CREDIT AGREEMENT

CREDIT AGREEMENT

by and between

RENEGY HOLDINGS, INC, a Delaware corporation

and

COMERICA BANK, a Texas banking corporation

Dated as of

March 28, 2008

Table of Contents

							Page
ARTICLE 1				DEFINITION OF TERMS			1
		1.1		Definitions			1
		1.2		References			10
		1.3		Accounting Terms			10
ARTICLE 2				THE NRLC			10
		2.1		NRLC Commitment			10
		2.2		Non Revolving Line of Credit			11
		2.3		NRLC Payments			11
		2.4		LIBOR Election			12
		2.5		Excess Balance Payment			13
		2.6		Optional Prepayment			13
		2.7		Non Use Fee			13
		2.8		Conditions			13
		2.9		Other NRLC Advances by Lender			13
		2.10		Assignment of NRLC Advance			13
		2.11		Assignment of Credit Agreement			14
ARTICLE 3				(INTENTIONALLY OMITTED)			14
ARTICLE 4				(INTENTIONALLY OMITTED)			14
ARTICLE 5				PAYMENTS, FEES AND PREPAYMENTS PROVISIONS			14
		5.1		Payments			14
		5.2		Computations			15
		5.3		Maintenance of Accounts			15
		5.4		LIBOR Based Rate Breakage Fees			15
		5.5		Special LIBOR Provisions			15
ARTICLE 6				SECURITY			16
		6.1		Security for Loans			16
		6.2		Additional Security			16
		6.3		Security Documents			16
ARTICLE 7				CONDITIONS PRECEDENT			16
		7.1		Initial or Any Subsequent Advance			17

 -i-

Table of Contents
(continued)

							Page
		7.2		Subsequent Advances			18
		7.3		NRLC Advances			19
ARTICLE 8				REPRESENTATIONS AND WARRANTIES			19
		8.1		Recitals			19
		8.2		Organization and Good Standing			19
		8.3		Authorization and Power			20
		8.4		Security Documents			20
		8.5		No Conflicts or Consents			20
		8.6		No Litigation			20
		8.7		Financial Condition			20
		8.8		Taxes			20
		8.9		No Stock Purchase			21
		8.10		Advances			21
		8.11		Enforceable Obligations			21
		8.12		No Default			21
		8.13		ERISA			21
		8.14		Compliance with Law			21
		8.15		Solvent			21
		8.16		Investment Company Act			22
		8.17		Title			22
		8.18		Survival of Representations, Etc			22
		8.19		Environmental Matters			22
		8.20		Existing Indebtedness			22
		8.21		Accuracy of Information			22
		8.22		Lien Priority			22
		8.23		Leases			22
		8.24		Capital Stock of Borrower			23
ARTICLE 9				AFFIRMATIVE COVENANTS			23
		9.1		Financial Statements, Reports and Documents			23
		9.2		Maintenance of Existence and Rights; Conduct of Business; Management			24

 -ii-

Table of Contents
(continued)

							Page
		9.3		Operations and Properties			24
		9.4		Authorizations and Approvals			24
		9.5		Compliance with Law			25
		9.6		Payment of Taxes and Other Indebtedness			25
		9.7		Compliance with Other Agreements			25
		9.8		Compliance with Credit Documents			25
		9.9		Notice of Default			25
		9.10		Other Notices			25
		9.11		Books and Records; Access; Appraisals; Audits			26
		9.12		ERISA Compliance			26
		9.13		Further Assurances			26
		9.14		Insurance			26
		9.15		Deposit Accounts			27
		9.16		Perfection of Liens			27
		9.17		Real Property			27
		9.18		Intellectual Property			27
		9.19		Recovery of Additional Costs			27
		9.20		Books and Records			28
		9.21		Creation of Subsidiaries			28
		9.22		Mandatory Payments			28
		9.23		Minimum Liquidity			28
ARTICLE 10				NEGATIVE COVENANTS			28
		10.1		Amendments to Organizational Documents			28
		10.2		Sale of Assets			28
		10.3		Distributions			29
		10.4		No Indebtedness			29
		10.5		Guaranties			30
		10.6		Change in Ownership Control			30
		10.7		Redemption of Stock			30
		10.8		Change or Suspension of Business			30

 -iii-

Table of Contents
(continued)

							Page
		10.9		Change Name, Office or Place of Business			30
		10.10		Liens			30
		10.11		Capital Expenditures			30
		10.12		No Further Assignment			30
ARTICLE 11				EVENTS OF DEFAULT			30
		11.1		Events of Default			30
		11.2		Remedies Upon Event of Default			32
		11.3		Performance by Lender			33
ARTICLE 12				MISCELLANEOUS			34
		12.1		Modification			34
		12.2		Right of Setoff			34
		12.3		Waiver			34
		12.4		Payment of Expenses			34
		12.5		Notices			35
		12.6		Governing Law; Jurisdiction, Venue; Waiver of Jury Trial			35
		12.7		Additional Sums			36
		12.8		Invalid Provisions			36
		12.9		Conflicts; Inconsistency			36
		12.10		Binding Effect			36
		12.11		Entirety			36
		12.12		Headings			36
		12.13		Survival			36
		12.14		No Third Party Beneficiary			37
		12.15		Time			37
		12.16		Exhibits Incorporated			37
		12.17		Counterparts			37
		12.18		Participations			37
		12.19		Exchange of Information			37
		12.20		Costs of Collection			37
		12.21		Bankruptcy			38

