UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Date of report (Date of earliest event reported) July 1, 1997
RIDGEWOOD ELECTRIC POWER TRUST IV
(Exact name of Registrant as Specified in Charter)
Delaware 0-25430 22-3324608
(State or other (Commission (IRS Employer
jurisdiction file number) Identification
of incorporation) Number)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 447-
9000
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Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
No historical or pro forma financial statements are
required under Regulation S-X.
(c) Exhibits. The exhibits will be filed in electronic
format by amendment.
Exhibit No. Item
2.A. Agreement to Purchase Membership Interests, dated
as of June 11, 1997, by and between Ridgewood Maine, L.L.C.
and Indeck Maine Energy, L.L.C. Exhibits and schedules, as
listed below, are omitted.
Schedule 4.1. Existing Members
Schedule 4.5. Governmental Consents and Notices
Schedule 4.6. Additional Consents and Notices
Schedule 5.3.1. Real Property Rights
Schedule 5.3.2. Title to Seller Assets
Schedule 5.4. Project Documents
Schedule 5.6. Project Permits
Schedule 5.7. General Legal Compliance
Schedule 5.8. Environmental Legal Compliance
Schedule 5.9. Insurance
Exhibit A Form of Consent and Guaranty
Agreement
Exhibit B Form of Amended and Restated
Operating Agreement (see
Exhibit 2.B.)
Exhibit C Form of First Amendment to System
Operating and Maintenance
Agreement
2.B. Amended and Restated Operating Agreement of
Indeck Maine Energy, L.L.C., dated as of June 11, 1997.
The Registrant agrees to furnish supplementally a copy of
any omitted exhibit or schedule to these exhibits to the
Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
RIDGEWOOD ELECTRIC POWER TRUST IV
By: /s/ Martin V. Quinn
Martin V. Quinn, Senior Vice
President and Chief Financial
Officer
AGREEMENT TO PURCHASE
MEMBERSHIP INTERESTS
Between
INDECK MAINE ENERGY, L.L.C.
as Seller,
And
RIDGEWOOD MAINE, L.L.C.
as Buyer,
Dated as of June 11, 1997
Acquisition of Membership Interests
In Indeck Maine Energy, L.L.C.
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INTERPRETATIONS 1
1.1 Defined Terms 1
1.2 Interpretations 5
ARTICLE 2 SALE AND PURCHASE OF BUYER'S MEMBERSHIP INTEREST;
PURCHASE PRICE 6
2.1 Sale of Buyer's Membership Interest 6
2.2 Manner of Payment 6
ARTICLE 3 CLOSING DATE AND ACTIONS AT CLOSING 6
3.1 Closing Date 6
3.2 Actions at Closing 6
3.2.1 Delivery of Closing Documents 6
3.2.2 Payment of Buyer's Membership Interest Purchase Price 6
3.3 Additional Actions 6
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
RELATING TO SELLER, ITS MEMBERS AND AFFILIATES 6
4.1 Due Organization 7
4.2 Power and Authority 7
4.3 Valid, Binding and Enforceable Obligations 7
4.4 No Violations 7
4.5 Governmental Consents and Notices 7
4.6 Additional Consents and Notices 8
4.7 Membership Interests 8
4.8 Bankruptcy 8
4.9 Business of Seller 8
4.10 Utility Status 8
4.11 Adequacy of the Seller Assets 9
4.12 No Undisclosed Liabilities 9
ARTICLE 5 REPRESENTATIONS AND WARRANTIES RELATING TO
THE FACILITIES 10
5.1 No Litigation 10
5.2 Qualifying Facility Matters 10
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5.3 Seller's Assets 10
5.3.1 Real Property Rights; Title Insurance 10
5.3.2 Title to Seller Assets 10
5.4 Project Documents 11
5.5 No Employees, Etc 11
5.6 Permits 11
5.7 General Legal Compliance 12
5.8 Environmental Legal Compliance 12
5.9 Insurance 12
5.10 Utilities 12
5.11 Facility Construction and Condition 12
5.12 Securities Laws 13
5.13 Brokers 13
5.14 Tax Returns 13
ARTICLE 6 BUYER'S REPRESENTATIONS AND WARRANTIES 13
6.1 Due Organization 13
6.2 Power and Authority 13
6.3 Valid, Binding and Enforceable Obligations 14
6.4 No Violations 14
6.5 Bankruptcy 14
6.6 No Litigation 14
6.7 Investment Intent 14
6.8 Accredited Investor 15
6.9 Brokers' Fees 15
ARTICLE 7 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS 15
7.1 No Termination 15
7.2 Representations True and Correct; Certificate 16
7.3 Compliance with Covenants; Certificate 16
7.4 No Adverse Proceedings 16
7.5 Proceedings Satisfactory 16
7.6 No Adverse Changes 16
7.7 Consents and Notices 16
7.8 Legal Opinion 16
7.9 Execution and Delivery of Closing Documents 16
7.10 No Violations 17
7.11 Closing Actions 17
7.12 Seller Documents 17
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ARTICLE 8 CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS 17
8.1 No Termination 17
8.2 Representations True and Correct; Certificate 17
8.3 Compliance with Covenants; Certificate 17
8.4 No Adverse Proceedings 17
8.5 Proceedings Satisfactory 18
8.6 Consents and Notices 18
8.7 Legal Opinion 18
8.8 Execution and Delivery of Closing Documents 18
8.9 No Violations 18
8.10 Closing Actions 18
ARTICLE 9 INDEMNIFICATION 18
9.1 Indemnification by Seller 18
9.2 Indemnification by Buyer. 19
ARTICLE 10 ADDITIONAL COVENANTS AND TERMINATION 19
10.1 Seller's General Pre-Closing Covenants 19
10.1.1 Full Access 19
10.1.2 Furnishing Information 19
10.1.3 Consultation with Accountants 19
10.1.4 Discussions with Facility Participants 19
10.1.5 Representations and Warranties 20
10.1.6 Conduct of Business 20
10.1.7 Preservation of Assets, Relationships, Etc. 20
10.1.8 New Obligations 20
10.1.9 No Defaults or Events of Default 20
10.1.10 No Solicitations, Etc. 20
10.1.11 Notification 20
10.1.12 Spare Parts 20
10.2 Filings and Consents 20
10.3 Provision of Information 21
10.4 Further Assurances 21
10.5 Termination 21
10.5.1 By Mutual Agreement 21
10.5.2 By Buyer 21
10.5.3 By Seller 21
10.5.4 By Any Party 21
ARTICLE 11 TAX MATTERS 21
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11.1 Sales and Transfer Taxes 21
11.2 Income Tax Matters 22
11.2.1 Certain Income Tax Effects of the Transactions 22
ARTICLE 12 MISCELLANEOUS 22
12.1 Transaction Costs 22
12.2 Entire Agreement 22
12.3 Amendments 22
12.4 Assignments 22
12.5 Binding Effect 22
12.6 Headings 22
12.7 Notices 22
12.8 Severability 23
12.9 Waivers 23
12.10 Enforcement Costs 24
12.11 Remedies Cumulative 24
12.12 Counterparts 24
12.13 Governing Law 24
12.14 Preparation of Agreement 24
12.15 Survival 24
12.16 Inducement to Transaction 24
ARTICLE 13 EXECUTION CLAUSE 25
<PAGE>
AGREEMENT TO PURCHASE MEMBERSHIP INTERESTS
THIS AGREEMENT TO PURCHASE MEMBERSHIP INTERESTS (the "Agreement") is made
and entered into as of June 11, 1997, between Indeck Maine Energy, L.L.C., a
limited liability company organized under the laws of the State of Illinois
(the "Seller"), and Ridgewood Maine, L.L.C., a limited liability company
organized under the laws of the State of Delaware (the "Buyer"), with
reference to the following recitals:
RECITALS
A. Seller has been formed as a limited liability company under the laws
of the State of Illinois;
B. The persons listed in Schedule 4.1 attached hereto own 100% of the
outstanding membership interests in Seller (the "Existing Members");
C. Seller owns and operates all of the assets comprising the Facilities
(as defined below). Seller has contracted to provide electrical energy and
capacity to the participants in NEPOOL (as defined below) pursuant to the
Power Purchase Agreement (as defined below).
D. At the closing described below, Buyer will acquire from Seller and
Seller will sell to Buyer the Buyer's Membership Interest (as defined below).
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants set forth below, the parties, intending to be legally bound, hereby
agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
1.1 Defined Terms. Capitalized terms used in this Agreement without
other definition shall have the meanings specified in this Section 1.1, unless
the context requires otherwise.
"Additional Consents and Notices" has the meaning set forth in Section
4.6.
"Affiliate" of a specified Person means any other Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by
or is under common control with the Person specified. For purposes of the
foregoing, "control," "controlled by" and "under common control with," with
respect to any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by contract
or otherwise.
"Agreement" means this Agreement, including all Exhibits and Schedules.
"Buyer" has the meaning set forth in the Preamble.
<PAGE>
"Buyer's Membership Interest" means the membership interest in Seller,
which Buyer is purchasing pursuant to this Agreement, which interest is
described more fully in the Operating Agreement.
"Buyer's Membership Interest Purchase Price" means an amount of Fourteen
Million Dollars ($14,000,000).
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Closing Documents" means, collectively, this Agreement, the Operating
Agreement and the Existing Members' Consent and Guaranty.
"Code" means the Internal Revenue Code of 1986, as amended, and all rules
and regulations adopted thereunder.
"Default" means, when used with reference to any agreement without other
reference, any event or circumstances that, with the giving of notice or lapse
of time, or both, would, unless cured or waived, become an Event of Default
under such agreement.
"Environmental Laws" means, collectively, all federal, state, local and
other applicable laws, statutes and regulations, which in any way relates to
health, safety or the environment, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. ( 9601 et seq.; the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976, as amended by the Solid and
Hazardous Waste Amendments of 1984, 42 U.S.C. ( 6901 et seq.; the Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33
U.S.C. ( 1251 et seq.; the Toxic Substances Control Act of 1976, 15 U.S.C. (
2601 et seq.; the Emergency Planning and Community Right-To-Know Act of 1986,
42 U.S.C. ( 11001 et seq.; the Clean Air Act of 1966, as amended, 42 U.S.C. (
7401 et seq.; the National Environmental Policy Act of 1975, 42 U.S.C. (
4231; the Rivers and Harbours Act of 1899, 33 U.S.C. ( 401 et seq.; the
Endangered Species Act of 1973, as amended, 16 U.S.C. ( 1531 et seq.; the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. ( 651 et
seq.; the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. ( 300(f) et
seq.; the Hazardous Materials Transportation Act, 42 U.S.C. (( 1471, 1472,
1655, 1801 et seq.; the Federal Insecticide, Fungicide & Rodenticide Act, 7
U.S.C. ( 136 et seq.; and the Atomic Energy Act, 42 U.S.C. ( 3011 et seq.
"Event of Default" means, when used with reference to any agreement
without other reference, an event of default or other similar event as
defined, or pursuant to, the terms of such agreement.
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"Existing Members" has the meaning set forth in the Recitals.
"Existing Members' Consent and Guaranty" means the consent and guaranty
agreement executed by each of the Existing Members, in the form attached
hereto as Exhibit A.
"Facilities" means collectively the Jonesboro Facility and the West
Enfield Facility.
"FERC" means the Federal Energy Regulatory Commission and its successors.
"FPA" means the Federal Power Act, as amended, and all rules and
regulations adopted thereunder.
"GAAP" means generally accepted accounting principles in effect in the
United States from time to time.
"Governmental Approval" means any applicable authorization, approval,
consent, license, lease, ruling, permit, tariff, certification, exemption,
filing or registration by or with any Governmental Person.
"Governmental Person" means any federal, state, local or other
government, any political subdivision or any governmental, judicial, public or
statutory instrumentality, tribunal, agency (including those pertaining to
health, safety or the environment), authority, body or entity, or other
regulatory bureau, authority, body or entity having legal jurisdiction over
the matter or Person in question.
"Governmental Rule" means any applicable federal, state, local or other
law, statute, treaty, rule, regulation, ordinance, order, code, judgment,
decree, directive, injunction, writ or similar action or decision duly
implementing any of the foregoing by any Governmental Person, but does not
include Governmental Approvals.
"Governmental Consents and Notices" has the meaning set forth in Section
4.5.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and all of the rules and regulations thereunder.
"Jonesboro Facility" means the approximately 24.5 megawatt biomass fired
electrical generating facility which is located in Jonesboro, Maine, and which
is owned by Seller.
"Knowledge," "known" and "knows," whether or not capitalized herein and
when used with respect to matters covered by representation, warranty,
covenant or other provision of this Agreement applicable to Seller, means the
knowledge and beliefs of each of Thomas M. Campone, but without any
independent investigation.
<PAGE>
"Lien" means any lien, mortgage, encumbrance, charge, pledge, lease,
security interest, claim, option or right of any kind (including any
conditional sale or other title retention agreement).
"MPUC" means the Maine Public Utilities Commission and its successors.
"NEPOOL" means the New England Power Pool.
"Operating Agreement" means the Amended and Restated Operating Agreement
of Seller by and among each of the Existing Members and Buyer (in the form
attached to this Agreement as Exhibit B), which amends and restates the
Operating Agreement dated as of April 1, 1997 among the Existing Members.
"Permits" has the meaning set forth in Section 5.6.
"Person" means any individual, corporation, partnership, trust, joint
venture, unincorporated association, limited liability company, Governmental
Person or other entity.
"Power Purchase Agreement" means that certain Agreement dated May __,
1997 between Seller and the NEPOOL Participants referred to therein pursuant
to which Seller agrees to provide electrical energy and capacity.
"Project Documents" has the meaning set forth in Section 5.4.
"PUHCA" means the Public Utility Holding Company Act of 1935, as amended,
and all rules and regulations adopted thereunder.
"PURPA" means the Public Utility Regulatory Policies Act of 1978, as
amended, and all rules and regulations adopted thereunder.
"Qualifying Facility" means a "qualifying facility" within the meaning of
PURPA.
"Securities Act" means the Securities Act of 1933, as amended, and all
rules and regulations adopted thereunder.
"Seller" has the meaning set forth in the Preamble.
"Seller Assets" means all of the assets and rights of any kind or
character owned or leased or otherwise benefiting Seller including (i) the
Sites, and all easements, rights of way and other similar rights in which
Seller has any interest, (ii) the Facilities and related fixtures,
improvements, equipment and other assets located on the Sites, (iii) the Power
Purchase Agreement and all of the other Project Documents, (iv) the Permits,
and (v) all of the tangible and intangible personal, real, mixed and other
property and assets of any kind owned or leased by Seller or in which Seller
has any right or interest.
<PAGE>
"Site" means with respect to the Jonesboro Facility, the land described
on Schedule 1.1(a), and with respect to the West Enfield Facility, the land
described on Schedule 1.1(b).
"Tax Liabilities" means all income, excise, sales, unemployment, employer
and employee withholding, social security, occupation, franchise, customs and
other taxes, duties or charges levied, assessed or imposed upon Seller, during
any portion of the taxable year of Seller ending on the Closing Date or that
accrued or are attributable to any portion of the taxable year of Seller
ending on the Closing Date.
"Tax Returns" has the meaning set forth in Section 5.14.
"West Enfield Facility" means the approximately 24.5 megawatt biomass
fired electrical generating facility which is located in West Enfield, Maine,
and which is owned by Seller.
1.2 Interpretations. For purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise necessarily
requires:
1.2.1 the terms "herein," "herewith" and "hereof" are references to
this Agreement, taken as a whole;
1.2.2 the terms "include," "includes" and "including" shall mean
"including, without limitation";
1.2.3 references to a "Section," "Article," "Exhibit" or "Schedule"
shall mean a Section, Article, Exhibit or Schedule of this Agreement, as the
case may be;
1.2.4 references to a given agreement, instrument or other document
shall be a reference to that agreement, instrument or other document as
modified, amended, supplemented and restated through the date as of which such
reference is made;
1.2.5 references to a Person includes its permitted successors and
permitted assigns;
1.2.6 the singular shall include the plural and the masculine shall
include the feminine and neuter, and vice versa;
1.2.7 reference to a given Governmental Rule is a reference to that
Governmental Rule as amended, modified, supplemented or restated as of the
date on which the reference is made; and
1.2.8 accounting terms have the meaning given to them by GAAP
applied on a consistent basis by the Person to which they relate.
<PAGE>
ARTICLE 2
SALE AND PURCHASE OF BUYER'S MEMBERSHIP INTEREST;
PURCHASE PRICE
2.1 Sale of Buyer's Membership Interest. Upon the terms and subject to
the conditions of this Agreement, at the Closing Seller shall sell and Buyer
shall purchase Buyer's Membership Interest.
2.2 Manner of Payment. At the Closing, Buyer shall pay Buyer's
Membership Interest Purchase Price in the manner specified in Article 3.
ARTICLE 3
CLOSING DATE AND ACTIONS AT CLOSING
3.1 Closing Date. Subject to the other provisions of this Agreement,
the closing of the transactions contemplated by this Agreement (the "Closing")
shall be held at the offices of the Seller, 1130 Lake Cook Road, Suite 300,
Buffalo Grove, Illinois 60089, at 10:00 a.m., local time, on July 1, 1997, or
on such other date and at such other place as may be mutually agreed upon by
the parties. The date of the Closing is sometimes referred to herein as the
"Closing Date."
3.2 Actions at Closing. In addition to, and without limiting any other
provisions of this Agreement, Seller and Buyer shall take the following
actions or cause the following actions to be taken at the Closing:
3.2.1 Delivery of Closing Documents. Seller, Buyer, and, to the
extent required, the Existing Members shall execute and deliver the Closing
Documents and any other certificates, instruments, or agreements necessary to
effect the transactions contemplated in this Agreement.
3.2.2 Payment of Buyer's Membership Interest Purchase Price. Buyer
shall pay, or cause to be paid to Seller, Buyer's Membership Interest Purchase
Price by wire transfer or other credit of immediately available funds to an
account designated by Seller.
3.3 Additional Actions. Seller and Buyer shall, on request, on and
after the Closing Date, take such further actions as may be requested pursuant
to Section 10.4.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
RELATING TO SELLER, ITS MEMBERS AND AFFILIATES
Seller hereby represents and warrants to Buyer (regardless of any
examinations, inspections, audits or other investigations Buyer has heretofore
made or may hereafter make with respect to such representations and
warranties) as of the Closing Date as follows:
<PAGE>
4.1 Due Organization. Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the State
of Illinois and is qualified to transact business in the State of Maine and
all other jurisdictions where the activities of Seller require Seller to be so
qualified. There are no dissolution, winding-up or similar proceedings
pending, or, to the knowledge of Seller, threatened against Seller or any of
its members or affiliates. Schedule 4.1 attached sets forth the name and
address of each member of Seller and a brief description of the membership
interest held by such Person.
4.2 Power and Authority. Seller has full power and authority to enter
into and perform its obligations hereunder and under the Closing Documents to
which it is or will be a party and to consummate the transactions herein and
therein contemplated in accordance with the terms, provisions and conditions
hereof and thereof. All proceedings required to be taken by Seller to
authorize it to execute, deliver and perform the terms of this Agreement and
the other Closing Documents to which it is or will be a party have been duly
and validly taken.
4.3 Valid, Binding and Enforceable Obligations. Each of this Agreement
and the other Closing Documents to which Seller is or will be a party has
been, or will be on the Closing Date, as the case may be, duly and validly
executed by Seller and constitutes, or will constitute when executed, a valid,
binding, and enforceable obligation, enforceable against Seller in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights and the enforcement of debtors' obligations generally and by
general principles of equity, regardless of whether enforcement is pursuant to
a proceeding in equity or at law.
4.4 No Violations. The execution and delivery by Seller of this
Agreement and the other Closing Documents to which it is or will be a party,
and Seller's consummation of the transactions contemplated hereby and thereby
will not (a) violate the organizational documents of Seller, (b) violate or
constitute a Default or Event of Default under, or cause or permit the
acceleration of the maturity of, or give rise to any right of termination,
cancellation, imposition of fees or penalties under, any debt, obligation,
contract, commitment of fees or other agreement to which Seller is a party or
by which any of the properties or assets of Seller is or may be bound, (c)
result in the creation or imposition of any Lien upon any of the property or
assets of Seller, or under any debt, obligation, contract, commitment or other
agreement to which Seller is a party or by which any of its properties or
assets is or may be bound, or (d) violate any Governmental Rule.
4.5 Governmental Consents and Notices. Except for the Governmental
Approvals set forth on Schedule 4.5 (collectively, the "Governmental Consents
and Notices"), no Governmental Approval is necessary or appropriate in
connection with the execution and delivery by Seller of this Agreement and the
other Closing Documents, or the consummation by Seller of the transactions
contemplated hereby and thereby, including the issuance of Buyer's Membership
Interest to Buyer. Except as expressly described on Schedule 4.5, all of the
Governmental Consents and Notices have been duly obtained or made and none has
been revoked or rescinded or has expired. Without limiting the generality of
the preceding
<PAGE>
provisions of this Section 4.5, no consent, approval or filing is required
under or in connection with the HSR Act in connection with the transactions
contemplated by this Agreement.
4.6 Additional Consents and Notices. Except for the consents, notices
and other items set forth on Schedule 4.6 (collectively, the "Additional
Consents and Notices"), no filing, registration, qualification, notice,
consent, approval or authorization to, with or from any Person (excluding
Governmental Persons) is necessary or appropriate in connection with the
execution and delivery by Seller of this Agreement and the other Closing
Documents, or the consummation by Seller of the transactions contemplated
hereby and thereby, including the issuance of Buyer's Membership Interest to
Buyer. Except as expressly described on Schedule 4.6, all of the Additional
Consents and Notices have been duly obtained or made and none has been revoked
or rescinded or has expired.
4.7 Membership Interests. Schedule 4.1 sets forth the name, address and
membership interest of each of the Existing Members. No other party has any
rights to acquire or otherwise holds any interest in or has any rights with
respect to any ownership, membership or participating interest in Seller.
Buyer's Membership Interest to be issued to Buyer on the Closing Date shall be
free and clear of all Liens (except to the extent created by or through
Buyer).
4.8 Bankruptcy. Neither Seller nor any of its Affiliates or members has
filed any voluntary petition in bankruptcy or been adjudicated a bankrupt or
insolvent, filed any petition or answer seeking any reorganization,
liquidation, dissolution or similar relief under any federal bankruptcy,
insolvency, or other debtor relief law, or sought or consented to or
acquiesced in the appointment of any trustee, receiver, conservator or
liquidator of all or any part of its properties. No court of competent
jurisdiction has entered an order, judgment or decree approving a petition
filed against Seller or any of its Affiliates or members seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any federal bankruptcy act, or other
debtor relief law, and no other liquidator has been appointed of Seller nor
any of its Affiliates or members or of all or any part of their respective
properties.
4.9 Business of Seller. Seller is not engaged in any business or
activities other than the development, ownership, operation and maintenance of
the Facilities and matters incidental thereto. Without limiting the
generality of the foregoing, Seller (a) does not own any capital stock,
partnership interest or other interest of any type, directly or indirectly, in
any other corporation, partnership or other Person, (b) does not conduct any
business other than the business contemplated by the Project Documents to
which it is a party and (c) is not a party to and is not bound by any
contract, agreement, instrument or other document other than the Project
Documents to which it is a party.
<PAGE>
4.10 Utility Status. Neither Seller nor any of its members or
Affiliates is
(a) (i) a "public utility company" or a "holding company" or (ii) a
"subsidiary company", "affiliate" or "associate company" of a "public utility
company or "holding company", all within the meaning of PUHCA;
(b) a "public utility" under the FPA; or
(c) a public utility company, public service company or other
similar company under any applicable state law regulating entities engaged in
the business of distributing and/or selling electric energy.
4.11 Adequacy of the Seller Assets. The Seller's Assets constitute all
of the land, buildings, equipment, spare parts, inventories, interconnection
and transmission agreements, permits, franchises and other legal rights which
are required by the Project Documents or which are otherwise necessary or
advisable to enable the Seller to lawfully perform all of its obligations
under the Power Purchase Agreement. in the ordinary course. Each of the
Facilities has successfully completed all start up or testing procedures
required by the Power Purchase Agreement, and each of the Facilities commenced
commercial operation by delivery of capacity and energy under the Power
Purchase Agreement on June 11, 1997, and have remained in commercial operation
through the Closing Date.
4.12 No Undisclosed Liabilities. As of the Closing Date, Seller has no
liabilities or obligations of any nature (whether accrued, absolute, fixed or
unfixed, known or unknown, asserted or unasserted, contingent, by guaranty,
surety or assumption or otherwise) other than:
(a) liabilities or obligations arising under the Project Documents
since June 11, 1997;
(b) liabilities or obligations incurred in the ordinary course of
operations since June 11, 1997 (such as amounts due or accrued for operator
expenses, fuel purchases and other operating expenses);
(c) contingent liabilities or obligations which may arise under
Environmental Laws and other rules, regulations and statutes of general
application, provided, however that to the knowledge of Seller, except to the
extent disclosed in the Phase I Environmental Assessments prepared by GZA
GeoEnvironmental, Inc. for each of the Facilities dated September 1996, there
exists no facts or circumstances which could reasonably be expected to subject
Seller to any material liability with respect thereto.
<PAGE>
ARTICLE 5
REPRESENTATIONS AND WARRANTIES RELATING TO
THE FACILITIES
Seller hereby represents and warrants to Buyer (regardless of any
examinations, inspections, audits or other investigations Buyer has heretofore
made or may hereafter make with respect to such representations and
warranties) as of the Closing Date as follows:
5.1 No Litigation. There are no actions, suits or proceedings of any
type relating to Seller or the Facilities pending or, to Seller's knowledge,
threatened, against Seller or any of its Affiliates or members or any of their
respective properties or business, whether at law or in equity, including
actions, suits, or proceedings before or by any federal, state, municipal or
other court or governmental department, commission, board, bureau, agent,
instrumentality or other Governmental Person. Seller has no knowledge of any
state of facts or contemplated event which may reasonably be expected to give
rise to any such action, suit or proceeding. Neither Seller nor any of its
Affiliates or members is operating under, or subject to, or in default with
respect to, any order, writ, injunction or decree of any Governmental Person
with respect to the business of Seller or the Facilities.
5.2 Qualifying Facility Matters. Each of the Facilities is an
electrical generating facility that has been certified by the FERC as a
Qualifying Facility, and is in compliance in all respects with all technical
and ownership requirements contained in all applicable FERC and MPUC rules and
regulations.
5.3 Seller's Assets.
5.3.1 Real Property Rights; Title Insurance. Schedule 5.3.1 is a
complete and accurate list of (i) all real property owned or leased by Seller
and of all easements, rights of way, rights of interconnection and other
similar agreements in which Seller has any rights, and (ii) all title
insurance policies and similar insurance policies issued to Seller relating to
any of the property described in preceding clause (i) or relating to the
fixtures and improvements affixed thereto.
5.3.2 Title to Seller Assets. Except as described on Schedule
5.3.2, Seller has good, valid and marketable title to the Sites, free and
clear of all Liens, and Seller has good and indefeasible title to the
remainder of the Facilities and all of the other Seller Assets, free and clear
of all Liens, in each case subject to customary and routine exceptions
normally found in title insurance policies. All of the Liens disclosed on
Schedule 5.3.2 will be discharged by Seller (or by the Members of Seller other
than the Buyer) on or before the Closing Date.
<PAGE>
5.4 Project Documents.
5.4.1 Set forth on Schedule 5.4 is a true, correct and complete
list and brief description of all material agreements, contracts, instruments,
licenses, permits and franchises, including all amendments thereto relating to
Seller or either of the Facilities, or to which Seller or either of the
Facilities are subject (collectively, the "Project Documents"). A true,
correct and complete copy of each of the Project Documents including all
amendments, supplements, exhibits and schedules, if any, thereto has been
delivered to Buyer.
5.4.2 The Power Purchase Agreement has not been modified,
supplemented, amended, waived or terminated in any respect whatsoever, and
none of the other Project Documents has been modified, supplemented, amended,
waived or terminated in any material respect, in any such case whether orally
or in writing, except by means of another Project Document.
5.4.3 Each of the Project Documents constituting an agreement,
contract, instrument or other similar document (including the Power Purchase
Agreement) (a) has been duly authorized, executed and delivered by Seller, and
to Seller's knowledge, by each of the other parties thereto, (b) except to the
extent fully performed in accordance with its terms, is in full force and
effect, and (c) to Seller's knowledge, is a valid obligation of such other
parties enforceable in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application referring to or affecting enforcement of creditor's rights
and general principles of equity.
5.4.4 No Default or Event of Default on the part of Seller has
occurred and is continuing under any Project Document (including the Power
Purchase Agreement), and Seller has not received notice, oral or written, that
a Default or Event of Default on the part of any other Person has occurred
thereunder or that any Person has alleged or asserted any such Default or
Event of Default by an Person.
5.5 No Employees, Etc. Seller has no employees, nor does it have any
obligation to make contributions to any compensation, bonus, health, sick pay,
disability, vacation pay, group-term life insurance, dependant care
assistance, accidental death and dismemberment insurance, severance, employee
welfare, pension, profit sharing, retirement or other employee benefit plans,
funds, programs or arrangements.
5.6 Permits. The Governmental Approvals listed on Schedule 5.6
(collectively, the "Permits") constitute, all of the material Governmental
Approvals which are necessary or appropriate in connection with the ownership,
use, operation and maintenance of the Facilities and the conduct of Seller's
business and activities. Each Permit has been duly and validly issued, or
transferred, to Seller, and is in full force and effect, and all rights and
entitlements thereunder are vested exclusively in Seller. Seller has not
received any notice that Seller has committed any act or failed to act in any
manner or under any circumstances which could result in the revocation or
suspension of any Permit or in any other disciplinary action relating
<PAGE>
thereto. The consummation of the transactions provided for in this Agreement
and the other Closing Documents will not violate any of the terms or
provisions of the Permits or impose any material obligation on Seller. Seller
has no reason to believe that any of such Permits will not be renewed upon
their natural expiration in the ordinary course of business upon compliance
with normal and customary renewal procedures applicable to the respective
Permit.
5.7 General Legal Compliance. Except as disclosed on Schedule 5.7 or
5.8, Seller and the Facilities are in compliance in all material respects with
all Governmental Rules applicable to Seller and/or the Facilities, as the case
may be, and with all Permits, including all Governmental Rules applicable to
the conduct of Seller's business and activities and to the construction,
ownership, operation, maintenance and use of the Facilities.
5.8 Environmental Legal Compliance. Without limiting the generality of
Section 5.7, and except as disclosed on Schedule 5.8, (a) Seller and each of
the Facilities and the Sites are in compliance in all material respects with
all Environmental Laws, and (b) there has not been (whether prior to, or in
connection with, the construction, fuel supply, power generation and
transmission, waste disposal, and other operations and processes relating to
the Facilities or otherwise) any release, emission, seepage, disposal, spill
or discharge at or to the Sites or its environments, whether onto or into the
ground, water, air or otherwise, of any petroleum products or of any substance
considered a hazardous or toxic substance that would give rise to liability to
the owner or operator of the Facilities under any Environmental Law, and to
the best of knowledge of Seller, none is reasonably expected to occur
imminently, other than those which (i) are not material, (ii) are permitted
under all applicable Environmental Laws and Permits, (iii) occur in the normal
course of the operation of the Facilities or (iv) have not had and are not
reasonably expected to have any material adverse impact on Seller or the
Facilities.
5.9 Insurance. Schedule 5.9 contains a list and description of all
insurance policies of any type which are held by Seller (or its Affiliates or
members which relate to Seller or the Facilities) specifying the insurer,
amount of coverage, type of insurance, policy number and any pending claims
thereunder. Except as disclosed on Schedule 5.9, no claim of any type has
been made under any of such policies.
