Document:

ex10-5.htm

    
      Exhibit
10.5

       

      

    

    WAIVER

     

    In
consideration for the benefits I will receive as a result of my employer’s
participation in the United States Department of the Treasury’s TARP Capital
Purchase Program, I hereby voluntarily waive any claim against the United States
or any state or territory thereof or my employer or any of its directors,
officers, employees and agents for any changes to my compensation or benefits
that are required in order to comply with Section 111 of the Emergency Economic
Stabilization Act of 2008, as amended (“EESA”), and rules,
regulations, guidance or other requirements issued thereunder (collectively, the
“EESA
Restrictions”).

     

    I
acknowledge that the EESA Restrictions may require modification of the
employment, compensation, bonus, incentive, severance, retention and other
benefit plans, arrangements, policies and agreements (including so-called
“golden parachute” agreements), whether or not in writing, that I have with my
employer or in which I participate as they relate to the period the United
States holds any equity or debt securities of my employer acquired through the
TARP Capital Purchase Program and I hereby consent to all such
modifications.  I further acknowledge and agree that if my employer
notifies me in writing that I have received payments in violation of the EESA
Restrictions, I shall repay the aggregate amount of such payments to my employer
no later than fifteen business days following my receipt of such
notice.

     

    This
waiver includes all claims I may have under the laws of the United States or any
other jurisdiction related to the requirements imposed by the EESA Restrictions
(including without limitation, any claim for any compensation or other payments
or benefits I would otherwise receive absent the EESA Restrictions, any
challenge to the process by which the EESA Restrictions were adopted and any
tort or constitutional claim about the effect of the foregoing on my employment
relationship) and I hereby agree that I will not at any time initiate, or cause
or permit to be initiated on my behalf, any such claim against the United
States, my employer or its directors, officers, employees or agents in or before
any local, state, federal or other agency, court or body.

     

    In
witness whereof, I execute this waiver on my own behalf, thereby communicating
my acceptance and acknowledgement to the provisions herein.

     

    Respectfully,

     

    
      	 
      	
               

               

              /Louis E.
      Prezeau/                                       
      

              Name:  Louis
      E. Prezeau

              Title:  President
      and Chief Executive Officer

              Date:
      April 10, 2009

            

    

     

     

    84Exhibit
10.1

       

    

    
      EXECUTION
VERSION

     

    

     

    AVENTINE RENEWABLE ENERGY HOLDINGS,
INC.  et
al.

     

    $30,000,000

     

    Debtor-in-Possession Credit
Facility

     

    Term
Sheet

    

    The
following summary (the “Term
Sheet”), together with the Interim Order and the Final Order (as such
terms are defined below) and any other definitive loan documents required by the
DIP Lenders (as defined below) and entered into by the parties hereto
(collectively, the “DIP
Facility Documents”),
set forth the terms of a Debtor-in-Possession Credit Facility with the Borrowers
and Guarantors identified below.  Upon the execution and delivery
hereof by the DIP Lenders, the Borrowers and the Guarantors, and entry of the
Interim Order and satisfaction of each and every other condition precedent to
the initial funding of the DIP Facility (as defined below), this Term Sheet
shall constitute a binding commitment by the DIP Lenders to provide the DIP
Facility, subject to the terms and conditions set forth in this Term Sheet, the
Interim Order, the Final Order and the other DIP Facility
Documents.  Prior to the execution and delivery hereof by the
Borrowers and the Guarantors, this
Term Sheet and the terms contained herein are strictly confidential and may not
be shared with any person or entity without the prior written consent of the
Informal Noteholder Group, which consists of those entities listed on
Annex I
attached hereto.

    

    
      	
              Borrowers:

            	 	
              (i) Aventine Renewable Energy,
      Inc., (ii) Aventine Renewable Energy – Mt Vernon, LLC, and (iii) Aventine
      Renewable Energy – Aurora West LLC (each a “Borrower” and, collectively, the
      “Borrowers”) on a joint and several basis as
      debtors in possession under chapter 11 of the United States Bankruptcy
      Code in jointly administered cases in the United States Bankruptcy Court
      for the District of Delaware (the “Chapter
      11 Cases”).

            
	 	 	 
	
              Guarantors:

            	 	
              (i)
      Aventine Renewable Energy Holdings, Inc. (“Holdings”),
      (ii) Aventine Renewable Energy, LLC (“Parent”), (iii)
      Aventine Power, LLC (“Power”), (iv)
      each of the Borrowers’ domestic subsidiaries (other than Nebraska Energy
      L.L.C. (“Nebraska Sub”))
      and (v) any other entity who, as of the Petition Date, was a party to the
      Credit Agreement (as defined below) (each a “Guarantor” and
      collectively, the “Guarantors” and
      together with the Borrowers, the “Debtors”).

            
	 	 	 
	 	 	 
	
              DIP
Lenders:

            	 	
              The
      institutions identified in the commitment schedule attached as Annex II to this Term Sheet (the “DIP
      Lenders”).

            
	 	 	 
	
              DIP Administrative and Collateral
      Agent:

            	 	
              Whitebox Advisors (the
      “DIP
      Agent”).

            
	 	 	 
	
              DIP
    Facility:

            	 	
              A debtor-in-possession term loan
      facility made available to the Borrowers in a maximum aggregate principal
      amount of up to $30,000,000 (the “DIP
      Facility”).  All obligations
      outstanding under the DIP Facility shall become due and payable on
      the Termination Date (as defined herein).  Prior to the entry by
      the Bankruptcy Court of an order finally and unconditionally approving the
      DIP Facility on terms and conditions acceptable to the DIP Lenders holding
      a majority of the commitments under the DIP Facility (the “Required
      DIP Lenders”) in
      

            

    

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	 	 	
              their
      sole discretion (the “Final
      Order”), the maximum
      aggregate principal amount of the DIP Facility shall be limited to
      the amount reflected in the Approved
      Budget (as defined below) prior to entry of the Final Order (the “Initial
      Availability”);
      provided, that the Initial Availability shall in no event exceed
      $20,000,000.
      

               

              The DIP Lenders reserve the right
      to require the Debtors to negotiate, in good faith, and enter into
      definitive loan documents, including, a definitive DIP credit agreement,
      in connection with entry of the Final DIP Order.  If the DIP
      Lenders do not exercise this right, the terms of the DIP Facility shall
      continue to be governed by the terms of this Term Sheet, the Interim Order
      (as defined below) and, upon entry thereof, the Final DIP Order, and all
      references herein to the “DIP Facility Documents” shall be deemed to
      reference, as applicable, the Term Sheet, the Interim Order, the Final
      Order and all exhibits, schedules, annexes or other documents related
      thereto, as well as any definitive loan documents, such as blocked account
      agreements, as may be entered into by the parties
      hereto.

            
	 	 	 
	
              Purpose / Use of
      Proceeds:

            	 	
              Proceeds
      of the DIP Facility
      will be used to, among other things, (i) fund the working capital and
      general corporate needs of the Debtors and the costs of the Chapter 11
      Cases in accordance with the Approved Budget (as defined below) to allow
      the Debtors and their creditors to negotiate a plan of reorganization that
      will provide for a deleveraging of the Debtors’ balance sheet through a
      conversion of debt to equity in the reorganized Debtors and (ii) provide
      adequate protection, in accordance with the terms of this Term Sheet, to
      the Prepetition Agent for the benefit of itself and the Prepetition
      Lenders (as such terms are defined below).

               

              For
      the avoidance of doubt, no portion of the DIP Facility, the collateral
      securing the DIP Facility, the proceeds of the DIP Facility or the
      Carve-Out (as defined below) may be used in connection with the
      investigation (including discovery proceedings), initiation or prosecution
      of any claims, causes of action, objection or other litigation against the
      DIP Agent or any of the DIP Lenders.

            
	 	 	 
	
              Closing
    Date:

            	 	
              No later than the one (1) business
      day following the entry of an interim order by the Bankruptcy Court
      approving the DIP Facility on terms and conditions acceptable to the
      Required DIP Lenders in their sole discretion (the “Interim
      Order”), which, among other things, (i)
      authorizes and approves the DIP Facility and the transactions contemplated
      thereby, including, without limitation, the granting of the superpriority
      status, security interests and liens, and the payment of all fees referred
      to herein, and (ii) modifies the automatic stay to permit the Debtors to
      perform their obligations under the DIP Facility Documents and the DIP
      Agent and the Required DIP Lenders to exercise their rights and remedies
      with respect to the DIP Facility.

            
	 	 	 
	
              Term:

            	 	
              The period from the Closing Date
      to the earliest to occur of (i) one year after the commencement of the
      chapter 11 cases (the “Outside
      Date”), (ii) the
      consummation of a sale of substantially all of the assets of the Debtors
      approved by the Required DIP Lenders, (iii) the effective date
      

            

    

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	 	 	of
      a plan of reorganization in respect of a Debtor in the Chapter 11 Cases,
      (iv) the date the loans become due and payable, whether at stated
      maturity, upon an event of default or otherwise, (v) the expiration of the
      Approved Budget, (vi) the acceptance by a Debtor of any offer or bid for
      the purchase of all or substantially all of the assets of a Debtor or all
      of the equity of a reorganized Debtor which is unacceptable to the
      Required DIP Lenders unless the proceeds of such offer or bid are deemed
      sufficient, in the discretion of the DIP Lenders, to pay in full in cash
      all of the obligations due under the DIP Facility, or (vii) the date on
      which any Debtor files a motion with the Bankruptcy Court for authority to
      proceed with the sale or liquidation of a Debtor (or any material portion
      of the assets of a Debtor) unless the proceeds of such sale or liquidation
      are deemed sufficient, in the discretion of the DIP Lenders, to pay in
      full in cash all of the obligations due under the DIP Facility (the
      earliest of the foregoing to occur being hereinafter referred to as
      the  “Termination
      Date”).
	 	 	 
	
              Availability:

            	 	
              During
      the Term and subject to the conditions described herein, the Borrowers
      shall be able to (i) draw up to the amount of the Initial Availability on
      the Closing Date and (ii) draw the remainder of the DIP Facility (the “Second
      Draw-Down”) upon entry of the Final Order (together, the “Full
      Availability”).

            
	 	 	 
	
              Priority:

            	 	
              Pursuant to section 364(c)(1) of
      the Bankruptcy Code, all amounts owing by the Debtors under the DIP
      Facility at all times will constitute allowed super-priority
      administrative expense claims in the Chapter 11 Cases having priority over
      all administrative expenses of the kind specified in sections 503(b) and
      507(b) of the Bankruptcy Code, subject only to the Carve-Out (as defined
      below).

            
	 	 	 
	
              Security:

            	 	
              Pursuant to sections 364(c)(2) and
      364(d) of the Bankruptcy Code, all amounts owing by the Debtors under the
      DIP Facility will be secured by a first priority priming security interest
      in, and lien on, all of the assets (tangible, intangible, real, personal
      or mixed) of the Debtors, whether now owned or hereafter acquired,
      including, without limitation, accounts, documents, inventory, equipment,
      capital stock in subsidiaries, investment property, instruments, chattel
      paper, commercial tort claims, cash, cash equivalents, securities
      accounts, deposit accounts, commodity accounts, real estate, leasehold
      interests, contracts, patents, copyrights, trademarks, causes of action,
      including avoidance actions (subject to entry of the Final Order), and
      other general intangibles, and all products and proceeds thereof
      (collectively, the “Postpetition
      Collateral”), subject
      only to (i) the Carve-Out and (ii) valid, perfected, enforceable and
      non-avoidable liens as of the commencement of the Chapter 11 Cases (the
      “Petition
      Date”) which were
      senior in priority to liens securing obligations owing as of the Petition
      Date (the “Permitted
      Priority Liens”)
      under that certain credit agreement dated as of March 27, 2007 (as
      amended, the “Credit
      Agreement”) by and among Aventine Renewable Energy, Inc.,
      Aventine Renewable Energy – Mt Vernon, LLC, and Aventine Renewable Energy
      – Aurora West LLC, as Borrowers, certain other loan parties thereto, and
      JPMorgan Chase Bank, N.A., as administrative agent (the “Prepetition
      Agent”) for certain
      lenders under the Credit 

            

    

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	 	 	Agreement
      (together with the Prepetition Agent, the “Prepetition
      Lenders”).  All collections and
      other proceeds from the Postpetition Collateral shall be directed to a
      lock-box or blocked account that would be assigned to the DIP Agent and in
      form and substance acceptable to the DIP Agent and the Required DIP
      Lenders in their sole discretion.
	 	 	 
	
              Carve-Out:

               

            	 	
              The liens and the superpriority
      claims securing the DIP Facility shall be subject to a “Carve-Out”, which, for purposes hereof
      shall mean collectively: (i) amounts payable pursuant to 28 U.S.C.
      § 1930(a)(6) and all fees required to be paid to the Clerk of the
      Bankruptcy Court, which are incurred after the first business
      day after effective delivery of a Carve-Out Trigger Notice (as defined
      below); (ii) allowed fees, expenses and costs of attorneys,
      accountants and other professionals retained in the Chapter 11 Cases by
      the Debtors or any official committee of unsecured creditors pursuant to
      Bankruptcy Code sections 327, 328, 330, 331, 503 or 1103 (“Professionals”)
      and owed pursuant to such professionals’ respective engagement letters
      (other than any success fee, transaction fee, or other similar fee set
      forth in such professionals’ respective engagement letter) to the extent
      permitted under the Approved Budget for such respective professionals in each case, which are actually
      incurred prior to the business day following delivery by the DIP Agent of
      a Carve-Out Trigger Notice, whether or not allowed prior to or after such
      date; and (iii) allowed fees and expenses of Professionals incurred after
      the first business day after effective delivery of a Carve-Out Trigger
      Notice not to exceed $2,000,000 in the aggregate, in each case subject to
      the rights of the DIP Lenders to object to the allowance of any such fees
      and expenses.

               

              For purposes hereof, “Carve-Out
      Trigger Notice” shall
      mean a written notice delivered by the DIP Agent to the Borrowers and
      their counsel which notice may be delivered at any time following the
      occurrence and during the continuation of an Event of
      Default.

              For the avoidance of doubt, the
      proceeds of the DIP Facility may be used, subject to the Approved Budget,
      (i) for payment of fees and expenses of Professionals allowed and payable
      under Sections 330 and 331 of the Bankruptcy Code (and the same shall not
      reduce the Carve-Out except to the extent paid after delivery of a
      Carve-Out Trigger Notice) and (ii) for payments contemplated to be made
      pursuant to “first day” orders (or any other order) approved by the
      Required DIP Lenders.

            
	 	 	 
	
              Interest
    Rate:

            	 	
              The DIP Facility shall accrue
      interest at a rate equal to 16.5% per annum, calculated on an
      actual/360 basis and payable monthly in arrears in cash on the last day of
      each month.

            

    

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	
              Default Interest
      Rate:

            	 	
              During the continuance of an Event
      of Default, the DIP Facility will accrue interest at an additional
      5.0% per annum,
      calculated on an actual/360 basis, payable on
    demand.

            
	 	 	 
	
              Fees:

            	 	
              An
      origination fee equal to 3.0% of the maximum aggregate principal amount
      of the DIP Facility shall be fully earned and due and payable for the
      ratable account of each DIP Lender at the Closing
    Date.

            
	 	 	 
	
              DIP Agent
    Fees:

            	 	
              $100,000.

            
	 	 	 
	
              Mandatory
      Repayments:

            	 	
              100% of the net proceeds from any
      and all asset sales (other than sales of inventory in the ordinary course
      of the Debtors’ business), insurance and condemnation proceeds (unless the
      Debtors promptly inform the DIP Agent that such proceeds are to be used by
      the Debtors to repair or replace damaged property and are in fact so used
      within sixty (60) calendar days of the Debtors’ receipt of such proceeds),
      and other extraordinary receipts (other than tax refunds the receipt of
      which is anticipated in the Approved Budget).

            
	 	 	 
	
              Conditions
      Precedent

            	 	
              The conditions to closing shall be
      as follows:

            
	      
              to the
      Closing:

            	 	 

    

    
      	 
      	 	●	
              All DIP Facility Documents shall
      be in form and substance acceptable to the Required DIP
      Lenders and their
      counsel in their sole discretion.

