that neither the undersigned nor any affiliate or principal of the undersigned
has any defenses to or setoffs against any Indebtedness or other obligations
owing by the undersigned, or by the undersigned's affiliates or principals, to
Lender or Lender's affiliates (the "Obligations"), nor any claims against Lender
or Lender's affiliates for any matter whatsoever, related or unrelated to the
Obligations, and (ii) releases Lender and Lender's affiliates, officers,
directors, employees and agents from all claims, causes of action, and costs, in
law or equity, known or unknown, whether or not matured or contingent, existing
as of the date hereof that the undersigned has or may have by reason of any
matter of any conceivable kind or character whatsoever, related or unrelated to
the Obligations, including the subject matter of this Agreement. The foregoing
release does not apply, however, to claims for future performance of express
contractual obligations that mature after the date hereof that are owing to the
undersigned by Lender or Lender's affiliates. As used in this paragraph, the
word "undersigned" does not include Lender or any individual signing on behalf
of Lender. The undersigned acknowledges that Lender has been induced to enter
into or continue the Obligations by, among other things, the waivers and
releases in this paragraph.

 

DOCUMENT IMAGING. Lender shall be entitled, in its sole discretion, to image or
make copies of all or any selection of the agreements, instruments, documents,
and items and records governing, arising from or relating to any of Borrower's
loans, including, without limitation, this document and the Related Documents,
and Lender may destroy or archive the paper originals. The parties hereto (i)
waive any right to insist or require that Lender produce paper originals, (ii)
agree that such images shall be accorded the same force and effect as the paper
originals, (iii) agree that Lender is entitled to use such images in lieu of
destroyed or archived originals for any purpose, including as admissible
evidence in any demand, presentment or other proceedings, and (iv) further agree
that any executed facsimile (faxed), scanned, or other imaged copy of this
document or any Related Document shall be deemed to be of the same force and
effect as the original manually executed document.

 

NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT THE UNDERSIGNED REPRESENTS
AND AGREES THAT; (A) THIS AND THE RELATED DOCUMENTS EXECUTED IN CONNECTION
HEREWITH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, (C) THIS DOCUMENT MAY NOT BE
CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

PLEDGES. Lender shall at all times have the right to grant security interests
in, to pledge and/or to hypothecate all or any portion of its interest in the
Loan, including without limitation as collateral in connection with discount
window advances, extensions of daylight credit or master account activity, or
other programs of the Federal Reserve System or any Federal Reserve Bank.

 

 

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BUSINESS LOAN AGREEMENT

(Continued)

Page 8

 

PROHIBITED DRUG LAW ACTIVITIES. Notwithstanding any other provision herein or in
the Note or any Related Document regarding the use, occupancy or leasing of all
or any portion of real property owned, occupied or used by Borrower
(collectively, the "Premises") and without limiting the generality of any of the
negative covenants of Borrower herein, Borrower shall not use or occupy, or
permit the use or occupancy of, the Premises (or any portion thereof), or enter
into any lease, license, sublease, occupancy agreement or other agreement
(collectively, "Lease") involving or providing for the use or occupancy of the
Premises (or any portion thereof), in any manner that would be a violation of
any federal, state or local law relating to the use, sale, possession,
cultivation or distribution of any controlled substances, including without
limitation any activity (whether for commercial or personal purposes) regulated
under the Compassionate Use Act of 1996 or any other California law relating to
the medicinal use or distribution of marijuana (collectively, "Prohibited Drug
Law Activities") or entering into a Lease with any Person engaged or intending
to engage in any Prohibited Drug Law Activities.

 

Any Lease involving or providing for the use or occupancy of the Premises
entered into by Borrower during the term of the Loan shall expressly prohibit
the tenant or other occupant of the Premises (or any portion thereof) from
engaging or permitting others to engage in any Prohibited Drug Law Activities.
In the event that Borrower becomes aware that any tenant, occupant or other
Person is or may be using, occupying or leasing the Premises (or any portion
thereof) with the intent to engage or is engaged in any Prohibited Drug Law
Activities, Borrower shall terminate its agreement with such tenant, occupant or
other Person and take all actions permitted under applicable law to discontinue
such activities in or on the Premises and shall immediately notify Lender
regarding the Prohibited Drug Law Activities and Borrower's actions to terminate
such agreement and the Prohibited Drug Law Activities. Borrower shall keep
Lender advised of each action it takes or plans to take in compliance with the
requirements of this section.

 

Compliance with this section is a material consideration and inducement to
Lender in its agreement to extend the Loan and other financial accommodations to
Borrower hereunder. Any failure of Borrower to comply with the requirements
under this section shall constitute a non-curable Event of Default upon written
notice by Lender to Borrower thereof and, notwithstanding any provision herein
or in the Note or the Related Documents with respect to the right to cure an
Event of Default, upon the occurrence of any breach, default or non-compliance
of or under this section, Lender shall have the right to immediately exercise
any and all remedies to which it may be entitled hereunder, under the Note or
any of the Related Documents or otherwise under law.

 

In addition and not by way of limitation, Borrower hereby agrees to indemnify,
defend and hold Lender harmless from and against any loss, claim, damage or
liability arising from or related to Borrower's breach or violation of the
covenants set forth herein. Borrower shall, within ten (10) business days
following a request from Lender, provide Lender with a written statement setting
forth its efforts to comply with the provisions of this section and stating
whether, to Borrower's knowledge, any Prohibited Drug Law Activities are or may
be on-going or have occurred in, on or around the Premises.

