<PAGE>

                                                                   EXHIBIT 10.26


                                                                EXECUTION COPY


                         MACQUARIE DISTRICT ENERGY, INC.



                                U.S. $120,000,000



                       6.82% Senior Secured Notes due 2023
                       6.40% Senior Secured Notes due 2023



                             NOTE PURCHASE AGREEMENT



                         Dated as of September 27, 2004






<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                              Page
                                                                              ----

<S>                                                                           <C>
SECTION 1.  INTRODUCTORY MATTERS; ISSUANCE OF NOTES.........................    1
      1.1     Introductory Matters..........................................    1
      1.2.    Authorization.................................................    1
      1.3.    Issuance of Notes.............................................    1
      1.4.    The Closing...................................................    2
      1.5.    Waiver of Closing Conditions..................................    2

SECTION 2.  THE NOTES; INTEREST; FEES.......................................    2
      2.1.    Notes.........................................................    2
      2.2.    Interest......................................................    2
      2.3.    Fee...........................................................    3

SECTION 3.  PREPAYMENTS.....................................................    3
      3.1.    Scheduled Prepayments.........................................    3
      3.2.    Optional Prepayments..........................................    3
      3.3.    Mandatory Prepayments.........................................    4
      3.4.    Allocation of Prepayments.....................................    5
      3.5.    Surrender, Etc................................................    5
      3.6.    Purchase of Notes.............................................    5

SECTION 4.  CONDITIONS PRECEDENT............................................    6
      4.1.    Conditions to the Closing.....................................    6
      4.2     Conditions to Initial Disbursement............................    8
      4.3     Conditions to Second Disbursement.............................   13
      4.4     Conditions to all Disbursements...............................   17

SECTION 5.  REPRESENTATIONS AND WARRANTIES..................................   18
      5.1.    Organization..................................................   18
      5.2.    Authorization; Enforceability; Execution and Delivery.........   19
      5.3.    No Breach of Laws and Contracts, Etc.; Nature of
              Business......................................................   19
      5.4.    Rights; Governmental Approvals................................   20
      5.5.    Proceedings...................................................   21
      5.6.    Financial Condition...........................................   21
      5.7.    Information; Disclosure.......................................   22
      5.8.    Taxes.........................................................   23
      5.9.    Margin Stock..................................................   23
      5.10.   ERISA.........................................................   23
      5.11.   Status Under Certain Statutes.................................   24
      5.12.   Collateral....................................................   26
      5.13.   Environmental Matters.........................................   26
      5.14.   Ownership, Etc................................................   28
      5.15.   Place of Business.............................................   28
      5.16.   No Default....................................................   28
      5.17.   Project Documents.............................................   29
      5.18.   Patents; Trademarks; Licenses.................................   29
      5.19.   Private Offering..............................................   29
      5.20.   Base Case Forecast............................................   30
      5.21.   Ranking.......................................................   30
</TABLE>


                                      -ii-
<PAGE>
<TABLE>
<S>                                                                           <C>
      5.22.   Representations of Subsidiary Guarantors......................   30

SECTION 6.  REPRESENTATIONS OF THE PURCHASER................................   31
      6.1.  Purchase for Investment.........................................   31
      6.2.  Source of Funds.................................................   31
      6.3.  Purchaser Not a Utility.........................................   32

SECTION 7.  DELIVERY OF FINANCIAL STATEMENTS, OPERATING BUDGET AND OTHER
            INFORMATION.....................................................   33

SECTION 8.  INSPECTION OF PROPERTIES AND BOOKS..............................   36

SECTION 9.  COVENANTS.......................................................   36
      9.1.    Books and Records; Fiscal Year; Corporate Existence;
              Payment of Taxes; Compliance with Laws........................   36
      9.2.    Project Operation; Maintenance of Properties..................   37
      9.3.    Project Documents, Etc........................................   37
      9.4.    Merger and Consolidation; Disposition of Assets...............   39
      9.5.    Indebtedness..................................................   41
      9.6.    Liens.........................................................   41
      9.7.    Investments...................................................   41
      9.8.    Nature of Business; Maintenance of Office in New York.........   41
      9.9.    Transactions with Affiliates..................................   41
      9.10.   Environmental Compliance......................................   42
      9.11.   Restricted Payments...........................................   43
      9.12.   Further Assurances............................................   44
      9.13.   Insurance.....................................................   45
      9.14.   Collection of Payments........................................   49
      9.15.   Use of Proceeds...............................................   49
      9.16.   Capital Expenditures..........................................   49
      9.17.   Debt Service Coverage Ratio...................................   49
      9.18.   Payment of Obligations........................................   49
      9.20.   Investment Company Act; PUHCA; State Utility Regulation.......   49
      9.20.   Operating Budget..............................................   51
      9.21.   Ratings.......................................................   51

SECTION 10. EVENTS OF DEFAULT; REMEDIES.....................................   51
      10.1.   Events of Default.............................................   51
      10.2.   Remedies......................................................   54
      10.3.   Suits for Enforcement.........................................   55
      10.4.   Remedies Cumulative...........................................   56
      10.5.   Remedies Not Waived...........................................   56

SECTION 11. REGISTRATION, TRANSFER AND EXCHANGE OF NOTES....................   56
      11.1.   Registration of Notes.........................................   56
      11.2.   Transfer and Exchange of Notes................................   56
      11.3.   Replacement of Notes..........................................   57

SECTION 12. AMENDMENT AND WAIVER............................................   57

SECTION 13. HOME OFFICE PAYMENT.............................................   59
</TABLE>


                                      -iii-
<PAGE>
<TABLE>
<S>                                                                           <C>
SECTION 14. LIABILITIES OF THE PURCHASER....................................   59

SECTION 15. TAXES...........................................................   59

SECTION 16. MISCELLANEOUS...................................................   60
      16.1.   Expenses......................................................   60
      16.2.   Reliance on Representations...................................   61
      16.3.   Successors and Assigns........................................   61
      16.4.   Communications................................................   61
      16.5.   Indemnification...............................................   61
      16.6.   Limitation of Liability.......................................   62
      16.7.   Jurisdiction and Process......................................   62
      16.8.   Confidentiality...............................................   63
      16.9.   Governing Law.................................................   64
      16.10.  Headings......................................................   64
      16.11.  Counterparts..................................................   64
      16.12.  Severability..................................................   64
</TABLE>


ANNEX I          -   Definitions

SCHEDULE I       -   Information Relating to Purchasers
SCHEDULE II      -   Amortization

SCHEDULE 4.1(e)  -   Section 4.1 Filings
SCHEDULE 4.2(e)  -   Section 4.2 Filings
SCHEDULE 4.3(e)  -   Section 4.3 Filings
SCHEDULE 4.2     -   Third Party Consents and Governmental Approvals
SCHEDULE 5.4     -   Necessary Governmental Approvals
SCHEDULE 5.5     -   Litigation
SCHEDULE 5.13    -   Environmental Disclosure
SCHEDULE 5.14    -   Ownership Interests
SCHEDULE 5.15    -   Place of Business
SCHEDULE 5.16    -   Default under Material Project Document
SCHEDULE 9.6     -   Liens
SCHEDULE 9.13    -   Insurance

EXHIBIT A        -   Form of Senior Secured Note due 2023
EXHIBIT B        -   Form of Agency, Disbursement and Control Agreement
EXHIBIT C        -   Form of Issuer Security and Pledge Agreement
EXHIBIT D1       -   Form of Subsidiary Guaranty, Pledge and Security Agreement
EXHIBIT D2       -   Form of Owner Subsidiary Guaranty and Security Agreement
EXHIBIT D3       -   Form of MDEH Guaranty and Pledge Agreement
EXHIBIT E        -   Form of Subsidiary Mortgage
EXHIBIT F        -   Form of Consent and Agreement
EXHIBIT G        -   Form of Assignment and Assumption Certificate
EXHIBIT H        -   Terms of Subordination
EXHIBIT I        -   Form of Sponsor Covenant
EXHIBIT J        -   Form of Aladdin Indemnity


                                      -iv-
<PAGE>
                         MACQUARIE DISTRICT ENERGY, INC.
                                600 FIFTH AVENUE
                                   21ST FLOOR
                               NEW YORK, NY 10020


                                                            New York, New York
                                                      as of September 27, 2004

TO THE PURCHASERS WHOSE NAMES
APPEAR ON THE SIGNATURE PAGE HERETO:

Ladies and Gentlemen:

            Macquarie District Energy, Inc., a corporation duly formed and
validly existing under the laws of the State of Delaware (the "Issuer"), hereby
agrees with each of you (each, a "Purchaser" and, collectively, the
"Purchasers"), and each Purchaser agrees with the Issuer, as follows:

      SECTION 1.    INTRODUCTORY MATTERS; ISSUANCE OF NOTES.

      Section 1.1.  Introductory Matters.

            (a) Except as otherwise defined herein, capitalized terms used
herein shall have the respective meanings assigned to them in Annex I to this
Agreement.

            (b) The Issuer proposes to issue the Notes described in this
Agreement, the proceeds of which will be used as follows: (i) $100,000,000 to
fund or refinance the acquisition of the Chicago District Energy Project and
$20,000,000 to fund or refinance the acquisition of the Las Vegas District
Energy Project; (ii) to fund certain development and operational activities of
the Issuer and its Subsidiaries; (iii) to pay the transaction costs and expenses
incurred in connection with the transactions contemplated hereby; (iv) to pay
the Fee (as defined below); and (v) to provide for the initial funding of the
Debt Service Reserve Account.

                    Accordingly, the parties to this agreement agree as follows:

      Section 1.2. Authorization. The Issuer has duly authorized the issuance of
$120,000,000 of its senior secured notes of which $100,000,000 aggregate
principal amount shall be its 6.82% Senior Secured Notes due 2023 (the "Chicago
Notes") and $20,000,000 aggregate principal amount shall be its 6.40% Senior
Secured Notes due 2023 (the "Las Vegas Notes" and together with the Chicago
Notes, the "Notes") substantially in the form of Exhibit A hereto, with such
changes therefrom, if any, as may be approved by each Purchaser and the Issuer.
As used herein, the term "Notes" shall include all notes originally issued
pursuant to this Agreement and all notes delivered in substitution or exchange
for any such originally issued notes pursuant to this Agreement.

      Section 1.3. Issuance of Notes. Subject to the terms and conditions of
this Agreement, the Issuer shall issue and sell to each Purchaser, and each
Purchaser agrees to purchase from the Issuer, according to the Disbursement
Schedule set forth below, Notes in the


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -2-


aggregate principal amount set forth opposite such Purchaser's name in Schedule
I hereto at a purchase price equal to 100% of such principal amount. The
Purchasers' obligations under this Agreement are several and not joint
obligations and no Purchaser shall have any liability to any Person for the
performance or non-performance of any obligation by any other Purchaser.

            The Notes shall be purchased by the Purchasers in two installments
according to the schedule set forth below.

<TABLE>
<CAPTION>
            EXPECTED FUNDING DATE                     AMOUNT
            ---------------------                     ------

<S>                                                   <C>
            No later than September 30, 2004          US$100,000,000
            No later than September 30, 2004          US$20,000,000
</TABLE>

      Section 1.4. The Closing. The closing of the purchase of the Chicago Notes
and the initial funding (the "Closing") shall take place at the offices of
Milbank, Tweed, Hadley & McCloy LLP, located at One Chase Manhattan Plaza, New
York, New York, at 10:00 a.m. (New York time), on September 29, 2004, or on such
other Business Day as may be agreed upon by the Issuer and each Purchaser (the
"Closing Date"). On the Closing Date, the Issuer will deliver to each Purchaser
one or more Notes being purchased by such Purchaser, registered in the name of
such Purchaser or in the name of such Purchaser's nominee, in any denominations
(in multiples of $100,000), and in the aggregate principal amount to be
purchased by such Purchaser pursuant to this Agreement, all as specified in
Schedule I hereto or as such Purchaser may specify by timely notice to the
Issuer (or, in the absence of such notice, and if not specified in such Schedule
I, one Note registered in such Purchaser's name), duly executed and dated the
Closing Date, against payment of the purchase price therefor.

      Section 1.5. Waiver of Closing Conditions. If on the Closing Date (i) the
Issuer fails to deliver to each Purchaser the Notes to be issued to such
Purchaser on such date or (ii) the conditions specified in Section 4.1 have not
been fully satisfied, such Purchaser may waive compliance with any such
condition to such extent as such Purchaser may in its sole discretion determine,
but such Purchaser shall have no obligation to do so. Nothing in this Section
1.5 shall operate to relieve the Issuer of any of its obligations under this
Agreement or under the other Financing Documents or to waive any of the rights
of such Purchaser against the Issuer.

      SECTION 2.    THE NOTES; INTEREST; FEES.

      Section 2.1. Notes. The purchase of the Notes by the Purchasers shall be
evidenced by the Notes delivered to the Purchasers pursuant to Section 1.3 or by
the one or more Notes delivered in connection with a transfer pursuant
to Section 11.

      Section 2.2.  Interest.

            (a) Until the Final Maturity Date, each Chicago Note shall bear
interest (computed on the basis of a 360-day year consisting of twelve 30-day
months) on the unpaid


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -3-


principal balance thereof at the rate of 6.82% per annum from the date of such
Note, payable quarterly in arrears on each Payment Date and on the Final
Maturity Date.

            (b) Until the Final Maturity Date, each Las Vegas Note shall bear
interest (computed on the basis of a 360-day year consisting of twelve 30-day
months) on the unpaid principal balance thereof at the rate of 6.40% per annum
from the date of such Note, payable quarterly in arrears on each Payment Date
and on the Final Maturity Date.

            (c) Notwithstanding the foregoing, any payment of principal,
interest or Make-Whole Amount with respect to any Note that is overdue shall
bear interest from and including the due date of such overdue payment to but
excluding the date such amount is paid in full (to the extent permitted by
applicable law) at a rate per annum equal to the Default Rate. Interest accrued
pursuant to this Section 2.2(b) shall be payable on demand.

      Section 2.3. Fee. The Issuer shall pay to ABN AMRO Incorporated on the
Closing Date a placement fee (the "Fee") as provided in a separate letter by the
Issuer to ABN AMRO Incorporated.

      SECTION 3.    PREPAYMENTS.

      Section 3.1. Scheduled Prepayments. On each Payment Date to and including
the Payment Date immediately prior to the Final Maturity Date, the Issuer shall
pay the principal amount (or such lesser principal amount as shall then be
outstanding) of the Notes set forth in Schedule II hereto for such date at par
and without payment of the Make-Whole Amount or any other premium.

      Section 3.2.  Optional Prepayments.

            (a) The Issuer may, at its option, upon notice as provided in
Section 3.2(b), prepay all or any part of the Notes in an amount not less than
5% of the aggregate principal amount of the Notes then outstanding (in the case
of a partial prepayment) at 100% of the principal amount so prepaid, together
with the applicable Make-Whole Amount, if any, determined for the prepayment
date with respect to such principal amount. Any such prepayment shall be made
ratably to the outstanding Chicago Notes and the outstanding Las Vegas Notes.

            (b) Written notice of each optional prepayment under this Section
3.2 shall be given by the Issuer or, at the Issuer's request, the Collateral
Agent, to the Noteholders not more than 60 nor less than 30 days prior to the
proposed date of such prepayment. Each such notice shall specify (i) the date of
such prepayment, (ii) the aggregate principal amount of the Notes to be prepaid
on such date, (iii) the principal amount of each Note held by the Noteholders to
be prepaid, (iv) the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, and (v) in the case of any prepayment in
part, the revised amortization schedule, as recalculated in accordance with
Section 3.4. Such notice shall be accompanied by a certificate of a Senior
Financial Officer as to the estimated Make-Whole Amount, if any, due in
connection with such prepayment (calculated as if the date of such notice were
the date of the prepayment) and


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -4-


setting forth the details of such computation, and two Business Days prior to
such prepayment, the Issuer shall deliver to the Noteholders a certificate of a
Senior Financial Officer specifying the calculation of such Make-Whole Amount as
of the specified prepayment date.

      Section 3.3.  Mandatory Prepayments.

            (a) Event of Loss. If the Collateral Agent has received any Loss
Proceeds with respect to an Event of Loss and either (i) the Issuer has not
Restored the related Affected Property in accordance with Section 9.13, (ii) the
Collateral Agent is required by Section 9.13(b)(ii) to apply such Loss Proceeds
to the prepayment of the Senior Secured Indebtedness or (iii) the Collateral
Agent has otherwise been instructed, in accordance with Section 9.13(b)(iv) or
(v), to apply such Loss Proceeds to the prepayment of the Senior Secured
Indebtedness, then the Issuer shall apply an aggregate amount equal to 100% of
the Net Available Amount of the Loss Proceeds received with respect to such
Event of Loss (less the amount theretofore expended on the Restoration of the
Affected Property, as permitted by and as expended in accordance with
Section 9.13) ratably to the prepayment of the Senior Secured Indebtedness;
provided that if, after an Event of Loss, the Issuer has Restored the applicable
District Energy Project to substantially the same condition it was in prior to
the occurrence of such Event of Loss and any excess Net Available Amount remains
in the Loss Proceeds Account after such Restoration (and after payment of all
obligations of the Issuer incurred with respect to such Restoration), such
excess Net Available Amount need not be applied to the prepayment of the Senior
Secured Indebtedness but shall be deposited in the Issuer Revenue Account for
application pursuant to the Agency, Disbursement and Control Agreement.

            (b) Dispositions of the District Energy Projects. If (i) the Issuer
transfers, conveys, sells or otherwise disposes of its equity interests in any
of its Subsidiaries (other than as permitted by Section 9.4(d) or Section
9.9(b)) or (ii) any Subsidiary of the Issuer transfers, conveys, sells or
otherwise disposes of its equity interests in any other Subsidiary (other than
as permitted by Section 9.4(d) or Section 9.9(b)) or (iii) any Subsidiary of the
Issuer (other than Northwind Aladdin) transfers, conveys, sells, leases or
otherwise disposes of any of its Property (other than as permitted by Section
9.4), then simultaneously with such transfer, conveyance, sale, lease or other
disposition, the Issuer shall apply an aggregate amount equal to the proceeds of
such disposition (net of closing and other costs in connection therewith and net
of any amounts due to third parties under the Stock Purchase Agreement) ratably
to the prepayment of the Senior Secured Indebtedness.

            (c) Other Events. If: (i) any Governmental Approval shall be
Impaired or shall cease to be in full force and effect and any such Impairment
or failure of any such Governmental Approval to remain in full force and effect
shall continue unremedied for a period of at least 30 days and such event could
reasonably be expected to have a Material Adverse Effect; or (ii) any material
provision of any Material Project Document (other than the Chicago Use
Agreement) shall at any time for any reason cease to be valid and binding or in
full force and effect (except upon any termination of such Material Project
Document in accordance with its terms) or shall be Impaired; or (iii) any party
to a Material Project Document (other than the Chicago Use Agreement) shall be
in default, or shall have breached its obligations, under any


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -5-


Material Project Document (other than the Chicago Use Agreement) and such
default or breach could reasonably be expected to have a Material Adverse
Effect; or (iv) a Bankruptcy occurs with respect to ETT Nevada; or (v) at any
time after the Second Disbursement Date, an "event of default" (as defined in
the note purchase agreement for the Northwind Aladdin Notes) occurs under the
Northwind Aladdin Notes, then the Agent shall apply the amounts on deposit in
the Accounts ratably to the prepayment of the Senior Secured Indebtedness until
the minimum and average Debt Service Coverage Ratio for the Rolling Fiscal
Period ending on the last day of the month preceding the next Payment Date are
at least 1.30 and 1.50, respectively.

            (d) Price. (i) Notes prepaid pursuant to Section 3.3(a) shall be
      prepaid at a price equal to the principal amount of the Notes to be
      prepaid, together with interest accrued (including interest accruing at
      the Default Rate, if any) thereon to the date of prepayment. No Make-Whole
      Amount or other premium shall be payable in connection with any prepayment
      under Section 3.3(a).

            (ii) Notes prepaid pursuant to Section 3.3(b) or Section 3.3(c)
      shall be prepaid at a price equal to 100% of the principal amount of the
      Notes to be prepaid, together with interest accrued (including interest
      accruing at the Default Rate, if any) thereon to the date of prepayment
      and, to the extent permitted by law, an amount equal to the Additional
      Amount (as hereinafter defined).

      Section 3.4. Allocation of Prepayments. All prepayments shall be applied
first, to the payment of accrued and unpaid interest, second, to the payment of
principal, and third, to the payment of any Additional Amount. In the event of
any prepayment of less than all of the outstanding principal amount of the Notes
other than a scheduled prepayment under Section 3.1, the principal amount to be
prepaid shall be allocated among all of the outstanding Notes in the inverse
order of their maturities, in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment, and ratably among the outstanding Chicago Notes and the outstanding
Las Vegas Notes.

      Section 3.5. Surrender, Etc. In the case of each prepayment of Notes
pursuant to this Section 3, the principal amount of each Note to be prepaid
shall mature and become due and payable on the date fixed for such prepayment,
together with interest on such principal amount accrued to such date and if
expressly provided in this Agreement, the applicable Make-Whole Amount. Any Note
paid or prepaid in full shall be surrendered to the Issuer or to the Collateral
Agent and canceled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

      Section 3.6. Purchase of Notes. The Issuer shall not and shall not permit
any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Issuer shall promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -6-


provision of this Agreement, and no Notes may be issued in substitution or
exchange for any such Notes.

      SECTION 4.    CONDITIONS PRECEDENT.

      Section 4.1. Conditions to the Closing. Each Purchaser's obligation for
the initial funding in accordance with Section 1.3 shall be subject to the
satisfaction or waiver of the following conditions; provided that if the Closing
Date is the Initial Disbursement Date, the conditions set forth in Section
4.1(c), (d), and (e) shall be satisfied by the satisfaction or waiver of the
conditions set forth in Section 4.2(b), (c) and (e):

            (a)   Documents.

                  (i) Each Purchaser shall have received each of the following
      documents (each of which shall be satisfactory to such Purchaser):

                  (A)  this Agreement, duly executed and delivered by the
            Issuer and the Purchasers;

                  (B)  the Agency, Disbursement and Control Agreement,
            duly executed and delivered by the intended parties thereto;

                  (C)  the Issuer Security Agreement, duly executed and
            delivered by the Issuer and the Collateral Agent;

                  (D)  the MDEH Pledge Agreement, duly executed and
            delivered by MDEH, the Issuer and the Collateral Agent; and

                  (E) each Purchaser's Chicago Note, duly executed and delivered
      by the Issuer.

            (b)     Certificates.

                  (i) Officer's Certificate. The Issuer shall have delivered to
      each Purchaser an Officer's Certificate, dated the Closing Date, pursuant
      to Section 4.4(d).

                  (ii) Secretary's Certificates. The Collateral Agent shall have
      received from each of the Issuer and MDEH a certificate (which shall be
      satisfactory to each Purchaser) as to the (w) veracity and completeness of
      the organizational documents of such party attached thereto, (x) the
      resolutions attached thereto and other corporate or limited liability
      company proceedings relating to the authorization, execution and delivery
      of the Financing Documents to which such party is a party, (y) such
      party's valid existence, good standing and qualification to engage in
      business in each jurisdiction where its ownership, lease or operation of
      properties or the conduct of its business


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -7-


      requires such qualification, except to the extent that failure to do so
      could not reasonably be expected to have a Material Adverse Effect and (z)
      the identity, authority and capacity of each Person thereof authorized to
      act as an Authorized Officer in connection with the Financing Documents to
      which such party is a party.

            (c) Opinion of Special Counsel to the Purchasers. Each Purchaser
shall have received an opinion, dated the Closing Date and addressed to such
Purchaser, from Milbank, Tweed, Hadley & McCloy LLP, the Purchasers' special New
York counsel in connection with the transactions contemplated in this Agreement,
in form and substance satisfactory to such Purchaser.

            (d) Opinions of Counsel for the Issuer and the Other Project
Parties. Each Purchaser shall have received an opinion or opinions, dated the
Closing Date and addressed to such Purchaser, from (i) counsel to the Issuer and
(ii) counsel to MDEH, in each case in form and substance satisfactory to such
Purchaser.

            (e) Financing Documents. Each of this Agreement, the Notes, the
Agency, Disbursement and Control Agreement, the Issuer Security Agreement, the
MDEH Pledge Agreement and any financing statement filed in connection with any
of the foregoing shall be in full force and effect and the Collateral Agent
shall have received copies of each such Financing Document. In addition, the
Collateral Agent shall have received evidence satisfactory to each Purchaser
that each of the Issuer and MDEH, as applicable, shall have taken all actions
(including, without limitation, the filing of the UCC-1 financing statements in
the appropriate jurisdictions and the making of all recordings and filings set
forth in Schedule 4.1(e) hereto or made arrangements acceptable to such
Purchaser for such recordings or filings) as may be necessary or appropriate in
order to create and perfect the security interests intended to be created
pursuant to the Security Documents in effect as of the Closing Date as first
priority Liens.

            (f) Independent Engineer's Report. The Collateral Agent shall have
received a final report of the Independent Engineer, dated as of a recent date,
in form and substance satisfactory to each Purchaser, favorably reviewing (among
other matters to be reviewed at the request of such Purchaser) (i) the technical
feasibility of all operating specifications and arrangements (including the
ability of the District Energy Projects to operate as expected including
adequacy of all related infrastructure and existence of all necessary permits
and approvals) and (ii) environmental matters relating to the District Energy
Projects (including environmental audits, associated remediation costs and the
ability to operate within all environmental laws and regulations).

            (g) Private Placement Number. The Collateral Agent shall have
received evidence satisfactory to each Purchaser that a private placement number
for the Notes shall have been obtained from Standard & Poor's Corporation's
CUSIP Service Bureau.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -8-


            (h) Rating. The Collateral Agent shall have received evidence that
the Notes are rated "BBB-" or better by Fitch, in form and substance
satisfactory to each Purchaser.

            (i) Other Documents. The Collateral Agent shall have received such
other documents as each Purchaser shall have reasonably requested.

            (j) Payment of Fees; Taxes. Without limiting the provisions of
Section 16.1, the Issuer shall have paid on or before the Closing Date any
costs, expenses, fees and other amounts due and owing to the Collateral Agent or
any Purchaser under the Financing Documents (including under Section 16.1), to
the extent statements therefor are provided to the Issuer on or prior to the
Closing Date. In addition, all Taxes (other than state or federal income taxes,
if any, assessed on any Purchaser's income or revenues) due in connection with
(a) the preparation, execution, delivery, filing, recordation, registration and
notarization of this Agreement, the Notes and the other Financing Documents or
any document furnished under or in connection with any thereof (including,
without limitation, all transfer, mortgage and documentary stamp taxes) and (b)
the issuance and delivery of the Notes to such Purchaser, shall have been paid
in full by the Issuer and such Purchaser shall have received evidence thereof
reasonably satisfactory to it of such payment.

            (k) Financial Statements. The Collateral Agent shall have received
copies of the unaudited consolidated financial statements of the Issuer (after
giving effect to the acquisition of the Chicago District Energy Project) as of
June 30, 2004 (the "Issuer Financial Statements"), accompanied by (i) a
certificate from the Senior Financial Officer of the Issuer certifying that (x)
the Issuer Financial Statements fairly present in all material respects the
financial condition and results of operation of the Issuer as of June 30, 2004
and (y) since June 30, 2004, there have not been any material adverse changes in
the assets, liabilities or financial position of the Issuer from those set forth
in the Issuer Financial Statements.

            (l) Base Case Forecast. The Collateral Agent shall have received the
Base Case Forecast, demonstrating Debt Service Coverage Ratios that are
generally upward-sloping for the term of the Notes with a minimum and average
Debt Service Coverage Ratio of at least 1.30 (but for the final balloon payment)
and 1.50, respectively, over the term of the Notes.

            (m) Guarantees. The Collateral Agent shall have received from MDEH a
certificate, in form and substance satisfactory to each Purchaser, signed by a
director or an appropriate officer of MDEH confirming that MDEH is, and after
giving effect to the MDEH Pledge Agreement will be, solvent and able to pay all
of its debts as and when they become due and payable and will not become
insolvent because of it entering into the MDEH Pledge Agreement or the doing of
any act for the purpose of giving effect to the MDEH Pledge Agreement.

            Section 4.2 Conditions to Initial Disbursement. Upon the
satisfaction or waiver of the following conditions, the Collateral Agent shall,
at the reasonable cost and expense of the Issuer, release the Initial Collateral
and transfer all amounts in the Proceeds Account (to the extent
<PAGE>
                                      -9-


available) in accordance with the Funds Disbursement Memorandum (the date of
such release and transfer, the "Initial Disbursement Date"); provided that if
the Closing Date is the Initial Disbursement Date, the conditions set forth in
Section 4.2(i) and (r) shall be satisfied by the satisfaction or waiver of the
conditions set forth in Section 4.1(f) and (l):

            (a)   Documents.

                  (i) The Collateral Agent shall have received each of the
      following documents (each of which shall be satisfactory to each
      Purchaser):

                  (A) Funds Disbursement Memorandum, duly executed and delivered
            by the intended parties thereto.

                  (B) The Security Agreement of each of Thermal Chicago, ETT
            National Power, Inc. and each Owner Subsidiary, duly executed and
            delivered by the intended parties thereto.

