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Exhibit 10.11  

 
 

Second Amended and Restated
  Basic Energy Services, Inc.
  2003 Incentive Plan    
    

SECTION 1. Purpose of the Plan.  

        The Second Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan (the "Plan") is intended to
promote the interests of Basic Energy Services, Inc. (formerly named BES Holding Co.), a Delaware corporation (the "Company"), by encouraging
officers, employees, directors and consultants of the Company and its Affiliates to acquire or increase their equity interest in the Company and to provide a means whereby they may develop a sense of
proprietorship and personal involvement in the development and financial success of the Company, and to encourage them to remain with and devote their best efforts to the business of the Company
thereby advancing the interests of the Company and its stockholders. The Plan is also contemplated to enhance the ability of the Company and its Affiliates to attract and retain the services of
individuals who are essential for the growth and profitability of the Company. 

        Effective
as of the effective date of the Plan as set forth in Section 10 hereunder, all outstanding stock options and other Awards granted under the Plan (including Awards
previously assumed by the Company under predecessor plans) prior to this amendment and restatement, are assumed and continued hereunder. All outstanding Awards that are assumed and continued under
this Plan, as amended and restated, shall remain subject to their individual Award Agreements for each such outstanding Award. 

SECTION 2. Definitions.  

        As used in the Plan, the following terms shall have the meanings set forth below: 

        "Affiliate" shall mean (i) any entity in which the Company, directly or indirectly, owns 50% or more of the combined voting power,
as determined by the Committee, (ii) any "parent corporation" of the Company (as defined in Section 424(e) of the Code) and
(iii) any "subsidiary corporation" of any such parent (as defined in Section 424(f) of the Code) thereof. 

        "Award" shall mean any Option, Restricted Stock, Performance Award, Phantom Shares, Bonus Shares, Other Stock-Based Award or Cash Award. 

        "Award Agreement" shall mean any written or electronic agreement, contract, or other instrument or document evidencing any Award, which
may, but need not, be executed or acknowledged by a Participant. 

        "Board" shall mean the Board of Directors of the Company. 

        "Bonus Shares" shall mean an award of Shares granted pursuant to Section 6(d) of the Plan. 

        "Cash Award" shall mean an award payable in cash granted pursuant to Section 6(f) of the Plan. 

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        "Change in Control" shall mean the occurrence of any one of the following: 

        (a)   the
consummation of any transaction (including without limitation, any merger, consolidation, tender offer, or exchange offer) the result of which is that any individual
or "person" (as such term is used in Sections 13(d)(3) and 14(d)(2), of the Securities Exchange Act of 1934 (the "Exchange
Act")), other than (i) Southwest Royalties Holdings, Inc. and its "affiliates" (as such term is defined in
Rule 144 under the Exchange Act), (ii) Credit Suisse First Boston Corporation and its "affiliates" (as such term is defined in
Rule 144 under the Exchange Act), (iii) the Company or any Affiliates controlled by the Company, (iv) any employee benefit plan of the Company or any of its Affiliates or
(v) an underwriter temporarily holding securities pursuant to an offering of such securities, becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of securities of the Company representing 40% or more of the combined voting
power of the Company's then-outstanding securities; 

        (b)   the
individuals who, as of the effective date of the Plan, constitute the Board (the "Incumbent Board"), cease for any
reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either (i) an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act), or an actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board, or (ii) a plan or agreement to replace a majority of the members of the Board then comprising the Incumbent Board; 

        (c)   the
sale, lease, transfer, conveyance or other disposition (including by merger or consolidation) in one or a series of related transactions, of all or substantially all
of the assets of the Company to an unrelated person; or 

        (d)   the
adoption of a plan relating to the liquidation or dissolution of the Company. 

        Solely
with respect to any Award that is subject to Section 409A of the Code, this definition is intended to comply with the definition of change in control under
Section 409A of the Code as in effect commencing January 1, 2005 and, to the extent that the above definition does not so comply, such definition shall be void and of no effect and, to
the extent required to ensure that this definition complies with the requirements of Section 409A of the Code, the definition of such term set forth in regulations or other regulatory guidance
issued under Section 409A of the Code by the appropriate governmental authority is hereby incorporated by reference into and shall form part of this Plan as fully as if set forth herein
verbatim and the Plan shall be operated in accordance with the above definition of Change in Control as modified to the extent necessary to ensure that the above definition complies with the
definition prescribed in such regulations or other regulatory guidance insofar as the definition relates to any Award that is subject to Section 409A of the Code. 

        "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations thereunder. 

        "Committee" shall mean the committee appointed by the Board to administer the Plan or, if none, the Board. 

        "Company" shall mean the corporation described in Section 1 of the plan. 

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        "Consultant" shall mean any individual, other than a Director or an Employee, who renders consulting or advisory services to the Company
or an Affiliate for a fee. 

        "Covered Person" shall mean any of the Chief Executive Officer of the Company and the four (4) highest paid officers of the Company
other than the Chief Executive Officer as described in Section 162(m)(3) of the Code. 

        "Director" shall mean a "non-employee director" of the Company, as defined in
Rule 16b-3. 

        "Employee" shall mean any employee of the Company or an Affiliate. 

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 

        "Fair Market Value" shall mean, with respect to Shares, the fair market value determined in good faith by the Committee, which may be
conclusively deemed by the Committee to be the closing sales price (or, if applicable, the highest reported bid price) of a Share on the applicable date (or if there is no trading in the Shares on
such date, on the next preceding date on which there was trading) as reported in The Wall Street Journal (or other reporting service approved by the
Committee). If the Shares are not publicly traded at the time a determination of its fair market value is required to be made hereunder, the determination of fair market value shall be made in good
faith by the Committee. 

        "Option" shall mean an option granted under Section 6(a) of the Plan. Options granted under the Plan may constitute
"incentive stock options" for purposes of Section 422 of the Code or nonqualified stock options that are not intended to satisfy the requirements
of Section 422 of the Code. 

        "Other Stock-Based Award" shall mean an award granted pursuant to Section 6(g) of the Plan that is not otherwise specifically
provided for, the value of which is based in whole or in part upon the value of a Share. 

        "Participant" shall mean any Director, Employee or Consultant granted an Award under the Plan. 

        "Performance Award" shall mean any right granted under Section 6(c) of the Plan. 

        "Performance Objectives" means the objectives, if any, established by the Committee that are to be achieved with respect to an Award
granted under this Plan, which may be described in terms of Company-wide objectives, in terms of objectives that are related to performance of a division, subsidiary, department or
function within the Company or a subsidiary in which the Participant receiving the Award is employed or in individual or other terms, and which will relate to the period of time determined by the
Committee. The Performance Objectives intended to qualify under Section 162(m) of the Code shall be with respect to one or more of the following: (i) net earnings; (ii) operating
income; (iii) earnings before interest and taxes ("EBIT"); (iv) earnings before interest, taxes, depreciation, and amortization expenses
("EBITDA"); (v) earnings before taxes and unusual or nonrecurring items; (vi) net income before interest, income and franchise taxes,
depreciation and amortization expenses, and any unusual or non-recurring non-cash expenses or income ("Company EBITDA");
(vii) revenue; (viii) return on investment; (ix) return on equity; (x) return on total capital; (xi) return on assets; (xii) total stockholder return;
(xiii) return on capital employed in the business; (xiv) stock price performance; (xv) earnings per share growth; and (xvi) cash flows. Which objectives to use with respect
to an Award, the weighting of the objectives if more than one is used, and whether the objective is to be measured against a Company-established budget or target, an index or a peer group of
companies, shall be determined by the Committee in its discretion at the time of grant of the Award. A Performance Objective need not be based on an increase or a positive result under a particular
business criterion and may include, for example, maintaining the status quo or limiting economic losses. 

        "Person" shall mean individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, government
or political subdivision thereof or other entity. 

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        "Phantom Shares" shall mean an Award of the right to receive Shares issued at the end of a Restricted Period which is granted pursuant to
Section 6(e) of the Plan. 

        "Plan" shall mean the plan described in Section 1 of the Plan and set forth in this document, as amended from time to time. 

        "Restricted Period" shall mean the period established by the Committee with respect to an Award during which the Award either remains
subject to forfeiture or is not exercisable by the Participant. 

        "Restricted Stock" shall mean any Share, prior to the lapse of restrictions thereon, granted under Sections 6(b) of the Plan. 

        "Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the Exchange Act, or any successor
rule or regulation thereto as in effect from time to time. 

        "SEC" shall mean the Securities and Exchange Commission, or any successor thereto. 

        "Shares" or "Common Shares" or "Common
Stock" shall mean the common stock of the Company, $.01 par value, and such other securities or property as may become the subject of Awards under the Plan. 

        "Termination for Cause" shall mean, unless eliminated or otherwise defined by the Committee in a Participant's Award, the occurrence of
any of the following events: 

          (i)  the
commission by Participant of a material act of willful misconduct including, but not limited to, the willful violation of any material law, rule, regulation or
cease and desist order applicable to Participant or the Company (other than a law, rule or regulation relating to a minor traffic violation or similar offense), or an act which constitutes a breach of
a fiduciary duty owed to the Company by Participant involving personal profit; 

         (ii)  the
commission by Participant of an act of dishonesty relating to the performance of Participant's duties, habitual unexcused absence from work, willful failure to
perform duties in any material respect (other than any such failure resulting from Participant's incapacity due to physical or mental illness or disability), or gross negligence in the performance of
duties resulting in material damage or injury to the Company, its reputation or goodwill (provided, however, that in the event of Participant's willful failure to perform duties in any material
respect, Participant shall be provided with written notice of such event and shall be provided with a reasonable opportunity, and in no event more than 30 days, to cure such failure to perform
his duties); or 

        (iii)  any
felony conviction of Participant or any conviction involving dishonesty, fraud or breach of trust (other than for a minor traffic violation or similar offense),
whether or not in the line of duty. 

        "Termination for Good Reason" shall mean, unless eliminated or otherwise defined by the Committee in a Participant's Award, any
nonconsentual (i) material reduction in the Participant's authority, duties or responsibilities; (ii) reduction in the Participant's compensation by more than 20 percent from the
compensation (excluding Awards pursuant to this Plan or other stock-based compensation) paid by the Company during the completed fiscal year prior to the Change of Control; or (iii) change
caused by the Company in the Participant's office location of more than 35 miles from its location on the date of the Change in Control; provided, however, that the Participant terminates his
employment with the Company and its Affiliates hereunder within 120 days following the date on which the Participant has actual notice of the event that gives rise to the Termination for Good
Reason. 

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SECTION 3. Administration.  

        (a)   General. The Plan shall be administered by the Committee. Should any class of Common Stock be registered under
Section 12(g) of the Exchange Act, the Committee shall be composed of not less than two (2) members of the Board, each of whom shall meet the definition of
"nonemployee director" for purposes of Rule 16b-3 promulgated by the SEC under the Exchange Act and an
"outside director" under Section 162(m) of the Code. A majority of the Committee shall constitute a quorum, and the acts of a majority of the
members of the Committee who are present at any meeting thereof at which a quorum is present, or the acts unanimously approved by the members of the Committee in writing, shall be the acts of the
Committee. 

        (b)   Committee Authority. Subject to the terms of the Plan and applicable law, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be
granted to a Participant; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards;
(iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to an Award made
under the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and
(ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan; provided, however, the Committee shall not take
any action otherwise authorized under this Section 3(b) to the extent that (i) such action would cause (A) the application of Section 162(m) or 409A of the Code to the
Award or (B) create adverse tax consequences under Section 162(m) or 409A of the Code should either or both of those Code sections apply to the Award or (ii) materially reduce the
benefit to the Participant without the consent of the Participant. No member of the Committee shall vote or act upon any matter relating solely to himself and grants of Awards to members of the
Committee must be ratified by the Board. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or
any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any
Participant, any holder or beneficiary of any Award, any stockholder and any Employee. No member of the Board or Committee shall be liable for any action or determination made in good faith with
respect to the Plan or any Award granted hereunder and the members of the Board and Committee shall be entitled to indemnification and reimbursement by the Company and its Affiliates in respect of any
claim, loss, damage or expense (including legal fees) arising therefrom to the full extent permitted by law. 

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SECTION 4. Shares Available for Awards.  

        (a)   Shares Available. Subject to adjustment as provided in Section 4(c), the aggregate number of Shares with respect
to which Awards may be granted under the Plan shall be up to 1,000,000 Shares. Except for withholding of Shares for payment of taxes or exercise price, if any Award is exercised, paid, forfeited,
terminated or canceled without the delivery of Shares, then the Shares covered by such Award, to the extent of such payment, exercise, forfeiture, termination or cancellation, shall again be Shares
with respect to which Awards may be granted. Awards will not reduce the number of Shares that may be issued pursuant to the Plan if the settlement of the Award will not require the issuance of Shares,
as, for example, an Other Stock-Based Award that can be satisfied only by the payment of cash. 

        (b)   Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part,
of authorized and unissued Shares or of treasury Shares and shall be fully paid and nonassessable. 

        (c)   Adjustments. In the event that the Committee determines that any dividend or other distribution (whether in the form of
cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction
or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or property) with
respect to which Awards may be granted, (ii) the maximum number and type of Shares (or other securities or property) with respect to which Awards may be granted to any single individual during
any calendar year, (iii) the number and type of Shares (or other securities or property) subject to outstanding Awards, and (iv) the grant or exercise price with respect to any Award or,
if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award. 

SECTION 5. Eligibility.  

        Any Employee, Director or Consultant shall be eligible to be designated a Participant and receive an Award under the Plan. 

SECTION 6. Awards.  

        (a)   Options. Subject to the provisions of the Plan, the Committee shall have the authority to determine the Participants to
whom Options shall be granted, the number of Shares to be covered by each Option, the purchase price therefor and the conditions and limitations applicable to the exercise of the Option, including the
following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan. 

          (i)  Exercise Price. The purchase price per Share purchasable under an Option shall be determined by the Committee at the
time the Option is granted, but shall not be less than the Fair Market Value per Share on such grant date. 

