Exhibit 10.51

 

Execution Version

 

 

 

DEPOSITORY AND CONTROL AGREEMENT

 

 

Among

 

 

DALLAS CLEAN ENERGY MCCOMMAS BLUFF, LLC

 

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Depository Bank

 

and as Securities Intermediary

 

 

And

 

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

 

 

Dated as of January 1, 2011

 

 

NOTE: PURSUANT TO SECTION 5.15 OF THE LOAN AGREEMENT AND SECTIONS 2.2(B) AND
2.3(B) OF THE INDENTURE, CERTAIN PROVISIONS IN THIS DEPOSITORY AGREEMENT RELATED
SOLELY AND EXCLUSIVELY TO THE WEEKLY INTEREST RATE PERIOD SHALL HAVE NO FORCE
AND EFFECT.

 

 

 

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DEPOSITORY AND CONTROL AGREEMENT

 

THIS DEPOSITORY AND CONTROL AGREEMENT, dated as of January 1, 2011, among Dallas
Clean Energy McCommas Bluff, LLC, a Delaware limited liability company (the
“Borrower”), The Bank of New York Mellon Trust Company, N.A., a national banking
association, as Trustee under that certain Trust Indenture dated as of
January 1, 2011 between said Trustee and Mission Economic Development
Corporation (in such capacity, the “Trustee”), and The Bank of New York Mellon
Trust Company, N.A., a national banking association, in its capacity as
depository bank and as securities intermediary (the “Depository Bank”),

 

W I T N E S S E T H :

 

WHEREAS, the Borrower has undertaken the acquisition, construction,
installation, improving, and/or equipping of certain solid waste disposal
facilities located in Dallas, Texas;

 

WHEREAS, Mission Economic Development Corporation (the “Issuer”) will issue its
Solid Waste Disposal Revenue Bonds (Dallas Clean Energy McCommas Bluff, LLC
Project) Series 2011 in the aggregate principal amount of $40,200,000 (the
“Bonds”) for the purpose of making a loan to the Borrower pursuant to a Loan
Agreement, dated as of January 1, 2011 (the “Loan Agreement”), and which funds
will be used by Borrower for the purpose of providing funds to acquire,
construct, install, improve and/or equip the Project;

 

WHEREAS, to secure its loan and other obligations under the Loan Agreement, the
Borrower will mortgage, pledge and collaterally assign, among other things, the
Project Revenues (as defined in the Indenture) as security therefor;

 

WHEREAS, the Authority will enter into a Trust Indenture, dated as of January 1,
2011 (the “Indenture”), with the Trustee, pursuant to which the Bonds will be
issued;

 

WHEREAS, the parties hereto have determined to enter into this Agreement to
provide for the deposit and disbursement of the funds received from the Gas Sale
Agreements (as defined in the Indenture) and Project Revenue Generating
Agreements;

 

WHEREAS, pursuant to that certain Consent and Agreement, dated as of January 1,
2011 (the “Consent Agreement”), among Shell Energy North America (US), L.P.
(“Shell”), the Borrower, the Trustee and the Depository Bank, Shell has agreed
to make payments under the Shell Gas Sale Agreement (as defined in the
Indenture) directly to the Depository Bank;

 

WHEREAS, the parties hereto intend that the Trustee have control of the Deposit
Accounts (as defined below) within the meaning of Texas Business & Commerce Code
Section 9.104 so that the Trustee has a perfected security interest in the
Deposit Accounts; and

 

WHEREAS, the parties hereto intend that the Trustee have control of the Surplus
Account (as defined below) within the meaning of Texas Business & Commerce Code
Section  9.106 so that the Trustee has a perfected security interest in the
Surplus Account;

 

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NOW, THEREFORE, in consideration of the premises and the respective
representations and covenants herein contained, the parties hereto agree as
follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1.                                   DEFINITION OF TERMS.  Unless the
context otherwise requires, the terms used in this Agreement shall have the
meanings specified in Section 1.1 of the Indenture, as originally executed or as
it may from time to time be supplemented or amended as provided therein.  In
addition, the following terms shall have the following meanings:

 

The term “Deposit Account” means each of the Revenue Fund, the Operation and
Maintenance Expense Account, the Debt Service Account, the Debt Service Reserve
Account, the Rebate Account, the Administrative Expenses Account and the Capital
Repair and Replacement Reserve Account, as such terms are defined in
Section 3.1(a).

 

The term “Deposit Account Notice of Exclusive Control” has the meaning set forth
in Section 3.7(a).

 

The term “Surplus Account Notice of Exclusive Control” has the meaning set forth
in Section 3.7(b).

 

Section 1.2.                                   NUMBER AND GENDER.  The singular
form of any word used herein, including the terms defined in Section 1.01 of the
Indenture, shall include the plural, and vice versa.  The use herein of a word
of any gender shall include all genders.

 

Section 1.3.                                   ARTICLES, SECTIONS, ETC.  Unless
otherwise specified, references to Articles, Sections and other subdivisions of
this Agreement are to the designated Articles, Sections and other subdivisions
of this Agreement.  The words “hereof,” “herein,” “hereunder” and words of
similar import refer to this Agreement as a whole.  The headings or titles of
the several articles and sections, and the table of contents appended to copies
hereof, shall be solely for convenience of reference and shall not affect the
meaning, construction or effect of the provisions hereof.

 

ARTICLE II

 

PAYMENT OF PROJECT REVENUES

 

Section 2.1.                                   PAYMENT OF PROJECT REVENUES TO
DEPOSITORY BANK.  The Borrower has directed Shell, pursuant to the Consent
Agreement, to pay the Project Revenues, payable monthly pursuant to the Shell
Gas Sale Agreement, directly to the Depository Bank.  The Depository Bank hereby
agrees to receive the Project Revenues and distribute them as provided herein. 
The Depository Bank shall have no responsibility or liability to collect the
Project Revenues.

 

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ARTICLE III

 

FUNDS AND ACCOUNTS

 

Section 3.1.                                   ESTABLISHMENT OF FUNDS AND
ACCOUNTS.

 

(a)                                  The Depository Bank has established and
shall maintain with itself the following Funds and Accounts:

 

(1)                                  a deposit account in the name of the
Trustee currently numbered 546178 and titled “Revenue Fund” (as such deposit
account may be renumbered or retitled, the “Revenue Fund”);

 

(2)                                  a deposit account in the name of the
Trustee currently numbered 546193 and titled “Operation and Maintenance Expense
Account” (as such deposit account may be renumbered or retitled, the “Operation
and Maintenance Expense Account”);

 

(3)                                  a deposit account in the name of the
Trustee currently numbered 546182 and titled “Debt Service Account” (as such
deposit account may be renumbered or retitled, the “Debt Service Account”);

 

(4)                                  a deposit account in the name of the
Trustee currently numbered 546183 and titled “Debt Service Reserve Account” (as
such deposit account may be renumbered or retitled, the “Debt Service Reserve
Account”);

 

(5)                                  a deposit account in the name of the
Trustee currently numbered 546192 and titled “Rebate Account” (as such deposit
account may be renumbered or retitled, the “Rebate Account”);

 

(6)                                  a deposit account in the name of the
Trustee currently numbered 546195 and titled “Administrative Expenses Account”
(as such deposit account may be renumbered or retitled, the “Administrative
Expenses Account”);

 

(7)                                  a deposit account in the name of the
Trustee currently numbered 546196 and titled “Capital Repair and Replacement
Reserve Account” (as such deposit account may be renumbered or retitled, the
“Capital Repair and Replacement Reserve Account”); and

 

(8)                                  a securities account in the name of the
Trustee currently numbered 546197 and titled “Surplus Account” (as such
securities account may be renumbered or retitled, the “Surplus Account”).

 

(b)                                 All the parties hereto agree that each
Deposit Account is a “deposit account” within the meaning of Chapter 9 of the
Texas Business & Commerce Code.  The Depository and the Borrower each represent,
warrant and covenant that each Deposit Account is not now, and will not at any
time be, evidenced by a certificate of deposit, passbook or

 

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instrument.  The tax identification number for the Revenue Fund and the
Operation and Maintenance Expense Account is the tax identification number of
the Borrower- 27-4298013.

 

(c)                                  All of the parties hereto agree that the
Surplus Account is a “securities account” within the meaning of Chapters 8 and 9
of the Texas Business & Commerce Code.  The tax identification number for the
Surplus Account is the tax identification number of the Borrower- 27-4298013.

 

Section 3.2.                                   DEPOSITS TO FUNDS AND ACCOUNTS.

 

(a)                                  Upon receipt thereof, the Depository Bank
shall deposit all of the Project Revenues and all moneys transferred pursuant to
Section 3.6(a) into the Revenue Fund, which funds shall, subject to Section 3.7,
be disbursed and applied only as hereinafter authorized.  On or before
December 15 of each year, the Borrower shall file with the Depository Bank its
Annual Budget for the next succeeding annual period (Exhibit A attached hereto
and labeled as “Schedule 3.2(a)”).  The Depository Bank shall use the Annual
Budget to make the applicable transfers in this Section 3.2.

 

(b)                                 Subject to Section 3.7, the Depository Bank
shall make the following transfers from the Revenue Fund in the following order
and priority.  Any transfer from the Revenue Fund must be made in the priority
listed below.  Any transfer to an account may occur only if all transfers
required to be made before the transfer in question (in the order shown below),
have been made in full and there are funds left in the Revenue Fund to make the
next transfer (in whole or in part).  Each transfer set forth in this
subsection (b) or in Sections 3.3, 3.4 and 3.5 shall take place as soon as funds
are received and available to the Depository Bank.

 

First:                     The Depository Bank shall transfer to the Operation
and Maintenance Expense Account an amount equal to the Budgeted Operating
Expenses of the Borrower for the next succeeding month (as such amount is
determined by the Borrower and presented in the Annual Budget of the Borrower
filed with the Depository Bank pursuant to Section 3.2(a) hereof unless the
Borrower shall provide to the Depository Bank the form of Exhibit B attached
hereto (labeled as “Schedule 3.2(b)”)).

 

Second:     The Depository Bank shall transfer to the Debt Service Account an
amount equal to the amount, if any, necessary to make the amount on deposit
therein equal to the sum of (i)(a) not less than the product of one-sixth (1/6)
of the amount of any interest of the Bonds Outstanding becoming due and payable
on the succeeding June 1 or December 1, as applicable, multiplied by the number
of months (starting at one) since the immediately preceding Interest Payment
Date, except for the Interest Period ending June 1, 2011 for which the amount
therein shall not be less than $192,500  and $233,574 for each of the payments
for April and May 2011, respectively, (b) in the case of Bonds then bearing
interest at a Weekly Interest Rate Period, the amount of accrued and unpaid
interest on the Bonds as of the first day of the immediately succeeding month
(calculated on the basis of the actual interest rates borne by the Bonds through
the date of such transfer and assuming the Bonds bear interest during any period
after the date of such transfer of the moneys to the Bond Fund (for which period
the interest rate borne of the Bonds shall not have been established) at an
annual rate equal to the interest rate borne on the Bonds on the date of such
transfer) and (ii) not less than the product of one-sixth

 

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(1/6) of the amount of any principal or sinking fund payment of the Bonds
Outstanding becoming due and payable on the succeeding June 1 or December 1, as
applicable, commencing December 1, 2011, multiplied by the number of months
(starting at one) since the immediately preceding Principal Payment Date, except
for the Interest Period ending June 1, 2011, for which the amount therein shall
not be less than $0 and $0 for each of the payments for April and May 2011,
respectively.

 

Third:  The Depository Bank shall transfer to the Debt Service Reserve Account
the amount, if any, necessary to cause the amount therein to equal to the Debt
Service Reserve Fund Requirement.

 

Fourth:  The Depository Bank shall transfer to the Rebate Account, the amount,
if any, as directed in writing by the Borrower in accordance with the terms
hereof and the Tax Certificate and the Loan Agreement.

 

Fifth:  The Depository Bank shall transfer to the Administrative Expenses
Account the amount, if any, necessary to pay the reasonable and necessary fees
and expenses of the Trustee, the Issuer and any professionals retained by the
Trustee, the Issuer and the Borrower related to the Bonds as directed in writing
by an Authorized Representative of the Borrower for the purpose of paying such
fees and expenses.

 

Sixth:  The Depository Bank shall transfer to the Capital Repair and Replacement
Reserve Account, the amount, if any, necessary to cause the amount therein to
equal the Capital Repair and Replacement Reserve Requirement.

 

Seventh:  The Depository Bank shall transfer to the Surplus Account any amount
remaining in the Revenue Fund after the transfers listed in clauses First
through Sixth above have been made in full.

 

Section 3.3.                                   DISBURSEMENTS FROM THE OPERATION
AND MAINTENANCE EXPENSE ACCOUNT AND CAPITAL REPAIR AND REPLACEMENT RESERVE
ACCOUNT.

 

(a)                                  Subject to Section 3.7, any amount
deposited in the Operation and Maintenance Expense Account shall be immediately
transferred by the Depository Bank to the Borrower, as directed by the Borrower
in writing.

 

(b)                                 Subject to Section 3.7, any amount deposited
in the Capital Repair and Replacement Reserve Account shall be transferred by
the Depository Bank to the Borrower (1) for the purpose of constructing or
acquiring replacements of real or personal property that have become worn out,
unusable or otherwise obsolete, (2) for the purpose of making capital
improvements to the Project, (3) for the purpose of making renewals, betterments
or other expenditures required to maintain the Project or (4) for the purpose of
reimbursing the Borrower for amounts theretofore expended by the Borrower for
the foregoing purposes, in each case on presentation to the Depository Bank of a
disbursement request from an Authorized Representative of the Borrower
accompanied by copies of bills, invoices or statements for the costs of capital
repairs and replacements to be paid or reimbursed.

 

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Section 3.4.                                   DISBURSEMENTS FROM THE DEBT
SERVICE ACCOUNT.

 

(a)                                  Subject to Section 3.7, no later than the
25th calendar day of each month, the Depository Bank shall transfer to the
Trustee for deposit in the Bond Fund established under the Indenture (i) not
less than the product of one-sixth (1/6) of the amount of any interest of the
Bonds Outstanding becoming due and payable on the succeeding June 1 or
December 1, as applicable, multiplied by the number of months (starting at one)
since the immediately preceding Interest Payment Date and (ii) in the case of
Bonds then bearing interest at a Weekly Interest Rate Period, the amount of
accrued and unpaid interest on the Bonds as of the first day of the immediately
succeeding month (calculated on the basis of the actual interest rates borne by
the Bonds through the date of such transfer and assuming the Bonds bear interest
during any period after the date of such transfer of the moneys to the Bond Fund
(for which period the interest rate borne of the Bonds shall not have been
established) at an annual rate equal to the interest rate borne on the Bonds on
the date of such transfer), except for the Interest Period ending June 1, 2011
for which the amount therein shall not be less than $192,500 and $233,574 for
each of the payments for April and May 2011, respectively.

