Exhibit 10.2
BLOCKED ACCOUNT CONTROL AGREEMENT
     This Blocked Account Control Agreement, dated January 1, 2009, is by and
among Renegy Holdings, Inc. , a Delaware corporation (“Company”), AZ Biomass
LLC, a Delaware limited liability company (“Secured Party”), and U.S. Bank
National Association (“Depository Bank”), with respect to Company’s deposit
account(s) number 103690226750 (such account(s), together with all substitutions
and replacements therefor, the “Deposit Account”) located at Depository Bank and
subject to the terms of the Deposit Agreements (defined below). Pursuant to
certain agreements between Company and Secured Party, Company has granted to
Secured Party a security interest in all rights of the Company with respect to
the Deposit Account.
1. Deposit Agreements. The terms and conditions of this Agreement are in
addition to any deposit account agreements and other related agreements that
Company has with Depository Bank, including without limitation all agreements
concerning banking products and services, treasury management documentation,
account booklets containing the terms and conditions of the Deposit Account,
signature cards, fee schedules, disclosures, specification sheets and change of
terms notices (collectively, the “Deposit Agreements”). The provisions of this
Agreement shall supersede the provisions of the Deposit Agreements only to the
extent the provisions herein are inconsistent with the Deposit Agreements, and
in all other respects, the Deposit Agreements shall remain in full force and
effect. All items deposited into the Deposit Account shall be processed
according to the provisions of the Deposit Agreements, as amended by this
Agreement.
2. Security Interest. Company has granted to Secured Party a security interest
in, among other property, the Deposit Account and all credits or proceeds
thereto and all monies, checks and other instruments held or deposited therein
(all of which shall be included in the definition of the “Deposit Account”).
Company represents and warrants that there are no perfected liens or
encumbrances with respect to the Deposit Account and covenants with Secured
Party that it shall not enter into any acknowledgment or agreement that gives
any other person or entity except Secured Party control over, or any other
security interest, lien or title in, the Deposit Account. Depository Bank
represents and warrants to Secured Party that Depository Bank (i) is an
organization engaged in the business of banking, (ii) maintains the Deposit
Account as a demand deposit account in the ordinary course of Depository Bank’s
business and (iii) has not entered into any currently effective agreement with
any person under which Depository Bank may be obligated to comply with
instructions directing the disposition of the funds in the Deposit Account that
are originated by a person other than Company or Secured Party. Depository Bank
will not enter into any agreement with any person under which Depository Bank
may be obligated to comply with instructions directing the disposition of the
funds in the Deposit Account originated by a person other than Company or
Secured Party.
3. Control. In order to provide Secured Party with control over the Deposit
Account, Company agrees that Depository Bank may comply with any and all orders,
notices, requests and other instructions originated by Secured Party directing
disposition of the funds in the Deposit Account without any further consent from
Company, even if such instructions are contrary to any of Company’s instructions
or demands or result in Depository Bank dishonoring items which may be presented
for payment. Company agrees that instructions from Secured Party may include the
giving of stop payment orders for any items presented to the Deposit Account,
instructions to transfer funds to or for the benefit of Secured Party or any
other person or entity, and instructions to close the Deposit Account.
Depository Bank shall comply with any and all orders, notices, requests and
other instructions originated by Secured Party directing disposition of the
funds in the Deposit Account without any further consent from Company, even if
such instructions are contrary to any of Company’s instructions or demands or
following such instructions results in Depository Bank dishonoring items
presented for payment from the Deposit Account.
4. Access to Deposit Account. [CHECK ONE BOX ONLY]

 

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  þ   (a) The Deposit Account shall be under the sole dominion and control of
Secured Party. Neither Company, nor any other person or entity, acting through
or under Company, shall have any control over the use of, or any right to
withdraw any amount from, the Deposit Account. Depository Bank is hereby
authorized and instructed to transfer all available funds (subject to Depository
Bank’s funds availability policy) in the Deposit Account to such account and at
such times as Secured Party may direct in writing to Depository Bank.     o  
(b) The Deposit Account shall be under the control of Secured Party; provided,
that unless and until Depository Bank receives Secured Party’s written notice
that Company’s access to the funds in the Deposit Account is terminated,
Depository Bank shall honor Company’s instructions, notices and directions with
respect to the transfer or withdrawal of funds from the Deposit Account,
including paying or transferring the funds to Company or any other person or
entity.         Upon receipt of a written notice from Secured Party instructing
Depository Bank to terminate Company’s access to funds in the Deposit Account,
Depository Bank shall transfer all available funds (subject to Depository Bank’s
funds availability policy) in the Deposit Account in accordance with Secured
Party’s written instructions.         As for any such written notice sent under
this subsection (b) to Depository Bank, Depository Bank shall endeavor to
promptly transfer to Secured Party the available funds as referenced above, but
Depository Bank shall not be obligated to do so until it provides written
confirmation to Secured Party that it received Secured Party’s notice of
direction.

5. Subordination by Depository Bank. Company and Depository Bank acknowledge
notice of and recognize Secured Party’s continuing security interest in the
Deposit Account and in all items deposited in the Deposit Account and in the
proceeds thereof. Depository Bank hereby subordinates any statutory or
contractual right or claim of offset or lien resulting from any transaction
which involves the Deposit Account if Section 4(a) is checked above or upon
Depository Bank’s confirmation of receipt of Secured Party’s notice under
Section 4(b). Notwithstanding the preceding sentence, in the event any fees and
expenses (“Fees”) related to the Deposit Account go unpaid or any checks or
other items which were deposited or credited to the Deposit Account are
returned, reversed, refunded or charged back for insufficient funds or for any
other reason (“Returned Items”), Depository Bank may charge the Deposit Account
or other accounts of Company maintained at Depository Bank. If there are
insufficient funds in the Deposit Account or any of Company’s other accounts to
cover the Fees and Returned Items, Company agrees to immediately reimburse
Depository Bank for the amount of such shortfall. If Company fails to pay the
amount demanded by Depository Bank, Secured Party agrees to reimburse Depository
Bank within three (3) business days of demand thereof by Depository Bank for any
Returned Items to the extent Secured Party received payment in respect thereof
pursuant to section 4.
6. Indemnity. Company agrees to defend, indemnify and hold Depository Bank and
its directors, officers, employees, attorneys, successors and assigns
(collectively “Depository Bank”) harmless from and against any and all claims,
losses, liabilities, costs, damages and expenses, including, without limitation,
reasonable legal and accounting fees (collectively, “Claims”), arising out of or
in any way related to this Agreement, excepting only liability arising out of
Depository Bank’s gross negligence or willful misconduct. Without regard to
Company’s indemnification obligations to Depository Bank, Secured Party agrees
to: (i) reimburse Depository Bank for any Returned Items (the proceeds of which
were received by Secured Party) and (ii) defend, indemnify and hold Depository
Bank harmless from and against any and all Claims arising out of Depository
Bank’s compliance with Secured Party’s instructions. Secured Party’s obligations
to Depository Bank hereunder shall in no way operate to release Company from its
obligations to Secured Party and shall not impair any rights or remedies of
Secured Party to collect any such amounts from Company. IN NO EVENT WILL
DEPOSITORY BANK BE LIABLE FOR ANY INDIRECT DAMAGES, LOST PROFITS, SPECIAL,
PUNITIVE, OR CONSEQUENTIAL DAMAGES WHICH ARISE OUT OF OR IN CONNECTION WITH THE
SERVICES CONTEMPLATED BY THIS AGREEMENT EVEN IF DEPOSITORY BANK HAS BEEN
INFORMED OF THE POSSIBILITY OF SUCH DAMAGES.

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7. Depository’s Bank’s Responsibility. The duties of Depository Bank are
strictly limited to those set forth in this Agreement and Depository Bank is not
acting as a fiduciary for any party hereto. Depository Bank shall be protected
in relying on any form of instruction or other notice purporting to be from
Secured Party which Depository Bank, in good faith, believes to be genuine and
what it purports to be. Depository Bank shall have no duty to inquire as to the
genuineness, validity, or enforceability of any such instruction or notice even
if Company notifies Depository Bank that Secured Party is not legally entitled
to originate any such instruction or notice. The Deposit Account and all actions
and undertakings by Depository Bank shall be subject to all rules and
regulations relating to the Deposit Account and to applicable law.
8. Termination. This Agreement shall not be terminable by Company so long as any
obligations of Company to Secured Party are outstanding and unpaid. This
Agreement may be terminated by Depository Bank upon thirty (30) days prior
written notice to all parties; provided, however, that Depository Bank may
terminate this Agreement immediately in the event Secured Party fails to make
payments to Depository Bank in accordance with section 5 above. This Agreement
may be terminated by Secured Party in a writing sent to Depository Bank in which
Secured Party releases Depository Bank from any further obligation to comply
with instructions originated by Secured Party with respect to the Deposit
Account. Any available funds remaining in the Deposit Account upon termination
or deposited in thereafter shall be transferred in accordance with the
provisions of section 4 above after deduction for any amounts otherwise
reimbursable to Depository Bank as provided hereunder. Termination shall not
affect the rights and obligations of any party hereto with respect to any period
prior to such termination.
9. Legal Process and Insolvency. In the event Depository Bank receives any form
of legal process concerning the Deposit Account, including, without limitation,
court orders, levies, garnishments, attachments, and writs of execution, or in
the event Depository Bank learns of any insolvency proceeding concerning
Company, including, without limitation, bankruptcy, receivership, and assignment
for the benefit of creditors, Depository Bank will respond to such legal process
or knowledge of insolvency in the normal course or as required by law.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota. The parties agree that
Minnesota is the “bank’s jurisdiction” for purposes of the Uniform Commercial
Code.
11. Notices. Except as otherwise provided in this Agreement, all notices and
other communications required under this Agreement shall be in writing and may
be personally served or sent by United States Mail or courier or by facsimile,
and shall be deemed given when delivered in person or received by facsimile or
upon deposit in the United States Mail or with such courier at the address
specified below. Any party may change its address for notices hereunder by
notice to all other parties given in accordance with this section 11.

         
 
  Company:   Renegy Holdings, Inc.
3418 North Val Vista Drive
Mesa, Arizona 85213
Attn: Robert Worsley
Facsimile: 480.556.5500
Telephone: 480.556.5555
 
       
 
  Secured Party:   AZ Biomass LLC
c/o State Street Bank and Trust Company
Energy Credit Investments
State Street Financial Center
One Lincoln Street, SFC 12
Boston, Massachusetts 02110-2900
Attn: Francine E. Lyons
Facsimile: (617) 664-4850
Telephone: 617.664.4718

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  Depository Bank:   U.S. Bank National Association
950 17th Street, 8th Floor
Denver, CO 80202
Attn: Ryan Earnest
Facsimile: 303-585-6935
Telephone: 303-585-4430

12. Miscellaneous. This Agreement shall bind and benefit the parties and their
respective successors and assigns. This Agreement may be amended only with the
prior written consent of all parties hereto. None of the terms of this Agreement
may be waived except as Depository Bank may consent thereto in writing. No delay
on the part of Depository Bank in exercising any right, power or privilege
hereunder shall operate as a waiver hereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude other or further
exercise thereof or the exercise of any right, power or privilege. The rights
and remedies specified herein are cumulative and are not exclusive of any rights
or remedies which Depository Bank would otherwise have.
13. Counterparts. This Agreement may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
14. Jury Trial Waiver. COMPANY, SECURED PARTY AND DEPOSITORY BANK HEREBY WAIVE
ALL RIGHTS TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING ARISING OUT OF, OR
RELATING TO, THIS AGREEMENT OR SERVICES RENDERED IN CONNECTION WITH THIS
AGREEMENT.

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Dated as of: January 1, 2009

            Very truly yours,

RENEGY HOLDINGS, INC.
      By:   /s/ Robert M. Worsley         Name:   Robert M. Worsley       
Title:   Chief Executive Officer        AZ BIOMASS LLC
      By:   Antrim Corporation, its Manager             By:   /s/ Francine E.
Lyons         Name:   Francine E. Lyons        Title:   Vice President       
U.S. BANK NATIONAL ASSOCIATION
DEPOSITORY BANK
      By:   /s/ Ryan Earnest         Name:   Ryan Earnest        Title:   Vice
President