DATED
 
 
 
 
 
 
(1)  RIDGEWOOD ROC II 2003 LLC 
 
(2)  CLP SERVICES LIMITED
 
 
 
 
 
 
 
OPERATIONS, REPAIR AND MAINTENANCE AGREEMENT
relating to the landfill gas power generation project at
Garlaff Landfill Site
 
EVERSHEDS LLP
115 Colmore Row
Birmingham
B3 3AL
Tel: +44 121 232 1000
Fax: +44 121 232 1900

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THIS AGREEMENT is made the day of

BETWEEN:-

(1)
RIDGEWOOD ROC II 2003 LLC a body corporate incorporated with limited liability
in the state of Delaware, U.S.A. whose registered address is situate at 947
Linwood Avenue, Ridgewood, NJ, 07450, USA (“the Purchaser”); and

(2)
CLP SERVICES LIMITED a company incorporated in England and Wales with company
number 04502345 of Unit 14-15, Queensbrook, Bolton Technology Exchange, Spa
Road, Bolton BL1 4AY (“the Contractor”).

WHEREAS

(A)  
The Purchaser has contracted with others for the installation of Power
Generation Equipment at the Site.

(B)  
At the date of this Agreement the Contractor has agreed to provide operation,
repair and maintenance services to the Purchaser pursuant to the terms of this
Agreement in respect of the Power Generation Equipment.

NOW IT IS HEREBY AGREED AS FOLLOWS:-

1.  
DEFINITIONS

The terms defined in this Agreement shall have the meaning specified hereunder
unless the context otherwise requires.

“CLP Developments Limited”
shall mean CLP Developments Limited (company number 4502342) whose registered
office address is situate at Unit 14-15, Queensbrook, Bolton Technology Park,
Spa Road, Bolton BL1 4AY
"the Commencement Date"
 
“Consumables”
shall mean the consumable items used in the provision of the Services, including
lubricating oil, water treatment chemicals, air and oil filters and spare and
replacement parts for the Equipment
“Development Services Agreement”
shall mean the agreement dated 30 September 2004 and made between the Purchaser
and CLP Developments Limited
“Downtime”
shall mean all time that the Equipment is not exporting electricity
“Existing Electricity Sales Contract”
shall mean the contracts (if any) relating to the sale and supply of electricity
from the Site under the NFFO or Scottish renewable orders regime as amended
and/or replaced from time to time;
“the Equipment”
shall mean the Power Generation Equipment and other associated equipment as more
particularly defined in the Development Services Agreement installed or to be
installed and including, where applicable, the flare and flare stack
“Group Member”
shall mean the Contractor and any holding company of the Contractor and
its/their respective subsidiaries from time to time
"Index Linked"
shall mean that the value quoted applies for any period commencing in the year
commencing 1 April 2004 and will be increased on the 1 April each year
thereafter in accordance with the change in the Retail Price Index (all items),
over the same period
"Initial Term"
shall mean the period set out in clause 2
"kWh Exported"
shall mean the kilowatt hours exported as per the export meter/ meters which are
used for the purpose of measuring the electricity generated by the Equipment and
exported to the National Grid
"Landfill Gas"
shall mean a gas mainly comprising methane, carbon dioxide, nitrogen and oxygen
produced by the decomposition of materials in the landfill at the site
"Power Generation Equipment"
shall mean the electrical power generation equipment supplied or to be supplied
by others (as defined in the Development Services Agreement)
“Project”
shall mean the generation of power from landfill gas at the Site
“Project Development and Services Agreement”
shall mean the agreement dated 30 September 2004 and made between (1) the
Purchaser, (2) CLPE ROC -2 Limited (3) CLPE ROC -2A Limited and (4) the Project
Companies (as therein defined)
"Services"
shall mean the services detailed in clause 3
"the Site"
shall mean the Garlaff landfill site
"the Site Operator"
shall mean Barr Limited or their successor in title or assignees

2.  
TERM OF AGREEMENT

This Agreement shall come into force on the Commencement Date and shall continue
for 15 years unless otherwise terminated under Clause 6 (the "Initial Term").

3.  
SERVICES

The Contractor will:
 

3.1  
Ensure that the allocation of Landfill Gas between any different projects on the
Site is done in such a way as to:

 

3.1.1  
first, maximise (subject to the availability of the existing engines) the
production of electrical energy to meet the obligations under the Existing
Electricity Sales Contract (if any) in respect thereof;

 

3.1.2  
second, to prioritise each project in the following order:-

 

3.1.2.1  
project funded by monies provided by the Powerbank I Fund;

 

3.1.2.2  
project funded by monies provided by the Powerbank II Fund;

 

3.1.2.3  
project funded by monies provided by the Powerbank III Fund; and

 

3.1.2.4  
project funded by monies provided by the Powerbank IV Fund;

 

3.1.3  
thereafter to give priority to the different projects in accordance with the
historical sequence of construction.

 

3.2  
Pay water charges for the supply of water to the Equipment.

3.3  
Pay electricity charges as levied by the local electricity supplier for the
supply of electricity to the Equipment or as reasonably recharged to the
Purchaser by the Site Operator.

3.4  
Pay taxes, rates and other similar costs as may be levied against the Purchaser
in the ordinary course of business provided always that the Purchaser undertakes
to forward invoices, notices or other correspondence relating to such taxes,
rates and costs to the Contractor as soon as reasonably practicable.

3.5  
Monitor the Equipment regularly and liaise with the Purchaser with the objective
of maximising the availability and output of the Equipment.

3.6  
Be available for the call out on a 24 hour basis for emergencies, breakdown and
security. The Contractor's staff shall be available to attend at the Site within
2 hours from notification of such events.

3.7  
Perform daily, weekly and monthly checks of the operations of the Equipment in
accordance with manufacturer’s recommendations and good maintenance practice and
supply to the Purchaser on a monthly basis a schedule of the checks that have
been carried out.

3.8  
Maintain and keep up to date a maintenance record or log book for the Equipment.

3.9  
Provide the Purchaser with a weekly operating record of hours run, electricity
exported and stoppages in a form to be agreed by the Purchaser and to meet with
the Purchaser on a regular basis to discuss operations, such meetings to take
place at the Contractor’s offices in Bolton, the Site or such other location as
the parties may agree.

3.10  
Take oil samples, analyse and examine analyses in accordance with the
manufacturer's recommendations and procedures and supply such information to the
Purchaser.

3.11  
Change lubricating oil at intervals as is consistent with prudent operating
practice or on such criteria as agreed with the engine and lubricant suppliers
(if so agreed).

 

3.12  
Maintain adequate levels of water treatment chemicals in the cooling system of
the Power Generation Equipment.

3.13  
Be wholly responsible for and shall indemnify and hold the Purchaser harmless
against any and all claims, liabilities, costs, damages and expenses of every
kind and nature with respect to:

3.13.1  
the injury or death of any of the Contractor's personnel (including the
personnel of the subcontractor of the Contractor) except to the extent such
injury or death is caused by the negligence of the Purchaser or a fault or
defect in the Equipment;

3.13.2  
the sickness, injury or death of any third party and the damage to or
destruction of any property of any third party arising directly or indirectly
during or as a result of any act or omission or default of the Contractor in
carrying out the services under this Agreement and the Contractor agrees to take
out the necessary insurance with a limit of indemnity of £5,000,000 to comply
with his obligation under this clause 3.13; and

3.13.3  
the use of the Site by the Contractor.

3.14  
Produce a statement at three monthly intervals giving its assessment of the
condition of the Equipment supported by details of maintenance work which has
been completed.

3.15  
Use the Site for the purposes of the Project and not for any unrelated business
activity.

3.16  
Arrange for adequate stocks of consumables including air and oil filters and
spark plugs to be held on Site.

3.17  
Provide supplies of lubricating oil in order to replenish and change the engine
lubricating oil at intervals on such criteria as agreed with the engine and
lubricant suppliers.

3.18  
Provide adequate supplies of water treatment chemicals in order to maintain the
cooling system of the Power Generation Equipment.

3.19  
Meet all costs and any associated costs (other than capital costs) involved in
providing the Services including lubricating oil and water treatment chemicals
provided that if the price of lubricating oil or water treatment chemicals
increases at a rate greater than the fee increase mechanism stipulated in clause
5.4 of this Agreement then the Purchaser shall pay the Contractor the difference
between the price paid by the Contractor for lubricating oil and water treatment
chemicals and the price for such items defined under the fee increase mechanism
in clause 5.4 of this Agreement.

3.20  
At the commencement of each calendar year provide the Purchaser and any other
party as the Purchaser reasonably directs with a programme for that year giving
the anticipated maintenance programme and Downtime periods for all elements of
the Equipment.

3.21  
Operate, maintain and repair the Equipment.

3.22  
Employ persons of adequate skill and experience to operate the Equipment.

3.23  
Follow all health and safety legislation and the codes of practice and
guidelines issued by the Health and Safety Executive.

3.24  
Keep the Equipment clean and of good appearance at all times.

3.25  
Liaise with the Site Operator as necessary and comply with all relevant Site
instructions, traffic movements and other Site management matters.

3.26  
Subject and without prejudice to clause 3.1 the Contractor will use reasonable
efforts to ensure that when the Equipment operates it exports the maximum
possible kilowatt hours of electricity, within the limitations of the rated
capacity of the Equipment and the gas available.

3.27  
Co-operate with the Purchaser and liaise with the engine, gas pump and other
equipment suppliers to ensure that the maintenance and servicing of the
Equipment is carried out either in accordance with such suppliers
recommendations and procedures or in accordance with the reasonable judgement of
the Contractor pursuant to Clause 3.32.

3.28  
Supply and fit spare and replacement parts to the Equipment in accordance with
the reasonable judgement of the Contractor acting in accordance with Clause 3.32
provided that it is accepted that the Contractor is not responsible for meeting
the costs of relocating the Equipment or supplying and installing additional
Equipment or any similar works or services and that the costs of such relocation
and installation will be born wholly by the Purchaser. 

3.29  
Subject to the provisions of clause 3.28 meet all costs (other than capital
costs) involved in providing the Services as described herein.

3.30  
Subject to the provisions of clause 5 pay for spare and replacement parts,
repair and maintenance costs provided by any third party supplier it being
accepted that any parts or costs associated with Equipment relocation or
extension as described in clause 3.28 above are the responsibility of the
Purchaser.

3.31  
Co-operate with all reasonable requests of any independent expert that may be
engaged by the Purchaser to oversee and report on the state of the Equipment and
the manner in which it is being operated and to act upon the reasonable
instructions of such independent expert.

3.32  
In all cases the Contractor shall carry out its obligations to the standards of
a reasonable and prudent operator, meaning standards, practices, methods and
procedures conforming to law and that degree of skill, diligence, prudence and
foresight which would reasonably and ordinarily be expected from a skilled and
experienced operator and, where appropriate, within manufacturer’s
recommendations and procedures.

3.33  
Insure the Equipment for its replacement value against fire and all perils and
take out catastrophic breakdown cover with a reputable Insurance Company and pay
all premiums and excesses on claims save in respect of any claims arising due to
the Contractor’s negligence.

4.  
PURCHASER’S OBLIGATIONS

The Purchaser shall :

4.1  
Pay for the Services pursuant to the terms set out in clause 5.

4.2  
Pay for such costs reasonably incurred by the Contractor as a consequence of
termination by Force Majeure as set in Clause 7.

5.  
PAYMENT

5.1  
Subject to Clause 5.4 the Services are to be invoiced at the rate of 1.50
pence per kwh Exported with effect from the Commencement Date.

5.2  
The charges arising from the Services shall be payable monthly and shall be
invoiced by the Contractor at the end of each month and settled within 30 days
by the Purchaser.

5.3  
Value Added Tax will be added to the above amounts at the rate prevailing at the
time.

5.4  
The fees as set out in Clause 5.1 will be increased on 1 April each year by the
amount that the Retail Price Index (all items) has increased (if at all) over
the previous year.

6.  
TERMINATION OF THE AGREEMENT

6.1  
Any party shall have the right at any time to terminate this Agreement in any of
the following events:-

6.1.1  
If any other party commits a material breach of any of the terms of, or
conditions of this Agreement, which may or may not be capable of remedy and
fails to rectify such breach within one hundred and twenty (120) days after
written notice of such breach has been given.

6.1.2  
If any other party commits a material breach of any of the provisions of this
Agreement which is not capable of rectification.

6.1.3  
If any other party has an administrator or an administrative receiver or
receiver appointed by its creditors or goes into liquidation other than
voluntary liquidation for the purposes of reconstruction or amalgamation.

6.2  
Either the Contractor or the Purchaser may terminate this Agreement immediately
if the Project has suffered a material adverse change in its business, financial
condition or prospects which, in the reasonable determination of the terminating
party, makes the continued operation of the Project uneconomic.

6.3  
Subject to Clause 11.2, the Purchaser shall be entitled to terminate this
Agreement on notice if the Site is substituted out of the Project Development
and Services Agreement by the Purchaser.

6.4  
On termination of the Agreement the Purchaser shall have the right but not the
obligation to purchase from the Contractor all items of Consumables held by the
Contractor in respect of the Project as at the date of termination, by giving
written notice to the Contractor on or before termination to that effect. The
price for such unused consumables shall be the cost price of the same to the
Contractor plus VAT. The cost of delivery (insofar as the items are not held at
the Project Site) to the place nominated by the Purchaser shall be for the
Purchaser’s account.

6.5  
Termination of this Agreement as between the parties will be without prejudice
to the accrued rights of such parties at the time of such termination.

7.  
FORCE MAJEURE

Notwithstanding any other provision in this Agreement no default delay or
failure to perform on the part of any party shall be considered a breach of this
Agreement if such default delay or failure to perform is shown to be due
entirely to cause beyond the direct control of the party charged with such
default, including, but not limited to such events as riots, civil embargoes,
storms, floods, fire, earthquakes, acts of God or the public enemy, an act of
terrorism, national emergency or nuclear disasters, strike, lockout, labour
unrest (affecting the performance of this agreement) provided that where such
incident extends to employees of the Contractor it is part of a national,
industry - wide action. In the case of the occurrence of such event the time for
performance required by either party under this Agreement shall be extended for
any period during which performance is prevented by such event. However, any
other party may terminate this Agreement by notice if such event preventing
performance continues for more than 60 continuous days.

8.  
UNDERTAKINGS

8.1  
The Purchaser agrees that monies received in respect of insurance policies shall
be applied in accordance with this Operations, Repair and Maintenance Agreement.

8.2  
The Contractor agrees not to make changes to the Equipment having a cost greater
than £15,000 that is not provided for in the approved budget without the prior
written approval of the Purchaser.

 

9.  
LIMITATION OF LIABILITY

9.1  
The Contractor will use reasonable endeavours to deliver the Services hereunder
within the time agreed and to the standard agreed and, if no time or standard is
agreed, then within a reasonable time and to a reasonable standard. If despite
those endeavours the Contractor is unable for any reason, other than the
Contractor’s wilful default, to deliver such Services the Contractor will be
deemed not to have breached this Agreement.

9.2  
It is agreed that the Contractor will have no liability to the Purchaser for
direct, indirect or consequential loss (all three of which terms includes,
without limitation, pure economic loss, loss of profits, loss of business,
depletion of goodwill and like loss) howsoever caused save that the Contractor
does not exclude its liability (if any) to the Purchaser for any direct loss
arising from the Contractor’s wilful default (but, for the avoidance of doubt,
the Contractor does exclude liability for any indirect or consequential loss
that may arise from such wilful default) and for personal injury or death
resulting from the Contractor’s negligence, fraud or for any matter which it
would be illegal for the Contractor to exclude or to attempt to exclude its
liability.

9.3  
For the avoidance of doubt the Purchaser agrees that its only remedy under this
Agreement (save in the case of the Contractor’s wilful default) shall be the
right of termination (if any) under Clause 6.

10.  
GENERAL

10.1  
Nothing in this Agreement shall constitute or be deemed to constitute a
partnership between the parties hereto or constitute or be deemed to constitute
the Purchaser as agents of the Contractor for any purpose whatever.

10.2  
The Agreement shall remain in full force and effect even after the expiry of the
term referred to in Clause 2 in respect of any matters, conditions, covenants or
obligations which shall not have been done, observed or performed by the
Contractor or the Purchaser prior thereto.

11.  
ASSIGNMENT

11.1  
Either party hereto may assign or transfer the whole or any part of its rights,
powers and benefits hereunder to any party but shall not be entitled to assign
or transfer its duties and obligations hereunder to any party except with the
written consent of the other party which shall not be unreasonably withheld or
delayed.

 

11.2  
The Contractor hereby expressly acknowledges the Purchaser’s right to substitute
the identity of the Site hereunder if the Site is substituted out of the Project
Development and Services Agreement by the Purchaser by means of terminating this
Agreement and entering into a new agreement on commercial terms identical
(mutatis mutandis) to this Agreement in respect of the Site that has acceded to
the Project Development and Services Agreement provided always that the
Purchaser shall furnish the Contractor with a copy of the relevant deed of
release, adherence and accession that permits the new Site to accede to the
Project Development and Services Agreement.

 

12.  
WAIVER

No waiver of any rights arising under this Agreement shall be effective unless
in writing and signed by the party against whom the waiver is to be enforced. No
failure or delay by either party in exercising any right power or remedy under
this Agreement except as specially provided in this clause shall operate as a
waiver of any right power or remedy. This clause shall not apply where time is
expressed to be the essence.

13.  
LEGAL COSTS

In the event of arbitration, litigation or other legal proceedings between the
parties arising from this Agreement the prevailing party shall be entitled to
recover in addition to any other relief awarded or granted its costs and legal
fees on a solicitor and own client basis.

14.  
INTEREST

Any party not making payment on the due date of any monies properly due under
this Agreement shall be liable to pay interest at an annual rate of 2% above the
Base Rate of Barclays Bank PLC prevailing from time to time on the amount not
paid.

15.  
NOTICES

15.1  
Any notice or other communication requiring to be given or served under or in
connection with this Agreement shall be in writing and shall be sufficiently
given or served if delivered:-

 
(a)
in the case of the Purchaser to:

947 Linwood Avenue
New Jersey
USA
07450
Fax:  001-201-447-9000
Attention: Chris Naunton
Email:   cnaunton@ridgewoodpower.com

 
(b)
in the case of the Contractor to:

Unit 14-15 Queensbrook Technology Exchange
Spa Road
Bolton
BL1 4AY
Fax: 01204 535 310
Attention: Dominic Greenough
Email: greenough@clpenvirogas.com

or to such alternative address, fax number, email address or person as any party
may nominate by notice to the others given in accordance with this Clause 15.

15.2  
Any notice shall be delivered by hand or sent by legible facsimile transmission
or pre-paid first class post (airmail if sent to or from an address outside the
United Kingdom) and if delivered by hand or sent by legible facsimile or email
transmission shall conclusively be deemed to have been given or served at the
time of despatch and if sent by post aforesaid shall conclusively be deemed to
have been received 48 hours from the time of posting (or 72 hours if sent to or
from an address outside the United Kingdom).

16.  
SEVERABILITY

If any terms of this Agreement shall be held to be invalid illegal or
unenforceable the remaining terms and provision of this Agreement shall remain
in full force and effect and such invalid illegal or unenforceable term or
provision shall be deemed not to be part of this Agreement.

17.  
HEADINGS

Headings used in this Agreement are for reference purposes only and shall not be
deemed part of this Agreement.

18.  
DISPUTES AND PROPER LAW

18.1  
Except as otherwise provided in this Agreement if a dispute of any kind
whatsoever arises between any of the parties hereto in connection with or
arising out of this Agreement it shall be settled in accordance with the
following provisions.

18.2  
For the purpose of this Agreement a dispute shall be deemed to arise when one
party serves on the other a notice in writing (hereinafter called the Notice of
Dispute) stating the nature of the dispute and requiring the dispute to be
considered by an adjudicator who, if not agreed upon between parties, shall be
appointed by the Chairman of the Chartered Institute of Arbitrators in England.
The dispute shall thereafter be referred and considered by such adjudicator in
accordance with the procedure under the TeCSA Adjudication Rules 2002, version
2.0 or any amendment or modification thereof being in force at the date of such
notice. The recommendation of the adjudicator shall be deemed to have been
accepted in settlement of the dispute unless written notice to refer under
sub-clause 18.3 is served within one calendar month of the receipt of the
adjudicators recommendation.

18.3  
Where the Purchaser or the Contractor is dissatisfied with any recommendation of
an adjudicator appointed under sub-clause 18.2 then either the Purchaser or the
Contractor may within one calendar month of receipt of the adjudicator's
recommendation refer the dispute to the jurisdiction of the court.

18.4  
This Agreement shall be deemed to have been made in England and the construction
validity and performance of this Agreement shall be governed in all respects by
English law. Subject to Sub-clauses 18.1 to 18.3, the parties agree to submit to
the exclusive jurisdiction of the English court.

19.  
COUNTERPARTS

This agreement may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.

20.  
THIRD PARTIES

20.1  
The parties to this Agreement do not intend that any of its terms will be
enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 by any
person not a party to it.

IN WITNESS thereof the parties hereto have executed this Agreement as a Deed
under hand

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EXECUTED and DELIVERED AS A DEED 
by RIDGEWOOD ROC II 2003 LLC 
acting by    

(Authorised Signatory)    

In the presence of:     

EXECUTED and DELIVERED AS A DEED 
by CLP SERVICES LIMITED  
acting by    

(Authorised Signatory)    

In the presence of: