Document:

EX-10.1

    Exhibit
    10.1

 

    BACKUP
    CERTIFICATE AGREEMENT

 

    This Backup Certificate Agreement is entered into among Indeck
    Maine Energy, LLC (“Indeck Maine”), Ridgewood
    Providence Power Partners, L.P. (“RPPP”),
    Ridgewood Rhode Island Generation, LLC
    (“RRIG”), Linwood 0708 LLC
    (“Linwood”), Rhode Island LFG Genco, LLC
    (“RILG,” and together with RPPP, RRIG and
    Linwood, “Backup Purchasers”), and acknowledged
    and consented to by, solely as to Section 5(b) below,
    Covanta Energy Corporation (“Covanta”) and
    Ridgewood Power Management LLC, as agent for Linwood, RPPP and
    RRIG under the Agreement (as defined below)
    (“RPM”), as of August 19, 2008 (this
    “Backup Agreement”). Indeck Maine and Backup
    Purchasers are referred to herein individually as a
    “Party” and collectively, as the
    “Parties.” Capitalized terms not otherwise
    defined herein have the meanings given to such terms in the
    Amendment or the Agreement (each defined below).

 

    RECITALS

 

    WHEREAS, under that certain Certificate Purchase and Sale
    Agreement entered into as of April 30, 2003 by and among
    Constellation Energy Commodities Group, Inc., f/k/a
    Constellation Power Source, Inc.
    (“Constellation”), Indeck Maine, RPPP, RRIG and
    RPM, as amended by that certain letter agreement dated
    January 25, 2006 and Amendment No. 1 dated as of
    October 31, 2006 (the “Previously Effective
    Agreement”), Indeck Maine, RPPP, RRIG and Linwood
    agreed to sell Certificates to Constellation;

 

    WHEREAS, under that certain Purchase and Sale Agreement
    dated as of the date hereof among Ridgewood Maine, L.L.C.,
    Indeck Energy Services, Inc., Covanta and, for certain limited
    purposes, Indeck Maine (the “Purchase and Sale
    Agreement”), Ridgewood Maine, L.L.C. and Indeck Energy
    Services, Inc. shall sell, assign, transfer and convey to
    Covanta their respective membership interests in Indeck Maine
    (the “Transaction”);

 

    WHEREAS, under that certain Assignment, Assumption,
    Release and Amendment to the Agreement dated as of July 31,
    2008 (the “Amendment”), Indeck Maine agreed to
    assign its respective rights and obligations under the Agreement
    to Linwood and Linwood agreed to assume such rights and
    obligations as of the Effective Date (as defined below) (the
    Previously Effective Agreement, as amended by the Amendment, is
    referred to herein as the “Agreement”);

 

    WHEREAS, as a result of the transactions contemplated by
    the Agreement, Linwood, RPPP and RRIG are obligated to provide
    Constellation with the Certificates required for the 2008
    Optional Firm Transaction and, if Constellation so elects, the
    2009 Optional Firm Transaction;

 

    WHEREAS, in order to fulfill such obligations, Backup
    Purchasers wish to purchase from Indeck Maine and Indeck Maine
    wishes to sell to Backup Purchasers certain Second Standard
    Certificates as contemplated in this Backup Agreement; and

 

    WHEREAS, Indeck Maine has agreed to act as agent (the
    “Agent”) for Linwood, RPPP and RRIG with
    respect to Delivery of Second Standard Certificates to
    Constellation and payments therefor pursuant to that certain
    Agency Agreement dated as of the date hereof (the
    “Agency Agreement”) among Indeck Maine, RPM,
    Linwood, RPPP and RRIG.

 

    NOW, THEREFORE, in consideration of the foregoing
    and the mutual agreements contained herein, and for other good
    and valuable consideration, the receipt and sufficiency of which
    are hereby acknowledged, the Parties hereto, intending to become
    legally bound, agree as follows:

 

    1. This Backup Agreement shall become valid, effective and
    enforceable as of the date this Backup Agreement is fully
    executed by all the Parties hereto, provided that
    Sections 2 through 11 shall be subject to, and not valid,
    effective or enforceable until, the closing of the Transaction
    (the “Effective Date”). Subject to and upon the
    Effective Date, the Parties agree that they will commence the
    performance of their obligations under Sections 2 through
    11 of this Backup Agreement.

