Document:

EXHIBIT 10.17

 

	
  THE IOWA STATE
  BAR ASSOCIATION

  Official Form No. 136

  	
  Richard K. Updegraff, ISBA No. 5668

  	
  FOR THE LEGAL EFFECT OF THE USE OF

  THIS FORM, CONSULT YOUR LAWYER

  
	
   

  	
   

  	
   

  
	
  

  	
  PROMISSORY NOTE

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
  $ 500,000.00

  	
   

  	
  March 9          2007

  

 

FOR
VALUE RECEIVED, the undersigned, each as principal, jointly and severally,
promise(s) to pay to the order of Rawhide Management, L.L.C. at 3500 S.
Phillips Avenue, Suite 241, Sioux Falls, SD 57105, Iowa, the sum of Five
hundred
thousand                                  
DOLLARS with interest thereon from above date, payable as below at the equal to
the interest rate established by the most recent auction of U.S. Treasury
1-year notes rate of 4.9 per cent per annum until payment hereof as follows:

 

In the event the Amended and Restated Capitalization Agreement executed
by the parties on Feb 14, 2007, is terminated for any reason prior to the date
that Rawhide subscribes for units in the Illini Offering or that Rawhide does
not subscribe for units in the Illini Offering for any reason, the aggregate
amount loaned by Rawhide to Illini pursuant to this note, together with
interest accrued thereon, shall be repaid to Rawhide on the earlier of the
Escrow Closing Date, the date upon which Illini or its unit holders receive
alternate financing in the event that the Illini Offering does not succeed, or March 1,
2008. This note is subject to all the terms and conditions of the Amended and
Restated Capitalization Agreement and specifically paragraph 2.4.

 

Interest shall first be deducted from the payment and
any balance shall be applied on principal.

 

Principal and interest not paid when due shall draw
interest at the rate of 4.9% per annum. Upon default in payment of any
interest, or any installment of principal, the whole amount then unpaid shall
become immediately due and payable at the option of the holder without notice.
The undersigned, in case of suit on this note, agrees to pay attorney’s fees.

 

Makers, endorsers and
sureties waive demand of payment, notice of non-payment, protest and notice.
Sureties, endorsers and guarantors agree to all of the provisions of this note,
and consent that the time or times of payment of all or any part hereof may be
extended after maturity, from time to time, without notice.

 

 

	
  Address:

  	
  3600 Wabash
  Ave., Suite C

  Springfield, IL 62711 

  	
   

  	
  Illini Bio-Energy, L.L.C. 

  	
   

  
	
  Phone:

  	
  (217) 726-9523

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Ernest D. Moody

  	
   

  	
   

  	
  /s/ Lynn D. Jensen

  	
   

  
	
  Illini Bio-Energy, LLC

  	
   

  	
  Rawhide Management, LLC

  	
   

  
						

 

 

	
  Caveat: This form not to be used for a Consumer
  Credit Transaction.

  
	
   

  	
   

  
	
  © 

  	
  The Iowa State Bar
  Association 2005

  	
  136 PROMISSORY NOTE

  
	
   

  	
  IOWADOCS®

  	
  Revised January 2005EXHIBIT 10.18

 

	
  THE IOWA STATE
  BAR ASSOCIATION

  Official Form No. 136

  	
  Miranda L. Hughes

  	
  FOR THE LEGAL EFFECT OF THE USE OF

  THIS FORM, CONSULT YOUR LAWYER

  
	
   

  	
   

  	
   

  
	
  

  	
  PROMISSORY NOTE

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
  $3,100,000.00 

  	
   

  	
  May 21, 2007

  

 

FOR
VALUE RECEIVED, the undersigned, each as principal, jointly and severally,
promise(s) to pay to the order of Rawhide Management, L.L.C. at 3500 S.
Phillips Avenue, Suite 241, Sioux Falls, SD 57105, Iowa, the sum of THREE
MILLION ONE HUNDRED THOUSAND AND 0/100 ($3,100,000.00) DOLLARS with interest
thereon from above date, payable as below at the rate of 4.85% per cent per
annum until payment hereof as follows:

 

In the event the
Amended and Restated Capitalization Agreement executed by the parties on February 14,
2007, is terminated for any reason prior to the date that Rawhide subscribes
for units in the Illini Offering or that Rawhide does not subscribe for units
in the Illini Offering for any reason, the aggregate amount loaned by Rawhide
to Illini pursuant to this note, together with interest accrued thereon, shall
be repaid to Rawhide on the earlier of the Escrow Closing Date, the date upon
which Illini or its unit holders receive alternate financing in the event that
the Illini Offering does not succeed, or March 1, 2008. This note is subject
to all the terms and conditions of the Amended and Restated Capitalization
Agreement and specifically paragraph 2.4.

 

Interest
shall first be deducted from the payment and any balance shall be applied on
principal.

 

Principal
and interest not paid when due shall draw interest at the rate of 4.85% per
annum. Upon default in payment of any interest, or any installment of
principal, the whole amount then unpaid shall become immediately due and
payable at the option of the holder without notice. The undersigned, in case of
suit on this note, agrees to pay attorney’s fees.

 

Makers,
endorsers and sureties waive demand of payment, notice of non-payment, protest
and notice. Sureties, endorsers and guarantors agree to all of the provisions
of this note, and consent that the time or times of payment of all or any part hereof
may be extended after maturity, from time to time, without notice.

 

Important.
Read Before Signing:  The terms of this
Agreement should be read carefully because only those terms in writing are
enforceable. No other terms or oral promises not contained in this written
contract may be legally enforced. You may change the terms of this
Agreement only by another written agreement. Borrower acknowledges the receipt
of a copy of this document at the time it was signed.

 

 

	
  Address:

  	
  3600 Wabash
  Avenue, Suite C

  	
   

  	
  /s/  Ernest D.
  Moody

  	
   

  
	
   

  	
  Springfield, IL
  62711

  	
   

  	
  Illini Bio-Energy,
  L.L.C.

  	
   

  
	
   

  	
   

  	
   

  	
  Chairman

  	
   

  
	
  Phone:

  	
  217-726-9523

  	
   

  	
   

  	
   

  

 

 

	
  Caveat:  This form not
  to be used for a Consumer Credit Transaction.

  
	
   

  	
   

  
	
  © 

  	
  The Iowa State Bar Association 2005

  IOWADOCS®

  	
  136 PROMISSORY NOTE

  Revised January 2005EXHIBIT 10.19

 

ETHANOL MARKETING AGREEMENT

 

This Ethanol Marketing Agreement (“Agreement”) is made
and entered into as of the 25th day of June, 2007 by and between Illini
Bio-Energy LLC, an affiliate of Rawhide Management LLC (“ILLINI BIO-ENERGY”)
and AVENTINE RENEWABLE ENERGY, INC., a Delaware corporation (“ARE”) (each a “Party”,
and collectively the “Parties”).

 

In consideration of the mutual terms and conditions contained herein,
the Parties agree as follows:

 

1.             Term and
Termination: The term of this Agreement shall commence on the date hereof
and shall continue for a primary term of two (2) years from the first day of
the first month commencing after the date of the first Bill of Lading delivered
hereunder for Ethanol produced at the Plant (as hereafter defined) and
thereafter; automatically renewing for successive one (1) year terms, unless
terminated on the expiration date of the two (2) year primary term, or on the
expiration date of any subsequent one (1) year renewal term, in each case by
either Party with at least one (1) year written notice prior to such expiration
date.  Notwithstanding the foregoing, in
the event the Plant is not constructed and delivering Ethanol to ARE hereunder
within three (3) years from the date first written above, ARE shall have the
right to terminate this Agreement upon prior written notice to ILLINI
BIO-ENERGY.

 

2.             Quantity and Quality

 

A.            ILLINI BIO-ENERGY shall sell exclusively
to ARE the total output of fuel grade ethanol (“Ethanol”) produced at ILLINI
BIO-ENERGY’s facility proposed to be constructed in Hartsburg, IL (“Plant”), less
the amount of local E-85 sales discussed in 2B below, currently anticipated to have
a nameplate capacity of one hundred (100) million gallons per year and
estimated annual production of one hundred twenty (120) million gallons per
year.  Ethanol shall be delivered FOB the
Plant, and title shall pass on the date of the Bill of Lading. Ethanol produced
for the intended use as an alternative or racing fuel shall not be excluded
from this Agreement.

 

B.            ILLINI BIO-ENERGY shall have the right to
sell a quantity of Ethanol produced at the Plant for use in local E-85 markets
within 50 miles of said Plant’s location; provided, however, such quantity
shall not exceed one million (1,000,000) gallons of Ethanol in any given month
and said E-85 gallons must be taken into account when providing a forecast to
ARE discussed in 4B.

 

C.            Such Ethanol shall meet or exceed all
industry standards and any specifications required by ARE’s customers.  ARE shall have the right to reject any
Ethanol which does not meet such standards and such standards are subject to
change by ARE.

 

1

 

3.             ARE shall, with respect to the Plant:

 

A.           Market all of the
Ethanol produced at the Plant, at the price outlined in Section 5;

 

B.            Remit payment to ILLINI BIO-ENERGY  for the Ethanol purchased by ARE hereunder as
provided in Section 5; and

 

C.            Be responsible for
scheduling all shipments of Ethanol to be purchased by ARE hereunder with ILLINI BIO-ENERGY.

 

4.             ILLINI BIO-ENERGY shall­, with respect to
the Plant:

 

A.            Provide to ARE on a timely basis annual production
forecasts, monthly updates to the rolling twelve month production forecasts,
monthly updates, daily plant inventory balances and shipment information, and
other information reasonably requested by ARE; ILLINI BIO-ENERGY shall use its
reasonable best efforts to meet the monthly production targets reflected in the
then-current annual production forecast;

 

B.            Notify ARE promptly of any material unscheduled
shut-down, suspension or significant decrease in production at the Plant that
was not reported in the rolling twelve month production forecasts or monthly
updates provided under Section 4.A. above;

 

C.            Provide to ARE specifications and certificates of
analysis of the Ethanol sold to ARE that are consistent with the specifications
referred to in Section 2.B. above; ILLINI BIO-ENERGY shall, at its expense,
provide or cause to be provided all testing and related test equipment at or in
the vicinity of the Plant to determine compliance with such specifications and
ARE or its representative shall, at ARE’S expense, have the right to perform
periodic tests to determine compliance with such specifications.

 

D.            Be responsible for compliance with all federal, state
and local rules, regulations and requirements regarding the shipment of Ethanol
from the Plant, including but not limited to, all U.S. Department of
Transportation (“DOT”) requirements relating to shipment of hazardous materials
(e.g. proper paperwork, railcars meeting DOT requirements, etc.).

 

E.             Provide for a minimum of eight (8) days  storage on the Plant’s premises at ILLINI BIO-ENERGY’s
cost;

 

F.             For all gallons sold to ARE, use certified meters or
weight-scales that provide both gross and net 60° Fahrenheit temperature
compensated gallons; and

 

G.            Provide any of the information to be provided by ILLINI
BIO-ENERGY pursuant to this Section 4 to ARE electronically in data form, if
such information is available in such form.

 

2

 

5.             Pricing and Commission

 

A.            Sales Price.  The per
gallon sale price ILLINI BIO-ENERGY shall receive for the Ethanol sold to ARE
under this Agreement shall be based on the Alliance Net Pool Price, as defined
below, which shall be adjusted to reflect the Pooled Volume Adjustment and/or
Pooled Volume True-Up, as applicable.  An
illustrative example of the calculation of Alliance Net Pool Price is attached
as Exhibit A hereto.

 

 “Alliance Net Pool Price” shall mean, with respect to any
month, (i) the weighted average gross price per gallon received by ARE for all
fuel grade Ethanol that was (A) supplied by an alliance partner or produced by
ARE and (B) sold during such month by ARE, minus (ii) all
costs (on a per gallon basis) incurred by ARE in conjunction with the handling,
movement and sale of such Ethanol, including but not limited to terminal lease
charges, throughput charges, terminal shrinkage costs, freight charges,
tariffs, costs of leasing railcars, trucks, river barges and ocean going
vessels, government taxes and assessments, insurance, inspection fees,
administrative costs, working capital carrying costs, bad debt expense, costs
of purchasing and delivering replacement ethanol due to lost or interrupted
Ethanol production and other costs, but excluding direct marketing costs
incurred in marketing such Ethanol.  ARE
shall use commercially reasonable efforts to contain the costs described in
clause (ii) above so as to maximize the Alliance Net Pool Price.

 

If ARE’s pooled volume of fuel grade Ethanol at the
end of a month is higher than its pooled volume at the end of the immediately
preceding month because pooled sales volumes were less than the aggregate
volume supplied by the alliance partners or produced by ARE during such month,
the Alliance Net Pool Price for such month shall be calculated as if the amount
of such increase was included as gallons supplied by the alliance partners
and/or produced by ARE and sold by ARE during such month at a price per gallon equal
to the estimated Alliance Net Pool Price for the immediately following month
(as determined in good faith by ARE). 
The amount by which the Alliance Net Pool Price for any month is
increased or decreased as a result of the foregoing sentence is the “Pooled
Volume Adjustment” for such month.

 

In the event that the actual Alliance Net Pool Price
for a month is different from the estimated Alliance Net Pool Price used in
calculating the Pooled Volume Adjustment for the immediately preceding month,
an adjustment to the Alliance Net Pool Price in the current month shall be made
by an offset which is equal to the amount of such difference.  Such adjustment is the “Pooled Volume
True-Up.”  Payment shall be made in
accordance with paragraph C below.  A
Pooled Volume True-Up shall occur at the time of payment for the last delivery
of Ethanol under this Agreement to reflect the actual Alliance Net Pool Price
for the final month of the term of this Agreement.

 

B.            Commission.  For each
gallon of Ethanol sold to ARE under this Agreement in any month, ARE shall
deduct from the Alliance Net Pool Price a commission equal to a percentage of the
Alliance Net Pool Price, such percentage to be determined from the

 

3

 

following schedule based
on the Total Capacity of all Qualifying Facilities delivering fuel grade
ethanol to ARE during such month.

 

	
  Total Capacity

  	
   

  	
   

  	
   

  
	
  of all Qualifying Facilities

  	
   

  	
  Commission

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

(**) 
(This material has been omitted in accordance with a request to the
Securities and Exchange Commission for confidential treatment under Rule 406
under the Securities Act. The omitted material has been filed separately with
the Commission.)

 

For purposes of this
Agreement:

 

(i) Qualifying Facilities
shall mean all fuel grade ethanol facility(ies) 
which are owned by RAWHIDE MANAGEMENT, LLC and/or an Affiliate of
RAWHIDE MANAGEMENT, LLC under which the total fuel grade ethanol output of such
facility(ies) are being sold to ARE under this Agreement and/or under any other
agreement between RAWHIDE MANAGEMENT, LLC and/or its Affiliates and ARE
containing (in all material respects) the same terms as this Agreement.  .

 

(ii)  “Affiliate” shall mean any
Person (whether now existing or hereafter created):  (i) which directly or indirectly is
controlled by RAWHIDE MANAGEMENT, LLC or (ii) which has fifty percent (50%) or
more of any class of voting stock or other ownership interest that is directly
or indirectly beneficially owned or held by RAWHIDE MANAGEMENT, LLC.  “Person” shall mean any natural person,
corporation, company, partnership, limited liability company, joint venture,
trust, unincorporated organization, organization, association, sole
proprietorship, government (or any agency, instrumentality or political subdivision
thereof, including autonomous and quasi-autonomous entities) or other entity.

 

(iii)  Total Capacity shall mean the sum of the
nameplate production capacities of all Qualifying Facilities (in millions of
gallons of fuel grade ethanol per year (“mgy”)).

 

Notwithstanding any other provision of this
Section 5.B to the contrary, in exchange for the shortened time periods for
which payment will be due by ARE under this Agreement with respect to Ethanol
deliveries during the first ten (10) Weekly Periods under this Agreement, as
set forth in Section 5.C. below, in lieu of the commission percentages set
forth in the above Table in this Section 5.B, the commission percentages shall
be as follows:

 

	
  Weekly Periods

  	
   

  	
  Commission

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

(**) 
(This material has been omitted in accordance with a request to the
Securities and Exchange Commission for confidential treatment under Rule 406
under the Securities Act. The omitted material has been filed separately with
the Commission.)

