DEBT CANCELLATION AGREEMENT

This DEBT CANCELLATION AGREEMENT (this “Agreement”) is dated as of October __,
2011, by and between DGSE COMPANIES, INC., a Nevada corporation (“DGSE”) and NTR
METALS, LLC, a Texas limited liability company (“NTR” and, together with DGSE,
the “Parties,” each, a “Party”).
 
WITNESSETH:
 
WHEREAS, DGSE currently owes in excess of US$2.5 million to NTR as a result of
bullion-related transactions (the “Intercompany Debt”); and

WHEREAS, NTR has agreed to forgive US$2.5 million of the Intercompany Debt (the
“Option Consideration”) in exchange for the issuance of options to purchase an
aggregate of five million (5,000,000) shares of the common stock of DGSE, par
value $0.01 per share, at an exercise price of fifteen dollars (US$15) per share
(the “Options”).

NOW, THEREFORE, the Parties, for good and valuable consideration, the receipt
and sufficiency of which is acknowledged, hereby agree as follows:

1.           Cancellation of Debt.  The Parties hereby agree that upon the
delivery of an Option Grant Agreement, in the form attached hereto as Exhibit A
(the “Option Contract”), by DGSE to NTR providing for the grant of the Options
to NTR, the portion of the Intercompany Debt constituting the Option
Consideration shall be fully satisfied.

2.           Modification.  This Agreement may only be amended, modified or
supplemented by an agreement in writing signed by each Party hereto. No waiver
by any Party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and signed by the Party so waiving. Except as
otherwise set forth in this Agreement, no failure to exercise, or delay in
exercising, any rights, remedy, power or privilege arising from this Agreement
shall operate or be construed as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.

3.           Successor and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto and their respective successors
and permitted assigns.  No Party may assign any of its rights hereunder without
the prior written consent of the other Party.  No assignment shall relieve the
assigning Party of any of its obligations hereunder.

4.           No Third-Party Beneficiaries.  This Agreement is for the sole
benefit of the Parties hereto and their respective successors and permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other person any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.

5.           Headings.  The headings in this Agreement are for reference only
and shall not affect the interpretation of this Agreement.

6.           Entire Agreement.  This Agreement, together with the Option
Contract, constitutes the sole and entire agreement of the Parties with respect
to the subject matter contained herein, and supersedes all prior and
contemporaneous understandings and agreements, both written and oral, with
respect to such subject matter.

 
 

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7.           Notices. All notices, requests, consents, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been given (a) when delivered by hand (with written confirmation of
receipt); (b) when received by the addressee if sent by a nationally-recognized
overnight courier (receipt requested); (c) on the date sent by e-mail of a PDF
document (with confirmation of transmission) if sent during normal business
hours of the recipient, and on the next business day if sent after normal
business hours of the recipient or (d) on the third day after the date mailed,
by certified or registered mail, return receipt requested, postage
prepaid.  Such communications must be sent to the respective Parties at the
addresses indicated below.

 
If to DGSE:
DGSE Companies, Inc.
11311 Reeder Road
Dallas, Texas 75229
Attention: William H. Oyster
 
   
with a copy to (which shall not constitute notice):
 
K&L Gates LLP
1717 Main Street
Suite 2800
Dallas, Texas 75201
Attention: I. Bobby Majumder, Esq.
E-mail: bobby.majumder@klgates.com
 
 
If to NTR:
NTR Metals, LLC
10720 Composite Drive
Dallas, Texas 75220
Attention: Trey Gum, General Counsel
E-mail: tgum@ntrmetals.com

8.           Duty to Cooperate.  Each Party to this Agreement agrees to perform
any further acts, and to execute and deliver any documents which may be
reasonably necessary to carry out the provisions of this Agreement.

9.           Severability.  If any term or provision of this Agreement is deemed
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or provision in
any other jurisdiction. Upon such determination that any term or other provision
is invalid, illegal or unenforceable, the Parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest extent possible.

10.           Governing Law.  This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Texas, without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Texas or any other jurisdiction) that would cause the application of laws of
any jurisdiction other than those of the State of Texas. Any legal suit, action
or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby may be instituted in the federal courts of the United States
or the courts of the State of Texas in each case located in the city of Dallas
and County of Dallas, and each Party irrevocably submits to the exclusive
jurisdiction of such courts in any such suit, action or proceeding. Service of
process, summons, notice or other document by mail to such Party's address set
forth herein shall be effective service of process for any suit, action or other
proceeding brought in any such court. The Parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action
or any proceeding in such courts and irrevocably waive and agree not to plead or
claim in any such court that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.

 
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11.           Attorneys' Fees.  In any action at law or in equity to enforce any
of the provisions or rights under this Agreement, the unsuccessful party of such
litigation, as determined by the court in a final judgment or decree, shall pay
the substantially prevailing party or parties all costs, expenses, and
reasonable attorneys' fees incurred therein by such party or parties (including,
without limitation, such costs, expenses, and fees on any appeals), and if such
successful party shall recover judgment in any such action or proceeding, such
costs, expenses, and attorneys' fees shall be included as part of such
judgment..

12.           Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall be deemed
to be one and the same agreement. A signed copy of this Agreement delivered by
facsimile, e-mail or other means of electronic transmission shall be deemed to
have the same legal effect as delivery of an original signed copy of this
Agreement.
 
 
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Dated _______________, 2011
 

 
DGSE COMPANIES, INC.,
a Nevada corporation
         
 
      By: William H. Oyster     Title: President          

 
NTR METALS, LLC,
a Texas limited liability company
         
 
      By: John R. Loftus     Title: President          

 
 
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EXHIBIT A

OPTION GRANT AGREEMENT

(Attached)