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Strictly Private and Confidential /
Memorandum of Understanding
Hong Kong AU
Transaction Code : RK/ST/HKAU/030208
Seller code : RK/ST/LE/HKAU200
Buyer code :
This Memorandum of understanding is entered into at Hong Kong, China
and on …….2008 by and between
Seller’s Mandate : Mr.
Thailand Passport No. :
Hereinafter called : “The Seller”
China Passport No. :
Hereinafter called : “The Buyer”
With full personal and corporate responsibilities and liabilities under penalty
and perjury of law. The Seller had the capability and agrees to sell and
deliver Gold (AU Metal 999.5 or better in the form of Bars plat) hereinafter
referred to as “Gold Bullion” Quantity of Two hundred Metric Tons (200
MT) with rolls and extensions with Non-Swiss Procedures. And the Buyer
has the capability and agrees to arrange payment by Bank Transfer for the
Purchase of the Gold Bullion. The Specifications. Terms and conditions
agreed between the above said parties are as follows:-
1. Specification of Format : 12.5 kg. bar
Commodity: Fineness : 999.5 or better
(Gold Bullion) Hallmark : Internationally accepted Hallmark
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2. Currency : Euro currency / US$ Dollar
3. Quantity : 200 (Two Hundred Metric tons) with rolls and
extensions, partial shipment allowed.
4. Pricing : London Bullion Market Association Second Fix Price
(LBMA Price), one day prior to the date of delivery,
LESS 8% Gross, 5% NET to Buyer. Commission
3% (1% to the Buyer side, 1% to the Seller side, 1%
Both sides of Intermediaries), FOB Hong Kong.
5. Payment : One payment per each tranche, by SWIFT MT103
Transfer from The Buyer’s Bank to The Seller’s
designated Bank, upon complete verification and
authentication by the Buyer’s designated
Internationally Licensed Refinery in Hong Kong,
6. Delivery : FOB at Buyer’s designated Internationally Licensed
Refinery in Hong Kong. Seller takes responsibility to
deliver the said gold in Hong Kong.
7. Documentation 1. Gold Bullion Certificate (GBC)
2. Private Warehouse Safe Keeping Receipt
3. Certificate of Ownership
4. Certificate of Assayer’s report, Internationally
5. Certificate of Warranty of Purity of Gold Bullion
Note : item 1 – 5 will be sent by the Seller via the Seller’s Bank upon
successful verification of the Buyer’s initial Proof of Fund (US$ 100 M),
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6. Packing List
7. Export Permit
8. Commercial invoice
Note: Item 6 – 8 available after actual Sales and Purchase transaction take
8. Verification At Buyer’s designated Internationally Licensed
and AU Test Refinery in Hong Kong according to the mutually
agreed schedules set up by The Seller and The Buyer.
In case Buyer would like to refine the AU into his own
Hallmark, buyer will be responsible for the cost of
refinement with the refinery.
9. Transfer of Physical Gold Bullion:
After verification and authentication of the AU quantity, quality, purity,
by the Buyer, and upon issuance of Assayer’s Report from the Refinery
in Hong Kong. And the Buyer’s Bank shall transfer payment in full by
SWIFT MT103 to the Seller’s designated Bank account within the same
10. Closing Transaction
This Sale and Purchase Transaction will be completed after Seller
delivers the physical AU to the Buyer’s Refinery in Hong Kong with
valid documents, and after Seller received payment in full from the
11. Transaction Procedures.
Step A Buyer signs the Memorandum of Understanding and sends it to
the Seller, Seller then signs the Memorandum of Understanding
and sends it back to the Buyer with attached following documents
from both parties.
1. Seller and Buyer’s Color Passport Copies,
2. Full Banking Coordinates,
3. Letter of Authorization in case the Authorized Signatory is the
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4. Corporate Resolution Letter if Buyer is a Company.
Step B Banking Coordinates. For this transaction,
Seller will assign Bank of China – Beijing Head Office to verify the
Buyer’s Initial Proof of Fund of US$ 100 M. Upon successful verification,
Seller will assign a new Bank in Hong Kong to receive Fund from the Sale
and Purchase transaction.
The Buyer’s Bank is
Step C Within 5 Banking days after both parties signed the MOU with
proper documents attached and lodged the executed MOU with
their respective banks. The Buyer’s bank sends Proof of Fund via
MT799 under the Buyer’s Name and Account (a minimum of US$
100Million, to the Seller’s Bank for verification).
After successful verification, the Seller via Seller’s Bank will submit
the documents related to the AU offered for sale to the Buyer’s
Bank. Procedures will be mutually agreed between the Seller’s
Bank and the Buyer’s Bank.
Step D Within three (3) Banking days, the Buyer will place a US$ 2
million Performance Bond as guarantee to purchase the Seller AU.
The Seller in turn will submit similarly a US$ 2 Million
Performance Bond to the Buyer, guarantees he has the AU as
offered for sale according to the terms and conditions outlined in
Buyer will be officially invited to inspect the Proof of Product
(physical AU) at Seller’s designated warehouse in Hong Kong.
Note: In case Buyer shows verifiable (on Bank to Bank Basis) Proof of
Fund more than USD 100M, it is not necessary to place US$ 2 Million
Performance Bond for both parties.
Mr. Espinar will come in to HK to monitor the transaction in behalf of the
Buyer or both to make sure the flow of the transaction is followed.
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Note: If the Buyer elects to assign their representative in the actual
transaction such as verification of physical product it’s up to the buyer.
Item in the Transaction Procedure Step D can be modified by the Buyer.
Note: D1 As the Seller’s security warehouse is a fully restricted
area, the Buyer’s team to be invited will strictly limit to only the
Buyer, his AU Specialist and his Bank Officer for the initial
D2 Buyer will submit his required daily AU delivery schedule to the
Seller. Then, the Buyer’s Fund will be blocked in favor of the Seller
for Ten (10) Banking Days according to the AU delivery schedule
submitted by the Buyer.
Step E After the Buyer’s fund is blocked for the AU value of each delivery
tranche, Seller shall deliver the AU to the Buyer’s designated
refinery for verification and authentication. Upon the Buyer’s
refinery issued the Assayer’s Reports. Buyer will effect payment by
Swift MT103, or with pre-issued irrevocable, dividable, transferable
Bank Guarantee from 25 prime banks for the total contracted
Step F The Seller shall deliver The AU Commodity with a complete set of
documents covering the said AU in the Buyer’s name through the
Buyer’s Receiving Bank or designated Warehouse in Hong Kong.
Step G Both parties agree to repeat these procedures with the remaining
delivery schedule until total commodity has been purchased and
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12. Compensation for failure of completion stipulated in this contract.
If The Buyer/ The Seller cannot complete the terms and conditions
stipulated in this Contract (Seller has no AU for sale with documents as
outlined, or Buyer can not purchase the Seller’s AU according to all the
terms and conditions as outlined) within 15 Banking Days after signing
the MOU, and upon receipt of the Performance Bond. The grieved party
will be compensated with the US$ 2 million Performance Bond (PB).
In the event that, the grieved party was compensated with US$ 2
Million PB. The beneficial party agrees to deduct 10% (Ten Percent)
out of the US$ 2 Million PB to be shared equally by the Seller’s
Intermediaries, and the Buyer’s Intermediaries. Both Parties’ Banks
will act as Guarantor for such payment distributions.
13. This MOU shall be incorporated as part & partial of the Buyer /Seller
This MOU shall also be binding upon the Parties, Heirs, Successors,
Assignees and Personal Representatives. The Representatives of the
Buyer and Seller agree to undertake the responsibility to assist and
negotiate for their respective parties for this transaction.
14. Seller and Buyer agree that, should it be any inconveniences occur
during this transaction, both parties agree to settle any pending issues
with utmost understanding and amicably.
15. This MOU serves as a “Non-Circumvention” and “Non-Disclosure
Agreement ” to be in effect for this day and any future transaction
between the Parties named herein for a period of five years. This duty is
in accordance with the International Chamber of Commerce
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Other Conditions :
1. Grammatical mistakes, typing errors if any, shall not be regarded
2. All facsimile or scanned email copies will have the same effect as
the original. Both parties guarantee with full Legal responsibility
3. Upon signing the MOU, Seller will issue Irrevocable Master Fee
Protection Agreement / Pay Order to all beneficiaries. The, the
End Buyer and End Seller will communicate directly.
4. This MOU is prepared exclusively between the designated Seller
and Buyer only. Any re-circulation without prior approval from
the Seller will be terminated, and is valid only until ……….. , 2008
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NOW, therefore for and in consideration of this MOU entered into by mutual
agreement. Both parties confirm that they are fully Authorized Mandates, and do
hereby acknowledge and accept the full contents, specifications, terms and
conditions of this MOU.
In witnesses, the parties hereto confirmed they have read, fully understood and
accepted all the terms and contents of this MOU, therefore have set their
signatures on this …………., 2007 in Hong Kong, China.
For and on behalf of the Seller For and on behalf of the Buyer
I have read, fully understood, and accepted I have read, fully understood, and accepted
all the terms and contents of this MOU all the terms and contents of this MOU
Passport No. Passport No.
Buyer’s Authorized Signature Buyer’s Authorized Signature
Mr. Mr. …………….
……….Passport No……… ……….. Passport No. …………….