Document:

Exhibit 10.1

 

FIRST AMENDMENT TO

SECURITIES PURCHASE AGREEMENT

This First Amendment to Securities Purchase Agreement (“First Amendment”) is made this 11th day of September, 2015, by and between 4Licensing Corporation (the “Company”), and the Leslie G. Rudd Living Trust U/A/D March 31, 1999 (“Buyer”).

Recitals

		A.	The parties previously entered into that certain Securities Purchase Agreement, dated as of January 30, 2015 (the “Agreement”), whereby Buyer purchased certain securities of the Company on the terms and conditions set forth therein.

		B.	The parties now desire to modify the Agreement on the terms and conditions contained herein.

Agreement

For good and valuable consideration, the sufficiency of which is hereby acknowledged, Company and Buyer agree as follows:

		1.	The third “Whereas” clause in the Agreement’s preamble is hereby deleted.

		2.	Section 1.2, The Issuance and Sale of the Shares and Warrants, is hereby amended as follows:

		a.	Subsection (b) is hereby deleted and replaced in its entirety with the following:

“[Intentionally omitted].”

		b.	Subsection (c) is amended to remove the references to the Option Shares and the Option Warrants.

		c.	Subsection (d) is deleted and replaced in its entirety with the following:

“[Intentionally omitted].”

		3.	Section 2.1, Deliveries at the Closing, is hereby amended to remove the references to any “Option Closing,” “Option Shares,” “Option Warrants,” and “Option Closing Date.”

		4.	Section 3.10, No Consent or Approval Required, is hereby amended to remove the following language in the third to last line:  “or any Option Closing, as applicable.”

 

		5.	Section 5.2, Right of First Offer, is hereby amended to read as follows:

So long as Buyer satisfies the Ownership Condition, except in the case of Excluded Stock, if the Company proposes to issue or sell shares of Common Stock (including securities convertible into or exchangeable for Common Stock) or indebtedness, then the Company shall, no later than 10 business days prior to the consummation of such issuance or sale, give written notice to Buyer of such proposed issuance or sale. Such notice shall describe the proposed issuance or sale, identify the proposed purchaser or purchasers, and contain an offer to Buyer to sell to Buyer, at the same price and for the same consideration to be paid by the proposed purchaser or purchasers, that number of shares of Common Stock (or shares or aggregate principal amount, as applicable, of securities convertible into or exchangeable for Common Stock) or aggregate principal amount of indebtedness, as applicable, in an amount up to Buyer’s pro rata portion of the number of shares of Common Stock (or shares or aggregate principal amount, as applicable, of securities convertible into or exchangeable for Common Stock) or aggregate principal amount of indebtedness, as applicable, in such issuance; provided, however, that prior to September 11, 2018, Buyer shall have the right to purchase up to 50% of the number of shares of Common Stock (or shares or aggregate principal amount, as applicable, of securities convertible into or exchangeable for Common Stock) or aggregate principal amount of indebtedness, as applicable, in such issuance irrespective of the Buyer’s pro rata portion.  Buyer’s pro rata portion shall be the percentage that the Common Stock beneficially owned by Buyer on a fully-diluted basis (which assumes full exercise and conversion of the Warrants) bears to the outstanding Common Stock on a fully-diluted basis immediately prior to such issuance. 

If Buyer fails to accept such offer by written notice within five business days after its receipt of the Company’s notice by specifying that number of shares of Common Stock (or shares or aggregate principal amount, as applicable, of securities convertible into or exchangeable for Common Stock) or aggregate principal amount of indebtedness, as applicable, up to the portion it desires to purchase, the Company may proceed with such proposed issuance, free of any right on the part of such Buyer under this Section 5.2 in respect thereof.

		6.	Section 5.3(a)(ii) is hereby amended to delete the words “Immediately following the first Option Closing, and,” such that the paragraph begins “So long as Buyer beneficially owns at least 20% of the outstanding shares of Common Stock on a fully-diluted basis...”

		7.	Section 6.13, Certain Definitions, is hereby amended as follows:

		a.	The definitions of Option, Option Closing, Option Closing Date, Option Shares, Option Warrants, and Termination Date are deleted in their entirety.

 

		b.	The definition of Shares is amended to remove the reference to the “Option Shares.”

		c.	The definition of Warrants is amended to remove the reference to the “Option Warrants.”

		d.	The definition of Warrant Shares is amended to remove the reference to the “Option Warrants.”

		8.	Release.  The Company, along with all of its past, present, and future related companies, affiliates, parents, subsidiaries, divisions, strategic partners, predecessors, successors, and assigns, and all of their respective members, trustees, beneficiaries, partners, officers, directors, employees, agents, and representatives (hereinafter referred to collectively as “Releasors”), for and in consideration of the terms and conditions of this Agreement and the agreements of Buyer as set forth herein, does hereby agree to unconditionally, irrevocably, and for all purposes, release, acquit, remise, and forever discharge the Buyer along with all of its past, present, and future related companies, affiliates, parents, subsidiaries, divisions, strategic partners, predecessors, successors, and assigns, and all of their respective members, stockholders, trustees, beneficiaries, partners, officers, directors, employees, agents, attorneys, and representatives, whether current or former, and any other persons, firms, corporations, insurers or other entities who can or may be liable (hereinafter collectively referred to as “Releasees”) of and from any and all legal, equitable, or other claims, counterclaims, demands, setoffs, defenses, contracts, accounts, suits, debts, liabilities, agreements, actions, causes of action, sums of money, reckonings, bonds, bills, specialties, covenants, promises, variances, trespasses, damages, extents, executions, awards, judgments, findings, controversies, disputes, responsibilities, costs, fees (including attorneys’ fees), or other expenses and obligations arising out of and related in any way to Buyer’s ownership in the Company, the Agreement, or any other action based on any dealings of the Releasees with any of the Releasors, including the Company or any of its former or current directors, officers, or shareholders, from the beginning of the world to the date of this Agreement, which are now known or unknown, contingent or absolute, matured or unmatured.

		9.	Conditions to Effectiveness.  As a condition to the effectiveness of this First Amendment, the Company shall, upon execution of this First Amendment, deliver to the Buyer releases of the Releasees, consistent in form and in substance with the release described in Section 8 (above), from each of the following Company shareholders: Prescott Group Capital Management, L.L.C.; Ken Feldman; Cleveland Capital Management LLC, Wade I. Massad, Bruce R. Foster, Duminda M. DeSilva, and Kenneth H. Klopp.

		10.	All Other Provisions.  Except as modified by this First Amendment, all other provisions of the Agreement shall remain unchanged and in full force and effect.

 

If there is a conflict between the terms of this First Amendment and the Agreement, the terms of this First Amendment shall control.

		11.	Counterparts.  This First Amendment may be executed by facsimile or electronic mail, with the original signature to follow as soon as is practicable, in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument.

		12.	Authority.  The individual executing this First Amendment on behalf of a party hereto represents and warrants that he or she has been authorized to do so and has the power to bind the party for whom he or she is signing.

[Signature page immediately following]

 

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

	
“Company”

	 	
“Buyer”

	
4LICENSING CORPORATION

	 	
LESLIE G. RUDD LIVING TRUST

	 	 	
U/A/D MARCH 31, 1999

	 	 	 	 	 
	
By:

	
/s/ Bruce R. Foster

	 	
By:

	
/s/ Darrell Swank

	 	 	 	 	 
	
Name:  

	
Bruce R. Foster

	 	
Name:  

	
  Leslie Rudd by Darrell Swank under

	 	 	 	
Durable POA dated 12/13/2010

	 	 	 	 
	
Title:  

	
Chief Executive Officer,

	 	 
	
Executive Vice President and Chief

	 	 
	
Financial Officer

	 	
Title:  

	
  Trustee

4LICENSING CORPORATION BOARD OF DIRECTORS

	
By:

	
/s/ Bruce R. Foster

	 	
By:

