Document:

EXHIBIT
10.2

ADVANCED
BIOENERGY, LLC

Perry C.
Johnston

EMPLOYMENT
AGREEMENT

This Employment Agreement
(this “Agreement”) is entered into on July 7,
2007 (the “Execution Date”) by and between
Advanced BioEnergy, LLC, a Delaware limited liability company (the Company”), and Perry C. Johnston, a resident of California (“Employee”).

Background

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

B.            The Company desires to employ
Employee and Employee wishes to provide services to the Company, subject to the
terms and conditions set forth in this Agreement.

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

Agreement

1.              Employment.   Subject to all terms and conditions hereof,
the Company will employ Employee, and Employee will serve the Company and
perform services for the Company, until Employee’s employment terminates under
Section 11.  Employee’s employment will
commence on August 8, 2007 (“Effective Date”).

2.              Position and
Duties.

(a)           Position with the Company.  Employee will serve as Vice President,
General Counsel and Company Secretary and will perform such duties and
responsibilities as the Company’s Chief Executive Officer (“CEO”), the CEO’s designee, or the Company’s
Board of Directors (“Board”) may
assign to Employee from time to time. 
Employee’s employment hereunder will be based at the Company’s
headquarters located in the Minneapolis, Minnesota metropolitan area.

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

accept other employment or engage in other material business activity,
except as approved in writing by the Board. 
During his employment with the Company, Employee may participate in
charitable activities and personal investment activities to a reasonable
extent, and he may serve as a director of business and civic organizations as
approved by the Board, so long as such activities and directorships do not
interfere with the performance of his duties and responsibilities hereunder.

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

3.  Compensation.

(a)           Base Salary.  The Company will pay to Employee an annual
base salary of $200,000, less deductions and withholdings, which base salary
will be paid in accordance with the Company’s normal payroll policies and
procedures.  During each year after the
first year of Employee’s employment hereunder, the Board may review and may
increase Employee’s base salary in its sole discretion.

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

(c)           Expenses.  The Company will reimburse Employee for all
reasonable and necessary out-of-pocket business, travel and entertainment
expenses incurred by Employee in the performance of the duties and
responsibilities hereunder, subject to Employee’s providing receipts and
complying with the Company’s normal policies and procedures for expense
verification and documentation.

(d)          Vacation.  Employee will receive 15  business days paid vacation time off per
full calendar year, such time to be taken with the approval of the CEO or his
designee, at such times so as not to disrupt the operations of the
Company.  During the remainder of 2007,
Employee will receive 8  business
days of paid vacation time off.

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(e)           Annual Performance Bonus.  After September 30, 2007, for each complete
fiscal year that Employee is employed by the Company, Employee shall be
eligible for an annual bonus in an amount up to 25% of Employee’s base salary
during such fiscal year.  Employee’s  eligibility for any such bonus, and the
amount of any such bonus that is paid, shall be based upon and subject to
reasonable criteria established by the Board or a committee of the Board.  Any bonus earned by Employee for a fiscal
year shall be payable to Employee no later than 60 days following the fiscal
year for which the bonus was earned.

(f)             Restricted Units.  As soon as reasonably practicable after the
Effective Date, the Company will issue and grant to Employee 15,000 units representing
membership interests in the Company (the “Initial
Membership Units”).  The terms
and conditions of such grant will be as set forth in a Restricted Unit
Agreement in substantially the form attached as Exhibit A (the “Restricted Unit Agreement”). The terms of
the Restricted Unit Agreement governing such Initial Membership Units will
control over this Section 3(f).

(g)          Long-term Compensation Plan. The Board
is considering a plan to provide for long term equity incentive compensation
for employees, directors and consultants to the Company.  The plan is subject to final Board and
shareholder approval.  Employee will be
eligible to participate if and when such a plan becomes effective.

(h)        Relocation Package.  Employee will relocate his principal residence
to the Minneapolis, Minnesota metropolitan area as soon as reasonably
practicable, and in any event within 180 days, following the Effective
Date.  The Company will provide Employee
with a “relocation package” consisting of cash payments in the aggregate amount
of $125,000.  The Company will otherwise
have no obligations to reimburse Employee in connection with his relocation to
Minnesota.  The Company will pay $25,000
to Employee within three (3) business days of the Execution Date, $60,000 to
Employee within three (3) business days of the Effective Date, and the
remaining $40,000 within thirty (3) calendar days after the Effective
Date.   If Employee voluntarily resigns
his employment with the Company for any reason other than Good Reason (as
defined herein), or the Company terminates Employee’s employment with the
Company for abandonment or for Cause only as it is described in Sections 12
(d)(1), (2) or (3), in any case prior to the first anniversary of the Effective
Date, Employee will promptly repay Company any and all monies that have been
paid to Employee under this Section 3(h).

4.          Affiliates.  As used in this Agreement, “Affiliates” includes the Company and each corporation,
partnership, LLC or other entity that controls the Company, is controlled by
the Company, or is under common control with the Company (in each case “control”
meaning the direct or indirect ownership of 50% or more of all outstanding
equity interests).

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5.          Confidential
Information.  Except as permitted
by the Company, Employee will not at any time divulge, furnish or make
accessible to anyone or use in any way other than in the ordinary course of the
business of the Company or its Affiliates, any confidential, proprietary or
secret knowledge or information of the Company or its Affiliates that Employee
has acquired or will acquire about the Company or its Affiliates, whether
developed by Employee or by others, concerning (i) any trade secrets, (ii) any
confidential, proprietary or secret designs, programs, processes, formulae,
plans, devices or material (whether or not patented or patentable) directly or
indirectly useful in any aspect of the business of the Company or of its
Affiliates, (iii) any customer or supplier lists, (iv) any confidential,
proprietary or secret development or research work, (v) any strategic or other
business, marketing or sales plans, (vi) any financial data or plans, or (vii)
any other confidential or proprietary information or secret aspects of the
business of the Company or of its Affiliates. 
Employee acknowledges that the above-described knowledge and information
constitutes a unique and valuable asset of the Company and represents a
substantial investment of time and expense by the Company, and that any
disclosure or other use of such knowledge or information other than for the
sole benefit of the Company or its Affiliates would be wrongful and would cause
irreparable harm to the Company.  The
foregoing obligations of confidentiality will not apply to any knowledge or
information that (A) is now or subsequently becomes generally publicly known,
other than as a direct or indirect result of the breach of this Agreement, (B)
is independently made available to Employee in good faith by a third party who
has not violated a confidential relationship with the Company or its
Affiliates, or (C) is required to be disclosed by law or legal process.

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

7.          Non-Competition
and Non-Solicitation Agreements.

(a)           Agreement Not to Compete.  During Employee’s employment with the Company
or any Affiliates and for a period of twenty-four (24) consecutive months from
and after the date of termination of Employee’s employment, whether such
termination is with or without Cause, or whether such termination is at the
instance of Employee or the Company, Employee shall not, directly or
indirectly, within 100 miles of any existing facility or development site that
the Company or any of its Affiliates operates or contemplates operating during
the 12 months prior to the last day of Employee’s employment with the Company
and any of its Affiliates, own, manage, control, have any interest in,
participate in, lend his name to, act as consultant or advisor to or render
services (alone or in association with any other person, firm, corporation or
other business organization) for:

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(1)          any other person or entity engaged in an
ethanol production or co-production business; or

(2)          any other business in which the Company or
any of its Affiliates engages and the gross revenues from which constitute at
least 20% the Company’s or any of its Affiliates’ gross revenues.

For purposes
of this Section, Employee agrees not to engage in any such activity as a
proprietor, principal, agent, partner, officer, director, stockholder,
employee, member of any association, consultant, agent or otherwise.  Ownership by Employee, as a passive
investment, of less than 1.0% of the outstanding shares of capital stock of any
corporation listed on a national securities exchange or publicly traded in the
over-the-counter market will not constitute a breach of this 

Section 7(a).