                  (C) The Subsidiary Mortgages and the Assignments of Rents and
            Leases, each duly executed and delivered by the intended parties
            thereto in a recordable form.

                  (D) The Accession Agreement of each of Thermal Chicago, ETT
            National Power Inc. and each Owner Subsidiary, duly executed and
            delivered by the intended parties thereto.

                  (E) The Sponsor Covenant, duly executed and delivered by the
            intended parties thereto.

                  (F) The Consents listed on Schedule 4.2 hereto.

            (b)     Certificates.

                  (i) Officer's Certificate. The Issuer shall have delivered to
      each Purchaser an Officer's Certificate, dated the Initial Disbursement
      Date, pursuant toSection 4.4(d).

                  (ii) Secretary's Certificates. The Collateral Agent shall have
      received from each of the Issuer, MDEH and the Subsidiary Guarantors
      (other than ETT Nevada) a certificate (which shall be satisfactory to each
      Purchaser) as to the (w) veracity and completeness of the organizational
      documents of such party attached thereto, (x) the resolutions attached
      thereto and other corporate, partnership or limited liability company
      proceedings relating to the authorization, execution and delivery of the
      Financing Documents to which such party is a party, (y) such party's valid
      existence, good standing and qualification to engage in business in each
      jurisdiction where its ownership, lease or operation of properties or the
      conduct of its business requires such qualification, except to


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -10-


      the extent that failure to do so could not reasonably be expected to have
      a Material Adverse Effect and (z) the identity, authority and capacity of
      each Person thereof authorized to act as an Authorized Officer in
      connection with the Financing Documents to which such party is a party.

                  (iii) Macquarie Secretary's Certificate. The Collateral Agent
      shall have received from Macquarie a certificate (which shall be
      satisfactory to each Purchaser) as to (x) the veracity and completeness of
      the organizational documents of such party attached thereto, (y) the power
      of attorney attached thereto relating to the authorization, execution and
      delivery of the Sponsor Covenant and (z) the identity, authority and
      capacity of each Person thereof authorized to act as an Authorized Officer
      in connection with the Sponsor Covenant.

            (c) Opinions of Counsel for the Issuer, MDEH and certain Subsidiary
Guarantors. Each Purchaser shall have received an opinion or opinions, dated the
Initial Disbursement Date and addressed to such Purchaser, from (i) counsel to
the Issuer, (ii) counsel to MDEH and (iii) counsel to each of the Subsidiary
Guarantors (other than ETT Nevada), in each case in form and substance
satisfactory to such Purchaser.

            (d) Project Documents. Each of the Material Project Documents
relating to the Chicago District Energy Project shall have been duly executed
and delivered by the parties intended to be party thereto, shall be in full
force and effect and no material default shall exist thereunder and the
Collateral Agent shall have received copies of such Material Project Documents
certified by an Authorized Officer of the Issuer to be true, correct and
complete.

            (e) Financing Documents. Each of the Financing Documents required to
be entered into on or prior to the Initial Disbursement Date shall be in full
force and effect and the Collateral Agent shall have received copies of each
such Financing Document. In addition, the Collateral Agent shall have received
evidence satisfactory to each Purchaser that each of the Issuer, MDEH and the
Subsidiary Guarantors (other than ETT Nevada), as applicable, shall have taken
all actions (including, without limitation, the filing of the UCC-1 financing
statements in the appropriate jurisdictions and the making of all recordings and
filings set forth in Schedule 4.2(e) hereto or made arrangements acceptable to
such Purchaser for such recordings or filings) as may be necessary or
appropriate in order to create and perfect the security interests intended to be
created pursuant to the Security Documents entered into on or prior to the
Initial Disbursement Date as first priority Liens.

            (f) Mortgage; Title Insurance. The Collateral Agent shall have
obtained the following documents:

                  (i) evidence (in form and substance satisfactory to each
      Purchaser) that all easements and other rights-of-way necessary for the
      operation of the Chicago District Energy Project are in full force and
      effect;


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -11-


                  (ii) (A) a mortgagee policy of title insurance in ALTA form
      issued by the Title Insurance Company, insuring the validity and priority
      of the Liens created under each of the Subsidiary Mortgages entered into
      on the Initial Disbursement Date for and in amounts satisfactory to each
      Purchaser, subject only to such exceptions as are satisfactory to such
      Purchaser; (B) one or more title reports issued by the Title Insurance
      Company of the property interests covered by each such Subsidiary
      Mortgage, indicating only such exceptions as are satisfactory to each
      Purchaser; and (C) to the extent necessary under applicable law, for
      filing in the appropriate offices, Uniform Commercial Code financing
      statements covering fixtures included as collateral under any of the
      Security Documents entered into on or prior to the Initial Disbursement
      Date, in each case appropriately completed and, if applicable, duly
      executed; and

                  (iii) surveys of recent date of each of the facilities and
      real property covered by each Subsidiary Mortgage entered into on the
      Initial Disbursement Date, showing such matters as may be reasonably
      required by each Purchaser, which surveys shall be in form and content
      acceptable to such Purchaser.

            (g) Governmental Approvals. The Collateral Agent and special counsel
to the Purchasers shall have received originals (or copies certified by an
Authorized Officer of the Issuer to be true copies) of all Necessary
Governmental Approvals with respect to the Chicago District Energy Project.

            (h) Insurance. The Collateral Agent shall have received (x)
certified copies of the insurance policies required by Section 9.13 or
certificates of an acceptable insurance broker meeting the requirements of
Section 9.13, such certificates to be in form and substance satisfactory to each
Purchaser, (y) a report of the Independent Insurance Consultant, dated as of a
recent date, indicating (among other matters reviewed at the request of such
Purchaser) that the insurance required by Section 9.13 adequately protects the
interests of the Noteholders and that insurance complying with Section 9.13,
covering the risks referred to therein, has been obtained and is in full force
and effect and no event has occurred that permits any provider of such insurance
to cancel such insurance and (z) evidence that all premiums with respect to such
insurance policies that are due have been paid in full.

            (i) Independent Engineer's Report. The Collateral Agent shall have
received a certificate of the Independent Engineer, dated as of a recent date,
in form and substance satisfactory to each Purchaser, confirming the conclusions
contained in the Independent Engineer's Report.

            (j) Environmental Survey and Assessment. The Collateral Agent shall
have received an environmental survey and assessment prepared by a firm of
licensed engineers (familiar with the identification of toxic and hazardous
substances) in form and substance satisfactory to each Purchaser, such
environmental survey and assessment to be based upon physical on-site
inspections by such firm of the existing Project Sites and facilities relating
to the Chicago District Energy Project that are owned, operated or leased by the
Issuer or any of the


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -12-


Subsidiary Guarantors, as well as a historical review of the uses of such
Project Sites and facilities and of the business and operations of the Issuer
and each such Subsidiary Guarantor.

            (k) Rating. The Collateral Agent shall have received a confirmation
from Fitch that the Notes are rated "BBB-" or better after taking into account
the acquisition of the Chicago District Energy Project, in form and substance
satisfactory to each Purchaser.

            (l) Other Documents. The Collateral Agent shall have received such
other documents as each Purchaser shall have reasonably requested.

            (m) Acquisition Documents. The Collateral Agent (i) shall have
received and approved the terms of all agreements, documents and instruments
related to the acquisition by the Issuer of all assets and properties that
comprise or shall comprise the Chicago District Energy Project and (ii) shall
have received such other information and data regarding such acquisition as any
Purchaser may reasonably request.

            (n) Financial Statements. The Collateral Agent shall have received
copies of the audited financial statements of each of MDE Thermal, Northwind
Chicago and Northwind Midway as of December 31, 2003 (the "Audited Chicago
Financial Statements") and the pro forma unaudited consolidated financial
statements of the Issuer and the Owner Subsidiaries (after giving effect to the
acquisition of the Chicago District Energy Project) as of June 30, 2004 (the
"Pro Forma Chicago Financial Statements"), accompanied by (i) a certificate from
the Senior Financial Officer of the Issuer certifying that the Pro Forma Chicago
Financial Statements fairly present in all material respects what would be the
consolidated financial condition and results of operation of the Issuer and the
Owner Subsidiaries as of June 30, 2004 and (ii) a certificate from the Senior
Financial Officer of each Owner Subsidiary certifying that (x) the Audited
Chicago Financial Statements fairly present in all material respects the
financial condition and results of operation of such Owner Subsidiary as of
December 31, 2003 and (y) since December 31, 2003, there have not been any
material adverse changes in the assets, liabilities or financial position of
such Owner Subsidiary from those set forth in the Audited Chicago Financial
Statements.

            (o) Recordings. The Issuer shall have caused, on or prior to the
Initial Disbursement Date, all mortgages, financing statements and other
instruments covering all or any part of the Collateral that are on file in any
recording office (other than any of the foregoing filed in favor of the Secured
Parties or with respect to Permitted Liens) to be terminated, released and
reconveyed.

            (p) Guarantees. (i) The Collateral Agent shall have received in
respect of each Subsidiary Guarantor (other than ETT Nevada) a certificate, in
form and substance satisfactory to each Purchaser, signed by a director or an
appropriate officer of such Subsidiary Guarantor confirming that such Subsidiary
Guarantor is, and after giving effect to the Subsidiary Guarantor Security
Agreements will be, solvent and able to pay all of its debts as and when they
become due and payable and will not become insolvent because of it entering into
the Subsidiary Guarantor Security Agreements or the doing of any act for the
purpose of giving effect to the


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -13-


Subsidiary Guarantor Security Agreements; and (ii) the Collateral Agent shall
have received from MDEH a certificate signed by a director or an appropriate
officer of MDEH confirming that MDEH is, and after giving effect to the MDEH
Pledge Agreement will be, solvent and able to pay all of its debts as and when
they become due and payable and will not become insolvent because of it entering
into the MDEH Pledge Agreement or the doing of any act for the purpose of giving
effect to the MDEH Pledge Agreement.

            (q) Operating Budget. The Collateral Agent shall have received the
Operating Budget.

            (r) Base Case Forecast. The Collateral Agent shall have received (i)
a certificate of the Issuer, dated as of a recent date, in form and substance
satisfactory to each Purchaser, confirming that there has been no adverse change
to the Base Case Forecast delivered pursuant to Section 4.1(l) or (ii) an
updated Base Case Forecast, in form and substance reasonably satisfactory to
each Purchaser.

            Section 4.3 Conditions to Second Disbursement. Each Purchaser's
obligation to make the second Disbursement in accordance with Section 1.3 shall
be subject to the satisfaction or waiver of the following conditions (the date
of such satisfaction or waiver, the "Second Disbursement Date"):

            (a)   Documents.

                  (i) Each Purchaser shall have received such Purchaser's Las
      Vegas Note, duly executed and delivered by the Issuer.

                  (ii) The Collateral Agent shall have received each of the
      following documents (each of which shall be satisfactory to each
      Purchaser):

                  (A) The ETT Nevada Guaranty, duly executed and delivered by
            the intended parties thereto.

                  (B) The Accession Agreement of ETT Nevada, duly executed and
            delivered by the intended parties thereto.

                  (C) The Consents listed on Schedule 4.2 hereto.

            (b)     Certificates.

                  (i) Officer's Certificate. The Issuer shall have delivered to
      each Purchaser an Officer's Certificate, dated the Second Disbursement
      Date, pursuant to Section 4.4(d).

                  (ii) Secretary's Certificates. The Collateral Agent shall have
      received from each of the Issuer, MDEH and the Subsidiary Guarantors a
      certificate (which shall


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -14-


      be satisfactory to each Purchaser) as to the (w) veracity and completeness
      of the organizational documents of such party attached thereto, (x) the
      resolutions attached thereto and other corporate, partnership or limited
      liability company proceedings relating to the authorization, execution and
      delivery of the Financing Documents to which such party is a party, (y)
      such party's valid existence, good standing and qualification to engage in
      business in each jurisdiction where its ownership, lease or operation of
      properties or the conduct of its business requires such qualification,
      except to the extent that failure to do so could not reasonably be
      expected to have a Material Adverse Effect and (z) the identity, authority
      and capacity of each Person thereof authorized to act as an Authorized
      Officer in connection with the Financing Documents to which such party is
      a party.

            (c) Opinions of Counsel for the Issuer, MDEH and the Subsidiary
Guarantors. Each Purchaser shall have received an opinion or opinions, dated the
Second Disbursement Date and addressed to such Purchaser, from (i) counsel to
the Issuer, (ii) counsel to MDEH and (iii) counsel to each of the Subsidiary
Guarantors, in each case in form and substance satisfactory to such Purchaser.

            (d) Project Documents. Each of the Material Project Documents shall
have been duly executed and delivered by the parties intended to be party
thereto, shall be in full force and effect and no material default shall exist
thereunder and the Collateral Agent shall have received copies of such Material
Project Documents certified by an Authorized Officer of the Issuer to be true,
correct and complete.

            (e) Financing Documents. Each of the Financing Documents shall be in
full force and effect and the Collateral Agent shall have received copies of
each such Financing Document. In addition, the Collateral Agent shall have
received evidence satisfactory to each Purchaser that each of the Issuer, MDEH
and the Subsidiary Guarantors, as applicable, shall have taken all actions
(including, without limitation, the amending of Annex 4 to the Issuer Security
Agreement to include ETT Nevada, the filing of amended UCC-1 financing
statements in the appropriate jurisdictions to include the Northwind Aladdin
Notes, the filing of the UCC-1 financing statements in the appropriate
jurisdictions and the making of all recordings and filings set forth in Schedule
4.3(e) hereto or made arrangements acceptable to such Purchaser for such
recordings or filings) as may be necessary or appropriate in order to create and
perfect the security interests intended to be created pursuant to the Security
Documents as first priority Liens.

            (f)   Filings; Governmental Approvals.

                  (i) The Collateral Agent and special counsel to the Purchasers
      shall have received (A) a reasonably detailed Officer's Certificate from
      the Issuer, in form and content acceptable to the Purchasers, that the
      Issuer has filed for an exemption under PUHCA or (B) an opinion from
      counsel to the Issuer, which shall be satisfactory to each


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -15-


      Purchaser, that the Issuer qualifies for an exemption under PUHCA without
      having to make such a filing.

                  (ii) The Collateral Agent and special counsel to the
      Purchasers shall have received originals (or copies certified by an
      Authorized Officer of the Issuer to be true copies) of all Necessary
      Governmental Approvals.

            (g) Insurance. The Collateral Agent shall have received (x)
certified copies of the insurance policies required by Section 9.13 or
certificates of an acceptable insurance broker meeting the requirements of
Section 9.13, such certificates to be in form and substance satisfactory to each
Purchaser, (y) a report of the Independent Insurance Consultant, dated as of a
recent date, indicating (among other matters reviewed at the request of such
Purchaser) that the insurance required by Section 9.13 adequately protects the
interests of the Noteholders and that insurance complying with Section 9.13,
covering the risks referred to therein, has been obtained and is in full force
and effect and no event has occurred that permits any provider of such insurance
to cancel such insurance and (z) evidence that all premiums with respect to such
insurance policies that are due have been paid in full.

            (h) Independent Engineer's Report. The Collateral Agent shall have
received a certificate of the Independent Engineer, dated as of a recent date,
in form and substance satisfactory to each Purchaser, confirming the conclusions
contained in the Independent Engineer's Report.

            (i) Environmental Survey and Assessment. The Collateral Agent shall
have received a certificate from a firm of licensed engineers (familiar with the
identification of toxic and hazardous substances), dated as of a recent date, in
form and substance satisfactory to each Purchaser, confirming the conclusions
contained in the environmental survey and assessment required by Section 4.2(j).

            (j) The Collateral Agent shall have received a confirmation from
Fitch that the Notes are rated "BBB-" or better after taking into account the
acquisition of the Las Vegas District Energy Project, in form and substance
satisfactory to each Purchaser.

            (k) Other Documents. The Collateral Agent shall have received such
other documents as each Purchaser shall have reasonably requested.

            (l) Acquisition Documents. The Collateral Agent (i) shall have
received and approved the terms of all agreements, documents and instruments
related to the acquisition by the Issuer of all assets and properties that
comprise or shall comprise the Las Vegas District Energy Project (including any
assignment of the Las Vegas Stock Purchase Agreement to the Issuer or any of its
Subsidiaries or any amendments to the Las Vegas Stock Purchase Agreement, each
of which shall require the consent of each Purchaser) and (ii) shall have
received such other information and data regarding such acquisition as any
Purchaser may reasonably request.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -16-


            (m) Financial Statements. The Collateral Agent shall have received
copies of the audited financial statements of Northwind Aladdin as of December
31, 2003 (the Audited Nevada Financial Statements") and the pro forma unaudited
consolidated financial statements of the Issuer, the Owner Subsidiaries and
Northwind Aladdin (after giving effect to the acquisitions of the District
Energy Projects) as of December 31, 2003 (the "Pro Forma Issuer Financial
Statements"), accompanied by (i) a certificate from the Senior Financial Officer
of the Issuer certifying that the Pro Forma Issuer Financial Statements fairly
present in all material respects what would be the consolidated financial
condition and results of operation of the Issuer and its Subsidiaries as of
December 31, 2003 and (ii) a certificate from the Senior Financial Officer of
Northwind Aladdin certifying that (x) the Audited Nevada Financial Statements
fairly present in all material respects the financial condition and results of
operation of Northwind Aladdin as of December 31, 2003 and (y) since December
31, 2003, there have not been any material adverse changes in the assets,
liabilities or financial position of Northwind Aladdin from those set forth in
the Audited Nevada Financial Statements.

            (n) Payment of Fees; Taxes. Without limiting the provisions of
Section 16.1, the Issuer shall have paid on or before the Second Disbursement
Date any costs, expenses, fees and other amounts due and owing to the Collateral
Agent or any Purchaser under the Financing Documents (including under Section
16.1), to the extent statements therefor are provided to the Issuer on or prior
to the Second Disbursement Date. In addition, all Taxes (other than state or
federal income taxes, if any, assessed on any Purchaser's income or revenues)
due in connection with (a) the preparation, execution, delivery, filing,
recordation, registration and notarization of the Notes and the other Financing
Documents and Material Project Documents or any document furnished under or in
connection with any thereof (including, without limitation, all transfer,
mortgage and documentary stamp taxes) and (b) the issuance and delivery of the
Notes to such Purchaser, shall have been paid in full by the Issuer and such
Purchaser shall have received evidence thereof reasonably satisfactory to it of
such payment.

            (o) Recordings. The Issuer shall have caused, on or prior to the
Second Disbursement Date, all mortgages, financing statements and other
instruments covering all or any part of the Collateral that are on file in any
recording office (other than any of the foregoing filed in favor of the Secured
Parties or with respect to Permitted Liens) to be terminated, released and
reconveyed.

            (p) Guarantees. The Collateral Agent shall have received in respect
of ETT Nevada a certificate, in form and substance satisfactory to each
Purchaser, signed by a director or an appropriate officer of such Subsidiary
Guarantor confirming that such Subsidiary Guarantor is, and after giving effect
to the Subsidiary Guarantor Security Agreements will be, solvent and able to pay
all of its debts as and when they become due and payable and will not become
insolvent because of it entering into the Subsidiary Guarantor Security
Agreements or the doing of any act for the purpose of giving effect to the
Subsidiary Guarantor Security Agreements.

            (q) Operating Budget. The Collateral Agent shall have received the
Operating Budget.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -17-


            (r) Base Case Forecast. The Collateral Agent shall have received (i)
a certificate of the Issuer, dated as of a recent date, in form and substance
satisfactory to each Purchaser, confirming that there has been no adverse change
to the Base Case Forecast delivered pursuant to Section 4.1(l) or (ii) an
updated Base Case Forecast, in form and substance reasonably satisfactory to
each Purchaser.

            (s) Northwind Aladdin Notes and Related Documents. The Collateral
Agent shall have received (i) the Northwind Aladdin Notes registered in the name
of the Issuer and the Consent relating to the pledge of the Northwind Aladdin
Notes to the Collateral Agent for the benefit of the Noteholders and (ii) if ETT
Nevada and/or any of its Affiliates owns or has the right to control 100% of the
outstanding equity interests in Northwind Aladdin, a copy of the amendment to
the note purchase agreement relating to the Northwind Aladdin Notes changing the
references from Exelon to Macquarie District Energy Inc. and providing that a
default under the Notes constitutes a default under the Northwind Aladdin Notes,
duly executed and delivered by the intended parties thereto, which in each case,
shall be satisfactory to each Purchaser.

            (t) Updated Schedules. The Collateral Agent shall have received
updated schedules to this Agreement and to the Issuer Security Agreement, in
form and substance satisfactory to each Purchaser. Such updated schedules shall
supersede the schedules attached to this Agreement and to the Issuer Security
Agreement on the date of this Agreement for the purposes of the representations
and warranties being made on the Second Disbursement Date and this Agreement and
the Issuer Security Agreement shall automatically be deemed to be amended to
include such updated schedules without any further action by the parties hereto
or thereto.

            Section 4.4 Conditions to all Disbursements. Each Purchaser's
obligations under Section 1.3 shall be subject to the satisfaction or waiver of
the following conditions:

            (a) Representations and Warranties. The representations and
warranties made by (i) the Issuer in each Financing Document and Material
Project Document to which it is a party and (ii) MDEH and each Subsidiary
Guarantor in each Financing Document and Material Project Document to which such
party is a party shall be true and correct in all material respects with the
same force and effect as if made on and as of the date of such Disbursement (or,
if any such representation or warranty is expressly stated to have been made as
of a specific date, as of such specific date).

            (b) No Default; No Material Adverse Change. No Default or Event of
Default shall have occurred and be continuing or would result from such purchase
of Notes, and no material adverse change shall have occurred in the business,
operations, condition (financial or otherwise), liabilities or prospects of the
Issuer, the District Energy Projects, MDEH or any of the Subsidiary Guarantors,
taken as a whole, since the date of this Agreement.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -18-


            (c)   Legality.

                  (i) On the Closing Date or the Second Disbursement Date, as
      applicable, the Notes to be purchased by each Purchaser shall be a legal
      investment for such Purchaser under the laws of each jurisdiction to which
      such Purchaser may be subject (without resort to any so-called basket
      provision of such laws, such as Section 1405(a)(8) of the New York
      Insurance Law), and the Collateral Agent shall have received such
      certificates or other evidence as each Purchaser may reasonably request
      demonstrating the legality of such purchase under such laws.

                  (ii) On the Closing Date or the Second Disbursement Date, as
      applicable, each Purchaser's purchase of Notes shall not subject such
      Purchaser to any tax, penalty or liability under or pursuant to any
      applicable law or regulation, which law or regulation was not in effect on
      the date hereof.

            (d)   Officer's Certificate.


                  (i) The Issuer shall have delivered to the Collateral Agent an
      Officer's Certificate, dated the Closing Date, the Initial Disbursement
      Date or the Second Disbursement Date, as applicable, certifying that the
      conditions specified in Sections 4.4(a) and (b) have been met.


                  (ii) MDEH and each Subsidiary Guarantor shall have delivered
      to the Collateral Agent an Officer's Certificate, dated the Closing Date,
      the Initial Disbursement Date or the Second Disbursement Date, as
      applicable, certifying that the conditions specified in Section 4.4(a)(ii)
      have been met.


      SECTION 5. REPRESENTATIONS AND WARRANTIES. The Issuer represents and
warrants to the Purchasers that, (after giving effect to the acquisition of the
relevant District Energy Project), as of the Closing Date, as of the Initial
Disbursement Date and as of the Second Disbursement Date, as applicable:

      Section 5.1.  Organization.

            Each of the Issuer and each of its Subsidiaries is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization and, except where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, each jurisdiction where such qualification is
required.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -19-


      Section 5.2.  Authorization; Enforceability; Execution and Delivery.

            The execution, delivery and performance of the Transaction Documents
to which the Issuer or any of its Subsidiaries is a party, the acquisition,
ownership and operation of the District Energy Projects and related assets and
the sale of energy and hot or chilled water therefrom: (i) are within the
Issuer's or such Subsidiary's corporate, partnership or limited liability
company powers (as applicable) and (ii) have been duly authorized by all
necessary corporate, partnership or limited liability company action (as
applicable) and, if required, by all necessary shareholder, partner or member or
other action.

            This Agreement and each other Transaction Document to which the
Issuer or any of its Subsidiaries is a party has been duly executed and
delivered by the Issuer and each of its Subsidiaries party thereto and
constitutes, and each of the other Transaction Documents to which the Issuer or
such Subsidiary will be a party, when executed and delivered by the Issuer or
such Subsidiary, will constitute, a legal, valid and binding obligation of such
Person, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

      Section 5.3. No Breach of Laws and Contracts, Etc.; Nature of Business.

            (a) Except for consents and approvals already received and specified
on the attached Schedule 4.2 hereto, none of the execution and delivery of the
Transaction Documents to which the Issuer or any of its Subsidiaries is or is
intended to be a party, the consummation of the transactions contemplated in
this Agreement and in the Transaction Documents and compliance with the terms
and provisions of this Agreement and of the Transaction Documents will (i)
conflict with or result in a breach of, or require any consent under, (A) the
bylaws or partnership or limited liability company agreement or other
constitutive documents of the Issuer or such Subsidiary, (B) any applicable
existing Governmental Rule or Governmental Approval, the compliance or failure
to comply with which could reasonably be expected to have a Material Adverse
Effect, (C) any order, writ, injunction or decree of any existing Governmental
Authority, the compliance or failure to comply with which could reasonably be
expected to have a Material Adverse Effect, or (D) any other agreement or
instrument to which the Issuer or such Subsidiary is a party or by which it or
its Property is bound or to which it or its Property is subject, or constitute a
default or result in the acceleration of any obligation or loss of any right
under any such agreement or instrument, the compliance or failure to comply with
which could reasonably be expected to have a Material Adverse Effect or (ii)
result in or require the creation or imposition of any Lien upon any Property of
the Issuer or such Subsidiary pursuant to the terms of any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
bylaws, or any other agreement or instrument to which the Issuer or any of its
Subsidiaries is bound or by which the Issuer or any such Subsidiary or any
Property of the Issuer or any such Subsidiary may be bound or affected other
than the Liens created by the Security Documents.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -20-


            (b) The Issuer and each of its Subsidiaries is in compliance (i)
with all Governmental Rules, the failure to comply with which could reasonably
be expected to have a Material Adverse Effect and (ii) with all requirements of
all applicable Governmental Approvals, organizational documents and all terms
and provisions of all contracts and other instruments binding upon the Issuer,
such Subsidiary or any of their respective Properties, except where the failure
to comply with the same could not reasonably be expected to have a Material
Adverse Effect.

            (c) The Issuer has not engaged in any business other than the
ownership of its Subsidiaries and the activities related or incident thereto.
The Subsidiaries of the Issuer have not engaged in any business other than the
acquisition, ownership, operation and maintenance of their respective District
Energy Projects and/or the ownership of their Subsidiaries, if any.


      Section 5.4.  Rights; Governmental Approvals.

            (a) As of the Initial Disbursement Date, each Owner Subsidiary has
all rights and interests required for the Operation of the Chicago District
Energy Project, including without limitation all Governmental Approvals
described in Section 5.4(b) and (c) below and all rights to the use of land and
to the use of water necessary in connection with such Operation. As of the
Second Disbursement Date, Northwind Aladdin has all rights and interests
required for the Operation of the Las Vegas District Energy Project, including
without limitation all Governmental Approvals described in Section 5.4(b) and
(c) below and all rights to the use of land and to the use of water necessary in
connection with such Operation.

            (b) All Governmental Approvals necessary under applicable
Governmental Rules to be obtained by the Issuer or any of its Subsidiaries in
connection with (i) the due execution and delivery of, and performance by the
Issuer or such Subsidiary of its respective obligations, and the exercise of its
rights, under the Financing Documents and Material Project Documents to which it
is a party, (ii) the grant by the Issuer and each of its Subsidiaries of the
Liens purported to be created pursuant to the Security Documents to which it is
a party and the validity, enforceability and perfection thereof and the exercise
by the Collateral Agent of its rights and remedies thereunder; provided that the
exercise by the Collateral Agent of its rights and remedies with respect to the
Chicago District Energy Project shall be subject to the terms of the Chicago Use
Agreement, (iii) in the case of each Subsidiary Operating a District Energy
Project, the Operation of such District Energy Project as contemplated by the
relevant Project Documents and (iv) the ownership or lease of the Project Sites
(collectively, the "Necessary Governmental Approvals") are set forth in Schedule
5.4 hereto and have been duly obtained or made, were validly issued, are in full
force and effect, are final and not subject to appeal or renewal, are held in
the name of the Issuer or such Subsidiary and are free from conditions or
requirements the compliance with which could reasonably be expected to have a
Material Adverse Effect or which the Issuer does not reasonably expect it or the
applicable Subsidiary will be able to satisfy.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -21-


            (c) There is no proceeding pending or, to the knowledge of the
Issuer, threatened against the Issuer or any of its Subsidiaries, which seeks to
rescind, terminate, suspend, modify or invalidate any Necessary Governmental
Approval.

            (d) Each District Energy Project and the Operation of such District
Energy Project in accordance with the Material Project Documents conforms to and
complies in all material respects with all covenants, conditions, restrictions
and reservations in the Necessary Governmental Approvals and the Material
Project Documents applicable thereto and all state and local zoning,
environmental, land use and other Governmental Rules applicable thereto.

            (e) The Collateral Agent has received a true and complete copy of
each Governmental Approval obtained by, or granted to, the Issuer or any of its
Subsidiaries on or prior to the date on which this representation and warranty
is made or deemed made.

            (f) To the best knowledge and belief of the Issuer, the Necessary
Governmental Approvals as to which a renewal has been filed will be issued to
the Issuer or the relevant Subsidiary in a timely manner and without adverse
modification.

      Section 5.5. Proceedings. Except as set forth in Schedule 5.5 hereto,
there are no actions, suits or proceedings at law or in equity or by or before
any Governmental Authority now pending against the Issuer or any of its
Subsidiaries or, to the best knowledge of the Issuer, threatened against or
affecting the Issuer or any of its Subsidiaries, any of their respective
Properties or any material provision of the Transaction Documents, which, if
adversely determined, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

      Section 5.6.  Financial Condition.

            (a) The Issuer has delivered to the Collateral Agent the Issuer
Financial Statements, the Audited Chicago Financial Statements, the Pro Forma
Chicago Financial Statements, the Audited Nevada Financial Statements or the Pro
Forma Issuer Financial Statements, as applicable, in each case, certified by an
Authorized Officer of the Issuer or an Authorized Officer of the relevant
Subsidiary, as applicable. The Issuer Financial Statements, the Audited Chicago
Financial Statements, the Pro Forma Chicago Financial Statements, the Audited
Nevada Financial Statements and the Pro Forma Issuer Financial Statements
present fairly, in all material respects, the financial position and results of
operations and cash flows of the Issuer and its Subsidiaries as of such dates
and for such periods in accordance with GAAP. There are no material liabilities,
contingent or otherwise, of the Issuer or its Subsidiaries as of such dates not
reflected in such financial statements or disclosed in the notes thereto. As of
December 31, 2003, the Subsidiaries of the Issuer had no contingent liabilities
that would have been shown in footnotes to the Audited Chicago Financial
Statements or the Audited Nevada Financial Statements.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -22-


            (b) Since June 30, 2004, there have not been any material adverse
changes in the assets, liabilities or financial position of the Issuer from
those set forth in the Issuer Financial Statements.

            (c) As of the Initial Disbursement Date, since December 31, 2003,
there have not been any material adverse changes in the assets, liabilities or
financial position of the Subsidiaries of the Issuer from those set forth in the
Audited Chicago Financial Statements.

            (d) As of the Second Disbursement Date, since December 31, 2003,
there have not been any material adverse changes in the assets, liabilities or
financial position of the Subsidiaries of the Issuer from those set forth in the
Audited Nevada Financial Statements.

      Section 5.7.  Information; Disclosure.

            (a) The Issuer has disclosed to the Purchasers all agreements,
instruments and limited liability or corporate or other restrictions to which it
or any of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.

            (b) The Issuer, through its agent, ABN AMRO Incorporated, has
delivered to each Purchaser a copy of a Private Placement Memorandum, dated
April 2004 (the "Memorandum"), relating to the transactions contemplated hereby.
The Memorandum fairly describes, in all material respects, the general nature of
the business and principal properties of the Issuer and its Subsidiaries. The
Memorandum, the documents, certificates or other writings provided to the
Purchasers by or on behalf of the Issuer in connection with the transactions
contemplated hereby and the Issuer Financial Statements, the Audited Chicago
Financial Statements, the Pro Forma Chicago Financial Statements, the Audited
Nevada Financial Statements and the Pro Forma Issuer Financial Statements, taken
as a whole, do not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading
in light of the circumstances under which they were made (or, in relation to
information identified as being supplied by third parties, is believed by the
Issuer to be so).

            (c) All projected financial information contained in the documents,
certificates, and other writings referred to in Section 5.7(a) was prepared in
good faith and the assumptions underlying such projected information are
reasonable as of the date of this Agreement and are based upon the Issuer's best
estimates based upon all information available to the Issuer at such time of the
expected operating results and financial condition of the Issuer and its
Subsidiaries.

            (d) There is no fact known to the Issuer that could reasonably be
expected to have a Material Adverse Effect that has not been set forth in this
Agreement or in the Memorandum or in other documents, certificates and other
writings provided to you by or on behalf of the Issuer specifically for use in
connection with the transactions contemplated hereby.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -23-


      Section 5.8.  Taxes.

            (a) Each of the Issuer and its Subsidiaries has timely filed or
caused to be filed all income tax returns, and all other tax returns which are
required to be filed by it, and such returns were true, complete and correct,
and has paid or caused to be paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Issuer or such Subsidiary, except
such taxes, if any, as are being contested in good faith and by proper
proceedings and as to which adequate reserves have been established in
accordance with GAAP.

            (b) Neither the Issuer nor any of its Subsidiaries is a party to any
action or proceeding by any Governmental Authority for the assessment or
collection of taxes, nor has any claim for assessment or collection of taxes
been asserted against it or its properties except such actions, proceedings or
claims as are being contested in good faith and by proper proceedings and as to
which adequate reserves have been established in accordance with GAAP.

            (c) The charges, accruals and reserves on the books of the Issuer
and its Subsidiaries in respect of Federal, state or other taxes for all fiscal
periods are adequate.

            (d) Assuming that neither the Noteholders nor the Collateral Agent
is for any reason otherwise subject to taxation in any jurisdiction in which any
of the District Energy Projects is located or in which the Issuer or any of its
Subsidiaries does business, no liability for any Tax directly or indirectly
imposed, assessed or collected by or for the account of any Governmental
Authority in any such jurisdiction will be incurred by any Noteholder or the
Collateral Agent solely as a result of the execution or delivery of this
Agreement, the Notes or any other Financing Document, the purchase or holding of
the Notes by any Noteholder or the granting or holding of the security interests
created (or purported to be created) under the Security Documents.

            Section 5.9. Margin Stock. Neither the Issuer nor its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose, whether immediate, incidental or ultimate,
of buying or carrying Margin Stock, and no part of the proceeds of the Notes
will be used to buy or carry any Margin Stock, or to refund indebtedness
originally incurred for those purposes.

      Section 5.10. Compliance with ERISA.

            (a) The Issuer and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Issuer nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in Section 3 of ERISA), and no event, transaction or condition
has occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Issuer or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets of the


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -24-


Issuer or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA
or to such penalty or excise tax provisions or to section 401(a)(29) or 412 of
the Code, other than such liabilities or Liens as would not individually or in
the aggregate be Material.

            (b) The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the end of
such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities. The term "benefit liabilities"
has the meaning specified in section 4001 of ERISA and the terms "current value"
and "present value" have the meaning specified in section 3 of ERISA.

            (c) The Issuer and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.

            (d) The expected postretirement benefit obligation (determined as of
the last day of the Issuer's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Issuer and its Subsidiaries is not Material.

            (e) The execution and delivery of this Agreement and the issuance
and sale of the Notes hereunder will not involve any transaction that is subject
to the prohibitions of section 406 of ERISA or in connection with which a tax
could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The
representation by the Issuer in the first sentence of this Section 5.10(e) is
made in reliance upon and subject to the accuracy of the Purchasers'
representation in Section 6.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by such Purchaser.

      Section 5.11. Status Under Certain Statutes.

            (a) Utility Regulation.

                  (i) Sierra Pacific has filed for an exemption under Section
      3(a)(2) of PUHCA and such exemption is currently in effect.

                  (ii) None of the Issuer nor any of its Subsidiaries is subject
      to regulation as a "holding company", or an "affiliate" of a "holding
      company" or a "subsidiary company" of a "holding company", within the
      meaning of PUHCA nor subject to regulation under PUHCA except pursuant to
      Section 9(a)(2) of PUHCA. None of the Issuer, any of its Subsidiaries, nor
      any of the Secured Parties is or will be, solely as a result of (x) the
      participation by such parties individually or as a group in the ownership
      of any of the Issuer or any of its Subsidiaries (including, with respect
      to the Secured Parties, as a result of exercising remedies under the
      Financing Documents) or (y) the use


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -25-


      or operation or ownership of each District Energy Project and sale of
      energy, or hot or chilled water therefrom or (z) the execution, delivery
      or performance of this Agreement or the other Financing Documents, subject
      to regulation as a "public-utility company," an "electric utility
      company," a "public utility," an "electric utility," a "holding company"
      or a "subsidiary company" or an "affiliate" of any of the foregoing, under
      PUHCA or subject to regulation under the applicable Governmental Rules of
      any state respecting the rates of utilities (including, without
      limitation, electric utilities, gas utilities and water utilities) or the
      financial and organizational regulation of utilities (including, without
      limitation, electric utilities, gas utilities and water utilities).

                  (iii) Without limiting the foregoing, the Issuer, ETT Nevada
      and Northwind Aladdin may be subject to regulation as a "public utility"
      or a "holding company" under the law of the State of Nevada, however, none
      of the Issuer, ETT Nevada or Northwind Aladdin are currently being
      regulated as such under the law of the State of Nevada. None of the
      Secured Parties is or will be, solely as a result of purchasing and
      holding the Notes as contemplated in this Agreement, subject to regulation
      as a "public-utility company," an "electric utility company," a "public
      utility," an "electric utility," a "holding company" or a "subsidiary
      company" or an "affiliate" of any of the foregoing, under PUHCA or subject
      to regulation under the applicable Governmental Rules of any state
      respecting the rates of utilities (including, without limitation, electric
      utilities, gas utilities and water utilities) or the financial and
      organizational regulation of utilities (including, without limitation,
      electric utilities, gas utilities and water utilities).

            (b) Investment Company Act. None of the Issuer or any of its
Subsidiaries is an "investment company", or a person directly or indirectly
"controlled" by or acting on behalf of an "investment company", within the
meaning of the Investment Company Act of 1940.

            (c) (i) Except to the extent any violation would be due solely to
the identity or nationality of one or more parties hereto other than MDEH, the
Issuer or any of its Subsidiaries, none of the transactions contemplated hereby
will violate (w) the United States Trading with the Enemy Act, as amended, (x)
any of the foreign assets control regulations of the United States Treasury
Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto (as amended, the "Department of
Treasury Rule"), (y) Executive Order No. 13,224, 66 Fed Reg 49,079 (2001),
issued by the President of the United States (Executive Order Blocking Property
and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or
Support Terrorism) (as amended, the "Terrorism Order")) or (z) the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Public Law 107-56 (October 26,
2001), as amended; (ii) none of the Issuer or any of its Subsidiaries nor any of
its or their Affiliates is a "blocked person" as described in Section 1 of the
Terrorism Order or a Person described in the Department of the Treasury Rule;
and (iii) none of the Issuer or any of its Subsidiaries knowingly engages in any
dealings or transactions, or is otherwise associated, with any such blocked
person or any such Person.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -26-


      Section 5.12. Collateral.

            (a) Each of the Issuer and its Subsidiaries has good and marketable
title to, or valid leasehold interests in, all its real and personal property
material to its business, free and clear of any Liens except Permitted Liens.

            (b) No portion of the Chicago District Energy Project, other than
the portion of the Chicago District Energy Project used to serve the premises at
600 W. Chicago (the "600 W. Chicago Premises"), is (i) located within the 600 W.
Chicago Premises, or (ii) dependent for its access on access to the 600 W.
Chicago Premises. The equipment located at the 600 W. Chicago Premises is the
property of MDE Thermal, is used solely for purposes of delivering chilled water
services to the 600 W. Chicago Premises pursuant to the Chilled Water Service
Agreement dated as of February 26, 2001 by and between MDE Thermal and Eport
600, L.L.C. ("Eport"), as amended, and the failure or loss of such equipment
will not materially affect the ability of MDE Thermal to service the customers
of the Chicago District Energy Project other than Eport. The ability of MDE
Thermal to service the customers of the Chicago District Energy Project other
than Eport is not dependent on any rights of ingress or egress to the 600 W.
Chicago Premises.

            (c) Each of the Issuer and its Subsidiaries possesses all necessary
easements and other rights-of-way necessary for the Operation of the District
Energy Project operated by it and there are no materials, supplies or equipment
necessary for such Operation that are not available or expected to be available
at the relevant Project Site on commercially reasonable terms consistent with
the current Operating Budget.

            (d) The provisions of the Security Documents are effective to
create, in favor of the Collateral Agent on behalf of the Secured Parties,
legal, valid and enforceable Liens on or in all of the Collateral intended to be
covered thereby, and all necessary recordings and filings have been made in all
necessary public offices and all other necessary and appropriate action has been
taken so that the Liens created by each Security Document constitute perfected
Liens on or in the Collateral intended to be covered thereby, prior and superior
to all other Liens other than Permitted Liens, and all necessary consents to the
creation, effectiveness, priority and perfection of each such Lien have been
obtained. The Purchasers acknowledge that their rights under the Security
Documents, insofar as they relate to the Chicago District Energy Project, are
subject to the terms and provisions of the Chicago Use Agreement.

            (e) No mortgage or financing statement or other instrument or
recordation covering all or any part of the Collateral is on file in any
recording office, except such as may have been filed in favor of the Secured
Parties or in respect of Permitted Liens.

      Section 5.13. Environmental Matters.

            (a) Except as set forth in Schedule 5.13 hereto, each of the Issuer
and its Subsidiaries has complied and is now complying in all respects with all
Environmental Laws


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -27-


applicable to the District Energy Project Operated by it and the requirements
and conditions of any Governmental Approvals issued under such Environmental
Laws relating to such District Energy Project, except to the extent that failure
to so comply could not reasonably be expected to have a Material Adverse Effect.
The Base Case Forecast takes into account all capital expenditures and operating
costs that are reasonably anticipated to be necessary for the District Energy
Projects to be Operated in compliance with such Governmental Approvals and
applicable Environmental Laws as now in effect.

            (b) There are no facts, circumstances, conditions or occurrences
regarding any of the District Energy Projects that could reasonably be expected
to give rise to any Environmental Claims that could reasonably be expected to
have a Material Adverse Effect. The Issuer has not received any notice of any
Environmental Claim against any District Energy Project, the Issuer or any of
its Subsidiaries that, either alone or together with all other such
Environmental Claims, could reasonably be expected to have a Material Adverse
Effect.

            (c) Except as set forth in Schedule 5.13 hereto, the Issuer and its
Subsidiaries have obtained all Governmental Approvals required under
Environmental Laws to Operate each of the District Energy Projects and each such
Governmental Approval is in full force and effect.

            (d) There are no past, pending or, to the knowledge of the Issuer,
threatened Environmental Claims against the Issuer, any of its Subsidiaries or
the District Energy Projects that individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.

            (e) None of the Issuer, any of its Subsidiaries or, to the Issuer's
best knowledge, any other Person has Released Hazardous Materials on any portion
of a Project Site other than in a manner complying in all material respects with
all applicable Environmental Laws and that could not give rise to any material
liability under Environmental Laws.

            (f) True and complete copies of all environmental studies in the
possession or reasonable control of the Issuer are listed on Schedule 5.13 and
have been delivered to the Purchasers.

            (g) Each of the Issuer and each Owner Subsidiary has obtained and
reviewed copies of the environmental reports identified on Schedule 5.13 and has
performed all recommended additional investigations, remediation and follow-up
as it has deemed necessary or warranted under the circumstances.

            (h) To the best of the Issuer's knowledge, none of the Issuer nor
any Owner Subsidiary has given a release or waiver of material liability that
would waive or impair any material claim based on any Environmental Activity to
a previous owner of the District Energy Projects or the Project Sites or to any
party who may be potentially responsible for such District Energy Projects or
Project Sites; and none of the Issuer nor any Owner Subsidiary has made any
promises of indemnification regarding any Environmental Activity to any parties
other than Secured Parties pursuant to the Financing Documents and the Loan
Documents; and none of the


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -28-


Issuer nor any Owner Subsidiary has any known material liability to any parties
other than Secured Parties pursuant to the Financing Documents and the Loan
Documents in connection with any Environmental Activity.

            (i) Except as set forth in Schedule 5.13 attached hereto, the use of
any of the District Energy Projects or the Project Sites for their intended
purpose will not result in any Environmental Activity in material violation of
any applicable Environmental Laws.

      Section 5.14. Ownership, Etc.

            (a) As of the Closing Date and as of the Initial Disbursement Date,
the Issuer has no Subsidiaries other than the Subsidiary Guarantors (other than
ETT Nevada).

            (b) As of the Second Disbursement Date, the Issuer has no
Subsidiaries other than the Subsidiary Guarantors and Northwind Aladdin.

            (c) As of the Initial Disbursement Date and the Second Disbursement
Date, the allocation of the equity interests in each of the Issuer and its
Subsidiaries is as set forth in Schedule 5.14 hereto. All of the outstanding
shares or capital stock or similar equity interests of each Subsidiary have been
validly issued, are fully paid and, if applicable, nonassessable and are owned
by the Issuer or another Subsidiary free and clear of any Lien (other than
Permitted Liens). None of the Issuer's Subsidiaries is a party to, or otherwise
subject to any legal restriction or any agreement (other than this Agreement and
customary limitations imposed by corporate law statutes) restricting the ability
of such Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Issuer or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such
Subsidiary.

      Section 5.15. Place of Business. The chief executive offices and the
principal places of business of the Issuer and each of its Subsidiaries are as
set forth in Schedule 5.15. The Issuer shall at all times maintain an office in
the City of New York, New York.

      Section 5.16. No Default.

            (a) Except as set forth in Schedule 5.16, neither the Issuer nor, to
the best of the Issuer's knowledge, any other Project Party, is in default under
or with respect to any Financing Document or Material Project Document to which
such Person is a party or by which it or its properties may be bound. No Event
of Default or other default under any Financing Document or Material Project
Document has occurred and is continuing nor has a waiver of any default under
any Financing Document or Material Project Document been granted by any party
thereto.

            (b) Neither the Issuer nor any of its Subsidiaries is in default
under any term of any agreement or instrument to which it is a party or by which
it is bound, or any order, judgment, decree or ruling of any court, arbitrator
or Governmental Authority, which default, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -29-


      Section 5.17. Project Documents.


            (a) The Purchasers have received a true and complete copy of each
Material Project Document as in effect on the Closing Date (including all
exhibits, schedules and disclosure letters referred to therein or delivered
pursuant thereto, if any). Except as permitted from time to time pursuant to
Section 9.3, none of the Material Project Documents has been amended,
supplemented, modified or terminated and all of the Material Project Documents
are in full force and effect and enforceable against the parties thereto. The
Project Documents include all agreements relating to the District Energy
Projects, and neither the Issuer nor any of its Subsidiaries is a party to any
agreement or instrument that is not a Financing Document or a Project Document
(other than (i) the mandate letter between the Issuer and Macquarie Securities
(USA) Inc., (ii) the Chicago Stock Purchase Agreement, (iii) the Las Vegas Stock
Purchase Agreement, (iv) the Loan Documents and (v) the note purchase agreement
and other documents relating to the Northwind Aladdin Notes).

            (b) There are no licenses, trademarks, patents, trade names, service
names, copyrights, technology, services, materials, equipment or rights required
for the Operation of the District Energy Projects other than those granted by,
or to be provided to the relevant Subsidiary pursuant to, the Project Documents.

            (c) Each Subsidiary Operating a District Energy Project has all
utilities and means of access and transportation necessary for the Operation of
such District Energy Project.

            (d) Except as set forth in Schedule 5.16, the Issuer has no
knowledge (after due inquiry of its Subsidiaries) of any event that could result
in a warranty claim or in a claim by a third party that it is entitled to
suspend or defer performance under any Material Project Document. The Issuer has
no knowledge (after due inquiry of its Subsidiaries) of any event, condition or
circumstance that could reasonably be expected to result in any warranty or
similar claim, or a claim by any Project Party that it is entitled to suspend or
defer the performance of its obligations, under any Material Project Document.

            Section 5.18. Patents; Trademarks; Licenses. Each of the
Subsidiaries Operating a District Energy Project owns, or is licensed or
otherwise has the lawful right to use all patents, trademarks, copyrights and
other such rights, free from burdensome restrictions, that are necessary for the
Operation of such District Energy Project.

            Section 5.19. Private Offering. Neither the Issuer nor any other
Person acting on behalf of the Issuer has offered the Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any Person other
than the Purchasers and not more than 7 other institutional investors, each of
which has been offered the Notes at a private sale for investment. Neither the
Issuer nor anyone acting on behalf of the Issuer has taken, or will take, any
action which would subject the issuance


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -30-


or sale of the Notes to Section 5 of the Securities Act, or otherwise require
the registration, filing or qualification of the Notes under any applicable laws
of the United States of America.

      Section 5.20. Base Case Forecast.

            (a) The Base Case Forecast was prepared in good faith and the
assumptions on the basis of which such projections were made are reasonable as
of the Closing Date and are consistent with the existing Project Documents. The
parties acknowledge and agree that such projections are not guaranteed and there
is no warranty that the projected results will actually be achieved.

            (b) The Base Case Forecast was prepared in good faith and the
assumptions on the basis of which projections were made in the Base Case
Forecast are reasonable as of the Initial Disbursement Date and are consistent
with the existing Project Documents.

            (c) The Base Case Forecast was prepared in good faith and the
assumptions on the basis of which projections were made in the Base Case
Forecast are reasonable as of the Second Disbursement Date and are consistent
with the existing Project Documents.

      Section 5.21. Ranking. All liabilities of the Issuer under the Notes
constitute direct, unconditional and general obligations of the Issuer and rank
in right of payment either pari passu or senior to all other Indebtedness of the
Issuer.

      Section 5.22. Representations of Guarantors. The representations and
warranties of MDEH contained in the MDEH Pledge Agreement and the
representations and warranties of each Subsidiary Guarantor contained in the
Subsidiary Guarantor Security Agreement of such Subsidiary Guarantor are true
and correct as of the date they are made and will be true and correct on each of
the Initial Disbursement Date and the Second Disbursement Date (after giving
effect to the acquisition of the relevant District Energy Project).


                                                         NOTE PURCHASE AGREEMENT

<PAGE>
                                      -31-


            SECTION 6. REPRESENTATIONS OF THE PURCHASER.

            Section 6.1. Purchase for Investment. Each Purchaser represents that
such Purchaser is purchasing its Notes for investment for its own account or for
one or more separate accounts maintained by such Purchaser and not with a view
to the sale or distribution thereof or the granting of any participation
therein, provided that the disposition of its or their property at all times
shall be within its or their control.

            Each Purchaser represents that it is an institutional "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D of the
Securities Act. Each Purchaser understands that (i) the Notes have not been
registered under the Securities Act or any state securities laws and may be
resold only if registered pursuant to the provisions of the Securities Act or if
an exemption for registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and (ii) the
Issuer is not required to register the Notes.

            Section 6.2. Source of Funds. Each Purchaser represents that at
least one of the following statements is an accurate representation as to each
source of funds (a "Source") to be used by such Purchaser to pay the purchase
price of the Notes to be purchased by such Purchaser:

            (a) the Source is an "insurance company general account" (as the
term is defined in Prohibited Transaction Exemption ("PTE") 95-60 (issued July
12, 1995)) in respect of which the reserves and liabilities (as defined by the
annual statement for life insurance companies approved by the National
Association of Insurance Commissioners (the "NAIC Annual Statement")) for the
general account contract(s) held by or on behalf of any employee benefit plan
together with the amount of the reserves and liabilities for the general account
contract(s) held by or on behalf of any other employee benefit plans maintained
by the same employer (or affiliate thereof as defined in PTE 95-60) or by the
same employee organization in the general account do not exceed 10% of the total
reserves and liabilities of the general account (exclusive of separate account
liabilities) plus surplus as set forth in the NAIC Annual Statement filed with
such Purchaser's state of domicile; or

            (b) the Source is a separate account that is maintained solely in
connection with such Purchaser's fixed contractual obligations under which the
amounts payable, or credited, to any employee benefit plan (or its related
trust) that has any interest in such separate account (or to any participant or
beneficiary of such plan (including any annuitant)) are not affected in any
manner by the investment performance of the separate account; or

            (c) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a
bank collective investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as disclosed by such Purchaser to the Issuer in
writing pursuant to this paragraph (c), no employee benefit plan or group of
plans maintained by the same employer or employee organization beneficially owns


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -32-


more than 10% of all assets allocated to such pooled separate account or
collective investment fund; or

            (d) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the QPAM
Exemption), no employee benefit plan's assets that are included in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total
client assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling or
controlled by the QPAM (applying the definition of "control" in Section V(e) of
the QPAM Exemption) owns a 5% or more interest in the Issuer and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the Issuer in
writing pursuant to this paragraph (d); or

            (e) the Source constitutes assets of a "plan(s)" (within the meaning
of Section IV of PTE 96-23 (issued April 10, 1996) (the "INHAM Exemption"))
managed by an "in-house asset manager" or "INHAM" (within the meaning of Part IV
of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM
Exemption are satisfied, neither the INHAM nor a person controlling or
controlled by the INHAM (applying the definition of "control" in Section IV(h)
of the INHAM Exemption) owns a 5% or more interest in the Issuer and (i) the
identity of such INHAM and (ii) the name(s) of the employee benefit plan(s)
whose assets constitute the Source have been disclosed to the Issuer in writing
pursuant to this paragraph (e); or

            (f) the Source is a governmental plan; or

            (g) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which has been identified to the Issuer in writing pursuant to this paragraph
(g); or

            (h) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.

            Section 6.3.  Purchaser Not a Utility. Each Purchaser represents and
warrants that it is not a person primarily engaged in the generation or sale of
electric power, an "electric utility," a "public utility holding company," a
wholly or partially owned "subsidiary of an electric utility," or a wholly or
partially owned


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -33-


"subsidiary of a public utility holding company" within the meaning of Part 292
of Title 18 of the Code of Federal Regulations.

            SECTION 7. DELIVERY OF FINANCIAL STATEMENTS, OPERATING BUDGET AND
OTHER INFORMATION.

