Long Term Contracts. The parties acknowledge that in the ------------------- ordinary course of the Business of SELLER(s), SELLER(s) enter into contracts with third parties providing for the sale of propane to such third parties over an extended period of time and at a fixed per unit sales price ("Fixed Sales Contracts"), and SELLER(s) enter into contracts with third parties providing for the purchase of propane from third parties over an extended period of time at a fixed per unit sales price ("Fixed Purchase Contracts"). BUYER agrees that at the Closing it will assume all such Fixed Sales Contracts and Fixed Purchase Contracts, subject to the following: (a) With respect to such contracts entered into after the date hereof, such contracts shall have been entered into by SELLER(s) in the ordinary course of business consistent with past practices. (b) BUYER shall assume all Fixed Sales Contracts that have been entered into by SELLERS prior to or following the date hereof with the third parties set forth in Schedule 3.2(b), and the Fixed Sales Contracts entered into by SELLERS with any other third parties that, in addition to satisfying the provisions of clause (a) above, satisfy the creditworthiness standards applied by BUYER in the ordinary course of its business. (c) Any such Fixed Sales Contract shall be subject to BUYER having offsetting Fixed Purchase Contracts (either assumed hereunder or otherwise) and/or long positions of propane inventory that would result in BUYER having no worse than a breakeven economic position upon BUYER's assumption of such Fixed Sales Contract, and if BUYER would not be in such economic position, then BUYER shall nevertheless assume such Fixed Sales Contract but the Purchase Price shall be reduced by an amount equal to BUYER's reasonably anticipated loss from such Fixed Sales Contract. In determining such "reasonably anticipated loss," there shall be taken into account the terms of such contracts, the transportation costs, the carrying costs of any such propane inventory and the amount payable by BUYER under Section 3.2(e) below for the offsetting Fixed Purchase Contract. (d) No amount shall be payable by BUYER in connection with the assumption by BUYER of any Fixed Sales Contract or any Fixed Purchase Contract; provided, however, in the event a SELLER has made any deposit with a counterparty to any Fixed Purchase Contract, any unapplied portion of such deposit as of the time of Closing shall be paid by BUYER to such SELLER as part of the Purchase Price; and provided, further, that with respect to any Fixed Purchase Contract, BUYER agrees (i) to pay such SELLER's amortized cost thereof that is traceable to the volume to be taken under any such contract that is offset against volumes to be sold under any Fixed Sales Contract assumed by BUYER under (c) above, and (ii) as to the balance of such contract, to pay to such SELLER an amount equal to the lower of such SELLER's amortized cost or the market value of such Fixed Purchase Contract as of the Closing. Amortized cost of a Fixed Purchase Contract shall be based upon industry accounting practice and in accordance with GAAP. By way of example of the foregoing proviso, if there is a Fixed Sales Contract for 1 million gallons of propane at $.50 per gallon and a Fixed Purchase Contract for 1.5 million gallons of propane at $.45 per gallon, then the purchase price for such Fixed Purchase Contract would be (i) at such SELLER's cost for 1 million gallons, plus (ii) the lower of such cost or the current market value for the remaining .5 million gallons. (e) BUYER's agreement to assume any Fixed Sales Contract and any Fixed Purchase Contract shall be subject to such SELLER obtaining any consent of the third party to such contract that would be required to permit the assignment of such contract to BUYER.
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Long Term Contracts. The parties acknowledge that in the ------------------- ordinary course of the Business of SELLER(s), SELLER(s) enter into contracts with third parties providing for the sale of propane to such third parties over an extended period of time and at a fixed per unit sales price ("Fixed Sales Contracts"), and SELLER(s) enter into contracts with third parties providing for the purchase of propane from third parties over an extended period of time at a fixed per unit sales price ("Fixed Purchase Contracts"). BUYER agrees that at the Closing it will assume all such Fixed Sales Contracts and Fixed Purchase Contracts, subject to the following:
(a) With respect to In the case of any Transferred Risk E&C Contract that is a Long- Term Contract, the Buyer and Raytheon shall for all federal and state Income Tax purposes (including without limitation the application of the lookback method described in Code Section 460(b)(2)) take into account all amounts paid by the customer and all contract costs incurred attributable thereto on the basis of a constructive completion of such contracts entered into after Long-Term Contract by the date hereof, such contracts shall have been entered into by SELLER(s) in applicable Selling Group member on the ordinary course of business consistent with past practicesClosing Date.
(b) BUYER Raytheon shall assume be responsible for reporting all Fixed Sales Contracts taxable income properly accruing under each Transferred Risk E&C Contract that have been entered is a Long-Term Contract through the Closing Date and paying all Taxes (including, when due, any lookback interest when payable) payable with respect to that period (taking into account all amounts paid by SELLERS prior the customer, all contract costs incurred through the Closing Date and all other amounts required to or following be included by reason of the date hereof constructive termination of such Long-Term Contract on the Closing Date), while the Buyer shall be responsible for reporting all taxable income properly accruing under each Transferred Risk E&C Contract that is a Long-Term Contract after the Closing Date and paying all Taxes (including lookback interest) payable with respect to that period (taking into account all amounts paid by the third parties set forth in Schedule 3.2(bcustomer (other than collection of amounts taken into account by the Selling Group), and all contract costs incurred after the Fixed Sales Contracts entered into by SELLERS with Closing Date). Any lookback interest refunds for periods through the Closing Date shall accrue to Raytheon, while any other third parties that, in addition lookback interest refunds for periods after the Closing Date shall accrue to satisfying the provisions of clause (a) above, satisfy the creditworthiness standards applied by BUYER in the ordinary course of its businessBuyer.
(c) Any such Fixed Sales Contract shall be subject to BUYER having offsetting Fixed Purchase Contracts For purposes of this Article 6:
(either assumed hereunder or otherwisei) and/or long positions of propane inventory that would result in BUYER having no worse than a breakeven economic position upon BUYER's assumption of such Fixed Sales Contract, and if BUYER would not be in such economic position, then BUYER shall nevertheless assume such Fixed Sales Contract but the Purchase Price shall be reduced by an amount equal to BUYER's reasonably anticipated loss from such Fixed Sales Contract. In determining such "reasonably anticipated loss," there shall be taken into account treated as amounts paid by the terms customer to the Selling Group member party thereto prior to the Closing Date and attributable to an Transferred Risk E&C Contract that is a Long-Term Contract (A) all amounts received with respect thereto on or prior to the Closing Date and (B) any then unpaid accounts receivable, unbilled work in progress, claims, disputes and retentions, to the extent (but only to the extent) those items are reflected in the final Cut-Off Date Balance Sheet; and
(ii) there shall be treated as contract costs incurred prior to the Closing Date attributable to an Transferred Risk E&C Contract that is a Long-Term Contract all costs properly accrued as of such contractsthe Closing Date, determined on a basis consistent with the transportation costs, the carrying costs of any such propane inventory and the amount payable by BUYER under Section 3.2(e) below for the offsetting Fixed Purchase Contractfinal Cut-Off Date Balance Sheet.
(d) No amount shall be payable by BUYER in connection with Raytheon and the assumption by BUYER of Buyer agree to provide the other party any Fixed Sales Contract assistance reasonably necessary or any Fixed Purchase Contract; provided, however, in appropriate to carry out the event a SELLER has made any deposit with a counterparty to any Fixed Purchase Contract, any unapplied portion of such deposit as of the time of Closing shall be paid by BUYER to such SELLER as part of the Purchase Price; and provided, further, that with respect to any Fixed Purchase Contract, BUYER agrees (i) to pay such SELLER's amortized cost thereof that is traceable to the volume to be taken under any such contract that is offset against volumes to be sold under any Fixed Sales Contract assumed by BUYER under (c) abovecomputations required by, and to file Tax Returns (iiincluding refund claims) as necessary or appropriate to the balance of such contractgive effect to, to pay to such SELLER an amount equal to the lower of such SELLER's amortized cost or the market value of such Fixed Purchase Contract as of the Closing. Amortized cost of a Fixed Purchase Contract shall be based upon industry accounting practice and in accordance with GAAP. By way of example of the foregoing proviso, if there is a Fixed Sales Contract for 1 million gallons of propane at $.50 per gallon and a Fixed Purchase Contract for 1.5 million gallons of propane at $.45 per gallon, then the purchase price for such Fixed Purchase Contract would be (i) at such SELLER's cost for 1 million gallons, plus (ii) the lower of such cost or the current market value for the remaining .5 million gallonsthis Article 6.
(e) BUYER's agreement to assume any Fixed Sales Contract and any Fixed Purchase Contract shall be subject to such SELLER obtaining any consent of the third party to such contract that would be required to permit the assignment of such contract to BUYER.
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Long Term Contracts. The parties acknowledge that in the ------------------- ordinary course of the Business of SELLER(s), SELLER(s) enter into contracts with third parties providing for the sale of propane to such third parties over an extended period of time and at a fixed per unit sales price ("Fixed Sales Contracts"), and SELLER(s) enter into contracts with third parties providing for the purchase of propane from third parties over an extended period of time at a fixed per unit sales price ("Fixed Purchase Contracts"). BUYER agrees that at the Closing it will assume all such Fixed Sales Contracts and Fixed Purchase Contracts, subject to the following:
(a) With respect In the case of any acquired Contract that is a long- term contract within the meaning of Code Section 460 (hereinafter a "LONG-TERM CONTRACT") the Buyer and the Seller shall for all federal and state Income Tax purposes (including without limitation the application of the lookback method described in Code Section 460(b)(2)) take into account all amounts treated as paid by the customer pursuant to Section 7.05(c)(i) and all contract costs incurred attributable thereto on the basis of a constructive completion of such contracts entered into after Long-Term Contract on the date hereof, such contracts shall have been entered into by SELLER(s) in the ordinary course of business consistent with past practicesClosing Date.
(b) BUYER The Seller shall assume be responsible for reporting all Fixed Sales Contracts taxable income properly accruing under each Long-Term Contract through the Closing Date and paying all Taxes (including, when due, any lookback interest when payable) payable with respect to that have been entered period (taking into account all amounts paid by SELLERS prior the customer as defined in Section 7.05(c)(i) and all contract costs incurred through the Closing Date) while the Buyer shall be responsible for reporting all taxable income properly accruing under each Long-Term Contract after the Closing Date and paying all Taxes (including lookback interest) payable with respect to or following that period (taking into account all amounts paid by the date hereof with customer (other than collection of unpaid accounts receivable and other amounts assigned to the third parties set forth in Schedule 3.2(bBuyer hereunder), and all contract costs incurred after the Fixed Sales Contracts entered into by SELLERS with Closing Date). Any lookback interest refunds for periods through the Closing Date shall accrue to the Seller, while any other third parties that, in addition lookback interest refunds for periods after the Closing Date shall accrue to satisfying the provisions of clause (a) above, satisfy the creditworthiness standards applied by BUYER in the ordinary course of its businessBuyer.
(c) Any such Fixed Sales Contract shall be subject to BUYER having offsetting Fixed Purchase Contracts For purposes of this Section 7.05:
(either assumed hereunder or otherwisei) and/or long positions of propane inventory that would result in BUYER having no worse than a breakeven economic position upon BUYER's assumption of such Fixed Sales Contract, and if BUYER would not be in such economic position, then BUYER shall nevertheless assume such Fixed Sales Contract but the Purchase Price shall be reduced by an amount equal to BUYER's reasonably anticipated loss from such Fixed Sales Contract. In determining such "reasonably anticipated loss," there shall be taken treated as amounts paid by the customer to the Seller prior to the Closing Date and attributable to a Long-Term Contract (A) all amounts received with respect thereto on or prior to the Closing Date, other than cost underruns, and (B) any then unpaid accounts receivable, unbilled work in progress at its fair market value (after taking into account any net progress payments) as determined under Section 2.08, and claims, disputes and retentions, without regard to whether any interest in such items is assigned or sold to the terms of such contracts, the transportation costs, the carrying costs of Buyer hereunder or whether any such propane inventory and items that are uncollected as of the amount payable by BUYER under Section 3.2(eClosing Date are ultimately collected; and
(ii) below for there shall be treated as contract costs incurred prior to the offsetting Fixed Purchase ContractClosing Date attributable to a Long- Term Contract all costs properly accrued as of the Closing Date.
(d) No amount shall be payable by BUYER in connection with Seller and the assumption by BUYER of Buyer agree to provide the other party any Fixed Sales Contract assistance reasonably necessary or any Fixed Purchase Contract; provided, however, in appropriate to carry out the event a SELLER has made any deposit with a counterparty to any Fixed Purchase Contract, any unapplied portion of such deposit as of the time of Closing shall be paid by BUYER to such SELLER as part of the Purchase Price; and provided, further, that with respect to any Fixed Purchase Contract, BUYER agrees (i) to pay such SELLER's amortized cost thereof that is traceable to the volume to be taken under any such contract that is offset against volumes to be sold under any Fixed Sales Contract assumed by BUYER under (c) abovecomputations required by, and to file Tax Returns (iiincluding refund claims) as necessary or appropriate to the balance of such contractgive effect to, to pay to such SELLER an amount equal to the lower of such SELLER's amortized cost or the market value of such Fixed Purchase Contract as of the Closing. Amortized cost of a Fixed Purchase Contract shall be based upon industry accounting practice and in accordance with GAAP. By way of example of the foregoing proviso, if there is a Fixed Sales Contract for 1 million gallons of propane at $.50 per gallon and a Fixed Purchase Contract for 1.5 million gallons of propane at $.45 per gallon, then the purchase price for such Fixed Purchase Contract would be (i) at such SELLER's cost for 1 million gallons, plus (ii) the lower of such cost or the current market value for the remaining .5 million gallons.
(e) BUYER's agreement to assume any Fixed Sales Contract and any Fixed Purchase Contract shall be subject to such SELLER obtaining any consent of the third party to such contract that would be required to permit the assignment of such contract to BUYER.this Section 7.05
Appears in 1 contract
Long Term Contracts. The parties acknowledge that in the ------------------- ordinary course of the Business of SELLER(s), SELLER(s) enter into contracts with third parties providing for the sale of propane to such third parties over an extended period of time and at a fixed per unit sales price ("Fixed Sales Contracts"), and SELLER(s) enter into contracts with third parties providing for the purchase of propane from third parties over an extended period of time at a fixed per unit sales price ("Fixed Purchase Contracts"). BUYER agrees that at the Closing it will assume all such Fixed Sales Contracts and Fixed Purchase Contracts, subject to the following:
(a) With respect In the case of any acquired Contract that is a long-term contract within the meaning of Code Section 460 (hereinafter a "Long- Term Contract") the Buyer and the Seller shall for all federal and state Income Tax purposes (including without limitation the application of the lookback method described in Code Section 460(b)(2)) take into account all amounts treated as paid by the customer pursuant to Section 7.05(c)(i) and all contract costs incurred attributable thereto on the basis of a constructive completion of such contracts entered into after Long-Term Contract on the date hereof, such contracts shall have been entered into by SELLER(s) in the ordinary course of business consistent with past practicesClosing Date.
(b) BUYER The Seller shall assume be responsible for reporting all Fixed Sales Contracts taxable income properly accruing under each Long-Term Contract through the Closing Date and paying all Taxes (including, when due, any lookback interest when payable) payable with respect to that have been entered period (taking into account all amounts paid by SELLERS prior the customer as defined in Section 7.05(c)(i) and all contract costs incurred through the Closing Date) while the Buyer shall be responsible for reporting all taxable income properly accruing under each Long-Term Contract after the Closing Date and paying all Taxes (including lookback interest) payable with respect to or following that period (taking into account all amounts paid by the date hereof with customer (other than collection of unpaid accounts receivable and other amounts assigned to the third parties set forth in Schedule 3.2(bBuyer hereunder), and all contract costs incurred after the Fixed Sales Contracts entered into by SELLERS with Closing Date). Any lookback interest refunds for periods through the Closing Date shall accrue to the Seller, while any other third parties that, in addition lookback interest refunds for periods after the Closing Date shall accrue to satisfying the provisions of clause (a) above, satisfy the creditworthiness standards applied by BUYER in the ordinary course of its businessBuyer.
(c) Any such Fixed Sales Contract shall be subject to BUYER having offsetting Fixed Purchase Contracts For purposes of this Section 7.05:
(either assumed hereunder or otherwisei) and/or long positions of propane inventory that would result in BUYER having no worse than a breakeven economic position upon BUYER's assumption of such Fixed Sales Contract, and if BUYER would not be in such economic position, then BUYER shall nevertheless assume such Fixed Sales Contract but the Purchase Price shall be reduced by an amount equal to BUYER's reasonably anticipated loss from such Fixed Sales Contract. In determining such "reasonably anticipated loss," there shall be taken treated as amounts paid by the customer to the Seller prior to the Closing Date and attributable to a Long-Term Contract (A) all amounts received with respect thereto on or prior to the Closing Date, other than cost underruns, and (B) any then unpaid accounts receivable, unbilled work in progress at its fair market value (after taking into account any net progress payments) as determined under Section 2.08, and claims, disputes and retentions, without regard to whether any interest in such items is assigned or sold to the terms of such contracts, the transportation costs, the carrying costs of Buyer hereunder or whether any such propane inventory and items that are uncollected as of the amount payable by BUYER under Section 3.2(eClosing Date are ultimately collected; and
(ii) below for there shall be treated as contract costs incurred prior to the offsetting Fixed Purchase ContractClosing Date attributable to a Long-Term Contract all costs properly accrued as of the Closing Date.
(d) No amount shall be payable by BUYER in connection with Seller and the assumption by BUYER of Buyer agree to provide the other party any Fixed Sales Contract assistance reasonably necessary or any Fixed Purchase Contract; provided, however, in appropriate to carry out the event a SELLER has made any deposit with a counterparty to any Fixed Purchase Contract, any unapplied portion of such deposit as of the time of Closing shall be paid by BUYER to such SELLER as part of the Purchase Price; and provided, further, that with respect to any Fixed Purchase Contract, BUYER agrees (i) to pay such SELLER's amortized cost thereof that is traceable to the volume to be taken under any such contract that is offset against volumes to be sold under any Fixed Sales Contract assumed by BUYER under (c) abovecomputations required by, and to file Tax Returns (iiincluding refund claims) as necessary or appropriate to the balance of such contractgive effect to, to pay to such SELLER an amount equal to the lower of such SELLER's amortized cost or the market value of such Fixed Purchase Contract as of the Closing. Amortized cost of a Fixed Purchase Contract shall be based upon industry accounting practice and in accordance with GAAP. By way of example of the foregoing proviso, if there is a Fixed Sales Contract for 1 million gallons of propane at $.50 per gallon and a Fixed Purchase Contract for 1.5 million gallons of propane at $.45 per gallon, then the purchase price for such Fixed Purchase Contract would be (i) at such SELLER's cost for 1 million gallons, plus (ii) the lower of such cost or the current market value for the remaining .5 million gallons.
(e) BUYER's agreement to assume any Fixed Sales Contract and any Fixed Purchase Contract shall be subject to such SELLER obtaining any consent of the third party to such contract that would be required to permit the assignment of such contract to BUYER.this Section 7.05
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