Document:

FORM OF REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into as of September 12, 2011, by and between DGSE Companies, Inc., a Nevada corporation (the “Company”) and the undersigned shareholders (the “Shareholders”).

 

RECITALS:

 

WHEREAS, the Shareholders are acquiring an aggregate of six hundred thousand (600,000) shares of the common stock of the Company, par value $0.01 per share (the “Common Stock”), pursuant to that certain Agreement and Plan of Merger, dated September 12, 2011, by and among the Company, Southern Bullion Trading, LLC, SBT, Inc., NTR Metals LLC and the members of Southern Bullion Trading LLC (the “Merger Agreement”); and

 

WHEREAS, the Company desires to grant to the Shareholders certain registration rights relating to the shares of Common Stock held by the Shareholders issued pursuant to the Merger Agreement (collectively, the “Shares”); and the Shareholders desire to obtain such registration rights, subject to the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual premises, representations, warranties and conditions set forth in this Agreement, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.           Definitions and References. For purposes of this Agreement, in addition to the definitions set forth above and elsewhere herein, the following terms shall have the following meanings:

 

(a)           The term “Commission” shall mean the Securities and Exchange Commission and any successor agency.

 

(b)           The terms “register”, “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the 1933 Act (as herein defined) and the declaration or ordering of effectiveness of such registration statement or document.

 

(c)           For purposes of this Agreement, the term “Registrable Stock” shall mean (i) the Shares, (ii) any shares of Common Stock issued or issuable to Shareholders as a result of their ownership of the Shares by way of a stock split, reorganization, merger or consolidation, and (iii) any Common Stock issued or issuable to Shareholders as a dividend on the Shares.  For purposes of this Agreement, any Registrable Stock shall cease to be Registrable Stock when (v) a registration statement covering such Registrable Stock has been declared effective and such Registrable Stock has been disposed of pursuant to such effective registration statement, (w) such Registrable Stock is sold pursuant to Rule 144 (or any similar provision then in force) under the 1933 Act, (x) such Registrable Stock is eligible to be sold pursuant to Rule 144 under the 1933 Act without being subject to any volume limitations except for volume limitations imposed upon the Holder of such Registrable Stock as a result of the Holder’s status as an affiliate (within the meaning of Rule 144 under the 1933 Act) of the Company, (y) such Registrable Stock has been otherwise transferred, no stop transfer order affecting such stock is in effect and the Company has delivered new certificates or other evidences of ownership for such Registrable Stock not bearing any legend indicating that such shares have not been registered under the 1933 Act, or (z) such Registrable Stock is sold by a person in a transaction in which the rights under the provisions of this Agreement are not assigned.

  

  

  

  

 

(d)           The term “Holder” shall mean the Shareholder or any transferee or assignee thereof to whom the rights under this Agreement are assigned in accordance with Section 8 hereof, provided that the Shareholder or such transferee or assignee shall then own the Registrable Stock.

 

(e)           The term “1933 Act” shall mean the Securities Act of 1933, as amended.

 

(f)            An “affiliate of such Holder” shall mean a person who controls, is controlled by or is under common control with a Holder, or the spouse or children (or a trust exclusively for the benefit of the spouse and/or children) of a Holder, or, in the case of a Holder that is a partnership, its partners.

 

(g)           The term “Person” shall mean an individual, corporation, partnership, trust, limited liability company, unincorporated organization or association or other entity, including any governmental entity.

 

(h)           The term “Requesting Holder” shall mean a Holder or Holders of in the aggregate at least a majority of the Registrable Stock.

 

(i)            References in this Agreement to any rules, regulations or forms promulgated by the Commission shall include rules, regulations and forms succeeding to the functions thereof, whether or not bearing the same designation.

 

2.           Incidental Registration.  Commencing immediately after the date of Closing (as defined in the Merger Agreement), if the Company determines that it shall file a registration statement under the 1933 Act (other than a registration statement on a Form S-4 or S-8 or filed in connection with an exchange offer or an offering of securities solely to the Company’s existing stockholders) on any form that would also permit the registration of the Registrable Stock and such filing is to be on its behalf and/or on behalf of selling holders of its securities for the general registration of its Common Stock to be sold for cash, at each such time the Company shall promptly give each Holder written notice of such determination setting forth the date on which the Company proposes to file such registration statement, which date shall be no earlier than thirty (30) days from the date of such notice, and advising each Holder of its right to have Registrable Stock included in such registration. Upon the written request of any Holder received by the Company no later than twenty (20) days after the date of the Company’s notice, the Company shall use commercially reasonable efforts to cause to be registered under the 1933 Act all of the Registrable Stock that each such Holder has so requested to be registered. If, in the written opinion of the managing underwriter or underwriters (or, in the case of a non-underwritten offering, in the written opinion of the placement agent, or if there is none, the Company), the total amount of such securities to be so registered, including such Registrable Stock, will exceed the maximum amount of the Company’s securities which can be marketed (i) at a price reasonably related to the then current market value of such securities, or (ii) without otherwise materially and adversely affecting the entire offering, then the amount of Registrable Stock to be offered for the accounts of Holders shall be reduced pro rata to the extent necessary to reduce the total amount of securities to be included in such offering to the recommended amount; provided, that if securities are being offered for the account of other Persons as well as the Company, such reduction shall not represent a greater fraction of the number of securities intended to be offered by Holders than the fraction of similar reductions imposed on such other Persons other than the Company over the amount of securities they intended to offer.

  

  

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3.           Holdback Agreement - Restrictions on Public Sale by Holder.

 

(a)           To the extent not inconsistent with applicable law, each Holder whose Registrable Stock is included in a registration statement agrees not to effect any public sale or distribution of the issue being registered or a similar security of the Company, or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 under the 1933 Act, during the fourteen (14) days prior to, and during the ninety (90) day period beginning on, the effective date of such registration statement (except as part of the registration), if and to the extent requested by the Company in the case of a nonunderwritten public offering or if and to the extent requested by the managing underwriter or underwriters in the case of an underwritten public offering.

 

(b)           Restrictions on Public Sale by the Company and Others.  The Company agrees (i) not to effect any public sale or distribution of any securities similar to those being registered, or any securities convertible into or exchangeable or exercisable for such securities, during the fourteen (14) days prior to, and during the ninety (90) day period beginning on, the effective date of any registration statement in which Holders are participating (except as part of such registration), if and to the extent requested by the Holders in the case of a non-underwritten public offering or if and to the extent requested by the managing underwriter or underwriters in the case of an underwritten public offering; and (ii) that any agreement entered into after the date of this Agreement pursuant to which the Company issues or agrees to issue any securities convertible into or exchangeable or exercisable for such securities (other than pursuant to an effective registration statement) shall contain a provision under which holders of such securities agree not to effect any public sale or distribution of any such securities during the periods described in (i) above, in each case including a sale pursuant to Rule 144 under the 1933 Act.

 

4.           Expenses of Registration.  The Company shall bear all expenses incurred in connection with each registration pursuant to Section 2 of this Agreement, excluding underwriters’ discounts and commissions, but including, without limitation, all registration, filing and qualification fees, word processing, duplicating, printers’ and accounting fees (including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance), exchange listing fees or National Association of Securities Dealers fees, messenger and delivery expenses, all fees and expenses of complying with securities or blue sky laws, fees and disbursements of counsel for the Company.  The selling Holders shall bear and pay the underwriting commissions and discounts applicable to the Registrable Stock offered for their account in connection with any registrations, filings and qualifications made pursuant to this Agreement and the selling Holders shall pay the legal fees of their counsel in connection with such registrations.

 

5.             Indemnification and Contribution.

 

(a)           Indemnification by the Company.  The Company agrees to indemnify, to the full extent permitted by law, each Holder, its officers, directors and agents and each Person who controls such Holder (within the meaning of the 1933 Act) against all losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein (in case of a prospectus or preliminary prospectus, in the light of the circumstances under which they were made) not misleading. The Company will also indemnify any underwriters of the Registrable Stock, their officers and directors and each Person who controls such underwriters (within the meaning of the 1933 Act) to the same extent as provided above with respect to the indemnification of the selling Holders.

  

  

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(b)           Indemnification by Holders. In connection with any registration statement in which a Holder is participating, each such Holder will furnish to the Company in writing such information with respect to such Holder as the Company reasonably requests for use in connection with any such registration statement or prospectus and agrees to indemnify, to the extent permitted by law, the Company, its directors and officers and each Person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue or alleged untrue statement of material fact or any omission or alleged omission of a material fact required to be stated in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or necessary to make the statements therein (in the case of a prospectus or preliminary prospectus, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information with respect to such Holder so furnished in writing by such Holder. Notwithstanding the foregoing, the liability of each such Holder under this Section 5(b) shall be limited to an amount equal to the initial public offering price of the Registrable Stock sold by such Holder, unless such liability arises out of or is based on willful misconduct of such Holder.

 

(c)           Conduct of Indemnification Proceedings.  Any Person entitled to indemnification hereunder agrees to give prompt written notice to the indemnifying party after the receipt by such Person of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such Person will claim indemnification or contribution pursuant to this Agreement and, unless in the reasonable judgment of such indemnified party, a conflict of interest may exist between such indemnified party and the indemnifying party with respect to such claim, permit the indemnifying party to assume the defense of such claims with counsel reasonably satisfactory to such indemnified party.  Whether or not such defense is assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). Failure by such Person to provide said notice to the indemnifying party shall itself not create liability except to the extent of any injury caused thereby. No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one (1) counsel with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels.

 

(d)           Contribution.  If for any reason the indemnity provided for in this Section 5 is unavailable to, or is insufficient to hold harmless, an indemnified party, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, or provides a lesser sum to the indemnified party than the amount hereinafter calculated, in such proportion as is appropriate to reflect not only the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other but also the relative fault of the indemnifying party and the indemnified party as well as any other relevant equitable considerations.  The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties; and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in this Section 5, any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.

  

  

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The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

If indemnification is available under this Section 5, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Sections 5(a) and 5(b) without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this Section 5.

 

6.           Participation in Underwritten Registrations.  No Holder may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s securities on the basis provided in any underwriting arrangements approved by the Holders entitled hereunder to approve such arrangements, and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

 

7.           Rule 144.  The Company covenants that it will file the reports required to be filed by it under the 1933 Act and the Securities Exchange Act of 1934, as amended, and the rules and regulations adopted by the Commission thereunder; and it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Stock without registration under the 1933 Act within the limitation of the exemptions provided by (a) Rule 144 under the 1933 Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements.

 

8.           Transfer of Registration Rights.  The registration rights of any Holder under this Agreement with respect to any Registrable Stock may be transferred to any transferee of such Registrable Stock; provided that there shall be no more than twenty (20) transferees; provided further  that such transfer may otherwise be effected in accordance with applicable securities laws; provided further, that the transferring Holder shall give the Company written notice at or prior to the time of such transfer stating the name and address of the transferee and identifying the securities with respect to which the rights under this Agreement are being transferred; provided further, that such transferee shall agree in writing, in form and substance satisfactory to the Company, to be bound as a Holder by the provisions of this Agreement; and provided further, that such assignment shall be effective only if immediately following such transfer the further disposition of such securities by such transferee is restricted under the 1933 Act. Except as set forth in this Section 8, no transfer of Registrable Stock shall cause such Registrable Stock to lose such status.

 

9.           Exchange Listing.  Upon the expiration of the period in which the Shareholders have agreed not to trade the Shares pursuant to that certain Lockup Agreement, dated September 12, 2011, by and between the Company and the Shareholders, the Company will use its commercially reasonable efforts to list the Shares on the NYSE Amex Equities stock exchange (the “NYSE Amex Exchange”) such that, upon (i) the expiration of the holding period set forth in Rule 144 of the 1933 Act applicable to the Shares or (ii) an effective resale registration statement in compliance with the requirements of the 1933 Act, the Shares may be traded on the NYSE Amex Exchange.

  

  

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10.           Mergers, Etc.  The Company shall not, directly or indirectly, enter into any merger, consolidation or reorganization in which the Company shall not be the surviving corporation unless the proposed surviving corporation shall, prior to such merger, consolidation or reorganization, agree in writing to assume the obligations of the Company under this Agreement, and for that purpose references hereunder to “Registrable Stock” shall be deemed to be references to the securities which the Holders would be entitled to receive in exchange for Registrable Stock under any such merger, consolidation or reorganization; provided, however, that the provisions of this Section 10 shall not apply in the event of any merger, consolidation or reorganization in which the Company is not the surviving corporation if each Holder is entitled to receive in exchange for its Registrable Stock consideration consisting solely of (i) cash, (ii) securities of the acquiring corporation which may be immediately sold to the public without registration under the 1933 Act, or (iii) securities of the acquiring corporation which the acquiring corporation has agreed to register within ninety (90) days of completion of the transaction for resale to the public pursuant to the 1933 Act.

 

11.           Miscellaneous.

 

  (a)           No Inconsistent Agreements.  The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders in this Agreement.

 

  (b)           Remedies.  Each Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive (to the extent permitted by law) the defense in any action for specific performance that a remedy of law would be adequate.

 

  (c)           Amendments and Waivers.  The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of the Holders of at least a majority of the Registrable Stock affected by such amendment, modification, supplement, waiver or departure.

 

  (d)           Successors and Assigns.  Except as otherwise expressly provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto. Nothing in this Agreement, express or implied, is intended to confer upon any Person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

  (e)           Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas applicable to contracts made and to be performed wholly within that state, without regard to the conflict of law rules thereof.

 

  (f)            Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

  (g)           Headings.  The headings in this Agreement are used for convenience of reference only and are not to be considered in construing or interpreting this Agreement.

  

  

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  (h)           Notices.  Any notice required or permitted under this Agreement shall be given in writing and shall be delivered in person or by fax, email or by overnight courier guaranteeing no later than second business day delivery, directed to (i) the Company at the address set forth below its signature hereof or (ii) a Holder at the address of the Administrator set forth below its signature hereof. Any party may change its address for notice by giving ten (10) days advance written notice to the other parties. Every notice or other communication hereunder shall be deemed to have been duly given or served on the date on which personally delivered, or on the date actually received, if sent by telecopy or overnight courier service, with receipt acknowledged.

 

  (i)            Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby, it being intended that all of the rights and privileges of the Holders shall be enforceable to the fullest extent permitted by law.

 

  (j)            Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

  (k)           Enforceability.  This Agreement shall remain in full force and effect notwithstanding any breach or purported breach of, or relating to, the Merger Agreement.

 

  (l)            Recitals.  The recitals are hereby incorporated in the Agreement as if fully set forth herein.

 

  (m)          Attorneys Fees.  If any action is necessary to enforce or interpret the terms of this agreement, the prevailing party shall be entitled to reasonable attorneys’ fees and costs, in addition to any other relief to which he is or may be entitled. This provision shall be construed as applicable to the entire agreement.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written hereinabove.

  

	  	
DGSE COMPANIES, INC.,

	  	
a Nevada corporation

	  	  
	  	
By:

	  
	  	  	
Name:

	
Dr. L.S. Smith

	  	  	
Title:

	
Chairman & Chief Executive Officer

	  	  	
Address:

	  	  	
Fax:

	  	  	
Email:

	  	  
	  	
SHAREHOLDERS

	  	  
	  	
LANDMARK METALS, LLC,

a Texas limited liability company

	  	  
	  	
By:

	  
	  	  	
Name:

	  	  	
Title:

	  	  	
Address:

	  	  	
Fax:

	  	  	
Email:

	  	  
	  	
JAMES J. VIERLING

	  	  
	 	 	 
	  	  	
James J. Vierling

	  	  	
Address:

	  	  	
Fax:

	  	  	
Email:

	  	  
	  	
WESLEY A. MULL

	  	  
	  	  	  
	  	  	
Wesley A. Mull

	  	  	
Address:

	  	  	
Fax:

	  	  	
Email:

 

[Signature Page to Registration Rights Agreement (Merger Agreement)]Unassociated Document

SECURITIES PURCHASE AGREEMENT

 

BY AND BETWEEN

 

DGSE COMPANIES, INC.

 

AND

 

NTR METALS, LLC

  

DATED AS OF SEPTEMBER 12, 2011

  

  

  

  

 

TABLE OF CONTENTS

 

	  	
Page

	 	 
	
ARTICLE 1 PURCHASE AND SALE OF SECURITIES

	
1

	 	 	 
	
Section 1.1

	
Purchase and Sale

	
1

	
Section 1.2

	
Consideration

	
1

	 	 	 
	
ARTICLE 2 PAYMENT OF PURCHASE PRICE

	
1

	 	 	 
	
Section 2.1

	
Payment of Purchase Price

	
1

	 	 	 
	
ARTICLE 3 CLOSING DELIVERIES

	
2

	 	 	 
	
Section 3.1

	
Delivery by the Company

	
2

	
Section 3.2

	
Delivery by Purchaser

	
2

	
Section 3.3

	
Closing Costs

	
2

	 	 	 
	
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF COMPANY

	
2

	 	 
	
Section 4.1

	
Representations and Warranties of the Company

	
2

	 	 	 
	
ARTICLE 5 REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS OF PURCHASER

	
5

	 	 
	
Section 5.1

	
Representations and Warranties of Purchaser

	
5

	 	 	 
	
ARTICLE 6 COVENANTS

	
7

	 	 
	
Section 6.1

	
General

	
7

	
Section 6.2

	
Exchange Listing

	
7

	 	 	 
	
ARTICLE 7 INDEMNIFICATION

	
8

	 	 
	
Section 7.1

	
Representations and Warranties

	
8

	
Section 7.2

	
Indemnification.

	
8

	
Section 7.3

	
Indemnification Procedures.

	
8

	
Section 7.4

	
Exclusive Remedy

	
10

	 	 	 
	
ARTICLE 8 MISCELLANEOUS

	
10

	 	 
	
Section 8.1

	
Notices

	
10

	
Section 8.2

	
Assignment

	
11

	
Section 8.3

	
Amendments; No Waivers

	
11

	
Section 8.4

	
Entire Agreement/No Third Party Beneficiaries

	
11

	
Section 8.5

	
Governing Law

	
11

	
Section 8.6

	
Exclusive Jurisdiction

	
11

	
Section 8.7

	
Counterparts; Effectiveness

	
11

	
Section 8.8

	
Severability

	
11

	
Section 8.9

	
Incorporation of Exhibits

	
11

	
Section 8.10

	
Headings

	
12

	
Section 8.11

	
Construction

	
12

EXHIBITS

	
Exhibit A

	
Registration Rights Agreement

SCHEDULES

	
Schedule 2.1

	
Wire Transfer Instructions

	
Schedule 4.1.4(a)

	
Capitalization

    

  

  

  

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of September 12, 2011 (the “Effective Date”), is entered into by and between DGSE COMPANIES, INC., a Nevada corporation (the “Company”), and NTR METALS, LLC, a Texas limited liability company (the “Purchaser”).

 

WITNESSETH

 

WHEREAS, the Company wishes to sell and issue 400,000 shares  (the “Securities”) of the common stock of the Company, par value $0.01 per share (the “Common Stock”), for an aggregate sales price of two million dollars (US$2,000,000), or five dollars ($5.00) per share (the “Purchase Price”), to Purchaser; and

 

WHEREAS, Purchaser wishes to purchase the Securities from the Company for the Purchase Price.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE 1

 

PURCHASE AND SALE OF SECURITIES

 

Section 1.1             Purchase and Sale. Upon the terms herein, and in reliance upon the representations, warranties and covenants set forth herein, Purchaser hereby purchases from the Company, and the Company hereby sells and issues to Purchaser, the Securities.

 

Section 1.2             Consideration. The total consideration for the Securities shall be the Purchase Price.

 

ARTICLE 2

 

PAYMENT OF PURCHASE PRICE

 

Section 2.1             Payment of Purchase Price. The Purchase Price to be paid by Purchaser to the Company shall be paid contemporaneously with the execution of this Agreement (the “Closing”) by wire transfer of immediately-available funds to an account specified by the Company, as set forth on Schedule 2.1.

  

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ARTICLE 3

 

CLOSING DELIVERIES

 

Section 3.1          Delivery by the Company.  Prior to or contemporaneously with the Closing, the Company shall cause to be delivered to Purchaser the following documents and instruments:

 

3.1.1           A certificate or certificates representing and evidencing the Securities, duly executed by authorized representatives of the Company, or, if delivered in electronic form, evidence that the Company has instructed its transfer agent to issue the Securities to Purchaser;

 

3.1.2           A certified resolution of the Company’s Board of Directors authorizing the execution of this Agreement and the consummation of the transactions contemplated hereby; and

 

3.1.3           A copy of that certain Registration Rights Agreement, dated as of September 12, 2011, by and between the Company and the Purchaser (the “Registration Rights Agreement”), in form attached hereto as Exhibit A, executed on behalf of the Company, providing for incidental registration rights for the offer and sale of the Securities pursuant to the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).

 

Section 3.2          Delivery by Purchaser.  Prior to or contemporaneously with the Closing, Purchaser shall cause to be delivered to the Company the following documents and instruments:

 

3.2.1           A certified resolution of Purchaser’s Board of Managers authorizing the execution of this Agreement and the consummation of the transactions contemplated hereby;

 

3.2.2           A copy of the Registration Rights Agreement, executed on behalf of Purchaser; and

 

3.2.3           The Purchase Price.

 

Section 3.3          Closing Costs.  Each party shall pay its respective closing costs, if any, associated with the purchase and sale of the Securities.

 

ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF COMPANY

 

Section 4.1         Representations and Warranties of the Company.  The Company makes the following representations and warranties to Purchaser, which representations and warranties shall be true and correct as of the date hereof.

 

4.1.1           Corporate Existence and Power.  The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada. The Company has all requisite corporate power and authority to carry on its business as presently conducted.  The Company has all necessary corporate power to enter into this Agreement and the other transaction documents required hereunder (the “Transaction Documents”) to which the Company is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.

 

4.1.2           Authorization.  The execution, delivery and performance of this Agreement and the other Transaction  Documents to which the Company is a party by the Company has been duly authorized and approved by the Company’s Board of Directors, and no other proceedings on the part of the Company are necessary to authorize this Agreement or the other Transaction  Documents to which the Company is a party or to consummate the transaction contemplated hereby or thereby.  This Agreement and the other Transaction  Documents to which the Company is a party have been duly and validly executed and delivered by the Company.  This Agreement and the other Transaction  Documents towhich the Company is a party constitute a valid and binding obligation enforceable in accordance with their respective terms.

  

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4.1.3           Non-Contravention.  Neither the execution and delivery of this Agreement or the other Transaction  Documents to which the Company is a party, nor the consummation of the transactions contemplated hereby or thereby, will (a) violate any provision of the Company’s Certificate of Incorporation or bylaws or any amendments thereto, (b) violate any applicable constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction (collectively, “Law”), except for, in all cases, such violations that would not prohibit or materially impair the Company’s ability to perform its obligations under this Agreement or the other Transaction  Documents to which the Company is a party, or (c) result in any material breach of, or constitute a material default under or give to others any material rights of termination, amendment, acceleration, modification or cancellation of any material contract to which the Company is a party or to which any of its assets or properties is subject, except in any such case for any violations, conflicts, breaches, defaults or other matters that would not prohibit or materially impair the Company’s ability to perform its obligations under this Agreement or the other Transaction  Documents to which the Company is a party.

 

4.1.4           Capitalization.

 

    (a)           The authorized capital stock of the Company consists of 10,000,000 shares of the Company Common Stock.  As of the close of business on August  31, 2011, (i) 10,425,633 shares of the Company Common Stock were outstanding, (ii) an aggregate of 1,498,134 shares of Company Common Stock were issuable upon exercise of then outstanding stock options (whether or not exercisable as of such date), (iii) and there were no outstanding warrants to purchase shares of the Company Common Stock..  All of the issued and outstanding capital stock of the Company has been duly-authorized, is validly-issued, fully-paid, and non-assessable.  The Company’s capital stock is not subject to, nor was it issued in violation of, any preemptive rights or rights of first refusal.  Other than as disclosed in any registration statements, prospectuses, reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated by reference) required to be filed or furnished with the Securities Exchange Commission (the “SEC”) by the Company (the “Company SEC Documents”), except as set forth above, there are no outstanding or authorized options, warrants, rights, contracts, calls, puts, rights to subscribe, conversion rights, or other agreements or commitments providing for the issuance, disposition, or acquisition of any of the Company’s capital stock (other than this Agreement).  Other than as disclosed in the Company SEC Documents, except as set forth on Schedule 4.1.4(a), there are no outstanding or authorized equity appreciation, phantom equity, or similar rights with respect to the Company.  Other than as disclosed in the Company SEC Documents, except as set forth on Schedule 4.1.4(a), there are no voting trusts, proxies, or any other agreements or understandings with respect to the voting of the Company’s capital stock.  Other than as disclosed in the Company SEC Documents, the Company is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any of the Company’s capital stock.

 

    (b)           The Securities have been duly-authorized and, when issued and delivered in accordance with the terms of this Agreement will have been validly-issued and will be fully-paid and non-assessable and the issuance thereof is not subject to any preemptive rights or rights of first refusal.

  

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4.1.5           SEC Filings. The Company has timely filed with or furnished to, as applicable, the SEC all Company SEC Documents since January 1, 2009 (the “Current Company SEC Documents”).  As of their respective filing dates (or, if amended or superseded by a subsequent filing, as of the date of the last such amendment or superseding filing prior to the date hereof), each of the Current Company SEC Documents complied as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the SEC thereunder applicable to such Current Company SEC Documents.  Other than as described in the Current Company SEC Documents, none of the Current Company SEC Documents, including any financial statements, schedules or exhibits included or incorporated by reference therein at the time they were filed (or, if amended or superseded by a subsequent filing, as of the date of the last such amendment or superseding filing prior to the date hereof), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Other than as described in the Current Company SEC Documents, each of the consolidated financial statements of the Company (including, in each case, any notes thereto) included in the Current Company SEC Documents have been prepared in accordance with United States generally accepted accounting principles, as in effect from time to time, applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto).  As of the date of this Agreement, neither the Company nor any of its subsidiaries has any pending or unresolved comments from the SEC or any other governmental entity with respect to any of the Current Company SEC Documents.

 

4.1.6           Third-Party Consents.  The execution, delivery and performance of this Agreement and the other Transaction  Documents to which the Company is a party do not and will not require any material consent, approval, authorization or other action by, or filing with or notification to, any third party or governmental entity by the Company, except where the failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prevent or materially delay the consummation by the Company of the transactions contemplated by this Agreement or the other Transaction  Documents to which the Company is a party.

 

4.1.7           Governmental Authorization.  The Company is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any governmental entity in connection with the consummation of the transactions contemplated by this Agreement or the other Transaction  Documents to which the Company is a party.

 

4.1.8           Litigation.  The Company has not received written notice from any governmental entity that consummation of the transactions contemplated by this Agreement or the other Transaction Documents to which the Company is a party would constitute a violation of any Laws.  There is no material order or claim pending or to the knowledge of the Company, threatened, against or affecting the Company that individually or when aggregated with one or more other claims would prohibit or materially impair the Company’s ability to perform its obligations under this Agreement or the other Transaction Documents to which the Company is a party.  Other than as disclosed in the Company SEC Documents, there is no material matter as to which the Company has received any notice, claim or assertion, or to the knowledge of the Company, which otherwise has been threatened or initiated, against or affecting the Company.

 

4.1.9           Brokers.  No investment banker, broker, finder or other intermediary has been retained by or is authorized to act on behalf of the Company who would be entitled to any fee or commission upon consummation of the transactions contemplated by this Agreement.

 

  

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ARTICLE 5

 

REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS OF

 PURCHASER

 

Section 5.1          Representations and Warranties of Purchaser.  Purchaser acknowledges that it is purchasing the Securities without being furnished any offering literature or prospectus.  Purchaser acknowledges that it has been furnished, or had made available to it via EDGAR, (i) the most recent Annual Report on Form 10-K of the Company, (ii) all subsequently-filed Quarterly Reports on Form 10-Q of the Company, and (iii) all subsequently-filed Current Reports on Form 8-K of the Company (collectively, the “Company Reports”) as filed with the SEC.  Purchaser acknowledges that Purchaser has had sufficient time to review the Company Reports, and further acknowledges that Purchaser has not been furnished, and may not rely on, any other information other than information or disclosure contained within the Company SEC Documents concerning the Company in connection with Purchaser’s decision to purchase the Securities. Purchaser acknowledges that it has had an opportunity to ask questions and receive answers concerning the terms and conditions of the offering of the Securities and to obtain any additional information that the Company possesses, or could acquire without unreasonable effort or expense, necessary to verify the accuracy of such information.  Purchaser further represents and warrants that:

 

5.1.1           Organization; Authorization.  Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Texas, with full power and authority to enter into this Agreement and the Transaction Documents to which Purchaser is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution and delivery by Purchaser of this Agreement and the Transaction Documents to which Purchaser is a party, the performance by Purchaser of its obligations hereunder and thereunder and the consummation by Purchaser of the transactions contemplated hereby and thereby have been duly authorized by all requisite company action on the part of Purchaser.  This Agreement has been duly executed and delivered by Purchaser and this Agreement constitutes a legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms.  When each other Transaction Document to which Purchaser is or will be a party has been duly executed and delivered by Purchaser, such Transaction Document will constitute a legal and binding obligation of Purchaser enforceable against Purchaser in accordance with the terms of such transaction document.

