EXHIBIT 10.1


Advanced BioEnergy, LLC


Restricted
Unit Agreement


Name of Holder:   Stephenson
Holdings, Inc.


 


	
  No. of Restricted Units:   up to
  300,000

  	
   

  	
  Date of Grant:

  



 


Restricted Units — Earnings Criteria for Restricted Units (“Earnings Criteria”):


 


From and after June 1, 2006, upon the occurrence of an
Event (as defined below), one restricted Unit (“RU”)
will be issued under this Agreement for each 1,000 gallons of additional
ethanol production or co-production facility acquired or built by the Company
on or prior to April 3, 2009 in addition to the Company’s currently proposed
facility located near Fairmont, Nebraska, subject to a maximum of 300,000 RUs
being issued under this Agreement.  The
determination of the timing of the acquisition or development by the Company of
an additional ethanol production or co-production facility, as well as the
number of gallons of ethanol produced or co-produced at such facility, will be
determined by the Board or the Committee in its sole discretion.  Each of the following constitutes an “Event:”


 


(1)                                  The
Board resolves to develop and build a new ethanol production facility, or
acquires the assets or equity of a third party that intends to establish one or
more such facilities, and:


 


(a)                                  acquires
appropriate real property on which to build such facility;


 


(b)                                 obtains
a letter of intent or similar commitment from a general contractor experienced
in the design and construction of ethanol facilities;


 


(c)                                  approves
of a plan and timeframe for construction and production capacity for such
facility; and


 


(d)                                 affirmatively
determines that the Company is reasonably likely to be able to finance the
proposed facility, whether by debt, through the sale of additional equity or
otherwise; or


 


(2)                                  Approval
by the Board of the acquisition of assets or equity of a third party ethanol
producer.


 


RU Vesting Schedule (Cumulative):


 


	
  Vesting
  Date(s)

  	
   

  	
  Percentage of Earned RUs 

  That Are Vested on Such Date

  
	
  Date the board of
  directors certifies operations relating to additional production capacity (“Certification Date”)

  	
   

  	
  50%

  
	
  First anniversary of
  the Certification Date

  	
   

  	
  25%

  
	
  Second anniversary of
  the Certification Date

  	
   

  	
  25%

  



 
















This is a Restricted Unit
Agreement (“Agreement”) between Advanced BioEnergy, LLC,
a Delaware limited liability company (the “Company”), and
the above-named holder of the RUs (the “Holder”).


RECITALS


A.                                   The board of directors
of the Company (the “Board”) or a
committee of two or more directors of the Company (the “Committee”)
has the authority to grant and administer equity awards (if the Board has not
appointed a committee to administer the awards, then the Board shall constitute
the Committee).


B.                                     The Committee has
determined that the Holder is eligible to receive an award in the form of a
restricted unit grant pursuant to the terms of Section 4(c) of that certain
Employment Agreement dated as of April 7, 2006 (the “Employment
Agreement”), between the Company and Revis L. Stephenson III (the “Employee”), who is the sole stockholder of the Holder.  All capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Employment
Agreement.


C.                                     The Company desires to
give the Employee, through his ownership of the Holder, an inducement to
acquire a proprietary interest in the Company and an added incentive to advance
the interests of the Company by granting the Holder restricted units (“RUs”) on the terms and conditions and subject to the
restrictions set forth herein.


The
Company hereby grants the right to be issued RUs to the Holder under the terms
and conditions as follows.


TERMS AND CONDITIONS


1.                                       Issuance
and Terms of Restricted Units.


(a)                                  Subject to the terms
and conditions of this Agreement, the Company has granted to the Holder the
right to be issued the number of RUs specified at the beginning of this
Agreement, and will grant RUs to the Holder in accordance with the terms and
subject to the conditions of this Agreement.


