Exhibit 10.99

 

PROMISSORY NOTE

 

Principal Amount: $3,500,000.00  

Date of Note: September 15, 2017        

  

PROMISE TO PAY. Collectors Universe, Inc. (“Borrower”) promises to pay to ZB,
N.A. dba California Bank & Trust (“Lender”), or order, in lawful money of the
United States of America, the principal amount of Three Million Five Hundred
Thousand & 00/100 Dollars ($3,500,000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until
repayment of each advance.

 

PAYMENT. Borrower will pay this loan in accordance with the following payment
schedule:

 

Non-Revolving Line of Credit. During the initial 12-month period of the loan
evidenced by this Note (the “Draw Period”), Borrower shall make monthly payments
of all accrued and unpaid interest on the outstanding principal balance under
this Note, commencing on September 15, 2017, and on the same day of each month
thereafter, with interest based on the rate as described in the “VARIABLE
INTEREST RATE” and “INTEREST RATE OPTIONS” hereinbelow. The interest rate
provisions set forth in the section entitled INTEREST RATE OPTIONS” hereinbelow
shall apply only during the Draw Period.

 

Conversion to Term Loan. Upon the expiration of the Draw Period on August 15,
2018 (the “Conversion Date”), the non-revolving line of credit evidenced by this
Note shall terminate and Borrower’s right to request, and Lender’s obligation to
fund, advances thereunder shall expire. Effective as of the Conversion Date, the
total outstanding principal balance under this Note will convert to a fully
amortizing term loan having a term of four (4) years from the Conversion Date
(the “Term Loan”), with interest accruing on the outstanding principal balance
at a rate selected by Borrower for the Term Loan (the “Interest Rate (Term
Loan)”) and based on an amortization period of 48 months.

 

No later than three days prior to the Conversion Date, Borrower shall provide
Lender with written notice of the Interest Rate (Term Loan) that it selects for
the Term Loan, which shall be one of the following:

 

(i)     Prime Option. A variable rate per annum equal to the Wall Street Journal
Prime Rate less 0.250%. As used herein, the “Wall Street Journal Prime Rate”
means the variable rate of interest per annum, as adjusted from time to time,
published in the Wall Street Journal as the prime rate or, if published as a
range, then the highest rate in such range. The Interest Rate (Term Loan) under
this option is subject to change from time to time based on changes in Wall
Street Journal Prime Rate, and such changes in the Interest Rate (Term Loan)
will be effective immediately upon changes in the Wall Street Journal Prime
Rate, provided, however, any such change will not occur more often than each
day.

 

(ii)     LIBOR Option. A variable rate per annum equal to the Three-Month LIBOR
plus 2.250%. As used herein, “Three-Month LIBOR” means the rate quoted by Lender
as its LIBOR rate for interest periods of three months, as quoted to Lender for
U.S. Dollars by Bloomberg or other comparable pricing services selected by
Lender. The Interest Rate (Term Loan) under this option is subject to change
based on changes in the Three-Month LIBOR, effective as of the expiration of the
then-current three-month interest period.

 

(iii)     Fixed Rate Option. A fixed rate per annum equal to the Four-Year LIBOR
Swap Rate plus 2.250%. “Four-Year LIBOR Swap Rate” shall have the meaning set
forth in the section entitled “FOUR-YEAR LIBOR SWAP RATE” set forth hereinbelow.

 

If Borrower fails to provide Lender with timely written notice of the Interest
Rate (Term Loan) option it selects, Borrower will be deemed to have selected the
Prime Option.

 

Once any option is selected in writing for the Interest Rate (Term Loan), such
selection may not be amended, changed, modified, rescinded, revoked or withdrawn
by Borrower.

 

Following the Conversion Date, Borrower shall make monthly payments on the Term
Loan as follows:

 

It Borrower has selected the Prime Option or the LIBOR Option for the Interest
Rate (Term Loan), Borrower shall make monthly payments of principal plus all
accrued and unpaid interest, commencing on September 15, 2018, and on the same
day of each month thereafter, except that the final payment due on the maturity
date of August 15, 2022, shall be in an amount equal to the total outstanding
balance under this Note, including without limitation any and all principal,
accrued and unpaid interest, fees, charges, costs and expenses and any and all
other sums due and payable on such maturity date.

 

If Borrower has selected the Fixed Option for the Interest Rate (Term Loan),
Borrower shall make equal monthly payments of principal and interest, commencing
on September 15, 2018, and on the same day of each month thereafter, except that
the final payment due on the maturity date of August 15, 2022, shall be in an
amount equal to the total outstanding balance under this Note, including without
limitation any and all principal, accrued and unpaid interest, fees, charges,
costs and expenses and any and all other sums due and payable on such maturity
date.

 

Unless otherwise agreed or required by applicable law, payments will be applied
first to any accrued unpaid interest; then to principal; then to any late
charges; and then to any unpaid collection costs. Borrower will pay Lender at
Lender’s address shown above or at such other place as Lender may designate in
writing.

 

 

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PROMISSORY NOTE
(Continued)

Page 2

 

4 YEAR LIBOR/SWAP RATE. As used herein, “Four-Year LIBOR Swap Rate” shall mean
the rate per annum quoted by Lender as its LIBOR swap rate for an interest
period of four years, as quoted to Lender for U.S. Dollars by Bloomberg or other
comparable pricing services selected by Lender. The Four-Year LIBOR Swap Rate is
to be strictly interpreted and is not intended to serve any other purpose other
than providing an index to determine the interest rate for the Fixed Option. The
Four-Year LIBOR Swap Rate may not necessarily be the same as the quoted offer
side in the Eurodollar time deposit market by any particular institution or
service applicable to any interest period. The Four-Year LIBOR Swap Rate is not
necessarily the lowest rate charged by Lender on its loans. If the Four-Year
LIBOR Swap Rate becomes unavailable during the term of this loan, Lender may
designate a substitute index after notifying Borrower. Lender will tell Borrower
the current Four-Year LIBOR Swap Rate upon Borrower’s request. Borrower
understands that Lender may make loans based on other rates as well. Interest on
the unpaid principal balance of this Note will be calculated as described in the
“INTEREST CALCULATION METHOD” paragraph using a rate of 2.25 percentage points
over the Four-Year LIBOR Swap Rate. NOTICE: Under no circumstances will the
interest rate on this Note be more than the maximum rate allowed by applicable
law.

 

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the Prime Rate as
published in the Wall Street Journal. Information about the Index is available
or published daily in the Wall Street Journal (the “Index”). The Index is not
necessarily the lowest rate charged by Lender on its loans. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute
index after notifying Borrower. Lender will tell Borrower the current Index rate
upon Borrower’s request. The interest rate change will not occur more often than
each day. Borrower understands that Lender may make loans based on other rates
as well. The Index currently is 4.250% per annum. Interest on the unpaid
principal balance of this Note will be calculated as described in the “INTEREST
CALCULATION METHOD” paragraph using a rate of 0.250 percentage points under the
Index, adjusted if necessary for any minimum and maximum rate limitations
described below, resulting in an initial rate of 4.000%. NOTICE: Under no
circumstances will the interest rate on this Note be less than 2.250% per annum
or more than the maximum rate allowed by applicable law.

 

INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360
basis; that is, by applying the ratio of the interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. All interest payable under
this Note is computed using this method. This calculation method results in a
higher effective interest rate than the numeric interest rate stated in this
Note.

 

INTEREST RATE OPTIONS. On the terms and subject to the conditions set forth
herein, Borrower will be able to select, from one of the following Rate Options,
an interest rate which will be applicable to a particular dollar increment of
amounts outstanding, or to be disbursed, under this Note. Principal shall be
payable as specified herein in the “Payment” section, and interest shall be
payable as specified for each Rate Option. The following Rate Options are
available to Borrower:

 

(A)     Default Option. The interest rate margin and index described in the
“VARIABLE INTEREST RATE” paragraph herein (the “Default Option”).

