OPERATION AGREEMENT
This Operation Agreement (the "Agreement") is made as
of the 16th day of April, 1996, by and among
Ridgewood/Providence Power Partners,, L.P., a Delaware
limited partnership ("Owner"), Ridgewood/Providence
Corporation, a Delaware corporation ("General Partner"), and
Ridgewood Power Management Corporation, a Delaware
corporation ("RPMC").
RECITALS
Some of the facts and circumstances surrounding this
Agreement are the following:
The Owner owns an independent power project. The
General Partner is responsible for the operation and
management of the Owner's project. The Owner and the
General Partner are beneficially owned by one or more
business trusts organized and managed by Ridgewood Power
Corporation.
Ridgewood Power Corporation ("Ridgewood Power") has
caused RPMC to be created in order to provide centralized
operation, management and other services for projects
beneficially owned by the business trusts, and has caused
the parties to enter into this Agreement. The project or
projects for which RPMC will provide services (the
"Projects") are listed on Exhibit A to this Agreement.
Section 1. Services of RPMC.
1.1. General. The Owner employs RPMC to provide the
services described below and RPMC agrees to do so.
RPMC shall provide operating personnel for the
Projects and will be responsible for all day-to-day
operations of the Projects. The services provided
by RPMC include, without limitation, management,
purchasing, engineering, planning, maintenance,
administrative, legal, financial, and regulatory
services, as well as any other services Owner
(through the General Partner) may need or request.
1.2. Responsibility. RPMC shall act on behalf of and
under the general direction of the General
Partner. Although the General Partner is
empowered to specify the responsibilities of RPMC,
to oversee RPMC and to direct RPMC to take action,
the General Partner shall not specify how RPMC is
to perform its obligations. RPMC is an
independent contractor and not an agent of the
General Partner or the Owner. Ridgewood Power is
authorized to act on behalf of the General Partner
in supervising RPMC.
Section 2. Reimbursement of RPMC.
RPMC shall charge Owner for all direct costs incurred
in connection with the Projects and shall also charge Owner
an allocable amount of RPMC's indirect costs and overhead as
described below.
2.1. Direct Costs. Costs and expenses paid by RPMC that
relate to a single Project shall be allocated to
that Project.
2.2. Multiple Project Costs and Other Indirect Costs.
Costs and expenses paid by RPMC that relate to more
than one Project or to Projects and to facilities
owned by other persons shall be allocated among the
Projects and facilities affected on the basis of
time records, comparative value of the work to each
Project or facility, size of each Project or
facility, number of employees affected, asset value
of Project or facility, investment in each Project
or facility or another reasonable basis approved
by RPMC and the General Partner. A share of
overhead and other indirect costs that do not
relate to identifiable Projects shall be allocated
to Owner on the basis of investment in each
Project or another reasonable basis approved by
RPMC and the General Partner. All allocations of
costs under this Section 2.2 shall be made
consistently with generally accepted accounting
principles, consistently applied.
2.3. Payment. RPMC shall be reimbursed by Owner for all
costs incurred by it and allocable to Projects
under Sections 2.1 and 2.2. RPMC may operate or
participate in a centralized cash management system
with Owner, Ridgewood Power and other entities
affiliated with Ridgewood Power and payments may be
made through that system without the need for Owner
to reimburse RPMC directly. If payments are not
made through that system, Owner shall reimburse
RPMC at least monthly and not later than 15 days
after receipt of a statement from RPMC.
2.4. Common Expenses with Ridgewood Power. If Ridgewood
Power provides space, facilities, personnel, goods
or services to RPMC that are used by RPMC in
performing its responsibilities under this
Agreement, RPMC shall not charge or allocate
charges to Projects or to other facilities that
RPMC manages in excess of the amounts, if any,
charged to RPMC by Ridgewood Power for those
items.
2.5. General Limitation. RPMC shall not be
reimbursed for any amount in excess of the actual
or properly allocated cost of the goods and
services it provides to the Projects.
Section 3. Indemnification.
