91 9.2 ARTICLE 9 LIQUIDATED DAMAGES PAYABLE BY PROJECT COMPANY in issionii (a) The Project Company covenants that Phase I shall be Commissioned on or before the Required Phase 1 Commercial Operation Date. If the Phase 1 Commercial Operation Date has not occurred by the Required Phase 1 Commercial Operation Date, the Project Company shall pay NEPCO, as liquidated damages, for the delay in ‘Commissioning, a sum equal to USS 50,000 per day or fraction thereof. In no event shall the damages assessed under this Article 9.1(a) exceed US$ 11,000,000. () The Project Company covenants that Phase 2 shall be Commissioned on or before the Required Phase 2 Commercial Operation Date. If the Phase 2 Commercial Operation Date has not occurred by the Required Phase 2 Commercial Operation Date, the Project Company shall pay NEPCO, as liquidated damages, for the delay in ‘Commissioning a sum equal to US$ 50,000 per day or fraction thereof. In no event shall the damages assessed under this Article 9.1(b) exceed USS 1 1,000,000. (©) In_no event shall the damages assessed under this Article 9.1 exceed US$ 22,000,000. Eaih Meet Contracted Facility Capacit (a) The Project Company covenants that the Initial Dependable Capacity of Phase I shall not be less than the Contracted Phase 1 Capacit In the event that upon completion of the Dependable Capacity Test used to establish the Initial Dependable Capacity of Phase 1, at the Phase 1 Commercial Operation Date, pursuant to Article 8, Initial Dependable Capacity is less than the Contracted Phase 1 Capacity, the Project Company shall have the option for a period of up to six (6) months from the Phase 1 Commercial Operation Date to undertake any necessary actions to increase the Initial Dependable Capacity to the Contracted Phase 1 Capacity ‘own cost. If upon the expiration of such period, the Initial Dependable Capacity is set below the Contracted Phase 1 Capacity, the Project Company shall pay to NEPCO, as liquidated damages, an amount equal to US$ 75 per kW of the shortfall. (6) The Project Company covenants that the Initial Dependable Capacity of Phase 2 shall not be less than the Contracted Facility Capacity. In the event that upon completion of the Dependable Capacity Test used to establish the Initial Dependable Capacity of Phase 2, at the Phase 2 Commercial Operation Date, pursuant to Article 8, Initial Dependable Capacity is less than the Contracted Facility Capacity (but greater than the Threshold Capacity), the Project Company shall have the option for a period of up to six (6) months from the Phase 2 Commercial Operation Date to undertake any necessary actions to increase the Initial Dependable Capacity to the Contracted Facility Capacity at its own cost. If upon the expiration of such period, the Initial Dependable Capacity is set at a level that is below the Contracted Facility Capacity, the Project Company shall pay to NEPCO, as liquidated damages, an amount equal to USS 75 per kW of the shortfall. (©) Inno event shall the damages assessed under this Article 9.2 exceed US$ 4,000,000. GW wf@ Results ofall Initial Dependable Capacity Tests and Dependable Capacity Tests shall be valid only to the extent such tests are performed while the Facility operates within the requirements of all Government Authorisations and the World Bank Guidelines. 9.3 Excessive Outages The Project Company covenants that, in respect of each Contract Year, the Excessive Outages s Energy ("EOE") for such Contract Year shall be less than or equal to zero (0). In the event that, during any Contract Year other than the first Contract Year, the Excessive Outage: s Energy is greater than zero (0), then the Project Company shall pay to NEPCO, as liquidated damages, the Capacity Damages, calculated as follows: ‘Capacity Damages (USS) = Capacity Damages Amount (USS/MW) x 1.4 x Excessive Outages Energy (MWh)/ eight thousand seven hundred sixty (8760) hours) Where MW per Month prevailing during the relevant Contract Year and (ii) 12 Months. @ the Capacity Damages Amount equals the product of (i) the Capacity Charge per ‘The Excessive Outages Energy (EOE) for any Contract Year, other than as modified in Article 9.3(c) for the first Contract Year, will be the sum of the actual weighted outages (WFOE, WMOE and WSOE) minus the Allowable Outages Energy (AOE), namely: | Excessive Outages Energy (MWh) = [WFOE + WMOE ~ WSOE - (AOE)] (MWh) WFOE (MWh) WMOE (MWh) WSOE (MWh) AOE (MWh) the summation of all periods of Forced Outage for this product: duration of outage (hours) x reduction in Dependable Capacity (MW) x Weighting Factor for these outage periods. the summation of all periods of Maintenance Outage of this product duration of outage (hours) x reduction in Dependable Capacity (MW) x Weighting Factor for these outage periods. the summation of all periods of Scheduled Outage of this product: duration of outage (hours) x reduction in Dependable Capacity (MW) x Weighting Factor for these outage period. Annual Average Dependable Capacity (MW) x seven hundred (700) hours except that, during any Contract Year where a Major Overhaul is carried out on both gas turbines, AOE (MWh) shall be equal to Annual Average Dependable Capacity (MW) x one-thousand and fifty hours (1050). hours. (b) © If the EOE for any Contract Year is less than or equal to zero, no liquidated damages are due. ‘The "Weighting Factor" applicable to hours of Forced Outage, Maintenance Outage, and Scheduled Outage, other than for the Free Commissioning Period which shall be: PA, oeMonths Weighting Faetor Weighting Factor 07:00-23:00 23:00-07:00 Hours January 0.85 037 February 0.85 037 March 0.85 037 April 10 0.45 May 115 047 | June 1.62 0.65 Jy 1.90 081 August 1.90 081 September 1.60 0.75 October 1.05 0.60 ‘November 0.95 0.50 l December 0.95 0.45 a (@ During the first Contract Year, the Capacity Damages shall be calculated as follows: ‘Capacity Damages (USS) ‘Capacity Damages Amount pri non rcp (USS/MW) x 1.4 x Excessive Outages Energy pitt won FCP (MWh) / (SCH (hours) - FCPH (hours)] Capacity Damages Amount rcp (USS/MW) x 1.0.x Excessive Outages Energy rce (MWh) / FCP (hours) i Capacity Damages Amountpyz (USS/MW) x 1.4 x Excessive Outages Energypsz (MWh) / CCH (hours) ‘Where: Capacity Damages Amount pri non rcp (USS/MWh) equals the product of (j) the Capacity Charge (US§/MW/Month) for the Simple Cycle Period during Contract Year | and (ii) SCM minus FCPM. (Month) Capacity Damages Amount pcp (USS/MWh) equals the product of (i) the Capacity Charge | (USS/MW/Month) forthe Simple Cycle Period during Contract Year 1 and (ii) CPM (Month) Capacity Damages Amount pz (USS/MWh) equals the product of (i) the Capacity Charge (USS/MW/Month) for the Combined Cycle Period during Contract Year | and (ii) CCM (Month) «6 alg‘SCH equals the total number of hours during the Simple Cycle operating period SCM equals the total number of Simple Cycle operating months FCPH equals the total number of hours during the FCP for avoidance of doubt 2,688 hours) FCPM equals the total number of FCP operating months CCH equals the total number of hours during the Combined Cycle operating period | CCM equals the total number of Combined Cycle operating months Excessive Outages Energy pu son rcp (MWh) equals Excessive Outages Energy (MWh) during the Simple Cycle Period (but excluding the FCP) of the first Contract Year calculated in accordance with the formula in Article 9.3(a), provided that AOE (MWh) in respect of such period equates to: Simple Cycle Average Dependable Capacity (MW) x 700 (hours) x [SCH (hours) - FCPH (hours)] / 8,760 (hours) Excessive Outages Energy rcp equals Excessive Outages Energy (MWh) calculated during the FCP of the first Contract Year in accordance with the formula in Article 9.3(a), provided that (i) AOE (MWh) in respect of such period equates to: Simple Cycle Average Dependable Capacity (MW) x 1,248 (hours) and (ji) the Weighting Factor is fixed at 1.0 during the Free Commissioning Period Excessive Outages Energy pi (MWh) equals Excessive Outages Energy (MWh) during the Combined Cycle Period of the first Contract Year calculated in accordance with the formula in Article 9.3(a), provided that AOE (MWh) in respect of such period equates to: Combined Cycle Average Dependable Capat 94 95 (MW) x 700 (hours) x CCH (hours) / 8,760 (hours) Waiver of Defences Notwithstanding that NEPCO may be substantially damaged in amounts that may be difficult or impossible to determine in the event that a Phase (i) is not Commissioned by the date required, (ji) is not capable of achieving and maintaining the Contracted Phase | Capacity or Contracted Facility Capacity, as the case may be (iii) cannot minimise the ‘number of Forced Outages or (iv) cannot achieve the designated operating levels, the Parties agree that the sums set out in this Article 9 constitute a genuine pre-estimate of the loss to NEPCO and as a result are fair and reasonable as liquidated damages and it is further understood and agreed that the payment of liquidated damages is in lieu of actual damages for such occurrences. The Project Company hereby waives any defence as to the validity of any liquidated damages in this Agreement on the grounds that such damages are void as penalties. uurity Deposit At Financial Close, NEPCO shall return the Proposal Security to the Project Company and the Project Company shall provide to NEPCO a security deposit (the "Construction Security”) in an amount in Dollars equal to USDS twenty-two million (USD$22,000,000) to ensure the Project Company's obligations to pay liquidated damages in accordance with Articles 9.1 and 9,2. The Construction Security shall terminate three (3) Months after the Phase 2 Commercial Operation Date, at which point NEPCO shall return the Construction Security to the Project Company. The Construction Security shall consist of either: unconditional and irrevocable direct pay letter of credit issued by an international bank with Ae