 

(B)     Lender’s 3 Month LIBOR Rate. A margin of 2.250 percentage points over
Lender’s 3 Month LIBOR Rate. For purposes of this Note, Lender’s 3 Month LIBOR
Rate shall mean 3 Month LIBOR rate. Lender’s LIBOR rate is to be strictly
interpreted and is not intended to serve any purpose other than providing an
index to determine the interest rate used herein. Lender’s LIBOR rate may not
necessarily be the same as the quoted offered side in the Eurodollar time
deposit market by any particular institution or service applicable to any
interest period. As used herein, Lender’s LIBOR rate shall mean the rates per
annum quoted by Lender as Lender’s 3 Month LIBOR rate based upon quotes from the
London Interbank Offered Rate from the ICE Benchmark Administration Interest
Settlement Rates, as quoted for U.S. Dollars by Bloomberg, or other comparable
services selected by the Lender. Interest based on this Rate Option is a
floating rate and will change on and as of the date of a change in Lender’s 3
Month LIBOR Rate (the “Interest Period”). Adjustments in the interest rate due
to changes in the maximum nonusurious interest rate allowed (the “Highest Lawful
Rate”) shall be made on the effective day of any change in the Highest Lawful
Rate. Under this Rate Option, Borrower shall make monthly interest payments on
the same day of the month, with a final payment of all accrued and unpaid
interest on the last day of such Interest Period and, in the case of an Interest
Period greater than three (3) months, at three month (3 month) intervals after
the first day of such Interest Period.

 

The following provisions concerning Rate Options are a part of this Note:

 

Selection of Rate Options. Provided Borrower is not in default under this Note,
Borrower may request (a “Rate Request”) that a $100,000.00 increment or any
amount in excess thereof (an “Increment”) of the outstanding principal of, or
amounts to be disbursed under, this Note bear interest at the selected rate.
Borrower may make this Rate Request by telephonic notice, however no later than
10:00 AM PDT three (3) business days prior to the effective date of the Rate
Request to permit Lender to quote the rate requested.

 

Applicable Interest Rate. Borrower’s Rate Request will become effective, and
interest on the increment designated will be calculated at the rate (the
“Effective Rate”), which Borrower requested, for the applicable Interest Period,
subject to the following:

 

(1)     Notwithstanding any Rate Request, interest shall be calculated on the
basis of the Default Option if (a) Lender, in good faith, is unable to ascertain
the requested Rate Option by reason of circumstances then affecting the
applicable money market or otherwise, (b) it becomes unlawful or impracticable
for Lender to maintain loans based upon the requested Rate Option, or (c)
Lender, in good faith, determines that it is impracticable to maintain loans
based on the requested Rate Option because of increased taxes, regulatory costs,
reserve requirements, expenses or any other costs or charges that affect such
Rate Options. Upon the occurrence of any of the events described in this
“Interest Rate Options” section, any increment to which a requested Rate Option
applies shall be immediately (or at the option of Lender, at the end the current
applicable interest Period), without further action of Lender or Borrower,
converted to an increment to which the Default Option applies.

 

(2)     Borrower may have no more than a total of 3 Effective Rates applicable
to amounts outstanding under this Note at any given time.

 

 

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PROMISSORY NOTE

(Continued)
Page 3

 

(3)     A Rate Request shall be effective as to amounts to be disbursed under
this Note only if, on the effective date of the Rate Requests, such amounts are
in fact disbursed to or for Borrower’s account in accordance with the provisions
of this Note and any related loan documents.

 

(4)     Any amounts of outstanding principal for which a Rate Request has not
been made, or is otherwise not effective, shall bear interest until paid in full
at the Default Option.

 

(5)     Any amounts of outstanding principal bearing interest based upon a Rate
Option shall bear interest at such rate until the end of the Interest Period for
that Rate Option, and thereafter shall bear interest based upon the Default
Option unless a new Rate Request for a Rate Option complying with the terms
hereof has been made and has become effective.

 

(6)     Upon default Lender shall no longer be obligated to honor any Rate
Requests.

 

(7)     No Interest Period shall extend beyond the maturity date of this Note.

 

Notices: Authority to Act. Borrower acknowledges and agrees that the agreement
of Lender herein to receive certain notices by telephone is solely for
Borrower’s convenience. Lender shall be entitled to rely on the authority of the
person purporting to be a person authorized by Borrower to give such notice, and
Lender shall have no liability to Borrower on account of any action taken by
Lender in reliance upon such telephonic notice. Borrower’s obligation to repay
all sums owing under the Note shall not be affected in any way or to any extent
by any failure by Lender to receive written confirmation of any telephonic
notice or the receipt by Lender of a confirmation which is at variance with the
terms understood by Lender to be contained in the telephonic notice.

 

VARIABLE RATE FLOOR. Notwithstanding anything to the contrary herein, if the
interest rate is calculated with any LIBOR or LIBOR/Swap rate index plus a
margin, then under no circumstances will the Index be less than zero percent
(0%) per annum. To the extent there is an interest rate floor described in the
VARIABLE INTEREST RATE paragraph which is different than the interest rate floor
described in this paragraph, then the interest rate floor amount set forth in
the VARIABLE INTEREST RATE paragraph shall be applicable. Under no circumstances
will the interest rate on this Note be less than zero percent (0%) per annum.

 

PREPAYMENT FEE; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment
of this Note, Borrower understands that Lender is entitled to a minimum interest
charge of $200.00. Upon prepayment of this Note, Lender is entitled to the
following prepayment fee: Borrower acknowledges that the “Fixed Rate Option”
interest rate payable under this Note has been offered by Lender in
contemplation of the loan being outstanding in accordance with its terms until
maturity. Borrower agrees to pay a fee for early payment of all or any part of
the outstanding principal balance under this Note in excess of the Permitted
Prepayment Amount (as defined below) during any consecutive 12-month period
ending on the anniversary of the date of this Note equal to:

 

(a)     No prepayment fee during the consecutive 12-month period ending on the
first anniversary of the date of this Note;

 

(b)     2.00% of the total principal prepaid in excess of the Permitted
Prepayment Amount during the consecutive 12-month period ending on the second
anniversary of the date of this Note;

 

(c)     1.50% of the total principal prepaid in excess of the Permitted
Prepayment Amount during each of the consecutive 12-month periods ending on the
third anniversary of the date of this Note;

 

(d)     1.00% of the total principal prepaid in excess of the Permitted
Prepayment Amount during each of the consecutive 12-month periods ending on the
fourth anniversary of the date of this Note;

 

(e)     No prepayment fee after the fourth anniversary of the date of this Note.

 

The outstanding balance under this Note may be partially prepaid up to a total
of twenty percent (20%) of the original principal amount in any consecutive
12-month period ending on an anniversary of the date of this Note (the
“Permitted Prepayment Amount”) without penalty, premium or fee. The prepayment
fee described herein will be assessed whether prepayment is voluntary, required
by reason of acceleration or otherwise. Other than Borrower’s obligation to pay
any minimum interest charge and prepayment fee, Borrower may pay all or a
portion of the amount owed earlier than it is due. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation
to continue to make payments of accrued unpaid interest. Rather, early payments
will reduce the principal balance due. Borrower agrees not to send Lender
payments marked “paid in full”, “without recourse”, or similar language. If
Borrower sends such a payment, Lender may accept it without losing any of
Lender’s rights under this Note, and Borrower will remain obligated to pay any
further amount owed to Lender. All written communications concerning disputed
amounts, including any check or other payment instrument that indicates that the
payment constitutes “payment in full” of the amount owed or that is tendered
with other conditions or limitations or as full satisfaction of a disputed
amount must be mailed or delivered to: ZB, N.A. dba California Bank & Trust;
Irvine Commercial; 1900 Main Street, Suite #200; Irvine, CA 92614.

 

LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged
6.000% of the regularly scheduled payment or $500.00, whichever is less.

 

INTEREST AFTER DEFAULT. Upon default, the interest rate on this Note shall, if
permitted under applicable law, immediately increase by adding an additional
5.000 percentage point margin (“Default Rate Margin”). The Default Rate Margin
shall also apply to each succeeding interest rate change that would have applied
had there been no default.

 

 

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PROMISSORY NOTE

(Continued)
Page 4

 

DEFAULT. Each of the following shall constitute an event of default (“Event of
Default”) under this Note:

 

Payment Default. Borrower fails to make any payment when due under this Note.

 

Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note 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 property or Borrower’s ability to repay this
Note or perform Borrower’s obligations under this Note or any of the related
documents.

 

False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower’s behalf under this Note 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.

 

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, endorser, surety, or accommodation party of any of the
indebtedness or any guarantor, endorser, surety, or accommodation party dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any guaranty of the indebtedness evidenced by this Note.

 

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 this
Note is impaired.

 

Insecurity. Lender in good faith believes itself insecure.

 

Cure Provisions. If any default, other than a default in payment, is curable and
if Borrower has not been given a notice of a breach of the same provision of
this Note within the preceding twelve (12) months, it may be cured if Borrower,
after Lender sends written notice to Borrower demanding cure of such default:
(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 sole 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.

 

LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance under this Note and all accrued unpaid interest immediately due, and
then Borrower will pay that amount.

 

ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender’s attorneys’ fees
and Lender’s legal expenses, whether or not there is a lawsuit, including
attorneys’ fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. Borrower also
will pay any court costs, in addition to all other sums provided by law.

 

GOVERNING LAW. This Note 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 Note 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.

 

LINE OF CREDIT. (1) This Note evidences a straight line of credit. (2) Once the
total amount of principal has been advanced, Borrower is not entitled to further
loan advances. (3) Advances under this Note may be requested either orally or in
writing by Borrower or as provided in this paragraph. (4) Lender may, but need
not, require that all oral requests be confirmed in writing. (5) All
communications, instructions, or directions by telephone or otherwise to Lender
are to be directed to Lender’s office shown above. (6) 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. Borrower agrees to be liable for all sums either: (A)
advanced in accordance with the instructions of an authorized person or (B)
credited to any of Borrower’s accounts with Lender. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements on this Note or
by Lender’s internal records, including daily computer print-outs.

 

 

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PROMISSORY NOTE

(Continued)
Page 5

 

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 its
Indebtedness hereunder. 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
Note, the loan evidenced hereby and any other loan documents in connection
herewith and therewith. 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.

 

If a jury trial waiver is not permitted by applicable law and a dispute arises
between Borrower and Lender with respect to this Note, its enforcement or the
transactions contemplated by the related loan documents, 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.

 

ONLINE BANKING - LOAN PAYMENTS. From time to time, Lender may (but shall not be
required to) permit loan payments to be made through its online banking website.
Lender may impose or change any terms, conditions or restrictions with respect
to making such online loan payments, including without limitation the minimum or
maximum payment amounts, the types of accounts from which loan payments may be
made and the types of payments that may be made online (including without
limitation ordinary installment payments, principal-only payments or other types
of payments). Whether Borrower is permitted to make online loan payments, and
Lender’s applicable terms, conditions and restrictions if such payments are
permitted, will be reflected in the features available online when a user logs
into the Lender’s online banking website. By making any loan payments online,
Borrower agrees to be bound by any such terms, conditions and restrictions
imposed by Lender. Lender shall have the right to terminate Borrower’s online
loan payment capability at any time in Lender’s sole discretion.

 

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.

 

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.

 

 

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PROMISSORY NOTE

(Continued)
Page 6

 

BUSINESS LOAN AGREEMENT. This Note is subject to the terms and conditions of
that Business Loan Agreement executed by Borrower in favor of Lender on August
14, 2017, as amended or restated from time to time.

 

PROHIBITED DRUG LAW ACTIVITIES. Notwithstanding any other provision herein or in
any other document, agreement or instrument relating to the loan evidenced
hereby or other financial accommodations extended by Lender to Borrower
(collectively, the “Loan”) or guaranty thereof, whether now existing or
hereafter arising (collectively, the “Loan Documents’), 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 Loan 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 any of the other Loan
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.

 

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower’s heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.

 

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by
law, waive any applicable statute of limitations, presentment, demand for
payment, and notice of dishonor. Upon any change in the terms of this Note, and
unless otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender’s
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also
agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.

 

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE.

 

 

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PROMISSORY NOTE

(Continued)
Page 7

 

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

 

COLLECTORS UNIVERSE, INC.

 

By:

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

 

*

The parties hereto have entered into that certain Addendum to Promissory Note
("Addendum") dated as of even date herewith, which modifies certain terms and
provisions of this Promissory Note. In the event of any conflict between any
provisions of this Promissory Note and any provisions of the Addendum, the
provisions of the Addendum shall control and supersede the conflicting
provisions of this Promissory Note.

 

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.     Matt Bullock, Senior Vice President                          

 

 

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

 

 

ADDENDUM TO PROMISSORY NOTE

 

This Addendum to Promissory Note ("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, pursuant to which Lender is providing Borrower with a
$3.5 million unsecured term loan (the "Term Loan") and, pursuant thereto,
Borrower is executing, and delivering to Lender, that certain promissory note
dated of even date herewith (the "Promissory Note" or the "Note") to evidence
borrowings by Borrower under the Term Loan;

 

B.     That Promissory Note is Lender's standard form of promissory note which
does not reflect or incorporate all of, and in certain respects conflicts with,
the understandings and agreements of the parties that will govern respective
rights and obligations of the parties under the Note; and

 

C.     Accordingly, the parties are hereby entering this Addendum to modify the
Promissory Note in various respects, as set forth hereinafter, to accurately
reflect the intentions and set forth all of the agreements of the parties in,
and their respective rights and obligations under, the Promissory Note.

 

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 the
Promissory Note and amends and modifies the Promissory Note in the manner and to
the extent set forth hereinafter. In the event of any conflict between any
provisions of the Promissory Note and any provisions of this Addendum, the
provisions of this Addendum shall control and supersede the conflicting
provisions of the Promissory Note.

 

B.     Amendments and Modifications to the Promissory Note. The provisions of
the Lender's Promissory Note are hereby modified and amended in the manner and
to the extent set forth below.

 

1.     Under the heading "PAYMENT" on page 1 of the Note, the second paragraph
under the section entitled "Conversion to Term Loan" is hereby amended to read
as follows:

 

"No later than three (3) business days prior to the Conversion Date, Borrower
shall provide Lender with written notice of the Interest Rate (Term Loan) that
it selects for the Term Loan, which shall be one of the following:"

 

2.     Under the heading "PAYMENT" on page 1 of the Note, the following sentence
is hereby added at the end of the subsection entitled "(i) Prime Option":

 

"NOTICE: Under no circumstances will the interest rate on this Note under the
Prime Rate Option be less than 2.250% per annum nor more than the maximum rate
allowed by applicable law."