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         (ii)  Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in
whole or in part (which may include the achievement of one or more Performance Objectives), and the method or methods by which, and the form or forms, in which payment of the exercise price with
respect thereto may be made or deemed to have been made (which may include, without limitation, cash, check acceptable to the Company, Shares held for the period required to avoid a charge to the
Company's reported financial earnings and owned free and clear of any liens, claims, encumbrances or security interests, outstanding Awards, a
"cashless-broker" exercise (through procedures approved by the Committee and the Company), other securities or other property, notes approved by the
Committee, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price); provided, however, in
order to exercise an Option, the Person or Persons entitled to exercise the Option shall deliver to the Company payment in full for the Shares being purchased and, unless other arrangements have been
made with, or procedures have been established and approved by, the Committee, any required withholding taxes. 

        (iii)  Incentive Stock Options. The terms of any Option granted under the Plan intended to be an incentive stock option shall
comply in all respects with the provisions of Section 422 of the Code, or any successor provision, and any regulations promulgated thereunder. Incentive stock options may be granted only to
employees of the Company and its parent corporation and subsidiary corporations, within the meaning of Section 424 of the Code while each such entity is a "Corporation" described in
Section 7701(a)(3) of the Code and Treas. Reg. Section 1.421-1(i)(1). To the extent the aggregate Fair Market Value of the Shares (determined as of the date of grant) of an
Option to the extent exercisable for the first time during any calendar year (under all plans of the Company and its parent and subsidiary corporations) exceeds $100,000, such Option Shares in excess
of $100,000 shall be nonqualified stock options. No Option that is an incentive stock option shall be exercisable after the expiration of 10 years from its date of grant. Notwithstanding
anything herein to the contrary, in no event shall any person owning stock possessing more than 10% of the total combined voting power of the Company and its Affiliates be granted an incentive stock
option hereunder unless (1) the Option exercise price shall be at least 110% of the Fair Market Value of the Shares subject to such Option at the time the Option is granted and (2) the
term during which such Option is exercisable does not exceed five years from its date of grant. 

        (iv)  Limits. Subject to adjustment as provided in Section 4(c), the maximum number of Options that may be granted to
any Participant during any calendar year shall not exceed 100,000 Shares. 

        (b)   Restricted Stock. Subject to the provisions of the Plan, the Committee shall have the authority to determine the
Participants to whom Restricted Stock shall be granted, the number of Shares of Restricted Stock to be granted to each such Participant, the duration of the Restricted Period during which, and the
conditions, including Performance Objectives, if any, under which if not achieved, the Restricted Stock may be forfeited to the Company, and the other terms and conditions of such Awards. 

          (i)  Dividends. Dividends paid on Restricted Stock may be paid directly to the Participant, may be subject to risk of
forfeiture and/or transfer restrictions during any period established by the Committee or sequestered and held in a bookkeeping cash account (with or without interest) or reinvested on an immediate or
deferred basis in additional shares of Common Stock, which account or shares may be subject to the same restrictions as the underlying Award or such other restrictions, all as determined by the
Committee in its discretion. 

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         (ii)  Registration. Any Restricted Stock may be evidenced in such manner as the Committee shall deem appropriate, including,
without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of Restricted Stock granted under
the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted
Stock. 

        (iii)  Forfeiture and Restrictions Lapse. Except as otherwise determined by the Committee or the terms of the Award that
granted the Restricted Stock, upon termination of a Participant's employment (as determined under criteria established by the Committee) for any reason during the applicable Restricted Period, all
Restricted Stock shall be forfeited by the Participant and reacquired by the Company. Unrestricted Shares, evidenced in such manner as the Committee shall deem appropriate, shall be issued to the
holder of Restricted Stock promptly after the applicable restrictions have lapsed or otherwise been satisfied. 

        (iv)  Transfer Restrictions. During the Restricted Period, Restricted Stock will be subject to the limitations on transfer as
provided in Section 6(h)(i). 

         (v)  Limits. Subject to adjustment as provided in Section 4(c), the maximum number of Shares of Restricted Stock that
may be granted to any Participant during any calendar year shall not exceed 100,000 Shares. 

        (c)   Performance Awards. The Committee shall have the authority to determine the Participants who shall receive a Performance
Award, which shall be denominated as a cash amount (e.g., $100 per award unit) at the time of grant and confer on the Participant the right to receive payment of such Award, in whole or in part, upon
the achievement of such Performance Objectives during such performance periods as the Committee shall establish with respect to the Award. 

          (i)  Terms and Conditions. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine
the Performance Objectives to be achieved during any performance period, the length of any performance period, the amount of any Performance Award and the amount of any payment or transfer to be made
pursuant to any Performance Award. In the case of any Performance Award granted to a Covered Employee in any calendar year in which any class of Common Stock is registered under Section 12(g)
of the Exchange Act, performance goals shall be designed to be objective and shall otherwise meet the requirements of Section 162(m) of the Code and regulations issued thereunder (including
Treasury Regulation Section 1.162-27 and any successor regulation thereto), including the requirement that the level or levels of performance targeted by the Committee are such that
the achievement of performance goals is "substantially uncertain" at the time of grant. In addition, achievement of performance goals in respect of Performance Awards shall be measured over a
performance period of not less than six (6) months and not more than ten (10) years, as specified by the Committee. Performance goals in the case of any Performance Award granted to a
Covered Person in any year in which any class of Common Stock is registered under Section 12(g) of the Exchange Act shall be established not later than ninety (90) days after the
beginning of any performance period applicable to such Performance Award, or at such other date as may be required or permitted for "performance-based
compensation" under Section 162(m) of the Code. Subject to Section 8, the Committee shall not exercise discretion to increase any amount payable in respect of a
Performance Award which is intended to comply with Section 162(m) of the Code. 

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         (ii)  Payment of Performance Awards. Performance Awards, to the extent earned, shall be paid (in cash and/or in Shares, in the
sole discretion of the Committee) in a lump sum following the close of the performance period. Except as may otherwise be required under Section 409A of the Code, payment described in the
immediately preceding sentence shall be made by the later of (i) the date that is 21/2 months after the end of the Participant's first taxable year in which the Performance Award
is earned and payable under the Plan and (ii) the date that is 21/2 months after the end of the Company's first taxable year in which the Performance Award is earned and payable
under the Plan, and such payment shall not be subject to any election by the Participant to defer the payment to a later period. To the extent that settlement is to be made in Shares, the amount
payable under a Performance Award shall be divided by the FMV Per Share of Common Stock on the determination date and a stock certificate evidencing the resulting shares of Common Stock (to the
nearest full share) shall be delivered to the Participant, or his personal representative, and the value of any fractional shares will be paid in cash. 

        (iii)  Limits. The maximum value of Performance Awards that may be granted to any Participant during any calendar year shall
not exceed $500,000. 

        (d)   Bonus Shares. The Committee shall have the authority, in its discretion, to grant Bonus Shares to Participants. Each
Bonus Share shall constitute a transfer of an unrestricted Share to the Participant, without other payment therefor, as additional compensation for the Participant's services to the Company. Bonus
Shares shall be in lieu of a cash bonus that otherwise would be granted. 

        (e)   Phantom Shares. The Committee shall have the authority to grant Awards of Phantom Shares to Participants upon such terms
and conditions as the Committee may determine. 

