AGX and AUX Coin(s)
Terms and Conditions of Use
January 1, 2024
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.
The LODE Protocol (“LODE”) is an internet-based distributed ledger and computing platform composed of many different and evolving components contributed by a wide variety of participants and professional Service Providers. LODE is built by LODE (Switzerland) AG (“LSA”) and the Service Providers Alliance. LSA safeguards the precious metals on behalf of the LODE users and specifically the AGX and AUX Coin holders. LODE has deployed a Fee Collector as a pool smart contract which consolidates the trading fees, and funds secure vaulting operations, which protects the precious metals that are backing the AGX and AUX Coins.
- The Terms and Conditions of Use set out below shall form part of the agreement entered into with LODE. The AGX and/or AUX Coin and the material published on the Site is not an offer or the solicitation of an offer to sell or buy any security.
- The Terms and Conditions of Use shall apply in accordance with the most recent version and to all subsequent transactions without any need of express reference thereto or agreement thereon at the conclusion of such transaction.
- The Buyer and/or Holder is defined as any person holding AGX and/or AUX Coins regardless of where the coins are acquired and/or purchased.
2. Offers and Orders
- LSA offers shall not be binding, in particular with reference to quantities, price, and delivery time.
- Orders placed by the Buyer and/or Holder shall not be regarded as accepted until these have been confirmed by LODE by sending the tokenized pick-up slip (see Section 4) to the wallet address of the Buyer and/or Holder.
3. Exchange Rates and Weight
- LODE’s exchange rate (physical to AGX/AUX) shall exclude any statutory VAT which shall be payable at the date of delivery or pick-up.
- LODE’s exchange rate (AGX/AUX to physical) shall include any statutory VAT which shall be payable at the date of delivery or pick-up.
- If, as a result of a change of law between the agreement date and the delivery date, additional or increased charges – in particular duties, levies, and currency compensation payments, shall be payable, LODE shall then have the right to increase the purchase price accordingly. The same shall apply to any fees for examination.
- The exchange rates shall be based on the weight and purity as determined at the time of exchange. A weight and purity decrease during transport shall be at the risk of the Buyer and/or Holder. Evidence of any increase/decrease in weight and purity will be communicated to the Buyer and/or Holder prior to the exchange. In the event of a dispute as to the weight and/or purity, the physical material will be returned at the Buyer and/or Holder’s expense.
4. Custody of the silver and/or gold
- LSA will arrange the storage with a LODE registered and authorized Bullion Dealer of one unallocated (1) gram of investment-grade silver on behalf of the Buyer and/or Holder for every AGX Coin and one (1) milligram of investment-grade gold for every AUX Coin sold. Unless otherwise agreed or confirmed by LSA in writing, the quality of the investment-grade silver and/or gold shall be in accordance with customary trade practice. Minor visual imperfections and tarnish are fine. Silver and gold are sold by purity, weight, and measure. Your AGX and/or AUX Coins are similar to a pick-up slip and/or warehouse receipt representing your unallocated beneficial interest in a pro rata portion of the respective investment-grade silver and/or gold. This means that you, the AGX/AUX Coin holder, hold all of the economic value of the investment-grade silver and/or gold represented by your coins, and all of the risk and reward related to your interest of the precious metal.
- LSA’s liability is limited to the selection of a proper vaulting partner, and at all times of the issuance of AGX Coins and AUX Coins, the total number of AGX and/or AUX Coins represents the physical amount of precious metals in grams LSA already holds in custody.
- LSA does not hold a direct beneficial interest in the silver and/or gold that has been utilized and stored to mint the AGX/AUX Coins. In case of insolvency of LSA or a third-party custody provider, the Buyer and/or Holder has the right to redeem the silver and/or gold from the LODE registered and authorized Bullion Dealer.
5. Transfer of ownership
- By purchasing each AGX and/or AUX Coin, LODE transfers the unallocated ownership of one (1) gram of silver or one (1) milligram of gold to the Buyer and/or Holder. The precious metals are usually stored in silver and/or gold bars. If the number of the purchased AGX and/or AUX Coins exceeds the total weight of the silver and/or gold bar in grams, LODE transfers the ownership of the whole bar. If the number of purchased AGX and/or AUX Coins does not exceed the total weight of the bar, LODE transfers the co-ownership in the bar. The share of unallocated co-ownership is determined by the total weight of the bar in integer (a Latin word meaning whole) grams for AGX/Silver and milligrams for AUX/Gold and the amount of AGX and/or AUX Coins purchased, whereas one AGX Coin shall count as one (1) gram of silver and one AUX Coin as one (1) milligram of gold.
- The physical silver and/or gold will not be handed over to the Buyer and/or Holder. By delivering the AGX and/or AUX Coins to the Buyer and/or Holder, LODE concludes a vaulting smart contract with the Buyer and/or Holder to safeguard the silver and/or gold on behalf of the Buyer and/or Holder.
6. Tokenized Pick-up Slip
- For all physical silver and gold sold by LODE, LODE issues a tokenized pick-up slip, “AGX Coin” for silver and “AUX Coin” for gold, on public blockchains.
