Document:

Exhibit 10.25

 

AGREEMENT
RELATING TO MASTER DEVELOPMENT AGREEMENT, GRAIN

SUPPLY
AGREEMENTS AND REAL ESTATE OPTION

 

THIS AGREEMENT RELATING TO MASTER DEVELOPMENT
AGREEMENT, GRAIN SUPPLY AGREEMENTS AND REAL ESTATE OPTION (this “Agreement”)  is made as of the 23rd day of March,
2010 (the “Execution Date”)  by NEBRASKA
ENERGY, LLC (“NELLC”),  AVENTINE
RENEWABLE ENERGY HOLDINGS, INC. (“Holdings”),
AVENTINE RENEWABLE ENERGY - AURORA WEST LLC (“Aurora West”, and, together with
NELLC and Holdings, the “Reorganized Debtors”)  and AURORA
COOPERATIVE ELEVATOR COMPANY (“Aurora Coop”).

 

Recitals:

 

A.                                   The Debtors’
First Amended Chapter 11 Plan of Reorganization Dated January 13, 2010
[Docket No. 678] (the “Plan”) was confirmed by the
Bankruptcy Court for the District of Delaware on February 24, 2010, and
became effective on March 15, 2010 (the “Effective Date”).

 

B.                                     NELLC,
Holdings, Aurora West, as assignee of Holdings pursuant to that certain
Assignment and Assumption Agreement dated August 13, 2007, and Aurora Coop
are parties to a certain Master Development Agreement (as amended by this
Agreement, the “MDA”) entered
into as of August 1, 2006 and assumed by the Reorganized Debtors as a part
of the Plan.

 

C.                                     Aurora Coop is
a party to a certain Amended and Restated NELLC Grain Supply Agreement with
NELLC (the “NELLC Grain Supply Agreement”) and a certain Aventine Grain
Supply Agreement with Holdings, both of which

 

 

are dated August 1, 2006 (collectively, the “Grain Supply Agreements”)
and have been assumed by the Reorganized Debtors as a
part of the Plan.

 

D.                               Aurora Coop has
a Real Estate Option (the “Option”) to repurchase from Holdings
Lots 5 and 6 in the Aurora West Subdivision in Aurora, Hamilton County,
Nebraska (the “Aurora West Property”) upon the occurrence of
certain events, as set forth in that certain Agreement for the Purchase and
Sale of Aurora Co-Op Real Estate (the “Purchase
Agreement’) dated June 5, 2006 and evidenced by a
Memorandum of Option recorded in the records of the Hamilton County, Nebraska
on August 11, 2006 at Book 46 Page 29.

 

E.                                 The Reorganized
Debtors and Aurora Coop desire to amend the MDA, the Grain Supply Agreements,
and the Option, to reaffirm the Option as amended herein (the “Amended Option”), and
to enter into certain other agreements.

 

For the mutual covenants hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

1.               Grain Storage
Capacity. As of the Effective Date, the Reorganized Debtors
and Aurora Coop agree to the following amendments to the MDA:

 

a.                                       The requirement
that the grain conveyor system to be constructed by Holdings and Aurora West on
the Aurora West Property include storage for at least 1,000,000 bushels of
grain shall be deleted

 

 

and the MDA shall provide in lieu thereof that such
system include storage for 500,000 bushels of grain on the Aurora West
Property.

 

b.                                      Aurora Coop
agrees to build storage capacity on its property (the “Coop Property’) adjacent to the Aurora West Property
in the amount of not less than 500,000 bushels to be able to meet the grain
supply needs of both Holdings and NELLC.

 

2.               Performance
Penalties. Upon two (2) business days after the
Execution Date, Aurora West shall pay to Aurora Coop by wire transfer all
penalties accrued under Section 10.2 of the MDA through and including the
Effective Date and all penalties under Section 10.2 of the MDA that will
accrue during the period commencing on the Effective Date through September 30,
2010.

 

3.               Easements. The
Reorganized Debtors and Aurora Coop agree to negotiate in good faith to grant
each other reciprocal easements that will be mutually beneficial to the
operations of the parties on the Aurora West Property, the Coop Property, and
the property owned by NELLC which is adjacent to the Coop Property.

 

4.               Site
Maintenance. Holdings and Aurora Coop agree to negotiate in
good faith to establish standards for ongoing site maintenance and grounds-
keeping with respect to the Aurora West Property.

 

5.               Amendments to Grain
Supply Agreements.  Throughout its bankruptcy, NELLC paid
for all grain purchased from the Aurora Coop one (1) business day in
advance of the delivery date (the “Payment Terms”). As of the Effective Date,
the Grain Supply Agreements are amended to provide that the

 

 

Payment Terms shall apply to all grain purchases made thereunder,
provided that the Reorganized Debtors and Aurora Coop agree to review the
Payment Terms annually. Aurora Coop agrees to pay one-half of any interest
expense incurred by the Reorganized Debtors as a result of making payments for
grain purchases in advance up to a maximum interest amount of five percent (5%)
per annum. Aurora Coop agrees that its claim against NELLC based upon NELLC’s
alleged repudiation of the NELLC Grain Supply Agreement is resolved by this
Agreement, and such claim is hereby withdrawn.

 

6.               Real Estate
Option Extension and Amendment. Aurora Coop has the Option
to repurchase the Aurora West Property upon the occurrence of certain events,
as set forth in the Purchase Agreement. The Reorganized Debtors and the Aurora
Coop hereby agree that Section 6.9 of the Purchase Agreement is hereby
amended in its entirety to read as follows:

 

6.9     Amended Option to Repurchase in Certain Events. In the
event Purchaser and/or its assignee fail to recommence construction of the
ethanol plant located on the Property (the “Aurora West Facility”) on or before
January 1, 2012, or, in the event construction is recommenced, Purchaser
and/or its assignee fail to diligently pursue construction of the Aurora West
Facility to completion on or before July 1, 2012, barring the occurrence
of one or more force majeure events (as described in Section 18.1 of the
Master Development Agreement, as amended, (the “MDA”)), then, in addition to
and not in limitation or derogation of any other rights Seller may have
hereunder or under any other agreements with Purchaser and/or its assignee or
otherwise at law or in equity, Seller shall have the right and option (the
“Amended Option”) at any time thereafter to repurchase the Property from
Purchaser and/or its assignee for an aggregate amount equal to $16,500.00 per
acre increased by the aggregate amount, if any, Purchaser and/or its assignee
has paid Seller to reimburse Seller for the cost and expense incurred by Seller
to construct the Loop Tracks, the Gravel Service Road, the Switches and
Crossover Tracks, the Entry Road and the Overpass, each as defined in the MDA,
and reduced by the aggregate amount, if any, of the performance penalties that
have accrued pursuant to the MDA to the

 

 

date on which the Amended Option is exercised as a
result of the failure of Purchaser and/or its assignee to meet the performance
criteria set forth in the MDA. In the event Seller elects to exercise the
Amended Option, closing (the “Closing”) shall occur within thirty (30) days of
the date on which the Amended Option is exercised, Purchaser and/or its
assignee shall convey marketable title to Seller at Closing, and the purchase
price as determined hereunder shall be payable by Seller to Purchaser and/or
its assignee, together with interest at the applicable federal rate, in equal
annual installments over a period of ten (10) years, commencing on the
date of the Closing. In the event Seller elects to exercise its right to repurchase
the Property, any penalties relating to the continued failure by Purchaser
and/or its assignee to meet the performance criteria set forth in the MDA will
cease to accrue as of the date on which the Amended Option is exercised. The
parties agree that Seller shall have the right to record a memorandum of the
Amended Option with the Hamilton County Register of Deed’s office, Hamilton
County, Nebraska in order to provide record notice of Seller’s rights
hereunder. Such memorandum shall be in the form of Exhibit A which
is attached hereto, and which the parties will execute contemporaneously
herewith.

 

7.               Termination of
the Amended Option. The Amended Option shall terminate when the Aurora
West Facility is completed and fully operational for the production of a
minimum of 90,000,000 gallons of ethanol per year for a period of thirty (30)
consecutive business days; or, if not previously terminated, on the later of
(i) July 31, 2012, or (ii) thirty (30) days after any stay of
Aurora Coop’s right to exercise the Amended Option has expired.

 

8.               Reaffirmation. The
Reorganized Debtors hereby reaffirm the rights of the Aurora Coop under the
Amended Option.

 

9.               Payments. Upon two (2) business
days after the Execution Date, in consideration of the mutual promises made by
the parties herein, Aurora West shall pay Aurora Coop $1,120,000.00 by wire
transfer in order to waive Aurora West’s and Holdings’ obligation to construct
an additional grain storage facility pursuant to section 6.1 of the MDA.

 

 

10.                                 Reconciliation. Attached
hereto as Exhibit B is a reconciliation of the amounts owed by the
parties prepared by the Reorganized Debtors, which shows a net payment due from
Aurora West to Aurora Coop on the Execution Date of $3,016,168.34, which amount
shall be paid by wire transfer two (2) business days after the Execution
Date.

 

11.                                 Miscellaneous. This
Agreement shall be governed by the internal laws of the State of Nebraska. Any
uncertainty or ambiguity existing herein shall not be interpreted against any
party because such party prepared any portion of this Agreement, but shall be
interpreted according to the application of rules of interpretation of
contracts generally. The headings used in this Agreement are inserted for
convenience and reference only and are not intended to be an integral part of
or to affect the meaning or interpretation of this Agreement.

 

Executed on the day and year first hereinabove
written.

 

 

	
   

  	
   

  	
  AURORA COOPERATIVE ELEVATOR COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Illegible

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title: CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AVENTINE RENEWABLE ENERGY HOLDINGS, INC.

  

 

 

Executed on the day and year first hereinabove
written.

 

 

	
   

  	
   

  	
  AURORA COOPERATIVE ELEVATOR COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AVENTINE RENEWABLE ENERGY HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas Manuel

  
	
   

  	
   

  	
   

  	
  Name: Thomas Manuel

  
	
   

  	
   

  	
   

  	
  Title: CEO & President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEBRASKA ENERGY, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas Manuel

  
	
   

  	
   

  	
   

  	
  Name: Thomas Manuel

  
	
   

  	
   

  	
   

  	
  Title: CEO & President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AVENTINE RENEWABLE ENERGY - AURORA WEST LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas Manuel

  
	
   

  	
   

  	
   

  	
  Name: Thomas Manuel

  
	
   

  	
   

  	
   

  	
  Title: CEO & President

  

 

7

 

	
   

  	
   

  	
  $21.00 #587

  State of Nebraska County of Hamilton

  Filed for record 4-1-2010

  at 9.15 M, and recorded in misc.

  Book 48 page 77

  Patricia L. Anderson, County Clerk

  Donna Driewer, Deputy

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  REGISTERED

  	
  Illegible

  
	
   

  	
   

  	
   

  	
  RECORDED

  	
  Illegible

  
	
   

  	
   

  	
   

  	
  COMPARED

  	
  Illegible

  
	
   

  	
   

  	
   

  	
  O.K.

  	
  Illegible

  

 

 

EXHIBIT A

 

MEMORANDUM OF AMENDED REAL
ESTATE OPTION

 

This Memorandum of Amended Real Estate Option (this “Memorandum”) is made as of the 15th day of March, 2010, by and between Aventine
Renewable Energy Holdings, Inc., a Delaware corporation (“Optionor”)  and Aurora Cooperative Elevator
Company, Aurora, Nebraska, a Nebraska cooperative corporation (“Optionee”).

 

1.             Legal
Description. Optionor has granted Optionee an option (the “Option”) to
repurchase the real property as described in that certain Agreement of Purchase
and Sale dated as of June 5, 2006. The real property subject to the Option
is described on Schedule I attached hereto and incorporated herein by
this reference.

 

2.             Amendment.
Optionor and Optionee have entered into an Agreement Relating to Master
Development Agreement, Grain Supply Agreements and Real Estate Option (the “Agreement”) dated
as of March 15, 2010 which amends the Option to change the conditions
under which the Option may be exercised and to extend the term thereof.

 

3.             Remaining
Terms. The rest and remaining terms of the Option as set forth in the
Agreement are hereby incorporated into this Memorandum by this reference as if
they were set forth in full,.

 

	
   

  	
   

  	
  “OPTIONOR”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AVENTINE RENEWABLE ENERGY HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas Manuel

  
	
   

  	
   

  	
  Name:

  	
  Thomas Manuel

  
	
   

  	
   

  	
  Its: 

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “OPTIONEE”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AURORA COOPERATIVE ELEVATOR COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ George Hohwieler

  
	
   

  	
   

  	
  Name:

  	
  George Hohwieler

  
	
   

  	
   

  	
  Its: 

  	
  President and Chief Executive Officer

  

 

8

 

	
  STATE OF 

  	
  Illinois

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
  )ss.

  	
   

  	
   

  
	
  COUNTY OF

  	
  Tazewell

  	
  )

  	
   

  	
   

  

 

The foregoing instrument was acknowledged before me
this 23rd day of March, 2010 by Thomas Manuel, President
of Aventine Renewable Energy Holdings, Inc., on behalf of the corporation.

 

	
  

  	
   

  	
  /s/
  Emily B. Smith

  
	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

	
  STATE OF NEBRASKA

  	
  )

  	
   

  	
   

  
	
   

  	
  )ss.

  	
   

  	
   

  
	
  COUNTY OF HAMILTON

  	
  )

  	
   

  	
   

  

 

The foregoing instrument was acknowledged before me
this 25th day of March, 2010, by George Hohwieler,
President and Chief Executive Officer of Aurora Cooperative Elevator Company.

 

	
   

  	
   

  	
  /s/ Lisa M. Keller

  	
  

  
	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

9

 

Schedule I

 

Lots Five (5) and Six (6), Aurora West Subdivision, Aurora,
Hamilton County, Nebraska

 

 

Execution Copy

 

EXHIBIT
B

 

 

 

Aventine Companies and Aurora Coop Set Off Amounts

 

	
   

  	
   

  	
   

  	
   

  	
  Due To

  	
   

  	
   

  	
   

  	
  Due To

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Aventine

  	
   

  	
  Due To

  	
   

  	
  Aventine

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewable

  	
   

  	
  Aventine

  	
   

  	
  Renewable

  	
   

  	
  Due To

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Energy

  	
   

  	
  Renewable

  	
   

  	
  Energy - Aurora

  	
   

  	
  Nebraska

  	
   

  	
  Consolidated

  	
   

  
	
  Amounts owed by Aurora Cooperative Elevator Company

  	
   

  	
  Due From

  	
   

  	
  Holdings, Inc.

  	
   

  	
  Energy, Inc.

  	
   

  	
  West, LLC

  	
   

  	
  Energy, LLC

  	
   

  	
  Totals

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wet Distiller’s
  Grains & CCDS sales transactions

  	
   

  	
  Aurora Cooperative
  Elevator Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  797,739.14

  	
   

  	
  $

  	
  797,739.14

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dried Distiller’s Grains
  sales transactions

  	
   

  	
  Aurora Cooperative
  Elevator Company

  	
   

  	
   

  	
   

  	
  $

  	
  5,890.39

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  5,890.39

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wet Distiller’s Grains
  Marketing Fee (Aug-08 thru Feb-10)

  	
   

  	
  Aurora Cooperative
  Elevator Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  195,976.64

  	
   

  	
  $

  	
  195,976.64

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amounts owed by Aurora
  Cooperative Elevator Company

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  5,890.39

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  993,715.78

  	
   

  	
  $

  	
  999,606.17

  	
   

  
																			

 

	
   

  	
   

  	
   

  	
   

  	
  Due From

  	
   

  	
   

  	
   

  	
  Due From

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Aventine

  	
   

  	
  Due From

  	
   

  	
  Aventine

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewable

  	
   

  	
  Aventine

  	
   

  	
  Renewable

  	
   

  	
  Due From

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Energy

  	
   

  	
  Renewable

  	
   

  	
  Energy - Aurora

  	
   

  	
  Nebraska

  	
   

  	
   

  	
   

  
	
  Amounts owed by Aventine Companies

  	
   

  	
  Due To

  	
   

  	
  Holdings, Inc.

  	
   

  	
  Energy, Inc.

  	
   

  	
  West, LLC

  	
   

  	
  Energy, LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Road Construction Costs

  	
   

  	
  Aurora Cooperative
  Elevator Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  673,051.89

  	
   

  	
   

  	
   

  	
  $

  	
  673,051.89

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pre-petition corn sales
  transactions

  	
   

  	
  Aurora Cooperative
  Elevator Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  130,577.64

  	
   

  	
  $

  	
  130,577.64

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pre-petition supplies
  sales transactions

  	
   

  	
  Aurora Cooperative
  Elevator Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  8,659.98

  	
   

  	
  $

  	
  8,659.98

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Master Development
  Agreement Penalties

  	
   

  	
  Aurora Cooperative
  Elevator Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  2,083,485.00

  	
   

  	
   

  	
   

  	
  $

  	
  2,083,485.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Waiver of Requirement to
  Construct Additional Grain Storage Facility

  	
   

  	
  Aurora Cooperative
  Elevator Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,120,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  1,120,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amounts owed by Aventine
  Companies

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  3,876,536.89

  	
   

  	
  $

  	
  139,237.62

  	
   

  	
  $

  	
  4,015,774.51

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net owed to (due from)
  Aurora Cooperative Elevator Company

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  (5,890.39

  	
  )

  	
  $

  	
  3,876,536.89

  	
   

  	
  $

  	
  (854,478.16

  	
  )

  	
  $

  	
  3,016,168.34

  	
   

  

 

12Exhibit
10.26

 

SPECIFIC TERMS IN THIS EXHIBIT
HAVE BEEN REDACTED BECAUSE

CONFIDENTIAL TREATMENT FOR THOSE
TERMS HAS BEEN REQUESTED.

THE REDACTED MATERIAL HAS BEEN
SEPARATELY FILED WITH THE 

SECURITIES AND EXCHANGE
COMMISSION, AND THE TERMS HAVE BEEN 

MARKED AT THE APPROPRIATE PLACE
WITH TWO ASTERISKS (**).

 

AVENTINE RENEWABLE ENERGY, INC.
AND AFFILIATES

KEY EMPLOYEE INCENTIVE PLAN

 

Key
Employee Incentive Plan Metrics

 

	
  PLAN COMPONENTS

  	
   

  	
  WEIGHTING

  	
   

  	
  TARGET

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Cash
  Position at Emergence

  	
   

  	
  30%
  of Maximum Incentive Bonus

  	
   

  	
  90%
  or greater of the Cash Position at Emergence

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Production
  Level

  	
   

  	
  40%
  of Maximum Incentive Bonus

  	
   

  	
  Production
  Level at Emergence equal to or above 105%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Emergence
  Date

  	
   

  	
  30%
  of Maximum Incentive Bonus

  	
   

  	
  March 31,
  2010

  

 

Plan Objective

 

The
Key Employee Incentive Plan (the “Plan”) for Aventine Renewable Energy, Inc.
and its direct and indirect affiliates (collectively, the “Company”) is
designed to optimize the Company’s business operations and profitability and
maximize the value of its assets by providing incentives to key employees of
the Company.

 

Defining
of Plan Targets

 

1.                                       Cash Position
at Emergence.

 

“Cash
Position at Emergence” shall mean the Company’s cash amount shown in Attachment
A annexed hereto titled “Cash Balances — 1st and 2nd Quarters 2010” for the
month immediately preceding the month in which the effective date of the plan
of reorganization occurs.  Actual Cash
Position at Emergence shall be determined based on the average Cash Balances of
the two weeks preceding the end of the month, as defined above.  The terms of payment to vendors shall follow
the “normal course” of practice for the preceding 4 months.

 

2.                                       Production
Level.

 

“Production
Level at Emergence” shall mean the cumulative gallons of denatured ethanol
produced as shown in Attachment B annexed hereto titled “Production
Forecast” for the period beginning October, 2009 through the month immediately
preceding the month in which the effective date of the plan of reorganization
occurs.

 

 

3.                                       Emergence Date.

 

“Emergence
Date” shall mean the effective date of a chapter 11 plan of reorganization or
closing of a sale of substantially all of the Company’s assets.

 

Eligible
Employees and Maximum Incentive Bonus Levels

 

Identified
below are (i) the employees eligible (collectively, the “Eligible
Employees”) to participate in the Plan and (ii) the amount of the
respective Maximum Incentive Bonus for each Eligible Employee.  The Maximum Incentive Bonus each Eligible
Employee may receive is based on a percentage of their respective annual salary
as of November 1, 2009.

 

	
  Eligible Employee

  	
   

  	
  (Estimated) Maximum Incentive Bonus(1)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Daniel Trunfio

  	
   

  	
  $

  	
  117,000

  	
   

  
	
  Bill Brennan

  	
   

  	
  $

  	
  46,688

  	
   

  
	
  **

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  347,662

  	
   

  

 

Conditions
to Payment of Incentive Bonuses

 

1.                                       The Plan is
subject to approval by the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”).

 

2.                                       Incentive
Bonuses will be deemed earned as of the effective date of a chapter 11 plan or
the closing date of a sale of substantially all of the Company’s assets and the
payment of the earned Incentive Bonuses made as soon as reasonably practical
thereafter.

 

3.                                       The Eligible
Employees must be employed by the Company as of the Emergence Date and, in
connection therewith, must continue through the Emergence Date to perform the
duties required by such Eligible Employee in the ordinary course of
business.  Provided that Targets are
achieved, Eligible Employees terminated without cause shall be entitled to
receive their pro rata share of the Incentive Bonus payments based on the
length of employment by calculating the number of months an Eligible Employee
has been employed by the Company from October 1, 2009 to the Emergence
Date.  For purposes of calculating length
of employment, if an Eligible Employee is employed by the Company on the first
of a given month, then such Eligible Employee will be deemed to 

 

(1)  As the Maximum Incentive Bonus amounts are a
percentage of the Eligible Employee’s salary as of November 1, 2009, the
amounts identified herein are estimated amounts based on each Eligible
Employee’s expected annual salary as of November 1, 2009.

 

 

have
been employed for the entire month.  For
example and for illustrative purposes only, if an Eligible Employee is
terminated without cause on December 15, 2009 and the Emergence Date is March 31,
2010, such Eligible Employee will be entitled to receive 50% of the Incentive
Bonus payments since he was employed for 50% of the time (ie., he was employed
for 3 months and Emergence Date occurred in month 6.

 

4.                                       For purposes of
the Plan, “for cause” termination means, either before or after adoption of the
Plan:

 

·                  The arrest or conviction (or
plea of guilty or nolo contendere) of the Eligible Employee of any felony or
other crime involving dishonesty or moral turpitude;

 

·                  A finding by a legal or
administrative court or tribunal that the Eligible Employee engaged in willful
misconduct, or was grossly negligent, in the performance of his or her duties;

 

·                  A material and direct
conflict of interest, not specifically waived in advance by the Company;

 

·                  Unauthorized use or
disclosure of confidential information that belongs to the Company or the
Company’s customers or employees;

 

·                  Repeated absences from work
that the Company reasonably determine to be materially adverse to the best
interests of the Company;

 

·                  Repeated failure of the
Eligible Employee to perform his or her job duties in a satisfactory manner;
provided that such failure continues for more than 14 days after written notice
thereof which specifically identifies the manner in which he Eligible Employee
is believed to have materially failed to perform said duties;

 

·                  Refusal to follow the
instructions of a direct supervisor or from the Company’s board of directors;
or

 

·                  Other material misconduct
including, but not limited to: falsification of the Company’s records, theft,
sexual harassment, or possession of firearms, controlled substances or illegal
drugs on the Company’s premises or while performing the Company’s business.

 

5.                                       In order for a
Target to be achieved, the result must reach or exceed the defined number or
date.  The Plan does not provide for
proration for failing to meet the specified Targets.

 

6.                                       Unless
otherwise ordered by the Bankruptcy Court, the Aventine Compensation Committee,
at its discretion, shall be the sole arbitrator for monitoring and applying
Plan and resolving any questions or issues, including whether an Eligible
Employee was terminated with or without cause.

