CASH COLLATERAL ACCOUNT AGREEMENT
THIS CASH COLLATERAL ACCOUNT
AGREEMENT (this “ Agreement ”), dated as of
March 28, 2008, is entered into by and between RENEGY
HOLDINGS, INC., a Delaware corporation, (collectively, “
Grantor ” and “ Borrower ”) and
COMERICA, a Texas corporation (hereinafter sometimes referred to as
“ Secured Party ” or “ Lender
”).
W I T
N E S S E T H:
WHEREAS , pursuant to that
certain Credit Agreement dated March ___, 2008 (the “
Credit Agreement ”), by and between Borrower and
Secured Party, Secured Party has agreed to make a loan to Grantor
in the principal amount not to exceed $6,200,000.00 (the “
Loan ”). The Loan is evidenced by and made pursuant to
the terms and conditions contained in that certain NRLC Note, dated
of even date herewith, in the original principal amount of
$6,200,000.00, as the same may be extended, supplemented,
consolidated, amended, replaced, renewed, increased, modified or
restated (the “ Note ”).
WHEREAS, pursuant to the Credit
Agreement, as of the date hereof, Grantor has deposited cash,
interest reserves and/or certificates of deposit with a face value
of at least $450,000.00 to the Cash Collateral Account (as defined
herein) maintained and operated by Grantor with Secured Party,
and/or as designated by Secured Party.
WHEREAS , Secured Party has
required as a condition to making such Loan available that Grantor
execute this Agreement.
NOW, THEREFORE , in
consideration of the mutual covenants, promises, and agreements set
forth herein, and for other good and valuable consideration, the
receipt, adequacy, and sufficiency of which are hereby acknowledged
the parties hereto covenant and agree as follows:
1. Additional Defined
Terms . Capitalized terms used in this Agreement, but which are
not otherwise expressly defined in this Agreement, shall have the
respective meanings given thereto in the Credit Agreement. In
addition, the following terms shall have the following
meanings:
“
Cash Collateral Account ”: Interest Reserve Account
with Secured Party, Account No.
, or any successor deposit account operated and maintained by
Grantor, and/or approved by Secured Party. All references to the
Cash Collateral Account shall include all subaccounts and
securities thereof and all securities accounts, if any, maintained
in connection therewith.
“
Collateral ”: As defined in Section 2
below.
“
Event of Default ”: As defined in
Section 8 .
“
Secured Obligations ”: As defined in
Section 2 .
“
UCC ”: The Uniform Commercial Code as in effect in the
State of Arizona.
2. Security for Secured
Obligations . To secure the payment and performance of the Loan
by the Grantor and any and all other obligations, contingent or
otherwise, whether now existing or hereafter arising, whether
matured or unmatured, liquidated or unliquidated, direct or
indirect, absolute or contingent, joint or several, due or to
become due, now existing or hereafter arising of Grantor to Secured
Party or to any of Secured Party’s subsidiaries or affiliates
or successors arising under or in connection with the Note (the
“ Secured Obligations ”), Grantor hereby sells,
assigns, conveys, grants, pledges, hypothecates and transfers to
Secured Party a first-in-lien-priority continuing security interest
in all of Grantor’s right, title and interest in and to the
following property, in each case whether certificated or
uncertificated, whether now owned or existing or hereafter acquired
or arising and regardless of where located (all of the same,
collectively, the “ Collateral ”):
(a) the
Cash Collateral Account and all cash, checks, drafts, documents,
certificates, certificates of deposit, passbooks, instruments and
other amounts, if any, from time to time deposited or held (whether
by physical possession, book entry or otherwise) in and/or
evidencing the Cash Collateral Account, including, without
limitation, all wire transfers made, or in the process of being
made, and all other deposits, to the Cash Collateral Account;
(b) all
interest, cash, instruments and other property from time to time
held (whether by physical possession, book entry or otherwise) in,
received, receivable, or otherwise payable in respect of, or in
exchange for, any or all of the foregoing;
(c) all
present and future accounts, contract rights, chattel paper
(whether tangible or electronic), deposit accounts, documents,
general intangibles (including, without limitation, payment
intangibles and software), goods, instruments (including, without
limitation, promissory notes), investment property, letter of
credit rights, letters of credit, money, supporting obligations (in
each case as such terms are defined in the UCC), and any other
rights and interests pertaining to any of the foregoing, all
documents, instruments or passbooks now or hereafter evidencing the
Cash Collateral Account, all replacements, substitutions, renewals,
products or proceeds of any of the foregoing, and all powers,
options, rights, privileges and immunities pertaining thereto
(including the right to make withdrawals therefrom); and
(d) to
the extent not covered by clauses (a) , (b) , or
(c) above, all products and proceeds as defined under the
UCC of any or all of the foregoing of every type.
3. Warranties and
Covenants . Grantor hereby warrants and represents to Secured
Party, and covenants and agrees with Secured Party as
follows:
(a) It
is acknowledged and agreed by the parties hereto that Secured Party
shall have sole and exclusive possession and control of the
Collateral and that this Agreement constitutes a present, absolute
and current assignment of all the Collateral and is effective upon
the execution and delivery hereof. Grantor acknowledges that this
Agreement is an “authenticated” record and that the
arrangements established under this Agreement constitute
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“control” of the Cash Collateral Account, as each of
these terms is defined in Article 9 of the UCC.
