EXHIBIT 10.10
SUBORDINATED SECURITY
AGREEMENT
This Subordinated Security Agreement (the
“Agreement”) is given as of May 9 2008 from
BLACKHAWK BIOFUELS, LLC, a Delaware limited liability company (the
“Borrower”), to REG VENTURES, LLC, an Iowa limited
liability company (“REG”).
Preliminary Statement . The Borrower and REG have entered
into, or contemporaneously herewith are entering into, a certain
Subordinated 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, REG 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. The Borrower now desires to grant to REG a
subordinated security interest in all present and future personal
property of the Borrower as security for all present and future
obligations of the Borrower to REG. The security interest
granted hereby is subordinate to the security interest of Borrower
granted to Fifth Third Bank under that certain Loan Agreement dated
May 9, 2008 between Fifth Third Bank and Biofuels Company of
America, LLC, and to any working capital loan facility of Borrower,
but only to the extent that such working capital loan facility is
secured by current assets of the Borrower. Notwithstanding anything in the
Subordinated Loan Documents to the contrary, payment and
performance under the Subordinated Loan Documents is subject and
subordinate to the terms, conditions and restrictions set forth in
the Senior Loan Documents with Fifth Third Bank and/or any
Replacement Lender.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower and REG agree as follows:
l. Grant of Security Interest .
The Borrower hereby grants to REG a subordinated 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 such
property or interest therein is now owned or existing or hereafter
acquired or arising (collectively, the
“Collateral”):
(a)
all accounts, accounts
receivable, payment intangibles, lease payments, rental payments,
lease rights, contract rights and other rights to the payment of
money, and all goods whose sale, lease, rental or other disposition
by Borrower have given rise to accounts and have been returned to
or repossessed or stopped in transit by Borrower;
(b)
all inventory of Borrower,
wherever located, including, without limitation, (i) all
inventory under lease, in transit, held by others for
Borrower’s account, covered by warehouse receipts, purchase
orders and/or contracts, or in the possession of any lessees,
renters, carriers, forwarding agents, truckers, warehousemen,
vendors or other persons or entities and (ii) all inventory
consisting of raw materials, work in process, finished goods,
supplies, goods, incidentals, office supplies and/or packaging and
shipping materials;
(c)
a ll 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 REG by any person or entity, and whether
covering any portion of Borrower’s inventory or
otherwise;
(d)
all instruments
(including, without limitation, promissory notes) of any kind or
nature whatsoever, whether negotiable or non-negotiable;
(e)
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;
(f)
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;
(g)
all goods, machinery,
equipment, motor vehicles, trucks, tractors, trailers, appliances,
furniture, furnishings, tools, dies, jigs and other tangible
personal property and all accessories and parts relating
thereto;
(h)
all deposit accounts and
certificates of deposit and all interest or dividends
thereon;
(i)
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,
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;
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(j)
all commercial tort claims
(REG 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(c));
(k)
all supporting
obligations;
(l)
all letter of credit
rights;
(m)
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;
(n)
all accessions to any of
the property described above and all substitutions, renewals,
improvements and replacements of and additions thereto;
and
(o)
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) and/or (n) 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) and/or
(n) 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 Oblig
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