Net Profits Interest Clause Samples

Net Profits Interest. Generally, a Nonoperating Interest in an oil and gas property which entitles the owner to a specified percentage share of the Gross Proceeds generated by such property, net of Operating Costs. The holder of a Net Profits Interest has no personal liability for Operating Costs and other expenses incurred in producing oil and gas from the underlying Producing Property. Under a Net Profits Agreement, the Partnership will receive from its companion Operating Partnership Net Profits Interests having the particular characteristics described therein.

Net Profits Interest. 3.1. If the Creditor exercises the Conversion Option, the Creditor will receive a net profits interest (the “Net Profits Interest”) in any future profits received by the Company that are derived from each Exploitation Activity as computed in accordance with paragraph 3.2 of this Agreement (the “Net Profits”), at a basis of 1% of the Company’s Net Profits for every $10,000.00 of the Converted Amount; 3.2. Net Profits will be computed on an individual Exploitation Activity basis, and consist of the cash income received by the Company from an Exploitation Activity less all expenses incurred to produce the income (“Exploitation Costs”), including, but not limited to: (a) the Licensors Royalty; (b) all direct costs, charges and expenses incurred by the Company in production, development, and other operations of the Exploitation Activity; (c) all taxes excluding income taxes; (d) all operating charges directly associated with the Exploitation Activity; (e) employment, management and professional expenses directly related to the Exploitation Activity; (f) liabilities, fines or other related costs directly associated with the Exploitation Activity; and (g) reasonable expense reimbursements owed to the Company. 3.3. The proceeds from the exploitation of the Technology may be subject to different Exploitation Costs depending on the type of Exploitation Activity. 3.4. For each of the Company’s fiscal quarters occurring wholly or partly during the term of this Agreement, the Company shall within sixty (60) days after the end of each such fiscal quarter, deliver to the Creditor its share of the proceeds from each Exploitation Activity. 3.5. Proceeds will only be disbursed after all Exploitation Costs are deducted. 3.6. The Creditor’s Net Profits Interest shall terminate when the Creditor has received eight times the Converted Amount.

Net Profits Interest. 8 Section 3.1. Net Profits Interest...................................................................8 Section 3.2. Establishment..........................................................................8 Section 3.3. Credits................................................................................8 Section 3.4. Debits................................................................................10 Section 3.5.

Net Profits Interest. From and after the date at which aggregate Net Revenue equals $13,000,000 (hereinafter called "Payout"), Buyer shall pay, within 30 days following the end of each calendar quarter, to Seller 10% of all Net Profits (defined below) received by Buyer after Payout. The term "Net Profits" as used in this Agreement shall mean the Net Revenue received by Buyer after Payout during the subject calendar quarter. The definition of Net Revenue as defined in Section 1.13 shall not include (i) general and administrative expenses incurred by Buyer (excluding bona fide third party expenses) directly associated with the ownership of the Assets, or (ii) costs or revenue associated with participation in a working interest. Buyer also agrees that leases to affiliates, if made will be at then current competitive lease rates. The net profits interest created hereby does not encumber the Assets or "run with the land," and Buyer shall have the authority and ability to transfer (via arm's-length transaction with a bona fide third party) all or any portion of the Assets free of this net profits interest; however, any proceeds received by Buyer from any such disposition (including any retained interest) shall be treated as income attributable to the Assets for the purpose of computing Net Revenue. Prior to Payout, Buyer shall provide an annual statement to Seller indicating Net Revenue which shall detail actual receipts and expenses attributable to Assets from all sources for the calendar year. After Payout, Buyer shall provide quarterly statements which shall detail receipts and expenses. Seller shall have the rights to audit all such statements and Buyer's records relating thereto, with advance notice, during regular business hours and at Seller's sole cost and expense. The first sentence of Section 3.1 of the Agreement is hereby amended by inserting the words net profits interest therein, so that this sentence now reads as follows: Subject to adjustments as set forth in 3.1, the Purchase Price for the Assets shall be thirteen million dollars ($13,000,000.00), and the Net Profits Interest described in Section 11.3 below. [remainder unchanged] The third sentence of Section 6.5 of this Agreement is hereby amended by inserting the words gas imbalances therein, so that this sentence now reads as follows:

Net Profits Interest. No payment in respect to the Net Profits Interest will be paid by the Purchaser to the Vendors hereunder until the Purchaser has been first reimbursed or recouped for its own account out of the Net Profits from any Mining Operation on the Property, an amount in the aggregate equal to:

Net Profits Interest. From and after such time as Lessee shall have recovered its Investment, as hereinafter defined, Owner shall have twenty percent (20%) Net Profits Interest in the claims, said twenty percent (20%) Net Profits Interest shall continue to be due under all circumstances even if Owner's claims are lost or invalidated through any governmental action, or Lessee asserts extralateral rights to mine areas appurtenant to Lessee's HR claims. The said Net Profits Interest shall be calculated and paid by Lessee in the manner set forth in Exhibit "B" attached hereto, for any minerals removed and sold by Lessee from beneath the vertical boundaries of the claims listed in Exhibit "A", attached hereto, as they existed of record on the date of this Agreement. The claims to which this subsection refers are depicted on the map attached hereto as Exhibit "C". The provisions of this Section 3(a) shall survive the termination of this Agreement. It is agreed by the parties hereto that this Amendment effects only Section 3(a) of said Lease and Option to Purchase Agreement and all other provisions of the Agreement shall remain unaffected by this Amendment and shall continue to be binding obligations of the parties.

Net Profits Interest. The Agent shall have received counterparts of the NPI Conveyance, dated on or about the date hereof, substantially in the form of Exhibit I or otherwise in form and substance reasonably satisfactory to the Agent, duly executed and delivered by the applicable Obligors in a sufficient number of counterparts for the due recording in each applicable recording office (including each office specified in any title opinions described in Section 5.1.15), granting to Centaurus a twelve and a half percent (12.5%) net profits interest in the Borrower Properties, as well as such other agreements, documents and other writings as may be reasonably requested by the Agent.

Net Profits Interest. In consideration for the payment by Investor to Owner of the Advance, Investor shall have the rights provided for in this Article III and elsewhere in this Agreement with respect to the Accounts, including without limitation the rights to receive payments from Owner measured by each Account pursuant to Section 3.7 (all of such rights are herein collectively called the "Net Profits Interest"). The Net Profits Interest is intended to provide to Investor substantially the same economic benefit as if Investor was the owner of a direct net profits interest in each Association Contract to the extent it relates to the Designated Percentage of the related Subject Interests and on the terms otherwise provided for herein; provided, however, that no rights or interest of any nature whatsoever in an Association Contract, any Subject Interests or Harken Colombia are intended to be, or are hereby, assigned or conveyed to Investor, it being understood and agreed that the Net Profits Interest is solely a contractual obligation of Owner as expressed in this Agreement.

Net Profits Interest. The Net Profits Interest payable to a former Participant whose Interest was converted (a “Payee”) to a Net Profits Interest will be a 15% Net Profits Interest which shall be calculated in accordance with this Schedule. Unless specifically provided otherwise, any terms or expressions given a defined meaning in this Schedule shall have a corresponding meaning in the attached Agreement.