Exhibit 10.2


 


ADVANCED
BIOENERGY


 


Richard
Peterson


 


AMENDED
AND RESTATED EMPLOYMENT AGREEMENT


 


                This Amended and Restated Employment Agreement (this “Agreement”) is entered into on December 11,
2007 by and between Advanced BioEnergy, LLC, a Delaware limited liability
company (the Company”), and
Richard Peterson, a resident of Minnesota (“Employee”).


 


Background


 


 A.           The
Company, which was formed in early 2005, is establishing and currently owns and
operates dry mill corn-based ethanol plants throughout the Midwest.


 


B.            Employee’s employment with the
Company commenced on November 13, 2006. 
Employee is employed by the Company as its Vice President of Accounting
and Finance, and as Chief Financial Officer.


 


C.            The Company and Employee are parties
to an Employment Agreement dated October 17, 2006 (the “Prior Agreement”),
which the parties desire to amend and restate in its entirety as set forth in
this Agreement.


 


D.            It is desirable and in the best
interests of the Company to provide inducement for Employee (1) to remain
in the service of the Company in the event of any proposed or anticipated
change in control of the Company and (2) to remain in the service of the
Company in order to facilitate an orderly transition in the event of a change
in control of the Company.


 


E.             In addition, in October 2004,
the American Jobs Creation Act of 2004 (the “Act”) was enacted, Section 885
of which Act added new provisions to the Internal Revenue Code pertaining to
deferred compensation.  The Treasury
Department has issued final regulations and guidances regarding the deferred
compensation provisions of the Act, which permit service providers and service
recipients a transition period to modify existing deferred compensation
arrangements to bring them into compliance with the Act.


 


F.             The parties agree that it is in
their mutual best interests to modify, amend and clarify the terms and
conditions of the Prior Agreement, as set forth in this Agreement, with the
full intention of complying with the Act so as to avoid the additional taxes
and penalties imposed under the Act.


 


G.            In consideration of the foregoing
premises and the respective agreements of the Company and Employee set forth
below, the Company and Employee, intending to be legally bound, agree as
follows.


 

















 


AGREEMENT


 


1.              Employment. 
Subject to all terms and conditions hereof, the Company will employ
Employee, and Employee will continue to serve the Company and perform services
for the Company, until Employee’s employment terminates under Section 11.


 


2.              Position and Duties.


 


(a)           Position with the Company. 
(“Position”) Employee will continue to serve as the Vice President of
Accounting and Finance, and as Chief Financial Officer,  and will continue to perform such duties
and responsibilities as the Company’s Chief Executive Officer (“CEO”), the CEO’s
designee, or the Company’s Board of Directors (“Board”) may assign to Employee
from time to time.


 


(b)          Performance of Duties and
Responsibilities.  Employee will serve the Company faithfully
and to the best of Employee’s ability and will devote Employee’s full time,
attention and efforts to the business of the Company during Employee’s
employment.  Employee will report to the
Company’s CEO, the CEO’s designee, or to such other party that may be
designated by the Board.  During Employee’s
employment hereunder, Employee will not accept other employment or engage in
other material business activity, except as approved in writing by the Board.


 


(c)           Prior Commitments. 
Employee hereby represents and warrants that Employee is under no
contractual or legal commitments that would prevent Employee from fulfilling
the duties and responsibilities as set forth in this Agreement.  Employee has provided copies to the Company
of any employment agreements, non-competition agreements or other agreements
that Employee previously signed that might arguably restrict Employee’s right
to work for the Company, the services that Employee may provide to the Company,
or the information that Employee may disclose to the Company or use in the
course and scope of his employment with the Company.


 


3.              Compensation.


 


(a)           Base Salary. 
The Company will pay to Employee an annual base salary of $17,500, less deductions and withholdings,
which base salary will be paid in accordance with the Company’s normal payroll policies
and procedures.  During each year after
the first year of Employee’s employment hereunder, the Board may review and may
adjust Employee’s base salary in its sole discretion.


 


(b)          Employee Benefits. 
While Employee is employed by the Company hereunder, Employee will be
entitled to participate in all employee benefit plans and programs of the
Company to the extent that Employee meets the eligibility requirements for each
individual plan or program.  These benefit
plans and programs currently include a 401(k) plan and medical, life and
disability insurance programs.  The
Company provides no assurance as to the adoption or continuance of any
particular employee benefit plan or program.


 

















 


(c)           Expenses.  The Company
will reimburse Employee for all reasonable and necessary out-of-pocket
business, travel and entertainment expenses incurred by Employee in the
performance of the duties and responsibilities hereunder, subject to Employee’s
providing receipts and complying with the Company’s normal policies and
procedures for expense verification and documentation; provided, however, that
Employee shall submit verification of expenses within 30 days after the date
the expense was incurred, and the Company shall reimburse Employee for such
expenses eligible for reimbursement within 30 days thereafter.  The right to reimbursement hereunder is not
subject to liquidation or exchange for any other benefit, and the amount of
expenses eligible for reimbursement in a calendar year shall not affect the
expenses eligible for reimbursement in any other calendar year.


 


(d)          Vacation.  Employee will
receive fifteen business days paid vacation time off, such time to be taken
with the approval of the CEO or his designee, at such times 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 will reimburse all cost incurred
in the use of that automobile for business or personal purposes, including
without limitation the costs of insuring, maintaining and operating the
automobile; provided, however, that Employee shall submit verification of
expenses within 30 days after the date the expense was incurred, and the
Company shall reimburse Employee for such expenses eligible for reimbursement
within 30 days thereafter.  The right to
reimbursement hereunder is not subject to liquidation or exchange for any other
benefit, and the amount of expenses eligible for reimbursement in a calendar
year shall not affect the expenses eligible for reimbursement in any other
calendar year.  Such automobile plan will
be structured within IRS requirements for personal use of a Company
vehicle.  In addition to complying with
the Company’s Substance Abuse Policy and Testing Program, Employee  shall never drive the vehicle while impaired
by or under the influence of alcohol or illegal drugs.


 


(f)             Annual Performance Bonus. 
For each complete fiscal year that Employee is employed by the Company,
Employee shall be eligible for an annual bonus in an amount up to 25% of
Employee’s base salary during such fiscal year.  Employee’s  eligibility for any such bonus, and the
amount of any such bonus that is paid, shall be based upon and subject to
reasonable criteria established by the Board or a committee of the Board.  Any bonus earned by Employee for a fiscal
year shall be payable to Employee no later than 60 days following the fiscal
year for which the bonus was earned.  
Employee will not be eligible for a bonus for performance during 2006.


 


4.              Affiliated Entities. 
As used in this Agreement, “Affiliates” includes the Company and 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).


 


5.              Confidential Information. 
Except as permitted by the Company, Employee will not at any time
divulge, furnish or make accessible to anyone or use in any way other than in
the


 

















 


ordinary 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 Employee
has acquired or will acquire about the Company or its Affiliates, whether
developed by Employee or by others, concerning (i) any trade secrets, (ii) any
confidential, proprietary or secret designs, programs, processes, formulae,
plans, devices or material (whether or not patented or patentable) directly or
indirectly useful in any aspect of the business of the Company 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 confidential or proprietary information
or secret aspects of the business of the Company or of its Affiliates.  Employee acknowledges that the
above-described knowledge and information constitutes a unique and valuable
asset of the Company and represents a substantial investment of time and
expense by the Company, and that any disclosure or other use of such knowledge
or information other than for the sole benefit of the Company or its Affiliates
would be wrongful and would cause irreparable harm to the Company.  The foregoing obligations of confidentiality
will not apply to any knowledge or information that (i) is now or
subsequently becomes generally publicly known, other than as a direct or
indirect result of the breach of this Agreement, (ii) is independently
made available to Employee in good faith by a third party who has not violated
a confidential relationship with the Company or its Affiliates, or (iii) is
required to be disclosed by law or legal process.


 


6.              Ventures. 
If, during Employee’s employment with the Company, Employee is engaged
in or provides input into the planning or implementing of any project, program
or venture involving the Company, all rights in such project, program or
venture belong to the Company.  Except as
approved in writing by the Board of Directors of the Company, Employee will not
be entitled to any interest in any such project, program or venture or to any
commission, finder’s fee or other compensation in connection therewith.  Employee will have no interest, direct or
indirect, in any customer or supplier that conducts business with the Company.


 


7.              Non-Competition and
Non-Solicitation Agreements.


 


(a)           Agreement Not to Compete. 
During Employee’s employment with the Company or any Affiliates and for
a period of twenty-four (24) consecutive months from and after the termination
of Employee’s employment, whether such termination is with or without cause, or
whether such termination is at the instance 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’s headquarters or any of the Company’s
ethanol plants or prospective ethanol plants, relating to the design, development,
construction or operation of an ethanol plant. 
For purposes of this Section, Employee agrees not to engage in any such
activity as a proprietor, principal, agent, partner, officer, director,
stockholder, employee, member of any association, consultant, agent or
otherwise.  Ownership by Employee, as a
passive investment, of less than 1.0% of the outstanding shares of capital
stock of any corporation listed on a national securities exchange or publicly
traded in the over-the-counter market will not constitute a breach of this Section 7(a).


 

















 


(b)          Agreement Not to Solicit or Hire Away
Employees. During
Employee’s employment with the Company or any Affiliates and for a period of
twenty-four (24) consecutive months from and after the termination of Employee’s
employment, whether such termination is with or without cause, or whether such
termination is at the instance of Employee or the Company, Employee will not,
directly or indirectly, hire, engage or solicit any person who is then an
employee or contractor of the Company or who was an employee of the Company at
any time during the twelve-month  period
immediately preceding Employee’s termination of employment, in any manner or
capacity, including without limitation 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 Business Relations. During Employee’s employment with the Company or any Affiliates and
for a period of twenty-four (24) consecutive months from and after the
termination of Employee’s employment, whether such termination is with or
without cause, or whether such termination is at the instance of Employee or
the Company, Employee will not, directly or indirectly, solicit, request,
advise or induce any current or potential customer, supplier or other business
contact of the Company to cancel, curtail or otherwise adversely change its
relationship with the Company, in any manner or capacity, including without limitation
as a proprietor, principal, agent, partner, officer, director, stockholder,
employee, member of any association, consultant or otherwise.


 


(d)          Acknowledgment. 
Employee hereby acknowledges that the provisions of this Section 7
are reasonable and necessary to protect the legitimate interests of the Company
and that any violation of this Section 7 by Employee will cause
substantial and irreparable harm to the Company to such an extent that monetary
damages alone would be an inadequate remedy therefore.


 


(e)           Blue Pencil Doctrine. 
If the duration of, the scope of, or any business activity covered by
any provision of this Section 7 is in excess of what is determined to be
valid and enforceable under applicable law, such provision will be construed to
cover only that duration, scope or activity that is determined to be valid and
enforceable.  Employee hereby
acknowledges that this Section 7 will be given the construction which
renders its provisions valid and enforceable to the maximum extent, not exceeding
its express terms, possible under applicable law.


 


8.              Patents, Copyrights and
Related Matters.


 


(a)           Disclosure and Assignment. 
Employee agrees to immediately disclose to the Company any and all
improvements and inventions that Employee may conceive and/or reduce to
practice individually or jointly with others while Employee is employed with
the Company or any of its Affiliates. 
Any such improvements and inventions will be the sole and exclusive
property of the Company and Employee shall immediately assign, transfer and set
over to the Company Employee’s entire right, title and interest in and to any
and all of such improvement and inventions as are specified in this Section 8(a),
and in and to any and all applications for letters patent that may be filed on
such inventions, and in and to any and all letters patent that may issue, or be
issued, upon such


 

















 


applications.  In connection therewith and for no additional
compensation therefor, but at no expense to Employee, Employee will sign any
and all instruments deemed necessary by the Company for patent protection of
such inventions.


 


(b)          Copyrightable Material. 
All right, title and interest in all copyrightable material that
Employee shall conceive or originate individually or jointly with others, and that
arise in connection with Employee’s services hereunder or knowledge of
confidential and proprietary information of the Company, will be the property
of the Company and are hereby assigned by Employee to the Company of its
Affiliates, along with ownership of any and all copyrights in the copyrightable
material.  Where applicable, works of
authorship created by Employee relating to the Company or its Affiliates and
arising out of Employee’s knowledge of confidential and proprietary information
of the Company 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 any time upon the Company’s request, Employee will promptly deliver to the
Company any and all Company and Affiliate records and any and all Company and
Affiliate property in Employee’s possession or under Employee’s control,
including without limitation manuals, books, blank forms, documents, letters,
memoranda, notes, notebooks, reports, printouts, computer disks, computer
tapes, source codes, data, tables or calculations and all copies thereof,
documents that in whole or in part contain any trade secrets or confidential,
proprietary or other secret information of the Company or its Affiliates and
all copies thereof, and keys, access cards, access codes, passwords, credit
cards, personal computers, telephones and other electronic equipment belonging
to the Company or its Affiliates.


 


10.       Remedies. 
Employee acknowledges that it would be difficult to fully compensate the
Company 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, the Company will, in
addition to any other remedies it may have, be entitled to injunctive and other
equitable relief to enforce such provisions, and such relief may be granted
without the necessity of proving actual monetary damages.  In the event that a court of competent
jurisdiction 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 the reasonable costs and attorneys’ fees that it incurs in any
legal action in which it enforces its legal rights under those paragraphs.


 


11.       Termination of Employment. 
The Employee’s employment with the Company will terminate immediately
upon:


 


(a)          Employee’s receipt of written notice from the Company
of the termination of Employee’s employment, effective as of the date indicated
in such notice;


 


(b)         The Company’s receipt of Employee’s written
resignation from the Company, effective as of the date indicated in such
resignation or Employee’s abandonment of his employment or resignation other
than by notice from the Company;;


 


(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 to timing 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 Revenue Code, and the regulations and
guidance thereunder.


 


“Disability” means the
inability of Employee to perform on a full-time basis the duties and
responsibilities of Employee’s 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. 
Notwithstanding any other provision of this Agreement, the Termination
of Employee’s employment does not terminate Employee’s other obligations under
this Agreement.


 


12.       Payments upon Termination of
Employment.


 


(a)           Payments Upon Involuntary Termination
Without Cause Or Resignation For Good Reason.   If Employee’s
employment with the Company is terminated by the Company for any reason other
than for “Cause” (as defined below), including without limitation termination
of Employee’s employment in connection with a Change in Control (as defined
herein), or by Employee as a result of his resignation for “Good Reason” (as
defined below) such that Employee’s Termination Date occurs within twenty-four
(24) months after the occurrence of the condition which is the basis for the
Good Reason termination by Employee, then Employee shall in either case receive
from Company the following severance pay and benefits.


 


(1)          The Company will pay Employee severance
pay in an aggregate amount equal to fifty two weeks of Employee’s weekly base
salary amount immediately prior to the Termination Date, payable over one year
in equal installments in accordance with the Company’s regular payroll
practices, with the first payment beginning no earlier than the expiration of
all applicable rescission periods provided by law and no later than forty-five
(45) calendar days following the termination of employment.


 


(2)          The Company will pay Employee a pro rata
portion (based on the portion of the fiscal year Employee provided services to
the Company) of any annual performance bonus pursuant to Section 3(e) that
would have been payable to Employee if he had remained employed by the Company
for the fiscal year in which the Termination Date occurs, based on actual
Company performance for such fiscal year. 
Such payment shall be made in the same manner and at the same time that
annual incentive bonus payments are made to current executive officers of the Company,
but no earlier than the expiration of all applicable


 

















 


rescission periods
provided by law and no later than the date 2-1/2 months following the end of
the fiscal year.


