EXHIBIT 10.6
SECURITY
AGREEMENT
This Security Agreement (the
“Agreement”) is given as of May 9, 2008, from
BLACKHAWK BIOFUELS, LLC, a Delaware limited liability company (the
“Borrower”), to FIFTH THIRD BANK, a Michigan banking
corporation (the “Lender”).
Preliminary Statement . The
Borrower and the Lender have entered into, or contemporaneously
herewith are entering into, that certain Loan Agreement dated on or
about the date hereof (as amended or otherwise modified from time
to time, the “Loan Agreement”) pursuant to which, and
subject to the terms and conditions thereof, the Lender has agreed
to extend credit to or for the benefit of the Borrower.
Capitalized terms used and not defined herein shall have the
meanings given to them in the Loan Agreement or the Code. The
Borrower now desires to grant to the Lender a security interest in
all present and future personal property of the Borrower as
security for all present and future obligations of the Borrower to
the Lender.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower and the Lender agree as
follows:
l. Grant of Security Interest
. The Borrower hereby grants to the Lender
a security interest in all assets and personal property of the
Borrower, including but not limited to all the Borrower’s
right, title and interest in and to the following property,
wherever located, whether held by Borrower or any other person
(including Secured Party, any financial institution or securities
intermediary) and whether such property or interest therein is now
owned or existing or hereafter acquired or arising (collectively,
the “Collateral”):
(a)
All Accounts, accounts receivable, other receivables, any right to
payment of a monetary obligation, whether or not earned
by performance, leases and lease payments, contract rights, any
other obligations or indebtedness owed to Borrower from whatever
source arising, all other rights of Borrower to receive performance
or any payments in money or in kind whether or not earned by
performance, all guaranties, security interests and Supporting
Obligations of any of the foregoing and insurance policies and
proceeds relating thereto, and all rights of Borrower as an unpaid
seller of Goods and services, including, but not limited to, the
rights to stoppage in transit, replevin, reclamation, and
resale, all rights to payment for money or funds advanced or
sold.
(b)
All Inventory, merchandise, raw materials, goods in process, work
in progress, materials used or consumed in a business, finished
goods, component materials, and all supplies, incidentals, office
supplies, packaging materials and any and all property or items
used or consumed in the operation of the business of Borrower or
which contribute to the finished products or to the sale, promotion
and shipment thereof, As-Extracted collateral, all property leased
by Borrower, held
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by
Borrower for sale or lease or to be furnished under a contract of
service, or furnished by Borrower under a contract for service and
all Documents evidencing any part of any of the
foregoing.
(c)
All Equipment, Goods other than Inventory, parts, computers,
including data, hardware and software, machinery, fixtures,
furniture, furnishings, tools, dies, aircraft, vessels and vehicles
of every kind and description, whether or not titled, all parts and
accessories for or relating to any of the foregoing.
(d)
all Documents, including, without limitation, all warehouse
receipts, bills of lading and similar documents of title relating
to goods in which Borrower at any time has an interest, whether now
or at any time or times hereafter issued to Borrower or Lender by
any person or entity, and whether covering any portion of
Borrower’s inventory or otherwise;
(e)
all Instruments (including, without limitation, Promissory Notes)
of any kind or nature whatsoever, whether negotiable or
non-negotiable;
(f)
all Chattel Paper of any kind or nature whatsoever, including,
without limitation, all leases, rental agreements, installment sale
agreements, conditional sale agreements and other chattel paper
relating to or arising out of the sale, rental, lease or other
disposition of any of the Collateral;
(g)
all General Intangibles of any kind or nature whatsoever,
including, without limitation, all Payment Intangibles, all
patents, trademarks, copyrights and other intellectual property,
and all applications for, registrations of and licenses of the
foregoing and all computer software, product specifications, trade
secrets, licenses, trade names, service marks, goodwill, tax
refunds, rights to tax refunds, franchises, rights related to
prepaid expenses, rights under executory contracts, choses in
action, causes of action and rights under partnership, joint
venture, co-ownership, management and/or similar agreements and/or
arrangements, except to the extent that Borrower is prohibited from
granting a security interest in any of the foregoing under the
applicable license or agreement giving rise to Borrower’s
rights in same;
(h)
all monies, reserves, deposits, cash, cash equivalents and other
property now or at any time or times hereafter in the possession or
under the control of Lender or any bailee of Lender;
(i)
all Deposit Accounts and certificates of deposit and all interest
or dividends thereon;
(j)
all Investment Property and financial assets of any kind or type,
whether certificated or uncertificated, including, without
limitation, all securities, securities accounts, securities
entitlements, stocks, bonds, options, warrants, commodity
contracts, futures contracts, commodity accounts, commodity
options, commercial paper, money market funds and/or accounts,
Treasury bills, notes and bonds,
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instruments, certificates of deposit, mutual
fund shares, cash and money, together with all rights, income,
revenues, proceeds and profits therefrom, including, without
limitation, all dividends, distributions (cash or stock,
extraordinary as well as ordinary), interest and other payments,
all additions thereto, substitutions or replacements thereof, any
goods or other property to be delivered thereunder, and any
exchanges for or changes in any of the foregoing;
(k)
all Commercial Tort Claims (Lender acknowledges that the attachment
of its security interest in any Commercial Tort Claim as original
collateral is subject to Borrower’s compliance with
Section 3(d));
(l)
all Supporting Obligations;
(m)
all letters of credit and Letter-of-Credit Rights;
(n)
all books, records, computer records, computer disks, ledger cards,
programs and other computer materials, customer and supplier lists,
invoices, orders and other property and general intangibles at any
time evidencing or relating to any of the Collateral;
(o)
all accessions to any of the property described above and all
substitutions, renewals, improvements and replacements of and
additions thereto; and
(p)
all proceeds, including, without limitation, proceeds which
constitute property of the types described in (a), (b), (c), (d),
(e), (f), (g), (h), (i), (j), (k), (l), (m), (n) and/or
(o) above and any rents and profits of any of the foregoing
items, whether cash or noncash, immediate or remote, including,
without limitation, all income, accounts, contract rights, general
intangibles, payment intangibles, chattel paper, notes, drafts,
acceptances, instruments and other rights to the payment of money
arising out of the sale, rental, lease, exchange or other
disposition of any of the foregoing items (provided, however, that
nothing contained herein shall be deemed to permit or assent to any
such disposition other than the sale or lease of inventory in the
ordinary course of business (which does not include any sale, lease
or other transfer of inventory in partial or total satisfaction of
any Indebtedness)), or the disposition of obsolete Collateral in
the ordinary course of business, and insurance proceeds, and all
products, of (a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k),
(l), (m), (n) and/or (o) above, and any indemnities,
warranties and guaranties payable by reason of loss or damage to or
otherwise with respect to any of the foregoing items.
2. Security for Obligations
. This Agreement secures the payment and performance of all
obligations of (i) the Borrower to the Lender under the Loan
Agreement and the other Loan Documents, (ii) the obligations
of Borrower and/or the Lender to the IFA pursuant to the IFA
Guaranty Documents, whether due to any Lender recovery under the
IFA Guaranty or otherwise, and (iii) any other obligation of
the Borrower to the Lender, whether monetary, nonmonetary, direct,
indirect, acquired, joint,
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