Document:

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Exhibit 10.2

                              CONVERSION AGREEMENT

     THIS  CONVERSION  AGREEMENT  is made and entered into as of January 6, 2007
(this  "Agreement"),  by  and  between  Superior  Galleries,  Inc.,  a  Delaware
corporation  (f/k/a Tangible Asset Galleries,  Inc., a Nevada  corporation) (the
"Company"),  and  Silvano  DiGenova,  an  individual  resident  of the  State of
California  ("DiGenova").  Capitalized  terms used but not defined  herein shall
have the respective  meanings ascribed to such terms in that certain Amended and
Restated Agreement and Plan of Merger and Reorganization,  made and entered into
as of the date hereof (the "Merger Agreement"),  by and among the Company,  DGSE
Companies,  Inc., a Nevada corporation  ("Parent"),  DGSE Merger Corp., a Nevada
corporation ("Merger Sub"), and Stanford  International Bank Ltd., a corporation
organized  under the laws of Antigua and Barbuda  (together with its successors,
"SIBL"), as stockholder agent.

                                 R E C I T A L S
                                 ---------------

     WHEREAS,  the respective Boards of Directors of Parent,  Merger Sub and the
Company have approved and declared advisable the Merger Agreement and the merger
of Merger Sub with and into the Company (the  "Merger"),  with the Company being
the surviving  corporation,  upon the terms and subject to the conditions of the
Merger Agreement;

     WHEREAS,  in the  Merger,  one  hundred  percent  (100%) of the  issued and
outstanding  shares of capital  stock of the Company will be converted  into the
right to receive  shares of Common  Stock of Parent (as set forth in Article III
of the Merger  Agreement),  on the terms and subject to the conditions set forth
in the Merger  Agreement and in accordance  with the General  Corporation Law of
the State of Delaware  (the  "DGCL")  and  Chapters 78 and 92A of Title 7 of the
Nevada Revised Statutes (the "NPCA");

     WHEREAS, DiGenova is the holder of 400,000 shares of the Company's Series B
$1.00 Convertible Preferred Stock (the "Preferred Shares"); and

     WHEREAS, DiGenova desires to induce Parent and Merger Sub to consummate the
Merger by converting  all of the DiGenova  Preferred  Shares into 202,330 shares
(the  "Converted  Shares")  common stock of the Company  (the  "Common  Shares")
effective on the date hereof,  all in  accordance  with the terms and subject to
the conditions set forth herein.

                                A G R E E M E N T
                                -----------------

     NOW, THEREFORE,  IN CONSIDERATION of the mutual covenants contained in this
Agreement,  and for other  good and  valuable  consideration,  the  receipt  and
adequacy of which are hereby acknowledged, the parties hereto (collectively, the
"Parties"), intending to be legally bound, hereby agree as follows:

     1.  Conversion of Preferred  Stock.  DiGenova and the Company hereby agree,
subject to the issuance of the Converted Shares as provided in Section 2 and the
tendering by DiGenova of all stock certificates  evidencing the Preferred Shares
to the Company, to convert the Preferred Shares into the Converted Shares on the
date hereof (the "Conversion Time"),  simultaneously with, and conditioned upon,
the issuance of the Converted Shares.  Upon the issuance of the Converted Shares
to DiGenova,  the Preferred Shares shall  automatically be cancelled and retired
and  shall  cease to  exist,  and the  holder  of any  stock  certificate  that,
immediately  prior to the Conversion  Time,  represented  issued and outstanding
Preferred Shares shall cease to have any rights with respect thereto,  including
any claims for any default  occurring or other  liability  arising  prior to the

<PAGE>

Conversion  Time,  except  the  right to  receive,  upon the  surrender  of such
certificates,  the certificates for the Converted Shares contemplated by Section
2.

     2. Issuance of Shares. At the Conversion Time and  simultaneously  with the
conversions contemplated by Section 1, and subject to the surrender of the stock
certificates  evidencing  the  Preferred  Shares,  the  Company  shall  issue to
DiGenova the Converted  Shares in exchange for the cancellation of the Preferred
Shares.  All Common  Shares  issued and paid upon  conversion  of the  Preferred
Shares in  accordance  with the terms hereof shall be deemed to have been issued
and paid in full satisfaction of all rights pertaining to the Preferred Shares.

     3. Waiver and Termination of Certain Rights.

         (a)  Effective at the  Conversion  Time,  DiGenova  hereby  irrevocably
waives all rights that he may have pursuant to any shares of preferred  stock of
the Company, and any agreement with the Company relating thereto,  including any
securities  purchase  agreement,  registration  rights  agreement,  shareholders
agreement or otherwise,  whether or not such agreement is referenced  herein, to
acquire  any Equity  Interest in the  Company,  other than as is to be issued to
DiGenova  hereunder.  Without  limitation of the  generality  of the  foregoing,
effective at the Conversion Time,  DiGenova hereby irrevocably waives all of his
preemptive  rights,  participation  rights,  rights of co-sale or first refusal,
registration rights, or any other similar rights that DiGenova may have pursuant
to any Preferred Shares, or any such agreements, which rights (if any) shall, at
such time, hereby be forever terminated.

         (b) DiGenova hereby irrevocably  waives all  anti-dilution,  conversion
rate  adjustment,  conversion  price  adjustment,  share coverage  adjustment or
similar  rights  he may have  pursuant  to the  Preferred  Shares  or any  other
Commitments  of the  Company  which  he may  have  in  connection  with  (i) the
exchanges of shares,  conversions of debt, or issuances of warrants contemplated
hereby or by the Merger Agreement, or (ii) the issuance of shares or assumptions
of options or warrants contemplated by Article III of the Merger Agreement.

     4. Representations and Warranties.  DiGenova represents and warrants to the
Company as follows:

         (a)  Investment  Purpose.  DiGenova  is  acquiring  the  Common  Shares
issuable  upon  the  conversion  of  the  Preferred  Shares  (collectively,  the
"Securities")  for his own  account  for  investment  only  and not  with a view
towards,  or for resale in  connection  with,  the public  sale or  distribution
thereof,  except  pursuant to sales  registered or exempted under the Securities
Act.

         (b) Accredited Investor Status. DiGenova is an "accredited investor" as
that term is defined in Rule 501(a) of Regulation D under the Securities Act.