 


(3)          The Company will continue to provide
Employee’s and his family’s then-applicable health, dental, disability and life
insurance under the same terms and conditions as then made available to other
Company employees and their families (the employer- and employee-portions being
the same as for then-current Company employees) for up to one year following
the Termination Date.  The Company shall
be entitled to cease providing any health, dental, disability, or life
insurance benefits prior to one year after the Termination Date if Employee
becomes eligible for group health, dental, disability or life insurance
coverage (as applicable) from any other employer.  Once Employee has become eligible for
comparable group health, dental, disability or life insurance coverage from any
other such employer, Employee shall promptly and fully disclose this fact to
the Company in writing and shall be liable to repay any amounts to the
Company that should have been so mitigated or reduced but for Employee’s
failure or unwillingness to make such disclosure.


 


(b)          If a Change in Control (as defined in Appendix
A of this Agreement) occurs and Employee’s employment with the Company is
terminated by the Company without Cause then, in addition to the severance pay
and benefits payable to Employee pursuant to Sections 12(a)(1)(2) and (3),
and provided that such termination occurs during a period beginning the earlier
of (x) the date the Company signs a letter of intent regarding the Change
in Control transaction or (y) 60 days prior to the consummation of the
Change in Control, and ending on the day immediately prior to the date of
Change in Control, Employee shall receive severance pay in an aggregate amount
equal to the lesser of (x) fifty two weeks of Employee’s weekly base
salary amount immediately prior to the Termination Date, or (y) Employee’s
weekly base salary amount for the number of weeks Employee had been employed by
the Company or its successor as of the Termination Date, payable in equal
installments in accordance with the Company’s regular payroll practices,
beginning on the first payroll date following the last severance payment made
pursuant to Section 12(a)(1) above.


 


(c)           If a Change in Control occurs and
Employee’s employment with the Company or its successor is terminated by the
Company or its successor without Cause or by Employee for Good Reason then, in
addition to the severance pay and benefits payable to Employee pursuant to
Sections 12(a)(1)(2) and (3), and provided that such termination occurs (1) during
the period starting on the date of consummation of the Change in Control
transaction and ending two years after consummation of the Change in Control
transaction in respect of termination by Company or its successor, or (2) by
Employee as a result of Employee’s resignation for Good Reason during the
period beginning 90 days after the closing of the Change in Control transaction
and ending on the date two years after consummation of the Change in Control
transaction, then


 

















 


Employee shall
receive severance pay in an aggregate amount equal to the lesser of (x) fifty
two weeks of Employee’s weekly base salary amount immediately prior to the
Termination Date, or (y) Employee’s weekly base salary amount for the
number of weeks Employee had been employed by the Company or its successor as
of the Termination Date, payable in equal installments in accordance with the
Company’s regular payroll practices, beginning on the first payroll date
following the last severance payment made pursuant to Section 12(a)(1) above.


 


(d)          Wages Due.  If Employee’s
employment with the Company is terminated by reason of (1) Employee’s
abandonment of Employee’s employment or Employee’s resignation for any reason; (2) termination
of Employee’s employment by the Company for Cause (as defined below); or (3) Employee’s
Disability or death, the Company will pay to Employee, Employee’s beneficiary
or Employee’s estate, as the case may be, Employee’s base salary through the
Termination Date.


 


(e)           Limitations on Severance Pay. 
Notwithstanding the foregoing provisions of this Section 12, the
obligation of the Company to make any of the termination payments to Employee
in Sections 12(a), 12(b), or 12(c) of this Agreement is contingent upon
Employee’s execution of a full and valid release of claims arising out of his
employment or the termination of that employment in favor of the Company, its
officers, directors, agents, employees, successors, assigns and
affiliates.  Execution of such a release
and the expiration of any applicable rescission period, following such
execution, is a condition precedent to the Company’s obligation to make any of
the termination payments set forth in this Agreement.


 


                         The Company will not be obligated to make any payments
or provide any benefits under this Section 12 if Employee’s employment
with the Company is terminated by the Company in connection with a Change in
Control and the Employee rejects an offer of employment in the Minneapolis,
Minnesota metropolitan area from any successor in interest of the Company in
respect of the Change in Control on terms that are comparable to those provided
for by this Agreement.


