Adjustment Procedures. (a) All adjustments to the Unadjusted Purchase Price described in Section 2.4 shall be made (i) in accordance with the terms of this Agreement and, to the extent not inconsistent with this Agreement and otherwise applicable, in accordance with the United States generally accepted accounting principles using the accrual method of accounting, as consistently applied (the “Accounting Principles”) except that the Accounting Principles shall not apply to any adjustments for Taxes and (ii) without duplication. For the avoidance of doubt, no item that is included in or taken into account in the determination the calculation of Effective Time Working Capital shall be subject to any other adjustment to the Unadjusted Purchase Price. When available, actual figures will be used for the adjustments to the Unadjusted Purchase Price at Closing. To the extent actual figures are unavailable, estimates will be used subject to final adjustments in accordance with the terms hereof. (b) In making the adjustments contemplated under Section 2.4, the following shall be taken into account to the extent not in conflict or inconsistent with the definitions of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities; provided, the following shall in no way be construed as a limitation to the definition of any of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities: (i) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), (A) Asset Sellers shall be entitled to all Mineral Proceeds attributable to the Asset Seller Assets earned or attributable to periods prior to the Effective Time, which amounts are received prior to, on or after Closing Date and (B) should Purchaser receive after Closing any Mineral Proceeds to which Asset Sellers are entitled hereunder, Purchaser shall fully disclose, account for, and promptly remit the same to Asset Sellers; (ii) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), (A) Purchaser shall be entitled to all Mineral Proceeds earned or attributable to periods from and after the Effective Time and (B) should Asset Sellers receive after Closing any Mineral Proceeds to which Purchaser is entitled hereunder, Asset Sellers shall fully disclose, account for, and promptly remit the same to Purchaser; (iii) For purposes of allocating production (and accounts receivable with respect thereto), under Section 2.4 and Section 2.6, (A) liquid Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests when they are produced into the tank batteries related to each Mineral Interest and (B) gaseous Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests when they pass through the delivery point sales meters or similar meters at the point of entry into the pipelines through which they are transported. Sellers shall use reasonable interpolative procedures to arrive at an allocation of production when exact meter readings, gauging, or strapping data are not available; and
Appears in 1 contract
Sources: Purchase and Sale Agreement
Adjustment Procedures. (a) All adjustments to the Unadjusted Purchase Price described in Section 2.4 shall be made (i) in accordance with the terms of this Agreement and, to the extent not inconsistent or in conflict with this Agreement and otherwise applicable, in accordance with the United States generally accepted accounting principles using the accrual method of accountingGAAP, as consistently applied by the applicable Subject Company Group prior to Closing (the “Accounting Principles”) except that the Accounting Principles shall not apply to any adjustments for Taxes to the extent inconsistent with the provisions of Section 11.1 and (ii) without duplication. For the avoidance of doubt, no item that is included in or taken into account in the determination of the calculation of Effective Time Working Capital of any Subject Company Group shall be subject to any other adjustment to the Unadjusted Purchase Price. When available, actual figures will be used for the adjustments to the Unadjusted Purchase Price at Closing. To the extent actual figures are unavailableunavailable at Closing, ▇▇▇▇▇▇▇’s good faith estimates will be used at Closing subject to final adjustments in accordance with the terms hereof.
(b) In making Notwithstanding anything to the contrary in this Agreement:
(i) at Closing, all adjustments to the Unadjusted Purchase Price (whether positive or negative) shall be made (x) sixty-five percent (65%) in cash (increasing or decreasing the Cash Purchase Price), and (y) thirty-five percent (35%) in Parent Common Equity (on the basis that each share of Parent Common Equity shall be valued at the Share Price) (increasing or decreasing the number of shares of Parent Common Equity to be issued to the Sellers as part of the Equity Purchase Price): provided, however:
(A) that any upward adjustments under Section 2.4(k) shall be made only in cash (and not in shares of Parent Common Equity), with the remaining adjustment to the Unadjusted Purchase Price settled on the sixty-five percent (65%) / thirty-five percent (35%) pro rata basis set forth in clause (i) above;
(B) the number of shares of Parent Common Equity comprising the Equity Purchase Price at Closing shall not exceed nineteen and ninety-nine hundredths percent (19.99%) of all issued and outstanding shares of Parent Common Equity as of immediately prior to Closing, and with respect to all net upward adjustments made in shares of Parent Common Equity based on the Share Price, such aggregate adjustments as to the Sellers shall be made until such maximum percentage is reached, after which point any additional upward adjustment to the Unadjusted Purchase Price made at Closing shall be made in cash to the Cash Purchase Price only; and
(ii) after Closing, all adjustments to the Unadjusted Purchase Price shall be made in cash.
