Exhibit 10.2
REVOLVING CREDIT AGREEMENT
     THIS REVOLVING CREDIT AGREEMENT (this “Agreement”) is made as of
February 12, 2008, by and among RENEGY HOLDINGS, INC., a Delaware corporation
(“Borrower”), ROBERT M. WORSLEY, an Arizona resident, CHRISTI M. WORSLEY, an
Arizona resident and the Robert M. Worsley and Christi M. Worsley Revocable
Trust (together with Christi M. Worsley and Robert M. Worsley, “Lender”).
     Borrower and Lender agree as follows:
     1. The Revolving Credit. Lender agrees, subject to the terms and conditions
hereof, to lend to Borrower from time to time from the Initial Draw Date (as
defined in Section 9(a) until the Termination Date (as defined in Section 11)
(the “Commitment Period”), such sums (each an “Advance” and collectively, the
“Advances”) not to exceed $6,000,000 in the aggregate at any one time
outstanding (the “Credit”) as Borrower may request from time to time. The Credit
is subject to the terms and conditions of this Agreement and the Revolving
Credit Note (the “Note”), which, together with this Agreement, evidences the
Credit. The Note shall be in the form attached hereto as Exhibit A. Proceeds of
the Credit are to be used for general corporate purposes of Borrower, including,
without limitation, expenses related to the biomass power plant under
construction in Snowflake, Arizona.
     2. Reduction of Credit. Borrower shall have the right, upon at least one
(1) Business Day’s (as defined in Section 5), to terminate in whole or reduce in
part the unused portion of the Credit; provided that no reduction shall be
permitted if, after giving effect thereto, and to any prepayment made therewith,
the outstanding and unpaid principal amount of the Advances shall exceed the
Credit. The Credit once reduced or terminated may not be reinstated.
     3. Conditions to all Loans. The obligation of Lender to make any Advance is
subject to its satisfaction of the following conditions precedent:
          (a) Delivery of Note. Borrower shall have delivered the Note to
Lender, properly executed by Borrower.
          (b) No Event of Default. No Event of Default (as defined in
Section 10) caused by Borrower under this Agreement shall have occurred and be
continuing on the date the Advance is to be made or after giving effect to the
Advance to be made.
          (c) Borrowing Certificate. Lender shall have received, at least three
(3) Business Days prior to the applicable Advance, a completed borrowing request
from Borrower in the form attached hereto as Exhibit B, signed by a duly
authorized officer of Borrower (other than Robert M. Worsley). Such borrowing
certificate signed by Borrower shall constitute a request for an Advance by
Borrower and shall be binding on Borrower.

 

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          (d) Representations and Warranties. The representations and warranties
of Borrower contained in this Agreement shall be true and correct in all
material respects as of the date of each Advance.
     4. Payment Schedule. From the Initial Draw Date through March 31, 2009,
accrued and unpaid interest shall accrue and not be due or payable until the
Termination Date. From March 31, 2009 through the Termination Date, accrued and
unpaid interest shall be due and payable in arrears on the first (1st) Business
Day of each month commencing on May 1, 2009. The entire outstanding principal
balance of the Advances made under the Credit then unpaid, together with all
accrued and unpaid interest and all other amounts payable hereunder shall be due
and payable in full on the Termination Date.
     5. Interest. The unpaid principal balance of the Advances made under the
Credit from day to day outstanding shall bear interest at a fluctuating rate of
interest per annum equal to the Prime Rate (as defined below). The “Prime Rate”
shall mean a fluctuating rate of interest per annum equal to the Prime Rate, as
published by The Wall Street Journal as determined for each Business Day at
approximately 9:00 a.m. Arizona time two (2) Business Days prior to the date in
question. A “Business Day” is a day on which banks in Arizona are open for
business. Interest shall be computed for the actual number of days which have
elapsed, on the basis of a 365-day year.
     6. Prepayments. Borrower may upon at one (1) Business Day’s notice to
Lender, prepay the Credit in whole or in part with accrued interest to the date
of such prepayment on the amount prepaid. Amounts repaid may be reborrowed.
     7. Method of Payment. Borrower shall make each payment under this Agreement
and under the Note not later than 5:00 p.m. Arizona time on the date when due in
lawful money of the United States to the bank account specified in writing to
Borrower by Lender in immediately available funds.
     8. Representations and Warranties. Borrower and Lender make the following
representations and warranties:
          (a) Good Standing and Authority of Borrower. Borrower is duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Borrower has corporate power and authority to transact the business in
which it is engaged; is duly licensed or qualified and in good standing in each
jurisdiction in which the conduct of business or ownership of property requires
such licensing or such qualification, except where the failure to be so licensed
or qualified could not reasonably be expected to have a material adverse effect
on the business or financial condition of Borrower; and has all necessary
corporate power and authority to enter into this Agreement and to execute,
deliver and perform this Agreement, the Note and any other document executed in
connection with this Agreement to which it is a party, all of which have been
duly authorized by all proper and necessary corporate and shareholder action, as
appropriate. This Agreement and the Note constitute the legal, valid and binding
obligations of Borrower, enforceable in accordance with their respective terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforceability of creditors’
rights generally, and subject to general principles of equity which

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may limit the availability of remedies (regardless of whether enforceability is
considered in a proceeding in equity or at law). To the knowledge of Borrower,
the execution and delivery of this Agreement and the Note is not and will not be
in violation of any agreement to which Borrower is a party (except for any
violation which would not have a material adverse effect on Borrower), and no
consent is required for Borrower to enter into or perform this Agreement or to
execute and deliver the Note (except for any consent which would not have a
material adverse effect on Borrower).
          (b) Authority of Lender. Lender has the authority to deliver and
perform this Agreement, the Note and any other document executed in connection
with this Agreement to which it is a party, all of which have been duly
authorized by all proper and necessary action. This Agreement and the Note
constitute the legal, valid and binding obligations of Lender, enforceable in
accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforceability of creditors’ rights generally, and subject to
general principles of equity which may limit the availability of remedies
(regardless of whether enforceability is considered in a proceeding in equity or
at law). To the knowledge of Lender, the execution and delivery of this
Agreement and the Note is not and will not be in violation of any agreement to
which Lender is a party (except for any violation which would not have a
material adverse effect on Lender), and no consent is required for Lender to
enter into or perform this Agreement or to execute and deliver the Note (except
for any consent which would not have a material adverse effect on Lender).
     9. Covenants.
          (a) Lender Covenants.
               (i) On or before March 31, 2008 (the “Initial Draw Date”), Lender
shall have a minimum of $6,000,000 of the Credit available in cash for
Advance(s) to Borrower.
               (ii) If, by March 5, 2008, Lender is unable to establish for
Borrower a line of credit for $6,000,000 with a bank or other financial
institution reasonably acceptable to Borrower on commercially reasonable terms
that are acceptable to Borrower in its reasonable discretion, and which shall be
personally guaranteed by Lender, Lender agrees to use its best efforts to grant
to Borrower a security interest in Lender’s personal assets in order to secure
Lender’s obligations to make Advances, pursuant to this Agreement.
          (b) Borrower Covenants.
               (i) So long as any part of the Credit is unpaid, or there exists
any commitment of Lender to make Advances Borrower will maintain its corporate
existence in good standing and remain or become duly licensed or qualified and
in good standing in each jurisdiction in which the conduct of its business or
ownership of its property requires such qualification or licensing except where
the failure to do so could not reasonably be expected to have a material adverse
effect on the business of Borrower.
               (ii) Borrower agrees to release any security interest in Lender’s
assets granted in accordance with Section 9(a)(ii), upon the full funding of the
Advances.

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     10. Events of Default. The occurrence of any one or more of the following
events shall constitute an event of default (each an “Event of Default”):
          (a) Nonpayment. Nonpayment when due, whether by acceleration or
otherwise, of principal of or interest on the Note or of any cost or expense
provided for in this Agreement, within five (5) Business Days after written
notice thereof by Lender to Borrower.
          (b) Covenants. Default in the observance of covenants or agreements
contained in this Agreement or the Note, which is not remedied within thirty
(30) days after written notice thereof by Lender to Borrower; provided, however,
such right to cure is not available to Lender for a default of Lender’s
covenants in Section 9(a), the default of which is immediate and without cure,
without the consent of Lender.
          (c) Financial Condition. The filing by or against Borrower of a
request or petition for liquidation, reorganization, arrangement adjustment of
debts, adjudication as a bankrupt, relief as a debtor or other relief under the
bankruptcy, insolvency or similar laws of the United States or any state or
territory thereof or any foreign jurisdiction, now or hereafter in effect (but
in the case of a filing against Borrower, only if such filing is not vacated or
bonded within sixty (60) days of filing); the making of any general assignment
by Borrower for the benefit of creditors; the appointment of a receiver or
trustee for Borrower or for any assets of any of them, including, without
limitation, the appointment of or taking possession by a “custodian,” as defined
in the Federal Bankruptcy Code; or the institution by or against Borrower of any
other type of insolvency proceeding (under the Federal Bankruptcy Code or
otherwise) or of any formal or informal proceeding for the dissolution or
liquidation of, settlement of claims against or winding up of affairs of
Borrower (but in the case of any involuntary proceeding described in this
paragraph instituted against Borrower, only if such proceeding is not vacated or
bonded within sixty (60) days of such institution).
          (d) Representations. If any representation or warranty made by
Borrower in this Agreement proves to have been false in any material respect at
the time as of which the facts therein set forth were stated or certified.
     11. Termination. This Agreement shall terminate at such time and on such
date (such date being referred to as the “Termination Date”) that is the
earliest of:
          (a) The date that Borrower obtains alternative debt or equity
financing in the amount of $6,000,000 or greater in the aggregate;
          (b) The date Lender terminates this Agreement in accordance with
Section 12 as a result of an Event of Default; and
          (c) March 31, 2010.
     12. Acceleration. Upon the termination of the Agreement pursuant to Section
11(a) and (c), any obligation of Lender to make Advances shall cease
immediately, and the Note shall become immediately due and payable, without
presentation, demand or notice of any kind to Borrower. Upon the happening of
any Event of Default, Lender may, upon notice to Borrower, terminate any
obligation of Lender to make Advances and declare the Note immediately due and

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payable, without presentation, demand or further notice of any kind to Borrower.
Notwithstanding the foregoing, any acceleration herein shall be subject to any
applicable grace periods provided for in this Agreement.
     13. Miscellaneous.
          (a) Amendments and Waivers. No modification, rescission, waiver,
release, or amendment of any provision of this Agreement shall be made except by
a written agreement signed by a duly authorized officer of Borrower (other than
Robert M. Worsley) and Lender and consented to by the Special Committee of the
Board of Directors of Borrower.
          (b) Delays and Omissions. No delay or omission by Lender in exercising
any right or remedy hereunder or with respect to the Credit shall operate as a
waiver thereof or of any other right or remedy, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right or remedy. Lender may remedy any default by Borrower
hereunder or with respect to the Credit in any reasonable manner without waiving
the default remedied and without waiving any other prior or subsequent default
by Borrower, and shall be reimbursed for its expenses in so remedying such
default. All rights and remedies of Lender hereunder, under any other agreement
and otherwise are cumulative; if any provision of this Agreement is inconsistent
with any provision of any other agreement between Lender and Borrower, the
provisions of this Agreement shall control.
          (c) Successors and Assigns. Borrower and Lender as used herein shall
include the legal representatives, successors, and assigns of those parties.
Notwithstanding the foregoing, neither party may assign or transfer this
Agreement, the Note, or any rights under the Note or this Agreement without the
prior written consent of the other party.
          (d) Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to:
     If to Lender, addressed to:
Robert and Christi Worsley
3418 N. Val Vista Drive
Mesa, Arizona 85213
Fax: (480) 718-7977

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     If to Borrower, addressed to:
Renegy Holdings, Inc.
301 West Warner Road, Suite 132
Tempe, AZ 85284-2963
Attention: Chief Financial Officer
Fax: 480-556-5500
     with a copy to:
Squire, Sanders & Dempsey L.L.P.
Two Renaissance Square
40 North Central Avenue, Suite 2700
Phoenix, Arizona 85004
Attention: Christopher D. Johnson, Esq.
Fax: (602) 253-8129
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
          (e) Generally Accepted Accounting Principles. Any financial
calculation to be made in connection with the provisions of this Agreement shall
be in accordance with generally accepted accounting principles consistently
applied each year and from year to year.
          (f) Severability. The invalidity, illegality or unenforceability of
any provision of this Agreement shall not affect or impair the validity,
legality or enforceability of the remainder of this Agreement, and to this end,
the provisions of this Agreement are declared to be severable.
          (g) Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the substantive laws (other than conflict laws)
of the State of Delaware.
          (h) Jurisdiction. Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby shall be brought
exclusively in the Delaware Court of Chancery and any state appellate court
therefrom (or, if the Delaware Court of Chancery declines to accept jurisdiction
over a particular matter, in any federal court located in the State of Delaware
or any Delaware state court), and each of the parties hereto hereby consents to
the exclusive jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court.

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          (i) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO
SO, TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING HEREUNDER.
          (j) Enforcement. The Special Committee of Borrower, acting on behalf
of Borrower, shall have the power to enforce this Agreement and the Note against
Lender to the full extent of Lender’s obligations under this Agreement and the
Note.

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     THE PARTIES HERETO have signed this Agreement on the date written above.

                  LENDER:    
 
                ROBERT M. WORSLEY    
 
                /s/ Robert M. Worsley              
 
                CHRISTI M. WORSLEY    
 
                /s/ Christi M. Worsley              
 
                ROBERT M. WORSLEY AND CHRISTI M. WORSLEY REVOCABLE TRUST    
 
           
 
  By:   /s/ Robert M. Worsley    
 
           
 
      Name: Robert M. Worsley    
 
      Its: Co-Trustee    
 
           
 
  By:   /s/ Christi M. Worsley    
 
           
 
      Name: Christi M. Worsley    
 
      Its: Co-Trustee    
 
                BORROWER:    
 
                RENEGY HOLDINGS, INC.    
 
           
 
  By:   /s/ Robert W. Zack    
 
           
 
      Name: Robert W. Zack    
 
      Its: Chief Financial Officer    

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EXHIBIT A TO THE REVOLVING CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
___ ___, 2008
$6,000,000
Due: March 31, 2010
1. Promise to Pay. FOR VALUE RECEIVED, RENEGY HOLDINGS, INC., a Delaware
corporation (“Borrower”), promises to pay to the order of ROBERT M. WORSLEY, an
Arizona resident, CHRISTI M. WORSLEY, an Arizona resdient, and the Robert M.
Worsley and Christi M. Worsley Revocable Trust (together with Christi M. Worsley
and Robert M. Worsley, “Lender”), the sum not to exceed of Six Million Dollars
($6,000,000.00), or so much thereof as may be from time to time outstanding,
together with all other amounts added thereto pursuant to this Note or otherwise
payable to Lender (together, the “Loan”), together with interest thereon (if
any) as hereinafter set forth, payable in lawful money of the United States of
America. Payments shall be made to Lender at such address or account as Lender
may hereafter designate in writing to Borrower.
2. Revolving Loan. This Note evidences a revolving credit, all or any part of
which may be advanced to Borrower, repaid by Borrower, and readvanced to
Borrower from time to time, subject to the other provisions hereof and the
provisions of the Revolving Credit Agreement (the “Credit Agreement”), dated as
of February 12, 2008, by and between Borrower and Lender provided that the
principal balance outstanding hereunder at any one time shall not exceed
$6,000,000.00.
3. Interest. Borrower promises to pay interest on the unpaid principal amount of
each Advance (as defined in the Credit Agreement) evidenced hereby from the date
of such Advance until the principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Credit Agreement.
4. Repayment of Advances. Borrower promises to pay the principal of any Advance
at such times and on such dates as specified in the Credit Agreement.
5. Governing Law; Severability. This Note shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without regard to
conflicts of laws principles. The invalidity, illegality or unenforceability of
any provision of this Note shall not affect or impair the validity, legality or
enforceability of the remainder of this Note, and to this end, the provisions of
this Note are declared to be severable.

 

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6. Miscellaneous.
     6.1 Credit Agreement. This Note is issued pursuant to the Credit Agreement.
In the event of any conflict between the provisions of this Note and the
provisions of the Credit Agreement, the provisions of the Credit Agreement shall
govern.
     6.2 Amendments. This Note may not be terminated or amended orally, but only
by a termination or amendment in writing signed by both Borrower and Lender and
consented to by the Special Committee of the Board of Directors of Borrower.
     6.3 Lawful Rate of Interest. In no event whatsoever shall the amount of
interest paid or agreed to be paid to Lender pursuant to this Note exceed the
highest lawful rate of interest permissible under applicable law.
     6.4 Waivers. Borrower hereby waives grace, diligence, presentment, demand,
notice of demand, dishonor, notice of dishonor, protest, notice of protest, any
and all exemption rights against the indebtedness evidenced by this Note and the
right to plead any statute of limitations as a defense to the repayment of all
or any portion of this Note, and interest thereon, to the fullest extent allowed
by law. No delay, omission and/or failure on the part of the Lender in
exercising any right and/or remedy hereunder shall operate as a waiver of such
right and/or remedy or of any other right and/or remedy of Lender.
     6.5 Captions. The captions of the Sections of this Note are for convenience
of reference only and shall not be deemed to modify, explain, enlarge or
restrict any of the provisions hereof.
     6.6 Notices. Notices shall be given under this Note in conformity with the
terms and conditions of the Credit Agreement.
     6.7 Time of Essence. Time is of the essence of this Note and the
performance of each of the covenants and agreements contained herein.
     6.8 Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, the
Credit Agreement or Note or the transactions contemplated thereby or hereby
shall be brought exclusively in the Delaware Court of Chancery and any state
appellate court therefrom (or, if the Delaware Court of Chancery declines to
accept jurisdiction over a particular matter, in any federal court located in
the State of Delaware or any Delaware state court), and Borrower hereby consents
to the exclusive jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court.
[Remainder of page intentionally left blank. See signature page attached.]

 

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     IN WITNESS WHEREOF, Borrower has executed this Note or has caused the same
to be executed by its duly authorized representatives as of the date set first
forth above.

                              BORROWER:        
 
                            RENEGY HOLDINGS, INC.        
 
                       
 
  By:                
 
                     
 
          Name:        
 
          Its:        

 

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EXHIBIT B TO THE REVOLVING CREDIT AGREEMENT
FORM OF ADVANCE REQUEST
Date:                                         
Time:                                         
Robert M. Worsley
Christi M. Worsley
3418 N. Val Vista Drive
Mesa, Arizona 85213
Dear Mr. and Mrs. Worsley:
     The undersigned, Renegy Holdings, Inc. (“Borrower”), refers to the
Revolving Credit Agreement dated as of February 12, 2008 (as it may hereafter be
amended, modified, extended or restated from time to time, the “Credit
Agreement”) by and between Borrower and Robert M. Worsley, Christi M. Worsley
and the Robert M. Worsley and Christi M. Worsley Revocable Trust, together as
Lender. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
     Borrower hereby gives notice that it requests an Advance pursuant to the
Credit Agreement and sets forth below the terms of such requested Advance:

                                            A.    
Date of Advance
                               
 
                          B.    
Principal Amount of Advance
                               
 
             

                              Sincerely,        
 
                            RENEGY HOLDINGS, INC.        
 
                       
 
  By:                
 
 
 
         
 
          Name:        
 
          Its: