EXHIBIT 10.1

 

INDEMNIFICATION AGREEMENT

 

 

THIS AGREEMENT is made and entered into as of the ___ day of ________, 2016,
(this “Agreement”) by and between DGSE Companies, a Nevada corporation (the
“Company”), and ______________________ (“Indemnitee”).

 

Recitals:

 

WHEREAS, highly competent persons have become more reluctant to serve
publicly-held corporations as directors or officers or in other capacities
unless they are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to, and activities on behalf of, the corporation;
this is because such persons in service to corporations are being increasingly
subjected to expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only against the
corporation or business enterprise itself; and

 

WHEREAS, the Board of Directors of the Company (the "Board") has determined
that, to attract and retain qualified individuals, the Company will attempt to
maintain on an ongoing basis, at its sole expense, liability insurance to
protect persons serving the Company and its subsidiaries from certain
liabilities; and

 

WHEREAS, the Board has determined that the increased difficulty in attracting
and retaining such persons is detrimental to the best interests of the Company's
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future; and

 

WHEREAS, it is reasonable, prudent and necessary for the Company to obligate
itself contractually to indemnify, and to advance expenses on behalf of, such
persons to the fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern that they will
not be so indemnified; and

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder; and

 

WHEREAS, each of Sections 78.7502 and 78.751 of the Nevada General Corporation
Law (“NGCL”) is nonexclusive, and therefore contemplates that contracts may be
entered into with respect to indemnification of directors, officers and
employees; and

 

WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that he be
so indemnified;

 

NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, the Company and Indemnitee hereby covenant and agree as follows:

 

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Section 1. Services by Indemnitee. Indemnitee agrees to serve or continue to
serve as a director and/or officer of the Company. Indemnitee may at any time
and for any reason resign from such position (subject to any other contractual
obligation or any obligation imposed by operation of law), in which event the
Company shall have no obligation under this Agreement to continue Indemnitee in
such position. This Agreement shall not be deemed an employment contract between
the Company (or any of its subsidiaries) and Indemnitee. This Agreement shall
continue in force after Indemnitee has ceased to serve as a director or officer
of the Company.

 

Section 2. Indemnification and Advancement - General. The Company shall
indemnify, and advance Expenses (as hereinafter defined) to, Indemnitee (a) as
provided in this Agreement and (b) to the fullest extent permitted by applicable
law in effect on the date hereof and as amended from time to time. The rights of
Indemnitee provided under the preceding sentence shall include, but shall not be
limited to, the rights set forth in the other Sections of this Agreement.

 

Section 3. Proceedings Other Than Proceedings by or in the Right of the Company.
Indemnitee shall be indemnified under this Section 3 if, by reason of his
Corporate Status (as hereinafter defined), he is, or is threatened to be made, a
party to or a participant in any threatened, pending, or completed Proceeding
(as hereinafter defined), other than a Proceeding by or in the right of the
Company. Pursuant to this Section 3, Indemnitee shall be indemnified against all
Expenses, judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by him or on his behalf in connection with such
Proceeding or any claim, issue or matter therein, if he acted in Good Faith.

 

Section 4. Proceedings by or in the Right of the Company. Indemnitee shall be
indemnified under this Section 4 if, by reason of his Corporate Status, he is,
or is threatened to be made, a party to or a participant in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection with such Proceeding if he acted in Good Faith;
provided that if applicable law so provides, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter in such
Proceeding as to which Indemnitee shall have been adjudged by a court of
competent jurisdiction after exhaustion of all appeals therefrom, to be liable
to the Company unless and to the extent that the court in which such Proceeding
shall have been brought or is pending, shall determine that such indemnification
may be made.

 

Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in any
Proceeding, he shall be indemnified to the maximum extent permitted by law
against all Expenses actually and reasonably incurred by him or on his behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or
matter.

 

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Section 6. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.

 

Section 7. Mandatory Advancement of Expenses. Notwithstanding any provision of
this Agreement to the contrary, the Company shall advance all Expenses incurred
by or on behalf of Indemnitee in connection with any Proceeding in which
Indemnitee is involved by reason of Indemnitee's Corporate Status within 10 days
after the receipt by the Company of a statement or statements from Indemnitee
requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee. Indemnitee hereby
undertakes to repay any Expenses advanced if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified against such Expenses. Such
undertaking is an unsecured obligation of Indemnitee and shall not bear
interest.

