Advanced BioEnergy, LLC (Form: SB-2, Received: 05/27/2005 17:11:48)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

ADVANCED BIOENERGY, LLC
(Name of small business issuer in its charter)

Delaware		2860		20-2281511
State or jurisdiction of incorporation or organization		Primary Standard Industrial Classification Code Number		I.R.S. Employer Identification No.

910 9th Street
Fairmont, Nebraska 68354
(402) 268-3101
(Address and telephone number of principal executive offices and principal place of business)

Robert E. Bettger
910 9th Street
Fairmont, NE 68354
(402) 268-3101
(Name, address, including zip code, and telephone number, including
area code, of agent for service)

Copies of Communications to:

William E. Hanigan
Miranda L. Hughes
Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, P.L.C.
666 Grand Avenue, Suite 2000, Des Moines, Iowa 50309-2510
(515) 242-2400

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is post-effective amendment filed pursuant to Rule 462(d) under the Securities act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. o

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Dollar Amount to be registered	Proposed maximum offering price per unit	Proposed maximum aggregate offering price	Amount of registration fee


Membership Units	$67,325,000	$10	$67,325,000	$7,924(1)

(1): Determined pursuant to Section 6(b) of the Securities Act of 1933 and Fee Rate Advisory #6 for Fiscal Year 2005.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Preliminary Prospectus

Dated May 27, 2005

The information in this prospectus is not complete and may be changed. The securities offered by this prospectus may not be sold until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is neither an offer to sell these securities nor a solicitation of an offer to buy these securities in any state where an offer or sale is not permitted.

ADVANCED BIOENERGY, LLC
a Delaware Limited Liability Company

[Effective Date]

The Securities being offered by Advanced BioEnergy, LLC are
Limited Liability Company Membership Units:

Minimum Offering Amount		$	33,662,500		Minimum Number of Units		3,366,250
Maximum Offering Amount		$	67,325,000		Maximum Number of Units		6,732,500

Offering Price: $10 per Unit
Minimum Purchase Requirement: 2,500 Units ($25,000)
Additional Increments: 100 Units ($1,000)

	Price to Investors		Proceeds to Company before deducting Offering Expenses
Per Unit	$	10	$	10
Total Minimum Offering	$	33,662,500	$	33,662,500
Total Maximum Offering	$	67,325,000	$	67,325,000

We are offering limited liability company membership units in Advanced BioEnergy, LLC, a Delaware limited liability company. If we are successful in this offering, and are able to obtain the debt financing that we seek, we intend to use the offering proceeds to pay for a portion of the construction and start-up costs of a 100 million gallons per year dry mill corn-processing ethanol plant to be located near Fairmont, Nebraska in Fillmore County. Depending on the level of equity we raise in this offering, we will need to obtain debt financing ranging from $67,325,000 to $100,987,500 in order to fully capitalize the project.

We are offering the units at a purchase price of $10 per unit. The minimum purchase requirement is 2,500 units for a minimum investment of $25,000. Additional units may be purchased in increments of 100. The offering will end no later than [one year from the effective date of this registration statement]. If we sell the maximum number of units prior to [one year from the effective date of this registration statement] , the offering will end on the date that the maximum number of units have been sold. We may also decide to end the offering any time after we have sold the minimum number of units and prior to [one year from the effective date of this registration statement] . If we decide to abandon the project for any reason, we will terminate the offering.

Investments will be held in escrow until the earliest of (1) our receipt of $33,662,500 or more in offering proceeds and a written debt financing commitment for an amount ranging from $67,325,000 to $100,987,500; (2) [one year from the effective date of this registration statement ]; or (3) our termination or abandonment of the offering. We are selling the units directly to investors on a best efforts basis without using an underwriter.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

These securities are speculative securities and involve a significant degree of risk ( see "RISK FACTORS" starting on page 8), and will constitute an investment in an illiquid security since no public or other market for the units now exists or is expected to develop.