 

(b)                                 Subject to Section 3.7, no later than the
25th calendar day of each month, the Depository Bank shall transfer to the
Trustee for deposit in the Bond Fund established under the Indenture, an amount
equal to not less than the product of one-sixth (1/6) of the amount of any
principal or sinking fund payment of the Bonds Outstanding becoming due and
payable on the succeeding June 1 or December 1, as applicable, commencing
June 1, 2011, multiplied by the number of months (starting at one) since the
immediately preceding Principal Payment Date, except for the Interest Period
ending December 1, 2011, for which the amount therein shall not be less than $0 
and $0 for each of the payments for April and May 2011, respectively.

 

(c)                                  Subject to Section 3.7, after the transfers
in subsections (a) and (b) have been made, the Depository Bank shall immediately
transfer the balance in the Debt Service Account to an account of the Borrower
as directed in writing by the Borrower.

 

Section 3.5.                                   DISBURSEMENTS FROM THE DEBT
SERVICE RESERVE ACCOUNT, REBATE ACCOUNT AND ADMINISTRATIVE EXPENSES ACCOUNT.

 

(a)                                  Subject to Section 3.7, the Depository Bank
shall transfer any amount in the Debt Service Reserve Account to the Trustee for
deposit in the Debt Service Reserve Fund established under the Indenture.

 

(b)                                 Subject to Section 3.7, the Depository Bank
shall transfer any amount in the Rebate Account to the Trustee for deposit in
the Rebate Fund established under the Indenture.

 

(c)                                  Subject to Section 3.7, the Depository Bank
shall transfer any amount in the Administrative Expenses Account necessary to
pay the reasonable and necessary fees and expenses of the Trustee, the Issuer
and any professionals retained by the Trustee, the Issuer and the Borrower
related to the Bonds as directed in writing by an Authorized Representative of
the Borrower for the purpose of paying such fees and expenses which request
shall be supported by copies of bills, invoices or statements for the costs such
fees and expenses to be paid.

 

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Section 3.6.                                   DISBURSEMENTS FROM THE SURPLUS
ACCOUNT.

 

(a)                                  Subject to Section 3.7, if on the 15th
calendar day of any month there are insufficient moneys already on deposit in
the Revenue Fund to make in full all of the transfers described in clauses First
through Seventh of Section 3.2(b), then the Depository Bank shall liquidate
investments credited to the Surplus Account in an amount sufficient to produce
cash proceeds equal to such insufficiency and transfer such cash proceeds to the
Revenue Fund.

 

(b)                                 Subject to Section 3.7, after the transfer
to be made pursuant to subsection (a) (if any such transfer has been required)
has been made, on the 30th calendar day following receipt by the Depository Bank
from the Borrower of its Covenant Compliance Certificate (as defined in this
Section 3.6(b)), the Depository Bank shall transfer to the Borrower any property
remaining to the credit of the Surplus Account but only as provided herein. No
such transfer shall be made unless (i) the Debt Service Reserve Fund is funded
in the full amount of the Debt Service Reserve Fund Requirement, (ii) the
Borrower’s Debt Service Coverage Ratio for the most recent four calendar
quarters then ended equals or exceeds 1.25:1 and (iii) the Borrower’s Debt
Service Coverage Ratio for the next four calendar quarters is reasonably
projected to equal or exceed 1.25:1. Notwithstanding the foregoing clauses (i),
(ii) and (iii), no such transfer of property from the Surplus Fund to the
Borrower shall be made if (x) the Borrower has committed an Event of Default or
Loan Default Event under either the Indenture or the Loan Agreement,
respectively, and (y) if after giving effect to the transfer, the Borrower’s
Minimum Days Cash on Hand (which shall be defined in accordance with GAAP) shall
be, or shall at any time be projected to be, less than the lesser of thirty-five
(35) Days Cash on Hand or one million three-hundred thousand dollars
($1,300,000).  “Covenant Compliance Certificate” shall mean that written
certification in the form of Exhibit C attached hereto (labeled as “Schedule
3.6(b)”) to be signed by an Authorized Representative of the Borrower and
delivered to the Trustee and the Depository Bank no more frequently than monthly
that shall contain (a) on a quarterly basis, for the most recently completed
calendar quarter beginning with the calendar quarter ending on December 31, 2011
and for each calendar quarter ending on each succeeding March 31, June 30,
September 30 and December 31, the Borrower’s financial statements for the most
recent calendar quarter, and (b) on a monthly basis, statements as to compliance
with clauses (i), (ii), (iii), (x)  and (y) of this Section 3.6(b); provided,
however, that with respect to clause (b)(i), no statement shall be required
until the first month immediately succeeding the month in which the Debt Service
Reserve Fund Requirement has been satisfied.

 

Section 3.7.                                   CONTROL.

 

Notwithstanding any other provision of this Agreement:

 

(a)                                  It is the intent of each of the parties
hereto that the Trustee is the customer of the Depository Bank with respect to
each Deposit Account.  The Depository Bank will comply with the Trustee’s
instructions directing disposition of funds in each Deposit Account without
further consent by the Borrower or any other person or entity.  The Depository
Bank may also comply with instructions directing the disposition of funds in the
Deposit Accounts as provided in, and make the transfers described in, Sections
3.2, 3.3, 3.4, and 3.5, until such time as the Trustee delivers a written notice
to the Depository Bank that the Trustee is thereby exercising exclusive control
over one or more Deposit Accounts (each such notice, a “Deposit Account

 

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Notice of Exclusive Control”).  After the Depository Bank receives a Deposit
Account Notice of Exclusive Control, it will (i) cease complying with
instructions concerning the one or more Deposit Accounts specified in such
Deposit Account Notice of Exclusive Control or the funds on deposit therein
originated by any person or entity other than the Trustee, and will cease making
the transfers described in Sections 3.2, 3.3, 3.4, and 3.5, and (ii) comply
solely with the Trustee’s instructions directing disposition of funds in the one
or more Deposit Accounts specified in such Deposit Account Notice of Exclusive
Control.  The Depository Bank has not agreed and will not agree with any person
or entity other than the Trustee to comply with instructions concerning any
Deposit Account or the disposition of funds on deposit therein originated by any
person or entity other than the Trustee.

 

(b)                                 It is the intent of each of the parties
hereto that the Surplus Account is a securities account of the Trustee.  The
Depository Bank will comply with entitlement orders originated by the Trustee
without further consent by the Borrower or any other person or entity.  The
Depository Bank may also comply with entitlement orders concerning the Surplus
Account as provided in, and make the transfers described in, Section 3.6, and
make the investments described in Section 4.2, until such time as the Trustee
delivers a written notice to the Depository Bank that the Trustee is thereby
exercising exclusive control over the Surplus Account (each such notice, a
“Surplus Account Notice of Exclusive Control”).  After the Depository Bank
receives a Surplus Account Notice of Exclusive Control, it will (i) cease
complying with entitlement orders concerning the Surplus Account or the property
credited thereto originated by any person or entity other than the Trustee, and
will cease making the transfers described in Section 3.6 and the investments
described in Section 4.2, and (ii) comply solely with the Trustee’s entitlement
orders concerning the Surplus Account and the property credited thereto. The
Depository Bank has not agreed and will not agree with any person or entity
other than the Trustee to comply with entitlement orders originated by any
person or entity other than the Trustee.

 

(c)                                  The Depository Bank subordinates all
security interests, encumbrances, claims and rights of setoff it may have, now
or in the future, against the Deposit Accounts, the Surplus Account, or any
property on deposit therein or credited thereto, other than for the reversal of
provisional credits.

 

(d)                                 The Depository Bank represents, warrants,
and covenants that it is as of the date hereof and shall be for the term of this
Agreement, a corporation or national bank that in the ordinary course of its
business maintains securities accounts for others and is acting in that capacity
hereunder with respect to the Surplus Account.  The Depository Bank agrees with
the parties hereto that the Surplus Account is an account to which financial
assets may be credited, and undertakes to treat the Trustee as entitled to
exercise the rights that comprise such financial assets.  The Depository Bank
agrees with the parties hereto that each item of property credited to the
Surplus Account shall be treated as a financial asset.

 

(e)                                  The Depository Bank is not and will not be
during the term of this Agreement a party to any agreement that is inconsistent
with the provisions of this Agreement.  The Depository Bank will not take any
action that is inconsistent with the provisions of this Agreement.

 

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(f)                                    The parties agree that the State of Texas
is the “bank’s jurisdiction” and the “securities intermediary’s jurisdiction”
for purposes of the Texas Business & Commerce Code.

 

ARTICLE IV

 

COMPENSATION AND INDEMNIFICATION OF DEPOSITORY BANK

 

Section 4.1.                                   COMPENSATION AND INDEMNIFICATION
OF DEPOSITORY BANK.

 

The Depository Bank shall be entitled to reasonable compensation from the
Borrower for all services rendered by it in the exercise and performance of any
of the powers and duties hereunder of the Depository Bank, which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust, and the Borrower will be required to pay or
reimburse the Depository Bank, upon its written request, for all expenses,
disbursements and advances incurred or made by the Depository Bank in accordance
with any of the provisions of this Agreement (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) except any such expense, disbursement or
advance as may arise from its negligence or bad faith.  The Borrower will also
be required to indemnify the Depository Bank for, and to hold it harmless
against, any loss, liability, expense or advance incurred or made without
negligence or bad faith on the part of the Depository Bank, arising out of or in
connection with the exercise and performance of any of the powers and duties
hereunder of the Depository Bank, including the costs and expenses of defending
itself against any claim of liability in the premises.  Notwithstanding the
foregoing, the Depository Bank shall make timely transfers, deposits and
payments as provided herein, and shall comply with the instructions and
entitlement orders of the Trustee as provided herein, without seeking any prior
indemnification from the Borrower.

 

Section 4.2.                                   INVESTMENTS.  Subject to
Section 3.7 and prior to the receipt of a Surplus Account Notice of Exclusive
Control, the Depository Bank shall invest any moneys held to the credit of the
Surplus Account in Investment Securities upon instructions of the Borrower. Any
Investment Security purchased pursuant to this section shall mature at such a
time as will permit funds to be available to make the transfers required by
Section 3.6.

 

The Depository Bank shall be entitled to the protections and limitations from
liability afforded to the Trustee under Article VIII of the Indenture.

 

ARTICLE V

 

MISCELLANEOUS

 

Section 5.1.                                   NOTICES.  All notices,
certificates or other communications shall be deemed sufficiently given on the
second day following the day on which the same have been mailed by first class
mail, postage prepaid, addressed as follows:

 

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To the Depository Bank,

The Bank of New York Mellon Trust Company, N.A.

the Securities Intermediary

700 South Flower Street, Suite 500

or the Trustee:

Los Angeles, California 90017-4104

 

Attn: Corporate Trust Department — Matthew Moon

 

Telephone: (213) 630-6257

 

Facsimile: (213) 630-6215

 

 

To the Borrower:

Dallas Clean Energy McCommas Bluff, LLC

 

c/o Cambrian Energy Management, LLC

 

624 S. Grand Avenue, Suite 2420

 

Los Angeles, California 90017-3325

 

Attention: Evan Williams

 

Telephone: (213) 628-8312

 

Facsimile: (213) 488-9890

 

The Depository Bank, the Trustee and the Borrower may, by notice given
hereunder, designate any different or additional addresses to which subsequent
notices, certificates or other communications shall be sent.

 

Section 5.2.            SEVERABILITY.  If any provision of this Agreement shall
be held or deemed to be, or shall in fact be, illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to
any extent whatever.

 

Section 5.3.            EXECUTION OF COUNTERPARTS.  This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.

 

Section 5.4.            AMENDMENTS, CHANGES AND MODIFICATIONS.  Except as
otherwise provided in this Agreement, subsequent to the initial issuance of
Bonds and prior to their payment in full, or provision for such payment having
been made as provided in the Indenture, this Agreement may not be effectively
amended, changed, modified, altered or terminated without the written consent of
each of the parties hereto.

 

Section 5.5.            GOVERNING LAW; ENTIRE AGREEMENT; LEGAL FEES.  This
Agreement shall be governed by and construed in accordance with the Constitution
and laws of the State of Texas applicable to contracts made and performed in the
State of Texas.  The parties agree that the terms and conditions of this
Agreement supersede those of all previous agreements between the parties, and
that this Agreement, together with the documents referred to in this Agreement,
contains the entire agreement between the parties hereto.  In the event of a
dispute between the parties under this Agreement, the losing party in such
dispute shall pay all costs and expenses incurred by the prevailing party in
connection therewith, including but not limited to reasonable attorneys fees.

 

10

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Section 5.6.            AUTHORIZED BORROWER REPRESENTATIVE.  Whenever under the
provisions of this Agreement the approval of the Borrower is required or the
Borrower is required to take some action at the request of the Depository Bank,
such approval or such request shall be given on behalf of Borrower by the
Authorized Representative of the Borrower, and the Depository Bank shall be
authorized to act on any such approval or request and no party hereto shall have
any complaint against any other or against the Depository Bank as a result of
any such action taken.

 

Section 5.7.            TERM OF THE AGREEMENT.  This Agreement shall be in full
force and effect upon the execution hereof and shall continue in effect as long
as any of the Bonds are outstanding or the Depository Bank holds any moneys
under this Agreement, whichever is later.

 

Section 5.8.            BINDING EFFECT.  This Agreement shall inure to the
benefit of and shall be binding upon the Depository Bank, the Borrower and the
Trustee and their respective successors and assigns.

 

Section 5.9.            RESIGNATION AND REMOVAL OF DEPOSITORY BANK AND
APPOINTMENT OF SUCCESSOR DEPOSITORY BANK.  The Depository Bank may at any time
resign by giving written notice to the other parties hereto.  Upon receiving
such notice of resignation, the Borrower shall appoint a successor depository
bank, by an instrument in writing, one copy of which instrument shall be
delivered to the resigning depository bank, and one copy to the successor
depository bank.  If no successor depository bank shall have been so appointed
and have accepted appointment within thirty days after the giving of such notice
of resignation, the resigning depository bank may petition any court of
competent jurisdiction for the appointment of a successor depository bank or the
Borrower may petition any such court for the appointment of a successor
depository bank.  Such court may thereupon, after such notice, if any, as it may
deem proper and may prescribe, appoint a successor depository bank.

 

The Borrower may remove the Depository Bank and appoint a successor depository
bank, by an instrument in writing, one copy of which instrument shall be
delivered to the Depository Bank so removed, and one copy to the successor
depository bank, or petition any court of competent jurisdiction for the removal
of the Depository Bank, as the case may be, and the appointment of a successor
depository bank.  Such court may thereupon, after such notice, if any, as it may
deem proper and may prescribe, remove the depository bank, and appoint a
successor depository bank.

 

Any resignation or removal of the Depository Bank, as the case may be, and
appointment of a successor depository bank shall become effective upon
acceptance of appointment by the successor depository bank.  Upon such
acceptance, the retiring Depository Bank shall immediately transfer to the
successor depository bank all money and other property on deposit in the Deposit
Accounts and the Surplus Account or credited thereto.

 

Any successor to the Trustee under the Indenture shall succeed to the Trustee’s
rights and obligations under this Agreement.

 

Section 5.10.          SURVIVAL OF FEE OBLIGATION. The right of the Depository
Bank to receive any fees or be reimbursed for any expenses incurred pursuant to
this Agreement, and the right of the Depository Bank to be protected from any
liability as provided in this Agreement, shall survive the termination of this
Agreement and the resignation and removal of the Depository Bank.

 

11

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Section 5.11.          NO PETITION.  The Depository Bank and the Trustee, for
itself and for the Holders of the Bonds, each agree that it will not, prior to
the date that is one year and one day after the payment in full of all Bonds
Outstanding, institute against, or join with any other person in instituting
against, the Borrower any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law.  This Section shall survive the termination of
this Agreement.

 

Section 5.12.          AGREEMENT OF TRUSTEE.  The Trustee agrees, solely for the
benefit of the Borrower, that it will not deliver a Deposit Account Notice of
Exclusive Control or a Surplus Account Notice of Exclusive Control to the
Depository Bank unless the Trustee has received notice that an Event of Default
exists under the Indenture or the Loan Agreement.  The agreement set forth in
the preceding sentence is solely between the Trustee and the Borrower, and shall
in no way limit the obligation of the Depository Bank set forth in Section 3.7
above to comply with instructions and entitlement orders originated by the
Trustee.

 

[Remainder of Page Intentionally Left Blank]

 

[Signature Page Follows]

 

12

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IN WITNESS WHEREOF, THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as
Depository Bank and as Securities Intermediary, has caused this Depository and
Control Agreement to be executed in its name by a duly authorized officer, THE
BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee has caused this
Depository and Control Agreement to be executed in its name by a duly authorized
officer, and DALLAS CLEAN ENERGY MCCOMMAS BLUFF, LLC has caused this Depository
and Control Agreement to be executed in its name by a duly authorized
representative, all as of the date first above written.

 

 

 

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Depository Bank and
as Securities Intermediary

 

 

 

 

 

 

 

 

By:

/S/ Matthew Moon

 

 

 

Authorized Officer

 

 

 

 

 

 

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee

 

 

 

 

 

 

 

 

 

 

By:

/S/Matthew Moon

 

 

 

Authorized Officer

 

 

 

 

 

 

 

 

 

 

DALLAS CLEAN ENERGY

 

 

MCCOMMAS BLUFF, LLC

 

 

 

 

 

 

 

 

 

 

By:

/S/ Harrison S. Clay

 

 

 

Authorized Representative

 

 

[Depository and Control Agreement]

 

13

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Exhibit A

 

SCHEDULE 3.2(a)

 

CERTIFICATE REGARDING ANNUAL BUDGET

 

Pursuant to Section 3.2(a) of the Depository and Control Account Agreement,
dated as of January 1, 2011 (the “Depository Agreement”), among Dallas Clean
Energy McCommas Bluff, LLC (the “Borrower”), The Bank of New York Mellon Trust
Company, N.A., as Depository Bank and as Securities Intermediary, and The Bank
of New York Mellon Trust Company, N.A., as Trustee, the undersigned Authorized
Representative of the Borrower certifies as follows:

 

1.             The undersigned has read Section 3.2(a) of the Depository
Agreement and the definitions in the Indenture relating thereto.

 

2.             The undersigned is making the certifications set forth herein
based upon [his/her] review of the Indenture and the Depository Agreement.

 

3.             In the opinion of the undersigned, [he/she] has made, or caused
to be made, such examination or investigation as is necessary to enable him to
make the certifications set forth herein.

 

4.             As required by Section 3.2(a) of the Depository Agreement,
attached hereto as Attachment A is the Annual Budget.

 

5.             Capitalized terms used and not defined herein shall have the
meaning given them in the Depository Agreement.

 

[Remainder of page intentionally left blank; signature page follows.]

 

A-1

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Dated: March       , 2011

 

 

DALLAS CLEAN ENERGY

 

MCCOMMAS BLUFF, LLC

 

 

 

 

 

 

 

Authorized Representative of the Borrower

 

A-2

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ATTACHMENT A

 

Pursuant to Section 3.2 of the Depository Control Agreement

Monthly Budget of the Borrower

 

Dallas Clean Energy McCommas Bluff, LLC Project

 

 

 

[Year]

 

 

 

 

 

12 months
ending

 

 

 

Monthly

 

Dec. 31, 20

 

Deposits to Revenue Fund:

 

 

 

 

 

Revenues (a)

 

$

—

 

 

 

Total Deposits to Revenue Fund

 

$

—

 

$

—

 

 

 

 

 

 

 

Transfers from Revenue Fund:

 

 

 

 

 

(1) Operation and Maintenance Expense Account - Budgeted Operating Expenses

 

$

—

 

 

 

(2) Debt Service Account

 

—

 

 

 

(3) Debt Service Reserve Account (b)

 

—

 

 

 

(4) Rebate Account

 

—

 

 

 

(5) Administrative Expenses Account (c)

 

—

 

 

 

(6) Capital Repair & Replacement Reserve Account

 

—

 

 

 

(7) Surplus Account

 

—

 

—

 

Total Transfers from Revenue Fund

 

0

 

0

 

 

--------------------------------------------------------------------------------

(a)  Based upon cash receipts for the month from any Gas Sales Agreement,
initially the Shell Energy Agreement or other Revenues as defined in the
Indenture

(b)  Reflects  monies that will be deposited to the Debt Service Reserve
Account, from Surplus Account, if any, until such account balance reaches the
Reserve Requirement.

