**Exhibit 10.6**

**LEASE AGREEMENT**

THIS LEASE AGREEMENT (this “Lease”) is made andentered into as of the       day of October, 2005,between R. BRUCE BLACKWELL (the “Lessor”), and EARTH BIOFUELS, LLC,a Mississippi limited liability company (the “Lessee”).

**STATEMENT OF BACKGROUND INFORMATION**

The Lessor is theowner of that certain parcel of real property and the improvements thereonlocated in Grenada County, Mississippi and more particularly described on ExhibitA attached hereto (the “Leased Premises”).

The Lessor desiresto lease to the Lessee and the Lessee desires to lease from the Lessor theLeased Premises on the terms and conditions described herein.

**STATEMENT OF AGREEMENT**

NOW, THEREFORE,for and in consideration of the mutual covenants and conditions containedherein, and other good and valuable consideration, the receipt and adequacy ofwhich is hereby acknowledged, the parties hereto agree as follows:

1.    Term. The Lessee shall use and occupythe Leased Premises for a Term of five years commencing on the date hereof, andending five years after such date (the “Term”), unless sooner terminatedas hereinafter provided.

2.    Rent. During the Term, the Lesseeshall pay to the Lessor as rent (the “Rent”) for the Leased Premises thesum of $120,000.00 per year (the “Annual Rental”), payable in equalmonthly installments. Monthly installments of Rent shall be paid in advance onthe first day of each and every calendar month during the Term.

3.    Maintenance and Repairs. During theTerm of this Lease, the Lessee covenants to keep the Leased Premises(including, without limitation, the exterior and structure of the building, allimprovements thereon and all heating, plumbing, electrical, air-conditioning,mechanical and other fixtures and equipment now or hereafter on the LeasedPremises) in good order, condition and repair, reasonable use and wear onlyexcepted, and to make all repairs and replacements.

4.    Utilities. The Lessee shall pay orcause to be paid all charges for gas, water, sewer, electricity, heat, airconditioning, telephone or other utility or service used in connection with theLeased Premises during the Term. The Lessor shall be under no obligation tofurnish any utilities to the Leased Premises and shall not be liable for anyinterruption or failure in the supply of any such utilities.

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5.    Taxes and Insurance. The Lessee shallpay all ad valorem taxes and assessments levied on the Leased Premises duringthe Term. The Lessee also shall obtain and keep in force during the Term fireand extended coverage property insurance covering the Leased Premises in anamount not less than the full cost of the replacement value thereof, againstall perils included within the classification of fire, extended coverage,vandalism, malicious mischief, and special extended perils (“all risk” as suchterm is used in the insurance industry) naming the Lessor as insured. Inaddition, the Lessee shall obtain and keep in force comprehensive publicliability insurance in amounts acceptable to Lessor and with the Lessor namedas an additional insured. All personal property belonging to the Lessee locatedin or about the Leased Premises shall be at the sole risk of the Lessee.

6.    Compliance with Law. The Lessee shallmake all repairs, alterations, additions or replacements to the Leased Premisesrequired by any law or ordinance of any public authority; keep the LeasedPremises equipped with all safety appliances so required; and to comply withthe orders and regulations of all governmental authorities with respect to zoning,building, fire, health, environmental regulations and other codes, regulations,ordinances or laws applicable to the Leased Premises.

7.    Surrender at End of Term. The Lesseeshall quit and surrender the Leased Premises at the expiration of the Term orearlier termination of this Lease in as good condition as reasonable use willpermit, damage by fire and elements accepted.

8.    Damage by Fire or Other Cause. If theLeased Premises shall be partially damaged by fire or other cause, the damageshall be repaired by the Lessor to the extent of insurance proceeds received bythe Lessor. If all or substantially all of the Leased Premises becomes unfitfor occupancy and use as a result of fire or other cause, the Lessor may elect(a) to terminate this Lease as of the time when the Leased Premises aremade unfit for occupancy and use by giving written notice to the Lessee withinfifteen (15) days after that date, or (b) to repair, restore orrehabilitate the Leased Premises to the extent of insurance proceeds receivedby the Lessor within one hundred eighty (180) days after the Lessor is able totake possession of the Leased Premises and undertake reconstruction or repairs,in which latter event this Lease shall not terminate but the Rent shall beabated on a per diem basis while the Leased Premises are unfit for occupancyand use. If the Lessor elects to restore, repair or rehabilitate the LeasedPremises and does not substantially complete the work within said one hundredeighty (180) day period, either party shall have the right to terminate thisLease as of the time when the Leased Premises became unfit for occupancy anduse by written notice to the other party not later then ten (10) days after theexpiration of said period. In the event of such termination of this Lease, theLessee’s liability for the Rent shall cease as of the date the Leased Premiseswere made unfit for occupancy and use.

9.    Condemnation. If any part of theLeased Premises shall be taken or condemned for any public use by any legallyconstituted authority by right of eminent domain and a part thereof remainswhich, in the Lessor’s judgment, is suitable for the full conduct of the Lessee’sbusiness, this Lease as to the part to be taken shall terminate as of the datetitle vests in the

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condemnor (or suchearlier date on which possession of the Leased Premises must be given to thecondemnor), the Lessor shall promptly restore the portion of the LeasedPremises not taken, and the rent payable hereunder shall be adjusted equitably.If Lessor determines that the aforementioned taking renders the remainder ofthe Leased Premises unsuitable for the Lessee’s use, the Lessor may terminatethis Lease as of the date when the Lessor determines that the Leased Premisesare unsuitable for the Lessee’s use by giving notice to that effect withinthirty (30) days after such determination.

If all orsubstantially all of the Leased Premises are taken or condemned or so muchthereof that the use by the Lessee shall be substantially impaired, this Leaseshall terminate. All compensation awarded or granted shall be the property ofthe Lessor. Notwithstanding the provisions herein, the Lessee shall have theright to make a separate claim with the condemning authority for the value ofthe Lessee’s trade fixtures and relocation expenses.

10.  Default by the Lessee. If (a) theLessee defaults in the payment of the Rent or any additional charge or cost tobe paid by the Lessee as provided in this Lease and such default shall continueuncorrected for a period of five (5) days after written notice, or (b) theLessee defaults in the performance and observance of any of the terms andconditions of this Lease to be performed or observed by the Lessee and suchdefault shall continue uncorrected for a period of thirty (30) days after writtennotice, or (c) any execution, attachment, or other order of court shall beissued upon or against the interest of the Lessee in this Lease and shallcontinue for a period of thirty (30) days after written notice, then and in anysuch event, interest shall accrue on all monetary obligations owed under thisLease at the lesser of the prime rate of BancorpSouth Bank (or its successor)plus four percent (4%), or the maximum rate permissible by law, and in additionto any and all rights and remedies allowed by law and equity, the Lessor mayterminate this Lease with written notice to the Lessee.

11.  Default by the Lessor. The Lessor’sfailure to perform or observe any of the Lessor’s obligations under this Leaseafter a period of thirty (30) days after the Lessor receives written noticefrom Lessee shall be a default by the Lessor. Upon the happening of a defaultby the Lessor, the Lessee shall have the right, but not the obligation, toperform the Lessor’s obligation and deduct any cost incurred by the Lessee fromthe Rent due hereunder. In addition, the Lessee may pursue any other legal orequitable remedies, including terminating this Lease.

12.  Indemnification. The Lessee shall saveLessor harmless, and exonerate and indemnify Lessor from and against any andall claims, liabilities or penalties asserted by or on behalf of any person,firm, corporation or public authority on account of injury, death, damage orloss to person or property in or upon the Leased Premises arising out of theuse or occupancy of the Leased Premises by Lessee or by any person claiming by,through or under Lessee (including, without limitation, all patrons, employeesand customers of Lessee), or arising out of any delivery to or service suppliedto the Leased Premises, or on account of or based upon anything whatsoever doneon the Leased Premises, except if the same was caused by the gross negligenceor willful misconduct of Lessor, its agents, servants or employees. In respectof all of the foregoing, Lessee shall indemnify Lessor from and against allcosts, expenses (including reasonable attorneys fees) and liabilities incurredin or in connection with any such claim, action

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or proceeding broughtthereon; and, in case of any action or proceeding brought against Lessor byreason of any such claim, Lessee, upon notice from Lessor and at Lessee’sexpense shall resist or defend such action or proceeding and employ counseltherefor reasonably satisfactory to Lessor.

