Back-In Right. (a) For a period of sixty (60) days following the date of the Optionor receiving all of the exploration results and confirmation of Expenditures from the Optionee, the Optionor shall, at its discretion, have the right to elect by notice in writing delivered to the Optionee: (i) to hold the two (2%) percent Net Smelter Return Royalty as set out in Section 13 hereof and, in such case, the Optionee will hold a one hundred (100%) percent undivided participating interest in the Property; or (ii) to exercise its right (the "Back-in Right") to acquire a fifty-one (51%) percent undivided interest in the Property by giving notice of such election in writing to the Optionee on or before the expiration of such sixty (60) day period. If the Optionor fails or neglects to give such a notice, it shall have no interest in the Property other than the Net Smelter Return Royalty pursuant to Section 13 hereof. (b) If the Optionor exercises its Back-in Right by giving notice to the Optionee pursuant to Section 14 (a) hereof, the Back-in Right shall vest in the Optionor when the Optionor incurs one hundred and thirty-five (135) percent of the Expenditures incurred by the Optionee on the Property (the "Back-in Interest Expenditures") within two (2) years after receipt by the Optionee of such notice by the Optionor (the "Vesting of the Back-in Right"). During this two (2) year period, the provisions of this Agreement hereof shall apply, mutatis mutandis, so that the Optionor, its employees, agents and independent contractors, shall have the exclusive rights and obligations of the Optionee, and its employees, agents and independent contractors, set forth in this Agreement and the Optionee, its employees, agents and independent contractors, shall have the exclusive rights and obligations of the Optionor, the employees, agents and independent contractors set for in this Agreement provided, that this shall not relieve either the Optionor or Optionee for responsibility under those Articles for their acts and omissions for the period prior to the two (2) year period. (c) Upon the Vesting of the Back-in Right, the Optionor and Optionee shall forthwith enter into a Joint Venture Agreement on the terms and conditions of the Joint Venture Agreement contemplated by Section 14 (d) upon the Optionor incurring the Back-in Interest Expenditures in accordance with Section 14 (b), with the initial undivided participating interests of the Optionor and Optionee in the Property being fifty-one (51%) percent and forty-nine (49%) percent, respectively; provided, if the Optionor does not incur the Back-in Interest Expenditures in accordance with Section 14 (b), the Optionee shall be deemed to have a retained one hundred (100%) percent undivided participating interest in the Property and the Optionor shall be entitled to the Net Smelter Royalty pursuant to Section 13. (d) Upon the Vesting of the Back-in Right, the Optionor and Optionee shall forthwith enter into a Joint Venture Agreement on the terms and conditions usual in the mining industry for the purpose of further exploring, developing and exploiting the Property. The Joint Venture Agreement shall include INTER ALIA: (i) rights of first refusal so that if either party wishes to dispose of its interest in the Property the other party shall have the right to purchase that interest; and (ii) all decisions to be made concerning the Property, including the approval of programs, budgets, and the determination of amounts to be expended by the Joint Venture, shall be made by votes of representatives of the parties holding an interest in the Property, in proportion to the respective interest then held by them in the Property. The initial undivided participating interests of the Optionor and Optionee in the Property shall be fifty-one (51%) percent and forty-nine (49%) percent, respectively. (e) Upon the parties entering into a Joint Venture Agreement pursuant to Section 14 (d), the parties shall immediately form a joint venture (the "Joint Venture") after which the parties shall share all future funding of exploration and other expenditures proportionately to their interest in the Property (each, a "Venture Interest"). The parties shall use their best efforts to execute a definitive agreement governing the Joint Venture which shall incorporate the terms set out herein in respect of their relationship in the Joint Venture and such other terms as the parties may agree. (f) If either party elects not to fund its share of future Joint Venture expenditures its Venture Interest shall be diluted based on expenditures incurred, with the Optionor being initially deemed to have spent $1,000,000 for a fifty-one (51%) percent interest and the Optionee being initially deemed to have spent $800,000 for a forty-nine (49%) percent interest upon formation of the Joint Venture. Each party's interest in the Property shall be calculated and re- calculated from time to time to the nearest four decimal places expressed as a percent, so that each party's interest shall be that percentage obtained by multiplying by 100 the result obtained when the aggregate of that party's deemed and actual expenditures on the Property is divided by the aggregate of both parties' deemed and actual expenditures on the Property. Actual expenditures are those incurred after Vesting of the Back-in Right to the Optionor. If either party's Venture Interest is reduced to ten (10%) percent or less, its Venture Interest shall be converted to a two (2%) percent Net Smelter Return Royalty calculated and paid in the manner described in Schedule "B". (g) Subject to available capacity and compatibility with the then current facilities and through put of ▇▇▇▇▇▇ Bay Mining and Smelting Co., Limited, the parties confirm that it is their intention that any Product derived from the Property be milled, concentrated, refined or otherwise treated at existing facilities owned or operated by ▇▇▇▇▇▇ Bay Mining and Smelting Co., Limited, whether pursuant to the Joint Venture or in the event that the Optionor has not exercised the Back-in-Right, at cost plus a reasonable fee to be negotiated by the Optionee and ▇▇▇▇▇▇ Bay Mining and Smelting Co., Limited.
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Back-In Right. (a) For a period of sixty (60) days following the date of the Optionor receiving all of the exploration results and confirmation of Expenditures from the Optionee, the Optionor shall, at its discretion, have the right to elect by notice in writing delivered to the Optionee:
(i) to hold the two (2%) percent Net Smelter Return Royalty as set out in Section 13 hereof and, in such case, the Optionee will hold a one hundred (100%) percent undivided participating interest in the Property; or
(ii) to exercise its right (the "Back-in Right") to acquire a fifty-one (51%) percent undivided interest in the Property by giving notice of such election in writing to the Optionee on or before the expiration of such sixty (60) day period. If the Optionor fails or neglects to give such a notice, it shall have no interest in the Property other than the Net Smelter Return Royalty pursuant to Section 13 hereof.
(b) If the Optionor exercises its Back-in Right by giving notice to the Optionee pursuant to Section 14 (a) hereof, the Back-in Right shall vest in the Optionor when the Optionor incurs one hundred and thirty-thirty five (135) percent of the Expenditures incurred by the Optionee on the Property (the "Back-in Interest Expenditures") within two (2) years after receipt by the Optionee of such notice by the Optionor (the "Vesting of the Back-in Right"). During this two (2) year period, the provisions of this Agreement hereof shall apply, mutatis mutandis, so that the Optionor, its employees, agents and independent contractors, shall have the exclusive rights and obligations of the Optionee, and its employees, agents and independent contractors, set forth in this Agreement and the Optionee, its employees, agents and independent contractors, shall have the exclusive rights and obligations of the Optionor, the employees, agents and independent contractors set for in this Agreement provided, that this shall not relieve either the Optionor or Optionee for responsibility under those Articles for their acts and omissions for the period prior to the two (2) year period.
(c) Upon the Vesting of the Back-in Right, the Optionor and Optionee shall forthwith enter into a Joint Venture Agreement on the terms and conditions of the Joint Venture Agreement contemplated by Section 14 (d) upon the Optionor incurring the Back-in Interest Expenditures in accordance with Section 14 (b), with the initial undivided participating interests of the Optionor and Optionee in the Property being fifty-one (51%) percent and forty-nine (49%) percent, respectively; provided, if the Optionor does not incur the Back-in Interest Expenditures in accordance with Section 14 (b), the Optionee shall be deemed to have a retained one hundred (100%) percent undivided participating interest in the Property and the Optionor shall be entitled to the Net Smelter Royalty pursuant to Section 13.
