U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 30, 1996
DALLAS GOLD AND SILVER EXCHANGE, INC.
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(Exact name of registrant as specified in its charter)
NEVADA
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(State or other jurisdiction of incorporation)
1-11048 88-0097334
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(Commission file number) (IRS employer identification number)
2817 Forest Lane, Dallas, Texas 75234
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(Address of principal executive office)
Registrant's telephone number, including area code: (972)484-3662
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Item 5. Other Information:
On December 30, 1996 Dallas Gold And Silver Exchange, Inc. (the "Company")
purchased 1,119,056 shares of its outstanding common stock. The consideration
paid for these shares was cash in the amount of $ 125,000.00 and an 8% unsecured
promissory note dated December 31, 1996. The note calls for quarterly interest
payments beginning March 31, 1997. Principal payments in the amount of
$100,000.00 are due on December 31, 1999 and 2000 with the remaining unpaid
balance due on December 31, 2001.
These shares were acquired from Mr. Henry Hirschman, an individual. The
Company plans to cancel these shares.
Item 7. Financial Statements and Exhibits:
(c) Exhibits:
1. Agreement For Purchase And Sale Of Stock
2. 8% Unsecured Promissory Note
SIGNATURE
In accordance with section 13 and 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
Dallas Gold And Silver Exchange, Inc.
Dated: December 30, 1996 /s/ Dr. L.S. Smith
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Dr. L.S. Smith
Chairman of the Board
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AGREEMENT
FOR
PURCHASE AND SALE
OF
STOCK
THIS AGREEMENT FOR PURCHASE AND SALE OF STOCK
("Agreement") is made and entered into as of this 30 day of December, 1996, by
and between Dallas Gold & Silver Exchange, Inc., A Nevada Corporation, (the
"Company") and Henry Hirschman, an individual ("Hirschman")
RECITALS
A. WHEREAS, Hirschman is the owner of record of 1,119,056 shares (the
"shares") of the issued and outstanding common stock of the Company
B. WHEREAS, the Company desires to purchase from Hirschman and
Hirschman desires to sell said shares in consideration for cash and a
promissory note as set forth below.
NOW, THEREFORE, in consideration of the mutual agreements,
representations and warranties contained herein, the parties agree as follows:
SECTION 1: PURCHASE PRICE. The purchase price to be paid by the Company to
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Hirschman is entirely composed of the sum of $125,000 and the promissory note
attached hereto as Exhibit 1.
SECTION 2: TRANSFER OF THE SHARES. Subject to the terms and conditions set forth
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in this Agreement, Hirschman shall sell, assign, transfer, convey and deliver
1,119,056 Shares of the Company's common stock , and the Company shall purchase
and accept the shares from the Hirschman..
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SECTION 3: DELIVERY.
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(a) On the Closing Date (as herein defined), Hirschman shall deliver to the
Company certificates representing ownership of the Shares together with executed
stock assignments or stock powers attached. Such Stock powers or assignments
shall have appropriate signature guaranties.
(b) On the Closing Date, the Company shall deliver to Hirschman it check in
the amount of $125,000 and a fully executed promissory note in the form attached
as Exhibit 1.
SECTION 4: CLOSING. The Closing Date shall occur on December 30,1996 and shall
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take place at the principal office of the Company or at such other place as may
be mutually agreed upon by the parties.
SECTION 5: REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
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and warrants to Hirschman as follows:
(a) Organization of Corporation. The Company is a general corporation duly
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organized, validly existing and in good standing under the laws of the State of
Nevada, having all necessary corporate powers to own its properties and to carry
on its business now owned and operated
(b) Authority and Effect. The Company has the right, power, legal capacity
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and authority to enter into, and perform its obligations under this Agreement
which, shall constitute the valid and binding obligation of American,
enforceable in accordance with its terms.
( c. ) No Breach of Statute or Contract. To the best of the Company's
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knowledge, the execution, delivery and performance of this Agreement does not
and will not breach any statute or regulations of any governmental authority and
will not, on the Closing Date, conflict with or result in a. breach of, or
default under any of the terms, conditions or provisions of any order, writ,
injunction, decree, agreement or instrument to which American is a party or by
which the Company is or may be bound.
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SECTION 6: REPRESENTATIONS AND WARRANTIES OF HIRSCHMAN
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(a) General Representations and Warranties. Hirschman represents and
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warrants to the Company as follows:
(i) Hirschman has good and marketable title to the Company shares
beneficially owned by him, free and clear of all liens, claims,
encumbrances, charges or restrictions against transfer;
(ii) Authority and Effect. Hirschman has the right, power, legal
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capacity and authority to enter into, and perform his obligations under
this Agreement which, shall constitute his valid and binding obligation,
enforceable in accordance with its terms.