 

For purposes of this section, the capitalized term "Person" means any natural
person, corporation, division of a corporation, limited liability company,
partnership, trust, joint venture, association, company, estate, unincorporated
organization or government or any agency or political subdivision thereof.

 

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

 

Amendments. This Agreement, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this Agreement. No alteration of or amendment to this Agreement shall be
effective unless given in writing and signed by the party or parties sought to
be charged or bound by the alteration or amendment.

 

Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of Lender's
costs and expenses, including Lender's attorneys' fees and Lender's legal
expenses, incurred in connection with the enforcement of this Agreement. Lender
may hire or pay someone else to help enforce this Agreement, and Borrower shall
pay the costs and expenses of such enforcement. Costs and expenses include
Lender's attorneys' fees and legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. Borrower also
shall pay all court costs and such additional fees as may be directed by the
court.

 

Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Agreement.

 

Consent to Loan Participation. Borrower agrees and consents to Lender's sale or
transfer, whether now or later, of one or more participation interests in the
Loan to one or more purchasers, whether related or unrelated to Lender. Lender
may provide, without any limitation whatsoever, to any one or more purchasers,
or potential purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower hereby
waives any rights to privacy Borrower may have with respect to such matters.
Borrower additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such participation
interests. Borrower also agrees that the purchasers of any such participation
interests will be considered as the absolute owners of such interests in the
Loan and will have all the rights granted under the participation agreement or
agreements governing the sale of such participation interests. Borrower further
waives all rights of offset or counterclaim that it may have now or later
against Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may enforce
Borrower's obligation under the Loan irrespective of the failure or insolvency
of any holder of any interest in the Loan. Borrower further agrees that the
purchaser of any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have against
Lender.

 

 

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BUSINESS LOAN AGREEMENT

(Continued)

Page 9

 

Governing Law. This Agreement will be governed by federal law applicable to
Lender and, to the extent not preempted by federal law, the laws of the State of
California without regard to its conflicts of law provisions. This Agreement has
been accepted by Lender in the State of California.

 

Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of Orange County, State of California.

 

No Waiver by Lender. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate as
a waiver of such right or any other right. A waiver by Lender of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Borrower, or between Lender and any Grantor, shall constitute a
waiver of any of Lenders rights or of any of Borrowers or any Grantors
obligations as to any future transactions. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender in any
instance shall not constitute continuing consent to subsequent instances where
such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.

 

Notices. Any notice required to be given under this Agreement shall be given in
writing, and shall be effective when actually delivered, when actually received
by telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement.
Any party may change its address for notices under this Agreement by giving
formal written notice to the other parties, specifying that the purpose of the
notice is to change the party's address. For notice purposes, Borrower agrees to
keep Lender informed at all times of Borrower's current address. Unless
otherwise provided or required by law, if there is more than one Borrower, any
notice given by Lender to any Borrower is deemed to be notice given to all
Borrowers.

 

Severability. If a court of competent jurisdiction finds any provision of this
Agreement to be illegal, invalid, or unenforceable as to any circumstance, that
finding shall not make the offending provision illegal, invalid, or
unenforceable as to any other circumstance. If feasible, the offending provision
shall be considered modified so that it becomes legal, valid and enforceable. If
the offending provision cannot be so modified, it shall be considered deleted
from this Agreement. Unless otherwise required by law, the illegality,
invalidity, or unenforceability of any provision of this Agreement shall not
affect the legality, validity or enforceability of any other provision of this
Agreement.

 

Subsidiaries and Affiliates of Borrower. To the extent the context of any
provisions of this Agreement makes it appropriate, including without limitation
any representation, warranty or covenant, the word "Borrower" as used in this
Agreement shall include all of Borrower's subsidiaries and affiliates.
Notwithstanding the foregoing however, under no circumstances shall this
Agreement be construed to require Lender to make any Loan or other financial
accommodation to any of Borrower's subsidiaries or affiliates.

 

Successors and Assigns. All covenants and agreements by or on behalf of Borrower
contained in this Agreement or any Related Documents shall bind Borrower's
successors and assigns and shall inure to the benefit of Lender and its
successors and assigns. Borrower shall not, however, have the right to assign
Borrower's rights under this Agreement or any interest therein, without the
prior written consent of Lender.

 

Survival of Representations and Warranties. Borrower understands and agrees that
in extending Loan Advances, Lender is relying on all representations,
warranties, and covenants made by Borrower in this Agreement or in any
certificate or other instrument delivered by Borrower to Lender under this
Agreement or the Related Documents. Borrower further agrees that regardless of
any investigation made by Lender, all such representations, warranties and
covenants will survive the extension of Loan Advances and delivery to Lender of
the Related Documents, shall be continuing in nature, shall be deemed made and
redated by Borrower at the time each Loan Advance is made, and shall remain in
full force and effect until such time as Borrower's Indebtedness shall be paid
in full, or until this Agreement shall be terminated in the manner provided
above, whichever is the last to occur.

 

Time is of the Essence. Time is of the essence in the performance of this
Agreement.

 

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. Accounting
words and terms not otherwise defined in this Agreement shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date of this Agreement:

 

 

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BUSINESS LOAN AGREEMENT

(Continued)

Page 10

 

Advance. The word "Advance" means a disbursement of Loan funds made, or to be
made, to Borrower or on Borrower's behalf on a line of credit or multiple
advance basis under the terms and conditions of this Agreement.

 

Agreement. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time, together
with all exhibits and schedules attached to this Business Loan Agreement from
time to time.

 

Borrower. The word "Borrower" means Collectors Universe, Inc. and includes all
co-signers and co-makers signing the Note and all their successors and assigns.

 

Collateral. The word "Collateral" means all property and assets granted as
collateral security for a Loan, whether real or personal property, whether
granted directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage, collateral
mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention contract,
lease or consignment intended as a security device, or any other security or
lien interest whatsoever, whether created by law, contract, or otherwise.

 

Environmental Laws. The words "Environmental Laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5
through 7.7 of Division 20 of the California Health and Safety Code, Section
25100, et seq., or other applicable state or federal laws, rules, or regulations
adopted pursuant thereto.

 

Event of Default. The words "Event of Default" mean any of the events of default
set forth in this Agreement in the default section of this Agreement.

 

GAAP. The word "GAAP" means generally accepted accounting principles.

 

Grantor. The word "Grantor" means each and all of the persons or entities
granting a Security Interest in any Collateral for the Loan, including without
limitation all Borrowers granting such a Security Interest.

 

Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation
party of any or all of the Loan.

 

Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or part of the Note.

 

Hazardous Substances. The words "Hazardous Substances" mean materials that,
because of their quantity, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to human health
or the environment when improperly used, treated, stored, disposed of,
generated, manufactured, transported or otherwise handled. The words "Hazardous
Substances" are used in their very broadest sense and include without limitation
any and all hazardous or toxic substances, materials or waste as defined by or
listed under the Environmental Laws. The term "Hazardous Substances" also
includes, without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos.

 

Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the
Note or Related Documents, including all principal and interest together with
all other indebtedness and costs and expenses for which Borrower is responsible
under this Agreement or under any of the Related Documents.

 

Lender. The word "Lender" means ZB, N.A. dba California Bank & Trust, its
successors and assigns.

 

Loan. The word "Loan" means any and all loans and financial accommodations from
Lender to Borrower whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations described
herein or described on any exhibit or schedule attached to this Agreement from
time to time.

 

Note. The word "Note" means the Promissory Note executed by Borrower in the
original principal amount of $10,000,000.00 dated January 10, 2016, together
with all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for the Note or Credit Agreement or any
other subsequent Notes evidencing further Indebtedness.

 

Permitted Liens. The words "Permitted Liens" mean (1) liens and security
interests securing Indebtedness owed by Borrower to Lender; (2) liens for taxes,
assessments, or similar charges either not yet due or being contested in good
faith; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other
like liens arising in the ordinary course of business and securing obligations
which are not yet delinquent; (4) purchase money liens or purchase money
security interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the date of
this Agreement or permitted to be incurred under the paragraph of this Agreement
titled "Indebtedness and Liens"; (5) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by the Lender in
writing; and (6) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to the
net value of Borrower's assets.

 

 

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BUSINESS LOAN AGREEMENT

(Continued)

Page 11

 

Related Documents. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Loan.

 

Security Agreement. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements, understandings or
other agreements, whether created by law, contract, or otherwise, evidencing,
governing, representing, or creating a Security Interest.

 

Security Interest. The words "Security Interest" mean, without limitation, any
and all types of collateral security, present and future, whether in the form of
a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment,
pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel
trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or
title retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever whether created by law, contract,
or otherwise.

 

 

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS
DATED SEPTEMBER 15, 2017.

 

BORROWER:

 

COLLECTORS UNIVERSE, INC.

 

By:

/s/ JOSEPH WALLACE     Joseph Wallace, CFO/Assistant Secretary of Collectors
Universe, Inc.  

 

LENDER:

 

ZB, N.A. DBA CALIFORNIA BANK & TRUST

 

By:

/s/ MATT BULLOCK     Senior Vice President, Authorized Signer  

 

*

The parties hereto have entered into that certain Addendum to Business Loan
Agreement (“Addendum”) dated of even date herewith, which modifies certain terms
and provisions of this Business Loan Agreement. In the event of a conflict
between any provision of the Business Loan Agreement and any provisions of the
Addendum, the provisions of the Addendum shall control and supersede the
conflicting provisions of this Business Loan Agreement.

 

 

COLLECTORS UNIVERSE, INC.

  ZB, N.A. dba CALIFORNIA BANK & TRUST              

By:

/s/ JOSEPH WALLACE   By: /s/ MATT BULLOCK     Joseph Wallace, CFO of Collectors
Universe, Inc.     Senior Vice President, Authorized Signer  

 

 

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ADDENDUM TO BUSINESS LOAN AGREEMENT

 

This Addendum to Business Loan Agreement (“Addendum”) is dated as of
September 15, 2017 by and between Collectors Universe, Inc., a Delaware
corporation ("Borrower"), and ZB, N.A., dba California Bank & Trust ("Lender"),
with reference to the following:

 

A.     Concurrently herewith, Borrower and Lender (who shall sometimes be
referred to herein, collectively, as the "parties"), are entering into a
Business Loan Agreement dated as of September 15, 2017 (the "Loan Agreement"),
pursuant to which Lender is providing Borrower with a $3.5 million unsecured
term loan (the "Term Loan"); and

 

B.     That Loan Agreement is Lender's standard form of business loan agreement
and does not reflect or incorporate all of, and in certain respects conflicts
with, the understandings and agreements of the parties that will govern the Term
Loan and the respective rights and obligations of the parties with respect
thereto; and

 

C.     Accordingly, the parties are hereby entering this Addendum to modify the
Loan Agreement in various respects, as set forth hereinafter, to reflect the
intentions and all of the agreements of the parties with respect to the Term
Loan, and the respective rights and obligations of the parties, under the Loan
Agreement.

 

NOW, THEREFORE, with the intent to be legally bound and for good and valuable
consideration, receipt and sufficiency of which is hereby acknowledged, the
parties expressly agree as follows:

 

A.     Addendum Controls. This Addendum is hereby made an integral part of and
amends and modifies the Business Loan Agreement in the manner and to the extent
set forth hereinafter. In the event of any conflict between any provisions of
the Business Loan Agreement and any provisions of this Addendum, the provisions
of this Addendum shall control and supersede the conflicting provisions of the
Loan Agreement.

 

B.     Amendments and Modifications to Loan Agreement. The provisions of the
Loan Agreement are hereby modified and amended in the manner and to the extent
set forth below.

 

1.     The second sentence in the first paragraph of the Loan Agreement is
hereby replaced with the following:

 

“Borrower has applied to Lender for a commercial loan or loans or other
financial accommodations, including those which may be described on any exhibit
or schedule to this Agreement.”

 

2.     The following paragraph is hereby added as the second paragraph on page 1
of the Loan Agreement immediately preceding the paragraph entitled "TERM":

 

“The amount of borrowings for Borrower hereunder on a non-revolving term loan is
$3,500,000.00 (the "Total Commitment").

 

3.     The following paragraph is hereby added as the fourth paragraph on page 1
of the Loan Agreement immediately following the paragraph entitled "TERM" and
immediately preceding the paragraph entitled "ADVANCE AUTHORITY":

 

“Notwithstanding the foregoing or anything to the contrary that may be contained
in this Agreement or in the Related Documents, Borrower shall have the right, in
its sole discretion, to unilaterally terminate this Agreement and its
obligations hereunder and under the Related Documents at any time prior to
maturity, without penalty, upon prior written notice to Lender and Borrower's
payment in full of all amounts owing by Borrower to Lender under this Agreement
and the Related Documents.”

 

4.     Under the heading "CONDITIONS PRECEDENT TO EACH ADVANCE", the section
entitled "Loan Documents" on page 1 of the Agreement is amended to read in its
entirety as follows:

 

“Loan Documents. Borrower shall provide to Lender the following documents for
the Loan: (1) the Note; (2) together with all such Related Documents as Lender
may reasonably require for the Loan; all in form and substance reasonably
satisfactory to Lender and Lender's counsel.”

 

5.     Under the heading "CONDITIONS PRECEDENT TO EACH ADVANCE", the section
entitled "Borrower's Authorization" on page 1 of the Agreement, the word
"reasonably" is hereby inserted (i) on the first line, between the words
"substance" and "satisfactory" and (ii) on the last line, between the words
"may" and "require.

 

 

--------------------------------------------------------------------------------

 

 

6.     Under the heading "CONDITIONS PRECEDENT TO EACH ADVANCE", in the section
entitled "Representations and Warranties" on page 1 of the Agreement, the words
"in all material respects" are hereby inserted at the end of the sentence.

 

7.     The second, third, fourth and fifth sentences of the section entitled
"Organization" under the heading "REPRESENTATIONS AND WARRANTIES" on page 1 of
the Loan Agreement are hereby amended to read in their entirety as follows:

 

“Borrower is duly authorized to transact business in all other states in which
it is doing business for which it is required by the laws of such states to be
so authorized, and at all times shall be duly qualified as a foreign corporation
in all such states, except where the failure to be so authorized or to be so
qualified would not have a material adverse effect on Borrower's business or
financial condition. Borrower has the full corporate power and authority to own
its properties and to transact the business in which it is presently engaged or
presently proposes to engage. Borrower currently maintains an office at 1921 E.
Alton Avenue, Santa Ana, CA 92705-5836. Unless Borrower has designated or
designates otherwise in writing, the principal office is the office in which
Borrower keeps its books and records.”

 

8.     The phrase “except for any instances of non-compliance that would not
have, either individually or in the aggregate, a material adverse effect on the
financial condition or business operations of Borrower” is hereby added to the
end of the final sentence of the section entitled "Organization" under the
heading "REPRESENTATIONS AND WARRANTIES" on page 1 of the Loan Agreement.

 

9.     Under the heading "REPRESENTATIONS AND WARRANTIES" in the section
entitled "Assumed Business Names", the third line in the chart of Assumed
Business Names containing the name "Professional Stamp Experts" is hereby
deleted in its entirety.

 

10.     The words "truly and completely disclosed" are hereby replaced with the
words "fairly present in all material respects" in the first sentence of the
section entitled "Financial Information" under the heading "REPRESENTATIONS AND
WARRANTIES" on page 2 of the Loan Agreement.

 

11.     The word "give" is replaced with the words "execute and deliver" in the
first sentence of the section entitled "Legal Effect" under the heading
"REPRESENTATIONS AND WARRANTIES" on page 2 of the Loan Agreement.