 

Section 8. Procedure for Determination of Entitlement to Indemnification.

 

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to
the Company a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of
such a request for indemnification, advise the Board in writing that Indemnitee
has requested indemnification.

 

(b) Upon written request by Indemnitee for indemnification pursuant to Section
8(a) hereof, a determination, if required by applicable law, with respect to
Indemnitee's entitlement thereto shall be made in the specific case: (i) if a
Change in Control shall have occurred, the Disinterested Directors shall direct
Independent Counsel to make such determination in a written opinion to the Board
of the Company, a copy of which shall be delivered to Indemnitee; or (ii) if a
Change in Control shall not have occurred, (A) by a majority vote of the
Disinterested Directors, even though less than a quorum of the Board of the
Company, or (B) by a committee of the Disinterested Directors designated by a
majority vote of Disinterested Directors, even though less than a quorum, or (C)
if there are no Disinterested Directors or, if the Disinterested Directors so
direct, by Independent Counsel in a written opinion to the Board of the Company,
a copy of which shall be delivered to Indemnitee; and, if it is so determined
that Indemnitee is entitled to indemnification, payment to Indemnitee shall be
made within 10 days after such determination. Any costs or expenses (including
attorneys' fees and disbursements) incurred by Indemnitee in cooperating with
the person, persons or entity making the determination discussed in this Section
8(b) with respect to Indemnitee's entitlement to indemnification, shall be borne
by the Company (irrespective of the determination as to Indemnitee's entitlement
to indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.

 

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(c) In the event the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 8(b) hereof, the Independent
Counsel shall be selected as provided in this Section 8(c). If a Change in
Control shall not have occurred, the Independent Counsel shall be selected by
the Board of the Company, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected.
If a Change in Control shall have occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Board of the Company, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event, Indemnitee
or the Company, as the case may be, may, within 10 days after such written
notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without merit. If,
within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 8(b) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may
petition a Texas Court (as defined herein) for resolution of any objection which
shall have been made by the Company or Indemnitee to the other's selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Texas Court or by such other person as the Texas Court
shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under
Section 8 hereof.

 

(d) Indemnitee will be deemed a party to a Proceeding for all purposes hereof if
Indemnitee is named as a defendant or respondent in a complaint or petition for
relief in that Proceeding, regardless of whether Indemnitee is ever served with
process or makes an appearance in that Proceeding.

 

(e) The Company shall not be required to obtain the consent of Indemnitee to the
settlement of any Proceeding the Company has undertaken to defend, which consent
shall not be unreasonably withheld or delayed. The Company shall not be liable
for any amount paid by the Indemnitee in settlement of any Proceeding that is
not defended by the Company, unless the Company has consented to such
settlement, which consent shall not be unreasonably withheld or delayed.

 

Section 9. Presumptions; Reliance and Effect of Certain Proceedings.

 

(a) In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or firm making such determination shall presume
that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with
Section 8(a), and the Company shall have the burden of proof to overcome that
presumption in connection with the making by any person, persons or firm of any
determination contrary to that presumption. Neither the failure of Independent
Legal Counsel to have made a determination prior to the commencement of any
action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination thereby that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption or
be evidence that Indemnitee has not met the applicable standard of conduct.

 

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(b) If the person, persons or firm empowered under Section 8 to determine
whether Indemnitee is entitled to indemnification shall not have made a
determination within 60 days after receipt by the Company of the request
therefor, the requisite determination of entitlement to indemnification shall be
deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee's statement not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law; provided that
such 60-day period may be extended for a reasonable time, not to exceed an
additional 20 days, if the person, persons or firm making the determination with
respect to entitlement to indemnification in good faith notifies the Company and
Indemnitee in writing that such person requires such additional time for the
obtaining or evaluating of documentation and/or information relating thereto.

 

(c) The termination of any Proceeding or of any claim, issue or matter therein,
by judgment, order, settlement or conviction, or upon a plea of nolo contendere
or its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption or be evidence that Indemnitee did not act in Good Faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe his conduct was unlawful.

 

(d) For purposes of any determination of Good Faith, Indemnitee shall be
conclusively presumed to have acted in Good Faith if Indemnitee's action or
inaction is based on the records or books of account of the Enterprise,
including financial statements, or on information supplied to Indemnitee by the
officers, agents or employees of the Enterprise in the course of their duties,
or on the advice of legal counsel for the Enterprise or on information or
records given or reports made to the Enterprise by an independent certified
public accountant or by an appraiser, financial advisor or other expert or
professional selected with reasonable care by the Enterprise or otherwise acted
in reliance on records of the Company or information, opinions, reports, books
of account or statements including financial statements or other financial data
as permitted by Section 78.138 of the NGCL. The provisions of this Section 9(d)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.

 

(e) The knowledge and/or actions, or failure to act, of any director, officer,
agent or employee of the Enterprise shall not be imputed to Indemnitee for
purposes of determining the right to indemnification under this Agreement.

 

Section 10. Nonexclusive Remedies of Indemnitee.

 

(a) If (i) a determination is made pursuant to Section 8 that Indemnitee is not
entitled to indemnification under this Agreement, (ii) advancement of Expenses
is not timely made pursuant to Section 7, (iii) no determination of entitlement
to indemnification shall have been made pursuant to Section 8(b) within 90 days
after receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 5, Section 6, the last sentence
of Section 8(b) or the last sentence of Section 17(g) within 10 days after
receipt by the Company of a written request therefor, or (v) payment of
indemnification pursuant to Section 3 or Section 4 is not made within 10 days
after a determination has been made that Indemnitee is entitled to
indemnification, Indemnitee shall be entitled to commence an adjudication by a
court of competent jurisdiction of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. The
Company shall not oppose Indemnitee's right to seek any such adjudication or
award in arbitration.

 

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(b) If a determination shall have been made pursuant to Section 8(b) that
Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 10 shall be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee shall
not be prejudiced by reason of that adverse determination.

 

(c) If a determination shall have been made pursuant to Section 8(b) that
Indemnitee is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant to
this Section 10, absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee's statements not
materially misleading, in connection with the request for indemnification that
in either case was ultimately relied upon by the person making the
indemnification determination, or (ii) a prohibition of such indemnification
under applicable law.

 

(d) If Indemnitee, pursuant to this Section 10, seeks a judicial adjudication of
or an award in arbitration to enforce his rights under, or to recover damages
for breach of, this Agreement, Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company against, any and all expenses
(of the types described in the definition of Expenses in Section 17 of this
Agreement) actually and reasonably incurred by him in such judicial adjudication
or arbitration unless it shall be finally determined by the court or arbitrator
before which such claim was brought that it was brought in bad faith. Even if it
shall be determined in such judicial adjudication or arbitration that Indemnitee
is entitled to receive part but not all of the indemnification or advancement of
Expenses sought, the expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration shall be paid in full.

 

(e) The Company shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 10 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and hereby
stipulates, and shall so stipulate in any such court or before any such
arbitrator, that the Company is bound by all the provisions of this Agreement.

 

Section 11. Nonexclusivity; Insurance; Subrogation.

 

(a) The rights of indemnification and to receive advancement of Expenses as
provided by this Agreement shall not be exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the Company's
Articles of Incorporation, the Company's Bylaws, any agreement, a vote of
stockholders or a resolution of directors, or otherwise. No amendment of this
Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal. To the extent that a change in the NGCL or the judicial interpretation
thereof, permits greater indemnification or advancement of Expenses than would
be afforded currently under the Company's Articles of Incorporation, Bylaws and
this Agreement, it is the agreement and intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. No right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right and remedy shall be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.

 

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(b) To the extent that the Company (i) enters into an agreement, arrangement or
understanding with another director or officer of the Company that provides
greater rights to indemnification or advancement of expenses than under this
Agreement or (ii) maintains an insurance policy or policies providing liability
insurance for directors, officers, employees, or agents of the Company or of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise such person serves at the request of the Company, Indemnitee
shall have the benefit of such agreement, arrangement or understanding and be
covered by such policy or policies in accordance with its or their terms to the
maximum extent of the coverage available for any such director, officer,
employee or agent under such policy or policies.

 

(c) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all documents reasonably requested by the Company
to secure such rights, including execution of such documents as are reasonably
requested by the Company to enable the Company to bring suit to enforce such
rights.

