Document:

Ex 10.3

Exhibit 10.3

TAX SEPARATION AGREEMENT
THIS TAX SEPARATION AGREEMENT (this “Agreement”) is entered into as of ________, 2013 between SPECTRUM GROUP INTERNATIONAL, INC., a Delaware corporation (“SGI”), and A-MARK PRECIOUS METALS, INC., a New York corporation and wholly owned subsidiary of SGI (“AMPMI,” and together with SGI, the “Parties”). Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to such terms in the Separation and Distribution Agreement, dated as of the date hereof, by and between SGI and AMPMI (the “Separation Agreement”).   
RECITALS
     WHEREAS, SGI is the common parent corporation of an affiliated group of corporations within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “Code”), that has filed consolidated federal income tax returns;   
WHEREAS, AMPMI is a wholly owned subsidiary of SGI;  
WHEREAS, on the Distribution Date at the Effective Time, SGI will distribute all of the issued and outstanding shares of AMPMI Common Stock pro rata to holders of SGI Common Stock (the “Distribution”);   
WHEREAS, the Parties intend that the Distribution shall qualify as tax-free to SGI under Section 355(c) of the Code and tax-free to the holders of the SGI Common Stock under Section 355(a) of the Code (the “Distribution Tax Treatment”);   
WHEREAS, after the Distribution AMPMI will not be a member of SGI’s affiliated group of corporations for federal income tax purposes;  
WHEREAS, the Parties desire to set forth their rights and obligations with respect to handling and allocating Taxes (as defined herein) due for periods before and after the Distribution Date;  
     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:  
ARTICLE I. DEFINITIONS
1.01 General. As used in this Agreement, the following terms shall have the following meanings:   

“Active Business” means the business(es) conducted by each of the Parties or their Affiliates as of the Distribution Date and relied upon to satisfy the active trade or business requirement under section 355 of the Code..

“Agreement” has the meaning set forth in the preamble to this Agreement.  
    
“AMPMI” has the meaning set forth in the preamble to this Agreement.  
 
 

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Exhibit 10.3

 “AMPMI Group” means AMPMI and its Subsidiaries, 
“AMPMI Indemnitees” has the meaning set forth in Section 4.01(a).   
“AMPMI Separate Tax Returns” means Tax Returns that include AMPMI or one or more members of the AMPMI Group but that do not include members of the SGI Group.
“AMPMI Taxes” has the meaning set forth in Section 2.03(a).   
“Ancillary Agreements” has meaning set forth in the Separation Agreement together with the Separation Agreement.  
“Code” has the meaning set forth in the recitals.   
“Dispute” has the meaning set forth in Article IX.   
“Distribution” has the meaning set forth in the recitals.  
“Distribution Date” has meaning set forth in the Separation Agreement.   
“Distribution Tax Treatment” has the meaning set forth in the recitals.  
“Distribution Taxes” means any and all Taxes required to be paid by or imposed on a Party or any of its Affiliates resulting from, or directly arising in connection with, the failure of the Distribution to qualify for the Distribution Tax Treatment. 
“Effective Time” means 11:59 p.m. EDT on the Distribution Date.   
“Final Determination” means a determination within the meaning of Section 1313 of the Code or any similar provision of state or local Tax law.
“Parties” has the meaning set forth in the preamble to this Agreement.   

“Post-Distribution Ruling” has the meaning set forth in Section 3.01.
“Post-Distribution Tax Period” means a Taxable period beginning and ending after the Distribution Date. 
“Post-Distribution Tax Returns” means all Tax Returns required to be filed by a Party or its Subsidiaries for a Post-Distribution Tax Period.
“Pre-Distribution Tax Period” means any taxable period beginning and ending on or before the Distribution Date.  
“Pre-Distribution Tax Returns” means all Tax Returns required to be filed by a Party or its Subsidiaries for a Pre-Distribution Tax Period. 
“Proposed Acquisition Transaction” means a transaction or series of transactions (or any agreement, understanding, arrangement, or substantial negotiations within the meaning of Section 355(e) of the Code and the Treasury Regulations thereunder, to enter into a transaction or 

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Exhibit 10.3

series of related transactions), including, inter alia, a merger and a change in a certificate of incorporation, as a result of which any Person or any group of Persons would (directly or indirectly) acquire, or have the right to acquire (through an option or otherwise), from any of the Parties or any of their Subsidiaries (or any successor thereto) and/or one or more holders of their stock, respectively, any amount of stock of any of the Parties or their Subsidiaries, as the case may be, that would, when combined with any other changes in ownership of the stock of such Party or their Subsidiaries, comprise more than thirty-five percent (35%) of (a) the value of all outstanding stock of such Party or their Subsidiaries as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series, or (b) the total combined voting power of all outstanding stock of such Party or their Subsidiaries as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series. For purposes of determining whether a transaction constitutes an indirect acquisition for purposes of the first sentence of this definition, any recapitalization or other action resulting in a shift of voting power or any redemption of shares of stock shall be treated as an indirect acquisition of shares of stock by the non-exchanging shareholders. This definition and the application thereof is intended to monitor compliance with Section 355(e) of the Code and the Treasury Regulations thereunder and shall be interpreted accordingly by the Parties in good faith.
“Remitting Party” has the meaning set forth in Section 2.02.
“Requesting Party” has the meaning set forth in Section 3.01.
“Responsible Party” has the meaning set forth in Section 2.02.
“Restricted Period” means the period beginning on the Distribution Date and ending on the twenty five (25) month anniversary thereof.
“Reverse Stock Split” means the reverse stock split contemplated to be undertaken by SGI following the Distribution.
“Separation Agreement” has the meaning set forth in the preamble to this Agreement.
 “SGI” has the meaning set forth in the preamble to this Agreement.

“SGI Filed Tax Return” means all (i) Pre-Distribution Tax Returns, (ii) Straddle Tax Returns, other than Straddle Tax Returns that are AMPMI Separate Tax Returns and that are required to be filed after the Distribution Date and (iii) Post-Distribution Tax Returns, other than Post-Distribution Tax Returns that are AMPMI Separate Tax Returns. 
“SGI Group” means SGI and its Subsidiaries, other than members of the AMPMI Group.
“SGI Indemnitees” has the meaning set forth in Section 4.01(b).
 “SGI Taxes” has the meaning set forth in Section 2.03(b).
  “Straddle Period” means a Taxable period beginning before and ending after the Distribution Date.

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Exhibit 10.3

“Straddle Tax Returns” means all Tax Returns required to be filed by a Party or its Subsidiaries for a Straddle Period.
   “Tax” or “Taxes” means (i) all taxes, charges, fees, duties, levies, imposts, rates or other assessments or governmental charges of any kind imposed by any federal, state, local or foreign Taxing Authority, including, without limitation, income, gross receipts, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, custom duties, property, sales, use, license, capital stock, transfer, franchise, registration, payroll, withholding, social security, unemployment, disability, value added, alternative or add-on minimum or other taxes, whether disputed or not, and including any interest, penalties, charges or additions attributable thereto, (ii) liability for the payment of any amount of the type described in clause (i) above arising as a result of being (or having been) a member of any consolidated, combined, unitary or similar group or being (or having been) included or required to be included in any Tax Return related thereto, and (iii) liability for the payment of any amount of the type described in clauses (i) or (ii) above as a result of any express or implied obligation to indemnify or otherwise assume or succeed to the liability of any other Person. 
   “Tax Advisor” has the meaning set forth in Section 9.01.

“Tax Attributes” mean for U.S. federal, state, local, and non-U.S. Income Tax purposes, earnings and profits, tax basis, net operating and capital loss carryovers or carrybacks, alternative minimum Tax credit carryovers or carrybacks, general business credit carryovers or carrybacks, income tax credits or credits against income tax, disqualified interest and excess limitation carryovers or carrybacks, overall foreign losses, research and experimentation credit base periods,, or similar Tax items determined under applicable Tax law.   

“Tax Contest” has the meaning set forth in Section 5.01.  

“Tax Information Packages” means any information relating to AMPMI or the AMPMI Group required in order to prepare and file any SGI Filed Tax Return.   

“Tax Opinion” means the Tax opinion that is a condition to the consummation of the Separation Agreement.

 “Tax Representation Letter” means any letter containing representations and covenants delivered by the Parties or their Affiliates in connection with the Tax Opinion.

“Tax Return” means any return, report, certificate, form or similar statement or document (including any related supporting information or schedule attached thereto and any information return, amended tax return, claim for refund or declaration of estimated tax) required to be supplied to, or filed with, a Taxing Authority, in each case, in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.   
“Tax Sharing Agreement” means that certain Tax Sharing Agreement dated June 23, 2011, between SGI and AMPMI.   

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Exhibit 10.3

“Taxing Authority” means any governmental authority (whether United States or foreign, and including any state, municipality, political subdivision or governmental agency) responsible for the imposition of any Tax.      
 “Treasury Regulations” means the Treasury regulations promulgated under the Code.
“Unqualified Tax Opinion” means an unqualified reasoned “will” opinion, which opinion is reasonably acceptable to each of the Parties and upon which each of the Parties may rely to confirm that a transaction (or transactions) will not result in Distribution Taxes. For purposes of this definition, an opinion is reasoned if it describes the reasons for the conclusions, including the facts and analysis supporting the conclusions.
1.02 References; Interpretations. References in this Agreement to the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires. The terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement (or the applicable Ancillary Agreement) as a whole (including all of the Schedules and Exhibits hereto and thereto) and not to any particular provision of this Agreement (or such Ancillary Agreement). Article, Section, Exhibit, Schedule and Appendix references are to the Articles, Sections, Exhibits, Schedules and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified. The word “including” and words of similar import when used in this Agreement (or the applicable Ancillary Agreement) means “including, without limitation,” unless the context otherwise requires or unless otherwise specified. The word “or” shall not be exclusive. Any definition of or reference to any statute shall be construed as referring also to any rules and regulations promulgated thereunder.  
ARTICLE II. TAX RETURNS AND TAX PAYMENTS
2.01 Obligations to File Tax Returns.  
(a)     To the extent not previously filed, SGI shall have the responsibility for the preparation and filing of all SGI Filed Tax Returns; provided, however, that all SGI Filed Tax Returns that include the AMPMI Group shall be (i) prepared on a basis that is consistent with the Distribution Tax Treatment, (ii) consistent with past practices of the Parties, and (iii) to the extent consistent with clause (i), that minimizes the overall amount of Taxes due and payable on such Tax Returns by the Parties, who shall cooperate in making such elections or applications for group or other relief or allowances available in the taxing jurisdiction in which the Tax Returns are filed. AMPMI shall prepare and deliver to SGI no later than 30 days before an SGI Filed Tax Return is due Tax Information Packages for such SGI Filed Tax Return. SGI shall be responsible for the costs and expenses associated with such preparation and filing. 
(b)    AMPMI, at its own cost and expense, shall have the responsibility for the preparation and filing of all AMPMI Separate Tax Returns that are not SGI Filed Tax Returns.

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Exhibit 10.3

(c)    SGI shall provide to AMPMI  sufficiently in advance of the due date for the filing thereof, and AMPMI shall have a reasonable opportunity to review and comment on, any SGI Filed Tax Returns (or the relevant portion thereof) to the extent that AMPMI is responsible for the portion of the Taxes reported thereon pursuant to Section 2.03 or that could impact the Tax Attributes allocable to AMPMI pursuant to Section 8.01.
(c)    AMPMI  hereby irrevocably authorizes and designates SGI as its agent, coordinator and administrator for the purpose of taking any and all actions necessary or incidental to the filing of any SGI Filed Tax Return and, except as otherwise provided herein, for the purpose of making payments to, or collecting refunds from, any Taxing Authority in respect of a SGI Filed Tax Return.. 
2.02 Obligation to Remit Taxes. SGI and AMPMI  shall each remit or cause to be remitted to the applicable Taxing Authority in a timely manner any Taxes due in respect of any Tax Return that such Party is required to file (or, in the case of a Tax for which no Tax Return is required to be filed, which is otherwise payable by such Party to any Taxing Authority).  In the case of any Tax (or portion thereof) required to be remitted by one Party pursuant to this Section 2.02 (the “Remitting Party”) as to which the other Party is responsible pursuant to Section 2.03 (the “Responsible Party”), the Responsible Party shall pay the amount of such Tax to the Remitting Party at least two (2) Business Days before payment of the relevant amount is required to be remitted to a Taxing Authority or, if later, within five Business Days after a request for payment is made by the Remitting Party.   
2.03 Tax Payment Obligations and Prior Agreements.   
(a)    AMPMI shall be responsible for the payment of (and shall be entitled to any refund of or credit for) all Taxes (other than Taxes described in Section 4.01(a)(ii))  that are attributable to AMPMI or one or more members of the AMPMI Group for any taxable period, provided, however, that (x) the determination of any such Taxes for any Pre-Distribution Period shall be made by treating AMPMI or one or more members of the AMPMI Group, as applicable, as a stand-alone corporation (or group that does not include the SGI Group), using methods and conventions consistent with past practices and the Tax Sharing Agreement, (y) such Taxes shall not include any Taxes incurred by either Party in connection with the Distribution, including Distribution Taxes, and (z) the determination of such Taxes shall take into account any available Tax attributes attributable to AMPMI or the applicable members of the AMPMI Group (collectively, “AMPMI Taxes”).   
(b)    SGI shall be responsible for the payment of (and shall be entitled to any refund of or credit for) all Taxes that are attributable to SGI or one or more members of the SGI Group, other than AMPMI Taxes (collectively, “SGI Taxes”).   
(c)    If, prior to the Distribution, a deposit (including a payment of estimated Taxes) was made by a Party  with respect to any Tax for which such Party is responsible under this Agreement, such deposit shall be credited to such Party and such Party shall be liable only for the amount of such Tax ultimately due in excess of the applicable deposit. To the extent the amount of such deposit exceeds the amount of Tax attributable to such deposit that is ultimately due, then such excess shall be paid to and retained by the Party that made 

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Exhibit 10.3

the deposit.  If, prior to the Distribution, a deposit (including a payment of estimated Taxes) was made by a Party  with respect to any Tax for which the other Party is responsible under this Agreement, such deposit shall be credited against the amount owed by such other Party pursuant to this Section 2.03 and such Party shall be liable for the full amount of such Tax ultimately due.  To the extent the amount of such deposit exceeds the amount of Tax attributable to such deposit that is ultimately due, then such excess shall be paid to and retained by the Party that made the deposit.
(d)    Refunds (or reductions in Tax in lieu of a refund) received and the amount of credits claimed by one Party with respect to Taxes for which the other Party is responsible under this Agreement shall be remitted to such other Party within five days after the first Party receives such refund or files the Tax Return claiming such refund (or reduction in Tax) or credit, as applicable. In the event that any such refund is subsequently required to be returned to the Taxing Authority or the credit (or reduction in Tax) is subsequently reduced as a result of any adjustment required by any Taxing Authority, such other Party shall pay the amount of such returned refund or such reduction to the first Party within five days of receiving notice thereof  from the first Party.   

(e)    At AMPMI ’s request, SGI shall, at AMPMI ’s expense, use its reasonable best efforts to obtain any refund or credit of a Tax or item included in a SGI Filed Tax Return to which AMPMI  is entitled pursuant to this Agreement, including through filing appropriate forms with the applicable Taxing Authority; provided that SGI shall not be required to comply with such request if SGI reasonably determines that attempting to obtain such refund or credit will have a material adverse impact on SGI.   
    
(f)    To the extent permitted by applicable law, AMPMI shall (or shall cause or permit the members of the AMPMI Group to) elect to relinquish any carryback of a Tax Attribute to any Pre-Closing Tax Period. No Party shall be obligated to compensate any other Party for the carryforward of Tax Attributes from a Pre-Closing Tax Period to a Post-Closing Tax Period or for the carryback of Tax Attributes from a Post-Closing Tax Period to a Pre-Closing Tax Period.

(g)    The Tax Sharing Agreement and any similar agreement, if any, shall be terminated as of the Distribution Date, and neither party shall have any continuing rights or obligations thereunder.   
    
2.04 Amended Returns.   

(a)    AMPMI shall not file any amended SGI Filed Tax Return.   

(b)    SGI, after consultation with AMPMI, may amend a SGI Filed Tax Return that includes AMPMI or one or more members of the AMPMI Group: (i) to the extent required by any Taxing Authority or (ii) if the amendment is prepared in a manner consistent with past practices of the Parties, does not affect the Distribution Tax Treatment, does 

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Exhibit 10.3

not increase any AMPMI Tax, unless AMPMI has consented to the filing of such amended SGI Filed Tax Return, or  otherwise give rise to indemnification pursuant to Section 4.01(b).  

ARTICLE III. COVENANTS
     3.01 Covenants. Notwithstanding anything else to the contrary contained in this Agreement or any other agreement, during the Restricted Period, no Party shall:
(a) enter into any Proposed Acquisition Transaction, approve any Proposed Acquisition Transaction for any purpose, or allow any Proposed Acquisition Transaction to occur, with respect to any of the Parties or their Subsidiaries;
(b) liquidate or partially liquidate; or approve or allow any liquidation, or partial liquidation of any of the Parties or their Subsidiaries; 
(c) approve or allow the discontinuance, cessation, or sale or other transfer (to an Affiliate or otherwise) of, or a material change in, any Active Business; 
(d) sell or otherwise dispose of more than thirty-five percent (35%) of its gross assets, or approve or allow the sale or other disposition (to an Affiliate or otherwise) of more than thirty-five percent (35%) of the consolidated gross assets of any of the Parties or their Subsidiaries (in each case, excluding sales in the ordinary course of business); 
(e) purchase, directly or through any Affiliate, any of its outstanding stock after the Distribution, other than (i) through stock purchases meeting the requirements of Section 4.05(1)(b) of Revenue Procedure 96-30 (without regard to the effect of Revenue Procedure 2003-48 on Revenue Procedure 96-30) or (ii) in connection with the Reverse Stock Split; 
(f) approve or allow payment of an extraordinary distribution by any of the Parties, or a redemption of shares of any of the Parties, other than in connection with the Reverse Stock Split; 
(g) take any action or fail to take any action, or permit any of its Affiliates to take any action or fail to take any action, that is inconsistent with any representation or covenant made in  the Tax Representation Letters, or that is inconsistent with the Tax Opinion; or 
(h) take any action or permit any of its Affiliates to take any action that, in the aggregate (taking into account other transactions described in this Section 3.01) would be reasonably likely to jeopardize the Distribution Tax Treatment; provided, however, that a Party (the “Requesting Party”) shall be permitted to take such action or one or more actions set forth in the foregoing clauses (a) through (g) if, prior to taking any such actions: (1) the Requesting Party shall have received a favorable private letter ruling from the IRS, or a ruling from another Taxing Authority (a “Post-Distribution Ruling”), in form and substance reasonably satisfactory to the non-Requesting Party that confirms that such action or actions will not result in U.S. federal or state Distribution Taxes, taking into account such actions and any other relevant transactions in the aggregate, (2) the Requesting Party shall have received an Unqualified Tax Opinion with respect to such actions and any other relevant transactions in the aggregate; or (3) such Requesting Party shall have received a written statement from the non-Requesting Party that waives the requirement to obtain a Post-

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Exhibit 10.3

Distribution Ruling or Unqualified Tax Opinion described in this paragraph. The non-Requesting Party’s evaluation of a Post-Distribution Ruling or Unqualified Tax Opinion may consider, among other factors, the appropriateness of any underlying assumptions, representations, and covenants made in connection with such Post-Distribution Ruling or Unqualified Tax Opinion. Each Party shall bear its own costs and expenses in connection with securing or evaluating any such Post-Distribution Ruling or Unqualified Tax Opinion. 

ARTICLE IV. INDEMNITY OBLIGATIONS AND PAYMENTS

4.01 Indemnity Obligations.   

(a)    SGI shall indemnify and hold harmless the AMPMI Group, and their directors, officers and employees (collectively, the “AMPMI Indemnitees”) from and against, and will reimburse the AMPMI Indemnitees for (i) all SGI Taxes and (ii) all Taxes, Liabilities and related losses arising out of, based upon or relating or attributable to any breach of or inaccuracy in any representation, covenant or obligation of SGI under this Agreement. 

 
      (b)    AMPMI shall indemnify and hold harmless the SGI Group, and their directors, officers and employees (collectively, the “SGI Indemnitees”) from and against, and will reimburse the SGI Indemnitees for (i) all AMPMI Taxes and (ii) all Taxes, Liabilities and related losses arising out of, based upon or relating or attributable to any breach of or inaccuracy in any representation, covenant or obligation of AMPMI under this Agreement.   

4.02 Notice. The Parties shall give each other prompt written notice of any payment that may be due to the provider of such notice under this Agreement.   

4.03 Treatment of Payments. The Parties agree that any payment made between the Parties pursuant to this Agreement or the Ancillary Agreements shall be treated, to the extent permitted by law, for all Tax purposes as a nontaxable payment (i.e., a distribution or a capital contribution) made immediately prior to the Distribution.  
ARTICLE V. TAX CONTESTS
5.01 Notice. SGI shall promptly notify AMPMI  in writing upon receipt by SGI or any of its Affiliates written communication from any Taxing Authority with respect to any pending or threatened audit, dispute, suit, action, proposed assessment or other proceeding (a “Tax Contest”) concerning any Taxes for which AMPMI  may be liable under this Agreement. AMPMI shall promptly notify SGI in writing upon receipt by AMPMI or any of its Affiliates of a written communication from any Taxing Authority with respect to any Tax Contest concerning any Taxes for which SGI may be liable under this Agreement.  
5.02 Control of Contests By SGI. SGI shall have the sole responsibility and control over the handling of any Tax Contest, including the exclusive right to communicate with agents of the Taxing 

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Exhibit 10.3

Authority and to control, resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Tax Contest, involving (i) any SGI Filed Tax Return other than an AMPMI Separate Tax Return, or (ii)  the Distribution or any transaction associated therewith as described in the Separation Agreement. Subject to SGI’s control right, upon request by AMPMI, AMPMI shall, at AMPMI’s expense, be allowed to participate in the handling of any such Tax Contest with respect to any item that may affect the liability of AMPMI under this Agreement or that relates to the Distribution Tax Treatment, and SGI shall not settle any such Tax Contest without the consent of AMPMI, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding anything else to the contrary contained herein, in the case of any such Tax Contest relating to the Distribution Tax Treatment, absent a settlement of such Tax Contest pursuant to the preceding sentence, SGI shall be required to exhaust all administrative remedies available with respect to such Tax Contest.  
     5.03 Control of Contests By AMPMI. AMPMI shall have the full responsibility and control over the handling of any Tax Contest, including the exclusive right to communicate with agents of the Taxing Authority and to control, resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Tax Contest, involving any AMPMI Separate Tax Return. 
ARTICLE VI. COOPERATION
6.01 General. Each Party shall fully cooperate with the other Party in connection with the preparation and filing of any Tax Return, the determination of the amount of Taxes attributable to AMPMI or one or more members of the AMPMI Group pursuant to Section 2.03(a), the determination of Tax Attributes pursuant to Section 8.01 and the conduct of any Tax Contest (including, where appropriate or necessary, providing a power of attorney) concerning any issues or any other matter contemplated under this Agreement. Each Party shall make its employees and facilities available on a mutually convenient basis to facilitate such cooperation. 
 
