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IF BORROWER IS LIMITED LIABILITY COMPANY: Schedule 1,210)
<br /> Name of Limited Liability Company
<br /> By_ Net Smelter Returns Calculation and Related Covenants
<br /> Its Authorized Representative
<br /> 1. Production Payments Measured by Net Smelter Returns
<br /> Title of Authorized Representative As part of the Purchase Price as described in Section 1.2 of the Corporate Stock
<br /> STATE OF COLORADO Purchase Agreement(the"Agreement")to which this Schedule 1.2(d)(the"Schedule")is attached,
<br /> Purchaser shall pay or cause the Company to pay to Seller a percentage (as set forth in the
<br /> County of __}ss. Agreement)of the Net Smelter Returns(as hereinafter defined)of Products mined,removed and
<br /> sold (or deemed sold as hereinafter described) from the Propetty, until the full amounts of
<br /> The foregoing instrument was acknowledged beforemethis_ day of_ ,20— _ Production Payment#1 and Production Payment H2(as defined in the Agreement)have been
<br /> by•--------------------------- paid.For purposes of this Schedule:(i)"Products"shall mean Base Metals and Precious Metals;
<br /> Witness my hand and official seal (1i)"Base Metals"shall mean copper,zinc,lead and all other metallic and non-metallic minerals
<br /> Mycotmnisslonexpires: of every kind except Precious Metals and coal,oil,gas,casinghead gas and associated liquid and
<br /> gaseous hydrocarbon substances;and(iii)"Precious Metals"shall mean gold,silver,platinum
<br /> and palladium in any form.
<br /> Notary Public 2. Net Smelter Returns and Related Definitions
<br /> --- — As used herein,"Net Smelter Returns"means the Gross Value of Base Metals or
<br /> Precious Metals,less Allowable Deductions.As used hetein,"Allowable Deductions"means all
<br /> costs, charges and expenses paid or incurred by Producer after production of concentrates,
<br /> 'if a natural PPerson or persons,insert the name(s)or such(>erson(s).If a corporation,insect,for example, John Doc whether at the Property or elsewhere,in either case for the transportation,processing,treatment
<br /> asPresidenlaudJaneDeeasSecretaryofDoe&Co.,nGolornddocorpor•alion,"ffapartnership,insert,forexnmple or upgrading of the concentrates,such costs,charges and expenses to include the following:
<br /> "Sam Smith as general partner in and for Smith&Smith,a general partneiship."A Statement of Authority may be
<br /> required if borrower is a limited liability company or other entity(38-30-172,C,R.S). (a) charges for treatment of concentrates by an independent third party commercial
<br /> smelter or refinery in the smelting,refining,and other treatment processes prior to sale(including
<br /> handling,processing,interest and provisional settlement fees,sampling,assaying and representation
<br /> costs, umpire charges, penalties and other processor deductions), or equivalent charges if the
<br /> concentrates are treated at a smelter,refinery,or other comparable treatment facility that is not an
<br /> independent third party;
<br /> (b) actual costs oftransportation(including fieight,insurance,security,transaction
<br /> taxes,handling,port,demurrage,delay,and forwarding expenses incurred by reason of or in the course
<br /> of such transportation),(1)in the case of ores that are sold or consumed in a manufacturing process in
<br /> raw form,from the Property to the place of sale(2)in the case of concentrates,from the mill or other
<br /> place of treatment where the concentrates are produced to the place of sale or consumption,or if further
<br /> treated prior to sale or consumption,from such place of initial treatment to the place of additional
<br /> treatment and then to the place of sale;and(3)in the case of other mineral products,from the place
<br /> where preparation for sale or consumption is completed to the place of sale of consumption;
<br /> (c) actual sales and brokerage costs for Base Metals which are based on
<br /> proceeds received by Producer as hereinafter provided in Section 3 below,and an allowance for
<br /> reasonable sales and brokerage costs for refined Precious Metals hereinafter provided in Sections
<br /> 3(b),(c)and(d)below;and
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<br /> Exhibit 2 Exhibit 2
<br /> Page 56 of 65 Page 57 of 65
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