Exhibit 10.6
 ADVANCED BIOENERGY, LLC
 Award Agreement for Unit Appreciation Right
With Tandem Nonqualified Unit Option
  Name of Grantee:
    
    Richard Peterson
 No. of Units Subject to Award:     150,000
    
    Date of Grant:     May 11, 2011
 Expiration Date:
    
    May 10, 2021
 Exercise Price Schedule
 Number of Units in Tranche
    
    Exercise Price Per Unit in TrancheTranche A
    
    
    50,000
    
    
    $
    1.50Tranche B
    
    
    50,000
    
    
    $
    3.00Tranche C
    
    
    50,000
    
    
    $
    4.50
 Vesting Schedule
 Number of Units as to WhichDates
    
    Award Becomes VestedMay 11, 2012
    
    
    30,000May 11, 2013
    
    
    30,000May 11, 2014
    
    
    30,000May 11, 2015
    
    
    30,000May 11, 2016
    
    
    30,000
   GRANTEE:
    
    ADVANCED BIOENERGY, LLC/s/ Richard Peterson
    
    By:  /s/ John LovegroveTitle: Chairman of the Board
 1




---



##### 



Advanced BioEnergy, LLC
Award Agreement for Unit Appreciation Right
With Tandem Nonqualified Unit Option ment
 Award Terms and Conditions1
 1.
    
    Nature of Award. Exercise of the UAR in accordance with this Agreement entitles you
to receive the difference between the Exercise Value (as defined in Section 19(f)) of each
Unit as to which the Award is then being exercised and the applicable Exercise Price of such
Unit as set forth in the Exercise Price Schedule. This difference is referred to in this
Agreement as the Appreciation Amount. Exercise of the Option entitles you to purchase the
number of Units as to which the Option is being exercised at the applicable Exercise Price per
Unit specified in the Exercise Price Schedule. This Option is not intended to be an
incentive stock option within the meaning of Section 422 of the Internal Revenue Code (the
Code). You may exercise some or all of the vested portion of this Award as either a UAR or
Option under the circumstances specified below, but not as both. Exercising any portion of
the Award as a UAR automatically cancels the corresponding Option as to the same number of
Units, and exercising any portion of the Award as an Option automatically cancels the
corresponding UAR as to the same number of Units.2.
    
    Vesting of Award. This Award will vest as to the number of Units and on the dates
specified in the Vesting Schedule, so long as your employment with the Company and its
Affiliates does not end. The Vesting Schedule is cumulative. If, however, your employment
terminates due to your death or Disability during the term of the Award, the next installment
of the Award that is scheduled to vest after the date of such termination of employment will
immediately vest upon such termination of employment. Accelerated vesting of the Award may
also occur under the circumstances described in Section 12 below. After giving effect to any
accelerated vesting as provided in this Section 2 or in Section 12, the unvested portion of
this Award will be immediately forfeited upon your termination of employment.3.
    
    Exercisability of Award as a UAR. To the extent the Award has vested and has not yet
expired or been terminated, you may exercise the Award as a UAR only under the following
circumstances and at the following times:
 (a)
    
    During the 30 day period immediately following a Change in Control (but a
notice of exercise as contemplated by Section 7 may be provided prior to such Change in
Control, to be effective upon such Change in Control);(b)
    
    At any time during the term of the Award when the Units are Publicly Traded; or(c)
    
    If the Units are then Publicly Traded, during the following periods of time
following the termination of your employment with the Company and its Affiliates other
than for Cause:
 (1)
    
    For one year after termination of your employment due to death
or Disability; or
 
 1
    
    Each capitalized term used in this Agreement
that is not defined when first used shall have the meaning specified in Section
19 or in the Second Amended and Restated Employment Agreement, as applicable. 2




---



##### 



(2)
    
    For three months following your termination of employment for
any reason other than death, Disability or Cause.
 4.
    
    Exercisability of Award as an Option. To the extent the Award has vested and has not
yet expired or been terminated, and if the Units are not then Publicly Traded, you may
exercise the Award as an Option only during the following periods of time following the
termination of your employment with the Company and its Affiliates other than for Cause:
 (a)
    
    For one year after termination of your employment due to death or Disability;
or(b)
    
    For three months following your termination of employment for any reason other
than death, Disability or Cause.
 5.
    
    Continued Employment Requirement.Except as otherwise provided in Sections 3(c), 4
or 12, this Award may be exercised only while you continue to be employed by the Company or
any of its Affiliates, and only if you have been continuously so employed since the Date of
Grant.6.
    
    Expiration. This Award will expire and will no longer be exercisable at 5:00 p.m.
Central Time on the earliest of:
 (a)
    
    The Expiration Date;(b)
    
    Upon your termination of employment with the Company for Cause;(c)
    
    Upon the expiration of any applicable period specified in Section 3(c), 4 or
12(c) during which this Award may be exercised after termination of your employment; or(d)
    
    The date of termination of this Award pursuant to Section 12(b).
 7.
    
    Exercise of Award as UAR. The vested portion of this Award may be exercised as a UAR
at the times and under the circumstances set forth in Section 3 by delivering a written notice
of exercise, in the form attached to this Agreement as Attachment 1, to the Company at
its principal executive office (or to the Companys designated agent for such purpose), and by
providing for payment of any related withholding taxes. The notice shall state the number of
Units as to which the UAR is being exercised, and shall be signed by the person exercising the
UAR. If you are not the person exercising the UAR, the person submitting the notice also must
submit appropriate proof of his/her right to exercise the UAR.8.
    
    Settlement of UAR Following Exercise. The per Unit Appreciation Amount payable in
connection with an exercise of the UAR under this Agreement is calculated by subtracting the
Exercise Price for each Unit as to which the UAR is being exercised from the Exercise Value of
that Unit as of the applicable exercise date. The aggregate Appreciation Amount payable in
connection with such an exercise (the Aggregate Appreciation Amount) is the sum of all the
applicable per Unit Appreciation Amounts. With respect to a UAR exercise pursuant to Section
3(b) or 3(c), payment of the Aggregate Appreciation Amount (net of applicable withholding
taxes) shall be made as soon as reasonably practicable after the Company receives the notice
of exercise as provided in Section 7, and shall be made in cash, Units or some combination of
the two in the Committees discretion. With respect to
a UAR exercise pursuant to Section 3(a), payment of the Aggregate Appreciation Amount shall
be made as provided in Section 12(d).9.
    
    Exercise of Award as Option. The vested portion of this Award may be exercised as an
Option under the circumstance and during the periods specified in Section 4 by delivering a
 3




---



##### 



written notice of exercise, in the form attached to this Agreement as Attachment 2, to
the Company at its principal executive office (or to the Companys designated agent for such
purpose), and by providing for payment of the exercise price of the Units being acquired and
any related withholding taxes in accordance with Section 11. The notice shall state the
number of Units to be purchased, and shall be signed by the person exercising the Option. If
you are not the person exercising the Option, the person submitting the notice also must
submit appropriate proof of his/her right to exercise the Option. When you submit your notice
of exercise, you must include payment in cash (including personal check, cashiers check or
money order) of the exercise price of the Units being purchased.10.
    
    Delivery of Units Upon Exercise of Option.As soon as practicable after the Company
receives the notice and exercise price as provided in Section 9, and has determined that all
conditions to exercise, including Sections 11 and 14 of this Agreement, have been satisfied,
it shall deliver to the person exercising the Option, in the name of such person, the Units
being purchased, as evidenced by issuance of a Unit certificate. The Company shall pay any
original issue or transfer taxes with respect to the issue or transfer of the Units and all
fees and expenses incurred by it in connection therewith.11.
    
    Withholding Taxes.You may not exercise this Award in whole or in part unless you
make arrangements acceptable to the Company for payment of any federal, state or local
withholding taxes that may be due as a result of the exercise of this Award. The Company
shall have the right, and you hereby authorize the Company, to (i) withhold from any cash
payment under this Award or from any other compensation or other amount owed to you an amount
sufficient to cover any required withholding taxes related to the exercise of this Award, and
(ii) require you or any other person receiving Units as a result of the exercise of this Award
to pay a cash amount sufficient to cover any required withholding taxes before actual receipt
of those Units. You may satisfy some or all of such withholding tax obligations (up to your
minimum required tax withholding rate) by surrendering to the Company Units you already own or
by having the Company retain a portion of the Units being acquired upon exercise of the Award.
Any Units surrendered to or retained by the Company in satisfaction of tax withholding
obligations shall be valued in the same manner as used in computing the withholding taxes
under applicable laws.12.
    
    Effect of Change in Control. In the event of a Change in Control during the term of
this Award:
 (a)
    
    If the Company is not the surviving or successor entity, then the surviving or
successor entity (or its parent entity) may assume or replace the Award (with such
adjustments as may be required or permitted by Section 18), subject to Section 12(c)
below. If the Company is the surviving entity, this Award shall continue in accordance
with its terms, subject to Section 12(c). For purposes of this Section 12(a), the
Award shall be considered assumed or replaced if, in connection with the Change in
Control and in a manner consistent with Code Section 409A, either
(i) the contractual obligations represented by this Agreement are expressly assumed
by the surviving or successor entity (or its parent entity) with appropriate
adjustments to the number and type of securities subject to the Award and the
Exercise Price thereof that preserve the intrinsic value of the Award existing at
the time of the Change in Control, or (ii) you have received a comparable
equity-
 4




---



##### 



based award that preserves the intrinsic value of the Award existing at the
time of the Change in Control and is subject to terms and conditions, including
those applicable to vesting and exercisability, that are substantially equivalent to
those to which this Award is subject. To the extent the Award was vested prior to
the Change in Control, it shall be exercisable as a UAR as provided in Section 3(a)
notwithstanding the continuation, assumption or replacement of the Award.(b)
    
    If the Company is not the surviving or successor entity, and if this Award is
not assumed or replaced in connection with a Change in Control, then the Award shall
become fully vested and fully exercisable as a UAR for the period of time provided in
Section 3(a), and shall terminate at the end of such period of exercisability.(c)
    
    If the Company is the surviving entity in a Change in Control, or if the Award
is assumed or replaced under the circumstances described in Section 12(a), and if
within two years after the Change in Control you experience an involuntary termination
of employment for reasons other than Cause or you terminate your employment for Good
Reason, then the Award shall immediately become fully vested and fully exercisable in
accordance with its terms and shall remain exercisable for three months following your
termination of employment.(d)
    
    If and to the extent this Award is exercised as a UAR in accordance with
Section 3(a) under the circumstances specified in either Section 12(a) or Section
12(b), payment of the Aggregate Appreciation Amount shall be made to you using the same
form(s) of consideration provided to Unit holders generally in connection with the
Change in Control transaction, provided that (i) the Committee may, to the extent that
the consideration provided to Unit holders generally is other than cash, provide for
the payment of some or all of the corresponding portion of the Aggregate Appreciation
Amount in cash, and (ii) to the extent the consideration provided to Unit holders
generally is other than cash or readily tradable securities, payment shall be made in
cash of a portion of the Aggregate Appreciation Amount equal to your required
withholding taxes in connection with the UAR exercise. Payment of any amount under
this Section 12(d) shall be made on the same schedule and subject to the same terms,
including subjecting such payment to escrow or holdback terms, as are applicable to
payments of the Change in Control consideration to the Companys Unit holders
generally.(e)
    
    If and to the extent this Award is exercised pursuant to Section 12(c), it
shall be exercisable as a UAR consistent with Section 3(c)(2) if the Units or other
underlying securities are then Publicly Traded, and exercisable as an Option
consistent with Section 4(b) if the Units or other underlying securities are not
then Publicly Traded.
 13.
    
    Forfeiture Conditions. If your employment with the Company and its Affiliates is
terminated for Cause, or if you breach any non-competition, non-solicitation or
confidentiality restrictions applicable to you, then (i) any unexercised portion of this Award
shall be forfeited, and (ii) any Units issued upon exercise of the Option or UAR or
 5




---



##### 



other
payments made upon exercise of the UAR within a period of [12] months prior to such
termination or breach or at any time thereafter shall be forfeited and returned to the
Company.
 14.
    
    Compliance with Laws. This Award may be exercised only if the issuance of Units upon
such exercise complies with all applicable legal requirements, including compliance with the
provisions of applicable federal and state securities laws.15.
    
    Transfer of Award. During your lifetime, only you (or your guardian or legal
representative in the event of legal incapacity) may exercise this Award except in the case of
a transfer described below. You may not assign or transfer this Award except (i) for a
transfer upon your death in accordance with your will, by the laws of descent and distribution
or pursuant to a beneficiary designation submitted in accordance with such procedures as the
Committee may specify, or (ii) with the prior written approval of the Company, by gift to a
permitted transferee as specified in Section 9.2(a)(ii) of the LLC Agreement. The Award as
held by any such transferee will continue to be subject to the same terms and conditions that
were applicable to the Award immediately prior to its transfer and may be exercised by such
transferee only as and to the extent that the Award becomes exercisable under this Agreement
and has not terminated in accordance with the provisions of this Agreement.16.
    
    No Unit Holder Rights Before Exercise. Neither you nor any permitted transferee of
this Award will have any of the rights of a Unit holder of the Company with respect to any
Units subject to this Award until the issuance of the Units has been effected in accordance
with the LLC Agreement and a certificate evidencing such Units have been issued. No
adjustments shall be made for distributions or other rights if the applicable record or
effective date occurs before your Units and the resulting certificate have been issued.17.
    
    Subject to LLC Agreement. You acknowledge that any Units issued to you pursuant to
this Agreement and Award are subject to the Companys Articles of Organization, as amended
from time to time, and the Companys LLC Agreement. You acknowledge and agree that you will
become a party to the Companys LLC Agreement, as currently in effect, if you are not already
a party to that agreement. Subject to the provisions of the LLC Agreement, you will have all
the rights of a member of the Company with respect to each Unit issued to you hereunder.18.
    
    Adjustment for Changes in Capitalization. In the event of any reorganization,
merger, consolidation, recapitalization, liquidation, reclassification, unit dividend, unit
split, combination of Units, rights offering, or extraordinary dividend or divestiture
(including a spin-off), or any other change in the structure or Units of the Company,
including any conversion by the Company into to a corporate form, the Committee (or if the
Company does not survive any such transaction, the board of directors or an authorized
committee of
the board of directors of the surviving company) shall, without your consent, make such
adjustments as it determines in its discretion to be appropriate as to the number and kind of
securities subject to this Agreement and to the Award in order to prevent dilution or
enlargement of your rights hereunder. Following any such adjustments, references in this
Agreement to Units or membership interests shall, to the extent necessary, be deemed to
refer to such other kind of securities.
 19.
    
    Definitions. In this Agreement, the following definitions will apply:
 6




---



##### 



(a)
    
    Affiliate means each corporation, partnership, LLC or other entity that
controls the Company, is controlled by the Company, or is under common control with the
Company (in each case, control meaning the direct or indirect ownership of 50% or
more of all outstanding equity interests).(b)
    
    Cause means (i) an act of dishonesty undertaken by you and intended to result
in personal gain or enrichment of you or another at the expense of the Company or its
Affiliates; (ii) unlawful conduct or gross misconduct by you, whether on the job or off
the job, that, in either event, is publicly detrimental to the reputation or goodwill
of the Company; (iii) your conviction of a felony, or your entry of a no contest or
nolo contendre plea to a felony; (iv) your persistent failure to perform the material
duties and responsibilities of your position with the Company or to meet reasonable
performance objectives set by the Board from time to time, which failure is willful and
deliberate on your part and has not been cured by you within fifteen (15) days after
written notice thereof to you from the Company; (v) your willful and deliberate breach
of your fiduciary obligations as an officer or director of the Company; or (vi) your
material breach of any terms or conditions of this Agreement or any other agreement
between you and Company which breach has not been cured by you within fifteen (15) days
after written notice thereof to you from the Company.For the purposes of this Section 19(b), no act or failure to act on your part shall
be considered dishonest, willful or deliberate unless done or omitted to be
done by you in bad faith and without reasonable belief that your action or omission
was in the best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board shall be
conclusively presumed to be done, or omitted to be done, by you in good faith and in
the best interests of the Company.(c)
    
    Change in Control means a change in control as defined in Appendix A to your
Second Amended and Restated Employment Agreement dated as of May 11, 2011.(d)
    
    Committee means the Compensation Committee of the Board of Directors of the
Company, or two or more non-employee directors of the Company designated by the Board
to administer this Agreement.(e)
    
    Disability means the your inability to perform on a full-time basis the
duties and responsibilities of your employment with the Company by reason of illness or
other physical or mental impairment or condition, if such inability continues for an
uninterrupted period of 90 days or for more than 90 complete days during any
12-month period.(f)
    
    Exercise Value of a Unit means the value of the Unit as of the date of
exercise of the UAR determined as follows:
 (1)
    
    If the UAR is being exercised pursuant to Section 3(a), the
value of the Unit as of the date of exercise shall be equal to the fair market
value per Unit, as determined by the Committee in good faith, of the
consideration to be received by the Company or its Unit holders, as the case
may be, in the applicable Change in Control transaction.
 7




---



##### 



(2)
    
    If the UAR is being exercised pursuant to Section 3(b) or 3(c),
the value of the Unit as of the date of exercise will be the closing or last
sale price of a Unit on the principal securities market on which the Units
trade on the date of exercise, or if no sale of Units occurred on that date, on
the next preceding date on which a sale of Units occurred, as reported by such
source as the Committee deems reliable.
 (g)
    