5.10 Utilities. All utility services necessary for the operation of the
Facilities are available at the boundaries of their respective Sites,
including water supply, sanitary and storm sewer facilities, and gas, electric
and telephone facilities.
5.11 Facility Construction and Condition. Each of the Facilities is
operating substantially as designed, all of Seller Assets are in good
operating condition, maintenance and repair (subject only to normal wear and
tear) and there are no material design or other material defects in the
Facilities or any other Seller Asset.
<PAGE>
5.12 Securities Laws. Based upon and provided that the representations
of Buyer in Sections 6.7 and 6.8 are true and correct, the sale of Buyer's
Membership Interest is not required to be registered pursuant to the
Securities Act, or applicable state securities laws or regulations.
5.13 Brokers. Neither this Agreement nor the consummation of the
transactions contemplated hereby was induced by or procured through any Person
acting on behalf of, or representing, either Seller, its members or any of
their respective Affiliates as a broker, finder, investment banker, financial
advisor or in any similar capacity.
5.14 Tax Returns. Seller has properly, accurately and timely completed
and filed all federal, state and local tax returns and reports, declarations
and information returns ("Tax Returns") required to be filed on or before the
Closing Date by or on behalf of Seller or the Facilities, and has withheld and
paid over all amounts shown as due on such returns, as well as other due and
payable charges, assessments and governmental charges of which Seller has
knowledge. Prior to the Closing Date, Seller is classifiable as a
partnership, and not as an association taxable as a corporation under Section
7701 of the Code and the regulations promulgated thereunder, and has been
taxed as a partnership for federal income tax purposes under subchapter "K" of
the Code. No Tax Returns of Seller have been audited by any federal, state or
local taxing authorities.
ARTICLE 6
BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer hereby represents and warrants to Seller (regardless of any
examinations, inspections, audits or other investigations Seller has
heretofore made or may hereafter make with respect to such representations and
warranties) as of the Closing Date as follows:
6.1 Due Organization. Buyer is a Delaware limited liability company,
duly organized, and validly existing under the laws of the State of Delaware,
and is qualified to transact business in all jurisdictions where the ownership
of its properties or its operations require such qualification, except where
the failure to so qualify would not have a material adverse effect on its
financial condition, its ability to own its properties or transact its
business, or to carry out the transactions contemplated hereby.
6.2 Power and Authority. Buyer has full limited liability company power
and authority to enter into and perform its obligations hereunder and under
the other Closing Documents to which it is or will be a party and to
consummate the transactions herein and therein contemplated in accordance with
the terms, provisions and conditions hereof and thereof. All limited
liability company proceedings required to be taken by Buyer to authorize it to
execute, deliver and perform the terms of this Agreement and the other Closing
Documents to which it is or will be a party have been duly and validly taken.
<PAGE>
6.3 Valid, Binding and Enforceable Obligations. Each of this Agreement
and the other Closing Documents to which Buyer is or will be a party has been,
or will be on the Closing Date, as the case may be, duly and validly executed
by Buyer and constitutes, or will when executed constitute, a valid, binding,
and enforceable obligation, enforceable against Buyer in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights and the enforcement of debtors' obligations generally and by general
principles of equity, regardless of whether enforcement is pursuant to a
proceeding in equity or at law.
6.4 No Violations. The execution and delivery by Buyer of this
Agreement and the other Closing Documents to which it is or will be a party,
and Buyer's consummation of the transactions contemplated hereby and thereby
will not (a) violate or be in conflict with the organizational documents of
Buyer, (b) violate, be in conflict with, or constitute a Default or Event of
Default under, or cause or permit the acceleration of the maturity of, or give
rise to any right of termination, cancellation, imposition of fees or
penalties under, any debt, obligation, contract, commitment of fees or other
agreement to which Buyer is a party or by which any of the properties or
assets of Buyer is or may be bound, (c) result in the creation or imposition
of any Lien upon any of the property or assets of Buyer, or under any debt,
obligation, contract, commitment or other agreement to which Buyer is a party
or by which any of the properties or assets is or may be bound, or (d) violate
any Governmental Rule.
6.5 Bankruptcy. Buyer has not filed any voluntary petition in
bankruptcy or been adjudicated a bankrupt or insolvent, filed any petition or
answer seeking any reorganization, liquidation, dissolution or similar relief
under any federal bankruptcy, insolvency, or other debtor relief law, or
sought or consented to or acquiesced in the appointment of any trustee,
receiver, conservator or liquidator of all or any substantial part of its
properties. No court of competent jurisdiction has entered an order, judgment
or decree approving a petition filed against Buyer seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any federal bankruptcy act, or other debtor relief law, and no
other liquidator has been appointed of Buyer or of all or any substantial part
of its properties.
6.6 No Litigation. There are no actions, suits or proceedings of any
type pending or, to Buyer's knowledge, threatened, against Buyer or any of its
properties or business, whether at law or in equity, before or by Governmental
Person. Buyer has no knowledge of any state of facts or contemplated event
which may reasonably be expected to give rise to any such action, suit or
proceeding. Buyer is not operating under, or subject to, or in default with
respect to, any order, writ, injunction or decree of any Governmental Person.
6.7 Investment Intent. Buyer is acquiring Buyer's Membership Interest
solely for the purpose of investment and not with a view to, or for sale in
connection with, any distribution thereof. Buyer acknowledges that Buyer's
Membership Interest is not registered under the Securities Act and that
Buyer's Membership Interest may not be transferred or sold except in
<PAGE>
compliance with the registration provisions of the Securities Act or pursuant
to an applicable exemption therefrom and in compliance with applicable state
securities laws and regulations.
6.8 Accredited Investor. Buyer is an "accredited investor" as defined in
Rule 501 of the Securities Act and is a sophisticated investor with the
capability of evaluating the merits and risks of entering into this Agreement
and the consummation of the transactions contemplated hereby. Further, Buyer
confirms that: (a) Seller has provided to Buyer full access to Seller's books
and records and to Seller's personnel which are familiar with the operations
of the Facilities, (b) Buyer has had the opportunity to question Seller's
personnel and that all such inquiries have been answered to Buyer's
satisfaction, and (c) no representations have been made by Seller or its
Affiliates except as set forth herein or in the documents being delivered in
connection with the consummation of the transactions contemplated hereby.
6.9 Brokers' Fees. Neither this Agreement nor the consummation of the
transactions contemplated hereby was induced by or procured through any Person
acting on behalf of, or representing, Buyer or any of its Affiliates as a
broker, finder, investment banker, financial advisor or in any similar
capacity, except Monhegan Partners, pursuant to a separate agreement for which
Buyer is solely responsible.
6.10 HSR Act. No consent, approval or filing is required under or in
connection with the HSR Act in connection with the transactions contemplated
by this Agreement.
6.11 Utility Status. Neither Buyer nor any of its members or Affiliates
is
(a) (i) a "public utility company" or a "holding company" or (ii) a
"subsidiary company", "affiliate" or "associate company" of a "public utility
company or "holding company", all within the meaning of PUHCA;
(b) a "public utility" under the FPA; or
(c) a public utility company, public service company or other
similar company under any applicable state law regulating entities engaged in
the business of distributing and/or selling electric energy.
ARTICLE 7
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligation of Buyer to consummate the transactions contemplated
hereby shall be subject to the fulfillment to the satisfaction of, or waiver
by, Buyer, in its sole discretion, of each of the following conditions on or
prior to the Closing:
7.1 No Termination. This Agreement shall not have been terminated
pursuant to Section 10.5 hereof.
<PAGE>
7.2 Representations True and Correct; Certificate. The representations
and warranties of Seller contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as if made on and as of the Closing Date, and Seller shall have
executed and delivered to Buyer an officer's certificate confirming the same.
7.3 Compliance with Covenants; Certificate. Seller shall have performed
and complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date, and Seller shall have executed and delivered to Buyer an officer's
certificate confirming the same.
7.4 No Adverse Proceedings. On the Closing Date, no action or
proceeding shall be pending by any public authority or private individual or
entity before any court or administrative body to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the transactions
contemplated hereby or to recover any damages or obtain other relief as a
result of the transactions proposed hereby.
7.5 Proceedings Satisfactory. All proceedings to be taken in connection
with the consummation of the transactions contemplated by this Agreement and
all documents incident thereto, shall be reasonably satisfactory in form and
substance to Buyer and its counsel, and Buyer and its counsel shall have
received copies of such documents and customary certificates as Buyer and its
counsel may reasonably request in connection therewith.
7.6 No Adverse Changes. There shall have been no material adverse
change in the position, financial or otherwise, or the assets, liabilities or
results of operations of Seller or the Facilities other than in the ordinary
course of business or as permitted or contemplated by this Agreement, nor
shall the business, assets and properties of Seller or the Facilities have
been materially and adversely affected in any way as a result of fire,
explosion, earthquake, disaster, accident, flood, riot, civil disturbance,
uprising, activity of armed forces, or act of God or public enemy, whether or
not covered by applicable insurance.
7.7 Consents and Notices. All Governmental Consents and Notices,
Additional Consents and Notices and other consents or notices required to be
obtained from or made to any Person shall have been duly obtained, made or
provided, as the case may be, and shall be in full force and effect.
7.8 Legal Opinion. Buyer shall have received from Pierce Atwood, legal
counsel to Seller, opinions as to the authorization, delivery and performance
of the Closing Documents and the other acts to be performed by Seller at the
Closing in form reasonably acceptable to Buyer and its counsel.
7.9 Execution and Delivery of Closing Documents. This Agreement and
each of the other Closing Documents shall have been duly authorized, executed
and delivered by the parties thereto and shall be in full force and effect on
the Closing Date without any material
<PAGE>
Default or Event of Default having occurred or existing thereunder or material
breach thereof or circumstance which would give any party thereto the right to
terminate any such Closing Document.
7.10 No Violations. The consummation of the transactions contemplated
hereby and by the other Closing Documents shall not violate any Governmental
Rule.
7.11 Closing Actions. Each of the actions required to be taken pursuant
to Section 3.2 or otherwise to effect the transactions contemplated hereby
shall have been duly performed and complied with, and Buyer shall have
received satisfactory evidence of any and all such actions.
7.12 Seller Documents. Buyer shall have received (i) a copy of the
fully executed Operating Agreement (in the form in effect prior to the Closing
Date), (ii) a certified copy of the Certificate of Organization issued by the
Illinois Secretary of State, and (iii) evidence as to the good standing of
Seller in the States of Illinois and Maine.
ARTICLE 8
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligation of Seller to consummate the transactions contemplated
hereby shall be subject to the fulfillment to the satisfaction of, or waiver
by, Seller, in its sole discretion, of each of the following conditions on or
prior to the Closing:
8.1 No Termination. This Agreement shall not have been terminated
pursuant to Section 10.5 hereof.
8.2 Representations True and Correct; Certificate. The representations
and warranties of Buyer contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as if made on and as of the Closing Date, and Buyer shall have executed
and delivered to Seller an officer's certificate confirming the same.
8.3 Compliance with Covenants; Certificate. Buyer shall have performed
and complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date, and Buyer shall have executed and delivered to Seller an officers'
certificate confirming the same.
8.4 No Adverse Proceedings. On the Closing Date, no action or
proceeding shall be pending by any public authority or private individual or
entity before any court or administrative body to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the transactions
contemplated hereby or to recover any damages or obtain other relief as a
result of the transactions proposed hereby.
<PAGE>
8.5 Proceedings Satisfactory. All proceedings to be taken in connection
with the consummation of the transactions contemplated by this Agreement and
all documents incident thereto, shall be reasonably satisfactory in form and
substance to Seller and its counsel, and Seller and its counsel shall have
received copies of such documents and customary certificates as Seller and its
counsel may reasonably request in connection therewith.
8.6 Consents and Notices. All Governmental Consents and Notices,
Additional Consents and Notices and other consents or notices required to be
obtained from or made to any Person shall have been duly obtained, made or
provided, as the case may be, and shall be in full force and effect.
8.7 Legal Opinion. Seller shall have received from Downs Rachlin &
Martin, PC, opinions as to the authorization, delivery and performance of the
Closing Documents and the other acts to be performed by Buyer at Closing in
form reasonably acceptable to Seller and its counsel.
8.8 Execution and Delivery of Closing Documents. This Agreement and
each of the other Closing Documents shall have been duly authorized, executed
and delivered by the parties thereto and shall be in full force and effect on
the Closing Date without any material Default or Event of Default having
occurred or existing thereunder or material breach thereof or circumstance
which would give any party thereto the right to terminate any such Closing
Document.
8.9 No Violations. The consummation of the transactions contemplated
hereby and by the other Closing Documents shall not violate any Governmental
Rule.
8.10 Closing Actions. Each of the actions required to be taken pursuant
to Section 3.2 or otherwise to effect the transactions contemplated hereby,
including the payment of the Buyer's Membership Interest Purchase Price, shall
have been duly performed and complied with, and Seller shall have received
satisfactory evidence of any and all such actions.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification by Seller. As Buyer's sole monetary remedy for any
breach of this Agreement by Seller, Seller shall to the maximum extent not
prohibited by law, indemnify, defend and hold harmless Buyer and all of its
Affiliates, shareholders, partners, members, investors, directors, officers,
employees, agents and assignees, from and against any and all losses,
liabilities, damages, claims or expenses (including reasonable attorneys' fees
and expenses) suffered or incurred to third parties by any such party by
reason of or resulting from the inaccuracy of any representation or warranty
or the breach, nonfulfillment or nonperformance of any covenant or agreement
of Seller under this Agreement or any other Closing Document. Notwithstanding
the foregoing, Seller shall not be obligated to indemnify with respect to any
claim unless and until the aggregate amount claimed equals or exceeds
<PAGE>
$250,000, in which case Seller's indemnity obligation shall include such
$250,000 amount. In no event shall Seller's liability hereunder exceed
Buyer's Membership Interest Purchase Price.
9.2 Indemnification by Buyer. As Seller's sole monetary remedy for any
breach of this Agreement by Buyer, Buyer shall to the maximum extent not
prohibited by law, indemnify, defend and hold harmless Seller and all of its
Affiliates, shareholders, partners, members, investors, directors, officers,
employees, agents and assignees, from and against any and all losses,
liabilities, damages, claims or expenses (including reasonable attorneys' fees
and expenses) suffered or incurred to third parties by any such party by
reason of or resulting from the inaccuracy of any representation or warranty
or the breach, nonfulfillment or nonperformance of any covenant or agreement
of Buyer under this Agreement or any other Closing Document.
ARTICLE 10
ADDITIONAL COVENANTS AND TERMINATION
10.1 Seller's General Pre-Closing Covenants. Until the Closing Date,
Seller shall, unless Buyer shall otherwise agree in writing, do the following:
10.1.1 Full Access. Permit Buyer and its representatives, agents,
counsel and accountants to have full access to all properties, books,
accounts, records, contracts, files, correspondence, tax records and documents
of or relating to Seller, the Facilities and Seller Assets, and permit Buyer
to cause its agents to conduct such reviews, inspections, surveys, tests and
investigations of Seller, the Facilities and Seller Assets as Buyer deems
necessary or advisable, provided that Buyer shall take all reasonable steps to
minimize the disturbance to the operations of Seller.
10.1.2 Furnishing Information. Promptly furnish to cause to be
furnished, at its sole cost and expense, to Buyer and its representatives,
originals or copies of all Project Documents and other documents, records,
data and information concerning such businesses, assets, finances and
properties of or relating to Seller, the Facilities and Seller Assets that may
be requested, including copies of all environmental reports, and plans and
specifications pertaining to all or any portion of the Facilities or the
Sites.
10.1.3 Consultation with Accountants. Permit Buyer to consult with
the accountants for Seller, and said accountants are hereby authorized to
disclose all information in their possession to Buyer with respect to Seller,
the Facilities and Seller Assets.