- The AGX and/or AUX Coin does not include any shipping costs for the silver and/or gold and is only representing the right to recover possession or the right to pick up silver and/or gold at the vaulting partners of LSA and LODE.
- LODE will make commercially reasonable efforts to provide prior notice of any material freeze or upgrade and inform holders of AGX and/or AUX Coins of the reasons and consequences of such freeze and/or upgrade.
7. Transfer of AGX and or AUX Coins
- The Buyer and/or Holder has the right to transfer the AGX and/or AUX Coins to a third party by transferring the AGX and/or AUX Coins via a transaction on the respective blockchain to a third party.
- Any transfer of AGX and/or AUX Coins is to be construed as the transfer of ownership of the stored silver and/or gold to the recipient of the AGX and/or AUX Coins. Therefore, LODE honors every AGX Coin holder as the legitimate owner of one (1) gram of silver held in custody by LODE and LODE honors every AUX Coin holder as the legitimate owner of one (1) milligram of gold held in custody by LODE (See the Continuity of Operations Plan (“COOP”) in paragraph 9 b).
- The partial transfer of claims under the AGX and/or AUX Coin is not permitted. The transfer of AGX and/or AUX Coins occurs exclusively through the Blockchain where the AGX and/or AUX Coin was issued by LODE. A transfer of the right to pick up silver and/or gold without transferring the AGX and/or AUX Coin is not permitted.
- Each holder of AGX and/or AUX Coins shall make these Terms and Conditions of Use of the AGX and/or AUX Coins part of a transfer contract with the recipient of the AGX and/or AUX Coins. If the Buyer and/or Holder fails to make these Terms and Conditions of Use the AGX and/or AUX Coins part of a transfer contract with the recipient of the AGX and/or AUX Coins, the Buyer and/or Holder will hold LSA and LODE harmless of all costs and damages that might arise out of the aforementioned transfer.
8. Right to Recover Possession/Pick-up
- Only holders of AGX and/or AUX Coins have the right to recover possession, i.e. the right to pick-up the stored silver and/or gold according to the AGX and/or AUX Coin(s) balance. Coin holders must contact LSA at firstname.lastname@example.org to redeem the coins, Buyer and/or Holder must not contact the vault companies directly.
- In order to pick-up silver and/or gold, each holder of AGX and/or AUX Coins must create a wallet at lodewallet.com, click redeem and complete the KYC and AML procedure.
- LODE may assume that the respective holder of the AGX and/or AUX Coin(s) is also the creditor of the right to recover possession or the owner of the silver and/or gold. LODE will therefore also be relieved of any liability by service to an AGX and/or AUX Coin holder who is not a creditor or owner unless LODE has knowledge that the holder of the AGX and/or AUX Coin(s) is not the creditor or owner.
- The Buyer and/or Holder understands that if it loses access to the AGX and/or AUX Coin(s) and/or transfers the coins to a third party it will lose the right to recover any silver from LODE. The Buyer and/or Holder understands that working with AGX and/or AUX Coins creates certain risks specific to blockchain technology (in particular, loss of private keys, compatible wallets, bugs, hacks etc.). The Buyer and/or Holder must take all necessary steps to understand the risks and to handle the AGX and/or AUX Coin(s) properly before buying any silver and/or gold from LODE at all times.
- LODE enables access to public networks that charge independent service fees. These fees will be passed through to the Buyer/Holder.
- Fee Collector Pool and Demurrage
i. LODE Fee Collector Pool smart contract funds a predetermined set of instructions and/or procedures that make it possible to maintain the Continuity of Operations Plan (“COOP”). It ensures that essential functions are performed in the event of a disruption of normal operations. These functions are being performed by the Service Provider’s Alliance in order to maintain that resilient mission-essential functions, which are sustained in the event that the LODE Fee Collector Pool smart contract is depleted the Demurrage Protocol will be activated in order to return to normal operations.
iii. In event of an extreme emergency and in order to cover the cost of vaulting and insurance, it may be necessary to activate “Demurrage” by reducing the value of all AGX and/or AUX Coins on a specific public blockchain. The rate for demurrage can be up to 1% annually of the silver and/or gold amount per AGX and/or AUX Coin, deducted no more than once per day, and no less than once a year. The applicable demurrage rate per blockchain (up to the maximum of 1%) will be determined by LODE. This is implemented by LODE as a negative interest rate gradually reducing the amount of silver and gold backing the AGX and/or AUX Coin on public blockchains that do not support transaction fees.
iii. Example: There are 10,000,000 AGX Coins set aside in Avalanche to be represented on a public platform. Therefore,10,000,000 tokens are minted on the public platform to represent them. Demurrage is applied at a rate of 0.00274% per day. Accordingly, after one day, 274 AGX Coins will be deducted, by transferring them back to treasury while the number in circulation on the public platform doesn’t change.
iv. The day-to-day operations are covered by the Fee Collector. If the Fee Collector does not have the required amount of funds to cover operations, the COOP is activated, and Demurrage takes over.
