SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated April 3, 2002,
is entered into by and among Tangible Asset Galleries, Inc., a corporation
formed under the laws of the State of Nevada (the "Company"), and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, an individual resident of the State of California (the "Insider").
All capitalized terms used herein and not specifically defined herein shall have
the same meanings as ascribed thereto in the Securities Purchase Agreement (the
"Stanford Securities Purchase Agreement") dated of even date herewith by and
among the Company, the Insider and Stanford Venture Capital Holdings, Inc., a
corporation formed under the laws of the State of Delaware ("Stanford").
R E C I T A L S
WHEREAS, the Company and the Insider are executing and delivering this
Agreement in reliance upon the exemptions from registration provided by
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), and/or Section 4(2) of the Securities Act;
WHEREAS, the Insider wishes to purchase, and the Company wishes to issue and
sell, upon the terms and conditions of this Agreement in consideration for the
cancellation of $1,100,000 of debt due and payable to the Insider by the Company
(the "Insider Debt"), (A) 400,000 shares of the Company's Series B $1.00
Convertible Preferred Stock (the "Series B Preferred Stock"), the terms of which
are as set forth in the Certificate of Designation attached as Exhibit A to the
Stanford Securities Purchase Agreement, (B) warrants to purchase in the
aggregate 4,000,000 shares (the "Warrants") of the Company's common stock,
US$.001 par value per share, the terms of the Warrant are set forth in the Form
of Warrant attached as Exhibit B to the Stanford Securities Purchase Agreement,
and (C) 7,000 shares of the Company's Series C Convertible Preferred Stock, with
a stated value of $100 per share (the "Series C Preferred Stock"; such shares of
the Series B Preferred Stock and the Series C Preferred Stock so purchased, the
"Insider Preferred Shares"), the terms of which are as set forth in the
Certificate of Designation attached as Exhibit F to the Stanford Securities
Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and of the agreements set forth
below, the parties hereby agree as follows:
1. PURCHASE AND SALE.
a. SHARES AND WARRANTS TO BE PURCHASED AND SOLD. On the First Closing
Date, the Company agrees to sell, transfer, convey, assign and deliver to the
Insider, the Insider Preferred Shares and the Warrants free and clear of all
liens, claims and encumbrances in consideration for the cancellation of the
Insider Debt hereinafter set forth.
b. CANCELLATION OF INSIDER DEBT. Upon the terms and subject to the conditions
set forth in this Agreement, in exchange for the Insider Preferred Shares and
the Warrants, the Insider hereby agrees to cancel the Insider Debt and release
the Company, its shareholders, directors, and officers from all actions, causes
of action, suits, and arbitrations relating to, or in connection with, the
payment by the Company of the Insider Debt.
c. CLOSING DATE. The closing shall occur on the First Closing Date (the
"Closing"). The Closing will be subject to and conditional upon (i) the closing
of the transactions contemplated by the Stanford Securities Purchase Agreement,
and (ii) the satisfaction or waiver of the conditions precedent set forth in
Sections 5 and 6 of the Stanford Securities Purchase Agreement.
d. DELIVERY OF SHARES AND WARRANT. At the Closing, the Company will deliver
to the Insider, certificates registered in the name of the Insider, representing
the Insider Preferred Shares and a Warrant substantially in the form of the Form
of Warrant attached as Exhibit B to the Stanford Securities Purchase Agreement.
The Company will be responsible for, and will pay any applicable sales taxes and
transfer taxes arising in connection with the transactions contemplated by this
Agreement.
