Common use of Payments to the State Clause in Contracts

Payments to the State. 1. During the valid period of the Concession Contract, the Concession Holder agrees to make available to DGEG, annually, during the initial period of the concession (eight years, which may be extended twice for periods of one year), annual financing equal to 50,000 € (fifty thousand euros) in the first five years, and 75,000 € (seventy-five thousand euros) in the remaining years in the initial period of the concession, for: a. Technology transfer programs, updates/training and promotional activities; b. Acquisition and/or contracting of equipment / specialized technical means; c. Preservation and treatment of technical data and information. 2. During the valid period of the Concession Contract, the Concession Holder must transfer, every year for the period of five years, with priority given to the University of Lisbon and the University of Coimbra, the amount of 25,000 € (twenty-five thousand euros), for technology transfer programs, special studies and training. 3. In the event of discovery, and once production is initiated, the Concession Holder, after recovering the costs for research and development of the oil field(s), and after discounting the operating costs for production, that is, when it attains a positive net result, must also pay the following to DGEG in a continuous manner: · 2% (two percent) of the value of the first 5 (five) million barrels of oil equivalent produced and effectively commercialized; · 5% (five percent) of the amount of production and commercialization of oil equivalent between 5 (five) and 10 (ten) million barrels; · 7% (seven percent) of the amount of the remaining barrels of oil equivalent produced and commercialized. 4. Within 30 (thirty) days after the end of each quarter, the Concession Holder will present all relevant information for calculating the amount it owes to DGEG, in accordance with what is established in number 2 above. This information must include production values, plus the costs of research, development, production and operation, the amounts obtained from sales of oil, and the taxes charged or to be charged. The Concession Holder will provide its estimate of what it should pay to DGEG in relation to the quarter in question. The DGEG will then issue an invoice of amounts owed, and it will notify the Concession Holder of this invoice. This amount must be paid within 30 (thirty) days following the date that invoice is received. Failure to pay this amount is a serious violation of the Concession Holder’s contractual duties, assuming that if the Concession Holder does not agree with the amount of the invoice, after payment of the amount that is not contested it will have the right to submit the difference in dispute to an Arbitration Court, as per Article 22. 5. The verification and collection of the amount stated in the previous number will have as reference the conversions internationally accepted by the oil industry, which are 1 boe (barrel of oil equivalent) = 6000 cubic feet of gas = 1 barrel of liquid oil.