PLEDGE AGREEMENT

Execution Version

Exhibit 10.8

PLEDGE AGREEMENT

among

AZ BIOMASS LLC ,
a Delaware limited liability company,
as Pledgor

SNOWFLAKE WHITE MOUNTAIN POWER, LLC,
an Arizona limited liability company,
as Borrower

and

COBANK, ACB ,
as Collateral Agent

Dated as of January 1, 2009

TABLE OF CONTENTS

PLEDGE AGREEMENT

     This PLEDGE AGREEMENT, dated as of January 1, 2009 (this “ Agreement ”), is entered into by and among AZ BIOMASS LLC, a Delaware limited liability company (“ Pledgor ”), SNOWFLAKE WHITE MOUNTAIN POWER, LLC, an Arizona limited liability company (“ SWMP ”) and COBANK, ACB, in its capacity as collateral agent (together with its successors, designees and assigns in such capacity, “ Collateral Agent ”).

RECITALS

     A. In order to finance the development, construction, financing, ownership, operation and maintenance of the approximately 24 MW biomass-fired power generation plant to be located near Snowflake, Arizona (the “ Project ”), SWMP, Renegy, LLC, an Arizona limited liability company (“ Renegy ”) and Renegy Trucking, LLC, an Arizona limited liability company (“ Renegy Trucking ”, and together with SWMP and Renegy, “ Borrowers ”) entered into that certain Credit Agreement, dated as of September 1, 2006, as amended and restated on the date hereof (as further amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Borrowers, CoBank, ACB, as lead arranger, administrative agent (in such capacity, “ Administrative Agent ”) and Collateral Agent, CoBank, ACB, as letter of credit issuer (“ LC Issuer ”) and the financial institutions parties thereto (“ Lenders ”), pursuant to which, among other things, Lenders have extended commitments to make loans to, and for the benefit of, Borrowers.

     B. It was a requirement of the Credit Agreement and the making of the advances of credit contemplated thereby that Renegy Holdings, Inc., a Delaware corporation (“ Renegy Holdings ”), upon becoming the sole member and manager of SWMP, enter into that certain Pledge Agreement, dated as of October 1, 2007 (as amended on the date hereof, the “ Renegy Pledge Agreement ”), with SWMP and Collateral Agent, pursuant to which Renegy Holdings pledged all of the membership interests of SWMP to Collateral Agent.

     C. Pursuant to (i) that certain Membership Interest Purchase Agreement, dated as of the date hereof, between Pledgor and Renegy Holdings (the “ Purchase Agreement ”), and (ii) that certain Amended and Restated Limited Liability Company Agreement of SWMP, dated as of the date hereof (the “ LLC Agreement ”) between Renegy Holdings and Pledgor, Pledgor purchased the Class A Interest (as defined in the LLC Agreement) in SWMP from Renegy Holdings and has become a Member (as defined in the LLC Agreement) of SWMP (the “ Transaction ”).

     D. In connection with the Transaction, and in order to preserve the security interest of Collateral Agent for the benefit of the Secured Parties in SWMP, Pledgor has agreed to enter into this Agreement.

AGREEMENT

     NOW, THEREFORE, in consideration of the promises contained herein, and to induce Administrative Agent, Collateral Agent, Lenders and LC Issuer to continue to perform under the Credit Agreement and to make the advances of credit to Borrowers contemplated thereby and for

other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Pledgor and SWMP hereby agree with Collateral Agent, as follows:

ARTICLE I.
DEFINITIONS

     1.1 Defined Terms . The following terms when used in this Agreement, including its preamble and recitals, shall have the following meanings:“ Administrative Agent ” has the meaning given in the recitals to this Agreement.

     “ Borrowers ” has the meaning given in the preamble to this Agreement.

     “ Class A Interest ” shall have the meaning given in the LLC Agreement.

     “ Collateral ” has the meaning given in Section 2.1.

     “ Collateral Agent ” has the meaning given in the preamble to this Agreement.

     “ Credit Agreement ” has the meaning given in the recitals to this Agreement.

     “ Forbearance Agreement ” means that certain Forbearance Agreement, dated as of the date hereof, among Pledgor, SWMP and Collateral Agent.

     “ Governing Documents ” means the LLC Agreement and Articles of Organization of SWMP (as amended).

     “ LC Issuer ” has the meaning given in the recitals to this Agreement.

     “ Lenders ” has the meaning given in the recitals to this Agreement.

     “ LLC Agreement ” has the meaning given in the recitals to this Agreement.

     “ Pledged Equity Interests ” has the meaning given in Section 2.1.

     “ Pledgor ” has the meaning given in the preamble to this Agreement.

     “ Project ” has the meaning given in the recitals to this Agreement.

     “ Purchase Agreement ” has the meaning given in the recitals to this Agreement.

     “ Renegy ” has the meaning given in the recitals to this Agreement.

     “ Renegy Holdings ” has the meaning given in the recitals to this Agreement.

     “ Renegy Pledge Agreement ” has the meaning given in the recitals to this Agreement.

     “ Renegy Trucking ” has the meaning given in the recitals to this Agreement.

     “ Secured Parties ” means Collateral Agent, Administrative Agent, LC Issuer, the Lenders and each of their respective successors, transferees and assigns; provided , that no Affiliate of any Borrower shall be a “Secured Party” under this Agreement.

     “ SWMP ” has the meaning given in the recitals to this Agreement.

     “ Transaction ” has the meaning given in the recitals to this Agreement.

     “ UCC ” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided , however , that in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “ UCC ” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions related to such provisions.

     1.2 Credit Agreement and UCC Definitions . Unless otherwise defined herein, (i) all capitalized terms used in this Agreement shall have the meanings provided in Exhibit A to the Credit Agreement or, if not defined therein, the UCC, and (ii) all terms defined in the UCC and used herein shall have the same definitions herein as specified therein. If a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term has the meaning specified in Article 9.

     1.3 Rules of Interpretation . Unless otherwise provided herein, the rules of interpretation set forth in Exhibit A of the Credit Agreement shall apply to this Agreement, including its preamble and recitals, and are incorporated herein by reference, mutatis mutandis .

ARTICLE II.
PLEDGE AND GRANT OF SECURITY INTEREST

     2.1 Granting Clause . Pledgor hereby assigns, grants and pledges to Collateral Agent for the benefit of the Secured Parties a continuing first-priority security interest in all right, title and interest of Pledgor, now owned or hereafter existing or acquired, in, to and under any and all of the following (collectively, the “ Collateral ”):

          (a) the Class A Interest in SWMP (the “ Pledged Equity Interests ”);

          (b) all rights to receive income, gain, profit, dividends and other distributions allocated or distributed to Pledgor in respect of or in exchange for all or any portion of the Pledged Equity Interests;

          (c) all of Pledgor’s capital or ownership interest, including capital accounts, in SWMP, and all accounts, deposits or credits of any kind with SWMP;

          (d) all of Pledgor’s voting rights in or rights to control or direct the affairs of SWMP;

          (e) all of Pledgor’s rights, title and interest in, to or under any and all of SWMP’s assets or properties;

          (f) all other rights, title and interest in or to SWMP derived from the Pledged Equity Interests;

          (g) all indebtedness or other obligations of SWMP owed to Pledgor;

          (h) all claims of Pledgor for damages arising out of, or for any breach or default relating to, the Collateral;

          (i) all rights of Pledgor to terminate, amend, supplement, modify, or cancel, the Governing Documents of SWMP, to take all actions thereunder and to compel performance and otherwise exercise all remedies thereunder;

          (j) all securities, notes, certificates and other instruments representing or evidencing any of the foregoing rights and interests or the ownership thereof and any interest of Pledgor reflected in the books of any financial intermediary pertaining to such rights and interests and all non-cash dividends, cash, options, warrants, stock splits, reclassifications, rights, instruments or other investment property and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such rights and interests; and

          (k) to the extent not included in any of the foregoing, all proceeds of the foregoing Collateral, whether cash or non-cash;

provided , however , that “Collateral” shall not include (i) any distribution, repayment of subordinated debt or any other payments made by or on behalf of SWMP to Pledgor expressly permitted pursuant to the terms of the Credit Documents, (ii) any amounts in the Deposit Account (as defined in the Purchase Agreement) or any of Pledgor’s rights under the Security Agreement or the Deposit Account Control Agreement (each as defined in the Purchase Agreement), (iii) any rights of or any amounts payable to Pledgor under Section 2.02, 2.05 or 12.03 of the Purchase Agreement, and (iv) any rights of, any amounts payable or any allocations to Pledgor under Article 5, Sections 7.5, 7.6 7.7 and 8.10 of the LLC Agreement and Article 11 of the Purchase Agreement, solely to the extent any such rights, amounts or allocations of such clause (iv) relate to acts, omissions, allocations or matters arising prior to the time that Pledgor is divested of ownership of the Class A Interest pursuant to this Agreement.

     2.2 Retention of Certain Rights . So long as Collateral Agent has not exercised remedies with respect to the Collateral under this Agreement or any other Credit Document upon the occurrence of an Event of Default, Pledgor reserves the right to exercise all voting and other rights with respect to the Collateral (except as limited by the Credit Documents and the Forbearance Agreement) and to receive all income, dividends and other distributions from the Collateral (except as limited by the Credit Documents); provided that no vote shall be cast, right exercised or other action taken which could materially impair the Collateral.

ARTICLE III.
OBLIGATIONS SECURED

     Without limiting the generality of the foregoing, this Agreement and all of the Collateral secure the payment and performance when due of all Obligations. If enforcement of the liability of Pledgor under this Agreement (not to exceed the value of the Collateral) would be an unlawful or voidable transfer under any applicable fraudulent transfer law or any comparable law, notwithstanding the representation and warranty set forth in Section 4.13 or anything to the contrary herein, then the liability of Pledgor hereunder shall be reduced to the greater of (a) the highest amount for which such liability may then be enforced without giving rise to an unlawful or voidable transfer under any such law and (b) the value of the Collateral.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PLEDGOR

     Pledgor represents and warrants to and in favor of Collateral Agent, as of the date hereof, as follows:

     4.1 Organization . Pledgor is (a) a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, (b) duly qualified as a foreign limited liability company and in good standing, in each jurisdiction in which such qualification is required by law, and (c) duly qualified, authorized to do business and in good standing in each jurisdiction in which such qualification is necessary to execute, deliver and perform this Agreement and each of the other Project Documents to which it is a party.

     4.2 Power and Authorization; Enforceable Obligations . Pledgor has the full limited liability company power and authority to execute, deliver and perform this Agreement and to take all action as may be necessary to complete the transactions contemplated hereunder. Pledgor has taken all necessary limited liability company action to authorize the execution, delivery and performance of this Agreement and to complete the transactions contemplated hereby. No consent or authorization of, filing with, or other act by or in respect of any other Person or governmental authority is required in connection with the execution, delivery or performance by Pledgor, or the validity or enforceability as to Pledgor, of this Agreement, except such consents or authorizations or filings or other acts as have already been obtained or made. This Agreement has been duly executed and delivered by Pledgor and constitutes a legal, valid and binding obligation of Pledgor enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the right of creditors generally and by general principles of equity.

     4.3 No Legal Bar . The execution, delivery and performance by Pledgor of this Agreement and the consummation of the transactions contemplated hereby (including the granting of security interests hereunder) do or will not violate any applicable law or any material contractual obligation of Pledgor and do or will not result in, or require, the creation or imposition of any Lien (other than the Liens created pursuant to this Agreement) on any of the properties or revenues of Pledgor pursuant to any applicable law or any such contractual obligation.

     4.4 Beneficial Ownership; Pledged Equity Interests . Pledgor is the lawful and beneficial owner of and has full right, title and interest in, to and under rights and interests comprising the Collateral, subject to no Liens (other than the Lien in favor of the Collateral Agent (on behalf of the Secured Parties)). The Pledged Equity Interests (a) have been duly authorized and validly issued, (b) are fully paid and non-assessable and (c), together with the Class B Interest (as defined in the LLC Agreement) held by Renegy Holdings and pledged to Collateral Agent pursuant to the Renegy Pledge Agreement, constitute all of the outstanding membership interests of SWMP. The Pledged Equity Interests are not securities governed by Article 8 of the New York Uniform Commercial Code, and are not certificated.

     4.5 No Prior Assignment . Pledgor has not previously assigned any of its rights in, to or under all or any portion of the Collateral.

     4.6 No Other Financing Documents . Pledgor has not executed and is not aware of any effective financing statement, security agreement or other instrument similar in effect covering all or any part of the Collateral on file in any recording office, except such as may have been filed pursuant to this Agreement and the other Credit Documents.

     4.7 Compliance with Law . Pledgor is in compliance with all applicable laws, except noncompliance which could not reasonably be expected to have a Material Adverse Effect, and no written notices of any material violation of any law relating to the Project or any Project Document have been received by Pledgor.

     4.8 No Litigation . There are no pending or, to Pledgor’s knowledge, threatened in writing actions, suits, proceedings or investigations of any kind, including actions or proceedings of or before any governmental authority, relating to the Collateral or to which Pledgor is a party or is subject, or by which it or its properties are bound that, if adversely determined to or against Pledgor could reasonably be expected to have a Material Adverse Effect.

     4.9 Taxes . Pledgor has timely filed all federal, state and local tax returns that it is required to file (except where a failure to file such local tax return could not reasonably be expected to have a Material Adverse Effect), has paid all taxes it is required to pay to the extent due (other than those taxes that it is contesting in good faith and by appropriate proceedings, with adequate reserves established for such taxes) and, to the extent such taxes are not due, has established reserves that are adequate for the payment thereof to the extent required by GAAP.

     4.10 Investment Company Act; Federal Energy Laws . Pledgor is not an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended. No provision of the Federal Power Act or the Public Utility Holding Company Act as to securities, rates or financial or organizational matters precludes Pledgor from entering into and performing its obligations hereunder.

     4.11 Name; Organizational Number . The name of Pledgor is “AZ Biomass LLC”, as indicated in the public records of the State of Delaware, and Pledgor’s federal employee identification number is 26-3717159 and Pledgor’s Delaware organizational number is 08110528.

     4.12 SWMP Information . Pledgor has established adequate means of obtaining financial and other information pertaining to the businesses, operations and condition (financial or otherwise) of SWMP and its properties on a continuing basis, and Pledgor now is and hereafter will be completely familiar with the businesses, operations and condition (financial or otherwise) of SWMP and its properties. Pledgor hereby agrees that Collateral Agent shall not have any duty to advise Pledgor of information known to Collateral Agent regarding such condition or any such circumstances or of any changes or potential changes affecting the Collateral. In the event Collateral Agent, in its respective discretion, undertakes at any time or from time to time to provide any such information to Pledgor, Collateral Agent shall not be under any obligation (a) to undertake any investigation not a part of its regular business routine, or reasonable commercial lending practices or (b) to make any other or future disclosure of such information to Pledgor.

     4.13 Capital Adequacy, Etc .

          (a) After giving effect to the transactions contemplated by this Agreement and the contingent obligations evidenced hereby, Pledgor is not, on either an unconsolidated basis or a consolidated basis with any Person that directly or indirectly controls Pledgor, insolvent as such term is used or defined in any applicable Bankruptcy Law, and Pledgor has and will have assets which, fairly valued, exceed its indebtedness, liabilities or obligations.

          (b) Pledgor is not executing this Agreement with any intention to hinder, delay or defraud any present or future creditor or creditors of Pledgor.

          (c) Pledgor is not engaged in any business or transaction which, after giving effect to the transactions contemplated by this Agreement, will leave Pledgor with capital or assets which are unreasonably small in relation to the business or transactions engaged by Pledgor, and Pledgor does not intend to engage in any such business or transaction.

          (d) Pledgor does not intend to incur, nor does Pledgor believe that it will incur, debts beyond Pledgor’s ability to repay such debts as they mature.

     4.14 Perfection of Security Interest . The security interest granted to Collateral Agent pursuant to this Agreement constitutes as to personal property included in the Collateral a valid lien. The security interest granted to Collateral Agent pursuant to this Agreement in the Collateral consisting of personal property will be perfected (a) with respect to any property that can be perfected by filing, upon the filing of financing statements in the proper filing offices and (b) with respect to any property, if any, that can be perfected by possession, upon Collateral Agent receiving possession thereof and, in each case, such security interest will be, as to Collateral perfected under the UCC or otherwise as aforesaid, superior and prior to the rights of all third Persons now existing or hereafter arising whether by way of mortgage, lien, security interests, encumbrance, assignment or otherwise.

     4.15 After-Acquired Collateral . It is understood and agreed that the foregoing representations and warranties shall apply only to the Collateral pledged on the date hereof and that, with respect to Collateral pledged thereafter, Pledgor shall, upon the written request of Collateral Agent, be required to make representations and warranties in form and substance

substantially similar to the foregoing in supplements hereto and that such representations and warranties contained in such supplements hereto shall be applicable to such Collateral hereafter delivered.

ARTICLE V.
COVENANTS OF PLEDGOR

     Pledgor covenants to and in favor of Collateral Agent as follows:

     5.1 Compliance with Obligations . Pledgor shall perform and comply in all material respects with all obligations and conditions on its part to be performed with respect to the Collateral.

     5.2 Defense of Collateral . Pledgor shall, until the payment in full in cash and performance in full of all Obligations and the termination of all the Lender’s Commitments and all other obligations to the Secured Parties under the Credit Documents (other than the Obligations that are intended to survive the termination of the Credit Documents and return or expiration of the Letter of Credit), defend its title to the Collateral and the interest of Collateral Agent in the Collateral pledged hereunder against the claims and demands of all Persons.

     5.3 Preservation of Value; Limitation of Liens . Pledgor shall not take or permit to be taken any action in connection with the Collateral which would impair in any material respect the value of the interests or rights of Pledgor therein or which would impair the interests or rights of Collateral Agent therein or with respect thereto, except as expressly permitted by the Credit Documents or the Forbearance Agreement; provided , however , that nothing in this Agreement shall prevent Pledgor, prior to the exercise by Collateral Agent of any rights pursuant to the terms hereof, from undertaking Pledgor’s operations in the ordinary course of business in accordance with the Credit Documents. Pledgor shall not directly or indirectly create, incur, assume or suffer to exist any Liens on or with respect to all or any part of the Collateral (other than the Liens in favor of the Collateral Agent (on behalf of the Secured Parties)). Pledgor shall at its own cost and expense promptly take such action as may be necessary to discharge any such Liens.

     5.4 No Other Filings . Pledgor shall not file or authorize or permit to be filed in any jurisdiction any financing statements under the UCC or any like statement relating to the Collateral in which Collateral Agent is not named as the sole secured party.

     5.5 No Sale of Collateral . Pledgor shall not cause, suffer or permit the sale, assignment, conveyance, pledge or other transfer of all or any portion of Pledgor’s ownership or interest or any portion of the Collateral, except as provided in Sections 2.05, 12.03 or 13.09 of the Purchase Agreement, or Article X of the LLC Agreement, provided that any such transferee assumes Pledgor’s rights and obligations hereunder, under the Forbearance Agreement, the LLC Agreement and the Purchase Agreement and executes such other documents as reasonably requested by Collateral Agent to continue its first priority lien on the Collateral. Upon such assignment and assumption, Pledgor shall have no liability or obligations under this Agreement with respect to matters arising after the date of such assignment and assumption. As used herein, the transfer of an ownership interest in the Collateral shall not include the direct or indirect sale,

assignment, pledge, hypothecation, transfer or other disposition (voluntarily or involuntarily, by gift or otherwise, and whether as security or otherwise) of any equity interest in Pledgor or in any Person that controls Pledgor.

     5.6 Notice . Pledgor shall promptly, upon acquiring notice or giving notice, as the case may be, or obtaining knowledge thereof, give written notice (with copies of any such underlying notices) to Collateral Agent of any and all writings, documents or instruments evidencing any additional Collateral or any Collateral which has been converted from one type of Collateral into another type, including, without limitation, any Collateral with respect to which possession is required or permitted for the Lien and security interest granted therein under this Agreement to be perfected.

     5.7 Filing of Bankruptcy Proceedings . To the extent it may so agree to do so under applicable law, Pledgor, for itself, its successors and assigns, shall not cast any vote as an owner in SWMP (a) in favor of the commencement of a voluntary case or other proceeding seeking liquidation, reorganization, rehabilitation or other relief with respect to SWMP or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect in any jurisdiction or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the owners of SWMP or any substantial part of SWMP’s property, (b) to authorize SWMP to consent to any such aforesaid relief or to the appointment of or taking possession by any such aforesaid official in an involuntary case or other proceeding commenced against SWMP or (c) to authorize SWMP to make a general assignment for the benefit of creditors.

     5.8 Distributions . If Pledgor in its capacity as owner of SWMP receives any income, dividend or other distribution of money or property of any kind from SWMP (other than as expressly permitted by the Credit Documents), Pledgor shall hold such income or distribution as trustee for, and shall promptly deliver the same to, Collateral Agent.

     5.9 Maintenance of Records . Pledgor shall, at all times, keep accurate and complete records of the Collateral. Pledgor shall permit representatives of Collateral Agent, upon reasonable prior written notice, at any time during normal business hours of Pledgor to inspect and make abstracts from Pledgor’s books and records pertaining to the Collateral. Upon the occurrence and during the continuation of any Event of Default, at Collateral Agent’s written request, Pledgor shall promptly deliver copies of any and all such records to Collateral Agent.

     5.10 Name; Jurisdiction of Organization . Pledgor shall not change its name, its jurisdiction of organization, the location of its principal place of business, its organization identification number or its fiscal year without notice to Collateral Agent at least 30 days prior to such change. In the event of such change, Pledgor shall at its expense or at the expense of SWMP, as applicable execute and deliver such instruments and documents as may be reasonably required by Collateral Agent or applicable law to maintain a prior perfected security interest in the Collateral.

     5.11 Amendments to Organizational Documents . Except as expressly permitted by this Agreement or the other Credit Documents, Pledgor shall not terminate, amend, supplement or otherwise modify, or cancel, the Governing Documents of SWMP without the prior written consent of Collateral Agent.

     5.12 Proceeds of Collateral . Pledgor shall, at all times, keep pledged to Collateral Agent pursuant hereto all Collateral and shall not consent to the issuance by SWMP of any membership interests or other equity interests unless such membership interests or other equity interests are immediately duly pledged to Collateral Agent hereunder on a first priority perfected basis.

     5.13 Collateral Secured by Possession . Pledgor shall, if requested by Collateral Agent, properly deliver or cause to be delivered to Collateral Agent all Collateral in which the Lien and security interest granted therein under this Agreement may be or is required to be perfected by possession.

ARTICLE VI.
EVENTS OF DEFAULT

     The occurrence of an Event of Default under, and as defined in, the Credit Agreement shall