    Good Reason means the occurrence of any of the following conditions without
your consent, provided that you have first given written notice to the Company of the
existence of the condition within 90 days of its first occurrence, and the Company has
failed to remedy the condition within 30 days thereafter: (i) a material reduction in
the your duties, responsibilities, or authority (except in connection with the
termination of your employment for Cause); (ii) a material reduction in the duties,
responsibilities, or authority of the person to whom you report; (iii) any reduction in
your base salary or failure to pay you any base pay or bonus to which you are entitled;
(iv) any material breach by the Company of its obligations under this Agreement or any
other agreement with you; (v) requiring you to be principally based at any office or
location more than 50 miles from Minneapolis, Minnesota (other than for normal travel
in connection with your performance of the duties and responsibilities of your position
with the Company); or (vi) the failure of the Company to assign this Agreement to a
successor pursuant to Section 20(e), or failure of such successor to explicitly assume
and agree to be bound by this Agreement.(h)
    
    Publicly Traded means at any time with respect to Units or other securities
that the Units or other securities are then readily tradable on an established
securities market for purposes of Treasury Regulation §1.409A-1(b)(5)(iv)(A).
 20.
    
    Miscellaneous.
 (a)
    
    Governing Law. This Agreement will be interpreted and enforced under
the laws of the state of Minnesota (without regard to its conflicts or choice of law
principles).(b)
    
    Jurisdiction and Venue. The parties consent to jurisdiction of the
courts of the State of Minnesota and/or the federal district courts, District of
Minnesota, for the purpose of resolving all issues of law, equity, or fact, arising out
of or in connection with this Agreement.(c)
    
    Entire Agreement. This Agreement contains the entire agreement of the
parties relating to the Award and supersedes all prior agreements and understandings
with respect to such subject matter, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement that are
not set forth herein.(d)
    
    Amendments. The Committee may unilaterally amend the terms of this
Agreement, except that no such amendment may materially impair the your rights with
respect to the Award without your prior written consent, unless such amendment is
necessary to comply with applicable law.
 8




---



##### 



(e)
    
    Successors and Assigns. This Agreement will be binding in all respects
on your heirs, representatives, successors and assigns , and on the successors and
assigns of the Company.(f)
    
    Counterparts. This Agreement may be executed by facsimile signature
and in any number of counterparts, and such counterparts executed and delivered, each
as an original, will constitute but one and the same instrument.(g)
    
    Severability. To the extent that any portion of any provision of this
Agreement is held invalid or unenforceable, it will be considered deleted herefrom and
the remainder of such provision and of this Agreement will be unaffected and will
continue in full force and effect.(h)
    
    Notices. Every notice or other communication relating to this
Agreement shall be in writing and shall be mailed to or delivered to the party for whom
it is intended at such address as may from time to time be designated by it in a notice
mailed or delivered to the other party as herein provided. Unless and until some other
address is so designated, all notices or communications by you to the Company shall be
mailed or delivered to the Company at its office at 10201 Wayzata Boulevard, Suite 250,
Minneapolis, Minnesota, 55305, and all notices or communications by the Company to you
may be given to you personally or may be mailed to you at the address indicated in the
Companys records as your most recent mailing address.(i)
    
    Captions and Headings. The captions and paragraph headings used in
this Agreement are for convenience of reference only and will not affect the
construction or interpretation of this Agreement or any of the provisions hereof.
 By signing the cover page of this Agreement, you agree to all the terms and conditions described
above and in the Plan document.
 9




---



##### 



Attachment 1
 NOTICE OF EXERCISE
Unit Appreciation Right
  Employee to Complete
    
    Company to CompleteNo. of
    
    Exercise
    
    
    
    
    
    AggregateExercise Price
    
    UAR
    
    Value Per
    
    Appreciation
    
    AppreciationPer Unit
    
    Exercised
    
    Unit
    
    Amount Per Unit
    
    AmountTranche A
    
    $
    1.50
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $Tranche B
    
    $
    3.00
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $Tranche C
    
    $
    4.50
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $Total Aggregate Appreciation Amount
    
    $
   Richard PetersonDate
 10




---



##### 



Attachment 2
 NOTICE OF EXERCISE
Unit Option
  Exercise Price Per
    
    Number of Units
    
    Aggregate ExerciseUnit
    
    Exercised
    
    PriceTranche A
    
    $
    1.50Tranche B
    
    $
    3.00Tranche C
    
    $
    4.50Totals
 
        11




---



##### 



Tax Withholding
 o
    
    I hereby direct the Company to pay any required withholding on my behalf and to
withhold from the number of Units to be delivered to me pursuant to my exercise of the
option, the number of whole Units the fair market value of which is equal to my minimum
withholding obligation, and I will pay the difference in cash.o
    
    I hereby deliver to the Company $ to satisfy my minimum tax withholding
obligation. I am enclosing payment in the form of .
  Richard PetersonDate
 12