 
     6.02 Consistent Treatment. Unless and until there has been a Final Determination to the contrary, each Party agrees not to take any position on any Tax Return, in connection with any Tax Contest or otherwise that is inconsistent with (a) the allocation of Taxes between SGI and AMPMI as set forth in this Agreement or (b) the Distribution Tax Treatment.   

ARTICLE VII. RETENTION OF RECORDS; ACCESS
7.01 Retention of Records; Access. For so long as the contents thereof may become material in the administration of any matter under applicable Tax law, but in any event until the later of (i) the expiration of any applicable statute of limitation and (ii) seven years after the Distribution Date, the Parties shall (a) retain records, documents, accounting data and other information (including computer data) necessary for the preparation and filing of all Tax Returns in respect of Taxes of either SGI or AMPMI  for any Pre-Distribution Period or any Straddle Period or for any Tax Contests relating to such Tax Returns, and (b) give to the other Party reasonable access to such records, documents, accounting data and other information (including computer data) and to its personnel (ensuring their cooperation) and premises, for the purpose of the review or audit of such Tax Returns 

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Exhibit 10.3

to the extent relevant to an obligation or liability of a Party under this Agreement or for purposes of the preparation or filing of any such Tax Return, the conduct of any Tax Contest or any other matter reasonably and in good faith related to the Tax affairs of the requesting Party. At any time after the Distribution Date that a Party proposes to destroy such material or information, it shall first notify the other Party in writing and the other Party shall be entitled to receive such materials or information proposed to be destroyed.   
ARTICLE VIII. TAX ATTRIBUTES
8.01 Allocation of Tax Attributes. The Parties shall cooperate with each other in determining the existence and the amount of the Tax Attributes to which it is entitled after the Effective Time; provided, however, that such determination shall be made in a manner that is (a) reasonably consistent with the past practices of the Parties; (b) in accordance with the rules prescribed by applicable Law, including the Code and the Treasury Regulations; (c) consistent the Tax Representation Letters and the Tax Opinion; and (d) to the extent possible and not in conflict with clauses (a)-(c) above, reasonably determined to minimize the aggregate cash Tax liability of the Parties. 
ARTICLE IX.  DISPUTE RESOLUTION
     9.01 Dispute Resolution. The Parties shall attempt in good faith to resolve any disagreement arising under this Agreement, including any dispute in connection with a claim by a third party (other than a Taxing Authority) (a “Dispute”). Either Party may give the other Party written notice of any Dispute not resolved in the normal course of business. If such a Dispute is not resolved within sixty (60) days following the date on which one Party gives such notice, the Parties shall jointly retain a nationally recognized law or accounting firm, reasonably acceptable to the Parties (the “Tax Advisor”), to act as an arbitrator in order to resolve the Dispute. The Tax Advisor’s determination as to any Dispute shall be made in accordance with the terms of this Agreement and shall be final and binding on the Parties and not subject to collateral attack for any reason (other than manifest error). All fees and expenses of the Tax Advisor shall be shared equally by SGI, on the one hand, and AMPMI, on the other hand.   
ARTICLE X.   MISCELLANEOUS PROVISIONS
10.01 Governing Law. This Agreement, except as expressly provided herein, shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware, irrespective of the choice of laws principles of the State of Delaware as to all matters, including matters of validity, construction, effect, enforceability, performance and remedies.  
10.02 Further Assurances. Subject to the provisions hereof, the Parties hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions, as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby. 
      10.03 Survival. Notwithstanding any other provision of this Agreement to the contrary, all representations, covenants and obligations contained in this Agreement shall survive until the 

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Exhibit 10.3

expiration of the applicable statute of limitations with respect to any such matter (including extensions thereof).   
10.04 Addresses and Notices. Each Party giving any notice required or permitted under this Agreement will give the notice in writing and use one of the following methods of delivery to the Party to be notified, at the address set forth below or another address of which the sending Party has been notified in accordance with this Section 10.04 as follows: (w) personal delivery; (x) facsimile or telecopy transmission with a reasonable method of confirming transmission; (y) commercial overnight courier with a reasonable method of confirming delivery; or (z) pre-paid, United States of America certified or registered mail, return receipt requested. Notice to a Party is effective for purposes of this Agreement or any Ancillary Agreement only if given as provided in this Section 10.04 and will be deemed given on the date that the intended addressee actually receives the notice.
	
							
	 
	 
	 
	 
	 

	If to SGI:

Spectrum Group International, Inc.
1063 McGaw Avenue
Irvine, California 92614
Attn:  CEO

	 
	

	 
	 
	 
	 

	 
	 
	 

	If to AMPMI:

A-Mark Precious Metals, Inc.
429 Santa Monica Boulevard, Suite 230 
Santa Monica, California 90401
Attn:  CEO

	 
	 
	 

10.05 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and assigns. No Party may assign any of its rights or delegate any of its obligations under this Agreement or any Ancillary Agreement without the written consent of the other Parties which consent may be withheld in such other Party's sole and absolute discretion, and any assignment or attempted assignment in violation of the foregoing will be null and void. 
10.06 Waivers of Default. The failure of either Party to require strict performance by the other Party of any provision in this Agreement, or to exercise any right or remedy under this Agreement will not waive or diminish such Party’s right to demand strict performance or exercise thereafter of that or any other provision, right or remedy hereof.   
10.07 Invalidity of Provisions. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or 

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Exhibit 10.3

unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby or thereby, as the case may be, is not affected in any manner adverse to any Party. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to affect the original intent of the Parties.  
10.08 Complete Agreement. This Agreement contains the entire agreement between the Parties pertaining to the subject matter of this Agreement and supersedes all prior agreements, negotiations, discussions, writings, understandings, commitments and conversations pertaining thereto and there are no agreements or understandings between the Parties other than those set forth or referred to in this Agreement. In the event of any inconsistency between this Agreement and the Separation Agreement or any other agreements relating to the transactions contemplated by the Separation Agreement, the provisions of this Agreement shall control.   
10.09 Construction. The language in all parts of this Agreement shall in all cases be construed according to its fair meaning and shall not be strictly construed for or against any Party.   
10.10 No Double Recovery. No provision of this Agreement shall be construed to provide an indemnity or other recovery for any costs, damages or other amounts for which the damaged Party has been fully compensated under any other provision of this Agreement or under any other agreement or action at law or equity. Unless expressly required in this Agreement, a Party shall not be required to exhaust all remedies available under other agreements or at law or equity before recovering under the remedies provided in this Agreement. 
 
 
    10.11 Setoff. All payments to be made by any Party under this Agreement may be netted against payments due to such Party under this Agreement, but otherwise shall be made without setoff, counterclaim or withholding, all of which are hereby expressly waived.  

     10.12 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be considered one and the same agreement, and shall become effective when each counterpart has been signed by each of the Parties and delivered to the other Party.   
10.13 No Third Party Rights. This Agreement is only intended to allocate the responsibility for certain Taxes between SGI and AMPMI and to address the other Tax matters stated herein. Nothing in this Agreement, express or implied, is intended or shall confer any right, benefit, claim or remedy of any nature whatsoever under or by reason of this Agreement upon any Person other than SGI and AMPMI . SGI and AMPMI acknowledge and agree that the respective rights of the SGI Indemnitees and the AMPMI Indemnitees expressly provided under this Agreement may only be enforced by SGI and AMPMI, respectively.   
10.14 Separation Agreement. To the extent not inconsistent with any specific term of this Agreement, the provisions of the Separation Agreement shall apply in relevant part to this Agreement, including Sections 7.1 (Termination), 8.10 (Headings), 8.13 (Specific Performance), 8.14 (Amendments) and 8.15 (Waiver of Jury Trial).  

13

Exhibit 10.3

SIGNED ON THE FOLLLOWING PAGE

14

Exhibit 10.3

IN WITNESS WHEREOF, each party has caused this Tax Separation Agreement to be executed on its behalf by a duly authorized officer effective as of the date first set forth above.

	
									
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 

	SPECTRUM GROUP INTERNATIONAL, INC., a Delaware corporation
	 
	 
	 
	A-MARK PRECIOUS METALS, INC., 
a Delaware corporation

	 
	 
	 
	 
	 

	By:
	 
	___________________________
	 
	 
	 
	By:
	 
	_____________________________

	Name:
	 
	Gregory N. Roberts
	 
	 
	 
	Name:
	 
	 

	Title:
	 
	Chief Executive Officer
	 
	 
	 
	Title:
	 
	 

	 
	 
	 

15Ex 10.4

Revised
Execution  Copy

AMENDED  AND RESTATED  COLLATERAL  AGENCY  AGREEMENT (1999)

This AMENDED AND RESTATED  COLLATERAL   AGENCY AGREEMENT   (1999) is dated as of  November 30, 1999, by and among A-MARK PRECIOUS  METALS,  INC.,  a New York corporation formerly known as Spiral Cycle Corporation  (the "Company"), and MEESPIERSON  N.V.  ("Mp"),  KBC BANK N.V.,  RZB FINANCE  LLC,  and BROWN BROTHERS  HARRIMAN  & CO.  ("Brown Brothers ") and any other entities that may become a party to this Agreement pursuant to the terms hereof (each individually a "Lender," and collectively the "Lenders") and Brown Brothers in its capacity as agent for itself as a Lender and all other Lenders, (the "Agent").   This Agreement amends and restates in its entirety the Amended and Restated Collateral Agency Agreement dated as of April 28, 1997, as amended.

INTRODUCTORY  STATEMENT

1.         The Company has acquired all of the assets of A-Mark Precious Metals, Inc.,  a California corporation  (the "Old Company") and pursuant to the terms of the Assumption Agreement the Company has assumed all of the Liabilities of the Old Company under the Old Loan Documents (as defined in the Assumption Agreement) including, without limitation, the Assumed Obligations owing to each Prior Lender, which Assumed Obligations are and shall be secured by the Security.

2.         Each Prior Lender has heretofore individually extended or may hereafter extend financial accommodations to the Company from time to time by the making of loans, the issuance of letters of credit and the creation of acceptances through inventory consignment arrangements  and otherwise. <       The Company has requested that (a) KBC Bank N.V. and RZB Finance LLC each become a Lender and (b) the Lenders continueto  provide financial accommodations to the Company and each Lender may, from time to time, individually and in its sole discretion,  agree to continue to extend financial accommodations to the Company, which shall be included in the Outstanding Credits and the Liabilities and be secured by the Security.

3.         The Company and the Lenders have agreed that any such extension of financial accommodations shall be subject to the terms and conditions hereof.

4.         The Company has granted to the Agent a security interest in all of the Security, as such term is defined herein.  The Company and the Lenders have requested the Agent, and the Agent has agreed, to act as Agent for the Lenders with respect to the Security, as more fully set forth herein.

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Accordingly,  the parties hereto hereby agree as follows:

I.       DEFINITIONS.

Rules of Construction.  The following terms shall have the meanings indicated unless the context otherwise requires (terms defined in the singular to have a correlative  meaning
when used in the 'plural and vice-versa).  Any reference to "the Lenders" in this Agreement shall mean all of the Lenders unless otherwise specifically stated.

"Affiliate"  shall mean the Guarantors, or any subsidiary of the Company or the Guarantors,  or any direct or indirect shareholder, director or employee of any of the foregoing,  or any other entity in which the Company, the Guarantors or any such shareholder has any beneficial or legal ownership interest.

"Agent Account" shall mean an account at an Approved Depository for the storage of
Precious Metals, which account is either: (i) in the name of the Agent on behalf of the
Lenders,  or (ii) subject to a Depository Agreement.

"Approved Carrier" shall mean any of the carriers listed in Exhibit 1 annexed' hereto, which list may be amended from time to time with the prior written approval of the Lenders.

"Approved Depositories" shall mean any of the depositories or vault facilities listed in Exhibit 1 annexed hereto, which list may be amended from time to time with the prior written approval of the Lenders.

"Assigned·Bank Account" shall be any account of the Company held at any of the Lenders,  or another bank which has signed a Notice of Security Interest similar to Exhibit 5, and which account is subject to a perfected first priority lien in favor of the Agent.  The Assigned Bank Accounts as of the date of this Agreement are listed in Exhibit 1 annexed hereto, which list may be amended from time to time with the prior written approval of the Lenders.

"Assigned Consignee Letter of Credit" shall mean a Consignee Letter of Credit meeting the following requirements: (i) such letter of credit is issued by an issuer previously approved in writing by the Lenders; (ii) the proceeds of such letter of credit have been assigned by the Company to the Agent on behalf of the Lenders; and (iii) such letter of credit and all necessary signed, undated drawing documents have been delivered to the Agent under an assignment agreement in the form of Exhibit 7 hereto.

"Assigned Forward Contract" shall mean a Forward Contract which has been assigned to the Agent under a written agreement in form and substance acceptable to the Lenders,  and the Agent has been granted a power of attorney, in form and substance acceptable

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to the Lenders,  by the Company allowing the Agent to make/take delivery on behalf of the Company of the Precious Metals which are the subject of such Forward Contract.   Each such assignment must be acknowledged and agreed to by the counterparty.

"Assigned  Material"  shall mean Precious Metals which are owned by the Company, are not subject to any security interest other than a perfected security interest granted to the Agent on behalf of the Lenders, and are either: (i) held in an Agent Account; or (ii) evidenced by negotiable documents of title in the possession of the Agent and endorsed in blank or to the order of the Agent or non-negotiable documents of title in the possession of the Agent and issued in its name, in each case issued by an Approved Depository.

"Assigned  Material  in Transit"  shall mean Precious Metals which are owned by the Company, are not subject to any security interest other than a perfected security interest granted to the Agent on behalf of the Lenders, and are being transported to an Agent Account at an Approved  Depository by an Approved Carrier.

"Assumed  Obligations"  shall have the meaning given such term in the Assumption
Agreement.

"Assumption   Agreement" shall mean the agreement among the Company, the Guarantors,  the Lenders, and the Agent dated as of November 30, 1999, as such agreement may be modified,  supplemented or amended from time to time.

"Broker  Accounts"  shall mean any accounts that are carried by the Company for trading in commodity futures or options contracts and which have been pledged to the Agent on behalf of the Lenders pursuant to agreements in form and substance acceptable to the
Lenders.   Each such account shall be maintained with a broker listed in Exhibit 1 hereto or any
other broker  approved in writing by the Lenders, and such broker shall have duly executed and delivered an acknowledgment of the pledge to the Agent in form and substance satisfactory to the Lenders,  or in the form of Exhibit 4 annexed hereto.
"Business  Day" shall mean any day on which the Lenders are open for business. "CBT"  shall mean the Chicago Board of Trade.

hereto.
 
"Collateral   Report"  shall mean a report in the approved form of Exhibit 2 annexed

"Collateral   Value"  shall have the meaning set forth in Section II(C) hereof. "COMEX"  shall mean Commodities Exchange, Inc.
"COMEX   Price." shall mean, in respect of gold or silver, the settlement price per troy ounce at the close of business on any Business Day for a contract to sell such Precious Metal for delivery in the next subsequent month for which such a contract is offered for sale.

"Confirmed   Material"   shall mean Precious Metals which are owned by the Company and are not subject to any security interest other than the perfected security interest granted to the Agent on behalf of the Lenders, and are located at an Approved Depository that has entered into, and is not in default under,  a Depository Letter.

"Consigned  Material"   shall mean Precious Metals that are included in the. Collateral Report, are held under a Consignment Agreement by a Consignee, and also meet the following criteria: (i) the term of the consignment does not exceed one year from the date of delivery to the Consignee or may be terminated at any time for any reason by the Company upon not more than thirty (30) days prior  notice; (ii) there is a letter(s) of credit which is an Assigned Consignee
Letter(s) of Credit in favor of the Company and for the account of such Consignee in an amount(s) equal to or greater than 110% of the aggregate Market Value of such Precious Metals; and (iii) the letter(s) of credit is/are issued by or confirmed by an entity located in the United States which has a debt rating of BBB or better by the Standard & Poor's  rating agency.

"Consignee"  shall mean a consignee of Precious Metals under a Consignment Agreement which consignee is not in default under such Consignment Agreement or any other agreement with the Company, and in respect of which consignee the Company has taken all actions necessary to fully protect the Company's rights as consignor of such Precious Metals, such actions to include without limitation, filing of all necessary Financing Statements and satisfying any other applicable notice requirements.

"Consignee  Letter  of Credit"  shall mean a letter of credit in the form of Exhibit 6(A)
or 6(B) hereto issued by an issuer not disapproved by any Lender.

"Consignment  Agreement"  shall mean an agreement, in the form of Exhibit 8(A) or 8(B) annexed hereto,  entered into by the Company and a Consignee governing the Precious Metals consignment arrangements between the Company and such Consignee.

"Contract   Value" shall mean, as of any date and with respect to any Forward Contract, the product  of the number of units of Precious  Metal which is the subject  of such Forward Contract,  multiplied by the price of each such unit as stated in such Forward Contract.

"Depository  Agreement"  shall mean an agreement, in form and substance acceptable to the Lenders,  among an Approved Depository,  the Company and the Agent on behalf  of the Lenders, concerning an account in which such Approved Depository will release Precious Metals from such account only upon the written instructions of the Agent.

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"Depository  Letter"  shall mean an agreement substantially  in the form of Exhibit 3 annexed hereto,  or other agreement in form and substance acceptable to the Lenders, among the Company, the Agent and an Approved Depository.
"Enforcement"    has the meaning given in Section 3.3 of the Intercreditor Agreement. "Facility  "Documents"  shall mean this Agreement, any promissory note, letter of credit
agreement or other evidence of Outstanding Credits, the Intercreditor  Agreement,  the General Security Agreement, the Guaranty, the Assumption Agreement, any security agreement signed by the Company or any Guarantors,  and any other agreement to which the Agent on behalf of the Lenders is a party,  pursuant to which the Agent on behalf of the Lenders is granted a security interest or lien on any Security, including without limitation, any Depository Agreement, Depository Letter or any other agreement with an Approved Depository,  or any agreement with an Approved Carrier  or any agreement with a broker.

"Financing  Statement"  shall mean a financing statement filed pursuant to the Uniform Commercial Code, as in effect from time to time in the applicable state, on form UCC-l  or other required form.
"Foreclosure  Plan" has the meaning given in Section 3.3 of the Intercreditor Agreement. "Foreign  Material"  shall mean (i) Assigned Material held at an Approved Depository
located outside the United States; and (ii) Confirmed Material held at the Johnson Matthey facility
in Ontario, Canada or Hertfordshire,  England.

"Forward   Contract"   shall mean a contract which is not held in any Broker Account between the Company and a counterparty not disapproved by the Lenders, for the purchase or sale of Precious Metals, at a stated price and at a future date, no later than one year after the date the contract is signed.

"GAAP" means generally accepted accounting principles in the United States of America applied on a basis consistent with those used in the preparation of the financial statements referred to in Section IV.

"Guarantor Security" shall mean the collateral security granted by either or both of the Guarantors to the Lenders pursuant to any agreement with the Agent, on behalf of each Lender, to secure the obligations of each Guarantor to the Lenders under its respective Guaranty.

"Guarantors"    shall mean The A-Mark Corporation, a California corporation,  and the
Holding Company.

"Guaranty"   shall mean the Guaranty dated as of the date hereof by the Guarantors in the form of Appendix C annexed hereto in favor of each Lender, guaranteeing the repayment of the

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Obligations  (as  defined  therein)  to  the  Lenders  and the  Agent,  as  such  may be  modified, supplemented or amended from time to time.

"Holding   Company"   shall  mean  A-Mark  Holding,  Inc.,  a  California  corporation formerly known as A-Mark Precious Metals, Inc.

"Insured  Consignments"  shall mean the Precious Metal owned by the Company and held by a Consignee  under  a Consignment Agreement which is insured under  an insurance policy approved by the Lenders in the face amount of at least 110% of the Market Value of such Precious Metal and under which the Agent, for the benefit of the Lenders, has been named loss payee.

"Intercreditor    Agreement"  shall mean the Amended and Restated Intercreditor Agreement (1999) relating to the Company and the Guarantors, dated as of the date hereof, and executed by the Lenders, as the same may be amended, supplemented or otherwise modified from time to time a copy of which appears as Appendix B annexed hereto.

"LME"  shall mean London Metals Exchange.
"Liabilities"  shall have the meaning given such term in the Security Agreement. "Market   "Value"  shall mean, with respect to any Precious Metal,  as of any date, the
dollar  amount  that  is the product of the number of fine troy  ounces of such Precious  Metal multiplied  by:  (i)  in the case of gold and silver,  the COMEX  Price;  and (ii) in the case of palladium and platinum, the NYMEX Price.

"Non-Investment  Grade Securities" shall mean any debt or equity security having a long term unsecured  rating of "B" or lower or an equivalent thereof  from a rating agency such as Standard & Poor's  Corporation or Moody's Investors Service, Inc. or another comparable service approved by the Lenders.

"NYMEX"  shall mean the New York Mercantile Exchange.

"NYMEX  Price"  shall mean, in respect of palladium or platinum, the settlement price per troy ounce at the close of business on any Business Day for a contract to sell such Precious Metal for delivery in the next subsequent month for which such a contract is offer~d for sale.

"On-Site  Material"  shall mean Precious Metals owned by the Company and not subject to any security interest other than a perfected security interest granted to the Agent on behalf of the Lenders and located at the facility of the Company at 100 Wilshire Boulevard, Santa Monica, California and at 550 South Hill Street, Los Angeles, California.