 -iv-

Table of Contents
(continued)

							Page
		12.22		No Transfer by Borrower			38
		12.23		Binding Nature			38

 -v-

EXHIBITS:

EXHIBIT “A”		Form of Advance Notice
EXHIBIT “B”		Form of Compliance Certificate
EXHIBIT “C”		Affiliates and Subsidiaries
EXHIBIT “D”		Description of Leases
EXHIBIT “E”		Form of Landlord Consent
EXHIBIT “F”		Trademarks/Names, Copyrights and Patents and Logo
EXHIBIT “G”		Proxies, Warrants, Options, Rights and Shareholder Agreements
EXHIBIT “H”		Chief Executive Office and Other Facilities
EXHIBIT “I”		Litigation
EXHIBIT “J”		CoBank Pledge Agreement
EXHIBIT “K”		Schedule of Permitted Debts
EXHIBIT “L”		Schedule of Permitted Indemnification Obligations

CREDIT AGREEMENT

     BY THIS CREDIT AGREEMENT (together with any amendments or modifications, the “ Credit Agreement ”), entered into as of this 28th day of March 2008 by and between RENEGY HOLDINGS, INC, a Delaware corporation (“ Borrower ”), and COMERICA BANK, a Texas banking corporation (the “ Lender ”), in consideration of the mutual promises herein contained and for other valuable consideration, the parties hereto do hereby agree as follows:

RECITALS

     A. Borrower has requested that Lender make available to Borrower the following financial accommodations:

     (1) A non revolving line of credit facility (the “ NRLC ”) in the principal amount of not to exceed SIX MILLION TWO HUNDRED AND NO/100 DOLLARS ($6,200,000.00) for the purpose of funding costs over-run associated with the Snowflake White Mountain Power Plant, Borrower’s working capital and other general corporate uses.

     B. As a condition for extending such financial accommodations, Lender has required that Borrower enter into this Credit Agreement and the other Credit Documents (as defined herein), establishing the terms and conditions thereof.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein, Borrower and Lender agree as follows:

ARTICLE 1

DEFINITION OF TERMS

     1.1 Definitions . For the purposes of this Credit Agreement, unless the context otherwise requires, the following terms shall have the respective meanings assigned to them in this Article 1 or in the Section hereof referred to below:

          “ Additional Sums ”: See Section 12.7 .

          “ Advance ” means, severally and collectively, any NRLC Advance by Lender to Borrower.

          “ Affiliate ” means any Person, excluding Borrower, which, directly or indirectly, is controlled by Borrower. For the purposes of this definition, “control” (including, with correlative meanings, the term “controlled by”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

          “ Authorized Officer ” means one or more officers of Borrower duly authorized (and so certified to Lender by an officer of Borrower pursuant to a certificate of authority and incumbency from time to time satisfactory to Lender in the exercise of Lender’s reasonable discretion), acting alone, to request Advances under the provisions of this Credit Agreement and

execute and deliver documents, instruments, agreements, reports, statements and certificates in connection herewith.

          “ Banking Day ” means a day of the year on which banks are not required or authorized to close in Texas, Detroit, Michigan and/or Phoenix, Arizona; provided, however, that when used in connection with a LIBOR Based Rate Amount, “ Banking Day ” shall mean any such day on which banks are open for dealings in or quoting deposit rates for Dollar deposits in the London interbank market.

          “ Base Rate ” means the rate per annum equal to the sum of the Prime Rate plus 1% as to a NRLC Advance.

          “ Base Rate Advance ” means an Advance that bears or is requested to bear interest at the Base Rate.

          “ Base Rate Amount ” means an amount of a Loan that bears interest at the Base Rate.

          “ Borrower(s) ”: shall have the meaning set forth in the Preamble hereto.

          “ Capital Expenditures ” means for any specified period, the sum of all expenditures capitalized for financial statement purposes in accordance with GAAP (whether payable in cash or other property or accrued as a liability).

          “ Capital Lease ” means any lease of Property by Borrower that has been or will be classified and accounted for as a capital lease on the balance sheet of Borrower in accordance with GAAP.

          “ Capital Raise ” means a transaction by the Borrower for the purpose of raising capital involving the issuance of any equity security by the Borrower, including debt convertible into or in conjunction with such debt, provided that any debt issued as part of a Capital Raise must be expressly subordinate to the Obligations hereunder in a manner reasonable acceptable to Lender.

          “ Cash Collateral Account Agreement ” means that certain Cash Collateral Account Agreement dated of even date herewith executed and delivered by the Borrower in favor and for the benefit of the Lender.

          “ Chase Guaranty ” means the Continuing Guaranty entered into by Borrower on March 17, 2008 in favor of Chase Equipment Lease, Inc.

          “ Closing Date ” means the date of delivery of this Credit Agreement fully executed by Borrower and Lender.

          “ CoBank ” means CoBank, ACB.