 

3.     Under the heading "PAYMENT" on page 1 of the Note, the two paragraphs,
immediately following the lead-in sentence "Following the Conversion Date,
Borrower shall make monthly payments on the Term Loan as follows", are amended
to read in their entirety as follows:

 

"If Borrower has selected the Prime Option or the LIBOR Option for the Interest
Rate (Term Loan), Borrower shall make monthly payments of principal plus all
accrued and unpaid interest, commencing on October 12, 2018, and on the same day
of each month thereafter, except that the final payment due on the maturity date
of September 12, 2022, shall be in an amount equal to the total then outstanding
balance under this Note, including without limitation any and all unpaid
principal, accrued and unpaid interest, fees, charges, costs and expenses and
any and all other sums due and payable under this Note on such maturity date."

 

"If Borrower has selected the Fixed Option for the Interest Rate (Term Loan),
Borrower shall make equal monthly payments of principal and interest, commencing
on October 12, 2018, and on the same day of each month thereafter, except that
the final payment due on the maturity date of September 12, 2022, shall be in an
amount equal to the total then outstanding balance under this Note, including
without limitation any and all unpaid principal, accrued and unpaid interest,
fees, charges, costs and expenses and any and all other sums due and payable
under this Note on such maturity date."

 

 

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

 

 

4.     The section on page 2 of the Note with the heading "VARIABLE INTEREST
RATE" is hereby amended to read in its entirety as follows:

 

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which will be whichever of
the following two interest rate indexes that Borrower, pursuant to the paragraph
below entitled "INTEREST RATE OPTIONS", selects: (i) the Prime Rate Index as
published in the Wall Street Journal (which sometimes shall be referred to as
the “Prime Rate Option” or the “Default Option”), or (ii) Lender’s 3 Month LIBOR
Rate Index (which sometimes shall be referred to as the “LIBOR Rate Option”).
Information about the Prime Rate Index is available or published daily in the
Wall Street Journal. The interest rate provided for in the Prime Rate Index is
not necessarily the lowest rate charged by Lender on its loans. If the Prime
Rate Index becomes unavailable during the term of this loan, Lender may
designate a substitute index after notifying Borrower. Lender will tell Borrower
the current Prime Rate Index rate upon Borrower’s request. The interest rate
change, if the Prime Rate Index has been selected by Borrower, will not occur
more often than once each day. Borrower understands that Lender may make loans
based on other rates as well. The Prime Rate Index interest rate currently is
4.250% per annum. If Borrower has selected the Prime Rate Index, then interest
on the unpaid principal balance of this Note will be calculated as described in
the “INTEREST CALCULATION METHOD” paragraph using a rate of 0.250 percentage
points under the Prime Rate Index, adjusted if necessary for any minimum and
maximum rate limitations described above, resulting in an initial rate of
4.000%. Under no circumstances will the interest rate on this Note be less than
2.25% per annum or more than the maximum rate allowed by applicable law."

 

5.     In the lead-in paragraph of the section on page 2 of the Note which
begins with the heading "INTEREST RATE OPTIONS", the words "during the Draw
Period" are hereby added between the words "Note," and "Borrower" in the first
line thereof.

 

6.     Paragraph (A) of the section on page 2 of the Note entitled "INTEREST
RATE OPTIONS" is hereby amended to read in its entirety as follows:

 

"(A)     Default Option. The Prime Rate Index that is described in, and the
margin that is set forth in the last sentence of, the section above entitled
“VARIABLE INTEREST RATE” (the “Default Option”)."

 

7.     The lead-in sentence of the section entitled "Applicable Interest Rate"
on page 2 of the Note is hereby amended to read in its entirety as follows:

 

"Applicable Interest Rate. Borrower's Rate Request will become effective, and
interest on the increment designated will be calculated at the rate (the
"("Effective Rate"), which Borrower requested for the applicable Interest Period
during the Draw Period, subject to the following:"

 

8.     Subsection (6) of the section entitled "Applicable Interest Rate" on page
2 of the Note is hereby amended to read in its entirety as follows:

 

"(6) Upon the occurrence and during the continuance of an Event of Default (as
defined below), Lender shall no longer be obligated to honor any Rate Requests."

 

9.     Subsection (7) of the section entitled "Applicable Interest Rate" on page
2 of the Note is hereby amended to read in its entirety as follows:

 

"(7) No Interest Period shall extend beyond the Draw Period."

 

10.     Under the heading "PREPAYMENT FEE; MINIMUM INTEREST CHARGE" on page 3 of
the Note, the second sentence is hereby amended to read as follows:

 

"Upon prepayment of this Note, Lender is entitled to the following prepayment
fee: Borrower acknowledges that the "Fixed Rate Option" interest rate payable
under this Note has been offered by Lender in contemplation of the loan being
outstanding in accordance with its terms until maturity and therefore,
notwithstanding any provision in this Note to the contrary, the prepayment fee
hereinbelow described shall only be applicable in the event Borrower elects the
Fixed Rate Option during the Term Loan."

 

11.     Under the heading "DEFAULT", the paragraph entitled "Default in Favor of
Third Parties" on page 3 of the Note is hereby amended to read as follows:

 

2

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"Default in Favor of Third Parties. Borrower defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other
agreement, 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 Note or any of the Related Documents."

 

12.     Under the heading "DEFAULT", the paragraph entitled "False Statements"
on page 3 of the Note is hereby amended to read as follows:

 

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

 

13.     The word "material" is hereby added between the words "any" and "part"
in the section entitled "Insolvency" under the heading entitled "DEFAULT" on
page 3 of the Note.

 

14.     Under the heading "DEFAULT", the first sentence of the paragraph
entitled "Creditor or Forfeiture Proceedings" on page 3 of the Note 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."

 

15.     Under the heading "DEFAULT", the second sentence of the paragraph
entitled "Creditor or Forfeiture Proceedings" on page 3 of the Note is hereby
deleted in its entirety.

 

16.     Under the heading "DEFAULT", the paragraph entitled "Change in
Ownership" on page 3 of the Note 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."

 

17.     Under the heading "DEFAULT", the paragraph entitled "Adverse Change" on
page 3 of the Note is hereby amended in its entirety to read as follows:

 

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

 

18.     Under the heading entitled "DEFAULT", the paragraph entitled
"Insecurity" on page 3 of the Note is hereby deleted in its entirety.

 

19.     Under the heading "DEFAULT", the paragraph entitled "Cure Provisions" on
page 3 of the Note is hereby amended in its entirety to read as follows:

 

"Cure Provisions. If any Event of Default, other than default in payment, 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 continue and complete all
reasonable  and necessary steps sufficient to produce compliance as soon as
reasonably practical."

 

20.     The words "and Michele Taylor, Controller." are hereby added to the end
of the sixth sentence of the paragraph entitled "LINE OF CREDIT" on page 4 of
the Note.

 

21.     The paragraph entitled "DEPOSIT ACCOUNT SECURITY" on page 4 of the Note
is hereby deleted in its entirety.

 

22.     Except in its penultimate sentence, wherever the term "undersigned"
appears in the section entitled "WAIVER OF DEFENSES AND RELEASE OF CLAIMS" on
page 4 of the Note, such term shall mean the Borrower.

 

23.     Clause (i) of the section entitled "WAIVER OF DEFENSES AND RELEASE OF
CLAIMS" on page 4 of the Note is amended to read in its entirety as follows:

 

3

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"(i) represents that it does not have any defenses to or set offs against any
indebtedness or other obligations owing by Borrower to Lender or Lender's
affiliates ("Obligations"), nor any claims against Lender or Lender's affiliates
for any matter whatsoever, related or unrelated to the Obligations,"

 

24.     Under the heading "PROHIBITED DRUG LAW ACTIVITIES" on page 5 of the
Note 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."

 

IN WITNESS WHEREOF, Borrower and Lender have executed this Addendum to
Promissory Note 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  

         

4