(c) Notwithstanding anything to the contrary in this Agreement, in determining the adjustments contemplated under Section 2.42.4(a), the following shall be taken into account to the extent not in express conflict or inconsistent with the definitions of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities; provided, the following shall in no way be construed as a limitation to the definition of any of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities:
(i) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), following shall be deemed to constitute Working Capital Assets of a Subject Company Group (without duplication or limitation):
(A) Asset Sellers shall be entitled to all Mineral Proceeds attributable to Cash and Cash Equivalents of such Subject Company Group at the Asset Seller Assets earned Effective Time, and all unpaid refunds on deposits, prepayments or similar items and all insurance proceeds receivable by any Subject Company Group attributable to periods prior to the Effective Time, which amounts are received prior to, on or after Closing Date and ;
(B) should Purchaser receive the amount of all pre-paid or deposited Property Costs and all other costs and expenses (other than Taxes) paid by or on behalf of such Subject Company Group prior to the Effective Time that are attributable to the ownership of the Assets after Closing the Effective Time that are not reimbursed or repaid to such Subject Company Group prior to the Effective Time, including (1) bond and insurance premiums and deductibles paid or borne by or on behalf of such Subject Company Group with respect to any Mineral Proceeds period after the Effective Time (prorated as applicable, and, with respect to which Asset Sellers are entitled hereunderany insurance premiums pertaining to insurance policies that will not be retained by a member of the applicable Subject Company Group after Closing, Purchaser shall fully disclose, account for, limited only to prepayments for the period between the Effective Time and promptly remit the same to Asset Sellers;
(ii) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(bClosing), (A2) Purchaser shall be entitled Royalties, (3) cash calls to all Mineral Proceeds earned Third Party operators, (4) bonus, lease extensions, rentals and other lease maintenance payments not due or attributable to periods from and payable until after the Effective Time and (B5) should Asset Sellers receive annual registration fees and/or well registration fees attributable to any period after Closing the Effective Time (prorated as applicable), but in any Mineral Proceeds event excluding (x) any Transaction Costs, (y) amounts attributable to which Purchaser is entitled hereunder, Asset Sellers shall fully disclose, account forExcluded Assets, and promptly remit the same to Purchaser(z) any amounts that would constitute “Leakage”;
(iiiC) all unpaid proceeds, receivables and amounts earned as of the Effective Time from the sale of Hydrocarbons produced from or attributable to the Oil and Gas Properties, in each case, net of any applicable Customary Hydrocarbon Deductions, together with any other unpaid amounts receivables earned by or owed to such Subject Company Group, in each case during any period before the Effective Time to the extent reasonably likely to be received by the Subject Company Group within the one hundred twenty (120) day period after the Closing Date;
(D) if any member of such Subject Company Group is the operator under an operating agreement covering any of the Assets or assets then owned by such Subject Company Group, an amount equal to the Property Costs and other costs and expenses paid before the Effective Time by such Subject Company Group, such Seller or any of its or their Affiliates on behalf of the other joint interest owners without reimbursement prior to the Effective Time (including through netting of revenues paid to such joint interest owners) that are attributable to periods after the Effective Time, in each case, only to the extent that such costs and expenses are (1) permitted to be charged to such joint interest owners under the applicable joint operating agreement, unit operating agreement, pooling agreement, pooling order or production sharing agreement or similar Contract and (2) reasonably likely to be received by the Subject Company Group (x) within the one hundred twenty (120) day period after the Closing Date or (y) recovered from such Third Party via netting of offsets under applicable Contracts); and
(E) with respect to any Imbalances where such Subject Company Group is underproduced as to Hydrocarbons or has overdelivered Hydrocarbons, an amount equal to the aggregate amount owed by Third Parties to such Subject Company Group for such Imbalances as of the Effective Time if the applicable Contract governing such Imbalance requires monthly cash balancing, or, if monthly cash balancing is not required under such applicable Contract, on the basis of the applicable Settlement Price; and
(ii) the following shall be deemed to constitute Working Capital Liabilities of a Subject Company Group (without duplication or limitation):
(A) the amount of all Property Costs payable by such Subject Company Group that are unpaid as of the Effective Time with respect to operations on or relating to the Assets that are attributable to periods prior to the Effective Time; and
(B) with respect to any Imbalances where such Subject Company Group is overproduced as to Hydrocarbons or has underdelivered Hydrocarbons, an amount equal to the aggregate amount owed by such Subject Company Group to Third Parties for such Imbalances as of the Effective Time, if the applicable Contract governing such Imbalance requires monthly cash balancing, or, if monthly cash balancing is not required under such applicable Contract, on the basis of the applicable Settlement Price.
(d) All adjustments and payments made pursuant to this Article 2 shall be without duplication of any other amounts paid or received under this Agreement.
(e) For purposes of allocating Hydrocarbon production (and accounts receivable with respect thereto), under Section 2.4 and Section 2.6, (Ai) liquid Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests Oil and Gas Properties when they are produced into the tank batteries related to each Mineral Interest Well and (Bii) gaseous Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests Oil and Gas Properties when they pass through the delivery point sales meters or similar meters at the point of entry into the pipelines through which they are transported. Sellers The Parties shall use reasonable interpolative procedures to arrive at an allocation of Hydrocarbon production when exact meter readings, gauging, gauging or strapping data are not available; and.
(f) Surface use or damage fees and other Property Costs that are paid periodically (including deficiency or shortfall payments pertaining to minimum volume commitments or similar requirements that accrue on a periodic basis (e.g., quarterly, semi-annually or annually)) shall be prorated based on the number of days in the applicable period falling on or before, or after, the Effective Time.
Appears in 1 contract
Sources: Securities Purchase Agreement (Devon Energy Corp/De)
Adjustment Procedures. (a) All adjustments to the Unadjusted Purchase Price described in Section 2.4 shall be made (i) in accordance with the terms of this Agreement and, to the extent not inconsistent with this Agreement and otherwise applicable, in accordance with GAAP and ▇▇▇▇▇ (provided, however, in the United States generally accepted accounting principles using the accrual method event of accountingany conflict between GAAP and ▇▇▇▇▇, GAAP shall control), as consistently applied by Company Group prior to Closing (the “Accounting Principles”) except that the Accounting Principles shall not apply to any adjustments for Taxes and (ii) without duplication. For the avoidance of doubt, no item that is included in or taken into account in the determination of the calculation of Effective Time Working Capital shall be subject to any other adjustment to the Unadjusted Purchase Price. When available, actual figures will be used for the adjustments to the Unadjusted Purchase Price at Closing. To the extent actual figures are unavailableunavailable at Closing, Sellers’ Representative’s estimates will be used subject to final adjustments in accordance with the terms hereof.
