Debits. Except as otherwise provided herein, the Net Profits Account shall be debited with the following: (a) All direct costs including capital costs which are attributable to the Subject Interests (i) for all direct labor and other services necessary for developing, reworking, recompleting, deepening, operating, producing, and maintaining the Subject Interests after the Effective Date and (ii) for all material, supplies, equipment and other personal property and fixtures purchased for use on, or in connection with, any of the Subject Interests after the Effective Date; (b) All taxes (except income, transfer, inheritance, estate, franchise and like taxes) incurred by Assignor with respect to the ownership of the Subject Interests after the Effective Date, including without limitation production, severance, and/or excise and other taxes assessed against, and/or measured by, the production of (or the proceeds or value of production of) Subject Hydrocarbons, occupation taxes, sales and use taxes, and ad valorem taxes assessed against or attributable to the Subject Interests or any non-Processing equipment located on any of the Subject Interests; (c) All insurance premiums attributable to the Subject Interests paid by Assignor for insurance actually carried for periods after the Effective Date with respect to the Subject Interests, or any non-Processing equipment located on any of the Subject Interests, or incident to the operation or maintenance of the Subject Interests after the Effective Date; it being recognized that where the coverage is general in nature, or relates to a group of properties (or more than one interest in the same property), only that portion which is reasonably allocated to the Subject Interests shall be debited hereunder; (d) All amounts properly attributable to the Subject Interests (to the extent attributable to periods after the Effective Date) and consisting of (i) rent and other consideration paid for the use or damage to the surface and (ii) rentals, shut-in gas well royalties, overriding royalties, minimum royalties and similar payments payable pursuant to the provisions of agreements in force and effect before the Effective Date; (e) Amounts attributable to the Subject Interests (and attributable to periods after the Effective Date) as overhead charges specified in applicable operating agreements now or hereafter covering the Subject Interests; (f) Any manufacturing costs or costs of acquiring, constructing, operating or maintaining any facility, plant, equipment or transmission pipeline for Processing or transporting any Subject Hydrocarbons or any other oil, gas and/or minerals; (g) If as a result of the occurrence of the bankruptcy or insolvency or similar occurrence of the purchaser of Subject Hydrocarbons any amounts previously included in Credited Proceeds are reclaimed from Assignor or its representative, then the amounts reclaimed as promptly as practicable following Assignor's payment thereof; and (h) If Assignor shall be a party as to any nonconsent operations conducted with respect to all or any of the Subject Interests after the Effective Date, all costs to be debited to the Net Profits Account with respect thereto shall be governed by Section 1.14. Notwithstanding the foregoing provisions of this Section or anything else to the contrary contained in this Assignment; the amounts debited to the Net Profits Account shall not include any of the following: (1) Any amount which has also been used to reduce the amount of the Subject Hydrocarbons and/or Credited Proceeds or has otherwise not been included therein (including, by way of example and without limitation, royalties, overriding royalties, production payments and other charges burdening the Subject Interests at the Effective Date, production, severance, excise, and other taxes and any other amounts deducted, withheld or paid by any other person); (2) Any overriding royalty, production payment or other charge burdening the Subject Interests which was created by Assignor; (3) Any expenses and any penalties, interest or other similar charges which result from the failure of Assignor to properly discharge all costs and expenses (including taxes) of developing, operating and maintaining the Subject Interests; (4) Any damages, penalties, interest or other similar charges paid by Assignor to any third party or governmental agency, commission or similar body arising from any conduct or omission by Assignor in its capacity as operator of any of the Subject Interests and any costs and expenses (including attorneys' fees) in defending any such action unless such charges, costs and expenses are properly chargeable to all working interest owners under an operating agreement to which all or part of the Subject Interests are subject; (5) Any general, administrative or overhead costs paid or incurred by the Assignor or its Affiliates; and (6) Any amounts paid by Assignor to such Assignor's predecessor in interest with respect to part or all of the Subject Interests (including without limitation any purchase price or other consideration paid by Assignor to such predecessor in interest to acquire all or part of the Subject Interests).