3.1. Indemnification of Owner. RPMC shall indemnify and
hold Owner harmless from and against any claim,
liability, damage, expense, legal action, lien,
loss or other obligation arising out of the actions
or omissions of RPMC taken under this Agreement or
in connection with this Agreement or the Projects.
RPMC shall indemnify the partners of the Owner and
their directors, officers, employees, agents,
affiliates, successors and assigns on the same
basis as the Owner.
3.2. Waivers of Subrogation and Contribution. RPMC
waives any right of subrogation or contribution
against the Owner or other persons indemnified
under Section 3.1 in connection with any liability
or obligation satisfied by RPMC and relating to
RPMC's responsibilities under this Agreement.
Section 4. Term of Agreement.
This Agreement may be terminated at any time without
penalty by either the Owner or RPMC on 60 days' prior
written notice to the other parties. This Agreement may
also be terminated by action of any trust or investment
program that is a beneficial owner of equity securities of
the Owner if (a) the managing shareholder, general partner
or board of directors of the trust or program so decides or
(b) a majority in interest of the holders of equity
securities of the trust or program (excluding any management
share or other special equity security owned solely by a
managing shareholder or general partner) vote to terminate
this Agreement. In that case, this Agreement terminates 60
days after all parties are given written notice of the
decision to terminate.
Section 5. Other Matters.
5.1. Non-exclusivity. RPMC may perform services for
other persons affiliated or not affiliated with
Ridgewood Power. Owner and the General Partner
waive any objection to (a) the fact that now or in
the future Xxxxxx X. Xxxxxxx and other persons who
are directors, officers, employees or affiliates of
Ridgewood Power may have similar positions with
RPMC and may have a financial interest in RPMC and
(b) the fact that RPMC and its directors, officers
and employees may be employed by or have financial
interests in Ridgewood Power and its affiliates.
5.2. Assignment. This Agreement may not be assigned by
either party. Notwithstanding the foregoing, in
the event of an unapproved assignment, the
assignee shall also be responsible for performance
of assignor's responsibilities and both assignor
and assignee shall be liable to the other parties
for breach of this covenant.
5.3. Amendments. This Agreement can be amended only by
a writing signed by all parties. In addition, no
amendment that materially increases the obligations
of the Owner or the General Partner or that
materially decreases the obligations of RPMC shall
become effective until 45 days after notice of the
amendment together with the text thereof has been
given to all holders of equity securities of the
trusts or other investment programs that
beneficially own the securities of the Owner and
the General Partner.
5.4. Governing Law. This Agreement is governed by the
laws of New Jersey applying to contracts having
their most significant contacts with New Jersey.
5.5. Entire Agreement. This Agreement is the entire
agreement among the parties as to its subject
matter and supersedes all prior agreements among
them.
5.6. Captions and Counterparts. The captions of this
Agreement are for reference only and shall not be
used in construing its meaning. This Agreement may
be executed in counterparts, each of which shall be
an original and all of which shall be considered
to be a single document.
5.7. Jurisdiction and Venue. ALL LAWSUITS IN CONNECTION
WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE
STATE OR FEDERAL COURTS SITTING IN OR FOR THE COUNTY
OF BERGEN, STATE OF NEW JERSEY. THE PARTIES AGREE
THAT THOSE COURTS SHALL HAVE PERSONAL JURISDICTION
AND AGREE TO VENUE IN THOSE COURTS. PROCESS MAY BE
SERVED IN ANY MANNER PERMITTED BY THE RULES OF THE
COURT DESCRIBED IN THIS SECTION IN WHICH AN ACTION
IS BROUGHT.
IN WITNESS WHEREOF, the parties have signed this
Agreement as of the date first stated above.
RIDGEWOOD PROVIDENCE POWER PARTNERS, L.P., Owner
By: RIDGEWOOD/PROVIDENCE CORPORATION, General Partner
By:/s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
RIDGEWOOD/PROVIDENCE CORPORATION, General Partner
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
RIDGEWOOD POWER MANAGEMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
EXHIBIT A
PROJECTS SUBJECT TO AGREEMENT
Providence Project at the Xxxxx Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxx