**Exhibit10.5**

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EXECUTION COPY

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**EMPLOYMENT AGREEMENT**

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ThisEmployment Agreement (this “Agreement”) is entered into on March 15,2010 to be effective as of the date of consummation of the Plan ofReorganization (as defined below) (the “Effective Date”), by and amongAventine Renewable Energy Holdings, Inc. (together with its successors andassigns the “Company”) and Thomas Manuel (“Executive”).

 

WHEREAS,the Company desires to employ Executive as Chief Executive Officer of theCompany after the consummation of the Company’s plan of reorganization under Section 1121of Title 11 of the United States Code (the “Plan of Reorganization”);

 

WHEREAS,Executive desires to accept such employment, subject to the terms andprovisions of this Agreement; and

 

WHEREAS,this Agreement is expressly contingent upon the consummation of the Plan ofReorganization;

 

NOW,THEREFORE, in consideration of the premises and mutual covenants containedherein and for other good and valuable consideration, the receipt of which ismutually acknowledged, the Company and Executive (collectively, the “Parties”)agree as follows:

 

# 1.                                       **Term of Employment**. The Company hereby agreesto employ Executive under this Agreement, and Executive hereby accepts suchemployment, for the “Term of Employment” which shall commence as of theEffective Date and shall end on December 31, 2012.

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# 2.                                       **Position, Duties and Responsibilities**.

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## (a)                                  During the Termof Employment, Executive shall serve as the Chief Executive Officer of theCompany; shall have all authorities, duties and responsibilities customarilyexercised by an individual serving in those positions in enterprises of asimilar size and structure; shall be assigned no authorities, duties orresponsibilities that are inconsistent with, or that impair his ability todischarge, the foregoing authorities, duties and responsibilities; and shallreport solely and directly to the Board of Directors of the Company (the “Board”).

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## (b)                                 Executive shalldevote substantially all of his business time and efforts to the affairs of theCompany; provided, however, that while employed by the Company,Executive may serve as a member of the board of directors of any for-profitcompany with the consent of the Board (which will not be unreasonablywithheld).  In addition, without approvalof the Board, Executive may (i) serve on the boards of directors of any not-for-profit entity, (ii) serve in anycapacity with respect to any civic, educational, professional or charitableorganization, and (iii) manage his and his family’s personal investments.  Executive may also continue to provideservices as managing director of International Strategy Advisors and may retainall compensation earned therefrom; provided, that such services do not materiallyinterfere or conflict with the performance of his duties to the Company orcreate a business conflict with the Company.

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## (c)                                  Upon expirationof the Term of Employment or the termination of Executive’s employment for anyreason, upon the request of the Board, Executive shall resign, in writing, fromany positions he then holds with the Company, including membership on anyboards.

 

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# 3.                                       **Principal Place of Business**.  Executive’s principal place of business, andto the extent determined by Executive, the Company’s commodities operations andother executive offices, shall be located in an office of the Company that theCompany will have established and staffed in Dallas, Texas prior to theEffective Date.  Executive agrees totravel on behalf of the Company as reasonably necessary to perform his dutiesunder this Agreement, including to the Company’s offices in Pekin, Illinois, towhich Executive acknowledges he may be required to travel on a regularbasis.  The Company will pay, orreimburse Executive in accordance with Section 4(f) below, for allreasonable and necessary costs in connection with such travel (including taxgross-ups for any income tax Executive incurs in connection with such costs orsuch gross-up).

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# 4.                                       **Compensation and Benefits**.

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## (a)                                  Base Salary. Commencing asof the Effective Date, the Company shall pay Executive an annualized BaseSalary of $500,000 (“Base Salary”), payable in accordance with theregular payroll practices applicable to senior executives of the Company.  Executive’s Base Salary shall be reviewed bythe Board for possible increase no less frequently than annually during theTerm of Employment and any increased Base Salary shall constitute “Base Salary”for purposes hereof.  The Base Salary(including as increased pursuant to the preceding sentence) shall not bedecreased at any time during the Term of Employment.

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## (b)                                 Annual Bonus. Executivewill be entitled to receive an annual bonus each year during the Term ofEmployment with a target equal to at least 125% of Executive’s Base Salary forthe applicable year (each a “Bonus”) based on reasonably attainablegoals as determined by the Board or its Compensation Committee afterconsultation with Executive.  There willalso be threshold and maximum levels for achievement below and above target asdetermined by the Board or its Compensation Committee after consultation withExecutive. Notwithstanding the foregoing, Executive’s Bonus for fiscal year2010 will not be less than $250,000 (the “Guaranteed Bonus”).  Bonuses will be paid in accordance with theCompany’s bonus policy as in effect from time to time in the year following theyear for which the Bonus is earned, but in no event later than March 15 ofsuch following year.

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## (c)                                  InducementBonus.  On the Effective Date, theCompany shall pay Executive a lump sum cash amount of $500,000.

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## (d)                                 EmployeeBenefits. During the Term of Employment, Executive shall beentitled to participate in all employee benefit plans and programs offered bythe Company to senior executives of the Company, and, subject to theeligibility requirements for participation therein, any employee benefit plansand programs which the Company may adopt from time to time generally for itsemployees.

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## (e)                                  Vacations. During theTerm of Employment, Executive shall be entitled to four (4) weeks’ paidvacation per year to be accrued and taken in accordance with the Company’snormal vacation policies.

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## (f)                                    Legal Fees.  The Company shall either pay or reimburseExecutive (as elected by the Company) for all reasonable legal fees andexpenses incurred by Executive in connection 

 

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## with the negotiation anddrafting of this Agreement (including, the negotiation and preparation of thePre-Emergence and Post-Emergence term sheets) in accordance with the Company’sexpense reimbursement policies, and the Executive shall receive a gross-uppayment for any income tax Executive incurs in connection with such payment orreimbursement and the gross-up.

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## (g)                                 Reimbursementof Business and Other Expenses. During the Term ofEmployment, Executive is authorized to incur reasonable expenses, including,without limitation, expenses for travel, entertainment and other ordinary and necessaryactivities, in carrying out his duties and responsibilities under this Agreement,and the Company shall promptly reimburse him for all such expenses subject todocumentation and subject to the expense reimbursement policies of the Companyrelating to expense reimbursement.

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# 5.                                       **Equity Arrangements**.

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## (a)                                  Equity Awards.  On the Effective Date, the Company will grantthe following equity awards to Executive: (i) stock options to purchase 128,250 shares of the Company’scommon stock (the “Common Stock”) (the “Options”), (ii) 42,750restricted shares of Common Stock (the “Restricted Stock”) and (iii) 128,250restricted stock units (the “RSUs,” and together with the Options andthe Restricted Stock, the “Equity Awards”).  The Equity Awards shall be granted pursuantto the Company’s 2010 Equity Incentive Plan (the “Incentive Plan”).  The Company will take such actions as arenecessary to provide that on, or as soon as reasonably practicable following,the Effective Date, but in no event later than ninety (90) days following theEffective Date, the shares of Common Stock available for awards under theIncentive Plan, including under the Equity Awards, are fully registered forresale on a Form S-8 or to the extent otherwise so registered inconnection with the general registration of Common Stock.  In the event such registration occursfollowing the Effective Date it shall include a resale prospectus with regardto the Restricted Stock.

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## (b)                                 Vesting.

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### (i)                                     Time-BasedVesting. The Options and two thirds of the RSUs shall vest 25% on theEffective Date, 25% on each of the first two anniversaries of the EffectiveDate and 25% on December 31, 2012, the Restricted Stock shall vest 50% onthe Effective Date and 50% on the first anniversary thereof and the remainingRSUs shall vest 50% on the second anniversary of the Effective Date and 50% on December 31,2012, subject in all cases to Executive’s continuing employment with theCompany on such dates.

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### (ii)                                  AcceleratedVesting.  Notwithstanding the foregoing,in the event of (A) a Change in Control (as defined below) of the Company,then 100% of the Equity Awards shall vest, and the Options will remainexercisable for the remainder of the Option Term (as defined below), or (B) atermination of Executive’s employment by the Company without Cause (as definedbelow), or Executive’s resignation with Good Reason (as defined below), then100% of the Equity Awards shall vest, and the Options will remain exercisablefor the applicable period set forth in Section 8(d)(iii).

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## (c)                                  Options.  The Options will have the following terms:

 

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### (i)                                     Exercise Price.  The exercise price of each share of CommonStock underlying an Option shall be equal to the per share fair market value ofthe Common Stock on the Effective Date as determined by the Board in its solediscretion in a manner that complies with the requirements of Section 409Aof Internal Revenue Code of 1986, as amended (“Code”), and theregulations and guidance promulgated thereunder (“Code Section 409A”).

