Common use of Elimination of Minority Interest Clause in Contracts

Elimination of Minority Interest. Upon the reduction of its Participating Interest to less than ten percent, a Participant shall be deemed to have withdrawn from this Agreement and shall relinquish its entire Participating Interest. Such relinquished Participating Interest shall be deemed to have accrued automatically to the other Participant, the withdrawing Participant shall receive in lieu of its Participating Interest a five percent Net Proceeds Interest. The provisions of this Section 6.5 shall only apply to a Participant whose Participating Interest is reduced to less than ten percent pursuant to any combination of voluntary reductions in participation pursuant to Sections 6.3 or Exploration contribution defaults pursuant to Section 6.4(b)(1), and shall not apply to a Participant whose Participating Interest is relinquished pursuant to Section 6.4(b)(2).