(b) In making Notwithstanding anything to the contrary in this Agreement, in determining the adjustments contemplated under Section 2.42.4(a)(i) or Section 2.4(a)(ii), the following shall be taken into account apply to the extent not in conflict or inconsistent with the definitions of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities; provided, the following shall in no way be construed as a limitation to the definition of any of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilitiesapplicable:
(i) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(bfollowing shall be deemed to constitute Working Capital Assets (without duplication), each determined in accordance with Accounting Principles:
(A) Asset Sellers shall all unpaid refunds on deposits, prepayments or similar items, in each case, that are contractually obligated to be entitled to paid, and all Mineral Proceeds attributable to the Asset Seller Assets earned or insurance proceeds that are attributable to periods prior to the Effective Time, which amounts are received prior to, on or after Closing Date and ;
(B) should Purchaser receive the amount of all pre-paid or deposited Property Costs and all other costs and expenses (other than Taxes) paid by or on behalf of Company Group prior to the Effective Time that are attributable to the ownership of the Assets after Closing the Effective Time, including (1) bond and insurance premiums and deductibles paid or borne by or on behalf of Company Group with respect to any Mineral Proceeds to which Asset Sellers are entitled hereunder, Purchaser shall fully disclose, account for, and promptly remit period after the same to Asset Sellers;
Effective Time (ii) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(bprorated as applicable), (A2) Purchaser shall be entitled Royalties, (3) cash calls to all Mineral Proceeds earned Third Party operators, (4) bonus, lease extensions, rentals and other lease maintenance payments not due or attributable to periods from and payable until after the Effective Time and (B5) should Asset Sellers receive annual registration fees and/or well registration fees attributable to any period after Closing any Mineral Proceeds to which Purchaser is entitled hereunder, Asset Sellers shall fully disclose, account for, and promptly remit the same to PurchaserEffective Time (prorated as applicable);
(iiiC) Company Group’s entitlement of any Hydrocarbons in tanks or storage facilities produced from or credited to the Assets at the Effective Time based upon the quantities in tanks or storage facilities as of the Effective Time multiplied by the applicable Settlement Price;
(D) unpaid proceeds, receivables and amounts earned as of the Effective Time from the sale of Hydrocarbons produced from or attributable to the Oil and Gas Properties and any other unpaid amounts receivables earned by or owed to the Company Group, in each case during any period before the Effective Time;
(E) if any member of the Company Group thereof is the operator under an operating agreement covering any of the Assets or assets then owned by Company Group, an amount equal to the Property Costs and other costs and expenses paid before the Effective Time by the Company Group on behalf of the other joint interest owners that are attributable to periods after the Effective Time; and
(F) with respect to any Imbalances where Company Group is underproduced as to Hydrocarbons or has overdelivered Hydrocarbons, an amount equal to the aggregate amount owed by Third Parties to Company Group for such Imbalances as of the Effective Time on the basis of the applicable Settlement Price.
(ii) the following shall be deemed to constitute Working Capital Liabilities (without duplication), each determined in accordance with Accounting Principles:
(A) the amount of all Property Costs accrued or otherwise payable by Company Group that are unpaid as of the Effective Time that are attributable to operations with respect to the Assets that were conducted prior to the Effective Time; and
(B) with respect to any Imbalances where Company Group is overproduced as to Hydrocarbons or has underdelivered Hydrocarbons, an amount equal to the aggregate amount owed by Company Group to Third Parties for such Imbalances as of the Effective Time on the basis of the applicable Settlement Price.
(c) All adjustments and payments made pursuant to this Article 2 shall be without duplication of any other amounts paid or received under this Agreement.
(d) For purposes of allocating Hydrocarbon production (and accounts receivable with respect thereto), under Section 2.4 and Section 2.6, (Ai) liquid Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests Oil and Gas Properties when they are produced into the tank batteries related to each Mineral Interest Well and (Bii) gaseous Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests Oil and Gas Properties when they pass through the delivery point sales meters or similar meters at the point of entry into the pipelines through which they are transported. Sellers The Parties shall use reasonable interpolative procedures to arrive at an allocation of Hydrocarbon production when exact meter readings, gauging, gauging or strapping data are not available; and.
(e) Surface use or damage fees and other Property Costs that are paid periodically shall be prorated based on the number of days in the applicable period falling on or before, or after, the Effective Time.
(f) The terms “earned” and “incurred,” as used in Section 2.4 and this Section 2.5, shall be interpreted in accordance with accounting recognition guidance under the Accounting Principles.
Appears in 1 contract
Sources: Securities Purchase Agreement (Matador Resources Co)
Adjustment Procedures. (a) All adjustments The amount of each adjustment to the Unadjusted Purchase Price described in Section 2.4 shall 2.3 shall, except as expressly set forth in the definition of Working Capital Assets and Working Capital Liabilities, be made (i) determined in accordance with GAAP and ▇▇▇▇▇, as applied by the terms of this Agreement andCompany Group in preparing the Unaudited Financial Statements (provided, to the extent not inconsistent with this Agreement and otherwise applicablehowever, in accordance with the United States generally accepted accounting principles using the accrual method event of accountingany conflict between GAAP and ▇▇▇▇▇, as consistently applied GAAP shall control) (the “Accounting Principles”) except that the Accounting Principles shall not apply to any adjustments for Taxes and (ii) without duplication). For the avoidance of doubt, no item that is included in or taken into account in the determination of the calculation of Effective Time Working Capital shall be subject to any other adjustment to the Unadjusted Purchase Price. When available, actual figures will be used for the adjustments to the Unadjusted Purchase Price at Closing. To the extent actual figures are unavailable, estimates will be used subject to final adjustments in accordance with the terms hereof.
(b) In making Notwithstanding anything to the contrary in this Agreement, but subject to Section 2.5(c) regarding the settlement of any post-Closing true up payment due to Purchaser in Parent Common Equity, all adjustments to the Unadjusted Purchase Price shall be made to the Cash Purchase Price (the Cash Purchase Price, as adjusted pursuant to this Article 2, the “Adjusted Cash Purchase Price”).
(c) Notwithstanding anything to the contrary in this Agreement, in determining the adjustments contemplated under Section 2.42.3(a), subject to the final proviso of Section 2.5(a), the following shall be taken into account to the extent not in conflict or inconsistent with the definitions of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities; provided, the following shall in no way be construed as a limitation to the definition of any of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities:
(i) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), The following shall be deemed to constitute Working Capital Assets (without duplication):
(A) Asset Sellers shall be entitled to all Mineral Proceeds attributable to Cash and Cash Equivalents of the Asset Seller Assets earned Company Group at the Effective Time, and all unpaid refunds on deposits, prepayments or similar items and all insurance proceeds attributable to periods prior to the Effective Time, which amounts are received prior to, on or after Closing Date and ;
(B) should Purchaser receive the amount of all pre-paid or deposited Property Costs paid by or on behalf of the Company Group prior to the Effective Time that are attributable to the ownership of the Assets after Closing the Effective Time, including (1) bond and insurance premiums and deductibles paid or borne by or on behalf of the Company Group with respect to any Mineral Proceeds period after the Effective Time (prorated as applicable), (1) Royalties,
(1) cash calls to which Asset Sellers are entitled hereunderThird Party operators and (1) bonus, Purchaser shall fully discloselease extensions, account forrentals and other lease maintenance payments not due or payable until after the Effective Time;
(C) unpaid proceeds, receivables and promptly remit amounts earned as of the same Effective Time from the sale, of Hydrocarbons produced from or attributable to Asset Sellersthe Leases, Units or ▇▇▇▇▇ and any other unpaid amounts earned by the Company Group, in each case during any period before the Effective Time;
(D) other income earned by the Company Group with respect to the Assets as of the Effective Time;
(E) an amount equal to the Property Costs and other costs and expenses paid before the Effective Time by any member of the Company Group, Seller or any of their Affiliates on behalf of the other joint interest owners to the extent attributable to periods after the Effective Time;
(F) with respect to any Imbalances where the Company Group is underproduced as to Hydrocarbons or has overdelivered Hydrocarbons, an amount equal to the aggregate amount owed by Third Parties to the Company Group for such Imbalances as of the Effective Time on the basis of the applicable Settlement Price;
(G) the amount of any Post-Effective Time Non-Income Taxes paid as of the Effective Time; and
(H) the amount of any inventory (as determined in accordance with GAAP) as of the Effective Time.
(ii) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), The following shall be deemed to constitute Working Capital Liabilities (without duplication):
(A) Purchaser shall be entitled to the amount of all Mineral Proceeds earned or attributable to periods from and after Property Costs payable by the Company Group that are unpaid as of the Effective Time and that are attributable to the ownership of the Assets prior to the Effective Time;
(B) should Asset Sellers receive after Closing if any Mineral Proceeds member of the Company Group is the operator under a joint operating agreement covering any of the Assets, an amount equal to which the costs and expenses paid to the Company Group by Third Party joint interest owners that constitute advance payments by such Third Parties for operations with respect to the Assets that are not incurred or conducted prior to the date Seller delivers to Purchaser is entitled hereunder, Asset Sellers shall fully disclose, account for, and promptly remit the same to Purchaserdraft final settlement statement;
(iiiC) with respect to any Imbalances where the Company Group is overproduced as to Hydrocarbons or has underdelivered Hydrocarbons, an amount equal to the aggregate amount owed by Third Parties to the Company Group for such Imbalances as of the Effective Time on the basis of the applicable Settlement Price;
(D) the amount of all Suspense Funds held by Seller or its Affiliates (other than the Company Group), to the extent such funds are not transferred to Purchaser’s or the Company Group’s control at the Closing; and
(E) the amount of any Pre-Effective Time Non-Income Taxes unpaid as of the Effective Time.
(d) All adjustments and payments made pursuant to this Article 2 shall be without duplication of any other amounts paid or received under this Agreement.
(e) For purposes of allocating Hydrocarbon production (and accounts receivable with respect thereto), under Section 2.4 and Section 2.6, (Ai) liquid Hydrocarbons shall be deemed to be “produced from the Leases, Units or attributable to” the Mineral Interests ▇▇▇▇▇ when they are produced into pass through the tank batteries related to each Mineral Interest inlet flange of the first measurement meter of the first applicable LACT unit and (Bi) gaseous Hydrocarbons shall be deemed to be “produced from the Leases, Units or attributable to” the Mineral Interests ▇▇▇▇▇ when they pass through the delivery point inlet flange of the first downstream sales meters or similar meters at meter. Seller and the point of entry into the pipelines through which they are transported. Sellers Company Group shall use reasonable interpolative procedures to arrive at an allocation of Hydrocarbon production when exact meter readings, gauging, gauging or strapping data are not available; and.
(f) Surface use or damage fees and other Property Costs that are paid periodically shall be prorated based on the number of days in the applicable period falling on or before, or after, the Effective Time.
(g) “Earned” and “incurred,” as used in Section 2.3 and Section 2.4, shall be interpreted in accordance with accounting recognition guidance under the Accounting Principles.
Appears in 1 contract
Adjustment Procedures. (a) All adjustments to the Unadjusted Purchase Price described in Section 2.4 shall be made (iA) in accordance with the terms of this Agreement and, to the extent not inconsistent with this Agreement and otherwise applicable, in accordance with GAAP and ▇▇▇▇▇ (provided, however, in the United States generally accepted accounting principles using the accrual method event of accountingany conflict between GAAP and ▇▇▇▇▇, GAAP shall control), as consistently applied by the Company Group prior to Closing (the “Accounting Principles”) except that the Accounting Principles shall not apply to any adjustments for Taxes to the extent inconsistent with the provisions of Section 11.1 and (iiB) without duplication. For the avoidance of doubt, no item that is included in or taken into account in the determination of the calculation of Effective Time Working Capital shall be subject to any other adjustment to the Unadjusted Purchase Price. When available, actual figures will be used for the adjustments to the Unadjusted Purchase Price at Closing. To the extent actual figures are unavailableunavailable at Closing, Sellers’ Representative’s good-faith estimates will be used at Closing subject to final adjustments in accordance with the terms hereof.
(b) In making Notwithstanding anything to the contrary in this Agreement, in determining the adjustments contemplated under Section 2.42.4(a), the following shall be taken into account to the extent not in express conflict or inconsistent with the definitions of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities; provided, provided that the following shall in no way be construed as a limitation to the definition of any of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities:
: (i) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), following shall be deemed to constitute Working Capital Assets (without duplication or limitation): (A) Asset Sellers shall be entitled to all Mineral Proceeds attributable Cash and Cash Equivalents of the Company Group at the Effective Time, and all unpaid refunds on deposits, prepayments or similar items and all insurance proceeds receivable by the Company Group (to the Asset Seller Assets earned or extent reasonably likely to be received by the Company Group by the fifteenth (15th) day following Sellers’ receipt of Purchaser’s draft statement pursuant to Section 2.7(b)) attributable to periods prior to the Effective Time, which amounts are received prior to, on or after Closing Date and (B) should Purchaser receive after Closing any Mineral Proceeds to which Asset Sellers are entitled hereunder, Purchaser shall fully disclose, account for, and promptly remit the same to Asset Sellers;
(ii) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), (A) Purchaser shall be entitled to all Mineral Proceeds earned or attributable to periods from and after the Effective Time and (B) should Asset Sellers receive after Closing any Mineral Proceeds to which Purchaser is entitled hereunder, Asset Sellers shall fully disclose, account for, and promptly remit the same to Purchaser;
(iii) For purposes of allocating production (and accounts receivable with respect thereto), under Section 2.4 and Section 2.6, (A) liquid Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests when they are produced into the tank batteries related to each Mineral Interest and (B) gaseous Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests when they pass through the delivery point sales meters or similar meters at the point of entry into the pipelines through which they are transported. Sellers shall use reasonable interpolative procedures to arrive at an allocation of production when exact meter readings, gauging, or strapping data are not available; and
Appears in 1 contract
Sources: Securities Purchase Agreement (Riley Exploration Permian, Inc.)
Adjustment Procedures. (a) All adjustments to the Unadjusted Purchase Price described in Section 2.4 shall be made (i) in accordance with the terms of this Agreement and, to the extent not inconsistent with this Agreement and otherwise applicable, in accordance with the United States generally accepted accounting principles using the accrual method of accountingIFRS, as consistently applied by the Subject Company Group consistent with the audited consolidated financial statements of Baytex Energy Corp. for the fiscal year ended December 31, 2024 (the “Accounting Principles”) except that the Accounting Principles shall not apply to any adjustments for Taxes to the extent inconsistent with the provisions of Section 11.1 and (ii) without duplicationduplication (for the avoidance of doubt, submission of a proposed adjustment pursuant to this Agreement that fails to conform to the Accounting Principles, while subject to resolution pursuant to Section 2.7, shall not be deemed a breach of this Agreement). For the avoidance of doubt, no item that is included in or taken into account in the determination of the calculation of Effective Time Working Capital of the Subject Company Group shall be subject to any other adjustment to the Unadjusted Purchase Price. When available, actual figures will be used for the adjustments to the Unadjusted Purchase Price at Closing. To the extent actual figures are unavailable, the Preliminary Settlement Statement will contain reasonable, good faith estimates (which will be used include reasonable, good faith estimates of revenues even if such revenues as of such time have not been collected), subject to final adjustments in accordance with the terms hereof.
(b) In making Notwithstanding anything to the contrary in this Agreement, in determining the adjustments contemplated under Section 2.42.4(a), the following shall be taken into account to the extent not in express conflict or inconsistent with the definitions of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities; provided, the following shall in no way be construed as a limitation to the definition of any of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities:
(i) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), following shall be deemed to constitute Working Capital Assets (without duplication and subject to the exclusions of Working Capital Assets set forth in the definition thereof):
(A) Asset Sellers shall be entitled to all Mineral Proceeds attributable to Cash and Cash Equivalents of the Asset Seller Assets earned Subject Company Group at the Effective Time, and all unpaid refunds on deposits, prepayments or similar items and all unpaid insurance proceeds receivable by the Subject Company Group attributable to periods prior to the Effective Time, which amounts are received prior to, on or after Closing Date and ;
(B) should Purchaser receive the amount of all pre-paid or deposited Property Costs paid by or on behalf of the Subject Company Group prior to the Effective Time that are attributable to the ownership of the Assets after Closing the Effective Time that are not reimbursed or repaid to the Subject Company Group prior to the Effective Time, including (1) bond and insurance premiums and deductibles paid or borne by or on behalf of the Subject Company Group with respect to any Mineral Proceeds period after the Effective Time (prorated as applicable, and, with respect to which Asset Sellers are entitled hereunderany insurance premiums pertaining to insurance policies that will not be retained by a member of the Subject Company Group after Closing, Purchaser shall fully disclose, account for, limited only to prepayments for the period between the Effective Time and promptly remit the same to Asset Sellers;
(ii) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(bClosing), (A2) Purchaser shall be entitled Royalties, (3) cash calls to all Mineral Proceeds earned Third Party operators, (4) bonus, lease extensions, rentals and other lease maintenance payments not due or attributable to periods from and payable until after the Effective Time and (B5) should Asset Sellers receive annual registration fees and/or well registration fees attributable to any period after Closing the Effective Time (prorated as applicable), but in any Mineral Proceeds event excluding amounts attributable to which Purchaser is entitled hereunder, Asset Sellers shall fully disclose, account for, and promptly remit the same to PurchaserExcluded Assets;
(iiiC) the Subject Company Group’s entitlement of any merchantable Hydrocarbons in tanks or storage facilities produced from or credited to the Assets (but excluding tank bottoms or linefill) associated with the Assets at the Effective Time based upon the quantities in tanks or storage facilities as of the Effective Time multiplied by the applicable Settlement Price;
(D) unpaid proceeds, receivables and amounts earned as of the Effective Time from the sale of Hydrocarbons produced from or attributable to the Oil and Gas Properties, in each case, net of any applicable Customary Hydrocarbon Deductions, together with any other unpaid amounts receivables earned by or owed to the Subject Company Group, in each case during any period before the Effective Time to the extent reasonably likely to be received by the Subject Company Group no later than one hundred twenty (120) days after the Closing Date (provided, that any amounts in respect of Suspense Funds or Imbalances shall not be subject to the foregoing one hundred twenty (120) day period);
(E) if any member of the Subject Company Group is the operator under an operating agreement covering any of the Assets or assets then owned by any member of the Subject Company Group, an amount equal to the Property Costs paid before the Effective Time by the Subject Company Group, Seller or any of its or their Affiliates on behalf of the other joint interest owners without reimbursement prior to the Effective Time (including through netting of revenues paid to such joint interest owners) that are attributable to periods after the Effective Time, in each case, only to the extent that such Property Costs are (1) permitted to be charged to such joint interest owners under the applicable joint operating agreement, unit operating agreement, pooling agreement, pooling order or production sharing agreement or similar Contract and (2) reasonably likely to be received by the Subject Company Group (x) no later than one hundred twenty (120) days after the Closing Date (provided, that this clause (x) shall not apply to any amounts in respect of Suspense Funds or Imbalances) or (y) recovered from such Third Party via netting of offsets under applicable Contracts);
(F) other income earned by the Subject Company Group with respect to the Assets as of the Effective Time; and
(G) with respect to any Imbalances where the Subject Company Group is underproduced as to Hydrocarbons or has overdelivered Hydrocarbons, an amount equal to the aggregate amount owed by Third Parties to the Subject Company Group for such Imbalances as of the Effective Time on the basis of the applicable Settlement Price.
(ii) the following shall be deemed to constitute Working Capital Liabilities (without duplication and subject to the exclusions of Working Capital Liabilities set forth in the definition thereof):
(A) the amount of all Property Costs and other costs and expenses (other than Taxes) payable by the Subject Company Group that are unpaid as of the Effective Time that are attributable to operations with respect to the Assets that were conducted prior to the Effective Time and the amount of any trade debits, accounts payable, notes payable and other similar payables owed by the Subject Company Group attributable to the period prior to the Effective Time;
(B) with respect to any Imbalances where the Subject Company Group is overproduced as to Hydrocarbons or has underdelivered Hydrocarbons, an amount equal to the aggregate amount owed by the Subject Company Group to Third Parties for such Imbalances as of the Effective Time on the basis of the applicable Settlement Price; and
(C) liabilities for all Royalties or, solely with respect to revenues received from and after June 20, 2023, interests held by other working interest owners with respect to any of the Oil and Gas Properties and Suspense Funds attributable to Hydrocarbons produced for the period prior to the Effective Time.
(c) All adjustments and payments made pursuant to this Article 2 shall be without duplication of any other amounts paid or received under this Agreement.
(d) For purposes of allocating Hydrocarbon production (and accounts receivable with respect thereto), under Section 2.4 and Section 2.6, (Ai) liquid Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests Oil and Gas Properties when they are produced into the tank batteries related to each Mineral Interest Well and (Bii) gaseous Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests Oil and Gas Properties when they pass through the delivery point sales meters or similar meters at the point of entry into the pipelines through which they are transported. Sellers The Parties shall use reasonable interpolative procedures to arrive at an allocation of Hydrocarbon production when exact meter readings, gauging, gauging or strapping data are not available; and.
(e) Surface use or damage fees and other Property Costs that are paid periodically (including deficiency or shortfall payments pertaining to minimum volume commitments or similar requirements that accrue on a periodic basis (e.g., quarterly, semi-annually or annually)) shall be prorated based on the number of days in the applicable period falling on or before, or after, the Effective Time.
Appears in 1 contract
Sources: Securities Purchase Agreement (Baytex Energy Corp.)
Adjustment Procedures. (a) All adjustments to the Unadjusted Purchase Price described in Section 2.4 shall be made (i) in accordance with the terms of this Agreement and, to the extent not inconsistent with this Agreement and otherwise applicable, in accordance with the United States generally accepted accounting principles using the accrual method of accounting, as consistently applied (the “Accounting Principles”) except that the Accounting Principles shall not apply to any adjustments for Taxes and (ii) without duplication. For the avoidance of doubt, no item that is included in or taken into account in the determination the calculation of Effective Time Working Capital shall be subject to any other adjustment to the Unadjusted Purchase Price. When available, actual figures will be used for the adjustments to the Unadjusted Purchase Price at Closing. To the extent actual figures are unavailable, estimates will be used subject to final adjustments in accordance with the terms hereof.
(b) In making the adjustments contemplated under Section 2.4, the following shall be taken into account to the extent not in conflict or inconsistent with the definitions of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities; provided, the following shall in no way be construed as a limitation to the definition of any of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities:
(i) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), (A) Asset Sellers shall be entitled to all Mineral Proceeds attributable to the Asset Seller Assets earned or attributable to periods prior to the Effective Time, which amounts are received prior to, on or after Closing Date and (B) should Purchaser receive after Closing any Mineral Proceeds to which Asset Sellers are entitled hereunder, Purchaser shall fully disclose, account for, and promptly remit the same to Asset Sellers;
(ii) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), (A) Purchaser shall be entitled to all Mineral Proceeds earned or attributable to periods from and after the Effective Time and (B) should Asset Sellers receive after Closing any Mineral Proceeds to which Purchaser is entitled hereunder, Asset Sellers shall fully disclose, account for, and promptly remit the same to Purchaser;
(iii) For purposes of allocating production (and accounts receivable with respect thereto), under Section 2.4 and Section 2.6, (A) liquid Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests when they are produced into the tank batteries related to each Mineral Interest and (B) gaseous Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests when they pass through the delivery point sales meters or similar meters at the point of entry into the pipelines through which they are transported. Sellers shall use reasonable interpolative procedures to arrive at an allocation of production when exact meter readings, gauging, or strapping data are not available; and
(iv) “Earned” as used in Section 2.4(b) and Section 2.6, shall be interpreted in accordance with accounting recognition guidance under the Accounting Principles.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Black Stone Minerals, L.P.)
Adjustment Procedures. (a) All adjustments to the Unadjusted Purchase Price described in Section 2.4 shall be made (i) in accordance with the terms of this Agreement and, to the extent not inconsistent with this Agreement and otherwise applicable, in accordance with GAAP and ▇▇▇▇▇ (provided, however, in the United States generally accepted accounting principles using the accrual method event of accountingany conflict between GAAP and ▇▇▇▇▇, GAAP shall control), as consistently applied by the applicable Subject Company Group prior to Closing (the “Accounting Principles”) except that the Accounting Principles shall not apply to any adjustments for Taxes to the extent inconsistent with the provisions of Section 11.1 and (ii) without duplication. For the avoidance of doubt, no item that is included in or taken into account in the determination of the calculation of Effective Time Working Capital of any Subject Company Group shall be subject to any other adjustment to the Unadjusted Purchase Price. When available, actual figures will be used for the adjustments to the Unadjusted Purchase Price at Closing. To the extent actual figures are unavailableunavailable at Closing, Sellers’ Representative’s good faith estimates will be used at Closing subject to final adjustments in accordance with the terms hereof.
(b) In making Notwithstanding anything to the contrary in this Agreement:
(i) all adjustments to the Unadjusted Purchase Price made at Closing (as reflected in the Preliminary Settlement Statement), other than the Adjustment Deposit or, if applicable, the Defect Deposit and Additional Lease Deposit, shall be made pro rata such that the Cash Percentage of such adjustments shall be made in cash and the Equity Percentage of such adjustments shall be made in Parent Common Equity (based on the Share Price); provided, however:
(A) all upward adjustments under Section 2.4(b) and Section 2.4(d)(ii) shall be made only in cash (and not shares of Parent Common Equity) up to an amount equal to Two Hundred Million Dollars ($200,000,000) in the aggregate for all of the Subject Company Groups, following which all upward adjustments under Section 2.4(b) and Section 2.4(d)(ii) shall be made pro rata such that the Cash Percentage of such adjustments shall be made in cash and the Equity Percentage of such adjustments shall be made in Parent Common Equity (based on the Share Price); and
(B) the number of shares of Parent Common Equity comprising the Equity Purchase Price at Closing, including any shares of Parent Common Equity comprising the Defect Deposit Equity Amount (if any) shall not exceed nineteen and ninety-nine hundredths percent (19.99%) of all issued and outstanding shares of Parent Common Equity as of immediately prior to Closing, and with respect to all net upward adjustments made in shares of Parent Common Equity based on the Share Price, such aggregate adjustments as to all Sellers shall be made until such maximum percentage is reached, after which point any additional upward adjustment to the Unadjusted Purchase Price made at Closing shall be made in cash to the Cash Purchase Price only; and
(ii) any adjustments to the Unadjusted Purchase Price made after Closing (including any amount included in the final settlement statement delivered under Section 2.7(b)) shall be settled in cash only.
