Terms and Conditions of Service
Last Updated: November 23, 2022
The legal relations between the Issuer and the holders are governed by the following Terms and Conditions of Service. Therefore, the Issuer highly recommends that any potential holder read the Terms and Conditions of Service carefully By acquiring the SST, the holder agrees to comply with and accepts these Terms and Conditions of Service; the holder declares that the holder is entitled to purchase SSTs and that there are no grounds for exclusion in his or her person.
The Terms and Conditions of Service for the SST are as follows:
1. Art. 1 Silver Stream Token
1.1. The Issuer, LODE (Switzerland) AG, Herisu, Switzerland, registered under CHE386.915.113 at the commercial register Appenzell Ausserrhoden, (hereinafter the "Issuer"), issues SSTs based on the resolution of the Issuer’s Board of Directors dated December 15th, 2022. The SST holder is the “holder”
1.2. The SST is a yield bearing token that provides a regular yield every 4-8 weeks based on the performance of the LODE (Switzerland) AG ore refining pipeline located in Mexico, hereinafter the “Ore-Silver Cycle” or OSC.
1.3. Each SST represents an obligation of the Issuer No security of any kind is, or will at any time be, provided by the Issuer or any other person securing the benefits of the holders. The SST establishes claims (constitutes unsecured obligations) against the Issuer which rank:
● subordinated to all obligations of the Issuer;
● subordinated to all subordinated obligations of the Issuer pursuant;
● pari passu among themselves;
● subordinated to all subordinated obligations of the Issuer required to be preferred by mandatory provisions of law; and
● subordinated to all subordinated dated obligations of the Issuer, unless such obligations are expressed to rank pari passu with, or junior to, the SST.
1.4. The SST benefits are represented by a SST, which is an ERC-20 Token on the Avalanche (AVAX) Blockchain. Each holder of such a SST is granted access to the
rights specified in these Terms and Conditions of Service (under the conditions of Art. 3).
1.5. The SST holder may not set off any claims arising under the SST against any claims that the Issuer may have against each of them. The Issuer may not set off any claims it may have against any SST holder against any of its obligations.
1.6. The SST holder has no involvement, attendance or voting rights in any corporate body (organ) or executive body of the Issuer, instead, the SST grants rights to the SST holder.
1.7. The Board of Directors of the Issuer has the sole responsibility of the Issuer's management, the SST holders have no right to manage the Issuer
1.8. A SST holder is not affected by a merger or conversion of the Issuer or by a change in the Issuer’s capital.
1.9. The SST is not and will not be issued as a certificate on paper.
1.10. The Issuer is entitled to issue a max supply of seven million (7,000,000) SSTs at its own discretion.
2. Art. 2 Subordination
2.1. The claims of SST holders, in particular, to receive silver streams (Art. 3) and to receive Repayment (Art. 5), are subordinated. This means that all claims of the SST holders rank behind all other creditors of the Issuer who have not declared a subordination and are therefore privileged. This also applies in the event of the liquidation of the Issuer
2.2. Any assertion of claims from the SST are excluded, as long as, to the extent that the fulfillment of the claims would give rise to a reason for the opening of insolvency proceedings against the assets of the Issuer.
2.3. Any fulfillment of claims (e.g. participation in silver streams) must only be made if the Issuer is in a position to do so from future profits, from a liquidation surplus, or from other - free - assets.
2.4. The SST holder claims (especially those participating in receiving silver streams) are not waived and those claims remain, even if and, to the extent that, the
qualified subordination does not permit their fulfillment at a certain point in time.
3. Art. 3 Distributions and benefits
3.1. The SSTs are subject to semi-regular silver stream distributions. There is a fixed rate of 12% per year, calculated daily and paid out periodically at the completion of each Ore-Silver Cycle. SSTs in aggregate will also be paid 10% of the gross profits produced by the Ore-Silver Cycle that LODE (Switzerland) AG operates in Mexico. Both the fixed rate and the profit sharing will be paid together in the form of AGX Coins Coins, using the prevailing market price to convert USD amounts into AGX Coins. The AGX Coins will be paid to the holder’s designated Avalanche wallet address within 20 days of completing an Ore-Silver Cycle.