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### (ii)                                  Option Term. The term ofthe Options shall expire ten (10) years following the Effective Date (the “OptionTerm”).

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### (iii)                               Exercise.  To the extent vested, the Options may beexercised by Executive in whole or in part at any time and from time to timeduring the Option Term by giving written notice of exercise to the Companyspecifying the number of shares of Common Stock to be acquired.  Such notice shall be accompanied by paymentin full of the purchase price as follows: (i) in cash or by check, bankdraft or money order payable to the order of the Company; (ii) through acashless exercise whereby the Company reduces the number of shares of CommonStock issuable upon exercise with a value equal to the applicable exerciseprice and withholding, (iii) solely to the extent permitted by applicablelaw, if the Common Stock is then traded on a securities exchange or system inthe United States, through a procedure whereby Executive delivers irrevocableinstructions to a broker reasonably acceptable to the committee establishedunder the Incentive Plan (the “Committee”) to deliver promptly to theCompany an amount equal to the purchase price; or (iv) on such other termsand conditions as may be acceptable to the Committee.

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### (iv)                              Post-TerminationExercise Periods.  Any vestedOptions held by Executive as of his termination shall remain exercisable forthe periods specified below under Sections 8(a)(vii), 8(c)(ii) or8(d)(iii), as applicable.

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## (d)                                 RSUs.  The vested portion of the RSUs shall bedistributed to the Executive in shares of Common Stock on the earlier of (x) thesixtieth (60th) day followingtermination of the Executive’s employment or (y) the date on which aChange in Control occurs.

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# 6.                                       **Termination of Employment**. Executive’s employmenthereunder may be terminated during the Term of Employment under the followingcircumstances and any such termination shall not be, nor deemed to be, a breachof this Agreement:

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## (a)                                  Death. Executive’semployment hereunder shall terminate automatically upon Executive’s death.

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## (b)                                 Disability.  The Company shall have the right to terminateExecutive’s employment hereunder for Disability by providing Executive with aNotice of Termination (as defined below) at least thirty (30) days prior tosuch termination.  For purposes of thisAgreement, “Disability” shall mean Executive’s becoming incapacitated byreason of sickness, accident or other physical or mental incapacity and havingbeen unable to perform his normal duties for a period of six (6) consecutivemonths as a result thereof.

 

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## (c)                                  For Cause. The Companyshall have the right to terminate Executive’s employment for Cause by providingExecutive with a Notice of Termination. For purposes of this Agreement, “Cause” shall mean (i) willfulmisconduct or gross negligence of a material nature by Executive in theperformance of his duties; (ii) Executive’s being convicted of, orpleading guilty or *nolo contendere*to a felony (other than a traffic violation); (iii) Executive’s willfultheft or embezzlement from the Company or its affiliates; (iv) willful andsubstantial failure of Executive to perform his duties or any other materialbreach by Executive of any material provision of this Agreement, which is notcured (if curable) by Executive within thirty (30) days following his receiptof written notice thereof.  For thepurposes of this definition, no act, or failure to act, on the part ofExecutive shall be considered “willful,” unless done, or omitted to be done, byhim in bad faith and without reasonable belief that his action or omission wasin, or not opposed to, the best interest of the Company (includingreputationally).  Notwithstanding theforegoing, the Company may not terminate Executive for Cause unless prior tosuch termination: (x) Executive is given five (5) business dayswritten notice specifying the alleged Cause event and is entitled to appearwith counsel upon written request, made within five (5) business days ofreceiving such notice, before a meeting of the full Board, which may betelephonic, within a reasonable time after such request to present informationregarding his views on the Cause event, and (y) after such meeting orExecutive’s failure to request such a meeting, there is a majority vote of thefull Board (excluding Executive) to terminate Executive for Cause.  After providing the notice in foregoingsentence, the Board may suspend Executive with full pay and benefits until afinal determination has been made in accordance with the procedures set forthabove.

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## (d)                                 Without Cause.  The Company shall have the right to terminateExecutive’s employment hereunder without Cause at any time by providingExecutive with a Notice of Termination.

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## (e)                                  By Executivefor Good Reason.  Executiveshall have the right to terminate his employment hereunder for Good Reason byproviding the Company with a Notice of Termination.  For purposes of this Agreement, Executiveshall have “Good Reason” to terminate his employment hereunder if,without Executive’s written consent, any of the following events occurs thatare not cured by the Company within thirty (30) days of written noticespecifying the occurrence such Good Reason event, which notice shall be givenby Executive to the Company within ninety (90) days after the occurrence of theGood Reason event: (i) a material diminution in Executive’s thenauthority, duties or responsibilities; (ii) a material diminution inExecutive’s reporting requirements such that Executive is no longer reportingto the Board; (iii) a material diminution in Executive’s Base Salary; (iv) arelocation of Executive’s principal business location to a location outside ofDallas, Texas; or (v) any material breach of this Agreement by theCompany.  Executive’s terminationhereunder for Good Reason shall not occur later than one hundred eighty (180)days following the initial date on which the event Executive claims constitutesGood Reason occurred.

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## (f)                                    By Executivewithout Good Reason.  Executiveshall have the right to terminate his employment hereunder without Good Reasonby providing the Company with a Notice of Termination at least thirty (30) daysprior to such termination.

 

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## (g)                                 Due toExpiration of the Term of Employment.  The Term of Employment shall automaticallyterminate upon the expiration of the Term of Employment in accordance with Section 1hereof.

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# 7.                                       **Termination Procedure**.

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## (a)                                  Notice ofTermination.  Anytermination of Executive’s employment by the Company or by Executive during theTerm of Employment (other than termination pursuant to Section 6(a)) shallbe communicated by written Notice of Termination to the other party hereto inaccordance with Section 14 hereof. For purposes of this Agreement, a “Notice of Termination” shallmean a notice which shall indicate the specific termination provision in thisAgreement relied upon and, in the event of a termination under Sections 6(b), 6(c) or6(e) above, shall set forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination of Executive’semployment under the provision so indicated.

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## (b)                                 Date ofTermination.  “Date ofTermination” shall mean (i) if Executive’s employment is terminated byhis death, the date of his death, (ii) if Executive’s employment isterminated pursuant to Section 6(b), the thirty-first (31st) day after the Notice ofTermination is provided to Executive (provided that Executive shall not havereturned to the substantial performance of his duties on a full-time basisduring the thirty (30) day period following the Notice of Termination), (iii) ifExecutive’s employment is terminated pursuant to Section 6(f), thethirty-first (31st) day after theNotice of Termination is provided to the Company; and (iv) if Executive’semployment is terminated for any other reason, the date the Notice ofTermination is given or any later date set forth in such Notice of Terminationas the effective date of termination.

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# 8.                                       **Compensation Upon Termination**.  Upon the termination of Executive’semployment, the Company shall provide Executive with the payments and benefitsset forth below.  The payments andbenefits described herein shall be in lieu of, and Executive hereby waives hisrights to receive, any other severance or termination benefits that Executivemay otherwise be eligible to receive under any policy, plan or programmaintained by the Company or as otherwise mandated by law (to the extent suchlegal rights may be waived by Executive).

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## (a)                                  Death orDisability.  IfExecutive’s employment is terminated due to his death or is terminated by theCompany due to Disability during the Term of Employment:

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### (i)                                     the Companyshall pay to Executive (or his beneficiaries) any accrued but unpaid BaseSalary earned through the Date of Termination, payable in accordance with theregular payroll practices applicable to senior executives of the Company;

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### (ii)                                  at the timethat the Bonus would otherwise be paid in accordance with Section 4(b) hereof,the Company shall pay to Executive (or his beneficiaries) any earned but unpaidBonus in respect of any completed year preceding the year in which suchtermination occurs (the “Accrued Bonus”);

 

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### (iii)                               the Companyshall reimburse Executive pursuant to Section 4(f) for any businessexpenses incurred through, but not reimbursed prior to, the Date ofTermination;

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### (iv)                              within ten (10) daysfollowing the Date of Termination, the Company shall pay to Executive a paymentfor his accrued but unused vacation through the Date of Termination;

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### (v)                                 the Companyshall pay or provide to Executive such vested accrued benefits, if any, as towhich Executive may be entitled under the Company’s employee benefit plans andprograms applicable to Executive as of the Date of Termination (other than anyseverance pay plan), which shall be paid or provided in accordance with theterms of the applicable plan or program (clauses (i) — (v) collectivelyreferred to as the “Accrued Obligations”);

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### (vi)                              Executive orhis beneficiary, legal representative or estate shall receive an amount equalto the product of (x) and (y), where (x) is the Bonus, if any, thatwould have been paid to Executive in respect of the year in which suchtermination occurred, based on actual performance for the year of termination,and (y) is a fraction, the numerator of which is the number of daysExecutive was employed by the Company during the calendar year in which suchtermination occurred and the denominator of which is the number of days in suchyear (the “Pro Rata Bonus”), to be paid at such time as the Bonus wouldhave normally been paid pursuant to Section 4(b) hereof in respect ofthe year in which such termination occurred; provided, that if suchtermination occurs in fiscal year 2010, the amount of the Pro Rata Bonus willnot be less than the amount of the Guaranteed Bonus; and

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### (vii)                           All vestedstock options and other exercisable awards then held by Executive shall remainexercisable for a period of one year following the Date of Termination and allunvested equity awards held by Executive shall immediately be forfeited withoutconsideration.

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## (b)                                 Termination bythe Company for Cause.  IfExecutive’s employment is terminated by the Company for Cause during the Termof Employment:

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### (i)                                     the Companyshall pay or provide to Executive the Accrued Obligations (other than the AccruedBonus) at the times, and subject to the same conditions, as provided in Section 8(a) hereof;and

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### (ii)                                  all equityawards held by Executive, whether or not vested and exercisable, shallimmediately be forfeited without consideration.

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## (c)                                  Termination byExecutive without Good Reason.  If Executive’s employment is terminated byExecutive other than for Good Reason during the Term of Employment:

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### (i)                                     the Companyshall pay or provide to Executive the Accrued Obligations (other than theAccrued Bonus) at the times, and subject to the same conditions, as provided inSection 8(a) hereof; and

 

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### (ii)                                  all vestedstock options and other exercisable awards then held by Executive shall remainexercisable for a period of ninety (90) days following the Date of Terminationand all unvested equity awards held by Executive shall immediately be forfeitedwithout consideration.

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## (d)                                 Terminationwithout Cause or for Good Reason. In the event thatExecutive’s employment under this Agreement is terminated by the Companywithout Cause or by Executive for Good Reason during the Term of Employment:

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### (i)                                     the Companyshall pay or provide to Executive the Accrued Obligations at the times, andsubject to the same conditions, as provided in Section 8(a) hereof;

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### (ii)                                  subject toExecutive’s signing (and not revoking) a general release of claims in the formattached hereto as Exhibit A (with such changes as may be necessaryfor changes in applicable law) within twenty-one (21) days or forty-five (45)days, which ever period is required under ADEA (as defined in Exhibit A)following such termination (the “Release”):

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#### (A)                              the Companyshall pay Executive the Pro Rata Bonus at such time as the Bonus would havenormally been paid pursuant to Section 4(b) hereof in respect of theyear in which such termination occurred; provided, that if suchtermination occurs in fiscal year 2010, the amount of the Pro Rata Bonus willnot be less than the amount of the Guaranteed Bonus;

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#### (B)                                within sixty(60) days following the Date of Termination, the Company shall pay to Executivea lump sum severance payment equal to the sum of the remaining Base Salary plustarget Bonus that Executive would have otherwise been entitled to receive fromthe Date of Termination through the end of the Term of Employment (includingany Bonus for such period that would otherwise be payable after the end of theTerm of Employment); and

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#### (C)                                the Companyshall pay the costs of continued group life, medical, dental, and visioninsurance coverage for Executive and his dependents under the plans andprograms in which Executive participated immediately prior to the Date ofTermination, or materially equivalent plans and programs maintained by theCompany in replacement thereof, for a period of eighteen (18) months followingthe Date of Termination (the “Coverage Period”); provided, that in the event the medical, dental, andvision plans under which Executive andhis dependents were receiving benefits immediately prior to the Date of Termination,or any applicable replacement plan or program, is not fully-insured, then inlieu of the foregoing, if Executive timely elects coverage under the ConsolidatedOmnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) andtimely pays the monthly premiums for such COBRA coverage, then the Company shall reimburse Executiveduring the Coverage Period for the amount of such monthly premium that is inexcess of the active employee rate (excluding, for purposes ofcalculating cost, an employee’s ability to pay premiums with pre-tax dollars), on a tax grossed-up basis to the extent suchmonthly premium is taxable 

 

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#### to Executive, payableon the first Company payroll date in each month following the Date ofTermination; and

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### (iii)                               all outstandingequity awards held by Executive will become fully vested and all stock optionsand other exercisable awards will become immediately exercisable and willremain exercisable for a period following the Date of Termination of (x) ninety(90) days following a termination by Executive for Good Reason and (y) twelve(12) months following a termination by the Company without Cause.

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## (e)                                  Termination dueto Expiration of the Term of Employment.  If Executive’s employment hereunderterminates due to the expiration of the Term of Employment in accordance with Section 1:

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### (i)                                     the Companyshall pay to Executive the Accrued Obligations at the times, and subject to thesame conditions, as provided in Section 8(a) hereof; and

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### (ii)                                  subject toExecutive’s signing (and not revoking) the Release within twenty-one (21) daysfollowing such termination, the Company shall pay the costs of continued grouplife, medical, dental, and vision insurance coverage for Executive and hisdependents under the plans and programs in which Executive participatedimmediately prior to the Date of Termination, or materially equivalent plansand programs maintained by the Company in replacement thereof, for a period ofeighteen (18) months following the Date of Termination (the “ExpirationCoverage Period”); provided,that in the event the medical, dental, and vision plans under which Executive and his dependentswere receiving benefits immediately prior to the Date of Termination, or anyapplicable replacement plan or program, is not fully-insured, then in lieu ofthe foregoing, if Executive timely elects COBRA coverage and timely paysthe monthly premiums for such COBRA coverage, then the Company shall reimburse Executive during the Coverage Periodfor the amount of such monthly premium that is in excess of the active employeerate (excluding, for purposes of calculating cost, an employee’s abilityto pay premiums with pre-tax dollars), ona tax grossed-up basis to the extent such monthly premium is taxable to Executive,payable on the first Company payroll date in each month following the Date ofTermination; and

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### (iii)                               all vestedstock options and other exercisable awards then held by Executive shall remainexercisable for a period of twelve (12) months following the Date ofTermination and all unvested equity awards held by Executive shall immediatelybe forfeited without consideration.

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## (f)                                    No Mitigation;No Off-Set.**** Executive will not be required to seek otheremployment or attempt to reduce any payments due to Executive under this Section 8,and any compensation (in whatever form) earned by Executive from any subsequentemployment will not offset or reduce the Company’s severance obligations underthis Section 8 following Executive’s termination.  The Company’s obligation to pay Executive anypayments under this Section 8 will not be subject to set-off, counterclaimor recoupment of amounts owed by Executive to the Company.

 

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## (g)           Change in Control/GoldenParachute Considerations.  Allequity awards held by Executive shall vest upon the occurrence of a Change inControl of the Company.  If Executivebecomes entitled to any payments and/or benefits that constitute “parachute payments”within the meaning of Section 280G(b)(2) of the Code, and as a resultbecomes subject to the excise tax under Section 4999 of the Code, theprovisions of Exhibit B attached hereto shall apply and areincorporated herein.

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## Forpurposes of this Agreement, a “Change in Control” shall mean theoccurrence of any of the following events subsequent to the EffectiveDate:  (i) any person, other than anexempt person (which includes the Company and its subsidiaries and employeebenefit plans), becoming a beneficial owner of 50% or more of the shares ofcommon stock or equity interests or voting stock or equity interests of theCompany then outstanding; (ii) the consummation of a reorganization,merger or consolidation in which existing Company stockholders or members ownless than 50% of the equity of the resulting company; (iii) theconsummation of the sale or other disposition of all or substantially all ofthe assets of the Company; or (iv) during any 12-month period and providedno other corporation is a majority shareholder of the Company,  individuals who on the Effective Date,constitute the Board (the “Incumbent Board”) cease for any reason toconstitute at least a majority thereof, provided that any person becoming adirector subsequent to the Effective Date, whose election or nomination forelection was approved by a vote of at least a majority of the directorscomprising the Incumbent Board shall be considered a member of the IncumbentBoard.  Notwithstanding anything hereinto the contrary, the determination as to whether a “Change in Control” asdefined herein has occurred shall be determined in accordance with therequirements of Code Section 409A and shall be intended to constitute a “changein control event” within the meaning of Code Section 409A, except to thatthe extent the provisions herein are more restrictive than the requirements ofCode Section 409A.

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# 9.             **Indemnification/Directorsand Officers Liability Insurance**. The Company will indemnifyExecutive to the fullest extent permitted by law and its bylaws (includingadvancement of legal fees) for any action or inaction of Executive whileserving as an officer or director of the Company.  The Company will cover Executive under itsdirectors and officers liability insurance and its defamation policies bothduring and, while potential liability exists, after Executive’s termination ofemployment.  The provisions of this Section 9shall survive the termination of Executive’s employment with the Company.