          (i)  Terms and Conditions. Each Phantom Share Award shall constitute an agreement by the Company to issue or transfer a
specified number of Shares or pay an amount of cash equal to a specified number of Shares, or a combination thereof to the Participant in the future, subject to the fulfillment during the Restricted
Period of such conditions, including Performance Objectives, if any, as the Committee may specify at the date of grant. During the Restricted Period, the Participant shall not have any right to
transfer any rights under the subject Award, shall not have any rights of ownership in the Phantom Shares and shall not have any right to vote such shares. 

         (ii)  Dividends. Any Phantom Share award may provide that an amount equal to any or all dividends or other distributions paid
on Shares during the Restricted Period be credited in a cash bookkeeping account (without interest) or that equivalent additional Phantom Shares be awarded, which account or shares may be subject to
the same restrictions as the underlying Award or such other restrictions as the Committee may determine. 

        (iii)  Limits. Subject to adjustment as provided in Section 4(c), the maximum number of Phantom Shares that may be
granted to any Participant during any calendar year shall not exceed 100,000. 

        (iv)  Additional Limitations. Notwithstanding any other provision of this Section 6(e) to the contrary, any such
Phantom Shares Award granted under the Plan shall contain terms that (i) are designed to avoid application of Section 409A of the Code to the Award or (ii) are designed to avoid
adverse tax consequences under Section 409A of the Code should that Code section apply to the Award. 

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        (f)    Cash Awards. The Committee shall have the authority to determine the Participants to whom Cash Awards shall be granted,
the amount, and the terms or conditions, if any, as additional compensation for the Participant's services to the Company or its Affiliates. If granted, a Cash Award shall be granted (simultaneously
or subsequently) in tandem with another Award and shall entitle a Participant to receive a specified amount of cash from the Company upon such other Award becoming taxable to the Participant, which
cash amount may be based on a formula relating to the anticipated taxable income associated with such other Award and the payment of the Cash Award; provided, however, a Cash Award shall not be
granted in tandem or in combination with any other Award if that would (i) cause application of Section 409A of the Code to either Award or (ii) result in adverse tax consequences
under Section 409A of the Code should that Code section apply to either Award. 

        (g)   Other Stock-Based Awards. The Committee may also grant to Participants an Other Stock-Based Award, which shall consist of
a right which is an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares as is deemed by the Committee to be consistent with the
purposes of the Plan. Subject to the terms of the Plan, including the Performance Objectives, if any, applicable to such Award, the Committee shall determine the terms and conditions of any such Other
Stock-Based Award. Notwithstanding any other provision of the Plan to the contrary, any Other Stock-Based Award shall contain terms that (i) are designed to avoid application of
Section 409A of the Code or (ii) are designed to avoid adverse tax consequences under Section 409A should that Code section apply to such Award. Subject to adjustment as provided
in Section 4(c) insofar as that provision relates to Shares, the maximum number of Shares or value for which Other Stock-Based Awards may be granted to any Participant during any calendar year
shall not exceed 100,000 Shares, if the Award is in Shares, or $500,000, if the Award is in dollars. 

        (h)   General. 

          (i)  Limits on Transfer of Awards. 

	A.
	Except
as provided in (C) below, each Award, and each right under any Award, shall be exercisable only by the Participant during the Participant's lifetime, or by
the person to whom the Participant's rights shall pass by will or the laws of descent and distribution.

	B.
	Except
as provided in (C) below, no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the laws of descent and distribution (or, in the case of Restricted Stock, to the Company). Any such attempted or purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void, ineffective and unenforceable against the Company or any Affiliate, and shall give no right to the purported transferee,
and shall at the sole discretion of the Committee result in the forfeiture of the Award with respect to the Award involved in such attempted or perpetual transfer or encumbrance.

	C.
	Notwithstanding
anything in the Plan to the contrary, to the extent specifically provided by the Committee with respect to a grant, (1) a nonqualified stock option
may be transferred to immediate family members or related family trusts, or similar entities on such terms and conditions as the Committee may establish, and (2) an Award other than an
Incentive Stock Option may be transferred pursuant to a qualified domestic relations order described in Section 414(p) of the Code. 

10

 

         (ii)  Term of Awards. Subject to the terms of the Plan, the term of each Award shall be for such period as may be determined
by the Committee; provided, that in no event shall the term of any Award exceed a period of 10 years from the date of its grant. 

        (iii)  Share Certificates. All certificates for Shares or other securities of the Company delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other
requirements of the SEC, any stock exchange upon which such Shares or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such restrictions. 

        (iv)  Consideration for Grants. Awards may be granted for no cash consideration or for such consideration as the Committee
determines including, without limitation, such minimal cash consideration as may be required by applicable law. 

         (v)  Delivery of Shares or other Securities upon Payment by Participant of Consideration. No Shares or other securities shall
be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement is received by the Company. 

        (vi)  Section 409A Considerations. Notwithstanding any other provision of the Plan to the contrary, any Award granted
after December 31, 2004 shall contain terms that (i) are designed to avoid application of Section 409A of the Code to the Award or (ii) are designed to avoid adverse tax
consequences under Section 409A of the Code should that Code Section apply to the Award. 

SECTION 7. Amendment and Termination.  

        Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan: 

        (a)   Amendments to the Plan. Except as required by applicable law or the rules of the principal securities exchange or market
on which the shares are traded and subject to Section 7(b) below, the Board or the Committee may amend, alter, suspend, discontinue, or terminate the Plan without the consent of any
stockholder, Participant, other holder or beneficiary of an Award, or other Person. 

        (b)   Amendments to Awards. Subject to (d) below, the Committee may waive any conditions or rights under, amend any
terms of, or alter any Award theretofore granted, provided no change, other than pursuant to Section 7(c), in any Award shall reduce the benefit to Participant without the consent of such
Participant. In no event shall the Committee, if not the Board, take action without the approval of the Board that constitutes a "repricing" of an
Option for financial accounting purposes, and any Board-approved repricing shall be inoperative and ineffective unless and until approved by the stockholders. 

11

 

        (c)   Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. Subject to (d) below, the
Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4(c) of the Plan) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan; provided, that any such election would not (i) cause the application of Section 409A of the Code to the Award or (ii) create adverse
tax consequences under Section 409A of the Code should Section 409A apply to the Award. 

        (d)   Section 162(m). The Committee, in its sole discretion and without the consent of the Participant, may amend
(i) any stock-based Award to reflect (1) a change in corporate capitalization, such as a stock split or dividend, (2) a corporate transaction, such as a corporate merger, a
corporate consolidation, any corporate separation (including a spinoff or other distribution of stock or property by a corporation), any corporate reorganization (whether or not such reorganization
comes within the definition of such term in Section 368 of the Code), (3) any partial or complete corporate liquidation, or (4) a change in accounting rules required by the
Financial Accounting Standards Board and (ii) any Award that is not intended to meet the requirements of the performance based compensation exception to Section 162(m) of the Code, to
reflect a significant event that the Committee, in its sole discretion, believes to be appropriate to reflect the original intent in the grant of the Award. With respect to an Award that is subject to
Section 162(m) of the Code, subject to Section 8, the Committee (i) shall not take any action that would disqualify such Award as performance based compensation and
(ii) must first certify that the Performance Objectives, if applicable, have been achieved before the Award may be paid. 

SECTION 8. Change in Control.  

        (a)   Awards Granted on or Prior to March 1, 2005. Notwithstanding any other provision of this Plan to the contrary, in
the event of a Change in Control of the Company all outstanding Awards granted on or prior to March 1, 2005 shall automatically become fully vested immediately prior to such Change in Control
(or such earlier time as set by the Committee), all restrictions, if any, with respect to such Awards shall lapse, and all performance criteria, if any, with respect to such Awards shall be deemed to
have been met in full (at the highest level). 

        (b)   Awards Granted After March 1, 2005. With respect to Awards granted after March 1, 2005, notwithstanding any
other provision of this Plan to the contrary, in the event that a Participant's employment with the Company (or a successor) and all of its Affiliates terminates within 2 years after a Change
in Control of the Company and (i) such termination of employment was initiated by the Company (or a successor) other than for a Termination for Cause or (ii) such termination of
employment was initiated by a Participant after determining in the Participant's good faith reasonable judgment that the termination is a Termination for Good Reason, all such Awards of each affected
Participant shall become fully vested immediately prior to such Change in Control (or such earlier time as set by the Committee in the Participant's Award), all restrictions, if any, with respect to
such Awards shall lapse, and all performance criteria, if any, with respect to such Awards shall be deemed to have been met in full (at the highest level). Unless the Company survives as an
independent publicly traded company, all Options outstanding at the time of the events that give rise to each affected Participant's right to Change in Control benefits hereunder shall terminate and
the Optionee shall be paid, with respect to each Option, an amount in cash 

12

 

equal
to the excess of the Fair Market Value of a Share over the Option's exercise price (if the Option exercise price exceeds the Fair Market Value of a Share on such date, the Optionee shall be paid
an amount in cash equal to the lesser of $1.00 or the Black-Scholes value of the cancelled Option as determined in good faith by the Board), unless and except to the extent provision is made in
writing in connection with such Change in Control event or transaction for the continuation of the Plan and/or the assumption of the Options theretofore granted, or for the substitution for such
Options of new options covering the stock of a successor entity, or the parent or subsidiary thereof, with appropriate adjustments as to the number and kinds of shares and exercise prices, in which
event the Plan and Options theretofore granted shall continue as fully vested and immediately exercisable Options in the manner and under the terms so provided. 

SECTION 9. General Provisions.  

        (a)   No Rights to Awards. No Director, Employee, Consultant or other Person shall have any claim to be granted any Award.
There is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards, and the terms and conditions of Awards need not be the same with respect to each recipient. 

        (b)   Withholding. The Company or any Affiliate is authorized to withhold from any Award, from any payment due or transfer made
under any Award or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other securities, Shares that would otherwise be issued pursuant to such
Award, other Awards or other property) of any applicable taxes payable at the minimum statutory rate in respect of an Award, its exercise, the lapse of restrictions thereon, or any payment or transfer
under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes at the minimum statutory rate.
In addition, the Committee may provide, in an Award Agreement, that the Participant shall have the right to direct the Company to satisfy the Company's tax withholding obligation through the
"constructive" tender of already-owned Shares or the withholding of Shares otherwise to be acquired upon the exercise or payment of such Award. 

        (c)   No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in
the employ of the Company or any Affiliate. Further, the Company or an Affiliate may at any time dismiss a Participant from employment or other service relationship at any time, free from any
liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement. 

        (d)   Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan
shall be governed by and construed in accordance with the laws of the State of Delaware and applicable federal law. 

        (e)   Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. 

13

 

        (f)    Other Laws. The Committee may refuse to issue or transfer any Shares or other consideration under an Award if, acting in
its sole discretion, it determines that the issuance of transfer or such Shares or such other consideration might violate any applicable law or regulation or entitle the Company to recover the same
under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly
refunded to the relevant Participant, holder or beneficiary. 

        (g)   Unfunded Plan. Neither the Plan nor the Award shall create or be construed to create a trust or separate fund or funds.
Neither the Plan nor any Award shall establish any kind of a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a
right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or any Affiliate. 

        (h)   No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall
be canceled, terminated or otherwise eliminated. 

        (i)    Substitute Awards. Awards may be granted from time to time in substitution for similar awards held by employees or
directors of other corporations who become Employees or Directors of the Company or its Affiliates as the result of a merger or consolidation of such director or employee's employing corporation with
the Company or any Affiliate, or the acquisition by the Company or any Affiliate of the assets of such director or employee's employing corporation, or the acquisition by the Company or any Affiliate
of the stock of such director or employee's employing corporation. The terms and conditions of substitute Awards granted shall comport with the terms and conditions set forth in the Plan. 

        (j)    Shareholder Agreements. The Committee may condition the grant, exercise or payment of any Award upon such person entering
into a stockholders' agreement or repurchase agreement in such form as approved from time to time by the Board. 

        (k)   Gender, Tense and Headings. Whenever the context requires, words of the masculine gender used herein shall include the
feminine and neuter and words used in the singular shall include the plural. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. 

        (l)    No Guarantee of Tax Consequences. None of the Board, the Company nor the Committee makes any commitment or guarantee that
any federal, state or local tax treatment will apply or be available to any person participating or eligible to participate hereunder. 

        (m)  Section 162(m) Special Transition Rule. Should any class of Common Stock be registered under Section 12(g)
of the Exchange Act, the Plan is intended to qualify for the transition relief provided under Treasury Regulation §1.162-27(f). Accordingly, all compensation realized by
Participants in connection with Awards granted under the Plan within the reliance period described therein is intended to be exempt from the limitation on tax deductibility under Section 162(m)
of the Code. For purposes of the Plan, the reliance period will expire on the earlier of (i) the expiration of the Plan, (ii) a "material modification" of the Plan (within the meaning of
Treasury Regulation §1.162-27(h)(1)(iii)), (iii) the issuance of all Common Stock that has been allocated under the Plan, or (iv) the first meeting of
stockholders of the Company at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Common Stock is first registered under
Section 12(g) of the Exchange Act. 

14

 

SECTION 10. Effective Date of the Plan.  

        The Plan, as hereby amended and restated, shall be effective on the date it is approved and adopted by the Board, including with respect to all Awards granted on
or after March 1, 2005, except as otherwise provided in the Plan. 

SECTION 11. Term of the Plan.  

        No Award shall be granted under the Plan after the 10th anniversary of the earlier of the date this Plan is adopted by the Board or the date the Plan is approved
by the stockholders of the Company. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted prior to such termination, and the authority of the
Board or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award, shall extend beyond such termination date. 

15

QuickLinks

Second Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan<Page>

                                                                     Exhibit 4.2

                             ADVANCED BIOENERGY, LLC

                             SUBSCRIPTION AGREEMENT

                   Limited Liability Company Membership Units

                                 $10.00 PER UNIT

                   MINIMUM INVESTMENT OF 2,500 UNITS ($25,000)
                     100 UNIT INCREMENTS THEREAFTER ($1,000)

The undersigned subscriber, desiring to become a member of Advanced BioEnergy,
LLC ("Advanced BioEnergy"), a Delaware limited liability company, with its
principal place of business at 910 9th Street, Fairmont, Nebraska 68354, hereby
subscribes for the purchase of the membership interests of Advanced BioEnergy,
and agrees to pay the related purchase price, identified below.

A.   SUBSCRIBER INFORMATION. Please print your individual or entity name and
address. Joint subscribers should provide their respective names. Your name and
address will be recorded exactly as printed below.

   1.    Subscriber's Printed Name   ___________________________________________
   2.    Title, if applicable:       ___________________________________________
   3.    Subscriber's Address:
              Street                 ___________________________________________
              City, State, Zip Code  ___________________________________________
   4.    Email Address:              ___________________________________________

B.   NUMBER OF UNITS PURCHASED. You must purchase at least 2500 units. We
presently have 634,650 units outstanding. The maximum number of units to be sold
is 6,732,500.

          _____________

C.   PURCHASE PRICE. Indicate the dollar amount of your investment (minimum
investment is $25,000).

<Table>
<Caption>
      1. Total Purchase Price         =            2. 1st Installment          +           3. 2nd Installment
         --------------------                         ---------------                         ---------------
<S>                                         <C>                                       <C>
($10.00 Per Unit multiplied by the          (10% of the Total Purchase Price)         (90% of the Total Purchase
number in box B above.)                                                               Price)

____________________________________    =   _________________________________    +    _____________________________
</Table>

D.   GENERAL INSTRUCTIONS FOR SUBSCRIBERS:

You should read the Prospectus dated [DATE OF EFFECTIVENESS] (the "Prospectus")
in its entirety including exhibits for a complete explanation of an investment
in Advanced BioEnergy, LLC. To subscribe, you must:

INSTRUCTIONS IF YOU ARE SUBSCRIBING PRIOR TO THE COMPANY'S RELEASE OF FUNDS FROM
ESCROW: If you are subscribing prior to the Company's release of funds from
escrow, you must follow Steps 1 through 5 below:

     1.   Complete all information required in this Subscription Agreement, and
date and sign the Subscription Agreement on page 6 and the Member Signature Page
to our Amended and Restated Operating Agreement attached to this Subscription
Agreement as Exhibit A.

                                        1
<Page>

     2.   Immediately provide your personal (or business) check for the first
installment of ten percent (10%) of your investment amount made payable to
Geneva State Bank, escrow agent for Advanced BioEnergy LLC. You will determine
this amount in box C.2 on page 1 of this Subscription Agreement.

     3.   Execute the Promissory Note and Security Agreement on page 7 of this
Subscription Agreement evidencing your commitment to pay the remaining ninety
percent (90%) due for the Units that is attached to this Subscription Agreement
and grant Advanced BioEnergy, LLC a security interest in your Units.

     4.   Deliver each of the original executed documents referenced in Items 1
and 3 of these Instructions, together with your personal or business check
described in Item 2 of these Instructions to either of the following:

          Advanced BioEnergy, LLC            Geneva State Bank
          137 N. 8th Street                   Attn:  Aaron Schardt
          Geneva, Nebraska 68361             896 "G" Street
                                             Geneva, Nebraska  68361

     5.   Upon written notice from Advanced BioEnergy, LLC stating that its
sales of Units have exceeded the Minimum Offering amount of $33,662,500, you
must, within twenty (20) days secure an additional personal (or business) check
for the second installment of ninety percent (90%) of your investment amount
made payable to Geneva State Bank, escrow agent for Advanced BioEnergy, LLC in
satisfaction of the Promissory Note and Security Agreement. You will determine
this amount in box C.3 on page 1 of this Subscription Agreement. You must
deliver this check to the same address set forth above in Instruction 4 within
twenty (20) days of the date of Advanced BioEnergy's written notice. If you fail
to pay the second installment pursuant to the Promissory Note and Security
Agreement, Advanced BioEnergy shall be entitled to retain your first installment
and to seek other damages, as provided in the Promissory Note and Security
Agreement.

Your funds will be placed in Advanced BioEnergy's escrow account at Geneva State
Bank. The funds will be released to Advanced BioEnergy or returned to you in
accordance with the escrow arrangements described in the Prospectus. Advanced
BioEnergy may, in its sole discretion, reject or accept any part or all of your
subscription. If Advanced BioEnergy rejects your subscription, your Subscription
Agreement and investment will be promptly returned to you, plus nominal
interest, minus escrow fees. Advanced BioEnergy may not consider the acceptance
or rejection of your subscription until a future date near the end of this
offering.

INSTRUCTIONS IF YOU ARE SUBSCRIBING AFTER THE COMPANY'S RELEASE OF FUNDS FROM
ESCROW: If you are subscribing after the Company's release of funds from escrow,
you must follow Steps 1 through 3 below:

     1.   Complete all information required in this Subscription Agreement, and
date and sign the Subscription Agreement on page 6 and the Member Signature Page
to our Amended and Restated Operating Agreement attached to this Subscription
Agreement as Exhibit A.

     2.   Immediately provide your personal (or business) check for the entire
amount of your investment (as determined in Box C.1 on page 1) made payable to
"ADVANCED BIOENERGY, LLC."

     3.   Deliver the original executed documents referenced in Item 1 of these
Instructions, together with your personal or business check described in Item 2
of these Instructions to the following:

                      Advanced BioEnergy, LLC
                      137 N. 8th Street
                      Geneva, Nebraska 68361

     If you are subscribing after we have released funds from escrow and we
accept your investment, your funds will be immediately at-risk as described in
the Prospectus. Advanced BioEnergy may, in its sole discretion, reject or accept
any part or all of your subscription. If Advanced BioEnergy rejects your
subscription, your Subscription Agreement and investment will be returned to you
promptly, plus nominal interest, minus escrow fees. Advanced BioEnergy may not
consider the acceptance or rejection of your subscription until a future date
near the end of this offering.

                                        2
<Page>

YOU MAY DIRECT YOUR QUESTIONS TO ONE OF OUR DIRECTORS LISTED BELOW OR TO
ADVANCED BIOENERGY AT 402-268-3101.

<Table>
<Caption>
                       Director             Phone Number
                       --------             ------------
                  <S>                       <C>
                  John T. Porter            402-432-5247

                  Troy Otte                 402-362-3885

                  John E. Lovegrove         402-366-4484

                  Robert E. Bettger         402-268-3101

                  Larry L. Cerny            402-759-1165

                  Richard W. Hughes         402-759-4615

                  Keith E. Spohn            402-947-8061
</Table>

E.   ADDITIONAL SUBSCRIBER INFORMATION. The subscriber, named above, certifies
the following under penalties of perjury:

     1.   FORM OF OWNERSHIP. Check the appropriate box (one only) to indicate
          form of ownership. If the subscriber is a Custodian, Corporation,
          Partnership or Trust, please provide the additional information
          requested.

          / /  Individual
          / /  Joint Tenants with Right of Survivorship (Both signatures must
               appear on Page 6.)
          / /  Corporation, Limited Liability Company or Partnership (Corporate
               Resolutions, Operating Agreement or Partnership Agreement must be
               enclosed.)
          / /  Trust
                  Trustee's Name:__________________________________________
                  Trust Date:______________________________________________
          / /  Other: Provide detailed information in the space immediately
               below.
               ____________________________________________________________
               ____________________________________________________________
               ____________________________________________________________

     2.   SUBSCRIBER'S TAXPAYER INFORMATION. Check the appropriate box if you
          are a non-resident alien, a U.S. Citizen residing outside the United
          States or subject to backup withholding. Trusts should provide their
          taxpayer identification number. Custodians should provide the minor's
          Social Security Number. All individual subscribers should provide
          their Social Security Number. Other entities should provide their
          taxpayer identification number.

          / /  Check box if you are a non-resident alien
          / /  Check box if you are a U.S. citizen residing outside of the
               United States
          / /  Check this box if you are subject to backup withholding

          Subscriber's Social Security No.         ________________________
          Joint Subscriber's Social Security No    ________________________
          Taxpayer Identification No.              ________________________

     3.   MEMBER REPORT ADDRESS. If you would like duplicate copies of member
          reports sent to an address that is different than the address
          identified in section A, please complete this section.

          Address:     _______________________________________
                       _______________________________________

     4.   STATE OF RESIDENCE.

                                        3
<Page>

          State of Principal Residence:                ____________________
          State where driver's license is issued:      ____________________
          State where resident income taxes are filed: ____________________

          State(s) in which you have maintained your principal residence during
          the past three years:

<Table>
          <S>                    <C>                    <C>
          a                      b.                     c.
</Table>

     5.   SUITABILITY STANDARDS. You cannot invest in Advanced BioEnergy unless
          you meet one, or more, of the following suitability tests (a, b, or c)
          set forth below. Please review the suitability tests and check the
          box(es) next to the following suitability test that you meet. For
          husbands and wives purchasing jointly, the tests below will be applied
          on a joint basis.

          a.      I (We) are "Producers" as defined hereunder. For purposes of
                  this Subscription Agreement, a "Producer" is defined as a
                  person who is ONE of the following:

                  / /  A natural person or a fiduciary of a natural person who
                       regularly participates in physical labor, operations or
                       management in a farming operation and files Schedule F as
                       part of the person's annual income tax return.

                  / /  A person who owns at least 150 acres of agricultural land
                       and receives as rent a share of the crops or the animals
                       raised on the land.

                  / /  A duly authorized officer of a family farm corporation,
                       member or manager of a family farm limited liability
                       company, general manager of a family farm limited
                       partnership or trustee of a family trust actively engaged
                       in farming.

                  / /  A general partnership in which all the partners are
                       natural persons actively engaged in farming;

          b. / /  I (We) have annual income from whatever source of at least
                  $45,000 AND a net worth of at least $45,000, exclusive of
                  home, furnishings and automobiles; or

          c. / /  I (We) have a net worth of at least $100,000, exclusive of
                  home, furnishings and automobiles.

     6.   SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES. You must read and certify
          your representations and warranties and sign and date this
          Subscription Agreement.

          By signing below the subscriber represents and warrants to Advanced
          BioEnergy that he, she or it:

          a.   has received a copy of Advanced BioEnergy's Prospectus dated
               __________ and the exhibits thereto;
          b.   has been informed that the Units of Advanced BioEnergy are
               offered and sold in reliance upon a federal securities
               registration; Nebraska, South Dakota, Iowa, Texas, Wisconsin,
               Kansas and Florida securities registrations; and exemptions
               from securities registrations in various other states, and
               understands that the Units to be issued pursuant to this
               subscription agreement can only be sold to a person meeting
               requirements of suitability;
          c.   has been informed that the securities purchased pursuant to this
               Subscription Agreement have not been registered under the
               securities laws of any state other than the States of Nebraska,
               South Dakota, Iowa, Texas, Wisconsin, Kansas and Florida,
               and that Advanced BioEnergy is relying in part upon the
               representations of the undersigned Subscriber contained herein;
          d.   has been informed that the securities subscribed for have not
               been approved or disapproved by the Nebraska, South Dakota,
               Iowa, Texas, Wisconsin, Kansas and Florida Securities Departments
               or any other regulatory authority, nor has any regulatory
               authority passed upon the accuracy or adequacy of the Prospectus;
          e.   intends to acquire the Units for his/her/its own account without
               a view to public distribution or resale and that he/she/it has no
               contract, undertaking, agreement or arrangement to sell or
               otherwise transfer or dispose of any Units or any portion thereof
               to any other person;

                                        4
<Page>

          f.   understands that there is no present market for Advanced
               BioEnergy's membership units, that the membership units will not
               trade on an exchange or automatic quotation system, that no such
               market is expected to develop in the future and that there are
               significant restrictions on the transferability of the membership
               units;
          g.   has been encouraged to seek the advice of his legal counsel
               and accountants or other financial advisers with respect to the
               tax and other considerations relating to the purchase of units;
          h.   has received a copy of the Advanced BioEnergy Operating
               Agreement, dated February 18, 2005, and understands that upon
               closing the escrow by Advanced BioEnergy, the subscriber and the
               membership units will be bound by the provisions of the Operating
               Agreement which contains, among other things, provisions that
               restrict the transfer of membership units;
          i.   understands that the Units are subject to substantial
               restrictions on transfer under state securities laws along with
               restrictions in the Advanced BioEnergy Operating Agreement and
               agrees that if the membership units or any part thereof are sold
               or distributed in the future, the subscriber shall sell or
               distribute them pursuant to the terms of the Operating Agreement,
               and the requirements of the Securities Act of 1933, as amended,
               and applicable state securities laws;
          j.   meets the suitability test marked in Item 5 above and is capable
               of bearing the economic risk of this investment, including the
               possible total loss of the investment;
          k.   understands that Advanced BioEnergy will place a restrictive
               legend on any certificate representing any unit containing
               substantially the following language as the same may be amended
               by the Directors of Advanced BioEnergy in their sole discretion:

                  THE TRANSFERABILITY OF THE UNITS REPRESENTED BY THIS
                  CERTIFICATE IS RESTRICTED. SUCH UNITS MAY NOT BE SOLD,
                  ASSIGNED, OR TRANSFERRED, NOR WILL ANY ASSIGNEE, VENDEE,
                  TRANSFEREE, OR ENDORSEE THEREOF BE RECOGNIZED AS HAVING
                  ACQUIRED ANY SUCH UNITS FOR ANY PURPOSES, UNLESS AND TO THE
                  EXTENT SUCH SALE, TRANSFER, HYPOTHECATION, OR ASSIGNMENT IS
                  PERMITTED BY, AND IS COMPLETED IN STRICT ACCORDANCE WITH,
                  APPLICABLE STATE AND FEDERAL LAW AND THE TERMS AND CONDITIONS
                  SET FORTH IN THE AMENDED AND RESTATED OPERATING AGREEMENT AS
                  AGREED TO BY EACH MEMBER.