(c) Notwithstanding anything to the contrary in this Agreement, in determining the adjustments contemplated under Section 2.42.4(a), the following shall be taken into account to the extent not in express conflict or inconsistent with the definitions of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities; provided, provided that the following shall in no way be construed as a limitation to the definition of any of Effective Time Working Capital, Working Capital Assets and Working Capital Liabilities:
(i) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(b), following shall be deemed to constitute Working Capital Assets of a Subject Company Group (without duplication or limitation):
(A) Asset Sellers shall be entitled to all Mineral Proceeds attributable to Cash and Cash Equivalents of such Subject Company Group at the Asset Seller Assets earned Effective Time, and all unpaid refunds on deposits, prepayments or similar items and all insurance proceeds receivable by any Subject Company Group attributable to periods prior to the Effective Time, which amounts are received prior to, on or after Closing Date and ;
(B) should Purchaser receive the amount of all pre-paid or deposited Property Costs paid by or on behalf of such Subject Company Group prior to the Effective Time that are attributable to the ownership of the Assets after Closing the Effective Time that are not reimbursed or repaid to such Subject Company Group prior to the Effective Time, including (1) bond and insurance premiums and deductibles paid or borne by or on behalf of such Subject Company Group with respect to any Mineral Proceeds period after the Effective Time (prorated as applicable, and, with respect to which Asset Sellers are entitled hereunderany insurance premiums pertaining to insurance policies that will not be retained by a Subject Company after Closing, Purchaser shall fully disclose, account for, limited only to prepayments for the period between the Effective Time and promptly remit the same to Asset Sellers;
(ii) Except amounts for which the Unadjusted Purchase Price was adjusted under Section 2.4(bClosing), (A2) Purchaser shall be entitled Royalties, (3) cash calls to all Mineral Proceeds earned Third Party operators, (4) bonus, lease extensions, rentals and other lease maintenance payments not due or attributable to periods from and payable until after the Effective Time and (B5) should Asset Sellers receive annual registration fees and/or well registration fees not due and payable until after Closing the Effective Time (prorated as applicable), but in any Mineral Proceeds to which Purchaser is entitled hereunder, Asset Sellers shall fully disclose, account for, event excluding (x) any Transaction Costs and promptly remit the same to Purchaser(y) any amounts that would constitute “Leakage”;
(iiiC) such Subject Company Group’s entitlement of any merchantable Hydrocarbons in tanks or storage facilities produced from or credited to the Assets, to the extent above the load line, produced from or attributable to the Assets at the Effective Time based upon the quantities in tanks or storage facilities that are (x) upstream of the pipeline connection or (y) upstream of the sales meter, as applicable, as of the Effective Time multiplied by the applicable Settlement Price, in each case, net of any Specified Hydrocarbon Deductions;
(D) all unpaid proceeds, receivables and amounts earned as of the Effective Time from the sale of Hydrocarbons produced from or attributable to the Oil and Gas Properties, in each case, net of any Specified Hydrocarbon Deductions, together with any other unpaid amounts receivables earned by or owed to such Subject Company Group, in each case during any period before the Effective Time to the extent reasonably likely to be received by the Subject Company Group within the one hundred twenty (120)-day period after the Closing Date;
(E) if any Subject Company thereof is the operator under an operating agreement covering any of the Assets or assets then owned by such Subject Company Group, an amount equal to the Property Costs and other costs and expenses paid before the Effective Time by such Subject Company Group, such Seller or any of its or their Affiliates on behalf of the other joint interest owners without reimbursement prior to the Effective Time (including through netting of revenues paid to such joint interest owners) that are attributable to periods after the Effective Time, in each case, only to the extent that such costs and expenses are (1) permitted to be charged to such joint interest owners under the applicable joint operating agreement, production sharing agreement or similar Contract and (2) reasonably likely to be received by the Subject Company Group within the one hundred twenty (120)-day period after the Closing Date; and
(F) with respect to any Imbalances where such Subject Company Group is underproduced as to Hydrocarbons or has overdelivered Hydrocarbons, an amount equal to the aggregate cash amount owed by Third Parties to such Subject Company Group for such Imbalances as of the Effective Time if the applicable Contract governing such Imbalance requires monthly cash balancing or, if monthly cash balancing is not required under such applicable Contract, on the basis of the applicable Settlement Price.
(ii) the following shall be deemed to constitute Working Capital Liabilities of a Subject Company Group (without duplication or limitation):
(A) the amount of all Property Costs payable by such Subject Company Group that are unpaid as of the Effective Time with respect to operations on or relating to the Assets that are attributable to periods prior to the Effective Time; and
(B) with respect to any Imbalances where such Subject Company Group is overproduced as to Hydrocarbons or has underdelivered Hydrocarbons, an amount equal to the aggregate cash amount owed by such Subject Company Group to Third Parties for such Imbalances as of the Effective Time if the applicable Contract governing such Imbalance requires monthly cash balancing or, if monthly cash balancing is not required under such applicable Contract, on the basis of the applicable Settlement Price;
(d) All adjustments and payments made pursuant to this Article 2 shall be without duplication of any other amounts paid or received under this Agreement.
(e) For purposes of allocating Hydrocarbon production (and accounts receivable with respect thereto), under Section 2.4 and Section 2.6, (Ai) liquid Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests Oil and Gas Properties when they are produced into the tank batteries related to each Mineral Interest Well and (Bii) gaseous Hydrocarbons shall be deemed to be “from or attributable to” the Mineral Interests Oil and Gas Properties when they pass through the delivery point sales meters or similar meters at the point of entry into the pipelines through which they are transported. Sellers The Parties shall use reasonable interpolative procedures to arrive at an allocation of Hydrocarbon production when exact meter readings, gauging, gauging or strapping data are not available; and.
(f) Surface use or damage fees and other Property Costs that are paid periodically (including deficiency or shortfall payments pertaining to minimum volume commitments or similar requirements that accrue on a periodic basis (e.g., quarterly, semi-annually or annually)) shall be prorated based on the number of days in the applicable period falling on or before, or after, the Effective Time.
(g) In determining the amount of the Working Capital Assets of a Subject Company Group, oil country tubular goods, spare parts, backup tangible inventory and other inventory that are booked under GAAP as property, plant and equipment, materials and supplies, other assets and current assets associated with discontinued operations shall be valued, in each case, based on the applicable fair market value of such assets and property as of the Effective Time.
Appears in 1 contract