Attached files
| file | filename |
|---|---|
| 8-K - Envela Corp | v186577_8k.htm |
| EX-10.3 - Envela Corp | v186577_ex10-3.htm |
| EX-10.4 - Envela Corp | v186577_ex10-4.htm |
| EX-10.2 - Envela Corp | v186577_ex10-2.htm |
| EX-10.5 - Envela Corp | v186577_ex10-5.htm |
EXHIBIT
10.1
CLOSING
AGREEMENT
This
Closing Agreement (“Agreement”) is entered into effective as of the day of May,
2010 (“Effective Date”), by and among DGSE Companies, Inc., a Nevada corporation
(hereinafter referred to as “Company”), Dr. L.S. Smith, an individual
(hereinafter referred to as “Dr. Smith”) and NTR Metals, LLC, a Texas limited
liability company (hereinafter referred to as “NTR”).
WHEREAS, as of the Effective
Date, there are 30,000,000 authorized shares of capital stock of the Company
(the “Shares”), of which there are 10,289,252 issued and outstanding Shares;
WHEREAS, as of the Effective
Date, Dr. Smith (CEO and Chairman of the Company) owns 2,847,938 Shares of the
Company, which number includes 945,634 unexercised stock options previously
granted to Dr. Smith (the “Smith Equity Interest”);
WHEREAS, pursuant to the terms
of this Agreement, at the time of Closing (as defined herein) NTR will acquire
3,000,000 Shares of the Company, subject to the terms and conditions as set
forth herein.
NOW, THEREFORE, in
consideration of the mutual covenants and consideration as described in this
Agreement, the receipt and adequacy of which is hereby acknowledged, the parties
agree as follows:
1. Company-SIBL
Transaction. The parties acknowledge and agree that Stanford
International Bank, LTD (“SIBL”), a non-party to this Agreement, currently owns
3,377,361 Shares of the Company (which number includes 1,000 Shares identified
in subsection (e) below) and SIBL also owns warrants to purchase 422,814
additional Shares (the “SIBL Equity Interest”). Pursuant to that certain
Purchase and Sale Agreement (and Amendment thereto) dated January 27, 2010 among
the Company and the court-appointed Receiver for SIBL, as implemented in
accordance with the Partial Assignment Agreement, (the “Company-SIBL Purchase
Agreement”), SIBL will: (a) sell to NTR the SIBL Equity Interest as set forth in
the Partial Assignment Agreement and in this Agreement, (b) transfer 377,361
Shares as designated by the Company, (c) cancel all previously issued warrants
and/or options issued to SIBL, (d) cancel all previously existing agreements
between the Company and SIBL and (e) convert all of the Company’s outstanding
unsecured debt owed to SIBL (as set forth in the Company-SIBL Purchase
Agreement) to 1,000 Shares of the Company (the “Company-SIBL Transaction”). The
purchase price for the Company-SIBL Transaction is $3,600,000. Pursuant to the
Company-SIBL Purchase Agreement, the Company may assign its rights and
obligations under the Agreement, in whole or in part, to one or more
third-parties (each defined as a “Buyer”).
2. Partial
Assignment Relating to NTR Acquired Interest. Subject to satisfaction of
the conditions and contingencies set forth in this Agreement and the execution
and delivery of each of the Closing Documents as set forth in Section 9 herein,
the parties agree as follows:
2.1 Pursuant to a Partial Assignment
Agreement to be executed by the parties (“Partial Assignment Agreement”): (a)
the Company shall make a partial assignment of the Company’s rights as a Buyer
to NTR under the Company-SIBL Purchase Agreement, and (b) upon Closing (as
defined herein), NTR shall acquire directly from SIBL 3,000,000 Shares of the
Company (the “NTR Acquired Interest”) for the Purchase Price, as defined herein.
The parties acknowledge and agree that the remaining portion of the SIBL Equity
Interest (i.e. 377,361 Shares) shall be transferred as designated by the
Company.
2.2 The parties agree that the NTR
Acquired Interest shall be transferred to NTR free and clear of any and all
liens, claims, encumbrances, pledges, charges and security interests. NTR
acknowledges that the Shares will be subject to a proxy in favor of Dr. L.S.
Smith and a one year restriction on resale.
3. Purchase
Price. The purchase price to be paid by NTR for the NTR
Acquired Interest shall be Three Million Six Hundred Thousand and 00/100 Dollars
($3,600,000) (“Purchase Price”). Subject to satisfaction of the conditions and
contingencies set forth in this Agreement, the Purchase Price shall be paid by
wire transfer to be delivered to the court-appointed Receiver for SIBL on the
Closing Date (as defined herein).
4. Closing. Subject
to satisfaction of the conditions and contingencies set forth in this Agreement,
including the execution and delivery of each of the Closing Documents as
referenced in Section 9 herein, and on the basis of the representations,
warranties, covenants and agreements set forth herein and in the Closing
Documents, the Closing shall take place simultaneously with the consummation of
the Company-SIBL Transaction. The Closing shall take place within five (5)
business days following the entry of a Court Order approving the Company-SIBL
Transaction (“Sale Order”) by the United States District Court, Northern
District of Texas in connection with the litigation captioned Securities and
Exchange Commission v. Stanford International Bank, Ltd., et al., Consolidated
Case No. 3:09-CV-00298-N (the “SIBL Litigation”), unless such date is extended
by the mutual agreement of the parties or otherwise mandated by the Court
(“Closing Date”).
5. Piggyback
Registration. The resale of
451,500 Shares of the NTR Acquired Interest are registered on that
certain Form S-3/A, filed with the Securities and Exchange Commission (the
“SEC”) on June 29, 2007, SEC Registration No. 333-143423 (the “Registered
Shares”). The
remaining 2,548,500 Shares of the NTR Acquired Interest remain restricted
securities (the “Remaining Shares”). If, after the expiration of the
one-year lock-up under the Lock-Up Agreement, such Form S-3/A is no longer
effective, then for purposes of this Section 5, the Remaining Shares shall
include the Registered Shares. If the Form S-3/A is effective at such
time, the Company shall amend the Form S-3/A to specify NTR as a selling
Stockholder.
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5.1 Right to Piggyback
Registration. If the Company, at any
time proposes to register any of its securities for public sale under the
Securities Act of 1933, as amended (the “Securities Act”) (except as provided in
Section 5.2), whether for its own account or the account of others, on a form
and in a manner which would permit registration of the Remaining Shares for sale
to the public under the Securities Act (a “Piggyback Registration”), the Company
will give prompt (but in no event less than thirty (30) days prior to the
proposed date of filing the registration statement relating to such
registration) written notice to NTR of its intention to do so, and upon the
written request of NTR delivered to the Company within twenty (20) days after
the giving of any such notice (which request shall specify the Remaining Shares
intended to be disposed of by NTR), the Company will use its best efforts to
effect, in connection with the registration of such other securities, the
registration under the Securities Act of all of the Remaining Shares which the
Company has been so requested to register by NTR (except as provided in Section
5.3), to the extent required to permit the disposition (in accordance with the
same method of disposition as the Company proposes to use to dispose of the
other securities) of the Remaining Shares to be so
registered.
5.2 No Registration Requirement
in the Event of a Mergers, Acquisition, Etc. The Company shall not be
required to effect any registration of the Remaining Shares incidental to the
registration of any of its securities in connection with mergers, acquisitions,
exchange offers, subscription offers, dividend reinvestment plans or stock
option or other employee benefit plans of the Company.
5.3 Underwriter
Limitation. If a Piggyback
Registration is an underwritten registration and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without materially adversely affecting the marketability
of the offering or the market for the Shares (the “Maximum Number”), the Company
shall include the following securities in such registration up to the Maximum
Number, and in accordance with the following priorities: (i) first, the
securities the Company proposes to sell, (ii) second, up to the number of
Remaining Shares requested to be included in such registration, and (iii) third,
up to the number of any other securities requested to be included in such
registration.
