Common use of Enforcement of the Compensatory Penalty Clause in Contracts

Enforcement of the Compensatory Penalty. If verified failure to comply with the Minimum Exploration Program, ANP shall summon the Contracted Parties to pay the adjusted amount corresponding to the parcel not implemented, as compensatory penalty, within thirty (30) days, with no discount for voluntary payment. In the absence of voluntary payment, ANP shall execute the respective financial guarantees. ANP’s representation of default in an administrative proceeding subject to adversary proceeding and legal defense has immediate effect and characterizes a cause sufficient to execute the bid bond offered, including performance bond. Any suspension of the execution depends on a decision made by ANP itself, pursuant to item “m” of paragraph 35.5, or on an arbitration or court decision in effect. In any case, such suspension does not preclude ANP from communicating the loss to the insurance company before expiration, as well as its effective execution when the suspension ends and the administrative decision was not reversed, even after the original term. Receipt of the amount corresponding to the compensatory penalty for failure to implement the Minimum Exploration Program: does not exempt the Consortium Members from performing the other obligations arising from the Agreement; does not affect ANP’s right to seek other remedies and impose any applicable sanctions for acts other than the mere failure to implement the Minimum Exploration Program; and does not entitle the Consortium Members to start the Production Phase.