13.  Improvements, Fixtures and Trade Fixtures.It is expressly understood and agreed that any and all signs, fixtures, tradefixtures, machinery, fencing, furniture, appliances and equipment erected orinstalled by the Lessee, whether or not attached to the Leased Premises, shallremain the property of the Lessee and may be removed by the Lessee at or beforethe expiration of this Lease and any renewals hereof, including the period ofany “holding over”, provided the Lessee repairs all damage which may be causedby any such removal in a good and workman-like manner. The building and otherimprovements located on the Leased Premises (excluding the items describedabove), whether constructed or renovated by the Lessor or the Lessee, shallremain the property of the Lessor at the termination of the Lease and anyrenewals hereof.

14.  Quiet Enjoyment. The Lessor covenantsand agrees that upon the Lessee paying the Rent as provided herein andperforming all of the covenants and conditions herein set forth, the Lesseeshall and may peaceably and quietly have, hold and enjoy the Leased Premisesfor the Term and for the intended uses and purposes, subject nevertheless tothe provisions of this Lease.

15.  Lessor’s Right to Enter. The Lesseecovenants and agrees to permit the Lessor and its agents to enter and examinethe Leased Premises at reasonable times and upon reasonable notice to theLessee and, during the last six months of the Term of the Lease, to keepaffixed in suitable places notices of availability of the Leased Premises.

16.  Ownership of Leased Premises. TheLessor represents that the Lessor owns the Leased Premises in fee simple andhas the right to lease the same to the Lessee. The Lessor agrees to deliver tothe Lessee the Leased Premises free from the tenancy of any person or entityother that the Lessee.

17.  Assignment and Subletting. The Lesseemay not convey, transfer, encumber or otherwise assign or sublease, whethervoluntarily or involuntarily or by operation of law, all or any part of itsinterest in the Leased Premises without the express written consent of the Lessor,which shall not be unreasonably withheld; provided, however, that the Lesseemay assign the Lease to a limited liability company controlled by the Lesseewithout the requirement of obtaining the Lessor’s consent. For purposes of thisSection, an assignment of this Lease shall be deemed to include any change incontrol of Lessee or any transaction pursuant to which Lessee is merged orconsolidated with another entity or pursuant to which all or substantially allof Lessee’s assets are transferred to any other entity, as if such change incontrol or transaction were an assignment of this Lease. No subletting orassignment shall in any way impair the continuing primary liability of Lesseeunder this Lease, and no consent to any subletting or assignment in aparticular instance shall be deemed to be a waiver of the obligation to obtainthe Lessor’s written approval in the case of any other subletting orassignment. Any subletting,

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assignment or othertransfer of Lessee’s interest in this Lease in contravention of this Sectionshall be voidable at Lessor’s option.

18.  Rights of Mortgagees. This Lease, andall rights of Lessee hereunder, are and shall be subject and subordinate to allmortgages, which may now or hereafter affect the Leased Premises, to each andevery advance made or hereafter to be made under such mortgages, and to allrenewals, modifications, replacements and extensions of such mortgages. ThisSection shall be self-operative and no further instrument of subordinationshall be required. In confirmation of such subordination, Lessee shall promptlyexecute, acknowledge and deliver any instrument that Lessor or the holder ofany such mortgage may reasonably request to evidence such subordination. Anymortgage to which this Lease is, at the time referred to, subject andsubordinate, is herein called a “Superior Mortgage” and the holder of aSuperior Mortgage is herein called the “Superior Mortgagee”.

If any SuperiorMortgagee or its nominee shall succeed to the rights of Lessor under thisLease, then at the request of such party so succeeding to Lessor’s rights (the “SuccessorLandlord”) and upon such Successor Landlord’s written agreement to acceptLessee’s attornment, Lessee shall attorn to and recognize such SuccessorLandlord as Lessee’s landlord under this Lease and shall promptly execute anddeliver any instrument that such Successor Landlord may reasonably request toevidence such attornment. Upon such attornment, this Lease shall continue infull force and effect as a direct lease between the Successor Landlord andLessee upon all of the terms, conditions and covenants as set forth in thisLease. Lessee agrees at any time and from time to time to execute a suitableinstrument in confirmation of Lessee’s agreement to attorn, as aforesaid.

19.  Assigns. The terms, covenants andconditions contained in this Lease shall bind and inure to the benefit of theLessor and the Lessee and their legal representatives, successors and assigns,subject to Section 17 herein.

20.  Severability. In case any one or moreof the provisions contained in this Lease shall be held to be invalid, illegal,or unenforceable in any respect, such invalidity, illegality, orunenforceability shall not affect any other provision hereof, and this Leaseshall be construed as if such invalid, illegal, or unenforceable provision hadnever been contained herein unless to do so would materially alter the benefitsand burdens the parties hereto have bargained for.

21.  Entire Agreement. This lease containsthe entire agreement between the parties and shall not be modified in anymanner except by an instrument in writing executed by the parties or theirrespective successors in interest.

22.  Memorandum of Lease. This Lease may notbe recorded in the land records. Upon request of the Lessee, the Lessor shallexecute a “short form” or memorandum of lease providing notice of Lessee’sinterest in the Leased Premises.

23.  Attorneys Fees. In the event it becomesnecessary for either party to enforce the terms of this Lease, the prevailingparty shall be entitled, in addition to such damages or other

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relief as may be granted,to recover reasonable attorneys’ fees and costs, such attorneys’ fees toinclude those incurred on any appeal.

IN WITNESSWHEREOF, the parties have executed this Lease effective as of date first above written.
|        |   | - LESSOR -                  |
|--------|--------|-----------------------------|
|   |   |                        |
|   |   | /s/ R. Bruce Blackwell      |
|   |   | R. BRUCE BLACKWELL          |
|   |   |                        |
|   |   | - LESSEE -                  |
|   |   |                        |
|   |   | EARTH BIOFUELS, LLC         |
|   |   |                        |
|   | By:    | /s/ R. Bruce Blackwell      |
|   |   | R. Bruce Blackwell, Manager |

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**EXHIBIT A**

**Legal Description of Leased Premises**

See attached

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|        |   | 253 HWY 7 NORTH |
|--------|--------|-----------------|
|   |   | GRENADA, MS     |

 

EXHIBIT “A”

3.898acres of land, more or less, lying in the East 1¤2 of Section14, T-23-N, R-4-E, Choctaw Meridian, Grenada County, Mississippi, and moreparticularly described as follows:

Beginningat a iron bar at the intersection of South R.O.W. of Mississippi HighwayNo. 7 with the Westerly R.O.W. of Country Meadows Road located 1482.2 feetWest and 2805.5 feet North of the Southeast corner of said Section 14,thence S 32° 58’ East along the Westerly line of Country Meadows Road for 438.0feet to an iron bar, thence S 65° 34’ West along a fence for 459.7 feet to aniron bar on the East line of a gravel road, thence N 28° 02’ West along theEasterly line of a gravel road for 333.5 feet to an iron bar on the SoutherlyR.O.W. of Mississippi Highway No. 7, thence run N 52° East along the saidHighway R.O.W. for 427.6 feet, more or less, to the Point of Beginning.
| SIGNED FOR IDENTIFICATION |                    |
|---------------------------|-------------------------|
|                      |                    |
| BY:                       | /s/ Richard B Blackwell |   |
| RICHARD B BLACKWELL       |                    |
|                           |                         |  |

 

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