 

12.     Under the heading "REPRESENTATIONS AND WARRANTIES", the paragraph
entitled "Properties" on page 2 of the Loan Agreement is hereby amended to read
in its entirety as follows:

 

“Properties. Except as contemplated by this Agreement or as previously disclosed
in Borrower's financial statements or in writing to Lender and as accepted by
Lender, and except for property tax liens for taxes not presently due and
payable and except for or in connection with other Permitted Liens: (i) Borrower
owns and has good title to all of Borrower's properties free and clear of all
Security Interests, and has not executed any security documents or financing
statements relating to such properties, (ii) all of Borrower's properties are
titled in Borrower's legal name, and (iii) Borrower has not used or filed a
financing statement under any other name for at least the last five (5) years.”

 

13.     Under the heading "REPRESENTATIONS AND WARRANTIES", the paragraph
entitled "Hazardous Substances" on page 2 of the Loan Agreement is hereby
amended to read in its entirety as follows:

 

“Hazardous Substances. Except as disclosed to Lender in writing, Borrower
represents and warrants that to Borrower's knowledge: (1) during Borrower's
occupancy of each of the offices it leases and occupies (the "Business
Offices"), there has been no use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substances by any
person on, under, about or from the Business Offices; (2) there has not been,
(a) any breach or violation by Borrower of any Environmental Laws; or (b) any
actual, or to Borrower's knowledge threatened, litigation or claims of any kind
by any person relating to any of the foregoing environmental matters;
(3) neither Borrower, nor any tenant, contractor, agent of Borrower or any other
authorized user of the Business Offices, shall use, generate, manufacture,
store, treat, dispose of or release any Hazardous Substances on, under, about or
from the Business Offices; and (4) any such activity shall be conducted in
compliance with all applicable federal, state and local laws, regulations, and
ordinances, including without limitation all Environmental Laws, except where
non-compliance would not have, either individually or in the aggregate, a
material adverse effect on the financial condition or operations of Borrower.
Borrower hereby (1) releases and waives any future claims against Lender for
indemnity or contribution in the event Borrower becomes liable for cleanup, or
other costs under any such laws, and (2) agrees to indemnify, defend and hold
harmless Lender against any and all claims, losses, liabilities, damages,
penalties and expenses which Lender may directly or indirectly sustain or suffer
resulting from a breach of this section of the Agreement or as a consequence of
any use, generation, manufacture, storage, disposal, release or threatened
release by Borrower, or any tenant, contractor or agent of Borrower, of a
hazardous waste or substance on the Business Offices. The provisions of this
section of the Agreement including the obligation to indemnify and defend, shall
survive the payment of the Indebtedness and the termination, expiration, or
satisfaction of this Agreement.”

 

2

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14.     The Section, entitled "Lien Priority" under the heading "REPRESENTATIONS
AND WARRANTIES" on page 2 of the Loan Agreement is deleted in its entirety from
the Loan Agreement.

 

15.     Under the heading "REPRESENTATIONS AND WARRANTIES", the paragraph
entitled "Binding Effect" on page 2 of the Loan Agreement is hereby amended to
read in its entirety as follows:

 

“Binding Effect. This Agreement, the Note, and all Related Documents are binding
upon Borrower as well as upon its successors and assigns and are legally
enforceable in accordance with their respective terms.”

 

16.     The paragraph entitled "Financial Records", under the heading
"AFFIRMATIVE COVENANTS" on page 2 of the Loan Agreement, is hereby amended to
read in its entirety as follows:

 

“Financial Records. Maintain its books and records in accordance with the
applicable provisions of GAAP, applied on a consistent basis.”

 

17.     Under the heading "AFFIRMATIVE COVENANTS", the paragraph entitled
"Interim Financial Statement" on page 2 of the Loan Agreement is hereby amended
to read in its entirety as follows:

 

"Interim Financial Statement. As soon as available, but in no event later than
forty five (45) days after the end of the first three (3) quarters of each of
Borrower's fiscal years, Borrower's balance sheet and income statement for the
quarter then ended, prepared by Borrower."

 

18.     Under the heading "AFFIRMATIVE COVENANTS", the last paragraph of the
section entitled "Financial Statements" on page 2 of the Loan Agreement is
hereby amended to read in its entirety as follows:

 

“All financial statements required to be provided under this Agreement other
than financial projections shall be prepared in accordance with the applicable
provisions of GAAP, applied on a consistent basis, and certified by Borrower as
fairly presenting, in all material respects, the financial condition and results
of operations of Borrower.”

 

19.     Under the heading "AFFIRMATIVE COVENANTS", in the Section entitled
"Additional Requirements", at the bottom, of page 2 of the Loan Agreement, the
word "reasonably" is hereby inserted between the words "may" and "request".

 

20.     Under the heading "AFFIRMATIVE COVENANTS" in the section entitled
"Financial Covenants and Ratios", the paragraph entitled "Debt Service Coverage
Ratio" is hereby amended to read as follows:

 

"Debt Service Coverage Ratio. Maintain a minimum Debt Service Coverage Ratio of
1.50 to 1.00. Debt Service Coverage Ratio means, for any period, the ratio of
(a) the trailing twelve (12) months of earnings before interest, income tax
expense, depreciation, and amortization minus the sum of tax expense paid in
cash (or, if applicable, cash distributions to equity holders to pay income tax
expense attributable solely to their equity interests in Borrower), and loans or
advances to, investments in, or receivables from (i) any affiliate of Borrower
or (ii) any third-party if such loan, advance, investment or receivable is
outside Borrower's ordinary course of business to (b) the sum of interest
expense paid in cash for the trailing twelve (12) month period, prior period
current maturities of long term debt and capital lease obligations, all
calculated for the Borrower (and its subsidiaries on a consolidated basis). This
ratio will be measured as of the end of each fiscal quarter for the trailing
twelve (12) months then ended."

