SALE AND BUYBACK OF FINE METAL AGREEMENT Made on the 12th day of June 2006
Exhibit 10.2
“XXXXX” indicates that a portion of the exhibit has been omitted based on a request for confidential treatment submitted to the Security and Exchange Commission. The omitted portions have been filed separately with the commission.
SALE AND BUYBACK OF FINE METAL AGREEMENT
Made on the 12th day of June 2006
BETWEEN:
| (1) | AGR MATTHEY ABN 33 824 096 614 (hereinafter called “AGR MATTHEY”) being a partnership between WA Mint ABN 44 590 221 751 (The Perth Mint), Australian Gold Alliance Pty Ltd ABN 67 095 743 703 and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Aust) Ltd ABN ▇▇ ▇▇▇ ▇▇▇ 838, of Horrie ▇▇▇▇▇▇ Drive, ▇▇▇▇▇▇▇, Western Australia and; |
| (2) | KULICKE & ▇▇▇▇▇ (SEA) PTE LTD (hereinafter called “K&S SEA”), a company incorporated in Singapore with its principal office at ▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇, #▇▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and |
| (3) | KULICKE & ▇▇▇▇▇ GLOBAL HOLDING CORPORATION, a company incorporated in Malaysia (hereinafter called “K&S GHC”) with its registered address at Unit Level 13(E), Main Office Tower, Financial Park Labuan, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ of Labuan, Malaysia. |
WHEREAS:
| A. | AGR MATTHEY at the request of K&S has agreed to sell Gold in the required quantum of ▇▇▇▇ ounces as stipulated in Item 1 of the attached Schedule 1. |
| B. | K&S has agreed to purchase from AGR MATTHEY Gold on the terms and conditions herein contained. |
| C. | K&S SEA and K&S GHC have agreed to be jointly and severally liable to AGR MATTHEY for the performance of all their respective obligations under this Agreement. |
NOW IT IS AGREED as follows:
| 1. | DEFINITIONS AND INTERPRETATION |
| 1.1 | Definitions |
In this Agreement including the Schedules, unless there is something in the subject or context inconsistent therewith, the following expressions have the following meanings:
“Agreement” means this Sale and Buyback of Fine Metal Agreement as it may be amended, varied or extended by mutual agreement from time to time;
“Bank Standby Letter of Credit” means a bank guarantee or standby letter of credit issued by a bank acceptable to AGR MATTHEY in favour of AGR MATTHEY as well as in a form and substance acceptable to AGR MATTHEY;
“Business Day” means any day on which banks are open for general banking business in Perth, Sydney, New York, Singapore and Labuan, Malaysia;
“Conditions Precedent” means the conditions specified in Clause 4;
“Delivery” means the physical act of delivery, where custody of the Gold shall pass from one party to the other, as evidenced by the Transportation Agent’s delivery receipt signed by a duly authorised K&S employee. A list of duly authorised K&S employees is annexed herewith as Appendix 1.
“Delivery Point” means K&S’s manufacturing facility as stated in Item 7 of Schedule 1;
“Dispute” means any dispute or disagreement between the Parties in connection with this Agreement;
“Event of Default” means an event of default under this Agreement pursuant to Clause 11.1;
“Fine Metal Delivered” or “Gold Delivered” means the Fine Metal delivered to K&S by AGR MATTHEY not purchased and settled in full by K&S (in accordance with Clause 5) and not bought back by AGR MATTHEY (in accordance with Clause 7), expressed as fine ▇▇▇▇ ounces of Gold;
“Gold” means Gold metal in any of its physical forms. The physical supply of Gold by AGR MATTHEY to K&S shall conform to technical specifications specified in paragraph 4 of Schedule 2.
“Gold AM Fix” means the USD Gold price as determined by LBMA Fixing Members at 10.30am (London time) daily and displayed as such on Reuters.
“Gold PM Fix” means the USD Gold price as determined by the LBMA Fixing Members at 3 pm (London time) daily and displayed as such on Reuters.
“Guaranteed Sum” means the sum secured under the Bank Standby Letter of Credit from time to time;
“Initial Date” means the date falling 24 months after the date of this Agreement;
“K&S” means K&S SEA and / or K&S GHC as applicable.
“LBMA” means the London Bullion Market Association;
“Margin Payment” means the cash deposit payable, the provision of a further Bank Standby Letter of Credit or the buyback of Gold (in accordance to Clause 7) at such time as the Market Value of Fine Metal Delivered exceeds ninety five percent (95%) of the Guaranteed Sum under the Bank Standby Letter of Credit in accordance with the terms set out in Clause 6;
“Market Value” of the Gold on any day means the price per ▇▇▇▇ Ounce of Gold in USD as determined by the latest Gold PM Fix prior to that day;
“Metals Account” means an unallocated Gold metal account denominated in fine ▇▇▇▇ ounces held in the name of K&S SEA or K&S GHC representing the balance of Fine Metal Delivered;
“Panel” is defined in Clause 16;
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“Parties” means the parties to this Agreement and “Party” means either AGR MATTHEY, K&S SEA or K&S GHC;
“Period” means the term of this Agreement commencing from the date of this Agreement and terminating in accordance with Clause 2.2;
“Product Fee” means the fee payable by K&S to AGR MATTHEY as specified in Item 5 of the Schedule 1 and detailed in Clause 5;
“Sale and Buyback of Fine Metal Facility” means the facility described and detailed in Clause 2.
“Schedule” means a schedule to this Agreement.
“Security” means the Bank Standby Letter of Credit provided pursuant to Clause 3.1 and (if any) any USD cash deposit provided by K&S as a result of a margin call by AGR MATTHEY in accordance with Clause 6.1 (a);
“Transportation Agent” means Securicor International Valuables Transport Pty Ltd or Brinks Australia Pty Ltd or any other agent as agreed in writing by both AGR MATTHEY and K&S;
“▇▇▇▇ Ounce” or “Toz” means 31.1035 grams.
“USD” and “United States Dollars” means the lawful currency of the United States of America;
| 1.2 | Interpretation |
In the interpretation of the Agreement, unless there is something in the subject or context inconsistent therewith:-
| (a) | Words importing the singular shall be deemed to include the plural and vice versa. |
| (b) | Words importing any gender shall be deemed to include all other genders. |
| (c) | Words importing persons shall be deemed to include all bodies and associations, corporate or unincorporate, and vice versa. |
| (d) | Any reference to a statute or statutory provision shall be deemed to include any statutory provision which amends, extends, consolidates or replaces the same or which has been amended, extended, consolidated or replaced by the same and any orders, regulations, instruments or other subordinate legislation made thereunder. |
| (e) | Headings are included for convenience only and shall not affect the interpretation of the Agreement. |
| (f) | All references to Clauses and Recitals are to clauses of and recitals to this Agreement. |
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| (g) | Expressions cognate with expressions defined in Clause 1 shall be construed accordingly. |
| (h) | All references to dates and times are to Perth, Western Australia time unless otherwise specified. |
| (i) | All terminology used with respect to Gold in this Agreement which is not expressly defined herein shall have the meanings given to such terminology by the practices and requirements of the LBMA. |
| 1.3 | Schedule 1 and Schedule 2 |
The Schedule 1 and Schedule 2 attached to this Agreement form part of this Agreement.
| 2. | SALE AND BUYBACK OF FINE METAL FACILITY |
| 2.1 | This Agreement shall be deemed to continue in operation and effect from the date of this Agreement and subsist until it is terminated in accordance with Clause 2.2 |
| 2.2 | After the Initial Period, either of the Parties may terminate this Agreement by giving to the other at least six (6) months written notice. In the event of such termination, the amount of Gold Delivered to K&S must be paid for in full (in accordance with Clause 5) or sold back to AGR MATTHEY (in accordance with Clause 7) before the expiration of the six (6) month notice period. |
| 2.3 | During the period of this Agreement, the total Market Value of the Gold Delivered to K&S is not to exceed ninety five percent (95%) of the Guaranteed Sum. |
| 2.4 | Drawdown |
The drawdown of Gold by K&S is subject to the conditions of this Agreement and will be pursuant to Clause 2.5 of this Agreement.
| 2.5 | Usage of Gold |
| 2.5.1 | K&S shall be responsible for all costs and charges relating to the processing by K&S of Gold Delivered supplied by AGR MATTHEY to K&S. |
| 2.5.2 | K&S may use the Gold Delivered in the conduct of its normal manufacturing operations (as they are from time to time) and may be used and processed in such operations. |
| 2.5.3 | For the avoidance of doubt, all Gold Delivered to K&S by AGR MATTHEY shall form part of the total volume of Fine Metal Delivered to K&S even where the Gold Delivered is held in storage in the vaulting facilities of K&S. |
| 2.6 | Risk and Title |
Risk and Title to the Gold shall pass from AGR MATTHEY to K&S upon Delivery of a shipment of Gold at the Delivery Point at which time AGR MATTHEY’s responsibility and insurance cover terminates.
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| 2.7 | Delivery of Gold |
| (a) | AGR MATTHEY shall deliver Gold (within the specifications set out in paragraph 4 of Schedule 2) to K&S within 7 days from the date of its receipt of K&S’s order (in accordance with paragraph 1 of Schedule 2). Delivery by AGR MATTHEY to K&S is deemed to have occurred upon physical delivery at the Delivery Point as evidenced by the Transportation Agent’s delivery receipt signed by one of the duly authorised K&S employees as listed in Appendix 1. |
| (b) | The terms on which K&S will deliver Gold to AGR MATTHEY are set out in paragraph 5 of Schedule 2 and the Refining Charges to be paid by K&S are stated in Item 4 of Schedule 1. Delivery by K&S to AGR MATTHEY is deemed to have occurred upon physical delivery at AGR MATTHEY’s refinery in Perth, Western Australia as evidenced by K&S’s Transportation Agent’s delivery receipt signed by one of the duly authorised AGR MATTHEY employees as listed in Appendix 2. Risk for Gold delivered by K&S to AGR MATTHEY shall pass from K&S to AGR MATTHEY upon Delivery. Title to the Gold delivered to AGR MATTHEY by K&S shall pass from K&S to AGR MATTHEY upon the crediting of an equal amount of Gold contained in the Gold delivered by K&S to the Metals Account in accordance with Clause 5 of Schedule 2. |
| 2.8 | Joint and several liability |
| (a) | References in this Agreement to K&S means K&S SEA and K&S GHC jointly and severally and their liability under this Agreement shall be joint and several. |
| (b) | Title to Gold sold to, and purchased by K&S SEA or K&S GHC under this Agreement is held by either of K&S SEA or K&S GHC on a several basis and nothing in this Agreement makes K&S SEA and K&S GHC joint owners of any Gold purchased under this Agreement. |
| (c) | Notwithstanding Clause 2.8(b), K&S SEA and K&S GHC shall be jointly and severally liable for all obligations of K&S SEA or K&S GHC under this Agreement to AGR MATTHEY. |
| (d) | All transactions effected under the Sale and Buyback of Fine Metal Agreement between AGR and K&S (SEA) dated 21st June 2004 shall be deemed to have been effected under this Agreement and all amounts of Gold, Fine Metal Delivered or money owed in respect of any such transactions shall be deemed to be owed under this Agreement. |
| 3. | COLLATERAL SECURITY |
| 3.1 | Bank Standby Letter of Credit |
| 3.1.1 | K&S is to procure or provide AGR MATTHEY with the following security against the Sale and Buyback of Fine Metal Facility: |
A Bank Standby Letter of Credit for an amount to be agreed between the Parties (such amount may be varied by the Parties by mutual consent from time to time).
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| 3.1.2 | The said Bank Standby Letter of Credit must have an expiry date no earlier than 30 (thirty) days after the Initial Date of this Agreement or as mutually agreed in writing. |
| 3.1.3 | Where the Bank Standby Letter of Credit is to be renewed, this renewal is to be effected and confirmed by K&S’s banker(s) to AGR MATTHEY’s banker(s) via SWIFT at least 14 (fourteen) days before the expiry date of the existing Bank Standby Letter of Credit. Failure by K&S or their banker(s) to renew the Bank Standby Letter of Credit at least seven (7) days prior to the expiry of the Bank Standby Letter of Credit shall confer upon AGR MATTHEY the right to require K&S to sell back the Fine Metal Delivered in accordance with Clause 7 and drawdown against the Bank Standby Letter of Credit for the value of Gold Delivered inclusive of any other charges stipulated in Clause 5. Any fees and charges resulting due to the drawdown are for the account of K&S. |
| 3.1.4 | A Bank Standby Letter of Credit provided by either K&S SEA or K&S GHC shall secure the liability of each of K&S SEA and K&S GHC jointly and severally. |
| 3.2 | Calls on Bank Standby Letter of Credit |
If at any time K&S SEA or K&S GHC defaults pursuant to Clause 11, in the performance of its obligations under this Agreement, and fails to remedy the default within five (5) Business Days of written notice from AGR MATTHEY requiring it to do so, then AGR MATTHEY may require payment, without notice to K&S, by the relevant bank which has issued a Bank Standby Letter of Credit of the whole or any part of the sum guaranteed under that Bank Standby Letter of Credit.
4(A). CONDITIONS PRECEDENT
The first drawdown of Gold by K&S will be subject to the satisfaction of the following conditions precedent:
| (a) | confirmation from K&S SEA and K&S GHC that their respective Memoranda and Articles of Association contain provisions to authorise all necessary corporate actions to perform its obligations under this Agreement and an extract of the minutes of a K&S SEA and K&S GHC board meeting providing authority for the signing of this Agreement; |
| (b) | execution of a Bank Standby Letter of Credit pursuant to Clause 3.1 to secure the obligations of K&S under this Agreement and the delivery of such Bank Standby Letter of Credit to AGR MATTHEY; |
| (c) | due execution of this Agreement by K&S SEA, K&S GHC and AGR MATTHEY; and |
| (d) | delivery of the specimen signatures of K&S’s officers who are authorised to sign advices and documents on behalf of K&S to AGR MATTHEY. |
| (e) | delivery of an opinion in respect of K&S GHC that: |
| i) | is addressed to AGR MATTHEY from a law firm that certified to practice Labuan law and Malaysian law (approved by AGR MATTHEY) together with evidence of such law firm’s professional indemnity insurance in an amount per event in excess of Malaysian Ringgit 20,000,000 (twenty million); |
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| ii) | advises that this Agreement is enforceable under Labuan law and Malaysian law; and |
| iii) | it is in a form and substance acceptable to AGR MATTHEY. |
| 4(B) | STAMPING OF AGREEMENT UNDER MALAYSIAN LAW |
Where necessary under Singapore or Malaysian law:
| (a) | As soon as reasonably practical after the Effective Date, K&S must provide to AGR MATTHEY satisfactory evidence that this Agreement has been duly stamped under Singapore law and Malaysian law. |
| (b) | K&S must pay all stamp duty payable in relation to this Agreement including, but not limited to, any fines and penalties which may be payable in relation to the stamping of this Agreement. |
| 5. | PURCHASE |
| 5.1 | The consideration payable for the purchase of Gold by K&S shall comprise the following: |
| (a) | AGR MATTHEY’s quoted selling price at the time of the transaction (as determined in the manner set out in paragraph 2 of Schedule 2) or on either the Gold AM or PM Gold Fix (where an additional fix fee of XXXXX per ▇▇▇▇ Ounce will be charged) with settlement of proceeds payable to AGR MATTHEY in USD for value within two (2) business days of the transaction date unless alternative terms are agreed upon by AGR MATTHEY; |
| (b) | a Gold Supply Delivery Fee based on the daily balance of the Gold Delivered and calculated in accordance with the formula set out below: |
Gold Supply Delivery Fee in relation to a day = Gold Delivered x Gold Price x (Gold Rate ÷ 360)
Where:
Gold Delivered (a term defined in the definitions of this Agreement) as at the close of that calendar day.
Gold Rate (expressed as a rate per annum) for each Fixed Period (as defined in Clause 5.3.2) is the USD LIBOR rate minus GOFO (the Gold Forward Rate) as at the first Business Day of each Fixed Period plus XXXXX.
Gold Price is the Gold PM Fix on the first calendar day of each Fixed Period or when no such price is available, reference shall be made to the spot price (as determined in the manner set out in paragraph 2 of Schedule 2) as at 08.00 AM Perth time on the following day.
| (c) | Product Fee of USD as stipulated in Item 5 of Schedule 1; |
| (d) | Annual Australian Manufacturing Plant Production Fee as stipulated in Item 5 of Schedule 1. |
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| 5.2 | For the avoidance of doubt, the Parties hereto expressly agree that the consideration payable for the purchase of Gold to K&S shall be one composite price comprising the sum total of the value of the various constituent components set out in Clause 5.1 (a) to (d) It is further expressly agreed that, apart from contributing to the determination of the composite price, none of the items set out in Clause 5.1 (a) to (d) shall be viewed as an independent or separate consideration in itself. |
| 5.3 | Gold Supply Delivery Fees |
| 5.3.1 | The Gold Supply Delivery Fees payable by K&S to AGR MATTHEY pursuant to this Clause will accrue on a daily basis and as per the formula set out in Clause 5.1(b). It is agreed that K&S shall pay AGR MATTHEY the Gold Supply Delivery Fee no later than 14 days from invoice date (in arrears on a monthly basis) of such Gold Supply Delivery Fees. |
| 5.3.2 | K&S may fix the Gold Rate for a specified period of between one month and one year (Fixed Period). The fix date is the first Business Day of a Fixed Period. The Fixed Period is not to exceed the expiry date on the Bank Standby Letter of Credit. AGR MATTHEY is to be notified in writing of any intention to fix no later than the first Business Day after the preceding Fixed Period expires. If K&S fails to notify AGR MATTHEY of its intention to fix the Gold Rate for a specified period by the first Business Day after the expiry of the preceding Fixed Period, K&S shall be deemed to have fixed the Gold Rate for a period of one month. |
| 5.4 | Annual Australian Manufacturing Plant Production Fee |
This fee shall be paid in equal monthly instalments in advance within 14 fourteen Business Days of the invoice date.
| 5.5 | Product Fee |
The Product Fee shall be payable to AGR MATTHEY on the second Business Day following the date that K&S and AGR MATTHEY set the price for the purchase of Gold in accordance with Clause 5.1(a).
Basis:
The Product Fee payable to AGR MATTHEY is for door to door delivery loco K&S Singapore or Labuan subject to shipping availability acceptable to AGR MATTHEY and to a minimum shipment size of 200 Kgs. If the shipment size is less than 200 Kgs, K&S shall pay an additional fee (to be determined by the Parties) in addition to the Product Fee. For shipment size of 400 Kgs or greater, AGR shall make a monthly refund to K&S of XXXXX ▇▇▇▇ Ounce.
| 6. | MARGIN PAYMENT |
| 6.1 | At any time and from time to time, during the period of this Agreement, if the aggregate Market Value of the Fine Metal Delivered exceeds ninety five percent (95%) of the Guaranteed Sum, K&S shall, at its option, within five (5) Business Days after notice has been served by AGR MATTHEY: |
| (a) | Make a deposit in cash in USD, to AGR MATTHEY’s account at: |
| ▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, New York | ||
| Account Name: | AGR MATTHEY – USD Account | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
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AND/OR
| (b) | Provide AGR MATTHEY with a further Bank Standby Letter of Credit for an amount in excess of the Guaranteed Sum |
AND/OR
| (c) | Sell back a quantity of Gold to AGR MATTHEY (or to AGR MATTHEY’s agent as directed by AGR MATTHEY in writing) in accordance with Clause 7 |
so that after the deposit of cash, provision of the further Bank Standby Letter of Credit and/or sell back of Gold in accordance with Clause 7, the aggregate Market Value of the Fine Metal Delivered does not exceed ninety five percent (95%) of the Guaranteed Sum.
| 6.2 | Where K&S elects to place cash deposits with AGR MATTHEY as opposed to increasing the value of the Bank Standby Letter of Credit (and K&S advises AGR MATTHEY in writing in advance) and such sums are not used on an ongoing basis for the payment of sums due to AGR MATTHEY which as a result allows AGR MATTHEY to place the cash deposits on a term deposit facility with their bank then any USD cash deposit made pursuant to Clause 6.1 to AGR MATTHEY in satisfaction of such Margin Payment shall earn interest based on daily balances of such deposits at a rate equal to the prevailing USD one month LIBOR rate (London Interbank Offer Rate) minus 0.5% per annum (half of one percent per annum). Interest earned on any such deposit shall be paid to K&S in accordance with Clause 8. |
| 6.3 | Interest earned pursuant to Clause 6.2 together with any USD cash deposit made pursuant to Clause 6.1 shall be paid to K&S in full by the bank holding the USD cash deposit upon the direction of AGR MATTHEY when the USD cash deposit is returned to K&S. |
| 6.4 | At the request of K&S, AGR MATTHEY shall return to K&S the USD cash deposit and/or Further Bank Standby Letter of Credit held as a Margin Payment to K&S, as the case may be, when the aggregate Market Value of the outstanding Gold Delivered has dropped back to or below 95% (ninety five percent) of the Guaranteed Sum and has remained so for five (5) consecutive Business Days. |
| 7. | BUYBACK |
| 7.1 | K&S shall have the option to sell any quantum of the Gold to AGR MATTHEY, and AGR MATTHEY shall purchase, such quantum of Gold Delivered sold at the option of K&S. |
| 7.2 | K&S shall deliver the Gold in the form and state which was delivered to K&S by AGR MATTHEY or in any other form and state acceptable to AGR MATTHEY (currently being in wire, granule, gold scrap or bar form). |
| 7.3 | In consideration of the purchase of Gold by AGR MATTHEY, AGR MATTHEY shall cause a credit entry to be made to the Metals Account of K&S to reflect the amount of Gold purchased from K&S in accordance with Clause 2.7(b) and paragraph 5 of Schedule 2. |
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| 7.4 | With regard to the delivery and the passing of the risk and title of Gold from K&S to AGR MATTHEY, the provisions of Clause 2.7(b) shall apply. |
| 7.5 | In the event that instead of delivering Gold to AGR MATTHEY’s refinery in Perth, Western Australia, K&S in its sole discretion agrees to AGR MATTHEY’s request to deliver Gold to a person within Singapore (hereinafter called “Singapore Recipient”) or to a place within Singapore (hereinafter called “Singapore Place”), it shall be on the conditions that (a) AGR MATTHEY shall at all times indemnify K&S from and against any and all loss and damage, cost and expense whatsoever arising therefrom including without limitation Goods and Services Tax under the Goods and Services Act (Cap. 117A) of Singapore and such other, if any, value added or consumption tax by whatever name called in respect of which K&S will or may be held chargeable to or otherwise held accountable for whether on K&S’s own account or the account of AGR MATTHEY’s or any other person’s by any tax or other relevant authority and (b) for the purposes of delivery of and the passing of the risk and title of Gold by K&S to AGR MATTHEY shall be deemed to have occurred upon physical delivery to the Singapore Recipient or at the Singapore Place. |
| 8. | WITHHOLDING |
| 8.1 | Payments to be free and clear: All sums payable by either Party under this Agreement shall be paid free of any restriction or condition, and free and clear of and (except to the extent required by law) without any deduction or withholding, whether for or on account of tax, by way of set-off or withholding or otherwise. |
| 8.2 | Grossing-up of Payments |
(i) If one of the Parties, must at any time deduct or withhold from tax or other amount from any sum paid or payable by, or received or receivable from, it shall pay such additional amount as is necessary to ensure that the other Party receives and retains (free from any liabilities other than tax on its own Overall Net Income) a net sum equal to what it would have received and so retained had no such deduction or withholding been required or made.
(ii) If one of the Parties must at any time pay any tax or other amount on, or calculated by reference to, any sum received or receivable by the other Party (except for payment by the other Party of tax on its Overall Net Income), it shall pay or procure the payment of that tax or other amount before any interest or penalty becomes payable.
(iii) Within 30 days after paying any sum which it is required by law to make any deduction or withholding, and within 30 days after the due date of payment of any tax or other amount which it is required by sub-Clause (ii) above to pay, the Party making such payment shall deliver to the other Party evidence satisfactory to the other Party of that deduction, withholding or payment and (where remittance is required) of the remittance thereof to the relevant taxing or other authorities.
(iv) In this Clause “Tax on Overall Income” of a Party shall be construed as reference to tax (other than tax deducted or withheld from any payment) imposed on that person by the jurisdiction in which its principal office is located on (1) the net
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income, profits or gains of that person worldwide or (2) such of its net income, profits or gains as arise in or relate to that jurisdiction.
| 9. | OVERDUE AMOUNTS |
If K&S fails to make payment when due any sum of money payable to AGR MATTHEY (whether at its stated due date, by acceleration or otherwise) under this Agreement then to the fullest extent permitted by law, K&S shall pay interest to AGR MATTHEY on such unpaid sums for each day during the period from and including its due date but excluding the day such amount is received in full by AGR MATTHEY at the percentage rate per annum which is the sum of:
The one month LIBOR (London Interbank Offer Rate) + three percentage points (3.00%).
| 10. | CLAUSE DELETED |
| 11. | K&S DEFAULT |
| 11.1 | Events of Default |
K&S SEA and K&S GHC shall each be deemed to be in default if any of the following Event(s) of Default occur in respect of either or both of them:
| (a) | it fails to make any due delivery of all or part of the Gold liable to be delivered to AGR MATTHEY pursuant to Clause 2.2 read with Clause 7. |
| (b) | it fails to pay on the due date any amount (apart from amounts pursuant to Sub-clause (a) of this Clause), fee, or charge payable by it under this Agreement and does not remedy such Default within a period of five (5) Business Days after notice from AGR MATTHEY. |
| (c) | it fails to perform or observe any of the terms and conditions of this Agreement (other than those referred to in sub-Clauses (a) and (b) of this Clause and Clause 6) or under the Security and where such Default is capable of remedy, does not remedy such Default within a period of five (5) Business Days after written notice of such Default had been given by AGR MATTHEY. |
| (d) | an order is made or an effective resolution is passed for the winding up of either K&S SEA, K&S GHC or Kulicke & ▇▇▇▇▇ Industries, Inc of the USA (“K&S USA”) or if a meeting is convened for the purpose of considering any such resolution and the same is not dismissed or withdrawn within ten (10) Business Days (unless the winding up is for the purpose of amalgamation or reconstruction the terms of which shall previously have been approved by AGR MATTHEY in writing, such approval shall not be unreasonably withheld or delayed). |
| (e) | a provisional liquidator, administrator, receiver or receiver and manager is appointed to any of K&S SEA, K&S GHC or K&S USA in respect of its undertaking, property or assets or any part thereof or if any of them cause a |
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| meeting of its creditors to be summoned for the purpose of considering any resolution for such appointment. |
| (f) | any distress or execution for an amount of USD 250,000.00 (Two Hundred and Fifty Thousand United States Dollars) or more is levied or enforced upon K&S SEA or K&S GHC or is made against the assets or any part thereof of K&S SEA or K&S GHC and such shall not have been paid out, removed or discharged within twenty one (21) Business Days. |
| (g) | K&S SEA or K&S GHC is unable to pay its debts as they fall due or is unable to certify that it is able to pay its debts as they fall due. |
| (h) | a compromise or arrangement is proposed K&S SEA or K&S GHC and its creditors or any class of them or if an application is made to a court for an order summoning a meeting of creditors of K&S SEA or K&S GHC or any class of them. |
| (i) | any present or future indebtedness due from K&S SEA or K&S GHC becomes due and payable prior to the date of maturity thereof as a result of K&S SEA’s or K&S GHC’s default or any such indebtedness is not paid at the maturity thereof or upon the expiration of applicable grace periods thereof or any guarantee or indebtedness or performance bond given by K&S SEA or K&S GHC is not honoured when due and called upon or any mortgage or charge, present or future, and created or assumed by K&S SEA or K&S GHC becomes enforceable. |
| (j) | any representation, warranty or statement made by K&S SEA or K&S GHC herein or in any document given to AGR MATTHEY by K&S SEA or K&S GHC or by K&S USA in connection with or pursuant to this Agreement is not being complied with or shall prove to be untrue or misleading in any material respect. |
| (k) | K&S SEA or K&S GHC fails to comply with AGR MATTHEY’s margin call requirement within five (5) Business Days as per Clause 6 of this Agreement. |
| 11.2 | In the event that K&S SEA, K&S GHC or K&S USA is deemed to be in default pursuant to Clause 11.1: |
| (i) | AGR MATTHEY shall have the absolute irrevocable right to terminate immediately the Sale and Buyback of Fine Metal Facility as well as this entire Agreement, and |
| (ii) | AGR MATTHEY shall have the absolute irrevocable right to charge K&S the price of the Gold Delivered to K&S at that time with reference to the international market spot price for Gold with reference to Reuters as determined by AGR MATTHEY, such price to be payable by K&S within two (2) Business Days from the date of pricing, or AGR MATTHEY is entitled to demand immediate payment by way of calling on the Bank Standby Letter of Credit pursuant to Clause 3.2. |
| 11.3 | K&S shall indemnify AGR MATTHEY and keep AGR MATTHEY indemnified against any losses, damages and/or expenses incurred by AGR MATTHEY arising or |
11
| resulting from K&S’s default as set out in Clause 11.1 excluding such losses, damages and expenses to the extent it arises or results from AGR MATTHEY’s negligent act or omission or wilful misconduct. AGR MATTHEY shall furnish documentary evidence to K&S of such loss or damage. |
| 12. | SET - OFF |
| 12.1 | K&S SEA and K&S GHC hereby authorise AGR MATTHEY at any time after any Event of Default has occurred and so long as it shall be continuing: |
| (a) | to apply any credit balances of metal or currency standing in the Metals Account with AGR MATTHEY, in or towards satisfaction of any sum due to AGR MATTHEY; and |
| (b) | in the names of K&S SEA or K&S GHC and/or AGR MATTHEY to do all such acts and execute all such documents as may be necessary or expedient for any such purpose. |
| 12.2 | Nothing in the foregoing shall, however, be implied to mean that AGR MATTHEY shall be compelled to exercise the right of set-off in an Event of Default. |
| 12.3 | Upon the occurrence and during the continuance of any Event(s) of Default or non-performance by K&S SEA, K&S GHC or K&S USA, AGR MATTHEY is hereby authorised at any time and from time to time, without notice to K&S (any such right to notice being expressly waived by K&S) to set-off and apply all deposits (general or special term of demand, provisional or final) at any time held and other indebtedness at any time owing by AGR MATTHEY to or for the credit or the account of K&S against any and all of the obligations of K&S now or hereafter existing although such obligations may be unmatured. |
In the event of a dispute as to whether an Event of Default or non performance by K&S SEA, K&S GHC or K&S USA has occurred, the Parties shall refer the dispute for resolution in accordance to Clause 18.
| 12.4 | AGR MATTHEY will promptly notify K&S after any set-off and application of proceeds under this Clause 12, provided that the failure to give such notice shall not affect the validity of set-off and application. |
| 12.5 | The rights of AGR MATTHEY under this Clause 12 are in addition to other rights and remedies (including without limitation, other rights of set-off) which AGR MATTHEY may have. |
| 13. | AGR MATTHEY |
| 13.1 | AGR MATTHEY Covenants |
AGR MATTHEY covenants that:
| (1) | it shall deliver Gold within the specifications as stipulated in paragraph 4 of Schedule 2; |
| (2) | it shall take all possible actions to avoid supply delays; |
12
| (3) | it shall hold in stock Gold conforming to the technical specifications as specified in paragraph 4 of Schedule 2. AGR will maintain a level of stock equal to twice the average weekly consumption of the 4 preceding weeks except when K&S deviate from the agreed procedure set out in Schedule 2, Clause 1 and increase their stock requirement. In which case the rate at which AGR will replenish stock supplied to K&S will be calculated as follows: |
Production Rate x Pass Rate – Orders = Stock Replenishment
Where;
“Production Rate” means the rate at which AGR produces Gold of 99.999% purity represented as Kilograms per calendar week;
“Pass Rate” means the rate at which AGR produces Gold conforming to the technical specifications as specified in paragraph 4 of Schedule 2 represented as a percentage;
“Orders” means the orders made by K&S to AGR in accordance with Item 1 of Schedule 2 Working Methodology;
| (4) | in addition to the primary production process, namely Aqua Regia Digest (ARD) it shall maintain a second production process in a separate area of the refinery, namely the Electrolytic Gold Room (EGR). Gold manufactured through the EGR process has previously been tested and qualified by K&S. Provided that the specification of the Gold meets with the K&S specifications AGR MATTHEY may supply from either process. K&S may inspect the AGR MATTHEY facility from time to time to ensure that AGR MATTHEY is maintaining the second production process; |
