responsibilities as the Company’s Board of Directors (“Board”) may assign toEmployee from time to time.  (b) Performance of Duties and Responsibilities. Employee willserve the Company faithfully and to the best of Employee’s ability and willdevote Employee’s full time, attention and efforts to the business of theCompany during Employee’s employment. Employee will report to the Board.During Employee’s employment hereunder, Employee will not accept otheremployment or engage in other material business activity, except as approved inwriting by the Board.  (c) Prior Commitments. Employee hereby represents and warrantsthat Employee is under no contractual or legal commitments that would preventEmployee from fulfilling the duties and responsibilities as set forth in thisAgreement. Employee has previously provided copies to the Company of anyemployment agreements, non-competition agreements or other agreements thatEmployee previously signed that might arguably restrict Employee’s right towork for the Company, the services that Employee may provide to the Company, orthe information that Employee may disclose to the Company or use in the courseand scope of his employment with the Company.**3.** **Compensation****.** (a) Base Salary. The Company will pay to Employee an annual basesalary of **$285,000**effective as of October 1, 2010**,**less deductions andwithholdings, which base salary will be paid in accordance with the Company’snormal payroll policies and procedures. During each year after the first yearof Employee’s employment hereunder, the Board may review and may adjustEmployee’s base salary in its sole discretion.  (b) Employee Benefits. While Employee is employed by the Companyhereunder, Employee will be entitled to participate in all employee benefitplans and programs of the Company to the extent that Employee meets theeligibility requirements for each individual plan or program. These benefitplans and programs currently include a 401 (k) plan and medical, life anddisability insurance programs. The Company provides no assurance as to theadoption or continuance of any particular employee benefit plan or program.  (c) Expenses. The Company will reimburse Employee for allreasonable and necessary out-of-pocket business, travel and entertainmentexpenses incurred by Employee in the performance of the duties andresponsibilities hereunder, subject to Employee’s providing receipts andcomplying with the Company’s normal policies and procedures for expenseverification and documentation; provided, however, that Employee shall submit
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   verification of expenses within 30 days after the date the expense wasincurred; and the Company shall reimburse Employee for such expenseseligible for reimbursement within 30 days thereafter. The right toreimbursement hereunder is not subject to liquidation or exchange for anyother benefit, and the amount of expenses eligible for reimbursement in acalendar year shall not affect the expenses eligible for reimbursement inany other calendar year.  (d) Vacation. Employee will receive fifteen business days paidvacation time off, such time to be taken with the approval of the Board at suchtimes so as not to disrupt the operations of the Company.  (e) Automobile Allowance. While employed by the Company hereunder,the Company shall provide employee with a vehicle classified as E-85 and willreimburse all cost incurred in the use of that automobile for business orpersonal purposes, including without limitation the costs of insuring,maintaining and operating the automobile; provided, however, that Employeeshall submit verification of expenses within 30 days after the date the expensewas incurred, and the Company shall reimburse Employee for such expenseseligible for reimbursement within 30 days thereafter. The right toreimbursement hereunder is not subject to liquidation or exchange for any otherbenefit, and the amount of expenses eligible for reimbursement in a calendaryear shall not affect the expenses eligible for reimbursement in any othercalendar year. Such automobile plan will be structured within IRS requirementsfor personal use of a Company vehicle. In addition to complying with theCompany’s Substance Abuse Policy and Testing Program, Employee shall neverdrive the vehicle while impaired by or under the influence of alcohol orillegal drugs.  (f) Annual Performance Bonus. For each complete fiscal year thatEmployee is employed by the Company, Employee shall be eligible for an annualbonus in an amount up to 37% of Employee’s base salary during such fiscal year.Employee’s eligibility for any such bonus, and the amount of any such bonusthat is paid, shall be based upon and subject to reasonable criteriaestablished by the Board or a committee of the Board. Any bonus earned byEmployee for a fiscal year shall be payable to Employee no later than 60 daysfollowing the fiscal year for which the bonus was earned.**4.** **Affiliated Entities****.**As used in this Agreement, “Affiliates” includes the Companyand each corporation, partnership, LLC or other entity that controls the Company, iscontrolled 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).
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**5.** **Confidential Information****.**Except as permitted by the Company, Employee will not atany time divulge, furnish or make accessible to anyone or use in any way other than in theordinary course of the business of the Company or its Affiliates, any confidential,proprietary or secret knowledge or information of the Company or its Affiliates that Employeehas acquired or will acquire about the Company or its Affiliates, whether developed byEmployee or by others, concerning (i) any trade secrets, (ii) any confidential, proprietary orsecret designs, programs, processes, formulae, plans, devices or material (whether or notpatented or patentable) directly or indirectly useful in any aspect of the business of theCompany or of its Affiliates, (iii) any customer or supplier lists, (iv) any confidential,proprietary or secret development or research work, (v) any strategic or other business,marketing or sales plans, (vi) any financial data or plans, or (viii) any other confidentialor proprietary information or secret aspects of the business of the Company or of itsAffiliates. Employee acknowledges that the above-described knowledge and informationconstitutes a unique and valuable asset of the Company and represents a substantial investmentof time and expense by the Company, and that any disclosure or other use of such knowledge orinformation other than for the sole benefit of the Company or its Affiliates would be wrongfuland would cause irreparable harm to the Company. The foregoing obligations of confidentialitywill not apply to any knowledge or information that (i) is now or subsequently becomesgenerally publicly known, other than as a direct or indirect result of the breach of thisAgreement, (ii) is independently made available to Employee in good faith by a third party whohas not violated a confidential relationship with the Company or its Affiliates, or (iii) isrequired to be disclosed by law or legal process. **6.** **Ventures****.**If, during Employee’s employment with the Company, Employee is engaged inor provides input into the planning or implementing of any project, program or ventureinvolving the Company, all rights in such project, program or venture belong to the Company.Except as approved in writing by the Board, Employee will not be entitled to any interest inany such project, program or venture or to any commission, finder’s fee or other compensationin connection therewith. Employee may have no interest, direct or indirect, in any customer orsupplier that conducts business with the Company. **7.** **Non-Competition and Non-Solicitation Agreements****.** (a) Agreement Not to Compete. During Employee’s employment withthe Company or any Affiliates and for a period of twenty-four (24) consecutivemonths from and after the termination of Employee’s employment, whether suchtermination is with or without cause, or whether such termination is at theinstance of Employee or the Company, Employee will not, directly or indirectly,engage in any business, in the area within a 100-mile radius of the Company’sheadquarters or any of the Company’s ethanol plants or prospective ethanolplants, relating to the design, development, construction or operation of anethanol plant. For purposes of this Section, Employee agrees not to engage inany such activity as a proprietor, principal, agent, partner, officer,director, stockholder, employee, member of any association, consultant, agentor otherwise. Ownership by Employee, as a passive investment, of less than
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   1.0% of the outstanding shares of capital stock of any corporation listed ona national securities exchange or publicly traded in the over-the-countermarket will not constitute a breach of this Section 7(a).  (b) Agreement Not to Solicit or Hire Away Employees. DuringEmployee’s employment with the Company or any Affiliates and for a period oftwenty-four (24) consecutive months from and after the termination ofEmployee’s employment, whether such termination is with or without Cause, orwhether such termination is at the instance of Employee or the Company,Employee will not, directly or indirectly, hire, engage or solicit any personwho is then an employee of the Company or who was an employee of the Company atany time during the twelve-month period immediately preceding Employee’stermination of employment, in any manner or capacity, including withoutlimitation as a proprietor, principal, agent, partner, officer, director,stockholder, employee, member of any association, consultant or otherwise.  (c) Agreement Not to Solicit Customers and Other BusinessRelations. During Employee’s employment with the Company or any Affiliatesand for a period of twenty-four (24) consecutive months from and after thetermination of Employee’s employment, whether such termination is with orwithout Cause, or whether such termination is at the instance of Employee orthe Company, Employee will not, directly or indirectly, solicit, request,advise or induce any current or potential customer, supplier or other businesscontact of the Company to cancel, curtail or otherwise adversely change itsrelationship with the Company, in any manner or capacity, including withoutlimitation as a proprietor, principal, agent, partner, officer, director,stockholder, employee, member of any association, consultant or otherwise.  (d) Acknowledgment. Employee hereby acknowledges that theprovisions of this Section 7 are reasonable and necessary to protect thelegitimate interests of the Company and that any violation of this Section 7 byEmployee will cause substantial and irreparable harm to the Company to such anextent that monetary damages alone would be an inadequate remedy therefore.  (e) Blue Pencil Doctrine. If the duration of, the scope of, or anybusiness activity covered by any provision of this Section 7 is in excess ofwhat is determined to be valid and enforceable under applicable law, suchprovision will be construed to cover only that duration, scope or activity thatis determined to be valid and enforceable. Employee hereby acknowledges thatthis Section 7 will be given the construction which renders its provisionsvalid and enforceable to the maximum extent, not exceeding its express terms,possible under applicable law.