TABLE OF CONTENTS

		PAGE
PROSPECTUS SUMMARY		1
RISK FACTORS		8
FORWARD LOOKING STATEMENTS		20
USE OF PROCEEDS		22
DETERMINATION OF OFFERING PRICE		22
DILUTION		22
CAPITALIZATION		24
DISTRIBUTION POLICY		24
SELECTED FINANCIAL DATA		26
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION		27
ESTIMATED SOURCES OF FUNDS		32
ESTIMATED USE OF PROCEEDS		33
DESCRIPTION OF BUSINESS		35
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS		59
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		61
UNITS BENEFICIALLY OWNED BY DIRECTORS AND OFFICERS		62
EXECUTIVE COMPENSATION		63
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES		65
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		65
PLAN OF DISTRIBUTION		66
DESCRIPTION OF MEMBERSHIP UNITS		70
SUMMARY OF OUR OPERATING AGREEMENT		74
FEDERAL INCOME TAX CONSEQUENCES OF OWNING OUR UNITS		77
LEGAL MATTERS		87
EXPERTS		87
TRANSFER AGENT		87
ADDITIONAL INFORMATION		87
INDEX TO FINANCIAL STATEMENTS		F-1
EXHIBITS:
	A. Certificate of Formation
	B. Amended and Restated Operating Agreement
	C. Subscription Agreement

PROSPECTUS SUMMARY

This summary only highlights selected information from this prospectus and may not contain all of the information that is important to you. You should carefully read the entire prospectus and the financial statements, and attached exhibits before you decide whether to invest.

The Company

We were formed on January 4, 2005 and are organized as a Delaware limited liability company. Our ownership interests are represented by membership interests, which are designated as units. Our principal address and location is 910 9th Street, Fairmont, Nebraska 68354. Our telephone number is (402) 268-3101.

We are a development-stage company with no prior operating history. We do not expect to generate any revenue until we begin operating the plant. The purpose of this offering is to raise equity to help fund the construction and start-up costs of a 100 million gallons per year dry mill corn-processing ethanol plant to be located near Fairmont, Nebraska.

The Offering

We are offering a minimum of 3,366,250 units and a maximum of 6,732,500 units at a purchase price of $10 per unit. You must purchase a minimum of 2,500 units to participate in the offering. You may purchase additional units in increments of 100 units. Our minimum aggregate offering amount is $33,662,500 and our maximum aggregate offering amount is $67,325,000. The offering will close upon the earliest occurrence of (1) our acceptance of subscriptions for units equaling the maximum amount of $67,325,000; (2) [one year from the effective date of this registration statement] ; or (3) our termination or abandonment of the offering. We may close the offering any time after the acceptance of subscriptions for units equaling the minimum amount of $33,662,500 prior to [one year from the effective date of the registration statement] . After the offering, there will be 3,991,250 units issued and outstanding if we sell the minimum number of units offered in this offering and 7,357,500 units issued and outstanding if we sell the maximum number of units offered in this offering. This includes 625,000 units previously issued in our previous private placement, of which 450,000 units were issued to our seed capital unit holders, 50,000 units were issued to our development consultant (including 42,500 restricted units) and 125,000 restricted units were issued to two of our directors as a development fee.

We plan to register the offering in the following states: Florida, Iowa, Kansas, Nebraska, South Dakota, Texas and Wisconsin. We may also offer or sell our units in other states in reliance on exemptions from the registration requirements of the laws of other states. However, we may not generally solicit investors in any jurisdictions other than Florida, Iowa, Kansas, Nebraska, South Dakota, Texas and Wisconsin. This limitation may result in the offering being unsuccessful. Our directors listed on page 7 of this prospectus will sell the units directly to investors without the use of an underwriter. We will not pay commissions to our directors for these sales.

The Project

If we are able to fully capitalize the project as described in our financing plan below, we will use the offering proceeds to build and operate a 100 million gallons per year dry mill corn-processing ethanol plant near Fairmont, Nebraska. We expect the ethanol plant will annually process approximately 37.0 million bushels of corn into 100 million gallons of ethanol, 321,429 tons of distillers grains for animal feed and 296,000 tons of carbon dioxide. Distillers grains and carbon dioxide are the principal by-products of the ethanol manufacturing process.

We have entered into a non-binding letter of intent with Fagen, Inc. of Granite Falls, Minnesota, for the design and construction of our proposed ethanol plant for a price of $98,000,000, exclusive of

any change orders we may approve. We expect Fagen, Inc. to build our plant using the technology of ICM, Inc. of Colwich, Kansas. Fagen, Inc. and ICM, Inc. have developed, designed and built numerous ethanol plants throughout the country. We expect to execute a definitive design-build agreement with Fagen, Inc. which will set forth in detail the design and construction services provided by Fagen, Inc. in exchange for a lump sum price equal to the $98,000,000 set forth in our letter of intent. Construction of the project is expected to take 14 to 16 months from the date our offering closes. We anticipate completion of plant construction during summer of 2007.

Once the plant is operational, we intend to sell all of the ethanol and distillers grains produced at the facility. There are no current plans to capture and market the carbon dioxide, however, at some point in the future we may decide it is feasible to do so. We intend to market our ethanol through an experienced ethanol marketer. We may try to market our distillers grains to the local livestock markets surrounding the plant; however, if the local markets are unable to support purchases of our distillers grains at the prices we desire, we will market the distillers grains through an experienced distillers grains marketer.

Our Financing Plan

We estimate the total project will cost approximately $134,650,000. Our letter of intent with Fagen, Inc. provides that the proposed plant will cost $98,000,000, excluding any change orders we may approve. We expect that costs and expenses incidental to construction and start-up will cost approximately an additional $36,650,000.

We raised $1,500,000 of seed capital in a private placement for the purpose of funding our development, organizational and offering expenses. We intend to raise a minimum of $33,662,500 and a maximum of $67,325,000 in this offering. Depending on the level of equity raised in this offering and the amount of any grants we may be awarded, we will need to obtain debt financing ranging from approximately $67,325,000 to $100,987,500 in order to fully capitalize the project. We have no contracts or commitments with any bank, lender or financial institution for this debt financing. There are no assurances that we will be able to obtain the necessary debt financing, other financing or grants sufficient to capitalize the project. The level of debt we require may be reduced by any grants awarded to us. Depending on the number of units sold, we may also seek third party credit providers to provide subordinate debt for the construction and initial operating expenses of the project.

Financial Information

We are a development-stage company with no operating history and no revenues. Please see "SELECTED FINANCIAL DATA" for a summary of our finances and the index to our financial statements for our detailed financial information.

Membership in Advanced BioEnergy and Our Amended and Restated Operating Agreement

If you purchase 2,500 or more of our units, you will become a member in Advanced BioEnergy upon approval by our board of directors and your written agreement to be bound by our amended and restated operating agreement. Our amended and restated operating agreement governs Advanced BioEnergy, our board of directors and our members. Each member will have one vote per unit owned. Members may vote on a limited number of issues, such as dissolving the company, amending the amended and restated operating agreement, and electing future directors.

As a unit holder, you will have a capital account to which your contributions will be credited. We will increase unit holders' accounts by the holders' allocated shares of our profits and other applicable items of income or gain. We will decrease capital accounts by the share of our losses and other applicable items of expenses or losses and any distributions that are made. Generally, we will allocate our profits and losses based upon the ratio each unit holder's units bear to total units outstanding.

We expect to be treated as a partnership for federal income tax purposes. As such, we will not pay any federal income taxes at the company level and will instead allocate net income to unit holders. Our unit holders must then include that income in his or her taxable income. This means that each unit holder must pay taxes upon the allocated shares of our income regardless of whether we make a distribution in that year.

The transfer of units is restricted by our amended and restated operating agreement. Generally, unless a transfer is permitted under our amended and restated operating agreement or by operation of law, such as upon death, units cannot be transferred without the prior written approval of a majority of directors. Except in limited circumstances, directors may not approve transfers until the plant is substantially operational. Based upon our estimated completion time of summer 2007, we expect units will not be eligible for transfer for at least 14 to 16 months from the date of this prospectus, and possibly longer. We will not be generating revenue during that time. Your investment in Advanced BioEnergy may never be liquid.

Management of Advanced BioEnergy

Our amended and restated operating agreement provides that Advanced BioEnergy is exclusively managed by our board of directors. Our initial board of directors consists of nine individuals. Directors are elected by the members. Our amended and restated operating agreement requires the initial board to consist of a minimum of three to a maximum of 13 directors. At the first annual or special meeting of the members following the date on which substantial operations of the ethanol plant commences, the number of directors shall be reduced and become fixed at nine. Directors are elected by plurality vote of the members which means that the nominees receiving the greatest number of votes relative to all other nominees are elected as directors.

Nominations for directors may be made by the nominating committee of the board of directors or by the board of directors as a whole. Members may also nominate candidates for our board by giving advance written notice to Advanced BioEnergy with information about the nominee and the nominating member. Any board nomination made by a member must be accompanied by a nominating petition signed by unit holders representing at least 5% of our outstanding units and must be delivered to the secretary of the company not less than 60 nor more than 90 days prior to our annual meeting.

At the first members' meeting following commencement of substantial operations at the plant, the number of directors shall be reduced and become fixed at nine. If this reduction in the number of directors requires the removal of any director, John T. Porter, Robert W. Holmes and Revis L. Stephenson, III shall not be included in the directors removed at that time. After the expiration of the initial terms of the directors, at each annual meeting of the members, directors shall be elected by the members for staggered terms of three years and until a successor is elected and qualified. Prior to that meeting, our initial board will separately identify the director positions to be elected and will classify each position as Group I, Group II or Group III. Group I directors will serve an initial term of one year with successor directors elected to three year terms. Group II directors will serve an initial term of two years with successor directors elected to three year terms. Group III directors will serve an initial term of three years with successor directors elected to three year terms. Our amended and restated operating agreement provides that John T. Porter shall be classified in Group I, Robert W. Holmes shall be classified in Group II and Revis L. Stephenson, III shall be classified in Group III.

Distributions to Unit Holders

Following completion of the seed capital private placement on April 14, 2005, the initial board of directors authorized a unit distribution to all of our unit holders equal to two units for every one unit issued and outstanding in order to compensate those initial unit holders for the risk associated with each of their seed capital investments in Advanced BioEnergy. In addition, we have transferred both

unrestricted and restricted units to our project development consultant and restricted units to two of our directors in exchange for services rendered during our seed capital private placement. You should not rely on our past unit distributions for an indication of our future distributions. We have not made any cash distributions since our inception and we do not intend to declare any additional unit distributions or any cash distributions until after we begin generating revenue and satisfy any loan covenants required by our lenders. We will not begin generating any revenue until we begin operation of the ethanol plant. Subject to loan covenants and restrictions, we intend to distribute our "net cash flow" to holders of our units in proportion to their units held after we begin operation of the ethanol plant. By net cash flow, we mean our gross cash proceeds received, less any portion that our board of directors, in its sole discretion, shall determine should be used to pay or establish reserves for our expenses, debt obligations, capital improvements, replacements and contingencies.

Suitability of Investors

Investing in the units involves a high degree of risk. Accordingly, the purchase of units is suitable only for persons of substantial financial means that have no need for liquidity in their investments and can bear the economic risk of loss of any investment in the units. Units will be sold only to persons that meet these and other requirements. You cannot invest in this offering unless you meet one of the following 5 suitability tests: (1) You regularly participate in the operations or management of a farming operation and file a Schedule F as part of your annual Form 1040 or 1041 filing with the Internal Revenue Service; (2) You have at least 150 acres of agricultural farmland under production; (3) You are a shareholder, member, manager or director of a family farm corporation, family farm limited liability company or family farm partnership; (4) You have annual income from whatever source of at least $45,000 and a net worth of at least $45,000 exclusive of home, furnishings and automobiles; or (5) You have a net worth of at least $100,000 exclusive of home, furnishings and automobiles. Even if you represent that you meet the suitability standards set forth above, the board of directors reserves the right to reject any subscription for any reason, including if the board determines that the units are not a suitable investment for you.

Subscription Period

The offering will close upon the earliest of (1) our acceptance of subscriptions for units equaling the maximum amount of $67,325,000; (2) [one year from the effective date of this registration statement] ; or (3) our termination or abandonment of the offering. We may, in our discretion, close the offering at any time after we have sold units for the aggregate minimum offering amount of $33,662,500 and prior to [one year from the effective date of this registration statement] . We may admit members to Advanced BioEnergy and continue to offer any remaining units to reach the maximum number to be sold until the offering closes. We reserve the right to cancel or modify the offering, to reject subscriptions for units in whole or in part, and to waive conditions to the purchase of units. Additionally, in our sole discretion, we may also determine that it is not necessary to sell all available units.

Subscription Procedures

Before purchasing any units, investors must:

•: read and complete the subscription agreement included as exhibit C to this prospectus;
•: draft a check payable to "Geneva State Bank", Escrow Agent for Advanced BioEnergy, LLC" in the amount of not less than 10% of the amount due for the units for which subscription is sought, which amount will be deposited in the escrow account;
•: sign a full recourse promissory note and security agreement for the remaining balance of the purchase price; and

•: deliver to us these items and an executed copy of the signature page to our amended and restated operating agreement.

