AMENDMENT DATED JANUARY 6, 2007
TO COMMERCIAL LOAN AND SECURITY AGREEMENT
THIS AMENDMENT DATED JANUARY 6, 2007 TO COMMERCIAL LOAN AND SECURITY
AGREEMENT ("Amendment"), is by and between STANFORD INTERNATIONAL BANK LTD., a
company organized under the laws of Antigua (the "Lender") and SUPERIOR
GALLERIES, INC., a Delaware corporation ("Borrower"), with reference to the
following facts:
R E C I T A L S
A. Pursuant to a Commercial Loan and Security Agreement originally dated
October 1, 2003, as amended as of March 29, 2005 and as further amended on April
7, 2006, Stanford Financial Group Company ("SFG") has provided certain credit
facilities to Borrower. Such Commercial Loan and Security Agreement as amended
to date, is referred to herein as the "Loan Agreement." On November 30, 2004,
the Lender was assigned all of SFG's right, title and interest in the Loan
Agreement and the promissory note issued thereunder.
B. The maximum amount that can currently be borrowed under the Loan
Agreement is $10,850,000. The parties desire to increase the maximum amount that
may be borrowed under the Loan Agreement to $19,892,340.00.
C. The parties to further amend the Loan Agreement in accordance with the
terms and conditions set forth herein.
D. As of the date hereof, the parties have entered into a forbearance
agreement (the "Forbearance Agreement") with respect to certain "Existing
Defaults" under the Loan Agreement, as such term is defined in the Forbearance
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties and
covenants herein contained, the parties agree as follows:
AGREEMENT
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1. Except as provided in the Forbearance Agreement or any other forbearance
agreement that the Lender may execute from time-to-time, the parties agree that
the maximum amount that may be borrowed under the Loan Agreement is Nineteen
Million Eight Hundred Ninety Two Thousand Three Hundred Forty Dollars
($19,892,340.00). Accordingly, the first sentence of Section 1.1 of the Loan
Agreement is hereby amended to read in full as follows:
"Subject to all the terms and conditions of this Agreement, including
the preconditions to loan advances as herein provided and so long as
there exists no Event of Default nor any event which with the passage
of time, the giving of notice or both would constitute an Event of
Default (other than "Existing Defaults" as defined in the Forbearance
Agreement), Lender will make available to the Borrower a revolving
Commercial Loan in the principal amount of Nineteen Million Eight
Hundred Ninety Two Thousand Three Hundred Forty Dollars
($19,892,340.00) (referred to herein as the "Loan") which Borrower
shall use for borrowing against its inventory and providing loans to
Borrower's customers secured by collateral property consigned to
Borrower for auction or otherwise in Borrower's possession, custody
and control."
2. Consistent with Section 1 above, Borrower shall execute and deliver an
amended and restated promissory note in the form attached hereto as Exhibit "A",
reflecting the increased loan amount. Such amended and restated note shall
replace the currently existing Commercial Note originally dated March 29, 2005,
as amended to date, delivered by the Borrower to Lender under the Loan Agreement
(the "Commercial Note") in the principal amount of $10,850,000.
3. Simultaneously with the execution hereof, the Lender shall make an
advance to the Borrower in the amount of $400,000, along with interest from
January 1, 2007 through the date of this payment (estimated at $137 per day), to
repay certain indebtedness due to an affiliate of the Borrower, which repayment
(including the interest payment) Lender expressly approves and waives any