 

21.     Under the heading "AFFIRMATIVE COVENANTS" in the section entitled
"Financial Covenants and Ratios", a paragraph entitled "Funded Debt to EBITDA
Ratio" on page 3 of the Loan Agreement is hereby inserted immediately after the
paragraph entitled "Debt Service Coverage Ratio" to read as follows:

 

3

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"Funded Debt to EBITDA Ratio. Maintain a maximum Funded Debt to EBITDA Ratio of
1.25 to 1.00. The term "Funded Debt to EBITDA Ratio" means Borrower's
outstanding indebtedness for borrowed money divided by consolidated earnings
before interest, taxes, depreciation, non-cash stock based compensation and
amortization, for the immediately preceding 12 months. This requirement will be
evaluated quarterly following completion and delivery by Borrower to Lender of
each quarter's financial statements, in accordance with the requirements set
forth herein. "For purposes of this covenant, the term Funded Debt as used
herein shall not include any operating lease (classified as such under GAAP as
in effect on the date hereof) for the Borrower's operations or corporate
headquarters."

 

22.     The last paragraph of the Section entitled "Financial Covenants and
Ratios", on page 3 of the Loan Agreement under the heading "AFFIRMATIVE
COVENANTS" is amended to read in its entirety as follows:

 

“Except as provided above, all computations made to determine compliance with
the requirements contained in this paragraph shall be made in accordance with
the applicable provisions of GAAP, applied on a consistent basis, and shall be
certified by Borrower as true and correct in all material respects.”

 

23.     Under the heading "AFFIRMATIVE COVENANTS", the paragraph entitled
"Insurance" on page 3 of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

“Insurance. Maintain fire and other risk insurance, public liability insurance
and such other insurance as Lender may reasonably require with respect to
Borrower's properties and operations, in form, amounts, coverages and with
insurance companies reasonably acceptable to Lender. Borrower, upon request of
Lender, will deliver to Lender from time to time the policies or certificates of
insurance in form reasonably satisfactory to Lender, including stipulations that
coverages will not be cancelled or diminished without at least ten (10) days
prior written notice to Lender.”

 

24.     The second and third sentences in the paragraph entitled "Insurance
Reports" on page 3 of the Loan Agreement under the heading "AFFIRMATIVE
COVENANTS" are hereby deleted.

 

25.     Under the heading "AFFIRMATIVE COVENANTS", the paragraph entitled "Other
Agreements" on page 3 of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

"Other Agreements. Comply with all terms and conditions of all other agreements,
whether now or hereafter existing, between Borrower and any other party that are
material to Borrower's financial condition or operations, except for any
instances of non-compliance that have not had and are not reasonably expected to
have, either individually or in the aggregate, a material adverse effect on
Borrower's financial condition."

 

26.     Under the heading "AFFIRMATIVE COVENANTS", the paragraph entitled
"Unused Commitment Fee" is hereby deleted in its entirety.

 

27.     In the paragraph entitled "Loan Proceeds" under the heading "AFFIRMATIVE
COVENANTS" on page 3 of the Loan Agreement, the phrase "and other general
corporate purposes" is hereby added after the word "operations" and before the
word "unless".

 

28.     Under the heading "AFFIRMATIVE COVENANTS", the paragraph entitled
"Operations" on page 3 of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

"Operations. Employ executive officers with substantially similar qualifications
and experience as the present executive officers; provide written notice to
Lender of any change in Borrower's executive officers; conduct its business in a
reasonable and prudent manner."

 

29.     The words "Lender or" are hereby deleted from the paragraph entitled
"Environmental Studies" under the heading "AFFIRMATIVE COVENANTS".

 

30.     Under the heading "AFFIRMATIVE COVENANTS", the paragraph entitled
"Compliance with Governmental Requirements" on page 3 of the Loan Agreement is
hereby amended to read in its entirety as follows:

 

“Compliance with Governmental Requirements. Comply in all material respects with
all laws, ordinances and regulations, now or hereafter in effect, of all
governmental authorities applicable to the conduct of Borrower's properties,
business and operations. Borrower may contest in good faith any such law,
ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Borrower has notified Lender in
writing prior to doing so.”

 

4

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31.     Under the heading "AFFIRMATIVE COVENANTS", the paragraph entitled
"Inspection" on page 3 of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

"Inspection. Permit employees or agent of Lender, at any reasonable time on not
less than ten (10) days prior written notice to Borrower, to examine or audit
Borrower's books, accounts, and records and to make copies and memoranda of
Borrower's books, accounts and records, except that (1) Borrower shall be
required to reimburse Lender for the reasonable out-of-pocket expenses it incurs
only for one such inspection or audit each year and Lender shall bear the
expenses of any additional inspections or audits in each year, and
(2) notwithstanding the foregoing, during the occurrence of an Event of Default
and continuance thereof, such examinations and audits may be made without notice
as Lender deems appropriate, at the sole expense of Borrower."

 

32.     Under the heading "AFFIRMATIVE COVENANTS", the first two clauses of the
paragraph entitled "Environmental Compliance and Reports" on page 3 of the Loan
Agreement are hereby amended to read in their entirety as follows:

 

“Borrower shall comply in all material respects with any and all Environmental
Laws applicable to it and its operations, except for instances of non-compliance
that would not have a material adverse effect on Borrower's financial condition
or operations; not cause or permit to exist, as a result of an intentional or
unintentional action or omission on Borrower's part, at or on the Business
Offices while occupied by Borrower or by any tenant or agent thereof, any
environmental activity where damage to the environment could reasonably be
expected to result therefrom, unless such environmental activity is pursuant to
and in compliance with the conditions of a permit issued by the appropriate
federal, state or local governmental authorities;”

 

33.     Under the heading "AFFIRMATIVE COVENANTS", the paragraph entitled
"Additional Assurances" on page 3 of the Loan Agreement is hereby amended to
read in its entirety as follows:

 

"Additional Assurances. Make, execute and deliver to Lender such promissory
notes, and other documents and agreements as Lender or its attorney may
reasonably request to evidence the Loans made hereunder to Borrower."

 

34.     Under the heading "AFFIRMATIVE COVENANTS", the paragraph entitled
"Additional Indebtedness" on the top of page 4 of the Loan Agreement is hereby
amended to read in its entirety as follows:

 

“Additional Indebtedness. Without the prior written approval of Lender, Borrower
shall not incur any additional indebtedness for borrowed money, except for
indebtedness under the revolving credit line established under that certain
Business Loan Agreement dated as of January 10, 2017 between Borrower and
Lender; purchase money indebtedness; indebtedness under capitalized leases; and
indebtedness secured by Permitted Liens; and any extensions, refinancings,
refundings or renewals of any of the foregoing.”

 

35.     The first sentence of the section entitled "LENDER'S EXPENDITURES" on
page 4 of the Loan Agreement is hereby amended to read in its entirety as
follows:

 

“If any action or proceeding is commenced that would materially and adversely
affect the Borrower or Borrower fails to comply with any provision of this
Agreement or any Related Documents, including but not limited to Borrower's
failure to discharge or pay when due any amounts Borrower is required to
discharge or pay under this Agreement or any Related Documents, Lender on
Borrower's behalf may (but shall not be obligated to) take any curative action
that Lender reasonably deems appropriate.”

 

36.     Under the heading "NEGATIVE COVENANTS", the paragraph entitled
"Continuity of Operations" on page 4 of the Loan Agreement is hereby amended to
read in its entirety as follows:

 

"(1) Engage in any business activities substantially different than those in
which Borrower is presently engaged, or (2) cease operations, liquidate,
dissolve, or transfer or sell all or substantially all of Borrower's assets out
of the ordinary course of business, or consummate a merger or consolidation with
another corporation or entity if the persons who were Borrower's shareholders
immediately prior to the consummation of the merger or consolidation own,
immediately after such consummation, less than a majority of the outstanding
voting stock of the Borrower or the surviving corporation or entity in such
merger or consolidation if that is other than the Borrower."

 

5

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37.     Under the heading "NEGATIVE COVENANTS", the section entitled "Loans,
Acquisitions and Guaranties" on page 4 of the Loan Agreement is hereby amended
to read in its entirety as follows:

 

"Loans and Guaranties. (1) Loan, invest in or advance money or assets to any
other person, enterprise or entity other than in connection with or in
furtherance of Borrower's business, or (2) incur any obligation as surety or
guarantor other than in the ordinary course of Borrower's business."

 

38.     In the paragraph entitled "CESSATION OF ADVANCES" on page 4 of the Loan
Agreement, all references to any “Guarantor” are hereby stricken in their
entirety, clauses (D) and (E) are hereby deleted in its entirety and clause (C)
of that paragraph is amended to read in its entirety as follows:

 

“or (C) there occurs a material adverse change in Borrower's financial
condition.”

 

39.     Under the heading "DEFAULT", the paragraph entitled "Default in Favor of
Third Parties" on page 4 of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

"Default in Favor of Third Parties. Borrower defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other
agreement to which Borrower is a party, in favor of any other creditor or other
party thereto, that would materially and adversely affect Borrower's ability to
repay the Loans or perform its obligations under this Agreement or any of the
Related Documents."

 

40.     The section entitled "False Statements" under the heading "DEFAULT" on
page 4 of the Loan Agreement is hereby amended to read in its entirety as
follows:

 

"False Statements. Any warranty, representation or statement made or furnished
to Lender in writing by Borrower or on Borrower's behalf under either this
Agreement or any of the Related Documents was false or misleading in any
material respect when made, or becomes false or misleading in any material
respect at any time thereafter."

 

41.     Under the heading "DEFAULT", the first sentence of the paragraph
entitled "Creditor or Forfeiture Proceedings" on page 4 of the Loan Agreement is
hereby amended to read as follows:

 

"Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceedings, self-help repossession or any
other method, by any creditor of Borrower or by any governmental agency against
a material portion of Borrower's assets."

 

42.     Under the heading "DEFAULT", the second sentence of the paragraph
entitled "Creditor or Forfeiture Proceedings" on page 4 of the Loan Agreement is
hereby deleted in its entirety.

 

43.     The sections entitled "Defective Collateralization" and "Events
Affecting Guarantor" are hereby deleted in their entirety from the Section of
the Business Loan Agreement entitled "DEFAULT" on page 4 thereof.

 

44.     The word "material" is hereby added between the words “any” and “part”
in the section entitled "Insolvency" under the heading entitled "DEFAULT" on
page 4 of the Loan Agreement.

 

45.     Under the heading "DEFAULT", the paragraph entitled "Change in
Ownership" on page 4 of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

"Change in Ownership. Any change in ownership of forty-nine percent (49%) or
more of the common stock of Borrower, except as a result of sales of shares of
common stock in SEC-registered offerings."

 

46.     Under the heading "DEFAULT", the paragraph entitled "Adverse Change" on
page 4 of the Loan Agreement is hereby amended to read in its entirety as
follows:

 

"Adverse Change. A material adverse change occurs in Borrower's financial
condition."

 

47.     The sentence entitled "Insecurity", under the heading "DEFAULT" on page
4 of the Business Loan Agreement, is deleted in its entirety.

 

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48.     Under the heading "DEFAULT", the paragraph entitled "Right to Cure" on
the top of page 5 of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

"Right to Cure. If any default, other than a payment default on Indebtedness, is
curable, it may be cured if, after Lender sends written notice to Borrower
demanding cure of such default, Borrower: (1) cures the default within fifteen
(15) days; or (2) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's reasonable discretion to be
sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical."

 

49.     The paragraph entitled "DEPOSIT ACCOUNT SECURITY" on page 5 of the Loan
Agreement is hereby deleted in its entirety.

 

50.     In the Section entitled "WAIVER OF DEFENSES AND RELEASE OF CLAIMS" on
page 5 of the Loan Agreement, except in the penultimate sentence thereof, the
term "undersigned", wherever it appears, shall mean "the Borrower".

 

51.     Under the heading "PROHIBITED DRUG LAW ACTIVITIES" on page 6 of the Loan
Agreement the second paragraph is hereby amended in its entirety to read as
follows:

 

"Any lease entered into by Borrower providing for the use or occupancy of
premises in which Borrower is landlord during the term of the Loan shall
expressly prohibit the tenant under such lease or other occupant of such
premises (or any portion thereof) from engaging or permitting others to engage
in any Prohibited Drug Law Activities."

 

52.     The paragraph entitled "Subsidiaries and Affiliates of Borrower" under
the heading "MISCELLANEOUS PROVISIONS" on page 7 of the Loan Agreement is hereby
amended to read in its entirety as follows:

 

"Subsidiaries of Borrower. To the extent the context of any provisions of this
Agreement makes it appropriate, including without limitation any representation,
warranty or covenant, the word "Borrower" as used in this Agreement shall
include all of Borrower's majority or wholly-owned subsidiaries. Notwithstanding
the foregoing, however, under no circumstances shall this Agreement be construed
to require Lender to make any Loan or other financial accommodation to any of
Borrower's subsidiaries or affiliates."

 

53.     The phrase "in all material respects" is hereby inserted on page 7 of
the Loan Agreement in the section entitled "Survival of Representations and
Warranties" under the heading "MISCELLANEOUS," (1) between the word "Borrower"
and the phrase "at the time each Loan Advance is made," and (2) between the word
"effect" and the phrase "until such time as Borrower's Indebtedness shall be
paid in full,".

 

54.     The following paragraph is hereby added as the last paragraph under the
heading entitled "MISCELLANEOUS PROVISIONS" on page 7 of the Loan Agreement:

 

"No Collateral. Notwithstanding anything to the contrary set forth herein or in
the Related Documents, it is expressly acknowledged and agreed by the parties
that (1) the Loan is and shall be unsecured and uncollateralized, (2) Borrower
is not granting any security interest in or any other lien or encumbrance on, or
any other rights or interests in or to, any of its assets or properties to
Lender for the purpose of securing Borrower's obligations under this Loan
Agreement or the Related Documents, and (3) any provisions in this Loan
Agreement or any of the Related Documents relating to "Collateral" or imposing
any obligations on Borrower with respect to Collateral, and any representations
or warranties in this Loan Agreement or any of the Related Documents with
respect to Collateral, are hereby stricken in their entirety from the Loan
Agreement and such Related Documents will have no force or effect whatsoever."

 

55.     The definition of the term "Grantor" is hereby deleted from the Section
entitled "DEFINITIONS" on page 7 of the Loan Agreement.

 

56.     The definition of the term "Note under the heading "MISCELLANEOUS
PROVISIONS" on page 8 of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

"Note. The word "Note" means the Promissory Note executed by Borrower in the
original principal amount of $3,500,000.00 dated September 12, 2017, together
with all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for the Note or Credit Agreement or any
other subsequent Notes evidencing further Indebtedness."

 

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57.     The following sentence is hereby added to the end of the definition of
the words "Permitted Liens" under the heading entitled "DEFINITIONS" on page 8
of the Loan Agreement:

 

"For purposes of this Agreement, including this paragraph, purchase money liens
and purchase money security interests shall include liens and security interests
on equipment or other property which Borrower possesses under capitalized or
operating leases, whether in existence on the date hereof or entered into by
Borrower at any time hereafter."

 

[Signature page to follow.]

 

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IN WITNESS WHEREOF, Borrower and Lender have executed this Addendum to Business
Loan Agreement as of the date first set forth above.

 

 

BORROWER:

 

   

COLLECTORS UNIVERSE, INC.,
a Delaware corporation

 

 

 

 

 

 

 

By:

/s/ JOSEPH WALLACE

 

Name: Joseph Wallace

Its: CFO/Assistant Secretary

 

 

 

LENDER:

 

Z.B. N.A. dba California Bank & Trust

 

 

By:

/s/ MATT BULLOCK  

Name:

Matt Bullock  

Its:

Senior Vice President  

    

9