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**8.** **Patents, Copyrights and Related Matters****.** (a) Disclosure and Assignment. Employee agrees to immediatelydisclose to the Company any and all improvements and inventions that Employeehas conceived or reduced to practice individually or jointly with others sinceEmployee began his employment with the Company or that Employee may conceive orreduce to practice individually or jointly with others while Employee isemployed with the Company or any of its Affiliates. Any such improvements andinventions will be the sole and exclusive property of the Company and Employeeshall immediately assign, transfer and set over to the Company Employee’sentire right, title and interest in and to any and all of such improvement andinventions as are specified in this Section 8(a), and in and to any and allapplications for letters patent that may be filed on such inventions, and inand to any and all letters patent that may issue, or be issued, upon suchapplications. In connection therewith and for no additional compensationtherefor, but at no expense to Employee, Employee will sign any and allinstruments deemed necessary by the Company for patent protection of suchinventions. Employee acknowledges that the assignment provisions of thisSection 8(a) are written to be in accordance with and shall be interpretedconsistent with Minnesota Statute Section 181.78, and therefore Employee’sassignment of inventions under this Section 8(a) does not apply to anyinvention for which no equipment, supplies, facility, or trade secretinformation of the Company was used and which was developed entirely on theEmployee’s own time, and (1) which does not relate (A) directly to the businessof the Company or (B) to the Company’s actual or demonstrably anticipatedresearch or development, or (2) which does not result from any work performedby the Employee for the Company.  (b) Copyrightable Material. All right, title and interest in allcopyrightable material that Employee shall conceives or originates individuallyor jointly with others, and that arises in connection with Employee’s serviceshereunder or knowledge of confidential and proprietary information of theCompany, will be the property of the Company and are hereby assigned byEmployee to the Company or its Affiliates, along with ownership of any and allcopyrights in the copyrightable material. Where applicable, works of authorshipcreated by Employee relating to the Company or its Affiliates and arising outof Employee’s knowledge of confidential and proprietary information of theCompany shall be considered “works made for hire,” as defined in the U.S.Copyright Act, as amended.**9.** **Return of Records and Property****.**Upon termination of Employee’s employment or at anytime upon the Company’s request, Employee will promptly deliver to the Company any and allCompany and Affiliate records and any and all Company and Affiliate property in Employee’spossession or under Employee’s control, including without limitation manuals, books, blankforms, documents, letters, memoranda, notes, notebooks, reports, printouts, computer disks,computer tapes, source codes, data, tables
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  or calculations and all copies thereof, documents that in whole or in part contain any tradesecrets or confidential, proprietary or other secret information of the Company or itsAffiliates and all copies thereof, and keys, access cards, access codes, passwords, creditcards, personal computers, telephones and other electronic equipment belonging to theCompany or its Affiliates. **10.** **Remedies****.**Employee acknowledges that it would be difficult to fully compensate theCompany for monetary damages resulting from any breach by him of the provisions hereof.Accordingly, in the event of any actual or threatened breach of any such provisions, theCompany will, in addition to any other remedies it may have, be entitled to injunctive andother equitable relief to enforce such provisions, and such relief may be granted without thenecessity of proving actual monetary damages. In the event that a court of competentjurisdiction concludes that Employee has violated Employee’s obligations under paragraphs 5,6, 7, 8 or 9 of this Agreement, Employee shall also be liable to the Company for thereasonable costs and attorneys’ fees that it incurs in any legal action in which it enforcesits legal rights under those paragraphs. **11.** **Termination of Employment****.**The Employee’s employment with the Company will terminateimmediately upon: (a) Employee’s receipt of written notice from the Company of thetermination of Employee’s employment, effective as of the date indicated insuch notice;  (b) The Company’s receipt of Employee’s written resignation from theCompany, effective as of the date indicated in such resignation or Employee’sabandonment of his employment;  (c) Employee’s Disability (as defined below); or  (d) Employee’s death.  The date upon which Employee’s termination of employment with the Company occurs is the“Termination Date.” For purposes of Section 12 of this Agreement only, with respect totiming of any payments thereunder, the “Termination Date” shall mean the date on which a“separation from service” has occurred for purposes of section 409A of the Internal RevenueCode, and the regulations and guidance thereunder (the “Code”).   “Disability” means the inability of Employee to perform on a full-time basis the duties andresponsibilities of Employee’s employment with the Company by reason of illness or otherphysical or mental impairment or condition, if such inability continues for an uninterruptedperiod of 90 days or for more than 90 complete days during any 12-month period.Notwithstanding any other provision of this Agreement, the termination of Employee’semployment does not terminate Employee’s other obligations under this Agreement.
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**12.** **Payments upon Termination of Employment****.** (a) Payments Upon Termination Without Cause Or Resignation For GoodReason. If Employee’s employment with the Company is terminated by theCompany for any reason other than for “Cause” (as defined below), includingwithout limitation termination of Employee’s employment in connection with aChange in Control (as defined in Appendix A hereof), or by Employee as a resultof his resignation for “Good Reason” (as defined below) such that Employee’sTermination Date occurs within twenty-four (24) months after the occurrence ofthe condition which is the basis for the termination of the Employee withoutCause, the Good Reason resignation by Employee or the termination of Employee’semployment in connection with a Change in Control, then, in addition to theCompany paying Employee his base salary through the Termination Date, Employeeshall in such case receive from Company the following severance pay andbenefits. (1) The Company will pay Employee severance pay in anaggregate amount equal to fifty two weeks of Employee’s weekly basesalary amount immediately prior to the Termination Date, payable overone year in equal installments in accordance with the Company’s regularpayroll practices, with the first payment beginning no earlier than theexpiration of all applicable rescission periods provided by law and nolater than forty-five (45) calendar days following the TerminationDate; provided that if the 45 day period begins in one taxable year andends in a second taxable year, the Company will begin payment in thesecond taxable year.  (2) The Company will pay Employee a pro rata portion (basedon the portion of the fiscal year Employee provided services to theCompany) of any annual performance bonus pursuant to Section 3(e) thatwould have been payable to Employee if he had remained employed by theCompany for the fiscal year in which the Termination Date occurs, basedon actual Company performance for such fiscal year. Such payment shallbe made in the same manner and at the same time that annual incentivebonus payments are made to current executive officers of the Company,but no earlier than the expiration of all applicable rescission periodsprovided by law and no later than the date 2-1/2 months following theend of the fiscal year.  (3) Provided Employee is eligible for and takes all stepsnecessary to continue his and his family’s then-applicable health,dental, disability and life insurance coverage with the Companyfollowing the Termination Date, the Company will continue to providesuch coverage under the same terms and conditions as then madeavailable to other Company employees and their families (the
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   employer- and employee-portions being the same as for then-currentCompany employees) for up to one year following the TerminationDate. The Company shall be entitled to cease providing any health,dental, disability, or life insurance benefits prior to one yearafter the Termination Date if Employee becomes eligible for grouphealth, dental, disability or life insurance coverage (asapplicable) from any other employer. Once Employee has becomeeligible for comparable group health, dental, disability or lifeinsurance coverage from any other such employer, Employee shallpromptly and fully disclose this fact to the Company in writing andshall be liable to repay any amounts to the Company that should havebeen so mitigated or reduced but for Employee’s failure orunwillingness to make such disclosure. (b) If the Employee is terminated by the Company or its successor withoutCause or the Employee resigns for Good Reason prior to June 18, 2012, then inaddition to the severance pay and benefits payable to Employee pursuant toSection 12(a)(l), (2) and (3), Employee shall receive severance pay in anaggregate amount equal to fifty two weeks of Employee’s weekly base salaryamount immediately prior to the Termination Date payable in equal installmentsin accordance with the Company’s or its successor’s regular payroll practices,beginning on the first payroll date following the last severance payment madepursuant to Section 12(a)(l) above.  (c) If a Change in Control occurs and Employee’s employment is terminatedby the Company without Cause, then in addition to the severance pay andbenefits payable to Employee pursuant to Section 12(a)(1), (2) and (3), andprovided that the Termination Date occurs during a period beginning the earlierof (1) the date the Company signs a letter of intent regarding the Change inControl transaction or (2) 120 days prior to the consummation of the Change inControl, and ending on the day immediately prior to the date of the Change ofControl, Employee shall receive severance pay in an aggregate amount equal tofifty two weeks of Employee’s weekly base salary amount immediately prior tothe Termination Date payable in equal installments in accordance with theCompany’s regular payroll practices, beginning on the first payroll datefollowing the last severance payment made pursuant to Section 12(a)(1) above.  (d) If a Change in Control occurs and Employee’s employment with theCompany or its successor is terminated by the Company or its successor withoutCause or by Employee for Good Reason then, in addition to the severance pay andbenefits payable to Employee pursuant to Section 12(a)(l), (2) and (3), andprovided that the Termination Date occurs (1) during the period starting on thedate of consummation of the Change in Control transaction and ending two yearsafter consummation of the Change in Control transaction in respect oftermination by Company or its
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   successor, or (2) by Employee as a result of Employee’s resignation for GoodReason during the period beginning 90 days after the closing of the Changein Control transaction and ending on the date two years after consummationof the Change in Control transaction, then Employee shall receive severancepay in an aggregate amount equal to fifty two weeks of Employee’s weeklybase salary amount immediately prior to the Termination Date, payable inequal installments in accordance with the Company’s regular payrollpractices, beginning on the first payroll date following the last severancepayment made pursuant to Section 12(a)(l) above.  (e) Wages Due. If Employee’s employment with the Company isterminated by reason of (1) Employee’s abandonment of Employee’s employment orEmployee’s resignation for any reason other than for Good Reason; (2)termination of Employee’s employment by the Company for Cause; or (3)Employee’s Disability or death, then the Company will pay to Employee,Employee’s beneficiary or Employee’s estate, as the case may be, Employee’sbase salary through the Termination Date and shall have no obligation toprovide any severance pay or benefits under this Agreement to Employee.  (f) Limitations on Severance Pay. (1) The Company will not be obligated to make any paymentsor provide any benefits under this Section 12 if Employee’s employmentwith the Company is terminated by the Company in connection with aChange in Control and the Employee rejects an offer of employment inthe Minneapolis, Minnesota metropolitan area from any successor ininterest of the Company in respect of the Change in Control on termsthat are comparable to those provided for by this Agreement.  (2) Notwithstanding anything to the contrary hereinprovided, if Employee becomes eligible to receive severance paymentspursuant to Section 12(a)(1) above and also becomes eligible to receiveseverance payments pursuant to either Section 12(b), 12(c) or 12(d)above, then the total amount of severance payable under Section12(a)(1) combined with severance payable under Section 12(b), 12(c) or12(d) may not exceed the lesser of two times (A) the limit ofcompensation set forth in section 401(a)(17) of the Code as in effectfor the year in which the Termination Date occurs, or (B) Employee’sannualized compensation based upon the annual rate of pay for servicesto the Company for the calendar year prior to the calendar year inwhich the Termination Date occurs (adjusted for any increase duringthat year that was expected to continue indefinitely if Employee hadnot separated from service).
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 (3) In the event that any severance payable under Section12(a)(1) combined with severance payable under Section 12(b), 12(c) or12(d) is limited by Section 12(f)(2) above, then the Company will alsopay Employee a lump sum payment equal to the difference between theseverance that would otherwise be payable under Section 12(a)(1)combined with severance payable under Section 12(b), 12(c) or 12(d) andthe amount payable as a result of the limitation imposed under Section12(f)(2) above. Such payment shall be paid to Employee in a lump sumon the Company’s first regular payroll date after expiration of allapplicable rescission periods provided by law but in no event no laterthan forty-five (45) calendar days following the Termination Date;provided that if the 45 day period begins in one taxable year and endsin a second taxable year, the Company will make payment only in thesecond taxable year.  (4) Notwithstanding the foregoing provisions of thisSection 12, the obligation of the Company to make any of thetermination payments to Employee under Sections 12(a), 12(b), 12(c),12(d), 12(f)(2) or 12(f)(3) of this Agreement is contingent uponEmployee’s execution of a full and valid release of claims arising outof his employment or the termination of that employment in favor of theCompany, its officers, directors, agents, employees, successors,assigns and affiliates. Execution of such a release and the expirationof any applicable rescission period, following such execution, is acondition precedent to the Company’s obligation to make any of thetermination payments set forth in this Agreement.  (5) If the payment of the employee’s portion of premiumsunder Section 12(a)(3) would be discriminatory under the PatriotProtection and Affordable Care Act, then in lieu of such payment, theCompany shall pay, in addition to the amount in Section 12(f)(3) anafter-tax amount equal to the present value of the full amount ofpremium payments otherwise due. (g) If, as of the Termination Date, Employee is a “specified employee”under Section 409A(a)(2)(B)(i) of the Code, and if any payments that Employeeis entitled to receive hereunder may not be made at the time contemplated bythe terms of this Agreement without causing Employee to be subject to theadditional tax imposed by Section 409A of the Code, then any such paymentsunder this Agreement that would have been paid during the period six monthsafter Termination Date shall be held and paid in a lump sum on the first day ofthe seventh month following the Termination Date (without interest orearnings). Such deferral, if any, shall have no effect on any paymentsscheduled following the period six months after the Termination Date.
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 (h) For purposes of this Agreement, **“Cause”**shall mean: (1) an act of dishonesty undertaken by Employee andintended to result in personal gain or enrichment of Employee oranother at the expense of the Company or its Affiliates;  (2) unlawful conduct or gross misconduct by Employee,whether on the job or off the job, that, in either event, is publiclydetrimental to the reputation or goodwill of the Company;  (3) the conviction of Employee of a felony, or Employee’sentry of a no contest or nolo contendre plea to a felony;  (4) persistent failure of Employee to perform Employee’smaterial duties and responsibilities hereunder or to meet reasonableperformance objectives set by the Board, as applicable, from time totime, which failure is willful and deliberate on Employee’s part andhas not been cured by Employee within fifteen (15) days after writtennotice thereof to Employee from the Company;  (5) willful and deliberate breach by Employee of hisfiduciary obligations as an officer or director of the Company; or  (6) material breach of any terms or conditions of thisAgreement by Employee which breach has not been cured by Employeewithin fifteen (15) days after written notice thereof to Employee fromthe Company.   For the purposes of this Section 12(h), no act or failure to act onEmployee’s part shall be considered “dishonest,” “willful” or “deliberate”unless done or omitted to be done by Employee in bad faith and withoutreasonable belief that Employee’s action or omission was in the bestinterests of the Company. Any act, or failure to act, based upon authoritygiven pursuant to a resolution duly adopted by the Board shall beconclusively presumed to be done, or omitted to be done, by Employee in goodfaith and in the best interests of the Company. (i) For purposes of this Agreement, **“Good Reason”**shall mean the occurrenceof any of the following conditions without Employee’s consent, provided thatEmployee has first given written notice to the Company of the existence of thecondition within 90 days of the occurrence of such condition which is the basisfor Good Reason termination by Employee, and the Company has failed to remedythe condition within 30 days thereafter: (1) a material reduction in the duties, responsibilities,or authority of Employee, whether such reduction is initiated byCompany or any
