Common use of Disposition of Production Clause in Contracts

Disposition of Production. 15.1 Subject to the provisions of subsection 15.3, for any period after the commencement of Commercial Production and provided that each Joint Operator has paid its respective Cost Share of Operating Costs for that period, each Joint Owner will take in kind and separately dispose of Product in the ratio of its Interest. Division of Product will take place at the Facilities unless in the opinion of either Joint Operator an equitable division of Product cannot be performed at the Facilities in which event division of Product will be performed at the refinery or other facilities at which an equitable division can be made by separation of payable metals. 15.2 For purposes of determining the value of Product taken in kind pursuant to subsection 15.3, each Joint Operator's share of Product will be valued at the time of delivery to the Joint Operators (or purchase or sale by the Taking Joint Operator pursuant to subsection 15.5) and at a value equal to that received by the Joint Operators after deduction of: (a) all costs of transporting Product, including insurance, from the Property to the place of delivery designated by the purchaser of such Product, (b) such reasonable charge for marketing Product as is consistent with generally accepted industry marketing practices, and (c) all taxes (other than income taxes), royalties or other charges or imposts provided for pursuant to any law or legal obligation imposed by any government if paid by either or both Joint Operators in connection with the disposition of Product taken in kind. 15.3 If one Joint Operator makes any payment on behalf of the other Joint Operator pursuant to: (a) subsection 14.5, it will have the prior and preferred right to receive that Non-Contributing Joint Operator's share of Product pursuant to subsection 15.1 until the Contributing Joint Operator has received Product in kind of a value equal to the actual payment made plus interest as provided therein from time to time from the date of advance of such funds; (b) subsections 10.7 or 11.5, it will have the prior and preferred right to receive that Non- Contributing Joint Operator's share of Product pursuant to subsection 15.1 until the Contributing Joint Operator has received Product in kind of a value equal to the actual payment made by the Contributing Joint Operator pursuant to subsections 10.7 or 11.5 together with interest as provided therein on the outstanding balance from time to time from the date of advance of such funds; or (c) subsection 14.3, it will have the prior and preferred right to receive that Non-Contributing Joint Operator's share of Product pursuant to subsection 15.1 until the Contributing Joint Operator has received Product in kind of a value equal to the actual payment made by the Contributing Joint Operator pursuant to subsection 14.3 together with interest as provided therein, calculated on the outstanding balance from time to time from the date of advance of such funds. The Joint Operator's rights hereunder will be subordinate only to the rights of any third party providing financing for the Production Program as contemplated in subsection 18.1, except for the Contributing Joint Operator's rights in respect of any amount advanced on behalf of the Non-Contributing Joint Operator pursuant to subsection 14.5, which will be paramount to any third party financing under subsection 18.1. 15.4 Any extra expenditure incurred by reason of the taking in kind or separate disposition by a Joint Operator of its proportionate share of Product will be borne by such Joint Operator and such Joint Operator will be required to construct, operate and maintain, at its own expense, any and all facilities which may be necessary to receive, store and dispose of its share of Product. 15.5 If a Joint Operator fails to make the necessary arrangements to take in kind or separately dispose of its proportionate share of Product (the "Non-Taking Joint Operator"), the other Joint Operator (the "Taking Joint Operator") as agent may upon reasonable notice purchase for its own account, sell or stockpile such share, subject to the right of the Non-Taking Joint Operator owning such share to revoke at will the Taking Joint Operator's authority under this subsection in respect of Product not then purchased by the Taking Joint Operator or committed for sale to others, and the Taking Joint Operator will be entitled to deduct from the sale proceeds all costs of or related to stockpiling or marketing such Product including, without limitation, transportation, storage, commissions, and discounts, but all contracts of sale executed by the Taking Joint Operator for a Non- Taking Joint Operator's share of Product will be only for such reasonable periods of time as are consistent with the minimum needs of the industry under the circumstances and in no event will any such contract be for a period in excess of one year. 15.6 Proceeds, if any, from the sale by the Taking Joint Operator of Product pursuant to subsection 15.5 will be calculated at the end of each calendar month and will be paid monthly within 21 days after the end of each such calendar month following payment by each Joint Operator of its respective Cost Share of Operating Costs outstanding as at the end of that calendar month. 15.7 If a Joint Operator, any Associated Company of a Joint Operator or any person with whom a Joint Operator is not dealing at arm's length is a purchaser of Product from a Taking Joint Operator, and if the value of such Product is to be used to determine any matter arising under this section 15, such Taking Joint Operator will be deemed to receive prevailing market prices for all Product so sold.

Appears in 1 contract

Samples: Joint Venture Agreement

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Disposition of Production. 15.1 1. Subject to the provisions of subsection 15.317.3, and either payment of or arrangement for the adequate provisions for the Vendor’s Royalty in accordance with the Asset Purchase Agreement, for any period after the commencement of Commercial Production Participation Date, and provided that each Joint Operator Participant has paid to the Operator its respective Cost Share of Operating Costs for that period, and that National Gold is not in default under the Asset Purchase Agreement, each Joint Owner Participant will take in kind kind, and separately dispose of of, Product in the ratio of proportion to its then Interest. Division of Product will take place at the Facilities unless in the reasonable opinion of either Joint the Operator an equitable division of Product cannot be performed at the Facilities in which event division of Product will be performed preformed at the refinery or other facilities at which an equitable division can be made by separation of payable metals. 15.2 2. For purposes of determining the value of Product taken in kind pursuant to subsection 15.317.3, each Joint Operator's Participant’s share of Product will be valued at the time of delivery to the Joint Operators Participants (or purchase or sale by the Taking Joint Operator pursuant to subsection 15.517.5) and at a value equal to that received by the Joint Operators Participant acting as Operator for its share of such Product after deduction of: (a) 1. all costs of transporting Product, including insurance, from the Property Properties to the place of delivery designated by the purchaser of such Product,; (b) 2. such reasonable charge for marketing Product as is consistent with generally accepted industry marketing practices, ; and (c) 3. all taxes (other than income taxes), royalties or other charges or imposts provided for pursuant to any law or legal obligation imposed by any government if paid by either or both Joint Operators such Participant in connection with the disposition of Product taken in kind. 15.3 3. If one Joint the Operator makes any payment on behalf of a Participant pursuant to subsection 16.5, after payment of the other Joint Operator Vendor’s royalty and subject to the rights, powers and remedies of the Vendor under or pursuant to: (a) subsection 14.5to the Asset Purchase Agreement, it will have the prior and preferred right to receive that Non-Contributing Joint Operator's Participant’s share of Product pursuant to subsection 15.1 17.1 until the Contributing Joint Operator has received Product in kind of a value equal to the actual payment made plus interest as provided therein from time to time from the date of advance of such funds; (b) subsections 10.7 or 11.5, it will have the prior and preferred right to receive that Non- Contributing Joint Operator's share of Product pursuant to subsection 15.1 until the Contributing Joint Operator has received Product in kind of a value equal to the actual payment made by the Contributing Joint Operator pursuant to subsections 10.7 or 11.5 subsection 16.5 together with interest as provided therein on the outstanding balance from time to time from the date of advance of such funds; or; (c) subsection 14.3, it will have the prior and preferred right to receive that Non-Contributing Joint Operator's share of Product pursuant to subsection 15.1 until the Contributing Joint Operator has received Product in kind of a value equal to the actual payment made by the Contributing Joint Operator pursuant to subsection 14.3 together with interest as provided therein, calculated on the outstanding balance from time to time from the date of advance of such funds4. The Joint Operator's rights hereunder will be subordinate only to the rights of any third party providing financing for the Production Program as contemplated in subsection 18.1, except for the Contributing Joint Operator's rights in respect of any amount advanced on behalf of the Non-Contributing Joint Operator pursuant to subsection 14.5, which will be paramount to any third party financing under subsection 18.1. 15.4 Any extra expenditure incurred by reason of the taking in kind or separate disposition by a Joint Operator Participant of its proportionate share of Product will be borne by such Joint Operator that Participant and such Joint Operator that Participant will be required to construct, operate and maintain, at its own expense, any and all facilities which may be necessary to receive, store and dispose of its share of Product. 15.5 5. If a Joint Operator any Participant fails to make the necessary arrangements to take in kind or separately dispose of its proportionate share of Product (the "Non-Taking Joint Operator")Product, the other Joint Operator (the "Taking Joint Operator") may, as agent may for such Participant, upon reasonable notice to such Participant, purchase for its own account, sell or stockpile such shareParticipant’s share of Product, subject to the right of the Non-Taking Joint Operator owning such share Participant to revoke at will the Taking Joint Operator's ’s authority under this subsection in respect of Product not then purchased by the Taking Joint Operator or committed for sale to others, and the Taking Joint Operator will be entitled to deduct from the sale proceeds all costs of or related to stockpiling or marketing such Product including, without limitation, transportation, storage, commissions, and discounts, but all contracts of sale executed by the Taking Joint Operator for a Non- Taking Joint Operator's Participant’s share of Product pursuant to this subsection will be only for such reasonable periods of time as are consistent with the minimum needs of the industry under the circumstances and in no event will any such contract be for a period in excess of one year. 15.6 6. Proceeds, if any, from the sale by the Taking Joint Operator of Product pursuant to subsection 15.5 19.5 will be calculated by the Operator separately for each Participant at the end of each calendar month and will be paid monthly within 21 twenty-one (21) days after the end of each such calendar month following payment to the Operator by each Joint Operator Participant of its respective Cost Share of Operating Costs outstanding as at the end of that calendar month. 15.7 7. If a Joint OperatorParticipant, any Associated Company Affiliate of a Joint Operator Participant or any person with whom a Joint Operator Participant is not dealing at arm's ’s length is a purchaser of Product from a Taking Joint OperatorParticipant or a supplier of services or goods to a Participant, and if the value of such Product Product, goods or services is to be used to determine any matter arising under this section 1517, such Taking Joint Operator Participant will be deemed to receive prevailing market prices for all Product so soldsold and to have paid the lesser of fair market value or the price actually paid for such goods or services.