         (c) Reliance on Exemptions.  DiGenova  understands  that the Securities
are being  offered and sold to him in reliance on specific  exemptions  from the
registration  requirements  of the Securities Act and state  securities laws and
that the  Company  is  relying  in part  upon the  truth and  accuracy  of,  and
DiGenova's  compliance  with,  the  representations,   warranties,   agreements,
acknowledgments  and  understandings  of DiGenova  set forth  herein in order to
determine the availability of such exemptions and the eligibility of DiGenova to
acquire the Securities.

         (d) Transfer or Resale.  DiGenova  understands that the Securities have
not been registered  under the Securities Act or any state  securities laws, and
may  not  be  offered  for  sale,  sold,  assigned,  pledged,   hypothecated  or
transferred unless (A) subsequently  registered  thereunder,  (B) DiGenova shall
have  delivered  to the  Company  an opinion of  counsel,  in a form  reasonably

                                       -2-
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satisfactory  to the Company,  to the effect that such  Securities  may be sold,
assigned or transferred pursuant to an exemption from such registration,  or (C)
DiGenova  provides  the Company  with such  documents  and  certificates  as the
Company may  reasonably  request to demonstrate  to his  satisfaction  that such
Securities can be sold, assigned or transferred pursuant to Rule 144 promulgated
under the Securities Act (or a successor rule thereto).

         (e) No General  Solicitation.  DiGenova is not acquiring the Securities
as a  result  of any  advertisement,  article,  notice  or  other  communication
regarding any Securities  published in any newspaper,  magazine or similar media
or broadcast  over  television or radio,  or presented at any seminar or meeting
whose  attendees  have been  invited  by any  general  solicitation  or  general
advertising.

         (f) Adequate  Information.  DiGenova is aware of the Company's business
affairs and financial condition,  and has acquired information about the Company
sufficient  to reach an  informed  and  knowledgeable  decision  to acquire  the
Securities.

         (g) Sophistication and Experience.  DiGenova,  either alone or together
with his representatives,  has such knowledge,  sophistication and experience in
business and financial  matters so as to be capable of evaluating the merits and
risks of the  prospective  investment in the Securities and has so evaluated the
merits and risks of such investment.

         (h) Ability to Bear Risk. DiGenova is able to bear the economic risk of
an  investment in the  Securities  and, at the present time, is able to afford a
complete loss of such investment.

         (i)  Relationship.  DiGenova  either  has  a  preexisting  personal  or
business  relationship  with the Company or any of its  officers,  directors  or
controlling persons, or by reason of his business or financial experience or the
business  or  financial   experience  of  his  professional   advisers  who  are
unaffiliated with and who are not compensated by the Company or any affiliate or
selling  agent of the  Company,  directly  or  indirectly,  has the  capacity to
protect his own  interests in  connection  with the  conversion of the Preferred
Shares and the acquisition of the Securities.

         (j)  Legend.   DiGenova   understands   that  the  stock   certificates
representing the Common Shares shall bear a restrictive  legend in substantially
the following form (or another legend substantially in such form as the transfer
agent  for the  Company  may from  time to time use  generally  on  certificates
evidencing restricted securities of the Company):

          THE  SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  HAVE NOT BEEN
         REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE
         "ACT"), OR APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES HAVE
         BEEN  ACQUIRED  FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
         SOLD,  TRANSFERRED  OR ASSIGNED  IN THE  ABSENCE OF AN  EFFECTIVE
         REGISTRATION  STATEMENT  OR AN  OPINION  OF  COUNSEL,  IN A  FORM
         REASONABLY  SATISFACTORY TO THE ISSUER,  THAT REGISTRATION IS NOT
         REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

     5. Governing  Law;  Jurisdiction.  This Agreement  shall be governed in all
respects by the laws of the State of Texas  applicable to contracts  negotiated,
executed and to be performed  entirely within such State. All suits,  actions or
proceedings  arising  out of,  or in  connection  with,  this  Agreement  or the
transactions  contemplated  by this Agreement shall be brought in any federal or
state court of competent subject matter  jurisdiction  sitting in Dallas County,
Texas.

                                       -3-
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     6.  Construction.  The  rules of  construction  specified  in  Section  1.3
(Construction)  of the Merger  Agreement  are hereby  incorporated  by reference
herein and shall apply to this Agreement mutatis  mutandis,  as if expressly set
forth herein.

     7.  Titles and  Headings.  The section and  paragraph  titles and  headings
contained  herein are inserted purely as a matter of convenience and for ease of
reference  and  shall be  disregarded  for all  other  purposes,  including  the
construction,  interpretation  or  enforcement  of this  Agreement or any of its
terms or provisions.

     8.  Counterparts.   This  Agreement  may  be  executed  in  any  number  of
counterparts,  each of which shall be enforceable  against the Parties  actually
executing such  counterparts,  and all of which  together  shall  constitute one
instrument.

     9. Facsimile Execution. A facsimile, telecopy or other reproduction of this
Agreement may be executed by one or more  Parties,  and an executed copy of this
Agreement may be delivered by one or more Parties by facsimile, email or similar
electronic  or digital  transmission  pursuant to which the  signature  of or on
behalf of such  Party can be seen,  and such  execution  and  delivery  shall be
considered valid, binding and effective for all purposes.  At the request of any
Party, all Parties agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.

     10. Entire  Agreement.  This Agreement and the Merger Agreement  constitute
the entire  agreement  among the  Parties  with  respect to the  subject  matter
hereof.

     11. Notices. All notices,  requests,  instructions or other documents to be
given or delivered under this Agreement  shall be given in the manner,  with the
effect and to the address, email address or fax number to be used for such Party
as provided in Section 10.1 of the Merger  Agreement;  provided that the initial
address, email address and fax number for DiGenova shall be as follows:

         Silvano DiGenova
         32001 S. Coast Highway
         Laguna Beach, California  92651
         Facsimile:
         Email:  [omitted]

     12.  Amendment;  Waiver.  This  Agreement and any  provision  hereof may be
changed,  waived,  discharged  or  terminated  only by an  instrument in writing
signed by the  Party  against  which  enforcement  of the same is sought  and by
Parent.  This Agreement may be amended only by a writing executed by all Parties
and by Parent.

     13.  Binding  Effect.  This Agreement  shall be binding upon,  inure to the
benefit of, and be enforceable by, the Parties and their  respective  successors
and permitted assigns.

     14.  Specific   Performance;   Injunctive  Relief.   Each  of  the  Parties
acknowledges and agrees that any breach or non-performance of, or default under,
any of the terms and provisions  hereof would cause  substantial and irreparable
damage  to the  other  parties  hereto,  and  that  money  damages  would  be an
inadequate remedy therefor. Accordingly, each of the Parties agrees that each of
them shall be entitled to seek equitable relief,  including specific performance
and  injunctive  relief,  in the event of any such  breach,  non-performance  or
default in any Action  instituted in any court of the United States or any state
having  competent  jurisdiction,  or before any  arbitrator,  in addition to any
other remedy to which such Party may be entitled, at law or in equity.

                                      -4-
<PAGE>

     15.  Severability.  The  provisions  of  this  Agreement  shall  be  deemed
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceability of the other provisions  hereof;  provided
that if any  provision  of this  Agreement,  as  applied  to any Party or to any
circumstance,  is adjudged  by a court,  tribunal  or other  governmental  body,
arbitrator or mediator not to be enforceable in accordance  with its terms,  the
Parties agree that such  governmental  body,  arbitrator or mediator making such
determination  shall  have  the  power  to  modify  the  provision  in a  manner
consistent  with its  objectives  such  that it is  enforceable,  and to  delete
specific words or phrases, and in its reduced form, such provision shall then be
enforceable and shall be enforced.

     16.  Further  Assurances.  At any time,  and from  time to time,  after the
effective  date,  each Party will execute such  additional  instruments and take
such  action as may be  reasonably  requested  by any other  Party to confirm or
perfect title to any property  interests  transferred  hereunder or otherwise to
carry out the intent and purposes of this Agreement.

     17.  Third-Party  Beneficiaries.  This  Agreement  is made  solely  for the
benefit of the Parties and Parent, and their respective permitted successors and
assigns, and no other Person shall have or acquire any right or remedy by virtue
hereof except as otherwise expressly provided herein.

     18.   Voluntary   Execution  of  Agreement.   This  Agreement  is  executed
voluntarily  and without any duress or undue  influence on the part or behalf of
the Parties.  Each of the Parties hereby  acknowledges,  represents and warrants
that (i) it has read and fully  understood  this Agreement and the  implications
and  consequences  thereof;  (ii) it has been  represented  in the  preparation,
negotiation, and execution of this Agreement by legal counsel of its own choice,
or it has made a  voluntary  and  informed  decision  to  decline  to seek  such
counsel;  and (iii) it is fully  aware of the legal and  binding  effect of this
Agreement.

         [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

                                      -5-
<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed by their  respective  authorized  signatories as of the date first
indicated above.

                                                      SUPERIOR GALLERIES, INC.

                                                      By: /s/ Silvano DiGenova
                                                         -----------------------
                                                         Silvano DiGenova
                                                         Chief Executive Officer

                                                      SILVANO DIGENOVA

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

ACKNOWLEDGED AND ACCEPTED:

DGSE COMPANIES, INC.

By: /s/ Dr. L.S. Smith
   -------------------------------------
   Dr. L.S. Smith
   Chairman and Chief Executive Officer

                                      -6-<PAGE>

Exhibit 10.3

                              MANAGEMENT AGREEMENT

     THIS  MANAGEMENT  AGREEMENT  is made and entered into as of January 6, 2007
(this  "Agreement"),  by and between DGSE Merger Corp.,  a Delaware  corporation
("DGSE"),  and Superior Galleries,  Inc., a Delaware corporation (f/k/a Tangible
Asset Galleries,  Inc., a Nevada  corporation)  ("Superior").  Capitalized terms
used but not defined herein shall have the respective  meanings ascribed thereto
in  that  certain  Amended  and  Restated  Agreement  and  Plan  of  Merger  and
Reorganization,  made  and  entered  into as of the  date  hereof  (the  "Merger
Agreement"),  by and among DGSE Companies Inc., a Nevada corporation ("Parent"),
DGSE, Superior and Stanford  International Bank, Ltd., a company organized under
the laws of Antigua and Barbuda (together with its successors, "Stanford").

                                 R E C I T A L S
                                 ---------------

     WHEREAS,  the  respective  Boards of  Directors  of Parent,  Merger Sub and
Superior  have  approved and declared  advisable  the Merger  Agreement  and the
merger of DGSE with and into Superior (the  "Merger"),  with Superior  being the
surviving corporation;

     WHEREAS,  Superior is engaged in the  business,  inter alia, of the sale of
rare coins on a retail, wholesale, and auction basis; and

     WHEREAS, key personnel of DGSE have substantial expertise that is useful to
Superior,  and Superior and DGSE desire that, during the Term hereof, DGSE shall
supply the  services  of certain of its  corporate  officers  to serve as senior
management of Superior.

                                A G R E E M E N T
                                -----------------

     NOW, THEREFORE,  IN CONSIDERATION of the mutual covenants contained in this
Agreement,  and for other  good and  valuable  consideration,  the  receipt  and
adequacy of which are hereby acknowledged, the parties hereto (collectively, the
"Parties"), intending to be legally bound, hereby agree as follows:

     1.  Appointment.  Superior  hereby  appoints  DGSE to render  the  Services
described in Section 2 for the term of this Agreement.

     2. Services.

         2.1 DGSE shall  provide two or three senior  executives  (the  "Interim
Executives"), on a part-time basis, for the term of this Agreement (the "Term"),
to serve as the senior  management of Superior.  These individuals are initially
anticipated to be William H. Oyster as interim Chief  Executive  Officer,  Scott
Williamson as interim Chief Operating Officer,  and John Benson as interim Chief
Financial  Officer and  interim  Vice  President,  Finance.  The  interim  Chief
Executive  Officer  shall  report to the Company  Board,  and the other  Interim
Executives shall report to the interim Chief Executive Officer.

         2.2 During the term of this  Agreement,  DGSE shall render to Superior,
by and through the Interim  Executives  and such of DGSE's  Representatives  and
Affiliates  and  Representatives  of  such  Affiliates  as  DGSE,  in  its  sole
discretion, shall from time to time designate,  management, advisory, consulting
and other services in relation to operations, inventory management,  litigation,
strategic planning,  sales,  restructuring,  marketing and financial  oversight,
including the selection,  retention and supervision of independent  auditors and
outside  legal  counsel and the  authority to approve  hiring,  discipline,  and
termination  of  all  Superior  employees,   consultants  and  contractors  (the
"Services"), in consultation with the Company Board.

<PAGE>

     3. Limitations.

         3.1 The Interim  Executives shall not effectuate any material  business
transaction  between DGSE (or any of its Affiliates) and Superior (or any of its
Affiliates),  except (i) as expressly contemplated by the Merger Agreement, (ii)
in the  Ordinary  Course of  Business  of each of DGSE and  Superior,  (iii) for
permitted  intercompany  transactions  on the terms  described  in Schedule  3.1
hereto,  or (iv) after consulting with and obtaining the approval of the Special
Interim Committee of the Company Board,  comprised of the Superior directors who
are not affiliated  with DGSE,  initially to consist of Mitchell Stolz and David
Rector (the "Independent Committee").

         3.2 The Interim  Executives  shall not materially  change the strategic
direction of Superior's business, except (i) for changes to Superior's strategic
direction  described in Schedule 3.2 hereto,  or (ii) after  consulting with and
obtaining the approval of the Independent Committee. The Parties acknowledge and
agree that Superior has been operating with heavy losses for an extended  period
of time and that DGSE shall have broad  authority  to  implement  a  turnaround,
including changing the focus,  strategy and direction of Superior as DGSE in its
business judgment and discretion deems appropriate,  and Superior authorizes and
directs the Independent  Committee to cooperate with DGSE in implementing DGSE's
turnaround strategy.

     4. Payment.

         4.1 In  consideration  for DGSE providing the Services,  Superior shall
pay DGSE fees in the amount of (i)  $50,000  per month for the  services  of the
Interim Executives,  and (ii) the hourly compensation rate, without mark-up, for
the services of all other DGSE Representatives. Fees shall accrue and be payable
on a daily basis. Fee payments shall be non-refundable.

         4.2  Superior  shall  reimburse  DGSE,  as  accrued,  for  all  of  its
reasonable  out-of-pocket expenses,  including travel, lodging and related costs
for the  Interim  Executives  and other DGSE  Representatives  for travel to the
offices of Superior or otherwise incurred to perform the Services.

         4.3 Superior shall pay to DGSE $60,000  concurrently with the execution
of this  Agreement as an advance  payment and retainer for all amounts  becoming
due under the Agreement, and DGSE may charge its fees and out-of-pocket expenses
directly  against the retainer as the same accrue.  On the first business day of
each  succeeding  calendar month during the term hereof,  Superior shall restore
the  balance of such  retainer  to  $60,000.  If at any time the  balance of the
retainer  shall fall below  $5,000,  Superior  shall  advance  additional  funds
reasonably  requested by DGSE as a retainer.  DGSE shall have no  obligation  to
provide any of its Services to Superior, or to incur any out-of-pocket  expenses
on behalf  of  Superior,  if it shall not be  reasonably  assured  of  obtaining
indefeasible  payment for its  Services.  DGSE shall be  obligated to return any
unearned retainer upon the termination of this Agreement.

     5. Term of Agreement. The Term shall commence on the date hereof, and shall
continue  until the first to occur of the  following (or such later time as DGSE
and Superior may agree in writing): (i) the consummation of the Merger; (ii) the
termination  of the Merger  Agreement;  and (iii) the Outside Date.  The Parties
acknowledge that nothing  contained in this Agreement shall obligate either DGSE
or Superior to consummate the Merger,  and that all  commitments  related to the
consummation of the Merger are set forth in the Merger Agreement.

     6. Other Business.

         6.1 DGSE and its Affiliates may engage in or possess an interest in any
other business venture of any kind, nature or description, independently or with
others,   whether  or  not  such  ventures  are   competitive   with   Superior,

                                      -2-
<PAGE>

notwithstanding  that  representatives  of  DGSE  or any of its  Affiliates  are
serving on the Company  Board or as senior  management  of the Company.  None of
DGSE  nor any of its  Affiliates,  as a  stockholder,  officer  or  director  of
Superior,  shall have any  obligation  to offer first to Superior  any  business
opportunity or venture of any kind,  nature or description that DGSE or any such
Affiliate  may wish to pursue from time to time,  independently  or with others.
Nothing  in this  Agreement  shall  be  deemed  to  prohibit  DGSE or any of its
Affiliates  from  dealing,  or  otherwise  engaging in  business,  with  Persons
transacting  business  with  Superior.  Superior  shall  not have any  rights or
obligations by virtue of this Agreement or the transactions contemplated hereby,
in or to any  independent  venture of DGSE or its  Affiliates,  or the income or
profits or losses or distributions  derived  therefrom,  and such ventures shall
not be deemed  wrongful or improper  even if  competitive  with the  business of
Superior.

         6.2 During the Term the  Interim  Executives  are  expected to continue
their current services to DGSE on a part-time basis. Nothing herein shall in any
way preclude DGSE or its officers, employees, agents,  representatives,  members
or affiliates,  including the Interim Executives,  from engaging in any business
activities or from  performing  services for its or their own account or for the
account of others,  including for companies that may be in competition  with the
business conducted by Superior.

     7. Confidentiality.

         7.1 The Parties  acknowledge  that DGSE,  Superior  and  Stanford  have
previously  executed that certain Mutual  Confidentiality  Agreement,  effective
April 1, 2006 (as amended from time to time, the  "Confidentiality  Agreement"),
which shall continue in full force and effect in accordance with its terms.

         7.2  Notwithstanding  anything to the  contrary in the  Confidentiality
Agreement,  the Parties acknowledge that each may use Residuals for any purpose.
"Residuals"   means  any   "Confidential   Information"   (as   defined  in  the
Confidentiality  Agreement)  and any ideas,  concepts,  know-how and  techniques
contained therein retained in the unaided memories of any employee or agent of a
Party who has had access to Confidential  Information.  Memory is deemed unaided
if an individual has not  intentionally  memorized the relevant  information for
the purpose of retaining  and  subsequently  using or disclosing it for purposes
unrelated to the purpose of disclosure.

         7.3  Notwithstanding  anything to the  contrary in the  Confidentiality
Agreement,  the  Parties  acknowledge  that the Interim  Executives  may use the
Confidential  Information in connection  with providing the Services,  including
(i) delivering Confidential Information to counterparties to Superior Contracts,
(ii) complying with  investigations  by Governmental  Entities,  (iii) providing
financial and other information to Superior's  independent public auditing firm,
and  (iv)  publicly  disclosing  the  Confidential  Information  as the  Interim
Executives  in good faith deem  necessary  to comply with  Superior's  reporting
obligations under the Securities Act, the Exchange Act, SOX or the SEC Rules.

         7.4 DGSE and Superior  acknowledge  and agree that they are competitors
operating in the same line of business and that  certain  customers,  suppliers,
vendors and  employees in this  business are known to both DGSE and Superior and
that each Party has access to information  regarding such customers,  suppliers,
vendors and employees that is not Confidential Information. The Party disclosing
Confidential Information ("Discloser") acknowledges that use of such information
will not be  restricted  by, or, in and of  itself,  be deemed to  violate,  any
provision of this  Agreement.  If a customer or employee of one Party  becomes a
customer or employee,  respectively, of the other Party, each Party acknowledges
and agrees that such other Party will have no  liability  with  respect  thereto
unless such Party can affirmatively prove that the Party receiving  Confidential
Information ("Recipient") used Confidential Information to solicit a customer or

                                      -3-
<PAGE>

employee  of  Discloser  to become a  customer  or  employee,  respectively,  of
Recipient.  Furthermore,  each  Party  understands  that  the  other  Party  may
currently or in the future be developing  information  internally,  or receiving
information  from other  Party that may be similar to  Discloser's  information.
Accordingly,  nothing in this Agreement or the Confidentiality Agreement will be
construed as a representation  or inference that Recipient will not enter into a
line of business, that, without violation of this Agreement,  would compete with
the business of the other  Party,  assuming  there is no misuse of  Confidential
Information.

     8. D&O Insurance. Upon the execution of this Agreement,  Superior shall use
its  commercially  reasonably  efforts  to add the  Interim  Executives  and new
members of the Company Board as named  beneficiaries  under its insurance policy
for directors and officers.

     9.  Exculpation;  Limitation of Liability.  Each Party agrees, on behalf of
itself and its  Affiliates,  that in  performing  any duties  hereunder,  to the
maximum  extent  permitted  by  applicable  law,  DGSE and its  Representatives,
including the Interim Executives,  shall not be directly or indirectly liable to
any Party,  or any  Affiliates of any Party,  for damages,  losses,  expenses or
other Liabilities, whether sounding in tort, contract or otherwise, arising from
their acts or omissions,  including for their active  negligence,  violations of
federal  or state  securities  laws,  breaches  of  fiduciary  duties,  or other
wrongful  act of DGSE or any such  Representative,  except for the acts of gross
negligence or willful misconduct of such Person. DGSE or its Representatives may
consult with legal counsel  (whether such counsel will be regularly  retained or
specifically  employed  and whether such counsel is engaged by DGSE or Superior)
in connection  with  providing the Services and shall be fully  protected in any
act taken,  suffered,  or permitted by it in good faith in  accordance  with the
advice of counsel.  IN NO EVENT SHALL DGSE OR ANY INTERIM  EXECUTIVE  BE LIABLE,
DIRECTLY  OR  INDIRECTLY,  FOR ANY (i)  DAMAGES OR  EXPENSES  ARISING OUT OF THE
SERVICES  PROVIDED  HEREUNDER  (OTHER  THAN  FOR  DAMAGES  CAUSED  BY THE  GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT BY DGSE OR THE INTERIM EXECUTIVE), (ii) SPECIAL
OR CONSEQUENTIAL DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR
(iii)  DAMAGES  WHICH IN THE  AGGREGATE  WOULD EXCEED THE AMOUNT OF FEES PAID TO
DGSE UNDER THIS AGREEMENT (OTHER THAN FOR DAMAGES CAUSED BY THE GROSS NEGLIGENCE
OR WILLFUL  MISCONDUCT  BY DGSE OR THE  INTERIM  EXECUTIVE).  Each Party  hereby
agrees to defend,  indemnify and hold harmless DGSE and its  Representatives for
any  Liabilities  to any Affiliate of such Party to the extent the provisions of
this Section 9 would limit such  Liabilities  if such Affiliate were a party and
signatory hereto.

     10. Indemnification.

         10.1  Superior  shall  defend,  indemnify  and hold DGSE,  the  Interim
Executives and their respective  Representatives  and Affiliates  (collectively,
the  "Indemnified  Parties")  harmless  from and  against all  damages,  losses,
expenses or other  Liabilities  incurred by the Indemnified  Parties directly or
indirectly as a result of providing the Services during the Term, including,  to
the maximum  extent  permitted by  applicable  law,  for the active  negligence,
violations of federal or state securities laws, breaches of fiduciary duties, or
other wrongful act of an Indemnified  Party;  provided,  however,  that Superior
shall not be liable  for any loss  caused by the  gross  negligence  or  willful
misconduct of an Indemnified Party.

         10.2  All  claims  for  indemnification  under  this  section  shall be
asserted and resolved as follows:

             (a) Third party claims.

                                      -4-
<PAGE>

                  (1) If an  Indemnified  Party  becomes  aware of a third-party
         claim that such Indemnified Party believes may result in a loss to such
         Indemnified  Party, such Indemnified Party (or DGSE on such Indemnified
         Party's behalf) shall promptly notify Superior of such claim;  provided
         that the failure to so notify  Superior  shall not relieve  Superior of
         any liability that it may have to any Indemnified Party,  except to the
         extent that Superior  demonstrates that the defense of such third-party
         claim is materially prejudiced by the failure to give such notice.

                  (2) If an Indemnified  Party (or DGSE on its behalf)  provides
         notice to Superior of the  assertion of a third-party  claim,  Superior
         shall be  entitled  to assume  the  defense of such  third-party  claim
         unless (i) Superior is also a Person against whom the third-party claim
         is made and the Indemnified  Party  determines in good faith that joint
         representation  would  be  inappropriate,  or (ii)  Superior  fails  to
         provide  reasonable  assurance to the Indemnified Party of both (x) the
         financial  capacity of Superior to defend such  third-party  claim, and
         (y) the ability of Superior to provide indemnification or to assume the
         defense of such  third-party  claim with  counsel  satisfactory  to the
         Indemnified  Party. After notice from Superior to the Indemnified Party
         of its  election  to assume  the  defense  of such  third-party  claim,
         Superior shall not, so long as it diligently  conducts such defense, be
         liable to the  Indemnified  Party for any fees of other  counsel or any
         other expenses with respect to the defense of such  third-party  claim,
         in  each  case  subsequently  incurred  by  the  Indemnified  Party  in
         connection  with the  defense  of such  third-party  claim,  other than
         reasonable costs of investigation. If Superior assumes the defense of a
         third-party claim, (A) such assumption shall establish conclusively for
         purposes of this  Agreement  that the claims  made in that  third-party
         claim are within the scope of and subject to  indemnification,  and (B)
         no compromise or settlement of such third-party  claims may be effected
         by Superior  without the  Indemnified  Party's  prior  written  consent
         unless (1) there is no finding or admission of any  violation of Law or
         any violation of the rights of any Person, (2) the sole relief provided
         is  monetary  damages  that are paid in full by  Superior,  and (3) the
         Indemnified   Party  shall  have  no  liability  with  respect  to  any
         compromise or settlement of such  third-party  claims effected  without
         its written consent. If notice is given to Superior of the assertion of
         any third-party  claim and Superior does not, within ten days after the
         Indemnified   Party's  notice  is  provided,   provide  notice  to  the
         Indemnified  Party of the election of Superior to assume the defense of
         such  third-party  claim,  then the  Indemnified  Party may  assume the
         defense of such third-party claim at the expense of Superior.  Superior
         shall be bound by any  determination  made in such third-party claim or
         any compromise or settlement effected by the Indemnified Party.

                  (3)  Notwithstanding  the foregoing,  if an Indemnified  Party
         determines in good faith that there is a reasonable  probability that a
         third-party  claim may adversely affect it or its Related Persons other
         than as a result of monetary  damages for which it would be entitled to
         indemnification  under this Agreement,  the  Indemnified  Party may, by
         notice to Superior, assume the exclusive right to defend, compromise or
         settle such  third-party  claim, but Superior shall not be bound by any
         determination  of any third-party  claim (including the losses incurred
         in connection therewith) so defended for the purposes of this Agreement
         or any compromise or settlement effected, without its written consent.

                  (4) Any dispute  between any  Indemnified  Party and  Superior
         under this section shall be resolved pursuant to the dispute resolution
         procedures described in Section 10.2(b) and Section 12.

                                      -5-
<PAGE>

                  (5) If Superior has  conducted any defense or consented to any
         settlement under this section, Superior shall not have the right, power
         or  authority  to object to the amount of any claim by any  Indemnified
         Party with respect to and in accordance with such settlement.

             (b) Non-third party claims.

                  (1) If an  Indemnified  Party has a claim  hereunder that does
         not involve a claim being asserted against or sought to be collected by
         a third party, such Indemnified Party shall with reasonable  promptness
         deliver a notice with  respect to such claim to  Superior.  Such notice
         shall set forth (i) a brief description of the circumstances supporting
         such   Indemnified   Party's  claim  against   Superior;   and  (ii)  a
         non-binding, preliminary estimate of the aggregate dollar amount of the
         actual and  potential  losses that have arisen and may arise related to
         such claim. If Superior does not notify such  Indemnified  Party within
         30 calendar  days from the date of receipt of such notice that Superior
         disputes  such claim,  the amount of such claim  shall be  conclusively
         deemed a liability of Superior hereunder. In case Superior shall object
         in writing  to any claim  made in  accordance  with this  section,  the
         Indemnified  Party shall have 15 calendar  days to respond in a written
         statement to the  objection of Superior.  If after such 15 calendar day
         period there remains a dispute as to any claim,  the Indemnified  Party
         and Superior  shall attempt in good faith for 60 calendar days to agree
         upon the rights of the respective  parties with respect to each of such
         claims.  If the  Indemnified  Party and  Superior  should  so agree,  a
         memorandum setting forth such agreement shall be prepared and signed by
         both parties.  If such parties do not so agree,  the Indemnified  Party
         and Superior  shall  resolve  such  dispute  pursuant to Section 12 and
         Section 15.6.

         10.3 An Indemnified Party's failure to give reasonably prompt notice to
Superior of any actual,  threatened  or possible  claim or demand which may give
rise to a right of  indemnification  hereunder shall not relieve Superior of any
liability which Superior may have to such Indemnified Party,  unless the failure
to give such notice materially and adversely prejudiced Superior.

         10.4 Each Party,  on its own behalf,  and on behalf of its  Affiliates,
agrees  that  DGSE  shall  not owe any  fiduciary  duties  to such  Party or its
Affiliates, in any capacity (including as a stockholder or creditor of Superior)
in the performance of any of the Services.

     11. Right of Setoff.  Superior hereby grants to DGSE a right of setoff upon
any and all monies,  securities or other property of Superior,  and the proceeds
therefrom,  now or  hereafter  held or received by or in transit to DGSE from or
for  the  account  of  Superior  (including  any  amounts  held  as  a  retainer
hereunder), whether for safekeeping,  custody, pledge, transmission,  collection
or  otherwise,  and also upon and against any and all claims or other Actions of
Superior  against  DGSE,  or any sums owing from DGSE to  Superior,  at any time
arising or  existing.  The right of setoff  granted  pursuant to this Section 11
shall be cumulative of and in addition to DGSE's common law right of setoff.

     12. Arbitration.

         12.1 If a dispute arises  concerning the matters  contemplated  by this
Agreement,  the Party  defending  the claim (the  "Defending  Party"),  may,  by
written  notice to the Party  asserting  the claim  (the  "Prosecuting  Party"),
demand  arbitration  of the matter,  which  arbitration  shall be conducted by a
single arbitrator. The Prosecuting Party and the Defending Party shall use their
respective best efforts to agree on the arbitrator, provided that if they cannot
so agree  within ten  business  days (or such longer  period as they may agree),
either the  Prosecuting  Party or the Defending  Party can request that Judicial

                                      -6-
<PAGE>

Arbitration  and  Mediation   Services  ("JAMS")  select  the  arbitrator.   The
arbitrator shall set a limited time period and establish  procedures designed to
reduce the cost and time for discovery  while  allowing the Defending  Party and
Prosecuting  Party  an  opportunity,  adequate  in  the  sole  judgment  of  the
arbitrator,  to discover  relevant  information from the other of them about the
subject matter of the dispute.  The arbitrator shall rule upon motions to compel
or limit discovery and shall have the authority to impose  sanctions,  including
attorneys'  fees and costs,  to the same extent as a court of  competent  Law or
equity,  should the  arbitrator  determine  that  discovery  was sought  without
substantial  justification  or that discovery was refused or objected to without
substantial  justification.  The  decision of the  arbitrator  shall be written,
shall be in accordance with applicable Law and with this Agreement, and shall be
supported by written  findings of fact and  conclusions  of Law, which shall set
forth  the  basis  for the  decision  of the  arbitrator.  The  decision  of the
arbitrator  as to the  validity  and amount of any claim  shall be  binding  and
conclusive.

         12.2 Judgment upon any award  rendered by the arbitrator may be entered
in any court having jurisdiction.  Any such arbitration shall be held in Dallas,
Texas under the  commercial  rules then in effect for JAMS.  The  non-prevailing
party to an arbitration shall pay its own expenses,  the fees of the arbitrator,
any administrative fee of JAMS, and the expenses,  including attorneys' fees and
costs, reasonably incurred by the other party to the arbitration.

     13. Notices. All notices,  requests,  instructions or other documents to be
given or delivered  under this Agreement shall be in writing and shall be deemed
given:  (i) five Business Days  following the deposit of registered or certified
mail in the  United  States  mails,  postage  prepaid,  (ii) when  confirmed  by
telephone confirmation,  if sent by facsimile or email, (iii) when delivered, if
delivered  personally  to the  intended  recipient,  and (iv) one  Business  Day
following  delivery  to a  reputable  national  courier  service  for  overnight
delivery,  postage  prepaid;  and in each  case,  addressed  to a  Party  at the
following address for such Party:

     If to DGSE, addressed to it at:

              DGSE Merger Corp.
              2817 Forest Lane
              Dallas, Texas  75234
              Attn:  Dr. L.S. Smith
              Facsimile:  [omitted]
              Email:  [omitted]

     with a copy  (which  shall not  constitute  notice  and which  shall not be
     required for delivery to be effective) to:

              Sheppard, Mullin, Richter & Hampton LLP
              12275 El Camino Real, Suite 200
              San Diego, California  92130-2006
              Attn:  John J. Hentrich, Esq.
              Facsimile:  [omitted]
              Email:  [omitted]

     If to Superior, addressed to it at:

              Superior Galleries, Inc.
              9478 W. Olympic Boulevard
              Beverly Hills, California  90212
              Attn:  Chair, Special Independent Committee
              Facsimile:  [omitted]
              Email:  [omitted]

                                      -7-
<PAGE>

     with  copies  (which  shall not  constitute  notice and which  shall not be
     required for delivery to be effective) to:

              Rutan & Tucker LLP
              611 Anton Boulevard Suite 1400
              Costa Mesa, California  92626-1931
              Attn: Thomas Brockington, Esq.
              Facsimile:  [omitted]
              Email:  [omitted]

     and:

              Stanford International Bank Ltd.
              c/o Stanford Financial Group
              6075 Poplar Avenue
              Memphis, Tennessee  38119
              Attn: James M. Davis, Chief Financial Officer
              Facsimile: [omitted]
              Email:  [omitted]

     and:

              Adorno & Yoss LLP
              2525 Ponce de Leon Blvd., Suite 400
              Miami, Florida  33134-6012
              Attn: Seth P. Joseph, Esq.
              Facsimile:  [omitted]
              Email:  [omitted]

Any Party may  change its  address,  email  address  or fax number for  purposes
hereof to such other address, email address or fax number as such Party may have
previously  furnished to the other  Parties in writing in  accordance  with this
Section 13.

     14. Status. The Parties intend that DGSE shall be an independent contractor
pursuant to this  Agreement,  and that this Agreement  shall not be construed to
create or give rise to any partnership, agency or joint venture.

     15. Miscellaneous.

         15.1  Headings.  The  headings  contained  in  this  Agreement  are for
reference  purposes  only  and  shall  not  affect  in any  way the  meaning  or
interpretation of this Agreement.

         15.2 Severability.  If any term or other provision of this Agreement is
invalid,  illegal or  incapable  of being  enforced by any rule of Law or public
policy,  all other terms 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  hereby is 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 shall negotiate

                                      -8-
<PAGE>

in good faith to modify this  Agreement so as to effect the  original  intent of
the  Parties as  closely as  possible  in an  acceptable  manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.

         15.3  Entire  Agreement.  This  Agreement,  together  with  the  Merger
Agreement and the Confidentiality Agreement, constitute the entire agreement and
understanding  of the Parties in respect of the subject matter of this Agreement
and supersede all prior  agreements  and  undertakings  by or among the Parties,
both written and oral,  among the Parties,  or any of them,  with respect to the
subject matter of this Agreement.

         15.4  Assignment.  Neither  this  Agreement  nor  any  of  the  rights,
interests,  Liabilities or obligations hereunder shall be assigned by any of the
Parties,  in whole or in part,  by  operation of Law or  otherwise,  without the
prior  written  consent of the other  Parties,  and any attempt to make any such
assignment  without  such  consent  shall  be null  and  void and of no force or
effect;  provided that DGSE may assign its rights and  obligations  hereunder to
any of its Affiliates.

         15.5  Parties in  Interest.  This  Agreement  shall be binding upon and
inure solely to the benefit of each Party and their  respective  successors  and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
or shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever  under or by reason of this  Agreement,  except  as  provided  in (i)
Section 10 with respect to  Indemnified  Parties and (ii) Section 8 with respect
to Interim Executives and new members of the Superior board of directors.

         15.6 Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury.

                  (a) This Agreement and the  performance of the  obligations of
         the Parties hereunder shall be governed by, and construed in accordance
         with,  the  laws  of  the  State  of  Texas   applicable  to  contracts
         negotiated, executed and to be performed entirely within such State.

                  (b) Each of the Parties hereby irrevocably and unconditionally
         submits, for itself and its property, to the exclusive jurisdiction and
         venue  of any  Texas  district  court  and any  state  appellate  court
         therefrom within the County of Dallas in the State of Texas (or, if the
         Texas district court declines to accept  jurisdiction over a particular
         matter, any state or federal court within said County) in any action or
         proceeding  arising  out  of or  relating  to  this  Agreement  or  for
         recognition or enforcement of any judgment relating hereto, and each of
         the Parties hereby  irrevocably and  unconditionally  (i) agrees not to
         commence  any such action or  proceeding  except in such  courts,  (ii)
         agrees that any claim in respect of any such action or  proceeding  may
         be heard and  determined  in such Texas  state  court or, to the extent
         permitted by law, in such federal court,  (iii) waives,  to the fullest
         extent it may legally and  effectively do so, any objection that it may
         now or  hereafter  have to the  laying  of venue of any such  action or
         proceeding in any such Texas state or federal  court,  and (iv) waives,
         to the fullest extent  permitted by law, the defense of an inconvenient
         forum to the maintenance of such action or proceeding in any such Texas
         state  or  federal  court.  Each  of the  Parties  agrees  that a final
         judgment in any such action or proceeding  shall be conclusive  and may
         be enforced in other  jurisdictions  by suit on the  judgment or in any
         other manner provided by law.

                  (c) Each Party  irrevocably  consents to service of process in
         the manner provided for notices under this  Agreement.  Nothing in this
         Agreement  shall  affect  the right of any Party to this  Agreement  to
         serve process in any other manner permitted by law.

                                      -9-
<PAGE>

                  (d) EACH PARTY  ACKNOWLEDGES  AND AGREES THAT ANY  CONTROVERSY
         THAT MAY ARISE UNDER THIS  AGREEMENT  IS LIKELY TO INVOLVE  COMPLICATED
         AND  DIFFICULT  ISSUES,   AND  THEREFORE  IT  HEREBY   IRREVOCABLY  AND
         UNCONDITIONALLY  WAIVES  ANY  RIGHT  IT MAY  HAVE TO A TRIAL BY JURY IN
         RESPECT OF ANY  LITIGATION  DIRECTLY  OR  INDIRECTLY  ARISING OUT OF OR
         RELATING TO THIS  AGREEMENT OR THE  TRANSACTIONS  CONTEMPLATED  HEREBY.
         EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (1) NO REPRESENTATIVE, AGENT
         OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
         THAT SUCH OTHER PARTY WOULD NOT,  IN THE EVENT OF  LITIGATION,  SEEK TO
         ENFORCE EITHER OF SUCH WAIVERS,  (2) IT UNDERSTANDS  AND HAS CONSIDERED
         THE   IMPLICATIONS   OF  SUCH  WAIVERS,   (3)  IT  MAKES  SUCH  WAIVERS
         VOLUNTARILY,  AND (4) IT HAS BEEN INDUCED TO ENTER INTO THIS  AGREEMENT
         BY, AMONG OTHER THINGS,  THE MUTUAL WAIVERS AND  CERTIFICATIONS IN THIS
         SECTION.

         15.7  Counterparts.  This  Agreement  may be  executed  in two or  more
original or facsimile  counterparts,  and by the  different  Parties in separate
counterparts,  each of which when executed shall be deemed to be an original but
all of which taken together shall constitute but one and the same agreement.

         15.8 Facsimile Execution.  A facsimile,  telecopy or other reproduction
of this  Agreement may be executed by one or more Parties,  and an executed copy
of this Agreement may be delivered by one or more Parties by facsimile, email or
similar electronic or digital transmission pursuant to which the signature of or
on behalf of such Party can be seen,  and such  execution and delivery  shall be
considered valid, binding and effective for all purposes.  At the request of any
Party, all Parties agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.

15.9 Remedies Cumulative. Except as otherwise provided in this Agreement, any
and all remedies in this Agreement that are expressly conferred upon a Party
shall be deemed cumulative with and not exclusive of any other remedy conferred
by this Agreement, or by law or equity upon such Party, and the exercise by a
Party of any one remedy shall not preclude the exercise of any other remedy and
nothing in this Agreement shall be deemed a waiver by any Party of any right to
specific performance or injunctive relief.

         15.10  Time.  Time  is of  the  essence  in  the  performance  of  this
Agreement.

         15.11  Interpretation.  The terms and  provisions of Section 1.3 of the
Merger Agreement are hereby  incorporated by reference herein and shall apply to
this Agreement mutatis mutandis, as if expressly set forth herein.

         [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]

                                      -10-
<PAGE>

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

                                                      DGSE MERGER CORP.

                                                      By: /s/ William H. Oyster
                                                         -----------------------
                                                         William H. Oyster
                                                         Chief Executive Officer

                                                      SUPERIOR GALLERIES, INC.

                                                      By: /s/ Silvano DiGenova
                                                         -----------------------
                                                         Silvano DiGenova
                                                         Chief Executive Officer

                                      -11-
<PAGE>

                                                                    SCHEDULE 3.1
                                                                    ------------

                       PERMITTED INTERCOMPANY TRANSACTIONS

The following  transactions  may be effected  between DGSE Merger Corp.  and its
Affiliates   (collectively,   "DGSE")  and  Superior  Galleries,  Inc.  and  its
Affiliates (collectively, "Superior"):

     1.  DGSE  and   Superior  may  each  consign   jewelry,   watches,   coins,
collectibles,  and any other inventory to the other for sale to customers at the
standard DGSE dealer rates.

     2. DGSE may pay Superior standard dealer rates for scrap gold,  silver, and
other metals.

     3. DGSE may repair jewelry, watches, and other inventory items for Superior
or Superior's customers at standard dealer rates.

     4.  Each may sell the other  inventory  as needed  based on  standard  DGSE
dealer rates.

     5. DGSE may  consign  rare coins to Superior  for auction at the  preferred
standard auction consignment rates charged by Superior.

     6. DGSE may write  appraisals  for Superior  jewelry  inventory or Superior
customer jewelry and charge the standard customer rates.

     7.  Either  company  may  consign to the other  items to be sold on eBay or
other  Internet  sites;  such items may be  consigned  to Superior to  establish
DGSE's interest in such items.

<PAGE>

                                                                    SCHEDULE 3.2
                                                                    ------------

                           APPROVED STRATEGIC CHANGES

DGSE  Merger  Corp.,  acting  through  the  Interim  Executives  and  its  other
Representatives  (collectively,  "DGSE"),  is authorized to change the strategic
direction  of  Superior  Galleries,   Inc.  and  its  Affiliates  (collectively,
"Superior") in, inter alia, the following manner:

     1. DGSE may reassign Superior  personnel between operating  activities,  or
substantially increase or decrease staffing levels.

     2. DGSE may increase or decrease  Superior's  emphasis on any or all of the
following operating activities:

          2.1  auction;

          2.2  wholesale;

          2.3  retail;

          2.4  over the counter buying and selling (second-hand transactions);

          2.5  scrap processing;

          2.6  trading;

          2.7  dealer wholesale; and

          2.8  any other activity in which Superior is currently engaged.

     3. DGSE may change Superior's accounting hardware and software.

     4. DGSE may modify Superior's corporate policies regarding compensation and
fringe benefits.

     5. DGSE may change Superior's advertising form and policy.

     6. DGSE may introduce new business related to jewelry, watches, diamonds.

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