Reduction in Participating Interest Clause Samples
Reduction in Participating Interest. A Participant may elect not to contribute to an approved Program and Budget or to limit its contributions toward Expenditures which are a part of an approved Program and Budget to some amount less than its respective Participating Interest (other than in respect of the then current Program and Budget to the extent to which such Participant has previously elected to contribute). If a Participant elects not to contribute to an approved Program and Budget or elects to contribute to an approved Program and Budget some amount toward Expenditures less than its respective Participating Interest, the Participating Interest of that Participant shall be recalculated at the time of such election by dividing the sum of, (i) such Participant's Initial Contribution set forth in section 7.1, (ii) the total of all of such Participant's contributions toward the Venture's Expenditures to the date of such election, and (iii) the amount, if any, that such Participant elects to contribute toward the Venture's Expenditures in the approved Program and Budget, by the sum of (i), (ii) and (iii) above for both Participants; and then multiplying the result by 100. The Participating Interest of the other Participant shall thereupon increase and become the difference between 100% and the recalculated Participating Interest of the Participant that made such election pursuant to this section 7.5.
Reduction in Participating Interest. (a) Each of Grandview and Fronteer may elect to contribute to the Program and Budget in some lesser amount than their respective participating interest, or not to contribute at all. Each of Grandview and Fronteer shall have the right to elect to participate or not to participate without regard to its vote on the adoption of the Program and Budget. The participating interest of such diluting participant ( the "Diluting Participant") will be reduced effective as of the date the Program and Budget is commenced (the "Diluting Date");
(b) A Diluting Participant's participating interest will be provisionally recalculated effective as of the Diluting Date according to the following formula: R = REA (P) X 100% REA (AP) Where: R = The recalculated participating interest of the Diluting Participant. REA(P) = The Diluting Participant's equity account (as provided for in the Joint Venture Agreement) immediately prior to the Diluting Date, as adjusted for anticipated debits and credits based on the Program and Budget and Diluting Participant's election as to contributions. REA(AP) = The equity account balance (as provided for in the Joint Venture Agreement) for all participants immediately prior to the Diluting Date, as adjusted for anticipated debits and credits based on the Program and Budget and each party's elections as to contributions. The participating interest of the non-diluting participant shall be increased by the amount of the reduction in the participating interest of the Diluting Participant. The recalculations made under this section will remain subject to any final adjustments to be provided for in subsection 8.02(c);
(c) At the end of each budgetary period, a final recalculation of each of the participant's participating interest shall be made, with the provisional recalculations made under subsection 8.02(b) adjusted to reflect actual debits, credits and contributions made during that period. A Diluting Participant shall retain all of its rights and all of its obligations (except as provided for I n subsection 8.02(b) above and such further provisions as may be found in the Joint Venture Agreement);
(d) Either participant that reduces its participating interest pursuant to this Section shall have the right to redeem its position if the actual costs are more than 20% below those set out in the Program and Budget to which such participant had limited its contributions. Otherwise the reduction is final. The Operator shall at least 20 days prior to the ma...