10.1.4 Discussions with Facility Participants. Permit Buyer and
its representatives and agents to discuss the proposed sale of Buyer's
Membership Interest with any of the parties to the Project Documents or any
other Person who has any relationship to Seller, the Facilities or Seller
Assets.
<PAGE>
10.1.5 Representations and Warranties. Refrain from doing, or
causing to be done, anything which would cause the representations and
warranties set forth in Articles 4 or 5 hereof from being true, complete and
accurate on the Closing Date as if made on such date.
10.1.6 Conduct of Business. Except as expressly contemplated
hereby, carry on the business of Seller, the Facilities and Seller Assets in
the ordinary course, and not sell, transfer or otherwise dispose of any Seller
Asset except in the ordinary course of business, and continue to use, operate,
maintain and repair the Facilities and all Seller Assets in accordance with
all Permits, all Project Documents and all applicable Governmental Rules and
otherwise in accordance with Seller's prior practice.
10.1.7 Preservation of Assets, Relationships, Etc. Preserve the
business organization of Seller and the Facilities and Seller Assets intact,
and preserve Seller's present relationships with all other parties to the
Project Documents and others involved with or having any material relationship
to the Facilities.
10.1.8 New Obligations. Not enter into any material contract,
agreement or instrument of any type, whether written or oral, or otherwise
incur any new liabilities, whether contingent or otherwise, except in the
ordinary course of business.
10.1.9 No Defaults or Events of Default. Refrain from doing any
act or omitting to do any act, or permitting any act or omission to act, which
will cause a Default or Event of Default under any Project Document.
10.1.10 No Solicitations, Etc. Refrain from soliciting or
encouraging (by way of furnishing information, or otherwise) any inquiries or
proposals for the acquisition of any interest in Seller, either of the
Facilities, or the Seller Assets.
10.1.11 Notification. Promptly notify Buyer in writing of any
event, circumstance or condition that results or, with the passage of time or
notice, or both, would reasonably be likely to result, in (a) any
representation or warranty of Seller under this Agreement being false in any
material respect at any time, (b) any condition to Closing for the benefit of
Buyer being unable to be satisfied, or (c) the inability of Seller to perform
any of its obligations hereunder.
10.1.12 Spare Parts. Contribute or cause to be contributed to
Seller, free and clear of any Liens and at no obligation to Seller, all spare
parts and other assets relating to or used in the operation of the Facilities
which are owned or controlled by Affiliates of Seller.
10.2 Filings and Consents. Seller and Buyer, as promptly as
practicable, shall each use their reasonable, good faith and diligent efforts
to make, or cause to be made, all such filings and submissions and obtain or
cause to be obtained all such consents and approvals applicable to it, in
order to consummate the transactions
contemplated by this Agreement in accordance with the terms hereof.
<PAGE>
10.3 Provision of Information. Seller shall cause all the originals of
all books and records, accounts, contracts, and other documents held by
Affiliates of Seller which relate to the Facilities or Seller Assets (other
than documents wholly internal to Seller's Affiliates and not reasonably
necessary to the proper operation and management of the Facilities) to be
delivered by such parties to Seller at the Closing or promptly after the
Closing Date, but in no event later than fifteen days after the Closing Date.
10.4 Further Assurances. Seller and Buyer shall, on request, on and
after the Closing Date, cooperate with each other by furnishing any additional
information, executing and delivering any additional documents and/or
instruments and doing any and all such other things as may be reasonably
requested by any of the parties or its counsel to consummate or otherwise
further implement or effectuate the transactions contemplated by this
Agreement and the other Closing Documents.
10.5 Termination. This Agreement may be terminated at any time prior to
the Closing as follows, and in no other manner:
10.5.1 By Mutual Agreement. By the mutual agreement of Buyer and
Seller in writing.
10.5.2 By Buyer. By written notice from Buyer to Seller if (a) any
condition set forth herein for the benefit of Buyer shall not have been timely
satisfied, (b) Seller fails to perform any obligation hereunder in a timely
manner and fails to cure the same promptly after written notice thereof from
Buyer to Seller or (c) any representation or warranty of Seller hereunder
proves to be false in any material respect and is not promptly cured after
written notice thereof from Buyer to Seller.
10.5.3 By Seller. By written notice from Seller to Buyer if (a)
any condition set forth herein for the benefit of Seller shall not have been
timely satisfied, (b) Buyer fails to perform any obligation hereunder in a
timely manner and fails to cure the same promptly after written notice thereof
from Seller to Buyer, or (c) any representation or warranty of Buyer hereunder
proves to be false in any material respect and is not promptly cured after
written notice thereof from Seller to Buyer.
10.5.4 By Any Party. By written notice from any party to the other
parties if the Closing contemplated hereunder has not taken place on or before
August 1, 1997.
ARTICLE 11
TAX MATTERS
11.1 Sales and Transfer Taxes. All transfer, sales, use, documentary
transfer, stamp or excise taxes, or other similar taxes of any type payable in
connection with the sale and transfer of Buyer's Membership Interest or in
connection with the indirect transfer of Seller Assets effected thereby or
otherwise in connection with the consummation of the transactions
<PAGE>
contemplated by this Agreement and the other Closing Documents shall be the
exclusive responsibility of and shall be paid by Seller.
11.2 Income Tax Matters.
11.2.1 Certain Income Tax Effects of the Transactions. For federal
and state income tax purposes, the Members intend that the transactions
effected by this Agreement, together with the payment of the Closing
Distribution under Section 8.1(a) of the Operating Agreement, shall be treated
as (i) a sale by the Indeck Members (as defined in the Operating Agreement) of
a portion of their membership interest in the Seller representing
substantially all of the present value of their membership interests in the
Seller for a sale price equal to the amount of the Closing Distribution, and
(ii) a capital contribution to the Seller of the remainder of the Membership
Interest Purchase Price.
ARTICLE 12
MISCELLANEOUS
12.1 Transaction Costs. Except as otherwise expressly provided herein,
Buyer, on the one hand, and Seller, on the other, shall pay all of their own
costs and expenses (including attorneys' fees and other legal costs and
expenses and accountants' fees and other accounting costs and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby.
12.2 Entire Agreement. This Agreement represents the entire
understanding and agreement among the parties with respect to the subject
matter hereof, and supersedes all other negotiations, understandings and
representations (if any) made by and among such parties.
12.3 Amendments. The provisions of this Agreement may not be amended,
supplemented, waived or changed orally, but only by a writing signed by each
of the parties hereto.
12.4 Assignments. No party shall assign its rights and/or obligations
hereunder without the prior written consent of each other party to this
Agreement.
12.5 Binding Effect. All of the terms and provisions of this Agreement,
whether so expressed or not, shall be binding upon, inure to the benefit of,
and be enforceable by the parties and their respective administrators,
executors, legal representatives, heirs, successors and permitted assigns.
12.6 Headings. The headings contained in this Agreement are for
convenience of reference only, are not to be considered a part hereof and
shall not limit or otherwise affect in any way the meaning or interpretation
of this Agreement.
<PAGE>
12.7 Notices. All notices, requests, consents and other communications
required or permitted under this Agreement shall be in writing and shall be
(as elected by the person giving such notice) hand delivered by messenger or
courier service, telefaxed, or mailed by registered or certified mail (postage
prepaid), return receipt requested, addressed to:
To Buyer: With a copy to:
Ridgewood Maine, L.L.C.
c/o Ridgewood Power Corporation Downs Rachlin & Martin, PC
947 Linwood Drive 199 Main Street, P.O. Box 190
Ridgewood, New Jersey 07450 Burlington, VT 05402-0190
Attn: President Attn: Thomas H. Moody, Esq.
To Seller: With a copy to:
Indeck Maine Energy, L.L.C. Pierce Atwood Schribner, Allen
1130 Lake Cook Road, Suite 300 Smith & Lancaster
Buffalo Grove, Illinois 60089 One Monument Square
Attn: President Portland, Maine 04101
with a separate copy to:
Alan R. Waskin, Esq.
or to such other address as any party may designate by notice complying with
the terms of this Section 12.7. Each such notice shall be deemed delivered
(a) on the date actually delivered if by messenger or courier service; (b) on
the date of confirmed answer-back if by telefax; and (c) on the date upon with
the return receipt is signed or delivery is refused or the notice is
designated by the postal authorities as not deliverable, as the case may be,
if mailed.
12.8 Severability. If any provision of this Agreement or any other
Agreement entered into pursuant hereto is contrary to, prohibited by or deemed
invalid under applicable law or regulation, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall
be given full force and effect so far as possible. If any provision of this
Agreement may be construed in two or more ways, one of which would render the
provision invalid or otherwise voidable or unenforceable and another of which
would render the provision valid and enforceable, such provision shall have
the meaning which renders it valid and enforceable.
12.9 Waivers. The failure or delay of any party at any time to require
performance by another party of any provision of this Agreement, even if
known, shall not affect the right of such party to require performance of that
provision or to exercise any right, power or remedy hereunder. Any waiver by
any party of any breach of any provision of this Agreement should not be
construed as a waiver of any continuing or succeeding breach of such
provision, a waiver of the provision itself, or a waiver of any right, power
or remedy
<PAGE>
under this Agreement. No notice to or demand on any party in any case shall,
of itself, entitle such party to any other or further notice or demand in
similar or other circumstances.
12.10 Enforcement Costs. If any legal action or other proceeding is
brought for the enforcement of this Agreement or any other Closing Document,
or because of an alleged dispute, breach, default or misrepresentation in
connection with any provision of this Agreement or any other Closing Document,
the successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees, sales and use taxes, court costs and all out-of-
pocket expenses even if not taxable as court costs (including, without
limitation, all such fees, taxes, costs and expenses incident to arbitration,
appellate, bankruptcy and post-judgment proceedings), incurred in that action
or proceeding, in addition to any other relief to which such party or parties
may be entitled. Attorneys' fees shall include, without limitation, paralegal
fees, investigative fees, administrative costs, sales and use taxes and all
other reasonable and customary charges billed by the attorney to the
prevailing party.
12.11 Remedies Cumulative. Except as otherwise expressly provided
herein, no remedy herein conferred upon any party is intended to be exclusive
of any other remedy, and each and every such remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or inequity or by statute or otherwise. No single or partial
exercise by any party of any right, power or remedy hereunder shall preclude
any other or further exercise thereof.
12.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Confirmation of
execution by telefax of a signature page shall be binding upon any party so
confirming.
12.13 Governing Law. This Agreement and all transactions contemplated
by this Agreement shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of Illinois, without regard to
principles of conflicts of laws.
12.14 Preparation of Agreement. This Agreement shall not be construed
more strongly against any party regardless of who is responsible for its
preparation. The parties acknowledge each contributed and is equally
responsible for its preparation.
12.15 Survival. All representations, warranties, covenants and
agreements made herein or otherwise referenced herein shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby for the time periods herein provided.
12.16 Inducement to Transaction. All representations and warranties
made by any party of this Agreement shall be deemed made for the purpose of
inducing the other party to enter into this Agreement.
ARTICLE 13
EXECUTION CLAUSE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date above first written.
SELLER:
INDECK MAINE ENERGY, L.L.C.
By: /s/ Thomas M. Campone
Name: Thomas M. Campone
Title: President
BUYER:
RIDGEWOOD MAINE, L.L.C.
By: RIDGEWOOD PENOBSCOT MANAGEMENT CORPORATION,
Manager
By: /s/ Mary Louise Olin
Name: Mary Louise Olin
Title: Vice President, Secretary
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
INDECK MAINE ENERGY, L.L.C.
Dated as of
June 11, 1997
<PAGE>
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
INDECK MAINE ENERGY, L.L.C.
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II CONTINUATION AND TERM . . . . . . . . . . . . . . . .4
2.1 Continuation . . . . . . . . . . . . . . . . . . . . .4
2.2 Business Purpose . . . . . . . . . . . . . . . . . . .5
2.3 Term of the Company. . . . . . . . . . . . . . . . . .5
2.4 Liability to Third Parties . . . . . . . . . . . . . .5
ARTICLE III OFFICES . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Principal Office . . . . . . . . . . . . . . . . . . .5
3.2 Registered Agent . . . . . . . . . . . . . . . . . . .5
3.3 Registered Office . . . . . . . . . . . . . . . .5
3.4 Change of Registered Agent or Office . . . . . . . . .5
ARTICLE IV CAPITAL CONTRIBUTIONS AND ADVANCES . . . . . . . . . 6
4.1 Capital Contributions. . . . . . . . . . . . . . . . .6
4.1.1 Initial Capital Contributions. . . . . . . .6
4.1.2 Additional Capital Contributions . . . . . .6
4.2 Method of Payment. . . . . . . . . . . . . . . . . . .6
4.3 Capital Accounts . . . . . . . . . . . . . . . . . . .6
4.4 Advances . . . . . . . . . . . . . . . . . . . . . . .6
4.5 No Interest. . . . . . . . . . . . . . . . . . . . . .6
4.6 No Return of Contribution. . . . . . . . . . . . . . .7
ARTICLE V MEMBERS . . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Participation in Management. . . . . . . . . . . . . .7
5.2 Liability of Members to the Company. . . . . . . . . .7
5.3 Annual Meetings. . . . . . . . . . . . . . . . . . . .7
5.4 Special Meetings . . . . . . . . . . . . . . . . . . .7
5.5 Place of Meetings. . . . . . . . . . . . . . . . . . .8
<PAGE>
5.6 Notice of Meetings. . . . . . . . . . . . . . . .8
5.7 Spontaneous Meeting of Members . . . . . . . . . . . .8
5.8 Quorum . . . . . . . . . . . . . . . . . . . . . . . .8
5.9 Proxies. . . . . . . . . . . . . . . . . . . . . . . .8
5.10 Written Action by Members. . . . . . . . . . . . . . .8
5.11 Telephonic Participation in Meetings . . . . . . . . .8
ARTICLE VI OPERATIONS AND MANAGEMENT. . . . . . . . . . . . . . 8
6.1 Managers. . . . . . . . . . . . . . . . . . . . .8
6.2 Appointment and Qualification. . . . . . . . . . . . .9
6.3 Duties and General Authority . . . . . . . . . . . . .9
6.4 Matters Requiring Ridgewood Consent. . . . . . . . . 10
6.5 Reliance by Third Parties. . . . . . . . . . . . . . 12
6.6 Compensation and Reimbursements. . . . . . . . . . . 12
6.7 Resignation and Removal. . . . . . . . . . . . . . . 12
6.8 Meetings and Action of Managers. . . . . . . . . . . 12
6.9 Reporting to Board of Managers . . . . . . . . . . . 13
6.10 Other Officers and Employees . . . . . . . . . . . . 13
6.11 Matters Requiring Consent of the Indeck Members. . . 13
ARTICLE VII ALLOCATION OF PROFITS AND LOSSES. . . . . . . . . .14
7.1 Allocations of Profits and Losses. . . . . . . . . . 14
7.2 Tax Allocations . . . . . . . . . . . . . . . . 15
7.3 Allocation Rules for Changes in Membership Interests 16
7.4 Reimbursements . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII
DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . 16
8.1 Distributions . . . . . . . . . . . . . . . . . . . 16
8.2 Procedure. . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IX TRANSFER OF MEMBERSHIP INTERESTS AND RESIGNATION OF
MEMBERS . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.1 Assignment and Transfer of Membership Interests. . . 18
9.2 Resignation. . . . . . . . . . . . . . . . . . . . . 18
ARTICLE X DISSOLUTION AND WINDING UP. . . . . . . . . . . . . .19
10.1 Dissolution. . . . . . . . . . . . . . . . . . . . . 19
10.2 Procedures . . . . . . . . . . . . . . . . . . . . . 20
10.2.1. Liquidation of Assets. . . . . . . . . . . 20
<PAGE>
10.2.2. Authority of Liquidating Agent . . . . . . 20
10.2.3. Distribution of Assets . . . . . . . . . . 20
10.2.4. No Recourse to Assets of Members . . . . . 20
10.3 Termination of the Company . . . . . . . . . . . . . 20
ARTICLE XI FISCAL AND ADMINISTRATIVE MATTERS. . . . . . . . . .20
11.1 Accounting Period. . . . . . . . . . . . . . . . . . 20
11.2 Deposits . . . . . . . . . . . . . . . . . . . . . . 21
11.3 Checks, Drafts, Etc. . . . . . . . . . . . . . . . . 21
11.4 Contracts. . . . . . . . . . . . . . . . . . . . . . 21
11.5 Books and Records. . . . . . . . . . . . . . . . . . 21
11.5.1 Right of Inspection. . . . . . . . . . . . 21
11.5.2 Financial Records. . . . . . . . . . . . . 21
11.6 Administrative Matters . . . . . . . . . . . . . . . 21
11.6.1 "Tax Matters Member" . . . . . . . . . . . 21
11.6.2 Address of Tax Matters Member. . . . . . . 22
11.6.3 Cooperation. . . . . . . . . . . . . . . . 22
11.6.4 Filings. . . . . . . . . . . . . . . . . . 22
11.6.5 Authorization. . . . . . . . . . . . . . . 22
11.6.6 Reporting to Members . . . . . . . . . . . 22
11.7 Financial Statements . . . . . . . . . . . . . . . . 22
11.8 Effective Date . . . . . . . . . . . . . . . . . . . 23
11.9 Reserves . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XII INDEMNIFICATION . . . . . . . . . . . . . . . . . .23
12.1 Right to Indemnification . . . . . . . . . . . . . . 23
12.2 Award of Indemnification . . . . . . . . . . . . . . 23
12.3 Successful Defense . . . . . . . . . . . . . . . . . 24
12.4 Advance Payments . . . . . . . . . . . . . . . . . . 24
12.5 Definitions. . . . . . . . . . . . . . . . . . . . . 24
12.6 Insurance. . . . . . . . . . . . . . . . . . . . . . 24
12.7 Employee Benefit Plan. . . . . . . . . . . . . . . . 25
12.8 Heirs and Personal Representatives . . . . . . . . . 25
12.9 Non-Exclusivity. . . . . . . . . . . . . . . . . . . 25
12.10 Amendment . . . . . . . . . . . . . . . . . . . 25
ARTICLE XIII MISCELLANEOUS. . . . . . . . . . . . . . . . . . .25
13.1 Waivers. . . . . . . . . . . . . . . . . . . . . . . 25
13.2 Amendment. . . . . . . . . . . . . . . . . . . . . . 25
13.3 Assignability. . . . . . . . . . . . . . . . . . . . 25
13.4 Notices. . . . . . . . . . . . . . . . . . . . . . . 25
<PAGE>
13.5 Third Party Rights . . . . . . . . . . . . . . . . . 27
13.6 Choice of Law. . . . . . . . . . . . . . . . . . . . 27
13.7 Headings . . . . . . . . . . . . . . . . . . . . . . 27
13.8 Entire Agreement . . . . . . . . . . . . . . . . . . 27
13.9 Severability . . . . . . . . . . . . . . . . . . . . 27
13.10 Counterparts. . . . . . . . . . . . . . . . . . 28
13.11 Pronouns and Plurals. . . . . . . . . . . . . . 28
13.12 Further Assurances. . . . . . . . . . . . . . . 28
13.13 Power of Attorney . . . . . . . . . . . . . . . 28
Exhibit 4.1.1Initial Capital Contributions . . . . . . . . . . 30
Exhibit 6.1
Name and Address of Managers. . . . . . . . . . . . . . . 31
Exhibit 6.4 (a)
Approved Operating Budget for FY ending 12/31/97. . . . . 32
Exhibit 6.4 (f)
Approved Agreements . . . . . . . . . . . . . . . . . . . 33
Exhibit 8.1
Percentages for Distributions to Indeck Members . . . . . 34
<PAGE>
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
INDECK MAINE ENERGY, L.L.C.