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# 10.           **RestrictiveCovenants**.

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## (a)           Acknowledgments.  Executive acknowledges that:  (i) as a result of Executive’semployment by the Company, Executive has obtained and will obtain ConfidentialInformation (as defined below); (ii) the Confidential Information has beendeveloped and created by the Company and its affiliates at substantial expenseand the Confidential Information constitutes valuable proprietary assets; (iii) theCompany and its affiliates will suffer substantial damage and irreparable harmwhich will be difficult to compute if, during the Term of Employment andthereafter, Executive should enter a Competitive Business (as defined herein)in violation of the provisions of this Agreement; (iv) the nature of theCompany’s and its affiliates’ business is such that it could be conducted anywhere in the world and that it is not limited to a geographic scope or region; (v) theCompany and its affiliates will suffer substantial damage which will bedifficult to compute if, during the Term of Employment or thereafter, Executiveshould solicit or 

 

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## interfere with the Company’sor its affiliates’ employees or should divulge Confidential Informationrelating to the business of the Company and its affiliates; (vi) theprovisions of this Agreement are reasonable and necessary for the protection ofthe business of the Company and its affiliates; (vi) the Company would nothave hired or continued to employ Executive or grant the equity awards andother benefits contemplated under this Agreement unless he agreed to be boundby the terms hereof; and (vii) the provisions of this Agreement will notpreclude Executive from other gainful employment. “Competitive Business”means any business, partnership, enterprise, association or activity that isactively involved in the business of producing and/or marketing ethanol andethanol co-products; provided, that a Competitive Business shall notinclude a separate non-competitive subsidiary or division related to a companythat is otherwise a Competitive Business if Executive is employed solely toperform services for such non-competitive subsidiary or division and does notengage in, assist, or have any material involvement with any aspect of suchcompany’s competitive business. “Confidential Information” as used in thisAgreement shall mean any and all confidential and/or proprietary knowledge,data, or information of the Company or any affiliate, including, withoutlimitation, any: (A) trade secrets, drawings, inventions, methodologies,mask works, ideas, processes, formulas, source and object codes, data,programs, software source documents, works of authorship, know-how,improvements, discoveries, developments, designs and techniques, and all otherwork product of the Company or any affiliate, whether or not patentable orregistrable under trademark, copyright, patent or similar laws; (B) informationregarding plans for research, development, new service offerings and/orproducts, marketing, advertising and selling, distribution, business plans,business forecasts, budgets and unpublished financial statements, licenses,prices and costs, suppliers, customers or distribution arrangements; (C) anyinformation regarding the skills and compensation of employees, suppliers,agents, and/or independent contractors of the Company or any affiliate; (D) conceptsand ideas relating to the development and distribution of content in any mediumor to the current, future and proposed products or services of the Company orany affiliate; or (E) any other information, data or the like that islabeled confidential or orally disclosed to Executive as confidential.

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## (b)           Confidentiality.  In consideration of the benefits provided forunder this Agreement, Executive agrees not to, at any time, either during theTerm of Employment or thereafter, divulge, use, publish or in any other mannerreveal, directly or indirectly, to any person, firm, corporation or any otherform of business organization or arrangement and keep in the strictestconfidence any Confidential Information, except (i) in the good faithperformance of Executive’s duties hereunder, (ii) with the Company’sexpress written consent, (iii) to the extent that any such information isin or becomes in the public domain or the relevant trade or industry other thanas a result of Executive’s breach of any of obligations hereunder, or (iv) whererequired to be disclosed by court order, subpoena or other government processand in such event, Executive shall cooperate with the Company in attempting tokeep such information confidential.  Uponthe request of the Company, Executive agrees to promptly deliver to the Companythe originals and all copies, in whatever medium, of all such ConfidentialInformation.

##  

## (c)           Non-Compete.  In consideration of the benefits provided forin this Agreement, Executive covenants and agrees that during Executive’semployment and for a period of twelve (12) months thereafter, Executive shallnot, directly or indirectly for or on behalf of himself or any other person orentity (i) engage in any Competitive Business or (ii) participate orinvest in, provide to, or assist (whether as owner, part-owner, shareholder,member, partner, director, 

 

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## officer, trustee, employee,agent or consultant, or in any other capacity) any Competitive Business; providedthat neither (i) nor (ii) shall be violated if Executive is employedby an entity in a senior executive position and a subsidiary or division ofsuch entity is engaged in a Competitive Business that is not in material competitionwith the Company and Executive is not directly involved in the daily operationsof such subsidiary or division.  For theavoidance of doubt, nothing in this Section 10 shall not precludeExecutive from trading ethanol-related commodities; provided; that suchactivity does not have a material adverse effect on the Company.  The restrictions set forth in this Section 10(c) shallnot apply in the event of a termination of Executive’s employment by theCompany without Cause or by Executive for Good Reason, in each case, ifExecutive provides a written waiver to the Company of his right to allseverance benefits, including equity acceleration (but other than the AccruedObligations) within sixty (60) business days following such termination.  The restrictions set forth in this Section 10(c) shallnot limit Executive’s right to own not more than 5% of any of the debt orequity securities of any business organization that is then filing reports withthe Securities and Exchange Commission pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934, as amended, or any compensatory equitysecurities that Executive receives in connection with services provided or tobe provided.

##  

## (d)           Non-Solicitation ofEmployees.  DuringExecutive’s employment and for a period of twelve (12) months thereafter,Executive will not directly or indirectly for or on behalf of himself or anyother person or entity (i) solicit, recruit, hire, endeavor to entice awayfrom the Company, or otherwise interfere with the Company’s relationship with,any of its current employees, or anyone who was employed by or engaged toprovide exclusive services to the Company at any time during the six (6) monthsprior to Executive’s Date of Termination, and (ii) endeavor to entice awayfrom or otherwise interfere with, the Company’s relationship with any personsor entities that were investors, suppliers, clients, customers or licensees ofthe Company at any time during the six (6) months prior to Executive’sDate of Termination; provided that the foregoing shall not be violatedby general advertising nor by serving as a reference upon request.

##  

## (e)           Post-Employment Property.  The parties agree that any work ofauthorship, invention, design, discovery, development, technique, improvement,source code, hardware, device, data, apparatus, practice, process, method orother work product whatever (whether patentable or subject to copyright, ornot, and hereinafter collectively called “discovery”) related to training ormarketing methods and techniques that Executive, either solely or incollaboration with others,  has made ormay make, discover, invent, develop, perfect, or reduce to practice during theterm of his employment, whether or not during regular business hours andcreated, conceived or prepared on the Company’s or any affiliates’ premises orotherwise shall be the sole and complete property of the Company and/or itsaffiliates.  More particularly, andwithout limiting the foregoing, Executive agrees that all of the foregoing andany (i) inventions (whether patentable or not, and without regard towhether any patent therefor is ever sought), (ii) marks, names, or logos(whether or not registrable as trade or service marks, and without regard towhether registration therefor is ever sought), (iii) works of authorship(without regard to whether any claim of copyright therein is ever registered),and (iv) trade secrets, ideas, and concepts ((i) - (iv) collectively,“Intellectual Property Products”) created, conceived, or prepared on theCompany’s or any affiliates’ premises or otherwise, whether or not duringnormal business hours, shall perpetually and throughout the world be theexclusive property of the Company and/or its affiliates, as the case may be, asshall all tangible media (including, but not limited to, 

 

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## papers, computer media ofall types, and models) in which such Intellectual Property Products shall berecorded or otherwise fixed.  Executivefurther agrees promptly to disclose in writing and deliver to the Company allIntellectual Property Products created during his engagement by the Company,whether or not during normal business hours. Executive agrees that all works of authorship created by Executiveduring his engagement by the Company shall be works made for hire of which theCompany or its affiliates is the author and owner of copyright. To the extentthat any competent decision-making authority should ever determine that anywork of authorship created by Executive during his engagement by the Company isnot a work made for hire, Executive hereby assigns all right, title andinterest in the copyright therein, in perpetuity and throughout the world, tothe Company.  To the extent that this Agreementdoes not otherwise serve to grant or otherwise vest in the Company or itsaffiliates all rights in any Intellectual Property Product created by Executiveduring his engagement by the Company, or within three (3) monthsthereafter, Executive hereby assigns all right, title and interest therein, inperpetuity and throughout the world, to the Company.  Executive agrees to execute, immediately uponthe Company’s reasonable request and without charge, any further assignments,applications, conveyances or other instruments, at any time after execution ofthis Agreement, whether or not Executive is engaged by the Company at the timesuch request is made, in order to permit the Company, its affiliates and/ortheir respective assigns to protect, perfect, register, record, maintain, orenhance their rights in any Intellectual Property Product; provided, that,the Company shall bear the cost of any such assignments, applications orconsequences.   Upon termination ofExecutive’s employment with the Company for any reason whatsoever, and at anyearlier time the Company so requests, Executive will immediately deliver to thecustody of the person designated by the Company all originals and copies of anydocuments and other property of the Company in Executive’s possession, underExecutive’s control or to which he may have access.

##  

## (f)            Non-Disparagement. Executiveacknowledges and agrees that during and for a period of three (3) yearsfollowing the Term of Employment, he will not defame or publicly criticize theCompany and/or its affiliates and their respective officers, directors,partners, executives or agents with the intent to damage the services,business, integrity, veracity or personal or professional reputation of anysuch party in either a professional or personal manner.  In addition, the Company acknowledges andagrees that during and for a period of three (3) years following the Termof Employment, the Company will not defame or publicly criticize Executive withthe intent to damage the services, business, integrity, veracity or personal orprofessional reputation of Executive in either a professional or personalmanner.  Notwithstanding the foregoing,nothing in this Section 10(f) shall prevent any person from makingany truthful statement to the extent (i) necessary to rebut any untruepublic statements made by another party; (ii) necessary with respect toany litigation, arbitration or mediation involving this Agreement, including,but not limited to, the enforcement of this Agreement; (iii) required bylaw or by any court, arbitrator, mediator or administrative or legislative body(including any committee thereof) with jurisdiction over such person; or (iv) made as good faith competitive statements in theordinary course of business.

##  

## (g)           Enforcement.  If Executive commits a breach of any of theprovisions of this Section 10 or the Company commits a breach of Section 10(g),the Company or Executive, as applicable, shall have the right and remedy tohave the provision specifically enforced by any court having jurisdiction.  Executive acknowledges and agrees that theservices being rendered 

 

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## hereunder to the Company areof a special, unique and extraordinary character and that any such breach willcause irreparable injury to the Company and that money damages will not providean adequate remedy to the Company and the Company acknowledges and agrees thatany such breach will cause irreparable injury to Executive and that moneydamages will not provide an adequate remedy to Executive.  Such right and remedy shall be in additionto, and not in lieu of, any other rights and remedies available to the Companyor Executive at law or in equity.

##  

## (h)           Blue Pencil.  If, at any time, the provisions of this Section 10shall be determined to be invalid or unenforceable under any applicable law, byreason of being vague or unreasonable as to area, duration or scope ofactivity, this Agreement shall be considered divisible and shall become and beimmediately amended to only such area, duration and scope of activity as shallbe determined to be reasonable and enforceable by the court or other bodyhaving jurisdiction over the matter and Executive and the Company agree thatthis Agreement as so amended shall be valid and binding as though any invalidor unenforceable provision had not been included herein.

##  

## (i)            EXECUTIVE ACKNOWLEDGES THATHE HAS CAREFULLY READ THIS SECTION 10 AND HAS HAD THE OPPORTUNITY TOREVIEW ITS PROVISIONS WITH ANY ADVISORS AS HE CONSIDERED NECESSARY AND THATEXECUTIVE UNDERSTANDS THIS AGREEMENT’S CONTENTS AND SIGNIFIES SUCHUNDERSTANDING AND AGREEMENT BY SIGNING BELOW.

##  

# 11.           **Assignability**. ** **This Agreement may only be assignedto an acquiror of all or substantially all of the Company’s business thatagrees in writing to assume the Company’s obligations under this Agreement.

#  

# 12.           **Representation**. Executive represents and warrants to theCompany, and Executive acknowledges that the Company has relied on suchrepresentations and warranties in employing Executive, that neither Executive’sduties as an employee of the Company nor his performance of this Agreement willbreach any other agreement to which Executive is a party and that he has notentered into, and will not enter into, any agreement, either oral or written,in conflict herewith.  The Company representsand warrants to Executive that all necessary corporate actions for the approvalof this Agreement have been taken such that, upon the Company’s execution ofthis Agreement, this Agreement will constitute a legal, valid and bindingobligation of the Company.

#  

# 13.           **Resolution of Disputes**.  Any dispute concerning the validity,interpretation, enforcement, or breach of this Agreement, or otherwise arisingbetween the parties, shall (except to the extent otherwise provided in Section 10(g) withrespect to certain requests for injunctive relief) be submitted to bindingarbitration before the American Arbitration Association (“AAA”) forresolution.  Such arbitration shall beconducted in Dallas, Texas, and the arbitrator will apply New York law,including federal law as applied in New York courts.  The arbitration shall be conducted inaccordance with the AAA’s Commercial Arbitration Rules, as modified by theterms set forth in this Agreement.  Thearbitration will be conducted by a single arbitrator, who shall be an attorneywho specializes in the field of employment law and shall have prior experiencearbitrating employment disputes.  Theaward of the arbitrator shall be final and binding on the parties, and judgmenton the award may be confirmed and entered in any court 

 

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# havingjurisdiction.  The arbitration shall beconducted on a strictly confidential basis except to the extent necessary toenforce any judgment, and neither the Company nor Executive shall not disclosethe existence of a claim, the nature of a claim, any documents, exhibits, orinformation exchanged or presented in connection with any such a claim, or theresult of any arbitration (collectively, “Arbitration Materials”), toany third party, with the sole exception of such Parties legal counsel, whoalso shall be bound by all confidentiality terms of this Agreement.  In the event of any court proceeding tochallenge or enforce an arbitrator’s award, the parties hereby consent to theexclusive jurisdiction of the state and federal courts in Dallas, Texas andagree to venue in that jurisdiction.  Theparties agree to take all steps necessary to protect the confidentiality of theArbitration Materials in connection with any such proceeding, agree to file allConfidential Information (and documents containing Confidential Information)under seal to the extent possible and agree to the entry of an appropriateprotective order encompassing the confidentiality terms of this Agreement.  Each party agrees (a) to pay its owncosts and fees in connection with any arbitration of a dispute arising underthis Agreement, and any court proceeding arising therefrom, regardless ofoutcome and (b) that the arbitration costs and other joint expenses shallbe borne equally by the Parties.

#  

# 14.           **Notices**.  Any notice, consent, demand, request or othercommunication given to a person in connection with this Agreement (a “Notice”)shall be in writing and delivered in person, by facsimile transmission (with aNotice contemporaneously given by another method specified in this Section 14),by overnight courier service or by postage prepaid mail with a return receiptrequested, at the following locations (or to such other address as either partymay have furnished to the other in writing by like Notice).  All such Notices shall be deemed to have beengiven and effective upon receipt (or refusal of receipt).

#  

Ifto the Company:               [                      ]

Attn: [                    ]

Facsimile: [                    ]

 

If to Executive:                      To the address of hisprincipal residence as it appears in the Company’s records, with a copy to him(during the Term of Employment) at the Company’s principal executive office andwith a copy to:

 

ProskauerLLP

1585Broadway

NewYork, NY 10036

Attn:  Michael S. Sirkin, Esq.

Facsimile:  212-969-2900

 

# 15.           **Miscellaneous**.

#  

## (a)           Entire Agreement.  This Agreement, and the exhibits attachedhereto, contain the entire understanding and agreement among the Partiesconcerning the subject matter hereof and supersede all prior agreements, termsheets, understandings, discussions, negotiations and undertakings, whetherwritten or oral, among them with respect thereto.

 

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## (b)           Severability.  In the event that any provision or portion ofthis Agreement shall be determined to be invalid or unenforceable for anyreason, in whole or in part, the remaining provisions of this Agreement shallbe unaffected thereby and shall remain in full force and effect to the fullest extentpermitted by law so as to achieve the purposes of this Agreement.

##  

## (c)           Amendment or Waiver.  No provision in this Agreement may be amendedunless such amendment is set forth in a writing that specifically identifiesthe provision being amended and that is signed by the Parties.  No waiver by any person of any breach of anycondition or provision contained in this Agreement shall be deemed a waiver ofany similar or dissimilar condition or provision at the same or any prior orsubsequent time.  To be effective, anywaiver must be set forth in a writing that specifically refers to the conditionor provision that is being waived and is signed by the waiving person.

##  

## (d)           Headings.  The headings of the Sections and sub-sectionscontained in this Agreement are for convenience only and shall not be deemed tocontrol or affect the meaning or construction of any provision of thisAgreement.

##  

## (e)           Beneficiaries/References.  Executive shall be entitled, to the extentpermitted under applicable law, to select and change a beneficiary orbeneficiaries to receive any compensation or benefit under this Agreementfollowing Executive’s death by giving the Company written notice thereof.  In the event of Executive’s death or ajudicial determination of his incompetence, references in this Agreement toExecutive shall be deemed, where appropriate, to refer to his beneficiary,transferee, estate or other legal representative.

