Exhibit 10.16
DEPOSIT ACCOUNT CONTROL
AGREEMENT
This Deposit Account Control
Agreement (“
Agreement ”) is made on January 3, 2007 ,
by Liberty Renewable Fuels LLC , a Delaware limited
liability company whose address is 3508 E. M-21, P.O. Box 335,
Owosso, Michigan 48867 (“ Liberty ”), and is
given to Fifth Third Bank , a Michigan banking corporation,
with offices located at 1000 Town Center, Southfield, Michigan
48075 (“ Fifth Third ”).
Recitals
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A.
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Fifth Third and
Liberty have entered into certain documents, agreements and
understandings in connection with a Commercial Letter of
Credit to be issued by Fifth Third for the benefit of Liberty
and Wilcox Design-Build, LLC for work to be performed by
Fisher Contracting Company on Bid Package No. 1
(Earthwork and Utilities) in the maximum amount of One Million
Six Hundred Thirty-Four Thousand and 00/100 ($1,634,000.00)
Dollars (the “ Letter of Credit
”).
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B.
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As a part of
those agreements and understandings, Liberty has agreed to place
the sum of One Million Six Hundred Thirty-Four Thousand and
00/100 ($1,634,000.00) Dollars into a restricted demand deposit
account to be created by Fifth Third in the name of Liberty (the
“ Cash Collateral ”).
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C.
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The parties
have further agreed that the Cash Collateral will be used to secure
the repayment of all of Liberty’s obligations to Fifth Third,
including, but not limited to the Letter of Credit.
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D.
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In order to
facilitate the agreement of the parties, Fifth Third has created
demand deposit account no. 7910273908 in the name of Liberty
(the “ Deposit Account ”).
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E.
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Liberty has
agreed to enter into this Agreement for the purpose of
memorializing the agreements and understandings between Fifth Third
and Liberty with respect to the Deposit Account and the Cash
Collateral.
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For these reasons, Liberty agrees as
follows:
Page 1 of 7
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1.
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Fifth
Third’s Security Interest in Deposit Account
. In order to secure Liberty’s obligations
to Fifth Third pursuant to the Letter of Credit and all other
present and future security arrangements between Fifth Third and
Liberty, Liberty hereby assigns the Deposit Account and the Cash
Collateral to Fifth Third and grants Fifth Third a security
interest in and lien upon the Deposit Account and the Cash
Collateral, any cash balances from time to time credited to the
Deposit Account, including all interest which may accrue with
respect to the Deposit Account and the Cash Collateral, and all
renewals and all proceeds of the foregoing, whether now existing or
later arising (collectively referred to as the “ Deposit
Account Collateral ”).
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2.
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Fifth
Third’s Right to Give Exclusive Instructions as to Deposit
Account . Liberty acknowledges and agrees that the Deposit
Account shall be a restricted account to be used solely for the
purposes described in this Agreement. Liberty hereby authorizes
Fifth Third, upon the occurrence of an Event of Default (and the
expiration of any applicable cure period), to make periodic
withdrawals from the Deposit Account at the times and in the
amounts necessary to satisfy any and all of Liberty’s
obligations to Fifth Third under all existing or future Letter of
Credits or Loans, including, but not limited to the Letter of
Credit. Fifth Third shall be entitled, to make these payments or
take any other actions relating to the Deposit Account or any of
the Deposit Account Collateral, without Liberty’s further
consent. Fifth Third may take any such actions even if such
instructions are contrary to any instructions or demands that
Liberty may attempt to give with respect to the Deposit Account and
the Deposit Account Collateral. Liberty hereby acknowledges and
agrees that Fifth Third shall not have any liability for
withdrawing the amounts described in this Agreement upon the
occurrence of an Event of Default.
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3.
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Obligations. The indebtedness and obligations now owing to
Fifth Third by Liberty includes, but is not necessarily limited to,
the indebtedness and obligations evidenced by the instrument listed
below:
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Original Principal Amount:
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January 3, 2007
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$
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1,634,000.00
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This Agreement secures all present
and future indebtedness and obligations owing by Liberty,
regardless of whether any such indebtedness or obligation is
(a) not listed above, (b) not presently intended or
contemplated by Liberty, (c) indirect, contingent or
secondary, (d) unrelated to the collateral or to any financing
of the collateral by Liberty, (e) of a kind or class that is
different from any indebtedness or obligation now owing to Fifth
Third by Liberty, or (f) evidenced by a note or other document
that does not refer to this Agreement.
Page 2 of 7
THE SECURITY INTEREST GRANTED IN
THIS AGREEMENT SECURES PAYMENT AND PERFORMANCE OF ALL INDEBTEDNESS
AND OBLIGATIONS NOW AND IN THE FUTURE OWING BY LIBERTY TO FIFTH
THIRD AND ALL AFFILIATES OF FIFTH THIRD BANCORP, INCLUDING ALL OF
LIBERTY’S OBLIGATIONS UNDER THIS AGREEMENT.
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4.
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Additional Obligations
. This Agreement secures all indebtedness and
obligations now and in the future owing by Liberty regardless of
whether one or more persons other than Liberty are also liable for
such indebtedness and obligations.
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5.
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Representations and Warranties
. Liberty hereby represents and warrants to Fifth
Third that:
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(a)
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It has the
unqualified right to assign the Deposit Account and grant Fifth
Third the security interest in the Deposit Account Collateral. The
Deposit Account Collateral is not subject to any security interest,
lien, encumbrance or claim in favor of any third-party, or to any
right or option of any third-party to purchase or acquire all or
any part of the Deposit Account Collateral.
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(b)
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It has full
power and authority to enter into and perform its obligations under
this Agreement; and the execution, delivery and performance of this
Agreement by them will not violate agreement or other instrument to
which it is a party.
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(c)
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This Agreement
is a valid and binding obligation of Liberty enforceable in
accordance with its terms.
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6.
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Cooperation . Liberty hereby agrees that:
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(a)
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It will
promptly sign and deliver to Fifth Third all financing statements.
assignments, endorse
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