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

(c)           Agreement Not to Solicit Customers and
Other Business Relations. During Employee’s employment with the Company or
any Affiliates and for a period of twenty-four (24) consecutive months from and
after the termination of Employee’s employment, whether such termination is
with or without cause, or whether such termination is at the instance of
Employee or the Company, Employee will not, directly or indirectly, solicit,
request, advise or induce any current or potential customer, supplier or other
business contact of the Company to cancel, curtail or otherwise adversely
change its relationship with the Company, in any manner or capacity, including
without limitation as a proprietor, principal, agent, partner, officer,
director, stockholder, employee, member of any association, consultant or
otherwise.

(d)          Acknowledgment.  Employee hereby acknowledges that the
provisions of this Section 7 are reasonable and necessary to protect the
legitimate interests of the Company and that any violation of this Section 7 by
Employee will cause substantial and irreparable harm to the Company to such an
extent that monetary damages alone would be an inadequate remedy
therefore.  Therefore, in the event that
Employee violates any provision of this Section 7, the Company shall be
entitled to an injunction, in addition to all the other 

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remedies it may have, restraining Employee
from violating or continuing to violate such provision.

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

8.              Patents,
Copyrights and Related Matters.

(a)           Disclosure and Assignment.  Employee shall immediately disclose to the
Company any and all improvements and inventions that Employee may conceive
and/or reduce to practice individually or jointly or commonly with others while
he is employed with the Company with respect to (i) any methods, processes or
apparatus concerned with the development, use or production of any type of
products, goods or services sold or used by the Company, and (ii) any type of
products, goods or services sold or used by the Company.  Employee also shall immediately assign,
transfer and set over to the Company his entire right, title and interest in
and to any and all of such inventions as are specified in this Section 8(a),
and in and to any and all applications for letters patent that may be filed on
such inventions, and in and to any and all letters patent that may issue, or be
issued, upon such applications.  In
connection therewith and for no additional compensation therefor, but at no
expense to Employee, Employee shall sign any and all instruments deemed
necessary by the Company for:

(1)          the filing and prosecution of any applications
for letters patent of the United States or of any foreign country that the
Company may desire to file upon such inventions as are specified in this
Section 8(a).

(2)          the filing and prosecution of any divisional,
continuation, continuation-in-part or reissue applications that the Company may
desire to file upon such applications for letters patent; and

(3)          the reviving, re-examining or renewing of any
of such applications for letters patent.

This Section 8(a) shall
not apply to any invention for which no equipment, supplies, facilities,
confidential, proprietary or secret knowledge or information, or other trade
secret information of the Company was used and that was developed entirely on
Employee’s own time, and (i) that does not relate (A) directly to the business
of the Company, or (B) to the Company’s actual or demonstrably anticipated
research or 

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development, or (ii) that
does not result from any work performed by Employee for the Company.

(b)          Copyrightable Material.   All right, title and interest in all
copyrightable material that Employee shall conceive or originate individually
or jointly or commonly with others, and that arise during the term of his
employment with the Company and out of the performance of his duties and
responsibilities under this Agreement, shall be the property of the Company and
are hereby assigned by Employee to the Company, along with ownership of any and
all copyrights in the copyrightable material. 
Upon request and without further compensation therefor, but at no expense
to Employee, Employee shall execute any and all papers and perform all other
acts necessary to assist the Company to obtain and register copyrights on such
materials in any and all countries. 
Where applicable, works of authorship created by Employee for the
Company in performing his duties and responsibilities hereunder shall be
considered “works made for hire,” as defined in the U.S. Copyright Act.  

(c)           Know-How and Trade Secrets.  All know-how and trade secret information
conceived or originated by Employee that arises during the term of his
employment with the Company and out of the performance of his duties and
responsibilities hereunder or any related material or information shall be the
property of the Company, and all rights therein are hereby assigned by Employee
to the Company

9.              Return of Records
and Property.  Upon termination
of Employee’s employment or at any time upon the Company’s request, Employee
will promptly deliver to the Company any and all Company and Affiliate records
and any and all Company and Affiliate property in Employee’s possession or
under Employee’s control, including without limitation manuals, books, blank
forms, documents, letters, memoranda, notes, notebooks, reports, printouts,
computer disks, computer tapes, source codes, data, tables or calculations and
all copies thereof, documents that in whole or in part contain any trade
secrets or confidential, proprietary or other secret information of the Company
or its Affiliates and all copies thereof, and keys, access cards, access codes,
passwords, credit cards, personal computers, telephones and other electronic
equipment belonging to the Company or its Affiliates.

10.       Remedies.  Employee acknowledges that it would be
difficult to fully compensate the Company for monetary damages resulting from
any breach by him of the provisions hereof. 
Accordingly, in the event of any actual or threatened breach of any such
provisions, the Company will, in addition to any other remedies it may have, be
entitled to injunctive and other equitable relief to enforce such provisions,
and such relief may be granted without the necessity of proving actual monetary
damages.  In the event that a court of
competent jurisdiction concludes that Employee has violated Employee’s
obligations under Sections 5, 6, 7, 8 or 9 of this Agreement, Employee shall
also be liable to the Company for the reasonable costs and attorneys’ fees that
it incurs in any legal action in which it enforces its legal rights under those
paragraphs.

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

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

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

(c)          Employee’s Disability (as defined below); or

(d)         Employee’s death.

The date upon
which Employee’s termination of employment with the Company occurs is the “Termination Date”.  “Disability” means the inability of Employee to perform on a
full-time basis the duties and responsibilities of Employee’s employment with
the Company by reason of illness or other physical or mental impairment or
condition, if such inability continues for an uninterrupted period of 90 days
or for more than 90 complete days during any 12-month period.  Notwithstanding any other provision of this
Agreement, the Termination of Employee’s employment does not terminate Employee’s
other obligations under this Agreement.

12.       
Payments upon Termination of Employment.

(a)           Severance Pay.    If Employee’s employment with the Company
is terminated by the Company for any reason other than for “Cause” (as defined
below), or by Employee as a result of his resignation for Good Reason (as
defined below), then, subject to Section 12(b), Employee shall receive from
Company the following severance pay and benefits:

(1)         severance pay in an amount equal to 52  weeks of Employee’s base salary at the
time of termination, less applicable withholdings,

(2)           a pro rata portion of any annual performance
bonus (determined as set forth in Section 12(b)(3) that would have been payable
to him pursuant to Section 3(e) for the fiscal year in which the Termination
Date occurs, as if Employee had been in the employ of the Company for the full
fiscal year based on actual Company performance for such fiscal year, less applicable
withholdings; and

(3)           continuance of Employee’s and his family’s
then-applicable health, dental, disability and life insurance under the same
terms and conditions as then made available to other Company employees and
their families (the employer- and employee-portions being the same as for
then-current Company employees) for up to one year

 8
 

(b)         Limitations
on Severance Pay.  The obligations of
the Company and the rights of Employee under Section 12(a) are subject to the
following provisions:

(1)           Employee executes and does not rescind a
general release, in a form provided by the Company, of any claims related to
his employment with the Company and any Affiliates of the Company or the
termination of that employment (“General
Release”).

(2)           The severance pay shall be paid to Employee
in approximate equal installments in accordance with the Company’s regular
payroll schedule.  The first payment
shall be made on the second normal payroll date following expiration of the
period of time during which Employee may rescind the General Release.

(3)           The “pro rata” payment referred to in
Section 12(a)(2) shall be equal to the actual annual incentive bonus as
described therein multiplied by a fraction, the numerator of which is the
number of days of Employee’s employment in such fiscal year and the denominator
of which is 365.  Such payment shall be
made in the same manner and at the same time that annual incentive bonus
payments are made to current executive officers of the Company, but no earlier
than the expiration of all applicable rescission periods provided by law.

(4)           The Company shall be entitled to cease
providing health, dental, disability or life insurance benefits to Employee
after the Termination Date provided Employee becomes eligible for group health,
dental, disability or life insurance coverage (as applicable) from any other
employer.  For purposes of mitigation and
reduction of the Company’s financial obligations to Employee under Section
12(a), Employee shall promptly and fully disclose to the Company in
writing the fact that he has become eligible for comparable group health,
dental, disability or life insurance coverage from any other such employer, and
Employee shall be liable to repay any amounts to the Company that should have
been so mitigated or reduced but for Employee’s failure or unwillingness to
make such disclosure.

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

(c)           Wages Due.  The Company will pay to Employee, Employee’s
beneficiary or Employee’s estate, as the case may be, Employee’s base salary
through the Termination Date if Employee’s employment with the Company is
terminated by reason of:

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(1) Employee’s abandonment of Employee’s
employment or Employee’s resignation for any reason;

(2) termination of Employee’s employment by
the Company for Cause (as defined below); or

(3) Employee’s Disability or death.

(d) “Cause”
means:

(1)          an act of dishonesty undertaken by Employee
and intended to result in personal gain or enrichment of Employee or another at
the expense of the Company or its Affiliates;

(2)          unlawful conduct or gross misconduct by
Employee, whether on the job or off the job, that, in either event, is publicly
detrimental to the reputation or goodwill of the Company;

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

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

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

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

For the purposes
of this Section 12(d), no act or failure to act on Employee’s part shall be
considered “dishonest,” “willful” or “deliberate” unless done or omitted to be
done by Employee in bad faith and without reasonable belief that Employee’s
action or omission was in the best interests of the Company.  Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board shall be
conclusively presumed to be done, or omitted to be done, by Employee in good
faith and in the best interests of the Company.

(e) “Good
Reason” hereunder shall mean the occurrence of any one of the
following events:

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(1)          any material breach of
any material terms and conditions of this Agreement by the Company not caused
by Employee, which breach has not been cured by the Company within 30 days
after receipt of written notice to the Company from Employee specifying with
reasonable detail the reasons that Employee believes a material breach has
occurred, including any of the following occurrences which shall be deemed to
be a material breach by the Company if not so cured:

(A)  failure to pay when due Employee’s base
salary or bonus in accordance with Sections 3(a) or 3(e); and

(B) any material adverse
change in Employee’s position, title, or responsibilities;

 

(2)          the Company becomes a direct or indirect
subsidiary of any other business entity through direct or indirect ownership of
more than fifty percent (50%) of the voting securities of the Company by such
business entity (“Parent”), and
Employee is not Vice President, General Counsel and Company Secretary or
otherwise does not continue to hold an officer position of similar seniority
with either the Company or Parent;

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

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

provided, Good
Reason shall not include any occurrence in this Section 12(e) of which Employee
has consented in writing stating specifically that such occurrence shall not
constitute Good Reason for purposes of this Section 12(e).

(f)             In the event of termination of Employee’s
employment, the sole obligation of the Company under this Agreement will be its
obligation to make the payments called for by Sections 12(a)hereof, and the
Company will have no other obligation to Employee or to Employee’s beneficiary
or Employee’s estate, except as otherwise provided by law, the terms of any
other applicable written agreement between Employee and the Company, and/or the
terms of any employee benefit plan or program then maintained by the Company
and in which Employee participates.

(g)          Notwithstanding the foregoing provisions of
this Section 12, the Company will not be obligated to make any payments to
Employee under Section 12(a) unless Employee has signed a General Release of
any and all claims related to his employment in a form to be prescribed by the
Company, the period of time for rescinding the General Release has 

 11
 

expired, and Employee is in strict compliance with the terms of this
Agreement as of the date of each such payments.

13.       Miscellaneous.

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

(b)          Beneficiary.  If Employee dies before receiving all of the
amounts payable to him in accordance with the terms and conditions of this
Agreement, such amounts shall be paid to the beneficiary (“Beneficiary”) designated by Employee in
writing to the Company during his lifetime, or if no such Beneficiary is
designated, to Employee’s estate. 
Employee may change his designation of Beneficiary or Beneficiaries at
any time or from time to time without the consent of any prior Beneficiary, by
submitting to the Company in writing a new designation of Beneficiary.

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

(d)          Arbitration.  Employee and Company agree to submit any and
all disputes concerning the terms of this Agreement or any other terms and
conditions of Employee’s employment, with the exception of an action for
injunctive relief under Sections 5, 7 or 8 
of this Agreement, to final and binding arbitration.  The arbitration will be conducted in
Minneapolis, Minnesota in accordance with the procedural rules of the American
Arbitration Association.  The arbitrator
may order any legal and equitable remedies, including backpay and/or
reimbursement, but will have no authority to alter, modify or amend the terms
of this Agreement or to award punitive damages.

(e)           Jurisdiction and Venue.  Employee and the Company consent to
jurisdiction of the courts of the State of Minnesota and/or the federal
district courts, District of Minnesota, for the purpose of resolving all issues
of law, equity, or fact, arising out of or in connection with this Agreement.
In connection therewith, each party consents to personal jurisdiction over such
party in the state and/or federal courts of Minnesota and to venue for the
purpose of such decisions in Hennepin County, State of Minnesota, and hereby
waives any defense of lack of personal jurisdiction or forum non conveniens.

(f)             Entire Agreement.  This Agreement, together with the Restricted
Unit Agreement and all attachments and exhibits hereto or thereto, contains the
entire agreement of the parties 

 12
 

relating to Employee’s employment with the Company and supersedes all
prior agreements and understandings with respect to such subject matter, and
the parties hereto have made no agreements, representations or warranties
relating to the subject matter of this Agreement that are not set forth herein.

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

(h)          No Waiver.  No term or condition of this Agreement will
be deemed to have been waived, except by a statement in writing signed by the
party against whom enforcement of the waiver is sought.  Any written waiver will not be deemed a
continuing waiver unless specifically stated, will operate only as to the
specific term or condition waived and will not constitute a waiver of such term
or condition for the future or as to any act other than that specifically
waived.

(i)              Assignment.  This Agreement shall not be assignable, in
whole or in part, by either party without the written consent of the other
party, except that the Company may, without the written consent of Employee,
assign its rights and obligations under this Agreement to any corporation or
other business entity (i) with which the Company may merge or consolidate, (ii)
to which the Company may sell or transfer all or substantially all of its
assets or membership interests, or (iii) of which 50% or more of the voting
control is owned, directly or indirectly, by the Company.  No such assignment without the written consent
of Employee shall discharge the Company from liability hereunder, and such
assignee jointly and severally with the Company shall thereafter be deemed to
be the “Company” for purposes of all terms and conditions of this Agreement,
including this Section 13(i).

(j)              Notices.  Any notice hereunder shall be in writing and
shall be deemed to have been duly given if delivered by hand, sent by reliable
next-day courier, or sent by registered or certified mail, return receipt
requested, postage prepaid, to the party to receive such notice addressed as
follows:

	
  If to the Company:

  	
   

  
	
   

  	
   

  
	
   

  	
  Advanced
  BioEnergy, LLC

  
	
   

  	
  10201 Wayzata
  Boulevard

  
	
   

  	
  Suite 250

  
	
   

  	
  Hopkins,
  Minnesota 55305

  
	
   

  	
  Attention:
  Chief Executive Officer

  
	
   

  	
   

  
	
  If to Employee:

  	
   

  
	
   

  	
   

  
	
   

  	
  Perry Johnston

  
				

 

 13
 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

or addressed to such
other address as may have been furnished to the sender by notice
hereunder.  All notices shall be deemed
given on the date on which delivered if delivered by hand or on the date sent
if sent by overnight courier or certified mail, except that notice of change of
address will be effective only upon receipt by the other party.

(k)           Counterparts.  This Agreement may be executed by facsimile
signature and in any number of counterparts, and such counterparts executed and
delivered, each as an original, will constitute but one and the same
instrument.

(l)              Severability.  Subject to Section 7(e) hereof, to the extent
that any portion of any provision of this Agreement is held invalid or
unenforceable, it will be considered deleted herefrom and the remainder of such
provision and of this Agreement will be unaffected and will continue in full
force and effect.

(m)        Captions and Headings.  The captions and paragraph headings used in
this Agreement are for convenience of reference only and will not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.

(n)          Company Approvals.  The Company represents and warrants to
Employee that it (and to the extent required, the Board) has taken all
corporate action necessary to authorize this Agreement.