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   successor in interest (except in connection with the termination ofEmployee’s employment for Cause);  (2) A material reduction in the duties, responsibilities,or authority of the Board;  (3) any reduction in Employee’s base salary or failure topay Employee any base salary or bonus to which he is entitled underthis Agreement;  (4) any material breach by the Company of its obligationsunder this Agreement;  (5) requiring Employee to be principally based at anyoffice or location more than 50 miles from Minneapolis, Minnesota(other than for normal travel in connection with Employee’s performanceof responsibilities hereunder); or  (6) the failure of the Company to assign this Agreement toa successor pursuant to Section 13(g), or failure of such successor toexplicitly assume and agree to be bound by this Agreement.**13.** **Miscellaneous****.** (a) Tax Matters. Employee acknowledges that the Company shalldeduct from any compensation payable to Employee or payable on his behalf underthis Agreement all applicable federal, state, and local income and employmenttaxes and other taxes and withholdings required by law. This Agreement isintended to be exempt from, or to satisfy, the requirements of Code Sections409A(a)(2), (3) and (4), and regulations interpreting such provisions, and itshould be interpreted accordingly.  (b) Governing Law. All matters relating to the interpretation,construction, application, validity and enforcement of this Agreement will begoverned by the laws of the State of Minnesota without giving effect to anychoice or conflict of law provision or rule, whether of the State of Minnesotaor any other jurisdiction, that would cause the application of laws of anyjurisdiction other than the State of Minnesota,  (c) Jurisdiction and Venue. Employee and the Company consent tothe jurisdiction of the federal and state courts located in the State ofMinnesota for the purpose of resolving all issues of law, equity, or fact,arising out of or in connection with this Agreement.  (d) Entire Agreement. This Agreement contains the entire agreementof the parties relating to Employee’s employment with the Company andsupersedes all prior agreements and understandings with respect to such subjectmatter, including without limitation the Prior Amended
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   Agreement, and the parties hereto have made no agreements, representationsor warranties relating to the subject matter of this Agreement that are notset forth herein.  (e) Amendments. No amendment or modification of this Agreementwill be deemed effective unless made in writing and executed by the Employeeand the Chairman of the Board.  (f) No Waiver. No term or condition of this Agreement will bedeemed to have been waived, except by a statement in writing signed by theparty against whom enforcement of the waiver is sought. Any written waiver willnot be deemed a continuing waiver unless specifically stated, will operate onlyas to the specific term or condition waived and will not constitute a waiver ofsuch term or condition for the future or as to any act other than thatspecifically waived.  (g) Assignment. This Agreement is not assignable, in whole or inpart, by Employee. The Company’s rights and obligations under this Agreementmay be assigned by the Company (1) to an Affiliate or (2) to any corporation orother person or business entity to which the Company may sell or transfer allor substantially all of its interest in the Company or any operating facilityor facilities. After any such assignment by the Company, the Company will bedischarged from all further liability hereunder and such assignee willthereafter be deemed to be “the Company” for purposes of all terms andconditions of this Agreement, including this Section 13.  (h) Counterparts. This Agreement may be executed by facsimilesignature and in any number of counterparts, and such counterparts executed anddelivered, each as an original, will constitute but one and the same instrument  (i) Severability. Subject to Section 7(e) hereof, to the extentthat any portion of any provision of this Agreement is held invalid orunenforceable, it will be considered deleted herefrom and the remainder of suchprovision and of this Agreement will be unaffected and will continue in fullforce and effect.  (j) Captions and Headings. The captions and paragraph headings usedin this Agreement are for convenience of reference only and will not affect theconstruction or interpretation of this Agreement or any of the provisionshereof.*(remainder of page intentionally left blank)*
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SIGNATURES  Employee and the Company have executed this Agreement as of the date set forth in the firstparagraph.     **Advanced BioEnergy LLC**   Date: May 9, 2011 By: */s/ John Lovegrove*     Its: Chairman of the Board     **EMPLOYEE**   Date: May 11, 2011 By: */s/ Richard Peterson*     Richard Peterson
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**Appendix A****“Change in Control”**for purposes of this Second Amended and Restated Employment Agreement shallmean the occurrence of any one or more of the following:     (1) the acquisition, during any 12 consecutive month period that ends subsequent to the dateof this Agreement (“Effective Date”), by any “person” (within the meaning of section 13(d)(3) or14(d)(2) of the Exchange Act) (an “Acquirer”) of ownership (determined taking into account theownership attribution rules of Section 318(a) of the Code) of membership interests of the Companypossessing 30% or more of the total voting power of the then outstanding membership interests ofthe Company; provided that for purposes of this paragraph (1):          (a) any membership interests of the Company owned by the Acquirer prior to the start of theapplicable 12 consecutive month period shall not be counted toward the 30% threshold specifiedabove; and          (b) an acquisition shall not constitute a Change in Control pursuant to this paragraph (1)if: (i) prior to the acquisition, the Acquirer owns membership interests of the Company possessingmore than 50% of the total fair market value or total voting power of the then outstandingmembership interests of the Company; (ii) the acquisition is by the Company or a subsidiary of theCompany; (iii) the acquisition is by an employee benefit plan (or related trust) sponsored ormaintained by the Company or one or more of its subsidiaries; (iv) the acquisition is by theEmployee or any group that includes the Employee; or (v) the acquisition is by a surviving oracquiring entity in connection with a Business Combination described in clause (4)(a) below;     (2) the acquisition by an Acquirer of membership interests of the Company that, together withmembership interests already held by such Acquirer, constitutes more than 50% of the total fairmarket value or total voting power of the membership interests of the Company, other than anacquisition by an Acquirer who, prior to the acquisition, owned more than 50% of the total fairmarket value or total voting power of the membership interests of the Company;     (3) the replacement, during any 12 consecutive month period that ends subsequent to theEffective Date, of a majority of the members of the Board with members whose appointment orelection is not endorsed by a majority of the members of the Board before the date of theappointment or election;     (4) the consummation of a merger or consolidation of the Company with or into another entity,a statutory share exchange or a similar business combination involving the Company (each, a“Business Combination”) which, subsequent to the Effective Date, has been approved by the unitholders of the Company, other than (a) a Business Combination where the holders of membershipinterests of the Company immediately before the Business Combination own, directly or indirectly,65% or more of the total voting power of all the outstanding equity securities of the surviving oracquiring entity resulting from such Business Combination, or (b) a Business Combination where theEmployee or a group that includes the Employee owns, directly or indirectly, 30% or more of thetotal value or voting power of all the outstanding
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equity interests of the surviving or acquiring entity resulting from such Business Combination; or     (5) the acquisition, during any 12 consecutive month period that ends subsequent to theEffective Date, by an Acquirer of assets of the Company with a total gross fair market value(determined without regard to any liabilities associated with such assets) equal to more than 40%of the total gross fair market value of all assets of the Company immediately prior to theacquisition, other than an acquisition (a) by a holder of membership interests in the Companyimmediately prior to such acquisition in exchange for its Company membership interests, (b) by anentity 65% or more of the total voting power of which is owned, directly or indirectly, by theCompany, (c) by a person or group (within the meaning of 26 CFR § 1.409A-3(i)(5)(vii)(C)) thatowns, directly or indirectly, 65% or more of the total voting power of all outstanding membershipinterests of the Company, (d) by an entity 65% or more of the total voting power of which isowned, directly or indirectly, by a person or group described in the immediately preceding clause(c), or (e) by a corporation or other entity 30% or more of the total value or voting power ofwhich is owned, directly or indirectly, by the Employee or a group that includes the Employee.
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