            The Issuer shall furnish to the Collateral Agent:

            (a) (i) unless the fiscal year of the Issuer and the fiscal year of
      its Subsidiaries are the same, within 90 days after the end of each fiscal
      year of the Issuer and within 90 days after the end of each fiscal year of
      each Subsidiary of the Issuer, as applicable, copies of (A) the audited
      consolidated financial statements of the Issuer as of the end of such
      fiscal year of the Issuer, (B) the audited consolidated financial
      statements of such Subsidiary as of the end of such fiscal year of such
      Subsidiary and (C) the unaudited consolidated financial statements of the
      Issuer and its Subsidiaries as of the end of each fiscal year of the
      Issuer, in each case, prepared in accordance with GAAP and accompanied by
      a certificate from the Senior Financial Officer of the Issuer certifying
      that (1) such financial statements fairly present in all material respects
      the financial condition and results of operation of the Issuer and its
      Subsidiaries, as applicable, and (2) such financial condition and results
      of operations of the Issuer and its Subsidiaries have been included in the
      annual audited consolidated financial statements for Macquarie for the
      same such fiscal year; provided that if the Issuer and its Subsidiaries
      are no longer direct or indirect Subsidiaries of Macquarie, then audited
      consolidated financial statements as described in this Section 7(a),
      within the same time period as set forth above, shall be delivered to the
      Collateral Agent by the Issuer, accompanied by an opinion thereon of
      independent certified public accountants of recognized national standing
      to the effect that such financial statements fairly present in all
      material respects the financial condition and results of operation of each
      of the Issuer and its Subsidiaries and have been prepared in conformity
      with GAAP, and that the examination of such accountants in connection with
      such financial statements has been made in accordance with generally
      accepted auditing standards, and that such audit provides a reasonable
      basis for such opinion in the circumstances;

                  (ii) if the fiscal year of the Issuer and the fiscal year of
      its Subsidiaries are the same, within 90 days after the end of each fiscal
      year of the Issuer, copies of the audited consolidated financial
      statements of the Issuer and its Subsidiaries as of the end of such fiscal
      year and stating in comparative form the respective audited figures as of
      the end of and for the previous fiscal year, if available, prepared in
      accordance with GAAP and accompanied by a certificate from the Senior
      Financial Officer of the Issuer certifying that such financial statements
      fairly present in all material respects the financial condition and
      results of operation of each of the Issuer and its Subsidiaries;

            (b) within 45 days after the end of each fiscal quarter of the
Issuer, copies of the unaudited consolidated financial statements of the Issuer
and its Subsidiaries as of the end of


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -34-


such quarter, prepared in accordance with GAAP and stating in comparative form
the respective figures for the corresponding period in the previous fiscal year,
certified by a Senior Financial Officer of the Issuer to fairly present in all
material respects the information contained therein;

            (c) concurrently with the financial statements furnished pursuant to
subsections (a) and (b) above, an Officer's Certificate duly executed by the
Senior Financial Officer of the Issuer (i) setting forth the information
(including detailed calculations) required to establish whether the Issuer was
in compliance with the requirements of Section 9.17 during the quarterly or
annual period covered by the statements then being furnished and (ii) stating
that based upon such examination or investigation and review of this Agreement
as in the opinion of the signer is necessary to enable the signer to express an
informed opinion with respect thereto, no Default or Event of Default has
occurred during the period covered by the financial statements being furnished
at such time or, if any Default or Event of Default shall have occurred during
such period, specifying all such Defaults and Events of Default, and the nature
and period of existence thereof, and what action the Issuer has taken, is taking
or proposes to take with respect thereto;

            (d) by June 30 of each calendar year, evidence satisfactory to each
Noteholder that the Notes are rated by a Rating Agency;

            (e) by December 1 of each calendar year, the Operating Budget for
the upcoming budget year;

            (f) by December 31 of each calendar year, a certificate from the
Independent Engineer confirming the projected Debt Service Coverage Ratio for
the Rolling Fiscal Period ending on the date that is one year from such December
31 and confirming that the financial and operational assumptions used in
determining such projected Debt Service Coverage Ratio are reasonable and
consistent with Prudent Operating Practices;

            (g) promptly after the Issuer becomes aware of the existence of a
Default or an Event of Default and in any event within three Business Days
thereof, a certificate duly executed by the Issuer specifying the nature and
period of existence thereof and what action the Issuer has taken, is taking or
proposes to take with respect thereto;

            (h) promptly after receipt thereof, copies of any notice or other
written communication from any Rating Agency then rating the Notes informing the
Issuer of a change in the rating of the Notes or informing the Issuer that such
Rating Agency is placing the Issuer on creditwatch;

            (i) promptly, and in any event within 30 days after the Issuer or
any of its Subsidiaries becomes aware of any of the following, a certificate
duly executed by the Issuer or the relevant Subsidiary specifying the nature and
period of existence thereof and what action the Issuer or the relevant
Subsidiary has taken, is taking or proposes to take with respect thereto:


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -35-


                  (i) with respect to any Plan, any reportable event, as defined
      in section 4043(c) of ERISA and the regulations thereunder, for which
      notice thereof has not been waived pursuant to such regulations as in
      effect on the date hereof; or

                  (ii) the taking by the PBGC of steps to institute, or the
      threatening by the PBGC of the institution of, proceedings under section
      4042 of ERISA for the termination of, or the appointment of a trustee to
      administer, any Plan, or the receipt by the Issuer or any ERISA Affiliate
      of a notice from a Multiemployer Plan that such action has been taken by
      the PBGC with respect to such Multiemployer Plan; or

                  (iii) any event, transaction or condition that could result in
      the incurrence of any liability by the Issuer or any ERISA Affiliate
      pursuant to Title I or IV of ERISA or the penalty or excise tax provisions
      of the Code relating to employee benefit plans, or in the imposition of
      any Lien on any of the rights, properties or assets of the Issuer or any
      ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or
      excise tax provisions, if such liability or Lien, taken together with any
      other such liabilities or Liens then existing, could reasonably be
      expected to have a Material Adverse Effect;

            (j) promptly, and in any event within 30 days of receipt thereof,
copies of any notice to the Issuer or any of its Subsidiaries from any
Governmental Authority relating to any Order or Governmental Rule that could
reasonably be expected to have a Material Adverse Effect, accompanied by a
written statement from the Issuer or the relevant Subsidiary indicating what
action the Issuer or the relevant Subsidiary is taking or proposes to take with
respect to such notice;

            (k) promptly after the Issuer becomes aware of any Material
Proceeding pending or threatened against or affecting the Issuer, any of its
Subsidiaries or any of the Collateral (including any arbitration proceeding), a
certificate duly executed by the Issuer specifying the nature thereof and what
action the Issuer or the relevant Subsidiary has taken, is taking or proposes to
take with respect thereto;

            (l) promptly after the Issuer becomes aware of any event or
circumstance that could reasonably be expected to have a Material Adverse
Effect, a certificate duly executed by the Issuer specifying the nature thereof
and what action the Issuer or the relevant Subsidiary has taken, is taking or
proposes to take with respect thereto;

            (m) promptly after the Issuer becomes aware of a failure by Sierra
Pacific to have or maintain its exemption under Section 3(a)(2) of PUHCA,
written notice of such failure; and

            (n) with reasonable promptness, such other data and information
relating to the business, operations, affairs, financial condition, assets or
properties of the Issuer or any of its Subsidiaries or relating to the ability
of the Issuer or any of its Subsidiaries to perform their


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -36-


respective obligations under the Transaction Documents to which it is a party,
as from time to time may be reasonably requested by any Noteholder.

            SECTION 8. INSPECTION OF PROPERTIES AND BOOKS. The Collateral Agent,
or any of its representatives, shall have the right upon reasonable advance
notice and at the direction and expense of the Noteholders (except as set forth
in the immediately succeeding sentence), to visit and inspect the District
Energy Projects and any of the properties of the Issuer and its Subsidiaries, to
review and inspect any documents received by the Issuer or any of its
Subsidiaries from any of the other Project Parties pursuant to the Project
Documents, to examine the books of account and records (including operating
logs) of the Issuer and any of its Subsidiaries, to make or be provided with
copies of the foregoing, and to discuss the affairs, finances and accounts of
the Issuer or any of its Subsidiaries with the Issuer's or such Subsidiary's
officers, employees and independent public accountants, all at such reasonable
times and intervals and to such reasonable extent under the circumstances as the
Collateral Agent may request. Notwithstanding the foregoing, the Issuer agrees
to pay all reasonable out-of-pocket expenses incurred by the Collateral Agent
(or any representative thereof) or any Noteholder in connection with the
exercise of rights pursuant to this Section 8 at any time when a Default or an
Event of Default has occurred and is continuing.

      SECTION 9. COVENANTS. The Issuer covenants and agrees that so long as any
Note or any obligation of the Issuer under this Agreement or any other Financing
Document shall be outstanding:

      Section 9.1. Books and Records; Fiscal Year; Corporate Existence; Payment
of Taxes; Compliance with Laws.

            (a) The Issuer shall keep, and cause each of its Subsidiaries to
keep, proper books of record in accordance with GAAP.

            (b) The Issuer shall not, and shall cause each of its Subsidiaries
not to, change its fiscal year; provided that if no Change in Control has
occurred but the Issuer is no longer owned and controlled, directly or
indirectly, by Macquarie, the Issuer shall change its fiscal year to a calendar
year.

            (c) Except as permitted under Section 9.4, the Issuer shall, and
shall cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its or such
Subsidiary's legal existence. Except as permitted under Section 9.4, the Issuer
shall, and shall cause each of its Subsidiaries to, do or cause to be done all
things reasonably necessary to preserve, renew and keep in full force and effect
the rights, licenses, permits, privileges and franchises relevant to the conduct
of its or such Subsidiary's business or the ownership of its or such
Subsidiary's Properties unless, in the reasonable judgment of the Issuer, the
termination of or failure to preserve and keep in full force and effect any such
right, license, permit, privilege or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -37-


            (d) The Issuer shall, and shall cause each of its Subsidiaries to,
pay and discharge or cause to be paid and discharged all Taxes, assessments and
governmental charges or levies imposed upon the Issuer or such Subsidiary or
upon the income or profits of the Issuer or such Subsidiary or upon any of the
Collateral, or upon any part thereof, all when due, as well as all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a Lien
upon the Property of the Issuer or such Subsidiary; provided, however, that
neither the Issuer nor any of its Subsidiaries shall be required to pay any such
Tax if (i) the amount, applicability or validity thereof shall currently be
contested in good faith by appropriate proceedings, and if adequate cash
reserves shall have been made therefor in accordance with GAAP or (ii) the
nonpayment of such Tax in the aggregate could not reasonably be expected to have
a Material Adverse Effect.

            (e) The Issuer shall, and shall cause each of its Subsidiaries to,
comply with all Governmental Approvals and Governmental Rules (including,
without limitation, all Environmental Laws) applicable to the Issuer, such
Subsidiary, any of their respective Properties, the District Energy Projects
owned by such Subsidiary or the Operation thereof except to the extent that
non-compliance could not reasonably be expected to have a Material Adverse
Effect.

      Section 9.2. Project Operation; Maintenance of Properties.

            (a) The Issuer shall and shall cause each of its Subsidiaries to
maintain and keep, or cause to be maintained and kept, their respective
Properties in good repair, working order and condition in accordance with
Prudent Operating Practices, so that the business carried on in connection
therewith may be properly conducted at all times; provided that this Section 9.2
shall not prevent the Issuer or any of its Subsidiaries from discontinuing the
operation and maintenance of any of its Properties if such discontinuation is
desirable in the conduct of its business and the Issuer has reasonably concluded
that such discontinuation could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

            (b) The Issuer shall promptly inform the Noteholders of any event
which would significantly interrupt or reduce the operation of any of the
District Energy Projects, excluding any planned outage or scheduled, routine
maintenance period.

            Section 9.3. Project Documents; Etc.

            (a) The Issuer shall and shall cause each of its Subsidiaries to:
(i) perform and observe in all respects all of its or such Subsidiary's
covenants and obligations contained in each of the Material Project Documents to
which it or such Subsidiary is a party, (ii) take all reasonable and necessary
action to prevent the termination or cancellation of any Material Project
Document to which it or such Subsidiary is a party in accordance with the terms
thereof or otherwise (except for any scheduled termination), and (iii) promptly
enforce against the relevant Project Party each covenant or obligation of such
Material Project Document in accordance with its terms. The Issuer shall comply
with the provisions of each Material Project


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -38-


Document and shall notify its direct and indirect shareholders of any actions
required to be taken by such shareholders in order for the Issuer to comply with
such Material Project Document. The Issuer shall promptly notify the Collateral
Agent of any default under any Material Project Document.

            (b) Except as expressly otherwise set forth in this Section 9.3, the
Issuer shall not and shall cause each of its Subsidiaries not to take the
following actions without the prior written consent of the Majority Noteholders
(which consent shall not be unreasonably withheld) unless such action could not
reasonably be expected to have a Material Adverse Effect: (i) cancel or
terminate any Material Project Document to which it or such Subsidiary is a
party or consent to or accept any cancellation or termination thereof prior to
the scheduled expiration thereof, (ii) sell, assign (other than pursuant to the
Security Documents) or otherwise dispose of (by operation of law or otherwise)
any part of its or such Subsidiary's interest in any Material Project Document,
(iii) waive any default under, or breach of, any Material Project Document or
waive, fail to enforce, forgive, compromise, settle, adjust or release any
right, interest or entitlement, howsoever arising, under or in respect of any
Material Project Document or in any way vary, or agree to the variation of, any
provision of such Material Project Document or of the performance of any
covenant or obligation by any other Person under any Material Project Document,
(iv) exercise any right to initiate any arbitration proceeding under any
Material Project Document or take any action with respect to any such legal
(including arbitral) proceeding initiated by any other Project Party or
compelled by the provisions of any Material Project Document, (v) petition,
request or take any other legal or administrative action that seeks, or may
reasonably be expected, to Impair any Material Project Document, or (vi) amend,
modify or supplement any Material Project Document; provided that the Issuer or
any of its Subsidiaries may enter into change orders in accordance with the
Material Project Documents without the prior written consent of the Majority
Noteholders if (A) such change order, individually or in the aggregate, would
not be reasonably likely to have a negative impact on the Issuer's EBITDA,
measured on a cash basis, in excess of $500,000 on a pro forma basis for the
Rolling Fiscal Period beginning on the date of such change order and (B) the
Issuer delivers to the Collateral Agent a certificate in advance notifying the
Noteholders of such proposed change order and such pro forma calculations. For
the purposes of clarification of this Section 9.3(b), the exercise by the Issuer
or any of its Subsidiaries of any election or option that would have the effect
of altering or modifying any economic or other material terms of a Material
Project Document shall constitute an "amendment" of such Material Project
Document.

            (c) The Issuer shall not and shall cause each of its Subsidiaries
not to enter into any Additional Project Document after the Closing Date without
the prior written consent of the Majority Noteholders except that no such
consent shall be required for the Issuer or any of its Subsidiaries to enter
into any Additional Project Documents constituting less than 5% of the gross
revenues of the Issuer in any given year or having a value of less than
$2,500,000 in any given year with unaffiliated third parties on an arms-length
basis in the ordinary course of business. The Issuer shall cause all
counterparties to any Additional Project Document constituting 5% or more of the
gross revenues of the Issuer in any year or having a value of $2,500,000 or more
in any given year to execute a Consent in substantially the form set forth in


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -39-


Exhibit F and satisfactory to the Majority Holders with respect to such
Additional Project Document. The Issuer shall, with respect to all other
Additional Project Documents, use its best efforts (which shall not include the
payment of a fee to any unaffiliated third party who is party to such Additional
Project Document) to obtain a Consent in substantially the form set forth in
Exhibit F.

            (d) Except to the extent expressly permitted under this Agreement,
the Issuer shall not and shall cause each of its Subsidiaries not to enter into
any contract or agreement (other than the Project Documents, the Financing
Documents and the Loan Documents) which restricts the ability of the Issuer or
such Subsidiary to: (i) enter into amendments, modifications, supplements or
waivers of the Material Project Documents or the Financing Documents, (ii) sell,
transfer or otherwise dispose of its assets, (iii) create, incur, assume or
suffer to exist any Lien upon any of its property, or (iv) create, incur,
assume, suffer to exist or otherwise become liable with respect to any
Indebtedness.

            (e) Promptly after the execution and delivery thereof, the Issuer
shall furnish each Secured Party with certified copies of: (i) all permitted
amendments, supplements or modifications that are of a material nature to any
Material Project Document, (ii) all permitted Additional Project Documents
entered into after the Closing Date and all amendments, supplements or
modifications thereto that are of a material nature and (iii) any additional
Consents executed in connection with an Additional Project Document in
accordance with Section 9.3(c).

      Section 9.4. Merger and Consolidation; Disposition of Assets.

            (a) The Issuer shall not, and shall not permit any of its
Subsidiaries to, change its (or such Subsidiary's) legal form, merge into or
consolidate with any other Person and shall not, and shall not permit any of its
Subsidiaries to, liquidate or dissolve; provided that any such Subsidiary may be
merged, liquidated or dissolved so long as (i) the assets of such Subsidiary
thereby become assets of the Issuer or another wholly-owned Subsidiary of the
Issuer engaging in the Operation of district energy projects; (ii) the Issuer
takes (and causes each applicable Subsidiary to take) such steps as may be
necessary in order to preserve the existence and the priority of the Liens under
the Security Documents and the validity and binding effect of the Financing
Documents; (iii) the Issuer or the surviving Subsidiary confirms the obligations
of the liquidated or dissolved Subsidiary or the Issuer, as applicable, under
the Security Agreements; and (iv) such liquidation or dissolution could not
reasonably be expected to have a Material Adverse Effect or cause an Event of
Default or violate any material Governmental Approval.

            (b) The Issuer shall not, and shall not permit any of its
Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, any of its or such Subsidiary's
Property except: (i) sales of energy, or hot or chilled or heated water, (ii)
sales of personal property no longer used or useful in the Issuer's or such
Subsidiary's business in the ordinary course of such Person's business (provided
that the aggregate amount of revenues of such sales of personal property of the
Issuer and its Subsidiaries shall not exceed


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -40-


$1,000,000 per any item or $2,000,000 in any fiscal year without the consent of
the Majority Noteholders), (iii) sales, transfers or other dispositions of the
Authorized Investments described in clauses (i) and (iii) of the definition
thereof and (iv) the transfer, assignment and delegation of all the Issuer's
right, title and interest in all or any portion of the Las Vegas Assets (to the
extent acquired prior to the Second Disbursement Date using new cash
contributions to capital of the Issuer or Affiliate Subordinated Debt) to, and
the assumption of all of the Issuer's liabilities thereunder by, an Affiliate of
the Issuer at any time prior to the Second Disbursement Date; provided, however,
that no payment, indemnity or undertaking of any kind shall be made by the
Issuer or any of its Subsidiaries to or for the benefit of such Affiliate in
connection with any such transfer, assignment, delegation and assumption of all
or any portion of the Las Vegas Assets (to the extent acquired prior to the
Second Disbursement Date using new cash contributions to capital of the Issuer
or Affiliate Subordinated Debt). The preceding sentence shall not apply to
transfers of assets between Subsidiaries of the Issuer or between any such
Subsidiary and the Issuer; provided that (A) in the case of any such transfer of
assets, the Issuer takes (and causes each applicable Subsidiary to take) such
steps as may be necessary to preserve the existence and the priority of the
Liens under the Security Documents and the validity and binding effect of the
Financing Documents; (B) the Issuer or the acquiring Subsidiary confirms the
obligations of the other Subsidiary or the Issuer, as applicable, under the
Security Agreements; and (C) such transfer could not reasonably be expected to
have a Material Adverse Effect or cause an Event of Default. The Collateral
Agent shall take such action as shall be necessary in order to release from the
Liens of the Security Documents the Property of the Issuer or of the relevant
Subsidiary conveyed, sold, transferred or otherwise disposed of in accordance
with this Section 9.4(b).

            (c) The Issuer shall not, and shall not permit any of its
Subsidiaries to, purchase or acquire any assets other than: (i) the purchase of
assets in the ordinary course of business reasonably required in connection with
the ownership, operation and maintenance of such Person's business as
contemplated by the Project Documents, (ii) the purchase of assets reasonably
required in connection with Restoration of a District Energy Project as
permitted in this Agreement, (iii) the purchase of assets in connection with
Permitted Capital Expenditures, (iv) the purchase of ETT Nevada pursuant to the
Las Vegas Stock Purchase Agreement with the proceeds of the Las Vegas Notes, new
cash contributions to capital of the Issuer or Affiliate Subordinated Debt, (v)
the purchase of the Northwind Aladdin Notes pursuant to the Agreement Regarding
Purchase and Sale of Debt dated as of July 6, 2004 among Exelon Thermal
Holdings, Inc., the Issuer and the holders of the Northwind Aladdin Notes with
the proceeds of the Las Vegas Notes, new cash contributions to capital of the
Issuer or Affiliate Subordinated Debt and (vi) Authorized Investments.

            (d) Except as provided in Section 9.9, the Issuer shall not, and
shall not permit any of its Subsidiaries to, convey, sell, transfer or otherwise
dispose of its equity interests in any of their respective Subsidiaries unless
the Issuer continues to be the direct or indirect owner of such Subsidiary.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -41-


            Section 9.5. Indebtedness. The Issuer shall not, nor will it permit
any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except Permitted Indebtedness.

            Section 9.6. Liens. The Issuer shall not, nor will it permit any OF
its Subsidiaries to, create, incur, assume or permit to exist any Lien on any of
its Properties now owned or hereafter acquired by it, nor assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except for Permitted Liens.

            Section 9.7. Investments. The Issuer shall not, and shall not permit
any of its Subsidiaries to, make any Investment other than Authorized
Investments.

            Section 9.8. Nature of Business; Maintenance of Office in New York.

            (a) The Issuer shall not, and shall not permit any of its
Subsidiaries to, engage to any material extent in any business other than (i) in
the case of the Issuer, the ownership of the Subsidiary Guarantors, the
activities related to the performance of the Transaction Documents to which it
is a party and related activities and (ii) in the case of the Subsidiaries of
the Issuer, the ownership of the relevant Owner Subsidiaries, the acquisition,
ownership, operation and use of its respective District Energy Projects as
contemplated by the existing Project Documents to which it is a party (and any
future permitted amendments to existing Project Documents or other future
agreements entered into in compliance with the terms of this Agreement) and the
activities related to the performance of the Transaction Documents to which it
is a party and related activities.

            (b) The Issuer shall maintain an office in the City of New York, New
York at all times.


            Section 9.9. Transactions with Affiliates. The Issuer shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly enter into
any other transaction that is otherwise permitted under this Agreement with or
for the benefit of an Affiliate (including guarantees and assumptions of
obligations of an Affiliate), except (a) as expressly contemplated by the
Transaction Documents, (b) transfers of ownership interests in any Subsidiary
Guarantor to Affiliates, including but not limited to Persons managed by
Macquarie or its Affiliates; provided that no such transfer will be allowed if
(i) it could reasonably be expected to result in a violation of the Chicago Use
Agreement or (ii) the proposed transferee is a "blocked person" as described in
Section 1 of the Terrorism Order or a Person described in the Department of
Treasury Rule referred to in Section 5.11(c) and (c) transactions that are (i)
disclosed to the Noteholders, (ii) on terms and conditions not less favorable to
the Issuer or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties and no Default would result from such transaction
and (iii) reasonably desirable for the Operation of the relevant District Energy
Project, and further, in the case of clause (c), each of the Issuer and its
Subsidiaries may make Restricted Payments in accordance with Section 9.11;
provided, further, that no payment, indemnity or undertaking of any kind shall
be made by the Issuer or any of its Subsidiaries to or for the benefit



                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -42-


of any Affiliate in connection with any assignment or assumption of the Las
Vegas Stock Purchase Agreement.

            Section 9.10. Environmental Compliance.

            (a) The Issuer shall not, and shall cause its Subsidiaries not to,
Release or permit the Release of Hazardous Materials at a Project Site other
than in a manner that (i) could not reasonably be expected to have a Material
Adverse Effect or give rise to a material Environmental Claim and (ii) complies
in all material respects with all applicable Environmental Laws.

            (b) The Issuer shall, and shall cause its Subsidiaries to, (i)
conduct and complete any investigation, study, sampling and testing that may be
reasonably required if there is any fact, circumstance, condition or occurrence
that could reasonably be expected to form the basis of an Environmental Claim
related to or against any of the District Energy Projects or any Environmental
Party or that any Secured Party may reasonably request and (ii) undertake any
cleanup, removal, remedial, response or other action necessary to remove and
clean up all Hazardous Materials related to or Released at, on, in, under or
from a Project Site to the extent required by applicable Environmental Laws
except if the failure to do so could not reasonably be expected to have a
Material Adverse Effect or give rise to a material Environmental Claim.

            (c) The Issuer shall deliver to the Secured Parties (i) promptly
upon obtaining knowledge of (A) any fact, circumstance, condition or occurrence
that could reasonably be expected to form the basis of a material Environmental
Claim related to or against any of the District Energy Projects or any
Environmental Party the effect of which could reasonably be expected to have a
Material Adverse Effect or result in a mandatory prepayment under Section
3.3(c), (B) any pending or threatened material Environmental Claim related to
any of the District Energy Projects or any Environmental Party, or (C) any
material change in the operations of or capital improvements to any District
Energy Project that is or could be required for such District Energy Project to
be in compliance with all Governmental Approvals and Environmental Laws relating
to such District Energy Project, a notice thereof describing the same in
reasonable detail and, together with such notice or as soon thereafter as
possible, a description of the action that the Issuer and any other relevant
Environmental Party has taken or proposes to take with respect thereto and,
thereafter, from time to time such detailed reports with respect thereto as any
Secured Party may reasonably request and (ii) promptly upon their becoming
available, copies of all material written communications with any Governmental
Authority regarding any Environmental Law or Environmental Claim relating to a
District Energy Project, including, without limitation, the loss of, or failure
to renew, Governmental Approvals related to any District Energy Project.

            (d) The Issuer and each Owner Subsidiary shall promptly, but in any
event within five (5) days, notify Agent if such Issuer becomes aware of the
discovery of any occurrence, condition or state of facts which would render any
representation contained in Section 5.13 incorrect in any material respect if
made at the time of such discovery.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -43-


            Section 9.11. Restricted Payments.

            (a) The Issuer shall not make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except that the Issuer may make a Restricted
Payment in cash from and to the extent of the cash funds then on deposit in the
Distribution Account at least five (5) Business Days after any Payment Date,
subject to the satisfaction of each of the following conditions on the date of
such Restricted Payment (the "Restricted Payment Date") and after giving effect
thereto:

                  (i) such Restricted Payment is permitted by applicable law and
      is made in accordance with the Agency, Disbursement and Control Agreement;

                  (ii) no Default or Event of Default shall have occurred and be
      continuing or would result from such Restricted Payment;

                  (iii) the Debt Service Reserve Account Balance is at least
      equal to the Required Debt Service Reserve Amount, and the Tax Reserve
      Account Balance is at least equal to the Required Tax Reserve Amount;

                  (iv) (A) the Debt Service Coverage Ratio for the Rolling
      Fiscal Period ending on the last day of the month preceding the Restricted
      Payment Date is at least 1.25 to 1 and the projected Debt Service Coverage
      Ratio for the Rolling Fiscal Period ending on the date that is one year
      from such Restricted Payment Date is at least 1.25 to 1; provided that if
      such Restricted Payment Date occurs on or after the date that is four
      years prior to the Final Maturity Date, the projected Debt Service
      Coverage Ratio for the next succeeding Rolling Fiscal Period and the
      Rolling Fiscal Period ending on December 31, 2023 are each at least 1.40
      to 1 and (B) such projected Debt Service Coverage Ratio does not
      negatively vary from the projected Debt Service Coverage Ratio contained
      in the certificate of the Independent Engineer delivered pursuant to
      Section 7(f) by 10% or more unless the Independent Engineer delivers a
      certification that the financial and operational assumptions contained in
      such projected Debt Service Coverage Ratio are reasonable and consistent
      with Prudent Operating Practices;

                  (v) if such Restricted Payment Date is on or after the date
      that is nine months after the Issuer acquires ETT Nevada pursuant to the
      Las Vegas Stock Purchase Agreement and the Issuer is not in compliance
      with the provisions of Section 9.19(d), either (A) the Collateral Agent
      shall have received the Aladdin Indemnity, duly executed and delivered by
      the Indemnitor, and an Officer's Certificate from the Indemnitor, dated
      not more than three Business Days before such Restricted Payment Date,
      certifying that the Aladdin Indemnity is in full force and effect and that
      the Indemnitor will, as of the Restricted Payment Date, have shareholders'
      equity of not less than $300,000,000 or (B) for the purposes of
      determining any projected component of the Debt Service Coverage Ratio
      calculations hereunder, the definition of Cash Flow shall not take into
      account any Revenue attributable to the Las Vegas District Energy Project
      (but shall include all


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -44-


      Operating Costs, Major Maintenance Expenditures, Capital Expenditures and
      Taxes attributable to the Las Vegas District Energy Project); and

                  (vi) if such Restricted Payment Date is on or after January 1,
      2013, the term of the Chicago Use Agreement has been extended at least 5
      years past the Final Maturity Date.

            (b) The Issuer shall cause its Owner Subsidiaries not to declare or
make any Restricted Payment except as set forth in Section 9.11(c).

            (c) Prior to each Payment Date (and in anticipation of the
application of funds on such Payment Date contemplated by the Agency,
Disbursement and Control Agreement), the Issuer shall cause (i) the balance of
outstanding Intercompany Subordinated Loans made by each Owner Subsidiary to the
Issuer to be repaid in an amount equal to the distribution in respect of equity
interests in such Owner Subsidiary described in clause (ii), and (ii) a
distribution in respect of equity interests in such Owner Subsidiary to be made
by such Owner Subsidiary to the Issuer in the maximum amount that is legally
permissible. The intent of the foregoing provision is to convert, prior to each
Payment Date and to the fullest extent legally permissible the balance of
Intercompany Subordinated Loans from an Owner Subsidiary to the Issuer to a
distribution to the Issuer in respect of the equity interests in such Owner
Subsidiary.

            (d) To the extent that the proceeds of any Affiliate Subordinated
Debt (with terms and conditions not less favorable to the Issuer than could be
obtained on an arm's-length basis from unrelated third parties) were used
exclusively to pay the purchase price of all or any portion of the Las Vegas
Assets prior to the Second Disbursement Date, the Issuer may use the net
proceeds of the Las Vegas Notes, to the extent such net proceeds are available
to the Issuer, to repay such Affiliate Subordinated Debt so long as no Default
or Event of Default has occurred or is continuing, notwithstanding anything to
the contrary in the subordination agreement applicable to such Affiliate
Subordinated Debt.

            Section 9.12. Further Assurances.

            (a) The Issuer shall take, or cause to be taken, all action required
or desirable to maintain its or its Subsidiary's (as applicable) good and valid
title to the Collateral (subject to Section 9.4(b)) and shall maintain and
preserve, and cause to be maintained and preserved (as applicable) the Liens
created by the Security Documents and the priority thereof.

            (b) The Issuer shall use its best efforts to obtain (i) Consents in
substantially the form set forth in Exhibit F with respect to Material Project
Documents not listed on Schedule 4.2 within 120 days of the Initial Disbursement
Date, or the Second Disbursement Date, as applicable, and (ii) Consents in
substantially the form set forth in Exhibit F with respect to Additional Project
Documents in accordance with Section 9.3.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -45-


            (c) If, at any time after the Closing Date, if ETT Nevada and/or any
of its Affiliates owns or has the right to control 100% of the outstanding
equity interests in Northwind Aladdin, the Issuer shall promptly cause ETT
Nevada to (i) cause Northwind Aladdin to amend the note purchase agreement
relating to the Northwind Aladdin Notes to (A) change references to Exelon under
such note purchase agreement to be references to Macquarie District Energy Inc.
and (B) provide that a default under the Notes constitutes a default under the
Northwind Aladdin Notes and (ii) pledge its member interest in Northwind Aladdin
and enter into the ETT Nevada Pledge Agreement.

            Section 9.13. Insurance.

            (a) Insurance Maintained by the Issuer and its Subsidiaries.

                  (i) The Issuer shall and shall cause each of its Subsidiaries
      to procure and maintain in full force and effect at all times on and after
      the date of this Agreement, at its or such Subsidiary's own expense,
      insurance with limits and coverage provisions sufficient to satisfy the
      requirements set forth in each of the Project Documents and in accordance
      with Prudent Operating Practices, but in no event less than the limits and
      coverage provisions specified in Schedule 9.13 hereto. The Issuer shall
      ensure that the Collateral Agent and each of the Secured Parties is listed
      as additional insureds and sole loss payees under the insurance policies
      procured in connection with any of the District Energy Projects.

                  (ii) All of the insurance specified in Schedule 9.13 hereto
      shall be provided by responsible insurance companies with a Best Insurance
      Reports Rating or Standard & Poor's Rating of "A-" or better and a
      financial size category of "IX" or higher (or alternatively by a company
      approved for this purpose by the Majority Noteholders).

            (b) Loss Proceeds.

                  (i) The Issuer shall cause the Net Available Amount of all
      Loss Proceeds in respect of any Event of Loss received by the Issuer or
      any of its Subsidiaries to be deposited in the Loss Proceeds Account and
      the amounts on deposit in the Loss Proceeds Account will be applied as
      provided in this Section 9.13(b).

                  (ii) The Net Available Amount of Loss Proceeds received from a
      Total Loss shall be used to prepay the Notes in accordance with
      Section 3.3(a).

                  (iii) The Net Available Amount of Loss Proceeds received from
      any Event of Loss (other than a Total Loss) shall be made available to the
      Issuer or the relevant Subsidiary, as the case may be, to Restore the
      Affected Property (such Restoration being referred to herein as
      "Restoration Work") or to reimburse the Issuer or such Subsidiary for the
      cost of any such Restoration Work incurred by the Issuer or such
      Subsidiary subject to the satisfaction of the following conditions:


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -46-


                        (A) If the aggregate Net Available Amount of Loss
            Proceeds with respect to any single Event of Loss requested by the
            Issuer to be applied to Restoration Work is not more than
            $7,500,000, such Net Available Amount shall be made available to the
            Issuer or such Subsidiary, as the case may be, upon receipt of a
            request therefor from the Issuer and a description of the proposed
            Restoration Work (which Restoration Work shall, to the extent
            possible, restore the relevant District Energy Project to
            substantially the same condition it was in prior to the occurrence
            of such Event of Loss, assuming the District Energy Project was in
            the condition required by Section 9.2(a)) together with the Issuer's
            certification that the proposed Restoration is feasible and will not
            be reasonably expected to result in a Material Adverse Effect, and
            the Issuer or such Subsidiary shall promptly apply such funds to
            such Restoration Work.

                        (B) If the Net Available Amount of Loss Proceeds
            requested by the Issuer to be applied to Restoration Work does not
            qualify under subclause (A) above, such Net Available Amount shall
            be made available to the Issuer or such Subsidiary, as the case may
            be, subject to the satisfaction of the following conditions: (I) the
            Issuer shall have notified the Collateral Agent of its intent to
            repair or restore the affected District Energy Project and (II) the
            Issuer shall have provided the Collateral Agent with each of the
            following at least 30 days prior to the date it proposes to commence
            such Restoration Work: (x) a report of the Independent Engineer,
            reasonably acceptable to the Majority Noteholders, as to (1) the
            economic viability of the affected District Energy Project after
            giving effect to such Restoration Work, (2) the expected performance
            levels of the affected District Energy Project after such
            Restoration Work, (3) the expected ability of such District Energy
            Project to comply with Governmental Rules and its then existing
            Governmental Approvals after giving effect to such Restoration Work,
            (4) the expected amount of time required to repair and restore such
            District Energy Project, (5) the estimated cost of such Restoration
            Work and (6) such other matters as are reasonably requested by the
            Majority Noteholders, (y) a certificate of an Authorized Officer of
            the Issuer as to (1) the availability of a sufficient amount of
            funds (including any funds on deposit in the Loss Proceeds Account)
            to complete such Restoration Work and pay all principal of and
            interest on the Notes when due during such Restoration Work, and (2)
            the likelihood that no Event of Default shall exist after giving
            effect to such repair or restoration and (z) such other
            certificates, opinions or documentation as the Collateral Agent and
            the Majority Noteholders may reasonably request, as necessary or
            appropriate, in connection with such Restoration Work or to preserve
            and protect its interests under this Agreement and the other
            Financing Documents. If the Issuer elects to perform, or cause the
            performance of, Restoration Work pursuant to this
            Section 9.13(b)(iii)(B), the Issuer shall use all reasonable efforts
            to perform, or cause the applicable Subsidiary to perform, such
            Restoration Work in a prompt and diligent manner.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -47-


                        (C) No Material Project Document or material
            Governmental Approval in effect with respect to the affected
            District Energy Project immediately prior to such Event of Loss
            shall have been Impaired, or is subject to being Impaired, due to
            such Event of Loss except in so far as the same is not reasonably
            likely to be reinstated or fully replaced upon the completion of the
            Restoration Work.

                        (D) The Property of the Issuer, or the applicable
            Subsidiary, as the case may be, constituting the Restoration Work
            shall be subject to the Lien of the Security Documents (whether by
            amendment to the Security Documents or otherwise) to the extent that
            the Affected Property was so subject immediately before the Event of
            Loss in accordance with the Financing Documents.

                  (iv) If the Issuer, or the Subsidiary Operating the affected
      District Energy Project, as the case may be, has not commenced the
      Restoration Work (including by ordering necessary equipment) in accordance
      with this Section 9.13 within 180 days after it has received notice of the
      receipt by the Collateral Agent of the Net Available Amount of the Loss
      Proceeds referred to above or at any time after such 180-day period, one
      or more of the foregoing conditions shall not have been satisfied, then,
      the Collateral Agent shall, at the written instructions of the Majority
      Noteholders, apply the Net Available Amount of such Loss Proceeds (to the
      extent not otherwise remitted as aforesaid to the Issuer) to the
      prepayment of the Notes in accordance with Section 3.3(a) on a date
      selected by the Majority Noteholders (and specified in such written
      instructions) not more than 15 Business Days after the end of such 180-day
      period or the failure to satisfy any such condition.

                  (v) Notwithstanding anything to the contrary in this
      Section 9.13, but subject to the Restoration obligations of the Owner
      Subsidiaries and Northwind Aladdin under the Project Documents, if an
      Event of Default shall have occurred and be continuing, the Collateral
      Agent shall, at the written direction of the Majority Noteholders, apply
      any amount of such Loss Proceeds in the Loss Proceeds Account in
      accordance with Section 3.3(a).

                  (vi) Prior to disbursing any insurance proceeds for the
      purpose of paying the expenses of any Restoration, the Collateral Agent
      shall receive from the Issuer evidence reasonably satisfactory to the
      Collateral Agent, certified by the Issuer, of the actual expenses incurred
      in performing such Restoration. The Collateral Agent may, at the written
      direction of the Issuer, disburse such amounts to the Issuer or the
      relevant Subsidiary for application to the payment of such expenses or
      directly to the party or parties furnishing the materials or labor for the
      Restoration.

                  (vii) If the Issuer, any of its Subsidiaries or the Collateral
      Agent receives any amount of proceeds of business interruption insurance
      and other payments received for interruption operations in respect of any
      Event of Loss, such amounts shall be deposited in the Revenue Accounts.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -48-


            (c) Evidence of Insurance. On each of the Initial Disbursement Date
and the Second Disbursement Date (unless certified copies of the insurance
policies required by this Section 9.13 have been delivered in accordance with
Section 4.2(h) or Section 4.3(h), as applicable) and on an annual basis at least
twenty days prior to each policy anniversary, the Issuer shall furnish the
Collateral Agent with certification of all required insurance. Such
certification shall be executed by each insurer or by an authorized
representative of each insurer or an acceptable insurance broker where it is not
practical for such insurer to execute the certificate itself. Such certification
shall identify the underwriters, the reinsurers (if any), the type of insurance,
the insurance limits and the policy term and shall specifically list the special
provisions for such insurance required by this Section 9.13. Upon request, the
Issuer will promptly furnish the Collateral Agent with copies of all insurance
policies, binders and cover notes or other evidence of such insurance relating
to the District Energy Projects.

            (d) Failure to Maintain Insurance. If the Issuer or any of its
Subsidiaries fails to take out or maintain the full insurance coverage required
by this Section 9.13, upon 30 days' prior notice (unless the aforementioned
insurance would lapse within such period, in which event notice should be given
as soon as reasonably possible) to the Issuer of any such failure, the Majority
Noteholders may, but shall be under no obligation to, take out the required
policies of insurance and pay the premiums on the same. All amounts so advanced
by the Majority Noteholders shall become an additional obligation of the Issuer
to the Majority Noteholders, and the Issuer shall forthwith pay such amounts to
the Majority Noteholders, together with interest thereon at the Default Rate,
from the date so advanced.

            (e) Insurance Adjustments. The Issuer shall not, and shall not
permit any of its Subsidiaries to, adjust, compromise or settle any claim under
any property or business interruption insurance which claim, individually or in
the aggregate with any other claims arising out of the same casualty, exceeds
$3,000,000, without the prior written consent of the Majority Noteholders.

            (f) No Duty of Collateral Agent to Verify. No provision of this
Section 9.13 or any provision of this Agreement or any Project Document shall
impose on the Collateral Agent any duty or obligation to verify the existence or
adequacy of the insurance coverage maintained by the Issuer and its Subsidiaries
nor shall the Collateral Agent be responsible for any representations or
warranties made by or on behalf of the Issuer or any of its Subsidiaries to any
insurance company or underwriter.

            (g) Notice of Cancellation. All policies of insurance required to be
maintained pursuant to this Section 9.13 and Schedule 9.13 hereto shall be
endorsed so that if at any time any such policy is canceled or the coverage
provided thereby be reduced, which cancellation or reduction would adversely
affect the Noteholders, such cancellation or reduction shall not be effective as
to the Noteholders for 30 days, except for non-payment of premium which shall be
for ten days, after receipt by the Collateral Agent of written notice from such
insurer of such cancellation or reduction.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -49-


            (h) Insurance Policies. The terms of all policies of insurance
required to be maintained pursuant to this Section 9.13 and Schedule 9.13 shall
be mutually acceptable to the Issuer and the Collateral Agent.

            Section 9.14. Collection of Payments. The Issuer shall, and shall
cause each of its Subsidiaries to, deposit all revenues and other payments
(other than Loss Proceeds) received by the Issuer or such Subsidiary and shall
cause all Persons party to a Project Document to remit all payment thereunder
payable to the Issuer or any of its Subsidiaries, to the Revenue Accounts.

            Section 9.15. Use of Proceeds The Issuer shall use (and shall cause
to be used) the proceeds of the Notes solely: (i) to fund or refinance the
acquisition of the District Energy Projects; (ii) to fund certain development
and operational activities of the Issuer and its Subsidiaries; (iii) to pay the
transaction costs and expenses incurred in connection with the transactions
contemplated hereby; (iv) to pay the Fee; and (v) to provide for the initial
funding of the Debt Service Reserve Account in the amount of the Required Debt
Service Reserve Amount in accordance with the Agency, Disbursement and Control
Agreement.

            Section 9.16. Capital Expenditures. The Issuer shall not, and shall
cause each if its Subsidiaries not to, make any Capital Expenditures other than
Permitted Capital Expenditures.

            Section 9.17. Debt Service Coverage Ratio. The Issuer shall
maintain, or caused to be maintained, a Debt Service Coverage Ratio for any
Rolling Fiscal Period ending on a Payment Date of at least 1.05 to 1; provided
that for the purposes of calculating the Debt Service Coverage Ratio for this
Section 9.17, "Cash Flow" shall mean the excess (if any) of: (a) the sum of (i)
all Revenues for such period plus (ii) contributions to capital fully paid in
cash received during such period (but only to the extent such contributions to
capital are used to fund Permitted Capital Expenditures) plus (iii) proceeds of
Qualifying Capital Expansion Indebtedness borrowed during such period over (b)
the sum of (i) Operating Costs for such period plus (ii) Major Maintenance
Expenditures for such period plus (iii) Capital Expenditures paid in such period
plus (iv) Taxes (other than federal income taxes) actually reserved against or
paid by or on behalf of the Issuer (without duplication) in such period.

            Section 9.18. Payment of Obligations. The Issuer shall, and shall
cause the Subsidiary Guarantors to, pay and discharge in full their respective
obligations under this Agreement, under the Notes and the other Financing
Documents and Material Project Documents.

            Section 9.19. Investment Company Act; PUHCA; State Utility
Regulation.

            (a) The Issuer shall not, and shall cause its Subsidiaries not to,
take any action which would result in any of the Issuer or its Subsidiaries
becoming subject to regulation under the Investment Company Act.

            (b) The Issuer shall not, and shall cause its Subsidiaries not to,
take any action which would result in any of the Issuer or its Subsidiaries
becoming subject to regulation


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -50-


under PUHCA, including as a result of the acquisition of the Las Vegas District
Energy Project or otherwise.

            (c) The Issuer shall confirm that Sierra Pacific is maintaining its
exemption under Section 3(a)(2) of PUHCA.

            (d) On or before the date that is nine months after the date the
Issuer acquires ETT Nevada pursuant to the Las Vegas Stock Purchase Agreement,
the Issuer shall deliver to the Collateral Agent (i) a reasonably detailed
Officer's Certificate from the Issuer, in form and substance satisfactory to
each Noteholder, and (ii) subject to standard assumptions and qualifications
with respect to the factual basis for such opinion, an opinion from counsel to
ETT Nevada and Northwind Aladdin, in form and substance satisfactory to each
Noteholder, each stating (A) either (1) that the Issuer and each of its
Subsidiaries is in compliance with all Governmental Rules as in effect from time
to time in the State of Nevada applicable to the Las Vegas District Energy
Project with respect to the regulation of public utilities by virtue of
obtaining and maintaining a Certificate of Public Convenience and Necessity from
the Public Utilities Commission of Nevada (and such other filings, applications,
exemptions or permits as may be required under applicable Nevada law with
respect to the regulation of public utilities) and that the Certificate of
Public Convenience and Necessity (and such other filings, applications,
exemptions or permits as may be required under applicable Nevada law with
respect to the regulation of public utiltities), in each case attached as
exhibits to such Officer's Certificate and legal opinion, were duly and validly
issued and are in full force and effect or (2) that none of the Issuer, ETT
Nevada, Northwind Aladdin or the Las Vegas District Energy Project is subject to
regulation by the Public Utilities Commission of Nevada or required or permitted
to obtain a Certificate of Public Convenience and Necessity or other exemption
or permit and attaching an Advisory Opinion from the Public Utilities Commission
of Nevada to that effect as an exhibit to such Officer's Certificate and legal
opinion, or (3) due to a change in law or circumstances, none of the Issuer, ETT
Nevada, Northwind Aladdin or the Las Vegas District Energy Project is subject to
regulation by the Public Utilities Commission of Nevada or required or permitted
to obtain a Certificate of Public Convenience and Necessity, Advisory Opinion or
other exemption or permit, (B) that the Material Project Documents applicable to
the Las Vegas District Energy Project are legal, valid, binding and enforceable
without any qualifications (other than as aforesaid and standard qualifications
with respect to creditors' rights generally and general equitable principles)
and are not subject to any regulatory tariff that is different from the contract
price contained in such Material Project Document, and that no challenge, claim
or defense has been filed, made, raised or threatened asserting that any
Material Project Document that is applicable to the Las Vegas District Energy
Project is void, voidable, invalid, illegal or unenforceable, and (C) that the
Issuer and each of its Subsidiaries are in compliance with all Governmental
Rules as in effect from time to time in the State of Nevada and Governmental
Approvals as in effect from time to time in the State of Nevada necessary to
conduct their business as contemplated by the Material Project Documents that
are applicable to the Las Vegas District Energy Project; provided that a failure
to comply with this Section 9.19(d) shall not constitute an Event of Default
under this Agreement. If, at any time after the date that is nine months after
the date the Issuer acquires ETT Nevada pursuant to the Las Vegas Stock


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<PAGE>
                                      -51-


Purchase Agreement, the Issuer is not in compliance with the foregoing
provisions of this Section 9.19(d), then for the purposes of determining any
projected component of the Debt Service Coverage Ratio calculations under
Section 9.11 of this Agreement and Section 5.1 of the Agency, Disbursement and
Control Agreement, the definition of Cash Flow shall not take into account any
Revenue attributable to the Las Vegas District Energy Project (but shall include
all Operating Costs, Major Maintenance Expenditures, Capital Expenditures and
Taxes attributable to the Las Vegas District Energy Project) unless an indemnity
in the form set forth in Exhibit J (the "Aladdin Indemnity") has been duly
executed and delivered by a direct or indirect parent of the Issuer for the
benefit of the Collateral Agent and each Noteholder, and the Indemnitor has and
maintains shareholders' equity of not less than $300,000,000.

            Section 9.20. Operating Budget. Not later than July 15 of each
calendar year, the Issuer shall submit to the Collateral Agent a report covering
the initial six months of the fiscal year detailing the differences between
actual expenditures and the Operating Budget. The Issuer, each of the Owner
Subsidiaries and Northwind Aladdin shall operate in a manner consistent with the
Operating Budget and in accordance with Section 5.1(a) of the Agency,
Disbursement and Control Agreement.

            Section 9.21. Ratings. The Issuer shall at all times cause the Notes
to be rated by a Rating Agency.

            SECTION 10. EVENTS OF DEFAULT; REMEDIES.

            Section 10.1. Events of Default. The occurrence of any one or more
OF the following events, conditions or circumstances shall constitute an "Event
of Default" (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or occur as a result of operation of law or
otherwise):

            (a) the Issuer shall fail to pay any principal of or premium, if
any, or interest on any Note or any other amount payable under this Agreement or
any Note when the same becomes due and payable, whether at stated maturity or at
a date fixed for prepayment or by declaration or otherwise;

            (b) (i) the Issuer shall fail to observe or perform any obligation
to be observed or performed by it under any of Section 9.3, Section 9.4, Section
9.5, Section 9.6, Section 9.8, Section 9.11, Section 9.13(a)(i), Section
9.13(b)(i), Section 9.14, Section 9.16, Section 9.17 or, to the extent not
covered by Section 10.1(a) above, Section 9.18, or under Article IV of the
Issuer Security Agreement; or (ii) any Subsidiary Guarantor shall fail to pay
when due any amount under the Subsidiary Guarantor Security Agreement to which
it is a party or shall fail to observe or perform any covenant or agreement
contained in Article V of the applicable Subsidiary Guarantor Security
Agreement; or (iii) MDEH shall fail to pay when due any amount under the MDEH
Pledge Agreement or shall fail to observe or perform any covenant or agreement
contained in Article V of the MDEH Pledge Agreement; or

            (c) the Issuer shall fail to observe or perform any obligation to be
observed or performed by it under any of Section 7, Section 9.7, Section 9.9,
Section 9.10, Section 9.13(d) or Section 9.15 and such failure shall have


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -52-


continued for a period of at least 30 days after the earlier of (i) an officer
of the Issuer obtaining actual knowledge of such default and (ii) the Issuer
receiving written notice of such default from any Noteholder or the Collateral
Agent; or

            (d) the Issuer, MDEH or any Subsidiary Guarantor shall fail to
perform or observe any covenant or agreement contained in any Financing Document
to which it is a party (other than those specified in clauses (a), (b) or (c) of
this Section 10.1) and such failure shall continue unremedied for a period of 30
or more days after the earlier of (i) an officer of the Issuer, MDEH or the
Subsidiary Guarantors, as applicable, obtaining actual knowledge of such default
and (ii) the Issuer, MDEH or the Subsidiary Guarantors, as applicable, receiving
written notice of such default from any Noteholder or the Collateral Agent; or

            (e) any representation or warranty made or deemed made by the Issuer
in this Agreement or any representation, warranty or statement in any
certificate, financial statement or other document furnished to any Noteholder
or the Collateral Agent by or on behalf of the Issuer under any Financing
Document, or any representation or warranty made or deemed made by MDEH or any
Subsidiary Guarantor in any Financing Document to which it is a party, shall
prove to have been false or misleading in any material respect as of the time
made or deemed made, confirmed or furnished; or

            (f) a Bankruptcy shall occur with respect to the Issuer, MDEH or any
Subsidiary Guarantor (other than ETT Nevada);

            (g) (i) one or more judgments for the payment of money in an
aggregate amount in excess of $500,000 shall be rendered against the Issuer and
its Subsidiaries or (ii) one or more judgments for the payment of money in an
aggregate amount in excess of $500,000 shall be rendered against any Subsidiary
of the Issuer, and any one or more of such judgments described in clause (i) or
(ii) above shall not be discharged or execution thereof stayed pending appeal,
within 60 days after entry thereof, or, in the event of such a stay, such
judgment or judgments shall not be discharged within 30 days after such stay
expires; or

            (h) any Security Document shall cease to be in full force and effect
or to be effective to grant a perfected Lien to the Collateral Agent, for the
benefit of the Secured Parties, on the Collateral described therein with the
priority purported to be created thereby; or

            (i) any material provision of the Chicago Use Agreement shall at any
time for any reason cease to be valid and binding or in full force and effect
(except upon any termination of the Chicago Use Agreement in accordance with its
terms) or shall be Impaired; or any party to the Chicago Use Agreement shall be
in default, or shall have breached its obligations, under the Chicago Use
Agreement and such default or breach could reasonably be expected to have a
Material Adverse Effect; or

            (j) the Issuer or any Subsidiary Guarantor shall default in the
payment when due of any principal of or interest on any of its Indebtedness
aggregating $500,000 or more (other than Indebtedness hereunder and other than
Affiliate Subordinated Debt so long as the


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -53-


lender with respect to such Affiliate Subordinated Debt is in compliance with
the subordination agreement containing the terms of subordination set forth in
Exhibit H hereto with respect to such Affiliate Subordinated Debt and has not
exercised any remedies (including acceleration) with respect thereto); or any
event specified in any note, agreement, indenture or other document evidencing
or relating to any such Indebtedness of the Issuer or any Subsidiary Guarantor
shall occur if the effect of such event is to cause or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause such Indebtedness to become due, or to be prepaid in full
(whether by redemption, purchase, offer to purchase or otherwise), prior to its
stated maturity; or

            (k) the Issuer, any of its Subsidiaries, MDEH or any Secured Party
shall become, solely by virtue of (i) the ownership or operation of the
respective District Energy Projects by the Subsidiaries of the Issuer or (ii)
the participation of MDEH or such Subsidiary in the transactions contemplated by
the Transaction Documents to which it is a party or its acquisition, ownership
and operation of the respective District Energy Project and the sale of energy,
or hot or chilled water therefrom: (1) an "electric utility company", a "holding
company" or either a "subsidiary company" or an "affiliate" of either a "holding
company" or an "electric utility company", as such terms are defined in PUHCA,
or (2) subject to any regulation contemplated by Section 5.11 and; in each case,
if any such event, condition or circumstance could reasonably be expected to
have a Material Adverse Effect; or

            (l) (i) any Plan shall fail to satisfy the minimum funding standards
of ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the Issuer or any
ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii)
the aggregate "amount of unfunded benefit liabilities" (within the meaning of
section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $500,000, (iv) the Issuer or any ERISA Affiliate
shall have incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (v) the Issuer or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (vi) the Issuer or any Subsidiary
establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability
of the Issuer or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect (as used herein, the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings assigned to
such terms in section 3 of ERISA); or

            (m) a Change in Control shall have occurred without the consent of
the Majority Noteholders; provided that such Change in Control shall not result
in an Event of Default under this Section 10.1(m) if (i) the Notes are rated at
least "BBB-" by S&P or Fitch or "Baa3"


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<PAGE>
                                      -54-


by Moody's both prior to and after giving effect to such Change in Control and
(ii) prior to such Change in Control, the Collateral Agent receives evidence
that all consents and approvals required under the terms of the Material Project
Documents in connection with such Change in Control have been obtained; or

            (n) a breach of the Sponsor Covenant shall have occurred.

            Section 10.2. Remedies.

            (a) Upon the occurrence of any Event of Default described in
Section 10.1(f) with respect to the Issuer, the unpaid principal amount of all
Notes, together with the interest accrued thereon and all other amounts payable
by the Issuer under this Agreement in respect of each such Note, shall
automatically become immediately due and payable, together with, to the extent
permitted by law, an amount equal to the Additional Amount (as hereinafter
defined), without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by the Issuer.

            (b) Upon the occurrence of any other Event of Default, the Majority
Noteholders may, by written notice to the Issuer, declare the unpaid principal
amount of all Notes to be, and the same shall forthwith become, due and payable,
together with the interest accrued thereon and all other amounts payable by the
Issuer under this Agreement in respect of each such Note and, to the extent
permitted by law, an amount equal to the Additional Amount in respect of each
such Note, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by the Issuer.

            For purposes of Section 10.2(a) and Section 10.2(b), the term
"Additional Amount" means an amount equal to the Make-Whole Amount that would
have been payable with respect to such Note if the Issuer had elected to prepay
such Note in full pursuant to Section 3.2(a) on the date of acceleration under
this Section 10.2. The Issuer acknowledges, and the parties hereto agree, that
each Noteholder has the right to maintain its investments in the Notes free from
repayment by the Issuer (except as specifically provided for in this Agreement)
and that the provision for payment of an Additional Amount by the Issuer in the
event that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such right
under such circumstances.

            (c) The provisions of this Section 10.2 are subject to the condition
that, if the Issuer shall pay all arrears of interest on the Notes and all
payments on account of the principal of and premium (if any) on the Notes which
shall have become due otherwise than by acceleration (with interest on such
principal, premium (if any) and, to the extent permitted by law, on overdue
payments of interest, at the rate specified in the Notes with respect to overdue
payments) and all Events of Default (other than nonpayment of principal of and
accrued interest on the Notes and amounts equal to the Additional Amount, due
and payable solely by virtue of acceleration) shall be remedied or waived
pursuant to Section 12, then, and in every such case, the Majority Noteholders,
by written notice to the Issuer, may rescind and annul any such


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -55-


acceleration and its consequences; but no such action shall affect any
subsequent Default or Event of Default or impair any right consequent thereon.

            (d) The Collateral Agent may, to the fullest extent permitted by
law, have a court having jurisdiction to appoint a receiver, which receiver
shall take charge and possession of and protect, preserve, replace and repair
the Collateral or any part thereof, and manage and operate the same, and receive
and collect all rents, income, receipts, royalties, revenues, issues and profits
therefrom. The Issuer hereby irrevocably consents and shall be deemed to have
hereby irrevocably consented to the appointment thereof, and upon such
appointment, the Issuer shall immediately deliver possession of such Collateral
to the receiver. The Issuer also irrevocably consents to the entry of an order
authorizing such receiver to invest upon interest any funds held or received by
the receiver in connection with such receivership. The Collateral Agent shall be
entitled to such appointment as a matter of right, if it shall so elect, without
the giving of notice to any other party and without regard to the adequacy of
the security of the Collateral.

            Section 10.3. Suits for Enforcement.

            (a) If any Default or Event of Default shall have occurred and be
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 10.2, any Secured Party may
proceed to protect and enforce its rights, either by suit in equity or by action
at law, or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Agreement or any Financing Document,
or for an injunction against a violation of any of the terms hereof or thereof,
or in aid of the exercise of any power granted in this Agreement or any
Financing Document by law, equity or otherwise, or any Secured Party may proceed
to enforce the payment of all sums due to such Secured Party, as the case may
be, or to enforce any other legal or equitable right of any Secured Party.

            (b) No recovery of any judgment or final decree by any Secured Party
and no levy of any execution under any such judgment upon any of the Collateral
shall in any manner or to any extent affect the obligations of the Subsidiary
Guarantors or MDEH under the Financing Documents or any rights, powers or
remedies of the Secured Parties, but the obligations of the Subsidiary
Guarantors or MDEH under the Financing Documents and all such rights, powers or
remedies shall continue unimpaired as before.

            (c) The Collateral Agent, in its own name, or as trustee of an
express trust, as the case may be, or in any one or more of such capacities
shall be entitled and empowered to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Secured Parties (whether such claims be based upon the provisions of this
Agreement or any Financing Document) allowed in any receivership, insolvency,
bankruptcy, moratorium, liquidation, readjustment, reorganization or any other
suit in equity, action at law or other judicial or administrative proceeding
relative to the Issuer, the


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -56-


Subsidiary Guarantors, MDEH or the creditors of the Issuer, the Subsidiary
Guarantors or MDEH, as the case may be, and any receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) in any such judicial or
other proceeding is hereby authorized to make such payments to the Collateral
Agent and, in the event that the Collateral Agent shall consent to the making of
such payments directly to the Secured Parties, to pay to the Collateral Agent
any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Collateral Agent, its agents and counsel.

            (d) Except as otherwise required by applicable law, all proofs of
claim, rights of action and rights to assert claims under this Agreement or any
Note may be enforced by the Collateral Agent without the possession of such
Notes or the production thereof at any trial or other proceedings instituted by
the Collateral Agent.

            Section 10.4. Remedies Cumulative. No remedy conferred in this
Agreement or in any other Financing Document upon any Secured Party is intended
to be exclusive of any other remedy and each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise.

            Section 10.5. Remedies Not Waived. No course of dealing between the
Issuer and any Secured Party and no delay or failure in exercising any rights
under this Agreement or under any other Financing Document in respect thereof
shall operate as a waiver of any of the rights of such Secured Party.

            SECTION 11. REGISTRATION, TRANSFER AND EXCHANGE OF NOTES.

            Section 11.1. Registration of Notes. The Issuer shall keep at the
principal executive office of the Collateral Agent a register for the
registration and registration of transfers of Notes. The name and address of
each Noteholder shall be registered in such register. Prior to due presentment
for registration of transfer and the Collateral Agent's receipt of written
notice thereof as set forth in Section 11.2, the Person in whose name any Note
shall be registered shall be deemed and treated as the owner and holder thereof
for all purposes hereof, and neither the Issuer nor the Collateral Agent shall
be affected or bound by, or required to act upon, any notice or knowledge to the
contrary. The Issuer shall give, or shall cause the Collateral Agent to give, to
any Noteholder promptly upon request therefor, a complete and correct copy of
the names and addresses of all registered holders of Notes.

            Section 11.2. Transfer and Exchange of Notes. Upon surrender of any
Note at the principal executive office of the Collateral Agent for registration
of transfer or exchange, the Issuer shall execute and deliver, at the Issuer's
expense (except as provided below), one or more new Chicago Notes or Las Vegas
Notes, as applicable, (as requested by the holder thereof) in exchange therefor,
in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note and shall provide prompt written notice of such action to the
Collateral Agent. Each such new Note shall be payable to such Person as such
holder may request and shall be


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
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substantially in the form of Exhibit A. Each such new Note shall be dated and
bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon. Notes shall not be transferred in denominations of less
than $500,000 unless the outstanding principal amount of such Note is less than
$500,000. Each Noteholder further agrees, and shall be deemed to have agreed by
its acceptance of a Note, that it will not transfer a Note to any transferee
unless such transferee executes and delivers an Assignment and Assumption
Certificate substantially in the form of Exhibit G hereto (and the Issuer shall
not issue new Notes unless and until it receives such written confirmation). In
addition, each Noteholder agrees that any Note surrendered for registration of
transfer in accordance with this Section 11.2 must be duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of such Note or his attorney duly authorized in writing and accompanied
by the address for notices of each transferee of such Note or part thereof.

            Section 11.3. Replacement of Notes. Upon receipt by the Issuer of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
any Purchaser or an institutional investor, notice from such institutional
investor of such ownership and such loss, theft, destruction or mutilation), and

            (a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note is, or
is a nominee for, such Purchaser or another institutional investor, such
Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), the Issuer at its own expense shall execute and deliver, in lieu
thereof, a new Chicago Note or Las Vegas Note, as applicable, dated and bearing
interest from the date to which interest shall have been paid on such lost,
stolen or destroyed Note or dated the date of such lost, stolen or destroyed
Note if no interest shall have been paid thereon, or

            (b) in the case of mutilation, upon surrender and cancellation
thereof, the Issuer at the expense of the applicable Purchaser shall execute and
deliver, in lieu thereof, a new Chicago Note or Las Vegas Note, as applicable,
dated and bearing interest from the date to which interest shall have been paid
on such mutilated Note or dated the date of such mutilated Note if no interest
shall have been paid thereon.

            SECTION 12. AMENDMENT AND WAIVER.

            (a) Any provision of this Agreement or of the Notes may, with the
consent of the Issuer, be amended or waived (either generally or in a particular
instance and either retroactively or prospectively), by one or more
substantially concurrent written instruments signed by the Majority Noteholders;
provided that:

                  (i) no such amendment or waiver shall:


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -58-


                        (A) change the rate or time of payment of interest,
            fees, Make-Whole Amount or indemnification amounts in respect of any
            of the Notes, without the consent of each Noteholder so affected,

                        (B) modify any of the provisions of this Agreement or of
            the Notes with respect to the payment or prepayment of the Notes
            (including, without limitation, Section 3.6) or with respect to the
            payment of premium in respect of the Notes, or change the percentage
            of the principal amount of the Notes the holders of which are
            required to effectuate or rescind any acceleration under this
            Agreement, without the consent of all of the Noteholders,

                        (C) modify any provision of this Agreement or of the
            Notes with respect to this Section 12 or modify any provision of
            Section 16.8 (or the definition of any of the defined terms used
            herein or therein) without the consent of all of the Noteholders, or

                        (D) release any of the Collateral under the Security
            Documents without the consent of the holders of all the Notes then
            outstanding except for Property disposed of in accordance with
            Section 9.4(b);

                  (ii) no such waiver shall extend to or affect any obligation
      not expressly waived or impair any right consequent thereon; and

                  (iii) no such amendment shall be effective to alter the
      duties, rights or immunities, of the Collateral Agent unless and until the
      Collateral Agent shall have consented to such amendment in writing.

Each holder of a Note at the time or thereafter outstanding shall be bound by
any such amendment or waiver, whether or not a notation thereof shall have been
placed on the Note.

            (b) The Issuer shall not, and the Issuer shall not permit any of its
Affiliates to, solicit, request or negotiate for or with respect to any proposed
waiver or amendment of any of the provisions of this Agreement, the Notes or any
other Financing Document unless each Noteholder (irrespective of the principal
amount of Notes then held by it and at substantially the same time as each other
Noteholder) shall be informed thereof by the Issuer and shall be afforded the
opportunity of considering the same and shall be supplied by the Issuer with
sufficient information to enable it to make an informed decision with respect
thereto and any information delivered to any other Noteholder. The Issuer shall
not, and the Issuer shall not permit any of its Affiliates to, directly or
indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any holder of a Note
as consideration for or as an inducement to the entering into by such holder of
any such amendment or waiver, unless such remuneration is concurrently paid, on
the same terms, ratably to all holders of all of the Notes then outstanding,
whether or not such holders shall have consented to such waiver or amendment.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -59-


            The Issuer will deliver to each holder of a Note executed true and
correct copies of any amendment or waiver effected pursuant to this Section 12
promptly, and in any event within 15 days, following the date on which the same
shall have become effective.

            (c) For purposes of determining whether the holders of outstanding
Notes of the requisite unpaid principal amount at any time have taken any
action, given any consent or made any determination authorized or provided by
this Section 12 or otherwise by this Agreement, any Notes held by the Issuer or
any Affiliate thereof (whether or not acquired in violation of Section 3.6 or
otherwise) shall not be deemed to be outstanding.

            SECTION 13. HOME OFFICE PAYMENT.

            (a) Notwithstanding anything to the contrary in this Agreement or
the Notes, the Issuer will pay, and will instruct the Collateral Agent to pay,
all amounts, in accordance with the terms and conditions thereof and hereof,
which become due and payable under any Financing Document to any Noteholder, at
the address for such Noteholder, and in the manner, set forth in Schedule I
hereof by 11:00 a.m., New York City time, on the date any such amounts become
due, or at such other address and in such other manner as such Noteholder may
designate by notice to the Issuer and the Collateral Agent, without, in the case
of payment to any Noteholder, presentation or surrender of any Note held by such
Noteholder. Prior to the sale, transfer or other disposition of any Note, each
Noteholder will make notation thereon of the portion of the principal amount
prepaid and the date to which interest has been paid thereon, or surrender the
same in exchange for a Note or Notes aggregating the same principal amount as
the unpaid principal amount of the Note so surrendered.

            (b) Anything in this Agreement, any Note or any other Financing
Document to the contrary notwithstanding, if the payment of any amount in
respect of this Agreement, any Note or any other Financing Document is due on a
date (including, without limitation any Payment Date, the "Due Date") other than
a Business Day, such payment shall be made on the next succeeding Business Day
(and no additional interest shall be payable on any amount of principal of the
Notes so extended for the period of such extension); provided, that if the such
next succeeding Business Day is more than four days after the Due Date, such
payment shall be made on the Business Day next preceding the Due Date.

            SECTION 14. LIABILITIES OF THE PURCHASER. Neither this Agreement NOR
any disposition of any of the Notes shall be deemed to create any liability or
obligation of any Purchaser to enforce any provision hereof or of any of the
Notes or of any other Financing Document for the benefit or on behalf of any
other Person who may be a Noteholder.

            SECTION 15. TAXES. The Issuer will pay all stamp, documentary or
similar taxes which may be payable in respect of the execution, delivery or
enforcement of this Agreement or any other Financing Document (other than the
Notes) or of the execution, delivery or enforcement (but not the transfer) of
any of the Notes or of any amendment of, or waiver or


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<PAGE>
                                      -60-


consent under or with respect to, this Agreement or any other Financing Document
and will save the Purchaser harmless against any loss or liability resulting
from nonpayment or delay in payment of any such tax. The obligations of the
Issuer under this Section 15 shall survive the final payment or prepayment of
the Notes with respect to taxes incurred prior to such final payment or
prepayment.

            SECTION 16. MISCELLANEOUS.

            Section 16.1. Expenses. The Issuer agrees, whether or not the
transactions hereby contemplated shall be consummated, to pay all expenses
incident to such transactions, including all document production costs and other
expenses, the reasonable fees and disbursements of the Independent Insurance
Consultant, Independent Engineer and special counsel for the Purchasers with
respect to such transactions and all out-of-pocket expenses in connection with
the preparation, negotiation and execution by the Purchasers of the Financing
Documents, the creation and perfection of the Liens in the Collateral
contemplated by the Security Documents and the shipping to and from the
Purchasers' offices or the office of the nominees of the Purchasers any of the
Financing Documents and upon any exchange or substitution of a Note pursuant to
the provisions of the Notes or this Agreement, and to reimburse the Purchasers
for any out-of-pocket expenses in connection therewith. The Issuer also agrees
to pay all reasonable expenses incurred by each Noteholder (including reasonable
fees of a single special counsel to the Noteholders and the fees, expenses and
disbursements of a single investment bank or other firm acting as financial
advisor for the Secured Parties) in connection with any amendment or requested
amendment of, or waiver or consent or requested waiver or consent under or with
respect to, this Agreement or any other Financing Document, whether or not the
same shall become effective, and all expenses incurred by each Noteholder
(including reasonable fees of a single special counsel to the Noteholders and
the fees, expenses and disbursements of a single investment bank or other firm
acting as financial advisor for the Secured Parties)) incurred in connection
with the preservation of any Lien or realization on or pursuit of remedies with
respect to any Collateral (including without limitation in connection with any
inspection, examination or discussion referred to in Section 8) following the
occurrence and during the continuance of any Event of Default or any workout,
restructuring or similar negotiations relating to the Notes. The obligations of
the Issuer under this Section shall survive the payment or prepayment of the
Notes.

            In furtherance of the foregoing, on the Closing Date and the Second
Disbursement Date, the Issuer shall pay or cause to be paid the reasonable fees
and disbursements of special counsel for the Purchasers which are reflected in
the statements of such counsel submitted to the Issuer at least one Business Day
prior to the Closing Date or the Second Disbursement Date, as applicable. The
Issuer shall also pay or cause to be paid, promptly upon receipt of supplemental
statements therefor delivered within 120 days of the Closing Date or the Second
Disbursement Date, as applicable, additional reasonable fees, if any, and
disbursements of such special counsel in connection with the transactions hereby
contemplated (including disbursements unposted as of the Closing Date or the
Second Disbursement Date, as applicable).


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -61-


            Section 16.2. Reliance on Representations and Warranties. The
parties hereby acknowledge and agree that each Purchaser is relying on the
agreements, representations and warranties of the Issuer set forth in this
Agreement and in any certificates or other instruments delivered pursuant to
this Agreement, and the rights of such Purchaser under this Agreement shall not
be affected by any investigation heretofore or hereafter made by any Purchaser
or on behalf of any Purchaser.

            Section 16.3. Successors and Assigns. This Agreement shall bind and
inure to the benefit of and be enforceable by the Issuer and its permitted
successors and assigns hereunder, the Purchasers and their respective successors
and assigns, and, in addition, shall inure to the benefit of and be enforceable
by all Noteholders from time to time.

            Section 16.4. Communications. All notices and other communications
provided for in this Agreement shall be sent, if practicable, by confirmed
telecopy (with hard copy sent on the same day by overnight courier) and,
otherwise, by overnight courier service prepaid to a Person at its address
specified below and shall be deemed effective when received. A communication
shall be addressed, until such time as a Person shall have notified the other
parties and holders of Notes of a change of address:

            (A) if to the Issuer, at:

                  Macquarie District Energy, Inc.
                  600 Fifth Avenue
                  21st Floor
                  New York, NY  10020
                  Attention:  Wendy Adams, Secretary/Treasurer
                  Telephone:  212-548-6525
                  Facsimile:  212-399-8930

            (B) if to a Purchaser, at the address specified therefor in Schedule
      I; provided that whenever the Issuer is required to give notice to, or to
      make any delivery to, all of the Secured Parties or all of the Purchasers,
      such obligations shall be satisfied by notice to, or delivery to, the
      Collateral Agent.


            Section 16.5. Indemnification. The Issuer agrees to indemnify,
exonerate and hold each Secured Party and each of their respective trustees,
officers, directors, employees and agents (collectively herein called the
"Indemnitees" and individually called an "Indemnitee") free and harmless on
demand from and against any and all actions, causes of action, suits, losses,
liabilities and damages, and expenses in connection therewith, including without
limitation reasonable counsel fees and disbursements (collectively herein called
the "Indemnified Liabilities") incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to any transaction financed or to be
financed in whole or in part directly or indirectly with proceeds from the sale
of any of the Notes, or the execution, delivery, performance or enforcement of
this Agreement or any other Transaction Document or any instrument



                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -62-


contemplated hereby or thereby by any of the Indemnitees, except for any such
Indemnified Liabilities arising on account of such Indemnitee's gross negligence
or willful misconduct, and if and to the extent the foregoing undertaking may be
unenforceable for any reason, the Issuer agrees to make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.

            Without limiting the generality of the foregoing, the Issuer will
indemnify each Indemnitee from and hold each Indemnitee harmless on demand
against any losses, liabilities, claims, damages or expenses described in the
preceding paragraph (but excluding, as provided in the preceding paragraph, any
loss, liability, claim, damage or expense incurred by reason of the gross
negligence or willful misconduct of such Indemnitee) arising under any
Environmental Law as a result of (i) the past, present or future operations of,
or conditions at, any site or facility owned, operated or leased by the Issuer
or its Subsidiaries (or any predecessor in interest to the Issuer or its
Subsidiaries), or (ii) any Release (actual or threatened) of any Hazardous
Materials related to or from, at or to any such site or facility, or (iii) any
Environmental Claim. All obligations of the Issuer under this Section 16.5 shall
survive the payment of the Notes.

            Section 16.6. Limitation of Liability. It is understood that the
sole recourse of the holders of the Notes in respect of the obligations of the
Issuer under this Agreement shall be limited to the Issuer, the Subsidiary
Guarantors, and to the Collateral under the Security Documents and, except as
aforesaid, no recourse shall be had against any Person other than the Issuer and
the Subsidiary Guarantors for the payment of principal of or premium, if any, or
interest on the Notes, or for any claim based thereon or otherwise in respect
thereof or based on or in respect to any agreement, certificate, representation,
covenant or warranty made by the Issuer in this Agreement or in any of the other
Financing Documents (without prejudice to the rights of the Noteholders and the
Collateral Agent for any claims for Restricted Payments made in violation of
Section 9.11). Notwithstanding the foregoing, (a) any Secured Party shall be
entitled to bring suit against any Person for the purpose of obtaining
jurisdiction over the Issuer or any Subsidiary Guarantor and (b) nothing in this
Section 16.6 shall be deemed to release any person from liability for such
Person's (i) fraudulent actions, (ii) material misrepresentation, (iii) gross
negligence or (iv) willful misconduct; and nothing in this Section 16.6 will
affect or diminish the obligations of any Person under or in respect of each
Transaction Document to which it is, or is intended to be, a party.

            Section 16.7. JURISDICTION AND PROCESS. THE ISSUER AGREES THAT ANY
LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER FINANCING DOCUMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH
OR THEREWITH, OR ANY LEGAL ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE
ANY JUDGMENT OBTAINED AGAINST THE ISSUER, FOR BREACH HEREOF OR THEREOF, OR
AGAINST ANY OF ITS PROPERTIES, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
BY ANY SECURED PARTY OR ON BEHALF OF SUCH SECURED PARTY, AS SUCH SECURED PARTY
MAY ELECT, AND THE ISSUER


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -63-


HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF SUCH COURTS FOR PURPOSES OF ANY SUCH LEGAL ACTION OR PROCEEDING. THE ISSUER
HEREBY AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE EFFECTED BY
MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY
SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO IT AT ITS ADDRESS SPECIFIED IN
Section 16.4 OR AT SUCH OTHER ADDRESS OF WHICH EACH HOLDER OF A NOTE SHALL HAVE
BEEN NOTIFIED PURSUANT THERETO. IN ADDITION, THE ISSUER HEREBY IRREVOCABLY
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

            Section 16.8. Confidentiality. The Purchasers will maintain the
confidentiality of Confidential Information (as defined herein) in accordance
with procedures adopted by such Person in good faith to protect confidential
information of third parties delivered to it, provided that any Purchaser may
deliver or disclose Confidential Information to (i) its directors, officers,
employees, agents, attorneys, affiliates and beneficial owners, (to the extent
such disclosure reasonably relates to the administration of the investment
represented by its Notes or other Investment in the Issuer), (ii) its financial
advisors and other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the terms of this
Section 16.8, (iii) any Noteholder, (iv) in the case of any Purchaser, any
institutional investor to which the Purchaser sells or offers to sell any Note
or any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 16.8), (v) any Person from which the Purchaser offers
to purchase any security of the Issuer (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 16.8), (vi) any federal or state regulatory authority
having jurisdiction over such Person, (vii) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about its
investment portfolio, or (viii) any other Person to which such delivery or
disclosure may be necessary (w) to effect compliance with any law, rule,
regulation or order applicable to such Person, (x) in response to any subpoena
or other legal process, (y) in connection with any litigation to which the
Purchaser is a party or (z) if an Event of Default has occurred and is
continuing, to the extent the Purchaser may reasonably determine such delivery
and disclosure to be necessary or appropriate in the enforcement or for the
protection of its rights and remedies under its Notes or this Agreement. If, in
connection with a subpoena or other legal process or in connection with any
litigation to which such Purchaser is a party (but not in any event in
connection with any regulatory oversight), a Purchaser is requested to provide
(by oral questions, interrogatories, requests for information or documents in
legal


                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -64-


proceedings, subpoena, civil investigative demand or other similar process) or
is required by operation of law to disclose any Confidential Information, such
Purchaser shall provide the Issuer with prompt written notice of such request or
requirement, which notice shall, if practicable, be given before such Purchaser
makes such disclosure. Each Noteholder (or holder of a beneficial interest in a
Note), by its acceptance of a Note (or such beneficial interest), will be deemed
to have agreed to be bound by and to be entitled to the benefits of this
Section 16.8 as though it were a party to this Agreement. On reasonable request
by the Issuer in connection with the delivery to any Noteholder of information
required to be delivered to such Noteholder under this Agreement or requested by
such Noteholder (other than a Noteholder that is a party to this Agreement or
its nominee), such Noteholder (or holder of a beneficial interest in a Note)
will enter into an agreement with the Issuer embodying the provisions of this
Section 16.8.

            For the purposes of this Section 16.8, "Confidential Information"
means information delivered to any Purchaser or any Noteholder (or holder of a
beneficial interest in a Note) by or on behalf of the Issuer or its Subsidiaries
in connection with the transactions contemplated by or otherwise pursuant to
this Agreement or any other Financing Document that is proprietary in nature,
provided that such term does not include information that (a) was publicly known
or otherwise known to such Person prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Person or
any other Person acting on its behalf, (c) otherwise becomes known to such
Person other than through disclosure by the Issuer or any Partner or (d)
constitutes financial statements delivered under Section 7 that are otherwise
publicly available.

            Section 16.9. Governing Law.  This Agreement and the Notes shall be
governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed in New York.

            Section 16.10. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect any of the
terms hereof.

            Section 16.11. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.

            Section 16.12. Severability. In case any one or more of the
provisions contained in this Agreement or in any instrument contemplated hereby,
or any application thereof, shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein, and any other application thereof, shall not in
any way be affected or impaired thereby.


                                                         NOTE PURCHASE AGREEMENT
<PAGE>


            If you are in agreement with the foregoing, please sign the form of
acceptance in the space provided below whereupon this Agreement shall become a
binding agreement between the Purchaser and the Issuer.

                              Very truly yours,

                              MACQUARIE DISTRICT ENERGY, INC.



                              By:  /s/ Michael Dorrell
                                   -------------------------------------
                                     Name:  Michael Dorrell
                                     Title: Authorized Signatory



                              By:  /s/ Murray Bleach
                                   -------------------------------------
                                     Name:  Murray Bleach
                                     Title: Authorized Signatory



                                                         NOTE PURCHASE AGREEMENT
<PAGE>
                                      -66-



JOHN HANCOCK LIFE INSURANCE COMPANY



By:  /s/ Gerald C. Hanrahan
     -------------------------------------
    Name:  Gerald C. Hanrahan
    Title: Managing Director




JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY



By:  /s/ Gerald C. Hanrahan
     -------------------------------------
    Name:  Gerald C. Hanrahan
    Title: Authorized Signatory




THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)



By:  /s/ C. Paul English
     -------------------------------------
    Name:  C. Paul English
    Title: Authorized Signatory





<PAGE>
                                      -67-



ALLSTATE LIFE INSURANCE COMPANY



By:  /s/ W.R. Schmidt
     -------------------------------------
    Name:  W.R. Schmidt

    Title:




By:  /s/ [ILLEGIBLE]
     -------------------------------------
    Name:

    Title:




ALLSTATE INSURANCE COMPANY



By:  /s/ W.R. Schmidt
     -------------------------------------
    Name:  W.R. Schmidt

    Title:




By:  /s/ [ILLEGIBLE]
     -------------------------------------
    Name:

    Title:


<PAGE>

                                                                         ANNEX I

                  DEFINITIONS; INTERPRETATION OF THIS AGREEMENT

            A. Certain Definitions. Except as otherwise specified or as the
context may otherwise require, the following terms shall have the respective
meanings set forth below whenever used in the Note Purchase Agreement:


600 W. CHICAGO PREMISES:    As defined in Section 5.12 of the Note Purchase
                            Agreement.

ACCESSION AGREEMENTS:       The Accession Agreements to the Agency, Disbursement
                            and Control Agreement, substantially in the form of
                            Exhibit E to the Agency, Disbursement and Control
                            Agreement.

ACCOUNTS:                   As defined in the Agency, Disbursement and Control
                            Agreement.

ACQUISITION CLOSING DATES:  The date of the closing of the acquisition of the
                            Chicago District Energy Project by the Issuer and
                            the date of the closing of the acquisition of the
                            Las Vegas District Energy Project by the Issuer.

ADDITIONAL AMOUNT:          As defined in Section 10.2 of the Note Purchase
                            Agreement.

ADDITIONAL INDEBTEDNESS:    Indebtedness of the Issuer incurred pursuant to the
                            Credit Agreement (including, without duplication,
                            reimbursement obligations (contingent or otherwise)
                            with respect to letters of credit issued pursuant to
                            the Credit Agreement) or, if the Credit Agreement
                            has been terminated, any other Indebtedness of the
                            Issuer that is incurred in addition to the Notes
                            (other than Qualifying Capital Expansion
                            Indebtedness and Subordinated Debt), in each case,
                            with an aggregate principal amount at any one time
                            outstanding of not more than $20,000,000.

ADDITIONAL PROJECT
DOCUMENT:                   All service agreements of the Issuer or any of its
                            Subsidiaries entered into after the Closing Date and
                            all other agreements of the Issuer or such
                            Subsidiary requiring payments or having a value of
                            $1,000,000 or more in any given year.

AFFECTED PROPERTY:          With respect to any Event of Loss, the Property of
                            the Issuer or any of its Subsidiaries lost,
                            destroyed, damaged, condemned or otherwise taken as
                            a result of such Event of Loss.

AFFILIATE:                  Of any designated Person means (i) any director,
                            officer or employee of such Person or (ii) any other
                            Person which, directly or indirectly, controls or is
                            controlled by or is under
<PAGE>
                                      - 2 -


                            common control with such designated Person (and
                            includes, without limitation, as to the Issuer, any
                            Person managed by Macquarie or any Affiliate of
                            Macquarie). For the purposes of this definition,
                            "control" (including, with correlative meanings, the
                            terms "controlled by" and "under common control
                            with"), as used with respect to any Person, means
                            the possession, directly or indirectly, of the power
                            to direct or cause the direction of the management
                            and policies of such Person, whether through the
                            ownership of voting securities or by contract or
                            otherwise, provided that, in any event, any Person
                            that owns directly or indirectly securities having
                            5% or more of the voting power for the election of
                            directors or other governing body of a corporation
                            or 5% or more of the partnership or other ownership
                            interests of any other Person (other than as a
                            limited partner of such other Person) will be deemed
                            to control such corporation or other Person.

AFFILIATE SUBORDINATED      Indebtedness of the Issuer to any Affiliate that is
DEBT:                       (i) subordinated in right of payment to the Notes on
                            terms set forth in Exhibit H to the Note Purchase
                            Agreement and (ii) repaid out of distributions
                            permitted under Section 9.11 of the Note Purchase
                            Agreement.

AGENCY, DISBURSEMENT AND
CONTROL AGREEMENT:          The Agency, Disbursement and Control Agreement,
                            dated as of the date of the Note Purchase Agreement,
                            among the Issuer, the Purchasers, LaSalle Bank
                            National Association (in its capacities as
                            collateral agent, securities intermediary and
                            deposit account bank), LaSalle Bank National
                            Association (in its individual capacity as a bank),
                            and each subsequent obligor from time to time party
                            thereto, substantially in the form of Exhibit B to
                            the Note Purchase Agreement.

ALADDIN BAZAAR:             Aladdin Bazaar, LLC, a limited liability company
                            organized under the law  of the State of Delaware.

ALADDIN ENERGY SERVICES
AGREEMENTS:                 Energy Service Agreement dated as of September 24,
                            1998 between Aladdin Gaming and Northwind Aladdin,
                            as amended by Amendment 1 on September 25, 1998,
                            Amendment 2 on May 28, 1999, Amendment 3 on May 28,
                            1999 and Amendment 4 in December 2002, and the
                            Energy Service Agreement dated as of September 24,
                            1998 between Aladdin Bazaar and Northwind Aladdin,
                            as amended by Amendment 1 on May 28, 1999, Amendment
                            2 on May 28,
<PAGE>
                                     - 3 -


                            1999 and Amendment 3 on May 28, 1999, each as
                            further amended, supplemented or modified from time
                            to time in accordance with the terms thereof.

ALADDIN GAMING:             Aladdin Gaming, LLC, a limited liability company
                            organized under the law of the State of Nevada.

ALADDIN INDEMNITY:          As defined in Section 9.19(d) of the Note Purchase
                            Agreement.

ALADDIN LEASE:              Lease Agreement dated as of December 3, 1997 between
                            Aladdin Gaming, LLC and Northwind Aladdin, LLC
                            amended by Amendment 1 on September 25, 1998,
                            Amendment 2 on May 28, 1999, Amendment 3 on May 28,
                            1999 and Amendment 4 in December 2002, as further
                            amended, supplemented or modified from time to time
                            in accordance with the terms thereof.

ASSIGNMENT OF RENTS AND     (a) The Assignment of Rents and Leases (Plant 1),
LEASES:                     dated as of the date hereof by LaSalle Bank, N.A.,
                            not personally but as successor trustee to American
                            National Bank and Trust Company of Chicago, not
                            personally but solely as trustee under Trust
                            Agreement dated April 29, 1993 and known as Trust
                            No. 116920-01, to and for the benefit of LaSalle
                            Bank National Association, in its capacity as
                            Collateral Agent, (b) the Assignment of Rents and
                            Leases (Plant 2), dated as of the date hereof by
                            Chicago Title Land Trust Company, not personally but
                            as trustee under Trust Agreement dated April 26,
                            1994 and known as Trust Number 1099363, to and for
                            the benefit of LaSalle Bank National Association, in
                            its capacity as Collateral Agent, (c) the Assignment
                            of Rents and Leases (Plant 4B), dated as of the date
                            hereof by Northwind Chicago, to and for the benefit
                            of LaSalle Bank National Association, in its
                            capacity as Collateral Agent and (d) the Assignment
                            of Rents and Leases (Plants 3, 4A, and 5 and Various
                            Easements) dated as of the date hereof by MDE
                            Thermal, to and for the benefit of LaSalle Bank
                            National Association, in its capacity as Collateral
                            Agent.

AUDITED CHICAGO FINANCIAL
STATEMENTS:                 As defined in Section 4.2(n) of the Note Purchase
                            Agreement.

AUDITED NEVADA FINANCIAL
STATEMENTS:                 As defined in Section 4.3(m) of the Note Purchase
                            Agreement.
<PAGE>
                                     - 4 -


AUTHORIZED INVESTMENTS:     Any of the following that are, in each case,
                            denominated in U.S. dollars and in which a
                            first-priority security interest may be created and
                            perfected:

                                  (i) direct obligations of, or obligations the
                            principal of and interest on which are
                            unconditionally guaranteed by, the United States, or
                            any agency of the United States, and which mature
                            (or are capable of redemption) within three months
                            from the date of acquisition thereof;

                                  (ii) commercial paper of any corporation with
                            a maturity not in excess of 90 days from the date of
                            acquisition thereof and rated at least "A-1" by
                            Standard & Poor's or Fitch or "P-1" by Moody's or
                            the equivalent rating under any successor rating
                            system or by any successor rating services;

                                  (iii) negotiable or non-negotiable time
                            certificates of deposit, demand deposits and time
                            deposits maturing (or capable of redemption by the
                            holder thereof) within 90 days from the date of the
                            acquisition thereof, that are issued, accepted or
                            guaranteed by any bank or any domestic office of a
                            commercial bank in the United States which has a
                            combined capital and surplus and undivided profits
                            of not less than $250,000,000 and whose long-term
                            debt is rated (or whose bank holding company
                            parent's long-term debt is rated) at least "A" by
                            Standard & Poor's or Fitch or "A-2" by Moody's or
                            the equivalent rating under any successor rating
                            system or by any successor rating services;
                            negotiable or non-negotiable time certificates of
                            deposit, demand deposits and time deposits maturing
                            (or capable of redemption by the holder thereof)
                            within 90 days from the date of the acquisition
                            thereof, that are issued, accepted or guaranteed by
                            any bank or any domestic office of a commercial bank
                            in the United States which has a combined capital
                            and surplus and undivided profits of not less than
                            $250,000,000 and whose long-term debt is rated (or
                            whose bank holding company parent's long-term debt
                            is rated) at least "A" by Standard & Poor's or Fitch
                            or "A-2" by Moody's or the equivalent rating under
                            any successor rating system or by any successor
                            rating services;

                                  (iv) money market funds having a rating by
                            Fitch, Standard & Poor's or Moody's in the highest
                            investment category granted thereby at the time of
                            acquisition; and
<PAGE>
                                     - 5 -


                                  (v)   other investment instruments approved in
                            writing by the Majority Noteholders.

AUTHORIZED OFFICER:         For any Person that is a corporation or a limited
                            liability company, the Chairman, the President, any
                            Vice President or the Chief Financial Officer of
                            such Person, and for any Person that is a
                            partnership, the general partner or managing partner
                            of such Person or officer thereof responsible for
                            its financial affairs, in each case whose name
                            appears on a certificate of incumbency of such
                            Person delivered under this Agreement, as such
                            certificate may be amended from time to time.

BANKRUPTCY:                 With respect to any Person, shall mean the
                            occurrence of any of the following events,
                            conditions or circumstances: (a) such Person shall
                            file a voluntary petition in bankruptcy or shall be
                            adjudicated a bankrupt or insolvent, or shall file
                            any petition or answer or consent seeking any
                            reorganization, arrangement, composition,
                            readjustment, liquidation, dissolution or similar
                            relief for itself under the Bankruptcy Code or any
                            present or future applicable federal, state or other
                            statute or law relating to bankruptcy, insolvency,
                            reorganization or other relief for debtors, or shall
                            seek or consent to or acquiesce in the appointment
                            of any trustee, receiver, conservator or liquidator
                            of such Person or of all or any substantial part of
                            its properties (the term "acquiesce," as used in
                            this definition, includes the failure to file a
                            petition or motion to vacate or discharge any order,
                            judgment or decree within 10 days after entry of
                            such order, judgment or decree); (b) an involuntary
                            case or other proceeding shall be commenced against
                            such Person seeking any reorganization, arrangement,
                            composition, readjustment, liquidation, dissolution
                            or similar relief with respect to such Person or its
                            debts under the Bankruptcy Code or any present or
                            future applicable federal, state or other statute or
                            law relating to bankruptcy, insolvency,
                            reorganization or other relief for debtors, or
                            seeking the appointment of a trustee, receiver,
                            liquidator, custodian or other similar official of
                            it or any substantial part of its property, and such
                            involuntary case or other proceeding shall remain
                            undismissed or unstayed for a period of 60
                            consecutive days, (c) a court of competent
                            jurisdiction shall enter an order, judgment or
                            decree approving a petition filed against such
                            Person seeking a reorganization, arrangement,
                            composition, readjustment, liquidation, dissolution
                            or similar relief under the Bankruptcy
<PAGE>
                                     - 6 -


                            Code, or any other present or future applicable
                            federal, state or other statute or law relating to
                            bankruptcy, insolvency, reorganization or other
                            relief for debtors, and such Person shall acquiesce
                            in the entry of such order, judgment or decree or
                            such order, judgment or decree shall remain
                            unvacated and unstayed for an aggregate of 60 days
                            (whether or not consecutive) from the date of entry
                            thereof, or any trustee, receiver, conservator or
                            liquidator of such Person or of all or any
                            substantial part of its property shall be appointed
                            without the consent or acquiescence of such Person
                            and such appointment shall remain unvacated and
                            unstayed for an aggregate of 60 days (whether or not
                            consecutive); (d) such Person shall admit in writing
                            its inability to pay its debts as they mature or
                            shall generally not be paying its debts as they
                            become due; (e) such Person shall make an assignment
                            for the benefit of creditors or take any other
                            similar action for the protection or benefit of
                            creditors or (f) such Person shall take any
                            corporate or partnership action for the purpose of
                            effecting any of the foregoing.

BANKRUPTCY CODE:            The United States Bankruptcy Reform Act of 1978, as
                            amended, to the extent codified in Title 11 of the
                            United States Code.

BASE CASE FORECAST:         Financial projections for the Issuer and its
                            Subsidiaries dated the Closing Date prepared by the
                            Issuer in form and substance reasonably acceptable
                            to the Purchasers (after consultation with the
                            Independent Engineer), certified by an Authorized
                            Officer of the Issuer to the effect that such
                            projections were made in good faith and the
                            assumptions on the basis of which such projections
                            were made are reasonable as of the Closing Date and
                            are consistent with the currently existing Project
                            Documents and including an express acknowledgement
                            that the Base Case Forecast is a projection.

BUSINESS DAY:               Any day except a Saturday or Sunday or other day on
                            which commercial banks are required or authorized to
                            remain closed in New York, New York.

CAPITAL EXPENDITURES:       For any period, expenditures (including the
                            aggregate amount of Capital Lease Obligations
                            incurred during such period) made by the Issuer or
                            its Subsidiaries to acquire or construct fixed
                            assets, plant and equipment (including renewals,
                            improvements and replacements, but excluding
                            ordinary course replacement and repairs) during such
                            period computed
<PAGE>
                                     - 7 -


                            in accordance with GAAP. For the avoidance of doubt,
                            "Capital Expenditures" shall not include any Major
                            Maintenance Expenditures.

CAPITAL LEASE OBLIGATIONS:  For any Person, all obligations of such Person to
                            pay rent or other amounts under a lease of (or other
                            agreement conveying the right to use) property to
                            the extent such obligations are required to be
                            classified and accounted for as a capital lease or
                            finance lease on a balance sheet of such Person.

CASH FLOW:                  With respect to the Issuer for any period means,
                            without duplication and on a consolidated basis, the
                            excess (if any) of: (a) the sum of (i) all Revenues
                            for such period plus (ii) contributions to capital
                            fully paid in cash received during such period (but
                            only to the extent such contributions to capital are
                            used to fund Permitted Capital Expenditures) over
                            (b) the sum of (i) Operating Costs for such period
                            plus (ii) Major Maintenance Expenditures for such
                            period plus (iii) Capital Expenditures paid in such
                            period plus (iv) Taxes actually reserved against or
                            paid by or on behalf of the Issuer (without
                            duplication) in such period.

CHANGE IN CONTROL:          Macquarie shall have ceased to own and control,
                            directly or indirectly, beneficially and of record
                            at least 50% of the equity interests in the Issuer
                            and at least 50% of the Voting Interests in the
                            Issuer; provided that no Change in Control shall
                            occur if the Issuer is owned and controlled,
                            directly or indirectly, by Macquarie Infrastructure
                            Assets Trust or a similar Person, at least 50% of
                            the equity of which is widely held, unless Macquarie
                            Infrastructure Assets Trust or such Person is not
                            actively managed, directly or indirectly, solely by
                            Macquarie.

CHICAGO AIRPORT ENERGY
DELIVERY AGREEMENT:         Energy Delivery Agreement dated as of March 31, 1998
                            between Unicom Thermal Technologies, Inc. (formerly
                            Northwind, Inc.) and the City of Chicago, as amended
                            by the First Amendment dated as of January 1, 1999,
                            as further amended, supplemented or modified from
                            time to time in accordance with the terms thereof.

CHICAGO DISTRICT ENERGY
PROJECT:                    The district energy facilities servicing the central
                            business district of Chicago and Chicago Midway
                            Airport.
<PAGE>
                                     - 8 -


CHICAGO NOTES:              As defined in Section 1.2 of the Note Purchase
                            Agreement.

CHICAGO STOCK PURCHASE
AGREEMENT:                  Stock Purchase Agreement (Chicago) dated as of
                            December 12, 2003, by and among the Issuer, MDEH,
                            Macquarie, Exelon Corporation and Exelon Thermal
                            Holdings, Inc.

CHICAGO USE AGREEMENT:      District Cooling System Use Agreement dated as of
                            October 1, 1994 between MDE Thermal Technologies,
                            Inc. (formerly Northwind, Inc.) and the City of
                            Chicago, pursuant to an Ordinance of the City
                            Council of the City of Chicago, Illinois passed on
                            September 14, 1994, as amended by Amendments No.
                            1-22 to such agreement, as further amended,
                            supplemented or modified from time to time in
                            accordance with the terms thereof.

CLOSING DATE:               As defined in Section 1.4 of the Note Purchase
                            Agreement.

CODE:                       The United States Internal Revenue Code of 1986, as
                            amended.

COLLATERAL:                 As defined in the Security Documents.

COLLATERAL AGENT:           LaSalle Bank National Association, a national
                            banking association, organized and existing under
                            the laws of the United States of America, in its
                            capacity as Collateral Agent for the Secured
                            Parties.

CONFIDENTIAL INFORMATION:   As defined in Section 16.8 of the Note Purchase
                            Agreement.

CONSENTS:                   The consents and agreements, in substantially the
                            form of Exhibit F to the Note Purchase Agreement.

CREDIT AGREEMENT:           The Credit Agreement dated as of the date hereof
                            between the Issuer and LaSalle Bank National
                            Association, in its individual capacity.

DEBT SERVICE:               For any period and on a consolidated basis, the sum
                            (determined without duplication in accordance with
                            GAAP), of the following: (i) all payments of
                            principal of Indebtedness scheduled to be made by
                            the Issuer and its Subsidiaries during such period
                            (other than Subordinated Debt) plus (ii) all
                            interest in respect of Indebtedness of the Issuer
                            and its Subsidiaries (other than Subordinated Debt)
                            accrued or capitalized during such period (whether
                            or not actually paid
<PAGE>
                                     - 9 -


                            during such period) plus (iii) Make-Whole Amount, if
                            any.

DEBT SERVICE COVERAGE
RATIO:                      For any period, in respect of the Issuer and its
                            Subsidiaries, the ratio of Cash Flow for such period
                            to Debt Service for such period.

DEBT SERVICE RESERVE
ACCOUNT:                    As defined in the Agency, Disbursement and Control
                            Agreement.

DEBT SERVICE RESERVE
ACCOUNT BALANCE:            As defined in the Agency, Disbursement and Control
                            Agreement.

DEFAULT:                    Any event or condition which constitutes an Event of
                            Default or which upon notice, lapse of time or both
                            would, unless cured or waived, become an Event of
                            Default.

DEFAULT RATE:               As of any date, for any Note, the applicable
                            interest rate with respect to such Note as of such
                            date plus 2%.


DEPARTMENT OF TREASURY
RULE:                       As defined in Section 5.11(c) of the Note Purchase
                            Agreement.


DISBURSEMENT:               As defined in Section 1.3 of the Note Purchase
                            Agreement.

DISBURSEMENT SCHEDULE:      As defined in Section 1.3 of the Note Purchase
                            Agreement.

DISTRIBUTION ACCOUNT:       As defined in the Agency, Disbursement and Control
                            Agreement.

DISTRICT ENERGY PROJECTS:   The Chicago District Energy Project and the Las
                            Vegas District Energy Project.

DUE DATE:                   As defined in Section 13(b) of the Note Purchase
                            Agreement.

ENERGY SERVICES
COORDINATION AGREEMENT:     The Energy Services Coordination Agreement dated as
                            of May 28, 1999 between Aladdin Gaming and Aladdin
                            Bazaar.

ENVIRONMENTAL ACTIVITY:     Any actual, proposed or threatened use, storage,
                            holding, existence, release, emission, discharge,
                            generation, processing, abatement, removal,
                            disposition, disposal, handling or transportation of
                            any Hazardous Material from, at, to, upon, around,
                            in, under or above any property,
<PAGE>
                                     - 10 -


                            including the District Energy Projects or the
                            Project Sites, or otherwise relating to any property
                            or the use of any property, or any use of any
                            property which affects any wetlands, or any other
                            activity or occurrence that causes or would cause
                            any of the foregoing to exist or occur.

ENVIRONMENTAL CLAIM:        Any oral or written notice, claim or demand
                            (collectively, a "claim") by any Person alleging or
                            asserting liability for investigatory costs, cleanup
                            or other remedial costs, legal costs, environmental
                            consulting costs, governmental response costs,
                            damages to natural resources or other property,
                            personal injuries, fines or penalties related to (i)
                            the presence, or release into the environment, of
                            any Hazardous Material at any location, whether or
                            not owned by the Person against whom such claim is
                            made, or (ii) any violation of, or alleged violation
                            of, or liability arising under any Environmental
                            Law. The term "Environmental Claim" shall include,
                            without limitation, any claim by any Person or
                            Governmental Authority for investigation,
                            enforcement, cleanup, removal, response, remedial or
                            other actions or damages pursuant to any
                            Environmental Law, and any claim by any third party
                            seeking damages, contribution, indemnification, cost
                            recovery, compensation or injunctive relief under
                            any Environmental Law.

ENVIRONMENTAL LAW:          All national, state, and local statutes, laws,
                            regulations, ordinances, rules, judgments, orders,
                            decrees, common law, permits, concessions, grants,
                            franchises, licenses, agreements or other
                            governmental restrictions now or hereafter in
                            effect, in each case as modified and supplemented
                            and in effect from time to time, including any
                            judicial or administrative order, consent decree or
                            judgment, relating to the regulation, use or
                            protection of the environment (including subsurface
                            strata) or to emissions, discharges, Releases or
                            threatened Releases of Hazardous Materials into the
                            environment, including, without limitation, ambient
                            air, soil, surface water, groundwater, wetlands,
                            coastal waters, land or subsurface strata, or
                            otherwise relating to the generation, manufacture,
                            processing, distribution, use, treatment, storage,
                            disposal, transport or handling of Hazardous
                            Materials.

ENVIRONMENTAL PARTY:        The Issuer and any other Project Party.

EPORT:                      As defined in Section 5.12 of the Note Purchase
                            Agreement.
<PAGE>
                                     - 11 -


ERISA:                      The Employee Retirement Income Security Act of 1974,
                            as amended.

ERISA AFFILIATE:            Any trade or business (whether or not incorporated)
                            which is a member of a group of which the Issuer is
                            a member and which is under common control within
                            the meaning of Section 414 of the Code.

ETT NEVADA:                 ETT Nevada Inc., a corporation organized under the
                            law of the State of Nevada.

ETT NEVADA GUARANTY AND
SECURITY AGREEMENT:         The Guaranty and Security Agreement dated as of the
                            Second Disbursement Date among ETT Nevada, the
                            Issuer and the Collateral Agent.

ETT NEVADA PLEDGE
AGREEMENT:                  The Subordinated Pledge Agreement of ETT Nevada.

EVENT OF DEFAULT:           As defined in Section 10.1 of the Note Purchase
                            Agreement.

EVENT OF LOSS:              With respect to any Property of the Issuer or any of
                            its Subsidiaries, any loss of, destruction or
                            condemnation of or damage to, or other taking of,
                            such Property.


FEE:                        As defined in Section 2.3 of the Note Purchase
                            Agreement.


FINAL MATURITY DATE:        December 31, 2023.

FINANCING DOCUMENTS:        The Note Purchase Agreement, the Notes, the Security
                            Documents and the Sponsor Covenant.

FITCH:                      Fitch Ratings, Ltd.

FUNDS DISBURSEMENT
MEMORANDUM:                 The written instructions from the Issuer to the
                            Collateral Agent dated as of the Initial
                            Disbursement Date with respect to the disbursement
                            of the amounts in the Proceeds Account, which shall
                            be consistent with the use of proceeds set forth in
                            Section 9.15 of the Note Purchase Agreement.

GAAP:                       Generally accepted accounting principles as in
                            effect from time to time in the United States of
                            America.
<PAGE>
                                     - 12 -


GOVERNMENTAL APPROVAL:      All approvals, permits, waivers, exemptions,
                            consents, variances, franchises, registrations,
                            authorizations, licenses or similar orders of, or
                            from, any Governmental Authority.

GOVERNMENTAL AUTHORITY:     Any governmental or any state, department, district
                            or other political subdivision thereof or
                            governmental authority, agency, authority,
                            department, commission (including without limitation
                            any taxing authority or political subdivision),
                            autonomous regional corporation or other entity or
                            instrumentality exercising executive, legislative,
                            judicial, regulatory or administrative functions of
                            or pertaining to government.

GOVERNMENTAL RULE:          Any statute, law, regulation, ordinance, rule,
                            judgment, order, decree, permit, license,
                            concession, directive, guideline, policy or rule of
                            common law, requirement of, or other governmental
                            restriction or any similar form of decision of or
                            determination by, or any interpretation or
                            administration of any of the foregoing by, any
                            Governmental Authority, whether now or hereafter in
                            effect.

HAZARDOUS MATERIAL:         (i) Any petroleum or petroleum products, flammable
                            materials, explosives or explosive wastes,
                            radioactive materials, asbestos in any form that is
                            or could become friable, and polychlorinated
                            biphenyls (PCBs) or transformers or other equipment
                            that contain dielectric fluid, (ii) any chemicals or
                            other materials or substances which are now or
                            hereafter become defined as or included in the
                            definition of "hazardous substances", "hazardous
                            wastes", "hazardous materials", "extremely hazardous
                            wastes", "restricted hazardous wastes", "toxic
                            substances", "toxic pollutants", "contaminants",
                            "pollutants" or words of similar import under any
                            Environmental Law and (iii) any other chemical or
                            other material or substance, exposure to which is
                            now or hereafter prohibited or limited or which is
                            otherwise regulated by any Governmental Authority.
<PAGE>
                                     - 13 -


IMPAIRMENT:                 With respect to any Project Document or Governmental
                            Approval material to the Operation of any District
                            Energy Project, the rescission, termination,
                            cancellation, repeal, invalidity, suspension,
                            injunction, inability to satisfy stated conditions
                            to effectiveness or amendment, modification or
                            supplement (other than, in the case of a Project
                            Document, any such amendment, modification or
                            supplement effected in accordance with Section 9.4
                            of the Note Purchase Agreement) of such Project
                            Document or Governmental Approval in whole or in
                            part. The verb "Impair" shall have a correlative
                            meanings.

INDEBTEDNESS:               Of any Person means, without duplication, (i) all
                            obligations for borrowed money of such Person, (ii)
                            all obligations for the deferred purchase or
                            acquisition price of Property or services, other
                            than trade accounts payable (other than for borrowed
                            money) arising, and accrued expenses incurred, in
                            the ordinary course of business so long as such
                            trade accounts payable are payable within 90 days of
                            the date the respective goods are delivered or the
                            respective services are rendered, (iii) all Capital
                            Lease Obligations of such Person, (iv) all
                            obligations for borrowed money secured by any Lien
                            upon or in any property owned by such Person whether
                            or not such Person has assumed or become liable for
                            the payment of such obligations for borrowed money
                            and (v) all obligations of the type described in any
                            of clauses (i) through (iv) above which are
                            guaranteed, directly or indirectly, or endorsed
                            (otherwise than for collection or deposit in the
                            ordinary course of business) or discounted with
                            recourse by such Person.

INDEMNIFIED LIABILITIES:    As defined in Section 16.5 of the Note Purchase
                            Agreement.

INDEMNITEE:                 As defined in Section 16.5 of the Note Purchase
                            Agreement.

INDEMNITOR:                 As defined in the Aladdin Indemnity.

INDEPENDENT ENGINEER:       Pacific Energy Systems.

INDEPENDENT INSURANCE
CONSULTANT:                 Aon Mergers & Acquisitions Group.

INITIAL COLLATERAL:         As defined in the Issuer Security Agreement.

INITIAL DISBURSEMENT DATE:  As defined in Section 4.2 of the Note Purchase
                            Agreement.

INTERCOMPANY SUBORDINATED
<PAGE>
                                     - 14 -


LOANS:                      Loans and advances made (or deemed made as provided
                            in the Financing Documents) by any Subsidiary of the
                            Issuer to the Issuer or by the Issuer to any of its
                            Subsidiaries, in each case, subordinated to the
                            Secured Obligations on the terms specified in
                            Exhibit H to the Note Purchase Agreement.

INVESTMENT GRADE:           A rating of  at least "Baa3" by Moody's or "BBB-" by
                            Standard & Poor's or "BBB-" by Fitch.

INVESTMENTS:                For any Person means:  (i) the acquisition (whether
                            for cash, Property, services or securities or
                            otherwise) of capital stock, bonds, notes,
                            debentures, partnership or other ownership interests
                            or other securities of any other Person or any
                            agreement to make any such acquisition (including,
                            without limitation, any "short sale" or any sale of
                            any securities at a time when such securities are
                            not owned by the Person entering into such sale);
                            (ii) the making of any deposit with, or advance,
                            loan or other extension of credit to, any other
                            Person (including the purchase of Property from
                            another Person subject to an understanding or
                            agreement, contingent or otherwise, to resell such
                            Property to such Person), but excluding any such
                            advance, loan or extension of credit having a term
                            not exceeding 90 days representing the purchase
                            price of inventory or supplies sold by such Person
                            in the ordinary course of business; or (iii) the
                            giving of any guarantee with respect to, or the
                            entering into of any other contingent obligation
                            with respect to, Indebtedness or other liability of
                            any other Person and (without duplication) any
                            amount committed to be advanced, lent or extended to
                            such Person.

ISSUER:                     Macquarie District Energy, Inc., a corporation
                            organized under the law of the State of Delaware.

ISSUER FINANCIAL            As defined in Section 4.1(k) of the Note Purchase
STATEMENTS:                 Agreement.

ISSUER SECURITY AGREEMENT:  The Pledge and Security Agreement, dated as of the
                            date of the Note Purchase Agreement, between the
                            Issuer and the Collateral Agent, substantially in
                            for the form of Exhibit C to the Note Purchase
                            Agreement.

LAS VEGAS ASSETS:           The Las Vegas Stock Purchase Agreement, ETT Nevada,
                            ETT Nevada's equity interest in Northwind Aladdin
                            and any other Subsidiary of ETT Nevada, the
                            Agreement Regarding Purchase and Sale of Debt dated
                            as of July 6, 2004 among
<PAGE>
                                     - 15 -


                            Exelon Thermal Holdings, Inc., the Issuer and the
                            holders of the Northwind Aladdin Notes, the
                            Northwind Aladdin Notes, and the Las Vegas District
                            Energy Project.

LAS VEGAS DISTRICT ENERGY
PROJECT:                    The district energy facilities owned by Northwind
                            Aladdin and, as of the date hereof, serving the
                            Aladdin resort and casino and the Desert Passage
                            mall.

LAS VEGAS NOTES:            As defined in Section 1.2 of the Note Purchase
                            Agreement.

LAS VEGAS STOCK PURCHASE
AGREEMENT:                  Stock Purchase Agreement (Nevada) dated as of
                            December 26, 2003, by and among the Issuer, MDEH,
                            Macquarie, Exelon Corporation and Exelon Thermal
                            Holdings, Inc.

LIEN:                       With respect to any Person, any mortgage, lien,
                            pledge, adverse claim, charge, security interest or
                            other encumbrance, or any interest or title of any
                            vendor, lessor, lender or other secured party to or
                            of such Person under any conditional sale or other
                            title retention agreement or capital lease, upon or
                            with respect to any property or asset of such
                            Person, or the signing or filing of any financing
                            statement which names such Person as debtor, or the
                            signing of any security agreement authorizing any
                            other party as the secured party thereunder to file
                            any financing statement naming such Person as debtor
                            (other than protective filings made by a lessor with
                            respect to an operating lease).

LOAN DOCUMENTS:             As defined in the Credit Agreement.

LOSS PROCEEDS:              With respect to any Event of Loss, insurance
                            proceeds (including title insurance), condemnation
                            awards or other compensation, awards, damages or
                            other payments or relief (exclusive, in each case,
                            of the proceeds of liability insurance and business
                            interruption insurance and other payments for
                            interruption of operations) with respect to any
                            Event of Loss (including any such payment by a
                            Project Party pursuant to an indemnity or similar
                            provision in any Project Document).

LOSS PROCEEDS ACCOUNT:      As defined in the Agency, Disbursement and Control
                            Agreement.

MACQUARIE:                  Macquarie Bank Limited, an Australian public
                            company.

MAJOR MAINTENANCE
<PAGE>
                                     - 16 -


EXPENDITURES:               All expenditures by a Subsidiary of the Issuer for
                            scheduled (or reasonably anticipated) major
                            maintenance of such Subsidiary's District Energy
                            Project in accordance with Prudent Operating
                            Practices and vendor and supplier requirements.

MAJORITY NOTEHOLDERS:       At any time, Noteholders holding in excess of 50% of
                            the outstanding aggregate principal amount of the
                            Notes.

MAKE-WHOLE AMOUNT:          With respect to any Note, an amount equal to the
                            excess, if any, of the Discounted Value of the
                            Remaining Scheduled Payments with respect to the
                            Called Principal of such Note over the amount of
                            such Called Principal, provided that the Make-Whole
                            Amount may in no event be less than zero.

                            For the purposes of determining the Make-Whole
                            Amount, the following terms have the following
                            meanings:

                            "Called Principal" means, with respect to any Note,
                            the principal of such Note that is to be prepaid
                            pursuant to Section 3.2 of the Note Purchase
                            Agreement or has become or is declared to be
                            immediately due and payable pursuant to Section 10
                            of the Note Purchase Agreement, as the context
                            requires.

                            "Discounted Value" means, with respect to the Called
                            Principal of any Note, the amount obtained by
                            discounting all Remaining Scheduled Payments with
                            respect to such Called Principal from their
                            respective scheduled due dates to the Settlement
                            Date with respect to such Called Principal, in
                            accordance with accepted financial practice and at a
                            discount factor equal to the sum of (i) the yield to
                            maturity on the United States Treasury instrument
                            with a maturity as close as practicable to the
                            remaining average life of the Notes (or the
                            scheduled installments thereof being prepaid) plus
                            (ii) 0.50%.

                            "Remaining Average Life" means, with respect to any
                            Called Principal, the number of years (calculated to
                            the nearest one-twelfth year) obtained by dividing
                            (i) such Called Principal into (ii) the sum of the
                            products obtained by multiplying (a) the principal
                            component of each Remaining Scheduled Payment with
                            respect to such Called Principal by (b) the number
                            of years (calculated to the nearest one-twelfth
                            year) that will elapse between the Settlement Date
                            with respect to such Called Principal and the
                            scheduled due date of such Remaining Scheduled
                            Payment.
<PAGE>
                                     - 17 -


                            "Remaining Scheduled Payments" means, with respect
                            to the Called Principal of any Note, all payments of
                            such Called Principal and interest thereon that
                            would be due after the Settlement Date with respect
                            to such Called Principal if no payment of such
                            Called Principal were made prior to its scheduled
                            due date, provided that if such Settlement Date is
                            not a date on which interest payments are due to be
                            made under the terms of the Notes, then the amount
                            of the next succeeding scheduled interest payment
                            will be reduced by the amount of interest accrued to
                            such Settlement Date and required to be paid on such
                            Settlement Date pursuant to Section 3.2 or Section
                            10 of the Note Purchase Agreement.

                            "Settlement Date" means, with respect to the Called
                            Principal of any Note, the date on which such Called
                            Principal is to be prepaid pursuant to Section 3.2
                            of the Note Purchase Agreement or has become or is
                            declared to be immediately due and payable pursuant
                            to Section 10 of the Note Purchase Agreement, as the
                            context requires.

MARGIN STOCK:               Means "margin stock" within the meaning of
                            Regulation U and Regulation X of the Board of
                            Governors of the United States Federal Reserve
                            System.

MATERIAL:                   Means material in relation to the business,
                            operations, affairs, financial condition, assets,
                            properties, or prospects of the Issuer and its
                            Subsidiaries taken as a whole.

MATERIAL ADVERSE EFFECT:    A material adverse effect on:  (i) the business,
                            operations, condition (financial or otherwise) or
                            liabilities of the Issuer, any District Energy
                            Project, any of Subsidiary of the Issuer or the
                            other Project Parties (to the extent any change with
                            respect to any other Project Party could be
                            reasonably expected to have a material adverse
                            effect on the performance by such Project Party of
                            any Material Project Document or on the Issuer, any
                            of its Subsidiaries or any District Energy Project),
                            taken as a whole, (ii) the ability of any Project
                            Party to perform its material obligations under any
                            Material Project Document to which it is a party,
                            (iii) the validity or enforceability of any
                            Financing Document or Material Project Document or
                            the ability of the Issuer or any of the Project
                            Parties to perform its respective material
                            obligations under any Financing Document or Material
                            Project Document to which it is a party, (iv) the
                            Collateral or the Operation of any
<PAGE>
                                     - 18 -


                            District Energy Project, (v) the availability of any
                            Governmental Approval as shall now or hereafter be
                            necessary to be obtained under applicable rules in
                            connection with the Operation of any District Energy
                            Project or the ability of any Project Party to
                            comply with the terms and conditions of any material
                            applicable Governmental Approval, (vi) the validity
                            or enforceability of the Liens under any Security
                            Document, or (vii) the issuance by any Governmental
                            Authority of any order, judgment, regulation or
                            decision or the taking of any other action the
                            effect of which could reasonably be expected to
                            result in a Material Adverse Effect under clauses
                            (i) through (vi) of this definition; provided that
                            (x) any event which, in and of itself, reduces the
                            cash flow associated with the Las Vegas District
                            Energy Project by no more than $1,000,000 in any
                            year will not be deemed to have a material adverse
                            effect on the Las Vegas District Energy Project, ETT
                            Nevada and Northwind Aladdin and (y) any event
                            which, in and of itself, reduces the cash flow
                            associated with the Chicago District Energy Project
                            by no more than $5,000,000 in any year will not be
                            deemed to have a material adverse effect on the
                            Chicago District Energy Project, Thermal Chicago
                            Corporation, MDE Thermal, Northwind Chicago, ETT
                            National Power and Northwind Midway.

MATERIAL PROCEEDINGS:       Any actions, suits or proceedings (including
                            counterclaims) in any court or before any arbitrator
                            of any kind or before or by any Governmental
                            Authority which, if adversely determined, could
                            reasonably be expected to result in a liability of
                            the Issuer or a lien on any District Energy Project
                            in an amount exceeding $500,000 in excess of amounts
                            covered by (i) a valid and binding insurance policy
                            or (ii) by a surety bond between the defendant and
                            an insurer, in each case, covering payment thereof
                            as to which such insurer or surety has been notified
                            of, and has accepted the claim made for payment of,
                            such amounts and neither MDEH, the Issuer nor any of
                            its Subsidiaries has any actual or purported
                            reimbursement or subrogation obligation to such
                            insurer or surety in respect of such payment.

MATERIAL PROJECT DOCUMENT:  (a) The Chicago Use Agreement, (b) all service
                            agreements of Northwind Aladdin, (c) all service
                            agreements of Northwind Midway, (d) any service
                            agreements of each of MDE Thermal, Northwind Chicago
                            and Northwind Midway (i) constituting at least 5% of
                            the gross revenues of the Issuer in
<PAGE>
                                     - 19 -


                            any given year, or (ii) with customers with whom MDE
                            Thermal, Northwind Chicago or Northwind Midway, as
                            applicable, have entered into leases or easements
                            for the relevant Project Sites, (d) the Aladdin
                            Lease and (e) any leases or other similar agreements
                            relating to a Project Site.

MDE THERMAL:                MDE Thermal Technologies Inc., a corporation
                            organized under the law of the State of Illinois.

MDEH:                       Macquarie District Energy Holdings LLC, a limited
                            liability company organized under the law of the
                            State of Delaware and sole shareholder of the
                            Issuer.

MDEH PLEDGE AGREEMENT:      The MDEH Guaranty and Pledge Agreement, dated as of
                            the date of the Note Purchase Agreement,
                            substantially in the form of Exhibit D3 to the Note
                            Purchase Agreement from MDEH.

MEMORANDUM:                 As defined in Section 5.7(b) of the Note Purchase
                            Agreement.

MEMORANDUM OF LEASE:        Memorandum of Lease dated as of the date hereof by
                            and between Health Care Service Corporation and MDE
                            Thermal.

MOODY'S:                    Moody's Investors Services Inc.

MULTIEMPLOYER PLAN:         A multiemployer plan as defined in Section
                            4001(a)(3) of ERISA.

NAIC ANNUAL STATEMENT:      As defined in Section 6.2(a) of the Note Purchase
                            Agreement.

NECESSARY GOVERNMENTAL
APPROVAL:                   As defined in Section 5.4(b) of the Note Purchase
                            Agreement.

NET AVAILABLE AMOUNT:       With respect to any Loss Proceeds, the aggregate
                            amount of such Loss Proceeds net of reasonable
                            expenses incurred by the Issuer or the Collateral
                            Agent in connection with the collection thereof.

NORTHWIND ALADDIN:          Northwind Aladdin, LLC, a limited liability company
                            organized under the law of the State of Nevada.

NORTHWIND ALADDIN NOTES:    The Fixed Rate Series B Senior Secured Notes of
                            Northwind Aladdin.

NOTEHOLDERS:                The holders from time to time of the Notes.
<PAGE>
                                     - 20 -


NOTES:                      As defined in Section 1.2 of the Note Purchase
                            Agreement.

OFFICER'S CERTIFICATE:      A certificate from, in the case of the Issuer or any
                            Subsidiary Guarantor, an Authorized Officer (or, if
                            so required under the Note Purchase Agreement, a
                            Senior Financial Officer) or any officer whose
                            responsibilities extend to the subject matter of
                            such certificate.

OPERATING ACCOUNT:          As defined in the Agency, Disbursement and Control
                            Agreement.

OPERATING BUDGET:           A plan and budget for the business activities and
                            operation of the Issuer and its Subsidiaries on a
                            consolidated basis established for a fiscal year of
                            the Issuer and its Subsidiaries (or, in the case of
                            2004, for the period from the relevant Acquisition
                            Closing Date to the end of such year), and, to the
                            extent required under Section 9.20 of the Note
                            Purchase Agreement, approved by the Majority
                            Noteholders, that is substantially in the form of
                            the operating budget delivered pursuant to Section
                            4.2(q) of the Note Purchase Agreement (until the
                            Acquisition Closing Date for the Las Vegas District
                            Energy Project) or Section 4.3(q) of the Note
                            Purchase Agreement (after the Acquisition Closing
                            Date for the Las Vegas District Energy Project) and
                            that includes itemized monthly projections of
                            revenues and operating and other costs (including
                            Operating Costs and Major Maintenance Expenditures).

OPERATING COSTS:            For any period and on a consolidated basis, the sum,
                            computed without duplication, of the following: (i)
                            expenses of administering and operating the District
                            Energy Projects and of maintaining them in good
                            repair and operating condition payable during such
                            period plus (ii) fuel procurement and transportation
                            costs payable during such period plus (iii) direct
                            operating and maintenance costs, plus (iv) insurance
                            costs payable during such period plus (v) state and
                            local income taxes and applicable franchise taxes
                            and sales and excise taxes with respect to the sale
                            of energy and hot or chilled water (if any) payable
                            during such period plus (vi) property taxes payable
                            during such period plus (vii) costs and fees
                            attendant to the obtaining and maintaining in effect
                            the Governmental Approvals payable during such
                            period plus (viii) legal, accounting and other
                            professional fees attendant to any of the foregoing
                            items payable during such period. Operating Costs
                            shall exclude, to the extent included above:
<PAGE>
                                     - 21 -


                            (a) payments into any of the Accounts during such
                            period, (b) payments of any kind with respect to
                            Restricted Payments during such period, (c) payments
                            of Major Maintenance Expenditures during such
                            period, (d) depreciation for such period, (e) any
                            Capital Expenditures, or (f) any payments of any
                            kind with respect to Restoration Work during such
                            period.

OPERATION:                  The ownership, occupation, repair, operation,
                            maintenance and use of a District Energy Project and
                            sale of energy and hot or chilled water therefrom as
                            contemplated by the Project Documents. "Operating"
                            and "Operate" shall have correlative meanings.

ORDER:                      Any order, writ, injunction, decree, judgment,
                            award, determination, direction or demand by any
                            Governmental Authority.

OWNER SUBSIDIARIES:         MDE Thermal Technologies Inc., Northwind Chicago
                            LLC, Northwind Midway, LLC and each Subsidiary of
                            the Issuer (other than Northwind Aladdin) directly
                            owning a District Energy Project.

OWNER SUBSIDIARY SECURITY
AGREEMENTS:                 The Guaranty and Security Agreements, dated as of
                            the Initial Disbursement Date, substantially in the
                            form of Exhibit D2 to the Note Purchase Agreement
                            from each of the Owner Subsidiaries.

PAYMENT DATE:               Each March 31, June 30, September 30 and December 31
                            of each year, commencing with December 31, 2004
                            until the Final Maturity Date.

PBGC:                       The Pension Benefit Guaranty Corporation referred
                            to and defined in ERISA and any successor entity
                            performing similar functions.

PERMITTED CAPITAL
EXPENDITURES:               (a)  Capital Expenditures funded solely from
                            proceeds of equity contributions, Subordinated Debt,
                            Additional Indebtedness, Qualifying Capital
                            Expansion Indebtedness or retained earnings or
                            Capital Expenditures funded by customer
                            contributions that:

                                  (i) relate solely to the core district
                            energy business of the Issuer or its Subsidiaries
                            and are prudent in the context
<PAGE>
                                     - 22 -


                            of the conduct of such business or, in the case of
                            the Las Vegas District Energy Project, relate solely
                            to the core district energy business of the Las
                            Vegas District Energy Project or the provision of
                            emergency power as required by the Aladdin Energy
                            Services Agreements; and

                                  (ii) are to be made pursuant to a contract
                            between the Issuer or a Subsidiary and one or more
                            creditworthy counterparties established in the
                            district energy business or sale of district energy
                            assets containing such terms and conditions as are
                            (x) substantially similar to the Project Documents
                            effective on the relevant Acquisition Closing Date,
                            pursuant to which the District Energy Projects are
                            Operated by the Owner Subsidiaries or (y) commonly
                            applicable in similar transactions in the district
                            energy industry;

                            (b) other Capital Expenditures (to the extent
                            funded solely from capital contributions or
                            Subordinated Debt of the Issuer) that could not
                            reasonably be expected to result in a Material
                            Adverse Effect; and

                            (c) other Capital Expenditures that do not exceed
                            $2,000,000 in any fiscal year of the Issuer;

                            provided that (i) Qualifying Capital Expansion
                            Indebtedness may not be used to fund Permitted
                            Capital Expenditures until after Permitted Capital
                            Expenditures in an amount equal to $5,000,000 have
                            been funded from equity contributions, Subordinated
                            Debt, Additional Indebtedness, retained earnings or
                            customer contributions; (ii) there is no currently
                            existing Event of Default on the date of such
                            Capital Expenditure; and (iii) neither the making of
                            such Capital Expenditure nor the performance of the
                            contract pursuant to which such Capital Expenditure
                            is to be made, could reasonably be expected to
                            result in an Event of Default.

PERMITTED INDEBTEDNESS:     The following Indebtedness of the Issuer and its
                            Subsidiaries: (i) Indebtedness arising under the
                            Note Purchase Agreement or under the Notes or the
                            other Financing Documents, (ii) Subordinated Debt,
                            (iii) Qualifying Capital Expansion Indebtedness,
                            (iv) Additional Indebtedness, (v) Capital Lease
                            Obligations arising under the Chicago Airport Energy
                            Delivery Agreement and (vi) the Northwind Aladdin
                            Notes.

PERMITTED LIENS:            The following Liens: (i) Liens granted to the
                            Collateral Agent for the benefit of the Secured
                            Parties pursuant to any Security
<PAGE>
                                     - 23 -


                            Document; (ii) Liens listed in Schedule 9.6 to the
                            Note Purchase Agreement; (iii) Liens for Taxes not
                            yet due or the payment of which is not at the time
                            required; (iv) statutory Liens of landlords and
                            Liens of carriers, warehousemen, mechanics,
                            materialmen, and other Liens imposed by law (other
                            than any Lien imposed by ERISA or by section 412(n)
                            of the Code) created in the ordinary course of
                            business for amounts not yet due or if due, the
                            subject of a good faith dispute and for which
                            adequate reserves have been established in
                            accordance with GAAP; (v) Liens (other than any Lien
                            imposed by ERISA or by section 412(n) of the Code)
                            incurred or deposits made in the ordinary course of
                            business in connection with workers' compensation,
                            unemployment insurance, and other types of social
                            security; (vi) easements, rights-of-way, zoning, and
                            similar restrictions, charges, encumbrances,
                            imperfections to title and similar Liens that do not
                            secure indebtedness for borrowed money; (vii) Liens,
                            deposits or pledges incurred or created in the
                            ordinary course of business or under applicable
                            Governmental Rules in connection with or to secure
                            the performance of bids, tenders, contracts (other
                            than for the payment of money), leases, statutory
                            obligations, surety bonds or appeal bonds; (viii)
                            Liens created by or resulting from any litigation or
                            legal proceeding which is currently being contested
                            in good faith by appropriate proceedings and with
                            respect to which adequate reserves have been
                            established in accordance with GAAP and which do not
                            prime Liens described in (i) above; and (ix) Liens
                            securing Qualifying Capital Expansion Indebtedness
                            or Additional Indebtedness; provided that such Liens
                            are against no other assets or property of the
                            Issuer or any of its Subsidiaries except the
                            Collateral and with respect to such Liens, the
                            Issuer shall provide, and as applicable, cause its
                            Subsidiaries to provide, that the Notes and, to the
                            extent applicable, the Subsidiary guarantees under
                            the Subsidiary Guarantor Security Agreements are
                            equally and ratably secured for so long as such
                            Qualifying Capital Expansion Indebtedness or
                            Additional Indebtedness is secured by such Liens and
                            cause the lenders under the Qualifying Capital
                            Expansion Indebtedness and the lenders under the
                            Additional Indebtedness, as applicable, to enter
                            into intercreditor arrangements with the Secured
                            Parties that are reasonably satisfactory to the
                            Majority Noteholders; and (x) Liens granted pursuant
                            to the pledge agreement dated as of June 7, 1999
                            between ETT Nevada and State Street Bank and
<PAGE>
                                     - 24 -


                            Trust Company, as collateral agent for the holders
                            of the Northwind Aladdin Notes; provided that, in
                            the cases of the Liens described in clauses
                            (iii)-(viii), do not interfere with the conduct of
                            the business of the Subsidiaries of the Issuer,
                            including the Operation of any District Energy
                            Project, do not detract materially from the value of
                            the Collateral and do not interfere with the ability
                            of the Secured Parties to exercise their rights and
                            remedies under the Security Documents.

PERSON:                     Any individual, cooperative, corporation,
                            association, organization, partnership, limited
                            liability company, trust or estate or government (or
                            any agency or political subdivision thereof) or any
                            other entity.

PLAN:                       Any employee pension benefit plan other than a
                            Multiemployer Plan which is subject to the
                            provisions of Title IV of ERISA and which is
                            maintained (in whole or in part) for employees of
                            the Issuer or any ERISA Affiliate of the Issuer.

PRO FORMA CHICAGO
FINANCIAL STATEMENTS:       As defined in Section 4.2(n) of the Note Purchase
                            Agreement.

PRO FORMA ISSUER FINANCIAL
STATEMENTS:                 As defined in Section 4.3(m) of the Note Purchase
                            Agreement.

PROJECT DOCUMENTS:          Any agreements with respect to the ownership,
                            construction, management, operation and maintenance
                            or assets of a District Energy Project, including
                            all Material Project Documents and any Additional
                            Project Documents.

PROJECT PARTIES:            The Issuer, the Subsidiary Guarantors and Northwind
                            Aladdin.

PROJECT SITE:               In the case of each of the District Energy Projects,
                            the land upon which such District Energy Project is
                            situated.

PROPERTY:                   Any interest in any kind of property or asset,
                            whether real, personal or mixed, or tangible or
                            intangible.

PRO RATA SHARE:'            For any Noteholder at any time, the quotient
                            (expressed as a percentage) obtained by dividing (x)
                            the aggregate outstanding principal amount of such
                            Noteholder's Notes at such time by (y) the aggregate
                            outstanding principal amount of all Notes.

PRUDENT OPERATING
<PAGE>
                                     - 25 -


PRACTICES:                  Those practices, methods, equipment, specifications
                            and standards of safety and performance, as the same
                            may change from time to time, commonly used by
                            district energy facilities or similar entities
                            providing substantially similar services in the
                            United States of a type and size similar to the
                            relevant District Energy Project and recognized as
                            good, safe and prudent engineering practices in
                            connection with the operation, maintenance, repair
                            and use of electrical and other equipment,
                            facilities and improvements of such power generation
                            stations, with commensurate standards of safety,
                            performance, dependability, efficiency and economy.
                            "Prudent Operating Practices" is not intended to be
                            limited to the optimum practice, method or act to
                            the exclusion of all others, but rather to a
                            spectrum of possible practices, methods or acts
                            having due regard for, among other things,
                            manufacturers' warranties, geographical location,
                            and engineering and operating considerations.

PURCHASERS:                 As defined in the introduction to the Note Purchase
                            Agreement.

PUHCA:                      The Public Utility Holding Company Act of 1935, as
                            amended.

QPAM EXEMPTION:             Prohibited Transaction Exemption 84-14 issued by the
                            United States Department of Labor, as in effect from
                            time to time.

QUALIFYING CAPITAL
EXPANSION INDEBTEDNESS:     Indebtedness of the Issuer that is incurred in
                            addition to the Notes and is pari passu with the
                            Indebtedness issued pursuant to the Note Purchase
                            Agreement, the proceeds of which will be used for
                            the purpose of a capital expansion of either or both
                            District Energy Projects; provided that (i) the
                            projected Debt Service Coverage Ratios, after taking
                            into account such Indebtedness and any incremental
                            net Revenue associated with such capital expansion
                            under any agreements to supply district energy
                            services to new customers as a result of such
                            capital expansion, are generally upward-sloping with
                            a minimum and average Debt Service Coverage Ratio of
                            at least 1.30 and 1.50, respectively over the
                            remaining term of the Notes, (ii) after taking into
                            effect any agreements to supply district energy
                            services to new customers as a result of such
                            capital expansion, the overall creditworthiness of
                            the customer portfolio shall not have been adversely
                            effected, and (iii) in no event shall the aggregate
                            principal amount of such
<PAGE>
                                     - 26 -


                            Qualifying Capital Expansion Indebtedness exceed 75%
                            of the cost of such capital expansion.

RATING AGENCY:              Any of Fitch, Moody's or Standard & Poor's.

RELEASE:                    With respect to any Hazardous Material, any release,
                            spill, emission, emanation, leaking, pumping,
                            injection, deposit, disposal, discharge, dispersal,
                            leaching or migration of such Hazardous Material
                            into the indoor or outdoor environment, including,
                            without limitation, the movement of such Hazardous
                            Material through ambient air, soil, surface water,
                            ground water, wetlands, land or subsurface strata.

REPORTABLE EVENT:           Any reportable event within the meaning of Section
                            4043(b) of Title IV of ERISA and the regulations
                            thereunder.

REQUIRED DEBT SERVICE
RESERVE AMOUNT:             As defined in the Agency, Disbursement and Control
                            Agreement.

REQUIRED TAX RESERVE
AMOUNT:                     As defined in the Agency, Disbursement and Control
                            Agreement.

RESTORE:                    With respect to any Affected Property, to rebuild,
                            repair, restore or replace such Affected Property.
                            The term "Restoration" shall have a correlative
                            meaning.

RESTORATION WORK:           As defined in Section 9.13 of the Note Purchase
                            Agreement.

RESTRICTED PAYMENT:         Any dividends or other distributions or payments
                            on the Issuer's capital stock or any of its
                            Subsidiaries' or other equity interests in the
                            Issuer or any of its Subsidiaries (in cash, property
                            or obligations) on, or other payments or
                            distributions on account of, or the setting apart of
                            money for a sinking or other analogous fund for, or
                            the purchase, redemption, retirement or other
                            acquisition of, any portion of any equity interest
                            in the Issuer or such Subsidiary or of any warrants,
                            options or other rights to acquire any such equity
                            interest (or to make any payments to any Person,
                            such as "phantom stock" payments, where the amount
                            thereof is calculated with reference to fair market
                            or equity value of the Issuer or any or its
                            Subsidiaries) or any payments by the Issuer or any
                            of its Subsidiaries in respect of Indebtedness to
                            any Affiliate.
<PAGE>
                                     - 27 -


RESTRICTED PAYMENT DATE:    As defined in Section 9.11 of the Note Purchase
                            Agreement.

REVENUE ACCOUNT:            As defined in the Agency, Disbursement and Control
                            Agreement.

REVENUES:                   For any period, the sum of all cash amounts
                            received by the Issuer and its Subsidiaries during
                            such period, including, but not limited to, all
                            interest earned and principal repaid with respect to
                            such period on Authorized Investments held in the
                            Accounts, all interest earned and principal repaid
                            in connection with the Northwind Aladdin Notes, cash
                            received in respect of lease receivables and any
                            proceeds of business interruption insurance received
                            during such period; but in any event excluding (to
                            the extent included) Net Available Amounts of Loss
                            Proceeds, proceeds of Permitted Indebtedness and
                            contributions to capital.

ROLLING FISCAL PERIOD:      For any date, the period of twelve full, consecutive
                            fiscal months ending on or immediately prior to such
                            date, except that for any date during the twelve
                            months following the Closing Date, the partial
                            period commencing on the Closing Date and ending on
                            such date.

SECOND DISBURSEMENT DATE:   As defined in Section 4.3 of the Note Purchase
                            Agreement.

SECURED OBLIGATIONS:        As defined in the Agency, Disbursement and Control
                            Agreement.

SECURED PARTIES:            As defined in the Agency, Disbursement and Control
                            Agreement.

SECURITIES ACT:             United States Securities Act of 1933, as amended.

SECURITY AGREEMENTS:        The Issuer Security Agreement, the MDEH Pledge
                            Agreement and the Subsidiary Security and Pledge
                            Agreements and the Owner Subsidiary Security
                            Agreements.

SECURITY DOCUMENTS:         The Security Agreements, the Subsidiary Mortgages,
                            the Assignments of Rents and Leases, the Memorandum
                            of Lease, the Consents, the Agency, Disbursement and
                            Control Agreement, the Accession Agreements and any
                            financing statements filed in connection with any of
                            the foregoing.

SENIOR FINANCIAL OFFICER:   The chief financial officer, principal accounting
                            officer, treasurer or comptroller (or, in their
                            absence, the president or
<PAGE>
                                     - 28 -


                            any vice president knowledgeable with respect to the
                            Issuer's or any Subsidiary Guarantor's financial
                            matters, as applicable) of the Issuer or of any
                            Subsidiary Guarantor.

SENIOR SECURED
INDEBTEDNESS:               The following Indebtedness of the Issuer:  (i)
                            Indebtedness arising under the Note Purchase
                            Agreement or under the Notes or the other Financing
                            Documents, (ii) Additional Indebtedness and (iii)
                            Qualifying Capital Expansion Indebtedness.

SIERRA PACIFIC:             Sierra Pacific Resources, a Nevada corporation and
                            holder of 25% of the equity interests in Northwind
                            Aladdin.

SPONSOR COVENANT:           The Sponsor Covenant dated as of the date of the
                            Note Purchase Agreement, substantially in the form
                            of Exhibit I to the Note Purchase Agreement from
                            Macquarie.

STANDARD & POOR'S:          Standard & Poor's Rating Group, a division of McGraw
                            Hill, Inc.

STOCK PURCHASE AGREEMENT:   The Stock Purchase Agreement (Nevada) dated as of
                            December 26, 2003 among the Issuer, MDEH, Macquarie,
                            Exelon Corporation and MDE Thermal Holdings, Inc.

SUBORDINATED DEBT:          Affiliate Subordinated Debt, Intercompany
                            Subordinated Indebtedness or other Indebtedness of
                            the Issuer or any of its Subsidiaries that is
                            subordinated in right of payment to the Notes on the
                            terms set forth in Exhibit H to the Note Purchase
                            Agreement.

SUBSIDIARY:                 As to any Person, any corporation, association or
                            other business entity in which such Person or one or
                            more of its Subsidiaries or such Person and one or
                            more of its Subsidiaries owns sufficient equity or
                            voting interests to enable it or them (as a group)
                            ordinarily, in the absence of contingencies, to
                            elect a majority of the directors (or Persons
                            performing similar functions) of such entity, and
                            any partnership or joint venture if more than a 50%
                            interest in the profits or capital thereof is owned
                            by such Person or one or more of its Subsidiaries or
                            such Person and one or more of its Subsidiaries
                            (unless such partnership or joint venture can and
                            does ordinarily take major business actions without
                            the prior approval of such Person and/or one or more
                            of its Subsidiaries). Unless the context clearly
                            requires, any
<PAGE>
                                     - 29 -


                            reference to a "Subsidiary" is a reference to a
                            Subsidiary of the Issuer.

SUBSIDIARY GUARANTORS:      Thermal Chicago Corporation, ETT Nevada Inc., ETT
                            National Power, Inc., any Subsidiary of the Issuer
                            indirectly owning a District Energy Project and the
                            Owner Subsidiaries, in each case, to the extent
                            owned by the Issuer.

SUBSIDIARY GUARANTOR
SECURITY AGREEMENTS:        The Subsidiary Security and Pledge Agreements and
                            the Owner Subsidiary Security Agreements.

SUBSIDIARY MORTGAGES:       The following mortgages, each dated as of the date
                            hereof: (a) the Leasehold Mortgage, Security
                            Agreement, Assignment of Leases and Rents and
                            Fixture Filing (Plant 1) by LaSalle Bank, N.A., not
                            personally but as successor trustee to American
                            National Bank and Trust Company of Chicago, as
                            trustee under a Trust Agreement dated April 29, 1993
                            and known as Trust No. 116920-01, to and for the
                            benefit of the Collateral Agent, (b) the Mortgage,
                            Security Agreement, Assignment of Leases and Rents
                            and Fixture Filing (Plant 2) by Chicago Title Land
                            Trust Company, not personally but solely as trustee
                            under a Trust Agreement dated April 26, 1994 and
                            known as Trust No. 1099363, to and for the benefit
                            of the Collateral Agent, (c) the Leasehold Mortgage,
                            Security Agreement, Assignment of Leases and Rents
                            and Fixture Filing (Plant 3) by MDE Thermal, to and
                            for the benefit the Collateral Agent, (d) the
                            Leasehold Mortgage, Assignment of Leases and Rents
                            and Fixture Filing (Plant 4B) by Northwind Chicago,
                            to and for the benefit of the Collateral Agent and
                            (e) the Leasehold Mortgage, Assignment of Leases and
                            Rents and Fixture Filing (Plant 4A, Plant 5 and
                            Various Easements) by MDE Thermal, to and for the
                            benefit of the Collateral Agent.

SUBSIDIARY SECURITY AND
PLEDGE AGREEMENTS:          The Guaranty, Pledge and Security Agreements,
                            dated as of the Initial Disbursement Date,
                            substantially in the form of Exhibit D1 to the Note
                            Purchase Agreement from each of Thermal Chicago
                            Corporation and ETT National Power, Inc., and the
                            ETT Nevada Guaranty and Security Agreement and the
                            ETT Nevada Pledge Agreement.

TAX OR TAXES:               All taxes (whether income, documentary, sales,
                            stamp, registration, issue, capital, property,
                            excise or otherwise), duties, levies, imposts, fees,
                            charges or withholdings.
<PAGE>
                                     - 30 -


TAX RESERVE ACCOUNT:        As defined in the Agency, Disbursement and Control
                            Agreement.

TITLE INSURANCE COMPANY:    Chicago Title Insurance Company.

TOTAL LOSS:                 Any Event of Loss (including condemnation,
                            seizure, requisition or taking) which, in the
                            reasonable determination of the Majority
                            Noteholders, causes the relevant District Energy
                            Project to be permanently unable to continue
                            Operating.

TRANSACTION DOCUMENTS:      The Financing Documents and the Project Documents.

UCC:                        The Uniform Commercial Code as in effect from time
                            to time in the State of New York.

VOTING INTERESTS:           The membership interests in the Issuer by their
                            terms possessing, directly or indirectly, the power
                            to direct or cause the direction of the management
                            or policies of the Issuer and not subject to a
                            voting trust or another arrangement transferring any
                            such power to or for the benefit of any other
                            Person.

WITHDRAWAL LIABILITY:       Liability to a Multiemployer Plan as a result of a
                            complete or partial withdrawal from such
                            Multiemployer Plan, as such terms are defined in
                            Part I of Subtitle E of Title IV of ERISA.
<PAGE>
                                     - 31 -


            B. Principles of Interpretation. In the Note Purchase Agreement,
unless otherwise indicated and unless otherwise required by the context, the
singular includes the plural and plural the singular; words importing any gender
include the other gender; references to statutes or regulations are to be
construed as including all statutory or regulatory provisions consolidating,
amending or replacing the statute or regulation referred to; references to
"writing" include printing, typing, lithography and other means of reproducing
words in a tangible visible form; the words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
words "will" and "shall" when used in connection with an obligation shall be
deemed to be interchangeable; references to articles, sections (or subdivisions
of sections), exhibits, annexes or schedules are to the Note Purchase Agreement;
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments, extensions and other modifications to those
instruments (without, however, limiting any prohibition on any such amendments,
extensions and other modifications by the terms of any Financing Document); and
references to Persons include their respective permitted assigns and successors
and, in the case of Governmental Authorities, Persons succeeding to their
respective functions and capacities.