3.2. The Issuer will pay the silver streams in AGX Coins Coins, which are redeemable for the respective amount of physical silver, to all SST holders that:
● have an account on the internet platform of the Issuer and
● have successfully completed the KYC/AML procedure of the Issuer
3.3. The silver stream profit-sharing payments are calculated as 10% of the gross profit of an Ore-Silver Cycle. Gross Profit is calculated by subtracting the gross expenses from the gross proceeds of the cycle. The fixed rate will be calculated at a rate of 0.032876% per day elapsed since the last distribution. The profit sharing amount and the fixed rate amount will be summed together as the “distribution amount” and will be distributed to all the SST holders that fulfill the foregoing requirements set out in 3.2.
3.4. Payments of the silver streams are planned and intended by the Issuer and are intended to be based on the revenue and profit of this specific portion of the Issuer’s business.
3.5. If there is an adverse event and the SST is unable to operate for a period of time, the issuer may suspend the fixed rate accumulation until the event has been concluded and operations are able to continue again. Adverse events include but are not limited to major weather events, worker strikes, embargos, cartel activity, war, terrorist attacks, disease outbreaks, major earthquakes, forest fires, etc.
4. Art. 4 Lode Switzerland’s Option to Purchase
Bullion
4.1. The issuer has the option to purchase silver or gold bullion from itself at 5% under spot or at cost, whichever is greater
4.2. The issuer agrees that this option precludes the purchase of bullion at a loss.
4.3. The issuer has one full business day after each batch of bullion is refined to make use of this option, otherwise, the option is canceled for the specific batch of bullion.
5. Art. 5 Term, Termination and Repayment
5.1. The SSTs have no expiration date.
5.2. The par value of each SST is $1.00 USDC.
5.3. The SST issuer has the right to call the SST(s) for redemption at a rate of par value + 2%. The right of the SST holder and the Issuer to extraordinary termination for good cause remains unaffected.
5.4. On or after January 1st, 2024, the SST holder has the right to put the SST(s) for redemption at a rate of par value. The Issuer will redeem them at the completion of the next OSC, immediately after all SST’s are paid their distribution. At the request of the holder, the redemption can be paid in an equivalent value of AGX Coins instead of USDC.
5.5. Subject to the Competent Supervisory Authority’s consent and applicable laws, the Issuer or any of its subsidiaries may at any time purchase SST(s) in the open market or otherwise and at any price. Such acquisitions may be canceled, held or resold.
5.6. A Gross-up Event will occur if an opinion of a recognized independent tax adviser has been delivered to the Paying Agent, stating that the Issuer has or will become obliged to pay additional amounts on the SST(s) as a result of any change in, or amendment to, the laws or regulations of the Issuer's country of domicile for tax purposes or any political subdivision or any authority thereof or therein having power to tax, or as a result of any change in the official interpretation or application of any such laws or regulations, which change or amendment becomes effective on or after the date of issue of the SST(s), and that obligation cannot be avoided by the protocol taking such reasonable measures it (acting in good faith) deems appropriate.
5.7. A Tax Event will occur if an opinion of a recognized independent tax counsel has been delivered to the Paying Agent, stating that, as a result of any change in, or amendment to, the laws or regulations of the Issuer's country of domicile for tax purposes or any political subdivision or any authority of or in the Issuer's country of domicile for tax purposes having power to tax, or as a result of any change in the official interpretation or application of any such laws or regulations by any legislative body, court, governmental agency or regulatory authority (including the enactment of any legislation, regulation or other rule and the publication of any judicial decision or regulatory determination), which change or amendment becomes effective on or after the date of issue of the SST(s), silver streams distributed by the protocol in respect of the SST(s) is no longer, or will no longer be, fully deductible by the protocol for income tax purposes, and that risk cannot be avoided by the protocol taking such reasonable measures it deems appropriate. The holder bears all personal taxes attributable to the SST(s).
5.8. A Regulatory Event will occur if on or after the date of issue of the SST(s), the Competent Supervisory Authority states in writing to the Issuer that under Applicable Supervisory Regulations (including the transitional provisions) the SST(s) (in whole or in part) or the AGX Coins Coin(s) (in whole or in part) or the sale of silver over the Internet (in whole or in part) is requiring additional licenses the Issuer does not have at the time of the issue of the SST(s).
5.9. An Accounting Event will occur if an opinion of a recognized accounting firm has been delivered to the Issuer (and the Issuer has provided the Principal Paying Agent with a copy thereof), stating that as a result of any change in or amendment to the Applicable Accounting Standards the Issuer must not or must no longer record the obligations under the SST(s) for the payment of principal as liabilities on the consolidated balance sheet prepared in accordance with Applicable Accounting Standards for purposes of the Issuer's published consolidated annual financial statements and this cannot be avoided by the Issuer taking such reasonable measures it (acting in good faith) deems appropriate.
6. Art. 6 Notices
6.1. All notices regarding the SST shall be published on the website of the Issuer (currently notices are published under the website address www.silverstream.one).
7. Art. 7 Issue, Purchase Price, Purchase Restrictions
7.1. Any natural or legal person may acquire SST(s) by accepting the Terms and Conditions of Service and arranging payment. The Issuer is not obliged to accept
offers. The Issuer reserves the right to commission third parties in whole or in part with the execution of the offer of the SST(s).
7.2. The SST(s) is sold in exchange for physical silver, gold, fiat or cryptocurrencies. In the case of physical delivery of silver in exchange for SST(s), the delivery of the physical silver for the SST(s) to the vaults of the Issuer is the responsibility of the holder. All costs to deliver the physical silver to the vault of the Issuer shall be borne by the holder. The holder might buy silver from a third party, such as a bullion dealer and that dealer may deliver the silver to the Issuer on behalf of the holder.
7.3. The SST(s) will be sent to the purchaser promptly upon confirmed receipt of funds. When the funds are fiat, such as bank wires, ACH transfers, credit cards, etc, the confirmation may take several business days. When payment is with crypto, confirmation will require a number of block confirmations depending on the blockchain used for finality The purchaser holds all responsibility for providing the correct blockchain address for the SST(s) to be delivered. SST(s) delivered to an address that was provided incorrectly or with a typo will still be deemed paid in full, unless the SST(s) are returned by the recipient, and can be re-sent to the correct address.
7.4. SST(s) must be fully paid for prior to the tokens being sent to the purchaser.
7.5. If the holder does not pay in full or if the holder’s delivered physical silver is not a whole number (non-integer silver gram), the Issuer shall be entitled in its own discretion in each case, to unilaterally reduce the subscribed nominal amount of the holder to a nominal amount which, taking into account its premium, corresponds to the actually paid-up purchase price (nominal amount of the registered) and which can be divided in whole numbers without any remainder. The holder waives receipt of the Issuer's declaration of reduction of the nominal amount.
7.6. In addition to the above, the Issuer does not charge any further costs or fees for the issuance of the SST(s). Insofar as costs or fees are charged by third parties, for example, costs or fees in connection with the holder's wallet or with the payment of the purchase price including the premium (transaction costs), the purchaser shall bear these costs itself.
7.7. In accordance with the Anti-Money Laundering Act, holders are obliged to provide the Issuer, immediately prior to the purchase, with the documentation required for the identification check. The Issuer is entitled, at its discretion, to request further documentation and, to refuse the holder’s participation, in the event that the holder fails to provide the required documentation.
7.8. By subscribing to or by accepting the SST(s), the holder declares that he or she does meet the aforementioned conditions.