 

7.                                       If the
Emergence Date does not occur before August 1, 2010, the Plan may be
modified or extended by motion of the Company and Order of the Bankruptcy
Court.

 

 

Further Actions

 

As
a condition to each Eligible Employee’s eligibility to participate in the Plan,
such Eligible Employee shall agree to take such further actions as are
reasonably requested by the Company.

 

No Promise of Continued Employment

 

The
Plan and any Eligible Employee’s selection as a participant in the Plan does
not, and is in no manner intended to constitute, a promise of employment for
any period of time or to change a Eligible Employee’s status, if applicable, as
an at will employee subject to termination at any time for any reason.

 

Taxes

 

All
payments made pursuant to the Plan shall be subject to standard withholding and
deductions.  Neither the Company nor its
officers or agents make or has made any representation about the tax
consequences of any payments or benefits offered by the Company to any Eligible
Employee.

 

Severability

 

If
any provision of the Plan is determined to be invalid or unenforceable, in
whole or in part, this determination shall not affect any other provision of
the Plan and the provision in question shall be modified as to be rendered
enforceable in a manner consistent with the intent of the parties insofar as
possible.  Any waiver of or breach of any
of the terms of the Plan shall not operate or be construed as a waiver of any
other breach of such terms or conditions or of any other terms and conditions,
nor shall any failure to enforce any provision hereof operate or be construed
as a waiver of such provision or of any other provision.

 

Choice of Law and Venue

 

The
Plan shall be governed by the laws of the State of Delaware, notwithstanding
that State’s conflict of law provisions. 
The Company and each Eligible Employee shall irrevocably and
unconditionally consent to the exclusive jurisdiction of the United States
District Court for the District of Delaware (the “District Court”) or,
if a chapter 11 proceeding is pending, the Bankruptcy Court.  The Company and each Eligible Employee shall
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit, or proceeding arising out of or related to the Plan in the
District Court or Bankruptcy Court, as applicable, and shall further
irrevocably and unconditionally waive and agree not to plead or claim that any
such action, suit or proceeding brought in the District Court or Bankruptcy
Court, as applicable, has been brought in an inconvenient forum.

 

Entire Agreement and Amendment

 

This
document constitutes the complete, final and exclusive embodiment of the terms
and conditions of the Plan and may only be modified in writing signed by an
authorized officer of the 

 

 

Company.  Any agreement between any Eligible Employee
and the Company with regard to the Plan and its subject matter is superseded in
its entirety by this document.

 

No Assignment

 

The
rights of an Eligible Employee or any other person to any payment or other
benefits under the Plan may not be assigned, transferred, pledged, or
encumbered except by will or the laws of decent and distribution.

 

 

ATTACHMENT A

 

Cash Balances 1st and 2nd Quarters 2010

 

	
  Cash (millions)

  	
   

  	
  January

  	
   

  	
  February

  	
   

  	
  March

  	
   

  	
  April

  	
   

  	
  May

  	
   

  	
  June

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  At the month ending

  	
   

  	
  $

  	
  28.5

  	
   

  	
  $

  	
  26.5

  	
   

  	
  $

  	
  30.0

  	
   

  	
  $

  	
  28.9

  	
   

  	
  $

  	
  29.7

  	
   

  	
  $

  	
  29.4

  	
   

  
																				

 

All
cash numbers assume no payback or further withdrawal of the DIP financing.  If such events are not as forecasted, the
numbers will be adjusted accordingly.

 

 

ATTACHMENT B

 

Production Forecast —
October, 2009 through June, 2010

 

	
  Ethanol (denatured)

  Million of gallons

  	
   

  	
  October through December

  	
   

  	
  January

  	
   

  	
  February

  	
   

  	
  March

  	
   

  	
  April

  	
   

  	
  May

  	
   

  	
  June

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  49.23

  	
   

  	
  16.73

  	
   

  	
  15.59

  	
   

  	
  16.68

  	
   

  	
  15.48

  	
   

  	
  15.46

  	
   

  	
  16.30

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