 

5.1.2           Non-Contravention.  Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any provision of Purchaser’s Limited Liability Company Operating Agreement or any amendments thereto or (ii) violate any Law of any government entity to which Purchaser is subject.

 

5.1.3           Accredited Investor Status.  Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D, promulgated under the Securities Act.

 

5.1.4           Investment Purpose.  Purchaser is acquiring the Securities for investment purposes only and not with a view to, or for offer or sale in connection with, any distribution thereof.  Purchaser acknowledges that the offer and sale of the Securities has not been registered under the Securities Act, and that the Securities may not be offered, sold, transferred, hypothecated, mortgaged, pledged, assigned or otherwise disposed of except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and subject to applicable state securities laws and regulations.

 

  

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5.1.5           Knowledge.  Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Securities and of making an informed investment decision.

 

5.1.6           Access to Information.  Before executing this Agreement, the Purchaser has had access to all information regarding the financial condition and business of the Company that it has requested, and it has had sufficient opportunity to ask questions of, and has received answers (to the extent available without unreasonable effort) from, the Company’s management.

 

5.1.7           No Representations.  There have been no representations, guaranties, or warranties made to the Purchaser by the Company, or its agents or employees, or by any other person, expressly or by implication, with respect to (i) the approximate length of time that the Purchaser will be required to remain an owner of the Securities; (ii) the percentage of profit and/or amount of or type of consideration, profit, or loss (including, without limitation, tax benefits) to be realized, if any, as a result of investment in the Securities; and (iii) the possibility that the past performance or experience on the part of any officer or director of the Company, or of any other person, might in any way indicate the predictable results of operations of the Company, or of ownership of the Securities.

 

5.1.8           No Recommendation or Endorsement.  Purchaser understands that no federal or state agency has passed on or made any recommendation or endorsement of the Securities.

 

5.1.9           Economic Risk.  Purchaser can bear the economic risk of losing its entire investment.

 

5.1.10         No Obligation to Register.  Purchaser understands that other than pursuant to the Registration Rights Agreement, the Company is under no obligation to register the resale of any of the Securities in the future.

 

5.1.11         Restricted Securities.  Purchaser understands that (i) the Securities (when issued) are restricted securities within the meaning of Rule 144 promulgated under the Securities Act (“Rule 144”), (ii) the offer and sale of the Securities has not been registered under the Securities Act or any applicable state laws, and (iii) the exemption from registration under Rule 144 will not be available unless the terms and conditions of Rule 144 have been complied with.

 

5.1.12         No Transfer.  Purchaser will not transfer or offer to transfer its Securities, (when issued) until it notifies the Company of his intention to do so and until it has been notified by the Company that either (i) in the opinion of counsel satisfactory to the Company, the Securities may be transferred or offered for transfer free of restrictive legend, or (ii) an appropriate registration statement with respect to the Securities has been filed by the Company with the SEC and any applicable state securities authority and declared effective by the SEC and any such authorities.

 

5.1.13         Restrictive Legend.  Purchaser understands that the representatives of the Company will make notations in the appropriate records of the Company of the restrictions on the transferability of the Securities and may stamp or affix to any document or instrument representing the Securities an appropriate legend stating, in effect, that the resale of the Securities has not been registered under the Securities Act and that transfers thereof are prohibited unless (among other things) such transfers comply with the Securities Act and applicable state securities laws or unless an opinion of counsel satisfactory to the Company is furnished by the Purchaser to the effect that an exemption from registration under the Securities Act and applicable state securities laws is available or is not required.

 

  

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5.1.14         Brokers.  No investment banker, broker, finder or other intermediary has been retained by or is authorized to act on behalf of Purchaser who would be entitled to any fee or commission upon consummation of the transactions contemplated by this Agreement.

 

5.1.15         Legal Proceedings.  There are no actions, suits or proceedings of any nature pending or, to the knowledge of Purchaser, threatened against or by Purchaser, any affiliate of Purchaser, any of their properties or any of their managers, officers or directors (in their capacities as such) that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.  To the knowledge of Purchaser, no event has occurred or circumstances exist that may give rise to or serve as a basis for any such action, suit or proceeding.

 

5.1.16         Full Disclosure.  No representation or warranty by Purchaser in this Agreement, any of the Transaction Documents to which Purchaser is a party, or any certificate or other document furnished or to be furnished to Purchaser pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

5.1.17         Disclosure of Certain Information.  Purchaser understands and acknowledges that the Company may be required to disclose to the SEC this Agreement and information relating to this Agreement, and hereby agrees that the Company, in its discretion, may disclose this Agreement and such information to the SEC at such time and in such manner as the Company deems reasonable or necessary.

 

ARTICLE 6

 

COVENANTS

  

Section 6.1          General.  In case at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, each of the parties will take such further action (including the execution and delivery of such further instruments and documents) as any other party reasonably may request, all at the sole cost and expense of the requesting party (unless the non-requesting party is obligated to do so at their sole cost and expense pursuant to the terms and conditions of this Agreement).

 

Section 6.2          Reasonable Efforts; Consents.  Subject to the terms and conditions provided in this Agreement, each of the parties hereto shall use its commercially reasonable efforts to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated hereby to obtain all necessary waivers, consents and approvals and to effect all necessary registrations and filings and to remove any injunctions or other impediments or delays, legal or otherwise, in order to consummate and make effective the transactions contemplated by this Agreement for the purpose of securing to the parties hereto the benefits contemplated by this Agreement.

 

Section 6.3          Exchange Listing.  The Company will use its commercially reasonable efforts to list the Securities on the NYSE Amex Equities stock exchange (the “NYSE Amex Exchange”) such that, upon (i) the expiration of the holding period set forth in Rule 144 of the Securities Act applicable to the Securities or (ii) an effective resale registration statement in compliance with the requirements of the Securities Act, the Securities may be traded on the NYSE Amex Exchange.