          “ CoBank Credit Agreement ” means the Credit Agreement, dated as of September 1, 2006 by and among Snowflake White Mountain Power, LLC, Renegy, LLC, Renegy

Trucking, LLC, the financial institutions thereto, CoBank, as letter of credit issuer, CoBank as administrative agent and CoBank as collateral agent for the secured parties under the Credit Agreement, as amended to date.

          “ CoBank Collateral ” means the collateral pledged to secure the obligations under the CoBank Credit Agreement as more particularly described in the CoBank Pledge Agreement, provided that, such collateral shall exclude any and all rights, interest, title or claims in and to that certain Loyalton Power Plant Facility to the extent acquired by Borrower after the date of this Credit Agreement, including without limitation all real and personal property, all general intangibles, including payment intangibles and rights relating to such property, all operational agreements, schematic designs, trade names, goodwill, accounts receivables, revenue and other consideration received, inventory, equipment, supply agreements and the like, related to the Loyalton Power Plant Facility, and all substitutions, replacements, additions, accessions and proceeds for or to any of the foregoing, and all books, records, and files relating to any of the foregoing, computer readable memory and data and any computer software or hardware reasonably necessary to access and process such memory and data.

          “ CoBank Pledge Agreement ” means the Pledge Agreement dated as of October 1, 2007 by and among Borrower, Renegy, LLC, Renegy Trucking, LLC, Snowflake White Mountain Power, LLC and CoBank, ACB, attached hereto as Exhibit J.

           “Code ” means the Internal Revenue Code of 1986, as amended.

          “ Collateral ” means all property subject to the Security Documents.

          “ Compliance Certificate ”: Shall have the meaning as set forth in Section 9.1(c) hereof.

          “ Control ” when used with respect to any Person means the power, directly or indirectly, to direct the management policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

          “ Controlled Group ” means, severally and collectively, the members of the group controlling, controlled by and/or in common control of Borrower, within the meaning of Section 4001(b) of ERISA.

          “ CPA ”: Shall have the meaning as set forth in Section 9.1(a) .

          “ Credit Agreement ”: means this Agreement.

          “ Credit Documents ” means this Credit Agreement, the Note, the Guaranty, the Security Documents and any written agreements, certificates or documents (and with respect to this Credit Agreement and such other written agreements and documents, any amendments or supplements thereto or modifications thereof) executed or delivered pursuant to the terms of this Credit Agreement.

          “ Default Rate ” means at any time three percentage points (3.00%) per annum over the then applicable interest rate.

          “ Dollars ” and the sign “ $ ” mean lawful currency of the United States of America.

          “EPA” means the Environmental Protection Act in force as of the date of this Credit Agreement, as the same may be amended, revised or modified from time to time.

          “ Equipment ” means equipment that is:

	(a)		acquired by Borrower for use in the usual and ordinary course of Borrower’s business;
	(b)		owned by Borrower free and clear of all Liens other than Liens held by Lender and the Liens described in clauses (a), (b), (c), and (d) of the definition of Permitted Liens; and
	(c)		reflected on the financial statements of Borrower as an asset in accordance with GAAP.

          “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, together with all final and permanent regulations issued pursuant thereto. References herein to sections and subsections of ERISA are deemed to refer to any successor or substitute provisions therefor.

          “ Event of Default ”: Shall have the meaning as set forth in Section 11.1 hereof.

          “ Exchange Act ” means the Securities Exchange Act of 1934.

          “ Financing Statements ” means the UCC financing statements relating to the Collateral, naming Lender as the secured party and Borrower as the debtor to be filed among the records of the Secretary of State, Corporation Commission or other appropriate Governmental Authority.

          “ GAAP ” means those generally accepted accounting principles and practices which are recognized as such by the American Institute of Certified Public Accountants acting through its Accounting Principles Board or by the Financial Accounting Standards Board or through other appropriate boards or committees thereof and which are consistently applied for all periods after the date hereof so as to properly reflect the financial condition, and the results of operations and changes in the financial position, of Borrower, except that any accounting principle or practice required to be changed by the said Accounting Principles Board or Financial Accounting Standards Board (or other appropriate board or committee of the said Boards) in order to continue as a generally accepted accounting principle or practice may be so changed.

          “ Governmental Authority ” means any government (or any political subdivision or jurisdiction thereof), court, bureau, agency or other governmental authority having jurisdiction over Borrower or any of its business, operations or properties.

          “ Guaranty ” means that certain guaranty dated of even date herewith executed and delivered by (1) Robert Merrill Worsley, a married man, (2) Christi Marie Worsley, a married woman, and (3) the Robert Merrill Worsley and Christi Marie Worsley Family Revocable Trust, dated July 28, 1998, in favor and for the benefit of Lender.

          “ Indebtedness ” of a Person means each of the following (without duplication): (a) obligations of that Person to any other Person for payment of borrowed money, (b) Capital Lease obligations, (c) notes and drafts drawn or accepted by that Person payable to any other Person, whether or not representing obligations for borrowed money (but without duplication of indebtedness for borrowed money), (d) any obligation for the purchase price of property the payment of which is deferred for more than one year or evidenced by a note or equivalent instrument, (e) guarantees of Indebtedness of third parties, and (f) a recourse or nonrecourse payment obligation of any other Person that is secured by a Lien on any property of the first Person, whether or not assumed by the first Person, up to the fair market value (from time to time) of such property.

          “ Interest Payment Date ” means:

          (a) as to Base Rate Amounts, the first day of each month, provided that if any such day is not a Banking Day, then such Interest Payment Date shall be the next succeeding Banking Day; and

          (b) as to LIBOR Based Rate Amounts the last day of the corresponding LIBOR Interest Period.

          “ Landlord(s) ” means the landlord(s) under the Leases.

          “ Landlord Consents ” collectively means, if applicable, the landlord consents (each in a form substantially similar to Exhibit “E” hereto and acceptable to Lender in its sole discretion) executed by the Landlords in favor of Lender, as the same may from time to time be amended, supplemented or modified, together with all exhibits and schedules from time to time attached thereto, pursuant to which each Landlord, among other things, waives any landlord’s lien, whether statutory or otherwise, and other claims in and to any of the Collateral for the Obligations and agrees to such other covenants as are reasonably requested by Lender.

          “ Leases ” collectively means the leases described on Exhibit “D” attached hereto (as Exhibit “D” may be updated from time to time), as such leases may from time to time be amended, supplemented or modified, and any other rental agreements or leases hereafter executed by Borrower for the lease or rental of real property or space, together with all exhibits and schedules from time to time attached thereto

          “ Lender ”: Shall have the meaning as set forth in the Preamble hereto.

          “ LIBOR ” means the interest rate for and during each LIBOR Interest Period, rounded upward to the nearest 1/100 of one percent, calculated as of the first day of each LIBOR Interest Period as follows:

          LIBOR Rate = London Inter-Bank Offered Rate

          (1.00 – Reserve Percentage)

Where,

“ London Inter-Bank Offered Rate ” means the rate of interest determined by Lender, based on such sources as may be selected by Lender, to be the rate at which deposits in United States dollars are offered by major banks in London, England to other major banks in the London inter-bank market at 11:00 a.m. (London, England, local time) on the first London Banking Day of the LIBOR Interest Period for the period in the London inter-bank market equal to or next greater than the LIBOR Interest Period. A “ London Banking Day ” is a day on which dealings are carried on in the London inter-bank market.

“ Reserve Percentage ” means the total of the maximum reserve percentages for determining the reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency Liabilities, as defined in the Federal Reserve Board Regulation D, rounded upward to the nearest 1/100 of one percent. The percentage will be expressed as a decimal, and will include, but not be limited to, marginal, emergency, supplemental, special, and other reserve percentages.

          “ LIBOR Based Rate ” means the rate per annum equal to the sum of LIBOR plus 3.75% as to a NRLC Advance.

          “ LIBOR Based Rate Advance ” means an Advance that bears or is requested to bear interest at the LIBOR Based Rate.

          “ LIBOR Based Rate Amount ” means an amount of a Loan that bears interest at the LIBOR Based Rate.

          “ LIBOR Interest Period ” means the period selected by Borrower pursuant to the provisions herein, and, thereafter, each subsequent period commencing on the last day of the immediately preceding LIBOR Interest Period and ending on the last day of the period selected by Borrower pursuant to the provisions herein. The duration of each LIBOR Interest Period shall be to any principal portion of the NRLC, 30 days, 60 days, 90 days, 120 days, 180 days, or 270 days, as selected by Borrower pursuant hereto; provided, however, that:

          (i) Whenever the last day of any LIBOR Interest Period would otherwise occur on a day other than a Banking Day, the last day of such LIBOR Interest Period shall be extended to occur on the next succeeding Banking Day, provided that if such extension would cause the last day of such LIBOR Interest Period to occur in the next following calendar month, the last day of such LIBOR Interest Period shall occur on the immediately preceding Banking Day;

          (ii) No LIBOR Interest Period shall extend beyond the applicable Maturity Date; and

          (iii) The maximum amount of LIBOR Interest Periods that can be pending at any one time with respect to the Loan shall be three (3).

          “ Lien ” means any lien, mortgage, security interest, tax lien, pledge, encumbrance, conditional sale or title retention arrangement, or any other interest in property designed to secure the repayment of Indebtedness whether arising by agreement or under any statute or law, or otherwise.

          “ Loan ” or “ Loans ” means the amounts advanced to or for the benefit of Borrower pursuant to the Agreement, including those advances in respect of the NRLC.

          “ Material Adverse Effect ” means any circumstance or event which (i) has any material adverse effect upon the validity or enforceability of any Credit Document, (ii) materially impairs the ability of Borrower to fulfill their obligations under the Credit Documents, or (iii) causes an Event of Default or any event which, with notice or lapse of time or both, would reasonably be expected to become an Event of Default.

          “ Maturity Date ” means, the NRLC Maturity Date.

          “ Maximum NRLC Loan Amount ” means Six Million Two Hundred Thousand and NO/100 Dollars ($6,200,000.00).

          “ Non Use Fee ” means the fee the Borrower agrees to pay on any difference between the Maximum NRLC Loan Amount and the amount of the NRLC the Borrower actually uses, determined by the average of the daily amount of credit outstanding during the specified. The fee will be calculated quarterly in arrears

          “ Note(s) ” means, separately or collectively, as applicable, the NRLC Note, and any note or notes required by Lender to be executed by any Borrower in connection with the Obligations, and any other note as notes issued in substitution, replacement or renewal of, or that amend or supersede any of the foregoing notes.

          “ NRLC ” shall have the meaning set forth in the preamble hereof.

          “ NRLC Advance ” means a disbursement of the proceeds of the NRLC.

          “ NRLC Maturity Date ” means the first Banking Day next preceding the first anniversary of the Closing Date, or such earlier date on which all amounts under the NRLC first become due and payable as provided herein.

          “ NRLC Note ” means that certain means that certain Non Revolving Line of Credit Promissory Note of even date herewith in the amount of the Maximum NRLC Amount executed by Borrower and delivered pursuant to the terms of this Credit Agreement, together with any renewals, extensions, modifications or replacements thereof.

          “ Obligations ” means, individually and collectively, all present and future indebtedness, obligations and liabilities of Borrower to Lender, and all renewals and extensions thereof, or any part thereof, arising pursuant to this Credit Agreement or represented by any of

the Notes, including without limitation the Loans and all interest accruing thereon, and attorneys’ fees incurred in the enforcement or collection thereof, regardless of whether such indebtedness, obligations and liabilities are direct, indirect, fixed, contingent, joint, several or joint and several; together with all indebtedness, obligations and liabilities of Borrower evidenced or arising pursuant to any of the other Credit Documents, and all renewals and extensions thereof, or part thereof.

          “ Operating Current Assets ” means, as determined in accordance with GAAP and on a consolidated basis, the sum of trade accounts receivable and inventory.

          “ PBGC ” means the Pension Benefit Guaranty Corporation, and any successor to all or substantially all of the Pension Benefit Guaranty Corporation’s functions under ERISA.

          “ Permitted Debt ” means the debt described and set forth in the Schedule of Permitted Debts attached hereto as Exhibit K.

          “ Permitted Liens ” means:

     (a) Liens in Lender’s favor.

     (b) Liens for taxes not delinquent.

     (c) Liens agreed to in writing by Lender.

     (d) To the extent not otherwise included in clauses (a) through (c) above, liens created by Capital Leases permitted by Section 10.4 , so long as (i) the Indebtedness secured by all such Liens, together with the Indebtedness described in clause (e) below, does not exceed $1,000,000.00 in the aggregate for the Borrower at any given time; (ii) the Liens created by such Capital Leases attach solely to the assets being leased or acquired by Borrower pursuant to such Capital Leases and secure only the capitalized amount; and (iii) the Indebtedness secured by any such Lien does not exceed one hundred percent (100%) of the capitalized amount.

     (e) To the extent not otherwise included in clauses (a) through (c) above, purchase money Liens or security interests permitted by Section 10.4 , and granted to suppliers in the ordinary course of business for purposes of purchasing any personal property, so long as (i) the Indebtedness secured by all such liens and security interests, together with the indebtedness described in clause (d) above, does not exceed $1,000,000.00 in the aggregate for the Borrower at any given time; (ii) such purchase money liens or security interests arise pursuant to a bona fide sales at prices consistent with the prevailing market price for such property; (iii) the Liens created by such transactions attach solely to the property being acquired by Borrower and secure only the balance of the purchase price of such property; and (iv) the Indebtedness secured by any such Lien does not exceed one hundred percent (100%) of the price of the property that is acquired.

     (f) Liens arising from Permitted Debt.

          “ Person ” includes an individual, a corporation, a joint venture, a partnership, a trust, a limited liability company, an unincorporated organization or a government or any agency or political subdivision thereof.

          “ Plan ” means an employee defined benefit plan or other plan maintained by Borrower for employees of Borrower and covered by Title IV of ERISA, or subject to the minimum funding standards under Section 412 of the Code.

          “ Prime Rate ” means the interest rate per annum publicly announced by Lender, or its successors, as its “prime rate” as in effect from time to time. Borrower acknowledges that the Prime Rate is not necessarily the best or lowest rate offered by Lender and Lender may lend to its customers at rates that are at, above or below its Prime Rate.

          “ Property ” means any interest of Borrower, now owned or herein after acquired, in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including without limitation all contracts and agreements to which Borrower is a party.

          “ Quarterly End Date ” means each March 31, June 30, September 30 and December 31.

          “ Regulation U ” means Regulation U promulgated by the Board of Governors of the Federal Reserve System, 12 C.F.R. Part 221, or any other regulation hereafter promulgated by said Board to replace the prior Regulation U and having substantially the same function.

          “ Regulatory Change ” means any change effective after the date of this Credit Agreement in United States federal, state, or foreign law, regulations, or rules or the adoption or making after such date of any interpretation, directive, or request applying to a class of banks including Lender, of or under any United States federal, state, or foreign law, regulation or rule (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof.

          “ Reportable Event ” means any “reportable event” as described in Section 4043(b) of ERISA with respect to which the thirty (30) day notice requirement has not been waived by the PBGC.

          “ Security Documents ”: Shall have the meaning set forth in Section 6.3 hereof.

          “ Snowflake White Mountain Power plant ” shall mean the approximately 24 megawatt biomass power plant being constructed near Snowflake, Arizona.

          “ Subsidiary ” means, as to any Person,

     (a) a corporation whose shares of stock having ordinary voting power (other than stock having such power only by reason of the happening of a contingency that has not occurred) to elect a majority of the board of directors or other managers of such corporation are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries or both, by such Person.

     (b) a limited liability company, the majority of the membership interests of which are at the time held, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries or both, by such Person.

     (c) a partnership, which is controlled, directly or indirectly through one or more intermediaries or both by such Person.

     (d) a limited partnership, the general partner of which is at the time, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries or both, by such Person.

          “ Trademarks/names, Registered Copyrights and Patents ” means all logos, insignia, trademarks and trade names, registered copyrights and patents or applications therefor, all of which are listed (and a copy of any logo is included) on Exhibit “F” , now or hereafter utilized for or in connection with the business of Borrower.

          “ Worsley Line of Credit ” means the Revolving Credit Agreement dated February 12, 2008 by and among the Borrower, Robert M. Worsley, Christi R. Worsley and the Robert M. Worsley and Christi R. Worsley Revocable Trust. Any draws under the Worsley Line of Credit shall be expressly subordinate to the Obligations hereunder in a manner reasonably acceptable to Lender.

     1.2 References . Capitalized terms shall be equally applicable to both the singular and the plural forms of the terms therein defined. References to “Credit Agreement,” “this Agreement,” “herein,” “hereof,” “hereunder,” or other like words mean this Credit Agreement as amended, supplemented, restated or otherwise modified and in effect from time to time.

     1.3 Accounting Terms . Except as expressly provided to the contrary herein, all accounting terms shall be interpreted and all accounting determinations shall be made in accordance with GAAP. To the extent any change in GAAP affects any computation or determination required to be made pursuant to this Credit Agreement, such computation or determination shall be made as if such change in GAAP had not occurred unless Borrower and Lender agree in writing on an adjustment to such computation or determination to account for such change in GAAP. Any report not prepared in accordance with GAAP shall not satisfy Borrower’s obligation to provide such report hereunder.

ARTICLE 2

     2.1 NRLC Commitment . Subject to the conditions herein set forth, and subject to the payment of a commitment fee in the amount of $31,000 (50 basis points), to the Lender by Borrower, Lender agrees to make the NRLC available to or for the benefit of Borrower, and Borrower may draw upon the NRLC, in the manner and upon the terms and conditions herein expressed, amounts that shall not exceed the Maximum NRLC Loan Amount.

     2.2 Non Revolving Line of Credit .

     Subject to the terms and conditions set forth in this Credit Agreement, Bank agrees to make NRLC Advances to Borrower from time to time on or before the NRLC Maturity Date, provided that the outstanding amount of NRLC Advances from time to time shall not exceed the Maximum NRLC Loan Amount. The NRLC shall be a non-revolving line of credit, against which NRLC Advances may be made to Borrower, and repaid by Borrower. NRLC Advances repaid may not be re-borrowed. Upon occurrence of an Event of Default, Bank, in its absolute and sole discretion and without notice, may suspend the commitment to make NRLC Advances. The obligation of Borrower to repay NRLC Advances is set forth in the NRLC Note. Although the outstanding principal of the NRLC Note may be zero from time to time, the Loan Documents shall remain in full force and effect until the Commitment terminates and all Obligations are paid and performed in full. No NRLC Advance shall be made on or after the NRLC Maturity Date.

     (a) The NRLC shall be evidenced by the NRLC Note.

     (b) NRLC Advances may be made for the purpose of funding Borrower’s over-run costs associated with the Snowflake White Mountain Power Plant, working capital and other general corporate uses.

     (c) Subject to all of the other terms and conditions hereof, NRLC Advances may be made upon written request in accordance with the procedures described below.

     (d) Each request for an NRLC Advance given pursuant to Section 2.2(e) shall be substantially in the form attached hereto as Exhibit “A” from an Authorized Officer and shall, in addition to complying with the other requirements in this Agreement, shall be made three (3) Banking Days prior to the disbursement of any NRLC Advances.

     2.3 NRLC Payments . The NRLC shall bear interest and be payable to Lender upon the following terms and conditions:

     (a) Interest shall accrue on the unpaid principal of an NRLC Advance at:

     (i) the applicable Base Rate; or

     (ii) the LIBOR Based Rate to the extent Borrower shall elect.

     (b) All accrued and unpaid interest shall be due and payable on each Interest Payment Date.

     (c) The entire unpaid principal balance, all accrued and unpaid interest, and all other amounts payable under the NRLC Note shall be due and payable in full on the NRLC Maturity Date.

     (d) If any payment of interest and/or principal is not received by Lender within ten (10) days after such payment is due, then in addition to the remedies

conferred upon Lender under the Credit Documents, a late charge of five percent (5%) of the amount of the installment due and unpaid will be added to the delinquent amount to compensate Lender for the expense of handling the delinquency for any such payment, regardless of any notice and cure period.

     (e) Upon the occurrence of an Event of Default and at any time when such Event of Default is continuing, the unpaid principal balance, all accrued and unpaid interest and all other amounts payable hereunder shall bear interest at the Default Rate.

     2.4 LIBOR Election .

     (a) If Borrower desires that any NRLC Advance bear interest at the LIBOR Based Rate, Borrower shall deliver to Lender at least three (3) Banking Days prior to a LIBOR Interest Period a notice making such election. Any request for a NRLC Advance not complying with the requirements provided herein for a NRLC Advance bearing interest at the LIBOR Based Rate shall bear interest at the Base Rate.

     (b) Each LIBOR Base Rate Advance under the NRLC shall be for a minimum principal amount of $1,000,000.00.

     (c) If Borrower desires that a LIBOR Based Rate Advance continue to bear interest at the LIBOR Based Rate after the end of an existing LIBOR Interest Period, Borrower shall deliver to Lender at least three (3) Banking Days prior to the end of the existing LIBOR Interest Period a notice making such election and specifying the new LIBOR Interest Period. If Borrower does not deliver such notice within such time, then after the expiration of the existing LIBOR Interest Period, the LIBOR Based Rate Advance shall become a Base Rate Advance and shall bear interest at the applicable Base Rate.

     (d) Borrower may upon advance written notice to Lender delivered not less than three (3) Banking Days prior to the proposed conversion date, convert a LIBOR Based Rate Advance into a Base Rate Advance, and vice versa; provided, however, that any conversion of a LIBOR Based Rate Advance shall only be made on the last day of the applicable LIBOR Interest Period. Each such request shall specify the date of such conversion and the Advance to be so converted.

     (e) Each request for an Advance as well as each election by Borrower that an Advance continue to bear interest at the LIBOR Based Rate after the end of an existing LIBOR Interest Period and each conversion request shall be irrevocable and binding upon Borrower once the request is received by Lender. Borrower shall indemnify Lender against any cost, loss, or expense incurred by Lender as a result of Borrower’s failure to fulfill, on or before the date specified in an Advance request, the conditions to such Advance, including any cost, loss, or expense incurred by reason of the liquidation of deposits or other funds acquired by Lender to fund such Advance. Lender shall, upon request, provide to Borrower a statement setting forth in

reasonable detail such losses and expenses, including an explanation of the manner of calculation thereof.

     (f) No Advance shall be requested by Borrower to bear a LIBOR Based Rate during the continuance of any Event of Default

     2.5 Excess Balance Payment . There shall be due and payable from Borrower to Lender, and Borrower shall immediately repay to Lender, any amount by which the outstanding principal balance of the NRLC exceeds the Maximum NRLC Loan Amount.

     2.6 Optional Prepayment . Provided that all matured interest and other charges accrued to the date of prepayment are also paid in full, Borrower may, at the option of Borrower, at any time and from time to time, prepay the principal amount of the NRLC, in whole or in part, without any prepayment premium or penalty. Notwithstanding any partial prepayment of principal under the NRLC, there shall be no change in the due date or the amount of any scheduled payment with respect to the NRLC unless Lender, in its sole discretion, agrees in writing to such change.

     2.7 Non Use Fee .

          The Borrower agrees to pay a Non Use Fee equal to 25 basis points, payable quarterly in arrears.

     2.8 Conditions . Lender shall have no obligation to make any NRLC Advance unless and until all of the conditions and requirements of this Credit Agreement are fully satisfied. However, Lender in its sole and absolute discretion may elect to make one or more NRLC Advances prior to full satisfaction of one or more such conditions and/or requirements. Notwithstanding that such a NRLC Advance or NRLC Advances are made, such unsatisfied conditions and/or requirements shall not be waived or released thereby. Borrower shall be and continue to be obligated to fully satisfy such conditions and requirements, and Lender, at any time, in Lender’s sole and absolute discretion, may stop making NRLC Advances until all conditions and requirements are fully satisfied.

     2.9 Other NRLC Advances by Lender . Lender, to allow for corrective action, at its option, without prior written notice to Borrower, from time to time, may make NRLC Advances in any amount in payment of accrued and unpaid (i) insurance premiums, taxes, assessments, liens or encumbrances existing against property encumbered by the Security Documents, (ii) interest accrued and payable upon the NRLC or any Loan, (iii) any charges and expenses that are the obligation of Borrower under this Credit Agreement or any other Credit Document, and (iv) any charges or matters necessary to preserve the property encumbered by the Security Documents or to cure any still existing Event of Default.

     2.10 Assignment of NRLC Advance . Borrower shall have no right to any NRLC Advance other than to have the same disbursed by Lender in accordance with the disbursement provisions contained in this Credit Agreement. Any assignment or transfer, voluntary or involuntary, of this Credit Agreement or any right hereunder shall not be binding upon or in any way affect Lender without its written consent; Lender may make NRLC Advances under the disbursement provisions herein, notwithstanding any such assignment or transfer.

     2.11 Assignment of Credit Agreement . Any assignment or transfer, voluntary or involuntary, of this Credit Agreement or any right hereunder shall not be binding upon or in any way affect Lender without its written consent and any such assignment without Lender’s consent shall be void.

ARTICLE 3

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ARTICLE 4

(INTENTIONALLY OMITTED)

ARTICLE 5

PAYMENTS, FEES AND PREPAYMENTS PROVISIONS

     5.1 Payments .

     (a) All payments and prepayments by Borrower of principal of and interest on the Notes and all fees, expenses and any other Obligations payable to Lender in connection with the Loans shall be nonrefundable and made in Dollars or immediately available funds to Lender not later than 12:00 p.m. (Phoenix, Arizona local time) on the dates called for under this Credit Agreement, at the office of Lender in Phoenix, Arizona. Funds received after such hour shall be deemed to have been received by Lender on the next Banking Day.

     (b) Borrower authorizes Lender to collect all interest, principal, fees, costs, expenses or other amounts due under the Credit Documents by charging Borrower’s deposit account, numbered                      , with Lender, or any other deposit account maintained by Borrower with Lender, for the full amount thereof. Should there be insufficient funds in any such demand deposit account to pay all such sums when due, the full amount of such deficiency shall be immediately due and payable by Borrower.

     (c) Unless otherwise required by applicable law, payments will be applied first to accrued, unpaid interest, then to principal, and any remaining amount to any unpaid collection costs, late charges and other charges; provided, however, upon an Event of Default and at any time in which such Event of Default is continuing, Lender reserves the right to apply payments among principal, interest, late charges, collection costs and other charges at its discretion.

     (d) Whenever any payment to be made hereunder shall be stated to be due on a day which is not a Banking Day, such payment shall be made on the next

succeeding Banking Day, and such extension of time shall in such case be included in the computation of interest, commission or fee, as the case may be.

     5.2 Computations . All fees and interest shall be computed on the basis of a year of 360-days/year and accrue on a daily basis for the actual number of days elapsed.

     5.3 Maintenance of Accounts . Lender shall maintain, in accordance with its usual practice, an account or accounts evidencing the indebtedness of Borrower and the amounts payable and paid from time to time hereunder. In any legal action or proceeding in respect of this Credit Agreement, the entries made in the ordinary course of business in such account or accounts shall be evidence of the existence and amounts of the obligations of Borrower therein recorded. The failure to record any such amount shall not, however, limit or otherwise affect the obligations of Borrower hereunder to repay all amounts owed hereunder, together with all interest accrued thereon.

     5.4 LIBOR Based Rate Breakage Fees . If for any reason (including voluntary or mandatory prepayment, or acceleration) Lender receives all or part of any LIBOR Based Rate Amount prior to the last day of the relevant LIBOR Interest Period, Borrower shall reimburse Lender and hold Lender harmless from any losses or reasonable expenses which Lender may sustain or incur as a result of such prepayment. Borrower shall reimburse Lender and hold Lender harmless from any losses or reasonable expenses which Lender may sustain or incur as a consequence of the failure of Borrower to make on a timely basis any payment of any principal of any Loan bearing interest at a LIBOR Based Rate, including any such loss or expense arising from liquidation or reemployment of funds obtained by it to maintain such Loan bearing a LIBOR Based Rate or from fees payable to terminate the deposits from which such funds were obtained.

     5.5 Special LIBOR Provisions .

     (a) Notwithstanding any provision of the Credit Documents to the contrary, Lender shall be entitled to fund and maintain funding of all or any part of any Advance in any reasonable manner.

     (b) Notwithstanding any provision of the Credit Documents to the contrary, Borrower shall pay interest on the unpaid principal amount from time to time outstanding under a Loan, in arrears, at the Base Rate if (i) by reason of any Regulatory Change, Lender reasonably determines that, by reason of circumstances affecting the London inter-bank market generally, adequate and fair means do not or will not exist for determining LIBOR or the LIBOR Based Rate, (ii) by reason of any Regulatory Change, Lender becomes restricted in the amount which it may hold of a category of liabilities which includes deposits by reference to LIBOR or a category of assets which includes loans which bear interest at rate determined in part by reference to LIBOR, (iii) by reason of any Regulatory Change, it shall be unlawful for Lender to maintain an Advance, or any portion thereof, bearing interest based on the LIBOR Based Rate, (iv) in the reasonable judgment of Lender, deposits are not available to Lender in the international inter-bank market in the requisite amounts and for the requisite durations, or (v) in the reasonable discretion of Lender, the LIBOR Based Rate does not adequately reflect the cost to Lender of the Advance. If Lender

reasonably determines that it cannot accept an election for a LIBOR Based Rate based on the previous sentence, the corresponding Advance shall bear interest at the Base Rate. Lender shall provide Borrower notice if Lender determines that it cannot accept an election to make a LIBOR Based Rate Advance or to continue or convert an existing Advance to a LIBOR Based Rate Advance; however, failure by Lender to provide such notification shall not create or result in any liability for or impose any other obligation on Lender.

ARTICLE 6

SECURITY

     6.1 Security for Loans . So long as any Loan is outstanding and so long as Lender has any commitment to make any Advance hereunder, Borrower shall:

     (a) cause such Loans and Borrower’s Obligations to be secured at all times by valid and effective security agreements and assignments (collectively, the “ Security Agreement ”), duly executed and delivered by or on behalf of Borrower as Lender shall reasonably specify, granting Lender a valid and enforceable security interest in all of its personal property as described therein (to the extent assignable), including but not limited to trademarks, tradenames, copyrights, patents, patent rights, and licensing agreements, but excluding the CoBank Co