Document:

Exhibit 10.3(a)

 

Execution Version

 

CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS OF THIS AGREEMENT. THE
REDACTIONS ARE INDICATED WITH THREE ASTERISKS (“***”). A COMPLETE VERSION OF
THIS AGREEMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

SECOND
LIEN SECURED PROMISSORY NOTE

 

	
  $260,000,000

  	
   

  	
  October 26, 2007

  

 

For value received, NEP EQUIPMENT FINANCE
HOLD CO., LLC, a Delaware limited liability company (the “Borrower”),
hereby unconditionally promises to pay to PARAGON NOBLE LLC, a Delaware limited
liability company (together with its successors and permitted assigns, the “Lender”),
the principal amount of TWO HUNDRED SIXTY MILLION DOLLARS ($260,000,000) (the “Note
Amount”) or such lesser principal amount as may be outstanding hereunder in
accordance with the terms hereof on the Maturity Date (as defined below),
together with all accrued and unpaid interest, fees and any other amounts due
and payable to the Lender pursuant to the provisions of this Second Lien Secured
Promissory Note (this “Note”).

 

The Borrower promises to pay interest on the
outstanding principal amount of the Loan (as defined below) under this Note for
the period from and including the Closing Date (as defined below) to, but
excluding, the date the Loan is repaid in full, in each case as and when
required by Section 2(b).

 

All payments under this Note shall be made in
Dollars (as defined below), in immediately available funds and without set-off,
deduction or counterclaim.  Any extension
of time for the repayment of the principal outstanding under this Note
resulting from the due date falling on a non-Business Day shall be included in
the computation of interest.

 

The Borrower hereby waives presentment,
notice of dishonor, protest and any other notice or formality with respect to
this Note except for such notice as provided herein.

 

1.             Definitions and
Interpretation.

 

(a)           Definitions.  Unless otherwise
defined herein, all capitalized terms used in this Note shall have the
following meanings:

 

“Affiliate”
shall mean, as to any Person, any other Person that directly or indirectly
controls, or is under common control with, or is controlled by, such
Person.  As used in this definition, “control”
(including, with its correlative meanings, “controlled by” and “under
common control with”) shall mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or membership or other ownership interests, by
contract or otherwise); provided, however, that, in any event,
any Person that owns directly or indirectly 30% or more of the securities
having ordinary voting power for the election of directors or other governing
body of a corporation or 30% or more of the membership 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.

 

 

“Altona Project”
shall mean the approximately 97.5 MW wind generation facility to be located in
the State of New York, near the town of Altona.

 

“Anti-Money Laundering Laws” shall
mean any laws or regulations relating to money laundering or terrorist
financing, including, without limitation, the Bank Secrecy Act, 31 U.S.C.
sections 5301 et seq.; the
Patriot Act; Laundering of Monetary Instruments, 18 U.S.C. section 1956;
Engaging in Monetary Transactions in Property Derived from Specified Unlawful
Activity, 18 U.S.C. section 1957; the Financial Recordkeeping and Reporting of
Currency and Foreign Transactions Regulations, 31 C.F.R. Part 103; and any
similar laws or regulations currently in force or hereafter enacted.

 

“Applicable Margin” shall mean fifteen
percent (15%) per annum.

 

“Appraisal Procedure” shall have the
meaning give to such term in Exhibit C.

 

“Basic Documents” shall mean this
Note, the NEP Guaranty, the Collateral Documents and any other documents,
agreements, or instruments entered into by the Borrower, the Guarantor,
Equipmentco, any First Lien Secured Party, any TSA Company and/or the owner of
any Qualified Project Company, on the one hand, and the Lender, on the other
hand, in connection with any of the foregoing.

 

“Bellmont Project” shall mean the approximately 21.0
MW wind generation facility to be located in the State of New York, near the
town of Bellmont.

 

“Borrower” shall have the meaning
given to such term in the first paragraph of this Note.

 

“Borrower Security Agreement” shall
have the meaning given to such term in Section 7(a)(ii).

 

“Borrowing Notice” shall mean a borrowing
notice to be delivered by the Borrower to the Lender, substantially in the form
of Exhibit A attached hereto.

 

“Business Day” shall mean any day on
which commercial banks are not authorized or required to close in New York, New
York.

 

“Chateaugay Project” shall mean the
approximately 106.5 MW wind generation facility to be located in the State of
New York, near the town of Chateaugay.

 

“Closing Date” shall mean the date
when the conditions precedent set forth in Section 3(a) are
satisfied, or waived by the Lender, and funding has occurred under the
Loan.  The Closing Date is the date of
this Agreement.

 

“Code” shall mean the Internal Revenue
Code of 1986, as amended, including any applicable Treasury Regulations.

 

“Collateral” shall mean all assets
which are subject or required to become subject to the security interests or
liens granted by the Borrower (or other Persons, as applicable) under any of
the Collateral Documents.

 

2

 

“Collateral Agent” shall mean HSH
Nordbank AG, New York Branch, in its capacity as collateral agent for the
Lender, the First Lien Secured Parties and other secured parties under the
Intercreditor Agreement, together with its successors and permitted assigns in
such capacity.

 

“Collateral Documents” shall mean the
Second Lien Borrower Pledge Agreement, the Borrower Security Agreement, the
Equipmentco Pledge Agreement, the Second Lien Equipmentco Security Agreement,
the Second Lien Project Pledge Agreements, the Second Lien TSA Companies
Security Agreements, the 2009 TSA Security Agreement, the NEP Pledge Agreement,
the Consents, the Escrow Agreement and any other security documents, financing
statements and the like filed in connection with the foregoing.

 

“Consents” shall mean, collectively,
the consents listed in Section 7(a)(v) by and among the
Borrower or the relevant TSA Company, the Lender and GE.

 

“Contract Price” shall have the
meaning given to such term in each Turbine Supply Agreement, as the same may be
adjusted from time to time to account for one or more TSA Options Approvals.

 

“Debt” of any Person at any date shall
mean, without duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) all obligations of such Person to
pay the deferred purchase price of property or services, except trade accounts
payable arising in the ordinary course of business, (d) all obligations of
such Person under leases which are or should be, in accordance with GAAP,
recorded as capital leases in respect of which such Person is liable, (e) all
obligations of such Person to purchase securities (or other property) which
arise out of or in connection with the sale of the same or substantially
similar securities (or property), (f) all deferred obligations of such
Person to reimburse any bank or other Person in respect of amounts paid or
advanced under a letter of credit or other instrument, (g) all Debt of
others secured by a lien on any asset of such Person, whether or not such Debt
is assumed by such Person, (h) all Debt of others guaranteed directly or
indirectly by such Person or as to which such Person has an obligation
substantially the economic equivalent of a guaranty and (i) obligations of
such Person under any Interest Rate Agreements.

 

“Dollars” and “$” shall mean
lawful money of the United States of America.

 

“Equipmentco” shall mean NEP Equipment
Finance Co., LLC, a Delaware limited liability company.

 

“Equipmentco Pledge Agreement” shall
have the meaning given to such term in Section 7(a)(iii).

 

“Event
of Default” shall have the meaning given to such term in Section 6.

 

“FERC” shall mean the Federal Energy
Regulatory Commission and its successors.

 

“First Lien Administrative Agent”
shall mean the “Administrative Agent” as defined in the First Lien Note.

 

3

 

“First Lien Facility” shall mean a
revolving financing facility entered into by and between Equipmentco and the
First Lien Secured Parties to provide financing to Equipmentco to fund the
purchase of the Turbines as set forth in, and subject to the terms and
conditions of, the First Lien Note and each of the other documents and
agreements described therein.

 

“First Lien Note” shall mean that
certain First Lien Senior Secured Promissory Note, dated as of the date hereof,
among Equipmentco and the First Lien Secured Parties.

 

“First Lien Secured Party” shall mean
each secured party under the First Lien Facility.

 

“GAAP” shall mean generally accepted
accounting principles in the United States of America consistently applied.

 

“GE” shall mean General Electric
Company, a New York corporation.

 

“Governmental Authority” shall mean
any national, state, municipal, territorial, or local government, any political
subdivision thereof or any other governmental department, commission, board,
judicial, public, regulatory or statutory instrumentality, authority, body,
agency, bureau or entity, (including any zoning authority, FERC and the New
York State Public Service Commission), any of which has the authority to bind a
party at law or having jurisdiction over the Borrower.

 

“Governmental Rule” shall mean any
law, rule, regulation, ordinance, order, code, judgment, consent, decree,
directive, guideline, policy or similar form of decision of any Governmental
Authority only to the extent that such directive, guideline, policy or decision
has the force and effect of law.

 

“Great Plains I Project” shall mean the approximately 114 MW wind
generation facility to be located in the State of Texas, near the town of
Gruver.

 

“Great Plains II Project” shall mean the approximately 126 MW wind
generation facility to be located in the State of Texas, near the town of
Gruver.

 

“Guarantor” shall mean Noble
Environmental Power, LLC, a Delaware limited liability company.

 

“Inchoate Default” shall mean any
event or circumstance which, with the lapse of time, the giving of notice or
both, would (if not cured or otherwise remedied during such time) constitute an
Event of Default.

 

“Independent Engineer” shall have the
meaning given to such term in the First Lien Note.

 

“Insurance Consultant” shall have the
meaning given to such term in the First Lien Note.

 

“Intercreditor Agreement” shall mean
that certain Intercreditor Agreement, dated as of the Closing Date, by and
among the Borrower, Equipmentco, the Lender, the Collateral 

 

4

 

Agent and the
First Lien Administrative Agent (on behalf of the First Lien Secured Parties),
substantially in the form attached hereto as Exhibit B.

 

“Interest Reserve Account” shall have
the meaning given to such term in Section 3(a)(xxv).

 

“Lender shall have the meaning given
to such term in the first paragraph of this Note.

 

“Loan” shall mean the loan made by the
Lender to the Borrower on the Closing Date in accordance with the terms and
conditions of this Note.

 

“Loan Maximum Outstanding”  shall mean the aggregate of (a) 100%
of the positive difference, if any, between the amount of the aggregate Contract
Price under all of the Turbine Supply Agreements that has been paid to GE under
such Turbine Supply Agreements (excluding amounts solely attributable to
transportation costs for Turbine deliveries but reflecting applicable
adjustments, if any, pursuant to TSA Option Approvals or any reappraisal
conducted pursuant to and in accordance with the terms of the First Lien Note
and the Appraisal Procedure) and any amounts borrowed by Equipmentco pursuant
to the First Lien Facility and used to fund such payments of the Contract
Price; plus (b) $40,000,000, which represents the portion of the
Loan deposited into the Interest Reserve Account on the Closing Date (or
applied to fees and/or interest paid on the Closing Date).

 

“Lock-Out Period” shall mean period from
the Closing Date up to and including the first anniversary of the Closing Date.

 

“Losses” shall have the meaning given
to such term in Section 8(b).

 

“Make Whole Premium” shall mean, with
respect to the amount of any prepayment of the Loan pursuant to Section 2(e)(i),
the aggregate of (a) the amount of such prepayment plus (b) the
present value of each applicable prepayment attributable to the principal of
the Loan, discounted at the Replacement Treasury Yield plus 50 basis points,
from the date of such prepayment up to and including the first anniversary of
the Closing Date.  For the purposes
hereof, “Replacement Treasury Yield” shall mean the rate of interest equal to
the yield to maturity for the most recently issued U.S. Treasury security
having a maturity date closest to the 1-year anniversary of the Closing Date,
as quoted in The Wall Street Journal on the prepayment date.  If The Wall Street Journal (i) quotes
more than one such rate, the average of such quotes shall apply, or (ii) ceases
to publish such quotes, the U.S. Treasury security shall be determined from
such financial reporting service or source as Lender shall reasonably
determine.

 

“Material Adverse Effect” shall mean
any event or occurrence that could reasonably be expected to have a material
adverse effect on any of the following: (a) the business, operations,
condition or prospects of the Borrower, the Guarantor, Equipmentco, the
Qualified Project Companies and the TSA Companies, taken as a whole; (b) the
ability of Borrower to repay the Loan as and when required hereunder; (c) the
ability of the Borrower, Equipmentco and the TSA Companies, taken as a whole,
on the one hand, or GE, on the other hand, to perform any material obligation
under the Turbine Supply Agreements or the First Lien Facility; or (d) the
priority and enforceability of the Lender’s liens on the Collateral as provided
in the Collateral Documents.

 

5

 

“Maturity Date” shall mean the earlier
to occur of (a) the acceleration of the obligations of the Borrower
hereunder in accordance with the terms and conditions hereof following an Event
of Default, and (b) July 31, 2010.

 

“NEP Guaranty” shall have the meaning
given to such term in Section 3(a)(xxvii).

 

“Non-Recourse Party” shall have the
meaning given to such term in Section 9.

 

“Note” shall have the meaning given to
such term in the introductory paragraph hereof.

 

“Obligations” shall mean, with respect
to the Borrower, the Guarantor, Equipmentco or any TSA Company (only to the
extent of each such Person’s respective obligations under any Basic Document to
which it is a party), the Loan and all obligations of performance, howsoever
arising (and whether arising or incurred before or after any bankruptcy,
insolvency, reorganization or other similar proceeding), owed by the Borrower,
the Guarantor, Equipmentco or any TSA Company (only to the extent of each such
Person’s respective obligations under any Basic Document to which it is a
party) to the Lender (whether or not evidenced by any note or instrument and
whether or not for the payment of money), due or to become due, now existing or
hereafter arising, pursuant to the terms of this Note or any of the other Basic
Documents, including all principal, interest, fees, charges, expenses,
attorneys’ fees and accountants’ fees chargeable and other amounts payable by
the Borrower, the Guarantor, Equipmentco or any TSA Company (only to the extent
of each such Person’s respective obligations under any Basic Document to which
it is a party) under this Note or any of the other Basic Documents.

 

“OFAC”
shall mean the United States Department of Treasury Office of Foreign Assets
Control.

 

“OFAC Laws”
shall mean any laws, regulations, and Executive Orders relating to the economic
sanctions programs administered by OFAC, including without limitation, the
International Emergency Economic Powers Act, 50 U.S.C. sections 1701 et seq.; the Trading with the Enemy Act,
50 App. U.S.C. sections 1 et seq.;
and the Office of Foreign Assets Control, Department of the Treasury
Regulations, 31 C.F.R. Parts 500 et seq.
(implementing the economic sanctions programs administered by OFAC).

 

“OFAC SDN
List” shall mean the list of “Specially Designated Nationals and Blocked
Persons” maintained by OFAC.

 

“OFAC Violation” shall have the
meaning given to such term in Section 5(xxiv).

 

“Patriot Act” shall mean the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (USA Patriot Act), Pub. L. 107-56 and all
other laws and regulations relating to money-laundering and terrorist
activities.

 

“Permit” shall mean any approval,
consent, waiver, exemption, variance, franchise, permit, authorization,
registration or license to, with or from a Governmental Authority.

 

6

 

“Permitted Debt” shall mean (a) the
Loan and the other Obligations, (b) any obligations of the Borrower
pursuant to the First Lien Facility, and (c) any obligations of the
Borrower incurred in connection with Acceptable Alternative Funding Commitments
(under and as defined in the First Lien Facility), in the case of this clause
(c), on terms and conditions satisfactory to the Lender in its sole discretion.

 

“Permitted
Liens” shall mean (a) any liens created pursuant to the Basic
Documents or the Turbine Supply Agreements; (b) liens imposed by law for
taxes that are not yet due (or are overdue by not more than ninety (90) days if
such liens would not have a Material Adverse Effect) or that are being contested
in good faith by the Borrower, Equipmentco or the relevant TSA Company and for
which adequate reserves have been set aside therefor or that are secured by a
bond reasonably acceptable to the Lender; (c) carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s and other like liens imposed by law,
arising in the ordinary course of business and securing obligations either for
amounts not yet due or that are being contested in good faith by the Borrower,
Equipmentco or the relevant TSA Company and for which adequate reserves have
been set aside therefor or are secured by a bond reasonably acceptable to the
Lender; (d) pledges and deposits made in the ordinary course of business
in compliance with workers’ compensation, unemployment insurance and other
social security laws or regulations; (e) cash deposits to secure the
performance of bids, trade contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business; (f) liens arising solely by
virtue of any statutory or common law provision relating to banker’s liens,
rights of set-off or similar rights and remedies as to deposit accounts or
other funds maintained with a creditor depository institution; (g) easements,
rights-of-way, restrictions, defects or other exceptions to title or other
similar encumbrances incurred in the ordinary course of business which are not
incurred to secure Debt, and which do not in any case materially detract from
the value of the property subject thereto or interfere with the ordinary
conduct of the Borrower’s business such that it would have a Material Adverse
Effect; (h) any other liens, easements, zoning restrictions, rights-of-way or
similar encumbrances on real property imposed by law or arising in the ordinary
course of business but that would not have a Material Adverse Effect; (i) liens
arising out of judgments or awards that do not otherwise constitute an Event of
Default so long as an appeal or proceeding to review is being prosecuted in
good faith and for the payment of which adequate reserves have been set aside
or are secured by a bond reasonably acceptable to the Lender; (j) other
liens in an aggregate amount not to exceed $1,000,000; and (k) liens on
the Collateral arising out of the First Lien Facility.

 

“Person” shall mean any individual,
corporation, company, voluntary association, partnership, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).

 

“Pledged Equity Interests” shall mean (a) all
the issued and outstanding membership interests of the Borrower, (b) all
the issued and outstanding membership interests of each TSA Company; (c) all
of the issued and outstanding membership interests of Equipmentco, and (d) all
of the issued and outstanding membership interests of each Qualified Project
Company to which Turbines have been allocated, to the extent that such
interests are owned by Equipmentco or an Affiliate of Equipmentco.

 

7

 

“Prior Turbine Supply Loans” shall
mean (a) the Loan Agreement, dated as of May 18, 2007, by and between
the Guarantor and CIT Capital USA Inc.; (b) the Senior Secured Promissory
Note, dated as of June 22, 2007, by and between the 2006 TSA Company and
Paragon Noble LLC; and (c) the Loan Agreement, dated as of December 4,
2006, by and between the 2007 TSA Company and CIT Capital USA Inc.

 

“Project Review” shall have the
meaning given to such term in Section 5(a)(xxii).

 

“Proportionate Share” shall have the
meaning given to such term in Section 11.

 

“PTC” shall mean production tax
credits under Section 45 of the Code.

 

“PTC Expiration Date” shall have the
meaning given to such term in Section 5(a)(xxii).

 

“Purchase Orders” shall mean,
collectively, (a) Purchase Order No. 1 and Purchase Order No. 2
with respect to the 2006 TSA, entered into by and between GE and the 2006 TSA
Company and (b) any additional purchase orders entered into under any
Turbine Supply Agreement by and between GE and the applicable TSA Company.

 

“Purchasing Lender” shall have the
meaning given to such term in Section 11(e).

 

“Qualified Project” shall have the
meaning given to such term in Section 5(a)(xxii).  For the avoidance of doubt, based on Project
Reviews conducted prior to the Closing Date, the following are Qualified
Projects as of the Closing Date: (i) Altona Project; (ii) Bellmont
Project; (iii) Chateaugay Project; (iv) Great Plains I Project; (v) Great
Plains II Project; (vi) Thumb Huron Project and (vii) Wethersfield
Project.

 

“Qualified Project Companies” shall
mean, collectively or individually, depending on the context, the
single-purpose companies that are Affiliates of the Borrower formed for the
development, financing, construction, acquisition, ownership, operation and/or
maintenance of a Qualified Project; provided, however, that in no
event shall the Borrower or an Affiliate of the Borrower own less than 80% of
the economic and voting interests of each such Qualified Project Company.

 

“Quarterly Date” shall mean the last
Business Day of each calendar quarter.

 

“Replaced Equity Interests” shall have
the meaning given to such term in Section 7(c).

 

“Second Lien Borrower Pledge Agreement”
shall have the meaning given to such term in Section 7(a)(i).

 

 “Second
Lien Equipmentco Security Agreement” shall have the meaning given to such
term in Section 7(a)(iv).

 

“Second Lien Project Pledge Agreements”
shall have the meaning given to such term in Section 7(a)(vi).

 

8

 

“Second Lien TSA Companies Security
Agreements” shall have the meaning given to such term in Section 7(a)(v).

 

“Selling Lender” shall have the
meaning given to such term in Section 11(e).

 

 “Take
Out Dates” shall mean the following: (i) with respect to each of the
2006 TSA Company, 2006 TSA, the 2007 TSA Company and the 2007 TSA, April 30,
2008; (ii) with respect to the 2008 TSA Company and the 2008 TSA, October 31,
2008 and (iii) with respect to the 2009 TSA Company and the 2009 TSA, October 31,
2009.

 

“Thumb Huron Project” shall mean the approximately 69 MW wind
generation facility to be located in the State of Michigan, near the town of
Thumb Huron.

 

“TSA Companies” or “TSA Company”
shall mean, individually or collectively, as the context requires, (i) the
2006 TSA Company; (ii) the 2007 TSA Company; (iii) the 2008 TSA
Company and (iv) the 2009 TSA Company.

 

“TSA Options Approval” shall have the
meaning given to such term in the First Lien Note.

 

“Turbine Supply Agreements” shall
mean, collectively or individually, depending on the context, (i) the 2006
TSA; (ii) the 2007 TSA; (iii) the 2008 TSA and (iv) the 2009
TSA.

 

“Turbines” shall mean the 1.5 MW SLE
wind turbines manufactured by GE that are the subject of the Turbine Supply
Agreements, together with the associated mechanical systems, electrical
systems, control systems, communications systems and towers.

 

“UCC” shall mean the Uniform
Commercial Code of the jurisdiction the law of which governs the document in
which such term is used or which governs the creation or perfection of the
liens granted thereunder.

 

“Wethersfield Project” shall mean the approximately 126.0 MW wind
generation facility to be located in the State of New York, near the town of
Wethersfield.

 

“2006 TSA” shall mean the Master
Contract for the Sale of Power Generation Equipment and Related Services, dated
as of February 15, 2006, by and between GE and the 2006 TSA Company, along
with the applicable Purchase Orders and as amended, modified and supplemented
from time to time.

 

“2007 TSA” shall mean the Master
Contract for the Sale of Power Generation Equipment and Related Services, dated
as of October 17, 2006, by and between GE and the 2007 TSA Company, along
with the applicable Purchase Orders and as amended by that certain First
Amendment to Master Contract for the Sale of Power Generation Equipment and
Related Services, dated June 4, 2007, by and between GE and the 2007 TSA
Company and as further amended, modified and supplemented from time to time.

 

“2008 TSA” shall mean the Master
Contract for the Sale of Power Generation Equipment and Related Services, dated
as of October 17, 2006, by and between GE and the 2008 

 

9

 

TSA Company,
along with the applicable Purchase Orders and as amended, modified and
supplemented from time to time.

 

“2009 TSA” shall mean the Master
Contract for the Sale of Power Generation Equipment and Related Services, dated
as of September 27, 2007, by and between GE and the 2009 TSA Company,
along with the applicable Purchase Orders and as amended, modified and
supplemented from time to time.

 

“2006 TSA Company” shall mean Noble
Environmental Power 2006 Equipment Co., LLC, a Delaware limited liability
company.

 

“2007 TSA Company” shall mean Noble
Environmental Power 2007 Equipment Co., LLC, a Delaware limited liability
company.

 

“2008 TSA Company” shall mean Noble
Environmental Power 2008 Equipment Co., LLC, a Delaware limited liability
company.

 

“2009 TSA Company” shall mean Noble
Environmental Power 2009 Equipment Co., LLC, a Delaware limited liability
company.

 

“2009 TSA Security Agreement”  shall having the meaning given to such term
in Section 7(a)(vi).

 

(b)           Certain
Rules of Interpretation.  In
this Note, unless otherwise indicated, the singular includes the plural and the
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 in each instance by the words “without limitation”; references to
articles, sections (or subdivisions of sections), exhibits, annexes or
schedules are to this Note; references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments, extensions
and other modifications to such agreements or instruments (without, however,
limiting any prohibition on any such amendments, extensions and other
modifications by the terms of this Note); and references to Persons include
their respective successors and permitted assigns and, in the case of any
government authorities, Persons succeeding to their respective functions and
capacities.

 

2.             Loans; Interest; Repayment; Prepayment; Change in Circumstances; Yield
Protection.

 

(a)       Loan.  Subject to
the terms and conditions set forth herein, the Lender agrees to make the Loan
to the Borrower in Dollars on the Closing Date (as requested in the relevant
Borrowing Notice), in an aggregate principal amount not to exceed the Note
Amount.  Amounts repaid or prepaid in
respect of the Loan may not be re-borrowed.

 

10

 

(b)       Interest Provisions. 
(i) (i)   The Borrower shall
pay interest on the unpaid balance of the Loan from the date of the funding
thereof until the repayment or prepayment thereof, at the Applicable
Margin.  Interest with respect to the
Loan shall be payable on the basis of a year of 365 (or, if applicable,
366) days for the actual number of days elapsed.  Following the receipt of notice from the
Lender of the occurrence of an Event of Default and as long as such Event of
Default is continuing, the interest payable by the Borrower on principal amount
of the Loan then outstanding will be equal to the Applicable Margin plus
2.00% per annum.

 

(ii)                   All interest accrued pursuant
to Section 2(b)(i) shall be due and payable on each Quarterly
Date and on the Maturity Date.  Except as
otherwise provided in this Note, the interest accrued pursuant to the
immediately preceding sentence may be paid from the proceeds of the Loan.

 

(iii)                  [Intentionally omitted]

 

(iv)                  The Borrower authorizes the
Lender to record in an account maintained by the Lender on its books (A) the
date and amount of each principal and interest payment on the Loan, and (B) such
other information as the Lender may determine is necessary for the computation
of interest payable by the Borrower hereunder.  The Borrower agrees that all such computations
of interest by the Lender shall be conclusive in the absence of manifest
error.  The Lender shall, at the request
of the Borrower, deliver to the Borrower a statement detailing such
computations.  All computations of
interest on the Loan shall include the first day but exclude the last day of
the period for which such interest is payable.

 

(c)   Loan Funding.

 

(i)                    To
request a Loan, the Borrower shall submit to the Lender a completed Borrowing
Notice and all documents required as conditions precedent pursuant to Section 3(a) by
12:00 noon New York time at least three (3) Business Days prior to
the Closing Date, unless a shorter period is otherwise agreed to by the Lender.

 

(ii)                   On the Closing Date and
subject to the satisfaction or waiver of the conditions precedent set forth in Section 3(a),
the Lender shall make available the Loan requested in the Borrowing Notice in
Dollars and in immediately available funds, by transferring such funds to one
or more accounts designated by the Borrower in the Borrowing Notice.

 

(d)       [Intentionally omitted]

 

(e)       Prepayments.

 

(i)    Optional Prepayments.  The Borrower shall have the right to make
optional prepayments of the outstanding principal of the Loan at any time and
in any amount; provided, however, that (A) the Borrower
shall give the Lender notice of such optional prepayment by 12:00 noon New
York time on the Business Day prior to the date of such proposed prepayment
(which date shall be a Business Day), and (B) the amount of such
prepayment shall be in a minimum aggregate amount of $500,000 or such lesser
amount equal to 100% of the total amount of the Loan then outstanding.  If the Borrower makes any prepayment pursuant
to this Section 2(e)(i) during the Lock-Out Period, then the
Borrower shall, within ten (10) Business Days after receiving a demand
therefor from the Lender (accompanied by a certificate from the 

 

11

 

Lender setting forth in reasonable detail the
calculation of the Make Whole Premium), pay to the Lender the Make Whole
Premium.  If the Borrower makes any
prepayment pursuant to this Section 2(e)(i) after the end of
the Lock-Out Period, such prepayment shall be without premium or penalty of any
kind.

 

(ii)    Mandatory Prepayments.  To the extent that the outstanding principal
amount of the Loan exceeds the Loan Maximum Outstanding (other than as a result
of an event that is an Inchoate Default or an Event of Default), the Borrower
shall either (A) repay such excess principal amount, without premium or
penalty, or (B) deposit into the Collateral Account (as defined in the
Borrower Security Agreement) for the benefit of the Lender an amount equal to
such excess principal amount, which amount shall be returned by the Lender to
the Borrower as and when (and to the extent that) the principal amount of the
Loan is less than the Loan Maximum Outstanding, so long as no Inchoate Default
or Event of Default has occurred and is continuing.

 

(f)   Repayments.  The Borrower hereby unconditionally promises
to pay to the Lender the then unpaid principal amount of the Loan and all other
Obligations on the Maturity Date.  If the
Guarantor or any other Affiliate of the Borrower pays to the Lender any amount
in repayment of the Loan or other Obligations (including, without limitation,
any applicable Make-Whole Premium), the Borrower’s obligations under this Note
shall be deemed satisfied to the extent of such payments.

