Form 5 LLC: Exploration, Development and Mining Limited Liability Company (License for multiple locations)
New in 2015
Also available as a single-location license
Form 5 LLC reflects significant changes in the law governing LLCs since the publication of the original Form 5A LLC in 1998, and it recognizes the more advanced familiarity of practitioners with the LLC form of entity after almost 20 years. Form 5 LLC supersedes Form 5A LLC and provides an updated model for practitioners whose clients would like to consider operating a project through an LLC as opposed to a contractual joint venture.
Like the Form 5 and Form 5A joint venture agreements, Form 5 LLC is structured for a transaction between two parties seeking to jointly develop a mineral project, where one party (XCO) will earn an interest in the project owned by the other party (YCO) by incurring an agreed-upon amount of exploration and development expenditures.
Form 5 LLC includes two sets of forms: (1) an exploration and development agreement accompanied by a development and mining LLC agreement for those parties agreeing that XCO will retain ownership of the properties until completion by YCO of its earn-in; and (2) a contribution agreement and an exploration, development, and mining LLC agreement for those parties agreeing that XCO will contribute the properties to the LLC at the outset, subject to the requirement that YCO forfeit its interest in the LLC if it fails to make the requisite contributions to complete its earn-in.
The package includes eight documents:
- Commentary
- Form Exploration, Development, and Mining LLC Agreement
- Form Development and Mining LLC Company Agreement
- LLC Agreement Exhibit Forms (Properties, Accounting Procedure, Tax Matters, Net Proceeds Calculation, Insurance, Initial Program and Budget)
- Form Exploration and Development Agreement
- LLC Agreement Form Checklist
- Form LLC Contribution Agreement
- LLC Agreement Form Alternate Provisions
Among the issues Form 5 LLC addresses are limited liability for the members with respect to obligations of the company; bankruptcy and protection from creditors of the other member; tax partnership and other tax considerations; fiduciary duties (or the lack thereof) between the members; structural flexibility; and financing considerations.
Published July 2015 – 259 pages (Word)
Also available as a single-location license
Order No. F5LLC
Published July 2015 – 259 pages (Word)
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