 

(d) The Company shall not be liable under this Agreement to make any payment of
amounts otherwise indemnifiable (or for which advancement is provided hereunder)
hereunder if and to the extent that Indemnitee has otherwise theretofore
actually received such payment under any insurance policy, contract, agreement,
the Certificate of Incorporation or Bylaws of the Company, or otherwise.

 

(e) The Company's obligation to indemnify or advance Expenses hereunder to
Indemnitee who is or was serving at the request of the Company as a director,
officer, employee or agent of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise shall be reduced by any amount
Indemnitee has actually theretofore received as indemnification or advancement
of expenses from such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise.

 

Section 12. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (i) 10 years after the date that Indemnitee shall
have ceased to serve as a director or officer, of the Company (or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that Indemnitee served at the request of the Company); (ii) the final
termination of any Proceeding then pending in respect of which Indemnitee is
granted rights of indemnification or advancement of Expenses hereunder, and
(iii) the final termination of any proceeding commenced by Indemnitee pursuant
to Section 10 relating thereto. This Agreement shall be binding upon the Company
and its successors and assigns and shall inure to the benefit of Indemnitee and
his heirs, executors and administrators.

 

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Section 13. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever: (i)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (ii) such provision or provisions shall be
deemed reformed to the extent necessary to conform to applicable law and to give
the maximum effect to the intent of the parties hereto; and (iii) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.

 

Section 14. Exception to Right of Indemnification or Advancement of Expenses.
Notwithstanding any other provision of this Agreement, but subject to Section
10, Indemnitee shall not be entitled to indemnification or advancement of
Expenses under this Agreement (i) with respect to any Proceeding brought by
Indemnitee, or any claim therein, unless the bringing of such Proceeding or
making of such claim shall have been approved by the Board of Directors or (ii)
with respect to any proceeding in which final judgment is rendered against
Indemnitee for an accounting of profits made from the purchase and sale or sale
and purchase by Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended.

 

Section 15. Identical Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.

 

Section 16. Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

 

Section 17. Definitions. For purposes or this Agreement:

 

(a) “Affiliate” means with respect to any person or entity, any other person or
entity that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with, such person or
entity.

 

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(b) “Change in Control” means a change in control of the Company of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Securities Exchange Act of 1934 (the “Act”), whether
or not the Company is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed to
have occurred if (i) any “person” (as such term is used in Sections 13(d) and
14(d) of the Act) other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 15% or more of the
combined voting power of the Company's then outstanding securities without the
prior approval of at least two-thirds of the members of the Board of the Company
in office immediately prior to such person attaining such percentage interest
(excluding any person who is the beneficial owner of more than 15% of the
combined voting power of the Company’s outstanding securities as of the date
hereof); (ii) any “person” (as such term is used in Sections 13(d) and 14(d) of
the Act) other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities without the
prior approval of at least two-thirds of the members of the Board of the Company
in office immediately prior to such person attaining such percentage interest;
(iii) there occurs a proxy contest, or the Company is a party to a merger,
consolidation, sale of assets, plan of liquidation or other reorganization not
approved by at least two-thirds of the members of the Board of the Company then
in office, as a consequence of which members of the Board in office immediately
prior to such transaction or event constitute less than a majority of the Board
thereafter; or (iv) during any period of two consecutive years, other than as a
result of an event described in clauses (ii) or (iii) of this subsection (a),
individuals who at the beginning of such period constituted the Board of the
Company (including for this purpose any new director whose election or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of such period) cease for any reason to constitute at least a
majority of the Board.

 

(c) “Corporate Status” describes the status of a person who is or was a
director, officer, employee or agent of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
that such person is or was serving at the request of the Company.

 

(d) “Disinterested Director” means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification is sought by
Indemnitee.

 

(e) “Enterprise” shall mean the Company and any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise of which
Indemnitee is or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary.

 

(f) “Expenses” shall include all reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel and lodging
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding.

 

(g) “Good Faith” shall mean Indemnitee having acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal Proceeding, having
had no reasonable cause to believe Indemnitee's conduct was unlawful.

