LIMITED LIABILITY COMPANY AGREEMENT OF RIDGEWOOD NEAR EAST HOLDINGS LLC
OF
RIDGEWOOD
NEAR EAST HOLDINGS LLC
This
Limited Liability Company Agreement of Ridgewood Near East Holdings LLC (the
"LLC") is made effective as of September 30, 1999, by and between Ridgewood
Electric Power Trust V, a Delaware business trust and The Ridgewood Power Growth
Fund, a Delaware business trust (individually, a "Member" and collectively,
the
"Members"), the initial members of the LLC in accordance with the provisions
hereof and whose names are set forth as Members on Schedule
A
hereto.
WHEREAS,
the LLC has been formed as a limited liability company under the New Jersey
Limited Liability Company Act (as amended from time to time, the "Act") on
September 30, 1999; and
WHEREAS,
the parties wish to set forth their understanding with respect to, among
other
things,
the management of the business and affairs of the LLC, the allocation of profits
and losses among the Members, the respective rights and obligations of the
Members to each other and to the LLC, and certain other matters,
NOW,
THEREFORE, in consideration of the mutual covenants expressed herein,
the
Members
hereby agree as follows:
ARTICLE
I
ORGANIZATION
AND POWERS
1.01
Organization.
The LLC
has been formed by the filing of its Certificate of Formation with the New
Jersey Secretary of State pursuant to the Act. The original Certificate of
Formation states that the registered agent and registered office of the LLC
in
New Jersey shall initially be The Corporation Trust Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. The Certificate of Formation may be
restated by the Manager (as hereinafter defined) as provided in the Act or
amended by the Manager with respect to the address of the registered office
of
the LLC in New Jersey and the name and address of its registered agent in New
Jersey or to make corrections required by the Act. Other additions to or
amendments of the Certificate of Formation shall be authorized by the Members
as
provided in Section 2.05. The Certificate of Formation as so amended from time
to time is referred to herein as the "Certificate".
1.02
Purposes
and Powers.
The LLC
shall have authority to engage in any lawful business, purpose or activity
permitted by the Act, and it shall possess and may exercise all of the powers
and privileges granted by the Act or which may be exercised by any person,
together with any powers incidental thereto, so far as such powers or privileges
are necessary or convenient to the conduct, promotion or attainment of the
business purposes or activities of the LLC.
1.03
Principal
Place of Business.
The
principal office and place of business of the LLC shall initially be c/o
Ridgewood Power LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. After
giving notice to the Members, the Manager may change the principal office or
place of business of the LLC at any time and may cause the LLC to establish
other offices or places of business.
1.04
Fiscal
Year.
The
fiscal year of the LLC shall end on December 31 in each year.
1.05
Qualification
in Other Jurisdictions.
The
Manager shall cause the LLC to be qualified or registered under applicable
laws
of any jurisdiction in which the LLC transacts business and shall be authorized
to execute, deliver and file any certificates and documents necessary to effect
such qualification or registration, including without limitation,
the
appointment
of agents for service of process in such jurisdictions.
ARTICLE
II MEMBERS
2.01
Members.
The
Members shall hold interests in the LLC ("Membership Interests") in proportion
to the Contributions, as defined in Section 6.02 of this Agreement, made to
the
LLC by the Members under Section 6.02. The Members' Membership Interests may
change from time to time and shall be based upon the proportionate Contributions
made to the LLC by the Members as of any point in time. The initial Members
of
the LLC and their addresses shall be listed on Schedule
A
and said
schedule shall be amended from time to time by the Manager to reflect the
withdrawal of Members of the admission of additional Members pursuant to this
Agreement. The Members shall constitute a single class or group of members
of
the LLC for all purposes of the Act, unless otherwise explicitly provided
herein. The Manager shall notify the Members of changes in Schedule
A,
which
shall constitute the record list of the Members for all purposes of this
Agreement.
2.02
Admission
of New Members.
Additional persons may be admitted to the LLC as Members and may participate
in
the profits, losses, distributions, allocations and capital contributions of
the
LLC upon such terms as are established by the Manager, but only with the consent
of Members holding a majority of the Membership Interests. New Members shall
be
admitted at the time when all conditions to their admission have been satisfied,
as determined by the Manager.
2.03
Meetings
of Members.
(a) Meetings
of Members may be called for any proper purpose at any time by the Manager
or
Members holding a majority of the Membership Interests. The Manager or the
Members calling the meeting shall determine the date, time and place of each
meeting of Members,
and written notice thereof shall be given by the Manager to each Member not
less
than
seven
(7) days or more than thirty (30) days prior to the date of the meeting. Notice
shall be sent
to
Members of record on the date when the meeting is called. The business of each
meeting of Members shall be limited to the purposes described in the notice.
A
written waiver of notice, executed before or after a meeting by a Member or
its
authorized attorney and delivered to the Manager shall be deemed equivalent
to
notice of the meeting.
(b) Persons
holding a majority of the Membership Interests shall constitute a quorum for
the
transaction of any business at a meeting of Members. Members may attend a
meeting in person or by proxy. Members may also participate in a meeting by
means of conference telephone or similar communications equipment that permits
all Members present to hear each other. If less than a quorum of the Members
is
present, the meeting may be adjourned by the chairman to a later date, time
and
place, and the meeting may be held as adjourned without further notice. When
an
adjourned meeting is reconvened, any business may be transacted that might
have
been transacted at the original meeting.
(c) The
Manager shall make available at any meeting of Members and for a period of
ten
(10) days prior thereto a complete list of Members entitled to vote at such
meeting or any adjournment thereof. The list shall reflect the current names
and
addresses of each Member and their Membership Interests and shall be subject
to
inspection by any Member at the meeting and during the ten-day period prior
thereto at the principal office of the LLC.
(d) A
chairman selected by the Manager shall preside at all meetings of the Members
unless the Members elect from the Membership a chairman of the meeting. The
chairman shall determine the order of business and the procedures to be followed
at each meeting of Members.
2.04
Action
Without a Meeting.
Any
action required or permitted to be taken at any meeting of Members may be taken
without a meeting if one or more written consents to such action shall be signed
by the holders of the amount of Membership Interests required to approve the
action being taken. Such written consents shall be delivered to the Manager
at
the principal office of the LLC and, unless otherwise specified, shall be
effective on the date when the first consent is so delivered. The Manager shall
give prompt notice to all members who did not consent to any action taken by
written consent of Members without a meeting.
2.05
Voting
Rights.
Unless
otherwise required by the Act, or this Agreement, all actions, approvals and
consents to be taken or given by the Members under the Act, this Agreement
or otherwise shall require the affirmative vote or written consent of Members
holding
a
majority of the Membership Interests.
2.06
Limitation
of Liability of Members.
Except
as otherwise provided in the Act, no Member
of
the LLC shall be obligated personally for any debt, obligation or liability
of
the LLC
or of
any other Member, whether arising in contract, tort or otherwise, solely by
reason of being a Member of the LLC. Except as otherwise provided in the Act,
by
law or expressly in this
Agreement,
no Member shall have any fiduciary or other duty to another Member with respect
to
the
business and affairs of the LLC, and no Member shall be liable to the LLC or
any
other
Member
for acting in good faith reliance upon the provisions of this Agreement. No
Member shall have any responsibility to restore any negative balance in its
Capital Account (as defined in Section 6.01) or to contribute to or in respect
of the liabilities or obligations of the LLC or return distributions made by
the
LLC except as required by the Act or other applicable law; provided, however,
that Members are responsible for their failure to make required Contributions
under Section 6.02. The failure of the LLC to observe any formalities or
requirements relating to the exercise of its powers or the management of its
business or affairs under this Agreement or the Act shall not be grounds for
making its Members or Manager responsible for the liabilities of the
LLC.
2.07
Authority.
Unless
specifically authorized by the Manager, no Member that is not the Manager shall
be an agent of the LLC or have any right, power or authority to act for or
to
bind the LLC or to undertake or assume any obligation or responsibility of
the
LLC or of any other Members.
2.08
No
Right to Withdraw.
No
Member shall have any right to resign or withdraw from
the
LLC without the consent of the Manager or to receive any distribution or the
repayment
of its
capital contribution except as provided in Section 7.02 and Article IX upon
dissolution and liquidation of the LLC.
2.09
Rights
to Information.
Members
shall have the right to receive from the Manager upon request a copy of the
Certificate and this Agreement, as amended from time to time, and such other
information regarding the LLC as is required by the Act, subject to reasonable
conditions and standards established by the Manager, as permitted by the Act,
which may include, without limitation, withholding or restrictions on the use
of
confidential information.
2.10
No
Appraisal Rights.
No
Member shall have any right to have its interest in the LLC appraised and paid
out under the circumstances provided in Section 18-210 of the Act, or under
any
other circumstance.
ARTICLE
III
MANAGEMENT
3.01
Manager.
Ridgewood Management Corporation is hereby appointed to serve as the initial
Manager of the LLC. The name and address of the Manager shall be listed on
Schedule
A
and said
schedule shall be amended from time to time by the Manager to reflect
the
resignation or removal of the Manager or the appointment of a new or additional
Manager pursuant to this Agreement.
3.02
Election
and Qualification.
The
Members hereby fix the number of Managers at one (1). The Manager may, but
is
not required, to be a Member, and shall hold office for the term specified
by
the Members or until its successor is chosen and qualified, or upon its earlier
resignation or removal.
3.03
Powers
and Duties of the Manager.
The
business and affairs of the LLC shall be conducted by or under the direction
of
the Manager, who shall have and may exercise on behalf of the LLC all of its
rights, powers, duties and responsibilities under Section 1.02 or as provided
by
law. Any action taken by the Manager, and the signature of the Manager on any
agreement,
contract,
instrument or other document on behalf of the LLC, shall be sufficient to bind
the LLC and shall conclusively evidence the authority of that the Manager and
the LLC with respect thereto.
3.04
Reliance
by Third Parties.
Any
person may rely upon a certificate signed by the Manager as to (i) the identity
of the Manager or Members; (ii) any factual matters relevant to the affairs
of
the LLC; (iii) the persons who are authorized to execute and deliver any
document on behalf of the LLC; or (iv) any action taken or omitted by the LLC,
the Manager or any Member.
3.05
Resignation
and Removal.
The
Manager may resign upon providing at least sixty (60) days notice to the Members
(unless notice is waived by them) and may be removed at any time with or without
cause by the Members holding a majority of the Membership Interests, upon five
(5) days prior notice to the Manager being removed. The Members may increase
or
decrease the number of managers at any time and appoint one or more additional
manager in the event of an increase. Any vacancy in the office of Manager shall
be filled by the Members.
3.06
Compensation.
The
Manager shall receive such compensation for its services and benefits
as may be approved from time to time by the Members either specifically or
as
part of an
annual
budget or operating plan of the LLC. In addition, the Manager shall be entitled
to reimbursement for out-of-pocket expenses incurred by it in managing and
conducting the business and affairs of the LLC.
3.07
Meetings
and Action of Manager.
Unless
otherwise determined by the Members, all action to be taken by the Manager
of
the LLC shall be taken by written consent of the Manager. The Manager shall
not
be required to hold a meeting in order to take action on any
matter.
3.08
Limitation
of Liability of Manager.
The
Manager shall not be obligated personally
for any debt, obligation or liability of the LLC or of any Member, whether
arising in
contract, tort or otherwise, solely by reason of being or acting as Manager
of
the LLC. The Manager shall not be personally liable to the LLC or to its Members
for acting in good faith reliance
upon the provisions of this Agreement, or for breach of any fiduciary or other
duty that
does not
involve (i) a breach of the duty of loyalty to the LLC or its Members; (ii)
acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; or (iii) a transaction from which the Manager derived
an improper personal benefit.
ARTICLE
IV
INDEMNIFICATION
4.01
Right
to Indemnification.
Except
as limited by law and subject to the provisions of this Article, the LLC shall
indemnify the Manager against all expenses incurred by it in connection with
any
proceeding in which the Manager is involved as a result of serving in such
capacity,
except that no indemnification shall be provided for the Manager regarding
any
matters
as to
which its liability is not limited under Section 3.08 or with respect to a
criminal matter, in which it had reasonable cause to believe that its conduct
was unlawful. Subject to the foregoing limitations, such indemnification may
be
provided by the LLC with respect to a proceeding in which it is claimed that
the
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.
4.02
Award
of Indemnification.
The
determination of whether the LLC is authorized to indemnify the Manager
hereunder and any award of indemnification shall be made in each case by the
holders of a majority of the Membership Interests of the Members. The LLC 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 LLC 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 LLC in which
the Manager is adjudged liable to the LLC, 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 the case, the Manager is fairly and
reasonably entitled to indemnification for such expenses as the court shall
deem
proper.
4.03
Successful
Defense.
Notwithstanding any contrary provisions of this Article IV, if the 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 the 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 LLC against all
expenses incurred by the Manager in connection therewith.
4.04
Advance
Payments.
Except
as limited by law, expenses incurred by the Manager in defending any proceeding,
including a proceeding by or in the right of the LLC, shall be paid by the
LLC
to the Manager in advance of final disposition of the proceedings upon receipt
of its written undertaking to repay such amount of 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 4.02 of this Article
on
the basis of the
circumstances known at the time (without further investigation) that the Manager
is ineligible
for
indemnification.
4.05
Definitions.
For
purposes of this Article:
"Manager"
includes (i) a person serving as an officer of the LLC or in a similar executive
capacity appointed by the Manager and exercising rights and duties delegated
by
the Manager; (ii) any director, officer or senior employee of the Manager;
(iii)
a person serving at the request of the LLC as a director, manager, officer,
employee or other agent of another organization; and (iv) 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 LLC 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.
4.06
Insurance.
The LLC
shall have the 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 LLC would have power to indemnify against such liability or
cost.
4.07
Employee
Benefit Plan.
If the
LLC 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 LLC
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 LLC
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.
4.08
Heirs
and Personal Representatives.
The
indemnification provided by this Article shall inure to the benefit of the
heirs
and personal representatives of each Manager.
4.09
Non-Exclusivity. The
provisions
of this Article shall not be construed to limit the power of
the
LLC
to indemnify its Manager, Members, or officers, employees or agents thereof
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.
4.10
Amendment.
The
provisions of this Article IV may be amended or repealed in accordance with
Section 10.05; however, no amendment or repeal of such provisions that adversely
affects the rights of the Manager under this Article IV 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
V
CONFLICTS
OF INTEREST
5.01
Transactions
with Interested Persons.
Unless
entered into in bad faith, no contract or transaction between the LLC and its
Manager or Members, or between the LLC and any other corporation, partnership,
association or other organization in which one or more of its Manager or Members
have a financial interest or are directors, partners, Manager or officers,
shall
be voidable solely for this reason or solely because the Manager or Member
was
present or participated in the authorization of such contract or transaction
if:
(a) the
material facts as to the relationship or interest of the Manager or Member
and
as to the contract or transaction were disclosed or known to the Members and
the
contract or transaction was authorized by the disinterested Members;
or
(b) the
contract or transaction was fair to the LLC as of the time it was authorized,
approved or ratified by the disinterested Members;
and
no
Manager or Member interested in such contract or transaction, because of such
interests, shall be considered to be in breach of this Agreement or liable
to
the LLC, the Manager or any Member, or any other person or organization for
any
loss or expense incurred by reason of such contract or transaction or shall
be
accountable for any gain or profit realized from such contract or
transaction.
5.02
Outside
Business.
The
Manager or any Member may engage or have an interest in
other
business ventures which are similar to or competitive with the business of
the
LLC, and
the
pursuit of such ventures, even if competitive, shall not be deemed wrongful
or
improper to give the LLC, its Manager or the other Members any rights with
respect thereto. Neither the Manager nor any Member shall be obligated to
present an investment opportunity to the LLC even if it is similar to or
consistent with the business of the LLC, and such Member or Manager
shall
have a right to take for their own account or recommend to others any such
investment opportunity.
ARTICLE
VI
CAPITAL
ACCOUNTS AND CONTRIBUTIONS
6.01
Capital
Accounts.
The LLC
shall establish a capital account ("Capital Account") for each Member and shall
maintain each Capital Account according to the following rules:
(a) A
separate Capital Account shall be maintained for each Member in accordance
with
Section 1.704-1(b)(2)(iv) of the U.S. Treasury Regulations (the "Regulations"),
and this Section 6.01 shall be interpreted and applied in a manner consistent
with said Section of the Regulations;
(b) Each
Member's Capital Account shall be credited for cash contributions and for the
value of non-cash contributions as determined pursuant to Section 6.02
hereof;
(c) The
LLC
shall adjust the Capital Accounts of its Members to reflect revaluations of
the
LLC property whenever the adjustment would be permitted under Regulations
Section 1.704-1(b)(2)(iv)(f). In the event that the Capital Accounts of the
Members are so adjusted, (i) the Capital Accounts of the Members shall be
adjusted in accordance with Regulations Section 1.704-1(b)(2)(iv)(g) for
allocations of depreciation, depletion, amortization and gain or loss, as
computed
for book purposes, with respect to such property and (ii) the Members' allocable
shares
of
depreciation, depletion, amortization and gain or loss, as computed for tax
purposes, with respect to such property shall be determined so as to take
account of the variation between the adjusted tax basis and book value of such
property in the same manner as under Section 704(c) of the Internal Revenue
Code
of 1986, as amended from time to time (the "Code"). In the event that Code
Section 704(c) applies to LLC property, the Capital Accounts of the Members
shall be adjusted in accordance with Regulations Section 1.704-1(b)(2)(iv)(g)
for allocations of depreciation, depletion, amortization and gain and loss,
as
computed for book purposes, with respect to such property. In applying clause
(ii) of the second preceding sentence and all of the preceding sentence, the
provisions of Code Section 704(b) shall apply.
(d) The
Capital Accounts shall be maintained for the sole purpose of accounting for
allocations of income, gain, loss and deduction among, and distributions to,
the
Members. The amount of all distributions to Members shall be determined pursuant
to Sections 7.01 and 7.02. Allocations
of profits and losses among Members shall be determined pursuant to Section
7.04.
6.02
Contributions.
The
Members may make contributions to the capital of the LLC in amounts requested
and determined by the Manager at such times as the Manager may determine
("Contributions"). No Member shall be required to make any Contributions to
the
LLC and no Member shall be subject to any penalties or damages for failure
to
make any Contributions, although Membership interests
shall
always be proportionate to actual Contributions. All
Contributions
shall be paid in cash unless otherwise agreed to by the Members. The LLC may
borrow from its Members as well as from banks or other lending institutions
to
finance its working capital or the acquisition of assets upon such terms and
conditions as shall be approved by the Manager, and any borrowing from Members
shall not be considered Contributions or reflected in their Capital Accounts.
The value of all non-cash Contributions made by Members shall be agreed upon
by
the Members. No Member shall be entitled to any interest or compensation with
respect to its Contribution or any services rendered on behalf of the LLC except
as specifically provided in this Agreement or approved by the Manager. No Member
shall have any liability for the repayment of the Contribution of any other
Member and each Member shall look only to the assets of the LLC for return
of
its Contribution.
ARTICLE
VII
DISTRIBUTIONS
AND ALLOCATIONS
7.01
Distribution
of LLC Funds.
Except
as otherwise provided in this Article VII, all funds
and
assets of the LLC which are determined by the Manager to be available for
distribution
at any
point in time shall be distributed to the Members in proportion to their
Membership Interests at that time. No Member shall be entitled to any
distribution or payment with respect to its interest in the LLC upon the
resignation or withdrawal of such Member except to the extent that the LLC
exercises its option to purchase the interest of such Member under Section
9.04.
Distributions may be limited and repayable as provided in the Act.
7.02
Distribution
Upon Dissolution.
Proceeds
from a sale or liquidation of all or substantially all of the assets of the
LLC
and amounts available upon dissolution, after payment of, or adequate provision
for, the debts and obligations of the LLC, including the expenses of its
liquidation and dissolution, and liabilities to its Manager or Members, if
any,
other than liabilities to Members for distributions, shall be distributed to
the
Members in proportion to their Membership Interests.
7.03
Allocation
of Profits and Losses.
All
items of LLC income, gain, loss and deduction as determined for book purposes
shall be allocated among the Members and credited or debited to their respective
Capital Accounts in proportion to the Members' Membership Interests during
the
relative accounting period and in accordance with Regulations Section
1.704-1(b)(2)(iv), so as to ensure to the maximum extent possible (i) that
such
allocations satisfy the economic effect equivalence test of Regulations Section
1.704-1(b)(2)(ii) and (ii) that all allocations of items that cannot have
economic effect (including credits and nonrecourse deductions) are allocated
to
the Members in accordance with their economic interest in the LLC as provided
in
Regulations Section 1.704-1(b)(3).
7.04
Tax
Allocations.
For each
Fiscal Year, each item of income, gain, loss or deduction as calculated for
federal and state income tax purposes shall be allocated among the Members
so as
to appropriately reflect allocations of income, gain, loss and deduction
as
determined
for book purposes pursuant to Section 7.03 hereof. Unless otherwise required
by
the Code,
the
"traditional method" without "curative allocations" provided for in Regulations
Section
1.704-3(b) shall apply to all income tax allocations governed by Section 704(c)
of the Code and all "reverse Section 704(c) allocations" pursuant to Regulations
Section 1.704-1(b)(2)(iv)(f).
ARTICLE
VIII
TRANSFERS
OF INTERESTS
8.01
General
Restrictions on Transfer.
No
Member may assign, transfer, pledge or grant a security interest in all or
any
part of its interest in the LLC except as provided in Section 8.05 or with
the
prior written approval of the Manager. The LLC
and
its
Manager and Members shall be entitled to treat the record owner of an interest
in the LLC as the absolute owner thereof in
all
respects, and shall incur no liability for distributions of cash or other
property made in good faith
to
such owner until such time as a written assignment of such interest has been
received and
accepted
by the Manager and recorded on the books of the LLC. The Manager may refuse
to
accept and record an assignment until the end of the next successive quarterly
accounting period of the LLC.
8.02
Requirements
for Transfer.
Every
transfer of an interest in the LLC
permitted
hereunder, including transfer permitted by Section 8.05, shall be subject to
the
following requirements:
The
transferee shall establish that the proposed transfer will not cause or result
in a breach of any agreement binding upon the LLC or any violation of law,
including without limitation, federal or state securities laws, and that the
proposed transfer would not cause the LLC to be an investment company as defined
in the Investment Company Act of 1940, as amended.
The
transferee shall establish to the satisfaction of the Manager that the
transferee
is
financially responsible and of good character and that the transfer would not
adversely affect
the classification of the LLC as a partnership for federal tax purposes,
terminate its
classification as a partnership under Code Section 708, or have a substantial
adverse
effect
with respect to federal income taxes payable by the LLC.
The
transferee shall execute a counterpart of this Agreement and such other
documents
or instruments as may be required by the Manager to reflect the
provisions
hereof.
Until
the
foregoing requirements are met, the LLC need not recognize the transferee for
any purpose under this Agreement, and the transferee shall be entitled only
to
the rights of a transferee who is not a Member under the Act. A transferee
shall
not be admitted as a Member without the approval of the Manager and the consent
of Members holding a majority of the Membership Interests.
8.03
Effect
of Transfer.
If the
transferee is admitted as a Member or is already a Member, the Member
transferring its interest shall be relieved of liability with respect to the
transferred interest arising or accruing under this Agreement on or after the
effective date of the transfer, unless the transferor affirmatively assumes
such
liability; provided, however, that the transferor shall not be relieved of
any
liability for prior distributions and unpaid Contributions unless the transferee
affirmatively assumes such liabilities.
Any
person who acquires in any manner an interest or any part thereof in the LLC,
whether or not such person has accepted and assumed in writing the terms and
provisions of this Agreement
or been admitted as a Member, shall be deemed by the acquisition of such
interests to
have
agreed to be subject to and bound by all of the provisions of this Agreement
with respect to such interest, including without limitation, the provisions
hereof with respect to any subsequent transfer of such interest.
8.04
Prohibited
Transfers.
Any
transfer in violation of any provisions of this Agreement shall be null and
void
and ineffective to transfer any interest in the LLC and shall not be binding
upon or be recognized by the LLC, and any such transferee shall not be treated
as or deemed to be a Member for any purpose. In the event that any Member shall
at any time transfer its interest in violation of any of the provisions of
this
Agreement, the LLC and the other Members,
in addition to all rights and remedies at law and equity, shall have and be
entitled to an
order
restraining or enjoining such transaction, it being expressly acknowledged
and
agreed that damages at law would be an inadequate remedy for a transfer in
violation of this Agreement.
8.05
Permitted
Transfers.
The
following transfers of interests in the LLC shall be permitted without the
approval of the Manager under Section 8.01 but shall be subject to the
requirements of Section 8.02 hereof:
An
interest of a Member may be transferred from time to time in connection with
(i)
any proceeding under the federal bankruptcy laws or
any applicable
federal or state laws relating to bankruptcy, insolvency, or the relief of
debtors and subject to the requirements and provisions thereof, or (ii) a
tax-free reorganization, merger or consolidation of the LLC; and
An
interest of a Member may be transferred from time to time to another
Member.
8.06
Transfers
of Interests by Member-Manager.
A
transfer of an interest in the LLC by
a
Member-Manager shall transfer only the economic interests, rights, duties and
obligations of
the
transferor in its capacity as a Member, and no transferee shall obtain as a
result of any such assignment any rights as the Manager without the prior
approval of Members holding a majority of the Membership Interests. A
Member-Manager who transfers all (but not less than all) of its interest in
the
LLC as a Member shall be deemed to have tendered its resignation as the Manager
to the LLC effective on the date of such transfer, and such resignation shall
be
deemed to have been accepted unless it is rejected within thirty (30) days
thereafter.
ARTICLE
IX
DISSOLUTION,
LIQUIDATION, AND TERMINATION
9.01
Dissolution.
The LLC
shall dissolve and its affairs shall be wound up upon the first to occur of
the
following:
(a) the
written consent of all of the Members;
(b) the
death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member
or
the
occurrence of any other event under the Act that terminates the continued
membership of a Member
in
the LLC unless, within ninety (90) days after the occurrence of such an event
all of the
remaining Members agree in writing to continue the business of the LLC and
to
the appointment, if necessary or desired, effective as of the date of such
event
of one or more additional Members;
(c) the
entry
of a decree of judicial dissolution under Section 18-802 of the Act;
or
(d) A
consolidation or merger of the LLC in which it is not the resulting or surviving
entity.
The
Manager shall promptly notify the Members of the dissolution of the
LLC.
9.02
Liquidation.
Upon
dissolution of the LLC, the Manager shall act as its liquidating trustee
or the Manager may appoint one or more Members as liquidating trustee. The
Liquidating
trustee
shall proceed diligently to liquidate the LLC, to wind up its affairs and to
make final distributions as provided in Section 7.02 and in the Act. The costs
of dissolution and liquidation shall be an expense of the LLC.
Until
final distribution, the liquidating trustee may continue to operate
the business and properties of the LLC
with
all
of the power and authority of the Manager.
As
promptly as possible after dissolution and again after final liquidation, the
liquidating trustee shall
cause an accounting of the LLC's assets, liabilities, operations and liquidating
distributions to
be given
to the Members.
9.03
Certificate
of Cancellation.
Upon
completion of the distribution of LLC assets as provided
herein, the LLC shall be terminated, and the Manager (or such other person
or
persons as the
Act
may require or permit) shall file a Certificate of Cancellation with the
Secretary of State of
New
Jersey pursuant to Sections 1.01, 1.03 and 1.05, and take such other actions
as
may be necessary to terminate the existence of the LLC.
9.04
Payments
to Terminating Member:
(a) In
the
event that a Member voluntarily or involuntarily withdraws from the LLC, the
LLC
shall have the option to purchase all or any part of the interest of the
Terminating Member at a Purchase price determined pursuant to paragraph (b)
and
upon the terms and conditions set forth below (unless otherwise agreed). The
Terminating Member must give the LLC prompt notice of its withdrawal, and the
option shall be exercisable in the LLC's sole discretion by giving notice to
the
Terminating Member or its legal representative at any time within ninety (90)
days thereafter. Such notice shall state the price and terms of the LLC's
election to repurchase the interest of the Terminating Member and the date
set
for the closing of the repurchase.
(b) Unless
the parties otherwise agree, the purchase price to be paid to the Terminating
Member shall be an amount equal to the positive balance of its Capital Account
(after allocating profits and losses of the LLC for the partial year ending
on
the date of termination) or the portion of said Capital Account which
corresponds to the portion of the interest of the Terminating Member which
the
LLC has elected to repurchase. The purchase price may be reduced by (i) the
allocable portion of any aggregate loss that the Manager determine in their
sole
discretion the LLC would incur if all of the assets of the LLC were sold for
their fair market value on the date of termination and (ii) such damages as
the
Manager determine in their sole discretion have been or will be suffered by
the
LLC as a result of a termination due to the resignation of the Terminating
Member, without the approval of the Manager.
(c) Payment
of the purchase price may be made in the Manager's sole discretion (i) by check
or by wire transfer to a bank account designated in writing by the Terminating
Member, (ii) by delivery of a promissory note under which payments shall be
made
in equal annual installments over a period of not more than ten (10) years
with
interest at the "applicable federal rate" established by the Internal Revenue
Service for the month in which the repurchase by the LLC is closed, which note
shall be unsecured and subordinated to all debts and liabilities of the LLC,
or
(iii) by any combination of (i) and (ii). Amounts due shall be subject to offset
as provided in Section 10.01.
(d) If
termination is due to the death of the Terminating Member or its withdrawal
under any other circumstances with the consent of the Manager and either the
Terminating Member or the LLC can demonstrate that the proposed purchase price
is unfair to any parry, they shall have the right to have the purchase price
determined by an independent appraisal and shall give notice of the exercise
of
this right to the other party within thirty (30) days after the LLC gives notice
of its exercise of the option. Each party shall name an appraiser within fifteen
(15) days after said 30-day period, and the two appraisers shall name a third
appraiser within fifteen (15) days thereafter, whereupon the appraisers shall
proceed to determine the fair market value of the interest of the Terminating
Member by a majority vote within sixty (60) days after their appointment under
such procedures as they shall establish. The LLC and the
Terminating
Member
shall promptly furnish to the appraisers such information regarding the LLC
and
the interest of the Terminating Member as they may reasonably require. The
appraisers' determination of the fair market value of the interest of the
Terminating Member shall be final and binding upon the parties. Each of the
parties shall pay the expenses and fees of the appraiser which it nominates
and
50% of the fees and expenses of the third appraiser.
(e) The
LLC
shall have the right (to be exercised in the sole discretion of the Manager)
to
assign all or part of its rights under an option which it has elected to
exercise to another Member or a third party to be admitted as a new Member,
provided that the assigned portion of the Purchase Price shall be payable by
check or wire transfer and not by delivery of a note under paragraph
(c).
(f) In
no
case shall the LLC be obligated to exercise its option under this Section,
and
if a Member becomes bankrupt, no trustee, receiver or creditor shall have any
right to require the LLC to repurchase the interest of said Member.
(g) Upon
payment of the purchase price at the closing of a repurchase as provided above,
the Terminating Member shall cease to have any rights with respect to the
interest in the LLC
being
repurchased, and if all of its interests in the LLC are repurchased from a
Terminating
Member
such Terminating Member shall cease to be a Member of the LLC.
9.05
No
Dissolution.
The LLC
shall not be dissolved by the admission of additional Members or substitute
Members in accordance with the terns of this Agreement.
ARTICLE
X
GENERAL
PROVISIONS
10.01
Offset.
Whenever
the LLC is obligated to make a distribution or payment to any Member, any
amounts that Member owes the LLC may be deducted by the Manager from said
distribution or payment.
10.02
Notices.
Except
as expressly set forth to the contrary in this Agreement, all notices, requests,
or consents required or permitted to be given under this Agreement must be
in
writing and shall be deemed to have been given (i) three (3) days after the
date
mailed by registered or certified mail, addressed to the recipient, with return
receipt requested, (ii) upon delivery to the recipient in person or by courier,
or (iii) upon receipt of a facsimile transmission by the recipient. Such
notices, requests and consents shall be given (x) to Members at their addresses
on Schedule
A,
or such
other address as a Member may specify by notice to the Manager or to all of
the
other Members, or (y) to the LLC or the Manager at the address of the principal
office of LLC specified in Section 1.03. Whenever any notice is required to
be
given by law, the Certificate or this Agreement, a written waiver thereof,
signed by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
10.03
Entire
Agreement.
This
Agreement constitutes the entire agreement of the Members
and the Manager relating to the LLC and supersedes all prior contracts or
agreements
with
respect to the LLC, whether oral or written.
10.04
Limitation
of Litigation; Consent to Jurisdiction.
No
Member shall be entitled to initiate or participate in a class action on behalf
of all or any part of the Members against the LLC, its Manager or any Member,
and no Member shall be entitled to initiate or participate in a derivative
suit on behalf of the LLC against its Manager or any Member, unless in each
case
such
action
or suit has received prior approval of the Manager and Members holding a
majority of the Membership Interests who are not defendant parties to the
proposed action or suit, or unless otherwise required by law. A Member or
Manager who initiates an action or suit in violation of this Agreement shall
be
liable to the LLC and its Manager and any Members who are defendant parties
for
all damages and expenses which they incur as a result, including without
limitation reasonable fees and expenses of legal counsel and expert witnesses
and court costs. The parties to this Agreement hereby consent to the
non-exclusive jurisdiction of the courts of the State of New Jersey in
connection with any matter or dispute arising under this Agreement or between
them regarding the affairs of the LLC.
10.05
Amendment
or Modification.
This
Agreement may be amended or modified from time to time only by a written
instrument signed by a majority of the Manager and by Members holding a majority
of the Membership Interests; provided, however, that (a) an amendment or
modification reducing a Member's Membership Interest or changing adversely
the
rights of a Member with respect to distributions, allocations or voting, (other
than to reflect the admission of new Members or changes otherwise provided
by
this Agreement) shall be effective only with that Member's consent, (b) an
amendment or modification to reflect the admission of a new Member shall be
subject to approval by Members holding a majority of the Membership Interests;
and an amendment or modification to reflect the admission of a new Member who
is
an assignee of an existing Member shall be subject to approval as provided
in
Section 2.05; (c) an amendment or modification increasing any liability of
a
Member to the LLC or its Manager or Members, or adversely affecting the
limitation of the liability of a Member with respect to the LLC, shall be
effective only with that Member's consent; (d) an amendment or modification
reducing the required percentage of Membership Interests for any consent or
vote
in this Agreement shall be effective only with the consent or vote of Members
having the percentage of Membership
Interests theretofore required; and (e) an amendment of this Section shall
require the
consent
of the Manager and of Members holding two-thirds of the Membership
Interests.
10.06
Binding
Effect.
Subject
to the restrictions on transfers set forth in this Agreement, this Agreement
is
binding on and inures to the benefit of the parties and their respective heirs,
legal representatives, successors and assigns.
10.07
Governing
Law; Severability.
This
Agreement is governed by and shall be construed in accordance with the law
of
the State of New Jersey, exclusive of its conflict-of-laws principles. In the
event of a conflict between the provisions of this Agreement and any provision
of the Certificate or the Act, the applicable provision of this Agreement shall
control, to the extent permitted by law. If any provision of this Agreement
or
the application thereof to any person or circumstance is held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of that provision shall be enforced to the fullest extent permitted by
law.
10.08
Further
Assurances.
In
connection with this Agreement and the transactions contemplated hereby, each
Member shall execute and deliver any additional documents and instruments and
perform any additional acts that may be necessary or appropriate to effectuate
and perform the provisions of this Agreement and those transactions, as
requested by the Manager.
10.09
Waiver
of Certain Rights.
Each
Member irrevocably waives any right it may have to maintain any action for
dissolution of the LLC
or
for
partition of the property of the LLC. The failure of any Member to insist upon
strict performance of a covenant hereunder or of any obligation hereunder,
irrespective of the length of time for which such failure continues, shall
not
be a waiver of such Member's right to demand strict compliance herewith in
the
future. No consent or waiver, express or implied, to or of any breach or default
in the performance of any obligation hereunder, shall constitute a consent
or
waiver to or of any other breach or default in the performance of the same
or
any other obligation hereunder.
10.10
Notice
to Members of Provisions of this Agreement.
By
executing this Agreement, each Member acknowledges that such Member has actual
notice of (a) all of the provisions of this Agreement, including, without
limitation, the restrictions on the transfer of Membership Interests set forth
in Article VIII, and (b) all of the provisions of the Certificate. Each Member
hereby agrees that this Agreement constitutes adequate notice of all such
provisions, and each Member hereby waives any requirement that any further
notice thereunder be given.
10.11
Third
Party Beneficiaries.
The
provisions of this Agreement are not intended to be for the benefit of any
creditor or other person to whom any debts or obligations are owed by, or who
may have any claim against, the LLC
or
any of
its Members of the Manager, except for this Agreement, no such creditor or
person shall obtain any rights under this Agreement or shall, by reason of
this
Agreement, be permitted to make any claim against the LLC or any Member or
the
Manager.
10.12
Interpretation.
For the
purposes of this Agreement, terms not defined in this Agreement shall be defined
as provided in the Act; and all nouns, pronouns and verbs used in this
Agreement shall be construed as masculine, feminine, neuter, singular, or
plural, whichever
shall be
applicable. Titles or captions of Articles and Sections contained in this
Agreement are inserted as a matter of convenience and for reference, and in
no
way define, limit, extend or describe the scope of this Agreement or the intent
of any provision hereof.
10.13
Counterparts.
This
Agreement may be executed in any number of counterparts with
the
same effect as if the parties had signed the same document, and all counterparts
shall be
construed together and shall constitute the same instrument.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
set
forth above.
RIDGE
WOOD ELECTRIC POWER TRUST V
By:
Ridgewood Power LLC
Managing
Shareholder
By:
▇▇▇▇▇▇
▇.
▇▇▇▇▇
Senior
Vice President and Chief Financial Officer
THE
RIDGEWOOD POWER GROWTH FUND By: Ridgewood Power VI LLC
Co-Managing
Shareholder
By:
▇▇▇▇▇▇
▇. ▇▇▇▇▇
Senior
Vice President and
Chief
Financial Officer
By:
Ridgewood Power LLC Co-Managing Shareholder
By:
▇▇▇▇▇▇
▇.
▇▇▇▇▇
Senior
Vice President and Chief Financial Officer