	
/s/ Duminda M. DeSilva

	 	 	 	 	 
	
Name:  

	
Bruce R. Foster

	 	
Name:  

	
Duminda M. DeSilva

	 	 	 	 	 
	
Title:

	
Director

	 	Title:	
Director

	 	 	 	 	 
	 	 	 	 	 
	
By:

	
/s/ Kenneth H. Klopp

	 	
By:

	 
	 	 	 	 	 
	
Name:

	
Kenneth H. Klopp

	 	
Name:

	 
	 	 	 	 	 
	
Title:

	
Director

	 	
Title:Exhibit
10.1

 

September 4, 2015

 

Matt:

 

On behalf of the
Board of Directors of DGSE Companies, Inc. (the “Board”), I am pleased to offer you the positions of Chief Executive
Officer, President and Chairman of the Board at DGSE Companies, Inc. This position will report directly to the Board of Directors.

 

The Board would
like to extend to you the following compensation and benefits, beginning on your starting date:

 

		·	Salary:
                                         Annual gross starting salary of $315,000, paid in biweekly installments by your choice
                                         of check or direct deposit

		·	Performance
                                         Bonus: Up to twenty-five percent (25%) of your annual gross salary based on achievement
                                         of goals, annually agreed upon by the Board.

		·	Equity:
                                         Participation in any equity compensation grants for senior management, commensurate
                                         or exceeding what other members of senior management receive

		·	Benefits:
                                         You will be entitled to participate in all DGSE benefit plans for which you are eligible.
                                         While the plans offered may change from time to time during your employment we currently
                                         offer the following:

 

Vacation:
20 days per year

401(k):
Available the 90 days following employment date

Health
Insurance: Blue Cross Blue Shield

Dental
Insurance: Met Life

Life
and Disability Insurance: MetLife 

Short
and Long Term Disability

Sick
leave

 

Additional statements
of understanding:

 

		·	This
                                         offer is pending approval by the Board, which is expected to occur on September 4, 2015

		·	Your
                                         starting date will be September 16th, 2015.

		·	Eligibility
                                         for DGSE Medical and Dental benefits begins the first month after 60 days of employment,
                                         which in this case will be December 2015. DGSE will reimburse you for any expense that
                                         you incur in the interim should you elect to continue coverage under your current employer’s
                                         group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985
                                         (“COBRA”).

		·	It
                                         is expected that the Board will empower me to negotiate an employment agreement with
                                         you, which will be consistent with the offer letter, but more fully cover all compensation,
                                         benefits, responsibilities and obligations of your role. Once agreed upon, any employment
                                         agreement will need to be approved by the Board, as it is constituted at that time. To
                                         the extent that the Board does not have a Compensation Committee at the time the agreement
                                         is approved, any such agreement will need to be ratified by the Compensation Committee,
                                         once such committee is reconstituted

 

Accepting this offer of employment,
you certify your understanding that your employment will be on an at-will basis, and that neither you, the Board, any shareholders,
nor any third party has entered into any other contract regarding the terms or duration of your employment. As an at-will employee,
either you or DGSE will be free to terminate your employment with the company at any time, with or without cause or advance notice.
We look forward to your arrival at DGSE and are confident that you will play a critical role in our company’s future.

 

     

     

    

 

 

If you have any questions, please
feel free to contact me at XXX-XXX-XXXX.

 

Sincerely,

 

/s/ BRETT BURFORD

 

Brett Burford

Chief Financial
Officer, Director

 

Accept Job Offer

By signing and dating
this letter below, I, Matthew Peakes, accept this job offer of Chief Executive Officer, President and Chairman of the Board, by
DGSE Companies, Inc.

 

	Signature: 	/s/ MATTHEW PEAKES	 	 Date: 	September 4,
    2015

 

Decline Job Offer

By signing and dating
this letter below, I, Matthew Peakes, decline this job offer of Chief Executive Officer, President and Chairman of the Board,
by DGSE Companies, Inc.

 

	Signature:	 	 	Date:

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