 

  

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ARTICLE 7

 

INDEMNIFICATION

 

Section 7.1          Representations and Warranties.  The representations and warranties of the Company and Purchaser will survive indefinitely notwithstanding any applicable statute of limitations (the “Survival Period”); additionally, any obligations under Section 7.2 will not terminate with respect to any losses, liabilities, claims, obligations, deficiencies, demands, judgments, damages, interest, fines, penalties, claims, suits, actions, causes of action, assessments, awards, costs, and expenses (including costs of investigation and defense and attorneys’ and other professionals’ fees), whether or not involving a Third-Party Claim (at that term is defined herein) (each, a “Loss,” and collectively, “Losses”) as to which the person to be indemnified will have given notice (stating in reasonable detail the basis of the claim for indemnification) to the Purchaser in accordance with Section 7.3 before the termination of the applicable Survival Period.

 

Section 7.2          Indemnification.

 

7.2.1           From and after the execution of this Agreement, but subject to the remaining provisions of this Article 7, Purchaser  will indemnify and hold the Company and its affiliates and directors, managers, officers, employees, equity holders, members, partners, agents, attorneys, representatives, successors, and permitted assigns (collectively, the “Company Indemnified Parties”) harmless from and against, and pay to the applicable Company Indemnified Parties the amount of, any and all Losses based upon, attributable to, or resulting from:

 

    (a)           Any inaccuracy of the representations or warranties made by Purchaser in this Agreement as of the date of this Agreement, except to the extent that any such representation or warranty relates to a specific date, in which case the failure of such representation or warranty to be true and correct as of such date; and

 

    (b)           Any breach of any covenant or other agreement on the part of Purchaser under this Agreement.

 

Section 7.3          Indemnification Procedures.

 

7.3.1           A claim for indemnification for any matter not involving a Third-Party Claim (as that term is defined herein) may be asserted by prompt written notice to the party from whom indemnification is sought.

 

7.3.2           In the event that any judicial, administrative, or arbitral action, suit, mediation, investigation, inquiry, proceeding, or claim (including any counterclaim) by or before any governmental body is instituted or that any claim or demand is asserted by any third party in respect of which indemnification may be sought under Section 7.2 (a “Third-Party Claim”), the indemnified party will promptly cause written notice of the assertion of any Third-Party Claim of which it has knowledge that is covered by this indemnity to be forwarded to the indemnifying party.  The failure of the indemnified party to give reasonably prompt written notice of any Third-Party Claim will not release, waive, or otherwise affect the indemnifying party’s obligations with respect thereto, except to the extent that the indemnifying party can demonstrate that it has been prejudiced as a result of such failure. Subject to the provisions of this Section 7.3:

 

  

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   (a)           The indemnifying party may elect by written notice to the indemnified party to assume and control, at its sole expense, the defense of any such Third-Party Claim, and the indemnifying party will have the right, at its sole expense, to be represented by counsel of its choice, which must be reasonably satisfactory to the indemnified party, and to defend against, negotiate, settle, or otherwise deal with any Third-Party Claim that relates to any Losses indemnified against under this Article 7; provided that the indemnifying party will have acknowledged in writing to the indemnified party its unqualified obligation to indemnify the indemnified party as provided under this Article 7;

 

   (b)           if the indemnifying party elects to defend against, negotiate, settle, or otherwise deal with any Third-Party Claim that relates to any Losses indemnified against by them under this Article 7, it will reasonably promptly notify the indemnified party of its intent to do so; provided, however, that the indemnifying party must conduct its defense of the Third-Party Claim actively and diligently thereafter in order to preserve its rights in this regard;

 

   (c)           if the indemnifying party elects not to defend against, negotiate, settle, or otherwise deal with any Third-Party Claim that relates to any Losses indemnified against by it under this Article 7, failure to notify the indemnified party of its election as provided in Section 7.3.2(b), or contests its obligation to indemnify the indemnified party for such Losses under this Agreement, the indemnified party may defend against, negotiate, settle, or otherwise deal with such Third-Party Claim;

 

   (d)           if the indemnifying party will assume the defense of any Third-Party Claim, the indemnified party may participate, at its own expense, in the defense of such Third-Party Claim; provided, however, that such indemnified party will be entitled to participate in any such defense with separate counsel at the expense of the indemnifying party if (1) so requested by the indemnifying party to participate or (2) in the reasonable opinion of counsel to the indemnified party, a conflict or potential conflict exists between the indemnified party and the indemnifying party that would make such separate representation advisable.

 

7.3.3           The indemnified party and the indemnifying party shall cooperate in order to ensure the proper and adequate defense of a Third-Party Claim, including, to the extent permitted by Law, by providing access to each other's relevant business records and other documents and employees, subject to customary covenants of confidentiality. The indemnified party and the indemnifying party shall use their reasonable best efforts to avoid production of confidential or competitively sensitive information (consistent with applicable Law), and to cause all communications among employees, counsel and others representing any party to a Third-Party Claim to be made so as to preserve any applicable attorney-client or work-product privileges.

 

7.3.4           Notwithstanding anything in this Section 7.3 to the contrary, neither the indemnifying party nor the indemnified party may, without the written consent of the other party, settle or compromise any Third-Party Claim or permit a default or consent to entry of any judgment unless (i) the claimant (or claimants) and such party provide to such other party an unqualified release from all liability in respect of the Third-Party Claim, and (ii) the terms of settlement or compromise of such Third-Party Claim provide that the indemnified party shall have no responsibility for the discharge of any settlement amount and impose no other obligations or duties on the indemnified party (including any admission of culpability). If the indemnifying party makes any payment on any Third-Party Claim, the indemnifying party will be subrogated, to the extent of such payment, to all rights and remedies of the indemnified party to any insurance benefits or other claims of the indemnified party with respect to such Third-Party Claim.