 

    2. (a) To the extent Linwood, RPPP and RRIG are
    permitted pursuant to the terms of the Agreement to provide
    Constellation with Second Standard Certificates (rather than
    First Standard Certificates) for 2008 to meet their obligations
    under the 2008 Optional Firm Transaction, Indeck Maine shall,
    subject only to Force Majeure, sell, transfer and Deliver to
    Backup Purchasers and Backup Purchasers shall purchase and take
    from Indeck Maine, Certificates for MWhs of generation from its
    biomass generating facilities located in Jonesboro, Maine and
    West Enfield, Maine, which include (a) Indeck West Enfield
    (NEPOOL GIS Asset I.D. #445) and (b) Indeck
    Jonesboro (NEPOOL GIS Asset I.D. #446) (together, the
    “Biomass Projects”) in 2008 meeting the Second
    Standards (“Maine Biomass 2008 Generation”), at
    the times, and in amounts equal to, the Second Standard
    Certificates otherwise to be Delivered by Linwood, RPPP and RRIG
    to Constellation under the Agreement for the 2008 Optional Firm
    Transaction, which will not in any event exceed 208,651 such
    Certificates (less Certificates Delivered pursuant to the
    Agreement prior to the Effective Date). Linwood, RPPP and
    RRIG’s agreed schedule for the delivery of Second Standard
    Certificates to Constellation, and thus, upon the Effective
    Date, the expected delivery schedule for Indeck Maine hereunder,
    with respect to the 2008 Optional Firm Transaction (less
    Certificates Delivered pursuant to the Agreement prior to the
    Effective Date) is attached hereto as Exhibit A to this
    Backup Agreement.

 

    (b) To the extent Linwood, RPPP and RRIG are permitted
    pursuant to the terms of the Agreement to provide Constellation
    with Second Standard Certificates (rather than First Standard
    Certificates) for 2009 to meet their obligations under the 2009
    Optional Firm Transaction, Indeck Maine shall, subject only to
    Force Majeure, sell, transfer and Deliver to Backup Purchasers
    and Backup Purchasers shall purchase and take from Indeck Maine,
    Certificates for MWhs of generation from its Biomass Projects in
    2009 meeting the Second Standards (“Maine Biomass 2009
    Generation”), at the times, and in an amounts equal to,
    the Second Standard Certificates otherwise to be Delivered by
    Linwood, RPPP and RRIG to Constellation under the Agreement for
    the 2009 Optional Firm Transaction, which will not in any event
    exceed 208,651 such Certificates. Linwood, RPPP and RRIG will
    provide Indeck Maine with the schedule for the delivery of First
    and Second Standard Certificates to Constellation, and thus,
    upon the Effective Date, the expected delivery schedule for
    Indeck Maine for Second Standard Certificates hereunder, with
    respect to the 2009 Optional Firm Transaction promptly after
    Linwood, RPPP and RRIG and Constellation reach agreement upon
    any such schedule.

 

    (c) Notwithstanding paragraphs (a) and (b) above,
    solely to the extent Indeck Maine is unable to provide
    Certificates to Backup Purchasers as required by paragraphs
    (a) and (b) that have been generated from the Biomass
    Projects and such failure is not excused as a Force Majeure,
    Indeck Maine may Deliver Certificates to Backup Purchasers
    otherwise meeting all of the other terms and conditions of
    paragraphs (a) and (b) above, but which have not been
    generated by the Biomass Projects.

 

    (d) For purposes of this Backup Agreement, a Certificate
    shall only be deemed to be “Delivered” if
    (1) such Certificate has been created on its “Creation
    Date” in the NEPOOL GIS and (2) such Certificate has
    subsequently been deposited in one of Backup Purchasers’
    account in the NEPOOL GIS. Title to and risk of loss with
    respect to the Certificates shall pass to Backup Purchasers upon
    Delivery of such Certificates to Backup Purchasers as provided
    herein. Notwithstanding any other provisions of this
    Section 2 to the contrary, delivery of Certificates to
    Constellation under the Agency Agreement shall constitute
    Delivery hereunder.

 

    (e) Backup Purchasers shall pay Indeck Maine the same price
    for the Certificates to be delivered hereunder as the price
    Linwood, RPPP and RRIG are entitled to receive (without setoff)
    from Constellation for such Certificates under the Agreement.
    Notwithstanding the foregoing, payment of any amount by
    Constellation to the Agent under the Agency Agreement shall
    satisfy Backup Purchasers’ payment obligations with respect
    to that same amount under this Backup Agreement.

 

    (f) Indeck Maine shall be entitled to reduce its
    obligations to Deliver Certificates under Section 2(a) of
    this Backup Agreement by the amount equal (without duplication
    of any reduction) to the Maine Biomass 2008 Generation
    Certificates actually Delivered under the Agreement prior to or
    on the Effective Date. For the avoidance of doubt, nothing
    herein, shall entitle Indeck Maine to receive compensation from
    Backup Purchasers for any Certificates Delivered to
    Constellation prior to or on the Effective Date, except to the
    extent such compensation is part of the Working Capital Payment
    under the Purchase and Sale Agreement.

    

    2

 

    (g) With respect to each sale and Delivery of Certificates
    hereunder, Indeck Maine represents, warrants and agrees that it
    shall convey good and marketable title to such Certificates upon
    Delivery and will Deliver such Certificates, free and clear of
    any and all Liens and Claims.

 

    (h) If and to the extent that Constellation sets off any
    Seller Amount against any Indeck Maine Amount under
    Section 5.4 of the Agreement and Section 9 of the
    Amendment and Backup Purchasers have not otherwise paid such set
    off amount to Indeck Maine under Section 2 hereof, Backup
    Purchasers shall immediately reimburse Indeck Maine for such set
    off amount. Backup Purchasers represent and warrant to and agree
    with Indeck Maine that, except with respect to the obligations
    of Linwood, RPPP and RRIG under the Agreement and except as
    provided in Section 9 below, Backup Purchasers have and
    will have during the term hereof no other agreements, contracts
    or undertakings with Constellation which could give rise to
    additional rights of Constellation to so set off against the
    Indeck Maine Amount.

 

    (i) In event that either Backup Purchasers or Indeck Maine
    claims the occurrence of a Force Majeure hereunder, the Party
    claiming that Force Majeure shall have the same rights and
    obligations and shall be subject to the same restrictions with
    respect to that Force Majeure as if it were the “Claiming
    Party” under Section 3.4 and under the definition of
    “Force Majeure” in Article 10 of the Agreement,
    and the Party or Parties not claiming that Force Majeure shall
    have the same rights and obligations, and shall be subject to
    the same restrictions with respect to that Force Majeure as if
    it were the “non-Claiming Party” under
    Section 3.4 and under the definition of Article 10 of
    the Agreement. Notwithstanding the foregoing, this Backup
    Agreement may not be terminated as a result of a Force Majeure
    unless the Agreement has been terminated as a result of the same
    Force Majeure.

 

    (j) So long as the Agency Agreement is in effect and
    Agent’s power and authority to act thereunder has not been
    suspended pursuant to Section 5 of the Agency Agreement,
    Indeck Maine will Deliver directly to Constellation all of the
    Second Standard Certificates to be delivered under the
    Agreement, invoice and receive payment from Constellation and
    collect payment from Constellation for such Second Standard
    Certificates (subject to the terms of the Agency Agreement). So
    long as the Agency Agreement is in effect, Agent’s power
    and authority to act thereunder has not been suspended pursuant
    to Section 5 of the Agency Agreement, and Indeck Maine
    complies with the first sentence of this Section 2(j),
    Linwood, RPPP and RRIG will not deliver Second Standard
    Certificates to Constellation under the Agreement (or invoice,
    receive payment or collect amounts related thereto) in place of
    the Second Standard Certificates to be delivered by Indeck Maine
    under Sections 2(a), 2(b) and 2(c) of this Backup Agreement.

 

    (k) RILG consents to the arrangements set forth in the
    Agency Agreement.

 

    3. (a) As soon as practicable after the end of each
    calendar month, Indeck Maine will prepare and deliver to Backup
    Purchasers the invoice and other information (collectively, the
    “Invoice Information”) required under
    Section 5.1 of the Agreement for any Certificates Delivered
    by it under Section 2(a) or 2(b) of this Backup Agreement,
    which Invoice Information shall be prepared in accordance with
    Section 5.1 of the Agreement and Section 9 of the
    Amendment.

 

    (b) All such invoices properly submitted by Indeck Maine to
    Backup Purchasers pursuant to this Agreement and in accordance
    with Section 5.1 of the Agreement shall be due and payable
    by Backup Purchasers in accordance with Indeck Maine’s
    invoice instructions on or before the later of the twenty-third
    (23rd)
    day of the calendar month in which such invoice was so
    submitted, and the thirteenth
    (13th)
    day after receipt of the invoice or, if such day is not a
    Business Day, then on the next Business Day. Each Party will
    make payments by electronic funds transfer, or by other mutually
    agreeable method(s), to the account designated by the other
    Party in Exhibit B hereto. Any amounts not paid by the due
    date therefor will be deemed delinquent and will accrue interest
    at the Interest Rate, such interest to be calculated from and
    including the due date to but excluding the date the delinquent
    amount is paid in full.

 

    (c) Indeck Maine will comply with the requirements of
    Section 5.5 of the Agreement with respect to any Invoice
    Information delivered to Constellation by Indeck Maine.

 

    4. (a) Indeck Maine hereby agrees to retain in its own
    NEPOOL GIS account Certificates relating to Maine Biomass
    2008 Generation, up to 208,651 Certificates (less Certificates
    Delivered pursuant to the

    

    3

 

    Agreement prior to the Effective Date) meeting the Second
    Standards (the “2008 Hold Back”), until the
    sooner of (x) the date on which Indeck Maine has received
    written notice from Backup Purchasers indicating that
    Linwood’s, RPPP’s and RRIG’s obligations to
    Constellation under the Agreement for the balance of the 2008
    Optional Firm Transaction have been satisfied or
    (y) April 30, 2009; provided Indeck Maine shall be
    entitled to reduce the amount of its 2008 Hold Back by an amount
    equal to the Maine Biomass 2008 Generation Certificates actually
    Delivered under this Backup Agreement as and when such amounts
    are Delivered. Backup Purchasers shall promptly provide to
    Indeck Maine written notice of Linwood’s, RPPP’s and
    RRIG’s satisfaction of the obligations to Constellation
    under the Agreement for the balance of the 2008 Optional Firm
    Transaction upon such satisfaction.

 

    (b) Indeck Maine hereby agrees to retain in its own NEPOOL
    GIS account all Certificates relating to Maine Biomass 2009
    Generation, up to 208,651 Certificates meeting the Second
    Standards (the “2009 Hold Back”), until the
    sooner of (x) the date on which Indeck Maine has received
    written notice from Backup Purchasers indicating that
    Linwood’s, RPPP’s and RRIG’s obligations to
    Constellation under the Agreement for the balance of the 2009
    Optional Firm Transaction have been satisfied or
    (y) April 30, 2010; provided Indeck Maine shall be
    entitled to reduce the amount of its 2009 Hold Back by an amount
    equal to the Maine Biomass 2009 Generation Certificates actually
    Delivered under this Backup Agreement as and when such amounts
    are Delivered; and, provided, further, that Indeck Maine’s
    obligation to hold back up to 208,651 Certificates as the 2009
    Hold Back shall be reduced Certificate for Certificate to the
    extent that Linwood, RPPP and RRIG commit to provide to
    Constellation greater than 51,349 Certificates in 2009 meeting
    the First Standards.

 

    (c) Within fifteen (15) days after the end of each
    calendar quarter, Backup Purchasers and Indeck Maine will
    provide each other with a report of (i) the number of
    Certificates Delivered by Linwood, RPPP and RRIG or Indeck
    Maine, as the case may be, to Constellation either under the
    Agreement or under the Agency Agreement for the 2008 Optional
    Firm Transaction
    and/or for
    the 2009 Optional Firm Transaction, (ii) the MWhs of
    generation produced by its respective facilities for the current
    calendar year through the end of such calendar quarter, and
    (iii) a good faith forecast of the MWhs of generation it
    expects its respective facilities to produce for the remainder
    of the calendar year.

 

    5. (a) Unless excused by Force Majeure (subject to
    Section 2(i)) or Backup Purchasers’ failure to
    perform, in the event that Indeck Maine Delivers fewer
    Certificates than it is required to Deliver hereunder (the
    number of Certificates that Indeck Maine fails to Deliver being
    referred to herein as the “Deficiency”), Indeck
    Maine shall pay to Backup Purchasers an amount equal to the
    product of (x) the Deficiency and (y) the positive
    difference, if any, between the price to be paid for each
    Certificate under the Agreement and the Replacement Price
    therefor, plus Deficiency Costs incurred by Constellation, plus
    Backup Purchasers’ reasonable attorneys’ fees, each in
    connection with such failure. As used in this Section 5(a),
    “Deficiency Costs” means, without duplication,
    any brokerage fees, commissions and similar third party
    transaction costs and expenses reasonably incurred by
    Constellation either in terminating a Transaction pursuant to
    which Constellation hedged its obligations or entering into new
    arrangements which replace such Terminated Transaction, plus all
    reasonable attorneys’ fees and expenses incurred by
    Constellation in connection with a Deficiency. The Parties
    hereby agree that the amounts payable under this Section 5
    are the only damages for the failure of Indeck Maine to perform
    its obligations under this Backup Agreement.

 

    (b) Covanta agrees to deliver to Backup Purchasers promptly
    upon execution of this Backup Agreement by all of the Parties
    hereto a guaranty of the obligations of Indeck Maine under this
    Backup Agreement, with a guaranteed amount not to exceed at any
    time an amount equal to 80% of the amount required to be funded
    at such time in the Account under and pursuant to
    Section 5.2 of the Agreement (but not the amount required
    with respect to Section 3.6 of the Agreement), but in any
    event not to exceed a maximum amount of $7,300,000, in the form
    of Exhibit C attached hereto, which guaranty shall be
    subject to, and its effectiveness conditioned upon, the
    Effective Date.

 

    6. Indeck Maine agrees to operate the Biomass Projects so
    as to maximize the MWhs of generation in respect of which
    Certificates are to be Delivered under Sections 2(a) and
    2(b) above; provided, however, that in no event shall Indeck
    Maine be required to operate the Biomass Projects in a manner
    not in accordance

    

    4

 

    with good utility practice and industry standards. Additionally,
    if the Effective Date occurs on or before September 30,
    2008, Indeck Maine shall notify Backup Purchasers not later than
    September 30, 2008 of Indeck Maine’s forecasted
    generation at the Biomass Projects during 2009.

 

    7. Subject to and upon the Effective Date, Indeck Maine,
    without any further action required, shall transfer and assign
    its entire interest in the Account, including all amounts on
    deposit in the Account, to Linwood, which transfer is subject to
    the rights and security interest of Constellation in such
    interest in the Account.

 

    8. If Constellation fails to exercise its option under the
    Agreement with respect to the 2009 Optional Firm Transaction by
    the deadline date therefor in the Agreement, then all provisions
    of this Agreement related to the 2009 Optional Firm Transaction,
    and the requirements of Sections 2(b) and 4(b) herein,
    shall be of no further force and effect.

 

    9. (a) Linwood, RPPP, RRIG and RPM shall not amend or
    modify any term, condition or covenant of the Agreement unless
    (i) Linwood, RPPP, RRIG and RPM give Indeck Maine prior
    written notice of any such proposed amendment or modification,
    including a copy of the proposed documentation to effect such
    amendment or modification, and (ii) Linwood, RPPP, RRIG and
    RPM comply with the following procedures, upon Indeck
    Maine’s reasonable opportunity to review such notice
    (together with all necessary and appropriate documentation),
    which opportunity to review will in no event be longer than ten
    (10) Business Days after receipt of such notice and all
    such necessary and appropriate documentation that may be
    reasonably requested by Indeck Maine:

 

    (1) in the event that Indeck Maine reasonably determines
    that such proposed amendment or modification of the Agreement
    could reasonably be expected to have an adverse impact on Indeck
    Maine’s rights or obligations under any material term,
    condition or covenant of this Backup Agreement or the Agency
    Agreement on and after the Effective Date, Linwood, RPPP, RRIG
    and RPM shall not amend or modify any such material term,
    condition or covenant of the Agreement having such adverse
    impact on Indeck Maine without obtaining Indeck Maine’s
    prior written consent to any such amendment or modification,
    such consent of Indeck Maine not to be unreasonably withheld,
    conditioned or delayed; and

 

    (2) in the event that Indeck Maine reasonably determines
    that clause (1) above does not apply to such proposed
    amendment or modification of the Agreement and that such
    proposed amendment or modification could reasonably be expected
    to materially reduce the contractual incentives or remedies for
    performance of any terms, conditions or covenants of Linwood,
    RPPP, RRIG under the Agreement on and after the Effective Date
    (including any reduction in or modification to collateral, terms
    of guaranties or other security arrangements other than an
    immaterial reduction in or modification to collateral, terms of
    guaranties or other security arrangements), Linwood, RPPP, RRIG
    and RPM shall not amend or modify any such term, condition or
    covenant of the Agreement without providing to Indeck Maine,
    prior to execution of the first such amendment or modification,
    a one-time cash deposit in the amount of $6,000,000 (the
    “Escrow Deposit”) to be held as collateral
    security pursuant to the Escrow Agreement dated as of the date
    hereof among Indeck Maine, Backup Purchasers and Capital One,
    N.A., as escrow agent (the “Escrow Agreement”)
    to secure the performance of Backup Purchasers under this Backup
    Agreement and the Agency Agreement. The Escrow Deposit will be
    held in an interest-bearing bank account and may be drawn on by
    Indeck Maine to the extent that Backup Purchasers fail to make
    any payment as and when due pursuant to the terms of this Backup
    Agreement or the Agency Agreement. Upon the expiration or
    termination of this Backup Agreement, all amounts in the Escrow
    Deposit (include all interest earned on amounts therein) at such
    time will be released to Backup Purchasers absent any pending
    obligation of the Backup Purchasers or any claim by Indeck Maine
    under the Escrow Agreement.

 

    (b) Linwood, RPPP and RRIG represent, warrant and agree to
    comply with the terms and conditions of the Agreement at all
    times during the term of the Backup Agreement.

 

    (c) During the term hereof, Backup Purchasers shall
    promptly provide to Indeck Maine a written copy of any notice or
    other communication received from or delivered to Constellation
    pursuant to the terms and conditions of the Agreement,
    including, without limitation, any and all (i) invoices
    delivered by Linwood,

    

    5

 

    RPPP and RRIG to Constellation, (ii) notices from
    Constellation related to the amount or timing of any requests
    for Delivery of Certificates meeting either First or Second
    Standards, (iii) Constellation’s exercise of its
    option under the Agreement with respect to the 2009 Optional
    Firm Transaction, or (iv) notice from or to Constellation
    of breach, default or termination.

 

    (d) Upon the reasonable request of either Party, the other
    Party shall provide to the requesting Party all reasonable
    documentation and information related to the administration
    and/or
    performance of the Agreement, this Backup Agreement and the
    Agency Agreement. The Parties further agree to provide to each
    other audit rights regarding the administration and performance
    of the Agreement and the Backup Agreement equivalent to the
    audit rights set forth in Section 5.5 of the Agreement. In
    furtherance of the purposes of this Section, Indeck Maine may
    reasonably direct Linwood, RPPP and RRIG to exercise their
    rights to audit the records of Constellation with respect to any
    Certificates and “Invoice Information” provided by
    Agent directly to Constellation under the Agency Agreement or to
    Backup Purchasers hereunder and to provide Agent with reasonable
    access to the information obtained with respect to such
    Certificates and Invoice Information, subject to the
    confidentiality provisions of Section 9.4 of the Agreement.

 

    10. This Backup Agreement shall terminate upon any
    termination of the Agreement unless such termination of the
    Agreement was caused by a breach or default of Linwood, RPPP or
    RRIG thereunder.

 

    11. Except as otherwise provided herein, either Party may
    terminate this Backup Agreement in the event the other Party is
    in breach of any material obligation hereunder and Party in
    breach fails to cure such breach within thirty days of receipt
    from the other Party of written notice of such breach.

 

    12. All notices, requests, demands, claims and other
    communications hereunder shall be in writing. Any notice,
    request, demand, claim or other communication hereunder shall be
    deemed duly given (i) upon confirmation of facsimile,
    (ii) one Business Day following the date sent when sent by
    overnight delivery and (iii) five Business Days following
    the date mailed when mailed by registered or certified mail
    return receipt requested and postage prepaid at the following
    address:

 

    If to Backup Purchasers:

 

    Ridgewood Providence Power Partners, L.P.,

    Ridgewood Rhode Island Generation, LLC & 

    Linwood 0708 LLC 

    Rhode Island LFG Genco, LLC 

    947 Linwood Avenue 

    Ridgewood, NJ 07450 

    Fax:
    (201) 447-0474

 

    Attn.: General Counsel

 

    If to Indeck Maine:

 

    Indeck Maine Energy, L.L.C. 

    40 Lane Road 

    Fairfield, NJ 07004 

    Attn: General Counsel 

    Tel:
    (973) 882-7160
    

    Fax:
    (973) 882-7357

 

    Attn.: General Counsel

 

    and, a copy to:

 

    Covanta Energy Corporation 

    40 Lane Road 

    Fairfield, NJ 07004 

    Attn: General Counsel 

    Tel:
    (973) 882-7160
    

    Fax:
    (973) 882-7357

    

    6

 

 

    Any Party may send any notice, request, demand, claim, or other
    communication hereunder to the intended recipient at the address
    set forth above using any other means (including personal
    delivery, expedited courier, messenger service, telecopy, telex,
    ordinary mail, or electronic mail), but no such notice, request,
    demand, claim or other communication shall be deemed to have
    been duly given unless and until it actually is received by the
    intended recipient. Any Party may change the address to which
    notices, requests, demands, claims and other communications
    hereunder are to be delivered by giving the other Parties notice
    in the manner herein set forth.

 

    13. Backup Purchasers represent and warrant to Indeck Maine
    that as of the date of this Backup Agreement the forecasted
    generation at RPPP’s and RRIG’s Facilities during 2009
    will be between 130,000 MWhs and 150,000 MWhs (of
    which 86,901 MWhs of generation represents vintage
    production for purposes of the Massachusetts renewable energy
    portfolio standard and therefore does not qualify for First
    Standard Certificates under the Agreement) and there are no
    planned expansions, modifications, shutdowns or other
    operational issues of which Backup Purchasers are aware related
    to such Facilities which are reasonably expected to materially
    affect the range of such forecasted generation.

 

    14. Two or more counterparts of this Backup Agreement may be
    signed by the Parties, each of which shall be an original but
    all of which together shall constitute one and the same
    instrument. Facsimile signatures on this Backup Agreement shall
    have the same force and effect as original signatures.

 

    15. This Backup Agreement sets out the entire agreement
    between the Parties as to the subject matter hereof. This Backup
    Agreement is governed by and construed in accordance with the
    laws of the State of New York without giving effect to conflict
    of law principles.

 

    16. This Backup Agreement shall be binding upon and inure
    to the benefit of the Parties and their respective successors
    and permitted assigns, but neither this Backup Agreement nor any
    of the rights, interests or obligations hereunder shall be
    assigned by any Party, including by operation of law, without
    the prior written consent of the other Parties, such consent not
    to be unreasonably withheld, conditioned or delayed,
    provided, however, that no assignment shall in any way
    affect a Party’s obligations or liabilities under this
    Agreement. Any assignment in contravention of the foregoing
    sentence shall be null and void and without legal effect on the
    rights and obligations of the Parties hereunder.

 

    17. The Parties acknowledge and agree that the transactions
    contemplated by this Backup Agreement constitute “forward
    contracts” within the meaning of the United States
    Bankruptcy Code. Each of the Parties represents that it is a
    “forward contract merchant” within the meaning of the
    United States Bankruptcy Code.

 

    18. A condition to the effectiveness of this Backup
    Agreement shall be the execution and delivery of the Agency
    Agreement by all of the parties thereto, including the parties
    contemplated to acknowledge the Agency Agreement.

 

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    7

 

    IN WITNESS WHEREOF, the Parties have executed this Backup
    Agreement as of the date first written above.

 

	 	 	 	 	 	 	 
	

    LINWOOD 0708 LLC

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    INDECK MAINE ENERGY, LLC

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    By:
	
 
	
    Ridgewood Renewable Power LLC, its 

    Manager
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    By:

	
 
	
    /s/  Randall
    D. Holmes

	
 
	
    By:
	
 
	
    /s/  Randall
    D. Holmes

	
 
	
 
	
    

	
 
	
 
	
 
	
    

	
 
	
 
	
    Name: Randall D. Holmes
	
 
	
 
	
 
	
    Name: Randall D. Holmes

	
 
	
 
	
    Title: President and Chief Executive Officer
	
 
	
 
	
 
	
    Title: President and Chief Executive Officer

	
 
	
 
	
 

	
    RIDGEWOOD RHODE ISLAND

    GENERATION, LLC
	
 
	
    RIDGEWOOD PROVIDENCE POWER PARTNERS, L.P.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    By:
	
 
	
    Ridgewood Management Corporation, its Manager
	
 
	
    By:
	
 
	
    Ridgewood Providence Power Corporation, its General Partner

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    By:

	
 
	
    /s/  Randall
    D. Holmes

	
 
	
    By:
	
 
	
    /s/  Randall
    D. Holmes

	
 
	
 
	
    

	
 
	
 
	
 
	
    

	
 
	
 
	
    Name: Randall D. Holmes
	
 
	
 
	
 
	
    Name: Randall D. Holmes

	
 
	
 
	
    Title: President and Chief Executive Officer
	
 
	
 
	
 
	
    Title: President and Chief Executive Officer

	
 
	
 
	
 
	
 
	
 

	

    RHODE ISLAND LFG GENCO, LLC

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    By:
	
 
	
    Ridgewood Renewable Power LLC, its 

    Manager
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    By:

	
 
	
    /s/  Randall
    D. Holmes

	
 
	
 
	
 
	
 

	
 
	
 
	
    

	
 
	
 
	
 
	
 

	
 
	
 
	
    Name: Randall D. Holmes
	
 
	
 
	
 
	
 

	
 
	
 
	
    Title: President and Chief Executive Officer
	
 
	
 
	
 
	
 

	
 

	

    Acknowledged and agreed to as of the date first written above:

	
 

	
    COVANTA ENERGY CORPORATION, solely as to Section 5(b) hereof

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    By:

	
 
	
    /s/  Anthony
    J. Orlando

	
 
	
 
	
 
	
 

	
 
	
 
	
    

	
 
	
 
	
 
	
 

	
 
	
 
	
    Name: Anthony J. Orlando
	
 
	
 
	
 
	
 

	
 
	
 
	
    Title: President And Chief Executive Officer
	
 
	
 
	
 
	
 

	
 

	
    RIDGEWOOD POWER MANAGEMENT LLC, as agent under the Agreement

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
    By:
	
 
	
    Ridgewood Management Corporation, its Manager
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    By:

	
 
	
    /s/  Randall
    D. Holmes

	
 
	
 
	
 
	
 

	
 
	
 
	
    

	
 
	
 
	
 
	
 

	
 
	
 
	
    Name: Randall D. Holmes
	
 
	
 
	
 
	
 

	
 
	
 
	
    Title: President and Chief Executive Officer
	
 
	
 
	
 
	
 

    

    8EX-10.2

    Exhibit
    10.2

 

    COVANTA
    GUARANTY

 

    As of August 19, 2008

 

    Ridgewood Providence Power Partners, L.P.,

    Ridgewood Rhode Island Generation, LLC,

    Linwood 0708 LLC

    947 Linwood Avenue

    Ridgewood, NJ 07450

    Fax:
    (201) 447-0474

 

    Attn: Randall D. Holmes

 

    Ladies and Gentlemen:

 

    For value received, Covanta Energy Corporation (the
    “Guarantor”), a corporation duly organized
    under the laws of Delaware, unconditionally and absolutely
    guarantees to Ridgewood Providence Power Partners, L.P.
    (“RPPP”), Ridgewood Rhode Island Generation,
    LLC (“RRIG”), Linwood 0708 LLC
    (“Linwood”) and Rhode Island LFG Genco, LLC
    (“RILG” and together with RRIG, RPPP and
    Linwood, the “Counterparties”), the prompt and
    complete payment when due, whether by acceleration or otherwise,
    of all payment obligations and liabilities (the
    “Guaranteed Obligations”), whether now in
    existence or hereafter arising, of Indeck Maine Energy, LLC, a
    limited liability company duly organized under the laws of the
    State of Illinois (together with its successors, the
    “Company”), pursuant to that certain Backup
    Certificate Agreement, dated on the date hereof, among the
    Company, RPPP, RRIG, Linwood, RILG and Ridgewood Power
    Management LLC, as agent for RPPP, RRIG and Linwood under the
    Agreement (defined below) (the “Backup
    Agreement”). Each capitalized term used but not defined
    herein shall have the meaning given to it in the Backup
    Agreement.

 

    This Guaranty is one of payment and not of collection.
    Notwithstanding anything to the contrary, the total liability of
    Guarantor hereunder, regardless of any amendment or modification
    to the Backup Agreement, shall not exceed at any time an amount
    equal to 80% of the amount required to be funded at such time in
    the Account (as defined in the Agreement as defined below) under
    and pursuant to Section 5.2 of the Certificate Purchase and
    Sale Agreement dated as of April 30, 2003 among the
    Company, RPPP, RRIG, Ridgewood Power Management LLC as agent
    (“RPMC”) and Constellation Energy Commodities
    Group, Inc., f/k/a Constellation Power Source, Inc.
    (“Constellation”), as amended by that certain
    letter agreement dated January 25, 2006, by Amendment
    No. 1 thereto dated as of October 31, 2006 and by the
    Assignment, Assumption, Release and Amendment Agreement of
    Certificate Purchase and Sale Agreement, among Constellation,
    the Company, RPPP, RRIG, RPMC, Ridgewood Electric Power
    Trust III, Ridgewood Electric Power Trust IV,
    Ridgewood Electric Power Trust V, Ridgewood Power B
    Fund/Providence Expansion and Linwood, dated as of July 31,
    2008 (together the “Agreement”), but not the
    amount required with respect to Section 3.6 of the
    Agreement, but in any event not to exceed a maximum amount of
    $7,300,000 (the “Liability Cap”). For the
    avoidance of doubt, the Guaranteed Obligations may at any time
    and from time to time exceed the liability of the Guarantor
    hereunder without impairing this Guaranty. The Guarantor’s
    obligations and liability under this Guaranty shall be limited
    to payment obligations only, and the Guarantor shall have no
    obligation to perform (other than payment of this Guaranty)
    under the Backup Agreement, including no obligation to generate,
    obtain or provide Certificates.

 

    The Guarantor hereby waives notice of acceptance of this
    Guaranty and notice of any obligation or liability to which it
    may apply, and waives presentment, demand for payment, protest,
    notice of dishonor or non-payment of any such obligation or
    liability, suit or the taking of other action by the
    Counterparties against, and any other notice to, the Company,
    the Guarantor or others.

 

    The Counterparties, at any time and from time to time without
    notice to or consent of the Guarantor and without impairing or
    releasing the obligations of the Guarantor hereunder, may, with
    respect to the Guaranteed Obligations: (1) agree with the
    Company to make any change in the terms of any obligation or
    liability of the Company to the Counterparties, (2) take or
    fail to take any action of any kind in respect of any security
    for any obligation or liability of the Company to the
    Counterparties, (3) exercise or refrain from exercising any
    rights against the Company or others, or (4) compromise or
    subordinate any obligation or liability of the Company to the
    Counterparties including any security therefor. Any other
    suretyship defenses are hereby waived by the Guarantor.

 

    This Guaranty shall be subject to and only effective on and
    after the closing of the transactions contemplated in the
    Purchase and Sale Agreement, dated as of the date hereof,
    between Ridgewood Maine, L.L.C. (“RM”), Indeck Energy
    Services (“IES”) and Guarantor, pursuant to which RM
    and IES shall sell, assign, transfer and convey to Guarantor
    their respective membership interests in the Company. This
    Guaranty shall continue in full force and effect until the later
    of (A) the termination or expiration of the Backup
    Agreement and (B) the satisfaction of all of the
    Company’s obligation under the Backup Agreement and the
    Guarantor’s obligations under this Guaranty.

 

    This Guaranty shall continue to be effective or be reinstated,
    as the case may be, if at any time any payment of any of the
    Guaranteed Obligations are annulled, set aside, invalidated,
    declared to be fraudulent or preferential, rescinded or must
    otherwise be returned, refunded or repaid by the Counterparties
    upon the insolvency, bankruptcy, dissolution, liquidation or
    reorganization of the Company or any other guarantor, or upon or
    as a result of the appointment of a receiver or conservator of,
    or trustee for the Company or any other guarantor or any
    substantial part of its property or otherwise, all as though
    such payment or payments had not been made. To the extent that
    any payment by the Guarantor hereunder is annulled, set aside,
    invalidated, declared to be fraudulent or preferential,
    rescinded or must otherwise be returned, refunded or repaid by
    the Counterparties, the amount available under the Liability Cap
    will be restored by an amount equal to such payment.

 

    The Guarantor may not assign its rights nor delegate its
    obligations under this Guaranty, in whole or in part, without
    prior written consent of the Counterparties, and any purported
    assignment or delegation absent such consent is void, except for
    an assignment and delegation of all of the Guarantor’s
    rights and obligations hereunder in whatever form the Guarantor
    determines may be appropriate to a partnership, corporation,
    trust or other organization in whatever form that succeeds to
    all or substantially all of the Guarantor’s assets and
    business and that assumes such obligations by contract,
    operation of law or otherwise. Upon any such delegation and
    assumption of obligations (including any obligations arising
    prior to such delegation and assumption), the Guarantor shall be
    relieved of and fully discharged from all obligations hereunder,
    whether such obligations arose before or after such delegation
    and assumption.

 

    THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
    ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
    WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
    GUARANTOR AGREES TO THE EXCLUSIVE JURISDICTION OF COURTS LOCATED
    IN THE STATE OF NEW YORK, UNITED STATES OF AMERICA, OVER ANY
    DISPUTES ARISING UNDER OR RELATING TO THIS GUARANTY.

 

    Very truly yours,

 

    COVANTA ENERGY CORPORATION

 

			
	 	    By: 
	
    /s/  Anthony
    J. Orlando

    Name:     Anthony J. Orlando

			
	 	    Title: 
	
    President and Chief Executive Officer

    

    2

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