(remainder of page intentionally left blank)

 14

SIGNATURES

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

	
  

  	
  Advanced BioEnergy LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date: July 9,
  2007

  	
  By:

  	
     /s/ Revis L. Stephenson III

  	
   

  	
   

  
	
   

  	
   

  	
    Revis
  L. Stephenson III

  	
   

  	
   

  
	
   

  	
   

  	
    Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMPLOYEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date: July 7,
  2007

  	
   

  	
     /s/ Perry Johnston

  	
   

  	
   

  
	
   

  	
   

  	
  Perry C. JohnstonEXHIBIT 10.3

 

 

REGISTRATION
RIGHTS AGREEMENT

BETWEEN

ADVANCED BIOENERGY, LLC

AND

ETHANOL INVESTMENT PARTNERS, LLC

 

 

June 25,
2007

 

TABLE OF CONTENTS

	
  

  	
   

  	
  

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  1.

  	
   

  	
  Definitions

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Registration
  Rights

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.1

  	
   

  	
  Demand Registration

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
  2.2

  	
   

  	
  Company
  Registration

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
  2.3

  	
   

  	
  Underwriting Requirements

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  2.4

  	
   

  	
  Obligations
  of the Company

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
  2.5

  	
   

  	
  Furnish Information

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
  2.6

  	
   

  	
  Expenses
  of Registration

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
  2.7

  	
   

  	
  Indemnification

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
  2.8

  	
   

  	
  Reports
  Under Exchange Act

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
  2.9

  	
   

  	
  Limitations
  on Subsequent Registration Rights

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
  2.10

  	
   

  	
  “Market Stand-off” Agreement

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
  2.11

  	
   

  	
  Restrictions
  on Transfer

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
  2.12

  	
   

  	
  Termination
  of Registration Rights

  	
   

  	
  14

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Miscellaneous

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.1

  	
   

  	
  Successors and Assigns

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
  3.2

  	
   

  	
  Governing
  Law

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
  3.3

  	
   

  	
  Counterparts;
  Facsimile

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
  3.4

  	
   

  	
  Titles
  and Subtitles

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
  3.5

  	
   

  	
  Notices

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
  3.6

  	
   

  	
  Amendments
  and Waivers

  	
   

  	
  16

  	
   

  
	
   

  	
   

  	
  3.7

  	
   

  	
  Severability

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
  3.8

  	
   

  	
  Aggregation
  of Securities

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
  3.9

  	
   

  	
  Entire
  Agreement

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
  3.10

  	
   

  	
  Delays or Omissions

  	
   

  	
  17

  	
   

  

 

 i

ADVANCED BIOENERGY, LLC

REGISTRATION RIGHTS AGREEMENT

This Registration Rights
Agreement (this “Agreement”)
is made as of the 25th day of June, 2007, between Advanced BioEnergy, LLC, a
Delaware limited liability company (the “Company”),
and Ethanol Investment Partners, LLC, a Delaware limited liability company (“EIP”).

Background

A.            On
April 20, 2007, the Company and EIP entered into that certain Note Purchase
Agreement (the “Note Purchase Agreement”)
providing for the issuance and sale of 15% Subordinated Convertible Promissory
Notes to EIP.

B.            In
connection with the Note Purchase Agreement the Parties desire to provide EIP
with the right, among other rights, to demand the registration of Registrable
Securities (as defined below) held by EIP in accordance with the terms of this
Agreement.  Capitalized terms used herein
but not otherwise defined have the meaning given to them in the Note Purchase
Agreement.

Agreement

NOW, THEREFORE, in consideration of the foregoing and
the mutual promises contained herein, the Parties agree as follows:

1.             Definitions.  For purposes of this Agreement:

1.1           “Additional Financing”
means the sale by the Company of additional Units as contemplated by the
registration statement on Form SB-2 filed by the Company with the SEC on September
13, 2006, as amended from time to time thereafter.

1.2           “Affiliate”
means, with respect to any specified Person, any other Person who or which,
directly or indirectly, controls, is controlled by, or is under common control
with such specified Person, including without limitation any general partner, officer, director, or manager of such Person.

1.3           “Damages”
means any loss, damage, or liability to which a party hereto may become subject
under the Securities Act, the Exchange Act, or other federal or state law,
insofar as such loss, damage, or liability (or any action in respect thereof)
arises out of or is based upon (a) any untrue statement or alleged untrue
statement of a material fact contained in any registration statement of the
Company, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto; (b) an omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading; or
(c) any violation or alleged violation by the  

 1
 

indemnifying  party (or any of
its agents or Affiliates)  of the
Securities Act, the Exchange Act, any state securities law, or any rule or
regulation promulgated under the Securities Act, the Exchange Act, or any state
securities law.

1.4          “Derivative Securities” means any securities
or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly),
Units, including options and warrants.

1.5          “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

1.6          “Excluded
Registration” means (a) a
registration of Units in connection with the Additional Financing so long as such registration is declared
effective by the SEC no later than June 30, 2007; (b) a
registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock
option, stock purchase, or similar plan;
or (c) a registration relating to an SEC Rule 145 transaction.

1.7          “Form S-1” means such form under the Securities Act as in effect on the date
hereof or any successor registration form under the Securities Act subsequently
adopted by the SEC.

1.8          “Form S-2”
means such form under the Securities Act as in effect on the date hereof or any
successor registration form under the Securities Act subsequently adopted by
the SEC.

1.9           “Form S-3”
means such form under the Securities Act as in effect on the date hereof or any
registration form under the Securities Act subsequently adopted by the SEC that
permits incorporation of substantial information by reference to other
documents filed by the Company with the SEC.

1.10         “GAAP” means
generally accepted accounting principles in the United States.

1.11         “Holder” means
any holder of Registrable Securities who is a party to this Agreement,
including permitted transferees that agree in writing to be bound by and
subject to the terms and conditions of this Agreement.

1.12         “Initiating Holders”
means, collectively, Holders who properly initiate a registration request under
this Agreement.

1.13         “Investor
Rights Agreement” means that certain Investor Rights Agreement dated
as of November 8, 2006 between the Company and SDWG, as amended.

1.14         “IPO” means the Company’s first underwritten
public offering of its Units or other equity securities under the Securities
Act.

 2
 

1.15         “Operating Agreement” means that certain Third Amended and Restated
Operating Agreement of the Company dated as of February 1, 2006.

1.16         “Person” means any individual, corporation, partnership,
trust, limited liability company, association or other entity.

1.17         “Registrable Securities”
means (a) the Units issued to EIP upon conversion of the promissory notes
issued to EIP under the Note Purchase Agreement; and (b) any Units issued
as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or
other distribution with respect to, or in exchange for or in replacement of,
the Units referenced in clause (a) above, including without limitation any
Units which are issued to EIP subsequent to the conversion resulting from any
stock split or merger, and excluding in all cases, however, any Registrable
Securities sold by a Person in a transaction in which the applicable  rights
under this Agreement are not
assigned pursuant to Section 3.1,
and excluding for purposes of Section 2  any
Units for which registration rights have terminated pursuant to Section 2.12  of
this Agreement.

1.18         “Restricted Securities” means the securities
of the Company required to bear the legend set forth in Section 2.11(b) hereof.

1.19         “SDWG”
means South Dakota Wheat Growers Association, a South Dakota cooperative.

1.20         “SDWG Holder”
means any “Holder” as that term is defined under the Investor Rights Agreement.

1.21         “SEC” means the Securities and Exchange
Commission.

1.22          “SEC Rule 144” means Rule 144 promulgated by
the SEC under the Securities Act.

1.23         “SEC Rule 144(k)” means Rule 144(k)
promulgated by the SEC under the Securities Act.

1.24         “SEC Rule 145” means Rule 145 promulgated by
the SEC under the Securities Act.

1.25         “Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.

1.26         “Selling Expenses” means all underwriting
discounts, selling commissions, and stock transfer taxes applicable to the sale
of Registrable Securities, and fees and disbursements of counsel for any
Holder, except for the fees and
disbursements of the Selling Holder Counsel borne and paid by the Company as
provided in Section 2.6.

 3
 

1.27         “Units”
means units of membership interests in the Company, or shares or other equity
interests of the Company issued in exchange for or otherwise in connection with
any transaction as described in Section 2.1.

2.             Registration Rights.  The Company covenants
and agrees as follows:

2.1           Demand Registration.

(a)            Form
S-1 Demand.  If at any time
after the earlier of (i) one year after the date of this Agreement or (ii)
ninety (90) days after the effective date of the registration statement for the
IPO or such longer period after the IPO if the Holders cannot sell their
securities as a result of executing a “market stand-off” agreement contemplated
by Section 2.10 hereof, the Company receives a request from Holders of at least
seventy-five percent (75%) of the Registrable Securities that the Company file a Form S-1 registration
statement with respect to at least seventy-five percent (75%) of the Registrable
Securities (or a lesser percentage if
the anticipated aggregate offering price, net of Selling Expenses, would exceed
$15 million), then the Company shall (x) within ten (10) days after
the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than
the Initiating Holders; and (y) as soon as practicable, and in any event
within forty-five (45) days after the date such request is given by the
Initiating Holders, file a Form S-1
registration statement under the Securities Act covering all Registrable
Securities that the Initiating Holders requested  to be registered and any additional Registrable Securities
requested to be included in such registration by any other Holders (including
for purposes of this Section 2.1(a), solely for purposes of being allowed to
participate in such registration, any SDWG Holder), as specified by notice
given by each such Holder to the Company within twenty (20) days of the date
the Demand Notice is given, and in each case, subject to the limitations of
Section 2.1(c) and Section 2.3.

(b)           Form
S-3 Demand.  If at any time when it
is eligible to use a Form S-3 registration statement, the Company receives
a request from Holders of at least seventy-five percent (75%) of the
Registrable Securities that the Company file a Form S-3 registration statement
with respect to at least seventy-five percent (75%) of the Registrable Securities (or a lesser percentage if the
anticipated aggregate offering price, net of Selling Expenses, would exceed
$15 million), then the Company shall (i) within ten (10) days after the
date such request is given, give a Demand Notice to all Holders other than the
Initiating Holders; and (ii) as soon as practicable, and in any event within
forty-five (45) days after the date such request is given by the Initiating
Holders, file a Form S-3 registration statement under the Securities Act
covering all Registrable Securities requested to be included in such
registration by any other Holders (including for purposes of this
Section 2.1(b), solely for purposes of being allowed to participate in such
registration, any SDWG Holder), as
specified by notice given by each such Holder to the Company within twenty (20)
days of the date the Demand Notice is given, and in each case, subject to the
limitations of Section 2.1(c) and Section 2.3.

(c)            Notwithstanding the foregoing
obligations, if the Company furnishes to Holders requesting a registration
pursuant to Section 2.1(a) or Section 2.1(b) a certificate signed 

 4
 

by the Company’s
chief executive officer stating that in the good faith judgment of the Board it
would be materially detrimental to the Company and its members for such
registration statement to either become effective or remain effective for as
long as such registration statement otherwise would be required to remain
effective, because such action would (i) materially interfere with a
significant acquisition, corporate reorganization, or other similar transaction
involving the Company; or (ii) require premature disclosure of material
information that the Company has a bona fide business purpose for preserving as
confidential; and it is therefore necessary to defer the filing of such
registration statement, then the Company shall have the right to defer taking
action with respect to such filing, and any time periods with respect to filing
or effectiveness thereof shall be tolled correspondingly, for a period of not
more than thirty (30) days after the request of the Initiating Holders is
given; provided, however, that the Company may not invoke this right more than
once in any twelve (12) month period; and provided further that the Company
shall not register any securities for its own account or that of any other
member during such thirty (30) day period other than an Excluded Registration.

(d)           The Company shall not be obligated to
effect, or to take any action to effect, any registration pursuant to Section
2.1(a): (i) during the
period that is thirty (30) days before the Company’s good faith estimate of the
date of filing of, and ending on a date that is ninety (90) days after the
effective date of, a Company-initiated registration, provided, that the Company
is actively employing in good faith commercially reasonable efforts to cause
such registration statement to become effective; (ii) after the Company
has effected two registrations pursuant
to Section 2.1(a); or (iii) if the Initiating Holders propose to
dispose of shares of Registrable Securities that may be immediately registered
on Form S-3 pursuant to a request made pursuant to Section 2.1(b). 
The Company shall not be obligated to effect, or to take any action to
effect, any registration pursuant to Section 2.1(b): (x) during the period that
is thirty (30) days before the Company’s good faith estimate of the date of
filing of, and ending on a date that is ninety (90) days after the effective
date of, a Company-initiated registration, provided, that the Company is
actively employing in good faith commercially reasonable efforts to cause such
registration statement to become effective; or (y) if the Company has effected
two registrations pursuant to Section 2.1(b) within the twelve (12) month
period immediately preceding the date of such request.  A registration shall not be counted as “effected”
for purposes of this Section 2.1(d)
until such time as the applicable registration statement has been declared
effective by the SEC, unless the Initiating Holders withdraw their request for
such registration, elect not to pay the registration expenses therefor, and
forfeit their right to one demand registration statement pursuant to Section 2.6, in which case such withdrawn
registration statement shall be counted as “effected” for purposes of this
Section 2.1(d).

2.2           Company Registration.  If the Company proposes to register
(including, for this purpose, a registration effected by the Company for equity
holders other than the Holders) any of its securities under the Securities Act
in connection with the public offering of such securities solely for cash
(other than in an Excluded Registration), the Company shall, at such time,
promptly give each Holder notice of such registration.  Upon the request of each Holder given within
twenty (20) days after such notice is given by the Company, the Company 

 5
 

shall, subject to
the provisions of Section 2.3, cause to be registered all of the Registrable
Securities that each such Holder has requested to be included in such
registration.  The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.2 before the effective date of such registration, whether or not any
Holder has elected to include Registrable Securities in such registration.  The expenses (other than Selling Expenses) of
such withdrawn registration shall be borne by the Company in accordance with
Section 2.6.

2.3           Underwriting Requirements.

(a)            If, pursuant to Section 2.1, the
Initiating Holders intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise the Company as
a part of their request made pursuant to Section 2.1, and the Company shall
include such information in the Demand Notice. 
The underwriter(s) will be selected by the Company and shall be
reasonably acceptable to a majority in interest of the Initiating Holders.  In such event, the right of any Holder to
include such Holder’s Registrable Securities in such registration shall be
conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting to the
extent provided herein.  All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in Section 2.4(e)) enter into an
underwriting agreement in customary form with the underwriter(s) selected for
such underwriting.  Notwithstanding any
other provision of this Section 2.3, if the underwriter(s) advise(s) the
Initiating Holders in writing that marketing factors require a limitation on
the number of equity securities to be underwritten, then the Initiating Holders
shall so advise all Holders of Registrable Securities that otherwise would be
underwritten pursuant hereto, and the number of equity securities that may be
included in the underwriting shall be allocated as follows: (1) as between the
Holders of Registrable Securities that are party to this Agreement (the “EIP Holders”) and the SDWG Holders in proportion (as nearly
as practicable) to the number of equity securities that each group requested to
be included in the underwriting, and then (2) as between the persons that
comprise the EIP Holders and the SDWG Holders in proportion (as nearly as
practicable) to the number of equity securities owned by each Holder or in such
other proportion as shall mutually be agreed to by all such Holders; provided,
however, that the number of Registrable Securities held by the EIP Holders to
be included in such underwriting shall not be reduced unless all other
securities, except the equity securities requested to be included in the
underwriting by the SDWG Holders which shall be reduced as contemplated in the
prior sentence, are first entirely excluded from the underwriting.

(b)           In connection with any offering
involving an underwriting of the Company’s securities pursuant to Section 2.2,
the Company shall not be required to include any of the Holders’ Registrable
Securities in such underwriting unless the Holders accept the terms of the
underwriting agreement as agreed upon between the Company and its underwriters
(which underwriting agreement shall contain customary terms and conditions),
and then only in such quantity as the underwriters in their reasonable
discretion determine will not jeopardize the success of the offering by the
Company.  If the total number of
securities, including Registrable Securities, requested by security holders of
the Company to be included in such offering exceeds 

 6
 

the number of
securities to be sold (other than by the Company) that the underwriters in
their reasonable discretion determine is compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters in their reasonable discretion determine will not jeopardize the
success of the offering.  If the
underwriters determine that less than all of the Registrable Securities
requested to be registered can be included in such offering, then the
Registrable Securities that are included in such offering shall be allocated
among the selling Holders in proportion (as nearly as practicable to) the
number of Registrable Securities owned by each selling Holder or in such other
proportions as shall mutually be agreed to by all such selling Holders; provided,
however, in no event shall any securities held by any SDWG Holder be eliminated
unless all Registrable Securities held by all EIP Holders are completely
eliminated.  For purposes of the
provision in this Section 2.3(b) concerning apportionment, for any selling
Holder that is a partnership, limited liability company, or corporation, the
partners, members, retired partners, retired members, stockholders, and
Affiliates of such Holder, shall be deemed to be a single “selling Holder,” and
any pro rata reduction with respect to such “selling Holder” shall be based
upon the aggregate number of Registrable Securities owned by all Persons
included in such “selling Holder” as defined in this sentence.

(c)            For purposes of Section 2.1, a registration shall not be counted
as “effected” if, as a result of an exercise of the underwriter’s cutback
provisions in Section 2.3, fewer
than fifty percent (50%) of the total number of Registrable Securities that
Holders have requested to be included in such registration statement are
actually included.

2.4           Obligations of the Company.  Whenever required under this Section 2 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:

(a)            prepare and file with the SEC a
registration statement with respect to such Registrable Securities and use its
commercially reasonable efforts to cause such registration statement to become
effective and, upon the request of the Holders of a majority of the Registrable
Securities registered thereunder, keep such registration statement effective
for a period of up to one hundred eighty (180) days or, if earlier, until the
distribution contemplated in the registration statement has been completed;
provided, however, that (i) such one hundred eighty (180) day period shall
be extended for a period of time equal to the period the Holder refrains, at
the request of the Company or an underwriter of Units (or other securities) of
the Company, from selling any securities included in such registration, and
(ii) in the case of any registration of Registrable Securities on Form S-3
that are intended to be offered on a continuous or delayed basis, subject to
compliance with applicable SEC rules, such one hundred eighty (180) day period
shall be extended for up to two hundred forty (240) days, if necessary, to keep
the registration statement effective until all such Registrable Securities are
sold;

(b)           prepare and file with the SEC such
amendments and supplements to such registration statement, and the prospectus
used in connection with such registration statement, as 

 7
 

may be necessary
to comply with the Securities Act in order to enable the disposition of all
securities covered by such registration statement;

(c)            furnish to the selling Holders such
numbers of copies of a prospectus, including a preliminary prospectus, as
required by the Securities Act, and such other documents as the Holders may
reasonably request in order to facilitate their disposition of their
Registrable Securities;

(d)           use its commercially reasonable
efforts to register and qualify the securities covered by such registration
statement under such other securities or blue-sky laws of such jurisdictions as
shall be reasonably requested by the selling Holders; provided that the Company
shall not be required to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required
by the Securities Act;

(e)            in the event of any underwritten
public offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the underwriter(s) of such offering;

(f)            use its commercially reasonable
efforts to cause all such Registrable Securities covered by such registration
statement to be listed on a national securities exchange or trading system and
each securities exchange and trading system (if any) on which similar
securities issued by the Company are then listed;

(g)           provide a transfer agent and
registrar for all Registrable Securities registered pursuant to this Agreement
and provide a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration;

(h)           promptly make available for
inspection by the selling Holders, any underwriter(s) participating in any disposition pursuant to such registration
statement, and any attorney or accountant or other agent retained by any such
underwriter or selected by the selling Holders, all financial and other
records, pertinent corporate documents, and properties of the Company, and
cause the Company’s officers, directors, employees, and independent accountants
to supply all information reasonably requested by any such seller, underwriter,
attorney, accountant, or agent, in each
case, as necessary or advisable to verify the accuracy of the information in
such registration statement and to conduct appropriate due diligence in
connection therewith;

(i)             notify each selling Holder,
promptly after the Company receives notice thereof, of the time when such
registration statement has been declared effective or a supplement to any
prospectus forming a part of such registration statement has been filed; and

(j)             after such registration statement
becomes effective, notify each selling Holder of any request by the SEC that
the Company amend or supplement such registration statement or prospectus.

 

 8

2.5           Furnish Information.  It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 2 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such
securities as is reasonably required to effect the registration of such Holder’s
Registrable Securities.

2.6           Expenses of Registration.  All expenses (other than Selling Expenses)
incurred in connection with registrations, filings, or qualifications pursuant
to Section 2, including all registration, filing, and qualification fees;
printers’ and accounting fees; fees and disbursements of counsel for the
Company; and the reasonable fees and disbursements of one counsel for the
selling Holders  (“Selling
Holder Counsel”), shall be borne and paid by the Company;
provided, however, that the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Section 2.1(a) or Section 2.1(b) if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (in which case all selling Holders,
including the SDWG Holders, shall bear such expenses pro rata based upon the
number of Registrable Securities that were actually to be included in the
withdrawn registration), unless the Holders of a majority of the Registrable
Securities agree to forfeit their right to one registration pursuant to Section
2.1(a) or Section 2.1(b), as the case may be; provided
further that if, at the time of such withdrawal, the Holders have learned of a
material adverse change in the condition, business, or prospects of the Company
from that known to the Holders at the time of their request and have withdrawn
the request with reasonable promptness after learning of such information, then
the Holders shall not be required to pay any of such expenses and shall not
forfeit their right to one registration pursuant to Section 2.1(a) or Section 2.1(b). 
All Selling Expenses relating to Registrable Securities registered
pursuant to Section 2 shall be borne and paid by the Holders pro rata on the
basis of the number of Registrable Securities registered on their behalf.

2.7           Indemnification.  If any Registrable Securities are included in
a registration statement under this Section 2:

(a)            To the extent permitted by law, the
Company will indemnify and hold harmless each selling Holder, and the partners,
members, officers, directors, and stockholders of each such Holder; legal
counsel and accountants for each such Holder; any underwriter (as defined in
the Securities Act) for each such Holder; and each Person, if any, who controls
such Holder or underwriter within the meaning of the Securities Act or the
Exchange Act, against any Damages, and the Company will pay to each such
Holder, underwriter, controlling Person, or other aforementioned Person any
legal or other expenses reasonably incurred thereby in connection with
investigating or defending any claim or
proceeding from which Damages may result, as such expenses are incurred;
provided, however, that the indemnity agreement contained in this Section 2.7(a) shall not apply to amounts paid
in settlement of any such claim
or proceeding if such settlement is effected without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the
Company be liable for any Damages to the extent that they arise out of or are
based upon actions or omissions made in reliance upon and in 

 9
 

conformity with
written information furnished by or on behalf of any such Holder, underwriter,
controlling Person, or other aforementioned Person expressly for use in
connection with such registration.

(b)           To the extent permitted by law, each
selling Holder, severally and not jointly, will indemnify and hold harmless the
Company, and each of its directors, each of its officers who has signed the
registration statement, each Person (if any), who controls the Company within
the meaning of the Securities Act, legal counsel and accountants for the
Company, any underwriter (as defined in the Securities Act), any other Holder
selling securities in such registration statement, and any controlling Person
of any such underwriter or other Holder, against any Damages, in each case only
to the extent that such Damages arise out of or are based upon actions or
omissions made in reliance upon and in conformity with written information
furnished by or on behalf of such selling Holder expressly for use in
connection with such registration; and each such selling Holder will pay,
severally and not jointly, to the Company and each other aforementioned Person
any legal or other expenses reasonably incurred thereby in connection with
investigating or defending any claim or
proceeding from which Damages may result, as such expenses are incurred;
provided, however, that the indemnity agreement contained in this Section 2.7(b) shall not apply to amounts paid
in settlement of any such claim
or proceeding if such settlement is effected without the consent of the Holder,
which consent shall not be unreasonably withheld; and provided further that in
no event shall any indemnity under this Section 2.7(b) exceed the proceeds from the offering received by such Holder, except in the case of common law fraud or
willful misconduct by such Holder.

(c)            Promptly after receipt by an
indemnified party under this Section 2.7
of notice of the commencement of any action (including any governmental action)
for which a party may be entitled to indemnification hereunder, such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 2.7,
give the indemnifying party notice of the commencement thereof.  The indemnifying party shall have the right
to participate in such action and, to the extent the indemnifying party so
desires, participate jointly with any other indemnifying party to which notice
has been given, and to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel, with
the fees and expenses to be paid by the indemnifying party, if representation
of such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential conflicting interests between
such indemnified party and any other party represented by such counsel in such
action.  The failure to give notice to
the indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the indemnified
party under this Section 2.7,
unless such failure actually and materially prejudices the indemnifying party’s
ability to defend such action.

(d)           Notwithstanding
anything else herein to the contrary, the  foregoing
indemnity agreements of the Company and the selling Holders are subject to the
condition that, insofar as they relate to any Damages arising from any untrue
statement or alleged untrue 

 10
 

statement of a
material fact contained in, or omission or alleged omission of a material fact
from, a preliminary prospectus (or necessary to make the statements therein not
misleading) that has been corrected in the form of prospectus included in the
registration statement at the time it becomes effective, or any amendment or
supplement thereto filed with the SEC pursuant to Rule 424(b) under the
Securities Act (the “Final Prospectus”),
such indemnity agreement shall not inure to the benefit of any Person if a copy
of the Final Prospectus was furnished to the indemnified party and such
indemnified party failed to deliver, at or before the confirmation of the sale
of the shares registered in such offering, a copy of the Final Prospectus to
the Person asserting the loss, liability, claim, or damage in any case in which
such delivery was required by the Securities Act.

(e)            To provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (i) any party otherwise entitled to indemnification hereunder makes
a claim for indemnification pursuant to this Section 2.7 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case, notwithstanding the fact that
this Section 2.7 provides for
indemnification in such case, or (ii) contribution under the Securities
Act may be required on the part of any party hereto for which indemnification
is provided under this Section 2.7,
then, and in each such case, such parties will contribute to the aggregate
losses, claims, damages, liabilities, or expenses to which they may be subject
(after contribution from others) in such proportion as is appropriate to
reflect the relative fault of each of
the indemnifying party and the indemnified party in connection with the
statements, omissions, or other actions that resulted in such loss, claim,
damage, liability, or expense, as well as to reflect any other relevant
equitable considerations.  The relative
fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or allegedly
untrue statement of a material fact, or the omission or alleged omission of a
material fact, relates to information supplied by the indemnifying party or by
the indemnified party and the parties’ relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or omission;
provided, however, that, in any such case, (x) no Holder will be required
to contribute any amount in excess of the public offering price of all such
Registrable Securities offered and sold by such Holder pursuant to such
registration statement, and (y) no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) will be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation; and provided further that in no event shall
a Holder’s liability pursuant to this Section 2.7(e), when combined with the amounts paid or payable by such
Holder pursuant to Section 2.7(b),
exceed the proceeds from the offering received
by such Holder (net of any Selling Expenses) paid by such Holder), except in the case of willful misconduct or
common law fraud by such Holder.

(f)            Notwithstanding the foregoing, to
the extent that the provisions on indemnification and contribution contained in
the underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, 

 11
 

the provisions in
the underwriting agreement shall control; provided, however, that the
provisions on indemnification and contribution contained in the underwriting
agreement shall not contain provisions which expose the Holders to greater
liability than the terms contained herein.

(g)           Unless otherwise superseded by an
underwriting agreement entered into in connection with the underwritten public
offering, the obligations of the Company and Holders under this Section 2.7 shall survive the completion of any
offering of Registrable Securities in a registration under Section 2, and
otherwise shall survive the termination of this Agreement.

2.8           Reports Under Exchange Act.  With a view to making available to the
Holders the benefits of SEC Rule 144 and any other rule or regulation of
the SEC that may at any time permit a Holder to sell securities of the Company
to the public without registration or pursuant to a registration on Form S-3,
the Company shall:

(a)            make and keep available adequate current public
information, as those terms are understood and defined in SEC Rule 144, at
all times;

(b)           use commercially reasonable efforts
to file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act ; and

(c)            furnish to any Holder, so long as
the Holder owns any Registrable Securities, upon request (i) to the extent accurate, a written
statement by the Company that it has complied with the reporting requirements of
SEC Rule 144, the Securities Act, and the Exchange Act, or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after the Company so qualifies); (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company; and (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation of the
SEC that permits the selling of any such securities without registration or
pursuant to Form S-3 (at any time after the Company so qualifies to use
such form).

2.9           Limitations on Subsequent
Registration Rights.  From and after
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the Registrable Securities, enter into
any agreement with any holder or prospective holder of any securities of the
Company that would allow such holder or prospective holder to include such
securities in any Company registration or demand registration of any securities
held by such holder or prospective holder unless, under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only on a pari passu
basis to the number of the Registrable Securities of the Holders that are
included.

2.10         “Market Stand-off” Agreement.  Each Holder hereby agrees that it will not,
without the prior written consent of the managing underwriter, during the
period commencing on the date of the final prospectus relating to the IPO or other registration by the Company for its own
behalf of Units or any other equity securities under the Securities Act on a  registration statement on Form S-1, Form S-2, or Form S-3, and ending on the date specified by 

 12
 

the Company and the managing underwriter (such period not to exceed
(a) one hundred eighty (180) days in the case of the IPO, which period may
be extended upon the request of the managing underwriter for an additional
period of up to fifteen (15) days if the Company issues or proposes to issue an
earnings or other public release within fifteen (15) days of the expiration of
the 180-day lockup period, or (b) ninety (90) days in the case of any
registration other than the IPO, which period may be extended upon the request
of the managing underwriter for an additional period of up to fifteen (15) days
if the Company issues or proposes to issue an earnings or other public release
within fifteen (15) days of the expiration of the 90-day lockup period), (i) lend;
offer; pledge; sell; contract to sell; sell any option or contract to purchase;
purchase any option or contract to sell; grant any option, right, or warrant to
purchase; or otherwise transfer or dispose of, directly or indirectly, any
Units or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Units
held immediately before the effective date of the registration statement for
such offering or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of such securities,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Units or other securities, in cash, or otherwise.  The foregoing provisions of this Section 2.10 shall not apply to the sale of any
shares to an underwriter pursuant to an underwriting agreement, and shall be
applicable to the Holders only if all officers, directors, and members
individually owning more than five percent (5%) of the Company’s outstanding
Units (or other voting equity securities) are subject to the same
restrictions.  Each Holder further agrees
to execute such agreements as may be reasonably requested by the underwriters
in connection with such registration
that are consistent with this Section 2.10
or that are necessary to give further effect thereto.

2.11         Restrictions on Transfer.

(a)            The Registrable Securities shall not
be sold, pledged, or otherwise transferred, and the Company shall not recognize
any such sale, pledge, or transfer, except upon the conditions specified in
this Agreement and Section 9 of the Operating Agreement, which conditions
are intended to ensure compliance with the provisions of the Securities
Act.  A transferring Holder will cause
any proposed purchaser, pledgee, or transferee of the Registrable Securities
held by such Holder to agree to take and hold such securities subject to the
provisions and upon the conditions specified in this Agreement and the
Operating Agreement.

(b)           In addition to any legend
requirements set forth in the Operating Agreement, each certificate or instrument representing the
Registrable Securities shall (unless otherwise permitted by the provisions of
Section 2.11(c)) be stamped or
otherwise imprinted with a legend substantially
in the following form:

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, OR
TRANSFERRED IN THE ABSENCE OF SUCH 

 13
 

REGISTRATION OR A
VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
SAID ACT.

THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF THAT CERTAIN REGISTRATION RIGHTS AGREEMENT BETWEEN
THE COMPANY AND CERTAIN HOLDERS OF ITS SECURITIES, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.

