Membership Interest Purchase And Equity Capital Contribution Agreement

Exhibit 10.40(a)


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


MEMBERSHIP INTEREST PURCHASE AND EQUITY CAPITAL CONTRIBUTION AGREEMENT


by and among


NOBLE ENVIRONMENTAL POWER 2008 HOLD CO., LLC,


NOBLE ENVIRONMENTAL POWER 2008 HOLD CO. PRIME, LLC,


EFS NOBLE II, LLC,


GE CAPITAL MARKETS, INC.


AND


ANY OTHER CLASS A EQUITY INVESTOR PARTY HERETO


dated as of


June 30, 2008


TABLE OF CONTENTS


Page


ARTICLE 1 DEFINITIONS AND PRINCIPLES OF INTERPRETATION


2


1.01.


Definitions


2


1.02.


Rules of Interpretation


21


ARTICLE 2


EQUITY CAPITAL CONTRIBUTION


22


2.01.


Membership Interest Purchase and Equity Capital Contribution


22


2.02.


Use of Proceeds


24


ARTICLE 3


REPRESENTATIONS AND WARRANTIES OF NOBLE HOLDCO


25


3.01.


Organization and Good Standing; Organizational Documents


25


3.02.


Authorization, Execution and Enforceability


25


3.03.


No Violation


26


3.04.


Ownership of Company and Project Companies


27


3.05.


Contracts


28


3.06.


Default


28


3.07.


Governmental Approvals


29


3.08.


Site Plans


30


3.09.


Legal Proceedings


30


3.10.


Title to Assets; No Options


30


3.11.


Financial Statements


30


3.12.


Consents and Approvals


31


3.13.


Compliance with Applicable Laws


31


3.14.


Development


31


3.15.


Insurance


31


3.16.


Environmental Matters


31


3.17.


Subsidies


31


3.18.


Information


32


3.19.


No Subsidiaries; Non-Related Liabilities


32


3.20.


Exempt Wholesale Generator


32


3.21.


No Employees


32


3.22.


Brokers


33


3.23.


Public Utility Holding Company Act


33


3.24.


Completion


33


i


3.25.


Taxes


33


3.26.


Real Property


34


3.27.


Real Property Payments


34


3.28.


Condemnation


35


3.29.


Status of Property


35


3.30.


Affiliate Transactions


35


3.31.


Class B Investment Intent; Unregistered Securities


35


3.32.


Class B Accredited Investor


35


3.33.


United States Person


35


3.34.


No Other Representations


36


3.35.


No Pre-1987 Contracts


36


3.36.


No Application for Private Letter Ruling


36


ARTICLE 4


CLASS A EQUITY INVESTOR REPRESENTATIONS AND WARRANTIES


36


4.01.


Organization and Good Standing


36


4.02.


Authorization, Execution and Enforceability


36


4.03.


Legal Proceedings


37


4.04.


No Violation


37


4.05.


Governmental Approvals


38


4.06.


Class A Investment Intent; Unregistered Securities


38


4.07.


Accredited Investor


38


4.08.


United States Person


38


4.09.


No Other Representations


38


4.10.


Brokers


39


ARTICLE 5


CONDITIONS PRECEDENT


39


5.01.


Commitment Conditions Precedent


39


5.02.


Equity Capital Contribution Conditions Precedent


40


5.03.


Obligations of the Equity Investors on each Equity Capital Contribution Date


48


5.04.


Site Access


49


5.05.


Equity Investors Consents; Opinions in Favor of Lenders


49


ii


ARTICLE 6


GENERAL PROVISIONS


50


6.01.


Notices


50


6.02.


Indemnification


51


6.03.


No Third Party Beneficiaries


56


6.04.


Amendment and Waiver


57


6.05.


Binding Nature; Assignment; Consent to Assignment


57


6.06.


Governing Law


58


6.07.


Jurisdiction; Service of Process


58


6.08.


Counterparts


58


6.09.


Headings


58


6.10.


Severability


58


6.11.


Entire Agreement


59


6.12.


Confidentiality


59


6.13.


Further Assurances


60


6.14.


LIMITATION OF LIABILITY


60


6.15.


Guaranty Payments


60


6.16.


WAIVER OF JURY TRIAL


61


6.17.


Acknowledgment


61


6.18.


Disclosure


61


iii


Annexes


Annex 1


Equity Investors Capital Contribution Commitment, Class A Units and Class B Units, and Maximum Capital Contribution

Annex 2


Form of Amended and Restated Limited Liability Company Agreement of Company

Annex 3-A


Real Property Documents at Execution

Annex 3-B


Real Property Documents at each ECCD

Annex 3-C


Debt Financing Documents at Execution

Annex 3-D


Debt Financing Documents at each ECCD

Annex 3-E


General Contracts at Execution

Annex 3-F


General Contracts at each ECCD

Annex 4-A


Project Company Governmental Approvals

Annex 4-B


Transaction Governmental Approvals

Annex 5


Insurance Policies

Annex 6


Base Case Model

Annex 7-A


General Assumptions

Annex 7-B


Fixed Pricing Assumptions

Annex 7-C


Restricted Pricing Assumptions

Annex 8-A


Legal Description of Altona Wind Farm Site

Annex 8-B


Legal Description of Chateaugay Wind Farm Site

Annex 8-C


Legal Description of Wethersfield Wind Farm Site

Annex 9


Transaction Expenses

Annex 10-A


Form of Approved Investor Equity Contributions Guaranty

Annex 10-B


Form of Approved Investor Equity Indemnity Guaranty

Annex 11-A


Form of EPC Estoppel

Annex 11-B


Form of Guarantor Estoppel

Annex 11-C


Form of O&M Estoppel

Annex 12


Knowledgeable Persons of Initial Class A Equity Investor and GECM

Annex 13


Proforma Owner' s Policy

Annex 14


Consents and Approvals

Annex 15-A


Form of FERC Regulatory Opinion of Counsel to Project Companies

Annex 15-B


Form of State Energy Regulatory Opinion of Counsel to Project Companies

Annex 15-C


Form of Permitting Opinion of Counsel to Project Companies

Annex 15-D


Form of Corporate Opinion of Counsel to the Project Companies, the Company, Noble Holdco, EPC Contractor, Guarantor, O&M Contractor and Administrator

Annex 15-E


Form of Opinion of In-House Counsel to Project Companies, the Company, Noble Holdco, EPC Contractor, Guarantor, O&M Contractor and Administrator

Annex 15-F


Form of Opinion of In-House Counsel to Administrative Agent

Annex 15-G


Form of Opinion of Counsel to Administrative Agent

Annex 15-H


Form of Opinion of Counsel to each Class A Equity Investor and provider of a Class A Equity Guaranty

Annex 16


Knowledgeable Persons of Noble Holdco

Annex 17


Form of Consent to Assignment

Annex 18


Ownership of Wind Farms

Annex 19


Subsidiaries


iv


Annex 20


Disqualified Transferees

Annex 21


Legal Proceedings

Annex 22


Real Property

Annex 23


Form of Equity Support Member Pledge Agreement

Annex 24


Environmental Disclosure

Annex 25


Form of Substantial Completion Certificate

Annex 26


Form of Equity Guaranty

Annex 27


Form of Assignment and Assumption Agreement


v


MEMBERSHIP INTEREST PURCHASE AND EQUITY CAPITAL CONTRIBUTION AGREEMENT


This MEMBERSHIP INTEREST PURCHASE AND EQUITY CAPITAL CONTRIBUTION AGREEMENT (this " Agreement" ), dated as of June 30, 2008 (the " Execution Date" ), is entered into by and among NOBLE ENVIRONMENTAL POWER 2008 HOLD CO., LLC, a Delaware limited liability company (the " Company" ), NOBLE ENVIRONMENTAL POWER 2008 HOLD CO. PRIME, LLC, a Delaware limited liability company (" Noble Holdco" ), EFS NOBLE II, LLC, a Delaware limited liability company (" Initial Class A Equity Investor" ), GE Capital Markets, Inc., a Delaware corporation (" GECM" ), and any other Class A Equity Investor party hereto.


RECITALS:


1. The Company was formed pursuant to the Delaware Limited Liability Company Act on June 1, 2007.


2. Immediately prior to the execution and delivery of this Agreement and the LLC Agreement (as defined below), Noble Holdco is the sole member and one hundred percent (100%) owner of the Company.


3. Immediately prior to the execution and delivery of this Agreement, Noble Environmental Power 2007 Hold Co., LLC (" Noble 2007 Holdco" ) is the sole member and one hundred percent (100%) owner of each Project Company (as defined below).


4. In connection with the financing of certain wind turbines (including those associated with the Wind Farms (as defined below)) (the " Turbine Financing" ), Noble 2007 Holdco pledged the membership interests in each Project Company to various lenders (the " Turbine Lenders" ).


5. Immediately upon funding of the Debt Financing (defined below), those obligations under the Turbine Financing relating to the wind turbines associated with the Project Companies will be repaid, and the lenders will release their liens on the membership interests of each Project Company.


6. Immediately upon the release of such liens, the interests in each Project Company will be transferred from Noble 2007 Holdco to the Company (the " Transfer" ).


7. Upon the Transfer, the Company shall be the sole member and one hundred percent (100%) owner of each Project Company (as defined below).


8. Noble Altona (as defined below) owns all the rights and interests in a proposed 97.5 MW wind-powered generation facility located in Clinton County, New York.


9. Noble Chateaugay (as defined below) owns all the rights and interests in a proposed 106.5 MW wind-powered generation facility located in Franklin County, New York, and Clinton County, New York.


10. Noble Wethersfield (as defined below) owns all the rights and interests in a proposed 126 MW wind-powered generation facility located in Wyoming County, New York.


11. The Company is expecting to enter into a financing transaction (the " Debt Financing" ) contemplated by that certain Financing Agreement dated as of the date hereof (as the same may be amended, modified or supplemented from time to time, the " Financing Agreement" ), by and among the Company, the financial institutions from time to time party thereto as lenders (collectively, the " Lenders" ), Citibank, N.A., as collateral agent, and the other agents party thereto from time to time, pursuant to which the construction and operation of the Wind Farms (as defined below) will be financed.


12. It is a condition to the Financial Closing Date (as defined in the Financing Agreement) under the Financing Agreement that this Agreement has been executed and delivered by the Parties hereto and, accordingly, in consideration of the mutual agreements, covenants, representations and warranties set forth herein, and intending to be legally bound hereby, the Parties agree as follows:


ARTICLE 1 DEFINITIONS AND PRINCIPLES OF INTERPRETATION 1.01. Definitions . As used in this Agreement, the following terms have the respective meanings set forth below or set forth in the Sections referred to below: " ACCA" means that certain Additional Capital Contribution Agreement by and among the Class A Equity Investors, the Company and Noble Holdco, dated as of the date hereof.


" Administrative Agent" means the Person acting in the capacity of " administrative agent" , or a similar capacity, under the Debt Financing Documents.


" Administrator" means Noble Management Services, LLC, a Delaware limited liability company, in its capacity as administrator under the Project Administration Agreements.


" Advisors" has the meaning set forth in Section 6.12(a) .


" Affiliate" means, as to any specified Person, any other Person directly or indirectly controlling, controlled by, or under common control with such specified Person. As used in this definition, " control" (including the terms " controlled by" and " under common control with" ) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of a Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise); provided that in any event, any Person that owns directly or indirectly fifty percent (50%) or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or fifty percent (50%) or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person; provided that, the defined term " Affiliate" herein which arises out of any obligation, requirement, regulation or order of FERC shall mean the foregoing replacing the phrase " fifty percent (50%)" wherever it appears with the phrase " ten percent (10%)."


2


" After-Tax Payout" means an effective after income tax internal rate of return of *** percent (***%) as of the tenth (10th) anniversary of the Initial Equity Capital Contribution Date, based on the Assumptions, as may be amended pursuant to Section 2.01; provided that such percentage shall be increased or decreased on the date which is two (2) Business Days prior to the Initial Equity Capital Contribution Date (the " determination date" ) by *** (***) of a basis point for each basis point increase or decrease, respectively, in the 10-year U.S. Dollar fixed interest rate swap (vs. 90-day LIBOR) as determined by the Bloomberg closing value (currency identifier " USSW10" ), or any replacement successor screen (the " yield rate" ), in effect at 11:00 am New York time on the determination date compared to such yield rate in effect at the closing of business on January 8, 2008, which was four and four-tenths percent (4.4055%); and provided, further, that such percentage may be increased and such term extended as set forth in the *** and as provided in the Assumptions.


" Agreement" means this Membership Interest Purchase and Equity Capital Contribution Agreement.


" ALTA Survey" means an ALTA survey of the real property interests in each Wind Farm Site other than the Border Parcels (the " Premises" ), current within ninety (90) days prior to the applicable date, certified to the Title Company, the Company and each of the Equity Investors, in a form reasonably acceptable to all such parties, showing: (a) the location of the perimeter of the Premises by metes and bounds or in rectangular survey format, (b) any additional easements, rights-of-way, and utility lines referred to in the Title Policy which actually service or cross the Premises to the extent the easements and rights-of-way are locatable from the description contained in the easement or right-of-way document or to the extent the utility lines are located above ground or are designated by monuments or markers or that are otherwise visible above ground, (c) the lines of the public streets abutting the Premises showing access to the Premises from a public right of way, and any established building and setback lines, if applicable, (d) encroachments and the extent thereof upon or off of the Premises and of any Wind Farm improvements upon any established building, setback and street lines, (e) such Wind Farm' s improvements to the extent constructed and the relationship of such Wind Farm improvements (other than roadways) by distances to the perimeter of the Premises, established building, setback, street lines, and, if any Wind Farm improvements encroach upon or violate any established building, setback or street lines, the relationship of such Wind Farm improvements by distances to the perimeter of the Border Parcels, (f) the location of the Border Parcels, (g) all flood zone designations in respect of the Premises, (h) any gaps, gores or overlaps between real property interests which comprise the Premises and whether such real property interests are contiguous, and (i) such other matters and details as may reasonably be requested by such parties; provided that, notwithstanding any of the foregoing, the survey may be based on aerial photograph of the Premises and, accordingly, may not satisfy the standards for accuracy of an ALTA survey with respect to precision of measurement.


" Ancillary Border Parcels" means Border Parcels that are not required for a Wind Farm to comply with any set-back requirements or other Applicable Laws.


" Applicable Laws" means, as to any Person, any treaty, constitution, law, statute, ordinance, judgment, order, writ, injunction, decree, award, rule, regulation or other directive which is legally binding and has been enacted, issued or promulgated by any Governmental


3


Authority, in each case, applicable to or binding upon such Person or any of its property, or to which such Person or any of its property is subject, including any Hazardous Substances Law.


" Approved Investor" means (a) an Institutional Investor whose long-term senior unsecured indebtedness is rated " A-" or higher by Standard & Poor' s Rating Services or " A3" or higher by Moody' s Investors Service, Inc.; (b) an Institutional Investor lacking such credit rating if, at such Institutional Investor' s option, (i) one of its Affiliates which has the minimum credit rating set forth above has provided (A) an irrevocable and unconditional guaranty in favor of the Company of such Institutional Investor' s pro rata share (based on the Class A Units to be acquired by it) of the obligations to the Company under this Agreement, the LLC Agreement and the ACCA and (B) an irrevocable and unconditional guaranty in favor of the Class B Equity Investor of such Institutional Investor' s pro rata share (based on the Class A Units to be acquired by it) of its obligations to the Class B Equity Investor under this Agreement, the LLC Agreement and the ACCA, or (ii) such Institutional Investor has provided a letter of credit issued by an entity which has the minimum credit rating set forth above or any other cash-collateralized financial instrument (in each of the case, in form and substance reasonably acceptable to the Company, and, so long as the Company has any Debt Obligations, the Administrative Agent) securing the Institutional Investor' s obligations described in the preceding clause (i); or (c) an Institutional Investor that has deposited cash in escrow (on terms and conditions reasonably acceptable to the Company and, so long as the Company has any Debt Obligations, the Administrative Agent) to secure its obligations described in clause (i) of the preceding clause (b).


" Assets" means, with respect to any Person, all right, title and interest of such Person in land, properties, buildings, improvements, fixtures, foundations, assets and rights of any kind, whether tangible or intangible, real, personal or mixed, including contracts, equipment, systems, books and records, proprietary rights, intellectual property, Governmental Approvals, rights under or pursuant to all warranties, representations and guarantees, cash, accounts receivable, deposits and prepaid expenses.


" Assumptions" means the assumptions and other inputs used in the Base Case Model (including those set forth in Annex 7-A , the Fixed Pricing Assumptions and the Restricted Pricing Assumptions), as such assumptions and other inputs (other than Fixed Pricing Assumptions) are subject to adjustment pursuant to Section 2.01 . For the avoidance of doubt, none of the Fixed Pricing Assumptions set forth on Annex 7-B shall be subject to any such adjustment pursuant to Section 2.01 , or otherwise in accordance with the terms hereof and the Restricted Pricing Assumptions set forth on Annex 7-C shall only be subject to adjustment pursuant to Section 2.01 or otherwise within the ranges specified on Annex 7-C .


" Base Case Model" means the financial projections with respect to the Wind Farms attached hereto as Annex 6 , as may be revised pursuant to the terms hereof.


" Border Parcels" means parcels of land within a Wind Farm Site on which no improvements, roadways or transmission equipment comprising any portion of a Wind Farm are located.


" Business Day" means any day other than a Saturday, a Sunday or any other day on which banks are authorized to be closed in New York, New York.


4


" Change of Law" means (i) any amendment or change enacted into the Code, (ii) any amendment or change to the Treasury Regulations (including the issuance or promulgation of temporary regulations), (iii) any legally binding administrative pronouncement or other ruling or guidance (including guidance from the IRS or the U.S. Department of Treasury), (iv) any legally binding executive order, or (v) any decision of a federal court that has not been reversed by a higher federal court.


" Charter Documents" means, with respect to any Person (other than an individual), (a) if a corporation, the articles or certificate of incorporation and the bylaws; (b) if a general partnership, the partnership agreement and any statement of partnership; (c) if a limited partnership, the limited partnership agreement and the certificate of limited partnership; (d) if a limited liability company, the articles of organization and operating agreement; (e) if another type of Person, any other charter or similar document adopted or filed in connection with the creation, formation or organization of the Person; and (f) any amendment or supplement to any of the foregoing.


" Class A Capital Commitment" means the commitment of each Class A Equity Investor to contribute capital to the Company in the amount set forth in Annex 1 as its " Class A Capital Commitment;" provided that such amount shall not include the amounts contributed under the ACCA.


" Class A Engineer" means Sigma Energy Solutions.


" Class A Equity Contributions Guaranty" means, with respect to any Approved Investor meeting such definition only by means of subclause (b)(i) of such definition, a guaranty in favor of the Company in substantially the form attached hereto as Annex 10-A , relating to the obligations of such Approved Investor to the Company under this Agreement, the LLC Agreement and the ACCA.


" Class A Equity Guarantees" means the Class A Equity Contributions Guaranty and the Class A Equity Indemnity Guaranty; and each of them is a " Class A Equity Guaranty ."


" Class A Equity Indemnity Guaranty" means, with respect to any Approved Investor meeting such definition only by means of subclause (b)(i) of such definition, a guaranty in favor of the Class B Equity Investor in substantially the form attached hereto as Annex 10-B, relating to the obligations of such Approved Investor to the Class B Equity Investor under this Agreement, the LLC Agreement and the ACCA.


" Class A Equity Investors" means the Equity Investors who purchase Class A Units.


" Class A Indemnified Party" has the meaning set forth in Section 6.02(a) .


" Class A Indemnifying Party" has the meaning set forth in Section 6.02(b) .


" Class A Unit" means a unit representing a membership interest in the Company having the rights, preferences and designations provided for such class in the LLC Agreement.


5


" Class B Equity Investor" means Noble Holdco.


" Class B Unit" means a unit representing a membership interest in the Company having the rights, preferences and designations provided for such class in the LLC Agreement.


" Code" means the Internal Revenue Code of 1986, as amended.


" Collateral Documents" means the documents that are listed in Sections I, J and K of Annex 3-C .


" Company" means Noble Environmental Power 2008 Hold Co., LLC, a Delaware limited liability company.


" Company Pledge Agreement" means that certain Pledge Agreement, dated as of the date hereof, by Noble Holdco in favor of the Administrative Agent, concerning the membership interests of Noble Holdco in the Company as required by the Financing Agreement.


" Consent to Assignment" has the meaning set forth in Section 5.06 .


" Contractors" means TSA Contractor, EPC Contractor, and O&M Contractor.


" Debt Financing" has the meaning set forth in the recitals to this Agreement.


" Debt Financing Documents" means the documents that are listed in Annex 3-C .


" Debt Obligations" has the meaning assigned to the term " Obligations" in the Financing Agreement.


" Disqualified Transferee" means any of the Persons listed on Annex 20 .


" Encumbrance" means any lien (statutory or otherwise), mortgage, deed of trust, claim, option, lease, easement, right of way, charge, pledge, security interest, hypothecation, assignment, use restriction, reservation, or other encumbrance of any kind or nature whatsoever, whether voluntary or involuntary, choate or inchoate (including any agreement to give any of the foregoing, and any conditional sale or other title retention agreement).


" Environmental C ...