##  

## (f)            Survivorship.  Except as otherwise set forth in thisAgreement, the respective rights and obligations of the Parties hereunder shallsurvive any termination of Executive’s employment under this Agreement.

##  

## (g)           Withholding Taxes.  The Company may withhold from any amounts orbenefits payable under this Agreement any taxes that are required to be withheldpursuant to any applicable law or regulation.

##  

## (h)           409A Provisions.

##  

### (i)            Notwithstanding anythingherein to the contrary, this Agreement is intended to be interpreted andapplied so that the payments and benefits set forth herein either shall eitherbe exempt from the requirements of Code Section 409A, or shall comply withthe requirements of Code Section 409A, and, accordingly, to the maximumextent permitted, this Agreement shall be interpreted to be exempt from or incompliance with Code Section 409A.

###  

### (ii)           If Executive notifies theCompany (with specificity as to the reason therefor) that Executive believesthat any provision of this Agreement (or of any award of compensation orbenefit, including equity compensation or benefits provided herein or at anytime during his employment with the Company) would cause the Executive to incurany additional tax or interest under Code Section 409A or the Companyindependently makes such determination, the Company shall, after consultingwith Executive, reform such provision (or award of compensation or benefit) toattempt to comply with or be 

 

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### exempt from Code Section 409Athrough good faith modifications to the minimum extent reasonablyappropriate.  To the extent that anyprovision hereof (or award of compensation or benefit) is modified in order tocomply with Code Section 409A, such modification shall be made in goodfaith and shall, to the maximum extent reasonably possible, maintain theoriginal intent and economic benefit to Executive and the Company withoutviolating the provisions of Section 409A.

###  

### (iii)          Notwithstanding anyprovision in this Agreement or elsewhere to the contrary, if on his Date ofTermination Executive is deemed to be a “specified employee” within the meaningof Code Section 409A and using the identification methodologyselected by the Company from time to time, or if none, the default methodologyunder Code Section 409A, any payments or benefits due upon atermination of Executive’s employment under any arrangement that constitutes a “deferralof compensation” within the meaning of Code Section 409A (whether underthis Agreement, any other plan, program, payroll practice or any equity grant)and which do not otherwise qualify under the exemptions under Treas. Regs. Section 1.409A-1(including without limitation, the short-term deferral exemption and thepermitted payments under Treas. Regs. Section 1.409A-1(b)(9)(iii)(A)),shall be delayed and paid or provided to Executive in a lump sum (whether theywould have otherwise been payable in a single sum or in installments in theabsence of such delay) with interest at the prime rate as published in the WallStreet Journal on the first business day on or following the Date ofTermination, on the earlier of (i) the date which is six (6) monthsand one (1) day after Executive’s separation from service (as such term isdefined in Code Section 409A) for any reason other than death, and (ii) thedate of Executive’s death, and any remaining payments and benefits shall bepaid or provided in accordance with the normal payment dates specified for suchpayment or benefit.

###  

### (iv)          Notwithstanding anything inthis Agreement or elsewhere to the contrary, a termination of employment shallnot be deemed to have occurred for purposes of any provision of this Agreementproviding for the payment of any amounts or benefits that constitute “non-qualifieddeferred compensation” within the meaning of Code Section 409A upon orfollowing a termination of Executive’s employment unless such termination isalso a “separation from service” within the meaning of Code Section 409Aand, for purposes of any such provision of this Agreement, references to a “termination,”“termination of employment” or like terms shall mean “separation from service”and the date of such separation from service shall be the Date of Terminationfor purposes of any such payment or benefits.

###  

### (v)           Each payment under thisAgreement or otherwise (including any installment payments) shall be treated asa separate payment for purposes of Code Section 409A.

###  

### (vi)          In no event may Executive,directly or indirectly, designate the calendar year of any payment to be madeunder this Agreement or otherwise which constitutes a “deferral of compensation”within the meaning of Code Section 409A.

 

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### (vii)         All expenses or otherreimbursements paid pursuant to Section 4(g) hereof or otherwise thatare taxable income to Executive shall in no event be paid later than the end ofthe calendar year next following the calendar year in which Executive incurssuch expense or pays such related tax. With regard to any provision herein that provides for reimbursement ofcosts and expenses or in-kind benefits, except as permitted by Code Section 409A,(i) the right to reimbursement or in-kind benefits shall not be subject toliquidation or exchange for another benefit, (ii) the amount of expenseseligible for reimbursement, of in-kind benefits, provided during any taxableyear shall not affect the expenses eligible for reimbursement, or in-kindbenefits to be provided, in any other taxable year, *provided* that the foregoing clause (ii) shall not beviolated without regard to expenses reimbursed under any arrangement covered byInternal Revenue Code Section 105(b) solely because such expenses aresubject to a limit related to the period the arrangement is in effect and (iii) suchpayments shall be made on or before the last day of Executive’s taxable yearfollowing the taxable year in which the expense occurred.  Any tax gross-up payment as provided hereinshall be made in any event no later than the end of the calendar yearimmediately following the calendar year in which Executive remits the relatedtaxes, and any reimbursement of expenses incurred due to a tax audit orlitigation shall be made no later than the end of the calendar year immediatelyfollowing the calendar year in which the taxes that are the subject of theaudit or litigation are remitted to the taxing authority, or, if no taxes areto be remitted, the end of the calendar year following the calendar year inwhich the audit or litigation is completed.

###  

## (i)            Governing Law.  This Agreement shall be governed, construed,performed and enforced in accordance with its express terms, and otherwise inaccordance with the laws of the State of New York, without reference toprinciples of conflict of laws.

##  

## (j)            Counterparts.  This Agreement may be executed in two or morecounterparts, each of which shall be deemed an original and all of whichtogether shall be deemed to be one and the same instrument.

##  

## (k)           Effectiveness ContingentUpon Emergence. This Agreement shall become effective only uponthe consummation of the Plan of Reorganization. In the event the Plan of Reorganization is terminated prior to theconsummation thereof in accordance with its terms for whatever reason, thisAgreement shall become null and void.

##  

## (l)            Joint Drafting.  The Company and Executive acknowledge andagree that this Agreement was jointly drafted by the Company on the one sideand by Executive on the other side. Neither party, nor any party’s counsel, shall be deemed the drafter ofthis Agreement in any proceeding that may hereafter arise between them.

 

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[SIGNATURE PAGE FOLLOWS]

 

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INWITNESS WHEREOF, the undersigned have executed this Agreement as of the datefirst set forth above.

 

 
|   | Aventine  Renewable Energy Holdings, Inc. |
|--------|------------------------------------------------|
|   |                                           |
|   |                                           |
|   | By:                                            | /s/Eugene  Davis |
|   | Name:  Eugene Davis                            |
|   | Title:  Chairman                               |
|   |                                           |
|   |                                           |
|   | Executive:                                     |
|   |                                           |
|   |                                           |
|   | /s/  Thomas Manuel                             |
|   | Thomas  Manuel                                 |

 

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** **

**EXHIBIT A**

** **

GENERAL RELEASE

 

# 1.             Termination of Employment.  Thomas Manuel (the “Executive”)acknowledges that Executive’s last day of employment with Aventine RenewableEnergy Holdings, Inc. (together with its successors and assigns the “Company”)is [                              ](the “Termination Date”).

#  

2.             Consideration.  In accordance with the Employment Agreementby and between the Company and Executive, dated March 15, 2010 (the “EmploymentAgreement”), a copy of which is attached hereto and incorporated herewith,the Company agrees to provide the consideration set forth in Section 8(**[d][e]**)(ii) of the EmploymentAgreement in exchange for this General Release.

 

3.             Full Release.  Executive, for himself, his heirs, executors,administrators, successors and assigns (hereinafter collectively referred to asthe “Releasors”), hereby fully releases and discharges the Company, itsparents, subsidiaries, affiliates, insurers, successors, and assigns, and theirrespective officers, directors, employees, related parties and agents (all suchpersons, firms, corporations and entities being deemed beneficiaries hereof andare referred to herein as the “Related Parties”) from any and allactions, causes of action, claims, obligations, costs, losses, liabilities, damagesand demands of whatsoever character, whether or not known, suspected orclaimed, which the Releasors have, from the beginning of time through the dateof this General Release, against the Related Parties arising out of or in anyway related to Executive’s employment with the Company or the termination ofhis employment with the Company. Notwithstanding anything herein to the contrary, this General Releaseshall not (i) apply to any benefits due to Executive under this GeneralRelease or otherwise under Section 8 of the Employment Agreement,including without limitation, your right to a gross-up payment under Section 8(g) andExhibit B of the Employment Agreement; (ii) apply to Executive’srights to indemnification from the Company or rights to be covered under anyapplicable insurance policy with respect to any liability Executive incurred ormight incur as an employee, officer or director of the Company or a fiduciaryof any Company benefit plan including, without limitation, Executive’srights under Section 9 of the Employment Agreement; (iii) impairany vested benefits Executive may have, as of the Termination Date, under anyother employee benefit plans and programs applicable to Executive as of theTermination Date; and (iv) impair your rights to any continuation ofmedical coverage, pursuant to the Consolidated Omnibus Budget ReconciliationAct of 1985, as amended.

 

4.             Waiver ofRights Under All Applicable Statutes, Contract And Common Law.  Executive understands that this GeneralRelease waives all claims and rights Executive may have under certainapplicable federal, state and local statutory and regulatory laws, as each maybe amended from time to time, including but not limited to, the AgeDiscrimination in Employment Act (including the Older Workers BenefitProtection Act) (“ADEA”), Title VII of the Civil Rights Act; theEmployee Retirement Income Security Act of 1974; the Equal Pay Act; theRehabilitation Act of 1973; the Americans with Disabilities Act; the Americanswith Disabilities Amendment Act, the Worker Adjustment and RetrainingNotification Act; the Family and Medical Leave Act, and all other statutes,regulations, contracts, common law, and other laws in any and alljurisdictions.

 

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# 5.             Informed and VoluntarySignature.  No promiseor inducement has been made other than those set forth in this GeneralRelease.  This General Release isexecuted by Executive without reliance on any representation by the Company orany of its agents.  Executive states thatthat he is fully competent to manage his business affairs and understands thathe is waiving legal rights by signing this General Release.  Executive hereby acknowledges that he hascarefully read this General Release and has had the opportunity to thoroughlydiscuss the terms of this General Release with legal counsel of hischoosing.  Executive hereby acknowledgesthat he fully understands the terms of this General Release and its final andbinding effect and that he affixes his signature hereto voluntarily and of hisown free will.

#  

# 6.             Waiver of Rights Under theAge Discrimination Act. Executive understands that this General Release, and the releasecontained herein, waives all of his claims and rights under the ADEA. Thewaiver of Executive’s rights under the ADEA does not extend to claims or rightsthat might arise after the date this General Release is executed.  All or part of the consideration to be paidto Executive are in addition to any sums to which Executive would be entitledwithout signing this General Release. For a period of seven (7) daysfollowing execution of this General Release, Executive may revoke the terms ofthis General Release by a written document received by the Employer no laterthan 11:59 p.m. of the seventh day following Executive’s execution of this General Release.  This General Release will not be effectiveuntil said revocation period has expired without a revocation by Executive (the“Effective Date”). Executive acknowledges that he has been given up to[21/45](1) days to decide whether to sign this General Release. Executivehas been advised to consult with an attorney prior to executing this GeneralRelease and has been given a full and fair opportunity to do so.

#  

7.             Covenant Not ToSue.  Except for an action brought toenforce this General Release or challenge the validity of the ADEA waiver,Executive agrees to refrain from filing or otherwise initiating any action,lawsuit, charge, claim, demand, grievance, arbitration or other legal actionagainst the Company or Related Parties over matters released or waived herein,and agrees that he will refrain from participating in any action, complaint,charge, claim, demand, grievance, arbitration or other legal action initiatedor pursued by any individual, group of individuals, partnership, corporation orother entity against Executive and/or the Related Parties over matters releasedor waived herein, except as required by law. Notwithstanding the foregoing, nothing in this General Release shallinterfere with Executive’s right to file a charge with or participate in aninvestigation or proceeding by the Equal Employment Opportunity Commission orother federal or state regulatory or law enforcement agency.  However, the consideration provided toExecutive under this General Release shall be the sole relief provided for thereleased claims. Executive will not be entitled to recover and Executive agreesto waive any monetary benefits or other recovery in connection with any suchcharge or proceeding, without regard to who has brought such charge orproceeding.

 

8.             Litigation AndRegulatory Cooperation. Executive shall (a) reasonably cooperate with the Company and/orRelated Parties in the defense or prosecution of any claims or actions now inexistence or that may be brought in the future against or on behalf of theCompany and/or Related Parties that relate to events or occurrences thattranspired while Executive was employed by the Company and (b) reasonablycooperate with the Company in connection with any 

 

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(1) Insert 45 days inthe event of a layoff of two or more employees.

 

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investigation or review by any federal, state, orlocal regulatory authority as any such investigation or review relates toevents or occurrences that transpired while Executive was employed by theCompany; provided, that the forgoing shall not apply if the interests of theCompany and Executive are adverse.  Anyrequest for such cooperation shall take into account Executive’s other personaland business commitments.  For any suchcooperation that Executive provides after December 31, 2012, the Companyshall pay Executive a per diem fee for such cooperation (calculated asone-fifth the weekly gross Base Salary at the rate in effect immediately priorto the Termination Date), paid on the last day of the month following the monthin which such fee was earned.  TheCompany shall reimburse the Executive for all reasonable out-of-pocket expensesincurred by him in connection with providing such cooperation, and for legal fees to the extent Executive in goodfaith reasonably believes that he needs the advice of his own counsel.  Executive’s entitlement to reimbursement ofsuch costs and expenses, including legal fees, pursuant to this Section 8,shall in no way affect Executive’s rights, if any, to be indemnified and/oradvanced expenses under law or in accordance with the Company’s by-laws.  Any reimbursement of expenses pursuant tothis Section 8 shall be made in the manner set forth in Sections 4(g) and15(h)(vii) of the Employment Agreement.

 

9.             Reaffirmationof Continuing Obligations Under Employment Agreement And Applicable Law.  Nothing in this General Release is intendedto replace, supersede or supplant Executive’s independent and obligations underthe Employment Agreement that specifically continue following a termination ofhis employment.  By executing thisGeneral Release, Executive hereby acknowledges and reaffirms all suchcontinuing obligations under the Employment Agreement and applicable law,including but not limited to his obligations set forth in Section 10 ofthe Employment Agreement, entitled “Restrictive Covenants.”  These obligations include, withoutlimitation, Executive’s agreements concerning Confidential Information,non-competition and non-solicitation.

 

10.           No Admission of Liability.  This General Release shall not in any way beconsidered or construed as an admission by the Company of any improper actionsor liability whatsoever as to Executive or any other person.

 

11.           Miscellaneous.

 

(a)           This General Release shallbe governed in all respects by the laws of the State of New York without regardto the principles of conflict of law.

 

# (b)           In the event that any one ormore of the provisions of this General Release is held to be invalid, illegalor unenforceable, the validity, legality and enforceability of the remaining provisionswill not in any way be affected or impaired thereby. Moreover, if any one ormore of the provisions contained in this General Release is held to beexcessively broad as to duration, scope, activity or subject, such provisionswill be construed by limiting and reducing them so as to be enforceable to themaximum extent compatible with applicable law.

#  

# (c)           This General Release may beexecuted in two or more counterparts, each of which shall be deemed anoriginal, but all of which together shall constitute one and the sameinstrument.

 

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# (d)           The paragraph headings usedin this General Release are included solely for convenience and shall notaffect or be used in connection with the interpretation of this GeneralRelease.

#  

# (e)           This General Release and theEmployment Agreement represent the entire agreement between the parties withrespect to the subject matter hereto and may not be amended except in a writingsigned by the Company and Executive.

#  

# (f)            This General Release shallbe binding on the executors, heirs, administrators, successors and assigns ofExecutive and the successors and assigns of the Related Parties and theReleasors and shall inure to the benefit of the respective executors, heirs,administrators, successors and assigns of the Related Parties and theReleasors.

#  

## [signaturepage follows]

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## **IN WITNESS WHEREOF**, the parties hereto haveexecuted this General Release on this        dayof                              .

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|   | Aventine  Renewable Energy Holdings, Inc. |
|--------|------------------------------------------------|
|   |                                           |
|   |                                           |
|   | By:                                            | /s/  Eugene Davis |
|   | Name:  Eugene Davis                            |
|   | Title:  Chairman                               |
|   |                                           |
|   |                                           |
|   | Executive:                                     |
|   |                                           |
|   |                                           |
|   | /s/  Thomas Manuel                             |
|   | Thomas Manuel                                  |

** **

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**EXHIBIT B**

** **

PARACHUTETAX INDEMNITY PROVISIONS

 

ThisExhibit B sets forth the terms and provisions applicable to Executivepursuant to the provisions of the Section 8(g) of the Agreement.  This Exhibit B shall be subject in allrespects to the terms and conditions of the Agreement.  Capitalized terms used without definition inthis Exhibit B shall have the meanings set forth in the Agreement.

 

(i)            In the event that Executive shall become entitled topayments and/or benefits provided by the Agreement or any other amounts to (orfor the benefit of) Executive that constitute “parachute payments,” as suchterm is defined under Section 280G of the Code, as a result of a change inownership or effective control of the Company or in the ownership of asubstantial portion of the assets of the Company (collectively, the “CompanyPayments”), and such Company Payments will be subject to the tax (the “ExciseTax”) imposed by Section 4999 of the Code (and similar tax, if any,that may hereafter be imposed by any taxing authority), the Company shall payto Executive at the time specified in clause (v) below an additionalamount (the “Gross-Up Payment”) such that the net amount retained byExecutive from the Company Payments together with the Gross-Up Payment, afterdeduction of any Excise Tax on the Company Payments and any U.S. federal,state, and local income or payroll tax upon the Gross-Up Payment provided forby this clause (i), but before deduction for any U.S. federal, state, and localincome or payroll tax on the Company Payments, shall be equal to the CompanyPayments.

 

(ii)           Notwithstanding the foregoing provisions of this Exhibit Bto the contrary, if it shall be determined that Executive is entitled to aGross-Up Payment, but the Company Payments do not exceed 110% of the greatestamount (the “Reduced Amount”) that could be paid to Executive such thatthe receipt of the Company Payments would not give rise to any Excise Tax, thenno Gross-Up Payment shall be made to Executive and the Company Payments, in theaggregate, shall be reduced to the Reduced Amount.  Any such reduction shall be made in thefollowing order:  any cash severanceExecutive is entitled to receive (starting with the last payment due), thenother cash amounts Executive is entitled to receive that are consideredparachute payments under Section 280G of the Code (starting with the lastpayment due), then any stock options that have exercise prices higher than thethen fair market value price of the stock (based on the latest vestingtranches), then restricted stock and restricted stock units based on the lastones scheduled to be distributed and then other stock options based on thelatest vesting tranches.  In the eventthat the Internal Revenue Service or court ultimately makes a determinationthat the “excess parachute payments” plus the “base amount” is an amount otherthan as determined initially, an appropriate adjustment shall be made with regardto the Gross-Up Payment or Reduced Amount, as applicable, to reflect the finaldetermination and the resulting impact on whether this clause (ii) applies.

 

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(iii)          For purposes of determining whether any of theCompany Payments and Gross-Up Payment (collectively, the “Total Payments”)will be subject to the Excise Tax and the amount of such Excise Tax:

 

(A)  the Total Paymentsshall be treated as “parachute payments” within the meaning of Section 280G(b)(2) ofthe Code, and all “parachute payments” in excess of the “base amount” (asdefined under Section 280G(b)(3) of the Code) shall be treated assubject to the Excise Tax, unless and except to the extent that, in the opinionof the Company’s independent certified public accountants appointed prior toany change in ownership (as defined under Section 280G(b)(2) of theCode) or a certified public accountantappointed following a change in ownership that is mutually acceptable to theCompany and Executive, or tax counsel selected by such accountants orthe Company (the “Accountants”) such Total Payments (in whole or inpart):  (1) do not constitute “parachutepayments,” (2) represent reasonable compensation for services actuallyrendered within the meaning of Section 280G(b)(4) of the Code inexcess of the “base amount” or (3) are otherwise not subject to the ExciseTax; and

 

(B) the value of anynon-cash benefits or any deferred payment or benefit shall be determined by theAccountants in accordance with the principles of Section 280G of the Code.

 

Inthe event that the Accountants are serving as accountants or auditors for theindividual, entity or group effecting the change in control (within the meaningof Section 280G of the Code), Executive may appoint another nationallyrecognized accounting firm to make the determinations hereunder (whichaccounting firm shall then be referred to as the “Accountants” hereunder).  All determinations hereunder shall be made bythe Accountants which shall provide detailed supporting calculations both tothe Company and Executive at such time as it is requested by the Company orExecutive.  The determination of theAccountants, subject to the adjustments provided below, shall be final andbinding upon the Company and Executive.

 

(iv)          For purposes of determining the amount of theGross-Up Payment, Executive’s marginal blended actual rates of federal, stateand local income taxation in the calendar year in which the change in ownershipor effective control that subjects Executive to the Excise Tax occurs shall beused.  In the event that the Excise Taxis subsequently determined by the Accountants to be less than the amount takeninto account hereunder at the time the Gross-Up Payment is made, Executiveshall repay to the Company, at the time that the amount of such reduction inExcise Tax is finally determined, the portion of the prior Gross-Up Paymentattributable to such reduction (plus the portion of the Gross-Up Paymentattributable to the Excise Tax and U.S. federal, state and local income taximposed on the portion of the Gross-Up Payment being repaid by Executive ifsuch repayment results in a reduction in Excise Tax or a U.S. federal, stateand local income tax deduction). Notwithstanding the foregoing, in the event that any portion of theGross-Up Payment to be refunded to the Company has been 

 

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paidto any U.S. federal, state and local tax authority, repayment thereof (andrelated amounts) shall not be required until actual refund or credit of suchportion has been made to Executive. Executive and the Company shall mutually agree upon the course of actionto be pursued (and the method of allocating the expense thereof) if Executive’sclaim for refund or credit is denied.  Inthe event that the Excise Tax is later determined by the Accountants or theInternal Revenue Service (or other taxing authority) to exceed the amount takeninto account hereunder at the time the Gross-Up Payment is made (including byreason of any payment the existence or amount of which cannot be determined atthe time of the Gross-Up Payment), the Company shall make an additionalGross-Up Payment in respect of such excess (plus any interest or penaltiespayable with respect to such excess) promptly after the amount of such excessis finally determined.

 

(v)           The Gross-Up Payment or portion thereof provided forin clause (iv) above shall be paid not later than the sixtieth (60th) day following an eventoccurring which subjects Executive to the Excise Tax; provided, however, thatif the amount of such Gross-Up Payment or portion thereof cannot be finallydetermined on or before such day, the Company shall pay to Executive on suchday an estimate, as determined in good faith by the Accountants, of the minimumamount of such payments and shall pay the remainder of such payments (togetherwith interest at the rate provided in Section 1274(b)(2)(B) of theCode), subject to further payments pursuant to clause (iv) above, as soonas the amount thereof can reasonably be determined, but in no event later thanthe seventy-fifth (75th) day after theoccurrence of the event subjecting Executive to the Excise Tax.  Subject to clauses (iv) and (ix) ofthis Exhibit B, in the event that the amount of the estimated paymentsexceeds the amount subsequently determined to have been due, such excess shallconstitute a loan by the Company to Executive, payable on the fifth (5th) day after demand by theCompany (together with interest at the rate provided in Section 1274(b)(2)(B) ofthe Code).

 

(vi)          In the event of any controversy with the InternalRevenue Service (or other taxing authority) with regard to the Excise Tax,Executive shall permit the Company to control issues related to the Excise Tax(at its expense), provided that such issues do not potentially materiallyadversely affect Executive, but Executive shall control any other issues.  In the event that the issues areinterrelated, Executive and the Company shall in good faith cooperate so as notto jeopardize resolution of either issue, but if the parties cannot agree,Executive shall make the final determination with regard to the issues.  In the event of any conference with anytaxing authority as to the Excise Tax or associated income taxes, Executiveshall permit the representative of the Company to accompany Executive, andExecutive and Executive’s representative shall cooperate with the Company andits representative.

 

(vii)         The Company shall be responsible for all charges ofthe Accountants.

 

(viii)        The Company and Executive shall promptly deliver toeach other copies of any written communications, and summaries of any verbalcommunications, with any taxing authority regarding the Excise Tax covered bythis Exhibit B.

 

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(ix)           Nothing in this Exhibit B is intended toviolate the Sarbanes-Oxley Act of 2002 and to the extent that any advance orrepayment obligation hereunder would do so, such obligation shall be modifiedso as to make the advance a nonrefundable payment to Executive and therepayment obligation null and void.

 

(x)            Notwithstanding the foregoing, any payment orreimbursement made pursuant to this Exhibit B shall be made in any eventno later than the end of the calendar year immediately following the calendaryear in which Executive remits the related taxes, and any reimbursement ofexpenses incurred due to a tax audit or litigation shall be made no later thanthe end of the calendar year immediately following the calendar year in whichthe taxes that are the subject of the audit or litigation are remitted to thetaxing authority, or, if no taxes are to be remitted, the end of the calendaryear following the calendar year in which the audit or litigation is completed.

 

(xi)           The provisions of this Exhibit B shall survivethe termination of Executive’s employment with the Company for any reason andany amount payable under this Exhibit B shall be subject to the provisionsof Section 15(h) of the Agreement.

 

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