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Debits. Except as otherwise provided herein, the Net Profits Account shall be debited with the following:
(a) All direct costs including capital costs which are attributable to the Subject Interests (i) for all direct labor and other services necessary for developing, reworking, recompleting, deepening, operating, producing, and maintaining the Subject Interests after the Effective Date and (ii) for all material, supplies, equipment and other personal property and fixtures purchased for use on, or in connection with, any of the Subject Interests after the Effective Date;
(b) All taxes (except income, transfer, inheritance, estate, franchise and like taxes) incurred by Assignor with respect to the ownership of the Subject Interests after the Effective Date, including without limitation production, severance, and/or excise and other taxes assessed against, and/or measured by, the production of (or the proceeds or value of production of) Subject Hydrocarbons, occupation taxes, sales and use taxes, and ad valorem taxes assessed against or attributable to the Subject Interests or any non-Processing equipment located on any of the Subject Interests;
(c) All insurance premiums attributable to the Subject Interests paid by Assignor for insurance actually carried for periods after the Effective Date with respect to the Subject Interests, or any non-Processing equipment located on any of the Subject Interests, or incident to the operation or maintenance of the Subject Interests after the Effective Date; it being recognized that where the coverage is general in nature, or relates to a group of properties (or more than one interest in the same property), only that portion which is reasonably allocated to the Subject Interests shall be debited hereunder;
(d) All amounts properly attributable to the Subject Interests (to the extent attributable to periods after the Effective Date) and consisting of (i) rent and other consideration paid for the use or damage to the surface and (ii) rentals, shut-in gas well royalties, overriding royalties, minimum royalties and similar payments payable pursuant to the provisions of agreements in force and effect before the Effective Date;
(e) Amounts attributable to the Subject Interests (and attributable to periods after the Effective Date) as overhead charges specified in applicable operating agreements now or hereafter covering the Subject Interests;
(f) Any manufacturing costs Manufacturing Costs or costs of acquiring, constructing, operating or maintaining any facility, plant, equipment or transmission pipeline for Processing or transporting any Subject Hydrocarbons or any other oil, gas and/or minerals;
(g) If as a result of the occurrence of the bankruptcy or insolvency or similar occurrence of the purchaser of Subject Hydrocarbons any amounts previously included in Credited Proceeds are reclaimed from Assignor or its representative, then the amounts reclaimed as promptly as practicable following Assignor's payment thereof; and
(h) If Assignor shall be a party as to any nonconsent operations conducted with respect to all or any of the Subject Interests after the Effective Date, all costs to be debited to the Net Profits Account with respect thereto shall be governed by Section 1.14. Notwithstanding the foregoing provisions of this Section or anything else to the contrary contained in this AssignmentAgreement; the amounts debited to the Net Profits Account shall not include any of the following:
(1) Any amount which has also been used to reduce the amount of the Subject Hydrocarbons and/or Credited Proceeds or has otherwise not been included therein (including, by way of example and without limitation, royalties, overriding royalties, production payments and other charges burdening the Subject Interests at the Effective Date, production, severance, excise, and other taxes and any other amounts deducted, withheld or paid by any other person);
(2) Any overriding royalty, production payment or other charge burdening the Subject Interests which was created by Assignor;
(3) Any expenses and any penalties, interest or other similar charges which result from the failure of Assignor to properly discharge all costs and expenses (including taxes) of developing, operating and maintaining the Subject Interests;
(4) Any damages, penalties, interest or other similar charges paid by Assignor to any third party or governmental agency, commission or similar body arising from any conduct or omission by Assignor in its capacity as operator of any of the Subject Interests and any costs and expenses (including attorneys' fees) in defending any such action unless such charges, costs and expenses are properly chargeable to all working interest owners under an operating agreement to which all or part of the Subject Interests are subject;
(5) Any general, administrative or overhead costs paid or incurred by the Assignor or its Affiliates; and
(6) Any amounts paid by Assignor to such Assignor's predecessor in interest with respect to part or all of the Subject Interests (including without limitation any purchase price or other consideration paid by Assignor to such predecessor in interest to acquire all or part of the Subject Interests).
