OPERATION, MAINTENANCE AND ADMINISTRATION AGREEMENT
RIDGEWOOD MAINE HYDROELECTRIC PROJECTS
THIS AGREEMENT, dated November __, 1996, made and entered
into by and between Ridgewood Maine Hydro Partners, L.P.
("Owner"), a Delaware limited partnership, and CHI Operations,
Inc. ("Operator") and Consolidated Hydro, Inc., ("Parent") each a
Delaware corporation.
W I T N E S S E T H
WHEREAS, Owner owns all the assets of 14 separate
hydroelectric facilities located in the State of Maine (the
"Projects") which collectively have a nameplate generating
capacity of 11.32 megawatts and which are further described on
Schedule A attached hereto; and
WHEREAS, the electricity generated by the Projects is sold
to Central Maine Power Company or Bangor Hydro Company pursuant
to certain power purchase agreements (the "Power Purchase
Agreements"); and
WHEREAS, Operator is in the business of operating,
maintaining and administering hydroelectric projects; and
WHEREAS, the parties mutually desire to enter into this
agreement to have Operator operate, maintain and administer the
Projects on the terms and conditions herein contained;
NOW THEREFORE, in consideration of the covenants and
commitments herein contained, the parties agree as follows:
SECTION 1
GENERAL CONDITIONS
1.1 Owner hereby retains Operator to perform and Operator
hereby undertakes to perform the necessary and desirable
operations, maintenance and administration services of the
Projects, in accordance with the terms of this Agreement.
1.2 In performing such services, Operator agrees that it
shall at all times during the term of this Agreement retain a
sufficient number of competent employees who are knowledgeable in
the operation, maintenance and administration of hydroelectric
generating facilities in order that Operator may fully perform on
a timely basis all of the Operator's obligations hereunder.
1.3 Operator shall perform all services efficiently,
skillfully and safely in compliance with the Power Purchase
Agreements and all applicable licenses, permits, safety standards
and other applicable laws, rules and regulations. Operator
recognizes that Owner desires to have the Projects operational at
all times when sufficient water is available, except during
necessary outages, whether scheduled or unscheduled, and in such
a manner as to maximize net cash flow. Operator will use best
efforts in performing the services required hereunder to achieve
that goal subject to the constraints of the Annual budget as
defined in Schedule 3.1(a)(6).
1.4 In addition to the Power Purchase Agreements, Owner has
made available to Operator, and Owner will hereafter promptly
furnish to Operator, copies of all applicable federal, state and
local licenses, permits, safety standards and other applicable
laws, rules and regulations relating to the Projects which are in
the possession of the Owner.
1.5 Owner, Operator and Parent warrant and represent to
each other that their entering into this Agreement is not
prohibited by or in contravention of any other agreement to which
any of them is a party.
1.6 Notwithstanding any other provisions contained in this
Agreement, Owner shall have the right to perform any and all acts
required by lawful order of the Federal Energy Regulatory
Commission or any successor agency affecting the Projects without
the prior consent of Operator. In such regard, Owner shall
provide Operator with as much notice as possible, but, except in
emergency situations, at least 30 days' written notice of any
such required acts.
1.7 Parent covenants with Owner that Parent will cause
Operator to perform all obligations undertaken by Operator
hereunder.
SECTION 2
TERM AND TERMINATION
2.1 This Agreement shall be deemed to have commenced on the
first day of July, 1996 (the "Commencement Date"), and when used
herein, the term "Year" shall mean the 12 calendar month period
commencing on July 1, and ending on the succeeding June 30.