8. Art. 8 Transfer of SSTs
8.1. The transfer of SST(s) takes place natively on the Avalanche Blockchain (“AVAX”) but may be bridged to other blockchains. Bridged SST(s) carry all the same benefits as native SST(s) on AVAX.
8.2. The Issuer shall recognize and acknowledge the person who is the holder of the SST(s) in accordance with the rules and provisions of the LODE Platform as the person entitled to claim and exercise any and all rights out of the SST(s). In order for SST holders to gain the full utility of SST(s) a holder must register a LODE Account, pass the required user identification and link their digital crypto wallet address to their LODE Account). Silver stream payments to such SST holders shall in each case discharge the Issuer from payment obligations under the SST Terms and Conditions of Service.
8.3. The transferor makes these Terms and Conditions of Service the subject matter of the contract with the transferee.
8.4. The obligation to sell and the transfer of the ownership rights of the SST(s) is subject to the formal requirement of a confirmed transaction of the SST(s) between the seller and the purchaser It is also subject to the condition precedent that a confirmed transaction of the SST(s) between the seller and the purchaser exists.
9. Art. 9 Paying Agent, Disbursements
9.1. The Paying Agent is the Issuer.
9.2. Unless the SST Terms and Conditions of Service expressly provide otherwise, the Issuer shall make silver stream distributions in accordance with the following paragraphs.
9.3. Payments of silver streams are made in AGX Coins Coins, regardless of what the holder paid as consideration to receive the SST(s). This also applies if the holder has acquired his SST(s) by other means, in particular by purchase on the secondary market, by donation or by inheritance. The Issuer is entitled, at its own discretion, to conclude agreements with individual holders that deviate from the individual contract.
10. Art. 10 Taxes, Limitation of Claim, Deposit
10.1. All silver streams distributed by the protocol on the SST(s) are to be sent without withholding or deduction of taxes or levies of any kind, unless such withholding or deduction is required by law. The holder bears all personal taxes attributable to the SST(s).
10.2. If claims arising from the SST(s) are not asserted in accordance with the Terms and Conditions of Service, the Issuer is entitled to transfer the amounts to a separate account of a trustee. The Issuer will draw attention to this possibility by contacting this person via email. After the expiry of the limitation period, the Trustee may pay the amounts to the Issuer.
11. Art. 11 Purchase, Data Protection
11.1. The Issuer is entitled to buy its own SST(s) on the market or otherwise at any price.
11.2. The SST(s) acquired by the Issuer may be held by the Issuer, resold or devalued at the discretion of the Issuer. The invalidation of the SST(s) takes place by deleting the SST(s).
11.3. The holder-related data necessary for contract fulfillment are stored and processed electronically. If a transfer is necessary, this will only take place on the basis of contractual or statutory regulations in compliance with the relevant (European) data protection law.
12. Art.12 SST Holders Representative
12.1. The Issuer can appoint a lawyer in Switzerland as the SST holder’s representative.
12.2. The SST holder’s representative is neither entitled nor obliged to assume any other duties or competencies or to take or consider any actions on behalf of or for the benefit of the SST holder other than those or going beyond the scope of the duties and competencies as explicitly described herein and in the SST holder’s Representative Agreement.
12.3. Communications from the SST holder’s representative to the SST holder will exclusively occur by publishing notices on the Issuer’s website or on the SST Platform. Such publications will be arranged for by the Issuer upon request of the SST holder’s representative.
13. Art. 13 Applicable Law, Place of Jurisdiction
13.1. The form and contents of the SST as well as the rights and obligations of the holders and the Issuer are governed in every respect by the laws of Switzerland.
13.2. The non-exclusive place of jurisdiction for all lawsuits or other proceedings arising in connection with the SST is the place of business of the Issuer.
13.3. Oral subsidiary agreements have not been made.
14. Art. 14 Severability
14.1. If at any time, one or more of the provisions of the Terms and Conditions of Service for the SST(s) is or becomes unlawful, invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not be in any way affected or impaired thereby