 


(f)             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 Employee is entitled to receive hereunder may not be
made at the time contemplated by the terms of this Agreement without causing
Employee to be subject to the additional tax imposed by Section 409A of
the Code, then any such payments under this Agreement that would have been paid
during the period six months after Termination Date shall be held and paid in a
lump sum on the first day of the seventh month following the Termination Date
(without interest or earnings).  Such
deferral, if any, shall have no effect on any payments scheduled following the
period six months after the Termination Date.


 


 (g)       For purposes of this Agreement, “Cause” shall mean:


 

















 


(1)          an act of dishonesty undertaken by
Employee and intended to result in personal gain or enrichment of Employee or
another 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 publicly
detrimental to the reputation or goodwill of the Company;


 


(3)          the conviction of Employee of a felony,
or Employee’s entry of a no contest or nolo contendre plea to a felony;


 


(4)          persistent failure of Employee to perform
Employee’s material duties and responsibilities hereunder or to meet reasonable
performance objectives set by the CEO or Board, as applicable, from time to
time, which failure is willful and deliberate on Employee’s part and has not
been cured by Employee within fifteen (15) days after written notice thereof to
Employee from the Company;


 


(5)          willful and deliberate breach by Employee
of his fiduciary obligations as an officer or director of the Company; or


 


(6)          material breach of any terms or
conditions of this Agreement by Employee which breach has not been cured by
Employee within fifteen (15) days after written notice thereof to Employee from
the Company.


 


                         For the purposes of this Section 12(g), no act or
failure to act on Employee’s part shall be considered “dishonest,” “willful” or
“deliberate” unless done or omitted to be done by Employee in bad faith and
without reasonable belief that Employee’s 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 Employee in good faith and in the best interests of the Company.


 


(h)          For purposes of this Agreement, “Good Reason” shall mean the occurrence of
any of the following conditions without Employee’s consent, provided that
Employee has first given written notice to the Company of the existence of the
condition within 90 days of the occurrence of such condition which is the basis
for Good Reason termination by Employee, and the Company has failed to remedy
the condition within 30 days thereafter:


 


(1)          a material reduction in the duties,
responsibilities, or authority of Employee, whether such reduction is initiated
by Company or any successor in interest (except in connection with the
termination of Employee’s employment for Cause);


 

















 


(2)          A material reduction in the duties,
responsibilities, or authority of the person to whom Employee reports;


 


(3)          any reduction in Employee’s base salary
or failure to pay Employee any base salary or bonus to which he is entitled
under this Agreement;


 


(4)          any material breach by the Company of its
obligations under this Agreement;


 


(5)          requiring Employee to be principally
based at any office or location more than 50 miles from Minneapolis, Minnesota
(other than for normal travel in connection with Employee’s performance of
responsibilities hereunder); or


 


 (6) the
failure of the Company to assign this Agreement to a successor pursuant to Section 13(i),
or failure of such successor to explicitly assume and agree to be bound by this
Agreement.


 


13.       Miscellaneous.


 


(a)           Tax Matters. 
Employee acknowledges that the Company shall deduct from any compensation
payable to Employee or payable on his behalf under this Agreement all
applicable federal, state, and local income and employment taxes and other
taxes and withholdings required by law.


 


(b)          Governing Law. 
All matters relating to the interpretation, construction, application,
validity and enforcement of this Agreement will be governed by the laws of the
State of Minnesota without giving effect to any choice or conflict of law
provision or rule, whether of the State of Minnesota or any other jurisdiction,
that would cause the application of laws of any jurisdiction other than the
State of Minnesota.


 


(c)           Jurisdiction and Venue. 
Employee and the Company 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.


 


(d)          Entire Agreement. 
This Agreement contains the entire agreement of the parties relating to
Employee’s employment with the Company 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.


 


(e)           Amendments.  No amendment
or modification of this Agreement will be deemed effective unless made in
writing and Employee and the CEO of the Chairman of the Board.


 


(f)             No Waiver.  No term or
condition of this Agreement will be deemed to have been waived, except by a
statement in writing signed by the party against whom enforcement of the waiver
is sought.  Any written waiver will not
be deemed a continuing waiver


 

















 


unless
specifically stated, will operate only as to the specific term or condition
waived and will not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.


 


(g)          Assignment.  This
Agreement is not assignable, in whole or in part, by Employee.  The Company’s rights and obligations under
this Agreement may be assigned by the Company (1) to an Affiliate or (2) to
any corporation or other person or business entity to which the Company may
sell or transfer all or substantially all of its interest in the Company or any
operating facility or facilities.  After
any such assignment by the Company, the Company will be discharged from all
further liability hereunder and such assignee will thereafter be deemed to be “the
Company” for purposes of all terms and conditions of this Agreement, including
this Section 13.


 


(h)          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.


 


(i)              Severability. 
Subject to Section 7(e) hereof, 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.


 


(j)              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.


 


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of page intentionally left blank)


 

















 


SIGNATURES


 


                Employee and the Company have executed this Agreement
as of the date set forth in the first paragraph.


 


	
   

  	
   

  	
  Advanced
  BioEnergy LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  , 2007

  	
  By:

  	
  /s/
  Revis L. Stephenson III

  	
   

  
	
   

  	
   

  	
  Its
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  , 2007

  	
  /s/
  Rich Peterson

  	
   

  
	
   

  	
   

  	
  Rich Peterson

  
							



 

















 


Appendix A


 


“Change in Control” for purposes of this
Amended and Restated Employment Agreement shall mean the occurrence of any one
or more of the following:


 


(1)           the acquisition, during any 12
consecutive month period that ends subsequent to the Effective Date, by any “person”
(within the meaning of section 13(d)(3) or 14(d)(2) of the Exchange
Act) (an “Acquirer”) of ownership (determined taking into account the ownership
attribution rules of Section 318(a) of the Code) of membership
interests of the Company possessing 30% or more of the total voting power of
the then outstanding membership interests of the 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 the applicable 12
consecutive month period shall not be counted toward the 30% threshold
specified above; 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 possessing
more than 50% of the total fair market value or total voting power of the then
outstanding membership interests of the Company; (ii) the acquisition
occurs after the Acquirer has satisfied the 30% threshold specified in
paragraph (1) above; (iii) the acquisition is by the Company or a
Subsidiary of the Company; (iv) the acquisition is by an employee benefit
plan (or related trust) sponsored or maintained by the Company or one or more
of its Subsidiaries; (v) the acquisition is by the Employee or any group
that includes the Employee; or (vi) the acquisition is by a surviving or
acquiring 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 with membership interests
already held by such Acquirer, constitutes more than 50% of the total fair
market value or total voting power of the membership interests of the Company,
other than an acquisition by an Acquirer who, prior to the acquisition, owned
more than 50% of the total fair market 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 the Effective Date, of a
majority of the members of the Board with members whose appointment or election
is not endorsed by a majority of the members of the Board before the date of
the appointment 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
stockholders of the Company, other than (a) a Business Combination where
the holders of membership interests 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 or
acquiring entity resulting from such Business Combination, or (b) a
Business Combination where the Employee or a group that includes the Employee
owns, directly or indirectly, 30% or more of the total value or voting power of
all the outstanding 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 the Effective 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 the acquisition, other than an acquisition (a) by
a holder of membership interests in the Company immediately prior to such
acquisition in exchange for or with respect to its Company membership
interests, (b) by an entity 65% or more of the total voting power of which
is owned, directly or indirectly, by the Company, (c) by a Person or group
(within the meaning of 26 CFR § 1.409A-3(i)(5)(vii)(C)) that owns, directly
or indirectly, 65% or more of the total voting power of all outstanding
membership interests of the Company, (d) an entity 65% or more of the
total voting power of which is owned, directly or indirectly, by a Person or
group described in the immediately preceding clause (c), or (e) by a
corporation 30% or more of the total value or voting power of which is owned,
directly or indirectly, by the Employee or a group that includes the Employee;


 


provided,
however, that in each case the transaction or transactions constitutes a change
in the ownership of the Company, a change in the effective control of the
Company or a change in the ownership of a substantial portion of the assets of
the Company, as determined under Section 409A of the Code.