Formation of Jointly Owned Company Sample Clauses

Formation of Jointly Owned Company. 4 3.4 Net Smelter Return......................................... 5 3.5 NSR Buy-Back............................................... 5 3.6

Formation of Jointly Owned Company. Upon Purchaser having exercised the Initial Earn-In Option and acquired an 80% undivided interest in the Property but having failed to exercise or having terminated the Subsequent Earn-In Option as provided for in Section 2.2(g), a joint venture shall have been formed and Purchaser and Lithium as of the date of failure to exercise or the date of 4 <PAGE> termination of the Subsequent Earn-In Option, then as of the date of failure to exercise or the date of termination of the Subsequent Earn-In Option, Purchaser and Lithium shall either (a) enter into a formal joint venture agreement, generally in accordance with the Rocky Mountain Mineral Law Foundation Exploration, Development and Mine Operating Agreement (Model Form 5A), or, (b) alternatively, if agreed to by both parties, an LLC Operating Agreement and accompanying contribution agreements based on the Rocky Mountain Mineral Law Foundation Form 5 LLC Operating Agreement, pursuant to which Lithium and Purchaser would form a limited liability company of which they would be the members, to which they would contribute their respective interests in the Property. That agreement will govern the parties' ongoing activities at the Project, in either case including the concepts set forth in Section 6 below, and such other terms and provisions as are mutually agreeable to the parties. Lithium will be manager of the joint venture or the LLC. The parties agree to begin good faith negotiations of the applicable agreement at any time during the Initial Earn-In Period, when requested by Purchaser. If Purchaser has exercised the Initial Earn-In Option and either failed to exercise or terminate the Subsequent Earn-In Option and the parties have not completed their negotiation of and executed and delivered a joint venture agreement or an LLC Operating Agreement, the provisions of Section 6 shall govern their relationship until the appropriate agreement(s) are executed and delivered. In the event Purchaser exercises the Subsequent Earn-in Right, the applicable agreement entered into shall terminate. 3.4 Net Smelter Return(a) . If Purchaser exercises the Subsequent Earn-In Option to acquire a 100% interest in the Property, Lithium shall be vested with a 2.5% net smelter returns royalty on the production of minerals from the Property (the "Lithium NSR"), as described in Exhibit C. Upon the exercise of the Subsequent Earn-In Option, the Purchaser must promptly execute and deliver to Lithium a royalty deed in form and substance...