(b) Grantor
is and shall remain the sole, lawful, beneficial and record owner
of the Collateral, free and clear of all liens, restrictions,
claims, pledges, encumbrances, charges, claims of third parties and
rights of set-off or recoupment whatsoever (other than those in
favor of Secured Party hereunder), and Grantor has the full and
complete right, power and authority to pledge and grant a security
interest in the Collateral in favor of Secured Party, in accordance
with the terms and provisions of this Agreement.
(c) This
Agreement creates a valid and binding first-in-lien priority pledge
and assignment of and security interest in the Collateral securing
the payment and performance of the Secured Obligations. Grantor has
not performed and will not perform any acts which might prevent
Secured Party from enforcing any of the terms and conditions of
this Agreement or which would limit Secured Party in any such
enforcement.
(d) Grantor’s
correct legal name, mailing address, and social security number are
as set forth on Exhibit A attached hereto and by this
reference made a part hereof. Grantor covenants and agrees with
Secured Party that Grantor shall not change any of the matters
addressed by this paragraph unless it has given Secured Party
thirty (30) days prior written notice of any such change and
executed at the request of Secured Party or authorized the
execution by Secured Party or Secured Party’s counsel of such
additional financing statements or other instruments to be filed in
such jurisdictions as Secured Party may deem necessary or advisable
in its sole discretion to prevent any filed financing statement
from becoming misleading or losing its perfected status.
(e) Grantor
shall not transfer or permit the transfer of any of the Collateral
to any other person until the full satisfaction and performance of
the Secured Obligations.
4. General Covenants .
Grantor covenants and agrees with Secured Party that so long as any
of the Secured Obligations are outstanding or have not been paid or
performed:
(a) Grantor,
without the prior written consent of Secured Party, which consent
may be withheld by Secured Party in its sole and absolute
discretion, shall not directly, indirectly or by operation of law
sell, transfer, assign, dispose of, pledge, convey, option,
mortgage, hypothecate or encumber any of the Collateral.
(b) Grantor
shall at all times defend the Collateral against all claims and
demands of all persons at any time claiming any interest in the
Collateral adverse to Secured Party’s interest in the
Collateral as granted hereunder.
(c) Grantor
shall pay all taxes and other charges against the Collateral to the
extent due and payable, shall not use the Collateral illegally, and
shall not suffer to exist any loss, theft, damage or destruction of
the Collateral and shall suffer to exist no levy, seizure or
attachment of the Collateral.
(d) Grantor
authorizes Secured Party, its counsel or its representative, at any
time and from time to time, at the expense of Grantor, to execute
and file any financing
3
statements or financing statement amendments or continuations, that
describe or relate to the Collateral or any portion thereof in such
jurisdictions as Secured Party may deem necessary or desirable to
perfect its security interest in any of the Collateral and such
financing statements may contain, among other items as Secured
Party may deem advisable to include therein, the social security
numbers of Grantor. Grantor will also obtain such waivers of lien,
estoppel certificates, deposit account control agreements or
subordination agreements as Secured Party may require to insure the
priority of its security interest in the Collateral. Grantor shall
also furnish to Secured Party such evidence as it may reasonably
require to confirm the value of the Collateral, and shall do
anything else Secured Party may reasonably require from time to
time to establish a valid security interest in and to further
protect and perfect its security interest in the Collateral.
5. Establishment, Operation,
Maintenance, and Funding of Account and Direction .
(a)
Establishment of Deposit Account; Funding of Deposit Account
. Grantor warrants and represents to, and covenants and agrees
with, Secured Party that Grantor has established, operates and
maintains the Cash Collateral Account with Secured Party and
deposited certificates of deposit, and/or interest reserve account,
with a face value of at least $450,000.00 into such Cash Collateral
Account. The Cash Collateral Account is a deposit account pledged
to Secured Party, and all funds on deposit in the Cash Collateral
Account shall bear interest only if and to the extent separately
agreed to by Secured Party, and Grantor. All funds on deposit in
the Cash Collateral Account shall be held by Secured Party free of
any liens or claims on the part of creditors of the Grantor other
than Secured Party.
(b)
Direction . Grantor authorizes and directs Secured Party to
comply with all instructions given by Secured Party in accordance
with this Agreement, including directing the disposition of the
Collateral or as to any other matter relating to the Cash
Collateral Account, without further consent of Grantor.
6. Cash Collateral Account
Access . Notwithstanding anything to the contrary contained in
this Agreement, Grantor shall not, without Secured Party’s
consent, which may be withheld in Secured Party’s sole and
absolute discretion, be entitled to withdraw or direct the
disposition of funds from the Cash Collateral Account, or close,
redesignate or move the Cash Collateral Account.
7. Further Assurances .
Grantor agrees that at any time, and from time to time, at the
expense of Grantor, Grantor will promptly execute and deliver all
further instruments an
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