| (5) | it shall give K&S 90 days notice of any change to the process location, a change to the process or a major equipment change; |
| (6) | in the event that AGR MATTHEY is not able to supply Gold within the specifications and in the time-frame as stipulated in this Agreement, then K&S may source from an alternative supplier. In the event that the cost of Gold sourced from the alternative supplier is of a greater cost to K&S than the cost under the terms of this Agreement, then AGR MATTHEY shall pay to K&S such additional costs within fourteen (14) Business Days of notification from K&S. Prior to any commitment by K&S to purchase Gold from an alternative supplier, K&S must notify AGR MATTHEY in writing of their proposed course of action; |
| (7) | it shall meet the delivery requirements as set out in paragraph 1 (a) and (b) of Schedule 2; |
| (8) | it shall not subcontract the manufacture of Gold supplied to K&S without the prior written consent of K&S, such consent not being unreasonably withheld; |
| (9) | should AGR MATTHEY find itself in a position such that it is unable to meet the supply requirements of K&S, then AGR MATTHEY shall immediately inform K&S. Furthermore, AGR MATTHEY, with the consent of K&S, shall source Gold from an alternative supplier that meets the minimum |
13
| specifications as stated in this Agreement, such consent not to be unreasonably withheld by K&S; and |
| (10) | In the event that there is a dispute over the assay of the Gold supplied, then AGR MATTHEY will arrange for an assay to be carried out by an agreed independent laboratory to determine the correct assay. In the event that the Gold supplied by AGR MATTHEY to K&S is not within the specifications as stipulated in this Agreement as determined by the independent laboratory, then the cost to deliver the Gold to AGR MATTHEY and the cost of the independent laboratory’s assay shall be borne by AGR MATTHEY. If determined by the independent laboratory that the Gold is within specification then K&S will be responsible for the cost to deliver the Gold to AGR MATTHEY and the cost of the independent laboratory’s assay. |
| 13.2 | AGR MATTHEY shall indemnify K&S and keep K&S indemnified against any losses, damages and/or expenses incurred by K&S arising or resulting from AGR MATTHEY’s breach of any Covenant(s) set out in Clause 13.1(1) to (10) excluding such losses, damages and expenses to the extent it arises or results from K&S’s negligent act or omission or wilful misconduct. K&S shall furnish documentary evidence to AGR MATTHEY of such loss or damage. |
| 13.3 | Termination by K&S |
Having followed the process of Dispute Resolution in accordance with Clause 16 and subject to the outcome of the process of Dispute Resolution, K&S may terminate this Agreement with immediate effect by giving notice to AGR MATTHEY if:
| (a) | the Panel determines that AGR MATTHEY has breached any provision of this Agreement and fails to remedy the breach within 5 Business Days after receiving notice requiring it to do so; |
| (b) | the Panel determines that AGR MATTHEY has breached a material provision of this Agreement where that breach is not capable of remedy. For the avoidance of doubt, clauses 14.1(1) to (10) are material provisions; or |
| (c) | the Panel determines that any event referred to in clause 14.4 happens to AGR MATTHEY. |
| 13.4 | Notification of events |
AGR MATTHEY must notify K&S immediately if:
| (a) | there is any change in the direct or indirect beneficial ownership or control of AGR MATTHEY; |
| (b) | it disposes of the whole or any part of its assets, operations or business other than in the ordinary course of business; |
| (c) | it ceases to carry on business; |
| (d) | it ceases to be able to pay its debts as they become due; |
| (e) | any step is taken by a mortgagee to take possession or dispose of the whole or any part of its assets, operations or business; |
14
| (f) | any step is taken to enter into any arrangement between AGR MATTHEY and its creditors; |
| (g) | any step is taken to appoint a receiver, a receiver and manager, a trustee in bankruptcy, a liquidator, a provisional liquidator, an administrator or other like person of the whole or any part of its assets or business; or |
| (h) | where AGR MATTHEY is a partnership, any step is taken to dissolve that partnership. |
| 13.5 | Accrued rights and remedies |
Termination of this Agreement under this clause 14 or under clause 15 does not affect any accrued rights or remedies of any Party.
| 14 | FORCE MAJEURE |
| 14.1 | Definition |
Force Majeure Event affecting a person means anything outside that Party’s reasonable control including, but not limited to, fire, storm, flood, earthquake, explosion, war, invasion, rebellion, sabotage, epidemic, labour dispute, labour shortage, failure or delay in transportation, and act or omission (including laws, regulations, disapprovals or failures to approve) of any third person (including, but not limited to, subcontractors, customers, governments or government agencies).
| 14.2 | Occurrence of Force Majeure Event |
If a Force Majeure Event affecting a Party precludes that Party (Precluded Party) partially or wholly from complying with its obligations (except its Security and payment obligations) under this Agreement then:
| (a) | as soon as reasonably practicable after that Force Majeure Event arises, the Precluded Party must notify the other Party of: |
| (i) | the Force Majeure Event; |
| (ii) | which obligations the Precluded Party is precluded from performing (Affected Obligations); |
| (iii) | the extent to which the Force Majeure Event precludes the Precluded Party from performing the Affected Obligations (Precluded Extent); and |
| (iv) | the expected duration of the delay arising directly out of the Force Majeure Event; |
| (b) | the Precluded Party’s obligation to perform the Affected Obligations will, to the Precluded Extent, be suspended for the duration of the actual delay arising directly out of the Force Majeure Event (Actual Delay); and |
| (c) | the other Party’s obligations to perform any obligations dependent on the Affected Obligations will be suspended until the Precluded Party resumes performance. |
15
| 14.3 | Termination |
If the Actual Delay continues for more than 30 days, the other Party may terminate this Agreement immediately by giving notice to the Precluded Party.
| 14.4 | Consequences of termination |
If a Party terminates this Agreement under clause 15.3:
| (a) | the rights and obligations of the Parties under this Agreement (including, but not limited to, any licence) cease; and |
| (b) | any accrued rights or remedies of a Party are not affected. |
| 15. | K&S |
| 15.1 | K&S COVENANTS |
K&S covenants that during the period of time that this Agreement is in effect it shall provide notice to AGR MATTHEY in the event that K&S intends to receive supplies of Gold from a party other than AGR MATTHEY, subject to clause 13.1 (6).
| 16. | DISPUTE RESOLUTION |
| 16.1 | Reference to a Panel |
| (a) | If any Dispute arises between the Parties, either Party may, by notice in writing to the other Party to the Dispute (the “Referral Notice”), refer the dispute to a panel constituted under clause 16.1(b) (the “Panel”) who will meet to discuss the Dispute (with any appropriate technical experts and/or an independent party) and endeavour to resolve the Dispute, within 10 Business Days of their first meeting (“Resolution Period”). |
| (b) | The Panel will consist of a director or the chief executive officer or chairman (as the relevant Party may decide) of each of the Parties. |
| 16.2 | Condition precedent to litigation |
A Party must not commence any proceedings in any court in respect of any other Dispute which is referable to a Panel under clause 16.1 unless the Dispute has first been referred to a Panel and the Panel does not meet or resolve the dispute under clause 16.1 before the expiry of the relevant Resolution Period.
| 16.3 | Interlocutory |
Nothing in clause 16.2 prevents a party from commencing proceedings in any court where the proceedings are required to obtain urgent interlocutory relief.
| 16.4 | Performance of obligations pending resolution of Dispute |
Prior to the resolution of a Dispute, the Parties must continue to perform their obligations under this Agreement insofar as those obligations are not the subject matter of the Dispute.
16
| 16.5 | Extension of time |
In the case of a Dispute which is referable to a Panel under clause 16.1, any time periods specified in this Agreement in relation to the subject matter of the Dispute will be extended by the time between the date on which the Referral Notice is delivered (or deemed to be delivered) and the sooner of the date the Panel determines the Dispute; and the date the Resolution Period expires.
| 17. | MISCELLANEOUS |
| 17.1 | Entire Agreement |
This Agreement constitutes the entire Agreement between AGR MATTHEY and K&S with respect to the subject matter hereof and supersedes and extinguishes all prior agreements and understandings between AGR MATTHEY and K&S with respect to the matters covered herein.
| 17.2 | Amendments |
This Agreement may not be amended, modified or supplemented except by a written instrument executed by persons duly authorised on behalf of AGR MATTHEY and K&S.
| 17.3 | Waivers and Remedies Cumulative |
| (a) | No failure to exercise and no delay in exercising any right, power or remedy under this Agreement or any Bank Standby Letter of Credit by AGR MATTHEY or K&S shall operate as a waiver, nor shall any single or partial exercise of any right, power or remedy preclude any other or further exercise of that or any other right, power or remedy. |
| (b) | The rights, powers and remedies provided to AGR MATTHEY or K&S under this Agreement are cumulative and are not exclusive of any rights, powers or remedies provided by law. |
| 17.4 | Assignment |
| 17.4.1 | Upon providing AGR MATTHEY with evidence that the assignee has the financial ability to honour the obligations contained within this Agreement, K&S may assign, transfer or charge all or any of its rights or obligations under this Agreement subject to K&S first obtaining AGR MATTHEY’s prior written consent which shall not be unreasonably withheld or delayed. Not withstanding the above, AGR MATTHEY expressly consents to the assignment by K&S SEA and K&S GHC of all or any of their respective rights under the Agreement to any financier providing Security to AGR MATTHEY. |
| 17.4.2 | Upon providing K&S with evidence that the assignee has the financial ability to honour the obligations contained within this Agreement AGR MATTHEY may assign, transfer or charge all or any of its rights or obligations under this Agreement subject to AGR MATTHEY first obtaining K&S’s prior written consent which shall not be unreasonably withheld or delayed. |
| 17.4.3 | This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and assigns. |
17
| 17.5 | Notices |
All notices, requests, demands, consents, approvals, agreements or other communications to or by a party to this Agreement shall:
| (a) | be in writing addressed to the address of the recipient shown in Item 6 of Schedule 1 or such other address as it may have notified the senders; |
| (b) | be signed by the sender; |
| (c) | be deemed to be duly given or made (in the case of delivery in person or by post or by facsimile transmission) when delivered to the recipient at such address, but if such delivery or receipt is later than 5.00pm (local time) on a day which business is generally carried on in the place to which such communication is sent, it shall be deemed to have been duly given or made at the commencement of business on the next such day in that place. |
| 17.5A | Deemed notice |
Any notice under this Agreement to be given to K&S shall be deemed to have been duly given if provided to K&S GHC in accordance with the requirements of Clause 17.5.
| 17.6 | Maintenance of Records |
| (a) | K&S hereby request that AGR MATTHEY establishes/maintains a Metals Account. |
| (b) | AGR MATTHEY shall record all transactions relating to the Delivered Gold in the Metals Account. The balance of the Metals Account (Supply Balance) shall reflect the quantum of Gold Delivered. |
| (c) | AGR MATTHEY shall provide a statement detailing all debits and credits to the Metals Account on a monthly basis or upon the request of K&S. |
| 17.7 | Governing Law and Jurisdiction |
This Agreement is governed by the laws of Western Australia and K&S submits to the non-exclusive jurisdiction of the courts of Western Australia.
| 17.8 | Counterparts |
This Agreement may be executed in any number of counterparts. All such counterparts, when signed by the respective Parties, taken together shall be deemed to constitute one instrument.
18
IN WITNESS WHEROF the Parties have duly executed this Agreement on the date of first above mentioned.
| } | ||||
| AGR MATTHEY | } | |||
| } | ||||
| Director | /s/ ▇▇▇▇▇ Bath | |||
| Director / Secretary | /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| THE COMMON SEAL of | } | |||
| KULICKE & ▇▇▇▇▇ (SEA) PTE LTD | } | |||
| was hereunto affixed in | } | |||
| accordance with its Articles of | } | |||
| Association in the presence of | } | |||
| Director | /s/ Ho ▇▇▇▇ ▇▇▇▇▇ | |||
| Secretary | /s/ Keloth ▇▇▇ ▇▇▇▇▇ | |||
| THE COMMON SEAL of | } | |||
| KULICKE & ▇▇▇▇▇ GLOBAL HOLDING | } | |||
| CORPORATION | } | [SEAL] | ||
| was hereunto affixed in | } | |||
| accordance with its Articles of | } | |||
| Association in the presence of | } | |||
| Authorised officer | /s/ Ho ▇▇▇▇ ▇▇▇▇▇ | |||
| Secretary | /s/ ▇▇▇▇ ▇▇▇▇▇▇ | |||
19
SCHEDULE 1
This schedule is supplemental to the Sale and Buyback of Fine Metal Agreement dated 12th of June 2006 between AGR MATTHEY and KULICKE & ▇▇▇▇▇ (SEA) PTE LTD and KULICKE & ▇▇▇▇▇ GLOBAL HOLDING CORPORATION and constitutes a part of that Agreement and constitutes a Contract between them.
Date of signature of Schedule:
| Item 1 | Gold Delivered | 95% of the value of the Guaranteed Sum. | ||
| Current value of Security being USD20 million. | ||||
| Item 2 | Period of Agreement | |||
| Commencement Date: | As per date of execution of the Agreement. | |||
| Initial Date: | The date falling 24 months after the date of this Agreement. The Agreement may not be terminated by notice within the period from the Commencement Date to the Initial Date. After the Initial Date, the prices and terms of this Agreement may be varied by mutual agreement and the Agreement may be terminated by either party by giving six- months’ written notice to the other party. | |||
| Item 3 | Gold Supply Delivery Fee: | Gold Rate to be determined by AGR MATTHEY on the basis set out in clause 5.1(b).
At the election of K&S and with the consent of AGR MATTHEY, K&S may fix the Gold Rate for a pre-elected period. | ||
| Item 4 | Refining Charges | For Gold of up to 99.99% Assay: ▇▇▇▇▇ ▇▇▇▇▇
For Gold of 99.99% and over 99.99% Assay: ▇▇▇▇▇ ▇▇▇▇▇ | ||
| Item 5 | Other Fees | |||
| Annual Australian Manufacturing Plant Production Fee: XXXXX per ▇▇▇▇ Ounce (minimum shipment size 200 kgs). For shipment size of 400 Kgs or greater, AGR shall make a monthly refund to XXXXX per ▇▇▇▇ Ounce. | ||||
(All fees and charges excludes any Singapore taxes, levies or imposts payable by K&S)
20
| Item 6 | Address for Service: | AGR MATTHEY | ||
| Horrie ▇▇▇▇▇▇ Drive ▇▇▇▇▇▇▇ WESTERN ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | ||||
| Facsimile: (▇▇▇) ▇▇▇▇ ▇▇▇▇ | ||||
| AND | ||||
| Kulicke & ▇▇▇▇▇ Global Holding Corporation and Kulicke & ▇▇▇▇▇ (SEA) Pte Ltd: Block ▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇ #▇▇-▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||
| Facsimile: 65 6880 9662 | ||||
| Item 7 | Delivery Point: | Kulicke & ▇▇▇▇▇ Global Holding Corporation and Kulicke & ▇▇▇▇▇ (SEA) Pte Ltd Block ▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇ #▇▇-▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Signed for and on behalf of | ||||||||
| AGR MATTHEY |
||||||||
| By | ▇▇▇▇▇ Bath, CEO | /s/ ▇▇▇▇▇ Bath | ||||||
| (Name & Position) | (Signature) | |||||||
| Signed for and on behalf of | ||||||||
| KULICKE & ▇▇▇▇▇ (SEA) PTE LTD | ||||||||
| By | Ho ▇▇▇▇ ▇▇▇▇▇, Director | /s/ Ho ▇▇▇▇ ▇▇▇▇▇ | ||||||
| (Name & Position) | (Signature) | |||||||
| Signed for and on behalf of | ||||||||
| KULICKE & ▇▇▇▇▇ GLOBAL HOLDING CORPORATION | ||||||||
| By | Ho ▇▇▇▇ ▇▇▇▇▇, Authorised Officer | /s/ Ho ▇▇▇▇ ▇▇▇▇▇ | ||||||
| (Name & Position) | (Signature) | |||||||
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SCHEDULE 2
WORKING METHODOLOGY
| 1. | Gold Supply |
K&S shall supply to AGR MATTHEY:
| (a) | On a weekly basis, an estimate for the quantity of Gold that K&S will require to be dispatched in fourteen calendar days, and |
| (b) | Three Business Days prior to the required dispatch date, an order for the quantity of Gold that K&S will require to be dispatched and K&S shall ensure that this order is within a 20% tolerance of the estimate provided in point (a) above. Where orders are placed by K&S outside of the 20% tolerance of the estimate provided in point (a) above then AGR shall utilise Gold held in stock to meet the order and the stock used shall be replenished at the rate as specified in Clause 13.1 (3) |
| 2. | Gold Pricing |
Spot Pricing
During normal business hours, an authorised representative of K&S (as listed in Appendix 1) may contact the Treasury department of AGR MATTHEY by telephone and request the current USD Gold selling price. AGR MATTHEY will provide K&S with their current selling price (being based on the Reuters Gold offer price at that time) and if acceptable to K&S the Parties will confirm the transaction. AGR MATTHEY will send a fax copy of the deal confirmation (setting out the selling price and the quantity of Gold Delivered to be purchased by K&S ) to K&S and K&S shall immediately sign and return the deal confirmation to AGR MATTHEY. K&S shall settle the amount due to AGR MATTHEY on the following second Business Day.
LBMA Fix Pricing
Prior to the end of the Business Day in Perth, an authorised representative of K&S (as listed in Appendix 1) may contact the Treasury department of AGR MATTHEY by telephone and place an order to buy Gold on either the Gold AM or PM Fix for that day. Transactions conducted on the Gold AM or PM Fix shall attract a premium of USD 0.25 per ▇▇▇▇ Ounce. At the commencement of business on the following Business Day AGR MATTHEY will send a fax copy of the deal confirmation (setting out the selling price and the quantity of Gold Delivered to be purchased by K&S) to K&S and K&S shall immediately sign and return the deal confirmation to AGR MATTHEY. K&S shall settle the amount due to AGR MATTHEY on the second Business Day following the date of the Gold AM or PM Fix.
| 3. | Record keeping |
At the end of each month, K&S will provide AGR MATTHEY with a confirmation detailing the volume of Gold Delivered to K&S at the close of business on the last Business Day of the month (in Toz)
AGR MATTHEY shall maintain a Metals Account in the name of K&S with separate sub accounts for K&S SEA and K&S GHC.
At the end of each month, AGR MATTHEY will provide K&S with:
| (a) | a statement showing the daily balance of Gold Delivered to K&S (in Toz) |
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| (b) | an invoice and statement detailing the Annual Australian Manufacturing Plant Production Supply Fees due, such charges to be paid by K&S within fourteen Business Days of the invoice date |
| (c) | a summary of transactions conducted during the month |
| 4. | Specification of Gold supplied by AGR MATTHEY to K&S |
Maximum allowable limits of impurities to meet K&S specification are listed below.
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ | |
| ▇▇▇▇▇ |
▇▇▇▇▇ |
XXXXX
Calculate Fine Gold content by difference.
Fine Gold Content = 100.0000% - (Total Impurities mg/kg/10,000)
| 5. | Delivery of Gold by K&S to AGR MATTHEY |
At the cost of K&S, K&S may deliver Gold in the form of wire, granule, gold scrap or bar to AGR MATTHEY’s Perth refinery. AGR MATTHEY will charge K&S Refining Charges as stipulated in Item 4 of Schedule 1. Within two Business Days of delivering such Gold to AGR MATTHEY’s Perth refinery, AGR MATTHEY will provide K&S with an Assay of the Gold delivered and simultaneously credit K&S’s Metals Account held with AGR MATTHEY thereby reducing the Gold Delivered to K&S.
23
Appendix 1
LIST OF AUTHORISED K&S EMPLOYEES
XXXXXX
Appendix 2
LIST OF AUTHORISED AGR MATTHEY EMPLOYEES
1. For a change to this Sale and Buyback of Fine Metal Agreement including any change to Security or the coordinates of AGR Matthey’s bank account (currently being with ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ New York XXXXX )
| Delegated Persons (both to sign): | ||||
| ▇▇▇▇▇ |
▇▇▇▇▇ |
XXXXX
TABLE OF CONTENTS
| 1. |
DEFINITIONS AND INTERPRETATION |
1 | ||
| 2. |
SALE AND BUYBACK OF FINE METAL FACILITY |
4 | ||
| 3. |
COLLATERAL SECURITY |
5 | ||
| 4. |
CONDITIONS PRECEDENT |
6 | ||
| 5. |
PURCHASE |
7 | ||
| 6. |
MARGIN PAYMENT |
8 | ||
| 7. |
BUYBACK |
9 | ||
| 8. |
WITHHOLDING |
10 | ||
| 9. |
OVERDUE AMOUNTS |
11 | ||
| 10. |
INSURANCE |
10 | ||
| 11. |
K&S DEFAULT |
11 | ||
| 12. |
SET-OFF |
13 | ||
| 13. |
AGR MATTHEY |
13 | ||
| 14. |
FORCE MAJEURE |
16 | ||
| 15. |
K&S |
17 | ||
| 16. |
DISPUTE RESOLUTION |
17 | ||
| 17. |
MISCELLANEOUS |
18 | ||
| SCHEDULE 1 |
21 | |||
| SCHEDULE 2 |
23 | |||