2. REPRESENTATIONS AND WARRANTIES BY THE INSIDER. The Insider
represents and warrants to the Company as follows:
a. EXECUTION, DELIVERY, AUTHORIZATION, APPROVAL AND PERFORMANCE OF
AGREEMENT. The execution and delivery by each Insider of this Agreement and his
performance hereunder does not and will not conflict with or constitute a
default, breach or violation under any provision of applicable law or regulation
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Insider or to which his properties is subject. This Agreement
when executed and delivered by the Insider will constitute the legal, valid and
binding agreement of the Insider and is enforceable in accordance with its
terms.
b. INVESTMENT REPRESENTATION:
(i) The Insider represents that he is acquiring the Insider Preferred Shares
(including any other securities into which such Insider Preferred Shares are
convertible into or exchangeable for) and the Warrant (collectively, the
"Purchased Securities") for his own account for investment only and not with a
view towards distribution or resale, and agrees not to sell, transfer, pledge,
hypothecate or otherwise dispose of, or offer to dispose of, the Purchased
Securities, unless the Purchased Securities have been registered under the
Securities Act and applicable state securities laws or such registration is not
required in the opinion of counsel for the Insider reasonably acceptable to the
Company. The Insider understands that any routine sale of the Purchased
Securities made in reliance upon Rule 144 promulgated under the Securities Act
can be made only in accordance with the terms and conditions of Rule 144 and
further, that in case Rule 144 is not applicable to any sale of the Purchased
Securities, resale thereof may require compliance with some other exemption
under the Securities Act prior to resale. The Insider understands that
certificates for the Insider Preferred Shares and the shares of common stock
underlying the Warrant issued pursuant to this Agreement shall bear the
following legend:
"THESE SECURITIES (INCLUDING ANY UNDERLYING SECURITIES) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN
OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION SHALL NO LONGER BE REQUIRED."
(ii) The Insider represents that (a) he is subscribing for the Insider
Preferred Shares and the Warrant after having made adequate investigation of the
business, finances and prospects of the Company, (b) he has been furnished any
information and materials relating to the business, finances and operation of
the Company and any information and materials relating to the offer and sale of
the Insider Preferred Shares and the Warrant which he has requested and (c) he
has been given an opportunity to make any further inquiries desired of the
management and any other personnel of the Company and has received satisfactory
responses to such inquiries.
(iii) The Insider represents that he in an "accredited investor," as that
term is defined in Regulation D, as amended, under the Securities Act and that
he possesses such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of an investment in the
Insider Preferred Shares and the Warrant and of making an informed investment
decision.
2. MISCELLANEOUS.
a. AMENDMENTS, ETC. No amendment of any provision of this Agreement shall
in any event be effective unless the amendment shall be in writing and signed by
the Company, Stanford, and the Insider, and no waiver nor consent to any
departure by any party therefrom shall in any event be effective unless such
waiver or consent shall be in writing and signed by the party waiving or
consenting to such provision, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
b. NOTICES, ETC. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, facsimile, telex or cable
communication) and mailed, telegraphed, telecopied, telexed, cabled or
delivered:
If to the Company: Tangible Asset Galleries, Inc.
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▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇, Savage, Kaplowitz, Wolf & Marcus, LLP
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Insider: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or, as to any such party, at such other address as shall be designated by such
party in a written notice to the other parties.
c. NO WAIVER; REMEDIES. No failure on the part of the Insider or the
Company to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
d. SURVIVAL OF AGREEMENTS, ETC. The representations, warranties, covenants
and provisions contained in this Agreement shall survive the date hereof and the
purchase of the Insider Preferred Shares and the Warrant by the Insider
hereunder.
e SEVERABILITY OF PROVISIONS. Any provision of this Agreement which is
prohibited or unenforce-able in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforce-ability without
invalidating the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
f. BINDING EFFECT; GOVERNING LAW. This Agree-ment shall be binding upon and
inure to the benefit of the Company and the Insider and their respective
successors and assigns, except that neither the Company nor the Insider may
assign this Agreement, or the rights or obligations hereunder, without the prior
written consent of the other parties to this Agreement. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
California applicable to agreements and instruments executed and performed in
the State of California. It is expressly acknowledged that Stanford is a
third-party beneficiary, but has no obligations whatsoever, under this
Agreement.
g. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute but one and the same
agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement.
TANGIBLE ASSET GALLERIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual