Document:

Exhibit 10.23

 

EXECUTION COPY

	
   

  

 

 

SECOND LIEN GUARANTY AND
SECURITY AGREEMENT

 

 

Dated as of July 17, 2009

by and between

 

CSSW Holdings, LLC,

 

CSSW, LLC

 

Certain of its Subsidiaries

 

and

 

HSH NORDBANK AG, NEW YORK BRANCH,

as the Collateral Agent for the Second Lien Secured Parties

 

	
   

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  2

  
	
  Section 1.01

  	
  Certain Defined Terms

  	
  2

  
	
  Section 1.02

  	
  Other Definitional Provisions

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE GUARANTEE

  	
  7

  
	
  Section 2.01

  	
  Guarantee

  	
  7

  
	
  Section 2.02

  	
  Obligations Unconditional

  	
  7

  
	
  Section 2.03

  	
  Waiver

  	
  9

  
	
  Section 2.04

  	
  Reinstatement

  	
  12

  
	
  Section 2.05

  	
  Subrogation

  	
  12

  
	
  Section 2.06

  	
  Remedies

  	
  13

  
	
  Section 2.07

  	
  Continuing Guarantee

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  THE GUARANTOR COLLATERAL

  	
  13

  
	
  Section 3.01

  	
  Grant of Guarantor Collateral

  	
  13

  
	
  Section 3.02

  	
  Intercreditor Arrangement

  	
  15

  
	
  Section 3.03

  	
  Perfection

  	
  15

  
	
  Section 3.04

  	
  Delivery and Other Perfection

  	
  15

  
	
  Section 3.05

  	
  Other Financing Statements and
  Liens

  	
  16

  
	
  Section 3.06

  	
  Preservation and Protection of
  Security Interests

  	
  16

  
	
  Section 3.07

  	
  Attorney-in-Fact

  	
  17

  
	
  Section 3.08

  	
  Special Provisions Relating to
  Certain Collateral

  	
  19

  
	
  Section 3.09

  	
  Use of Guarantor Collateral

  	
  20

  
	
  Section 3.10

  	
  Rights and Obligations

  	
  20

  
	
  Section 3.11

  	
  Termination

  	
  21

  
	
  Section 3.12

  	
  [Intentionally Omitted]

  	
  22

  
	
  Section 3.13

  	
  Commercial Tort Claims

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS

  	
  22

  
	
  Section 4.01

  	
  Organization; Power;
  Authorization; Validity

  	
  22

  
	
  Section 4.02

  	
  Title

  	
  23

  
	
  Section 4.03

  	
  Intellectual Property

  	
  23

  
	
  Section 4.04

  	
  Commercial Tort Claims

  	
  23

  
	
  Section 4.05

  	
  Deposit and Securities Accounts

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  COVENANTS

  	
  23

  
	
  Section 5.01

  	
  Further Assurances

  	
  23

  
	
  Section 5.02

  	
  Covenants on Basic Documents

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  REMEDIES

  	
  24

  
	
  Section 6.01

  	
  Events of Default, Etc.

  	
  24

  
	
  Section 6.02

  	
  Deficiency

  	
  25

  
	
  Section 6.03

  	
  Private Sale

  	
  26

  

 

 

	
  Section 6.04

  	
  Cash Proceeds of Guarantor
  Collateral

  	
  26

  
	
  Section 6.05

  	
  Application of Proceeds

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  MISCELLANEOUS PROVISIONS

  	
  27

  
	
  Section 7.01

  	
  Communication

  	
  27

  
	
  Section 7.02

  	
  Amendments

  	
  29

  
	
  Section 7.03

  	
  Successors and Assigns

  	
  29

  
	
  Section 7.04

  	
  Survival

  	
  29

  
	
  Section 7.05

  	
  No Waiver; Remedies Cumulative

  	
  29

  
	
  Section 7.06

  	
  Counterparts

  	
  29

  
	
  Section 7.07

  	
  Captions

  	
  29

  
	
  Section 7.08

  	
  Severability

  	
  29

  
	
  Section 7.09

  	
  Governing Law; Waiver of Jury
  Trial; Jurisdiction and Process

  	
  30

  
	
  Section 7.10

  	
  Entire Agreement

  	
  31

  
	
  Section 7.11

  	
  Independent Obligations

  	
  31

  
	
  Section 7.12

  	
  Expenses

  	
  31

  
	
  Section 7.13

  	
  Duty of the Collateral Agent

  	
  32

  
	
  Section 7.14

  	
  Additional Grantors

  	
  32

  
	
  Section 7.15

  	
  Intercreditor Agreement

  	
  32

  

 

	
  Annex
  1

  	
  Organization
  and Chief Executive Office of the Guarantors

  	
   

  
	
  Annex
  2

  	
  Copyrights

  	
   

  
	
  Annex
  3

  	
  Patents

  	
   

  
	
  Annex
  4

  	
  Trademarks

  	
   

  
	
  Annex
  5

  	
  Commercial
  Tort Claims

  	
   

  
	
  Annex
  6

  	
  Deposit
  and Security Accounts

  	
   

  
	
  Annex
  7

  	
  Pledged
  Notes and Pledged Stock

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit I

  	
  Intercreditor
  Agreement

  	
   

  
	
  Exhibit II

  	
  Assumption
  Agreement

  	
   

  

 

3

 

GUARANTY
AND SECURITY AGREEMENT

 

This SECOND LIEN GUARANTY AND SECURITY
AGREEMENT (this “Agreement”), dated as of July 17, 2009, is made by
and among CSSW Holdings, LLC (“CSSW Holdings”), a limited liability
company duly formed and validly existing under the laws of the State of
Delaware, CSSW, LLC (“CSSW”), a limited liability company duly formed
and validly existing under the laws of the State of Delaware (together with
their permitted successors and assigns, the “Guarantors” and each a “Guarantor”),
and HSH NORDBANK AG, NEW YORK BRANCH (“HSHN”), in its capacity as
Collateral Agent (in such capacity, the “Collateral Agent”) for the
Second Lien Secured Parties (as defined below).

 

R E C I T A L S:

 

WHEREAS, pursuant to
that certain Second Amended and Restated Secured Promissory Note, dated as of
17 (as amended, modified or supplemented from time to time (the “FWA4
Promissory Note”), by First Wind Acquisition IV, LLC, a Delaware limited
liability company (“FWA4”), HSH Nordbank AG, New York Branch (“HSHN”)
has agreed to extend credit to FWA4 in the amounts specified and on the terms
and subject to the conditions set forth therein;

 

WHEREAS, First Wind
Holdings, LLC, a Delaware limited liability company (“FWH”), has entered
into that certain Letter of Credit and Reimbursement Agreement, dated as of 17
(as amended, modified or supplemented from time to time, the “Holdings Loan
Agreement”) with HSHN, in its separate capacities as the Issuing Bank, the
Collateral Agent and the Administrative Agent;

 

WHEREAS,  First Wind Acquisition, LLC a Delaware limited liability
company and a wholly owned subsidiary of FWH (“FWA1”, and together with
FWA4 and FWH, the “Borrowers”, and individually, each a “Borrower”)
has entered into that certain Fourth Amended and Restated Secured Promissory
Note, dated as of 17, with HSHN (the “FWA1 Promissory Note”);

 

WHEREAS, FWH has
entered into that certain Second Amended and Restated Guaranty, dated as of July 17,
2009, for the benefit of HSHN (the “FWH Guaranty” and together with the
FWA1 Promissory Note, the FWA4 Promissory Note and the Holdings Loan Agreement,
the “FW Credit Facilities”);

 

WHEREAS, CSSW Holdings
and CSSW have entered into that certain Credit Agreement, dated as of the date
hereof, among CSSW Holdings, CSSW, the lenders from time to time party thereto,
and Wells Fargo Bank, National Association, as Administrative Agent and
Collateral Agent (the “AIMCO Loan Agreement”);

 

WHEREAS, in connection
with the AIMCO Loan Agreement, the FW Credit Facilities and the transactions
thereunder, Wells Fargo Bank, National Association, as Collateral Agent and
Administrative Agent under the AIMCO Loan Agreement and HSHN, as Collateral
Agent hereunder, have entered into, and CSSW, FWH, FWA1, and FWA4 have
acknowledged, that certain Intercreditor Agreement, dated as of the date
hereof, a copy of which is attached 

 

 

hereto as Exhibit I
(as amended, modified or supplemented from time to time, the “Intercreditor
Agreement”);

 

WHEREAS, the Guarantors
will directly and indirectly benefit from the consummation of the transactions
contemplated by the FW Credit Facilities and the AIMCO Loan Agreement and,
accordingly, desire to execute this Agreement to satisfy a requirement under
the Intercreditor Agreement;

 

WHEREAS, it is a
requirement under the FW Credit Facilities that each Guarantor shall have
executed and delivered this Agreement;

 

NOW, THEREFORE, in
consideration of the foregoing premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, each
Guarantor hereby agrees with the Collateral Agent as follows:

 

ARTICLE
I   DEFINITIONS

 

Section 1.01                                Certain Defined
Terms.

 

(a)                                  Each
capitalized term used and not otherwise defined herein shall have the meaning
assigned to such term (whether directly or by reference to another agreement or
document) in the FWA4 Promissory Note as in effect on the date hereof (or as
modified with the consent of the Second Lien Secured Parties).  The Rules of Interpretation set forth in
the FWA4 Promissory Note are hereby incorporated by reference as if fully set
forth herein.  Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Guarantor, shall refer to such Guarantor’s
Collateral or the relevant part thereof.

 

(b)                                 The following
terms are used herein as defined in the UCC: 
Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims,
Contracts, Deposit Accounts, Documents, Equipment, General Intangibles, Instruments,
Inventory, Letter-of-Credit Rights, Proceeds, Securities Accounts and
Supporting Obligations.

 

(c)                                  In addition to
the terms defined in the FWA4 Promissory Note, the preamble and the recitals,
the following terms shall have the following respective meanings:

 

“AIMCO Loan Agreement” shall have the
meaning set forth in the Recitals hereto.

 

“Basic Document” shall mean any Basic
Document as defined under the corresponding FW Credit Facility.

 

“Borrower” and, collectively, “Borrowers”
shall have the meaning set forth in the Recitals hereto.

 

“Collateral Agent” shall have the
meaning set forth in the preamble hereto.

 

2

 

“Commodity Hedge Agreements” shall
have the meaning assigned to it, as applicable, in the FWA1 Promissory Note and
in the FWA4 Promissory Note.

 

“Contracts” shall mean all contracts
and agreements to which any Guarantor is or may hereafter become a party (in
each case, whether written or oral, or third party or intercompany), including the
Material Project Documents (as defined in the AIMCO Loan Agreement), as the
same may be amended, supplemented or otherwise modified from time to time,
including, without limitation, (i) all rights of any Guarantor to receive
moneys due and to become due to it thereunder or in connection therewith, (ii) all
rights of any Guarantor to damages arising thereunder and proceeds of any
insurance, indemnity, warranty or guaranty with respect thereto and (iii) all
rights of any Guarantor to perform and to exercise all remedies thereunder.

 

“Copyrights” shall mean (i) all
copyrights arising under the laws of the United States, any other country or
any political subdivision thereof, whether registered or unregistered and
whether published or unpublished (including, without limitation, those listed
in Annex 2), all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation, all
registrations, recordings and applications in the United States Copyright
Office, and (ii) the right to obtain all renewals thereof.

 

“Copyright Licenses” shall mean any
written agreement naming any Guarantor as licensor or licensee (including,
without limitation, those listed in Annex 2), granting any right under
any Copyright, including, without limitation, the grant of rights to
manufacture, distribute, exploit and sell materials derived from any Copyright.

 

“CSSW” shall have the meaning set
forth in the preamble hereto.

 

“CSSW Holdings” shall have the meaning
set forth in the preamble hereto.

 

“Deposit Account” shall have the
meaning ascribed to such term in the Uniform Commercial Code of any applicable
jurisdiction and, in any event, including, without limitation, any demand,
time, savings, passbook or like account maintained with a depositary
institution.

 

“First Lien Guarantee and Security Agreement” shall mean the
First Lien Guarantee and Security Agreement, dated as of the date hereof, by
and among the Guarantors for the benefit of Wells Fargo Bank, National
Association, as Collateral Agent.

 

“FW Credit Facilities” and, each
individually, a “FW Credit Facility” shall have the meaning set forth in
the Recitals hereto.

 

“FWA1” shall have the meaning set
forth in the Recitals hereto.

 

“FWA1 Guaranteed Obligations” shall
mean any and all obligations, indebtedness, liabilities and other obligations
of FWA1 (including, but not limited to, all such obligations in respect of
principal, interest (including post-petition interest), fees, indemnities,
costs and other expenses, whether due after acceleration or otherwise and
whether incurred before or after the bankruptcy of FWA1), of whatever nature
and however evidenced, owed to the Second Lien Secured Parties under or
pursuant to the FWA1 Promissory Note, the 

 

3

 

Commodity Hedge Agreements
and/or each other Basic Document, in each case, direct or indirect, primary or
secondary, fixed or contingent, now or hereafter arising out of or relating to
any such document.

 

“FWA1 Promissory Note” shall have the
meaning set forth in the Recitals hereto.

 

“FWA4” shall have the meaning set
forth in the Recitals hereto.

 

“FWA4 Guaranteed
Obligations” shall mean any and all obligations, indebtedness, liabilities
and other obligations of FWA4 (including, but not limited to, all such
obligations in respect of principal, interest (including post-petition
interest), fees, indemnities, costs and other expenses, whether due after
acceleration or otherwise and whether incurred before or after the bankruptcy
of FWA4), of whatever nature and however evidenced, owed to the Second Lien
Secured Parties under or pursuant to the FWA4 Promissory Note, the Commodity
Hedge Agreements and/or each other Basic Document, in each case, direct or
indirect, primary or secondary, fixed or contingent, now or hereafter arising
out of or relating to any such document.

 

“FWA4 Promissory Note” shall have the
meaning set forth in the Recitals hereto.

 

“FWA Guaranty Guaranteed Obligations” shall mean any and all
obligations, indebtedness, liabilities and other obligations of FWH (including,
but not limited to, all such obligations in respect of principal, interest
(including post-petition interest), fees, indemnities, costs and other
expenses, whether due after acceleration or otherwise and whether incurred
before or after the bankruptcy of FWH), of whatever nature and however
evidenced, owed to the Second Lien Secured Parties under or pursuant to the FWH
Guaranty, in each case, direct or indirect, primary or secondary, fixed or
continent, now or hereafter arising out of or relating to such document.

 

“Guarantor” or, collectively, “Guarantors”
shall have the meaning set forth in the preamble hereto.

 

“Guarantor Collateral” has the meaning
assigned to that term in Section 3.01.

 

“Holdings Guaranteed Obligations”
shall mean any and all obligations, indebtedness, liabilities, and other
obligations of FWH (including, but not limited to, all such obligations in
respect of principal, interest (including post-petition interest), fees,
indemnities, costs and other expenses, whether due after acceleration or
otherwise and whether incurred before or after the bankruptcy of FWH), of
whatever nature and however evidenced, owed to the Second Lien Secured Parties
under or pursuant to the Holdings Loan Agreement and/or each other Basic
Document, in each case, direct or indirect, primary or secondary, fixed or
contingent, now or hereafter arising out of or relating to any such document.

 

“Holdings Loan Agreement” shall have
the meaning set forth in the Recitals hereto.

 

“HSHN” shall have the meaning set
forth in the preamble hereto.

 

4

 

“Initial Steel Winds Transfer” shall
have meaning set forth in the Holdings Loan Agreement.

 

“Intellectual Property”
shall mean the collective reference to all rights, priorities and privileges
relating to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including, without limitation, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks and the Trademark Licenses, and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.

 

“Intercreditor Agreement” shall have
the meaning set forth in the Recitals hereto.

 

“Investment Property” shall mean the
collective reference to (i) all “investment property” as such term is
defined in Section 9-102(a)(49) of the UCC 
and (ii) whether or not constituting “investment property” as so
defined, all Pledged Notes and all Pledged Stock.

 

“Mars Hill Project”
shall mean the wind
generating facility with a nameplate capacity of 42 megawatts located in Mars
Hill, Maine.

 

“Mars
Hill Transfer” shall mean the transfer of each Existing Letter of Credit
(as defined in the Holdings Loan Agreement) with respect to the Mars Hill
Project to a separate letter of credit facility under which the related Project
Company (or its Affiliate) is the obligor as contemplated by Section 2(a)(xiii)
of the Holdings Loan Agreement.

 

“Patents” shall mean (i) all
letters patent of the United States, any other country or any political
subdivision thereof, all reissues and extensions thereof and all goodwill
associated therewith, including, without limitation, any of the foregoing
referred to in Annex 3, (ii) all applications for letters patent of
the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of the
foregoing referred to in Annex 3, and (iii) all rights to obtain
any reissues or extensions of the foregoing.

 

“Patent License” shall mean all
agreements, whether written or oral, providing for the grant by or to any
Guarantor of any right to manufacture, use or sell any invention covered in
whole or in part by a Patent, including, without limitation, any of the
foregoing referred to in Annex 3.

 

“Pledged Notes” shall mean all
promissory notes listed on Annex 7, all Intercompany Notes at any time
issued to any Guarantor and all other promissory notes issued to or held by any
Guarantor (other than promissory notes issued in connection with extensions of
trade credit by any Guarantor in the ordinary course of business).

 

“Pledged Stock” shall mean the Equity
Interests listed on Annex 7, together with any other shares, stock
certificates, options, interests or rights of any nature whatsoever in respect
of the Equity Interests of any Person that may be issued or granted to, or held
by, any Guarantor while this Agreement is in effect.

 

5

 

“Proceeds” shall mean all “proceeds”
as such term is defined in Section 9-102(a)(64) of the UCC and, in any
event, shall include, without limitation, all dividends or other income from
the Investment Property, collections thereon or distributions or payments with
respect thereto.

 

“Release Event” shall have the meaning
assigned to it under the FWA4 Promissory Note.

 

“Second Lien Event of Default” shall
mean an Event of Default under the FWA4 Promissory Note.

 

“Second Lien Guaranteed Obligations”
shall mean, in the aggregate, the FWA1 Guaranteed Obligations, the FWA4
Guaranteed Obligations, the FWH Guaranty Guaranteed Obligations and the
Holdings Guaranteed Obligations; provided, however, that
immediately upon the occurrence of the Release Event, the Guarantors’ guarantee
of the FWA1 Guaranteed Obligations shall terminate and this Agreement shall no
longer be enforceable against any Guarantor with respect to the FWA1 Guaranteed
Obligations; and provided, further, that immediately upon the
occurrence of the Mars Hill Transfer and the Initial Steel Winds Transfer and the creation and perfection of liens
in connection with each of the Mars Hill Project and the Steel Winds Project as
required pursuant to the FW Credit Facilities, the Guarantors’ guarantee
of the Holdings Guaranteed Obligations shall terminate and this Agreement shall
no longer be enforceable against any Guarantor with respect to the Holdings
Guaranteed Obligations.

 

“Second Lien Secured Parties” shall
mean the Lenders, the Collateral Agent, the Issuing Bank, the Arranger and the
Administrative Agent, each as defined under the FW Credit Facilities.

 

“Steel
Winds Project” shall mean the wind generating facility with a nameplate
capacity of up to 20 megawatts located in Lackawanna, New York.

 

“Trademark License” shall mean any
agreement, whether written or oral, providing for the grant by or to any
Guarantor of any right to use any Trademark, including, without limitation, any
of the foregoing referred to in Annex 4.

 

“Trademarks” shall mean (i) all
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other source
or business identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and
all applications in connection therewith, whether in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Annex 4, and (ii) the
right to obtain all renewals thereof.

 

6

 

“Uniform Commercial Code”
or “UCC” shall mean the Uniform Commercial Code as in effect in the
State of New York from time to time or, by reason of mandatory application, any
other applicable jurisdiction.

 

Section 1.02                                Other
Definitional Provisions. 
Where the context requires, terms relating to the Guarantor Collateral
or any part thereof, when used in relation to a Guarantor, shall refer to such
Guarantor’s Guarantor Collateral or the relevant part thereof.

 

ARTICLE
II   THE GUARANTEE

 

Section 2.01                                Guarantee.  Subject to the terms of the Intercreditor
Agreement and the First Lien Guarantee and Security Agreement, each Guarantor
hereby jointly and severally guarantees to the Second Lien Secured Parties the
performance and prompt payment in full when due (whether at stated maturity,
upon acceleration, upon any optional or mandatory prepayment or otherwise) of
the Second Lien Guaranteed Obligations in each case strictly in accordance with
its terms.  Each Guarantor hereby further
agrees that if any Borrower fails to pay in full when due (whether at stated
maturity, upon acceleration, upon any optional or mandatory prepayment or
otherwise) all or any part of the Second Lien Guaranteed Obligations, such
Guarantor will immediately pay the same, without any demand or notice
whatsoever, and that, in the case of any extension of time of payment or
renewal of all or any part of the Second Lien Guaranteed Obligations, such
Guarantor will timely pay the same in full when due (whether at extended
maturity, upon acceleration or otherwise) in accordance with the terms of that
extension or renewal.  This Agreement is
irrevocable and unconditional in nature and is made with respect to any Second
Lien Guaranteed Obligations now existing or in the future arising.  The liability of each Guarantor under this
Agreement shall continue until full satisfaction of all the Second Lien
Guaranteed Obligations.  This Agreement
is a guarantee of due and punctual payment and performance and is not merely a
guarantee of collection.

 

Section 2.02                                Obligations
Unconditional.  The
obligations of each Guarantor under Section 2.01 shall be
continuing, irrevocable, primary, absolute and unconditional irrespective of
the value, genuineness, validity, regularity or enforceability of the FW Credit
Facilities as applicable, any Basic Document or any other agreement or
instrument referred to therein, or any substitution, release or exchange of any
other guarantee of or security for any of the Second Lien Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 2.02 that the obligations of
each Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.  Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or
more of the following shall not alter, limit or impair the liability of any
Guarantor hereunder, which shall remain absolute and unconditional as described
above without regard to and not be released, discharged or in any way affected
(whether in full or in part) by:

 

(a)                                  any
modification or amendment (including without limitation by way of amendment,
extension, renewal, novation or waiver), or any acceleration or other change in
the time for payment or performance of the terms of all or any part of the
Second Lien Guaranteed Obligations or any Basic Document or any other agreement
or instrument whatsoever relating thereto;

 

7

 

(b)                                 any release,
termination, waiver, abandonment, lapse or expiration, subordination or
enforcement of the liability of any Guarantor hereunder or of any other
guarantee of all or any part of the Second Lien Guaranteed Obligations;

 

(c)                                  any exchange,
substitution, release, non-perfection or impairment of any Collateral securing
payment of any Second Lien Guaranteed Obligation;

 

(d)                                 any release of
any other Person (including, without limitation, any other guarantor with
respect to the Second Lien Guaranteed Obligations) from any personal liability
with respect to all or any part of the Second Lien Guaranteed Obligations;

 

(e)                                  any settlement,
compromise, release, liquidation or enforcement, upon such terms and in such
manner as applicable law may dictate, of all or any part of the Second Lien
Guaranteed Obligations or any other guarantee of (including without limitation
any letter of credit issued with respect to) all or any part of the Second Lien
Guaranteed Obligations;

 

(f)                                    any agreement
not to pursue or enforce or any failure to pursue or enforce (whether
voluntarily or involuntarily as a result of operation of law, court order or
otherwise) any right or remedy in respect of any Second Lien Guaranteed
Obligation, any guarantee or other liability in respect thereof or any
Collateral or other security for any of the foregoing; any sale, exchange,
release, substitution, compromise or other action in respect of any such
Collateral or other security; or any failure to create, protect, perfect,
secure, insure, continue or maintain any liens in any such Collateral or other
security;

 

(g)                                 the exercise of
any right or remedy available under the Basic Documents or the documents
pursuant to which any other Obligation is incurred, as applicable, at law, in
equity or otherwise in respect of any Collateral or other security for any
Guaranteed Obligation or for any guarantee or other liability in respect
thereof, in any order and by any manner thereby permitted, including, without
limitation, foreclosure on any such Collateral or other security by any manner
of sale thereby permitted, whether or not every aspect of such sale is
commercially reasonable;

 

(h)                                 any manner of
application of any payments by or amounts received or collected from any
Person, by whomsoever paid and howsoever realized, whether in reduction of any
Second Lien Guaranteed Obligations or any other obligations of the Borrowers or
any other Person directly or indirectly liable for any Second Lien Guaranteed
Obligations, regardless of what Second Lien Guaranteed Obligations may remain
unpaid after any such application;

 

(i)                                     any other
circumstance that might otherwise constitute a legal or equitable discharge of,
or a defense, set-off or counterclaim available to, the Borrowers, any
Guarantor or a surety or guarantor generally, other than irrevocable payment,
performance, satisfaction or discharge in full (in accordance with the terms of
the applicable Basic Document);

 

8

 

(j)                                     the giving of
any consent to the merger or consolidation of, the sale of substantial assets
by, or other restructuring or termination of the corporate existence of the
Borrowers or any other Person or any disposition of any shares of any
Guarantor; or

 

(k)                                  any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the Borrowers
or its assets or any resulting release or discharge of any Guaranteed
Obligation.  Each Guarantor acknowledges
and agrees that the Second Lien Guaranteed Obligations include interest on the
Second Lien Guaranteed Obligations at the applicable rate therefor under the
Basic Documents, which accrues after the commencement of any such proceeding
(or, if interest on any portion of the Second Lien Guaranteed Obligations
ceases to accrue by operation of law by reason of the commencement of said
proceeding, such Second Lien Guaranteed Obligations include the interest which
would have accrued on such portion of the Second Lien Guaranteed Obligations if
said proceedings had not been commenced), since it is the intention of the
parties that the amount of the Second Lien Guaranteed Obligations which is
guaranteed by each Guarantor pursuant to this Agreement should be determined
without regard to any rule of law or order which may relieve the Borrowers
of any portion of the Second Lien Guaranteed Obligations.  The Guarantors will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay the Collateral Agent, or allow the claim of
the Collateral Agent in respect of, interest which would have accrued after the
date on which such proceeding is commenced. 
Notwithstanding the above, so long as any Second Lien Guaranteed
Obligation shall remain outstanding, no Guarantor shall, without the prior written
consent of the Collateral Agent, commence or join with any other person in
commencing any bankruptcy, reorganization or insolvency proceedings of or
against any Borrower.

 

(l)                                     Should any
money due or owing under this Agreement not be recoverable from any Guarantor
for any reason, whether by operation of law or otherwise, then, in any such
case, such money shall nevertheless be recoverable by the Collateral Agent from
such Guarantor as though such Guarantor were the principal debtors in respect
thereof and not merely a guarantor and shall be paid by such Guarantor
forthwith.

 

Section 2.03                                Waiver.

 

(a)                                  Each Guarantor
hereby expressly waive promptness, diligence, presentment, demand for payment
or performance and protest; filing of claims with any court; any proceeding to
enforce any provision of the Basic Documents; notice of acceptance of and
reliance on this Agreement by the Second Lien Secured Parties, notice of the
creation of any Second Lien Guaranteed Obligations of the Borrowers, and any
other notice whatsoever; any requirement that the Collateral Agent exhaust any
right, remedy, power or privilege or proceed or take any other action against
the Borrowers under any Basic Document, or any lien or encumbrance on, or any
claim of payment against, any property of the Borrowers or any other agreement
or instrument referred to therein, or any other Person under any other
guarantee of, or lien securing, or claim for payment of, any of the Second Lien
Guaranteed Obligations; any right to require a 

 

9

 

proceeding
by the Collateral Agent first against the Borrowers whether to marshal any
assets or to exhaust any right or take any action against the Borrowers or any
other Person or any Collateral or otherwise, any diligence in collection or
protection for realization upon any Guaranteed Obligation; any obligation
hereunder or any collateral security for any of the foregoing; any right of
protest, presentment, notice or demand whatsoever, and any claims of waiver, release,
surrender, alteration or compromise and all defenses, set-offs counterclaims,
recoupments, reductions, limitations, impairments or terminations, whether
arising hereunder or otherwise.  Each
Guarantor further waives (i) any requirement that the Borrowers or any
other Person be joined as a party to any proceeding for the enforcement by the
Collateral Agent of any of the Second Lien Guaranteed Obligations and (ii) the
filing of claims by the Collateral Agent in the event of the receivership or
bankruptcy of any Borrower.  The
Collateral Agent shall have the right to bring suit directly against any
Guarantor with respect to the obligations owed to the Collateral Agent
hereunder either prior to or concurrently with any lawsuit against, or without
bringing any suit against any Borrower or any other Person.

 

(b)                                 The
enforceability and effectiveness of this Agreement and the liability of each
Guarantor, and the rights, remedies, powers and privileges of the Collateral
Agent under this Agreement shall not be affected, limited, reduced, discharged
or terminated, and each Guarantor hereby expressly waives to the fullest extent
permitted by law any defense now or in the future arising, by reason of:

 

(i)                                     the illegality,
invalidity or unenforceability of all or any part of the Second Lien Guaranteed
Obligations, any Basic Document or any agreement, security document, guarantee
or other instrument relating to all or any part of the Second Lien Guaranteed
Obligations;

 

(ii)                                  any disability
or other defense (other than the defense that the Second Lien Guaranteed
Obligations have been indefeasibly paid in full) with respect to all or any
part of the Second Lien Guaranteed Obligations of the Borrowers or any
Guarantor, including the effect of any statute of limitations that may bar the
enforcement of all or any part of the Second Lien Guaranteed Obligations;

 

(iii)                               the illegality,
invalidity or unenforceability of any security or guarantee for all or any part
of the Second Lien Guaranteed Obligations or the lack of perfection or
continuing perfection or failure of the priority of any lien or encumbrance on
any Collateral for all or any part of the Second Lien Guaranteed Obligations;

 

(iv)                              the cessation,
for any cause whatsoever, of the liability of any Guarantor for all or any part
of the Second Lien Guaranteed Obligations (other than by reason of the full
payment and performance of all Second Lien Guaranteed Obligations);

 

(v)                                 any failure of
the Collateral Agent to give notice of sale or other disposition of any
Collateral (including any notice of any judicial or non-

 

10

 

judicial
foreclosure or sale of any interest in real property serving as Collateral for
all or any part of the Second Lien Guaranteed Obligations) for all or any part
of the Second Lien Guaranteed Obligations to the Borrowers, any Guarantor or
any other Person or any defect in, or any failure by the Borrowers, any
Guarantor or any other Person to receive, any notice that may be given in
connection with any sale or disposition of any Collateral;

 

(vi)                              any failure of
the Collateral Agent to comply with applicable laws in connection with the sale
or other disposition of any Collateral for all or any part of the Second Lien
Guaranteed Obligations;

 

(vii)                           any judicial or
non-judicial foreclosure or sale of, or other election of remedies with respect
to, any interest in real property or other Collateral serving as security for
all or any part of the Second Lien Guaranteed Obligations, even though such
foreclosure, sale or election of remedies may impair the subrogation rights of
either the Borrowers or any Guarantor or may preclude the Borrowers or any
Guarantor from obtaining reimbursement, contribution, indemnification or other
recovery from the other or any other Person and even though the Borrowers or
such Guarantor may not, as a result of such foreclosure, sale or election of
remedies, be liable for any deficiency;

 

(viii)                        any act or
omission of the Collateral Agent or any other Person that directly or
indirectly results in or aids the discharge or release of the Borrowers of any
part of the Second Lien Guaranteed Obligations or any security or guarantee
(including any letter of credit) for all or any part of the Second Lien
Guaranteed Obligations by operation of law or otherwise;

 

(ix)                                any
counterclaim, set-off or other claim which the Borrowers or any other guarantor
of all or any part of the Second Lien Guaranteed Obligations has or alleges to
have with respect to all or any part of the Second Lien Guaranteed Obligations;

 

(x)                                   any failure of
the Collateral Agent to file or enforce a claim in any bankruptcy or other
proceeding with respect to any Person;

 

(xi)                                the election by
the Collateral Agent, in any bankruptcy proceeding of any Person, of the
application or non-application of Section 1111(b)(2) of the United
States Bankruptcy Code;

 

(xii)                             any extension
of credit or the grant of any lien or encumbrance under Section 364 of the
United States Bankruptcy Code;

 

(xiii)                          any use of cash
collateral under Section 363 of the United States Bankruptcy Code;

 

(xiv)                         any agreement
or stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person;

 

11

 

(xv)                            the avoidance
of any lien or encumbrance in favor of the Collateral Agent for any reason;

 

(xvi)                         any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against any Person, including any
discharge of, or bar or stay against collecting, all or any part of the Second
Lien Guaranteed Obligations (or any interest on all or any part of the Second
Lien Guaranteed Obligations) in or as a result of any such proceeding; or

 

(xvii)                      any action
taken by the Collateral Agent that is authorized by this Section 2.03(b) or
otherwise in this Agreement or by any other provision of any Basic Document or
any omission to take any such action.

 

Section 2.04                                Reinstatement.  The obligations of any Guarantor under this Article II
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of such Guarantor in respect of the Second Lien
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Second Lien Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise.  Each Guarantor agrees that it will indemnify
the Collateral Agent on demand for all reasonable and properly documented costs
and expenses (including reasonable and properly documented fees of counsel)
incurred by the Collateral Agent in connection with such rescission or
restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.

 

Section 2.05                                Subrogation.

 

(a)                                  To the extent
of any payments made under this Agreement, each Guarantor shall be subrogated
to the rights of the Lenders receiving such payments, but each Guarantor
covenants and agrees that such right of subrogation shall be subordinate in
right of payment to the rights of any Lenders for which full payment has not
been made or provided for and, to that end, each Guarantor agrees not to claim
or enforce any such right of subrogation or any right of set-off or any other
right which may arise on account of any payment made by such Guarantor in
accordance with the provisions of this Agreement unless and until all of the
Second Lien Guaranteed Obligations owned or held by Persons other than such
Guarantor and all other sums due or payable under this Agreement have been
fully, finally and indefeasibly, paid and discharged or payment therefor has
been provided.

 

(b)                                 Subject to the
provisions of Section 2 of the Intercreditor Agreement, if any amount
shall be paid to any Guarantor on account of such subrogation rights at any
time prior to the indefeasible and unconditional payment, discharge or
performance in full of the Second Lien Guaranteed Obligations and all other
amounts payable under this Agreement, such amount shall be held in trust for
the benefit of the Collateral Agent and shall forthwith be paid to the
Collateral Agent to be credited and applied upon and against the Second Lien Guaranteed
Obligations, to the extent then 

 

12

 

matured,
in accordance with the terms of the relevant Basic Documents, or, to the extent
not then matured or existing, be held by the Collateral Agent as collateral
security for the Second Lien Guaranteed Obligations.

 

Section 2.06                                Remedies.  Subject to the terms of the Intercreditor
Agreement, each Guarantor agrees that, as between such Guarantor and the
Collateral Agent, any obligations of the Borrowers to the Second Lien Secured
Parties under any of the Basic Documents may be declared to be forthwith due
and payable notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically
due and payable) against the Borrowers and that, in the event of such
declaration (or such obligations being deemed to have become automatically due
and payable), such obligations (whether or not due and payable by the
Borrowers) shall forthwith become due and payable by such Guarantor for
purposes of this Agreement.  For the
avoidance of doubt, it is understood and agreed that any amount payable by a
Guarantor pursuant to the immediately preceding sentence is intended to be
applied to the payment or prepayment (as the case may be) of the Second Lien
Guaranteed Obligations.  Each of the
obligations of each Guarantor under this Agreement is separate and independent
of the Second Lien Guaranteed Obligations, and each Guarantor agrees that a
separate action or actions may be brought and prosecuted by the Collateral
Agent against such Guarantor to enforce this Agreement, irrespective of whether
any action is brought by the Collateral Agent against the Borrowers under any
relevant Basic Document or whether the Borrowers is joined in any such action
or actions.

 

Section 2.07                                Continuing
Guarantee.  The
guarantee in this Article II is a continuing, absolute and
unconditional guarantee of payment and shall remain in full force and effect
until the date when all Second Lien Guaranteed Obligations whenever arising
have been paid in full in cash and all obligations of each Guarantor hereunder
shall have been paid in full in cash.

 

ARTICLE
III   THE GUARANTOR COLLATERAL

 

Section 3.01                                Grant of Guarantor
Collateral.  Subject to
the terms of the Intercreditor Agreement and the grant of collateral security
pursuant to the First Lien Guarantee and Security Agreement, each Guarantor
hereby assigns and transfers to the Collateral Agent, and hereby grants to the
Collateral Agent, for the ratable benefit of the Second Lien Secured Parties, a
second lien security interest in, all of the following property now owned or at
any time hereafter acquired by such Guarantor or in which such Guarantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the “Guarantor Collateral”), as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Guarantor’s Obligations:

 

(a)                                  all Accounts;

 

(b)                                 all Chattel
Paper;

 

(c)                                  all Contracts;

 

(d)                                 all Deposit
Accounts;

 

13

 

(e)                                  all Documents;

 

(f)                                    all Equipment;

 

(g)                                 all Fixtures;

 

(h)                                 all General
Intangibles;

 

(i)                                     all
Instruments;

 

(j)                                     all Intellectual
Property;

 

(k)                                  all Inventory;

 

(l)                                     all Investment
Property;

 

(m)                               all
Letter-of-Credit Rights;

 

(n)                                 all Commercial
Tort Claims from time to time described on Annex 5;

 

(o)                                 all other
property not otherwise described above (except for any property specifically
excluded from any clause in this section above, and any property specifically
excluded from any defined term used in any clause of this section above);

 

(p)                                 all books and
records pertaining to the Collateral; and

 

(q)                                 to the extent
not otherwise included, all Proceeds, Supporting Obligations and products of
any and all of the foregoing and all collateral security and guarantees given
by any Person with respect to any of the foregoing;

 

provided, however, that
notwithstanding any of the other provisions set forth in this Section 3.01,
this Agreement shall not constitute a grant of a security interest in any
property to the extent that such grant of a security interest is prohibited by
any requirements of law of a Governmental Authority, requires a consent not
obtained of any Governmental Authority pursuant to such requirement of law or
is prohibited by, or constitutes a breach or default under or results in the
termination of or requires any consent not obtained under, any contract,
license, agreement, instrument or other document evidencing or giving rise to
such property or, in the case of any Investment Property, Pledged Stock or
Pledged Note, any applicable shareholder or similar agreement, except to the
extent that such requirement of law or the term in such contract, license,
agreement, instrument or other document or shareholder or similar agreement
providing for such prohibition, breach, default or termination or requiring
such consent is ineffective under applicable law; provided that any such
property shall be excluded from such security interest only to the extent and
for so long as the consequences specified above shall exist and shall cease to
be excluded and shall be subject to the Lien of the Security Documents
immediately and automatically at such time as such consequence shall no longer
exist.

 

14

 

Section 3.02                                Intercreditor
Arrangement.  Notwithstanding anything herein to the
contrary, (a) it is the
understanding of the parties that the liens granted pursuant to Section 3.01
herein shall, prior to the Discharge of Aimco Lien Indebtedness (as such term
is defined in the Intercreditor Agreement), be subject and subordinate
(pursuant to the terms and conditions of the Intercreditor Agreement) to the
liens granted to the Aimco Agent (as such term is defined in the Intercreditor
Agreement) for the benefit of the Aimco Lenders (as such term is defined in the
Intercreditor Agreement) to secure the Aimco Lien Indebtedness (as such term is
defined in the Intercreditor Agreement) pursuant to the First Lien Guarantee
and Security Agreement, and (b) 
the liens and security interest granted to the Collateral Agent pursuant to
this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder
are subject to the provisions of the Intercreditor Agreement.

 

Section 3.03                                Perfection.  Prior to or concurrently with the execution
and delivery of this Agreement, and subject to the terms of the Intercreditor
Agreement, each Guarantor authorizes the Collateral Agent to file such
financing statements and other documents in such offices as the Collateral
Agent may deem necessary to perfect the security interests granted by Section 3.01
of this Agreement.  Without limiting the
foregoing, each Guarantor consents that UCC financing statements may be filed
describing the Guarantor Collateral as “all assets” or “all personal property”
of such Guarantor (provided that no such description shall be deemed to modify
the description of Guarantor Collateral set forth in Section 3.01).

 

Section 3.04                                Delivery and
Other Perfection.  Subject to
the terms of the Intercreditor Agreement and the First Lien Guarantee and
Security Agreement, each Guarantor shall:

 

(a)                                  deliver to the
Collateral Agent any and all Instruments constituting part of the Guarantor
Collateral in which such Guarantor purports to grant a security interest
hereunder, endorsed and/or accompanied by such instruments of assignment and
transfer in such form and substance as the Collateral Agent may reasonably
request;

 

(b)                                 give, execute,
deliver, file, record, authorize or obtain all such financing statements,
notices, instruments, documents, agreements or consents or other papers as may
be necessary or desirable in the reasonable judgment of the Collateral Agent to
create, preserve, perfect or validate the security interest granted pursuant
hereto or to enable the Collateral Agent to exercise and enforce its rights
hereunder with respect to such pledge and security interest, provided
that notices to account debtors in respect of any Accounts, Chattel Paper or
General Intangibles and to obligors on Instruments shall be subject to the
provisions of clause (c) below;

 

(c)                                  upon the
occurrence and during the continuation of any Second Lien Event of Default, upon
request of the Collateral Agent, promptly notify (and each Guarantor hereby
authorizes the Collateral Agent so to notify) each account debtor in respect of
any Accounts, Chattel Paper, Instruments or General Intangibles of such
Guarantor that such Guarantor Collateral has been assigned to the Collateral
Agent hereunder, and that any payments due or to become due in respect thereof
are to be made directly to the Collateral Agent;

 

15

 

(d)                                 keep full and
accurate books and records relating to the Guarantor Collateral, and stamp or
otherwise mark such books and records all in such manner as the Collateral
Agent may reasonably require in order to reflect the security interests granted
by this Agreement;

 

(e)                                  forward copies
of any notices or communications received by such Guarantor with respect to the
Guarantor Collateral, as the Collateral Agent may reasonably require; and

 

(f)                                    execute and
deliver and cause to be filed, such continuation statements, and do such other
acts and things, as may be necessary to maintain the perfection of the security
interest granted pursuant hereto.

 

Section 3.05                                Other Financing
Statements and Liens.  Other than
with respect to prior security interests created and perfected in connection
with the Permitted Liens (including without limitation the liens securing the
First Lien Guarantee and Security Agreement), without the written consent of
the Collateral Agent (acting at the direction of the Majority Lenders), no
Guarantor shall (a) file or suffer to be on file, or authorize or permit
to be filed or to be on file, in any jurisdiction, any financing statement or
like instrument with respect to any of the Guarantor Collateral in which the
Collateral Agent is not named as the sole secured party for the benefit of the
Second Lien Secured Parties, or (b) cause or permit any Person to have “control”
(as defined in Section 9-104, 9-105, 9-106 or 9-107 of the UCC) of any
Deposit Account, Electronic Chattel Paper, Investment Property or Letter-of-Credit
Right constituting part of the Guarantor Collateral other than the Collateral
Agent.

 

Section 3.06                                Preservation
and Protection of Security Interests.  Subject to the terms of the Intercreditor
Agreement and the First Lien Guarantee and Security Agreement, each Guarantor
shall:

 

(a)                                  upon the
acquisition after the date of this Agreement by such Guarantor of any
Instruments, Deposit Account, other Investment Property, Electronic Chattel
Paper, Letter-of Credit Rights, or other Equipment covered by a certificate of
title or ownership, promptly (i) take such action with respect to that
Guarantor Collateral as is specified for that type of Guarantor Collateral in Section 3.03
and (ii) take all such other actions, and authenticate or sign and file or
record such other records or instruments, as are necessary or as the Collateral
Agent may reasonably request to create, perfect and establish the priority of
the liens granted by this Agreement in any and all of the Guarantor Collateral,
to preserve the validity, perfection or priority of the liens granted by this
Agreement in any and all of the Guarantor Collateral or to enable the
Collateral Agent to exercise its remedies, rights, powers and privileges under
this Agreement;

 

(b)                                 upon such
Guarantor’s acquiring, or otherwise becoming entitled to the benefits of, any
Copyright (or copyrightable material), Patent (or patentable invention),
Trademark (or associated goodwill) or other Intellectual Property or upon or
prior to the Guarantor’s filing, either directly or through the Collateral
Agent, any licensee or any other designee, of any application with any
governmental authority for any Copyright, Patent, Trademark or other
Intellectual Property, in each case after the 

 

16

 

date
of this Agreement, execute and deliver such contracts, agreements and other
instruments as the Collateral Agent may reasonably request to create, perfect
and establish the priority of the liens granted by this Agreement in that and
any related Intellectual Property; and

 

(c)                                  whether with
respect to Guarantor Collateral as of the date of this Agreement or Guarantor
Collateral in which such Guarantor acquires rights in the future, authorize,
give, authenticate, execute, deliver, file or record any and all financing
statements, notices, contracts, agreements or other records or instruments,
obtain any and all permits, and take all such other actions, as are necessary
or as the Collateral Agent may reasonably request to create, perfect and establish
the priority of the liens granted by this Agreement in any and all of the
Guarantor Collateral, to preserve the validity, perfection or priority of the
liens granted by this Agreement in any and all of the Guarantor Collateral or
to enable the Collateral Agent to exercise its remedies, rights, powers and
privileges under this Agreement, including causing any or all Securities to be
transferred of record into the name of the Collateral Agent or its nominee (and
the Collateral Agent agrees that if any Security is transferred into its name
or the name of its nominee, the Collateral Agent shall thereafter promptly give
to the Guarantor copies of any notices and communications received by it with
respect to that Security).

 

Section 3.07                                Attorney-in-Fact.

 

(a)                                  Subject to each
Guarantor’s rights under Sections 3.08 through 3.10, each
Guarantor hereby irrevocably constitutes and appoints the Collateral Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact, effective as of the date of this Agreement and
terminating upon the release of the Guarantor Collateral pursuant to Section 3.11,
with full irrevocable power and authority in the place and stead of such
Guarantor and in the name of such Guarantor or in its own name, for the purpose
of carrying out the provisions of this Agreement, to take any appropriate
action and to execute any document or instrument that may be necessary or
desirable to accomplish the purposes of this Agreement, to preserve the validity,
perfection and priority of the liens granted by this Agreement and, following
any default under any Basic Document or other document pursuant to which any
other Guaranteed Obligation is incurred, as applicable, to exercise its rights,
remedies, powers and privileges under this Agreement.  This appointment as attorney-in-fact is
irrevocable and coupled with an interest. 
Without limiting the generality of the foregoing, each Guarantor hereby
gives the Collateral Agent the power and right, on behalf of such Guarantor,
without notice to or assent by such Guarantor, upon the occurrence and
continuation of any Second Lien Event of Default (or, in respect of Section 3.04,
any default under any Basic Document or other document pursuant to which any
other Guaranteed Obligation is incurred, as applicable) (i) to ask,
demand, collect, sue for, recover, receive and give receipt and discharge for
amounts due and to become due under and in respect of all or any part of the
Guarantor Collateral, (ii) to, in the name of such Guarantor or its own
name, or otherwise, take possession of, receive and indorse and collect any
check, Account, Chattel Paper, draft, note, acceptance or other Instrument for
the payment of moneys due under any Account or General Intangible, (iii) to
file any claims or take any action or proceeding that the Collateral Agent may
deem necessary or

 

17

 

advisable
for the collection of all or any part of the Guarantor Collateral, (iv) to
execute, in connection with any sale or disposition of the Guarantor Collateral
under Article VI, any endorsements, assignments, bills of sale or
other instruments of conveyance or transfer with respect to all or any part of
the Guarantor Collateral, (v) in the case of any Intellectual Property,
execute and deliver, and have recorded, any agreement, instrument, document or
paper as the Collateral Agent may request to evidence the Collateral Agent’s
security interest in such Intellectual Property and the goodwill and General
Intangibles of such Guarantor relating thereto or represented thereby, (vi) pay
or discharge taxes and liens levied or placed on or threatened against the
Guarantor Collateral, effect any repair or pay or discharge any insurance
called for by the terms of this Agreement (including all or any part of the
premiums therefor and the costs thereof), (vii) execute, in connection
with any sale provided for in Article VI, any endorsement,
assignment or other instrument of conveyance or transfer with respect to the
Guarantor Collateral, and (viii) (A) direct any party liable for any
payment under any Guarantor Collateral to make payment of any moneys due or to
become due thereunder directly to the Collateral Agent or as the Collateral
Agent shall direct, (B) ask or demand for, collect, and receive payment of
and receipt for, any moneys, claims and other amounts due or to become due at
any time in respect of or arising out of any Guarantor Collateral, (C) sign
and indorse any invoice, freight or express bill, bill of lading, storage or
warehouse receipt, draft against debtors, assignment, verification, notice and
other document in connection with any Guarantor Collateral, (D) commence
and prosecute any suit, action or proceeding at law or in equity in any court
of competent jurisdiction to collect any Guarantor Collateral and to enforce
any other right in respect of any Guarantor Collateral, (E) defend any
suit, action or proceeding brought against such Guarantor with respect to any
Guarantor Collateral, (F) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Collateral Agent may deem appropriate, (G) assign any
Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Trademark pertains) throughout the world for such term or terms,
on such conditions, and in such manner as the Collateral Agent shall in its sole
discretion determine, including the execution and filing of any document
necessary to effectuate or record such assignment and (H) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise deal with
any Guarantor Collateral as fully and completely as though the Collateral Agent
were the absolute owner thereof for all purposes, and do, at the Collateral
Agent’s option and such Guarantor’s expense, at any time, or from time to time,
all acts and things that the Collateral Agent deems necessary to protect,
preserve or realize upon the Guarantor Collateral and the Collateral Agent’s
and the other Second Lien Secured Parties’ security interests therein and to
effect the intent of this Agreement, all as fully and effectively as such
Guarantor might do.

 

(b)                                 Without
limiting the rights and powers of the Collateral Agent under Section 3.07(a),
each Guarantor hereby appoints the Collateral Agent as its attorney-in-fact,
effective the date of this Agreement and terminating upon the termination of
this Agreement, for the purpose of (i) filing such applications with such
state agencies, and (ii) executing such other documents and instruments on
behalf of, and taking such other action in the name of, such Guarantor as the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Agreement (including the purpose of exercising the rights, remedies,
powers and privileges of the Collateral Agent 

 

18

 

under
Section 6.01).  This
appointment as attorney-in-fact is irrevocable and coupled with an interest.

 

(c)                                  Without
limiting the rights and powers of the Collateral Agent under Section 3.07(a),
each Guarantor hereby appoints the Collateral Agent as its attorney-in-fact, effective
the date of this Agreement and terminating upon the termination of this
Agreement, at the Collateral Agent’s option, but without any obligation to do
so, for the purpose of performing, executing, and filing all such contracts,
agreements and other documents as are contemplated by Section 3.06(b).  This appointment as attorney-in-fact is
irrevocable and coupled with an interest.

 

(d)                                 The expenses of
the Collateral Agent incurred in connection with actions undertaken as provided
in this Section 3.07, together with interest thereon at a rate per
annum equal to the rate following the occurrence and confirmation of an Second
Lien Event of Default under any FW Credit Facility, from the date of payment by
the Collateral Agent to the date reimbursed by such Guarantor, shall be payable
by such Guarantor to the Collateral Agent on demand and shall constitute Second
Lien Guaranteed Obligations and be secured by the liens of the Security
Agreements.

 

(e)                                  Each Guarantor
hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof.  All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.

 

Section 3.08                                Special
Provisions Relating to Certain Collateral.

 

(a)                                  Intellectual
Property.

 

(i)                                     Subject to the
terms of the Intercreditor Agreement and the First Lien Guarantee and Security
Agreement, for the purpose of enabling the Collateral Agent to exercise the
rights, remedies, powers and privileges under Section 6.01 at that
time or times as the Collateral Agent is lawfully entitled to exercise those
rights, remedies, powers and privileges, and for no other purpose, each
Guarantor hereby grants to the Collateral Agent, to the extent assignable, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to such Guarantor) to use, assign, license or sublicense any
of the Intellectual Property of such Guarantor, together with reasonable access
to all media in which any of the licensed items may be recorded or stored and
to all computer programs used for the compilation or printout of those items.

 

(ii)                                  Notwithstanding
anything contained herein to the contrary, but subject to the terms of the FWA4
Promissory Note, so long as no Second Lien Event of Default shall have occurred
and be continuing, each Guarantor will be permitted to exploit, use, enjoy,
protect, license, sublicense, assign, sell, dispose of or take other actions
with respect to the Intellectual Property in the ordinary course of the
business of the Guarantor.  In
furtherance of the foregoing, unless a Second Lien Event of Default shall have
occurred and be continuing and subject 

 

19

 

to
the terms of the Intercreditor Agreement, the Collateral Agent shall from time
to time, upon the request of any Guarantor, execute and deliver any
instruments, certificates or other documents, in the form so requested, that
such Guarantor shall have certified are appropriate (in its judgment) to allow
it to take any action permitted above (including relinquishment of the license
provided pursuant to clause (i) immediately above as to any specific
Intellectual Property).  Further, upon
the payment in full of all of the Second Lien Guaranteed Obligations or earlier
expiration of this Agreement or release of the Guarantor Collateral, the
Collateral Agent shall grant back to each Guarantor the license granted
pursuant to clause (i) immediately above. 
The exercise of rights and remedies under Section 6.01 by
the Collateral Agent shall not terminate the rights of the holders of any
licenses or sublicenses theretofore granted by either Guarantor in accordance
with the first sentence of this clause (ii).

 

Section 3.09                                Use of
Guarantor Collateral.  So long as
no Second Lien Event of Default has occurred and is continuing, and subject to
the terms of the Intercreditor Agreement and the First Lien Guarantee and
Security Agreement, each Guarantor shall be entitled to possess the Guarantor
Collateral, subject to the rights, remedies, powers and privileges of the
Collateral Agent under Articles III and VI.

 

Section 3.10                                Rights and
Obligations.

 

(a)                                  No reference in
this Agreement to proceeds or to the sale or other disposition of Guarantor
Collateral shall authorize any Guarantor to sell or otherwise dispose of any
Guarantor Collateral except to the extent otherwise expressly permitted by the
terms of any Basic Document.  The
Collateral Agent shall not be required to take steps necessary to preserve any
rights against prior parties to any part of the Guarantor Collateral.

 

(b)                                 Each Guarantor
shall remain liable to perform its duties and obligations under the contracts
and agreements included in the Guarantor Collateral in accordance with their
respective terms to the same extent as if this Agreement had not been executed
and delivered.  The exercise by the
Collateral Agent of any right, remedy, power or privilege in respect of this
Agreement shall not release any Guarantor from any of its duties and
obligations under those contracts and agreements.  Except as expressly provided for in the Basic
Documents, the Collateral Agent shall not have any duty, obligation or
liability under those contracts and agreements or with respect to any permit
included in the Guarantor Collateral by reason of this Agreement, or any other
Basic Document, nor shall the Collateral Agent be obligated to perform any of
the duties or obligations of either Guarantor under any such contract or
agreement or any such permit or to take any action to collect or enforce any
claim (for payment) under any such contract or agreement or permit.

 

(c)                                  No lien granted
by this Agreement in any Guarantor’s right, title and interest in any contract,
agreement or permit shall be deemed to be a consent by the Collateral Agent to
any such contract, agreement or permit.

 

20

 

Section 3.11                                Termination.

 

(a)                                  Upon the
occurrence of a Release Event, the grant of Guarantor Collateral hereunder
shall terminate with respect to and no longer secure the FWA1 Second Lien
Guaranteed Obligations; provided, however, if upon the occurrence of a Release
Event:

 

(i)                                     the North Shore
Loan remains unpaid, all of the Guarantor Collateral shall remain as security
solely for the North Shore Loan until the earliest to occur of (x) the
repayment in full of the North Shore Loan or (y) termination of this
Agreement pursuant to the remaining provisions of this Section; it being
understood that such repayment or termination shall automatically and
concurrently cure any Event of Default under the Basic Documents that relates
solely to the North Shore Loan and

 

(ii)                                  the Turbines
that, as of the Second Amendment Effective Date, have not been allocated (under
and in accordance with the Turbine Supply Agreements and Wind Acquisition
Facilities) to an Eligible Qualified Project under the Holdings Loan Agreement,
remain unallocated or the Corresponding Term Loans have not been repaid in
full, all of the Guarantor Collateral shall remain as security solely for the
Corresponding Term Loans to such unallocated Turbines until the earliest to
occur of (x) the allocation (under and in accordance with the Turbine
Supply Agreements and Wind Acquisition Facilities) of all such Turbines to an
Eligible Qualified Project under the Holdings Loan Agreement, (y) the
repayment in full of the Corresponding Term Loans or (z) termination of
this Agreement pursuant to the remaining provisions of this Section; it being
understood that any such allocation, repayment or termination shall
automatically and concurrently cure any Event of Default under the Basic
Documents that relates solely to such Turbines.

 

(b)                                 Upon the
occurrence of the Mars Hill Transfer and the Initial Steel Winds Transfer and the creation and perfection of liens
in connection with each of the Mars Hill Project and the Steel Winds Project as
required pursuant to the FW Credit Facilities, the grant of Guarantor
Collateral hereunder shall terminate with respect to and no longer secure the
Holdings Guaranteed Obligations.

 

Upon the termination of the FWA1 Second Lien
Guaranteed Obligations or the Holdings Guaranteed Obligations, as applicable,
the Collateral Agent shall execute and deliver to each Guarantor, at such
Guarantor’s expense, such UCC termination statements and other documentation as
shall be reasonably requested by such Guarantor to effect the termination and
release of the liens created under this Agreement with respect to the FWA1 Second
Lien Guaranteed Obligations or the Holdings Guaranteed Obligations, as
applicable. Upon the date when all Second Lien Guaranteed Obligations shall
have been indefeasibly paid in full (other than inchoate obligations or indemnification
obligations), this Agreement shall terminate, and the Collateral
Agent shall forthwith cause to be assigned, transferred and delivered, against
receipt but without any recourse, warranty or representation whatsoever, any
remaining Guarantor Collateral and money received in respect of the Guarantor
Collateral, to or on the order of such 

 

21

 

Guarantor. 
The Collateral Agent shall also execute and deliver to such Guarantor,
at such Guarantor’s expense, upon such termination such UCC termination
statements and other documentation as shall be reasonably requested by such
Guarantor to effect the termination and release of the liens created under this
Agreement.  The security interest created
hereby shall also be released with respect to any portion of the Guarantor
Collateral that is sold, transferred or otherwise disposed of in compliance
with the terms and conditions of the Basic Documents or other documents
pursuant to which any other Guaranteed Obligation is incurred, as applicable.

 

Section 3.12                                [Intentionally
Omitted].

 

Section 3.13                                Commercial Tort
Claims.  Subject to the terms of the
Intercreditor Agreement and the First Lien Guarantee and Security Agreement,
each Guarantor agrees that, if it shall acquire any interest in any Commercial
Tort Claim with a potential value in excess of $500,000 (whether from another
Person or because such Commercial Tort Claim shall have come into existence), (i) such
Guarantor shall, immediately upon such acquisition, deliver to the Collateral
Agent, in each case in form and substance reasonably satisfactory to the
Collateral Agent, a notice of the existence and nature of such Commercial Tort
Claim and deliver a supplement to Annex 5 containing a specific
description of such Commercial Tort Claim, certified by such Guarantor as true,
correct and complete, (ii) the provision of Section 3.01 shall
apply to such Commercial Tort Claim (and such Guarantor authorizes the
Collateral Agent to supplement such annex with a description of such Commercial
Tort Claim if such Guarantor fails to deliver the supplement described in
clause (i)), and (iii) such Guarantor shall execute and deliver to the
Collateral Agent, in each case in form and substance reasonably satisfactory to
the Collateral Agent, any certificate, agreement and other document, and take
all other action, deemed by the Collateral Agent to be reasonably necessary or
appropriate for the Collateral Agent to obtain a first-priority, or
second-priority, as appropriate, perfected security interest in all such
Commercial Tort Claims.  Any supplement
to Annex 5 delivered pursuant to this Section 3.13 shall
become part of such Annex 5 for all purposes hereunder.

 

ARTICLE
IV   REPRESENTATIONS

 

As of the date of this Agreement, each
Guarantor represents and warrants to the Collateral Agent as follows:

 

Section 4.01                                Organization;
Power; Authorization; Validity.

 

(a)                                  Without
limiting the generality of Section 4.01, each Guarantor represents
and warrants that (i) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and, except
where the failure to do so could not reasonably be expected to result in a
Material Adverse Effect, is qualified to do business in, and is in good
standing in, each jurisdiction where such qualification is required, and has
all requisite limited liability company power and authority to carry on its
business as now conducted, (ii) the execution, delivery and performance by
such Guarantor of its obligations under this Agreement are within such
Guarantor’s limited liability company powers and have been duly authorized by
all necessary limited liability company action, and, if required, by all
necessary Borrowers action, and (iii) this Agreement has been duly
executed and delivered by such Guarantor and constitutes a 

 

22

 

legal,
valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

 

(b)                                 Annex 1 correctly sets
forth each Guarantor’s full and correct legal name, type of organization,
jurisdiction of organization, organizational identification number (if
applicable), chief executive office and mailing address as of the date of this
Agreement.

 

(c)                                  Such Guarantor
has not (i) changed its location (as defined in Section 9-307 of the
UCC), (ii) previously changed its name except as set forth on Annex 1
and (iii) previously become a “new debtor” (as defined in the UCC) with
respect to a currently effective security agreement entered into by another
Person except as set forth on Annex 1.

 

Section 4.02                                Title.  Such Guarantor is the sole beneficial owner
of such Guarantor Collateral in which it purports to grant a security interest
pursuant to this Agreement, and no lien exists or will exist upon such Guarantor
Collateral, except for the Permitted Liens (including without limitation the
liens securing the First Lien Guarantee and Security Agreement) and except for
the security interest in favor of the Second Lien Secured Parties created
pursuant hereto.  The security interest
created pursuant hereto constitutes a valid and perfected second lien security
interest in the Guarantor Collateral in which such Guarantor purports to grant
a security interest pursuant to Section 3.01.  The liens granted by this Agreement have
attached and constitute a perfected second lien security interest in all of the
Guarantor Collateral (other than Intellectual Property registered or otherwise
located outside of the United States of America) prior to all other liens and
encumbrances (except for the Permitted Liens, including without limitation the
liens securing the First Lien Guarantee and Security Agreement).

 

Section 4.03                                Intellectual
Property.  Annexes
2, 3, and 4 respectively, set forth a complete and correct
list of all Copyrights, Patents and Trademarks owned by each Guarantor on the
date hereof.

 

Section 4.04                                Commercial Tort
Claims.  Annex 5 sets forth a
complete and correct list of all Commercial Tort Claims of each Guarantor in
existence on the date hereof.

 

Section 4.05                                Deposit and
Securities Accounts.  Annex 6
sets forth a complete and correct list of all Deposit Accounts and Securities
Accounts for each Guarantor on the date hereof.

 

ARTICLE V   COVENANTS

 

Section 5.01                                Further
Assurances.  Until the
indefeasible payment in full of all of the Second Lien Guaranteed Obligations
(other than contingent obligations or indemnification obligations), each
Guarantor agrees that, from time to time upon the written request of the
Collateral Agent, such Guarantor shall execute and deliver such further
documents and do such 

 

23

 

other acts and things as the Collateral Agent may reasonably request in
order fully to effect the purposes of this Agreement.

 

Section 5.02                                Covenants on
Basic Documents.  Until the
indefeasible payment in full of all of the Second Lien Guaranteed Obligations
(other than contingent obligations or indemnification obligations), each
Guarantor agrees to observe and perform during the period commencing on the
date hereof and ending on the date when all Second Lien Guaranteed Obligations
have been paid in full each of the covenants specified to be applicable to such
Guarantor in the Basic Documents in effect as of the date hereof, and each such
covenant and agreement is hereby incorporated by reference in this Agreement,
mutatis mutandis, as a direct obligation, covenant and agreement of such
Guarantor with respect to itself.

 

ARTICLE
VI   REMEDIES

 

Section 6.01                                Events of
Default, Etc.  Subject to
the terms of the Intercreditor Agreement, if any Second Lien Event of Default
shall have occurred and be continuing:

 

(a)                                  The Collateral
Agent in its discretion may require each Guarantor to, and such Guarantor
shall, assemble the Guarantor Collateral owned by it at such place or places,
reasonably convenient to both the Collateral Agent and such Guarantor,
designated in the Collateral Agent’s request;

 

(b)                                 The Collateral
Agent in its discretion may make any reasonable compromise or settlement it
deems desirable with respect to any of the Guarantor Collateral and may extend
the time of payment, arrange for payment in installments, or otherwise modify
the terms of, all or any part of the Guarantor Collateral;

 

(c)                                  The Collateral
Agent in its discretion may, in its name or in the name of such Guarantor or
otherwise, demand, sue for, collect or receive any money or property at any
time payable or receivable on account of or in exchange for all or any part of
the Guarantor Collateral, but shall be under no obligation to do so;

 

(d)                                 The Collateral
Agent in its discretion may, upon ten (10) Business Days’ prior written
notice to such Guarantor of the time and place, with respect to all or any part
of the Guarantor Collateral which shall then be or shall thereafter come into
the possession, custody or control of the Collateral Agent or any of its
agents, sell, lease or otherwise dispose of all or any part of such Guarantor
Collateral, at such place or places as the Collateral Agent deems best, for
cash, for credit or for future delivery (without thereby assuming any credit
risk) and at public or private sale, without demand of performance or notice of
intention to effect any such disposition or of time or place of any such sale
(except such notice as is required above or by applicable statute and cannot be
waived), and the Collateral Agent or any other Person may be the purchaser,
lessee or recipient of any or all of the Guarantor Collateral so disposed of at
any public sale (or, to the extent permitted by law, at any private sale) and
thereafter hold the same absolutely, free from any claim or right of whatsoever
kind, including any right or equity of redemption (statutory or otherwise), of
such Guarantor, any such demand, notice and right or equity being hereby
expressly waived and released.  The
Collateral Agent may, 

 

24

 

without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
the sale, and such sale may be made at any time or place to which the sale may
be so adjourned;

 

(e)                                  The Collateral
Agent shall have, and in its discretion may exercise, all of the rights,
remedies, powers and privileges with respect to the Guarantor Collateral of a secured
party under the UCC (whether or not the UCC is in effect in the jurisdiction
where such rights, remedies, powers and privileges are asserted) and such
additional rights, remedies, powers and privileges to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights,
remedies, powers and privileges in respect of this Agreement or the Guarantor
Collateral may be asserted, including the right, to the maximum extent
permitted by law, to exercise all voting, consensual and other powers of
ownership pertaining to the Guarantor Collateral as if the Collateral Agent
were the sole and absolute owner of the Guarantor Collateral (and each
Guarantor agrees to take all such action as may be appropriate to give effect
to such right);

 

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

 

(g)                                 The Collateral
Agent in its discretion may enforce one or more remedies hereunder,
successively or concurrently, and such action shall not operate to estop or
prevent the Collateral Agent from pursuing any other or further remedy which it
may have hereunder or by law, and any repossession or retaking or sale of the
Guarantor Collateral pursuant to the terms hereof shall not operate to release
any Guarantor until full and final payment of any deficiency has been made in
cash.  Such Guarantor shall reimburse the
Collateral Agent upon demand for, or the Collateral Agent may apply any
proceeds of Guarantor Collateral to, the costs and expenses (including
reasonable attorneys’ fees, transfer taxes and any other charges) incurred by
the Collateral Agent in connection with any sale, disposition, repair,
replacement, alteration, addition, improvement or retention of any Guarantor
Collateral hereunder.

 

Section 6.02                                Deficiency.  If the proceeds of, or other realization
upon, the Guarantor Collateral by virtue of the exercise of remedies under Section 6.01
are insufficient to cover the costs and expenses of such exercise and the
payment in full of the Second Lien Guaranteed Obligations, such Guarantor shall
remain liable for any deficiency.

 

25

 

Section 6.03                                Private Sale.

 

(a)                                  Subject to the
terms of the Intercreditor Agreement, the Collateral Agent shall incur no
liability as a result of the sale, lease or other disposition of all or any
part of the Guarantor Collateral at any private sale pursuant to Section 6.01
conducted in a commercially reasonable manner. 
Each Guarantor hereby waives any claims against the Collateral Agent
arising by reason of the fact that the price at which the Guarantor Collateral
may have been sold at such a private sale was less than the price which might
have been obtained at a public sale or was less than the aggregate amount of
the Second Lien Guaranteed Obligations, even if the Collateral Agent accepts
the first offer received and does not offer the Guarantor Collateral to more
than one offeree.

 

(b)                                 Each Guarantor
recognizes that, by reason of certain prohibitions contained in the Securities
Act of 1933, as amended, and applicable state securities laws, the Collateral
Agent may be compelled, with respect to any sale of all or any part of the
Guarantor Collateral, to limit purchasers to those who will agree, among other
things, to acquire the Guarantor Collateral for their own account, for
investment and not with a view to distribution or resale.  Each Guarantor acknowledges that any such
private sales may be at prices and on terms less favorable to the Collateral
Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner and that
the Collateral Agent shall have no obligation to engage in public sales and no obligation
to delay the sale of any Guarantor Collateral for the period of time necessary
to permit the respective issuer of such Guarantor Collateral to register it for
public sale.

 

Section 6.04                                Cash Proceeds
of Guarantor Collateral.

 

(a)                                  If so requested
by the Collateral Agent at any time after the occurrence and during the
continuation of a Second Lien Event of Default, and subject to the terms of the
Intercreditor Agreement and the First Lien Guarantee and Security Agreement,
such Guarantor shall instruct all account debtors in respect of Accounts,
Chattel Paper and General Intangibles and all obligors on Instruments to make
all payments in respect thereof either (i) directly to the Collateral
Agent (by instructing that such payments be remitted to a post office box which
shall be in the name and under the control of the Collateral Agent) or (ii) to
one or more other banks in the United States of America (by instructing that
such payments be remitted to a post office box which shall be in the name and
under the control of the Collateral Agent) under arrangements, in form and
substance reasonably satisfactory to the Collateral Agent, pursuant to which
such Guarantor shall have irrevocably instructed such other bank (and such
other bank shall have agreed) to remit all proceeds of such payments directly
to the Collateral Agent for deposit in accordance with the terms of the FW
Credit Facilities.

 

(b)                                 In addition to
the foregoing, and subject to the terms of the Intercreditor Agreement, each
Guarantor agrees that, at any time after the occurrence and during the
continuation of a Second Lien Event of Default, if the proceeds of any
Guarantor Collateral hereunder (including the payments made in respect of
Accounts)

 

26

 

shall
be received by it, such Guarantor shall, as promptly as possible deposit such
proceeds in accordance with the terms of the FW Credit Faculties. Until so
deposited, all such proceeds shall be held in trust by such Guarantor for and
as the property of the Collateral Agent and shall not be commingled with any
other funds or property of such Guarantor.

 

Section 6.05                                Application of
Proceeds.  The
Proceeds of, or other realization upon, all or any part of the Guarantor
Collateral shall be applied in accordance with the Intercreditor
Agreement.  To the extent that the
Proceeds of, or other realization upon, all or any part of the Guarantor
Collateral may be applied towards the Second Lien Guaranteed Obligations
hereunder, except as otherwise expressly provided in this Agreement, the
Proceeds of, or other realization upon, all or any part of the Guarantor
Collateral by virtue of the exercise of remedies under Section 6.01,
and any other cash at the time held by the Collateral Agent or under this Article VI,
shall be applied by the Collateral Agent:

 

First, to the
payment of documented, out-of-pocket costs and expenses of such exercise of
remedies, including documented, out-of pocket costs and expenses of the
Collateral Agent, and documented fees and out-of-pocket expenses of its agents
and reasonable fees and expenses of its counsel and all documented,
out-of-pocket other expenses incurred and advances made by the Collateral Agent
in that connection;

 

Next, to the
payment in full of the remaining Second Lien Guaranteed Obligations equally
ratably in accordance with their respective amounts then due and owing; and

 

Finally, subject to
the rights of any other holder of any lien in the relevant Guarantor
Collateral, to the payment of such Guarantor, or its respective successors or
assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining.

 

ARTICLE
VII   MISCELLANEOUS
PROVISIONS

 

Section 7.01                                Communication.  All notices and other communications provided
for in this Agreement shall be sent, if practicable, by confirmed telecopy
(with hard copy sent on the same day by overnight courier) and, otherwise, by
overnight courier service prepaid to a Person at its address specified below
and shall be deemed effective when received. 
A communication shall be addressed, until such time as a Person shall
have notified the other parties hereto of a change of address:

 

(A)                              if to CSSW HOLDINGS, LLC,
at:

 

CSSW HOLDINGS, LLC

First Wind Energy, LLC

85 Wells Avenue, Suite 305

Newton, MA 02459

Attention: President

Facsimile: (617) 964-3342

 

27

 

with copy to

 

First Wind Energy, LLC

85 Wells Avenue, Suite 305

Newton, MA 02459

Attention: General Counsel

Facsimile: (617) 964-3342

 

(B)                                if to CSSW,
LLC, at:

 

CSSW, LLC

First Wind Energy, LLC

85 Wells Avenue, Suite 305

Newton, MA 02459

Attention: President

Facsimile: (617) 964-3342

 

with copy to

 

First Wind Energy, LLC

85 Wells Avenue, Suite 305

Newton, MA 02459

Attention: General Counsel

Facsimile: (617) 964-3342

 

(C)                                if to the Collateral Agent,
at:

 

HSH NORDBANK AG, NEW YORK BRANCH

230 Park Avenue

32nd Floor

New York, New York 10169-0005

	
  Attention:

  	
   

  	
  Energy
  - Portfolio Management

  
	
  Telephone:

  	
   

  	
  212
  407 6147 - Brian Caldwell

  
	
  Facsimile:

  	
   

  	
  212-407-6807

  

 

with a copy to:

 

HSH NORDBANK AG, NEW YORK BRANCH

230 Park Avenue

32nd Floor

New York, New York 10169-0005

	
  Attention:

  	
   

  	
  General
  Counsel

  
	
  Telephone:

  	
   

  	
  (212)
  407-6142

  
	
  Facsimile:

  	
   

  	
  (212)
  407-6811

  

 

28

 

Section 7.02                                Amendments.  No amendment of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
the Collateral Agent and each Guarantor, and such consent shall be effective
only in the specific instance and for the specific purpose for which
given.  The Collateral Agent shall not be
obligated to enter into any amendment that affects its rights, duties or
obligations under this Agreement.

 

Section 7.03                                Successors and
Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however,
that (a) no Guarantor may assign or transfer any of its respective rights
or interest in or under this Agreement or delegate any of its obligations under
this Agreement without the prior written consent of the Collateral Agent and (b) the
Collateral Agent shall transfer or assign its rights under this Agreement in
connection with a resignation or removal of such Person from its respective
capacity in accordance with the terms of this Agreement.

 

Section 7.04                                Survival.  All agreements, statements, representations
and warranties made by each Guarantor herein or in any certificate or other
instrument delivered by such Guarantor or on its behalf under this Agreement shall
be considered to have been relied upon by the Collateral Agent and shall
survive the execution and delivery of this Agreement and the other Basic
Documents until termination thereof or the indefeasible payment in full in cash
of all Second Lien Guaranteed Obligations regardless of any investigation made
by or on behalf of the Collateral Agent.

 

Section 7.05                                No Waiver;
Remedies Cumulative.  No failure
or delay on the part of the Collateral Agent or any Secured Party to exercise
and no delay in exercising, and no course of dealing with respect to any right,
remedy, power or privilege hereunder shall operate as a waiver of such right,
remedy, power or privilege nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Collateral Agent would otherwise have.

 

Section 7.06                                Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall together constitute one and the same instrument.

 

Section 7.07                                Captions.  The headings of the several articles and
sections and sub sections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.

 

Section 7.08                                Severability.  In case any one or more provisions contained
in this Agreement or obligation under this Agreement shall be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions or obligations contained herein, and any other application
thereof, shall not in any way be affected or impaired thereby.

 

29

 

Section 7.09                                Governing Law;
Waiver of Jury Trial; Jurisdiction and Process.

 

(a)                                  THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN NEW YORK (WITHOUT
REGARD TO CONFLICT OF LAWS PROVISIONS THEREOF OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).

 

(b)                                 EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(c)                                  EACH GUARANTOR
AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER SECURITY AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH, OR ANY LEGAL ACTION OR PROCEEDING TO EXECUTE
OR OTHERWISE ENFORCE ANY JUDGMENT OBTAINED AGAINST SUCH GUARANTOR, FOR BREACH
HEREOF OR THEREOF, OR AGAINST ANY OF ITS PROPERTIES, MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK BY ANY SECURED PARTY OR ON BEHALF OF SUCH SECURED
PARTY, AS SUCH SECURED PARTY MAY ELECT, AND EACH GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
SUCH COURTS FOR PURPOSES OF ANY SUCH LEGAL ACTION OR PROCEEDING.  EACH GUARANTOR HEREBY AGREES THAT SERVICE OF
PROCESS IN ANY SUCH PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF
BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO IT AT ITS ADDRESS SPECIFIED IN SECTION 7.01
OR AT SUCH OTHER ADDRESS OF WHICH THE COLLATERAL AGENT SHALL HAVE RECEIVED
NOTICE PURSUANT TO SECTION 7.01. 
IN ADDITION, EACH GUARANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER SECURITY AGREEMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

30

 

(d)                                 EACH GUARANTOR
HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS WITH RESPECT TO ANY
PROCEEDING (WHETHER OR NOT IN NEW YORK), BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS SET FORTH
IN SECTION 7.01.

 

(e)                                  NO CLAIM MAY BE
MADE BY ANY GUARANTOR OR ANY OTHER PERSON AGAINST THE COLLATERAL AGENT OR ANY
OF ITS SUCCESSORS IN INTEREST OR ITS AFFILIATES, DIRECTORS, OFFICERS,
EMPLOYEES, ATTORNEYS OR AGENTS OF ANY OF THEM FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT
OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATING TO, OR ANY ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE
OTHER SECURITY AGREEMENTS, AND EACH GUARANTOR HEREBY WAIVES, RELEASES AND
AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED
AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

 

Section 7.10                                Entire
Agreement.  This
Agreement, together with any other agreement executed in connection with this
Agreement, is intended by the parties as a final expression of their agreement
as to the matters covered by this Agreement and is intended as a complete and
exclusive statement of the terms and conditions of such agreement.

 

Section 7.11                                Independent
Obligations.  Each
Guarantor’s obligations under this Agreement are independent of those of any
other Person.  The Collateral Agent may
bring a separate action against any Guarantor without first proceeding against
the Borrowers or any other Person or any other security held by the Collateral
Agent and without pursuing any other remedy.

 

Section 7.12                                Expenses.  Each Guarantor agrees to pay or to reimburse
the Collateral Agent for all reasonable documented, out-of-pocket costs and
expenses (including reasonable attorney’s fees and reasonably documented
out-of-pocket expenses) that may be incurred by the Collateral Agent in any
effort to enforce any of the provisions of Article VI, or any of
the obligations of such Guarantor in respect of the Guarantor Collateral or in
connection with (a) the preservation of the liens on, or the rights of the
Collateral Agent to the Guarantor Collateral pursuant to this Agreement or the
other Security Agreements or (b) any actual or attempted sale, lease,
disposition, exchange, collection, compromise, settlement or other realization
in respect of, or care of, the Guarantor Collateral, including all such costs
and expenses (and reasonable attorney’s fees and reasonable documented out-of-pocket
expenses) incurred in any bankruptcy, reorganization, workout or other similar
proceeding.  The Collateral Agent shall
provide reasonable support for any costs, expenses, and/or charges at the
Borrowers’ reasonable request and shall obtain approval from the Borrowers
(which shall not be unreasonably withheld) prior to incurring any unusual or
extraordinary expenses.

 

31

 

Section 7.13                                Duty of the
Collateral Agent.  The
Collateral Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under the UCC or
otherwise, shall be to deal with it in the same manner as the Collateral Agent
deals with similar property for its own account.  The Collateral Agent shall be accountable
only for amounts that it actually receives as a result of the exercise of such
powers, and neither it not any of its officers, directors, employees or agents
shall be responsible to any Guarantor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.  Except for reasonable care and preservation
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Collateral Agent shall have no duty as to the
collection or protection of the Collateral or any income thereon, nor as to the
preservation of rights against prior parties, nor as to the preservation of any
rights pertaining thereto beyond the safe custody thereof.

 

Section 7.14                                Additional Grantors.  Each Subsidiary of CSSW that is required to
become a party to the First Lien Guarantee and Security Agreement on or after
the Subsequent Closing Date (as such term is defined in the AIMCO Loan
Agreement) pursuant to the AIMCO Loan Agreement shall become a Guarantor for
all purposes of this Agreement upon execution and delivery by such Subsidiary
of an Assumption Agreement in the form of Exhibit II hereto.

 

Section 7.15                                Intercreditor
Agreement.  Notwithstanding anything to the contrary
contained herein, the liens, security interests and rights granted pursuant to
this Agreement or any other security document shall be as set forth in, and
subject to the terms and conditions of (and the exercise of any right or remedy
by the Collateral Agent hereunder shall be subject to the terms and conditions
of), the Intercreditor Agreement.  In the
event of any conflict between this Agreement or any other security document and
the Intercreditor Agreement, the Intercreditor Agreement shall control, and no
right, power, or remedy granted to the Collateral Agent hereunder shall be
exercised by the Collateral Agent, and no direction shall be given by the
Collateral Agent in contravention of the Intercreditor Agreement.  Without limiting the generality of the
foregoing, and notwithstanding anything herein to the contrary, all rights and
remedies of the Collateral Agent (and the Second Lien Secured Parties) shall be
subject to the terms of the Intercreditor Agreement, and, with respect to any
Guarantor Collateral in favor of the Aimco Agent and Aimco Lenders (the “First
Lien Collateral”) until the Discharge of Aimco Lien Indebtedness (as such
term is defined in the Intercreditor Agreement), any obligation of the Borrower
and the Guarantors hereunder with respect to the delivery or control of any
First Lien Collateral, the novation of any lien on any certificate of title,
bill of lading or other document, the giving of any notice to any bailee or
other Person, the provision of voting rights or the obtaining of any consent of
any Person shall be deemed to be satisfied if the Borrower or such Guarantor,
as applicable, complies with the requirements of the similar provision of the
First Lien Guarantee and Security Agreement. 
Until the Discharge of Aimco Lien Indebtedness (as such term is defined
in the Intercreditor Agreement), the delivery of any First Lien Collateral to,
or the control of any First Lien Collateral by, the Aimco Agent pursuant to the
Aimco Loan Documents (as such term is defined in the Intercreditor Agreement) shall
satisfy any delivery or control requirement hereunder; provided, however,
the delivery of any First Lien Collateral to the Aimco Agent pursuant to the
Aimco Loan Documents, together with a notice instructing the Aimco Agent to
deliver any such Guarantor Collateral constituting First Lien Collateral to the
Collateral Agent, shall satisfy any delivery requirement hereunder.

 

32

 

[SIGNATURES
TO FOLLOW]

 

33

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered by their respective
authorized officers as of the date first written above.

 

 

	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  CSSW
  HOLDINGS, LLC,

  
	
   

  	
  A
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CSSW,
  LLC,

  
	
   

  	
  A
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

Second Lien Guaranty and Security Agreement

 

 

	
   

  	
  COLLATERAL
  AGENT:

  
	
   

  	
   

  
	
   

  	
  HSH
  NORDBANK AG, NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

Second Lien Guaranty and Security Agreement

 

 

Annex 1

 

Organization and Chief
Executive Office of the Guarantors

 

Each Guarantor’s Legal Name, Type and Jurisdiction
of Organization, and Organizational Identification Number:

 

	
  Full
  and Correct Legal Name

  	
   

  	
  CSSW
  HOLDINGS, LLC

  	
   

  	
  CSSW,
  LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Type
  of Organization

  	
   

  	
  Limited
  Liability Company

  	
   

  	
  Limited
  Liability Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jurisdiction
  of Organization

  	
   

  	
  Delaware

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Organizational
  ID Number

  	
   

  	
  4707418

  	
   

  	
  4707420

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mailing
  Address

  	
   

  	
  c/o
  First Wind Energy, LLC

  85
  Wells Avenue, Suite 305 

  Newton,
  MA 02459 

  Attention:
  President

  	
   

  	
  c/o
  First Wind Energy, LLC 

  85
  Wells Avenue, Suite 305 

  Newton,
  MA 02459 

  Attention:
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Place
  of Business

  	
   

  	
  Delaware

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Location
  of Chief Executive Officer

  	
   

  	
  c/o
  First Wind Energy, LLC 

  85
  Wells Avenue, Suite 305 

  Newton,
  MA 02459 

  Attention:
  President

  	
   

  	
  c/o
  First Wind Energy, LLC 

  85
  Wells Avenue, Suite 305 

  Newton,
  MA 02459 

  Attention:
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Change
  of Name

  	
   

  	
  N/A

  	
   

  	
  N/A

  

 

 

Annex 2

 

Copyrights

 

None

 

 

Annex 3

 

Patents

 

None

 

 

Annex 4

 

Trademarks

 

None

 

 

Annex 5

 

Commercial Tort Claims

 

None

 

 

Annex 6

 

Deposit and Security
Accounts

 

None

 

 

Annex 7

 

Pledged Notes and Pledged Stock

 

Pledged
Stock:

 

	
  Issuer

  	
   

  	
  Class of Stock

  	
   

  	
  Stock Certificate No.

  	
   

  	
  No. of Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CSSW, LLC

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  100% of membership interests

  
	
  New York Wind III, LLC

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  100% of membership interests

  
	
  Stetson Holdings, LLC

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  100% of membership interests

  

 

Pledged Notes:

 

	
  Issuer

  	
   

  	
  Payee

  	
   

  	
  Principal Amount

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Exhibit I

 

Intercreditor
Agreement

 

[to
be attached]

 

 

Exhibit II

 

Assumption
Agreement

 

ASSUMPTION AGREEMENT, dated as of
                                ,
20    , made by
                                                     
(the “Additional Guarantor”), in favor of HSH Nordbank AG, New York
Branch (“HSHN”), as collateral agent (in such capacity, and together
with its successors and assigns in such capacity, the “Collateral Agent”)
for the benefit of the Second Lien Secured Parties to the FW Credit Facilities
referred to below.  All capitalized terms
not defined herein shall have the meaning ascribed to them in the Second Lien
Guaranty and Security Agreement (as defined below).

 

W I T N E S S E T H :

 

WHEREAS, pursuant to that certain Second
Amended and Restated Secured Promissory Note, dated as of July 17, 2009
(as amended, modified or supplemented from time to time (the “FWA4
Promissory Note”), by First Wind Acquisition IV, LLC, a Delaware limited
liability company (“FWA4”), HSH Nordbank AG, New York Branch (“HSHN”)
has agreed to extend credit to FWA4 in the amounts specified and on the terms
and subject to the conditions set forth therein;

 

WHEREAS, First Wind Holdings, LLC, a Delaware
limited liability company (“FWH”), has entered into that certain Letter
of Credit and Reimbursement Agreement, dated as of July 17, 2009 (as
amended, modified or supplemented from time to time, the “Holdings Loan
Agreement”) with HSHN, in its separate capacities as the Issuing Bank, the
Collateral Agent and the Administrative Agent;

 

WHEREAS,  First Wind
Acquisition, LLC a Delaware limited liability company and a wholly owned
subsidiary of FWH (“FWA1” together with FWA4 and FWH, the “Borrowers”,
individually each a “Borrower”) has entered into that certain Fourth
Amended and Restated Secured Promissory Note, dated as of July 17, 2009,
with HSHN (the “FWA1 Promissory Note”);

 

WHEREAS, FWH has entered into that certain
Second Amended and Restated Guaranty, dated as of July 17, 2009, for the
benefit of HSHN (the “FWH Guaranty” and together with the FWA1
Promissory Note, the FWA4 Promissory Note and the Holdings Loan Agreement, the “FW
Credit Facilities”);

 

WHEREAS, CSSW Holdings, LLC (“CSSW
Holdings”), a Delaware limited liability company and CSSW, LLC (“CSSW”),
a Delaware limited liability company, have entered into that certain Credit
Agreement, dated as of July 17, 2009, among CSSW Holdings, CSSW, the
lenders from time to time party thereto, and Wells Fargo Bank, National
Association, as Administrative Agent and Collateral Agent (the “AIMCO Loan
Agreement”);

 

WHEREAS, in connection
with the AIMCO Loan Agreement, the FW Credit Facilities and the transactions
thereunder, Wells Fargo Bank, National Association, as Collateral Agent and
Administrative Agent under the AIMCO Loan 

 

2

 

Agreement and HSHN have
entered into, and CSSW, FWH, FWA1, and FWA4 have acknowledged, that certain
Intercreditor Agreement, dated as of July 17, 2009 (as amended, modified
or supplemented from time to time, the “Intercreditor Agreement”);

 

WHEREAS, in connection with the FW Credit Facilities
and the AIMCO Loan Agreement, CSSW Holdings and CSSW have entered into the
Second Lien Guaranty and Security Agreement, dated as of July 17, 2009 (as
amended, supplemented or otherwise modified from time to time, the “Second
Lien Guaranty and Security Agreement”) in favor of the Collateral Agent for
the ratable benefit of the Second Lien Secured Parties;

 

WHEREAS, the Intercreditor Agreement requires the
Additional Guarantor to become a party to the Second Lien Guaranty and Security
Agreement; and

 

WHEREAS, the Additional Guarantor has agreed to
execute and deliver this Assumption Agreement in order to become a party to the
Second Lien Guaranty and Security Agreement.

 

NOW, THEREFORE, IT IS AGREED:

 

1.  Second
Lien Guarantee and Security Agreement. 
By executing and delivering this Assumption Agreement, the Additional
Guarantor, as provided in Section 7.14 of the Second Lien Guaranty and
Security Agreement, hereby becomes a party to the Second Lien Guaranty and
Security Agreement as a Guarantor thereunder with the same force and effect as
if originally named therein as a Guarantor and, without limiting the generality
of the foregoing, hereby expressly assumes all obligations and liabilities of a
Guarantor thereunder.  The information
set forth in Annex I-A hereto is hereby added to the information set forth in
the Annexes to the Second Lien Guaranty and Security Agreement. The Additional
Guarantor hereby represents and warrants that each of the representations and
warranties contained in Section 4 of the Second Lien Guaranty and Security
Agreement is true and correct on and as the date hereof (after giving effect to
this Assumption Agreement) as if made on and as of such date.

 

2.  Governing Law.  THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.

 

IN WITNESS WHEREOF, the
undersigned has caused this Assumption Agreement to be duly executed and
delivered as of the date first above written.

 

	
   

  	
  [ADDITIONAL GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

3

 

Annex
I-A to

Assumption Agreement

 

Supplement to Annex 1

 

 

Supplement to Annex 2

 

 

Supplement to Annex 3

 

 

Supplement to Annex 4

 

 

Supplement to Annex 5

 

 

Supplement to Annex 6

 

 

Supplement to Annex 7

 

SECOND LIEN GUARANTY & SECURITY (CSSW & CSSW
HOLDINGS)Exhibit 10.24

 

EXECUTION COPY

 

AMENDMENT NO. 1

TO

SECOND LIEN GUARANTY AND SECURITY AGREEMENT

 

This
AMENDMENT NO. 1 TO SECOND LIEN GUARANTY AND SECURITY AGREEMENT (this “Amendment”),
dated as of November 12, 2009, is entered into by and among CSSW HOLDINGS,
LLC (“CSSW Parent”), CSSW, LLC (“Borrower”, together with CSSW
Parent, the “Guarantors”, and each individually, a “Guarantor”),
and HSH NORDBANK AG, NEW YORK BRANCH (“HSHN”), in its capacity as
Collateral Agent (in such capacity, the “Collateral Agent”) for the
Second Lien Secured Parties.

 

RECITALS

 

WHEREAS,
Guarantors and Collateral Agent have entered into that certain Second Lien
Guaranty and Security Agreement (the “Guaranty and Security Agreement”),
dated as of July 17, 2009; and

 

WHEREAS,
Guarantors and Collateral Agent desire to amend the description of Pledged
Stock in the Guaranty and Security Agreement.

 

NOW,
THEREFORE, in consideration of the foregoing and mutual agreements herein
contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:

 

AGREEMENT

 

Section 1.                                            Definitions.  Capitalized terms used and not otherwise
defined in this Amendment shall have the meanings assigned to such terms in the
Guaranty and Security Agreement and the principles of interpretation set forth
therein shall apply herein.

 

Section 2.                                            Amendment to
Guaranty and Security Agreement.

 

(a)                                  Section 7 is hereby amended as
follows: (i) all references to “85 Wells Avenue, Suite 305, Newton MA
02459” are hereby deleted and replaced with “179 Lincoln Street, Suite 500,
Boston, MA 02111” and (ii) all references to “Facsimile: (617) 964-3342”
are hereby deleted and replaced with “Facsimile: (617) 960-2889”.

 

(b)                                 Annex 7 is hereby deleted and replaced in
its entirety with Annex 7 attached hereto.

 

Section 3.                                            Miscellaneous.

 

(a)                          This Amendment shall become effective as
of the date hereof.  Except as expressly
set forth herein, the Guaranty and Security Agreement as specifically amended
by this Amendment shall remain unchanged and in full force and effect and is
hereby ratified and confirmed.

 

 

(b)                         This Amendment shall be governed by and
construed in accordance with the laws of the State of New York (without giving
effect to conflict of laws or choice of laws principles other than Section 5-1401
of the General Obligations Law).

 

(c)                          This Amendment may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.

 

[Remainder of page intentionally left blank.]

 

2

 

IN WITNESS WHEREOF, the parties have caused this
Amendment to be duly executed and delivered as of the day and year first above
written.

 

	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  CSSW
  HOLDINGS, LLC

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Evelyn Lim

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CSSW,
  LLC

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Evelyn Lim

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  

 

SIGNATURE PAGE TO AMENDMENT NO. 1 TO SECOND LIEN

GUARANTY AND SECURITY AGREEMENT

 

 

	
  COLLATERAL
  AGENT:

  	
   

  
	
   

  	
   

  
	
  HSH
  NORDBANK AG, NEW YORK BRANCH

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

SIGNATURE PAGE TO AMENDMENT NO. 1 TO SECOND LIEN

GUARANTY AND SECURITY AGREEMENT

 

 

Annex 7

 

Pledged Notes and Pledged Stock

 

Pledged
Stock:

 

	
  Issuer

  	
   

  	
  Class of Stock

  	
   

  	
  Stock Certificate No.

  	
   

  	
  No. of Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CSSW, LLC

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  100% of membership interests

  
	
  New York Wind III, LLC

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  100% of membership interests

  
	
  Stetson Holdings, LLC

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  100% of membership interests

  
	
  CSSW Cohocton Holdings, LLC

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  100% of membership interests

  

 

Pledged Notes:

 

	
  Issuer

  	
   

  	
  Payee

  	
   

  	
  Principal
  Amount

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

AMENDMENT NO. 1 TO SECOND
LIEN

GUARANTY AND SECURITY
AGREEMENT

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