5.4 The Company shall indemnify and
hold harmless, to the fullest extent permitted by law, NTR and each of its
officers, directors, managers, members, partners, stockholders, employees and
Affiliates and each Person who controls NTR (within the meaning of the
Securities Act) against any losses, claims, actions, damages, liabilities, joint
or several, and expenses (each, a “Loss”) arising out of or based upon (i) any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, prospectus, free writing prospectus or preliminary
prospectus or any amendment thereof or supplement thereto, any “roadshow”
materials or in any application for listing on a national securities exchange,
or (ii) any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances under which they were made) not
misleading, or (iii) any violation by the Company of the Securities Act, the
Exchange Act or applicable “blue sky” laws, except insofar as the same are made
in reliance and in conformity with information relating to NTR, furnished in
writing to the Company by NTR, expressly for use therein, and the Company will
reimburse NTR and each such officer, director, manager, member, partner,
stockholder, employee, Affiliate and controlling Person for any legal or other
expenses actually and reasonably incurred by them in connection with
investigating, defending or settling any such Loss.
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6. Representations
and Warranties of Company. The Company represents and warrants to NTR as
follows:
6.1 The execution and delivery of this
Agreement and the Closing Documents, as well as the performance by the Company
of its obligations hereunder and thereunder, have been duly authorized by all
necessary corporate actions of the Company.
6.2 This Agreement constitutes a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms. No consent or approval by any person,
entity, officer, director or governmental authority is required in connection
with the execution and delivery by the Company of this Agreement or the
consummation of the transactions contemplated hereby, which has not yet been
obtained or will be obtained as provided herein.
6.3 There are no restrictions on the
transfer or sale of the NTR Acquired Interest under any governing documents of
the Company including the Articles of Incorporation dated September 17, 1965 as
amended (“Articles”) and the By-Laws of the Company dated March 2, 1992
(“By-Laws”) or under any other shareholders’ agreement or otherwise, except for
applicable voting rights restrictions (as set forth in the NTR Proxy as defined
herein), as well as the one year restriction upon resale (as set forth in the
Lock-Up Agreement).
6.4 The Company represents and warrants
that NTR’s acquisition of the NTR Acquired Interest will be in compliance with
all applicable existing laws, governmental rules and/or regulations. The Company
further represents and warrants that (a) the Nevada Acquisition of Controlling
Interest Act (Nevada Revised Code §78.378 through §78.3793) is not applicable to
NTR’s acquisition of the NTR Acquisition Interest and/or the transactions
contemplated herein, and (b) the Company has taken such action as necessary to
approve NTR’s acquisition of the NTR Equity Interest for purposes of compliance
with the Nevada Combinations With Interested Stockholders Act (Nevada Revised
Code §78.411 through §78.444).
6.5 The Company represents and warrants
that no liability to any broker or agent has been incurred with respect to the
payment of any commission relating to this Agreement or the Closing Documents
and/or the consummation of the transactions contemplated herein and
therein.
6.6 Upon the parties’ execution of the
Partial Assignment Agreement and NTR’s payment of the Purchase Price, NTR shall
receive good, marketable title to the NTR Acquired Interest, free and clear of
any and all liens, claims, encumbrances, pledges, charges and security
interests.
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6.7 The above representations and
warranties of the Company are true and accurate upon the Effective Date and will
be true and accurate on the Closing Date.
7. Representations
and Warranties of NTR. NTR represents and warrants to Company as
follows:
7.1 The execution and delivery of this
Agreement and the Closing Documents, as well as the performance by NTR its
obligations hereunder and thereunder, have been duly authorized by all necessary
company actions of NTR.
7.2 This Agreement constitutes a valid
and binding obligation of NTR, enforceable against NTR in accordance with its
terms. No consent or approval by any person, entity, officer, director or
governmental authority is required in connection with the execution and delivery
by NTR of this Agreement or the consummation of the transactions contemplated
hereby, which has not yet been obtained or will be obtained as provided
herein.
7.3 NTR represents and warrants that no
liability to any broker or agent has been incurred with respect to the payment
of any commission relating to this Agreement or the Closing Documents and/or the
consummation of the transactions contemplated herein and therein.
7.4 The above representations and
warranties of NTR are true and accurate upon the Effective Date and will be true
and accurate on the Closing Date.
8. Conditions
to Consummation of the Transactions. The obligations of each party to
consummate the transactions provided for in this Agreement and/or the Closing
Documents are subject to the satisfaction or waiver, at or prior to the Closing
Date, of the following conditions:
8.1 Approvals. All
authorizations, consents and approvals, if any, of, and filings, if any,
with, any governmental authority, including, but not limited to the SEC, or
other third parties (including the Company’s lenders), that are required for the
Company to validity execute, deliver and/or perform the Company-SIBL Purchase
Agreement, this Agreement and each of the Closing Documents, or to consummate
the transactions provided for in this Agreement and/or the Closing Documents
shall have been obtained or made.
8.2 Consummation of Company-SIBL
Transaction. The Company and SIBL shall have performed all obligations
under the terms of the Company-SIBL Purchase Agreement, including, but not
limited to:
(a)
Cancellation of all previously-issued warrants and/or options issued to
SIBL;
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(b)
Cancellation of all previously-existing agreements between the Company andSIBL;
and
(c)
Conversion of all of the Company’s outstanding unsecured debt owed to SIBL(as
set forth in the Company-SIBL Purchase Agreement) to 1,000 Shares ofthe
Company.
8.3 Court Entry of Sale
Order. The United States District Court, Northern District of Texas in
connection with the SIBL Litigation shall have entered a Sale Order approving
the Company-SIBL Transaction and no stay of such Sale Order shall be in
effect.
8.4 Delivery of Closing
Documents. The parties shall have executed and delivered each of the
Closing Documents as identified in Section 9 herein.
8.5 Compliance with
Agreements. The parties shall have performed each agreement, and shall
have complied with each covenant, to be performed or complied with by the
parties pursuant to this Agreement and/or the Closing Documents on or prior to
the Closing Date.
8.6 Pending Action. No
action, suit or proceeding is threatened or pending, and no injunction, order,
decree or ruling is in effect, seeking to restrain or prohibit, or to obtain
damages or other relief in connection with, the execution and delivery of this
Agreement, the Closing Documents or the consummation of the transactions
contemplated herein or therein.
8.7 Issuance of
Certificates. The certificates representing the NTR Acquired Interest
will be transferred directly to NTR from SIBL via Registrar and Transfer Company
(the “Transfer Agent”). The NTR Acquired Interest will be distributed among one
or more certificates as indicated in a Letter of Instruction provided to the
Transfer Agent by the Receiver.
8.8 Transfer of NTR Acquired
Interest. NTR shall have acquired the NTR Acquired Interest, free and
clear of any and all liens, claims, encumbrances, pledges, charges and security
interests.
8.9 Payment of Purchase
Price. NTR shall have paid the Purchase Price to SIBL, as stated in
Section 3 hereinabove.
8.10 Representations
True. The representations and warranties of the parties made
in this Agreement and/or the Closing Documents shall be true and correct upon
the Closing Date.
9. Execution
and Delivery of Closing Documents. On or before the Closing Date, the
parties shall execute and/or deliver the following documents (“Closing
Documents”):
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9.1 On or before the Closing Date the
parties shall execute and deliver this Agreement and each of the following
documents (“Closing Documents”):
(a)
Partial Assignment Agreement between the Company and NTR in the formattached
hereto as Exhibit
“A”;
(b)
Option Contract between Dr. Smith and NTR in the form attached hereto asExhibit
“B”;
(c) NTR
Irrevocable Proxy (“NTR Proxy”) betweenNTR and Dr. Smith in theform attached
hereto as Exhibit
“C-1”, and an Agreement to Execute Irrevocable Proxy from Dr. Smith to
NTR (the "Agreement to Execute SmithProxy"), attached hereto as Exhibit
"C-2";
(d)
Lock-up Agreement in the form attached hereto as Exhibit
“D”;
(e)
Waiver of Dr. Smith of Change of Control provisions contained in hisEmployment
Agreement with the Company in the form attached hereto asExhibit
“E”.
(f)
Waiver of William Oyster of Change of Control provisions contained in
hisEmployment Agreement with the Company in the form attached hereto asExhibit
“F”;
(g)
Secretary’s Certificate of DGSE, including copies of the Resolutions of theBoard
of Directors of Company authorizing and approving the execution anddelivery of
this Agreement and the Closing Documents, as well as theconsummation of the
transactions contemplated herein and therein in theformattached hereto as Exhibit
“G”;
(h)
Certified Copy of Resolutions of the Members of NTRauthorizing and approving
theexecution and delivery of this Agreement and the ClosingDocuments, as wellas
the consummation of the transactions contemplated herein and therein in theform
attached hereto as Exhibit “H”; and
(i) Sale
Order.
(j)
Subject to NTR’s prior receipt and reasonable approval of the form of
Buyer’sRelease (as identified in Section 1(D) of the Company-SIBL
PurchaseAgreement), an executed Buyer’s Release of claims against the
court-appointedReceiver of SIBL.
9.2 The parties acknowledge and agree
the terms and conditions of this Agreement, including the representations and
warranties of the parties as set forth herein, shall control and govern as to
each Closing Document executed and/or delivered by the parties in connection
herewith, including the Partial Assignment Agreement.
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10. Post-Closing
Covenants.
10.1 The Company shall be responsible
for payment of all taxes, if any, assessed with respect to the NTR Acquired
Interest prior to Closing. Further, the Company shall be responsible for payment
of all sales and transfer taxes (including, without limitation, documentary
transfer) and similar fees and taxes, if any, payable in connection with the
transfer of the NTR Acquired Interest to NTR and the consummation of the
transactions contemplated herein.
10.2 Prior to NTR’s exercise of the
Option (as defined in the Option Contract), the Company shall:
(a)
reaffirm the Company’s representations and warranties that the NevadaAcquisition
of Controlling Interest Act is not applicable to NTR’s exercise ofthe Option
and/or the transactions contemplated therein.
(b) take
such action as necessary to approve NTR’s exercise of the Option, and
thetransactions contemplated thereby, for purposes of compliance with the
NevadaCombinations With Interested Stockholders.
10.3 The Company shall execute and
deliver, at the Company’s own expense, such further instruments and documents as
may be reasonably requested by NTR to satisfy any of the Company’s obligations
hereunder and/or to complete any of the transactions contemplated
hereby.
11. Direct Claims and
Indemnification.
11.1 Direct Claims. Each
party agrees to pay and reimburse the other party for any damages resulting from
or arising out of any breach of, or failure to perform, any obligation,
representation and/or warranty of such party under this Agreement.
11.2 Third-Party Claims.
Each party agrees to defend, indemnify and hold the other party harmless from
and against any and all third-party claims (including claims of shareholders of
the Company), causes of action, suits, penalties, losses, damages and expenses
of any nature incurred or suffered, arising out of or in connection with the
breach of, or failure to perform, any obligation, representation or warranty of
such party under this Agreement.
11.3 Attorneys’ Fees. In
the event of litigation arising under Section 11, the non-prevailing party shall
pay the other party’s reasonable attorneys' fees and expenses.
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12. Miscellaneous.
12.1 Waivers and
Amendments. This Agreement or any provision hereof may be
amended, waived, discharged or terminated only by a statement in writing signed
by all of the parties hereto.
12.2 Governing Law; Jurisdiction;
Choice of Venue and Forum. This Agreement has been prepared,
is being executed and delivered, and is intended to be performed, in the State
of Texas, and the substantive laws of Texas shall govern the validity,
construction, enforcement, and interpretation of this Agreement. The parties
shall have the right, but not the obligation, to apply to a court of competent
jurisdiction within Dallas County, Texas to enjoin any breach of this Agreement
or to seek specific performance of this Agreement. Excepting the right of a
party to seek such injunctive relief, all claims, disputes and matters in
question arising out of or related to this Agreement, whether sounding in
contract, tort or otherwise, shall be resolved by binding arbitration,
administered by the American Arbitration Association (“AAA”) pursuant to its
then current AAA Commercial Arbitration Rules (“Rules”). The dispute shall be
heard and determined by one (1) arbitrator. Within thirty (30) days of the
notification of a party’s intent to proceed with arbitration, the parties shall
mutually agree upon and designate an arbitrator. If the parties fail to
designate an arbitrator within the time specified, then the arbitrator shall be
appointed by the AAA. The arbitrator shall decide whether a particular dispute
is or is not arbitrable. The costs of the arbitrator shall be divided equally
between the parties. Only damages alleged pursuant to this Agreement may be
awarded, and the arbitrator shall have no authority to award punitive or
exemplary damages, the parties hereby waiving their right, if any, to recover
punitive or exemplary damages, either in arbitration or in litigation. The
arbitration shall take place in Dallas, Texas. Judgment on the award
may be entered in any court having jurisdiction.
12.3 Entire
Agreement. This Agreement and the Closing Documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof and they
supersede, merge and render void every other prior written and/or oral
understanding or agreement among or between the parties hereto. This Agreement
supersedes all agreements previously made between the parties relating to its
subject matter. There are no other understandings or agreements between the
parties concerning the matters set forth herein.
12.4 Severability. In
case any provision of this Agreement shall be found by a court of law to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
12.5 Brokers’ Fees and/or
Expenses. The parties agree that if any claims for commissions, fees or
other compensation, including, without limitation, brokerage fees, finder's
fees, or commissions are ever asserted against a party in connection with this
Agreement and the Closing Documents or the transactions contemplated herein or
therein, based upon that party’s dealings or activities, all such claims shall
be handled and paid by the party against whom such claims have been made and the
party shall indemnify, defend (with counsel reasonably satisfactory to the other
party), protect and save and hold the other party harmless from and against any
and all such claims or demands asserted by any person, firm or corporation.
Notwithstanding the foregoing, the parties acknowledge and agree that no party
shall have any obligation or liability relating to any broker’s commissions or
fees incurred by SIBL in connection with the Company-SIBL
Transaction.
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12.6 Expenses. Except as
otherwise stated in Sections 6.6 and 6.7 hereinabove, each of the parties hereto
shall each bear their own expenses and legal fees in connection with the
preparation and execution of this Agreement and the Closing Documents and the
consummation of the transactions contemplated herein and therein.
12.7 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one
instrument. Facsimile signatures are as binding as original
signatures for all purposes hereunder.
12.8 Non-Waiver. No
delay or failure by a party to exercise any rights under this Agreement, and no
partial or single exercise of that right, shall constitute a waiver of that or
any other right, unless otherwise expressly provided herein.
12.9 Headings. Headings
in this Agreement are for convenience only and shall not be used to interpret or
construe its provisions.
12.10 Necessary
Acts. Each of the parties hereto agrees that it will do any
act or thing and will execute any and all instruments necessary and/or proper to
make effective the provisions of this Agreement.
12.11 Binding
Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, executors,
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
executors, successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
IN WITNESS WHEREOF, the
parties have signed this Closing Agreement effective as of the date first
written hereinabove.
| NTR METALS, LLC, a Texas limited liabilitycompany | |||
|
|
By:
|
||
| Name: | John R. Loftus | ||
| Title: | President | ||
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| COMPANY | |||
| DGSE COMPANIES, INC., a Nevada corporation | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
| DR. L.S. SMITH | |||
| Dr. L.S. Smith | |||
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Exhibit
“A”
Form of Partial Assignment
Agreement
Exhibit
“B”
Form of Option
Contract
Exhibit
“C-1”
Form of NTR Irrevocable
Proxy
Exhibit
“C-2”
Form of Agreement to Execute
Smith Irrevocable Proxy
Exhibit
“D”
Form of Lock-Up
Agreement
Exhibit
“E”
Form of Waiver Agreement
(Dr. Smith)
Exhibit
“F”
Form of Waiver Agreement
(William Oyster)
Exhibit
“G”
Secretary’s Certificate of
DGSE Companies, Inc.
Exhibit
“H”
Certified Copy of
Resolutions of the Members of NTR Metals, LLC