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
                  SOLD, OFFERED FOR SALE, OR TRANSFERRED IN THE ABSENCE OF
                  EITHER AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OF
                  1933, AS AMENDED, AND UNDER APPLICABLE STATE SECURITIES LAWS,
                  OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
                  TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES
                  ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE STATE SECURITIES
                  LAWS.

          l.   understands that, to enforce the above legend, Advanced BioEnergy
               may place a stop transfer order with its registrar and stock
               transfer agent (if any) covering all certificates representing
               any of the membership units;
          m.   has examined the information presented in the prospectus and
               exhibits and is competent to evaluate and establish that the
               investment is consistent with the subscriber's risk tolerance
               and investment goals such that the subscriber can bear the
               economic risk of the purchase of Units including the total loss
               of the undersigned's investment;
          n.   may not transfer or assign this subscription agreement, or any of
               the subscriber's interest herein;
          o.   has written his, her, or its correct taxpayer identification
               number under Item E.2 on this subscription agreement;
          p.   is not subject to back up withholding either because he, she or
               it has not been notified by the Internal Revenue Service ("IRS")
               that he, she or it is subject to backup withholding as a result
               of a failure to report all interest or dividends, or the IRS has
               notified him, her or it that he is no longer subject to backup
               withholding (Note this clause (p) should be crossed out if the
               backup withholding box in Item 2 is checked);

                                        5
<Page>

          q.   understands that execution of the attached Promissory Note and
               Security Agreement will allow Advanced BioEnergy or its assigns
               to pursue the obligor for payment of the amount due thereon by
               any legal means, including, but not limited to, acquisition of a
               judgment against the obligor in the event that the subscriber
               defaults on that Promissory Note and Security Agreement; and
          r.   Acknowledges that Advanced BioEnergy may retain possession of
               certificates representing subscriber's Units to perfect its
               security interest in those Units.

SIGNATURE OF SUBSCRIBER/JOINT SUBSCRIBER:

DATE:
          -----------------------------------

<Table>
<Caption>
INDIVIDUALS:                                                  ENTITIES:
     <S>                                                      <C>

-------------------------------------------------------       ---------------------------------------
     Name of Individual Subscriber (Please Print)             Name of Entity (Please Print)

-------------------------------------------------------       ---------------------------------------
     Signature of Individual                                  Print Name and Title of Officer

-------------------------------------------------------       ---------------------------------------
     Name of Joint Individual Subscriber (Please Print)       Signature of Officer

-------------------------------------------------------
     Signature of Joint Individual Subscriber
</Table>

ACCEPTANCE OF SUBSCRIPTION BY ADVANCED BIOENERGY, LLC:

Advanced BioEnergy, LLC hereby accepts the subscription for the above Units.

Dated this_________day of________________________, 200____.

ADVANCED BIOENERGY, LLC

By:
    ----------------------------------------------------

Its:
    ----------------------------------------------------

                                        6
<Page>

                     PROMISSORY NOTE AND SECURITY AGREEMENT

Date of Subscription Agreement: ___________________________________, 200__.
                                          $10.00 PER UNIT

        MINIMUM INVESTMENT OF 2,500 UNITS ($25,000), 100 UNIT INCREMENTS
                               THEREAFTER ($1,000)

_______________ Number of Units subscribed

_______________ Total Purchase Price ($10.00 per Unit multiplied by number of
Units subscribed)

___(________)__ Less Initial Payment (10% of Principal Amount)

_______________ Principal Balance

FOR VALUE RECEIVED, the undersigned hereby promises to pay to the order of
Advanced BioEnergy, LLC, a Delaware limited liability company ("Advanced
BioEnergy"), at its principal office located 910 9th Street, Fairmont, Nebraska
68354, or at such other place as required by Advanced BioEnergy, the Principal
Balance set forth above in one lump sum to be paid without interest within 20
days following the call of the Advanced BioEnergy Board of Directors, as
described in the Subscription Agreement. In the event the undersigned fails to
timely make any payment owed, the entire balance of any amounts due under this
full recourse Promissory Note and Security Agreement shall be immediately due
and payable in full with interest at the rate of 12% per annum from the due date
and any amounts previously paid in relation to the obligation evidenced by this
Promissory Note and Security Agreement may be forfeited at the discretion of
Advanced BioEnergy.

The undersigned agrees to pay to Advanced BioEnergy on demand, all costs and
expenses incurred to collect any indebtedness evidenced by this Promissory Note
and Security Agreement, including, without limitation, reasonable attorneys'
fees. This Promissory Note and Security Agreement may not be modified orally and
shall in all respects be governed by, construed, and enforced in accordance with
the laws of the State of Delaware.

The provisions of this Promissory Note and Security Agreement shall inure to the
benefit of Advanced BioEnergy and its successors and assigns, which expressly
reserves the right to pursue the undersigned for payment of the amount due
thereon by any legal means in the event that the undersigned defaults on
obligations provided in this Promissory Note and Security Agreement.

The undersigned waives presentment, demand for payment, notice of dishonor,
notice of protest, and all other notices or demands in connection with the
delivery, acceptance, performance or default of this Promissory Note and
Security Agreement.

The undersigned grants to Advanced BioEnergy, and its successors and assigns
("Secured Party"), a purchase money security interest in all of the
undersigned's Membership Units of Advanced BioEnergy now owned or hereafter
acquired. This security interest is granted as non-exclusive collateral to
secure payment and performance on the obligation owed Secured Party from the
undersigned evidenced by this Promissory Note and Security Agreement. The
undersigned further authorizes Secured Party to retain possession of
certificates representing such Membership Units and to take any other actions
necessary to perfect the security interest granted herein.

Dated:      , 200  .

<Table>
<Caption>
OBLIGOR/DEBTOR:                             JOINT OBLIGOR/DEBTOR:
<S>                                         <C>

-----------------------------------------   ------------------------------------
Printed or Typed Name of Joint Obligor      Printed or Typed Name of Obligor

By:                                         By:
    -------------------------------------       --------------------------------
    (Signature)                                 (Signature)

-----------------------------------------
Officer Title if Obligor is an Entity

-----------------------------------------

-----------------------------------------
</Table>

                                        7
<Page>

Address of Obligor

                                   EXHIBIT "A"

                              MEMBER SIGNATURE PAGE

                                 ADDENDA TO THE
              AMENDED AND RESTATED OPERATING AGREEMENT OF ADVANCED
                                 BIOENERGY, LLC

     The undersigned does hereby represent and warrant that the undersigned, as
a condition to becoming a Member in Advanced BioEnergy, LLC, has received a copy
of the Amended and Restated Operating Agreement dated May 19, 2005, and, if
applicable, all amendments and modifications thereto, and does hereby agree that
the undersigned, along with the other parties to the Amended and Restated
Operating Agreement, shall be subject to and comply with all terms and
conditions of said Amended and Restated Operating Agreement in all respects as
if the undersigned had executed said Amended and Restated Operating Agreement on
the original date thereof and that the undersigned is and shall be bound by all
of the provisions of said Amended and Restated Operating Agreement from and
after the date of execution hereof.

<Table>
<Caption>
INDIVIDUALS:                                    ENTITIES:
<S>                                                           <C>

--------------------------------------------------    ---------------------------------------
Name of Individual Member (Please Print)              Name of Entity (Please Print)

--------------------------------------------------    ---------------------------------------
Signature of Individual                               Print Name and Title of Officer

--------------------------------------------------    ---------------------------------------
Name of Joint Individual Member (Please Print)        Signature of Officer

--------------------------------------------------
Signature of Joint Individual Member
</Table>

AGREED AND ACCEPTED ON BEHALF OF THE
COMPANY AND ITS MEMBERS:

ADVANCED BIOENERGY, LLC

By:
    ----------------------------------------------

Its:
    ----------------------------------------------

                                        8

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