EXHIBIT 10.F.
MANAGEMENT AGREEMENT
AGREEMENT made as of the 3rd day of January, 1995 by
and
between RIDGEWOOD ELECTRIC POWER TRUST IV, a Delaware business
trust (the "Trust"), and Ridgewood Power Corporation, a
Delaware corporation (hereinafter referred to as the
"Management Company").
W I T N E S S E T H:
WHEREAS, the Trust is a business trust organized under
The Delaware Business Trust Act, as amended, and is engaged in
business as a business development company under the
Investment Company Act of 1940, as amended (hereinafter
referred to as the "Investment Company Act"); and
WHEREAS, the Management Company is the managing
shareholder of the Trust and will engage principally in
rendering management, administrative and investment advisory
services to the Trust and will register to become an
investment adviser under the Investment Advisers Act of 1940,
as amended; and
WHEREAS, the Trust desires to retain the Management
Company to render management, administrative and certain
investment advisory services to the Trust in the manner and on
the terms hereinafter set forth; and
WHEREAS, the Management Company is willing to provide
management, administrative and investment advisory services to
the Trust on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and
the covenants hereinafter contained, the Trust and the
Management Company hereby agree as follows:
ARTICLE I
Duties of the Management Company
The Trust hereby employs the Management Company to
furnish, or arrange for affiliates of the Management Company
to furnish, the management, administrative and investment
advisory services described below, subject to the general
supervision and review of the Board of the Trust for the
period and on the terms and conditions set forth in this
Agreement. The "Board" consists of the Management Company and
two Independent Trustees appointed pursuant to the terms and
conditions of the Declaration of Trust ("the Declaration") for
the Trust dated as of January 3, 1995. The Management Company
hereby accepts such employment and agrees during such period,
at its own expense, to render, or arrange for the rendering
of, such services and to assume the obligations herein set
forth for the compensation provided for herein.
(a) Management Services. The Management Company shall
perform (or arrange for the performance of) the management
and administrative services necessary for the operation of the
Trust, including providing managerial assistance to portfolio
companies of the Trust and such other services related to
investments in non-utility generating facilities which sell
electric and/or thermal power and in other non-utility
facilities which provide power- related products or services,
as shall be necessary for the operation of the Trust. The
Management Company shall also perform services related to
administering the accounts and handling relations with all
holders of beneficial interests in the Trust. The Management
Company shall provide the Trust with office space, equipment
and facilities and such other services as the Management
Company shall from time to time determine to be necessary or
useful to perform its obligations under this Agreement. The
Management Company shall also, on behalf of the Trust, conduct
relations with custodians, depositories, transfer agents,
other shareholder service agents, accountants, attorneys,
underwriters, brokers and dealers, corporate fiduciaries,
insurers, banks and such other persons in any such other
capacity deemed to be necessary or desirable. The Management
Company shall report to the Board as to its performance of
obligations hereunder and shall furnish advice and
recommendations with respect to such other aspects of the
business and affairs of the Trust as the Management Company
shall determine to be desirable.
(b) Investment Advisory Services. Pursuant to the
Declaration, the Management Company in its capacity as the
managing shareholder of the Trust is responsible for providing
investment advisory services in connection with the Trust's
power investments and in connection with the money market
securities or other non-power investments held by the Trust
(such investments being referred to herein as the
"Investments"). The Management Company shall also provide the
Trust with such investment research, advice and supervision as
the latter may from time to time consider necessary for the
proper supervision of the Investments, and shall advise the
Board of the investment program for the Investments and shall
determine from time to time which Investments shall be
purchased, sold or exchanged and what portion of the Trust's
assets shall be held in the various money market securities or
cash, subject always to any restrictions of the Declaration,
as amended from time to time, the provisions of the Investment
Company Act and the Trust's investment objectives, investment
policies and investment restrictions as the same are set forth
in the reports filed by the Trust under the Securities
Exchange Act of 1934, as amended. The Management Company
shall also make determinations with respect to the manner in
which voting rights, rights to consent to corporate action and
any other rights pertaining to the Trust's Investments shall
be exercised. The Management Company shall take, on behalf of
the Trust, all actions which it deems necessary to implement
its investment policies. Subject to the provisions of the
Investment Company Act and other applicable provisions of law,
the Management Company may select brokers or dealers with
which it or the Trust is affiliated to effect the purchase or
sale of Investments. The Management Company, in its sole
discretion, may engage professionals, consultants and other
persons whose expertise or qualifications may assist the
Management Company or the Trust in connection with the Trust's
business and, if such persons are not affiliated with the
Management Company, may treat the costs and expenses so
incurred as a Trust expense.
ARTICLE II
Allocation of Charges and Expenses
(a) The Management Company. The Management Company
assumes and shall pay the expense for maintaining the staff
and personnel necessary to perform its obligations under this
Agreement and shall at its own expense, provide the Trust with
office space, facilities, equipment and personnel necessary to
carry out its obligations hereunder. The Management Company
will bear the administrative and service expenses associated
with the management services it is to provide for the
Investments of the Trust pursuant to the terms of this
Agreement.
(b) The Trust. The Trust assumes and shall pay or
cause to be paid all other expenses of the Trust not expressly
assumed by the Management Company, including, without
limitation: expenses of portfolio transactions, valuation
costs (including the quarterly calculation of net asset
value), expenses of printing reports and other documents
distributed to the Securities and Exchange Commission and
holders of beneficial interests, Securities and Exchange
Commission and other regulatory fees, interest, taxes, fees
and actual out-of-pocket expenses of the Independent Trustees,
fees for legal, auditing and consulting services, litigation
expenses, costs of printing proxies and other expenses related
to meetings of holders of beneficial interest, postage and
other expenses properly payable by the Trust.
ARTICLE III
Compensation of the Management Company
(a) Management Fee. For the services rendered, the
facilities furnished and the expenses assumed by the
Management Company, the Trust shall pay to the Management
Company compensation which shall be at the annual rate of 3%
of the net asset value of the Trust determined in the manner
set forth in the Confidential Memorandum ("Memorandum") of the
Trust dated January 3, 1995. Such fee is payable monthly in
advance. To the extent that the Trust does not have cash or
readily marketable securities in an amount sufficient to pay
the management fee, the Trust will accrue such fee as a
liability and pay the accrued fee at such time as it has
sufficient cash available to it. Interest on the amount of
the accrued fee will be assessed at the annual rate of ten
percent (10%).
(b) Other Fees. In connection with the offering of
shares of beneficial interest in the Trust ("Shares"), the
Management Company is entitled to receive an organizational,
distribution and offering fee of 6% of each capital
contribution to the Trust to defray expenses incurred in the
offer and sale of the shares. In connection with the initial
management of the capital contributions, the Management
Company is also entitled to receive an investment fee of 2% of
each capital contribution to the Trust for services in
investigating and evaluating investment opportunities. If the
Management Company or an affiliate performs brokerage services
in connection with the acquisition or disposition of Trust
investments in the independent power industry (other than the
Trust's participation in or investments made through any
entity organized to develop multiple independent power
projects), the entity providing those services will be
entitled to a brokerage fee of up to 2% of the gross proceeds
of the acquisition or disposition. Ridgewood Securities
Corporation, an affiliate of the Management Company, is acting
as placement agent for the offering of Shares and is entitled
to a 1% placement fee from each capital contribution and, to
the extent it effects the sales of Shares as a broker-dealer,
to an 8% selling commission on each such Share. The Trust
will reimburse Ridgewood Energy Holding Corporation, the
corporate trustee of the Trust, for all actual and necessary
expenses paid or incurred in connection with the operation of
the Trust, including the Trust's allocable share of the
corporate trustee's overhead. All these fees and expenses are
to be paid pursuant to the provisions of the Declaration.
(c) Expense Limitations. In the event the operating
expenses of the Trust, including amounts payable to the
Management Company pursuant to subsection (a) hereof, for any
fiscal year ending on a date on which this Agreement is in
effect exceed any expense limitations applicable to the Trust
imposed by applicable state securities laws or regulations
thereunder, as such limitations may be raised or lowered from
time to time, the Management Company shall reduce its
management fee hereunder by the extent of such excess and, if
required pursuant to any such laws or regulations, will
reimburse the Trust in the amount of such excess; provided,
however, to the extent permitted by law, there shall be
excluded from such expenses the amount of any interest, taxes,
portfolio transaction costs and extraordinary expenses
(including but not limited to legal claims and liabilities and
litigation costs and any indemnification related thereto) paid
or payable by the Trust. Whenever the expenses of the Trust
exceed a pro rata portion of the applicable annual expense
limitations, the estimated amount of reimbursement under such
limitations shall be applicable as an offset against the
monthly payment of the fee due to the Management Company.
Should two or more such expense limitations be applicable as
at the end of the last business day of the month, that expense
limitation which results in the largest reduction in the
Management Company's management fee shall be applicable.
ARTICLE IV
Limitation of Liability of the Management Company
(a) As more fully described in Article 3 of the
Declaration, the Management Company shall not be liable for
any loss suffered by the Trust that arises out of any action
or inaction of the Trust, any Trust officers, agents or
affiliates, the Management Company, the Trustees, or any
affiliate of the Management Company or a Trustee, or any
director, officer or agent of those entities (collectively,
"Managing Persons") or out of any error of judgment or mistake
of law, if the Managing Person responsible, in good faith,
determined that such course of action was in the Trust's best
interest and such course of conduct was within the scope of
this Management Agreement or the Declaration of Trust and did
not constitute negligence or misconduct of the Managing
Persons involved.
(b) Indemnification. The provisions of Section 3.7 of
the Declaration are hereby incorporated by reference into this
Management Agreement and are expressly approved by the Board
of the Trust. The Management Company shall be entitled to
indemnification hereunder in each instance where the "Managing
Shareholder" is entitled to indemnification under said Section
3.7.
ARTICLE V
Activities of the Management Company
The services of the Management Company of the Trust to
be performed under this Management Agreement are not deemed to
be exclusive, the Management Company being free to render
services to others. It is understood that Trustees or
affiliates of the Trust (other than the Independent Trustees)
and holders of beneficial interest of the Trust are or may
become interested in the Management Company as directors,
officers, employees or shareholders of the Management Company
or otherwise and that the Management Company or its directors,
officers, employees or shareholders are or may become
interested in the Trust as Trustees (other than as an
Independent Trustee), holders of beneficial interests or
otherwise.
ARTICLE VI
Duration and Termination of this Contract
This Agreement shall become effective as of the date
first above written and shall remain in force until the second
anniversary thereof, and thereafter, but only so long as such
continuance is specifically approved at least annually by (i)
the Board of the Trust or the vote of a majority of the
outstanding voting securities of the Trust and (ii) a majority
of those Trustees of the Trust who are not parties to this
Agreement or interested persons of any such party, by a vote
cast in person at a meeting called for the purpose of voting
on such approval.
This Agreement may be terminated at any time, without
the payment of any penalty, by the Board of the Trust or by
vote of a majority of the outstanding voting securities of the
Trust, or by the Management Company, on sixty days' written
notice to the other party. This Agreement shall automatically
terminate in the event of its assignment.
ARTICLE VII
Amendments of this Agreement
This Agreement may be amended by the parties only if
such amendment is specifically approved by (i) the Board of
the Trust or the vote of a majority of the holders of
outstanding voting securities of the Trust and (ii) a majority
of those Trustees of the Trust who are not parties to this
Agreement or interested persons of any such party, by a vote
cast in person at a meeting called for the purpose of voting
on such approval.
ARTICLE VIII
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting
securities," "assignment," "affiliated person" and "interested
person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act
and the rules thereunder.
ARTICLE IX
Governing Law
This Agreement shall be construed in accordance with
the laws of the State of New York and the applicable
provisions of the Investment Company Act. To the extent that
the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of
the Investment Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Agreement as of the date first above
written.
RIDGEWOOD ELECTRIC POWER
TRUST IV
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President
RIDGEWOOD POWER CORPORATION
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Senior Vice President