Subject to the other provisions of this Section set forth below,
this Agreement shall:
(a) extend for a initial term of five Years expiring
June 30, 2001 (the "Initial Term");
(b) unless previously terminated in accordance with the
terms hereof, upon the expiration of the Initial Term
this Agreement shall be automatically extended on the
same terms and conditions for an additional term of
five Years commencing July 1, 2001 and ending June 30,
2006 (the "Second Term"); and
(c) unless otherwise previously terminated in
accordance with the terms hereof, upon the expiration
of the Second Term, this Agreement shall be
automatically extended on the same terms and conditions
for an additional term of five Years commencing July 1,
2006 and ending on June 30, 0000 (xxx "Xxxxx Xxxx").
2.2 This Agreement may be terminated by Operator as
follows:
(a) Upon delivery by Operator to Owner of Operator's
written notice of termination, at least six calendar
months prior to the expiration of the Initial Term, the
Second Term or the Third Term, in which case this
Agreement shall terminate upon the expiration of the
Initial Term, the Second Term or the Third Term, as the
case may be.
(b) Upon default by Owner in the performance of any
material term, condition or covenant contained in this
Agreement, which default continues for a period of more
than thirty (30) days after delivery by Operator to
Owner of written notice thereof; provided however, that
if the default is a default which, by its nature,
cannot be cured within such thirty (30) day period,
then this Agreement may not be terminated by Operator
if Owner takes good faith action to remedy such default
within such thirty (30) day period and thereafter
diligently process such remedy until the default is
cured. In the event that the default is non-payment by
Owner of its monetary obligation to Operator hereunder,
Operator may seek all available remedies to enforce
payment to it of all obligations of Owner then due
without terminating this Agreement.
2.3 This Agreement may be terminated by Owner as follows:
(a) Upon default by Operator in the performance of any
material term, condition or covenant contained in this
Agreement, which default continues for a period of more
than thirty (30) days after delivery by Owner to
Operator of written notice thereof; provided however,
that if the default is a default which, by its nature,
cannot be cured within such thirty (30) day period,
then this Agreement may not be terminated by Owner if
Operator takes good faith action to remedy such default
within such thirty (30) day period and thereafter
diligently process such remedy until the default is
cured. In the event that the default is non-
performance by Operator of its obligations to Owner
hereunder, Owner may seek all available remedies to
enforce performance to it of all obligations of
Operator without terminating this Agreement.
(b) If in any Year, the Average Facility Availability
(as defined in Section 2.3(e) below) is less than 70%,
then the Owner may deliver written notice to Operator
of Owner's intention to terminate this Agreement, in
which case this Agreement shall automatically terminate
at the end of the calendar month which is nine full
calendar months after the month in which Owner
delivered the notice described in this Section 2.3(b)
to Operator; provided, however, that this Agreement
shall not be terminated and shall continue in full
force and effect if the Average Facility Availability
for the six full calendar months following the month in
which Owner delivers the notice described in this
Section 2.3(b) to Operator increases to 80% or more.
(c) If during the four Year period ending on June 30,
2000, the cumulative Average Facility Availability from
the Commencement Date through June 30, 2000 is less
than 80%, then the Owner may deliver to Operator
written notice of termination at any time prior to
December 31, 2000, in which case this Agreement shall
terminate at the end of the sixth calendar month after
such notice is given to Operator by Owner.
(d) At any time after June 30, 2000, Owner may deliver
written notice to Operator of the termination of this
Agreement, in which case this Agreement shall terminate
at the end of the sixth calendar month after the end of
the month in which such notice is delivered by Owner to
Operator. In the event Owner terminates this Agreement
pursuant to this Section 2.3(d), Owner shall be
required to make a lump sum cash payment to Operator
with respect to the Year in which such termination
becomes effective equal to the sum of (i) the amount
set forth in the table below, plus (ii) 50% of the
positive balance of any Carry Forward Amount existing
as of July 1 of the Year in which such termination
becomes effective:
Year in which
Termination is Effective
Amount
July 1, 2000 - June 30,
2001
$1,200,000
July 1, 2001 - June 30,
2002
1,090,909
July 1, 2002 - June 30,
2003
981,818
July 1, 2003 - June 30,
2004
872,727
July 1, 2004 - June 30,
2005
763,636
July 1, 2005 - June 30,
2006
654,545
July 1, 2006 - June 30,
2007
545,455
July 1, 2007 - June 30,
2008
436,364
July 1, 2008 - June 30,
2011
327,272
(e) For purposes of Section 2.3(b) and 2.3(c) above,
Average Facility Availability shall mean, with respect
to any period, the percentage equal to the fraction,
the numerator of which is (x) the total number of
kilowatt hours for which the Projects were available to
operate during such period (determined by multiplying
the nameplate rating of each of the generating units of
each of the Projects times the number of hours such
generating unit was available to operate during such
period), and the denominator of which is the total
number of kilowatt hours in the period (determined by
multiplying the nameplate rating of each of the
generating units of each of the Projects times the
number of hours in such period), provided, however,
that non-availability which is attributable to any one
or more of the following events shall be disregarded in
computing Average Facility Availability:
(i) shut down of any generating unit in order to
accomplish scheduled capital improvements which
have been approved by Owner;
(ii) shut down of any generating unit by Owner for
economic reasons;
(iii) force majeure events under any of the Power
Purchase Agreements which relieve the utility of
the obligation to purchase power thereunder;
(iv) refusal or viability of any utility to accept
and pay for power in accordance with any Power
Purchase Agreement; or
(v) non-availability as to which Owner is receiving
offsetting payments under its business interruption
insurance coverage.
In determining Average Facility Availability under this
Section 2.3(e), shutdown or other non-operation of any one
or more otherwise operational generating units at any
Project shall be disregarded to the extent that shutdown or
non-operation of any of such units is attributable to low
water flow at the Project.
SECTION 3
OPERATOR SERVICES
3.1 The management services to be performed by Operator
hereunder are limited to those services specified in Schedule
3.1(a) attached hereto and incorporated herein (the "Management
Services"). The operation and maintenance services to be
performed by Operator hereunder are limited to those services
specified in Schedule 3.1.(b) attached hereto and incorporated
herein (the "O&M Services"). The administration services to be
performed by Operator hereunder are limited to those services
specified in Schedule 3.1(c) attached hereto and incorporated
herein (the "Administration Services"). (The Management
Services, the O&M Services and the Administration Services are
sometimes collectively referred to hereinafter as the "Scheduled
Services".) In addition to the Scheduled Services, Operator
shall perform additional services, including, but not limited to
the additional services specified in Schedule 3.1(d) (the
"Additional Services") attached hereto, in accordance with the
procedures set forth in such Schedule.
3.2 Operator shall appoint a representative (the
"Operator's Representative") who shall be responsible for
maintaining communications with Owner. Operator's Representative
shall respond in a timely manner to all Owner communications.
3.3 Insurance. Operator shall provide broad form liability
insurance and errors and omissions insurance in conformity with
the terms and conditions set forth in Schedule 3.3. Operator's
insurance policies shall name Owner as an additional insured and
shall provide, so long as commercially available, at least 30
days written notice prior to cancellation, termination,
alteration or material change of insurance. Operator shall
provide Owner a copy of insurance certificates evidencing such
insurance prior to the commencement of this Agreement.
3.4 Operator represents to Owner that the Scheduled
Services represent all of the services (other than the Additional
Services)necessary to operate the Projects in the normal course,
consistent with past practices employed by Operator when the
Projects were owned by an affiliate of the Operator.
SECTION 4
OWNER'S OBLIGATIONS
4.1 Owner shall provide Operator with all information
concerning the Projects which Operator reasonably requests,
including construction and equipment drawings, start up and
testing procedures, equipment, parts and maintenance manuals, an
overall plant operation and maintenance manual and all records
relating to historical and current power generation, revenues and
expenses to the extent such items exist and are available to
Owner.
4.2 Owner shall appoint a representative (the "Owner's
Representative") who shall be responsible for maintaining
communications with Operator. Owner's Representative shall
respond in a timely manner to all Operator requests. Operator
may rely on and act upon all communications from Owner's
Representative.
4.3 Owner has established separate bank accounts to be
funded by Owner and used by Operator to provide for the ongoing
expenses of the Projects, as follows:
(i) Owner has established the Ridgewood Maine Hydro
Partners, L.P. Operating Expense Account (Account No.
2017209259) at Fleet Bank in Ridgewood, New Jersey (the
"Operating Expense Account") and has delivered to
Operator checks and signature cards which authorize
designated representatives of the Operator to draw on
such account in accordance with the terms of this
Agreement to (a) reimburse Operator for the labor costs
incurred by the Operator in providing the O&M Services
and (b) to make payments for parts, services and
supplies supplied to or for the benefit of the Projects
as part of the routine day-to-day operation of the
Projects. Owner has funded the Operating Expense
Account with an initial deposit of $175,000. Within
five days before the end of each month, Operator shall
provide Owner with a reconciliation of the amounts
drawn by Operator from the Operating Expense Account
and an itemized estimate of the total labor costs and
routine operating expenses to be incurred by the
Projects for the succeeding month. Within three days
after receipt of such reconciliation and estimate,
Owner shall make a deposit in the Operating Expense
Account so that the balance of such account will be not
less than 125% of the total amount set forth in the
Operator's estimate. Owner acknowledges that the
monthly deposit requirements for the Operating Expense
Account may vary significantly over the course of the
year depending on the operating parameters of the
Projects.
(ii) Owner has established the Ridgewood Maine Hydro
Partners, L.P. Capital Expense Account (Account No.
0000000000) (the "Capital Expenditure Account") at
Fleet Bank in Ridgewood, New Jersey and has delivered
to Operator checks and signature cards which authorize
designated representatives of Operator to draw on such
account to pay for capital expenditures for the
Projects which have been approved by the Owner. Owner
confirms that it has approved the capital expenditures
set forth in Schedule 4.3 attached hereto, and Owner
has reserved the sum of $1 million to be available to
fund such capital expenditures. Upon receipt from
Operator of a detailed budget (including reasonable
contingencies) supporting such approved capital
expenditures in form reasonably satisfactory to Owner,
Owner will fund the Capital Expenditures Account in an
amount sufficient to cover the estimated costs of such
capital expenditures. From time to time Operator may
propose additional capital expenditure projects for
approval by Owner. Upon any such approval (which
approval may be evidenced by Owner's approval of an
Annual Budget containing any such capital expenditure
projects) and unless otherwise agreed, Owner shall be
required to fund the estimated cost of such capital
expenditures into the Capital Expenditure Account.
Within 10 days after the end of each calendar month,
Operator will furnish Owner with a reconciliation of
the amounts, if any, drawn by Operator from the Capital
Expenditure Account, a description of the work
completed with respect to such capital expenditures and
Operator's estimate of the work remaining and an update
of the budget with respect thereto.
4.4 Insurance. Owner shall provide property, business
interruption and general liability insurance in conformity with
the terms and conditions set forth in Schedule 4.4. Owner's
insurance policies shall name Operator as an additional insured
and shall provide, so long as commercially available, at least 30
days written notice prior to cancellation, termination,
alteration or material change of insurance. Owner shall provide
Operator a copy of insurance certificates evidencing such
insurance prior to the commencement of this Agreement.
4.5 Owner covenants that during the term of this Agreement
and for a period of one year thereafter, neither Owner nor its
subsidiaries, affiliates, officers, employees or agents shall
induce, directly or indirectly, any individual who is employed by
Operator or its subsidiaries or affiliates to become an employee
of any of them without Operator's prior written consent,
provided, however, that if this Agreement is terminated for any
reason or otherwise expires by its terms, the restrictions set
forth herein on Owner's ability to employ personnel of the
Operator which previously have been involved with the operations
of the Projects shall be limited to such personnel which Operator
has determined to retain and assign to other duties, as set forth
in a written notice delivered by Operator to Owner (i) within 90
days after any termination notice described in Section 2 above
shall have been delivered or (ii) not less than 90 days before
the expiration of this Agreement in accordance with its terms.
SECTION 5
COMPENSATION
5.1 Owner shall pay Operator the following fees for the
Scheduled Services:
5.1.1 For performing the Management Services, Owner
shall pay Operator the Management Fee in the amount of Two
Hundred Thirteen Thousand Seven Hundred Fifty Dollars
($213,750.00) per Year, subject to adjustment as set forth in
Sections 5.6 and 5.7 below.
5.1.2 For performing the Administration Services,
Owner shall pay Operator the Administration Fee in the amount of
Ninety-Three Thousand Seven Hundred Fifty Dollars ($93,750.00)
per Year, subject to adjustments as set forth in Section 5.6
below.
5.1.3 Owner shall reimburse Operator for all out-
of-pocket expenses paid of incurred by Operator on behalf of
Owner in performing the O&M Services, including all employee
wages, costs and expenses. Employee wages shall be reimbursed,
only for hours actually worked, at Operator's Standard Employee
Rates, reduced by 15%. Operator shall not be entitled to a xxxx-
up for overhead or profit on the out-of-pocket expenses incurred
in performing the O&M Services. Operator's Standard Employee
Rates shall be as set forth in Schedule 5.1.3, and as such Rates
may be adjusted from time to time.
5.2 For performance of the Additional Services provided in
accordance with Schedule 3.1(d), Owner shall pay Operator the
cost of such services, whether provided directly by Operator or
by Operator's retained contractors or subcontractors, plus a
markup for overhead and profit of 5% of costs of third party
provided supplies and services, including Operator's retained
contractors and subcontractors, and 10% of Operator's Standard
Employee Rates set forth in Schedule 5.1.3 for services provided
directly by Operator. Operator may also propose similar fee
arrangements for proposed capital expenditures to be included in
the Annual Budget, which proposals shall be subject to Owner's
overall approval of the Annual Budget.
5.3 In further consideration for performing the Scheduled
and Additional Services, Operator shall be entitled to receive
50% of the annual aggregate net cash flow from the Projects in
excess of $1,875,000.00 (the "Incentive Fee"), up to a maximum of
$112,500.00 per annum (the "Annual Limit"); provided, however,
that (i) in the event Operator would be entitled to receive
additional Incentive Fees hereunder but for the Annual Limit or
(ii) the aggregate net cash flow from the Projects is less than
$1,875,000 per Year, then the amount of such earned but unpaid
Incentive Fees (or the reduction of Incentive Fees attributable
to shortfalls in net cash flow) shall be carried forward (the
"Carry Forward Amount") into subsequent years. The positive
balance remaining after application of any such Carry Forward
Amounts (after giving effect to operations of the Projects for
such Year) shall be payable to Operator, subject to the
continuing requirement that all amounts payable to the Operator
with respect to the Incentive Fee, whether earned in such Year or
payable as a result of any Carry Forward Amount, shall be subject
to the Annual Limit. The Carry Forward Amount shall be adjusted
in each year to reflect the results of operations for such year
and any payments made to Operator with respect to the Incentive
Fee (whether out of the Carry Forward Amounts or otherwise). See
Schedule 5.3 for sample calculations of the Incentive Fee. For
purposes of calculating the Incentive Fee, "net cash flow" shall
mean all revenues received by Owner from the Projects, reduced by
(a) expenses and fees paid under the terms of this Agreement, (b)
other direct Project expenses and (c) costs, if any, of Owner
provided insurance, but not reduced by (x) capital expenditures
in an amount in excess of that recommended by Operator in the
Annual Budget, (y) the Incentive Fee or (z) taxes other than
franchise or property or similar taxes.
5.4 Operator will charge Owner and Owner will pay Operator
for all vehicle use, including round trip travel from Operator's
base of operations to the Project sites, at the rates set forth
in Schedule 5.4 attached hereto, as such rates may be adjusted
from time to time. Costs for any vehicles not specified on
Schedule 5.4 shall be as agreed upon by Owner and Operator.
5.5 The Management Fee and Administration Fee shall be paid
in advance in 12 equal installments on the first of each month.
Fees for performing O&M Services and Additional Services shall be
paid to Operator once a month in arrears from funds provided by
Owner pursuant to Section 4.3. The Incentive Fee shall be paid
in a lump sum to Operator once a year within thirty (30) days of
the end of each Year. In addition, there shall be a one time
payment upon execution of this Agreement calculated in accordance
with the formula set forth in Schedule 5.5.
5.6 On each anniversary of the Commencement Date, the
Management Fee and the Administrative Fee will be increased by a
percentage increase equal to the percentage increase of the
Consumer Price Index for All Urban Consumers ("CPI").
5.7 If at any time, the Owner determines to shut down,
curtail or discontinue the operations of any one or more of the
Projects because Owner reasonably determines that actual and/or
projected revenues from such Project will not be sufficient to
cover the operating expenses of the Project (including capital
expenditures which may be advisable or required), then the
Management Fee described in Section 5.1.1 above, as escalated
pursuant to Section 5.6 above, shall be adjusted as of the
beginning of each Year following the Year in which any such
shutdown, curtailment or discontinuance shall occur by
multiplying the total amount of such Management Fee (as
escalated) by the total amount of the percentages set forth on
Schedule A which are attributable to all Projects which remain in
operation as of the beginning of such Year; provided, however,
that no reduction shall be made in the Management Fee under this
Section 5.7 (i) for any Year ending on or before the end of the
First Term and (ii) unless the cumulative cash distributions made
to Owner with respect to all prior Years are less than the amount
determined by multiplying (x) the number of all complete Years,
by (y) $1,734,375. The provisions of this Section 5.7 shall not
apply to any shutdown, curtailment or discontinuance of
operations of any Project as a result of any voluntary sale or
termination by Owner of any Power Purchase Agreement or Project.
SECTION 6
INDEMNIFICATION
6.1 Owner shall defend, indemnify and save harmless
Operator from and against any and all liabilities, damages,
expenses, fees, penalties, actions, proceedings, costs, claims or
judgments directly resulting from the negligence or willful
misconduct of Owner, its agents or employees.
6.2 Operator shall defend, indemnify and save harmless
Owner from and against any and all liabilities, damages,
expenses, fees, penalties, actions, proceedings, costs, claims or
judgments directly resulting from the negligence or willful
misconduct of Operator, its agents or employees.
XXXXXXX 0
XXXXX XXXXXXX
7.1 Neither party shall be liable to the other, nor be in
breach of the Agreement, by reason of any failure to perform or
delay in performance of any kind or duration which is due to any
cause beyond either party's reasonable control, including without
limitation: labor dispute, lockout, work slow down or strike; act
of God; fire; flood; earthquake; volcanic activity; hurricane;
unusually severe weather conditions; epidemic; quarantine
restriction, act of civil or military authority, war; political
strife, embargo, delay in manufacture or transportation; fuel or
material shortage; compliance with any regulation or directive of
any national, state or local government, or any department or
agency thereof; act of any third party; or any other similar
cause beyond the control of the responsible party.
SECTION 8
MISCELLANEOUS
8.1 In the event of the failure or refusal of either party
to perform any of its obligations hereunder, the other party
shall be entitled to all available remedies at law or in equity.
8.2 This Agreement constitutes the entire agreement between
the parties on the subject matter hereof, and may not be altered
or amended except by an instrument in writing signed by both
parties.
8.3 No waiver by either party of any term or condition of
this Agreement shall be binding unless in writing and signed by
the party against whom the same is sought to be enforced, nor
shall any such waiver, if given, be deemed a continuing waiver.
8.4 All questions relating to the validity, construction,
performance and enforcement of this Agreement shall be governed
by the laws of the State of Maine and all actions by either party
against the other shall commence in such state.
8.5 All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of such service if served
personally or via fax on the party on whom the notice is given,
or on the fifth day after mailing if mailed to the party to whom
the notice is to be given by first class mail, registered or
certified, postage prepaid and properly addressed as follows:
If to the Owner, then the following address:
c/o Ridgewood Power Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
(000) 000-0000
(000) 000-0000 (fax)
If to Operator, then to the following address:
CHI Operations, Inc.
Andover Business Park
000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
(000) 000-0000
(000) 000-0000 (fax)
and a copy to:
Consolidated Hydro, Inc.
Stamford Towers
000 Xxxxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
(000) 000-0000
(000) 000-0000 (fax)
Either party may change its address by giving the other
party written notice of the new address in the manner set forth
above.
8.6 Neither party may assign its rights and obligations
under this Agreement, without the express prior written consent
of the other party hereto. However, Operator may assign this
Agreement to its affiliates or subsidiaries without the prior
written consent of the other party.
8.7 This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective
representatives, successors and assigns.
8.8 Arbitration. If a dispute should arise between the
parties with respect to this Agreement, the parties shall attempt
to settle the dispute by negotiation. If the parties are unable
to resolve the dispute within ten (10) days of receipt of written
notice of the existence of the dispute, either party may demand
that the dispute be resolved through mediation in accordance with
the rules established by the American Arbitration Association.
If mediation does not result in the resolution of such dispute
within 30 days, such dispute shall be subject to and decided by
arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association currently in effect
unless the parties mutually agree otherwise, except that nothing
herein shall prevent either party from pursuing equitable
remedies, including interim relief in any court of competent
jurisdiction. A demand for arbitration shall be made within a
reasonable time after the claim but in no event after the date
when institution of legal or equitable proceedings based on such
claim would be barred by the applicable statute of limitations.
Such arbitration shall take place in the City of Portland, Maine
and be resolved by a single arbitrator selected in accordance
with the Commercial Rules of the American Arbitration
Association. Reasonable discovery shall be allowed in such
arbitration. The award rendered by the arbitrator shall be
final, and judgment may be entered upon it in accordance with the
applicable law in any court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties have executed this
Operation, Maintenance and Administration Agreement the day and
year first above written.
OWNER: Ridgewood Maine Hydro
Partners, L.P.
By:_____________________________
Its:
OPERATOR: CHI Operations, Inc.
By:_____________________________
Its:
PARENT: Consolidated Hydro, Inc.
By:_____________________________
Its:
EVENFOOTER:
ODDFOOTER:
SCHEDULE 5.3
Sample Incentive Fee Calculations
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total
Annual Net
Cash
Flow 2,625,000 1,500,000 2,100,000 1,500,000 1,500,000
2,650,000 11,875,000
Target Net
Cash
Flow1,875,0001,875,0001,875,0001,875,0001,875,0001,875,000
11,250,000
Excess
(Deficit)
Net Cash
Flow 750,000(375,000)225,000(375,000)(375,000)775,000
625,000
Incentive
Fee
Factor x .50 x .50 x .50 x .50 x .50 x .50
x .50
Incentive
Fee
Pool for
Year 375,000(187,500)112,500(187,500)(187,500)387,500
312,500
Carry
Forward
Amount
from
Prior Year 0 262,500 0 0(187,500)
(375,000)
Total
Incentive
Fee Pool375,00075,000112,500(187.500)(375,000)12,500
312,500
Incentive
Fee
Payable(112,500) (75,000)(112,500) 0 0
(12,500) (312,500)
Carry
Forward
Amount262,500 0 0(187,500)(375,000) 0 0