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Debits. Except as otherwise provided herein, the Net Profits Account shall be debited with the following:
(a) All direct costs including capital costs which are attributable to the Subject Interests (i) for all direct labor and other services necessary for developing, reworking, recompleting, deepening, operating, producing, and maintaining the Subject Interests after the Effective Date and (ii) for all material, supplies, equipment and other personal property and fixtures purchased for use on, or in connection with, any of the Subject Interests after the Effective Date;
(b) All taxes (except income, transfer, inheritance, estate, franchise and like taxes) incurred by Assignor with respect to the ownership of the Subject Interests after the Effective Date, including without limitation production, severance, and/or excise and other taxes assessed against, and/or measured by, the production of (or the proceeds or value of production of) Subject Hydrocarbons, occupation taxes, sales and use taxes, and ad valorem taxes assessed against or attributable to the Subject Interests or any non-Processing equipment located on any of the Subject Interests;
(c) All insurance premiums attributable to the Subject Interests paid by Assignor for insurance actually carried for periods after the Effective Date with respect to the Subject Interests, or any non-Processing equipment located on any of the Subject Interests, or incident to the operation or maintenance of the Subject Interests after the Effective Date; it being recognized that where the coverage is general in nature, or relates to a group of properties (or more than one interest in the same property), only that portion which is reasonably allocated to the Subject Interests shall be debited hereunder;
(d) All amounts properly attributable to the Subject Interests (to the extent attributable to periods after the Effective DateTime) and consisting of (i) rent and other consideration paid for the use or damage to the surface and (ii) rentals, shut-in gas well royalties, overriding royalties, minimum royalties and similar payments payable pursuant to the provisions of agreements in force and effect before the Effective Date;
(e) Amounts attributable to the Subject Interests (and attributable to periods after the Effective DateTime) as overhead charges specified in applicable operating agreements now or hereafter covering the Subject Interests;
(f) Any manufacturing costs or costs of acquiring, constructing, operating or maintaining any facility, plant, equipment or transmission pipeline for Processing or transporting any Subject Hydrocarbons or any other oil, gas and/or minerals;
(g) If as a result of the occurrence of the bankruptcy or insolvency or similar occurrence of the purchaser of Subject Hydrocarbons any amounts previously included in Credited Proceeds are reclaimed from Assignor or its representative, then the amounts reclaimed as promptly as practicable following Assignor's payment thereof; and
(h) If Assignor shall be a party as to any nonconsent operations conducted with respect to all or any of the Subject Interests after the Effective Date, all costs to be debited to the Net Profits Account with respect thereto shall be governed by Section 1.14. Notwithstanding the foregoing provisions of this Section or anything else to the contrary contained in this AssignmentAgreement; the amounts debited to the Net Profits Account shall not include any of the following:
(1) Any amount which has also been used to reduce the amount of the Subject Hydrocarbons and/or Credited Proceeds or has otherwise not been included therein (including, by way of example and without limitation, royalties, overriding royalties, production payments and other charges burdening the Subject Interests at the Effective Date, production, severance, excise, and other taxes and any other amounts deducted, withheld or paid by any other person);
(2) Any overriding royalty, production payment or other charge burdening the Subject Interests which was created by Assignor;
(3) Any expenses and any penalties, interest or other similar charges which result from the failure of Assignor to properly discharge all costs and expenses (including taxes) of developing, operating and maintaining the Subject Interests;
(4) Any damages, penalties, interest or other similar charges paid by Assignor to any third party or governmental agency, commission or similar body arising from any conduct or omission by Assignor in its capacity as operator of any of the Subject Interests and any costs and expenses (including attorneys' fees) in defending any such action unless such charges, costs and expenses are properly chargeable to all working interest owners under an operating agreement to which all or part of the Subject Interests are subject;
(5) Any general, administrative or overhead costs paid or incurred by the Assignor or its Affiliates; and
(6) Any amounts paid by Assignor to such Assignor's predecessor in interest with respect to part or all of the Subject Interests (including without limitation any purchase price or other consideration paid by Assignor to such predecessor in interest to acquire all or part of the Subject Interests).
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