Exhibit 10.6


 


THIS WARRANT AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO (1) REGISTRATION IN COMPLIANCE WITH SUCH
ACT AND SUCH STATE LAWS OR (2) AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED.


 


WARRANT


 


To Purchase Class A
Units


 


BLACKHAWK
BIOFUELS, LLC


 


June 30, 2006


 


THIS
CERTIFIES THAT, for good and valuable consideration, the
receipt of which is hereby acknowledged,                                                        
or its lawful assignee (the “Holder”) is entitled to subscribe for and purchase
from Blackhawk Biofuels, LLC, an Illinois limited liability company (the “Company”),
                                                    
of the Class A Units of the Company pursuant to the terms and subject to
the conditions hereof. The Class A Units that may be acquired upon
exercise of this Warrant are referred to herein as the “Warrant Units.”  As used herein, the term “Holder” means the
Holder, any party who acquires all or part of this Warrant as a registered
transferee of the Holder, or any record holder or holders of the Warrant Units
issued upon exercise, whether in whole or in part, of the Warrant.


 


This Warrant is subject
to the following provisions, terms and conditions:


 


1.                                       Exercise
and Term.


 


(a)                                  The right to purchase the Warrant Units
at the Warrant Exercise Price shall be exercisable at any time from and after
the date on which the 30 million gallon per year biodiesel production plant
that the Company proposes to construct (the “Plant”) commences operations at
its nameplate capacity, as certified by the design-build firm that the Company engages to construct the Plant,
and continue for a period of one (1) year following such date (the “Exercise
Period”), after which date all such rights shall terminate.


 


(b)                                 The
rights represented by this Warrant may be exercised by the Holder hereof,
in whole or in part (but not as to a fractional units), by written notice
of the Holder’s irrevocable election to exercise the purchase right represented
by such Warrant (in the form attached hereto) delivered to the Company ten
(10) days prior to the intended date of exercise at its principal offices
prior to the expiration of this Warrant along with or preceded by (i) a
certified or bank cashier’s check in payment of the Warrant Exercise Price for
such Units, and (ii) the surrender of this Warrant.


 


2.                                       Warrant
Exercise Price. The Warrant Units shall be exercisable at a price of One
Dollar and no cents ($1.00) per unit (the “Warrant Exercise Price”).


 

















 


3.                                       Issuance
of Securities. The Company agrees that the Warrant Units purchased hereby
shall be and are deemed to be issued to the record holder hereof as of the
close of business on the date on which this Warrant shall have been surrendered
and the payment made for such Warrant Units as aforesaid. Within a reasonable
time, not exceeding ten (10) days after the rights represented by this
Warrant shall have been so exercised, and, unless this Warrant has expired, a
new Warrant representing the number of Warrant Units, if any, with respect to which
this Warrant shall not then have been exercised shall also be delivered to the
holder hereof.


 


4.                                       Status
as Accredited Investor. The Holder represents and warrants to the Company
that as of the date of this Warrant, Holder is an “accredited investor” as that
term is defined under Rule 501 of Regulation D of the Securities Act of
1933, as amended, and Holder understands that the Company is relying upon this
representation in connection with the issuance of this Warrant to Holder.


 


5.                                       Covenants
of Company. The Company agrees that all Warrant Units which may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be duly authorized and issued, fully paid and nonassessable. The
Company further agrees that during the period within which the rights
represented by this Warrant may be exercised, in the event this Warrant is
exercised, the Company will have authorized, and reserved for the purpose of
issue or transfer upon exercise of the subscription rights evidenced by this Warrant,
a sufficient number of such Warrant Units, to provide for the exercise of the
rights represented by this Warrant.


 


6.                                       Anti-dilution
Adjustments. The above provisions are, however, subject to the following:


 


(a)                                  In
case the Company shall at any time hereafter subdivide or combine its
outstanding Class A Units, the Warrant Exercise Price, in effect
immediately prior to the subdivision or combination shall forthwith be
proportionately increased, in the case of combination, or decreased, in the
case of subdivision, and each Warrant Unit purchasable upon exercise of the
Warrant shall be changed to the number determined by dividing the then current
Warrant Exercise Price by the exercise price as adjusted after the subdivision
or combination.


 


(b)                                 If
any merger, capital reorganization or reclassification of the outstanding
capital stock of the Company, or consolidation or merger of the Company with
another entity, or the sale of all or substantially all of its assets to
another entity shall be effected in such a way that holders of the Company’s Class A
Units shall be entitled to receive securities or assets with respect to or in
exchange for their Class A Units (an “Exchange Event”), then, from and
after such Exchange Event, the Warrant will be exercisable, upon the terms and
conditions specified in this Warrant, for an amount of such securities or
assets to which a holder of the number of Class A Units purchasable upon
exercise of the Warrant at the time of such Exchange Event would have been
entitled to receive upon such Exchange Event. Appropriate provisions will be
made with respect to the rights and interests of the Holder to ensure that the
provisions of this Warrant (including without limitation the provisions to
adjust the Warrant Exercise Price and the number of Class A Units
purchasable upon the exercise of this Warrant) will be applicable, as nearly as
may be, in relation to any such securities or assets deliverable upon the
exercise of this Warrant after an Exchange Event. The Company will not effect
any Exchange Event unless, prior to the consummation thereof, the successor or
purchasing corporation (if other than the Company) with respect to such
Exchange Event, assumes by written instrument executed and delivered to the
Holder at the address of such Holder as shown on the books of the Company, the
obligation to deliver to such Holder such securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to
purchase.


 


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(c)                                  Upon
any adjustment of the Warrant Exercise Price in accordance with this Section 6,
then and in each such case, the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered Holder of
this Warrant at the address of such Holder as shown on the books of the
Company, which notice shall state the Warrant Exercise Price resulting from
such adjustment and the increase or decrease, if any, in the number of Class A
Units purchasable at such price upon the exercise of this Warrant, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based.


 


7.                                       No
Voting Rights. This Warrant shall not entitle the holder hereof to any
voting rights or other rights as a unitholder of the Company.


 


8.                                       Transfer
of Warrant or Resale. The holder acknowledges that it has obtained this
Warrant for investment and not with the intention of making any resale or
distribution. The holder further acknowledges (a) that neither this
Warrant nor any of the securities obtainable under it have been registered
under the Securities Act of 1933, as amended, or any state securities statutes,
(b) that neither this Warrant nor any securities obtained under it may be
transferred without such registration or an opinion of legal counsel acceptable
to the Company that such transfer may be made without registration and (c) the
Warrant Units will be issued subject to the terms of and restrictions on
transfer contained in the Company’s Limited Liability Company Agreement as it may be
amended from time to time.


 


9.                                       Successors
and Assigns. This Warrant shall inure to the benefit of and be binding upon
the successors and permitted assigns of the parties hereto. The Holder of this
Warrant may assign any of its rights under this Warrant to his or her
heirs to the extent permitted by this Warrant and applicable law (including,
without limitation, federal and state securities laws and regulations) and
subject to restrictions administered by the Company substantially similar to
those applicable to Units under the Company’s Limited Liability Company
Agreement.


 


10.                                 Governing
Law. This Warrant shall be governed by and construed in accordance with the
laws of the State of Illinois, without regard to the principles of conflicts of
law thereof.


 


IN
WITNESS WHEREOF, Blackhawk Biofuels, LLC has caused this
Warrant to be signed by its duly authorized officer.


 


 


	
   

  	
  BLACKHAWK BIOFUELS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
					



 


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WARRANT EXERCISE


 


(To
be signed only upon exercise of Warrant)


 


The undersigned, the
Holder of a Warrant to purchase Class A Units of Blackhawk Biofuels, LLC,
hereby irrevocably elects to exercise the purchase right represented by such
Warrant for, and to purchase thereunder,                                
of the Class A Units to which such Warrant relates and herewith makes
payment of $                            
therefor in cash or by check and requests that the certificates for such Class A
Units be issued in the name of, and be delivered to                                               ,
whose address is set forth below the signature of the undersigned. This Warrant
Exercise form is accompanied by the original Warrant, which is hereby
surrendered to the extent necessary to effect the exercise.


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
  (Print Name)

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  	
   

  



 


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