Appears in 1 contract

Samples: Option & Joint Venture Agreement (Alamos Gold Inc)

Disposition of Production. 15.1 Subject to the provisions of subsection 15.3, for 11.01 For any period periods after the commencement of Commercial Production and provided that each Joint Operator Participant has paid to the Operator its respective Cost Share of Operating Costs for that periodperiod or the Operator has deducted each Participants pro-rata contribution to the Cost, each Joint Owner will Participants shall be entitled to take in cash or kind and separately dispose of Product Products in the ratio of its Interest. Division of Product will take place at the Facilities unless in the opinion of either Joint Operator an equitable division of Product cannot be performed at the Facilities in which event division of Product will be performed at the refinery or other facilities at which an equitable division can be made by separation of payable metalstheir respective Interests. 15.2 11.02 For purposes of determining the value of Product Products taken in kind pursuant to subsection 15.3paragraph 11.03, each Joint Operator's Participant’s share of Product will Products shall be valued at the time of delivery to the Joint Operators Participants (or purchase or sale by the Taking Joint Operator pursuant to subsection 15.5paragraph 11.05) and at a value equal to that received by the Joint Operators Optionee for its share of such Products after deduction of:of all Costs, as defined in paragraph 1.01(f). (a) all costs 11.03 The Operator will deduct the Costs of transporting Commercial Production from the sale of Product, including insurancehowever, from for a period after commencement of Commercial Production the Property Operator may require the Costs to be paid prior to the place sale of delivery designated by the purchaser Products, and the Operator may request each Participant to contribute their pro-rata share of such Product, (b) such reasonable charge for marketing Product as is consistent with generally accepted industry marketing practicesthe Costs, and (c) all taxes (other than income taxes)the Operator shall be entitled to pay the unpaid share of Costs of that Participant, royalties or other charges or imposts provided for pursuant to any law or legal obligation imposed by any government and if paid by either or both Joint Operators in connection with the disposition of Product taken in kind. 15.3 If one Joint Operator makes any such payment on behalf of the other Joint Operator pursuant to: (a) subsection 14.5, a Participant it will shall have the prior and preferred right to receive that Non-Contributing Joint Operator's Participant’s share of Product Products pursuant to subsection 15.1 paragraph 11.01 until the Contributing Joint Operator has received Product Products in kind of a value equal to two hundred percent (200%) of the actual payment made plus interest as provided therein from time to time from the date of advance of such funds; (b) subsections 10.7 or 11.5, it will have the prior and preferred right to receive that Non- Contributing Joint Operator's share of Product pursuant to subsection 15.1 until the Contributing Joint Operator has received Product in kind of a value equal to the actual payment made by the Contributing Joint Operator pursuant to subsections 10.7 or 11.5 together with interest as provided therein on the outstanding balance from time to time from the date of advance of such funds; or (c) subsection 14.3, it will have the prior and preferred right to receive that Non-Contributing Joint Operator's share of Product pursuant to subsection 15.1 until the Contributing Joint Operator has received Product in kind of a value equal to the actual payment made by the Contributing Joint Operator pursuant to subsection 14.3 together with interest as provided therein, calculated on the outstanding balance from time to time from the date of advance of such funds. The Joint Operator's rights hereunder will be subordinate only to the rights of any third party providing financing for the Production Program as contemplated in subsection 18.1, except for the Contributing Joint Operator's rights in respect of any amount advanced on behalf of the Non-Contributing Joint Operator pursuant to subsection 14.5, which will be paramount to any third party financing under subsection 18.1paragraph 11.02. 15.4 11.04 Any extra expenditure incurred by reason of the taking in kind or separate disposition by a Joint Operator Participant of its proportionate share of Product will Products shall be borne by such Joint Operator that Participant and such Joint Operator will that Participant shall be required to construct, operate and maintain, at its own expense, any and all facilities which may be necessary to receive, store and dispose of its share of ProductProducts. 15.5 11.05 If a Joint Operator any Participant fails to make the necessary arrangements to take in kind or separately dispose of its proportionate share of Product (the "Non-Taking Joint Operator")Products, the other Joint Operator (the "Taking Joint Operator") as agent for the Participant may upon reasonable notice purchase for its own account, account or sell or stockpile such share, subject to the right of the Non-Taking Joint Operator Participant owning such share to revoke at will the Taking Joint Operator's ’s authority under this subsection paragraph in respect of Product Products not then purchased by the Taking Joint Operator or committed for sale to others, and the Taking Joint Operator will shall be entitled to deduct from the sale proceeds all costs of or related to stockpiling or marketing such Product Products including, without limitation, transportation, storage, commissions, and discounts, discounts but all contracts of sale executed by the Taking Joint Operator for a Non- Taking Joint Operator's Participant’s share of Product will Products shall be only for such reasonable periods of time as are consistent with the minimum needs of the industry under the circumstances and in no event will shall any such contract be for a period in excess of one year. 15.6 11.06 Proceeds, if any, from the sale by the Taking Joint Operator of Product Products pursuant to subsection 15.5 will paragraph 11.05 shall be calculated by the Operator separately for each Participant at the end of each calendar month and will shall be paid to each Participant monthly within 21 twenty (20) days after the end of each such calendar month following payment to the Operator by each Joint Operator Participant of its respective Cost Share share of Operating Costs outstanding as at the end of that calendar month. 15.7 11.07 If a Joint Participant fails to pay to the Operator its respective share of Costs for any period after commencement of Commercial Production as set out in paragraph 11.03, the Operator shall charge interest to that Participant on such unpaid Costs at the rate of the greater of twelve percent (12%) per annum, and the prime lending of the Operator’s Bank charged from time to time to its most preferred commercial borrowers plus three percent (3%) per annum. 11.08 If the Optionee, any Associated Company Affiliate of a Joint Operator the Optionee or any person with whom a Joint Operator the Optionee is not dealing at arm's arms length is a purchaser of Product from a Taking Joint OperatorProducts form the Optionee, and if the value of such Product Products is to be used to determine any matter arising under this section 15Section, such Taking Joint Operator will the Optionee shall be deemed to receive prevailing market competitive prices for all Product Products so sold.

Appears in 1 contract

Samples: Option Agreement (Tara Gold Resources Corp.)

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Disposition of Production. 15.1 Subject to the provisions of subsection 15.3, for 11.01 For any period periods after the commencement of Commercial Production and provided that each Joint Operator Participant has paid to the Operator its respective Cost Share of Operating Costs for that periodperiod or the Operator has deducted each Participants pro-rata contribution to the Cost, each Joint Owner will Participants shall be entitled to take in cash or kind and separately dispose of Product Products in the ratio of its Interest. Division of Product will take place at the Facilities unless in the opinion of either Joint Operator an equitable division of Product cannot be performed at the Facilities in which event division of Product will be performed at the refinery or other facilities at which an equitable division can be made by separation of payable metalstheir respective Interests. 15.2 11.02 For purposes of determining the value of Product Products taken in kind pursuant to subsection 15.3paragraph 11.03, each Joint OperatorParticipant's share of Product will Products shall be valued at the time of delivery to the Joint Operators Participants (or purchase or sale by the Taking Joint Operator pursuant to subsection 15.5paragraph 11.05) and at a value equal to that received by the Joint Operators Optionee for its share of such Products after deduction of:of all Costs, as defined in paragraph 1.01(f). (a) all costs 11.03 The Operator will deduct the Costs of transporting Commercial Production from the sale of Product, including insurancehowever, from for a period after commencement of Commercial Production the Property Operator may require the Costs to be paid prior to the place sale of delivery designated by the purchaser Products, and the Operator may request each Participant to contribute their pro-rata share of such Product, (b) such reasonable charge for marketing Product as is consistent with generally accepted industry marketing practicesthe Costs, and (c) all taxes (other than income taxes)the Operator shall be entitled to pay the unpaid share of Costs of that Participant, royalties or other charges or imposts provided for pursuant to any law or legal obligation imposed by any government and if paid by either or both Joint Operators in connection with the disposition of Product taken in kind. 15.3 If one Joint Operator makes any such payment on behalf of the other Joint Operator pursuant to: (a) subsection 14.5, a Participant it will shall have the prior and preferred right to receive that Non-Contributing Joint OperatorParticipant's share of Product Products pursuant to subsection 15.1 paragraph 11.01 until the Contributing Joint Operator has received Product Products in kind of a value equal to two hundred percent (200%) of the actual payment made plus interest as provided therein from time to time from the date of advance of such funds; (b) subsections 10.7 or 11.5, it will have the prior and preferred right to receive that Non- Contributing Joint Operator's share of Product pursuant to subsection 15.1 until the Contributing Joint Operator has received Product in kind of a value equal to the actual payment made by the Contributing Joint Operator pursuant to subsections 10.7 or 11.5 together with interest as provided therein on the outstanding balance from time to time from the date of advance of such funds; or (c) subsection 14.3, it will have the prior and preferred right to receive that Non-Contributing Joint Operator's share of Product pursuant to subsection 15.1 until the Contributing Joint Operator has received Product in kind of a value equal to the actual payment made by the Contributing Joint Operator pursuant to subsection 14.3 together with interest as provided therein, calculated on the outstanding balance from time to time from the date of advance of such funds. The Joint Operator's rights hereunder will be subordinate only to the rights of any third party providing financing for the Production Program as contemplated in subsection 18.1, except for the Contributing Joint Operator's rights in respect of any amount advanced on behalf of the Non-Contributing Joint Operator pursuant to subsection 14.5, which will be paramount to any third party financing under subsection 18.1paragraph 11.02. 15.4 11.04 Any extra expenditure incurred by reason of the taking in kind or separate disposition by a Joint Operator Participant of its proportionate share of Product will Products shall be borne by such Joint Operator that Participant and such Joint Operator will that Participant shall be required to construct, operate and maintain, at its own expense, any and all facilities which may be necessary to receive, store and dispose of its share of ProductProducts. 15.5 11.05 If a Joint Operator any Participant fails to make the necessary arrangements to take in kind or separately dispose of its proportionate share of Product (the "Non-Taking Joint Operator")Products, the other Joint Operator (the "Taking Joint Operator") as agent for the Participant may upon reasonable notice purchase for its own account, account or sell or stockpile such share, subject to the right of the Non-Taking Joint Operator Participant owning such share to revoke at will the Taking Joint Operator's authority under this subsection paragraph in respect of Product Products not then purchased by the Taking Joint Operator or committed for sale to others, and the Taking Joint Operator will shall be entitled to deduct from the sale proceeds all costs of or related to stockpiling or marketing such Product Products including, without limitation, . transportation, storage, commissions, and discounts, but all contracts of sale executed by the Taking Joint Operator for a Non- Taking Joint OperatorParticipant's share of Product will Products shall be only for such reasonable periods of time as are consistent with the minimum needs of the industry under the circumstances and in no event will shall any such contract be for a period in excess of one year. 15.6 11.06 Proceeds, if any, from the sale by the Taking Joint Operator of Product Products pursuant to subsection 15.5 will paragraph 11.05 shall be calculated by the Operator separately for each Participant at the end of each calendar month and will shall be paid to each Participant monthly within 21 twenty (20) days after the end of each such calendar month following payment to the Operator by each Joint Operator Participant of its respective Cost Share share of Operating Costs outstanding as at the end of that calendar month. 15.7 11.07 If a Joint Participant fails to pay to the Operator its respective share of Costs for any period after commencement of Commercial Production as set out in paragraph 11.03, the Operator shall charge interest to that Participant on such unpaid Costs at the rate of the greater of twelve percent (12%) per annum, and the prime lending of the Operator's Bank charged from time to time to its most preferred commercial borrowers plus three percent (3%) per annum. 11.08 If the Optionee, any Associated Company Affiliate of a Joint Operator the Optionee or any person with whom a Joint Operator the Optionee is not dealing at arm's arms length is a purchaser of Product from a Taking Joint OperatorProducts form the Optionee, and if the value of such Product Products is to be used to determine any matter arising under this section 15Section, such Taking Joint Operator will the Optionee shall be deemed to receive prevailing market competitive prices for all Product Products so sold. 12.01 The records relating to Products taken in kind or to the calculation of proceeds from the sale thereof shall be audited annually at the end of each fiscal year of the Operator and: (a) any adjustments required by such audit shall be made forthwith; (b) a copy of the audited statements shall be delivered to the Participants within 140 days of such year end; and (c) the Participants, or either of them, at reasonable times and upon notice in writing to the Operator, shall have the right to inspect, audit and copy the Operator's accounts and records relating to the account for Products taken in kind or to the determination of proceeds from the sale thereof for any calendar year within twelve (12) months following the end of such calendar year. All such accounts and records shall be deemed to be correct and accurate unless questioned by a party within eighteen (18) months following the end of each calendar year to which the accounts relate. The Participants shall make all reasonable efforts to conduct audits in a manner which will result in a minimum of inconvenience to the Operator.

Appears in 1 contract

Samples: Option Agreement (Tara Gold Resources Corp.)

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