 

(g)                Other Payment Terms.

 

(i)    Borrower shall make all payments due to the
Lender hereunder at its account identified in Annex I from time to time,
in Dollars and in immediately available funds not later than 1:00 p.m.,
New York time, on the date on which such payment is due.  Any payment made after such time on any day shall
be deemed received on the next Business Day after such payment is received.

 

(ii)   Unless otherwise specified in this Note,
whenever any payment due hereunder shall fall due on a day other than a
Business Day, such payment shall instead be due on the next succeeding Business
Day, and such extension of time shall be included in the computation of
interest or fees in respect of the portion of the Loan required to be repaid.

 

(iii)  Except as otherwise provided in this Note,
payments made under this Note and the other Basic Documents shall be applied first,
to any fees, costs, charges or expenses payable to the Lender hereunder or
under the other Basic Documents, second, to any accrued but unpaid
interest on the Loans, and third, to the outstanding principal of the
Loan.

 

(h)           Additional
Interest.  On the Closing Date, the
Borrower shall pay to the Lender additional interest equal to the product of (A) three
percent (3%) times (B) the principal amount of the Loan.  Except as otherwise provided in this Note, the
additional interest payable pursuant to this Section 2(h)(i) may
be paid from the proceeds of the Loan, and such amount shall be added to the
outstanding principal amount of the Loan.

 

(i)            Yield
Protection.  If, after the date of
this Note, any change in laws applicable to the Lender (A) subjects the
Lender to any tax, duty or other similar charges with respect to the Loan or
changes the basis of taxation with respect to repayment of the 

 

12

 

Loan (other than franchise taxes, minimum taxes, any branch profit
taxes imposed by the United States or any other jurisdiction, taxes, duties or
other charges or changes in the basis of taxation on the overall income of the
Lender and excluding any taxes covered by Section 8(b)), (B) imposes
any additional reserve, special deposit or other similar requirements for
reserves held by the Lender with respect to the Loan (without duplication of
any requirement under this Section 2(i)(C)), (C) affects the
amount of capital required to be maintained by the Lender with respect to the
Loan, or (D) otherwise increases the cost to the Lender of making,
renewing and maintaining the Loan, then the Borrower shall, from time to time,
upon demand of the Lender (accompanied by a certificate from the Lender setting
forth in reasonable detail the incurred costs), absent manifest error, pay to
the Lender additional amounts sufficient to reimburse or compensate the Lender
for such additional costs.

 

3.             Conditions
Precedent.

 

(a)           The obligation of the Lender to make the Loan to the
Borrower on the Closing Date is subject to the satisfaction by the Borrower, or
waiver by the Lender, of each of the following conditions precedent:

 

(i)            receipt by the Lender of this Note,
which shall be duly authorized, executed and delivered by the Borrower;

 

(ii)           receipt by the Lender of a Borrowing
Notice with respect to the Loan, which shall be duly executed and delivered by
the Borrower;

 

(iii)          receipt by the Lender of a certificate
signed by an authorized officer of the Borrower attaching its certificate of
formation, other organizational documents, incumbency certificate and good
standing certificates, each as in effect on the Closing Date, and resolutions
regarding the authorization, execution and delivery of each Basic Document to
which it is a party;

 

(iv)          receipt by the Lender of certificates
signed by authorized officers of each of Guarantor, Equipmentco, each TSA
Company, and each relevant owner of each Qualified Project Company in existence
as of the Closing Date, attaching the certificates of formation, other
organizational documents, good standing certificates and incumbency
certificates of each such Person, each as in effect on the Closing Date, and
resolutions regarding the authorization, execution and delivery of each Basic
Document to which such Person is a party;

 

(v)           receipt by the Lender of (A) the
Collateral Documents duly executed by all of the Persons party thereto, and (B) executed
copies of each Turbine Supply Agreement, certified by the Borrower as true,
correct and complete and in form and substance reasonably satisfactory to the
Lender;

 

(vi)          each Basic Document and each Turbine
Supply Agreement delivered pursuant to Section 3(a)(v) to
which such Person is a party shall be in full force and effect and shall
constitute a legally valid and binding obligation of the Borrower, Guarantor,
Equipmentco, each TSA Company (if any) and each relevant owner of a Qualified
Project Company, enforceable against such Person in accordance with its respective
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors’ rights generally and the application of general principles
of equity;

 

13

 

(vii)         receipt by the Lender of the following
opinions of counsel:  (A) in-house
opinion for the Borrower, Guarantor, Equipmentco, each TSA Company, and each
relevant owner of each Qualified Project Company with respect to the existence,
due authorization and absence of conflicts; (B) the opinion of Latham &
Watkins LLP, special counsel for the Borrower, the Guarantor, Equipmentco, each
TSA Company (if any) and each relevant owner of each Qualified Project Company
with respect to the enforceability of the Basic Documents against each such
Persons; and (C) the opinion of in-house counsel for GE, regarding each
Turbine Supply Agreement and the related Consent and addressing such matters as
the Administrative Agent may request;

 

(viii)        receipt by the Lender of the most
recently available unaudited financial statements (to include a balance sheet
and an income and expense statement) of the Borrower, the Guarantor and
Equipmentco dated as of August 31, 2007, August 31, 2007 and August 31,
2007, respectively, in form and substance reasonably satisfactory to the Lender
and certified by an authorized officer of the Borrower that such financial
statements fairly present, in all material respects, the financial position of
the Borrower, the Guarantor and Equipmentco as at the date thereof;

 

(ix)           no Material Adverse Effect shall have
occurred and be continuing since the date of this Note;

 

(x)            each representation and warranty set
forth in Section 4 shall be true and correct in all material
respects as of the Closing Date (or if such representation and warranty relates
solely to an earlier date, as of such date);

 

(xi)           no Event of Default or Inchoate
Default shall have occurred and be continuing as of the Closing Date;

 

(xii)          the additional interest described in Section 2(h) that
is due and payable on the Closing Date shall have been paid to the Lender on or
prior to the Closing Date, in full, in immediately available funds (it being
acknowledged and agreed that such additional interest is to be paid with the
proceeds of the Loan to be made on the Closing Date);

 

(xiii)         the Lender shall have been reimbursed
for the reasonable out-of-pocket costs, expenses and charges as set forth in Section 8(a),
which fee, costs, expenses and charges may be paid out of the proceeds of the
Loan;

 

(xiv)        receipt by the Lender of a report by the
Independent Engineer, together with a reliance letter relating thereto
addressed to Lender, containing a third-party market valuation study with
respect to the Turbines, assessing the wind turbine market and providing a
technical review of the Turbines purchased or to be purchased under the Turbine
Supply Agreements;

 

(xv)         receipt by the Lender of evidence
reasonably satisfactory to it that all financing statements necessary to be
filed in accordance with the relevant Collateral Documents with respect to the
Borrower, Equipmentco, each TSA Company and each relevant owner of each
Qualified Project Company (if any) have been filed or will be filed in
connection with the funding of the Loan;

 

(xvi)        the Borrower shall have delivered to (a) the
Collateral Agent the original certificates, duly endorsed in blank,
representing the Pledged Equity Interests with respect to 

 

14

 

Equipmentco,
each TSA Company and each Qualified Project Company (if any) and (b) to
the Lender, the original certificates, duly endorsed in blank, representing the
Pledged Equity Interests with respect to the Borrower;

 

(xvii)       the liens of the Collateral Documents
shall have attached and shall constitute valid and enforceable second priority
liens on the Collateral in accordance with the Basic Documents (subject to
Permitted Liens);

 

(xviii)      the Lender shall have received UCC search
reports of a recent date before the Closing Date, satisfactory to it, for each
of the jurisdictions in which the UCC-1 financing statements are intended to be
filed in respect of the Collateral.  The
Lender shall have received litigation and docket search reports of a recent
date before the Closing Date, satisfactory to the Lender, for each of the
jurisdictions in which Borrower, Equipmentco, each TSA Company and the owners
of each Qualified Project Company (if any) have a main place of business;

 

(xix)         insurance complying with the requirements
of Section 5(xix) shall be in full force and effect and the Lender
shall have received certified copies of all policies evidencing such insurance
(or a binder, commitment or certificates signed by the insurer or a broker
authorized to bind the insurer), in form and substance satisfactory to the
Lender;

 

(xx)          delivery to the Lender of the
Insurance Consultant’s certificate and the Insurance Consultant’s report,
together with a reliance letter relating thereto addressed to Lender, to the
effect that all required insurance policies are in full force and effect, are
not subject to cancellation without thirty (30) days’ prior notice and
otherwise conform with the requirements set forth in this Note and the Turbine
Supply Agreements;

 

(xxi)         delivery to the Lender of all
information of the Borrower, Equipmentco, the Guarantor, the TSA Companies and
the Qualified Project Companies requested by the Lender at least five (5) Business
Days prior to the Closing Date for the Lender to comply with the requirements
of the Patriot Act;

 

(xxii)        delivery of an initial Project Review
for (1) the Altona Project, (2) the Thumb Huron Project, (3) the
Chateaugay Project, (4) the Bellmont Project, (5) the Wethersfield
Project, (6) the Great Plains I Project and (7) the Great Plains II
Project;

 

(xxiii)       the initial funding of loans under the
First Lien Facility shall have occurred in accordance with the terms and
conditions thereof;

 

(xxiv)       the proposed amount of the Loan shall not
exceed the Loan Maximum Outstanding as of the Closing Date;

 

(xxv)        the Borrower shall have established a
bank account into which amounts will be deposited and maintained in accordance
with Section 5(a)(xxv) (the “Interest Reserve Account”) and
shall have taken all actions reasonably necessary to grant the Lender a
perfected first priority security interest therein;

 

(xxvi)       the Borrower shall have established the
Collateral Account and shall have taken all actions reasonably necessary to
grant the Lender a perfected first priority security interest therein; and

 

15

 

(xxvii)      delivery to the Lender of a Guaranty
Agreement, duly executed by the Guarantor, substantially in the form of Exhibit D
(the “NEP Guaranty”).

 

4.             Representations.

 

(a)           The Borrower represents and warrants to the Lender as of
the date hereof, the Closing Date that:

 

(i)    It is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, and
has all requisite power and authority to carry on its business as now
conducted.  It or Equipmentco, as
applicable, has all requisite limited liability company power and authority to (A) execute
and deliver each Basic Document and each Turbine Supply Agreement to which it
is a party; (B) grant to the Lender a second-priority security interest in
the Collateral subject to the Collateral Documents (subject to Permitted Liens)
to which it is a party; and (C) perform all of its obligations under each
Basic Document and each Turbine Supply Agreement to which it is a party.

 

(ii)   The execution and delivery by the Borrower or
Equipmentco, as applicable, of each Basic Document and of each Turbine Supply
Agreement to which it is a party and the performance by it of all of its
obligations hereunder and thereunder:  (A) will
not violate, be in conflict or inconsistent with, result in a breach of, or
constitute a default (with or without the giving of notice or the passage of
time or both) under, any term or provision of any document, agreement or
instrument to which the Borrower is a party such that there could reasonably be
expected to be a Material Adverse Effect; (B) will not violate, be in
conflict or inconsistent with, result in a breach of, or constitute a default
(with or without the giving of notice or the passage of time or both) under,
any term or provision of any organizational document, of the Borrower; (C) to
the knowledge of the Borrower, will not violate any Governmental Rule applicable
to or binding on the Borrower or any of its properties; and (D) except as
specifically contemplated by the Basic Documents or the Turbine Supply
Agreements, will not result in the creation or imposition of any lien upon any
of the assets and properties of the Borrower.

 

(iii)  Each of the Basic Documents to which the
Borrower is a party constitutes a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms and
provisions, except as such enforceability may be affected by applicable
bankruptcy, insolvency, moratorium or other similar laws affecting creditors
rights generally and the application of general principles of equity.  Each such Basic Document and Turbine Supply
Agreement has been duly authorized, executed and delivered by the Borrower or
Equipmentco, as applicable.

 

(iv)  The Borrower has filed, or has caused to be
filed on behalf of itself, all federal, state and local tax returns that it is
required to file, and has paid, or has caused to be paid, all material taxes
that it is required to pay to the extent due or, to the extent not so paid, has
established adequate reserves for the payment thereof as required by GAAP.

 

(v)   The Borrower has not engaged in any business
other than the purchasing, transporting, financing and/or ownership of turbines
to be utilized in the development, construction and operation of wind energy
generation projects (and business reasonably incidental thereto).  The Borrower is not a general partner or a
limited partner in any general or limited partnership, a joint 

 

16

 

venturer in
any joint venture or a member in any limited liability company, other than the
Borrower being the sole member of Equipmentco, which in turn is the sole member
of each TSA Company.

 

(vi)  The Borrower, Equipmentco or the applicable
TSA Company has good title to, or the right to acquire title to, the Turbines,
in each case free and clear of all liens other than Permitted Liens.  The rights, title and interest of the
Borrower, Equipmentco and each TSA Company under the Turbine Supply Agreements
to which such Person is a party are free and clear of all liens other than
Permitted Liens.

 

(vii) The Borrower is not an investment company or a
company controlled by an investment company within the meaning of the
Investment Company Act of 1940, as amended.

 

(viii)  The
financial statements of each of the Borrower, the Guarantor and Equipmentco
delivered pursuant to Section 5(a)(viii) fairly present, in
all material respects, their respective financial positions, as of the date thereof.

 

(ix)   The Borrower is in compliance with all
applicable Governmental Rules applicable to it, except to the extent there
could not reasonably be expected to have a Material Adverse Effect.

 

(x)    None of the Borrower, Equipmentco nor any
TSA Company is in violation of any environmental law with respect to the
relevant proposed project site for which the Turbines may be delivered or has
any liability under applicable environmental law with respect to such relevant
project site that could reasonably be expected to have a Material Adverse
Effect.  There are no claims or
investigations pending, or to the Borrower’s knowledge, threatened by any
Governmental Authority of or against the Borrower, Equipmentco and/or any TSA
Company under any applicable environmental law that could reasonably be
expected to have a Material Adverse Effect. 
To the knowledge of the Borrower, none of the Borrower, Equipmentco, any
TSA Company nor any subcontractor of any such Person has used, released,
discharged, generated, manufactured, stored or disposed of any hazardous
substances in, on or under the relevant proposed project site for which the
Turbines may be delivered that that could reasonably be expected to have a
Material Adverse Effect.

 

(xi)   None of the Borrower, Equipmentco nor any TSA
Company is subject to regulation under the Employee Retirement Income Security
Act of 1974, as amended.

 

(xii)  No Event of Default or Inchoate Default has
occurred and is continuing.  Neither the
Borrower nor any TSA Company is in default under any provision of the Turbine
Supply Agreement that could reasonably be expected to have a Material Adverse
Effect.

 

(xiii) Each lien created and perfected under the
Collateral Documents in favor of the Lender has been perfected as of each date
this representation is made or deemed made and shall constitute a valid and
enforceable second-priority lien on the Collateral that is subject to such lien
(subject to Permitted Liens).  All
filings and recordings, re-filings or re-recordings necessary to perfect and
maintain the perfection and priority of the interest, title or liens of the
Lender, subject to Permitted Liens, have been made as required by the Basic
Documents.

 

(xiv)        There are no actions, suits, proceedings
or investigations by or before any arbitrator or Governmental Authority now
pending against or, to the knowledge of the Borrower, 

 

17

 

threatened
against or affecting the Borrower or the Guarantor that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

(xv) Each of
the Borrower and each TSA Company is in material compliance with all material
Governmental Rules applicable to it, except to the extent the failure to
comply with such Governmental Rule could not reasonably be expected to
have a Material Adverse Effect.

 

(xvi)   All
policies of insurance required to be obtained by the Borrower or any TSA
Company under the Basic Documents and the Turbine Supply Agreements have been
obtained and are in full force and effect; all premiums due thereon have been
paid and, except with respect to policies that have been replaced with other
policies in compliance with this Note, no notice from any insurer or its
representative as to any cancellation or reduction or other change in coverage
has been received by the Borrower or any TSA Company.

 

(xvii)   All
issued and outstanding ownership interests in the Borrower are directly owned
by the Guarantor.  All issued and
outstanding ownership interests in Equipmentco are directly owned by the
Borrower.  All issued and outstanding
ownership interests in each TSA Company are directly owned by Equipmentco.  At least 80% of the issued and outstanding
ownership and economic interests in each Qualified Project Company are indirectly
owned by the Guarantor.

 

(xviii)   None
of the Borrower, Equipmentco nor any TSA Company has conducted any business
other than the business contemplated by the Basic Documents and the Turbine
Supply Agreements, they have no outstanding Debt or other material liabilities
other than pursuant to or allowed by the Basic Documents and the Turbine Supply
Agreements, and they are not a party to or bound by any material contract other
than the Basic Documents and the Turbine Supply Agreements.

 

(xix)   The
representations and warranties of the Borrower, Equipmentco and each TSA
Company contained in the Basic Documents and the Turbine Supply Agreements to
which each such Person is a party other than this Note are, as of the time made
or deemed made, true and correct.

 

(xx)  Neither Borrower, nor, to the Borrower’s
knowledge, any Person holding any legal or beneficial interest whatsoever in
Borrower (whether directly or indirectly) (a) appear on the OFAC SDN List;
(b) are included in, owned by, controlled by, acting for or on behalf of,
providing assistance, support, sponsorship, or services of any kind to, or
otherwise associated with any of the persons or entities referred to or
described in the OFAC SDN List; or (c) have conducted business with or
engaged in any transaction with any person or entity named on any of the OFAC
SDN List or any person or entity included in, owned by, controlled by, acting
for or on behalf of, providing assistance, support, sponsorship, or services of
any kind to, or otherwise associated with any of the persons or entities
referred to or described in the OFAC SDN List.

 

(xxi) Neither this Note, any other Basic Document,
nor any certificate furnished to the Lender, by or, to the knowledge of the
Borrower, on behalf of Borrower in connection with the transactions
contemplated by this Note, the other Basic Documents or the Turbine Supply
Agreements, taking into account all other documentation furnished to the
Lender, the Independent Engineer or the Insurance Consultant on or prior to the
Closing Date contains any untrue statement of a material fact or omits to state
any material fact necessary to make the statements therein, in the 

 

18

 

light of the
circumstances under which they were made, not misleading as of the time signed
or delivered; provided,
however, that no representation or warranty is made with respect to any
projections or other forward looking statements provided by or on behalf of
Borrower.

 

5.             Covenants.

 

(a)       The Borrower hereby covenants and agrees
that, as long as the Loan remains outstanding, it shall comply with each of the
following:

 

(i)            Use of Loan Proceeds.  The Borrower shall not, and shall not allow
Equipmentco or any TSA Company or any Qualified Project Company to use the
proceeds of the Loan for any purpose other than (A) for the payment of
fees, interest and other expenses due and payable under this Note from time to
time (including the additional interest payable pursuant to Section 2(h));
or (B) to invest equity in Equipmentco by way of a subscription for
membership interests, one or more subordinated loans or a combination of the
foregoing; provided, however, that the Borrower shall not allow
Equipmentco, nor any TSA Company or any Qualified Project Company, to use the
proceeds invested in Equipmentco pursuant to this Section 5(a)(i)(B) for
any purpose other than (w) for the funding of the payments due and payable
under the Turbine Supply Agreements (including any increase in the Contract
Price of a Turbine Supply Agreement in connection with any TSA Options
Approval) to GE in accordance with the relevant Turbine Supply Agreement
payment schedule; (x) to make deposits into the Interest Reserve Account
(which amounts may thereafter be applied in accordance with Section 5(a)(xxv));
(y) to repay amounts owed by the Guarantor, the 2006 TSA Company and/or
the 2007 TSA Company, as applicable, to the lenders under the Prior Turbine
Supply Loans; and/or (z) to reimburse the Guarantor, the Borrower or any
TSA Company for amounts previously funded under a Turbine Supply Agreement by
such Person to GE prior to the Closing Date.

 

(ii)           Notices and Deliveries.  The Borrower shall promptly, upon acquiring
notice or giving notice, as the case may be give written notice (and deliver
the documents or reports, as applicable, that are the subject of such notices)
to the Lender of:

 

(A)          Any litigation or proceeding pending
or, to the knowledge of Borrower, threatened against the Borrower, Equipmentco,
any TSA Company or any Qualified Project Company if such litigation or
proceeding would have a Material Adverse Effect;

 

(B)           Any notice of a material violation of
any Governmental Rule to the Borrower, Equipmentco, any TSA Company or any
Qualified Project Company;

 

(C)           Any Event of Default or any Inchoate
Default;

 

(D)          Any casualty, damage or loss, whether
or not insured, to the Turbines through fire, theft, other hazard or casualty,
if such casualty, damage or loss would have a Material Adverse Effect; and

 

(E)           Any notice of default or claim of force
majeure under any Turbine Supply Agreement, if such default or claim would have
a Material Adverse Effect.

 

19

 

(iii)          Amendments, Waivers, Etc.  The Borrower shall provide the Lender,
promptly after execution thereof by any TSA Company (but no later than within
thirty (30) days after such execution) with copies of any material amendment or
other material modification or material waiver of compliance with any Turbine
Supply Agreement or the First Lien Facility.

 

(iv)          Compliance with Governmental Rules and
Permits.  The Borrower shall, and
shall cause Equipmentco, each TSA Company and each Qualified Project Company
to, comply with (A) all Governmental Rules, including all environmental
laws, applicable to the Borrower, each TSA Company or each Qualified Project
Company, and (B) all Permits applicable to the Borrower, Equipmentco, each
TSA Company or each Qualified Project Company, unless, in either of cases (A) or
(B), the failure to do so could not reasonably be expected to have a Material
Adverse Effect.  Each Qualified Project
Company shall obtain and maintain each Permit reasonably necessary for the
related Qualifying Project, unless the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

 

(v)           Existence; Conduct of Business.  Except as otherwise expressly permitted under
this Note or the other Basic Documents, the Borrower shall (A) maintain
and preserve its existence as a Delaware limited liability company and shall
cause Equipmentco, each TSA Company and each Qualified Project Company to
maintain and preserve its existence as a limited liability company in the
jurisdiction of its organization; and (B) engage only in the business of
the purchasing, transporting, financing and/or ownership of turbines to be
utilized in the development, construction and operation of wind energy
generation projects (and business reasonably incidental thereto), and cause
each Qualified Project Company to engage only in the business of the development,
financing and/or ownership of the relevant Qualified Project (and business
reasonably incidental thereto).

 

(vi)          Performance of Turbine Supply
Agreements.  So long as a Turbine
Supply Agreement is included in the Collateral, the Borrower shall (i) perform,
and shall cause Equipmentco and/or the relevant TSA Company to perform, all of
their respective material contractual obligations under such Turbine Supply
Agreement and (ii) maintain and preserve (and cause Equipmentco and/or
such TSA Company to maintain and preserve) 
all of such Person’s material rights under such Turbine Supply
Agreement, in each case, unless the failure to do so could not reasonably be
expected to have a Material Adverse Effect. 
The Borrower shall cause each Qualified Project Company to pay and
perform all of its respective material contractual obligations, in each case,
unless the failure to do so could not reasonably be expected to have a Material
Adverse Effect.

 

(vii)         Books, Records, Access.  The Borrower shall keep and maintain the
books of account and the financial records for itself, Equipmentco, each
Qualified Project Company and each TSA Company at its address identified on the
signature pages to this Note in accordance with GAAP.  The Lender shall have the right, on reasonable
advance notice to the Borrower and at reasonable times during the Borrower’s
usual business hours, to audit, examine and make copies of the books of account
and other records of the Borrower, Equipmentco, each Qualified Project Company
and each TSA Company, as applicable, and to discuss the financial condition and
business of the Borrower or such other Person with its respective authorized
representatives.  The Lender may exercise
such rights through any employee of the Lender or through any independent
public accountant, legal counsel or any other consultant acting on behalf of
the Lender; provided, 

 

20

 

however,
that Lender shall cause such Persons to comply with the confidentiality
obligations set forth in Section 13(j).

 

(viii)                Financial Statements.

 

(A)          As soon as available and in any event within forty-five
(45) days after the end of each quarterly fiscal period of each fiscal
year of the Borrower, the Guarantor and Equipmentco (except for the fourth
fiscal quarter of such fiscal year), the Borrower shall deliver to the Lender
unaudited statements of income, members’ equity and cash flows of the Borrower,
the Guarantor and Equipmentco for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and the
related balance sheet as at the end of each such period, setting forth in each
case (to the extent applicable) in comparative form the corresponding figures
for the corresponding period in the preceding fiscal year, accompanied by a
certificate of an authorized officer of the Borrower, which certificate shall
state that such financial statements fairly present in all material respects
the financial condition and (to the extent applicable) results of operations of
the Borrower, the Guarantor and Equipmentco in accordance with GAAP,
consistently applied, as at the end of, and for, such period (subject to normal
year-end audit adjustments).

 

(B)           As soon as available and in any event within ninety
(90) days after the end of each fiscal year of the Borrower and
Equipmentco, the Borrower shall deliver to the Lender unaudited statements of
income, members’ equity and cash flows of the Borrower and Equipmentco for such
fiscal year and the related balance sheet as at the end of each such fiscal
year, setting forth in each case (to the extent applicable) in comparative form
the corresponding figures for the preceding fiscal year, accompanied by a
certificate of an authorized officer of the Borrower, which certificate shall
state that such financial statements fairly present in all material respects
the financial condition and (to the extent applicable) results of operations of
the Borrower and Equipmentco in accordance with GAAP, consistently applied, as
at the end of, and for, such fiscal year (subject to normal year-end audit
adjustments).

 

(C)           As soon as available and in any event
within ninety (90) days after the end of each fiscal year of the
Guarantor, the Borrower shall deliver to the Lender audited statements of
income, members’ equity and cash flows of the Guarantor for such fiscal year
and the related balance sheet as at of the end of such fiscal year, setting
forth in each case (to the extent applicable) in comparative form the
corresponding figures for the preceding fiscal year, accompanied by an opinion
of independent certified public accountants of recognized standing, which
opinion shall state that such financial statements fairly present in all
material respects the financial condition and results of operations of the
Guarantor, as at the end of, and for, such fiscal year in accordance with GAAP
(subject to normal year-end audit adjustments).

 

(ix)                   Taxes.  The Borrower shall pay, and shall cause
Equipmentco, each TSA Company and each Qualified Project Company to pay, all
taxes that such Person is required to pay to the extent due; provided, however,
that the Borrower, Equipmentco, each TSA Company or each Qualified Project
Company, as applicable, shall not be obligated to pay such taxes to the extent
any of them is contesting the validity or amount of any such tax by appropriate
proceedings as long as 

 

21

 

such Person
has established adequate reserves for the payment thereof as and to the extent
required by GAAP.

 

(x)            Limitations on
Debt.  The Borrower shall not incur
any Debt except for Permitted Debt.

 

(xi)           Limitations on
Liens.  The Borrower shall not incur,
create or suffer to exist any lien or other encumbrance on its assets or
properties, except for Permitted Liens.

 

(xii)          Sale or Lease of Certain Assets.  Except as provided in this Note (including Section 7(c))
or the other Basic Documents, the Borrower shall not sell, lease, assign,
transfer or otherwise dispose of (or permit Equipmentco or any TSA Company to
sell, lease, assign or dispose of) any Turbines or any of its rights or
interests in or under any Turbine Supply Agreement to any Person other than the
Borrower, Equipmentco or a TSA Company. 
In respect of the Collateral at any time, the Borrower will not, and
will not allow Equipmentco or any TSA Company to, assign any part of the
Collateral to a Qualified Project Company unless such assignment or transfer is
in accordance with terms governing the replacement of the Collateral described
in Section 7(c), a prepayment of the Loan as contemplated by Section 7(c)(ii) and
Section 2(e)(ii) or otherwise, with the prior written consent
of the Lender, such consent not to be unreasonably withheld, delayed or
conditioned.

 

(xiii)         First Lien Facility Notices.  The Borrower shall deliver to the Lender
copies of any material notices that are delivered to the Collateral Agent (or
the other agents and lenders) under and in accordance with the First Lien
Facility.

 

(xiv)        Name and Location; Fiscal Year.  The Borrower shall not (A) (nor shall it
permit Equipmentco, any TSA Company or any Qualified Project Company to) change
its name, its limited liability company structure or its jurisdiction of
organization without having provided the Lender with notice of such change and
taken such actions as may be reasonably necessary to maintain the perfection of
the liens and security interests granted pursuant to the Collateral Documents,
or (B) change its fiscal year without the Lender’s prior written consent,
such consent not to be unreasonably withheld, delayed or conditioned.

 

(xv)         Dissolution.  Except as otherwise provided in Section 5(a)(xii),
the Borrower shall not liquidate or dissolve or combine, merge or consolidate
with or into any other entity.

 

(xvi)        Transfer of Interests.  The Borrower shall not cause, make, suffer to
exist, permit or consent to any creation, sale, assignment or transfer of (A) any
direct or indirect ownership interests of the Guarantor in the Borrower; (B) any
direct or indirect ownership interests of the Borrower in Equipmentco; or (C) any
direct or indirect ownership interests of Equipmentco in any TSA Company,
except, in each of cases (A), (B) and (C), with the Lender’s prior written
consent (which consent shall not be unreasonably withheld, delayed or
conditioned); provided, however, that, solely with respect to the
assignment or transfer set forth in sub-clause (B) above, no such consent
shall be required if (y) the Borrower is transferring 25% or less of its
ownership interests in Equipmentco, and (z) the transferee shall enter
into a pledge agreement, substantially similar to the Second Lien Borrower
Pledge Agreement, and such other documents as the Lender determines are
reasonably necessary to enable the Lender to maintain its second priority perfected
lien on the equity interests of the Borrower.

 

22

 

(xvii)               Amendments.  The Borrower shall not (nor shall it allow
Equipmentco nor any TSA Company to) cause, consent to, or permit, any amendment
or other modification of, or waiver of compliance with, any material terms or
conditions of any Turbine Supply Agreement if such amendment, modification or
waiver would have a material adverse effect on the Lender.

 

(xviii)              Qualified Project Status.  The Borrower shall, promptly upon obtaining
knowledge or notice thereof, provide the Lender with written notice of any
delay in (or the occurrence of any other event with respect to) a Qualified
Project to the extent such Qualified Project could no longer reasonably be
expected to complete construction at least sixty (60) days prior to the PTC
Expiration Date applicable to such Qualified Project.  Additionally, the Borrower shall, within ten (10) Business
Days, respond to inquiries by the Lender as to the status of the development
and construction schedule (including any potential delays) of each Qualified
Project.  If, pursuant to the terms and
conditions of the First Lien Note, any Qualified Project ceases to be a “Qualified
Project” thereunder because the First Lien Administrative Agent is notified by
Equipmentco that such Qualified Project can no longer reasonably be expected to
achieve construction completion sixty (60) days prior to the PTC Expiration
Date applicable to such Qualified Project, or if the First Lien Administrative
Agent otherwise reasonably determines the same, then, unless Equipmentco
successfully challenges such determination in accordance with the terms of the
First Lien Note, such project will immediately cease to be a “Qualified Project”
hereunder.

 

(xix)                 Insurance.  The Borrower shall comply, and shall cause
Equipmentco and each TSA Company to comply, with all insurance requirements set
forth on Annex II.

 

(xx)                  Turbines.  Following delivery at the applicable project
site, any Turbine that forms part of the Collateral, without the prior written
consent of the Lender (such consent not to be unreasonably withheld, delayed or
conditioned), the Borrower shall not (i) erect such Turbine or (ii) transport
or take any other actions or fail to take any action with respect to such
Turbine that could reasonably be expect to reduce the value or marketability of
any such Turbine (including storage of Turbines at the applicable project site
in any manner or for any period that would result in loss or diminishment of
such Turbine’s warranty).

 

(xxi)                 [Intentionally omitted].

 

(xxii)                Project Review.  Borrower shall provide “desktop, fatal flaw”
reviews (each a “Project Review”) to the Lender as and when such Project
Reviews are provided to the First Lien Administrative Agent pursuant to the
First Lien Facility, and any project that is determined to be a Qualified Project
pursuant to the terms and conditions of the First Lien Facility shall be deemed
to be a “Qualified Project” hereunder.

 

(xxiii)               [Intentionally omitted]

 

(xxiv)               Compliance with Anti-Money
Laundering and OFAC Laws.

 

(A)         The Borrower shall
comply at all times in all material respects with the requirements of all
Anti-Money Laundering Laws.

 

(B)          The Borrower shall
provide the Lender any information regarding Borrower, its Affiliates and its
subsidiaries reasonably requested by the Lender as may be 

 

23

 

necessary for
the Lender to comply with all Anti-Money Laundering Laws.

 

(C)           The Borrower shall
comply at all times in all material respects with the requirements of all OFAC
Laws.  In the event that any of the
Borrower becomes aware that it is not in compliance with any applicable OFAC
Laws, Borrower shall notify the Lender and diligently take all actions required
thereunder to become compliant.

 

(D)          Upon the Lender’s
request from time to time, Borrower shall deliver a certification confirming
its compliance with the covenants set forth in this Section 5(a)(xxiv).

 

(xxv)                Interest Reserve Account.  The Borrower shall, at all times, maintain in
the Interest Reserve Account an amount, in Dollars, equal to or greater than
the amount of interest that will become due and payable by the Borrower to the
Lender in respect of the Loan in the subsequent three (3) month period
until the earlier to occur of (A) the date that is three (3) months
prior to the Maturity Date, or (B) the date on which this Note shall have
been terminated in accordance with the terms and conditions hereof (whether by
repayment, acceleration or otherwise); provided, however, that so
long as the foregoing requirements under this Section 5(a)(xxv) are
satisfied, the Borrower shall be permitted to use amounts deposited in the
Interest Reserve Account to make payments of interest pursuant to this Note,
including payments of additional interest pursuant to Section 2(h).

 

(xxvi)               Pledge of Interests.  The Borrower shall not cause, make, suffer to
exist, permit or consent to any transfer by Guarantor of its interests in any
Qualified Project Company (except to the extent contemplated herein or in the
First Lien Facility) and will not pledge to any third party any amounts it is
owed or may receive from such Qualified Project Companies.

 

6.             Events of Default.

 

(a)           The occurrence of any of the following events, conditions
or circumstances shall constitute an event of default under this Note (each, an
“Event of Default”):

 

(i)            Failure to Make Payments.  The Borrower shall fail to pay (A) any
portion of the principal of the Loan on the date within three (3) Business
Days after such portion of the principal becomes due and payable (including any
mandatory prepayment required pursuant to Section 2(e)(ii)); (B) any
interest accrued hereunder on the Loan within five (5) Business Days after
the date when such interest becomes due and payable hereunder; (C) any
fees payable under this Note within ten (10) Business Days after the date
when such fees become due and payable and notice thereof is given to the
Borrower; or (D) any other amount payable by the Borrower under this Note
or under any Basic Document within ten (10) days after any such other
amount becomes due and payable and notice thereof is given to the Borrower;

 

(ii)           Judgments.  A final judgment or judgments shall be
entered by a court of relevant jurisdiction against the Borrower, Equipmentco,
any TSA Company or any Qualified Project Company in the aggregate amount of
$1,500,000 or more (net of insurance proceeds) which remains unstayed or
unsatisfied or for which no bond is posted in the amount of such judgment;

 

24

 

(iii)                  Representations and
Warranties.  Any representation or
warranty made by the Borrower, the Guarantor, Equipmentco, any TSA Company or
the owner of any Qualified Project Company under this Note or any other Basic
Document to which such Person is a party shall prove to have been incorrect in
any respect as of the time made or deemed made (unless such representation or
warranty expressly relates only to an earlier date) which could reasonably be
expected to have a Material Adverse Effect, and the adverse effect of such
incorrect representation or warranty (if any) is not cured or addressed to the
reasonable satisfaction of the Lender within thirty (30) days after
receipt of notice thereof by the Lender;

 

(iv)                  Bankruptcy; Insolvency.  The Borrower, the Guarantor or Equipmentco
shall (A) admit in writing its inability to pay its debts as its debts
become due; (B) make a general assignment for the benefit of creditors, or
petition or apply to any tribunal for the appointment of a custodian, receiver
or trustee for its or a substantial part of its assets; (C) commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation; (D) have had any such petition filed, or
any such proceeding shall have been commenced against it, in which an
adjudication is made or order for relief is entered or which remains
undismissed for a period of seventy-five (75) days; (E) have had a
receiver, custodian or trustee appointed for all or a substantial part of its
property; or (F) take any action effectuating, approving or consenting to
any of the events described in clauses (A) through (E);

 

(v)                   Loss of a Turbine Supply
Agreement.  Any Turbine Supply
Agreement or any material provision thereof shall cease for any reason to be in
full force and effect.

 

(vi)                  Breach of Covenants.

 

(A)              The Borrower shall fail to perform
or observe any covenant set forth in Sections 5(a)(i), 5(a)(v)(A),
5(a)(xii), 5(a)(xv)-5(a)(xvii) or 5(a)(xxiii) in any
material respect;

 

(B)               The Borrower shall fail to perform or observe any
covenant set forth in Sections 5(a)(x), 5(a)(xi), 5(a)(xiii),
5(a)(xx) or 5(a)(xxi) in any material respect and such failure
shall continue unremedied for a period of ten (10) Business Days; or

 

(C)               The Borrower, the Guarantor, Equipmentco, any TSA
Company or the relevant owner of any Qualified Project Company shall fail to
perform or observe any other covenants set forth in this Note or any other
Basic Document to which it is a Party that is not listed in Section 6(a)(vii)(A) or
Section 6(a)(vii)(B) in any material respect and such failure
shall continue unremedied for a period of thirty (30) days after receipt
of notice of such failure (or if such failure cannot be cured within such
thirty (30) day period with the use of commercially reasonable diligent efforts
by the Borrower, the Guarantor, Equipmentco, any TSA Company or the relevant
owner of any Qualified Project Company (as applicable), such longer period not
to exceed an additional forty-five (45) days as may be necessary with the
use of diligent efforts to remedy such failure).

 

(vii)                 Basic Documents; Collateral.  Unless as a result of the acts or omissions
of the Lender, (A) any of the Basic Documents (including any Collateral
Documents), once executed and delivered, shall cease to be in full force and
effect; (B) any Collateral Document (other than any Consent) shall fail to
provide the Lender with the security interests in and to the Collateral
intended to be created thereby, or is declared null and void or otherwise
ceases to be in full force and effect; 

 

25

 

provided,
however, that, to the extent that such failure is reasonably susceptible
of cure, such failure shall not constitute an Event of Default to the extent
that the Borrower, the Guarantor, Equipmentco or any TSA Company, as
applicable, takes such action as the Lender may reasonably request within no
more than five (5) days after receiving the Lender’s request therefor; or (C) the
validity or enforceability of any Collateral Document is contested in a legal proceeding
by the Borrower, the Guarantor, Equipmentco or any TSA Company which is a party
thereto, as applicable;

 

(viii)                Loss of Permits.  Any Permit required to be obtained or
maintained by the Borrower, Equipmentco or any TSA Company under any Turbine Supply
Agreement shall be revoked or cancelled by the issuing  Governmental Authority having jurisdiction,
or any such Permit shall otherwise fail to be in full force and effect, or the
Borrower, Equipmentco or any TSA Company shall fail to comply with any such
Permit, in each case, which revocation, cancellation or failure could
reasonably be expected to have a Material Adverse Effect, and in each case, if
any adverse effect of such revocation, cancellation or failure is not remedied
to the reasonable satisfaction of the Lender within sixty (60) days after
receipt of notice thereof by such Person; or

 

(ix)                   Loss of Guaranty.  The NEP Guaranty shall have been terminated
or otherwise ceases to be in full force and effect, other than in accordance
with the terms and conditions thereof.

 

(b)       Upon the occurrence and during the continuation of an Event of
Default, the Lender may, immediately upon a notice thereof to the Borrower (but
without any further notice of exercise of remedies, presentment, demand for
payment, protest or other notices or demands of any kind):

 

(i)    Declare and make any or all sums of accrued
and outstanding principal of  the Loan
and accrued but unpaid interest remaining under this Note, together with all
other Obligations immediately due and payable; provided, however,
that, in the event of an Event of Default occurring under Section 6(a)(iv) (other
than clause (A) thereof), all such amounts shall become immediately due
and payable without further act of the Lender or any other Person; or

 

(ii)   Exercise any and all rights and remedies
available to the Lender under any of the Basic Documents, including, to the
extent permitted by the Basic Documents, judicial or non-judicial foreclosure
or public or private sale of any of the Collateral (including the Pledged
Equity Interests) pursuant to the Collateral Documents for the entire amount of
the unpaid principal amount of the Loan then outstanding under this Note, along
with any other Obligations then due and payable with respect thereto.

 

(c)       Notwithstanding the other provisions of this Section 6,
and subject to Section 7(b), to the extent that an Event of Default has
occurred solely with respect to a particular Qualified Project, a particular
Turbine, a particular Turbine Supply Agreement or a particular Qualified
Project Company, the Borrower may cure such Event of Default by repaying the
portion of the principal amount of the Loan then outstanding with respect to
such Turbine or the Turbines funded hereunder and allocated to such Qualified
Project or purchased under such Turbine Supply Agreement, as applicable,
together with any interest, fees and other amounts accrued thereon no later
than thirty (30) days after the occurrence of such Event of Default.  If such Event of Default relates solely to a Qualified
Project or a Qualified Project Company, the Borrower may cure such Event of
Default by causing Equipmentco to repay such amount under the First Lien Note
as may be necessary to ensure that Equipmentco 

 

26

 

remains in compliance with its
obligations in respect of the Loan Maximum Outstandings under and as defined in
the First Lien Note.

 

7.             Collateral.

 

(a)     Collateral.  The
Obligations shall be secured by the following, and the Borrower shall deliver
or cause to be delivered the following (each in form and substance satisfactory
to the Lender) to the Lender at the times required pursuant to Section 3:

 

(i)                    A Pledge Agreement, duly
executed by Borrower, in favor of the Lender (the “Second Lien Borrower
Pledge Agreement”);

 

(ii)                   A Pledge and Security
Agreement, duly executed by the Borrower, in favor of the Lender (the “Borrower
Security Agreement”);

 

(iii)                  A Pledge Agreement, duly
executed by Equipmentco, in favor of the Lender (the “Equipmentco Pledge Agreement”)
in respect of the 2009 TSA Company;

 

(iv)                  A Pledge and Security
Agreement, duly executed by Equipmentco, in favor of the Lender (the “Second
Lien Equipmentco Security Agreement”);

 

(v)                   A Security Agreement, duly
executed by each of 2006 TSA Company, 2007 TSA Company and 2008 TSA Company, in
favor of the Lender (each individually, a “Second Lien TSA Company Security
Agreement”, and collectively, the “Second Lien TSA Companies Security
Agreements );

 

(vi)                  A Security Agreement, duly
executed by the 2009 TSA Company, in favor of the Lender (the “2009 TSA
Security Agreement”);

 

(vii)                 A Pledge and Security
Agreement, duly executed by each owner of the outstanding membership interests
in a Qualified Project Company, in favor of Lender (each individually, a “Second
Lien Project Pledge Agreement”, and collectively, the “Second Lien
Project Pledge Agreements”);

 

(viii)                The Consents from GE in respect
of each Turbine Supply Agreement, in favor of the Lender (the “Consents”);

 

(ix)                   The Intercreditor Agreement,
duly executed by the parties thereto;

 

(x)                    A Pledge Agreement, duly
executed by the Guarantor, in favor of the Lender (the “NEP Pledge Agreement”);

 

(xi)                   An Escrow, Security and
Control Agreement, duly executed by Borrower, the Lender and JPMorgan Chanse
Bank, N.A., as escrow agent, covering the Interest Reserve Account (the “Escrow
Agreement”); and

 

(xii)                  Such other Collateral
Documents as are necessary to grant to the Lender liens in the Collateral
subject to the foregoing Collateral Documents.

 

27

 

(b)       Release of Collateral. 
Upon the repayment in full of the Obligations (or earlier to the extent
the Borrower elects to remove, transfer or dispose of any Collateral in
accordance with the terms hereof), the Lender shall release all of its liens on
the Collateral (in the case of any removal, disposition or transfer only to the
extent of the Collateral so removed, disposed of or transferred).  The obligations of the Borrower pursuant
to this Agreement shall continue to be effective or automatically reinstated,
as the case may be, if at any time payment of any of the Obligations is
rescinded or otherwise must be restored or returned by the Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any other obligor or otherwise, all as though such payment
had not been made.

 

(c)       Removal of a Qualified Project Company, a Turbine or a
Turbine Supply Agreement.

 

(i)            Notwithstanding any provision to the
contrary in this Note, at any time, at the option of the Borrower, the Borrower
may replace a pledge of the outstanding membership interests in a Qualified
Project Company evidenced by a Second Lien Project Pledge Agreement (each a “Replaced
Equity Interest”) with a pledge of all of the outstanding membership
interests in one or more replacement Qualified Project Companies which own one
or more Qualified Projects; provided, however, that such owner of
the proposed replacement Qualified Project Company shall duly execute and deliver
a replacement Second Lien Project Pledge Agreement, in form and substance
reasonably satisfactory to the Lender; provided, further, that,
following such replacement, the Lender will have a substantially equivalent
lien in respect of the relevant Qualified Project Companies that will
accommodate the same or a greater number of Turbines as the Qualified Project
Companies (including the Replaced Equity Interests) that form part of the
Collateral before such replacement, as determined by the Lender in its reasonable
discretion.

 

(ii)           Notwithstanding any provision to the
contrary in this Note and subject to the Borrower’s compliance with Section 2(e)(ii),
at any time, the Borrower may (or shall as required pursuant to Section 5(a)(xxiii))
remove one or more Turbines, Turbine Supply Agreements or TSA Companies from
the Collateral (together with the pledge in the Qualified Project Companies,
granted pursuant to a Second Lien Project Pledge Agreement, corresponding to
the number of megawatts of Turbines removed).

 

8.             Expenses;
Indemnification; Net of Taxes.

 

(a)       Expenses.  The
Borrower agrees hereby to reimburse the Lender within thirty (30) days
following demand for all reasonable out-of-pocket costs, expenses and charges
(including, without limitation, reasonable and properly documented fees and
charges of legal counsel, consultants and advisors to the Lender) incurred in
connection with the preparation, execution and delivery of this Note and the
other Basic Documents, any amendment or waiver of this Note or the other Basic
Document, any enforcement (including in any workout, restructuring or
bankruptcy proceeding) of this Note or any other Basic Document or the defense
or prosecution of any rights of the Lender hereunder.

 

(b)       Indemnification. 
The Borrower agrees hereby to indemnify and hold the Lender, together
with its directors, officers, employees, agents and consultants harmless from
and against all claims, damages, losses, liabilities, costs, deficiencies and
expenses of third parties, including, without limitation, investigative costs,
settlement costs and reasonable legal, 

 

28

 

accounting or other expenses of such third
parties for investigating or defending against any actions or threatened
actions (collectively, the “Losses”), arising out of or in connection
with (i) the execution or delivery of each Basic Document, including this
Note, and the performance by the Borrower, Equipmentco, any TSA Company or the
relevant owner of any Qualified Project Company of its obligations under each
such Basic Document to which it is a party, (ii) the making of the Loan,
and (iii) the use of the proceeds of the Loan and any prospective claim,
litigation, investigation or proceeding related to any of the foregoing, but
excluding, in each case, any such Losses incurred by reason of the bad faith,
gross negligence or willful misconduct of any Person indemnified
hereunder.  Except as provided in Section 8(c),
the Borrower agrees hereby to indemnify and hold the Lender harmless for the
full amount of taxes (excluding taxes (including franchise taxes and minimum
taxes) imposed on or measured by the income or capital of the Lender, or any
branch profits taxes imposed by the United States or any other jurisdiction)
arising from the execution, delivery or performance of its obligations or from
receiving a payment under any Basic Document, or enforcing this Note, or any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto; provided, however, that the Borrower shall
not be required to indemnify any such Person for any penalties, interest or
expenses relating to taxes arising from the Lender’s bad faith, gross
negligence, willful misconduct or unexcused breach of this Note.  The Lender shall promptly notify the Borrower
of any claim under this Section 8(b).  The Borrower may elect to assume the defense
of any action, proceeding or dispute with a third party in respect of which a
claim is to be made under this Section 8; provided, however,
that if the Borrower assumes control of the defense of any such action,
proceeding or dispute, the Borrower shall not agree or conclude any settlement
that affects the Lender in any material respect without the prior written
approval of the Lender (such approval not to be unreasonably withheld or
delayed).  In the event the Borrower
assumes control of the defense of any such action, proceeding or dispute, the
Borrower shall not be liable to the Lender for any legal fees and expenses of
additional counsel incurred by the Lender in connection with such defense; provided,
however, that the Lender shall (at its own expense) have the right to
employ its own counsel whose reasonable legal fees and expenses shall be
indemnified by the Borrower if (A) there is or could reasonably be
expected to be a conflict of interest between the Lender and the Borrower in
connection with the defense of such action, proceeding or dispute, or (B) there
is a specific defense available to the Lender that is different from or
additional to those available to the Borrower. 
If the Lender determines in its sole discretion that it has received a
refund of any taxes as to which it has received an indemnification, or with
respect to which the Borrower has paid additional amounts, the Lender agrees to
repay to the Borrower any such refund, net of any out of pocket costs incurred
by the Lender, as the case may be, in connection therewith and without interest
(other than any net after tax interest paid by the relevant Governmental
Authority with respect to such refund), as soon as commercially practicable
after receipt of such refund.  Whenever
any taxes are payable by the Borrower pursuant to this Section 8,
as promptly as possible thereafter, the Borrower shall send to the Lender a
certified copy of an original receipt (if reasonably available) received by the
Borrower showing payment thereof.

 

(c)       Withholding Certificates.  Any and all payments to or for the benefit of
the Lender under this Note or the other Basic Documents shall be made free and
clear of, and without deduction, setoff or counterclaim of any kind whatsoever
and in such amount as may be necessary in order that all such payments, after
deduction for or on account of, any present or future taxes, levies, imposts,
charges or withholdings imposed by the United States of America or any
political subdivision thereof, arising or relating to the Loans (excluding
taxes 

 

29

 

(including franchise taxes and minimum taxes)
imposed on or measured by the income or capital of the Lender or any branch
profits taxes imposed by the United States or any other jurisdiction) shall not
be less than the amounts otherwise due and payable under this Note.  The Borrower shall not be required to pay any
additional amount to (or indemnify) the Lender under this Section 8
to the extent that the obligation to withhold or pay such amount with respect
to indemnified taxes existed on the date that the Lender became a party to this
Note (or, in the case of a transferee that is a participation holder, on the
date such a participation holder became a transferee hereunder) except, in each
case, to the extent the transferor was entitled to additional payments or
indemnification hereunder.  The Lender
(upon becoming a Lender hereunder) and any Person to which the Lender grants a
participation (or otherwise transfers its interest in this Note) as permitted
by this Note agrees that on the date the Lender or Person becomes a party to
this Note it will deliver to the Borrower either (A) if the Lender or
Person is a United States person as defined in the Code, two duly and
appropriately completed copies of a United States Internal Revenue Service Form W-9
or any successor applicable form or (B) if the Lender or Person is not a
United States person as defined in the Code, two duly and appropriately
completed copies of United States Internal Revenue Service Form W-8IMY,
W-8ECI or W-8BEN (in the case of the Lender claiming an exemption under the
so-called portfolio interest exemption rules, together with an exemption
certificate reasonably satisfactory to the Borrower) or successor applicable
form, as the case may be, and, if reasonably requested by the Borrower, any
additional statements and forms so requested from time to time and including a
U.S. taxpayer identification number if required by such form or otherwise
necessary to obtain any benefit claimed therein.  If the Lender is required to deliver to the
Borrower a form, or certificate pursuant to the preceding sentence, the Lender
shall deliver such form or certificate as follows:  (x) the Lender party hereto on the
Closing Date shall deliver such form or certificate at least five (5) Business
Days prior to the first date on which any payment hereunder or under any other
Basic Document is payable by the Borrower hereunder for the account of such
entity and (y) each assignee or participant shall deliver such form at
least five (5) Business Days before the effective date of such assignment
or participation.  If the Lender is
required to deliver to the Borrower a Form W-9, W-8IMY, W-8ECI or W-8BEN
or other form or statement pursuant to the preceding sentence further, the
Lender undertakes to deliver to the Borrower and further copies of the Form W-9,
W-8IMY, W-8ECI or W-8BEN, or successor applicable form or other form or
certificate, or other manner of certification or procedure, as the case may be,
at least ten (10) days before any such form or certificate expires or
becomes obsolete (which date shall be notified by the Borrower) or within a reasonable
time (not to exceed sixty (60) days) after gaining knowledge of the
occurrence of any event requiring a change in the most recent forms or
certificates previously delivered by it to the Borrower, unless in any such
cases an event has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent the Lender from duly completing and delivering any such form with
respect to it.  The Borrower shall not be
obligated to pay any additional amounts pursuant to this Section 8
(or make an indemnification payment pursuant to this Section 8) to
the Lender or any other Person (including any Person to which the Lender sells,
assigns, grants a participation in, or otherwise transfers, its rights under
this Agreement) to the extent the obligation to pay such additional amounts (or
such indemnification) would not have arisen but for a failure of the Lender or
such Person to comply with its obligations under this Section 8(c).  Notwithstanding the foregoing or anything
else to the contrary in this Note, no Lender or other Person shall be obligated
to deliver any form, certificate or document which it cannot deliver as a
matter of law.

 

30

 

(d)       Upon a change of law with respect to any Lender following
delivery of the documentation set forth in Section 8(c) above,
the Borrower shall gross up any payments due to the Lender hereunder that
become subject to withholding tax to mitigate the effect to the Lender of the
change of law; provided, however, that the Lender shall use
commercially reasonable efforts to mitigate the effects of such change of law,
and if the Lender is unsuccessful in its efforts, the Lender shall assign its
Loan and the related rights and obligations to a new lender identified by the
Borrower, as set forth in a written request by the Borrower (and pursuant to
assignment documentation acceptable to the Lender); and provided, further,
that the Lender shall not be obligated to assign its Loan and Commitments for
the lesser of their face value or their fair market value.

 

9.             No
Recourse.  The Lender shall have no claims of any kind or nature (other than for
fraud, willful misconduct or express indemnities) with respect to the transactions
contemplated by this Note and the other Basic Documents against the Guarantor
or any Affiliate thereof (except for the Borrower, Equipmentco and each TSA
Company), or the stockholders, members or other owners, officers, directors or
employees of any of such Person (each, a “Non-Recourse Party”), except
to the extent of any obligations of a Non-Recourse Party specifically provided
in the Basic Documents to which such Non-Recourse Party is a party.  Subject to the exception at the end of the
foregoing sentence, if (a) any Event of Default shall have occurred and is
continuing, or (b) any claim by the Lender against the Borrower or any
alleged liability of the Borrower to the Lender shall be asserted under any of
the Basic Documents, in each case, the Lender agrees that it shall not have the
right to proceed against any of the Non-Recourse Parties or against their
respective properties and assets for the satisfaction of any such claim or
liability or for any deficiency judgment (other than for fraud, willful
misconduct or express indemnities).

 

10.          Governing Law; Submission to
Jurisdiction.  This Note shall be governed
by, and construed in accordance with, the laws of the State of New York
(without regard to conflict of laws provisions thereof other than Section 5-1401
of the New York General Obligations Law). 
The Borrower agrees that any legal action or proceeding arising out of
or relating to this Note or any other Basic Document, or any legal action or
proceeding to execute or otherwise enforce any judgment obtained against the
Borrower, 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 the Lender as it may elect.  The Borrower hereby irrevocably and
unconditionally submits to the non-exclusive jurisdiction of such courts for
purposes of any such legal action or proceeding.  Service of process by the Lender in any such
dispute shall be binding on the Borrower if sent to the Borrower by registered
or certified mail, at the address specified on the signature page of this
Note.  The Borrower agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction.

 

THE BORROWER
WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL IN ANY ACTION RELATED TO THIS
NOTE, ANY OTHER BASIC DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.

 

NO CLAIM SHALL
BE MADE BY ANY PARTY HERETO OR ANY OF ITS AFFILIATES, DIRECTORS, EMPLOYEES,
ATTORNEYS OR AGENTS AGAINST ANY OTHER PARTY HERETO OR ANY OF ITS AFFILIATES,
DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL OR 

 

31

 

PUNITIVE DAMAGES (WHETHER OR NOT THE CLAIM
THEREFOR IS BASED ON CONTRACT, TORT, DUTY IMPOSED BY LAW OR OTHERWISE), IN
CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTIONS
CONTEMPLATED BY THIS NOTE OR THE OTHER BASIC DOCUMENTS OR ANY ACT OR OMISSION
OR EVENT OCCURRING IN CONNECTION THEREWITH; AND EACH PARTY HEREBY WAIVES,
RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER
OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

 

11.          Assignment.

 

(a)           This Note shall be binding on, and shall inure to the
benefit of, the Borrower, the Lender and their respective successors and
permitted assigns.

 

(b)           The Borrower may not assign or transfer its rights or
obligations under this Note without the prior written consent of the Lender.

 

(c)           At any time after making the Loan, the Lender may assign
the Loan, in one or more transactions, with the prior written consent of the
Borrower (such consent not to be unreasonably withheld, delayed or
conditioned); provided that Borrower’s consent shall not be required if
an Event of Default has occurred and is continuing.  At any time after making the Loan, the Lender
may, without consent of the Borrower, (i) sell participations to any other
Person; (ii) assign all or part of its rights or obligations under this
Note to any of its Affiliates; and (iii) assign all or part of its rights
under this Note as security to any U.S. Federal Reserve Bank.

 

(d)           Upon any assignment or participation in accordance with Section 11(c),
the Lender shall provide to the Borrower the name, address and contact
information of the permitted assignee or purchaser.  Upon any assignment or participation in
accordance with Section 11(c), all references to “the Lender” shall
be automatically deemed to refer to all such assignees and participants any and
all actions contemplated to be taken and decision to be made by the Lender
shall not be effective until consented to or directed by the Lenders holding
more than 50% of the outstanding Loans. 
As used herein, “Proportionate Share” shall mean with respect to all
payments, computations and other matters relating to the Loan and to any
Lender, the percentage obtained by dividing (a) the sum of the outstanding
principal amount of the Loan of such that Lender by (b) the aggregate
outstanding principal amount of the Loan, as the applicable percentage may be
adjusted by assignments in accordance with this Section 11.  The aggregate principal, prepayment fees, if
any, and interest payments shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to the Lenders’
respective Proportionate Shares.  If any
Lender obtains any payment of the Loans owing to it, any interest thereon or
fees in respect thereof in excess of its Proportionate Share of all payments of
such Obligations obtained by all the Lenders, such Lender (a “Purchasing
Lender”) shall forthwith purchase from the other Lenders (each, a “Selling
Lender”) such participations in their Loans or other Obligations as shall
be necessary to cause such Purchasing Lender to share the excess payment
ratably with each of them.  If all or any
portion of any payment received by a Purchasing Lender is thereafter recovered
from such Purchasing Lender, such purchase from each Selling Lender shall be
rescinded and such Selling Lender 

 

32

 

shall repay to the Purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Selling Lender’s ratable share (according to the proportion of (i) the
amount of such Selling Lender’s required repayment in relation to (ii) the
total amount so recovered from the Purchasing Lender) of any interest or other
amount paid or payable by the Purchasing Lender in respect of the total amount
so recovered.  Any Purchasing Lender so
purchasing a participation from a Selling Lender pursuant to this provision
may, to the fullest extent permitted by law, exercise all its rights of payment
with respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.

 

(e)           From and after any such assignment, the Borrower shall
maintain, or cause to be maintained, a register (the “Register”) on
which it shall enter the names and addresses of the Lender and the principal
amounts due under this Note (and stated interest thereon).  The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Borrower
and the Lender may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Note.  The Register shall be available for
inspection by each Lender at any reasonable time and from time to time upon
reasonable notice.  Notwithstanding
anything to the contrary contained herein, this Note is a registered obligation
and the right, title, and interest of the Lender in and to such Note shall be
transferable only upon notation of such transfer in the Register.  This Note shall only evidence the Lender’s
right, title and interest in and to the Note, and in no event shall this Note
be considered a bearer instrument or obligation.  This provision shall be construed so that
this Note is at all times maintained in “registered form” within the meaning of
Code Sections 163(f), 871(h)(2) and 881(c)(2) and any related
Treasury Regulations promulgated thereunder.

 

12.          [Intentionally
omitted]

 

13.          Miscellaneous.

 

(a)           The provisions of this Note are intended to be
severable.  If for any reason any
provisions of this Note shall be held invalid or unenforceable in whole or in
part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions thereof in any jurisdiction.

 

(b)           No amendment, modification or supplement to any provision
of this Note shall be effective unless the same shall be in writing and signed
by the Borrower and the Lender (or, after partial any assignment contemplated
by Section 11(c), the holders of more than 50% of the outstanding
Loans).

 

(c)           The waiver of any breach of any of the provisions of this
Note shall not be construed to be a waiver of any subsequent breach or default
of the same or other provisions.  No
failure on the part of the Lender to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right.

 

(d)           The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

 

33

 

(e)           Unless otherwise agreed in writing, notices shall be given
to the Lender and the Borrower at their respective addresses set forth on the
signature pages to this Note. 
Notices under this Note shall be effective (i) when personally
delivered to a party hereto, upon receipt as shown by messenger receipt, (ii) when
mailed to such addressee, upon receipt of a signed confirmation from such
addressee, or (iii) when sent to such addressee by facsimile, upon receipt
of the addressor’s facsimile machine confirmation or other verifiable
electronic receipt.

 

(f)            The provisions of Sections 8 and 10
shall survive the repayment of the Obligations and all other amounts due and
payable with respect thereto; provided, however, that the
provisions of Sections 8(a) and (b) only shall survive
for a period of one (1) year after the date on which the Loan has
been repaid in full.

 

(g)       This Note and any amendment, waivers, consents or supplements
hereto or in connection herewith may be executed in one or more counterparts,
each of which when executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.

 

(h)           This Note and any agreement, document or instrument
attached hereto or referred to herein integrate all the terms and conditions
mentioned herein or incidental hereto and supersede all oral negotiations and
prior writings with respect to the subject matter hereof.

 

(i)            The Lender agrees to keep confidential, in accordance
with its customary procedures for handling confidential information of this nature,
any confidential information supplied to it by the Borrower, Equipmentco, the
Guarantor, any TSA Company and any Qualified Project Company; provided, however,
that such information does not include information that (A) was publicly
known or otherwise known to it prior to the time of such disclosure and (B) subsequently
becomes publicly known through no act or omission by it or any Person acting on
its behalf; and provided, further, that nothing in this Section 13(j) shall
require the Lender to obtain any consent of the Borrower, the Guarantor,
Equipmentco, any TSA Company or any Qualified Project Company in connection
with: (i) exercising any of the Lender’s rights under the Basic Documents,
including those exercisable upon the occurrence of an Event of Default; (ii) any
situation in which the Lender is required by any Governmental Rule or  any Governmental Authority to disclose
information (if the Lender informs such Governmental Authority of the
confidential nature of such information and requests that it be kept
confidential to the fullest extent of the applicable law); (iii) providing
information to counsel or other consultants of the Lender in connection with
the transactions contemplated by any of the Basic Documents (if the Lender
informs such counsel or consultants of the confidential nature of such
information and requires that it be kept confidential except as permitted
herein); (iv) providing such information to independent auditors of the
Lender (if the Lender informs such auditors of the confidential nature of such
information and requires that it be kept confidential except as permitted
herein); or (v) providing such information to a potential Lender or
participant (if the Lender informs such lender or participant of the
confidential nature of such information and such lender or participant agrees
that such information will be kept confidential except as permitted
herein).  Notwithstanding the foregoing,
the parties hereto and their officers, directors, employees thereof are
authorized to disclose to any and all persons, without limitation of any kind,
the structure and tax aspects of 

 

34

 

this transaction (as defined in Treasury
Regulation Section 1.6011-4) and all materials of any kind which are
related to such structure and tax aspects.

 

(j)            Upon payment in full of the First Lien Facility, the
provisions and definitions set forth in the First Lien Note that are
incorporated by reference herein shall continue to be in full force in effect
as if fully set forth herein, notwithstanding the fact that any such First Lien
Note may be deemed terminated by such payments in full.  Such provisions and definitions shall remain
in effect as set forth as of the date hereof unless otherwise expressly
modified herein.  All such references to
the “Administrative Agent” or “Collateral Agent” in such applicable provisions
in the First Lien Note from and after such termination, shall be deemed to
references to the Lender hereunder.

 

[Signature page follows]

 

35

 

	
   

  	
  NEP
  EQUIPMENT FINANCE HOLD CO., a

  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christopher Lowe

  
	
   

  	
   

  	
  Name:     Christopher Lowe

  
	
   

  	
   

  	
  Title:       Vice President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEP Equipment Finance Hold Co.

  
	
   

  	
   

  	
  c/o Noble Environmental Power, LLC

  
	
   

  	
   

  	
  8 Railroad Avenue

  
	
   

  	
   

  	
  Second Floor, Suite 8

  
	
   

  	
   

  	
  Essex, CT 06426

  
	
   

  	
   

  	
  Attention: Jeffrey M. Nelson

  
	
   

  	
   

  	
  Facsimile No.:  (860) 767-7041

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LATHAM & WATKINS LLP

  
	
   

  	
   

  	
  555 Eleventh Street, N.W.

  
	
   

  	
   

  	
  Washington, D.C. 20004

  
	
   

  	
   

  	
  Attention: John L. Sachs

  
	
   

  	
   

  	
  Facsimile No.: (202) 637-2201

  

 

 

	
   

  	
  PARAGON NOBLE LLC, as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Phelan

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
  Paragon
  Noble LLC

  
	
   

  	
  ***

  
	
   

  	
  ***

  
	
   

  	
  New York, NY
  10022-5910

  
	
   

  	
  Attention:

  	
  General
  Counsel

  
	
   

  	
  Facsimile
  No:

  	
  ***Exhibit
10.3(b)

 

EXECUTION
VERSION

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE
REDACTED PORTIONS OF THIS AGREEMENT. THE REDACTIONS ARE INDICATED WITH THREE
ASTERISKS (“***”). A COMPLETE VERSION OF THIS AGREEMENT HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

GUARANTEE

 

October 26, 2007

 

To:          Paragon
Noble LLC

                ***

                ***

                New York, NY 
10022

                Attention: 
General Counsel

                Facsimile:  ***

 

Ladies/Gentlemen:

 

1.             For
value received and subject to the Cap (as defined below), the undersigned party
(the “Guarantor”), hereby guarantees the
prompt and complete payment when due (whether at extended maturity, by
acceleration or otherwise), of any and all obligations by NEP Equipment
Finance Hold Co., LLC (the “Borrower”), including interest, if any, accruing
before or after any proceeding under any applicable bankruptcy or insolvency
law with respect to the Borrower, whether now existing or hereafter arising to Paragon Noble LLC (the “Lender”) arising
with respect to any and all Loans outstanding under that certain Second Lien
Secured Promissory Note, dated as of October 26, 2007 (as amended, modified or
supplemented from time to time, the “Secured Promissory Note”), between the
Borrower and the Lender (collectively, the “Obligations”).  The Obligations under this Guarantee (other
than any principal, interest and fees owed to the Lender with respect to the
Loans which shall not, in any event, be subject to the limitations provided
further in this sentence) shall not, in the aggregate, exceed 10% of the
aggregate principal amount of the Loans outstanding on the Closing Date (the “Cap”)
in effect as of the date of determination (without giving effect to any Loans
made on the Closing Date); provided, however, that the Cap
shall not apply to any bad faith, gross negligence or willful misconduct by the
Guarantor; and provided, further, that the obligations of the
Borrower to pay such amounts with respect to the Loans payable under the
Secured Promissory Note shall not be amended or modified in any way by this
sentence. In case of the failure of the Borrower to pay any such Obligations in
accordance with the Secured Promissory Note, the Guarantor hereby agrees, upon
written demand by the Lender in accordance with Section 2, to pay
to the Lender such Obligations.  This guarantee agreement (this “Guarantee”)
is a guarantee of payment and not merely a guarantee of collection.  Capitalized terms used, but not defined, in
this Guarantee shall have the respective meanings assigned to such terms in the
Secured Promissory Note.

 

1

 

2.             The
Guarantor shall pay any Obligations within fifteen (15) Business Days after
receipt of written demand for such payment from the Lender after the Borrower
shall have failed to make such payment when due under the Secured Promissory
Note.

 

3.             The
obligations of the Guarantor under this Guarantee shall be continuing and
irrevocable, primary, absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of the Secured Promissory
Note or any other agreement or instrument referred to therein, in each case
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor
(other than a discharge or defense that the Borrower would be entitled to
assert under the Secured Promissory Note). 
Without limiting the generality of the foregoing, the Guarantor agrees
that the occurrence of any of the following shall not alter or impair the
liability of the Guarantor hereunder, which shall remain absolute and
unconditional, and shall not be released, discharged or in any way affected
(whether in full or in part) by any of the following events or occurrences:

 

(a)           at any time, without
notice to the Guarantor, the time for any performance of, or compliance with,
any of the Obligations shall be extended by the Lender or such performance or
compliance shall be waived;

 

(b)           at any time, any of the
Obligations shall be, or shall be deemed to have been, modified, supplemented
or amended in any respect; or

 

(c)           any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against the Borrower, including any
discharge of, or bar or stay against collecting, all or any part of the
Obligations (or any interest on all or any part of the Obligations) in or as a
result of any such proceeding.

 

The Guarantor hereby
expressly waives promptness, diligence, presentment, demand for payment or
performance (other than the delivery of the written demand from the Lender as
described in Section 2) and protest, filing of claims with any
court, any requirement for a proceeding to enforce any provision of the Secured
Promissory Note; notice of acceptance of and reliance on this Guarantee by the
Borrower; notice of creation of any liabilities of the Borrower and any
requirement that the Lender exhausts any right, power or remedy against the
Borrower before proceeding under this Guarantee.  The Guarantor further waives any requirement
that the Borrower or any other entity be joined as a party to any proceeding
for the enforcement of any Obligation. 
The obligations of the Guarantor under this Guarantee shall be
automatically reinstated if, and to the extent that, for any reason, any
payment by or on behalf of the Borrower in respect of the Obligations is
rescinded or must otherwise be restored by any holder of the Obligations,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise.  The Guarantor agrees that a
separate action or 

 

2

 

actions may be brought
and prosecuted against the Guarantor to enforce this Guarantee, irrespective of
whether any action is brought against the Borrower under the Secured Promissory
Note.  The Guarantor acknowledges hereby
that this Guarantee is an instrument for the payment of money and consents and
agrees hereby that the Lender, at its sole option, shall have the right to
bring motion-action under New York CPLR Section 3213.

 

4.             The
Guarantor shall be subrogated to all rights of the Lender against the Borrower
in respect of any amounts paid by the Guarantor pursuant to the provisions of
this Guarantee; provided, however, that the Guarantor shall not
be entitled to enforce or to receive any payments arising out of, or based
upon, such right of subrogation until all Obligations due and payable by the
Borrower to the Lender under the Secured Promissory Note have been paid in
full.

 

5.             The
Guarantor represents and warrants to the Lender, as of the date of this
Guarantee (unless such representation and warranty relates to an earlier date),
that:

 

                (a)           The Guarantor is duly formed, validly existing
and in good standing under the laws of the jurisdiction of the Guarantor’s
organization and has all requisite limited liability company power and
authority to carry on its business as now conducted.  The Guarantor has the full power and
authority to (i) execute and deliver this Guarantee and (ii) perform all
of its obligations under this Guarantee.

 

            (b)           As
of the date hereof, the execution and delivery by the Guarantor of this
Guarantee and the performance by the Guarantor of all of its obligations
hereunder have been duly authorized by the Guarantor in accordance with all
applicable laws and the organizational documents of the Guarantor.

 

            (c)           As
of the date hereof, the execution and delivery by the Guarantor of this
Guarantee and the performance by the Guarantor of its obligations
hereunder:  (i) will not violate or
be in conflict with any term or provision of (A) any applicable law
(including, without limitation, any applicable usury or similar laws), or (B) any
judgment, order, writ, injunction, decree or consent of any court or other
judicial authority applicable to the Guarantor; (ii) will not violate, be
in conflict or inconsistent with, result in a breach of, or constitute a
default (with or without the giving of notice or the passage of time or both)
under, any term or provision of any document, agreement or instrument to which
the Guarantor is a party (including its organizational documents); and (iii) will
not result in the creation or imposition of any lien upon any of the assets and
properties of the Guarantor, such that, in the case of any of clauses (i), (ii) or
(iii), there would be a material adverse effect on the ability of the Guarantor
to comply with its obligations under this Guarantee.  This Guarantee is a legally valid and binding
obligation of the Guarantor, enforceable against it in accordance with its
terms and provisions, except as such enforceability may be affected by
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
creditors’ rights generally and the application of general principles of
equity.

 

3

 

            (d)           No
material consent, approval or authorization of, or registration, declaration or
filing with, any governmental authority or any other Person is required for the
due and valid execution, delivery and performance by the Guarantor of this
Guarantee.  The Guarantor is in material
compliance with all applicable laws except to the extent there would be no
material adverse effect on the ability of the Guarantor to comply with its
obligations under this Guarantee.

 

            (e)           Other
than as previously disclosed to the Lender in writing, there are no actions,
suits, investigations or proceedings pending or, to the Guarantor’s knowledge,
threatened at law, in equity, in arbitration or by or before any other
governmental authority involving or affecting the Guarantor that, if adversely
determined, could reasonably be expected to have a material adverse effect on
the ability of the Guarantor to comply with its obligations under this
Guarantee.  The Guarantor is not in
default with respect to any judgment, order, writ, injunction, decree or
consent of any court or other judicial authority applicable to it or its
property that would result in a material adverse effect on the ability of the
Guarantor to comply with its obligations under this Guarantee.

 

            (f)            The
Guarantor has filed, or has caused to be filed on behalf of itself, all
federal, state and local tax returns that it is required to file and has paid,
or has caused to be paid, all taxes it is required to pay to the extent due
(except for taxes that the Guarantor is contesting in good faith and by
appropriate proceedings, with adequate reserves established for such taxes).

 

            (g)           As
of the date hereof, the Guarantor is exempt from regulation under the
Investment Company Act of 1940.  The
Guarantor’s assets are not “plan assets” within the meaning of the U.S.
Department of Labor regulations and the Guarantor is not subject to regulation
under the Employee Retirement Income Security Act of 1974, as amended.

 

(h)           As of the date hereof, all issued and outstanding
ownership interests in the Borrower are directly owned by the Guarantor.

 

(i)            As of the date hereof, the written information
provided to the Lender with respect to the Guarantor was true and correct in
all material respects at the time it was provided.

 

(j)            The Guarantor has not
engaged in any business other than, directly or indirectly through its
subsidiaries, the development, acquisition, financing, management, construction
and operation of wind energy generation projects, the purchasing, transporting,
financing and/or ownership of turbines relating to such wind energy generation
projects and business reasonably incidental to any of the foregoing.

 

6.             The
Guarantor agrees that, until the full payment of the Obligations (other than
contingent Obligations):

 

4

 

              (a)             The Guarantor shall
provide such information regarding its financial condition and creditworthiness
as may be reasonably requested by the Lender for the purpose of confirming the
Guarantor’s ability to perform its obligations hereunder.

 

              (b)             The Guarantor shall
maintain and preserve its existence in its current  form in the
jurisdiction of its organization, except for purposes of undertaking a public
offering of interests in the Guarantor; provided that such public
offering does not have a material adverse effect on (i) the ability of the
Guarantor to
comply with its obligations under this Guarantee or (ii) the
Collateral.

 

                (c)           The Guarantor shall not, without the prior
written consent of the Lender, not to be unreasonably withheld, enter into any
transaction of merger, consolidation or amalgamation, except for
purposes of undertaking a public offering of interests in the Guarantor; provided
that such public offering does not have a material adverse effect on (i) the
ability of the Guarantor to comply with its obligations under this Guarantee or
(ii) the Collateral.  The Guarantor shall not enter into any
liquidation or dissolution.  The
Guarantor shall not transfer or assign any of its direct ownership interests in
the Borrower without the prior written consent of the Lender, which consent
shall not be unreasonably withheld.

 

                (d)           (i)            As soon as available and in any event within
forty five (45) days after the end of each quarterly fiscal period of each
fiscal year of the Guarantor (except for the fourth fiscal quarter of such
fiscal year), the Guarantor shall deliver to the Lender an unaudited balance
sheet for such period accompanied with a certificate confirming that the
relevant balance sheet for such period (A) is true, complete and correct,
in all material respects, and (B) fairly represents the financial
condition of the Guarantor for such period (subject to normal year-end
adjustments).

 

                (ii)           As
soon as available and in any event within ninety (90) days after the end of
each fiscal year of the Guarantor, the Guarantor shall deliver to the Lender
its unaudited balance sheet for such fiscal year.

 

                (e)           The
Guarantor shall not commence any bankruptcy, insolvency, receivership,
assignment for the benefit of creditors, marshalling of assets or similar
proceeding with respect to itself, the Borrower, Equipmentco, any Qualified
Project Company or any TSA Company.

 

                (f)            The Guarantor shall
not combine, merge or consolidate with any other entity (except for purposes of
undertaking a public offering of interests in the Guarantor; provided
that such public offering does not have a material adverse effect on (i) the
ability of the Guarantor to comply with its obligations under this Guarantee or
(ii) the Collateral) without the prior written consent of the Lender, such
consent not to be unreasonably withheld.

 

5

 

(g)           Guarantor shall not: (i) incur any Debt
other than:

 

(A) Debt incurred under this Guarantee or any
other Basic Document;

 

(B) trade or other similar indebtedness
incurred in the ordinary course of business;

 

(C) up to $1,500,000 of Debt incurred in the
ordinary course of business or associated with Permitted Liens;

 

(D) Debt incurred under the documents listed in
Annex 1 hereto (in each case, as in effect on the date hereof);

 

(E) Debt incurred in connection with any
performance guarantees under any operation and maintenance agreements,
management services agreements and/or construction agreements or otherwise in
connection with the provision of services for the development, construction,
ownership and operation of wind energy generation projects; and

 

(F) Debt incurred by the Guarantor (including
loans guaranteed by the Guarantor) provided that in respect of such other Debt
the repayment or satisfaction of such Debt by the Guarantor is junior in right
of payment to the Obligations guaranteed hereunder.

 

(ii) incur,
create or suffer to exist any lien or other encumbrance on any property or
assets directly or indirectly owned by the Guarantor other than

 

(A) any Permitted Lien or any lien granted
pursuant to any document listed in Annex 1 hereto (in each case, as in effect
on the date hereof);

 

(B) any lien or other encumbrance incurred in
connection with Debt permitted under Section 6(g)(i)(F) above up to a
maximum of $100,000,000;

 

(C) any lien or other encumbrance incurred in
connection with the acquisition of any turbines (and related equipment and spare parts)  by the Guarantor or an Affiliate of the
Guarantor (other than in respect of the Collateral, which may be subject to the
liens and encumbrances under the Basic Documents and the First Lien Facility);
provided, however, that any such lien or other encumbrance secures only such
turbines so acquired (and related equipment and spare parts);

 

(D) any lien or other encumbrance incurred in
connection with the financing, development, construction, ownership and
operation of any 

 

6

 

wind
power project owned or acquired, directly or indirectly, by the Guarantor or
any Affiliate of Guarantor, provided that such lien secures only (1) the
assets that comprise such wind power projects (or are otherwise owned by the
owner of such wind power projects) and (2) equity interests in the owner
of such wind power projects;  and

 

(E) any lien or other encumbrance relating to
or arising with respect to any of the events described in Section 6(g)(iii)(1) through
(5) below; or (iii) make any disposition (including without
limitation, any dividend or distribution with respect to, repurchase of or
exchange for, the equity of the Guarantor) or enter into any agreement to make
any sale, transfer, license, lease or other disposition of any  property directly or indirectly owned by the
Guarantor, including any sale, assignment, transfer or other disposal with or
without recourse, of any of its notes or accounts receivable or any rights and
claims associated therewith (collectively a “Disposition”) except:

 

(1)           Disposition of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

 

(2)           Disposition of inventory in the ordinary course of business;

 

(3)           Disposition of equipment or real property to the extent that (x) such
property is exchanged for credit against the purchase price of similar
replacement property or (y) proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

 

(4)           Disposition of any property or assets, including equity interests in
its Affiliates (other than the equity interests of the Borrower, Equipmentco,
the TSA Companies or any Qualified Project Company, except in accordance with
the Basic Documents), either (x) for fair market value (including the
value of any consideration received by any Affiliate of the Guarantor in
exchange for such disposition) or (y) where such property or assets are
being transferred in a transaction or a series of transactions by means of a
distribution or Disposition from one Affiliate (other than the Borrower,
Equipmentco, the TSA Companies or any Qualified Project Company, except in
accordance with the Basic Documents) to another Affiliate; and

 

(5)           Disposition with the prior written consent of the Lender, which consent
shall not be unreasonably withheld.

 

7.             This
Guarantee shall terminate and be of no further effect upon the later to occur
of (a) the payment in full of the Obligations (other than contingent
Obligations), if any, and (b) the expiration of any remaining contingent
Obligations under the Secured Promissory Note.

 

7

 

8.             THIS GUARANTEE SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, UNITED STATES OF AMERICA, WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK).  The Guarantor irrevocably and unconditionally
submits to the exclusive jurisdiction of any state or federal court sitting in
the County of New York over any suit, action or proceeding arising out of or
relating to this Guarantee.  Service of
process by the Lender in any such dispute shall be binding on the Guarantor if
sent to the Guarantor by registered or certified mail, at the address specified
on the signature page of this Note. 
The Guarantor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction.

 

9.             The Guarantor may not assign or transfer its obligations
under this Guarantee without the prior written consent of the Lender, which
consent shall not be unreasonably withheld.

 

10.           No amendment, modification, supplement or waiver of any provision of
this Guarantee shall be effective unless the same shall be in writing and duly
executed by the Guarantor and the Lender. 
No failure on the part of the Lender to exercise, and no delay in
exercising, any of its rights and remedies under this Guarantee shall operate as
a waiver thereof or shall preclude any other or further exercise thereof or the
exercise of any other right under this Guarantee by the Lender.

 

11.           The maximum aggregate amount of the Obligations for which the Guarantor
shall be liable hereunder shall not exceed the maximum amount for which the
Guarantor can be liable without rendering this Guarantee subject to avoidance
under applicable law (including section 548 of the United States Bankruptcy
Code or any applicable provisions of comparable state law).

 

[Signature Page Follows]

 

8

 

	
   

  	
  NOBLE ENVIRONMENTAL
  POWER, 

  LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Christopher
  Lowe

  
	
   

  	
  Name: Christopher Lowe

  
	
   

  	
  Title: Vice President
  and Treasurer

  
	
   

  	
   

  
	
   

  	
  Noble Environmental
  Power, LLC

  
	
   

  	
  8 Railroad Avenue

  
	
   

  	
  Second Floor,
  Suite 8

  
	
   

  	
  Essex, CT 06426

  
	
   

  	
  Attention: Jeffrey M.
  Nelson

  
	
   

  	
  Facsimile No.: (860)
  767-7041

  
	
   

  	
   

  
	
   

  	
  PARAGON NOBLE LLC

  
	
   

  	
    as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ John Phelan

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Paragon Noble LLC

  
	
   

  	
  ***

  
	
   

  	
  ***

  
	
   

  	
  New York, NY 10022-5910

  
	
   

  	
  Attention: General
  Counsel

  
	
   

  	
  Facsimile No.: ***

  

 

 

Annex 1

 

1.             That certain
guarantee in respect of amounts up to approximately $12,000,000 (and which may,
in addition, also cover certain interest, fees and other expenses and amounts,
including enforcement costs, in respect of the relevant guaranteed obligations)
by the Guarantor in favor of Great Plains Windpower, LLC, entered into in
connection with that certain exclusive due diligence agreement between the
Guarantor and Great Plains Windpower, LLC, dated May 18, 2007 related to
the membership interests in North Texas Wind Center, LLC.

 

2.             That certain
guarantee in an amount of up to approximately $30,100,000 (and which may, in
addition, also cover certain interest, fees and other expenses and amounts,
including enforcement costs, in respect of the relevant guaranteed obligations)
by the Guarantor in favor of Noble Bliss Windpark, LLC, Noble Clinton Windpark
I, LLC, Noble Ellenburg Windpark, LLC and/or certain other beneficiaries,
entered into in connection with certain payments arising under certain
engineering, procurement and construction agreements and certain operations and
maintenance agreements.

 

3.             That certain
guarantee in the amount of up to approximately $208,000,000 (and which may, in
addition, also cover certain interest, fees and other expenses and amounts,
including enforcement costs, in respect of the relevant guaranteed obligations)
by the Guarantor in favor of EFS Noble Holdings, LLC and/or certain other
beneficiaries entered into in connection with certain payments arising under
that certain equity capital contribution agreement, that certain limited
liability company agreement and certain management services agreements.

 

4.             That certain
guarantee by the Guarantor in favor of Dexia Crédit Local, New York Branch in
an amount of up to approximately $15,000,000 (and which may, in addition, also
cover certain interest, fees and other expenses and amounts, including
enforcement costs, in respect of the relevant guaranteed obligations) in
connection with certain payments, including certain (a) construction
costs, and (b) completion costs.

 

5.             That certain
guarantee by the Guarantor in favor of Credit Suisse Energy LLC to in an amount
of up to approximately $15,000,000 (and which may, in addition, also cover
certain interest, fees and other expenses and amounts, including enforcement
costs, in respect of the relevant guaranteed obligations) in connection with
certain payments, including certain (a) construction costs, and (b) completion
costs.

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