April 20, 2009
Silver Consignment/Purchase
Agreement
We are pleased to confirm
that, Mitsubishi International Corporation ("MIC") will be prepared
to deliver on an uncommitted basis, from time to time, silver upon
consignment (the "Consignment(s)") to _________ (the "Consignee"
and together with MIC, "the Parties") subject to availability and
to the terms and conditions outlined herein and further subject to
MIC's absolute discretion not to deliver silver if it so
decides.
Definitions
. For the purposes of this
Agreement:
"Dollar Value" with respect to
silver shall mean, on the day of determination, the value in U.S.
dollars of one troy ounce of silver determined by the current Handy
& Harmon (H&H) price for AMI Doduco Inc. and AMI Doduco
(Nexico) S. de R.L. de C.V. or the current London Fix price for AMI
Doduco Espana, S.L. and AMI Doduco GmbH.
1.
Availability . Silver delivered and held on consignment
hereunder from time to time by the Consignee shall not at any time
have a Dollar Value which exceeds $_____________ U.S. (the "Maximum
Dollar Limit").
2. Restoration
of Maximum Dollar Limit . If at any time the aggregate Dollar
Value of silver held on consignment hereunder by the Consignee
should exceed the Maximum Dollar Limit, then MIC may at its option,
by telex or telecopied notice to the Consignee, require that by the
end of the Business Day immediately following the day upon which
such telex or telecopied notice is given, the Consignee
either:
(i) re-deliver to MIC a portion of the
silver held on consignment hereunder sufficient to reduce the
Dollar Value of the silver continued to be held on consignment
hereunder to an amount no greater than the Maximum Dollar
Limit;
(ii)
purchase from MIC, at the applicable H&H Noon price plus the
all accrued and unpaid Consignment Fees (defined below) relating to
such quantity of silver, a quantity of the silver held on
consignment hereunder sufficient to reduce the Dollar Value of the
silver held on consignment hereunder to an amount no greater than
the Maximum Dollar Limit.;
(iii) deposit, by wire transfer, funds equal
to the Dollar Value of the silver held on consignment hereunder in
excess of the Maximum Dollar Limit (the "Excess Funds") into a
margin account established with the MIC, which will pay interest to
the Consignee at a rate based on the average of the federal funds
rate during the period from the date of the first deposit of the
Excess Funds to the date of the withdrawal of the Excess Funds.
Upon the reduction of the aggregate value of the Dollar Value of
the silver held on consignment hereunder in excess of the Maximum
Dollar Limit, MIC shall immediately return the Excess Funds to the
Consignee; or
(iv)
provide to MIC a standby irrevocable letter of credit issued by a
bank agreed by MIC, which shall set forth the amount equal to the
Dollar Value of the silver held on consignment hereunder in excess
of the Maximum Dollar Limit.
3. Quality
. Silver delivered to the Consignee and returned to MIC shall be in
London Good Delivery bar form and of a minimum fineness of .9999,
unless otherwise mutually agreed to in advance of
delivery.
- Orders . Requests for delivery of silver will be
made by an authorized representative of the Consignee to an
authorized officer of MIC by telephone, telex or telecopied
transmission. Each request will indicate the quantity and quality
of the silver to be delivered, the delivery location, the date on
which the delivery is requested to be made and the required term of
the Consignment, which term may be for up to twelve (12) months or
any other lesser term which is mutually acceptable to the Parties.
The annual percentage consigned rate to apply to a Consignment will
be inform the Consignee by MIC at the time of such request and will
be agreed by the Consignee and MIC. Any silver delivered shall be
of the quality set forth in paragraph 3. All telephone requests and
the annual percentage consigned rate shall be confirmed in writing
to MIC within three (3) Business Days of such agreed.
5. Deliveries
by MIC .
(a) If MIC has agreed to make a
requested delivery of silver, it will arrange for the delivery of
the silver to a location acceptable to both Parties and on the date
agreed upon for delivery. MIC will bear the cost of such delivery
and bear all risk of loss or damage to the silver until it has been
delivered to the agreed upon location at which time such risk shall
pass to the Consignee. Such delivery shall be accompanied by a
delivery statement provided by MIC setting out the quantity and
quality of silver delivered.
(b) If on receipt of the silver it is
determined by the Consignee that the silver delivered by MIC to the
Consignee is of a different quantity and/or quality than is set out
in the delivery statement, the Consignee shall forthwith give a
written notice of such discrepancy to MIC and MIC and the
Consignee, as the case may be, shall make the appropriate
adjustments. Such notice of the discrepancy shall be notified by
the Consignee within on three (3) Business Days immediately after
the receipt of the silver.
Business Day . For the purposes of this Agreement,
"Business Day" shall mean any day, other than a Saturday, a Sunday
or a day that banks are lawfully closed for business in New York
City, New York, or in the case of any location to which silver is
to be delivered or received, a day that transactions cannot be
carried out at such location.
6. Return by
the Consignee . Upon the scheduled or earlier termination of
the Consignment, the Consignee shall immediately return at the
Consignee ' s cost, risk
and expense, the silver consigned hereunder or silver of equivalent
quantity and quality to the same location or buy or transfer from
another lessor or extend/renew lease.
7. Consignment
Fee . Consignment Fees equals (i) Dollar Value of the silver
making up the applicable Consignment on the date of the
confirmation by MIC, times (ii)the annual percentage consigned rate
agreed upon by the Consignee and MIC at the time of each
Consignment request or request for renewal, which rate shall remain
in effect for the term of the applicable Consignment, times
(iii)the number of troy ounces of the silver being consigned, times
(iv)the number of days the silver is being consigned to the
Consignee, which shall include the date of delivery but not the
date of return, divided by (v) three hundred sixty (360) days. The
Consignee will pay monthly and on the last day of a Consignment
term, to MIC as a consignment fee in respect of the applicable
Consignment an amount which shall be calculated by multiplying (i)
Dollar Value of the silver making up the applicable Consignment on
the date of the confirmation by MIC, times (ii)the annual
percentage consigned rate agreed upon by the Consignee and MIC at
the time of each Consignment request or request for renewal, which
rate shall remain in effect for the term of the applicable
Consignment, times (iii)the number of troy ounces of the silver
being consigned, times (iv)the number of days the silver was
consigned to the Consignee during the month in question divided by
three hundred sixty (360) days.
8. Title
.
(a) Title to the silver delivered by
MIC and held by the Consignee on consignment for MIC will remain
with MIC and will not pass to the Consignee until such time as the
silver is purchased by the Consignee as provided for in paragraphs
11, 12 and 8(b) hereof. In the event that only a portion of a
Consignment is purchased, then title as pertains to that portion
only will transfer to the Consignee.
(b) Title to the silver
purchased by the Consignee as provided for in paragraphs 11 and 12
hereof will pass to the Consignee upon receipt by MIC of all funds
due to it from the Consignee in payment for the silver
purchased.
9.
Commingling . The Consignee and MIC agree that the Consignee
shall be permitted, in the ordinary course of its business as now
being conducted, to commingle the silver held on consignment for
MIC with any other silver or silver containing alloys being held by
the Consignee on consignment, safekeeping, or trust, or with silver
or silver containing alloys owned by the Consignee.
10. Safekeeping .
Until such time as the silver received from MIC has been returned
to MIC, or purchased by the Consignee, as hereinafter provided, the
Consignee will afford the silver no less safekeeping protection
than it affords silver held for its own account. The Consignee will
at the Consignee ' s cost
arrange and maintain insurance coverage on the silver held on
consignment for MIC by the Consignee in such amounts and covering
such risks as is usually carried by companies engaged in a similar
business and the Consignee shall, upon request, deliver to MIC a
copy of all policies for such insurance. The Consignee covenants
that it will not dispose of any interest in silver consigned
hereunder (including by way of sub-consignment) to any third party.