            
	 	 	 	 
	 	 	●	      
              The Borrowers and the Required DIP
      Lenders shall have agreed upon an Approved
      Budget.

            
	 	 	 	 
	 	 	●	The
      Borrower shall have established lockbox arrangements and a cash collection
      system satisfactory to the DIP Agent and the Required DIP Lenders in their
      sole discretion.
	 	 	 	 
	 	 	●	All
      fees and expenses (including reasonable fees and expenses of counsel)
      incurred by the DIP Agent and the DIP Lenders before the Closing Date
      (including all such fees and expenses incurred before the Petition Date)
      have been paid.
	 	 	 	 
	 	 	●	All
      motions and other documents to be filed with and submitted to the
      Bankruptcy Court in connection with the DIP Facility (including, without
      limitation, the Interim Order) shall be in form and substance acceptable
      to the Required DIP Lenders in their sole discretion. The Interim Order
      shall be in full force and effect and shall not have been reversed,
      vacated or stayed and shall not have been amended, supplemented or
      otherwise modified without the prior written consent of the Required DIP
      Lenders (which consent may be withheld in their sole
  discretion).
	 	 	 	 
	 	 	●	Except
      for the filing of the Cases, there shall have occurred no material adverse
      effect on any of (i) the operations, performance, prospects, business,
      assets, properties, or condition (financial or otherwise) of the Debtors,
      taken as a whole, based on information provided by the Debtors to the DIP
      Agent and the DIP Lenders 

    

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

      
         

        EXECUTION
VERSION

    

    
      	 	 	 	since
      March 1, 2009, (ii) the ability of any Debtor to perform its obligations
      under the DIP Facility Documents or (iii) the ability of the DIP Agent and
      the DIP Lenders to enforce the DIP Facility Documents (any of the
      foregoing being a “Material
      Adverse Change”).
	 	 	 	 
	 	 	●	Any
      and all Governmental and third party consents and approvals necessary in
      connection with the DIP Facility and the transactions contemplated thereby
      shall have been obtained and shall remain in effect.
	 	 	 	 
	 	 	●	The
      representations and warranties of the Debtors shall be true and correct
      immediately prior to, and after giving effect to, funding, except to the
      extent that any such representation or warranty expressly relates only to
      an earlier date, in which event such representation and warranty shall be
      true and correct as of such earlier date.
	 	 	 	 
	Conditions Precedent	 	      
              The conditions to the Second
      Draw-Down of the DIP Facility shall be as
      follows: 

            
	to
      the Second Draw-Down	 	 
	
              of the DIP
      Facility:

            	 	●	
              There shall exist no default or
      Event of Default under the DIP Facility
  Documents.

            
	 	 	 	 
	 	 	●	      
              The representations and warranties
      of the Debtors shall be true and correct immediately prior to, and after
      giving effect to, funding, except to the extent that any such
      representation or warranty expressly relates only to an earlier date, in
      which event such representation and warranty shall be true and correct as
      of such earlier date.

            
	 	 	 	 
	 	 	●	The
      Second Draw-Down shall not violate any requirement of applicable law and
      shall not be enjoined, temporarily, preliminarily or
  permanently.
	 	 	 	 
	 	 	●	No
      Material Adverse Change shall have occurred.
	 	 	 	 
	 	 	●	The
      Bankruptcy Court shall have entered the Final Order, in form and substance
      acceptable to the Required DIP Lenders, which order shall be in full force
      and effect and shall not have been reversed, vacated or stayed and shall
      not have been amended, supplemented or otherwise modified without the
      prior written consent of the Required DIP Lenders (which consent may be
      withheld in their sole discretion) and which, among other things, (i)
      authorizes and approves the DIP Facility and the transactions contemplated
      thereby, including, without limitation, the granting of the superpriority
      status, security interests and liens, and the payment of all fees referred
      to herein, and (ii) modifies the automatic stay to permit the Debtors to
      perform their obligations under the DIP Facility Documents and the DIP
      Agent and the Required DIP Lenders to exercise their rights and remedies
      with respect to the DIP Facility.

    

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	 	 	●	The
      Borrowers shall have delivered to the DIP Agent by 12:00 noon on the third
      (3) business day immediately preceding the proposed Second-Draw Down a
      borrowing notice and a compliance certificate in form satisfactory to the
      DIP Agent and the Required DIP Lenders.

    

     

    
      	
              Representations

              and
    Warranties:

            	 	
              Each of the Debtors shall be
      deemed to make each of the representations and warranties set forth in
      Article III of the Credit Agreement and in the Security Agreement (as
      defined in the Credit Agreement), mutatis
      mutandis, and are incorporated herein by
      reference as fully as if such representations and warranties were set
      forth herein in their entirety, except for (a) any such
      representation and warranty expressly stated to be “as of the Effective
      Date” (as “Effective Date” is defined in the Credit Agreement), and (b)
      the representations and warranties set forth in Section 3.04, the second
      sentence of Section 3.11, and Sections 3.13, 3.16 and 3.20 of the Credit
      Agreement.  Each such representation and warranty so deemed to
      be made by each of the Debtors shall also be deemed, as the context may
      require, to be made subject to an exception for the filing of the Chapter
      11 Cases.

            
	 	 	 
	
              Affirmative and
      Negative

              Covenants:

            	 	
              Until the DIP Facility shall have
      terminated and all amounts payable by any of the Debtors thereunder or in
      connection therewith (including principal, interest, fees and expenses)
      shall have been paid in full in cash, each of the Debtors will observe,
      perform and be bound by each of the covenants set forth in Articles V and
      VI of the Credit Agreement and in the Security Agreement (as defined in
      the Credit Agreement), mutatis
      mutandis, and are incorporated herein by
      reference as fully as if such covenants were set forth herein in their
      entirety, except for
      Sections 5.01 (other than with respect to any financial statements,
      certificates, reports and other notices or information furnished pursuant
      to such Section to the Prepetition Agent or any Prepetition Lender at any
      time after the Petition Date), 5.08, 5.18 and 5.19 of the Credit
      Agreement.  No such covenant shall be deemed to have been
      breached as a result of the filing of the Chapter 11
      Cases.  None of the exceptions set forth in the negative
      covenants contained in Article VI of the Credit Agreement shall be deemed
      permitted hereunder to the extent that the matters addressed in any such
      exception are prohibited by any provision of this Term Sheet or any other
      DIP Facility Document.  In addition, the Debtors shall be
      required to:

            

    

     

    
      	 	 	●	Deliver
      all pleadings, motions and other documents filed on behalf of the Debtors
      with the Bankruptcy Court to counsel for the DIP Lenders.
	 	 	 	 
	 	 	●	Not
      file, support or endorse any plan of reorganization or propose any sale of
      assets outside the ordinary course of business that has not been approved
      by the DIP Lenders (unless such plan or sale is determined by the DIP
      Lenders, in their discretion, to result in the payment in full in cash of
      all obligations due under the DIP
Facility).

    

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	 	 	●	Not
      make or permit to be made any change to the Interim Order or the Final
      Order.

    

     

    
      	
              Approved
      Budget:

            	 	
              The Borrowers and the Required DIP
      Lenders shall agree upon a budget (the “Approved
      Budget”) which shall
      be a 13-week budget (“Original
      Budget Period”) which
      reflects on a line-item basis the Borrowers’ anticipated cumulative cash
      receipts and disbursements on a weekly basis and all necessary and
      required cumulative expenses (subject to a permitted variance for
      such cumulative cash receipts, disbursements and expenses, each not to
      exceed 15% on a weekly basis and on a cumulative basis from the
      commencement of such Approved Budget to the date of determination, in each
      case, an “Excess
      Budget Variance”) which the Borrowers expect to
      incur during each week of the Approved Budget and which shall be in a form
      and substance acceptable to the Required DIP Lenders.  Not later
      than one month prior to the expiration of the Original Budget Period, the
      Borrowers shall provide to the DIP Agent and the Required DIP Lenders an
      updated budget for an additional 13-week period in substantially the same
      format as the previous budget, which upon acceptance by the Required DIP
      Lenders, shall become the Approved Budget; provided, however, that a new
      budget may be effectuated at any time with the consent of the Required DIP
      Lenders.  In the event the Borrowers and the Required DIP
      Lenders fail to agree upon a new budget by the end of the then-current
      Approved Budget, the DIP Facility will terminate upon the expiration of
      the last Approved Budget.  The Borrowers shall provide the DIP
      Agent and the DIP Lenders with a weekly variance report reflecting the
      actual cash receipts and disbursements for each weekly period during the
      term of the DIP Facility within three (3) business days after the end of
      such weekly period, and showing the percentage variance of actual receipts
      and disbursements from those reflected in the Approved Budget for such
      period.

            
	 	 	 
	
              Events of
      Default:

            	 	
              The
      DIP Facility shall consist of the following events of default
      (collectively, the “Events of
      Default”):  

               

              (a)  The
      Borrowers shall fail to pay any principal of any of the loans extended
      under the DIP Facility (collectively, the “Postpetition
      Loans”) when the same becomes due and payable; or

               

              (b)  The
      Borrowers shall fail to pay any interest on the Postpetition Loans or any
      fee or other amount due with respect to the Postpetition Obligations after
      such interest, fee, or other amount becomes due and payable;
      or

               

              (c)  Any
      representation or warranty made by the Borrowers or the Guarantors in this
      Term Sheet, the Interim DIP Order or the Final Order, or that is contained
      in any certificate, document or financial or other statement furnished by
      it at any time under or in connection with this Term Sheet or any such
      other DIP 

            

    

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	 	 	Loan
      Document shall prove to have been inaccurate in any material respect on or
      as of the date made or deemed made or furnished; or
      
               

              (d)  Any
      Debtor shall breach or violate any term, covenant or agreement contained
      herein, the Interim Order or the Final Order; or

               

              (e)  An
      Event of Default shall occur under and as defined in this Term Sheet, the
      Interim Order or the Final Order; or

               

              (f)  Conversion
      of any Borrower’s or Guarantor’s Chapter 11 Case to a case under Chapter 7
      of the Bankruptcy Code; or

               

              (g)  The
      appointment of a trustee in any Borrower’s or Guarantor’s Chapter 11 Case
      without the consent of the Required DIP Lenders; or

               

              (h)  The
      appointment of an examiner in any Borrower’s or Guarantor’s Chapter 11
      Case with expanded powers without the consent of the Administrative Agent
      and the Required DIP Lenders; or

               

              (i)  The
      dismissal of any Borrower’s or Guarantor’s Chapter 11 Case;
or

               

              (j)  The
      entry of any order modifying, reversing, revoking, staying, rescinding,
      vacating or amending the Interim Order or the Final Order without the
      express prior written consent of the Required DIP Lenders; or

               

              (k)  The
      Interim Order shall not have been replaced by a Final Order acceptable to
      the Required DIP Lenders in their discretion within thirty (30) days of
      the Petition Date; or

               

              (l)  A
      change in executive management (which shall be deemed to consist of the
      Chief Executive Officer, the Chief Financial Officer and the Chief
      Operations Officer of the Debtors) shall occur, unless (i) a person
      acceptable to the Required DIP Lenders is appointed to fill the vacancy
      caused by such change or (ii) a process for replacing such person is
      agreed upon by the Required DIP Lenders, in each case within ten (10)
      business days following such change; or

               

              (m)  A
      plan of reorganization is filed that is not acceptable (unless such plan
      is determined by the DIP Lenders, in their discretion, to result in the
      payment in full in cash of all obligations due under the DIP Facility);
      or

               

              (n)  The
      Borrowers or Guarantors shall attempt to vacate or modify the Interim
      Order or the Final Order over the objection of the Required DIP Lenders;
      or

            

    

     

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	 	 	      
              (o)  The
      Bankruptcy Court shall enter an order granting relief from the automatic
      stay to the holder or holders of any other security interest or lien
      (other than the DIP Lenders) in any Postpetition Collateral to permit the
      pursuit of any judicial or non-judicial transfer or other remedy against
      any of the Postpetition Collateral; or

               

              (p)  Any
      provision of the documents relating to the Postpetition Loans shall cease
      to be valid and binding on the Borrowers and Guarantors, or any Borrower
      or Guarantor shall so assert in any pleading filed in any court;
      or

               

              (q)  Any
      Debtor shall bring or consent to any motion or application in the Chapter
      11 Cases:  (i) to obtain working capital financing from any
      person other than the DIP Lenders under section 364(d) of the
      Bankruptcy Code (other than with respect to a financing used, in whole or
      part, to repay in full in cash all obligations due under the DIP
      Facility); or (ii) to obtain financing from any person other than the
      DIP Lenders under section 364(c) of the Bankruptcy Code (other than
      with respect to a financing used, in whole or part, to repay in full in
      cash all obligations due under the DIP Facility); or (iii) to grant
      any lien that is pari
      passu or senior to any lien granted to the DIP Agent under the
      Interim Order or Final Order, except as permitted therein; or (iv) to
      recover from any portions of the Postpetition Collateral any costs or
      expenses of preserving or disposing of such Postpetition Collateral under
      section 506(c) of the Bankruptcy Code; or (v) to grant a
      superpriority claim, other than that granted in the Interim Order or Final
      Order (and other than with respect to the Carve-Out), which is pari passu with or
      senior to any of the claims of the DIP Agent and the DIP Lenders against
      the Borrower or any other Guarantor hereunder, the Interim Order or the
      DIP Order (or there shall arise or be granted any superpriority claim
      pari passu or
      senior to any such claims); or

               

              (r)  Any
      other party shall seek and obtain allowance of any order in the Chapter 11
      Cases to recover from any portions of the Postpetition Collateral any
      costs or expenses of preserving or disposing of such Postpetition
      Collateral under section 506(c) of the Bankruptcy Code;
      or

               

              (s)  An
      order shall be entered by the Bankruptcy Court confirming a plan of
      reorganization or liquidation in any of the Chapter 11 Cases (or any
      Debtor shall propose a plan of reorganization or liquidation in any of the
      Chapter 11 Cases) that does not contain a provision for payment of all of
      the obligations due under the DIP Facility by an indefeasible payment in
      full in cash of such obligations on or before the effective date of such
      plan; or

               

              (t)  An
      order shall be entered by the Bankruptcy Court, or any Debtor shall make a
      motion for an order of the Bankruptcy

            

    

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	 	 	Court,
      dismissing any of the Chapter 11 Cases that does not contain a provision
      for payment of all of the obligations due under the DIP Facility by an
      indefeasible payment in full in cash of such obligations; or
      
               

              (u)  There
      shall occur an Excess Budget Variance unless waived by the Required DIP
      Lenders; or

               

              (v)  (i)
      Any Debtor shall enter into, or the Bankruptcy Court shall approve, any
      debtor-in-possession credit facility in the Chapter 11 Cases (except as
      expressly permitted herein) without the consent of the Required DIP
      Lenders, that in any way is inconsistent with any of the provisions of
      this Term Sheet, the Interim DIP Order or the Final Order or otherwise
      adversely affects the rights, remedies, claims, liens or bankruptcy
      priorities of the DIP Lenders as established by Term Sheet, the Interim
      DIP Order or the Final Order, or (ii) any Debtor shall seek approval of,
      or the Bankruptcy Court shall approve, any order permitting the use of
      cash collateral of any Debtor in the Chapter 11 Cases (except as expressly
      permitted herein), without the consent of the Required DIP Lenders, that
      in any way is inconsistent with any of the provisions of this Term Sheet,
      the Interim DIP Order or the Final DIP Order or otherwise adversely
      affects the rights, remedies, claims, liens or bankruptcy priorities of
      the DIP Lenders as established by this Term Sheet, the Interim DIP Order
      or the Final DIP Order; or

               

              (w)  The
      Borrower shall fail to provide an Approved Budget that is acceptable to
      the Required DIP Lenders in accordance with the terms set forth herein,
      the Interim Order or the Final Order; or

               

              (x)  The
      Borrowers shall make any payment (whether by way of adequate protection or
      otherwise) of principal or interest or otherwise on account of any
      prepetition indebtedness, unless approved by the Required DIP Lenders or
      as authorized by the Bankruptcy Court after notice and hearing;
      or

               

              (y)  The
      Borrowers shall for any reason fail to remit to the DIP Agent and the DIP
      Lenders all net proceeds from the sale, disposition, collection, or other
      realization upon the Debtors’ assets for application in accordance with
      the terms set forth herein.

            
	 	 	 
	
              Reporting:

            	 	
              The Debtors are
      authorized and directed to provide the DIP Agent and the DIP Lenders with
      the following documentation and reports:  (i) weekly
      reports of cash receipts and disbursements and incurred expenses;
      (ii) copies of all reports filed with the Office of the United States
      Trustee within two (2) business days after such filing; and
      (iii) such additional financial or other information concerning the
      acts, conduct, property, assets, liabilities, operations, financial
      condition, and transactions of the Debtors, or concerning any matter that
      may affect the administration of the estates, as the DIP Agent or the
      Required DIP 

            

    

     

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	 	 	Lenders
      may from time to time reasonably request within ten (10) business days of
      any such request (the “Reporting
      Information”).  All Reporting Information shall be in
      accordance with accounting principles and bookkeeping practices
      consistently applied with past accounting principles and bookkeeping
      practices and reporting of the Debtors to the Prepetition
      Lenders.  The DIP Agent and its respective agents and advisors
      shall have full access, upon reasonable notice during normal business
      hours, to the Debtors’ business records, business premises, and to the
      Postpetition Collateral to enable the DIP Agent or its agents and advisors
      to (a) review, appraise, and evaluate the physical condition of the
      Postpetition Collateral, (b) inspect and review the financial records
      and all other records of the Debtors concerning the operation of the
      Debtors’ business, and (c) evaluate the Debtors’ overall financial
      condition and all other records relating to the operations of the
      Debtors.  The Debtors shall fully cooperate with the DIP Agent
      regarding such reviews, evaluations, and inspections, and shall make their
      employees and professionals available to the DIP Agent and its
      professionals and consultants to conduct such reviews, evaluations and
      inspections.
	 	 	 
	
              Indemnification:

            	 	
              The Debtors shall indemnify and
      hold harmless the DIP Agent, each DIP Lender and each of their affiliates
      and each of the respective officers, directors, members, partners,
      employees, agents, advisors, attorneys and representatives of each (each,
      an “Indemnified
      Party”) from and
      against any and all claims, damages, losses, liabilities and expenses
      (including, without limitation, reasonable fees and disbursements of
      counsel), joint or several, that may be incurred by or asserted or awarded
      against any Indemnified Party (including, without limitation, in
      connection with or relating to any investigation, litigation or proceeding
      or the preparation of any defense in connection therewith), in each case
      arising out of or in connection with or by reason of the DIP Facility, the
      DIP Facility Documents or any of the transactions contemplated thereby, or
      any actual or proposed use of the proceeds of the DIP Facility, except to
      the extent such claim, damage, loss, liability or expense is found in a
      final judgment by a court of competent jurisdiction to have resulted from
      such Indemnified Party’s gross negligence or willful
      misconduct.  In the case of an investigation, litigation or
      other proceedings to which the indemnity in this paragraph applies, such
      indemnity shall be effective whether or not such investigation, litigation
      or proceeding is brought by the Debtors, any of their directors, security
      holders or creditors, an Indemnified Party or any other person, or an
      Indemnified Party is otherwise a party thereto and whether or not the
      transactions contemplated hereby are consummated.  The Debtors
      further agree that no Indemnified Party shall have any liability (whether
      direct or indirect, in contract, tort, or otherwise) to the Debtors or any
      of their security holders or creditors for or in connection with the
      transactions contemplated hereby, except for direct damages (as opposed to
      special, indirect, consequential or punitive damages (including, without
      limitation, any loss of profits, business or anticipated savings))
      determined in a final judgment by a court of competent jurisdiction to
      have resulted from such Indemnified Party’s gross negligence or willful
      misconduct.

            

    

     

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	
              Expenses:

            	 	
              The Debtors shall jointly and
      severally pay all out of pocket costs and expenses of the DIP Agent and
      DIP Lenders (including all fees, expenses and
      disbursements of outside counsel and consultants) incurred in any of their
      respective capacities in connection with the Chapter 11 Cases, including,
      but not limited to, the preparation, execution and delivery of the DIP
      Facility Documents and the funding of the DIP Facility, the administration
      of the DIP Facility and any amendment or waiver of any provision of the
      DIP Facility Documents (whether or not executed) and in connection with
      the enforcement or protection of any of their rights and remedies under
      the DIP Facility Documents.

            
	 	 	 
	
              Adequate
      Protection:

            	 	
              Pursuant
      to sections 361, 363(e) and 364(d)(1) of the Bankruptcy
      Code, the Prepetition Agent, for the benefit of itself and the
      Prepetition Lenders, shall be granted adequate protection of its
      prepetition security interests for, and equal in amount to, the diminution
      in the value of the prepetition security interests of the Prepetition
      Agent, calculated in accordance with section 506(a) of the Bankruptcy
      Code, whether or not such diminution in value results from the sale, lease
      or use by the Debtors of the collateral securing obligations owed under
      the Credit Agreement (including, without limitation, cash collateral), the
      priming of the prepetition security interests of the Prepetition Agent or
      the stay of enforcement of any pre-petition security interest of the
      Prepetition Agent arising from section 362 of the Bankruptcy Code, or
      otherwise, which adequate protection shall include (i) cash payments of
      interest on account of the outstanding obligations under the Credit
      Agreement at the non-default rate of interest set forth in the Credit
      Agreement; (ii) replacement liens and superpriority claims junior in
      priority to the liens and superpriority claims securing the obligations
      under the DIP
      Facility and (iii) receiving the same documentation and
      reports provided by the Debtors to the DIP Agent and the DIP Lenders
      pursuant to the terms of this Term Sheet, the Interim Order or the Final
      Order.

            
	 	 	 
	
              Amendments and
      Waivers:

               

            	 	
              Amendments and waivers shall be in
      writing and shall require the consent of the Required DIP Lenders, except
      that (a) amendments and waivers that affect the rights, obligations or
      duties of the DIP Agent shall also require the consent of the DIP Agent,
      and (b) without the consent of each DIP Lender, no such amendment or
      waiver shall (i) increase the lending commitment of any DIP Lender, (ii)
      reduce the amount of any payment of principal, interest or fees required
      hereunder (other than any mandatory prepayment), (iii) postpone the date
      of any scheduled payment hereunder, (iv) release all or substantially all
      of the Postpetition Collateral or release any Debtor from any of its
      obligations in respect of the DIP Facility or (v) amend this provision or
      the definition of “Required DIP Lenders”.

            
	 	 	 
	
              Assignments and
      Participations:

               

            	 	
              The DIP Lenders shall be entitled
      to assign any of their rights and obligations hereunder, with notice to
      the DIP Agent and the Debtors but without any obligation to obtain the
      consent of any person or entity.  The DIP Lenders shall be
      entitled to grant participations in their rights and obligations
      hereunder, without any obligation to give notice to, or obtain the consent
      of, any person or entity.

            

    

     

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      	
              Governing Law:

            	 	
              State of New York.

            

    

    
    

    

    The
Borrowers and Guarantors must evidence their acceptance of this Term Sheet by
signing in the space indicated below.  If the DIP Lenders signatory
hereto have not received counterparts hereof so executed by the Borrowers and
Guarantors by 10:00 p.m. EDT on Tuesday, April 7, 2009, this offer to provide a
commitment for the DIP Facility described herein shall expire and be of no
further force or effect, and neither the DIP Lenders, the DIP Agent, nor any
other person or entity shall have any further obligations or liability with
respect to such DIP Facility or any other financing.

     

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      EXECUTION
VERSION

    
      
        ANNEX I

      

       

      INFORMAL NOTEHOLDER
GROUP

       

      Funds
and/or accounts managed or advised by the following entities:

    

     

     

    Brigade
Leveraged Capital Structures Fund, Ltd.

    

    Nomura
Corporate Research & Asset Management, Inc.

    

    Whitebox
Advisors

    
       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

       

      
        EXECUTION
VERSION

      ANNEX II

       

      
        COMMITMENT
SCHEDULE

      

    

    
 

    
      	
              DIP
      Lender1

            	
              Commitment
      Percentage

            	
              Commitment
      Amount

               

            
	
              Brigade
      Leveraged Capital Structures Fund, Ltd.

               

            	
              70.0000%

            	
              $21,000,000

            
	
              Nomura
      Corporate Research & Asset Management, Inc., as Investment Manager for
      and on behalf of certain lenders

               

            	
              13.3333%

            	
              $4,000,000

            
	
              Whitebox
      Hedged High Yield Partners, L.P.

               

            	
              15.0000%

            	
              $4,500,000

            
	
              Pandora
      Select Partners, L.P.

               

            	
              1.6667%

            	
              $500,000

            

    

    

    

    

      

    

     

      1 The DIP
Lender may be funds and/or accounts managed or advised by the entities listed
above.

       

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

    

     

     

    Brigade
Leveraged Capital Structures Fund, Ltd.

     

    
    

     

     

    
      	By:	 	      
              /s/
      Carney Hawks

            
	Name: 	 	      
              Carney
      Hawks

            
	Title:	 	      
              Authorized
      Signatory

            

    

     

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

     

    Nomura
Corporate Research & Asset Managment, Inc., as Investment Manager for and on
behalf of certain lenders

     

     

     

    
       

      
        	By:	 	      
                /s/ Stephen
      Kotsen

              
	Name: 	 	      
                      
                  Stephen
      Kotsen

                

              
	Title:	 	      
                      
                  Authorized
      Signatory

                

              
	 	 	Managing
      Director

      

       

       

       

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
       

       

       

       

      
        Whitebox Hedged
High Yield Partners, LP

      

       

      
        By: Whitebox
Hedged High Yield Advisors LLC its General Partner

        By: Whitebox
Advisors LLC, its General Partner

      

      
         

         

         

        
          	By:	 	      
                  /s/ Jonathan
      Wood

                
	Name: 	 	      
                        
                          
                      Jonathan
      Wood

                    

                  

                
	Title:	 	      
                        
                          
                      Chief
      Operating
  Officer

                    

                  

                

        

         

         

         

         

      

    

    Pandora
Select Partners, LP

     

    By: Pandora
Select Partners LLC its General Partner

    By: Whitebox
Advisors LLC, its General Partner

     

     

    
       

      
        	By:	 	      
                /s/ Jonathan
      Wood

              
	Name: 	 	      
                      
                        
                    Jonathan
      Wood

                  

                

              
	Title:	 	      
                      
                        
                    Chief
      Operating
  Officer

                  

                

              

      

       

    

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    Accepted and
agreed as of April __, 2009

     

     

     

    Aventine
Renewable Energy Holdings, Inc.

     

     

     

     

     

    
      
        
          	By:	 	 
	Name: 	 	      
                        
                          
                       

                    

                  

                
	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]