This Amended and Restated Operating Agreement of INDECK MAINE ENERGY,
L.L.C., a limited liability company organized under the laws of the State of
Illinois (the "Company"), is made as of June 11, 1997 (the "Operating
Agreement"), by and among Gerald R. Forsythe, an individual, Thomas M. &
Silvia Campone, jointly an individual, Michelle R. Fawcett, an individual,
Marsha F. Fournier, an individual, Monica Forsythe Breslow, an individual, and
Melissa S. Forsythe, an individual, as the initial members (collectively, the
"Indeck Members"), and Ridgewood Maine, L.L.C., a Delaware limited liability
company ("Ridgewood," and collectively with the Indeck Members, the
"Members").
WHEREAS, the Indeck Members have heretofore formed a limited liability
company pursuant to the Act (as hereinafter defined) by filing Articles of
Organization of the Company with the office of the Secretary of State of the
State of Illinois on April 1, 1997, and entering into an Operating Agreement
of the Company dated March 17, 1997 (the "Original Operating Agreement"); and
WHEREAS, the Indeck Members desire to continue the Company as a limited
liability company under the Act, admit Ridgewood as a Member, and amend and
restate the Original Operating Agreement of the Company in its entirety.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree as
follows:
ARTICLE I
DEFINITIONS
As used in this Operating Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to and include both
the singular and plural forms of the terms defined):
"Act" means the Illinois Limited Liability Company Act in effect on June
1, 1997.
<PAGE>
"Adjusted Capital Account Deficit" means, with respect to any Member, the
deficit balance if any, in such Member's Capital Account as of the end of the
relevant Year, after giving effect to any adjustments required pursuant to
Treasury Regulations (( 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
"Affiliate" means, with respect to any Person, any other Person who
either directly, or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, such Person.
"Articles of Organization" means the articles referred to in the Act,
which was filed for the Company on April 1, 1997, and such certificate as
amended.
"Board of Managers" has the meaning set forth in Section 6.1.
"Capital Account" means, with respect to any Member, the capital account
maintained for such Member pursuant to Section 4.3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Company" has the meaning set forth in the first paragraph hereof.
"Continuing Members" has the meaning set forth in Section 9.2(a).
"Depreciation" means for each taxable year of the Company, an amount
equal to depreciation, amortization, or other cost recovery deduction
allowable for federal income tax purposes with respect to the tangible and
intangible assets of the Company.
"Distribution Default" means (a) the failure of the Company to make
distributions to Members under Section 8.1(b) and 8.1(c) hereof with respect
to any calendar quarter or any Fiscal Year in the manner required by Section
8.2 hereof, or (b) the failure of the Company to make distributions to
Ridgewood pursuant to Section 8.1(b) hereof with respect to any calendar
quarter commencing with the calendar quarter ending September 30, 1997, in an
amount equal to twenty-five percent (25%) of Ridgewood's Priority Return From
Operations; provided, however, that the Distribution Default described in
clause (b) above shall not become effective if at any time during the period
ending on the last day of the fifth calendar quarter succeeding the calendar
quarter in which such Distribution Default shall occur, Ridgewood shall have
received cash distributions pursuant to Section 8.1(b) which, when aggregated
with all prior cash distributions received by Ridgewood under such Section
8.1(b), yields an amount which is equal to or greater than the amount of
Ridgewood's Priority Return From Operations through the period ending on the
date any such determination is made.
"Effective Date" has the meaning set forth in Section 11.8.
"Facilities" has the meaning set forth in the Purchase Agreement.
<PAGE>
"Fiscal Year" means the twelve (12) calendar month period commencing on
January 1 and ending on December 31 of each year, including any period of less
than twelve (12) calendar months (i) beginning with the Closing Date under the
Purchase Agreement or (ii) ending with dissolution of the Company.
"Initial Capital Contribution" means, with respect to each Member, the
capital contributions shown on Exhibit 4.1.1, subject to adjustment as
specified in Section 4.1.2(b).
"Indeck Members" shall have the meaning given in the first paragraph
hereof, provided that the term "Indeck Members" shall include any permitted
transferee (in accordance with Section 9.1) of any interest formerly held by
an Indeck Member (regardless of whether such permitted transferee is an
Affiliate or otherwise related to Indeck).
"Liquidating Agent" has the meaning set forth in Section 10.4.1.
"Managers" shall mean the Board of Managers collectively or one or more
members of the Board of Managers, as the context requires.
"Member Consent" means the prior written consent of Ridgewood and the
holders of a majority of the interests of the Indeck Members, as referenced on
Exhibit 8.1.
"Members" means the Indeck Members, Ridgewood and any other Person who
becomes a Substituted Member (as such term is used in the Act) of the Company
in accordance with Section 9.1.
"Net Cash Flow From Operations" means, with respect to each Fiscal Year,
an amount equal to (i) the gross cash receipts of the Company which are
attributable to the ongoing operation of the Facilities in the ordinary course
during such Fiscal Year, less (ii) all amounts paid by or for the account of
the Company with respect to such ongoing, ordinary course operations.
Net Cash Flow From Operations shall be determined by reference to the amount
of the Company's Profits for such Fiscal Year as shown on the Company's
federal income tax return for such year (computed without regard to any gain
or loss attributable to the sale or other disposition of any of the Company's
assets other than in the ordinary course of business), increased by the amount
of Depreciation and the amount of any reduction in the Reserves, and reduced
by the amount of any increase in the Reserves.
"Net Cash Flow From Capital Events" means any cash received or held by
the Company from any source other than Net Cash Flow From Operations.
"Operating Agreement" means this Agreement, as amended from time to time.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, a limited
liability company, an unincorporated organization of a governmental entity or
any department, agency or political subdivision thereof.
<PAGE>
"Profits" and "Losses" means, for each taxable year of the Company, the
Company's taxable income or loss for such Year determined in accordance with
Code Section 703(a), including all items of income, gain, loss or deduction
required to be stated separately pursuant to Code Section 703(a)(1); provided
that no Depreciation shall be taken into account.
"Purchase Agreement" means the Agreement to Purchase Membership Interests
between the Company and Ridgewood dated as of June 11, 1997.
"Reserves" means collectively the working capital, maintenance or other
reserves established by the Board of Managers from time to time in accordance
with Section 6.4.
"Resignation" has the meaning set forth in Section 9.2(a).
"Resigning Member" has the meaning set forth in Section 9.2(a).
"Ridgewood" has the meaning set forth in the first paragraph hereof.
"Ridgewood's Priority Return From Operations" means an amount equal to
eighteen percent (18%) per annum computed on a base equal to Ridgewood's
Initial Capital Contribution, as such base amount is (i) increased from time
to time by the amount of any additional contribution made by Ridgewood
pursuant to Section 4.1.2(b) below, or (ii) reduced from time to time by the
amount of distributions to Ridgewood of Net Cash Flow From Capital Events
pursuant to Section 8.1(c).
"Secretary of State" means the Secretary of State of the State of
Illinois.
"Subsidiary" means any corporation or other entity of which the
securities having a majority of the ordinary voting power in electing the
board of directors or other elected governing body are, at the time such
determination is being made, owned by the Company, either directly or
indirectly through one or more intermediate Subsidiaries.
"Tax Matters Member" has the meaning set forth in Section 11.6.1.
"Treasury Regulation" means, unless otherwise noted herein, a final or
temporary regulation issued by the United States Treasury Department with
respect to the Code and published in Title 26 of the Code of Federal
Regulations.
ARTICLE II
CONTINUATION AND TERM
2.1 Continuation.
(a) The Members hereby agree to continue the Company as a manager-
managed limited liability company under and pursuant to the provisions of the
Act and agree that
<PAGE>
the rights, duties and liabilities of the Members and the Managers shall be as
provided in the Act, except as otherwise provided herein.
(b) Upon execution of this Operating Agreement, the Indeck Members
shall be and Ridgewood shall become members of the Company in accordance with
this Agreement.
2.2 Business Purpose. The purpose of the Company is to carry on any
lawful business, purpose or activity for which limited liability companies may
be formed under the Act.
2.3 Term of the Company. The Company's existence commenced upon the
filing of the Articles of Organization with the Secretary of State on April 1,
1997 and shall continue until December 31, 2050 unless (a) extended by
amendment to this Operating Agreement and the Articles of Organization, or (b)
dissolved earlier under Section 10.1 hereof or by law.
2.4 Liability to Third Parties. Except as otherwise provided by the
Act, the debts, obligations and liabilities of the Company, whether arising in
contract, tort, strict liability or otherwise, shall be solely the debts,
obligations and liabilities of the Company, and no Member or Manager of the
Company shall be obligated personally for any such debt, obligation or
liability of the Company solely by reason of being a Member or acting as a
Manager of the Company.
ARTICLE III
OFFICES
3.1 Principal Office. The Company may have such offices or places of
business, either within or without the State of Illinois, as the Managers may
designate or as the business of the Company may from time to time require.
The principal office of the Company is:
1130 Lake Cook Road, Suite 300
Buffalo Grove, Illinois 60089
3.2 Registered Agent. The initial registered agent of the Company is CT
Corporation.
3.3 Registered Office. The address of the initial registered office of
the Company is:
208 S. LaSalle St.
Chicago, IL 60604
3.4 Change of Registered Agent or Office. The registered office and
registered agent may be changed from time to time by action of the Board of
Managers, and by the filing of the prescribed form, accompanied by the
requisite filing fee, with the Secretary of State in accordance with the Act.
<PAGE>
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ADVANCES
4.1 Capital Contributions.
4.1.1 Initial Capital Contributions. Each Member agrees to make an
Initial Capital Contribution in the amount set forth opposite such Member's
name as set forth on Exhibit 4.1.1 attached hereto. Upon receipt by the
Company of cash from each Member in the specified amount, the Company shall
credit each Member's Capital Account with the amount of such contribution.
4.1.2 Additional Capital Contributions. No Member shall be
required to make any additional capital contribution to the Company. However,
the Company may, with the approval of the Managers, accept additional capital
contributions (a) from any Indeck Member or from any new Member admitted
pursuant to Section 9.1, (in which case the only effect of the addition
capital contribution shall be to modify the relative interests of the Indeck
Members set forth on Exhibit 8.1 from and after the date of acceptance of such
additional contributions), and (b) from Ridgewood (in which case the amount
contributed shall be included in calculating Ridgewood's Initial Capital
Contribution for purposes of this Agreement from and after the date of
acceptance of such additional contributions).
4.2 Method of Payment. All cash contributions to the capital of the
Company shall be made by means of a good check or a wire transfer of
immediately available funds to the account of the Company.
4.3 Capital Accounts. The Company shall maintain a separate capital
account (each a "Capital Account") for each Member according to the capital
accounting rules of Treasury Regulation Section 1.704-1(b)(2)(iv).
4.4 Advances. Unless expressly provided for in this Operating
Agreement, or as otherwise agreed by the Managers pursuant to Section 6.4 (a)
no payment shall be made by the Company to any Member for the services of the
Member, (b) no payment shall be made by the Company to any Affiliate of a
Member for the services of such Affiliate, (c) no loans or advances shall be
made by the Company to any Member or any Affiliate of a Member, and (d) no
Member or any Affiliate of a Member shall be entitled to any compensation or
reimbursement from the Company or from the other Members for expenses incurred
in connection with the formation, business or affairs of the Company.
4.5 No Interest. No interest shall be paid by the Company on (a) any
initial, additional or new capital contribution, (b) on the balance of any
Capital Account, or (c) unless approved by the Managers pursuant to Section
6.4, on any advance to the Company from any Member.
<PAGE>
4.6 No Return of Contribution. Except as otherwise provided in Article
VIII, no Member shall be entitled to demand the return of any capital
contribution except as provided in Article X hereof upon dissolution and
liquidation of the Company.
ARTICLE V
MEMBERS
5.1 Participation in Management. The management of the business and
affairs of the Company is delegated pursuant to Article VI below to the Board
of Managers. Except for the actions set forth in this Section 5.1, the
Members hereby delegate to the Board of Managers the right to decide and the
manner of decision of any matter within the scope of the powers of the
Company. It is the intention of the Members to delegate management authority
to the Board of Managers to the maximum extent permitted by the Act. The
following are the only actions that may be taken by the Members under this
Agreement:
(a) election of Managers, which action must be approved in
accordance with Article VI;
(b) amendment of this Agreement or the Articles of Organization,
which actions may only be taken with Member Consent;
(c) dissolution of the Company pursuant to Section 10.1(b), which
action may only be taken with Member Consent; and
(d) approval of the assignment or other transfer under Section 9.1
and admission as a Member of the transferee of such interest, which action
must be approved in accordance with Section 9.1.
Except as set forth above in this Section 5.1, no Member shall have any right,
solely as a Member, to participate in the management and affairs of the
Company.
5.2 Liability of Members to the Company. A Member shall be liable to
the Company for payment of the capital contributions set forth in Exhibit
4.1.1 as and to the extent provided by the Act.
5.3 Annual Meetings. An annual meeting of the Members, commencing with
the year 1998, shall be held each year at such time and on such date prior to
February 28 in each year as the Board of Managers may designate, at which
meeting the Members shall transact such business as may be brought before such
meeting. If the annual meeting shall not be held on the day designated
therefor, the Members may cause the meeting to be held as soon thereafter as
may be convenient.
5.4 Special Meetings. Special meetings of the Members may be called by
any two (2) or more Managers.
<PAGE>
5.5 Place of Meetings. The Members may designate any place, within or
without the United States and the State of Illinois, as the location for any
annual meeting or for any special meeting of the Members, provided, however,
that if no place is designated, the meeting shall be held at the principal
office of the Company specified in Section 3.1 above.
5.6 Notice of Meetings. Written or printed notice stating the place,
day and hour of the meeting and, in case of a special meeting, the purpose or
purposes for which such meeting is called, shall be delivered to each Member
not less than ten (10) days nor more than fifty (50) days before the meeting,
at the direction of the Member(s) calling such meeting.
5.7 Spontaneous Meeting of Members. If all of the Members meet at any
time and place, either within or without the State of Illinois, and consent to
the holding of a meeting at such time and place, such meeting shall be valid
without call or notice, and at such meeting any Company action may be taken.
5.8 Quorum. At each meeting of the Members, Ridgewood and the holders
of a majority of the interests held by Indeck Members as reflected on Exhibit
8.1, present in person or by proxy, shall constitute a quorum for the
transaction of Company business. In the absence of a quorum, any Member
present at such meeting in person or by proxy shall have the power to adjourn
such meeting until a quorum shall be constituted.
5.9 Proxies. At any meeting of the Members, a Member may vote by proxy
executed in writing by such Member or by its duly authorized representative.
5.10 Written Action by Members. Any action required to, or which may,
be taken by the Members may be taken without a meeting if consent thereto in
writing, setting forth the action so taken, shall be signed by sufficient
Members to constitute Member Consent.
5.11 Telephonic Participation in Meetings. Members may participate in
any meeting through telephonic or similar communications equipment by means of
which all persons participating in the meeting can hear one another, and such
participation shall constitute presence in person at such meeting.
ARTICLE VI
OPERATIONS AND MANAGEMENT
6.1 Managers. The business and affairs of the Company will be carried
out by or under the direction of a Board of Managers, consisting of five (5)
Managers. The size of the Board of Managers may only be increased or
decreased with the prior approval the Managers pursuant to Section 6.4. The
names and addresses of the initial Managers are listed on Exhibit 6.1 and said
Exhibit shall be amended from time to time by the Managers to reflect the
resignation or removal of Managers or the appointment of new Managers pursuant
to this Operating Agreement.
<PAGE>
6.2 Appointment and Qualification. At each annual meeting the Members
shall, and, at any special meeting the Members may, elect Managers in
accordance with this Section 6.2:
(a) Prior to the occurrence of a Distribution Default, the Indeck
Members shall have the right to designate three (3) Managers for election to
the Board of Managers and Ridgewood shall have the right to designate two (2)
Managers for election to the Board of Managers.
(b) Upon the occurrence of a Distribution Default and thereafter,
Ridgewood shall have the right to designate three (3) Managers for election to
the Board of Managers and the Indeck Members shall have the right to designate
two (2) Managers for election to the Board of Managers. No meeting of the
Members or Managers shall be required to effect such action.
(c) Ridgewood and each of the Indeck Members agree to vote all
membership interests held by it in such manner to cause the election of the
Managers designated by the other party to the Board of Managers in accordance
with the provisions of this Section 6.2.
(d) Managers shall hold office for a term ending at the conclusion
of the next meeting of the Members at which their successors are chosen and
qualified, or upon their earlier death, resignation or removal. Each Manager
shall devote such time to the business of the Company as is reasonably
necessary for the performance of the Manager's duties, but such Managers shall
not be required to devote full time to the performance of such duties and may
delegate his or her responsibilities as provided in Section 6.3.
6.3 Duties and General Authority. The business and affairs of the
Company shall be conducted by or under the direction of the Managers, who
shall have and may exercise on behalf of the Company all of its rights,
powers, duties and responsibilities, including without limitation the right
and authority to manage the business and affairs of the Company. Without
limiting the generality of the foregoing, the specific authority and
responsibilities of the Managers shall, except as otherwise provided by the
Members' action appointing the Managers or by this Operating Agreement,
include the following:
(a) Effectuating the provisions of this Operating Agreement and the
resolutions, actions and decisions of the Members;
(b) Directing, managing and supervising the executive, day-to-day
operations, business and affairs of the Company;
(c) Advising the Members with respect to all matters pertaining to
the operation of the Company, including services rendered on behalf of the
Company, operating income and expenses, financial position, and the
preparation and submission
<PAGE>
of reports to the Members at each regular meeting of the Members, and at such
other times as may be directed by the Members or requested by a Member
pursuant to Section 11.5.1;
(d) Presiding over and recording the minutes of all meetings of,
and actions taken by, the members, when present at any such meeting;
(e) Subject to Section 6.4, signing, on behalf of the Company, such
agreements, notes, consents, approvals, deeds, mortgages, bonds,
contracts or other instruments which have been appropriately authorized by the
Managers or the Members, as required under this Agreement, to be executed on
behalf of the Company, except in cases where the signing or execution thereof
shall be expressly delegated by the Members, this Operating Agreement or by
operation of law to some other officer or agent of the Company;
(f) Performing all duties and taking all actions as may be
necessary in the ordinary course of managing the business and affairs of the
Company, or as prescribed by the Members from time to time; and
(g) Creating such positions and offices of the Company having such
authority and responsibility as the Managers may determine to be necessary or
advisable and appointing such Persons as the Managers deem appropriate to fill
such positions.
6.4 Matters Requiring Ridgewood Consent. Notwithstanding the foregoing,
the Managers may not take any of the following actions without the consent of
the Managers designated by Ridgewood:
(a) Approval of the annual operating budgets of the Company and of
Indeck Operations, Inc. or any successor to Indeck Operations, Inc. as
operator of the facilities owned by the Company; provided, however, that if
Ridgewood does not consent to the proposed annual operating budget, the
Managers may continue the affairs of the Company in accordance with the then
existing budget, except that the aggregate of all expenditures contained in
such existing budget shall be increased to an amount equal to 105% of the
total of all such expenditures contained in the existing budget and such
existing budget, as increased, shall constitute the budget for the succeeding
Fiscal Year. The Members confirm that the operating budget for the fiscal
year ending December 31, 1997 attached hereto as Exhibit 6.4(a) is hereby
approved in all respects, and absent approval of a succeeding operating budget
as contemplated by this Section 6.4(a), will constitute the operating budget
for the Fiscal Year commencing January 1, 1998, adjusted as necessary to
reflect (i) a full twelve months of operations and (ii) the 5% annual increase
referenced above.
(b) Assign, transfer, pledge, compromise or release any of the
Company's claims or debts, except upon payment in full, or arbitrate or
consent to the arbitration of any of its disputes or controversies;
<PAGE>
(c) Make, execute and deliver any assignment for the benefit of
creditors, or any bond, confession of judgment, chattel mortgage, deed,
guarantee, indemnity bond, surety bond, or contract to sell a substantial
portion of its personal property;
(d) Purchase, sell or mortgage any real estate or interest therein,
or enter into any contract or lease for such purpose other than to acquire
rights to property contiguous to the Facilities for the purpose of expanded
operation of the Facilities for an annual cost not to exceed $10,000 per year;
(e) Borrow or loan money, or make, execute, deliver, accept, or
endorse any commercial paper, or use the credit, money or other property of
the Company except in accordance with the operating budget of Company
established with the consent of the Managers designated by Ridgewood; and
(f) Pay any money to, provide any services to, engage in any
transaction or enter into any contract or agreement with any Affiliate of the
Indeck Members; provided, however, that (i) the Company may perform all its
obligations under the agreements described on Exhibit 6.4(f) attached hereto
or such agreements exist on the date hereof, all of which agreements are
hereby expressly approved, ratified and confirmed by all the Members; and (ii)
the Company may purchase goods and services from any Affiliate of any Indeck
Member which is in the business of providing such goods or services to third
parties in the ordinary course of business so long as the terms and conditions
of any such purchase are no less favorable to the Company in the aggregate
than those otherwise obtainable by the Company from third parties.
(g) Enter into any agreement, undertaking or commitment which
requires the Company to make payments exceeding $100,000 in the aggregate,
provided, however, that the foregoing restriction shall not apply to
agreements, undertakings or commitments by the Company (i) to purchase fuel
for the Facilities in the ordinary course of business (ii) which are
contemplated by the annual operating budget.
(h) Enter into any contract for the sale of electrical energy or
capacity for a term in excess of six months.
(i) Elect to have the Company governed by the Illinois Limited
Liability Company Act, as amended after June 1, 1997.
(j) Take any of the following actions: (i) dispose of any
substantial portion of the Company's assets; (ii) merge with or consolidate
into another entity or Person; (iii) continue the Company after dissolution,
or (iv) change the structure by which the Company is organized.
(k) Actions in this agreement specifically requiring approval of
the Managers pursuant to this Section 6.4.
<PAGE>
6.5 Reliance by Third Parties. Any person dealing with the Company, the
Managers or any Member may rely upon a certificate signed by all members of
the Board of Managers as to (i) the identity of any Managers or Members; (ii)
any factual matters relevant to the affairs of the Company; (iii) the persons
who are authorized to execute and deliver any document on behalf of the
Company; or (iv) any action taken or omitted by the Company, the Managers or
any Member.
6.6 Compensation and Reimbursements. Except as the Members may
determine, the Managers shall not receive compensation from the Company for
serving as Managers. The Company shall reimburse the Managers for all out-of-
pocket expenses that they may incur in connection with the performance of
their duties as Managers in accordance with the terms of this Operating
Agreement.
6.7 Resignation and Removal. Any Manager may resign upon at least ten
(10) days' notice to the Members and other Managers (unless notice is waived
by them) and may be removed, at any time, with or without cause, by a
unanimous vote all of the Managers except the Manager whose removal is being
voted upon. However, no Manager may be removed, without cause, without the
consent of the Member that designated such Manager. In addition, a Manager
may be removed, at any time, with or without cause, by the Member that
designated such Manager upon written notice to the Members and the Manager
being removed. In the event that a Manager resigns or is removed, the Member
or Members that designated such Manager will designate his or her replacement
to serve the remaining balance of such Manager's term.
6.8 Meetings and Action of Managers. Except as to matters identified in
Article 6.4 as to which the consent of the Managers appointed by Ridgewood is
required, all action to be taken by the Managers of the Company shall be taken
by affirmative vote of a majority of the Managers then in office or by
unanimous written consent of the Managers then in office. There is no
requirement that the Managers hold a meeting in order to take action on any
matter. Meetings of the Managers may be called by any two or more of the
Managers. If action is to be taken at a meeting of the Managers, notice of
the time, date and place of the meeting shall be given to each Manager by
personal delivery, telephone or fax sent to the business or home address of
each Manager at least twenty-four (24) hours in advance of the meeting, or by
written notice mailed to each Manager at either such address at least seventy-
two (72) hours in advance of the meeting; however, no notice need be given to
a Manager who waives notice before or after the meeting, or who attends the
meeting without protesting, at or before its commencement, the inadequacy of
notice to him or her. Managers may attend a meeting in person or by proxy,
and they may also participate in a meeting by means of conference telephone or
similar communications equipment that permits all Managers to hear each other.
A Chairman selected by the Managers shall preside at all meetings of the
Managers. The Chairman shall determine the order of business and the
procedures to be followed at each meeting of the Managers. The initial
Chairman shall be Gerald R. Forsythe.
<PAGE>
6.9 Reporting to Board of Managers. Each Manager shall keep the other
Members of the Board of Managers informed of all material matters that come to
his or her attention in his or her capacity as Manager or otherwise.
6.10 Other Officers and Employees. The Managers may, by majority vote,
elect and appoint such other officers, employees and agents of the Company,
and grant such officers, employees and agents such responsibilities and
duties, as they may deem necessary or appropriate to effectuate the provisions
of this Operating Agreement and to conduct the business and affairs of the
Company, subject, however, to limitations of authority set forth in this
Agreement.
6.11 Matters Requiring Consent of the Indeck Members. At such times as
Ridgewood shall have elected the majority of the Board of Managers pursuant to
Section 6.2(a) above, all of the provisions contained in Section 6.4 above
shall remain applicable with the following modifications:
(a) Wherever the phrase "Managers designated by Ridgewood" is used
in such Section 6.4 it shall be deemed deleted and the phrase "Managers
designated by the Indeck Members" shall be inserted in lieu thereof.
(b) The provisions of subparagraph (f) shall be deleted and the
following inserted in lieu thereof:
"Pay any money to provide any services to or engage in any
transaction with, or enter into any contract or agreement with Ridgewood or
any Affiliate of Ridgewood; provided, however, that upon any termination by
the Company of any agreements or understandings between the Company and any of
the Indeck Members or their respective Affiliates, the Members hereby
authorize and direct the Company to enter into and perform agreements between
the Company and Ridgewood or its Affiliates on terms and conditions which are
not in any material respect less favorable to the Company than the terms and
conditions of the agreements between the Company and the Indeck Members and
their respective Affiliates as such agreements existed on the date
immediatesly preceeding the date of termination thereof; and
(c) the phrase "six months" in Section 6.4(h) shall be deleted and
the phrase "two years" inserted in lieu thereof.
<PAGE>
ARTICLE VII
ALLOCATION OF PROFITS AND LOSSES
7.1 Allocations of Profits and Losses.
(a) General Rules. Except as otherwise provided in Section 7.1(b)
or Section 7.1(c)(i) and after giving effect to the allocations set forth in
Section 7.1(c)(ii) and 7.1(c)(iii), all Profits and Losses shall be allocated
among the Members in the following order of priority:
(i) FIRST, there shall be allocated to each Member (other than
Ridgewood) with respect to each Fiscal Year, Profits (including gross income
and gain, if necessary) so that the cumulative amount of Profits allocated
pursuant to this Section 7.1(a)(i) is equal to the cumulative amount of the
distributions theretofore made or to be made to each such Member pursuant to
Sections 8.1(b) and 8.1(c) with respect to such Fiscal Year; and
(ii) SECOND, all remaining items of Profits and Losses, and
other items in the nature of income, gain, loss or deduction shall be
allocated to Ridgewood.
(b) Depreciation. All Depreciation shall be allocated to
Ridgewood.
(c) Special Rules.
(i) LOSS LIMITATIONS. The Losses and Depreciation allocated
to any Member pursuant to Sections 7.1(a) and (b) with respect to any Fiscal
Year shall not exceed the maximum amount of Losses and Depreciation that can
be so allocated without causing such Member to have an Adjusted Capital
Account Deficit at the end of such year. All Losses and Depreciation in
excess of the limitation set forth in this Section shall be allocated to the
remaining Members who will not be subject to this limitation, in proportion to
and to the extent of their positive Capital Account balances.
(ii) QUALIFIED INCOME OFFSET. If in any Fiscal Year a Member
unexpectedly receives an adjustment, allocation or distribution described in
Regulations (( 1.704-1(b)(2)(ii)(d)(5) or (6), and such allocation or
distribution causes or increases an Adjusted Capital Account Deficit for such
Fiscal Year, such Member shall be allocated items of income and gain
(consisting of a pro rata portion of each item of Company income, including
gross income and gain) in an amount and manner sufficient to eliminate such
Adjusted Capital Account Deficit as quickly as possible.