 

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(h) “Independent Counsel” means a law firm that, or a member of a law firm who,
is experienced in matters of corporation law and neither presently is, nor in
the past five years has been, retained to represent: (i) the Company or any
Affiliate thereof or Indemnitee (other than with respect to matters concerning
the Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the foregoing,
the term “Independent Counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict in representing the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement. The Company shall promptly pay the
reasonable fees and expenses of the Independent Counsel referred to above (who
is an intended third-party beneficiary of this sentence) and shall fully
indemnify such counsel against any and all Expenses, claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant
hereto.

 

(i) “Proceeding” includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding,
whether brought by or in the right of the Company or otherwise and whether
civil, criminal, administrative or investigative, in which Indemnitee was, is or
will be involved as a party or otherwise, by reason of the fact that Indemnitee
is or was a director or officer of the Company, by reason of any action taken by
him or of any inaction on his part while acting as director or officer of the
Company, or by reason of the fact that he is or was serving at the request of
the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, in each case whether or
not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification or advancement of expenses can be
provided under this Agreement; except one initiated by Indemnitee pursuant to
Section 10 to enforce his rights under this Agreement.

 

(j) References to “other enterprise” shall include employee benefit plans;
references to “fines” shall include any excise tax assessed with respect to any
employee benefit plan; references to “serving at the request of the Company”
shall include any service as a director, officer, employee or agent of the
Company that imposes duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, as participants or
beneficiaries; and a person who acted in good faith and in the manner he
reasonably believed to be in the interests of the participants and beneficiaries
of an employee benefit plan shall not be deemed to have acted in manner “not
opposed to the best interests of the Company” as referred to in this Agreement.

 

Section 18. Enforcement.

 

(a) The Company expressly confirms and agrees that it has entered into this
Agreement and assumed the obligations imposed on it hereby in order to induce
Indemnitee to continue to serve as a director and/or officer of the Company, and
to serve upon any committee of the Board of Directors of the Company as
requested by such Board, and the Company acknowledges that Indemnitee is relying
upon this Agreement in serving as a director and/or officer of the Company and a
member of any such committee.

 

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(b) This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof.

 

(c) The right to be indemnified or to receive advancement of Expenses under this
Agreement (i) is a contract right based upon good and valuable consideration,
pursuant to which Indemnitee may sue, (ii) is and is intended to be retroactive
and shall be available as to events occurring prior to the date of this
Agreement and (iii) shall continue after any rescission or restrictive
modification of this Agreement as to events occurring prior thereto.

 

Section 19. Amendment and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

 

Section 20. Notice by Indemnitee. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter that may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation it may have to the Indemnitee under this
Agreement or otherwise, except and only to the extent the Company is materially
prejudiced by such failure.

 

Section 21. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom the notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed to the notice address set forth on Exhibit A or to such
other address as may have been furnished to Indemnitee by the Company or to the
Company by Indemnitee, as the case may be.

 

Section 22. Contribution. To the fullest extent permissible under applicable
law, if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such Proceeding in order
to reflect (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving cause to such Proceeding;
and/or (ii) the relative fault of the Company (and its directors, officers,
employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).

 

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Section 23. Governing Law; Submission to Jurisdiction; Appointment of Agent for
Service of Process. This Agreement and the legal relations among the parties
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Nevada, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 10(a),
the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that
any action or proceeding arising out of or in connection with this Agreement
shall be brought only in the courts of the State of Texas, County of Dallas (the
“Texas Court”), and not in any other state or federal court in the United States
of America or any court in any other country, (ii) consent to and submit to the
exclusive jurisdiction of the Texas Court for purposes of any action or
proceeding arising out of or in connection with this Agreement, (iii) appoint,
to the extent such party is not a resident of the State of Texas, irrevocably
the Company’s registered agent through its Texas office as its agent in the
State of Texas as such party's agent for acceptance of legal process in
connection with any such action or proceeding against such party with the same
legal force and validity as if served upon such party personally within the
State of Texas, (iv) waive any objection to the laying of venue of any such
action or proceeding in the Texas Court, and (v) waive, and agree not to plead
or to make, any claim that any such action or proceeding brought in the Texas
Court has been brought in an improper or otherwise inconvenient forum.

 

Section 24. Miscellaneous. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate. All references in this
Agreement to Sections, shall be deemed to be references to Sections of this
Agreement unless the context indicates otherwise.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

 

  DGSE COMPANIES INC.                     By:                       Indemnitee:
                 

 

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