(c)  Includes annual fees of the Issuer and the Trustee and the annual rating
surveillance fee.

 

--------------------------------------------------------------------------------

 

Exhibit B

 

SCHEDULE 3.2(b)

 

CERTIFICATE REGARDING BUDGETED OPERATING EXPENSES

 

Pursuant to Section 3.2(b) of the Depository and Control Account Agreement,
dated as of January 1, 2011 (the “Depository Agreement”), among Dallas Clean
Energy McCommas Bluff, LLC (the “Borrower”), The Bank of New York Mellon Trust
Company, N.A., as Depository Bank and as Securities Intermediary, and The Bank
of New York Mellon Trust Company, N.A., as Trustee, the undersigned Authorized
Representative of the Borrower certifies as follows:

 

1.     The undersigned has read Section 3.2(b) of the Depository Agreement and
the definitions in the Indenture relating thereto.

 

2.             The undersigned is making the certifications set forth herein
based upon [his/her] review of the Indenture and the Depository Agreement.

 

3.             In the opinion of the undersigned, [he/she] has made, or caused
to be made, such examination or investigation as is necessary to enable him to
make the certifications set forth herein.

 

4.             Pursuant to Section 3.2(b) of the Depository Agreement, attached
hereto as Attachment A are the Budgeted Operating Expenses of the Borrower for
the succeeding month.

 

5.             The monthly Budgeting Operating Expenses submitted herewith
differ from the corresponding amount in the Annual Budget contained in Schedule
3.2(a).

 

6.             Capitalized terms used and not defined herein shall have the
meaning given them in the Depository Agreement.

 

[Remainder of page intentionally left blank; signature page follows.]

 

B-1

--------------------------------------------------------------------------------

 

Dated: March       , 2011

 

 

DALLAS CLEAN ENERGY

 

MCCOMMAS BLUFF, LLC

 

 

 

 

 

 

 

Authorized Representative of the Borrower

 

B-2

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ATTACHMENT A

 

--------------------------------------------------------------------------------

 

Exhibit C

 

SCHEDULE 3.6(b)

 

COVENANT COMPLIANCE CERTIFICATE

 

Pursuant to Section 3.6(b) of the Depository and Control Account Agreement,
dated as of January 1, 2011 (the “Depository Agreement”), among Dallas Clean
Energy McCommas Bluff, LLC (the “Borrower”), The Bank of New York Mellon Trust
Company, N.A., as Depository Bank and as Securities Intermediary, and The Bank
of New York Mellon Trust Company, N.A., as Trustee, the undersigned Authorized
Representative of the Borrower certifies as follows:

 

1.     The undersigned has read Section 3.6(b) of the Depository Agreement and
the definitions in the Indenture relating thereto.

 

2.             The undersigned is making the certifications set forth herein
based upon [his/her] review of the Indenture and the Depository Agreement.

 

3.             In the opinion of the undersigned, [he/she] has made, or caused
to be made, such examination or investigation as is necessary to enable him to
make the certifications set forth herein.

 

4.             [Attached hereto as Attachment A are the Borrower’s financial
statements for the most recent calendar quarter, ending                    ,
        .]

 

5.             [Attached hereto as Attachment A/Attachment B are calculations
evidencing that:

 

(a)           the Borrower’s Debt Service Coverage Ratio for the most recent
four calendar quarters, ending                      ,         , equals or
exceeds 1.25:1;

 

(b)           the Borrower’s Debt Service Coverage Ratio for the next four
calendar quarters, ending                        ,         is reasonably
projected to equal or exceed 1.25:1; and

 

(c)           after giving effect to the transfer to the Borrower of the
property remaining to the credit of the Surplus Account, the Borrower’s Minimum
Days Cash on Hand (defined in accordance with GAAP) will be, or will at any time
be projected to be, not less than the lesser of thirty-five (35) days cash on
hand or one million three-hundred thousand dollars ($1,300,000).

 

6.             No event or condition that constitutes, or with notice or lapse
of time, or both, would constitute, an Event of Default or a Loan Default Event
under either the Indenture or the Loan Agreement, respectively, exists at the
date hereof.]

 

7.             Capitalized terms used and not defined herein shall have the
meaning given them in the Depository Agreement.

 

C-1

--------------------------------------------------------------------------------

 

Dated: March       , 2011

 

 

DALLAS CLEAN ENERGY

 

MCCOMMAS BLUFF, LLC

 

 

 

 

 

 

 

Authorized Representative of the Borrower

 

C-2

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ATTACHMENT A

 

--------------------------------------------------------------------------------

 

[ATTACHMENT B]

 

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