(iii) LIMITED EFFECT; CURATIVE ALLOCATIONS. The special rules
set forth in this Section 7.1(c) hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of the Code and Regulations. The
<PAGE>
Members do hereby acknowledge and agree that the Regulatory Allocations may
not be consistent with the manner in which the Members intend to divide
Company Losses and similar items. Accordingly, the Tax Matters Member is
hereby authorized and directed to divide other allocations of Profits, Losses,
and other items of income, gain, loss and deduction among the Members in any
reasonable manner so as to prevent the Regulatory Allocations from distorting
the manner in which the Members intend to divide Company Profits, Losses and
similar items. In general, the Members anticipate that this will be
accomplished by specially allocating other Profits, Losses, and other items of
income, gain, loss and deduction among the Members so that, after such
offsetting special allocations are made, the amount of each Member's Capital
Account will be, to the extent possible, equal to the Capital Account balance
such Member would have had if the Regulatory Allocations were not a part of
this Agreement and all Profits, Losses and similar items had been allocated to
the Members solely pursuant to Sections 7.1(a) and (b) hereof.
7.2 Tax Allocations.
(a) Generally. Allocations for tax purposes of items of income,
gain, loss and deduction, and credits and basis therefor, shall be made in the
same manner as allocations of Profits, Losses and similar items as provided
for in Section 7.1. Allocations pursuant to this Section 7.2 are solely for
purposes of federal, state and local income taxes and shall not affect, or in
any way be taken into account in computing, any Partner's Capital Account or
share of Profits, Losses, other items or distributions pursuant to any
provision of this Agreement.
(b) Special Rules.
(i) Elimination of Book/Tax Disparities. If any Company
property has a book value different from its adjusted tax basis to the Company
for federal income tax purposes (whether by reason of the contribution of such
property to the Company, the revaluation of such property hereunder, or
otherwise), allocations of taxable income, gain, loss and deduction under this
Section 7.2 with respect to such asset shall take account of any variation
between the adjusted tax basis of such asset for federal income tax purposes
and its book value in the same manner as under Code Section 704(c) or the
principles set forth in Regulations ( 1.704-1(b)(2)(iv)(g), as the case may
be. Any elections or other decisions relating to such allocations shall be
made by the Tax Matters Member in such manner as reasonably reflects the
purpose and intention of this Agreement.
(ii) Allocation of Separately Stated Items Among Partners.
Each item of income, gain, loss, deduction and credit governed by Code Section
702(a) shall be allocated among the Members in proportion to the allocation of
Profits, Losses and similar items as provided for in Section 7.1.
<PAGE>
(c) Conformity of Reporting. The Members are aware of the income
tax consequences of the allocations made by this Section 7.2 and hereby agree
to be bound by the provisions of this Section 7.2 in reporting their shares of
Company income, loss, credits and other items for income tax purposes, except
in the case of manifest error.
7.3 Allocation Rules for Changes in Membership Interests. If there is a
change in any Member's share of the Company's Profits, Losses or similar items
during any Fiscal Year, including any change resulting from a Member's
transfer of all or any portion of its membership interest, allocations among
the Members shall be made in accordance with their interests in the Company
from time to time during such Fiscal Year in accordance with Code Section 706,
using the closing-of-the-books method, except that Depreciation and similar
items shall be deemed to accrue ratably on a daily basis over the entire
Fiscal Year during which the corresponding asset is owned by the Company for
the entire year, and over the portion of a Fiscal Year after such asset is
placed in service by the Company if such asset is placed in service during the
Fiscal Year.
7.4 Reimbursements. All of the Company's expenses shall be billed
directly to and paid by the Company.
ARTICLE VIII
DISTRIBUTIONS
8.1 Distributions. The Company shall make the following distributions:
(a) Closing Distribution. Upon the Closing of the Purchase
Agreement, the Company shall make a distribution (the "Closing Distribution")
to the Indeck Members (in accordance with the respective interests of the
Indeck Members as shown on Exhibit 8.1), in the amount of (i) $13,000,000,
(ii) less the amounts required to discharge all existing indebtedness of the
Company, including without limitation amounts payable to Indeck Power
Overseas, Ltd. in respect of a promissory note dated April 23, 1997, (iii)
less amounts expended prior to the Effective Date to bring each Project into
operating condition, including without limitation amounts payable to Indeck
Energy Services, Inc. and any of its Affiliates that have paid Company
expenses or advanced funds to the Company, and (iv) plus the amounts of any
prepaid expenses of the Company determined in accordance with generally
accepted accounting principles as of the Effective Date.
Since the exact amount of the Closing Distribution will not be known
on the date of closing of the Purchase Agreement, the Company shall make a
preliminary distribution (the "Preliminiary Closing Distribution") on the date
of closing of an estimated amount determined by the Board of Managers, subject
to a reasonable reserve. Within sixty (60) days after closing, the Board of
Managers shall detemine the exact amount of the Closing Distribution and the
Company shall make a final distribution of the excess of the Closing
Distribution over the amount of the Preliminary Closing Distribution, or the
Indeck Members shall return to the Company an amount equal to the excess of
the Preliminary Closing Distribution over the amount of the Closing
Distribution, as the case may be.
<PAGE>
(b) Distribution of Net Cash Flow From Operations. For each Fiscal
Year, the Company shall distribute Net Cash Flow From Operations to the
Members in the following order of priority:
(i) FIRST, the Company shall distribute to Ridgewood one
hundred percent (100%) of Net Cash Flow From Operations until Ridgewood has
received the full amount of any unpaid portion of Ridgewood's Priority Return
From Operations for any preceding Fiscal Year;
(ii) SECOND, the Company shall distribute to Ridgewood one
hundred percent (100%) of Net Cash Flow From Operations until Ridgewood has
received Ridgewood's Priority Return From Operations for the current Fiscal
Year;
(iii) THIRD, the Company shall distribute one hundred percent
(100%) of Net Cash Flow From Operations to the Indeck Members (in accordance
with the respective interests of the Indeck Members as shown on Exhibit 8.1)
until the Indeck Members have collectively received an amount equal to the
amount distributed to Ridgewood with respect to the current Fiscal Year
pursuant to Section 8.1(b)(ii) above.
(iv) FOURTH, after the Company has satisfied all the preceding
distribution requirements of this Section 8.1(b), the Company shall thereafter
distribute any remaining balance of Net Cash Flow From Operations twenty-five
percent (25%) to Ridgewood, and seventy-five percent (75%) to the Indeck
Members (in accordance with the respective interests of the Indeck Members as
shown on Exhibit 8.1), provided however that at such time as Ridgewood shall
have received aggregate distributions equal to Ridgewood's Initial Capital
Contribution pursuant to Section 8.1(c) below, the distribution percentages
set forth in this Section 8.1(b)(iv) shall be amended to fifty percent (50%)
to Ridgewood and fifty percent (50%) to the Indeck Members.
(c) Distributions of Net Cash Flow From Capital Events. The
Company shall distribute Net Cash Flow From Capital Events to the Members
fifty percent (50%) to Ridgewood and fifty percent (50%) to the Indeck Members
(in accordance with the respective interests of the Indeck Members as shown on
Exhibit 8.1); provided, however, to the extent that Net Cash Flow From Capital
Events is attributable to events which may have a material adverse effect upon
the ability of the Facilities to operate in the ordinary course consistent
with past practices (such as insurance or condemnation proceeds), such
proceeds shall be applied first to restore the normal operating capabilities
of the Facilities prior to any distributions to Members.
8.2 Procedure. Distributions under Sections 8.1(b) and 8.1(c) shall be
made by the Company on a quarterly basis within fifteen (15) days after the
end of each calendar quarter, based upon good faith estimates for the Fiscal
Year made by the Board of Managers with due
<PAGE>
regard for all information available to the Board of Managers at the time such
distributions are made. Each quarterly distribution shall be made by the
Company as an interim advance against final determination of the results of
operations for such Fiscal Year. Within one hundred twenty (120) days after
the end of each Fiscal Year, the Board of Managers shall determine Net Cash
Flow From Operations and Net Cash Flow From Capital Events, and the
distributions due to the Members with respect to such Fiscal Year. Any excess
of the amount so determined for a Member over the amount of interim advances
received by such Member shall be distributed as soon as reasonably practicable
after the amount of such Member's distribution has been determined, but in no
event later than one hundred thirty (130) days after the end of such Fiscal
Year. Any excess of interim advances paid to a Member over the amount of
distributions determined to be due such Member for any Fiscal Year shall be
repaid to the Company by such Member within ten (10) days of the receipt of
written notice from the Company that excess advances were made, and, to the
extent not repaid, may be offset against future distributions to such Member.
Until distributed, amounts due to the Members under this Article VIII shall be
held in trust by the Company for the Persons entitled to distribution thereof.
ARTICLE IX
TRANSFER OF MEMBERSHIP INTERESTS AND
RESIGNATION OF MEMBERS
9.1 Assignment and Transfer of Membership Interests. An Indeck Member
may sell, assign, pledge or otherwise transfer its interest in the Company to
any other Person, and such person shall become a Substituted Member (as such
term is used in the Act), only after the Member wishing to transfer his or her
interest has received the prior written consent of Ridgewood, which consent
shall not be unreasonably withheld so long as the transfer will not result in
a termination of the Company under section 708 of the Internal Revenue Code.
Ridgewood may sell, assign, pledge or otherwise transfer its interest in the
Company to any other Person, and such Person shall become a Substituted Member
(as such term is used in the Act), only after Ridgewood has received the prior
written consent of the holders of a majority of the Indeck Members, which
consent shall not be unreasonably withheld. A purported transfer made by a
Member in violation of this Section 9.1 shall be null and void ab initio, and
the purported transferee shall have no right to participate in the management
of the business and affairs of the Company or to become a Member. The
admission of a transferee as a Member may be conditioned upon satisfaction of
such terms and compliance with such conditions as Ridgewood and the holders of
a majority of the interests of the Indeck Members (other than the Member
effecting the transfer) may determine, including, without limitation,
requiring the transferee to execute such agreements, instruments and other
documents as may be necessary or desirable to substitute the transferee for
the transferring member hereunder.
9.2 Resignation.
(a) Generally. Resignation of a Member prior to the end of the
term of this Agreement shall constitute a violation of this Agreement.
However, a Member ("Resigning Member") may resign from the Company
("Resignation") by giving notice
<PAGE>
to the Company and to each other Member ("Continuing Member"). Such
Resignation shall be effective upon receipt of notice by all such parties.
(b) Damages. In the event of a Resignation in violation of this
Agreement, the Company shall be entitled to damages as provided by the Act.
Such damages shall be offset against amounts that would be otherwise payable
to the Resigning Member as distributions.
(c) Obligations of Resigning Members.
(i) General. No Resignation by a Resigning Member shall
relieve such Member of its liabilities and obligations to the Company or the
Members which arose or accrued prior to the effective date of such
Resignation.
(ii) Use of Members' Names and Name Change Matters. From and
after the effective date of a Resignation, neither the Company nor any of its
Affiliates shall use any of the names of the Resigning Member. No later than
60 days following the effective date of such Resignation, the Company shall
obliterate the aforesaid names from all assets and properties of the Company,
including obliteration from letterhead, labelling, packaging, data sheets,
invoices, stationary, business cards and other materials distributed to third
parties, or discard and replace any such materials with materials not bearing
such names.
(d) Ridgewood's Option to Purchase Resigning Members' Interest. In
the event that any of the Indeck Members elect to resign as Members, Ridgewood
shall have the option, exercisable upon thirty (30) days written notice from
the Company that an Indeck Member has tendered its resignation, to purchase
such tendered interest from the Company for the sum of One Hundred Dollars
($100).
(e) Survival. The rights and obligations of the Members under this
Article IX shall survive any termination of this Agreement or dissolution of
the Company.
ARTICLE X
DISSOLUTION AND WINDING UP
10.1 Dissolution. The Company shall be dissolved and its affairs wound
up upon the first to occur of the following events:
(a) When the period fixed in the Articles of Organization for the
duration of the Company shall expire;
(b) By Member Consent;
(c) The entry of a decree of judicial dissolution under the Act as
to the Company.
<PAGE>
The resignation, expulsion, bankruptcy, dissolution or withdrawal of any
Member or the occurrence of any other event which terminates the continued
membership of a Member in the Company shall not cause the dissolution of the
Company.
10.2 Procedures.
10.2.1. Liquidation of Assets. In the event of the dissolution of
the Company, the members, the Managers or the person permitted by the Act to
wind up the Company's affairs (the Members, the Managers or such other Person
being referred to herein as the "Liquidating Agent") shall commence to wind up
the affairs of the Company and liquidate its assets as promptly as is
consistent with obtaining the fair value thereof. In connection with any such
winding up, a financial statement of the Company as of the date of dissolution
shall be prepared and furnished to all the Members by the Liquidating Agent.
The Members shall continue to share Profits and Losses during the period of
winding up in accordance with Section 7.1.
10.2.2. Authority of Liquidating Agent. In connection with the
winding up and dissolution of the Company, in addition to the rights and
powers conferred by the Act, the Liquidating Agent shall have all of the
rights and powers with respect to the assets and liabilities of the Company
that a Manager would have pursuant to this Operating Agreement or any other
applicable law.
10.2.3. Distribution of Assets. Upon winding up of the Company,
following the payment of, or provision for, the distributions required by the
Act, and subject to the right of the Liquidating Agent to set up such reserves
as may be reasonably necessary pursuant to the Act, the net proceeds of the
liquidation of the Company shall be distributed to the Members in accordance
with Section 8.1 of this Agreement.
10.2.4. No Recourse to Assets of Members. Each Member shall look
solely to the assets of the Company for all distributions with respect to the
Company and such Member's capital contributions thereto and share of profits
or losses thereof, and shall have no recourse therefor (upon dissolution of
the Company or otherwise) against any other Member.
10.3 Termination of the Company. Upon completion of the winding up of
the Company and the distribution of all Company funds and other assets, the
Liquidating Agent shall take or cause to be taken such actions as are
necessary or reasonable in order to effectuate the dissolution and termination
of the Company, including the filing of a certificate of cancellation with the
Secretary of State.
ARTICLE XI
FISCAL AND ADMINISTRATIVE MATTERS
11.1 Accounting Period. The accounting period of the Company for both
financial and tax reporting purposes shall be the Fiscal Year.
<PAGE>
11.2 Deposits. All funds of the Company shall be deposited from time to
time to the credit of the Company in such banks, trust companies or other
depositories as the Managers may select.
11.3 Checks, Drafts, Etc. All checks, drafts or other orders for the
payment of money, and, subject to Section 6.4, all notes or other evidences of
indebtedness, issued in the name of the Company shall be signed by any Manager
or other Person specified by the Managers, by form of bank resolution, or
authorized by other action of the Managers.
11.4 Contracts. Subject to the limitations set forth in Section 6.4
hereof, the Managers may authorize any person, Member or agent of the Company
to enter into any contract or execute any instrument in the name of, and on
behalf of, the Company, and such authority may be general or confined to
specific instances.
11.5 Books and Records. The Company shall keep or cause to be kept
accurate and complete minutes and records of the Managers and books and
records of account of the Company, which shall be kept at the principal place
of business of the Company or at such other places, within or without the
State of Illinois, as the Members shall from time to time determine.
11.5.1 Right of Inspection. Any Member of the Company shall have
the right to examine at any reasonable time or times for any purpose, the
minutes and records of the Managers and the books and records of account of
the Company, and to make copies thereof. Upon the written request of any
Member of the Company, the Company shall cause to be mailed to such Member the
most recent financial statements of the Company, showing in reasonable detail
its assets and liabilities and the results of its operations. Such inspection
may be made by any agent or duly appointed attorney of the member making such
request.
11.5.2 Financial Records. All books and records of account of the
Company shall be maintained and reported based upon the accrual basis of
accounting and otherwise in accordance with generally accepted accounting
principles.
11.6 Administrative Matters.
11.6.1 "Tax Matters Member". The Members agree that Ridgewood's
acquisition of its membership interest terminated the Company as a partnership
on the date of the closing of the Purchase Agreement, under Code Section
708(b)(1)(B). The Company as constituted before such closing date (the "Old
Tax Partnership") shall file a final information return for the period ending
on such closing date. Gerald R. Forsythe shall remain the Tax Matters Partner
(as defined in Code Section 6231(a)(7)) of the Old Tax Partnership. The Old
Tax Partnership shall file a section 754 election with its final return, so
that the tax basis in the Company as constituted on such closing date and
thereafter (the "New Tax Partnership") will have asset tax basis determined by
reference to the Membership Interest Purchase Price paid by Ridgewood.
Ridgewood is hereby designated the "Tax Matters Partner" of the New Tax
Partnership. The New Tax Partnership shall obtain a new federal employer
identification number and shall file an initial information return for the
period beginning on such closing date.
<PAGE>
The Tax Matters Member is authorized and required (i) to represent the Company
(at the Company's expense) in connection with all examinations of the
Company's affairs by tax authorities, including administrative and judicial
proceedings ("Tax Proceedings"), (ii) to make all applicable elections,
determinations and other decisions under the Code required of the Company,
including without limitation, the rates of depreciation to be claimed by the
Company, the deductibility of any particular item of expense and the positions
to be taken on the Company's tax returns, and (iii) to expend Company funds
for professional services and costs associated with the Company's tax affairs.
11.6.2 Address of Tax Matters Member. The name and mailing address
of theTax Matters Member of the New Tax partnership is:
Ridgewood Maine, L.L.C.
c/o Ridgewood Power Corporation
947 Linwood Avenue
Ridgewood, New Jersey 07450
11.6.3 Cooperation. Each Member agrees to cooperate with the Tax
Matters Member and to do or refrain from doing any or all things reasonably
requested by the Tax Matters Member with respect to the conduct of any Tax
Proceedings. The Members shall each take reporting positions on their
respective federal, state and local income tax returns consistent with the
positions determined for the Company.
11.6.4 Filings. The Tax Matters Member shall arrange for the
preparation and timely filing of all tax returns required to be filed by the
Company and the distribution of Form K-1 or other similar forms to all Members
on or before March 1st of each year.
11.6.5 Authorization. The actions of the Tax Matters Member shall
be deemed to be authorized by the unanimous consent of the Members with
respect to the matters set forth in Sections 7.2, 7.5 and 11.6.1.
11.6.6 Reporting to Members. The Tax Matters Member shall keep the
other Members informed of all material matters that may come to its attention
in its capacity as Tax Matters Member, shall consult with all of the Members
and permit all such Members to participate with the Tax Matters Member in such
matters. Such participation shall include, without limitation, the right to
review the Company's tax returns at a reasonable time prior to filing, and the
right to attend, with the Tax Matters Member, any meetings with any taxation
or auditing authority.
11.7 Financial Statements. The Company shall prepare and provide to
each Member (a) unaudited quarterly financial statements within thirty (30)
days of the end of each fiscal quarter, and (b) audited financial statements
of the Company within 90 days of the end of each Fiscal Year. The audit of
the Company's financial statements shall be conducted by Price Waterhouse or
another auditor acceptable to Ridgewood.
<PAGE>
11.8 Effective Date. The Members agree that the effective date of this
Agreement is to be as of 12:01 AM, Eastern Daylight Time, June 11, 1997 (the
"Effective Date") and that the economic results of the Facilities from and
after the Effective Date shall be for the account of the Members in accordance
with the terms and conditions hereof, notwithstanding any later date for the
closing of the Purchase Agreement. The Indeck Members shall take into
account, shall report on their respective tax returns, and shall pay and
discharge all taxes relating to all items of gain, income, depreciation or
loss relating to the operation of the Company for the short taxable year
ending on the date of the closing of the Purchase Agreement. Each of the
Members hereby agree to file their respective tax returns in a manner
consistent with the provisions of this Section 11.8.
11.9 Reserves. The Members intend that the Board of Managers use the
excess of (i) the aggregate amount of Capital Contributions made by Members as
described in Section 4.1.1 over (ii) the aggregate distributions to the Indeck
Members as contemplated by Section 8.1(a) to create Reserves.
ARTICLE XII
INDEMNIFICATION
12.1 Right to Indemnification. Except as limited by law and subject to
the provisions of this Article, from and after the closing of the Purchase
Agreement, the Company shall indemnify the Managers against all expenses
incurred by them in connection with any proceeding in which the Managers are
involved as a result of serving in such capacity, on or after such date,
except that no indemnification shall be provided for a Manager regarding any
matters as to which it shall be finally determined that the Manager did not
act in good faith and in the reasonable belief that its action was in the best
interests of the Company, or with respect to a criminal matter, that it had
reasonable cause to believe that its conduct was unlawful. Subject to the
foregoing limitations, such indemnification may be provided by the Company
with respect to a proceeding in which it is claimed that a Manager received an
improper personal benefit by reason of its position, regardless of whether the
claim arises out of the Manager's service in such capacity, except for matters
as to which it is finally determined that an improper personal benefit was
received by the Manager.
12.2 Award of Indemnification. The determination of whether the Company
is authorized to indemnify a Manager hereunder and any award of
indemnification shall be made in each instance (a) by a majority of the
Managers who are not parties to the proceeding in question, or (b) by
independent legal counsel appointed by the Managers. The Company shall be
obligated to pay indemnification applied for by the Manager unless there is an
adverse determination (as provided above) within forty-five (45) days after
the application. If indemnification is denied, the applicant may seek an
independent determination of its right to indemnification by a court, and in
such event, the Company shall have the burden of proving that the applicant
was ineligible for indemnification under this Article. Notwithstanding the
foregoing, in the case of a proceeding by or in the right of the Company in
which the Manager is adjudged liable to the Company, indemnification hereunder
shall be provided to the Manager only upon a determination by a court having
jurisdiction that in view of all the circumstances of
<PAGE>
the case, the Manager is fairly and reasonably entitled to indemnification for
such expenses as the court shall deem proper.
12.3 Successful Defense. Notwithstanding any contrary provisions of
this Article, if a Manager has been wholly successful on the merits in the
defense of any proceeding in which it was involved by reason of its position
as Manager or as a result of serving in such capacity (including termination
of investigative or other proceeding without a finding of fault on the part of
the Manager), the Manager shall be indemnified by the Company against all
expenses incurred by the Manager in connection therewith.
12.4 Advance Payments. Except as limited by law, expenses incurred by a
Manager in defending any proceeding, include a proceeding by or in the right
of the Company, shall be paid by the Company to the Manager in advance of
final disposition of the proceeding upon receipt of its written undertaking to
repay such amount if the Manager is determined pursuant to this Article or
adjudicated to be ineligible for indemnification, which undertaking shall be
an unlimited general obligation but need not be secured and may be accepted
without regard to the financial ability of the Manager to make repayment;
provided, however, that no such advance payment of expenses shall be made if
it is determined pursuant to Section 12.2 of this Article on the basis of the
circumstances known at the time (without further investigation) that the
Manager is ineligible for indemnification.
12.5 Definitions. For purposes of this Article:
"Manager" includes (i) a person serving as an officer of the Company
or in a similar executive capacity appointed by the Manager and exercising
rights and duties delegated by the Manager, (ii) a person serving at the
request of the Company as a director, manager, officer, employee or other
agent of another organization, and (iii) any person who formerly served in any
of the foregoing capacities;
"expenses" means all expenses, including attorneys' fees and
disbursements, actually and reasonably incurred in defense of a proceeding or
in seeking indemnification under this Article, and except for proceedings by
or in the right of the Company or alleging that the Manager received an
improper personal benefit, any judgments, awards, fines, penalties and
reasonable amounts paid in settlement of a proceeding; and
"proceeding" means any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, and
any claim which could be the subject of a proceeding.
12.6 Insurance. The Company shall have power to purchase and maintain
insurance on behalf of any Manager, officer, agent or employee against any
liability or cost incurred by such person in any such capacity or arising out
of its status as such, whether or not the Company would have power to
indemnify against such liability or cost.
<PAGE>
12.7 Employee Benefit Plan. If the Company or the Manager sponsors or
undertakes any responsibility as a fiduciary with respect to an employee
benefit plan, then for purposes of this Article (i) "Manager" shall be deemed
to include the Manager or any officer of the Company who serves at its request
in any capacity with respect to said plan, (ii) the Manager or officer shall
not be deemed to have failed to act in good faith or in the reasonable belief
that its action was in the best interests of the Company if the Manager or
officer acted in good faith and in the reasonable belief that its action was
in the best interests of the participants or beneficiaries of said plan, and
(iii) "expenses" shall be deemed to include any taxes or penalties imposed
upon the Manager or officer with respect to said plan under applicable law.
12.8 Heirs and Personal Representatives. The indemnification provided
by this Article shall inure to the benefit of the heirs and personal
representatives of each Manager.
12.9 Non-Exclusivity. The provisions of this Article shall not be
construed to limit the power of the Company to indemnify its Manager, Members,
officers, employees or agents to the full extent permitted by law or to enter
into specific agreements, commitments or arrangements for indemnification
permitted by law. The absence of any express provision for indemnification
herein shall not limit any right of indemnification existing independently of
this Article.
12.10 Amendment. The provisions of this Article may be amended or
repealed in accordance with Section 13.2; however, no amendment or repeal of
such provisions that adversely affects the rights of the Manager under this
Article with respect to its acts or omissions at any time prior to such
amendment or repeal shall apply to the Manager without its consent.
ARTICLE XIII
MISCELLANEOUS
13.1 Waivers. The failure at any time of either Member to require
performance by the other Member of any responsibility or obligation required
by this Operating Agreement shall in no way affect a Member's right to require
such performance at any time thereafter, nor shall the waiver by a Member of a
breach of any provision of this Operating Agreement by the other Member
constitute a waiver of any other breach of the same or any other provision nor
constitute a waiver of the responsibility or obligation itself.
13.2 Amendment. This Operating Agreement may be amended only by an
instrument, including an Addendum, in writing duly executed by all of the
Members.
13.3 Assignability. This Operating Agreement shall be binding upon and
inure to the benefit of the successors and assigns of each party hereto.
Subject to the terms of this Operating Agreement, neither this Operating
Agreement nor any right (other than a right to receive the payment of money)
or obligation hereunder may be assigned or delegated in whole or in part to
any other Person without the prior written consent of the other Members.
13.4 Notices. In any case where any notice or other communications is
required or permitted to be given hereunder (including, without limitation,
any change in the information set
<PAGE>
forth in this Section 13.4), such notice or communication shall be in writing
and (i) personally delivered, (ii) sent by postage prepaid registered airmail,
(iii) transmitted by telex or telecopy, or (iv) sent by established overnight
courier service as follows:
If to the Company:
INDECK MAINE ENERGY, L.L.C.
1130 Lake Cook Rd.
Buffalo Grove, Illinois 60090
(847) 520-3212
Attn: Law Department
If to Gerald R. Forsythe:
Gerald R. Forsythe
c/o Indeck Maine Energy, L.L.C.
1075 Noel Avenue
Wheeling, Illinois 60090
(847) 459-4250
If to Thomas & Silvia Campone
1130 Lake Cook Rd.
Buffalo Grove, Illinois 60089
(847) 520-3212
If to Michelle R. Fawcett:
c/o Indeck Maine Energy, L.L.C.
1075 Noel Avenue
Wheeling, Illinois 60090
(847) 459-4250
If to Marsha F. Fournier:
1075 Noel Avenue
Wheeling, Illinois 60090
(847) 459-4250
If to Monica Forsythe Breslow:
c/o Indeck Maine Energy, L.L.C.
1075 Noel Avenue
Wheeling, Illinois 60090
(847) 459-4250
If to Melissa S. Forsythe:
1075 Noel Avenue
Wheeling, Illinois 60090
(847) 459-4250
<PAGE>
If to Ridgewood:
c/o Ridgewood Power Corporation
947 Linwood Avenue
Ridgewood, New Jersey 07450
(201) 447-0474
All such notices or other communications shall be deemed to have been given or
received (i) upon receipt if personally delivered, (ii) on attempt at delivery
if delivery is refused by the addressee if by postage prepaid registered
airmail, and (iii) when sent with confirmed answer-back if by telex or
telecopy.
13.5 Third Party Rights. Nothing in this Operating Agreement, whether
express or implied, is intended or shall be construed to confer, directly or
indirectly, upon or give to any Person other than the Company, the members and
their Affiliates, any legal or equitable right, remedy or claim under or in
respect of this Operating Agreement or any covenant, condition or other
provision contained herein.
13.6 Choice of Law. This Operating Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of Illinois
without giving effect to the principles of conflict of laws thereof.
13.7 Headings. The headings of the Articles and Sections in this
Operating Agreement are provided for convenience of reference only and shall
not be deemed to constitute a part hereof.
13.8 Entire Agreement. This Operating Agreement, together with the
Exhibits hereto and the agreements and instruments expressly provided for
herein, constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and supersede all prior agreements and
understandings, oral and written, among the parties hereto with respect to the
subject matter hereof.
13.9 Severability. Should any provision of this Operating Agreement be
deemed in contradiction with the laws of any jurisdiction in which it is to be
performed or unenforceable for any reason, such provision shall be deemed null
and void, but this Operating Agreement shall remain in full force in all other
respects. Should any provision of this Operating Agreement be or become
ineffective because of changes in applicable laws or interpretations thereof,
or should this Operating Agreement fail to include a provision that is
required as a matter of law, the validity of the other provisions of this
Operating Agreement shall not be affected thereby. If such circumstances
arise, the parties hereto shall negotiate in good faith appropriate
modifications to this Operating Agreement to reflect those changes that are
required by law. In the event of a conflict between the provisions of this
Operating Agreement or any provision of the Articles of Organization or the
Act, the applicable provision of this Operating Agreement shall control, to
the extent permitted by law.
<PAGE>
13.10 Counterparts. This Operating Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.11 Pronouns and Plurals. All pronouns and variations thereof in this
Operating Agreement shall be deemed to refer to the masculine, feminine,
neuter, singular or plural, as the identity of any person or persons referred
to may require.
13.12 Further Assurances. Each Member shall execute such deeds,
assignments, endorsements, evidences of transfer and other instruments and
documents and shall give such further assurances as shall be necessary to
perform its obligations hereunder. The obligations of the Members set forth
in this Section 13.12 shall survive the termination of this Operating
Agreement.
13.13 Power of Attorney. Each Member hereby appoints any Manager,
acting pursuant to authorization from the Board of Managers, as agent and
attorney-in-fact to execute such documents and to take such action as may be
necessary to comply with the laws of any jurisdiction requiring the filing of
copies of this Operating Agreement or certificates with respect hereto or with
respect to the use of the Company's name.
[Remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF the undersigned, being all of the Members of INDECK
MAINE ENERGY, L.L.C., organized under the laws of Illinois, have executed this
Operating Agreement as of the date and year first above written.
_/s/ Gerald R. Forsythe__________ _/s/ Thomas M. Campone____________
GERALD R. FORSYTHE THOMAS M. CAMPONE
_/s/ Michelle R. Fawcett_________ _/s/ Silvia Campone_______________
MICHELLE R. FAWCETT SILVIA CAMPONE
_/s/ Marsha F. Fournier__________ _/s/ Monica J. Breslow____________
MARSHA F. FOURNIER MONICA FORSYTHE BRESLOW
_/s/ Melissa S. Forsythe_________
MELISSA S. FORSYTHE
RIDGEWOOD MAINE, L.L.C.
By: RIDGEWOOD PENOBSCOT MANAGEMENT CORPORATION,
Manager
By: /s/ Mary Louise Olin
Name: Mary Louise Olin
Title: Vice President & Secretary