Consignee shall permit agents or representatives of MIC to inspect,
during normal business hours and upon five (5) business days
notice, or at its own discretion should Lessee be in Default, any
silver consigned to Consignee or silver containing allows being
held by the Consignee on consignment, safekeeping, or trust, or
with silver or silver containing alloys owned by the Consignee
and/or the Consignee's books and records related to such silver or
alloys.
11. Purchase
Request . If the Consignee wishes to purchase part or all of
the silver held hereunder on consignment for MIC, an authorized
representative of the Consignee will at any time during the
consigned period make a request to an authorized officer of MIC by
telephone, telex or telecopied transmission stating the quantity
and quality of silver to be purchased and the intended date of the
purchase. MIC will send Consignee written confirmation of all
telephone requests including the purchase price, which is an amount
equal to the Dollar Value as of the purchase date for the quantity
of silver to be purchased plus all accrued and unpaid Consignment
Fees relating to such quantity of silver (the "Purchase Price") for
such silver and if the Consignee agreed the Purchase Price,
Consignee shall send MIC written acknowledgement of such
confirmation within five (5) Business Days of receipt.
12. Purchase. Upon
MIC ' s receipt of the
written acknowledgement for such silver so purchased, in good
funds, MIC shall sell, transfer and convey good title to such
silver so purchased to the Consignee. Each such sale shall be
effective upon MIC ' s
full receipt of such Purchase Price. .
13. Security Interest
.
(a)
Both parties acknowledge that this is a true Consignment in which
MIC retains title and settlement by return of the silver consigned
hereunder is contemplated. Notwithstanding the foregoing, the
Consignee hereby grants MIC a security interest in all silver
delivered pursuant to this Agreement in any physical or chemical
state and any proceeds of sale, disposition, or destruction thereof
until all required silver is returned to MIC. MIC is hereby
authorized to file any and all appropriate UCC financing
statements, with or without the Consignee having executed such
filing. The Consignee shall execute all appropriate documents
reasonably required by MIC to protect MIC ' s interests in the silver. The Consignee
shall take all reasonable actions not to prejudice MIC '
s security interest in, and
shall take such other actions as MIC may reasonably require to
protect, the Consignee in the Consignee ' s possession.
(b)
If sufficient credit has not been established with MIC '
s credit department, MIC may, in
addition to the security interest granted by the Consignee under
the paragraph 13(a), require security, either in the form of
prepayment or a standby irrevocable bank letter of credit, or any
other form of security, as MIC may determine in its sole and
unencumbered discretion. Any letter of credit must be opened in a
format and by a bank acceptable to MIC.
(c)
Further, as continuing collateral security for the present and
future indebtedness and liability of the Consignee to MIC
hereunder, the Guarantor [the Parent of the Consignee] shall
deliver in favor of MIC an unconditional guarantee of all present
and future indebtedness and liability incurred by the Consignee to
MIC under this Agreement. This Agreement shall not become effective
until MIC shall receive such guaranty agreement ( "
Guaranty Agreement "
), in form and content
satisfactory to MIC.
(d)
If MIC ' s requirements as
to security are not satisfied within the time limits specified by
MIC, MIC shall have the option of canceling the Consignment and/or
proceeding against the Consignee for damages occasioned by the
Consignee ' s failure to
perform. MIC hereby reserves the right in its absolute discretion
to revise the credit terms applicable to the Consignee, and to call
for such further security as MIC deems necessary.
14. Invoices
.
(a) In the case of a Consignment, MIC
will furnish the Consignee, on the following 22nd day of each month
for the Consignment Fee of the applicable month and on the last day
of a Consignment term for the Consignment Fee of the last month of
such Consignment Term and the preceding month of such last month,
with a statement of the quantity and quali