- LODE enables access to public networks that charge independent service fees. These fees will be passed through to the Buyer/Holder.
i. Redemptions may only be done by qualified bullion dealers or qualified individuals. Redemptions have a minimum size of 100 Troy Ounces of silver bullion for AGX Coins and a minimum size of 2 Troy ounces of gold bullion for AUX Coins.
ii. Each redemption will be charged a 200 AGX Coin(s) Administrative Fee for AGX Coin(s) and a 2000 AUX Coin(s) Administrative Fee for AUX Coin(s).
iii. Redemptions are only available in multiples of 100 troy ounce bars for AGX Coins (silver) and multiples of 1 troy ounce for AUX Coins (gold). The accepted rate of redemption for physical metals is 3,110 AGX Coins per 100 troy ounce bar of silver for AGX Coin and 31103.4 AUX Coins per 1 troy ounce of gold.
iv. Example: 3,310 AGX Coins will cover the Administration Fee, and the redemption rate, and the recipient will receive one bar of silver, weighing 100-troy ounces (100 ounce minimum)
v. Example: 33,034 AUX Coins will cover the Administration Fee, and the redemption rate, and the recipient will receive 1 troy ounce bar (2 ounce minimum)
vi. Redemptions via a LODE registered and authorized Bullion Dealer will only be accepted for AGX and/or AUX Coins from a holder who has completed the Bullion Dealer’s KYC, AML and due diligence processes (see LODE’s registered and authorized Bullion Dealers list located on the Site).
10. Bullion Dealer Redemption Procedures, Gold/Silver Pick-Up, Shipment and Delivery
- The LODE Platform enables AGX and AUX Holders to redeem AGX and AUX Coins for physical silver and gold. Holders that wish to redeem may do so by visiting www.lodewallet.com and activating a non-custodial account by utilizing the Redeem feature to arrange a redemption by a LODE registered and authorized Bullion Dealer. If the AGX and/or AUX Coin(s) holder chooses to have the silver and/or gold delivered, the holder must pay the shipment costs in advance. The silver and/or gold shall be transported uninsured and, in any event, at the risk of the Buyer and/or Holder. This shall also apply in cases of any delivery free of charge and regardless of which means of transport shall be used. Any transport insurance shall be provided only upon express demand of the Buyer and/or Holder. Any costs arising therefrom shall be at the expense of the Buyer and/or Holder. Bullion Dealers may require holders to complete KYC/AML prior to redemption. The Buyer/Holder must agree with the Bullion Dealer’s Terms and Conditions of Service. Any Duty of Inspection and Objection to the redemption process must be made with the Bullion Dealer.
- Bullion Dealers may require holders to select the place of dispatch, the transport route and the means of transport shall, in the absence of any written arrangement dictating otherwise, be subject to Bullion Dealer’s reasonable discretion.
- It is the Buyer and/or Holder’s responsibility to check quantities, weight and packaging and record any objections thereto on the delivery note or consignment note and/or the acknowledgement of receipt/warehouse removal note of the storage.
- It is the Buyer and/or Holder’s responsibility to conduct a quality check representatively on a spot check basis and for such purpose, open the packaging (if applicable) and check all attributes of the silver and/or gold bullion.
11. Warranty and Limitation of Liability
- LODE does not assume any liability for AGX Coins and/or AUX Coins lost due to user error on the part of the user or third party. The user assumes full responsibility for the management and safekeeping of the coins.
12. Retention of Title
- LODE shall not retain any title or interest in the silver and/or gold bullion that has been delivered to the Bullion Dealer. The Buyer and the Bullion Dealer must discharge all claims arising from the business relationship.
13. Right of Redemption
- In all cases, LODE’s registered and authorized Bullion Dealer retains the right of redemption for physical silver and/or gold bullion under their own Redemption
14. Arbitration Terms for Users outside of the European Economic Area
- Any dispute, controversy or claim arising out of, or in relation to, the Terms and Conditions of Use, including the validity, invalidity, breach, or termination thereof, shall be resolved by arbitration in accordance with the Swiss Rules of International Arbitration of the Swiss Chambers’ Arbitration Institution in force on the date on which the Notice of Arbitration is submitted in accordance with these Rules. The number of arbitrators shall be three. The seat of the arbitration shall be Zürich, Switzerland. The arbitral proceedings shall be conducted in English. This arbitration agreement only applies LSA and to cases where the user or the jurisdiction of the lawsuit is outside of the European Economic Area (EEA).
15. LSA’s Final Provisions
- The place of performance for deliveries shall be the respective place of destination.
- The laws of Switzerland shall apply. International purchase laws shall not apply. This shall refer to the UN Convention (CISG) on the International Sale of Goods.
- The invalidity of any provision of these Terms and Conditions of Use shall not affect the validity of the other provisions. Invalid provisions shall be deemed to be replaced by such valid provisions that shall be suitable to implement the economic purpose of the deleted provision to the greatest extent possible. All individual agreements must be in writing.