 

C.            Payment.  For all
quantities of Ethanol purchased by ARE from ILLINI BIO-ENERGY and shipped from
the Plant during a one-week period beginning on Monday

 

4

 

and ending on the
following Sunday (each a “Weekly Period”), ARE shall pay the estimated Alliance
Net Pool Price referred to in Section 5.A. less commissions referred to in
Section 5.B., to ILLINI BIO-ENERGY by ACH or wire no later than ten (10)
business days following the end of said Weekly Period; provided, however,
Ethanol purchased by ARE hereunder and shipped from the Plant during the first ten
(10) Weekly Periods shall be paid for no later than five (5) business days
following the end of such Weekly Periods. 
If at calendar month’s end, the actual Alliance Net Pool Price exceeds
the estimated Alliance Net Pool Price, ARE shall pay ILLINI BIO-ENERGY on or
before the 15th business day of the following calendar month an
amount equal to the product of (x) the difference between the actual and
estimated Alliance Net Pool Price (in each case less commissions) and (y) the
aggregate quantity of Ethanol purchased by ARE from ILLINI BIO-ENERGY and
shipped from the Plant under this Agreement during the prior calendar
month.  If the actual Alliance Net Pool
Price is less than the estimated Alliance Net Pool Price, ILLINI BIO-ENERGY shall
pay ARE and ARE shall have the right to withhold and set off from future
payments to ILLINI BIO-ENERGY, an amount equal to the product of (x) the
difference between the actual and estimated Alliance Net Pool Price (in each
case less commissions) and (y) the aggregate quantity of Ethanol purchased by
ARE from ILLINI BIO-ENERGY and shipped from the Plant under this Agreement
during such month.

 

D.            Supporting Records.  ARE shall
keep a set of books and records in accordance with generally accepting
accounting principals with respect to all sales of Ethanol hereunder and all
costs and commissions associated therewith, and shall make such books and
records reasonably available to ILLINI BIO-ENERGY’s independent outside accounting
representatives (upon execution by such independent outside accounting
representative of a mutually agreeable confidentiality agreement) at ARE’s
office at any time by appointment during normal business hours upon at least
five (5) business days prior written notice; provided
that ILLINI BIO-ENERGY shall be entitled to no more than one (1) such visit in
any year and ILLINI BIO-ENERGY ‘s independent outside accounting
representatives shall be permitted to disclose to ILLINI BIO-ENERGY only
aggregate summary information of the results of its review, and not any
contract or customer specific information. 
In addition, ARE shall provide ILLINI BIO-ENERGY by e-mail or fax with
supporting documentation regarding the calculation of the estimated Alliance
Net Pool Price with each weekly payment for Ethanol.

 

6.             Responsibility for Dedicated Railcars. ILLINI BIO-ENERGY acknowledges that ARE
will enter into leases or other arrangements intended to secure the
availability of sufficient railcars to ship the Ethanol produced at the Plant
as contemplated by this Agreement (“Dedicated Railcars”).  ARE shall promptly notify ILLINI BIO-ENERGY of
such arrangements.  In the event ILLINI
BIO-ENERGY or ARE terminates this Agreement and ARE’s commitments with respect
to the Dedicated Railcars continue past the date of such termination, unless
ARE otherwise notifies ILLINI BIO-ENERGY in writing,  ILLINI BIO-ENERGY shall be responsible for all
of ARE’s costs and expenses (including without limitation carrying costs and
finance charges) related to such Dedicated Railcars after the date of such
termination.  If, pursuant to the
preceding sentence, ILLINI BIO-ENERGY is responsible for costs and expenses
related to such Dedicated Railcars after the date of such termination, ARE and ILLINI
BIO-ENERGY shall cooperate in good faith to minimize the amount of any such
costs and expenses, including using commercially reasonable efforts to assign
ARE’s rights and obligations with respect to the Dedicated Railcars to ILLINI
BIO-ENERGY.  Without limiting the
generality of

 

5

 

the foregoing, except as may otherwise be agreed by
ARE and ILLINI BIO-ENERGY and recognizing that ARE will make a good faith
effort to accommodate any start-up issues and schedule rail cars accordingly,
in the event that the Plant does not start up or fails to provide substantially
the contemplated volumes of Product, any costs incurred for such Dedicated
Railcars not so utilized shall be for ILLINI BIO-ENERGY’s account.

 

7.             Indemnity:  ARE shall
indemnify, defend, and hold ILLINI BIO-ENERGY and its affiliates, subsidiaries,
parents, and its and their respective directors, officers, stockholders,
employees, and agents harmless from and against any and all claims, losses,
awards, judgments, settlements, fines, penalties, liabilities, damages, costs
or expenses (including reasonable out-of-pocket Attorney’s fees and expenses)
incurred on account of any injury or death of persons or damages to property to
the extent caused by or arising out of the negligence or willful misconduct of
ARE, its officers, employees, or agents in performing ARE’s obligations under
this Agreement.

 

ILLINI BIO-ENERGY shall
indemnify, defend, and hold ARE and its affiliates, subsidiaries, parents, and
its and their respective directors, officers, stockholders, employees, and
agents harmless from and against any and all claims, losses, awards, judgments,
settlements, fines, penalties, liabilities, damages, costs or expenses
(including reasonable out-of-pocket Attorney’s fees and expenses) incurred on
account of any injury to or death of persons or damages to property to the
extent caused by or arising out of the negligence or willful misconduct of ILLINI
BIO-ENERGY, its officers, employees, or agents in performing ILLINI BIO-ENERGY’s
obligations under this Agreement.  In
addition, ILLINI BIO-ENERGY shall indemnify and hold ARE and its affiliates,
subsidiaries, parents, and its and their respective directors, officers,
stockholders, employees, and agents harmless from and against any and all
claims, losses, awards, judgments, settlements, fines, penalties, liabilities,
damages, costs or expenses (including reasonable out-of-pocket Attorney’s fees
and expenses) to the extent caused by or arising out of (i) any defects in, or
otherwise relating to the quality or condition of, the Ethanol supplied by ILLINI
BIO-ENERGY and (ii) noncompliance with applicable federal, state or local
rules, regulations or requirements regarding shipment of Ethanol from the Plant
as more fully set forth in Section 4.D above.

 

8.             Force Majeure:

 

A.  In the event either Party is rendered unable,
wholly or in part, by Force Majeure to carry out its obligations under this
Agreement, it is agreed that on such Party’s giving notice in writing, or by
telephone and confirmed in writing, to the other Party as soon as possible
after the commencement of such Force Majeure event, the obligations of the
Party giving such notice, so far as and to the extent they are affected by such
Force Majeure, shall be suspended from the commencement of such Force Majeure
and during the remaining period of such Force Majeure, but for no longer
period, and such Force Majeure shall so far as possible remedied with all
reasonable dispatch; provided, however, the obligation to make payments then
accrued hereunder prior to the occurrence of such Force Majeure shall not be
suspended.

 

B.            The term “Force
Majeure” as used in this Agreement shall mean strikes, lockouts or industrial
disturbances; riots or civil disturbances; interference by civil or military
authorities; wars, blockades, insurrection, or acts of other public enemy or
acts of terrorism; epidemics, landslides, lightning, earthquakes, fires,
storms, floods, washouts or

 

6

 

other acts of God;
arrests or restraints of governments and people; compliance with federal, state
or local laws, rules or regulations, acts, orders, directives, requisitions or
requests of any official or agency of federal, state or local governments;
fires, explosions, freezing, failures, disruptions, breakdowns or accidents to
transportation equipment or facilities; prorationing by transporters; the
necessity of testing, making repairs, alterations or enlargements to
transportation equipment or facilities; embargoes, priorities, expropriation or
condemnation by government or governmental authorities; and any other cause
which is not reasonably within the control of the Party claiming suspension.

 

9.             Limitation of
Damages:  NEITHER PARTY SHALL BE LIABLE
OR OTHERWISE RESPONSIBLE TO THE OTHER PARTY HEREUNDER FOR CONSEQUENTIAL,
EXEMPLARY, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES AS TO ANY ACTION OR
OMISSION, WHETHER CHARACTERIZED AS A CONTRACT BREACH OR TORT OR OTHERWISE THAT
ARISES OUT OF OR RELATES TO THIS AGREEMENT OR ITS PERFORMANCE EXCEPT FOR ANY
SUCH AMOUNTS PAID BY A PARTY TO A NON-AFFILIATE THIRD PARTY, WHICH WOULD
THEREFORE BE CONSIDERED ACTUAL DAMAGES INCURRED BY SUCH PARTY.

 

10.           Independent Contractor: It is expressly understood that the relationship of
ARE to ILLINI BIO-ENERGY is that of an independent contractor and nothing
contained herein shall be construed to create any partnership, agency, or
employer/employee relationship.  ARE may
freely choose the customers from whom business shall be solicited and the time
and place for solicitation.

 

11.           Financing:     ARE
acknowledges that ILLINI BIO-ENERGY may borrow funds for the development,
construction, ownership and operation of the Plant, from one or more Persons
that will be or become a Financing Person. 
Any Financing Person, as a condition to making such loans may request
due diligence or financing documents or consents from ARE.  In connection therewith, ARE agrees to
furnish, at ILLINI BIO-ENERGY’s expense, to any Financing Person, such written
information, certificates, copies of invoices or delivery receipts, lien
waivers (upon payment), affidavits and other like documents as the Financing
Person may reasonably request with respect to the Plant or this Agreement.  In addition, in connection therewith, ARE
agrees to execute any additional documentation, as may be mutually agreed on,
in form and substance reasonably requested by a Financing Person, including,
but not limited to, documentation sufficient to evidence, to the satisfaction
of the Financing Person, ARE’s consent to assignment of this Agreement as
security to the Financing Person.

 

This Agreement is subject to
the approval of ILLINI BIO-ENERGY’s financing person(s) and equity partner(s).

 

12.           Notices:  Any notices
required to be given under this Agreement shall be in writing and be
sufficiently given when delivered in person or deposited in the U.S. mail
(registered or certified), postage prepaid, addressed as follows:

 

7

 

	
  ILLINI BIO-ENERGY:

  	
   

  	
   

  
	
   

  	
   

  	
  3600 Wabash Avenue

  	
   

  
	
   

  	
   

  	
  Suite C

  	
   

  
	
   

  	
   

  	
  Springfield, IL 62711 

  	
   

  
	
   

  	
   

  	
  Attn:

  
	
   

  	
   

  	
   

  
	
  ARE:

  	
   

  	
  AVENTINE RENEWABLE ENERGY, INC.

  
	
   

  	
   

  	
  P. O. Box 10

  
	
   

  	
   

  	
  Pekin, IL 61555

  
	
   

  	
   

  	
  Attn: Ron Miller

  

 

13.           Insurance:  Each Party
shall maintain, at all times while this Agreement is in effect, and each at its
own sole cost and expense, comprehensive general liability insurance with a
combined single limit for bodily injury and property damage of not less than
$1,000,000 for any one occurrence.  Each
Party shall promptly after execution of this Agreement furnish the other Party
a Certificate of Insurance evidencing the foregoing insurance coverage, and
shall promptly provide the other Party with prior written notice of any change
to or cancellation of such Certificate of Insurance or insurance coverage.  The insurance requirements set forth herein
are minimum coverage requirements and are not to be construed in any way as a
limitation on liability under this Agreement.

 

14.           Entire Agreement: This Agreement contains the entire agreement between
the Parties and supersedes all previous agreements, either oral or written,
between the Parties.  The language of
this Agreement shall not be construed in favor of or against either Party, but
shall be construed as if; the language was drafted mutually by both
Parties.  No modifications hereof shall
be valid unless made in writing and signed by both Parties.

 

15.           Waiver:  The failure
of either Party to enforce any of its rights hereunder on any particular
occasion shall not constitute a waiver of such rights on any subsequent
occasion.

 

16.           Assignment:  This
Agreement may not be assigned by either Party without the prior written consent
of the other Party, which consent shall not be unreasonably withheld.

 

17.           Headings:  Any paragraph
headings are used for convenience only and are not intended and shall not be
used in interpreting any provisions of this Agreement.

 

18.           No Third Party Beneficiary: Except as otherwise provided herein,
nothing contained in this Agreement shall be considered or construed as
conferring any right or benefit on a person not a Party to this Agreement and
neither this Agreement nor the performance hereunder shall be deemed to have
created a joint venture or partnership between the Parties.

 

19.           Governing Law: This Agreement shall be governed by the laws of the
State of Illinois without regard to the conflict of laws provisions thereof.

 

20.           Arbitration: Any dispute arising out of or in connection with
this Agreement shall be submitted to arbitration.  The arbitration shall be conducted according
to the Commercial

 

8

 

Arbitration Rules of the
American Arbitration Association.  The
place of arbitration shall be Pekin, Illinois or such other place as may be
agreed upon by the Parties.  Both Parties
shall attempt to agree upon one arbitrator, but if they are unable to agree,
each shall appoint an arbitrator and these two shall appoint a third
arbitrator.  Expenses of the
arbitrator(s) shall be divided equally between the Parties.  Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof, and
shall be enforceable against the Parties in accordance with the 1958 Convention
on the Recognition and Enforcement of Foreign Arbitral Awards, as amended.

 

21.           Severability: If any term or provision of this Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms and provisions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to a Party.  Upon such determination, the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner so that
the transactions contemplated hereby be consummated as originally contemplated
to the fullest extent possible.

 

22.           Confidentiality:  :  The
terms of this Agreement and any non-public information provided to ILLINI BIO-ENERGY pursuant to this
Agreement (including without limitation pursuant to Section 5.D. hereof) or as
a result of ILLINI BIO-ENERGY being an alliance partner (as that term is used
in the definition of “Alliance Net Pool Price” under Section 5.A. above) are
confidential and ILLINI BIO-ENERGY (i) will hold, and will cause its employees,
officers, directors, agents, accountants and advisors to hold, all such information
in confidence, unless it is compelled to disclose such information by judicial
or administrative process or by other requirements of law and (ii) will use,
and will cause its employees, officers, directors, agents, accountants and
advisors to use, such information only in connection with the implementation of
this Agreement, and for no other purpose.   
In this regard, such information may be considered “insider information”
under the securities laws of the United States and shall not be shared with
others (except as permitted under the preceding sentence) and shall not be used
to buy, sell or otherwise invest in securities of ARE or any of the alliance
partners.

 

In WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be duly executed as of the date
first written above.

 

	
  AVENTINE RENEWABLE ENERGY, INC.

  	
  [ILLINI BIO-ENERGY]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Ronald
  Miller   JMR 

  	
   

  	
  By:

  	
  Ernest D. Moody

  	
   

  
	
   

  	
  Ronald Miller,
  President

  	
   

  	
   

  	
  Chairman     
     ,
                   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  6/25/07

  	
   

  	
  Date: 

  	
  6/25/07

  	
   

  
								

 

9

 

EXHIBIT A

 

ILLUSTRATIVE
EXAMPLE OF CALCULATION OF

ALLIANCE NET POOL
PRICE

 

	
   

  	
   

  	
  $/GALLON

  	
   

  
	
  Gross Ethanol
  price (alliance producers and ARE)

  	
   

  	
  1.650

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:

  	
  Terminal Lease Charges, Throughput Charges, Terminal
  Shrinkage Costs, Freight, Tariffs, Tank Car, Truck, River Barge and Ocean
  Going Vessel Leasing Costs, Government Taxes and Assessments, Insurance,
  Inspection Fees and other costs (except for those separately set forth below)
  under item (ii) of the definition of Alliance Net Pool Price.

  	
   

  	
  0.135

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Working Capital including Inventory Carrying Costs

  	
   

  	
  0.006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Indirect Marketing Costs including Bad Debt Expense

  	
   

  	
  0.002

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ALLIANCE POOL
  PRICE before POOLED VOLUME ADJUSTMENT

  	
   

  	
  1.507

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Pooled Volume
  Adjustment Plus or (Minus)

  	
   

  	
  +0.002

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ALLIANCE POOL
  PRICE before POOLED VOLUME TRUE-UP

  	
   

  	
  1.509

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Prior Month
  Pooled Volume True-Up Plus or (Minus)

  	
   

  	
  (0.001

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  ALLIANCE NET
  POOL PRICE

  	
   

  	
  1.508

  	
   

  

 

10

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