(d) Upon the Vesting of the Back-in Right, the Optionor and Optionee shall forthwith enter into a Joint Venture Agreement on the terms and conditions usual in the mining industry for the purpose of further exploring, developing and exploiting the Property. The Joint Venture Agreement shall include INTER ALIA: (i) rights of first refusal so that if either party wishes to dispose of its interest in the Property the other party shall have the right to purchase that interest; and (ii) all decisions to be made concerning the Property, including the approval of programs, budgets, and the determination of amounts to be expended by the Joint Venture, shall be made by votes of representatives of the parties holding an interest in the Property, in proportion to the respective interest then held by them in the Property. The initial undivided participating interests of the Optionor and Optionee in the Property shall be fifty-one (51%) percent and forty-nine (49%) percent, respectively.
(e) Upon the parties entering into a Joint Venture Agreement pursuant to Section 14 (d), the parties shall immediately form a joint venture (the "Joint Venture") after which the parties shall share all future funding of exploration and other expenditures proportionately to their interest in the Property (each, a "Venture Interest"). The Interest").The parties shall use their best efforts to execute a definitive agreement governing the Joint Venture which shall incorporate the terms set out herein in respect of their relationship in the Joint Venture and such other terms as the parties may agree.
(f) If either party elects not to fund its share of future Joint Venture expenditures its Venture Interest shall be diluted based on expenditures incurred, with the Optionor being initially deemed to have spent $1,000,000 1,875,000 for a fifty-one (51%) percent % interest and the Optionee being initially deemed to have spent $800,000 1,500,000 for a forty-nine (49%) percent % interest upon formation of the Joint Venture. Each party's interest in the Property shall be calculated and re- re-calculated from time to time to the nearest four decimal places expressed as a percent, so that each party's interest shall be that percentage obtained by multiplying by 100 the result obtained when the aggregate of that party's deemed and actual expenditures on the Property is divided by the aggregate of both parties' deemed and actual expenditures on the Property. Actual expenditures are those incurred after the Vesting of the Back-in Right to the Optionor. If either party's Venture Interest is reduced to ten (10%) percent % or less, its Venture Interest shall be converted to a two (2%) % percent Net Smelter Return Royalty calculated and paid in the manner described in Schedule "B".
(g) Subject to available capacity and compatibility with the then current facilities and through put of ▇▇▇▇▇▇ Bay Mining and Smelting Co., Limitedthe Optionor, the parties confirm that it is their intention that any Product derived from the Property be milled, concentrated, refined or otherwise treated at existing facilities owned or operated by ▇▇▇▇▇▇ Bay Mining and Smelting Co., Limitedthe Optionor, whether pursuant to the Joint Venture or in the event that the Optionor has not exercised the Back-in-Right, at cost plus a reasonable fee to be negotiated by the Optionee and ▇▇▇▇▇▇ Bay Mining and Smelting Co., Limitedparties.
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Back-In Right. (a) For a period of sixty (60) days following the date of the Optionor receiving all of the exploration results and confirmation of Expenditures from the Optionee, the Optionor shall, at its discretion, have the right to elect by notice in writing delivered to the Optionee:
(i) to hold the two (2%) percent Net Smelter Return Royalty as set out in Section 13 hereof and, in such case, the Optionee will hold a one hundred (100%) percent undivided participating interest in the Property; or
(ii) to exercise its right (the "Back-in Right") to acquire a fifty-one (51%) percent undivided interest in the Property by giving notice of such election in writing to the Optionee on or before the expiration of such sixty (60) day period. If the Optionor fails or neglects to give such a notice, it shall have no interest in the Property other than the Net Smelter Return Royalty pursuant to Section 13 hereof.
(b) If the Optionor exercises its Back-in Right by giving notice to the Optionee pursuant to Section 14 (a) hereof, the Back-in Right shall vest in the Optionor when the Optionor incurs one hundred and thirty-five (135) percent of the Expenditures incurred by the Optionee on the Property (the "Back-in Interest Expenditures") within two (2) years after receipt by the Optionee of such notice by the Optionor (the "Vesting of the Back-in Right"). During this two (2) year period, the provisions of this Agreement hereof shall apply, mutatis mutandis, so that the Optionor, its employees, agents and independent contractors, shall have the exclusive rights and obligations of the Optionee, and its employees, agents and independent contractors, set forth in this Agreement and the Optionee, its employees, agents and independent contractors, shall have the exclusive rights and obligations of the Optionor, the employees, agents and independent contractors set for in this Agreement provided, that this shall not relieve either the Optionor or Optionee for responsibility under those Articles for their acts and omissions for the period prior to the two (2) year period.
(c) Upon the Vesting of the Back-in Right, the Optionor and Optionee shall forthwith enter into a Joint Venture Agreement on the terms and conditions of the Joint Venture Agreement contemplated by Section 14 (d) upon the Optionor incurring the Back-in Interest Expenditures in accordance with Section 14 (b), with the initial undivided participating interests of the Optionor and Optionee in the Property being fifty-one (51%) percent and forty-nine (49%) percent, respectively; provided, if the Optionor does not incur the Back-in Interest Expenditures in accordance with Section 14 (b), the Optionee shall be deemed to have a retained one hundred (100%) percent undivided participating interest in the Property and the Optionor shall be entitled to the Net Smelter Royalty pursuant to Section 13.
(d) Upon the Vesting of the Back-in Right, the Optionor and Optionee shall forthwith enter into a Joint Venture Agreement on the terms and conditions usual in the mining industry for the purpose of further exploring, developing and exploiting the Property. The Joint Venture Agreement shall include INTER ALIA: (i) rights of first refusal so that if either party wishes to dispose of its interest in the Property the other party shall have the right to purchase that interest; and (ii) all decisions to be made concerning the Property, including the approval of programs, budgets, and the determination of amounts to be expended by the Joint Venture, shall be made by votes of representatives of the parties holding an interest in the Property, in proportion to the respective interest then held by them in the Property. The initial undivided participating interests of the Optionor and Optionee in the Property shall be fifty-one (51%) percent and forty-nine (49%) percent, respectively.
(e) Upon the parties entering into a Joint Venture Agreement pursuant to Section 14 (d), the parties shall immediately form a joint venture (the "Joint Venture") after which the parties shall share all future funding of exploration and other expenditures proportionately to their interest in the Property (each, a "Venture Interest"). The parties shall use their best efforts to execute a definitive agreement governing the Joint Venture which shall incorporate the terms set out herein in respect of their relationship in the Joint Venture and such other terms as the parties may agree.
(f) If either party elects not to fund its share of future Joint Venture expenditures its Venture Interest shall be diluted based on expenditures incurred, with the Optionor being initially deemed to have spent $1,000,000 2,500,000 for a fifty-one (51%) percent interest and the Optionee being initially deemed to have spent $800,000 2,000,000 for a forty-nine (49%) percent interest upon formation of the Joint Venture. Each party's interest in the Property shall be calculated and re- re-calculated from time to time to the nearest four decimal places expressed as a percent, so that each party's interest shall be that percentage obtained by multiplying by 100 the result obtained when the aggregate of that party's deemed and actual expenditures on the Property is divided by the aggregate of both parties' deemed and actual expenditures on the Property. Actual expenditures are those incurred after Vesting of the Back-in Right to the Optionor. If either party's Venture Interest is reduced to ten (10%) percent or less, its Venture Interest shall be converted to a two (2%) percent Net Smelter Return Royalty calculated and paid in the manner described in Schedule "B".
(g) Subject to available capacity and compatibility with the then current facilities and through put of ▇▇▇▇▇▇ Bay Mining and Smelting Co., Limited, the parties confirm that it is their intention that any Product derived from the Property be milled, concentrated, refined or otherwise treated at existing facilities owned or operated by ▇▇▇▇▇▇ Bay Mining and Smelting Co., Limited, whether pursuant to the Joint Venture or in the event that the Optionor has not exercised the Back-in-Right, at cost plus a reasonable fee to be negotiated by the Optionee and ▇▇▇▇▇▇ Bay Mining and Smelting Co., Limited.
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