EXHIBIT 10.1
COIN PURCHASE AND DEBT REPAYMENT AGREEMENT
THIS COIN PURCHASE AND DEBT REPAYMENT AGREEMENT ("Agreement") is
effective as of the 31st day of March, 2006, by and between SUPERIOR GALLERIES,
INC,. a Delaware corporation ("Borrower") and the XXXX XXXXXX ENGLISH LIVING
TRUST (the "Trust"), with respect to the following facts:
R E C I T A L S
A. The Trust is the successor to Xxxx Xxxxxx English, who made certain
loans to the Borrower's predecessor-in-interest. As a result of those loans and
the succession by the Trust to the liabilities, obligations and rights of Xxxx
Xxxxxx English, the Borrower is indebted to the Trust in the principal amount of
$1,900,000, plus interest of $9,682.19 as of March 31, 2006 (the "Existing
Indebtedness"). The Borrower is obligated to make monthly payments with respect
to such Existing Indebtedness, with the entire unpaid balance being due and
payable September 1, 2006 (the "Maturity Date").
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing recitals and the
agreements to the parties contained herein, the parties do hereby agree as
follows:
1. PURCHASE OF COINS.
Concurrently herewith, the Trust is purchasing (and does hereby
purchase) coins (the "Coins") from the Borrower for a total purchase price of
$1,000,000. The Coins are being valued at their wholesale value as determined by
a valuation performed by Xx. Xxxxx Xxxxxx. Each of the parties agrees to accept
the valuation placed on the Coins in this manner. The Trust acknowledges that it
has received possession of the Coins, and that as a result it is indebted to the
Borrower for the purchase price thereof, in the amount of One Million Dollars
($1,000,000) (the "Purchase Price Indebtedness").
2. PAYMENT OF INDEBTEDNESS.
The parties agree as follows:
(a) The Purchase Price Indebtedness is hereby offset against the
Existing Indebtedness. Accordingly, the Purchase Price Indebtedness is hereby
extinguished, and the outstanding balance on the Existing Indebtedness is hereby
reduced by $1,000,000.
(b) The Borrower is concurrently delivering to the Trust a certified or
cashier's check in the amount of $850,000, for application against the
outstanding balance of the Existing Indebtedness.
(c) The Borrower is also concurrently delivering to the Trust a check
in the amount of $9,682.19 constituting accrued interest through March 31, 2006.
3. WAIVER AND RELEASE.
The Trust agrees that effective upon its receipt of the consideration
described Section 2 above, the Existing Indebtedness shall be paid in full, and
upon such receipt the Trust waives, releases and forever discharges Borrower
from any remaining obligations under or liability with respect to the
Indebtedness, which shall, accordingly, then be conclusively considered to have
been paid in full. The parties agree that the Trust's waiver of Fifty Thousand
Dollars ($50,000) of the principal amount of Indebtedness shall be in
consideration of the Company's agreement to prepay the Indebtedness at the time
and in the manner described herein. Accordingly, the Trust agrees that all
security interests it holds in collateral provided by the Borrower with respect
to the Indebtedness are terminated, and the Trust authorizes the Borrower to
file appropriate termination statements in all jurisdictions in which such
security interests are of record. The Trust further agrees that all guarantees
with respect to the Indebtedness are terminated as a result of the payments made
pursuant to Section 2 above.
4. EFFECT ON PRIOR AGREEMENT.
The parties agree that this Agreement reflects their original intent
regarding the sale of coins on March 31, 2006 from the Borrower to the Trust,
and the application of the proceeds thereof. Accordingly, this Agreement
supercedes in its entirety the parties prior Prepayment Agreement dated March
31, 2006.
5. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
(b) COUNTERPARTS. This Agreement may be executed in two counterparts,
which taken together shall be deemed a single instrument. Executed copies of
this Agreement may be delivered by facsimile transmission, and delivery by such
means shall have the same effect as delivery of the executed original agreement.
(c) ENTIRE AGREEMENT. This Agreement includes the entire agreement of
the parties concerning the subject matter hereof, and supersedes all prior
discussions or agreements concerning such subject matter.
(d) AUTHORIZATION. Each of the parties hereby represents that such
party has been fully authorized by all necessary corporate or trust action, as
appropriate, in connection with the execution, delivery and performance of this
Agreement, and that this Agreement therefore constitutes such party's valid,
binding and enforceable agreement.
IN WITNESS WHERE, the undersigned have executed this Agreement as of
the dates indicated opposite their names below.
BORROWER:
Dated: June 26, 2006 SUPERIOR GALLERIES, INC,
a Delaware corporation
By: /s/ Xxxxxxx XxXxxxxx
-----------------------------------------
Xxxxxxx XxXxxxxx, Chief Executive Officer
TRUST:
Dated: June 12, 2006 XXXX XXXXXX ENGLISH LIVING TRUST
By: /s/ Xxxxxxx Xxxxx
-----------------------------------------
Xxxxxxx Xxxxx, Trustee