"Outstanding Credits"  shall have the meaning set forth in Section II(B) hereof.

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"Precious  Metals"  shall mean the gold, silver, platinum and palladium content whether in the form of bars,  coins, ingots, rods, alloy, sponge, grain, scrap, or shot.  Suchgold,  silver, platinum,  and palladium content must qualify as Comex quality.
"Prior  Lender"  shall have the meaning given such term in the Assumption Agreement. "Security"   shall mean the property  constituting the collateral  security granted by the
Company to the Agent on behalf of the Lenders pursuant to the Security Agreement or pursuant
to any other agreement,  including, without limitation, the Assumption Agreement.

"Security  Agreement"  shall mean the Amended and Restated General Security Agreement (1999) dated as of the date hereof executed by the Company in favor of the Agent on behalf of the Lenders,  a copy of which appears as Appendix A annexed hereto, as the same may be amended,  supplemented or modified from time to time.

"Supplier   Advance"  shall mean, at any date of calculation thereof,  the funds (or the Market Value of Precious Metals) advanced by the Company within the previous ten (10) Business Days to suppliers in payment for Precious Metals which are in the process of shipment or which have been received by the Company at an Approved Depository but have not yet been assayed or certified by the Company.

"This Agreement"  shall mean the Amended and Restated Collateral Agency Agreement (1999) dated as of November 30, 1999, which supersedes the Amended and Restated Collateral Agency Agreement  dated April 28,  1997, among and between the Company,  the Lenders and others, as such have been amended ana/or restated from time to time.

"Trade  Receivable"  shall mean an account receivable which at all times meets each of the following requirements:

		
	(a)
	it arises  in the normal course of the Company's  business  and is evidenced  by proper entries in the Company's accounting records;

		
	(b)
	it is valid, legally enforceable and is not subject to offset, defense, counterclaim or dispute;

		
	(c)
	it is subject to a first priority perfected security interest in favor of the Agent on behalf of the Lenders and no other security interest;

		
	(d)
	it has a due date that corresponds with customary industry practice and is not more than 10 Business Days from the invoice date, and not overdue;

(e)it is not due from an Affiliate;

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	(f)
	the Company has the full and unqualified right  to assign  and grant  a security interest in such account as security for the Outstanding Credits;

		
	(g)
	such account is evidenced by an invoice rendered to the account debtor and is not evidenced by any instrument or chattel paper;

		
	(h)
	such account arises from the sale of goods which have been shipped or delivered to the account debtor or to shipping addressees) designated by an account debtor;

		
	(i)
	with respect to such account, the account debtor is not incorporated or primarily conducting business in any jurisdiction located outside the United States, a foreign government or any agency, department or instrumentality thereof other than mints to which the Company sells in the ordinary course of its business;

		
	(j)
	such account is not an account owing by an account debtor with respect to which 10% or more of the aggregate balance of all accounts owing by such account debtor

does not comply with the requirements in paragraph (d) above;

		
	(k)
	such account is in excess of the amount then owed by the Company to the account debtor in the event the Company is indebted to such account debtor and only such excess shall be included as a Trade Receivable; and

		
	(l)
	such account is not subject to the Assignment of Claims Act of 1940, as amended (31 U.S.C.  Section 3727) unless the Company has complied in all respects with the provisions of such Act.

"Unrealized  Loss" shall mean, with respect to Forward Contracts, the amount by which the Value exceeds the Contract Value for each Forward Contract under which the Company is a seller, or the amount by which the Contract Value exceeds the Value for each Forward Contract under which the Company is a buyer.

"Unrealized  Profit"  shall mean, with respect to Forward Contracts, the amount by which the Value exceeds the Contract Value for each Forward Contract under which the Company is a buyer, or the amount by which the Contract Value exceeds the Value for each Forward Contract under which the Company is a seller.

"Value"  shall mean, with respect to any Precious Metal subject to a Forward Contract, as of any date, the dollar amount that is the product of (i) the total number of units of such Precious Metal  subject  to  such Forward  Contract multiplied by  (ii) either  the COMEX  Price,  or the NYMEX Price, as the case may be, for such a unit of such Precious Metal, for the delivery month closest to the maturity of the Forward Contract.

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"Working   Capital"   shall have the meaning set forth in the Working Capital Leverage defmition.

"Working  Capital  Leverage"  shall mean the ratio of current liabilities to working capital. For the  purposes  of this definition,  working capital shall mean current  assets  minus current liabilities, and current assets and current liabilities shall be determined in accordance with GAAP, except current  assets shall exclude, any receivables subject to offset or defense or counterclaim, prepaids, any receivables or other sums due from Affiliates and Noninvestment Grade Securities.

II.        COLLATERAL ARRANGEMENTS.

A.Outstanding    Credits  Not to  Exceed  Collateral   Value:  The  Company  hereby covenants to and agrees with the Agent and each of the Lenders that so long as this Agreement shall remain in effect or there shall be any Outstanding Credits, the Company shall not permit the Outstanding Credits on any date to exceed the Collateral Value on such date.

B."Outstanding Credits"  on any date shall be the sum of the following:

		
	1.
	The aggregate principal amount on such date of all promissory  notes or other evidence of indebtedness owing to the  Lenders arising from direct loans to the Company and overdrafts on accounts of the Company with any of the Lenders;

		
	2.
	The  aggregate maximum  amount  of  all  letters  of credit  lissued by the Lenders outstanding on such date as to which the Company is the account party (less any amounts theretofore paid in respect of drafts drawn under such letters of credit  which  reduce  the amounts  which  may  be drawn  . thereunder) ;

		
	3.
	All amounts owing by the Company on such date to the Lenders pursuant to any obligation of the Company to reimburse any Lender for drafts drawn under  any letter of credit  issued by such Lender  for the  account of the Company;

		
	4.
	The aggregate amount which the Company is obligated on such date to pay to the Lenders on or after such date in respect of amounts paid or to be paid by any Lender under any bankers acceptances created by such Lender for the account of the Company; and

		
	5.
	The  aggregate  Market  Value  of  all  Precious  Metals  delivered  to  the Company by the Lenders  pursuant  to any consignment,  loan,  lease or conditional sale agreement (or any document designated as such) which theCompany    remains   obligated    to   return   to   a  Lender    or   for   which   the Company   remains   obligated   to make  payment  to such  Lender  on or after such date;

provided, however, that (x) none of the Outstanding  Credits shall be counted more  than  once  in  computing   the  total  Outstanding    Credits   and  (y)  the Outstanding  Credits 

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shall not exclude  obligations  of the Company  under any guarantee  or similar agreement  with respectto obligations  of a third-party  or any Affiliate.

(C)   The  "Collateral   Value"  on any date shall be the sum without  duplication   of the following:

(1)       Inventory  Component  of Collateral  Value:

		
	(a) 
	(i)         If the Market Value  of all Assigned  Material  plus Assigned  Material in Transit plus Consigned  Material  is equal to or greater than 70% of the Market Value of all Assigned  Material  plus Assigned  Material  in Transit    plus   Confirmed,   Material    plus   On-Site    Material    plus Consigned  Material,  then:

(x) 95% of the Aggregate  Market Value of all Assigned  Material and Assigned   Material   in  Transit   which   is  hedged   by  an  Assigned Forward Contract  or a futures contract which has been assigned  to the Agent and meets all other terms and conditions  that the Agent and the Lenders  require;  and

(y) 90% of the  Aggregate  Market  value of all Assigned  Material  and Assigned  Material  in Transit  which is hedged  by a Forward  Contract or a futures  contract  without  written  assignment  to the Agent;  or

(ii)        If the Market Value  of all Assigned  Material  plus Assigned  Material
in Transit  plus Consigned   Material  is less than  70%  of the Market value of all Assigned  Material plus Assigned  Material  in Transit plus
Confirmed  Material plus On-Site  Material  plus Consigned  Material, then:

(x)  90% of the Aggregate  Market Value of all Assigned  Material  and Assigned   Material   in  Transit   which   is, hedged   by  an  Assigned Forward Contract or a futures contract  which has been assigned to the Agent, and meets  all other terms  and conditions   that the Agent  and the Lenders  require;  and

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(y) 85% of the Aggregate Market value of all Assigned Material and Assigned Material in Transit which is hedged by a Forward Contract or a futures contract without written assignment to the Agent;

		
	(iii)
	In no event shall the aggregate Market Value of all Assigned Material plus Assigned Material in Transit plus Consignments fall below 60% of total  inventory plus Consignments.

(b)        85% of the aggregate Market Value of all Confirmed Material;

		
	(c)
	80% of the aggregate Market Value of all On-Site Material, but in no event shall the aggregate Market Value of On-Site Material exceed the lesser of

$2,500,000 or the amount of Company obtained insurance coverage then in force, where the aggregate Market Value of all Precious Metals held on deposit for others is deducted from said insurance coverage.

(2)        Other Components of Collateral Value:

a.80% of the aggregate amount of all Trade Receivables;

b.75% of the aggregate amount of all Supplier Advances;

		
	c.
	100% of the positive net balance in any Broker Account which would remain to the credit ofthe Company upon the event of closing such Broker Account, provided, however, that if the net balance  upon the closing of any such Broker Account would be negative, 100% of such negative numbers shall be subtracted from the Collateral Value;

		
	d.
	90% of the aggregate Market Value of Consigned Material, except in the event that the letter(s) of credit (as described under definition of "Consigned Material") issued by a bank with a Standard & Poors debt rating of AA or better, then 95%;

		
	e.
	100% for Assigned Bank Accounts, but in no event shall the amount exceed $500,000 at an entity other than the Lenders;

		
	f.
	80% of the amount by which the aggregate Unrealized Profit in all Forward Contracts and Assigned Forward Contracts exceeds the aggregate Unrealized Loss in all Forward Contracts and Assigned Forward Contracts; provided, however, that should the aggregate Unrealized Loss in all Forward Contracts and Assigned Forward Contracts exceed the aggregate Unrealized Profit in all Forward Contracts and Assigned Forward Contracts, 100% of such excess

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Unrealized  Loss shall be subtracted  from the Collateral  Value; and provided, further, that the amount added to the Collateral  Value pursuant  to this Section II (C) (2) (f) shall not exceed  $1,000,000;  and

		
	(g)
	80%  of  the  Market   Value  of the  Insured  Consignments,    which  shall not exceed  $1,000,000  for each Consignee,  and which  shall not in the aggregate exceed  $3,000,000.

Any  of the  above  items which  at one time met the requirements   to be a component   of the Collateral  Value  as specified  in this Section  II (C), but which  has subsequently  failed to meet  such requirements,   shall  forthwith  cease to be a component  of the Collateral  Value  until  it again  meets such  requirements.     In addition,  any Lender  may,  in its reasonable   discretion,   exclude  from  the Collateral  Value  any component(s)   it deems  unsatisfactory.

Notwithstanding    anything  to the contrary  contained  in n(C)  solely  with  respect  to Brown Brothers  as a Lender,  the Market Value of all Assigned  Material plus Assigned  Materials  in Transit plus Consigned   Material  shall be equal to or greater than 60% of Outstanding   Credits.

III.        SUBMISSION OF COLLATERAL REPORT.

No  later than  the close of business  on the third Business  Day of each  week,  the Company shall send by telecopier  and mail to the Agent and each ofthe  Lenders  a Collateral  Report  executed on behalf  of the Company  by the President,  Executive  Vice President,  or Chief Financial  Officer or Controller  of the Company  with a certification  by the President,  Executive  Vice President  or Chief Financial  Officer  or Controller  that such Collateral  Report is true and correct  as of its date.

IV.       ADDITIONAL REPORTING AND OTHER  REQUIREMENTS.

(A)       (1) As soon as available and in any event not later than thirty (30) days after the end of each month,  except  for the July monthly  statement,  which  will  be provided  not later than  sixty (60)  days  after  the  end  of  July,  the  Company   shall  deliver  to  the  Agent  and  each  Lender  the unaudited  consolidated   and consolidating  balance sheet of the Guarantors  and the Company  as at the end of such month,  together  with an unaudited  consolidated  and consolidating   statement  of income and changes  in shareholders'   equity  of the Guarantors  and the  Company   for such  month  and the period  from  the beginning   of each of the Guarantors'   and the Company's   fiscal  year to the end of such month,  all in reasonable  detail and certified  as true and correct by the President,  Executive  Vice President,   Chief  Financial   Officer  or  Controller   of  the  Company,   as  the  case  may  be,  subject
however,  to year-end  audit adjustments.

(2)        As soon as available  and in any event not later than thirty  (30) days after the end of each  month,  except  for the July aging schedule,  which  will be provided  not later than sixty

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(60) days  after  the end of July, the Company   shall  deliver  to the Agent  and each Lender  an aging schedule   of  all  Trade  Receivables   and  Supplier  Advances.    The  Company   shall  simultaneously deliver  to the Agent  and each Lender  a list of the ten (10) obligors  with the largest  amounts  of total outstanding   Trade  Receivables   owing  to the  Company,   and  the  ten  (10)  suppliers   to whom  the Company   has made  the largest  total  outstanding   Supplier  Advances;   provided  that the Company shall include  in such list each obligor with total outstanding  Trade Receivables  exceeding  $250,000, and each supplier  to whom the Company  has made total outstanding   Supplier  Advances  exceeding
$250,000  (even  if at such time there are more than ten (10) such obligors  or ten (10) such suppliers).

(B)       As soon as available  and in any event not later than  120 days  after the end of each fiscal year of the Company,  the Company  shall deliver to the Agent  and each Lender  a statement  of income  and changes  in shareholders'  equity of the Guarantors  and the Company  for such year, and the related  balance  sheet of the Guarantors  and the Company  as at the end of such year (setting  forth in comparative   form any material restatements  relating to the preceding  fiscal year), all in reasonable detail  and  accompanied   by an opinion  without  qualification   of independent   public  accountants  of recognized   standing   selected  by the  Guarantors   and the  Company   and  approved   by each  of the Lenders  as to  said  financial  statements   and a certificate  signed  by the President,   Executive  Vice President,  Chief  Financial  Officer  or Controller  of the Guarantors  and the Company  stating that to the  best  of  their  knowledge   said  financial  statement   (including   the  notes  thereto  and the  report thereon  of the Company's  independent  public accountants)  present  fairly the financial  position  and results  of operations  of the Guarantors  and the Company  as at the end of, and for, such year, and that there exists  no default  by the Guarantors  or the Company  under  any Facility  Agreement.

(C)       As soon as available  and in any event not later than  120 days  after the end of each fiscal  year  of  the  Guarantors   and  the  Company,   the  Agent  and  each  Lender   shall  receive  the accountant's   letter to management  which shall include  a detailed  summary  of the accountant's  audit scope  and  findings  for each category  of the Collateral  Value  with  respect  to the Company.    Such letter and summary  in its final form shall be sent to the Agent  and each Lender  concurrent  with its delivery  to the Guarantors  andlor the C~mpany.

(D)       The Company  shall provide to the Agent, as soon as available,  at the expense of the Company,   originals  of the following  documents  and agreements:  (1) all Consignment   Agreements applicable  to any Consigned  Material;  (2) all Assigned  Consignee  Letters  of Credit  and all drawing documents   related  thereto  issued for the account  of the Consignee;   and (3) all Forward  Contracts.

(E)       The  Company  shall  also  provide  to the Agent,  upon  request  of the Agent  or any Lender,  at the expense  of the Company,  evidence of any Financing  Statements  filed by the Company on the material  or assets  of any Consignee,  and evidence  of the Company's   compliance   with  any other  applicable   notice  requirements   necessary  to fully protect  the Company's  rights  as consignor of Precious  Metals.

(F)       The Company  shall provide  to the Agent  complete  copies  of all insurance  policies relating  to  accounts  receivable  (if applicable),  Precious  Metals  (including,  without  limitation,  all

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insurance  policies  relating  to the Insured  Consignments)   or other  inventory  and  Company   owned premises,  naming  the Company  as insured,  each such policy  to name the Agent  as sole  loss payee on behalf  of the Lenders.

(G)       The  Company   shall  provide   each  Lender  as  promptly   as  practicable   with  such information   as  such  Lender  shall  from  time  to time  request  respecting   the  Collateral   Value,  the Outstanding   Credits,  futures  contracts  to which  the  Company   is a party,  the Company's   hedging position  and other  matters  respecting  the financial  condition  and operations  of the Company  (none of which  shall be disclosed  to any person  other than another  Lender  or the Agent,  and the partners, directors,  officers,   employees,   agents  and representatives   of the Lenders  or the Agent,  and except to the extent  such disclosure  may be required  by applicable  law).

(H)       The  Company   shall  promptly   notify  the  Agent  and  each  Lender  of  any  material adverse  change  in the business  and/or financial  condition  of the Company.

(I)         The Company  shall permit,  at any reasonable  time and from time to time, the Agent or any Lender  or any agent or representative  thereof, to examine  and make copies and abstracts  from the records  and  books  of account  of, and visit the properties  of, the Company,   and to discuss  the affairs,   finances   and  accounts   of  the  Company   with  any  of  its  officers   and  directors   and  the Company's   independent   accountants.

V.         APPOINTMENT OF AGENT.

(A)      Each of the Lenders hereby appoints the Agent to act as agent hereunder and under any other Facility Document and authorizes the Agent to take all actions and exercise all powers specifically provided for herein, therein or under any other agreement, document or instrument pertaining to any of the Security, as well as all actions and powers reasonably incidental thereto.

(B)      (1)       The Agent, on behalf of the Lenders, will use its best efforts to complete, sign and file, or cause to be filed, Financing Statements naming the Company as debtor and the Agent as secured party for the Lenders, and any amendments thereto, continuation statements or other papers or filings necessary to perfect and continue its security interest in the Security. Additionally, for each Assigned  Consignee Letter of Credit, the Agent on behalf of the Lenders shall take assignment of all Financing Statements filed by the Company on the material or assets of the applicable  Consignee.   The Agent shall cause each Guarantor to execute and deliver a security agreement and financing statements in favor of the Agent, on behalf of each Lender, with respect to the Guarantor Security. The relative rights and priorities of the Lenders in the Guarantor Security shall be governed by the Intercreditor Agreement.

(2)       The Agent, on behalf of the Lenders, will receive and hold  any of-the following which are delivered to the Agent by or at the direction of the Company: (i) all title documents evidencing any Assigned Material; and (ii) all Assigned Consignee Letters of Credit

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(along with  any related  drawing  documents),  and such Consignee  Letters  of Credit  (along  with any related  drawing  documents),   Consignment   Agreements,   Forward  Contracts  and other  agreements or documents   and other  security  as the Company  may be required  to deliver  under  this Agreement or any other Facility  Document.   The Agent will also, on behalf of the Lenders,  enter into Depository Agreements   with  Approved   Depositories   and receive  confirmations   of Confirmed   Material  from such Approved   Depositories,   maintain  Agent  Accounts  at Approved  Depositories,   and enter  into agreements   among  the Agent,  the Company,  and an Approved  Carrier  with respect  to the transport of Precious  Metals  from Agent  Accounts   and Approved  Depositories   to Agent  Accounts  at other Approved   Depositories.     Without  limitation   of the  foregoing,  the  parties  agree  that  the  Agent's possession  or control  of any security,  security  interests  in which may be perfected  by possession  or control  under  applicable   law, shall perfect  the security  interest  of the Agent  for the ratable  benefit of all Lenders.

(C)        The Agent  shall permit  each Lender, upon request  and with reasonable  prior notice, to inspect  all books,  records  and documents  relating  to the Security,  including,  without  limitation, all reports  and  other  documents   delivered  to the Agent  from time  to time  pursuant  to any of the Facility  Documents   which relate to the Security,  and such Lender  shall be permitted,  at its expense, to make copies  of any thereof.                                                                                                    

VI.       IMMUNITY. INDEMNIFICATION; ETC.

(A)       N either the Agent nor any of its partners, directors,  officers, agents or employees  shall be liable to any Lender,  the Guarantors  or the Company  for any action taken or omitted  to be taken by it or them  under  or in connection  with this Agreement,  any other  Facility  Document,  any other agreement,   document   or  instrument   pertaining   to  any  of the  Security,  or  any  other  documents contemplated   thereby  or referred to therein or the transactions  contemplated  thereby or in connection therewith  or under  or in connection  with any other agreement,  document  or instrument  pertaining to any of the Security,  except  for its or their own gross negligence  or willful  misconduct.

(B)        The Agent shall not be responsible  to any of the Lenders  for any recitals,  statements, warranties   or  representations    made  by  the  Guarantors   or  the  Company   herein  or  in  any  other agreement,   document,    instrument   or  certificate,   or  be  bound  to  ascertain   or  inquire  as  to  the performance   or observance  of any of the terms hereof on the part of the  Guarantors  or the Company or any other  party  except  the Agent.

(C)        The Agent may rely upon the opinion of any legal counsel  selected  by it with respect to the matters  contemplated   by this Agreement  and any other Facility  Document.   The Agent  shall have no duties  or responsibilities   except those expressly  set forth in this Agreement  and in any other Facility  Document.    Each of the Lenders agrees to promptly  notify the Agent of its becoming  aware of the occurrence   of a default by the Company  hereunder or in the payment  of any of the Outstanding Credits.   The Agent  shall notify each of the other Lenders promptly  upon receiving  such notice and upon its becoming   aware of such a default.

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(D)       The  Agent  shall  not be responsible   to the  Lenders   for the  genuineness,   validity, effectiveness,   perfection   or priority  of any Security  given  to or held by it as Agent  hereunder  nor shall it be liable  to the Lenders  because  of any invalidity  of the security  provisions   of the Security Agreement,   whether  arising  from statute,  law or decision  of any court or by reason  of any action or omission  to act on its part.

(E)        The Agent may employ agents and attorneys-in-fact   only with the written  consent of all of the Lenders  and shall not be liable for the defaults,  negligence  or misconduct  of any such agent or attorney-in-fact.

(F)        The   Agent    shall   be   entitled    to   rely   upon   any   certificate,    notice   or   other communication,    document  or instrument  believed  by it to be genuine  and correct  and to have been signed  or sent by the proper  person  or persons,  and with respect  to legal matters,  upon the opinion of legal counsel  reasonably   selected by the Agent; and any action taken or suffered  in good faith by it in accordance   with the opinion  of any such counsel  shall be full justification   and protection  to it.

(G)       Nothing  contained  herein shall affect the rights of the Agent, acting  in its individual capacity  as a Lender,  to accept  deposits  from, lend money  to, and generally  engage  in any kind of banking  or trust business  with the Company  as if it were not acting  as Agent.

(H)       (1)        Except  as provided  in Section  VI (H) (2) and to the extent  not  indemnified by  the  Company   pursuant   to  Section  IX  of  this  Agreement,   each  of  the  Lenders,   ratably  in accordance   with  its pro  rata portion  (determined   at the  time  of the  taking  or omission   of action complained  of) ofthe  Outstanding  Credits,  agrees to indemnify  and hold the Agent  and its partners, directors,  officers,  employees  and agents (collectively,   the "Indemnified  Parties")  harmless  against (i) any and all liabilities,  obligations,  losses, damages,  penalties,  actions, judgments   or suits of any kind and nature whatsoever,  and any and all reasonable  costs, expenses and disbursements   (iricluding without  limitation   reasonable  counsel  fees and expenses  incurred  by any Indemnified   Party in any action or proceeding   between  any ofthe  Indemnified  Parties or any Indemnified  Party and any third party  or otherwise)   related  to the  foregoing,  which  may  be imposed  on,  incurred  by or asserted against  any Indemnified   Party in any way relating  to or arising  out of this Agreement   or any other Facility  Document,   any other agreement,  document  or instrument  pertaining  to any of the Security, or any  other  documents   contemplated   hereby  or referred  to herein  or the transactions   or matters (including  without  limitation  any Enforcement)  contemplated  hereby and thereby;  provided  that no Lender  shall  be liable  to so indemnify  any Indemnified   Party  for (A) any of the foregoing   to the extent  they  arise  from  the gross negligence  or willful  misconduct   of such Indemnified   Party,  (B) amounts  paid in settlements  not approved by such Lender,  or (C) administrative   and overhead  costs and  expenses   incurred   by  an  Indemnified   Party,  and  (ii)  any  and  all  reasonable   out-of-pocket expenses   and  fees  incurred   specifically   by  any  and  all  Indemnified   Parties  (including   without limitation  all fees and charges of all in-house and outside counsel  incurred by any Indemnified  Party in any action  or proceeding   between  any of the Lenders  and any of the Indemnified   Parties  or any Indemnified   Party  and  any third party  or otherwise)  in connection   with  the  Enforcement   or any Foreclosure   Plan, for the benefit of the Lenders,  of this Agreement  or any other Facility  Document,

15

any  other   agreement,    document   or  instrument   pertaining   to  any  of  the  Security,   or  any  other documents  contemplated   hereby  or referred  to herein.   Agent  agrees to reimburse  Lenders  on a pro rata basis (as determined  above) if Agent subsequently  recovers from the Company.   The indemnities set forth  in this  Section  shall  survive  the termination   of this  Agreement   or the resignation   of the Agent  as herein  provided.

(2)        If any Lender(s)  instruct(s)  the Agent  in accordance   with  the  Intercreditor Agreement   to commence   Enforcement,   such Lender(s)  agrees  to indemnify   and hold  each  of the Indemnified   Parties  harmless  to the extent not indemnified  by the Company  pursuant  to Section IX of this Agreement,   against  any reasonable  cost or expense  (including  reasonable   counsel  fees and expenses),   and  against   any  and  all  liabilities,   obligations,   losses,  damages,     penalties,   actions, judgments,   suits,  costs,  expenses  or disbursements   of any kind  and nature  whatsoever   which  may be imposed  on, incurred  by or asserted  against  any Indemnified   Party in connection   with or in any way  relating   to  such  Enforcement;   provided  that  no Lender  shall  be liable  to so indemnify   any Indemnified   Party;  for (i) any of the foregoing  to the extent they arise from the gross negligence  or willful  misconduct   of such Indemnified  Party; (ii) for amounts  paid in settlements  not approved  by such Lender;  or (iii) for administrative  and overhead  costs and expenses  incurred  by an Indemnified Party.    If  more  than  one  such  Lender   so  instructs   the  Agent  to  commence   Enforcement,   the indemnity  obligation  contained  in this Section IV (H) (2) shall be the several obligation  of each such Lender  according  to a pro rata portion based upon the Outstanding   Credits on the date Enforcement
is commenced   by the Agent  and shall survive the termination  of this Agreement   or the resignation of the Agent  as herein  provided.   Agent  agrees  to reimburse  Lenders  on a pro rata basis  if Agent subsequently   recovers  from the Company.

(I)         The Agent undertakes  to perform  such duties, and only such duties, as are specifically set forth in this Agreement,  it being expressly  understood  that there are no implied  duties hereunder. Except  as  specifically   set  forth  herein,  the  Agent  does  not  make  any  warranties,   expressed   or implied.   The Agent  shall not be liable,  directly  or indirectly,  for damages  or expenses  arising  out of the services  provided  hereunder  other than damages  which directly  result  from the Agent's  gross negligence   or willful  misconduct;   provided,  however,  that the Agent  shall not be liable  for special or consequential   damages  (whether  or not foreseen).

(J)         Notwithstanding anything contained herein or in the Intercreditor Agreement or the Security Agreement to the contrary, the Agent shall not have any duty or obligation to manage, control, use, sell, dispose of or otherwise deal with any Precious Metals, Forward Contract or other Security or otherwise to take or refrain from taking any action under or in connection with this Agreement, the Security Agreement or the Intercreditor Agreement, except as expressly provided by the terms of any of such agreements; and no implied duties or obligations shall be read into this Agreement against the Agent.  The Agent shall have no responsibility to make any independent investigation or inquiry as to (i) whether or not any Lender, the Company, any prior Agent, any Approved Carrier, any Approved Depository, and Consignee or any other person, firm, entity or corporation has performed or is duly authorized to perform its respective obligations and duties under any agreement, document or instrument to which any or all of them may be a party, which is

17

referred  to or otherwise  contemplated   by the terms  hereof or any credit  facility,  including,  but not limited  to the  Collateral   Reports  or (ii) the accuracy  and  determination   of the  Collateral   Value, Contract   Value,   Market   Value  and  Value  of  any  Precious  Metals,   Trade  Receivables   or  other Security  or Guarantor   Security  as set forth in any Collateral  Report or other instruments,   document
.or agreement   delivered   to or brought  to the attention  of the Agent  pursuant  to the terms  hereof,  or
(iii) genuineness,   validity  or enforceability   of any of the documents  referred  to in Paragraph  V (B) (2) hereof  and  as  to the  existence,   quantity,   grade  or location  of  any  Precious   Metals  or  other Security  or Guarantor   Security.

(K)       The  Lenders   acknowledge   that  they  are  entering   into  this  Agreement    and  the Intercreditor   Agreement   in  reliance  upon  th~ir  own  independent   investigation   of  the  financial condition  and creditworthiness   of the Company  and they will, independent  and without  reliance  on the Agent,  and based on such documents  and information  as they shall deem appropriate  at the time, continue   to  make   their  own  analysis   and  decision   in  taking   or  not  taking   action  under.  this Agreement.   The Agent  shall not be required  to keep the Lenders informed  as to the performance   of the Company   or observance   by the Company  of any terms  or conditions   set forth  in any Facility Documents,   other  than  those  provided   for herein,   or  to  inspect  the  properties   or  books  of  the Company.    The  Agent  shall not have any  duty or responsibility   to provide  the  Lenders  with  any credit  or other  information   concerning  the affairs,  financial  condition,  or business  of the Company that may come  into the possession  of the Agent,  other than that which  is provided  for herein.   The Lenders  agree and acknowledge  to the Agent that the Agent makes  no representations   or warranties about the creditworthiness   ofthe  Company  or the Guarantors  or with respect to the legality,  validity, accuracy,  sufficiency,   or enforceability  ofthis  Agreement,  the Facility  Documents,  the Security,  the Guarantor  Security,  or any other matter  relating  to any of the foregoing.

VII.     RESIGNATION OF AGENT.

Subject to the appointment and acceptance of a successor Agent, as provided below, the Agent may give thirty (30) days written notice to the Lenders and the Company of its intent to resign.  The Agent may be removed at any time with or without cause by the Lenders other than Brown Brothers upon thirty (30) days prior written notice to the Agent and the Company. Upon any such resignation or removal, and subject to the approval of the Lenders, the Company shall have the right to appoint a successor Agent.  If no successor Agent shall have been so appointed, and shall have accepted such appointment, then the Lenders and the Company shall use their best efforts to agree upon alternative arrangements, Upon the acceptance or assumption of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers and privileges, and the duties and obligations of the retiring Agent, and the retiring Agent shall be discharged from its rights, powers and privilege, and its duties and obligations hereunder.

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VIII.    RELEASE  OF SECURITY.

The  Agent  will,  upon  request  of the  Company,  or, if a Foreclosure   Plan  (as such  term  is defined  in the Intercreditor   Agreement)  is in effect,  to the extent  consistent  with  such Foreclosure Plan, (A) either  (i) release  to the Company,  documents  of title with respect  to property  included  in the Security  then  held  by the Agent,  or (ii) instruct  the issuer  thereof  (by specific  authorization   or by continuing   authorizations   which shall be effective  until revoked  by the Agent)  to make delivery of a portion  or all of the property covered thereby  to the Company,  and (B) with respect  to Assigned Material  or Confirmed  Material held in Approved  Depositories,  instruct such Depositories   to release such Assigned  Material  or Confirmed  Material (by specific instructions  or by continuing  instructions which  shall  be effective   until  revoked  by the  Agent):  provided  that  the  Company   in each  such request  shall  represent  and warrant  in writing  at the time of each such request  that such  release or instruction   is in connection   with the sale of inventory  in the ordinary  course  of business  and, after giving  effect  to each  such release  or instruction,   (X) the Outstanding   Credits  on such date do not exceed  the  lesser  of: (i) the Collateral  Value  on such date or (ii) the Collateral  Value  as evidenced by the most  recent  Collateral  Report, and (Y) the Company  is not in default in any of its obligations to the Agent  or any  Lender  under this Agreement   or otherwise.    Upon  the written  request  of any Lender  to  the  Agent  that  such  Lender  receive  prior  notice  of  any  release   of  Collateral   from  a specified  location,  the Agent  shall provide  such notice.

IX.      INDEMNITY BY THE COMPANY AND PAYMENT  OF EXPENSES.

(A)        Indemnity.     The Company  agrees  to indemnify  and hold  any and all Indemnified Parties  harmless   against  any  and  all liabilities,   obligations,   losses,  damages,   penalties,   actions, judgments   or suits  of any kind and nature  whatsoever,   and any and all reasonable   costs,  expenses and disbursements   (including  without limitation  reasonable  counsel fees and expenses)  related to the foregoing,  which  may be imposed  on, incurred  by or asserted  against  any Indemnified   Party in any way  relating   to  or  arising   out  of  this  Agreement   or  any  other  Facility   Document,   any  other agreement,   document   or  instrument  pertaining   to  any  of the  Security,   or  any  other  documents contemplated   hereby  or referred to herein or the transactions  or matters (including  without  limitation any Enforcement)   contemplated   hereby  or thereby;  provided  that the Company   shall not be liable to so indemnify   any Indemnified   Party  for any  of the foregoing  to the extent  they  arise  from the gross negligence   or willful  misconduct  of such Indemnified  Party.  The indemnities   set forth in this Section  shall  survive  the termination   of this Agreement  or the resignation   of the Agent  as herein provided.

(B)        Expenses.   The Company  shall pay on demand all reasonable  out-of-pocket   expenses and  fees  incurred   by  any of the Agent  or the Lenders  (including   without  limitation   all fees and charges  of all in-house  and outside counsel)  in connection  with the enforcement   of this Agreement or any other  Facility  Document,  any other agreement,  document  or instrument  pertaining  to any of the Security,  or any other documents  contemplated   hereby  or referred  to herein.

(C)        Survival.    The obligations  set forth in this Section  IX shall survive  the payment  of all Outstanding   Credits  and the termination  ofthis   Agreement.

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x.     MISCELLANEOUS.

(A)      Amendments;   Etc.    No provision hereof shall be modified, amended or waived except by a written agreement expressly referring hereto signed by the Company and the Lenders, and if such modification, amendment or waiver affects the rights, duties and responsibilities of the Agent as such hereunder, by the Agent.  Any such waiver shall be effective only in the specific instance given.  This Agreement shall be binding upon the assigns or successors of the Company, the Lenders, and any successor Agent appointed in accordance with the terms of this Agreement; shall constitute  a continuing agreement, applying to all future as well as existing transactions, whether or not of the character contemplated at the date of this Agreement, and if all transactions between the Agent or any other Lenders and the Company shall be at' any time terminated, shall be equally applicable to any new transaction thereafter until this Agreement is terminated.

In any case under this Agreement where any consent, approval or other action is required to be given or taken by the'Lenders,  if the Company shall request such consent, approval or other action, it shall make such request in writing to the Agent, which shall promptly forward such request to the other Lenders, and the Lenders shall respond to such request in writing tothe  Agent, which shall promptly advise the Company in writing of the response of the Lenders, and such consent, approval or other action shall be deemed given, taken, or denied when such written advice as to the' Lenders' response is delivered to the Company by the Agent; and if such action is taken at the request of the Lenders, the Lenders shall so notify the Agent in writing, whereupon the Agent shall promptly notify the Company and the Lenders in writing, and such actions shall be deemed to have been taken by the Lenders when such written notice is delivered to the Company by the Agent.

(B)      Notices.   All notices hereunder shall be given by receipted courier service or by telegram, telecopier or other teletransmission device capable of creating a written record of such notice and its receipt.  Notices hereunder shall be effective upon receipt and shall be addressed as follows, or to such other addresses as a party shall designate by notice to the other parties by the means specified in the previous sentence:

If to the Company:      A-Mark Precious Metals, Inc.
100 Wilshire Boulevard, Third Floor
Santa Monica, California 9040 I
Attention:       Allison Adams, Chief Financial Officer
Telecopier:     310-319-0279

		
	If to the                        The A-Mark Corporation and A-Mark Holding, Inc. Guarantors:
	100 Wilshire Boulevard, Third Floor

Santa Monica, California 90401
Attention:  Joseph Ozaki, Controller
Telecopier: 310-260-0308

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If to the Agent
(and as a Lender):     Brown Brothers Harriman & Co. U.S. Banking
59 Wall Street
New York, New York 10005
Attention:        Senior Credit Officer
Telecopier:     212-493-8998

If to any other
Lender:        Meesl'ierson N.V.
23 Camomile Street
London, England EC3A7PP 
Attention:       Christina Roberts Telephone:      011-44-171-444-8732
Telecopier:     011-44-171-444-8384

KBC BankN.V.
125 West 55th Street, 1ph   Floor
New York, New York 10019
Attention:       Paul Feldman
Telephone:      (212) 541-0787
Telecopier:     (212) 765-2821

RZB Finance LLC
1133 Avenue of the Americas
New York, New York 10036
Attention:       Hermine Kirolos
Telephone:
Telecopier:     (212) 944-2093

(C)      Counterparts.   This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this agreement by signing any such counterpart.

(D)      Headings.  The captions in this Agreement are for convenience or reference only and shall not define or limit the provisions hereof.

(E)       No Waiver.    No failure  on the part  of the Agent  or any Lender  to exercise,   and no delay  in exercising,    any  right  hereunder   shall operate  as a waiver  thereof  or  preclude   any other or further   exercise   thereof  or the exercise  of any  other  right.

(F)        Additional    Parties.    Any entity that is not a party  to this Agreement   initially  may, with  the  consent   of the  Lenders  (which  consent  shall  not be unreasonably    withheld),   become  a party  hereto   by  executing   an amendment   to  this  Agreement   agreeing   to be bound  by all of the terms  and  conditions   hereof  to the extent  applicable   to such  entity,   and  which  amendment   shall also  be  duly   executed   by  the  Agent,   the  Lenders   and  the  Company.      Notwithstanding     the foregoing,   the Lenders,   the Company  and the Guarantors  hereby  consent  to the assignment  by MP to a wholly-owned    subsidiary   (the  "MP  Subsidiary")   of all of MP's   rights  and  obligations   under this Agreement   and the other  Facility  Documents.    Upon  delivery  by MP and the MP  Subsidiary of  notice  of  such  assignment   to the  Agent,   the  other  Lenders   and  the  Company,   which  notice
provides  that  the MP  Subsidiary  agrees  to be bound  by all of the terms  and conditions  hereof  and  , each  other  Facility   Document  to the extent  applicable   to the MP  Subsidiary,   then  in such event,
the  MP  Subsidiary    shall  become   a  party  hereto   and  shall  be  bound  by  all  of  the  terms  and conditions   hereof  to the extent  applicable  to such entity;  and MP shall have no further  obligations or liabilities  hereunder   or thereunder,   all without  the necessity  of executing  any amendment  hereto or thereto.

XI.         ALTERNATE PRICING TECHNIQUES.

In  any  case  under  this Agreement   where  a calculation   is to be made  using  the COMEX Price  for a Precious   Metal  or the NYMEX  Price  for a Precious  Metal,  if the Company  determines for  any  reason   that  such  COMEX   Price  or  NYMEX   Price  cannot  be  determined   on  the  date required,   then  the  Company   shall  immediately   so notify  the  Agent  and  the  Lenders   and  in lieu thereof  the  applicable   price  shall be the sales price per troy ounce at the close of business on the Business  Day  immediately preceding such date for a contract  on the CBT (in the case of a calculation to be made by reference to the COMEX Price) or the LME (in the case of a calculation to be made by reference to the NYMEX Price) to sell the relevant quantity of such Precious Metal in the nearest subsequent month for which such a contract is offered thereon; provided, however, if the Company determines for any reason that a contract on the CBT or the LME, as the case may be, to sell such Precious Metal cannot be determined on the date required, then the Company shall immediately  so  notify  the  Agent  and Lenders,  and  in  lieu  thereof  the  Company,  with  the concurrence  of the Lenders,  shall use its good faith judgment in determining the value of such Precious Metal for the purposes hereof.

XII.      BINDING  EFFECT.

This Agreement shall become effective when it shall have been executed by the Company, the Agent and each of the Lenders and thereafter shall be binding upon and inure to the benefit of their respective  successors and assigns, provided that the Company shall not have the right to

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XIII.     GOVERNING   LAW.

This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to conflict of laws principles.   Unless the context otherwise requires,  all terms used herein which are defined in the Uniform Commercial Code as in effect in New York shall have the meanings therein stated.

		
	XIV.
	JURISDICTION   AND VENUE: SERVICE  OF PROCESS; APPOINTMENTOF AGENT.

In connection  with any claim or controversy,   action or litigation,  among  or between the  parties   hereto   arising  out  of  or  relating   to  this  Agreement   or  any  of  the  Facility Documents,    each   of  the   parties   hereto,   irrevocably    (a)  submits   to  the   non-exclusive jurisdiction    of the  courts  of the  State  of New York  and  the  United  States  District  Court located in the Borough  of Manhattan  in New York City, (b) waives any objection to the laying of venue in such courts,  (c) waives any claim that  any suit,  action or proceeding  in any such court has been brought  in an inconvenient forum,  (d) waives the right to object that  any such court  does not have jurisdiction   over the parties  hereto,  (e) waives the right  to trial  by jury in any suit,  action or proceeding,  and (I) in the case of the Company,  designates the Secretary of State  of the  State  of New York as its agent  for the service of process  (provided  that  the Company  may by written  notice to the others,  change its designation  of agent to a specified person  located  in the Borough  of Manhattan,   provided  any such person  indicates  its, his or her written  consent  to act as such agent).

IN WITNESS  WHEREOF,  each of the parties hereto has caused this Agreement to be executed by its duly authorized officer, all as of the day and date first above written.

A-MARK PRECIOUS  METALS,  INC.,

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per pro BROWN BROTHERS HARRIMAN & CO., for itself as a Lender and as Agent

By:_________________________
Name:_______________________
Title:________________________

BANQUE NATIONALE DE PARIS, as Lender

By:_________________________
Name:_______________________
Title:________________________

By:_________________________
Name:_______________________
Title:________________________

MEESPIERSON N.V., as Lender

By:_________________________
Name:_______________________
Title:________________________

By:_________________________
Name:_______________________
Title:________________________

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per pro BROWN BROTHERS HARRIMAN & CO., for itself as a lender and as Agent

By:________________________
Name:_______________________
Title:_______________________

MEESPIERSON N.V., as Lender

By:________________________
Name:_______________________
Title:_______________________

By:________________________
Name:_______________________
Title:_______________________

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KBC BANK N.V., as Lender

By:________________________
Name:_______________________
Title:_______________________

By:________________________
Name:_______________________
Title:_______________________

RZB FINANCE LLC, as Lender

By:________________________
Name:_______________________
Title:_______________________

By:________________________
Name:_______________________
Title:_______________________

KBC BANK N.V., as Lender

25

By:________________________
Name:_______________________
Title:_______________________

By:________________________
Name:_______________________
Title:_______________________

RZB FINANCE LLC, as Lender

By:________________________
Name:_______________________
Title:_______________________

By:________________________
Name:_______________________
Title:_______________________

AGREED AS TO SECTIONS IV, VI AND
X TO EXTENT THE GUARANTORS ARE OBLIGATED THEREUNDER:

THE  A-MARK CORPORATION
By:________________________
Name:_______________________
Title:_______________________

By:________________________
Name:_______________________
Title:_______________________

THE  A-MARK CORPORATION
By:________________________
Name:_______________________
Title:_______________________

By:________________________
Name:_______________________
Title:_______________________

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LIST OF APPENDICES AND EXHIBITS

Appendix A:   General Security Agreement Appendix B:   Intercreditor Agreement Appendix C:   Guaranty
Appendix D:   General Security Agreement of Guarantors

Exhibit 1:    a) Approved Depositories
b) Approved Carriers
c) Approved Brokers
d) Assigned Bank Accounts

Exhibit 2:        Form of Collateral Report

Exhibit 3:        Form of Depository Letter to be sent to Approved
Depositories for Confirmed Material

Exhibit 4:        Form of Assignment of Commodity Account

Exhibit 5:        Notice of Security Interest in Cash Account

Exhibit 6:        Form of Assignment of Consignee Letter of Credit proceeds. 

Exhibit 7:        Form of Letter of Credit issued by Consignee
Exhibit 8:        Consignment Agreement.

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