Debits to Net Profits Account Sample Clauses

Debits to Net Profits Account. Except as otherwise provided herein the Net Profits Account shall be debited (without duplication), on an accrual accounting basis, with the following amounts: (a) All direct costs which are attributable to production (excluding depletion, depreciation and amortization) of the Subject Interests (i) for all direct labor (including fringe benefits) and other services necessary for developing, operating, producing, reworking and maintaining the Subject Interests after the Effective Date, (ii) for dehydration, compression, separation, transportation and marketing of the Subject Hydrocarbons after the Effective Date, and (iii) for all materials, 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 (including without limitation (A) all amounts paid by Grantee for conformance of investment if the Subject Interests or any part or parts thereof are hereafter from time to time unitized or if any participating area in a federal divided-type unit is changed, and (B) the cost of secondary recovery, pressure maintenance, repressuring, recycling and other operations conducted for the purpose of enhancing oil production); (b) Costs (including without limitation outside legal, accounting and engineering services) attributable to the Subject Interests of (i) handling, investigating and/or settling litigation, administrative proceedings and claims (including without limitation lien claims other than liens for borrowed funds) and (ii) payment of judgments, penalties and other liabilities (including interest thereon), paid by Grantee (and not reimbursed under insurance maintained by Grantee or others) and involving any of the Subject Interests, or incident to the development, operation or maintenance of the Subject Interests after the Effective Date, or requiring the payment or restitution of any proceeds of Subject Hydrocarbons, or arising from tax or royalty audits, except that there shall not be debited to the Net Profits Account any expenses incurred by Grantee in litigation of any claim or dispute arising hereunder between Grantee and Grantor or amounts paid by Grantee to Grantor pursuant to a final order entered by a court of competent jurisdiction resolving any such claim or dispute or amounts paid by Grantee to Grantor in connection with the settlement of any such claim or dispute; (c) All taxes (except federal and state income, transfer, mortgage, inheritance, es...