(b)                                 Each RU represents one
Unit of the Company as defined in the Company’s Operating Agreement, as may be amended
from time to time, except that;


(1)                                  The Capital Account
balance of such RU as of the date of grant specified above shall be zero;


(2)                                  For purposes of
Section 3 of the LLC Agreement (relating to allocations of profits and
losses), the holder of the RU shall be treated the same as the holder of a
Unit.  However, upon the occurrence of a “Liquidity
Event” as defined below, if and to the extent that the Company generates a
capital gain upon such Liquidity Event, notwithstanding the provisions of
Section 3 of the LLC Agreement of the Company, an amount of such capital
gain shall be allocated 100% to the Holder until the Capital Account balance
attributable to each RU is equal to the Capital Account balance attributable to
one Unit.  Capital gain generated by the
Company in excess 



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of the amount specially allocated to the Holder
under the preceding sentence shall be allocated in the manner specified in
Section 3.1 of the LLC Agreement (i.e., among all holders of Units in
proportion to their respective number of Units, including the Holder with
respect to the RUs).


(3)                                  For purposes of this
Agreement, a Liquidity Event shall be deemed to have occurred if (a) the
Company sells all or substantially all of its assets, (b) the Company
merges with or into any other entity, (c) the Company converts (by
whatever means) into an entity taxed as a corporation for federal income tax
purposes, or (d) a Dissolution Event (as defined in the LLC Agreement)
occurs.


2.                                       Forfeiture
and Transfer Restrictions.


(a)                                  Forfeiture.  Any issued RUs not otherwise vested will be
forfeited by the Holder and deemed immediately cancelled and the Holder will
thereafter have no right, title or interest whatsoever in such RUs if


(1)                                  the Employee’s
employment with the Company, or a parent or subsidiary thereof, is terminated
by the Company for Cause (as defined in the Employment Agreement) or by the
Employee without Good Reason (as defined in the Employment Agreement); or


(2)                                  the Board determines
that the Event giving rise to the issuance of RUs to the Holder will not be
reasonably likely to result in additional ethanol production capacity or that
the Company should no longer pursue the development of such additional ethanol
production capacity for a period of at least 12 months.


Any
RUs which are forfeit will be deemed to be eligible for issuance to the Holder
in connection with and on the occurrence of subsequent Events.


(b)                                 Limitation
on Transfer.  Until such time as the RUs have
been issued and vested as provided in this Agreement, the Holder shall not
transfer the RUs and the RUs shall not be subject to pledge, hypothecation,
execution, attachment or similar process. 
Any attempt to assign, transfer, pledge, hypothecate or otherwise
dispose of any RUs contrary to the provisions hereof, and any attempt to levy
any attachment or pursue any similar process with respect to them, shall be
null and void.  Any RUs issued to the
Holder and otherwise vested will continue to remain subject to any restrictions
on transfer set forth in the Company’s Operating Agreement (as amended and
restated from time to time) or as otherwise agreed to by the Holder.


3.                                       Vesting of
RUs.


(a)                                  Normal
Vesting.  The RUs issued pursuant to the Earnings
Criteria shall vest upon satisfaction of the 
Vesting Criteria, on the dates specified in the Schedule at the
beginning of this Agreement.  Once such
RUs have vested, they shall no longer be 



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subject
to forfeiture under Section 2 of this Agreement, and will not be subject to any
further restrictions under this Agreement.


(b)                                 Accelerated
Vesting.  In
the event of a Fundamental Change the Committee may, but shall not be obligated
to:


(i)                                     if the Fundamental Change is a merger or
consolidation or statutory unit exchange, make appropriate provision for the protection of the RUs by the substitution
for these RUs of membership units or restricted voting membership units or
common stock of the company surviving any merger or consolidation or, if
appropriate, the parent company of the Company or such surviving company; or


(ii)                                  at least ten days before the occurrence of
the Fundamental Change, declare, and provide written notice to the Holder of
the declaration, that RUs shall vest for the maximum number of RUs as if both
the Earnings Criteria and the Vesting Criteria had been satisfied immediately
before the occurrence of the Fundamental Change.


“Fundamental Change” means a dissolution or liquidation of
the Company, a sale of substantially all of the assets of the Company, a merger
or consolidation of the Company with or into any other company, regardless of
whether the Company is the surviving company, or a statutory unit exchange
involving equity securities of the Company; provided, that the primary purpose
of such transaction is not to change the state of organization of the Company.


(c)                                  Change in Control.  In
the event of (i) a Change in Control and (ii) the Employee’s employment with
the Company or its successor is terminated by the Company or its successor
within one year after consummation of the Change in Control transaction, then,
without any action by the Committee or the Board, or their successors, each RU
issued shall, immediately before the effective time, vest.


(d)                                 Discretionary Acceleration. 
Notwithstanding any other provisions of this Agreement to the contrary,
the Committee may, in its sole discretion, declare at any time that RUs shall
be issued and vest as if all Earnings Criteria and Vesting Criteria for the
maximum number of RUs has been satisfied.


(e)                                  Death or Disability.  If
the Employee’s employment or other relationship with the Company and its
affiliates terminates prior to the date any RUs issued under this Agreement
have vested, the Company will treat the Vesting Criteria as also having been
satisfied.


(f)                                    Mechanics
of Issuance.  Each
RU will be evidenced by a duly issued unit certificate (which may represent
more than one RU) registered in the name of the Holder.  The Holder will have all rights of a member
of the Company with respect to each RU (including the right to receive dividends
and other distributions, if any).  Each
certificate evidencing any RU may contain such legends and transfer 



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instructions
or limitations as may be determined or authorized by the Company in its sole
discretion or as otherwise required under the Company’s Operating Agreement.


4.                                       Representations,
Warranties and Covenants of Holder.  Holder
represents, warrants and covenants to the Company as follows:


(a)                                  Charter
Documents.  Holder is a corporation duly organized, validly existing and in corporate good
standing under the laws of the state of Minnesota.


(b)                                 Sole Stockholder. 
Revis L. Stephenson III is the sole stockholder, director and executive
officer of Holder.  Without the Company’s
prior written consent, Holder will not change its ownership or management
structure so that any person or entity other than Revis L. Stephenson III will
be a stockholder, director or officer of Holder.


(c)                                  Corporate Authority. 
Holder has all corporate power and authority to enter into and to
perform its obligations under this Agreement. 
This Agreement constitutes the legal, valid and binding obligation of
Holder, enforceable against Holder in accordance with its terms, subject to
(a) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, and (b) rules of law governing specific performance,
injunctive relief and other equitable remedies.


5.                                       Tax
Withholding.  The parties hereto
recognize that the Company or a subsidiary of the Company may be obligated to
withhold federal and state taxes or other taxes upon the issuance of the RUs.  The Holder agrees that, at such time, if the
Company or a subsidiary is required to withhold such taxes, the Holder will
promptly pay, in cash upon demand to the Company or the subsidiary having such
obligation, such amounts as shall be necessary to satisfy such obligation.  The
Holder further acknowledges that the Company has directed the Holder and the
Employee to seek independent advice regarding the applicable provisions of the
Internal Revenue Code of 1986, and the income tax laws of any municipality,
state or foreign country in which the Holder or the Employee may reside or in
which the Company does business.


6.                                       Restrictive Legends and
Stop-Transfer Orders.


(a)                                  Legends.  The
certificate or certificates representing the RUs shall bear the following legend
(as well as any legends required by applicable state and federal limited
liability company and securities laws) noting the existence of the restrictions
and the Company’s rights set forth in this Agreement:


“THE UNITS REPRESENTED BY
THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A
RESTRICTED UNIT AGREEMENT BETWEEN THE COMPANY AND THE HOLDER, A COPY OF WHICH
IS ON FILE WITH THE SECRETARY OF THE COMPANY.”


(b)                                 Stop-Transfer Notices.  The Holder agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate “stop 



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transfer”
instructions to its transfer agent, if any, and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect in its
own records.


(c)                                  Refusal to Transfer.  The
Company shall not be required (i) to transfer on its books any RUs that
have been sold or otherwise transferred in violation of any of the provisions
of this Agreement or (ii) to treat as owner of the RUs or to accord the
right to vote or pay dividends to any purchaser or other transferee to whom the
RUs shall have been so transferred.


7.                                       Interpretation
of this Agreement.  All decisions
and interpretations made by the Committee with regard to any question arising
hereunder shall be binding and conclusive upon the Company, the Holder and the
Employee.


8.                                       Discontinuance
of Employment.  This Agreement shall not give
the Employee a right to continued employment with the Company or any parent or
subsidiary of the Company, and the Company or any such parent or subsidiary
employing the Employee may terminate his or her employment at any time and
otherwise deal with the Employee without regard to the effect it may have upon
him or her under this Agreement.  From
and after the termination of employment of the Employee, the Holder will no
longer be entitled to be issued any RUs under this Agreement.


9.                                       Discretionary
Adjustment.  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 company structure or Units of the Company, the Committee
(or if the Company does not survive any such transaction, a comparable
committee of the board of directors of the surviving company) may, without the
consent of the Holder, make such adjustment as it determines in its discretion
to be appropriate as to the number and kind of securities subject to and
reserved under this Agreement and, in order to prevent dilution or enlargement
of rights of the Holder, the number and kind of securities issuable upon lapse
of the forfeiture restrictions of the RUs.


10.                                 Binding
Effect.  This Agreement shall be binding in all respects
on the heirs, representatives, successors and assigns of the Holder.


11.                                 Choice of
Law.  This Agreement is entered into under the laws of the
State of Delaware and shall be construed and interpreted thereunder (without
regard to its conflict of law principles).


12.                                 Entire
Agreement.  This Agreement, together with
the Employment Agreement, sets forth the entire agreement and understanding of
the parties hereto with respect to the issuance of the RUs and supersedes all
prior agreements, arrangements, plans, and understandings relating to the
issuance of these RUs.  In the event of a
conflict between the provisions of Section 4(c) of the Employment Agreement and
this Agreement, the provisions of this Agreement will govern.



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13.                                 Amendment
and Waiver.  This Agreement may be amended,
waived, modified, or canceled only by a written instrument executed by the
parties or, in the case of a waiver, by the party waiving compliance.


14.                               RUs Subject to Articles of
Organization and Operating Agreement.  The Holder acknowledges that
the RUs granted under this Agreement are subject to the Company’s Articles of
Organization, as amended from time to time, and the Company’s operating
agreement, as amended from time to time, and any applicable federal or state
laws, rules or regulations.  The Holder
acknowledges and agrees that the Holder will become a party to the Company’s
operating agreement, as currently in effect, if such Holder is not already a
party to that agreement.


15.                                 Section 409A.  Notwithstanding anything in this Agreement to
the contrary, any payments hereunder that would be subject to an additional or
accelerated tax under Section 409A of the Internal Revenue Code of 1986 shall
be adjusted to the minimum extent necessary that such payments may be made
without the imposition of such tax.


16.                                 Capital
Account Balance.  The parties
specifically acknowledge that the RUs issued under this Agreement will have an
initial capital account balance of $0, which is consistent with the parties
understanding that that the Holder’s initial interest will be a “profit
interest.”


(remainder of this page intentionally left blank)



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IN WITNESS WHEREOF, the Holder and the Company have
executed this Agreement as of the 7th day of November, 2006.


	
   

  	
   

  	
  STEPHENSON HOLDINGS, INC.,

  
	
   

  	
   

  	
  a Minnesota corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Revis L. Stephenson III

  	
   

  
	
   

  	
   

  	
  Revis L. Stephenson III

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ADVANCED BIOENERGY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
  /s/ Larry L. Cerny

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Larry L. Cerny

  	
   

  
	
   

  	
   

  	
  Its:

  	
   Secretary

  	
   

  
							



 



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