exv10w10






Exhibit 10.10




CONSENT AND WAIVER AGREEMENT




          This CONSENT AND WAIVER AGREEMENT (this “Agreement”) is entered into as of December
31, 2008 in connection with that certain Credit Agreement, dated as of September 1, 2006, among
SNOWFLAKE WHITE MOUNTAIN POWER, LLC (“SWMP”), RENEGY, LLC (“Renegy”), RENEGY
TRUCKING, LLC (“Renegy Trucking” and together with Renegy and SWMP, the
“Borrowers”), the financial institutions from time to time party thereto (collectively, the
“Lenders”) and COBANK, ACB, as administrative agent for the Lenders (in such capacity,
“Administrative Agent”), as letter of credit issuer, collateral agent (in such capacity,
“Collateral Agent”) and as a Lender, to be amended and restated as of January 1, 2009 (as
further amended, amended and restated and modified from time to time, the “Credit
Agreement”). Terms used herein but not defined shall have the meaning given to them in the
Credit Agreement and section references refer to sections of the Credit Agreement unless otherwise
stated.




     WHEREAS, Renegy Holdings, Inc., a Delaware corporation (“Renegy Holdings”) proposes to
enter into that certain Membership Interest Purchase Agreement, to be dated on or about the date
hereof (in substantially the form of Exhibit A hereto, the “Purchase Agreement”),
with AZ Biomass LLC, a Delaware limited liability company and indirect subsidiary of State Street
Bank and Trust Company (“AZ Biomass”), pursuant to which AZ Biomass will purchase certain
membership interests in SWMP (the “Tax Equity Investment”);



     WHEREAS, in connection with such Tax Equity Investment, Renegy Holdings and AZ Biomass propose
to enter into that certain Amended and Restated Limited Liability Company Agreement of SWMP, to be
dated on or about the date hereof (in substantially the form of Exhibit B hereto, the
“LLC Agreement”), pursuant to which (a) AZ Biomass shall be the Class A Member, Renegy
Holdings shall be the Class B Member and Renegy Holdings shall remain the sole Manager (each as
defined therein) and (b) Renegy Holdings shall be paid a Management Fee (as defined therein) and
shall provide a working capital loan to SWMP, the funds of which shall be used for its operating
costs and working capital needs (together, the “Renegy Holdings Payments”);



     WHEREAS, in connection with the LLC Agreement, AZ Biomass has requested that Administrative
Agent enter into a Forbearance Agreement substantially in the form of Exhibit C hereto (the
“Forbearance Agreement”), pursuant to which Administrative Agent shall agree to forebear on
its exercise of remedies with respect to the membership interests held by AZ Biomass upon certain
terms and conditions provided for therein;



     WHEREAS, in order to secure certain obligations of Renegy Holdings under the LLC Agreement and
the Purchase Agreement, AZ Biomass has required that Renegy Holdings pledge its Class B Interest
(and all of its rights, privileges, authority and power thereunder as a member of SWMP) to AZ
Biomass pursuant to that certain Member Interest Pledge Agreement, to be



 









 







dated on or about the date hereof (substantially in the form of Exhibit D hereto, the
“Subordinated Pledge Agreement”);



     WHEREAS, the Borrowers propose to enter into that certain Amended and Restated Biomass Supply
and Services Agreement, to be dated on or about the date hereof (in substantially the form of
Exhibit E hereto, the “Amended Fuel Supply Agreement”), pursuant to which Renegy
Trucking will become a party and Renegy Trucking and Renegy, as the suppliers thereunder, will be
paid an additional fee for their services thereunder;



     WHEREAS, SWMP proposes to enter into (a) that certain Amendment No. 4 to Lease Agreement with
Catalyst, to be dated on or about the date hereof (in substantially the form of Exhibit F
hereto, the “Lease Amendment”), pursuant to which Catalyst and SWMP shall approve the
Annual Budget (as defined therein) and amend certain of the lease and operations provisions
contained in the Ground Lease and (b) that certain Settlement and Release Agreement with Catalyst,
to be dated on or about the date hereof (in substantially the form of Exhibit G hereto, the
“Settlement Agreement”), pursuant to which SWMP will make a payment to Catalyst for certain
costs and expenses described therein with respect to the Ground Lease;



     WHEREAS, the Borrowers propose to modify their Original Air Permit (as modified, the
“Major Source Permit”) such that the Project is deemed a major source facility by Arizona
Department of Environmental Quality (“ADEQ”), upon the issuance of which the Project will
be in compliance with certain ADEQ emission requirements; and



     WHEREAS, the Borrowers have requested that the undersigned Lenders agree to provide the
waivers and consent set forth herein.



     NOW THEREFORE, in consideration of the premises, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:



          1. Consents. Administrative Agent, Collateral Agent, as applicable, and the
undersigned Lenders hereby:



          (a) consent to and approve the LLC Agreement, as required under Sections 6.5 and 8.1.11 of the
Credit Agreement;




          (b) consent to and approve the Forbearance Agreement;




          (c) consent to and approve the Subordinated Pledge Agreement;




          (d) consent to and approve the Amended Fuel Supply Agreement, as required under Section 6.12
of the Credit Agreement; and




          (e) consent to and approve the Lease Amendment and Settlement Agreement, as required under
Section 6.12 and Section 6.18 of the Credit Agreement, as applicable.




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          2. Waivers. Administrative Agent, Collateral Agent, as applicable, and the
undersigned Lenders hereby:




          (a) waive any Default or Event of Default under the Credit Agreement, including without
limitation Sections 6.5 and 8.1.11 thereto, with respect to Renegy Holdings entering into and
effecting the transactions contemplated by the Purchase Agreement and the LLC Agreement; and




          (b) waive any Default or Event of Default under the Credit Agreement, including without
limitation Section 8.1.12(b), solely with respect to violations of the Original Air Permit solely
to the extent addressed by the Major Source Permit.




          3. Conditions.




          (a) The consents provided in Paragraphs 1(a), 1(b) and 1(c) and the waiver provided in
Paragraph 2(a) above are conditioned upon Administrative Agent’s receipt of fully executed (i)
Purchase Agreement, (ii) LLC Agreement, (iii) a subordination agreement between Renegy Holdings and
Administrative Agent with respect to the Renegy Holdings Payments, substantially in the form of
Exhibit H hereto, (iv) a pledge agreement by AZ Biomass in favor of Collateral Agent,
substantially in the form of Exhibit I hereto, (v) the Forbearance Agreement, (vi) the
Subordinated Pledge Agreement and (vii) a subordination agreement between AZ Biomass and Collateral
Agent with respect to the Subordinated Pledge Agreement, substantially in the form of Exhibit
J hereto.




          (b) The consent provided in Paragraph 1(d) above is conditioned upon Administrative Agent’s
receipt of the fully executed Amended Fuel Supply Agreement.




          (c) The consent provided in Paragraph 1(e) above is conditioned upon Administrative Agent’s
receipt of the fully executed (i) Lease Amendment and (ii) Settlement Agreement.




          (d) The waiver of Paragraph 2(b) above is conditioned upon the Borrowers’ full compliance with
the obligations of Section 5.25 of the Credit Agreement.




          4. Amendment. The Credit Agreement is hereby amended as follows:




          (a) The definition of “Date Certain” in the Credit Agreement is amended to read in full as
follows:





               “Date Certain” means February 28, 2009.



          (b) In connection with the extension of the Date Certain and its effect on the Construction
Loan Maturity Date, Exhibit I-1 to the Credit Agreement is hereby amended, restated and replaced in
its entirety with Exhibit I-1 to this Agreement.




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          (c) In connection with the extension of the Date Certain and its effect on the Construction
Loan Maturity Date, Exhibit I-2 to the Credit Agreement is hereby amended, restated and replaced in
its entirety with Exhibit I-2 to this Agreement.




          5. Representations and Warranties. The Borrowers represent and warrant to
Administrative Agent and the Lenders as follows:




          (a) The representations and warranties made by the Borrowers in Article 4 of the
Credit Agreement and each other loan document are true and correct in all material respects on and
as of the date hereof, except to the extent such representations and warranties expressly relate to
an earlier date.




          (b) Other than as addressed herein, no Default or Event of Default has occurred and is
continuing.




          (c) No Material Adverse Effect has occurred and is continuing.




          6. Full Force and Effect of Entire Agreement. Except as specifically amended,
modified or supplemented hereby, the Credit Agreement is hereby confirmed and ratified in all
respects and shall remain in full force and effect according to its terms. This Agreement,
together with the Credit Agreement and its attendant documents and collateral agreements, sets
forth the entire understanding and agreement of the parties in relation to the subject matter
hereof and supersedes any prior negotiations and agreements among the parties relating to such
subject matter.




          6. Governing Law. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and construed, interpreted and enforced in accordance with the laws
of the State of New York (including Section 5-1401 and Section 5-1402 of the New York General
Obligations Law), without regard to conflicts of law principles that would require application of
the laws of another jurisdiction.




          7. Enforceability. Should any one or more of the provisions of this Agreement be
determined to be illegal or unenforceable as to one or more of the parties hereto, all other
provisions nevertheless shall remain effective and binding on the parties hereto.




[Signature Pages Follow]




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          IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed by their
officers duly authorized as of the date first set forth above.




	 	 	 	 	 
	 	BORROWERS:



SNOWFLAKE WHITE MOUNTAIN POWER, LLC,


 	 
	 	By:  	Renegy Holdings, Inc.,

a Delaware corporation, as Manager

 	 
	 	/s/ Robert M. Worsley
 	 
	 	Robert M. Worsley 	 
	 	Chief Executive Officer 	 
	 
	 	RENEGY, LLC

 	 
	 	By:  	/s/ Robert M. Worsley
 	 
	 	 	Robert M. Worsley 	 
	 	 	Manager 	 
	 
	 	RENEGY TRUCKING, LLC

 	 
	 	By:  	/s/ Robert M. Worsley
 	 
	 	 	Robert M. Worsley 	 
	 	 	Manager 	 
	 
	 	COBANK, ACB, as Administrative Agent and a

Lender

 	 
	 	By:  	/s/ Dale Keyes
 	 
	 	 	Dale Keyes 	 
	 	 	Vice President, Energy Banking Group 	 




WAIVER AND CONSENT (TAX EQUITY INVESTMENT)



 









 







EXHIBIT A

Purchase Agreement




EXHIBIT B

LLC Agreement




EXHIBIT C

Forbearance Agreement




EXHIBIT D

Subordinated Pledge Agreement




EXHIBIT E

Amended Fuel Supply Agreement




EXHIBIT F

Lease Amendment




EXHIBIT G

Settlement Agreement




EXHIBIT H

Subordination Agreement (Renegy Payments)




EXHIBIT I

Pledge Agreement




EXHIBIT J

Subordination Agreement (AZ Biomass Pledge)




SCHEDULE I-1

Term Loan Amortization Schedule




SCHEDULE I-2

Renegy Term Loan Amortization Schedule






WAIVER AND CONSENT (TAX EQUITY INVESTMENT)