Common use of After Payout Clause in Contracts

After Payout. At that point in time when one hundred percent (100%) of the development and operating costs expended to establish and maintain production from the Overriding Royalty Depth and/or the Overriding Royalty Surface Acreage are recovered by the party paying such costs, then the Overriding Royalty Interest determined under Section 5.01(a) above shall automatically be adjusted to an Overriding Royalty Interest equal to (i) twelve and one-half percent (12.5%) of 8/8ths, (ii) multiplied by the Fixed Percentage, then (iii) multiplied by the percentage working interest of Operating Partnership in that Lease. That is to say, if it is assumed as in the example above that Operating Partnership owns sixty percent (60%) of the working interest which is fully subject to Pension Partnership's Net Profits Interest, and if it is assumed that the Fixed Percentage is fifty percent (50%), then Pension Partnership's Overriding Royalty Interest converts to three and three-quarters percent (3.75%), i.e., twelve and one-half percent (12.5%) of 8/8ths multiplied by fifty percent (50%) (the Fixed Percentage) multiplied by sixty percent (60%) (the Operating Partnership's working interest). The resultant Overriding Royalty Interest calculated under (a) or (b) above shall be reduced or increased proportionately to reflect any sliding scale or reversionary overriding royalty, working interest or similar arrangements contained in the Leases or Subject Interests covering the Overriding Royalty Depth or Overriding Royalty Surface Acreage or contained in any other document as to which such Leases or Subject Interests are made subject as of the date of acquisition.