The Holders consent to
the Company making a notation in its records and giving instructions to any
transfer agent of the Restricted Securities in order to implement the
restrictions on transfer set forth in this Section 2.11

(c)            The holder of each certificate
representing Restricted Securities, by acceptance thereof, agrees to comply in
all respects with the provisions of this Section 2.  Before any proposed sale, pledge, or transfer
of any Restricted Securities, unless there is in effect a registration
statement under the Securities Act covering the proposed transaction, the
Holder thereof shall give notice to the Company of such Holder’s intention to
effect such sale, pledge, or transfer. 
Each such notice shall describe the manner and circumstances of the
proposed sale, pledge, or transfer in sufficient detail and, if reasonably
requested by the Company, shall be accompanied at such Holder’s expense by
either (i) a written opinion of legal counsel who shall, and whose legal
opinion shall, be reasonably satisfactory to the Company, addressed to the
Company, to the effect that the proposed transaction may be effected without
registration under the Securities Act; (ii) a “no action” letter from the
SEC to the effect that the proposed 
sale, pledge, or transfer of such Restricted Securities without
registration will not result in a recommendation by the staff of the SEC that
action be taken with respect thereto; or (iii) any other evidence
reasonably satisfactory to counsel to the Company to the effect that the
proposed sale, pledge, or transfer of the Restricted Securities may be effected
without registration under the Securities Act, whereupon the Holder of such Restricted
Securities shall be entitled to sell, pledge, or transfer such Restricted
Securities in accordance with the terms of the notice given by the Holder to
the Company.  The Company will not
require such a legal opinion or “no action” letter (x) in any transaction
in compliance with SEC Rule 144
or (y) in any transaction in which such Holder distributes Restricted
Securities to an Affiliate of such Holder for no consideration; provided that
in the case of a transfer to an Affiliate each transferee agrees in writing to
be subject to the terms of this Section 2.11. Each certificate or
instrument evidencing the Restricted Securities transferred as above
provided shall bear, except if such transfer is made pursuant to SEC Rule 144, the appropriate
restrictive legend set forth in Section 2.11(b), except that such certificate shall not bear such
restrictive legend if, in the opinion of counsel for such Holder and the
Company, such legend is not required in order to establish compliance with any
provisions of the Securities Act.

2.12         Termination of Registration Rights.
 The
right of any Holder to request registration or inclusion of Registrable
Securities in any registration pursuant to Section 2.1 or Section 2.2
shall terminate upon the earliest to
occur of (a) the closing of a transaction resulting 

 14
 

in a “Dissolution
Event” as such term is defined in the Operating Agreement and (b) the date
on which such Holder is entitled to sell all of the Units owned by it in
compliance with SEC Rule 144(k).

3.             Miscellaneous.

3.1           Successors and Assigns.  Except as set forth in this Section 3.1, this
Agreement shall not be assignable by EIP without the prior written consent of
the Company.  Prior written consent will
not be required for any assignment of this Agreement by EIP to an Affiliate
assignee, provided that (i) the Company is, within a reasonable period of time
after such transfer, furnished with written notice of the name and address of
the Affiliate assignee and (ii) the Affiliate assignee agrees in a written
instrument satisfactory to the Company, to be bound by and subject to the terms
and conditions of this Agreement. 
Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
permitted assignees any rights, remedies, obligations or liabilities under or
by reason of this Agreement, except as expressly provided herein.

3.2           Governing
Law.  This Agreement shall be
governed by and construed in accordance with the Limited Liability Company Act
of the State of Delaware as to matters within the scope thereof, and as to all
other matters shall be governed by and construed in accordance with the
internal laws of the State of Minnesota, without regard to its principles of
conflicts of laws.  In any action between
the parties arising out of or relating to this Agreement or any of the
transactions contemplated by this Agreement: 
(a) each of the parties irrevocably waives the right to trial by
jury; and (b) each of the parties irrevocably consents to service of
process by first class certified mail, return receipt requested, postage
prepaid, to the address at which such party is to receive notice in accordance
with Section 3.5.

3.3           Counterparts;
Facsimile.  This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  This Agreement may also be
executed and delivered by facsimile signature and in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

3.4           Titles
and Subtitles.  The titles and
subtitles used in this Agreement are for convenience only and are not to be
considered in construing or interpreting this Agreement.

3.5           Notices.

(a)
All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed), one
business day after being deposited with a nationally recognized overnight
courier, or two business days after being mailed by registered or certified
mail (return receipt requested) to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice):

 15
 

 

	
  If to EIP:

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Ethanol
  Investment Partners, LLC

  c/o Ethanol Capital Management, LLC

  4400 East Broadway Blvd.

  Tucson, Arizona 85711

  Attention: Scott Brittenham

  Telephone: (520) 628-2000

  Fax: (520) 323-9177

  	
   

  	
  Baker, Donelson, Bearman, Caldwell & Berkowitz

  211 Commerce Street, Suite 1000

  Nashville, Tennessee 37201

  Attn: Tonya Mitchem Grindon

  Telephone: (615) 726-5607

  Fax: (615) 744-5607

  
	
   

  	
   

  
	
  If to the
  Company:

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Advanced
  BioEnergy, LLC

  10201 Wayzata Boulevard, Suite 250

  Minneapolis, Minnesota 55305

  Attention: President Donald Gales

  Fax: (763) 226-2725

  	
   

  	
  Faegre & Benson LLP

  2200 Wells Fargo Center

  90 South Seventh Street

  Minneapolis, Minnesota 55402

  Attention: Peter J. Ekberg

  Fax: (612) 766-1600

  

 

(b)           If, during the period of time from
and after any permissible assignment under Section 3.1 until the time the
Company receives written notice of the name and address of the Affiliate
assignee, the Company provides notice to EIP under this Agreement and in
accordance with this Section 3.5, the notice given to EIP will be deemed to
have been given to the Affiliate assignee.

3.6           Amendments and Waivers.  Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance, and either retroactively or prospectively) only with
the written consent of the Company and the Holders of a majority of the
Registrable Securities; provided, that the Company may in its sole
discretion waive compliance with Section 2.11(c) (and the Company’s failure to object promptly in
writing after notification of a
proposed assignment allegedly in violation of Section 2.11(c) shall be deemed to be a
waiver); and provided further,
that any provision hereof may be waived by any waiving party on such party’s
own behalf, without the consent of any other party; provided further,
however, this Agreement may not be amended or terminated and the
observance of any term hereof may not be waived with respect to any Holder
without the written consent of such Holder, unless such amendment, termination,
or waiver applies to all Holders in the same fashion.  The Company shall give prompt notice of any
amendment or termination hereof or waiver hereunder to any party hereto that
did not consent in writing to such amendment, termination, or waiver.  Any amendment, termination, or waiver
effected in accordance with this Section 3.6 shall be binding on all parties hereto, regardless of
whether any such party has consented thereto. 
No waivers of or exceptions to any term, condition, or provision of this
Agreement, in any one or more instances, shall be deemed to be or construed as
a further or continuing waiver of any such term, condition, or provision.

 16
 

3.7           Severability.  If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law or
regulation, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Agreement will be construed
and enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (c) the remaining provisions of this Agreement
will remain in full force and effect and will not be affected by the illegal,
invalid or unenforceable provision or by its severance from this Agreement and
(d) in lieu of such illegal, invalid or unenforceable provision, there
will be added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.

3.8           Aggregation of Securities.  All shares of Registrable Securities held or
acquired by Affiliates of a Holder shall be aggregated together for the purpose
of determining the availability of any rights under this Agreement of such
Holder.

3.9           Entire Agreement.  This Agreement, together with the Note
Purchase Agreement (including any Schedules and Exhibits hereto and thereto),
constitutes the full and entire understanding and agreement among the parties
with respect to the subject matter hereof, and any other written or oral
agreement relating to the subject matter hereof existing between the parties is
expressly canceled.

3.10         Delays or Omissions.  No delay or omission to exercise any right,
power, or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power, or remedy of such nonbreaching or nondefaulting party, nor shall it be
construed to be a waiver of or acquiescence to any such breach or default, or
to any similar breach or default thereafter occurring, nor shall any waiver of
any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring.  All
remedies, whether under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.

*****

[Remainder
of page intentionally left blank]

 

 17

The
Parties hereto have executed this Agreement on the date first above written.

	
  

  	
  ADVANCED BIOENERGY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Revis L. Stephenson III

  
	
   

  	
  Revis L. Stephenson, III

  
	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ETHANOL INVESTMENT PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Scott Brittenham

  
	
   

  	
  Scott Brittenham

  
	
   

  	
  President

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