 

7.3.5           With respect to a Third-Party Claim under this Section 7.3, after (i) any final decision, judgment or award will have been rendered by a governmental body of competent jurisdiction and the expiration of the time in which to appeal therefrom, (ii) a settlement will have been consummated, or (iii) the indemnified party and the indemnifying party will have arrived at a mutually binding agreement, the indemnified party will forward to the indemnifying party notice of any sums due and owing by the indemnifying party in accordance with this Agreement with respect to such matter and the indemnifying party will pay all of such remaining sums so due and owing to the indemnified party in accordance with this Article 7.

 

  

9

  

 

Section 7.4          Exclusive Remedy.  The parties acknowledge and agree that the foregoing indemnification provisions in this Article 7 shall be the sole and exclusive remedy with respect to a breach of the representations, warranties and covenants contained in this Agreement, except in the case of fraud; provided, however, this Article 7 shall not prohibit equitable remedies, including, without limitation, specific performance or injunctive relief.

 

ARTICLE 8

 

 MISCELLANEOUS

 

Section 8.1          Notices.  Any notices or other communications required or permitted hereunder shall be sufficiently given if in writing and (i) hand delivered, or (ii) sent by certified mail, return receipt requested, postage prepaid, addressed as shown below, or to such other address as the party concerned may substitute by written notice to the other. All notices hand delivered shall be deemed received on the date of delivery. All notices forwarded by mail shall be deemed received on a date three (3) days immediately following date of deposit in the U.S. Mail; provided, however, the return receipt indicating the date upon which all notices were received shall be prima facie evidence that such notices were received on the date on the return receipt.

 

	
If to the Company:

	
DGSE Companies, Inc.

	  	
11311 Reeder Road

	  	
Dallas, Texas 75229-3408

	  	
Attn: Dr. L. S. Smith

	  	  
	
With a copy (which shall not constitute notice) to:

	
K&L Gates LLP

	  	
1717 Main St., Suite 2800

	  	
Dallas, Texas 75201

	  	
Attn: I. Bobby Majumder, Esq.

	 	  
	
If to Purchaser:

	
NTR Metals, LLC

	  	
10720 Composite Drive

	  	
Dallas, Texas 75220-1208

	  	
Attn:  Carl D. Gum, III, General Counsel

	 	  
	
With a copy (which shall not constitute notice) to:

	
Jones Day

	  	
2727 N. Harwood Street

	  	
Dallas, Texas  75201

	  	
Attn:  Emil Bova, Esq.

 

  

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The addresses and addressees may be changed by giving notice of such change in the manner provided herein for giving notice.  Unless and until such written notice is received, the last address and addressee given shall be deemed to continue in effect.  No notice to either Purchaser or the Company shall be deemed given or received unless the entity noted “With a copy to” is simultaneously delivered notice in the same manner as any notice given to another party.

 

Section 8.2          Assignment.  This Agreement may not be assigned by either party without the prior written consent of the other party.

 

Section 8.3          Amendments; No Waivers.  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Company and Purchaser or in the case of a waiver, by the party against whom the waiver is to be effective.  No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

 

Section 8.4          Entire Agreement/No Third Party Beneficiaries.  All prior negotiations and agreements between the parties hereto relating to the subject matter hereof are superseded by this Agreement and as of the date hereof there are no representations, warranties, understandings or agreements, whether written or oral, express or implied, other than those specifically set forth herein. Except for the shareholders, directors, officers, employees and agents of the Company and the Company Indemnified Parties, to the extent such persons benefit from the provisions set forth herein, there are no third party beneficiaries to this Agreement.

 

Section 8.5          Further Assurances.  Each of the parties agrees to cooperate fully in the effectuation of the transactions contemplated hereby and to execute any and all additional documents or take such additional actions as shall be reasonably necessary or appropriate for such purpose.

 

Section 8.6          Governing Law.  All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of Texas, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Texas.  In furtherance of the foregoing, the internal law of the State of Texas shall control the interpretation and construction of this Agreement and the exhibits and schedules hereto, even though under that jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.

 

Section 8.8          Exclusive Jurisdiction.  The parties agree that any legal action, suit or proceeding arising out of or relating to this Agreement or the agreements and transactions contemplated hereby shall be instituted in a court located in Dallas County, Texas, which shall be the exclusive jurisdiction and venue of any legal proceedings, and each party hereto waives any objection which such party may now or hereafter have to the laying of venue of any such action, suit or proceeding.

 

Section 8.9          Counterparts; Effectiveness.  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument.  This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

 

  

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Section 8.10        Severability.  If any term or other provision of this Agreement is found to be invalid, illegal, or incapable of being enforced by any rule, Law or public policy by a court of competent jurisdiction, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement be consummated as originally contemplated to the fullest extent possible.

 

Section 8.11        Incorporation of Exhibits.  All exhibits and schedules attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if fully set forth herein.

 

Section 8.12        Headings.  The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

 

Section 8.13        Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against either party. Whenever required by the context, any gender shall include any other gender, the singular shall include the plural and the plural shall include the singular. Whenever the word “including” is used in this Agreement, it shall be deemed to mean “including, without limitation,” “including, but not limited to” or other words of similar import such that the items following the word “including” shall be deemed to be a list by way of illustration only and shall not be deemed to be an exhaustive list of applicable items in the context thereof.

 

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IN WITNESS WHEREOF, the parties have executed this instrument as of the date first written above.

 

	  	
Company:

	 	 	 
	  	  	
DGSE COMPANIES, INC.,

	  	  	
a Nevada corporation

	 	 	 
	  	  	  
	  	  	
By:

	
Dr. L. S. Smith

	  	  	
Title:

	
Chairman & Chief Executive Officer

	 	 	 	 
	  	
Purchaser:

	 	 	 
	  	  	
NTR METALS, LLC,

	  	  	
a Texas limited liability company

	 	 	 
	  	  	  
	  	  	
By:

	
John R. Loftus

	  	  	
Title:

	
President

   

  

 

  

 

EXHIBIT A

 

REGISTRATION RIGHTS AGREEMENT

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