MANAGEMENT AGREEMENT
This AGREEMENT made as of the 12th day of April, 1996 by and
between RIDGEWOOD ELECTRIC POWER TRUST V, 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
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
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. 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, subject always to any restrictions of the
Declaration, as amended from time to time, applicable provisions
of law and the Trust's investment objectives, investment policies
and investment restrictions as the same are set forth in the
Trust's Confidential Memorandum, dated April 12, 1996, as amended
(the "Memorandum"), or in 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, 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 2.5% of the
total Capital Contributions to the Trust, as set forth in the
Memorandum. 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 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 performs brokerage
services in connection with the disposition of Trust investments
and if no other broker or similar adviser is engaged by the Trust,
the Management Company will be entitled to a brokerage fee of up
to 2% of the gross proceeds of the disposition for those services.
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, and the Trust will reimburse Ridgewood Power
Management Corporation as provided under the Operation Agreements
between the Trust's subsidiaries and that Corporation. 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 recklessness or willful misconduct
of the Managing Persons involved.
(b) Indemnification. The provisions of Section 3.6 of the
Declaration are hereby incorporated by reference into this
Management Agreement. The Management Company shall be entitled to
indemnification hereunder in each instance where the "Managing
Shareholder" is entitled to indemnification under said Section
3.6.
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
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 indefinately. This
Agreement may be terminated at any time, without the payment of
any penalty, by vote of a Majority (as defined in the Memorandum)
of the Investors of the Trust, or by the Management Company, on
sixty days' written notice to the other party.
ARTICLE VII
Amendments of this Agreement
This Agreement may be amended by the parties only if such
amendment is specifically approved by (i) the Managing Shareholder
of the Trust or, (ii) the vote of a Majority of the Investors of
the Trust, by a vote cast in person at a meeting called for the
purpose of voting on such approval.
ARTICLE VIII
Governing Law
This Agreement shall be construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
RIDGEWOOD ELECTRIC POWER
TRUST V
By: /s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President
RIDGEWOOD POWER CORPORATION
By: /s/Xxxxxx X. Gold
Xxxxxx X. Gold
Executive Vice President
