Unassociated Document


    UNSECURED PROMISSORY
NOTE

    


    
      
        	
                $2,000,000

              	
                Costa
      Mesa, California

              
	
                Two
      Million Dollars

              	
                July
      3, 2008

              


      

    

    


    FOR VALUE
RECEIVED, the undersigned, Energy and Power Solutions, Inc., a California
corporation ("Maker"), promises to
pay to the order of NEC DG II, LLC, a Delaware limited liability company (“Holder”), the
principal sum of Two Million Dollars ($2,000,000) in five installments. Interest
on the unpaid principal balance shall be paid at a rate of three percent (3%)
per annum (on the basis of a 365 day year and the actual number of days
elapsed), compounded monthly. On each of the first five anniversaries of the
date of this unsecured promissory note (this “Note”), Maker shall
pay Holder the principal amount of Four Hundred Thousand Dollars ($400,000) plus
all accrued interest. The entire unpaid principal balance and any interest
accrued thereon shall become due and payable on the fifth anniversary of the
date of this Note.

    


    All
payments under this Note shall be made to Holder or its order, in lawful money
of the United States of America and delivered to Holder by wire transfer to the
following account of Holder:

    


    Mellon
Bank

    One
Mellon Bank Plaza

    Pittsburgh,
PA

    ABA
Number: 043-000-261

    SWIFT
CODE: MELNUS3P


    For
Credit To: Merrill Lynch Account #___________

    For
Further Credit to: New Energy Capital LLC

    Account
Number: ___________

    


    or at
such other place as Holder or any holder hereof shall designate in writing for
such purpose from time to time.

    


    If a
payment under this Note otherwise would become due and payable on a Saturday,
Sunday or legal holiday, the due date thereof shall be extended to the next day
which is not a Saturday, Sunday or legal holiday, and interest shall be payable
thereon during such extension.

    


    The
indebtedness evidence by this Note shall be unsecured and, as such, there shall
be no collateral for this Note and Holder shall not impose any liens or security
interests on the property of Maker.

    


    The
following events shall be “Events of Default”
hereunder:

    


    
      	
              (a)

            	
              Maker
      shall fail to pay, as and when payment is due, any sum payable hereunder
      and shall fail to remedy such failure for a period of thirty (30) days
      after receiving notice of such failure from
  Holder;

            


    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      	
              (b)

            	
              Maker
      shall admit in writing its inability to pay its debts hereunder as they
      mature or shall make an assignment of this Note for benefit of its
      creditors;

            


    

    


    
      	
              (c)

            	
              A
      proceeding in bankruptcy or for reorganization of the Maker under any
      state or federal law for the relief of debtors shall be commenced against
      or by Maker; and

            


    

    


    
      	
              (d)

            	
              An
      event of default shall have been declared in writing and be continuing
      under any of Maker’s material indebtedness for borrowed money due to a
      failure by Maker to make a required payment under such indebtedness in an
      amount greater than $750,000.

            


    

    


    On and
after the date of any such Event of Default, this Note shall bear interest at
the Prime Rate of interest (as published from time to time in the Wall Street
Journal) plus two percent until such Event of Default is cured. Holder may
declare all amounts payable under this Note due and payable immediately without
further action of any kind and without notice, demand or presentment thirty days
(30) days after the occurrence of an Event of Default if such Event of Default
has not been remedied.

    


    If any
payment of principal amount or interest due hereunder is not made within fifteen
(15) days of the date when due, then Maker shall pay Holder a late penalty equal
to five percent (5%) of such late payment; provided, however, that this
paragraph shall not apply to any amounts due and owing in connection with or
following an Event of Default.

    


    Maker
shall promptly pay Holder upon request the amount of any reasonable costs and
attorneys’ fees actually incurred by Holder in connection with the collection of
any principal amount or interest due and payable on this Note during the period
of time that an Event of Default has occurred and is continuing.

    


    Upon
written notice to Holder, Maker shall be entitled to prepay this Note, in whole
or in part, at any time, without penalty, except that interest shall be paid to
the date of payment on the principal amount prepaid. Any partial principal
prepayment under this Note shall be applied against the future installments of
principal due under this Note in a pro rata manner. Interest on
any future installment payment shall be computed on the principal balance due
after deducting the principal portion of such prepayment.

    


    Failure
to pursue any rights and/or remedies under this Note by Holder shall not
constitute a waiver of any provision of this Note by Holder.

    


    To the
extent applicable, the provisions of Article IX of the Purchase Agreement, dated
July 3, 2008, by and among Maker, Holder and NEC-EPS Holding, LLC, a Delaware
limited liability company, shall govern this Note.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    

    


    IN
WITNESS WHEREOF, Maker has executed and Holder has acknowledged and agreed
to the
terms of this Note as of the date first hereinabove written.

    


    
      
        
          
            	 
      	
                    “MAKER”

                  
	 
      	 
      
	 
      	
                    ENERGY
      AND POWER SOLUTIONS, INC.

                  
	 
      	 
      
	 
      	
                    By:

                  	
                    /s/
      JAY B ZOELLNER

                  
	 
      	 
      	
                    Name:   JAY
      B ZOELLNER

                  
	 
      	 
      	
                    Title:     PRESIDENT

                  
	 
      	 
      
	
                    ACKNOWLEDGED
      AND AGREED TO:

                  	 
      
	 
      	 
      
	
                    “HOLDER”

                  	 
      
	 
      	 
      
	
                    NEC
      DG II, LLC

                  	 
      
	 
      	 
      
	
                    By:

                  	
                    

                  	 
      
	 
      	
                    Name:

                  	 
      
	 
      	
                    Title: