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;
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