General Terms and Conditions of Sale and Storage

1. DEFINITIONS

As used in these General Terms and Conditions (“GTC”) and the Purchase Contract (“PC”) and/or Storage Contract (“SC”) the following definitions apply:

“Agreement” shall mean both a Purchase and/or Storage Agreement together with the General Terms and Conditions of Purchase and/or Storage, as the case may be.

“Baskets” when used as singular or plural, shall mean one or more baskets of strategic metals.

“Business Day” shall mean Monday to Friday, except public holidays in Panama, Germany, Switzerland or the United States.

“Buyer” shall mean any individual, sole proprietor, partnership, limited liability company, firm, corporation or other entity to which the PC and/or SC is issued.

“Daily Basket Price” shall mean the price indicated daily on the SMH PA Website for the relevant Basket at: http://smhpa.com/basket-values/

“Delivery” shall mean when the Goods arrive at and are accepted at the relevant storage facility, or are allocated and insured at the whole sellers’ facility.

“Fluctuation Reserve” shall mean the reserve of 5% above the Daily Basket Price that is used towards the difference in Daily Basket Price and Purchase Price and which is refundable, if not required, at Buyer’s request.

“Goods” shall mean Baskets, strategic metals baskets, individual strategic metals and/or Precious Metals, as the context deems appropriate.

“Precious Metals” shall mean silver, gold, platinum and palladium, as the context deems appropriate.

“Purchase Price” shall mean the price for appropriate Goods, as set on the next Business Day (or next day that the Daily Basket Price was issued), after SMH has received ready funds from the Buyer.

“SMH” shall mean SMH Schweizerische Metallhandel Panama, S.A., a Panamanian corporation with its principal offices at Ave. Samuel Lewis, Generali Building, and Office 21, Panama City, Panama.

2. APPLICATION

2.1 This purchase and storage of Goods is placed by the Buyer subject to the specific terms stated in the PC and/or SC and the following general terms and conditions, which terms and conditions may not be modified, except in writing signed by SMH.

2.2 Any provisions inconsistent herewith that are stipulated by the Buyer or appear on the Buyer’s business documents shall be valid only if accepted beforehand by SMH in the form of a written contract signed by the Buyer and SMH.

3. PRICES, SURCHARGE & FLUCTUATION RESERVE

3.1 The Buyer agrees that the Purchase Price of an individual Basket is determined based on the Daily Basket Price listed on http://smhpa.com/basket-values/, as set on the next Business Day (or next day that the Daily Basket Price was issued), after SMH has received full payment in ready funds from the Buyer.

3.2 Due to the fact that the Daily Basket Price may change between the date of execution of the PC and the date of receipt of ready funds by SMH, a 5% Fluctuation Reserve is added to the Daily Basket Price noted on the PC and this total amount is the total amount that the Buyer must pay to SMH; provided that single metals and Precious Metals are not subject to Fluctuation Rate. Should the Purchase Price be higher than the Daily Basket Price noted on the executed Purchasing Contract, then the Fluctuation Reserve will be used towards the actual Purchase Price.

3.3 Should a difference exist between the Purchase Price and the ready funds received, as mentioned above, or if the Purchase Price is lower than the Daily Basket Price noted on the executed Purchase Contract, the excess cleared funds will be used to purchase an equal amount of Precious Metals. The Buyer should note that by checking the relevant box on the Purchase Contract, Buyer may elect to have that part of the Fluctuation Reserve not used (as described above) and refunded to their bank account.

3.4 The Daily Basket Price(s) are listed on the website as stated above. This Daily Basket and Single Metal Price is always inclusive of a floating premium that ranges from 12% to 15% above and beyond the cost of purchasing the individual metals. This floating premium represents the market access fee, which includes the costs involved in delivering the metals from the source to the storage facility.

3.5 A surcharge of 5% will be charged by SMH to the BUYER. Please note, that this surcharge will be applied to the total Purchase Price, including purchases of individual metals.

3.6 Partial payments may be accepted only if agreed to in advance by SMH in the form of a written agreement signed by SMH and Buyer. In such case, the Purchase Price will be set as of the date on which the final installment of the partial payment is received in full in ready funds by SMH.

3.7 Whilst it is not envisaged that value added tax (VAT) will be applied to any Goods stored at the Panama storage facility or the storage facility in Switzerland, both currently located at its respective duty free zone; VAT may be assessed on the Goods removed from the duty free zones storage in Panama or Switzerland. All such VAT payment is solely the responsibility of the Buyer.

3.8   Baskets of Metals and Purities

Basket Contents

2 Kg       Indium
2 Kg       Gallium
3 Kg       Hafnium
7 Kg       Tellerium
8 Kg       Tantalum
47.7 Kg       Bismuth

2 Kg       Indium
2 Kg       Gallium
3 Kg       Hafnium

4 Kg       Tantalum
20 Kg       Molybdenum
20 Kg       Chromium
20 Kg       Cobalt
20 Kg       Zirconium
20 Kg       Tungsten

1 Kg      Rhenium
5 Kg      Tantalum
5 Kg       Indium
5 Kg       Gallium
20 Kg       Tungsten

2 Kg       Germanium
5 Kg       Dysprosium
6 Kg       Rhenium
10 Kg       Niobium
15 Kg       Silver

Metal Purities

Indium min. 99.99%
Gallium min. 99.99%
Hafnium min. 99.9%, Zr. max. 1%
Tantalum min. 99.9%
Tellurium min. 99.9%
Bismuth min. 99.99%
Germanium 99.999%
Dysprosium 99.5%
Molybdenum min. 99.8%
Chromium min. 99.0%
Cobalt min. 99.8%, vacuum grade
Zirconium min. 99.2% Hf. Max. 1%
Tungsten min. 99.9%
Rhenium min. 99.99%
Niobium min. 99.9%
Silver min. 99.99%

4. RESALE AND REDEMPTION POLICY

4.1 Baskets and individual metals should be seen as a mid-term hedge against inflation.

4.2 Due to the business model of SMH, the physical metals are not as liquid as ETF’s or options.

4.3 Re-sales within the first year of ownership will be executed on a best effort basis, but cannot be guaranteed. In the 2nd to 5th year, the client can redeem 25% of his holdings per calendar quarter with 90 days notice. From year 6 onwards, the client can redeem ALL of his metals with 90 days notice.

4.4 Clients can sell individual metals out of their baskets. After the sale is executed the client holds individual metals.

4.5 SMH and their partners monitor metal prices worldwide. In the case of a buying or selling opportunity within the long-term strategy, we will contact you.

5. DELIVERY

5.1 Delivery is considered completed on the date the Goods arrive at and are accepted at a storage facility, or when allocated and insured at the whole sellers’ facility.

5.2 Our delivery dates are in all cases stated as a guideline only, they do not take into account unforeseeable circumstances or cases of force majeure. Although SMH endeavors always to maintain adequate storage facilities prior to the execution of Storage Contracts, there may be periods that alternative arrangements for storage are being made. This may cause an unintended delay in delivery. SMH shall not be held liable for any losses or damages caused by any delay in delivery, except in instances whereby the delay in delivery has been caused by commercial or logistic considerations such as finding additional storage facilities.

5.3 Any late payment by the Buyer may lead to the temporary suspension or definitive discontinuance of our shipments.

5.4 Shipment of Goods shall be accompanied by a shipping notice or a packing slip describing the contents of each package, showing weight, quantity and order number.

5. TRANSFER OF OWNERSHIP AND RISK

Transfer of risks occurs as of the moment the Goods are loaded at the place of loading, provided that transfer of ownership shall occur only after the Buyer has discharged all its payment obligations towards SMH in full in ready funds. In the event of nonpayment of the total amount of the invoice, either at the due date stipulated or for any time extension granted, SMH, in addition to the right to claim the Goods concerned, automatically and shall resume full ownership of the Goods delivered. With respect to the defaulting Buyer, the mere presentation by SMH of the unpaid invoice shall be deemed a resumption of ownership.

6. PAYMENT

Payment will be by a certified bank check, irrevocable and confirmed, or a bank wire transfer.

7. WAREHOUSING OF GOODS ON BEHALF OF THE BUYER AND/OR DELIVERY TO BUYER

7.1 SMH will store the Goods in either Switzerland or Panama, both Bank Level 1 Security facilities, free of customs duties, or at any other storage facility that may be utilized by SMH from time to time, but that will not in any event prejudice the terms of storage as described by the terms and conditions contained herein. Goods will be covered by insurance, and only authorized personnel under surveillance may enter either storage facility.

7.2 The client can choose as well to sign a storage contract with the storage facility directly. Charges and Interest as outlined in 8.1 will remain the same.

7.3 Upon written request to SMH, Buyer can request the physical delivery of the Goods to the location indicated by the Buyer, at Buyer’s sole expense. See Section 10 below.

8. CHARGES AND INTEREST FOR STORAGE

8. 1 For Basket A (Key Industries), the annual charges for the storage are 1.5% of Purchase Price.
For Basket B (Energy and Tech), the annual charges for the storage are 1.5% of Purchase Price.
For Basket C (K) (Construction and Engineering), the annual charges for the storage are 1.5% of Purchase Price.
For Basket D (Defense and Aviation), the annual charges for the storage are 1.5% of Purchase Price.
For Basket E (Emerging Technologies), the annual charges for the storage are 1.5% of Purchase Price.
For individual strategic metals, the annual charges for the storage are 1.5% of Purchase Price.
Please, note the fees above are in effect for the first 5 years and subject to change thereafter.

8.2 Storage charges for Precious Metals vary from 0.65% to 1% depending on the type of metal and invoiced semiannually. Because the Purchase Price may be different from the Daily Basket Value, it is not possible to know the precise and actual “Total amount of storage charges” when the Buyer executes the SC. Any increase in the actual storage fees as reflected in the final statement will be paid for with the Fluctuation Reserve.

8.3 Storage charges for any strategic metals, both Baskets and individual metals, are due for 5 years in advance. Buyer will receive a separate invoice for storage charges. In case of liquidation prior to 5 years, storage charges will be reimbursed pro rata, on an annual basis. In the event storage charges are past due, a written past due notice will be delivered to Buyer. In the event of non-payment for more than 10 business days from the date of such notice, SMH will have the right to sell stored Goods to cover the past due amount of the charges and expenses or to remove a corresponding amount of the Goods from the warehouse at Buyer’s sole expense.

9. PHYSICAL DELIVERY

9.1 The Buyer may, at any time, request in writing physical delivery of the Goods. Physical delivery of Goods will be at Buyer’s sole cost and expense, including but not limited to, freight charges, insurance costs, sales / turnover taxes, fees for administration and handling, customs duties and further country-specific fees and dues, as applicable.

9.2 Import and export regulations of individual countries of delivery will apply. In some countries, the physical delivery of one or more metals is prohibited by law. In each individual case, SMH will contact Buyer to further discuss applicable procedures.

10. ARBITRATION

10.1 These General Terms and Conditions are subject to the laws of Panama, without application of any conflicts of laws principles.

10.2 In the event that any dispute arises between the parties hereto with regard to any of the provisions of this GTC or the performance of the terms and conditions contained herein or PC or SC by either of the parties hereto, such dispute shall be settled by binding arbitration to be conducted in Panama City, Panama, according to the rules of the Center for Conciliation and Arbitration of Panama, in both the Spanish and English languages before three arbitrators.

10.3 The transactions contemplated hereby shall not be subject to the United Nations Convention on Contracts for the International Sale of Goods (the “Convention”); rather the rights and obligations of the parties hereto shall be governed as provided in this Section 10. Buyer expressly acknowledges hereby that the Convention does not apply to the Purchase Contract and Storage Contract or to the resolution of any disputes arising out of or relating to GTC.

11. LIMITATION OF LIABILITY

UNDER NO CIRCUMSTANCES SHALL SMH BE SUBJECT TO ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR CONTINGENT DAMAGES WHATSOEVER WITH RESPECT TO ANY CLAIMS MADE HEREUNDER OR PURSUANT TO THE PURCHASE CONTRACT AND/OR STORAGE CONTRACT BY ANY BUYER.

12. WARRANTIES AND QUALITY CONTROL

SMH warrants that the Goods delivered to the storage facility or the Buyer, as the case may be, shall:
a) Conform to the specifications set forth in the PC and,
b) Comply with all applicable laws and regulations.
SMH, or its designee, shall, for the benefit of the Buyer, endeavor to inspect the Goods prior to delivery to the storage facility to determine whether they conform to the terms of PC and/or SC, as the case may be. The cost of the inspection of the Goods performed by SMH, or its designee is a component of the prices stated therein.

13. NOTICE

All notices given hereunder shall, unless otherwise specifically provided, be given in writing, by personal delivery, regular mail, international courier, electronic mail with electronic confirmation of delivery, or facsimile transmission at the respective addresses of SMH and Buyer set forth in the PC or SC, unless either party at any time designates another address for itself by notifying the other party thereof by certified mail, in which case all notices to such party shall thereafter by given at its most recently so designated address. Notice given by mail shall be deemed given on the date of mailing thereof with postage prepaid. Notice given by electronic mail or facsimile transmission shall be deemed given upon receipt thereof by the recipient as evidenced by the electronic confirmation of delivery thereof.

14. INDEMNITIES

The Buyer shall indemnify and hold SMH, its shareholders, officers, agents and employees harmless from any liability or loss resulting from judgments or claims against them arising out of the activities to be carried out pursuant to the obligations of this GTC and PR and/or SC, provided, however, that Buyer shall not hold SMH harmless from claims arising out of the negligence or willful malfeasance of SMH, its officers, agents, or employees.

15. SEVERABILITY

In the event one or more of the provisions contained herein should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby.

16. AUTHORIZATIONS OF SIGNATORIES

The undersigned represents and warrants that if the Buyer is a legal entity (i) he/she holds the designated offices with the respective entities, (ii) that he/she is duly authorized to execute the PC, SC and GTC and thereby bind their respective entity, and (iii) that all required approvals have been obtained.

17. HEADINGS

Headings used herein are for purposes of reference only and shall not limit or affect the meaning hereof.