(iii) No Breach of Statute or Contract. To the best of Hirschman's
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knowledge, the execution, delivery and performance of this Agreement does
not and will not breach any statute or regulations of any governmental
authority and will not, on the Closing Date, conflict with or result in a
breach of or default under any of the terms, conditions or provisions of
any order, writ, injunction, decree, agreement or instrument to which the
Hirschman is a party or by which he is or may be bound.
SECTION 7: NOTICES. All notices or communications required under this Agreement
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shall be in writing and delivered personally or sent by United States registered
or certified mail, postage prepaid, and properly addressed as follows:
The Company: Dallas Gold & Silver Exchange, Inc
Attention: Dr. L.S. Smith
519 Interstate 30, Suite 243
Rockwall, Texas 75087.
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Hirschman: 155 East 29th Street, Apt. 32A
New York, New York 10016
SECTION 8: BINDING EFFECT OF AGREEMENT. Except as expressly provided herein to
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the contrary, this Agreement shall be binding on all the heirs, executors,
administrators, successors and assigns of each of the parties hereto.
SECTION 9: GOVERNING LAW. This Agreement shall in all respects be interpreted,
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enforced and governed by and under the laws of the State Nevada.
SECTION 10: HEADINGS. The headings in the sections and paragraphs of this
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Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
SECTION 11: GENDER. The neuter gender includes the feminine and masculine, the
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masculine includes the feminine and neuter, and the feminine includes the
masculine and neuter, and each includes corporation, partnership or other legal
entity when the context so requires.
SECTION 12: SINGULAR AND PLURAL. The singular number includes the plural
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whenever the context so requires.
SECTION 13: ADDITIONAL DOCUMENTS. The parties hereto each agree after the
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Closing Date to executed, acknowledge and deliver any additional documents and
instruments, and to take any other action consistent with the terms of this
Agreement that may reasonably be requested by the other party to. give effect to
the provisions hereof.
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SECTION 14: COUNTERPARTS. This Agreement may be executed in counterparts, each
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of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
SECTION 15: AMENDMENT. No supplement, modification. or amendment of this
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Agreement shall be valid except through written document executed by each of the
parties hereto.
EXECUTED as of the date first above written.
Dallas Gold & Silver Exchange.
By: ______________________________
Its Chairman
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Henry Hirschman
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8 % UNSECURED PROMISSORY NOTE
$875,000
December 31, 1996
THIS 8% UNSECURED PROMISSORY NOTE is made as of December 31, 1996 by Dallas
Gold & Silver Exchange, Inc., a Nevada corporation (the "Company").
SECTION 1. Payment Obligation.
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Subject to the terms and conditions hereinafter set forth, for
value received the Company promises to pay to Henry Hirschman., or registered
assigns ("Holder"), on December 31, 2001 the principal sum of Eight Hundred
Seventy Five Thousand Dollars ($875,000) less any prepayments or required
principal reductions. The Company further promises to pay interest on the
outstanding principal balance hereof from the date hereof until paid at the rate
of nine percent 8 per cent per annum calculated on the basis of a 365-day year.
Accrued interest hereunder shall be payable quarterly in arrears on the first
day of each calendar quarter or, if such day is not a Business Day, the next
succeeding Business Day. Each date on which an installment of interest is
payable pursuant to the terms of this Note is referred to herein as an "Interest
Payment Date". Payment of principal and interest on this Note shall be made at
155 East 29th Street, Apt 32A New York , New York 10016 , or at such other
address as the Holder shall designate in writing in accordance with Section 8.2,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that the Company may pay principal and interest by check payable in
such money. On both December 31, 1999 and on December 31, 2000 the Company shall
pay the sum of $100,000 as a principal reduction on this note and the remaining
balance shall be reduced accordingly.
SECTION 2. Conversion of the Note.
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2.1 Conversion Privilege. Subject to and upon compliance with the
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provisions of this Section 2, the Holder, at the Holder's option, at any
time prior to payment in full of this Note, may convert $100,000 of this
Note into shares of Common Stock of the Company, par value $.01 per share
(the "Common Stock") , at the Price of $1.00 per share.. The holder must
convert the full allowable amount in order for this revision to be in full
force and effect.
2.2 Manner of Exercise of Conversion Privilege. In order to exercise
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the conversion privilege of this Note, the Holder shall deliver written
notice in substantially the form attached to this Note as Exhibit I to the
Company during regular business hours at its principal executive office
(which currently is located at 519 Interstate 30, Suite 243, Rockwall,
Texas 75087). Conversion shall be deemed to have been effected on the date
when such notice is received by the Company (the "Conversion Date") and at
that time the rights of the Holder as such shall cease, except with respect
to the payment of accrued interest in accordance with Section 2.4 below. An
election to convert this the allowable portion of the note shall be
irrevocable once made.
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2.3 Issuance of Certificates. As promptly after the Conversion Date as
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practicable, the Company shall instruct its transfer agent to issue and
deliver to the Holder at the address of the Holder set forth on the
Company's records, without any charge to the Holder, a certificate or
certificates (issued in the name of the Holder or, subject to the
provisions of Section 5.2 hereof, in such name as the Holder may designate)
for I 00,000 shares of Common Stock of the Company issuable upon the
conversion of this Note. The Holder must surrender the original note for a
conversion and the Company shall execute and deliver to the Holder a new
Note in an aggregate principal amount equal to the unconverted portion of
the principal amount of the surrendered Note due at the point of
conversion.
2.4 Interest on Conversion. On exercise of the conversion privilege of
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this Note, interest shall cease to accrue as of the Conversion Date on the
principal amount converted, but interest accrued to the Conversion Date
shall be payable on or before the third (3rd) business day following the
Conversion Date. No payment or adjustment shall be made on conversion of
this Note for any dividends on Common Stock issued upon conversion that
were declared before the Conversion Date. Upon such conversion the Holder
shall be deemed to have become the stockholder of record on the Conversion
Date (unless the transfer books of the Company are closed on that date, in
which event the Holder shall be deemed to have become the stockholder of
record on the next succeeding day on which the transfer books are open and
the conversion shall be at the rate in effect on such date).
2.5 Taxes Upon Conversion. The Company shall pay any and all taxes
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that may be payable in respect of the issuance or delivery of any shares of
Common Stock on conversion of this Note or any portion thereof. The Company
shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of shares of
Common Stock in a name other than that of the Holder, and the Company shall
not he required to issue or deliver such shares of Common Stock unless or
until the person or persons requesting the issuance thereof shall have paid
to the Company the amount of any such tax or shall have established to the
satisfaction of the Company that such taxes have been paid.
2.6 Elimination of Fractional Interests. No fractional shares of
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Common Stock shall be issued upon conversion of this Note, nor shall the
Company be required to pay cash in lieu of fractional interests, it being
the intent of the parties that all fractional interests shall be
eliminated.
2.7 Conversion Price. The Conversion Price of this Note shall be $1.00
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($1.00) per share of Common Stock. The Conversion Price shall be not be
adjusted for any reason and shall be limited to the extent of $ 100,000 in
principal amount.,
2.8 Rights of Holder. Nothing contained in this Note shall be
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construed as conferring upon the Holder the right to vote or to consent or
to receive notice on account of the shares of Common Stock into which the
Note is convertible, or as having any rights whatsoever as a stockholder of
the Company with respect to such shares.
2.9 Reservation and Listing of Shares for Issuance. The Company shall
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at all times reserve and keep available out of its authorized and unissued
shares of Common Stock, for the purpose of effecting the conversion of this
Note, such number of its duly authorized shares as shall from time to time
be sufficient to effect the conversion of this Note. The Company covenants
that all shares of Common Stock issued upon conversion of this Note in
compliance with the terms herewith shall be validly issued and fully paid
and non-assessable. As long as this Note shall be outstanding, the Company
shall use its best efforts to cause all shares of Common Stock issuable
upon conversion of this Note to be listed (subject to official notice of
issuance) on all securities exchanges on which the Common Stock is then
listed.
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<PAGE>
SECTION 3. Transfer, Exchange and Replacement of Note. This Note shall be
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transferable only on the note register of the Company maintained at the office
of the Company . It is the intent of the parties that this note be retained by
the Holder until maturity and therefore the note may not be transferred,
assigned or sold to any third party without the written consent of the Company.
Upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Note, the Company shall make and
deliver a new Note of like tenor, in lieu of this Note, if (i) in case of loss,
theft or destruction, the Company receives indemnity or security reasonably
satisfactory to it, (ii) the Company is reimbursed for all reasonable expenses
incidental to such replacement, and (iii) this Note is surrendered and
cancelled, if mutilated.
SECTION 4. Prepayment
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The principal amount of this Note may be prepaid, in whole or in part, at
any time without restriction.
SECTION 5. Acquisition for Investment and Restrictions On Transfer.
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5.1 Investment Intent.
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(a) The Holder, by acceptance of this Note, represents that this
Note and any shares of Common Stock issuable upon conversion of this
Note will be acquired for the Holder's own account for investment and
not with a view to, or for resale in connection with, the distribution
thereof, and that the Holder has no present intention of distributing
or reselling the Note or any such shares of Common Stock.
(b) Holder, by acceptance of this Note, further represents that
it has not offered or sold this Note, or any shares of Company Stock
into which this Note is convertible, directly or indirectly to any
other "Person" (as defined in Section 8.1 below) and that the Holder
is not acquiring the Note or any such shares for the account of any
other Person.
5.2 Restrictions on Transfer. The Holder, by acceptance of this Note,
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agrees that the Holder will not sell, transfer, assign, pledge, hypothecate
or otherwise dispose of this Note or any of the shares of Common Stock
issuable upon conversion of this Note unless: (i) a registration statement
under the Securities Act of 1933, as amended (the "Act"), covering the sale
or transfer of the Note or the shares of Common Stock issuable upon
conversion of the Note, as the case may be, is in effect; or the Holder
first provides the Company with an opinion of counsel (which may be counsel
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<PAGE>
for the Company) reasonably acceptable to the Company to the effect that
such sale, transfer, assignment, pledge, hypothecation or other disposition
will be exempt from the registration and the prospectus delivery
requirements of the Act. Any such sale, transfer, assignment, pledge,
hypothecation or other disposition shall also comply with applicable state
securities or "blue sky" laws.
5.3 Legends. Certificates evidencing shares of Common Stock issuable
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upon conversion of this Note shall bear the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT
PURPOSES ONLY AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF, AND SUCH
SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE
COMPANY) REASONABLY ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE OR
TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT."
The certificates representing such shares of Common Stock, and each certificate
issued upon transfer thereof, shall also bear any legend required under any
applicable state securities law. The Holder consents to the Company's making a
notation on its records or giving instructions to any transfer agent of the
Common Stock in order to implement the restrictions on transfer of the Note and
shares of Common Stock issuable upon conversion hereof set forth herein. The
Company shall remove any legend endorsed on this Note or on a certificate
representing the shares of Common Stock issued upon conversion hereof, and any
stock transfer instructions and record notations with respect to the Note and
shares of Common Stock issuable upon conversion hereof, and shall issue a Note
or certificate without such legend to the Holder if.: (i) this Note or any
Common Stock issuable upon conversion hereof is registered under the Act and
under any applicable state securities laws, as the case may be; or (ii) the
Holder provides the Company with an opinion of counsel (which may be counsel for
the Company) reasonably acceptable to the Company to the effect that a public
sale or transfer of this Note or such shares of Common Stock may be made without
registration under the Act or under any applicable state securities laws, as the
case may be.
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SECTION 6. Default.
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6.1 Rights Upon Default. Upon any Event of Default as defined in
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Section 6.2, the Holder may, at its option, declare the entire amount of
principal and accrued interest on this Note immediately due and payable, by
written notice to the Company, in which event the Company shall immediately
pay to the Holder the entire unpaid principal balance of this Note together
with accrued interest thereon to the date of such payment. At any time
within fifteen (I 5) days after such declaration, the same may be rescinded
and such Event of Default may be waived by the Holder of this Note by
written notice from it to the Company. In the event the Company fails to
make payment to the Holder of this Note as provided in this Section 6. 1,
the Holder shall be entitled to take such measures as may be appropriate to
enforce the Company's obligations under this Note, by judicial proceedings
or otherwise. No delay or omission of the Holder of this Note to exercise
any right or power accruing upon any Event of Default shall impair any such
right or power or shall be construed as a waiver of any such Event of
Default or an acquiescence therein.
6.2 Events of Default. An "Event of Default" under this Note shall
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occur if.
(a) the Company defaults in the payment of principal under this
Note when due, either at maturity or by declaration as authorized in
this Note;
(b) the Company defaults in the payment of interest under this
'Note when due and the default continues for a period of fifteen (I5)
days;
(c) the Company shall default in the performance or observance of
any agreement, term, covenant or condition contained in this Note
(other than as specifically provided in this Section 6.2) and such
default is not remedied within fifteen (I 5) days after receipt by the
Company of written notice from the Holder of such default.
SECTION 7. Representations and Warranties.
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The Company represents and warrants that:
(a) The execution and delivery of this Note has been duly and validly
authorized by the Board of Directors of the Company and that no other
corporate proceedings on the part of the Company are necessary to authorize
this Note. This Note has been duly and validly executed and delivered by
the Company and constitutes the valid and binding agreement of the Company
enforceable against it in accordance with its terms;
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(b) The execution, delivery or performance by the Company of this Note
will not, with or without the giving of notice or the passage of time, or
both, conflict with, violate, result in a breach of or default, right to
accelerate or loss of rights under, or result in the creation or imposition
of any lien, charge or encumbrance upon any of the material assets or
properties of the Company or its subsidiaries pursuant to any provision of
the Company's Certificate of Incorporation or Bylaws, or any agreement,
law, rule, or regulation, or any order, judgment or decree to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries, or their respective assets or properties is bound;
and
(c) No consent or approval of, or notification to or filing with, any
governmental authority, stock exchange, interdealer quotation system or any
other party is required in connection with the execution, delivery and
performance of this Note, other than such as have been obtained.
The Holder represents and warrants:
(a) That he has accepted this note based on his own independent
investigation of the affairs of the company and that he has exercised his
own independent judgement in connection with all decisions related thereto.
SECT10N 8. Miscellaneous.
8.1 Definitions. As used herein the following terms shall have the
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following meanings:
"Person" shall mean any individual or entity, including without
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limitation any corporation, partnership, joint venture or trust.
"Business Day" shall mean any day other than a Saturday, Sunday
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or other day on which banks in the State of Nevada or New York are
authorized by law to remain closed.
8.2 Notices.All notices and other communications made pursuant to the
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provisions of or in connection with this Note shall be in writing and shall
be deemed to have been duly made when delivered personally or by express
mail or courier or when sent by facsimile transmission with confirmation
received (provided a writing evidencing such transmission is mailed by
first class mail, postage prepaid within two (2) Business Days):
(a) If to the Holder, to Henry Hirshman
155 East 29th Street, Apt. 32A
New York, New York 10016
(b) If to the Company, to Dallas Gold & Silver Exchange, Inc.,
519 Interstate 30, Suite 243, Rockwall, Texas 75087, fax no. (214)
772-3093, or to such other address as the Company may give notice of
to the Holder from time to time.
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8.3 Successors. All the covenants, agreements, representations and
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warranties contained in this Note shall bind the parties hereto and their
respective heirs, executors administrators, distributees, successors and
assigns.
8.4 Law Governing. This Note is delivered in the State of Nevada and shall
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be construed and enforced in accordance with, and governed by, the internal laws
of the State of Nevada without application of the conflict of laws provisions
hereof.
8.5 Headings. The Section headings in this Note are inserted for purposes
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of convenience only and shall have no substantive effect.
8.6 Expenses. Each party to this agreement shall bear his own expenses in
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connection with this note.
8.7 Usury. Notwithstanding any other provision of this Note to the
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contrary, all agreements between the Company and the Holder are expressly
limited, so that in no event or contingency whatsoever, whether by reason of the
advancement of the proceeds of this Note, acceleration of maturity of the unpaid
principal balance, the addition of accrued interest to principal or otherwise,
shall the amount paid or agreed to be paid to the Holder for the use,
forbearance, or detention of the money to be advanced under this Note exceed the
highest lawful rate permissible under applicable usury laws. If, under any
circumstances whatsoever, fulfillment of any provision of this Note or any other
agreement pertaining to this Note, after timely performance of such provision is
due, shall involve transcending the limit of validity prescribed by law which a
court of competent jurisdiction deems applicable, then the obligations to be
fulfilled shall be reduced to the limit of such validity, and if, under any
circumstances whatsoever, the Holder shall ever receive as interest an amount
that exceeds the highest lawful rate, the amount that would be excessive
interest shall be applied to the reduction of the unpaid principal balance under
this Note and not to the payment of interest, or, if such excessive interest
exceeds the unpaid balance of principal under this Note, such excess shall be
refunded to the Company.
WITNESS the signature of the duly authorized officer of the Company
DALLAS GOLD & SILVER EXCHANGE,
INC., a Nevada corporation
by: _______________________________
Name: Dr. L.S. Smith
Title: Chairman
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Exhibit 1
To
The undersigned owner of this Note hereby irrevocably exercises the option to
convert $ 1 00,000 principal amount of this Note into shares of I 00,000 shares
of Common Stock of in accordance with the terms of this Note, and directs that
the shares issuable and deliverable upon the conversion be issued and delivered
to the registered holder hereof..
Dated:
Signature
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