Direct and Indirect Clause Samples

Direct and Indirect. Coverages Defense coverage is not subject to a deductible.

Direct and Indirect costs 22.6.1 All Direct Costs of the Joint Operation shall be charged to the Parties in the same proportion that the production is allocated after royalties. 22.6.2 Indirect Costs shall be charged to the Parties in the same proportion that has been established for Direct Costs in Item 22.6.1 of this Clause. The amount of such costs shall be the result of taking the total annual investment value and direct expenses (excepting technical and administrative support) and applying the equation "a + m <PAGE> EMPRESA COLOMBIANA DE PETROLEOS ECOPETROL RIO ▇▇▇▇▇▇▇▇▇ ASSOCIATION CONTRACT Pag. 37 (X-b)" In such equation, "X" is the total value for investments and annual expenses and "a", "m", and "b" are constants whose values are indicated in the following table in relation with the amount of investments and annual expenses: INVESTMENT AND EXPENSES VALUE OF THE CONSTANTS "X"(US$) "a"(US$) m(fracc.) "b"(US$) 1. 0 to 25.000.000 0 0.10 0 2. 25.000.001 to 50.000.000 2.500.000 0.08 25.000.000 3. 50.000.001 to 100.000.000 4.500.000 0.07 50.000.000 4. 100.000.001 to 200.000.000 8.000.000 0.06 100.000.000 5. 200.000.001 to 300.000.000 14.000.000 0.04 200.000.000 6. 300.000.001 to 400.000.000 18.000.000 0.02 300.000.000 7. 400.000.001 and over 20.000.000 0.01 400.000.000 The equation will be applied once a year in each case with the value of the constants corresponding to the total value of annual investments and expenses.

Direct and Indirect