DEVELOPMENT SERVICES AGREEMENT

Development Agreement

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RIDGEWOOD POWER GROWTH FUND /NJ | EVERSHEDS LLP

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Title: DEVELOPMENT SERVICES AGREEMENT
Date: 3/1/2006

Search Development Agreement by:

ROC Redline Developement

DATED2004
(1) RIDGEWOOD ROC II 2003 LLC (2) CLP DEVELOPMENTS LIMITED
DEVELOPMENT SERVICES AGREEMENT relating to the development of additional electricity generation plants on behalf of certain within mentioned Project Companies

EVERSHEDS LLP
115 Colmore Row Birmingham B3 3AL Tel: +44 121 232 1000 Fax: +44 121 232 1900

bir_corp\718934\4

THIS AGREEMENT is made the day of 2004

BETWEEN

(1)

RIDGEWOOD ROC II 2003 LLC a Delaware limited liability company trading in the UK whose registered address is situate at 947 Linwood Avenue, Ridgewood, NJ, 07450, USA ("Ridgewood"); and

(2)

CLP DEVELOPMENTS LIMITED a company incorporated in England and Wales with company number 04502342 whose registered address is situate at Units 14-15, Queensbrook, Bolton Technology Exchange, Spa Road, Bolton BL1 4AY (the “Project Manager”).

WHEREAS

(A) Each Project Company:-

(i) owns an operating electricity generating plant that uses landfill gas extracted from a landfill site pursuant to an existing NFFO Power Purchase Agreement; or

(ii) has committed to build an electricity generating plant at a site in order that it may sell the output of the plant under an existing NFFO Power Purchase Agreement; or

(iii) neither owns nor has committed to build electricity generating plant pursuant to a NFFO Power Purchase Agreement but has a landfill site from which landfill gas may be extracted

(and in the case of each of (i) and (ii) above such existing or proposed electricity generating plants including their associated gas extraction, collection, burning and handling equipment, transformers, switchgear and other associated plant, machinery infrastructure equipment and apparatus from time to time shall be hereinafter referred to as an “Existing Plant”)

(B)

Each Project Company with Existing Plant is desirous of adding additional generating capacity and additional infrastructure improvements at its Site so that such Project Company might use the surplus landfill gas to generate additional electricity and each Project Company with no Existing Plant is desirous of constructing, developing and operating electricity generating equipment at its Site in order to generate new electricity, such electricity to be sold, along with its environmental attributes, to one or more third parties.

(C)

Ridgewood has entered into an agreement with CLPE ROC -2 Limited, CLPE ROC -2A Limited, and the Project Companies dated on or around the date hereof (“ROC Project DSA”) pursuant to which Ridgewood has agreed to procure, construct, install, engineer, develop (to Commissioning) and make available for use by the Project Companies (using monies provided by the Powerbank II Fund) the additional electricity generation plants in order that the Project Companies may utilise the landfill gas extracted from the Site as stated in Recital (B).

(D)	It is the intent of the parties hereto that Ridgewood will at all times and, for the avoidance of doubt, during any period of development following the date hereof and after Commissioning, be the legal owner of the Equipment.

(E)	The Project Manager is willing to be engaged as aforesaid on the following terms in order to bring about Commissioning.

1.	INTERPRETATION

1.1

Definitions

In this Agreement and the Schedules hereto the following words and expressions shall, unless the context otherwise requires or is inconsistent therewith, have the following meanings:-

“Commissioning”

means the stage at which the installation of the Equipment at the relevant Project Company Site has been completed and the New Project has been consistently (over a period of 7 days) exporting electricity to the National Grid and Commissioned shall have the appropriate meaning;

“Equipment”

means in relation to any New Project, the electricity generating facilities together with all and any gas extraction equipment, blower fans, wells, pipes and the transformers to connect the power generation equipment to the electricity distribution system installed or constructed on the relevant Site (other than, for the avoidance of doubt, the Existing Plant);

"Export Capacity"

means the amount of electricity expressed in megawatts the Equipment is capable of exporting to the National Grid on a consistent basis assuming that the Equipment is operating to its maximum capacity;

"Fees"

means the fees payable by Ridgewood to the Project Manager pursuant to Clause 7;

"Group Company"

means the Project Manager and any holding company of the Project Manager and its/their respective subsidiaries from time to time;

"New Project"

means, in relation to any Project Company, the project for the procurement, design, construction, installation, development and Commissioning on a “turnkey” basis of the Equipment and all associated equipment to be supplied by the Project Manager to Ridgewood at a given Site pursuant to the ROC Project DSA;

“NFFO Power Purchase Agreements”

means contracts with The Non Fossil Purchasing Agency Limited and those in connection with Scottish renewable orders including any replacement contract with the Non Fossil Purchasing Agency Limited concluded in connection with the implementation of the new British Electricity Trading and Transmission Arrangements in Scotland presently targeted for on or around April 2005;

"Project Budget"

means in relation to any New Project, the budget of necessary expenditure required to bring about the Commissioning of the same, as prepared by the Project Manager and agreed with Ridgewood’s Representative;

“Project Companies”

means those companies listed in Schedule 1 and any company that may accede to the ROC Project DSA in accordance with the provisions set out therein and each one a “Project Company”;

“Project Manager’s Representative”

means Dominic Greenough or such other authorised representative of the Project Manager as shall be nominated by it in substitution for such person;

“Ridgewood’s Representative”

means Chris Naunton or such other director, employee or authorised representative of Ridgewood as shall be nominated by Ridgewood in substitution for such person;

"Project Timetable"

means, in relation to any New Project, the timetable of principal events in bringing about Commissioning of the same as is set out in Schedule 2 or any changes thereto prepared by the Project Manager and agreed with Ridgewood’s Representative;

"Services"

means the services to be provided by the Project Manager under this Agreement as described in Schedule 3;

"Site"

means, in relation to any New Project, the landfill site on which the Equipment concerned is to be constructed and/or installed.

1.2	Words and expressions defined in the Companies Act 1985 (as amended) (the "Companies Act") shall (unless the context clearly does not so permit) bear the same meanings where used in this Agreement.

1.3	The ejusdem generis rule of construction shall not apply to this Agreement and accordingly general words shall not be given a restrictive meaning by reason of their being preceded or followed by words indicating a particular class or examples of acts matters or things.

1.4	Words importing the singular shall include the plural and vice versa and words importing any gender shall include all other genders and references to persons shall include corporations and unincorporated associations.

1.5

References in this Agreement to statutory provisions shall be construed as references to those provisions as respectively amended consolidated extended or re-enacted from time to time and shall include the corresponding provisions of any earlier legislation (whether repealed or not) and any orders regulations instruments or other subordinate legislation made from time to time under the statute concerned.

1.6	References to this Agreement shall include the Schedules hereto which shall form part hereof and shall have the same force and effect as if expressly set out in the body of this Agreement.

1.7	The Clause headings in this Agreement are for convenience only and shall not affect the interpretation hereof.

2.	APPOINTMENT

Ridgewood hereby appoints the Project Manager and the Project Manager agrees to accept such appointment and to perform the Services on behalf of Ridgewood in respect of each New Project upon the terms and conditions set out in this Agreement so as to enable the procurement, design, construction, installation, development and Commissioning of Equipment at the Site, or such works on behalf of Ridgewood as may be agreed in writing between Ridgewood and the Project Manager.

3.	SERVICES

3.1

Subject to Clause 3.2, the Project Manager will provide the Services in relation to each New Project causing the minimum amount of disruption to the operation of the Existing Plant as possible. In relation to any New Project, the list of services set out in Schedule 3 may be amended at any time and from time to time by written agreement by Ridgewood and the Project Manager in respect of all or any one New Project.

3.2

Where at the date hereof, some Equipment exists at a Site then, upon payment of the fee payable in accordance with Clause 7.1, the Project Manager will transfer or cause to be transferred to Ridgewood legal title to such Equipment and Ridgewood shall make all such Equipment available to the Project Manager to complete Commissioning in accordance with the terms hereof.

4.	PROJECT MANAGER’S AUTHORITY

4.1	The Project Manager shall have the authority to act on behalf of Ridgewood as its agent solely to the extent reasonably necessary for the Project Manager to carry out its duties and to provide the Services hereunder and for no other purpose.

4.2

Ridgewood shall indemnify and keep indemnified the Project Manager for any loss, damage, costs and expenses suffered or incurred by it as a result of the Project Manager acting or purporting to act on behalf of Ridgewood where the Project Manager has been authorised in so acting, either pursuant to Clause 4.1 or otherwise.

4.3	The Project Manager shall be entitled to hold itself out as agent of Ridgewood for the purposes of properly carrying out the Services in relation to each New Project and Ridgewood shall confirm the appointment of the Project Manager.

4.4

At no time shall the Project Manager claim ownership of or any right, title or interest to the Equipment and the Project Manager shall do all such acts and enter into such documents as may be reasonably necessary and always at the expense of Ridgewood to vest ownership of the Equipment in Ridgewood.

5.	LEVEL OF CARE AND APPLICATION OF RESOURCES

5.1

In carrying out the Services the Project Manager shall exercise such reasonable skill, care and diligence to be expected of a competent consultant and project manager experienced in undertaking services similar to the Services in relation to projects of a similar size, scope and complexity to the New Projects.

5.2	The Project Manager shall make all necessary visits to each Site for the proper performance of the Services, to inspect the progress and quality of the development of the New Project thereat and generally to ensure the proper execution and Commissioning of that New Project.

5.3	The Project Manager shall devote sufficient resources to perform the Services in accordance with the terms hereof.

6.	UNDERTAKINGS OF RIDGEWOOD

Ridgewood undertakes to provide the Project Manager with all information as may be relevant, required, requested or of assistance to the Project Manager in the performance of the Services.

FEES

7.1

Subject to the provisions of Clause 3.2 and 12.6, the fees payable to the Project Manager for the provision of the Services in relation to the New Projects hereunder (exclusive of VAT) shall be a fixed fee of eight hundred and fifty thousand pounds (£850,000) per megawatt of rated Export Capacity Commissioned at each Site pro rated to the extent that such installed Export Capacity is expressed in other than whole megawatt amounts (“the Fee”).

7.2

The Fee payable in accordance with the provisions of Clause 7.1 shall be paid by Ridgewood to the Project Manager or, as the Project Manager may in writing direct, in accordance with the terms of the Project Timetable and will be paid on demand at such time as payments are made or commitments are entered into where such payments or commitments are of a material amount and are entered into and/or made with respect to a New Project. Materiality is to be determined by the Project Manager acting in good faith.

7.3	If the Fee or any part thereof is not paid on the due date, Ridgewood shall be liable to pay interest on such sum from the due date of payment at the annual rate of 2 percent above the base lending rate from time to time of Barclays Bank plc, accruing on a daily basis until payment is made in full.

7.4

The Project Manager shall pay to Ridgewood with respect to each New Project, an amount in lieu of interest equal to 0.8333 per cent per month (or part thereof) on all amounts advanced to the Project Manager by Ridgewood as progress payments with respect to such New Project pursuant to Clause 7.2, such interest to accrue up to the earlier of (i) the date of Commissioning (ii) the date, if any, upon which the Equipment is resited under Clause 10.2 and (iii) the Relevant Project Company Long Stop Date (as defined in the ROC Project DSA).

8.	DURATION OF APPOINTMENT

8.1

Subject to Clause 8.2, this Agreement shall remain in effect in relation to each New Project until the New Project concerned has reached Commissioning or until it is agreed between the parties that there is no reasonable prospect of that New Project Commissioning and the Project Manager shall not be entitled to terminate this Agreement except as otherwise provided herein.

8.2

Ridgewood may terminate this Agreement by giving 21 days' notice in writing if the Project Manager shall commit a material breach of its obligations hereunder and shall fail to remedy such breach within a reasonable time of notice of such breach being given to it. The right to terminate this Agreement granted to Ridgewood under this Clause 8.2 shall be without prejudice and in addition to any other remedies available to Ridgewood in respect of such breach but subject always to the provisions of Clause 14.4.

8.3

The Project Manager may terminate this Agreement by giving 21 days’ notice in writing if Ridgewood shall commit a material breach of its obligations hereunder and shall fail to remedy such breach within a reasonable time of notice of such breach being given to it. The right to terminate this Agreement granted to the Project Manager under this Clause 8.3 shall be without prejudice and in addition to any other remedies available to the Project Manager in respect of such breach.

8.4	Upon termination of this Agreement in relation to any New Project the Project Manager shall return any part of the Fee received by it that has not been expended on the provision of Services or committed to be expended in accordance with the Project Timetable.

9.	THE PROJECT MANAGER’S PERSONNEL

9.1	The Project Manager shall use reasonable endeavours to procure that the Project Manager’s Representative is fully acquainted with all matters relating to the development of the New Projects and shall devote proper attention to the Services.

9.2	The Project Manager shall be under no obligation to provide the Services through any particular person and the Project Manager shall be entitled to change the personnel engaged in the performance of the Services without first notifying Ridgewood.

10.	PROJECT TIMETABLES AND PROJECT BUDGETS

10.1	The Project Manager shall use reasonable endeavours to ensure that the development of each New Project is carried out in accordance with the Project Timetable for that New Project, subject to the terms hereof.

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