Once we sell the minimum aggregate offering amount of $33,662,500, we will give you written demand for payment and you will have 20 days to pay the balance of the purchase price. If we acquire sufficient equity proceeds to release funds from escrow prior to your initial investment, but the offering has not yet been terminated, then you must pay the full purchase price at the time of subscription for the total number of units you wish to purchase.

In the subscription application, an investor must make representations to us concerning, among other things, that he or she has received our prospectus, exhibits and any supplements, agrees to be bound by the amended and restated operating agreement, and understands that the units are subject to significant transfer restrictions. The subscription application also requires information about the nature of your desired ownership, your state of residence, and your taxpayer identification or Social Security Number. We encourage you to read the subscription agreement carefully and in its entirety.

Escrow Procedures

Proceeds from subscriptions for the units will be deposited in an interest-bearing escrow account that we have established with Geneva State Bank, as escrow agent, under a written escrow agreement. Geneva State Bank is acting only as an escrow agent in connection with the offering described herein and has not endorsed, recommended or guaranteed the purchase, value or repayment of the securities being offered. We will not release funds from the escrow account until specific conditions are satisfied. Those conditions are (1) the subscription proceeds in the escrow account equals or exceeds the minimum offering amount of $33,662,500, exclusive of interest; (2) we obtain a written debt financing commitment for debt financing ranging from $67,325,000 to $100,987,500 depending on the level of equity raised and the amount of subordinated debt; (3) we elect, in writing, to terminate the escrow agreement; and 4) an affidavit prepared by our escrow agent has been sent to the states in which we have registered units stating that the conditions set out in (1) and (2) have been met.

You should be aware that a commitment for debt financing is not a binding loan agreement and the lender may not be required to provide us the debt financing as set forth in the commitment. A commitment is an agreement to lend, subject to certain terms and conditions and subject to the negotiation, execution and delivery of loan and loan-related documentation satisfactory to the lender. The agreement is conditional and a lender could later decline the loan if the terms and conditions set forth in the debt financing commitment letter are not satisfied.

In the event that we are unable to meet the requirements for releasing funds from escrow prior to [one year from the effective date of this registration statement] , or we elect to terminate or abandon the offering prior to closing of the offering for any other reason, your investment will be promptly returned to you plus nominal interest, less a deduction for escrow agent fees. If we are able to sell units equal to or exceeding the minimum aggregate offering amount of $33,662,500 prior to [one year from the effective date of this registration statement] , we may demand and collect the subscription proceeds payable to us after [one year from the effective date of this registration statement] . Even if we are successful in releasing funds from escrow, we may allow the offering to continue until [one year from date of effectiveness of this prospectus] or the sale of the maximum number of units.

Important Notices to Investors

This prospectus does not constitute an offer to sell or the solicitation of an offer to purchase any securities in any jurisdiction in which, or to any person to whom, it would be unlawful to do so.

Investing in our units involves significant risk. Please see "RISK FACTORS" beginning on page 8 to read about important risks you should consider before purchasing units in Advanced BioEnergy. These risks include, but are not limited to, the following:

•: we are a development-stage company and have not yet generated any revenue and do not expect to generate revenue until plant operations begin;
•: cash distributions depend upon our future financial and operational performance and will be affected by debt covenants, reserves, and operating expenditures;
•: our project and future plant operations are subject to construction risks, fluctuations in the prices of grain, utilities and ethanol, which are affected by various factors including weather, production levels, supply, demand, changes in technology, and government support and regulations;
•: we are very dependent on Fagen, Inc. and ICM, Inc. for the construction, design and technology for our plant and any loss of our relationships with Fagen, Inc. and ICM, Inc., may cause us to delay or abandon the project;
•: conflicts of interest may arise in the future between us, our members, our directors and the companies upon which we will depend;
•: the units are subject to a number of transfer restrictions, and no public market exists for our units and none is expected to develop;
•: member's voting rights are limited and we are managed by a board of directors and officers; and
•: we may elect to terminate or abandon the offering prior to [one year from effective date of this registration statement] if we have not sold the minimum offering amount of $33,662,500 or we have not received a written debt financing commitment ranging from $67,325,000 to $100,987,500, which will be necessary to fully capitalize the project.

No representations or warranties of any kind are intended or should be inferred with respect to economic returns or tax benefits of any kind that may accrue to the investors of the securities.

These securities have not been registered under the securities laws of any state other than the states of Florida, Iowa, Kansas, Nebraska, South Dakota, Texas and Wisconsin and may be offered and sold in other states in reliance on exemptions from the registration requirements of the laws of those other states.

In making an investment decision, investors must rely upon their own examination of the entity creating the securities and the terms of the offering, including the merits and risks involved. Investors should not invest any funds in this offering unless they can afford to lose their entire investment. There is no public market for the resale of the units in the foreseeable future. Furthermore, there are substantial restrictions on the transferability of the units within state securities laws and the amended and restated operating agreement to which the units are subject. Investors should be aware that they will be required to bear the financial risks of this investment for an indefinite period of time.

During the course of the offering of the units and prior to the sale of the units, each prospective purchaser and his or her representatives, if any, are invited to ask questions of, and obtain additional information from, our representatives concerning the terms and conditions of this offering, us, our business, and other relevant matters. We will provide the requested information to the extent that we possess such information or can acquire it without unreasonable effort or expense. Prospective purchasers or representatives having questions or desiring additional information should contact us at (402) 268-3101 or at our current business address: Advanced BioEnergy, LLC, 910 9th Street, Fairmont,

Nebraska 68354. Also, you may contact any of the following board members involved in the sale of our units directly at the phone numbers listed below:

NAME	POSITION	PHONE NUMBER
John T. Porter	Director	(402) 432-5247
Troy Otte	Director	(402) 362-3885
John E. Lovegrove	Director	(402) 366-4484
Robert E. Bettger	Director	(402) 268-3101
Larry L. Cerny	Secretary and Director	(402) 759-1165
Richard W. Hughes	Director	(402) 759-4615
Keith E. Spohn	Director	(402) 947-8061

RISK FACTORS

The purchase of units involves substantial risks and the investment is suitable only for persons with the financial capability to make and hold long-term investments not readily converted into cash. Investors must, therefore, have adequate means of providing for their current and future needs and personal contingencies. Prospective purchasers of the units should carefully consider the Risk Factors set forth below, as well as the other information appearing in this prospectus, before making any investment in the units. Investors should understand that there is a possibility that they could lose their entire investment in us.

Risks Related to the Offering

Failure to sell the minimum number of units will result in the failure of this offering, which means your investment may be returned to you with nominal interest.

We are attempting to raise funds to construct a 100 million gallons per year dry mill corn-processing ethanol plant. We must sell 3,366,250 units in order to reach our minimum offering amount. There is a substantial risk that we may not be able to sell this minimum amount of units necessary to close this offering. If we do not sell units with a purchase price of at least $33,662,500 by [one year from the effective date of this registration statement], we cannot close the offering and must return investors' money with nominal interest, less expenses for escrow agency fees. This means that from the date of an investor's investment, the investor would earn a nominal rate of return on the money he, she, or it deposits with us in escrow. We do not expect the termination date to be later than [one year from effective date of this prospectus] .

We are not experienced in selling securities and no one has agreed to assist us or purchase any units that we cannot sell ourselves, which may result in the failure of this offering.

We are making this offering on a "best efforts" basis, which means that we will not use an underwriter or placement agent. We have no firm commitment from any prospective buyer to purchase our units and there can be no assurance that the offering will be successful. We plan to offer the units directly to investors in the states of Florida, Iowa, Kansas, Nebraska, South Dakota, Texas and Wisconsin. We plan to advertise in local media and by mailing information to area residents. We may also hold informational meetings throughout Florida, Iowa, Kansas, Nebraska, South Dakota, Texas and Wisconsin. Our directors have significant responsibilities in their primary occupations in addition to trying to raise capital. Most of our directors have no broker-dealer experience and most have limited or no experience with public offerings of securities. There can be no assurance that our directors will be successful in securing investors for the offering.

Proceeds of this offering are subject to promissory notes due after the offering is closed.

As much as 90% of the total offering proceeds of this offering could be subject to promissory notes that may not be due until after the offering is closed. The success of our offering will depend on the investors' ability to pay the outstanding balances on these promissory notes. In order to become a member in Advanced BioEnergy, each investor must, among other requirements, submit a check in the amount of 10% of the total amount due for the number of units for which subscription is sought, and a promissory note for the remaining 90% of the total amount due for the units. That balance will become due within 20 days of the date of our notice that our sales of units, including the amounts owed under the promissory notes, have exceeded the minimum escrow deposit of $33,662,500. We will take a security interest in the units. We intend to retain the initial payment and to seek damages from any investor who defaults on the promissory note obligation. Nonetheless, the success of the offering depends on the payment of these amounts by the obligors.

Investors will not be allowed to withdraw their investments, which means that you should invest only if you are willing to have your investment unavailable to you for an indefinite period of time.

Investors will not be allowed to withdraw their investments for any reason, absent a rescission offer tendered by us. We do not anticipate making a rescission offer. This means that from the date of your investment through [the ending date of this offering] , your investment will be unavailable to you. You should only invest in us if you are willing to have your investment be unavailable for this period of time, which could be up to one year. If our offering succeeds, and we convert your cash investment into units, your investment will be denominated in our units until you transfer those units. There are significant transfer restrictions on our units. You will not have a right to withdraw from Advanced BioEnergy and demand a cash payment from us.

Risks Related to Our Financing Plan

Even if we raise the minimum amount of equity in this offering, we may not obtain the debt financing necessary to construct and operate our ethanol plant, which would result in the failure of the project and Advanced BioEnergy.

We do not have contracts or commitments with any bank, lender or financial institution for debt financing, and we will not release funds from escrow until we secure a written debt financing commitment sufficient to construct and operate the ethanol plant. If debt financing on acceptable terms is not available for any reason, we will be forced to abandon our business plan and return your investment from escrow plus nominal interest less deduction for escrow agency fees. Depending on the level of equity raised in this offering, we expect to require approximately $67,325,000 to $100,987,500 in senior or subordinated long term debt from one or more commercial banks or other lenders and government grants. Because the amounts of equity and grant funding are not yet known, the exact amount and nature of total debt is also unknown. If we do not sell the minimum amount of units, the offering will not close. Even though we must receive a debt financing commitment as a condition of closing escrow, the agreements to obtain debt financing may not be fully negotiated when we close on escrow. A commitment for debt financing is not a binding loan agreement and the lender may not be required to provide us the debt financing as set forth in the commitment. A commitment is an agreement to lend, subject to certain terms and conditions and subject to the negotiation, execution and delivery of loan and loan-related documentation satisfactory to the lender. The agreement is conditional and a lender could later decline the loan if the terms and conditions set forth in the debt financing commitment letter are not satisfied. We expect that we will be required to use the funds raised from this offering prior to receiving the debt financing funds putting your investment at risk.

Any agreements with lenders may require us to abide by restrictive loan covenants that may hinder our ability to operate.

Our debt load and service requirements necessary to implement our business plan will result in substantial debt service requirements. Our debt load and service requirements could have important consequences which could hinder our ability to operate, including our ability to:

•: incur additional indebtedness;
•: make capital expenditures or enter into lease arrangements in excess of prescribed thresholds;
•: make distributions to unit holders, or redeem or repurchase units;
•: make certain types of investments;
•: create liens on our assets;
•: utilize the proceeds of asset sales; and

•: merge or consolidate or dispose of all, or substantially all, of our assets.

In the event that we are unable to pay our debt service obligations, our creditors could force us to (1) reduce or eliminate distributions to unit holders (even for tax purposes) or (2) reduce or eliminate needed capital expenditures. It is possible that we could be forced to sell assets, seek to obtain additional equity capital or refinance or restructure all or a portion of our debt. In the event that we would be unable to refinance our indebtedness or raise funds through asset sales, sales of equity or otherwise, our ability to operate our plant would be greatly affected and we may be forced to liquidate.

Risks Related to Advanced BioEnergy as a Development-Stage Company

We have no operating history, which could result in errors in management and operations causing a reduction in the value of your investment.

We were recently formed and have no history of operations. We cannot provide assurance that we can manage start-up effectively and properly staff operations, and any failure to manage our start-up effectively could delay the commencement of plant operations. A delay in start-up operations is likely to further delay our ability to generate revenue and satisfy our debt obligations. Our proposed operations are subject to all the risks inherent in the establishment of a new business enterprise. We anticipate a period of significant growth, involving the construction and start-up of operations of the plant. This period of growth and the start-up of the plant are likely to be a substantial challenge to us. If we fail to manage start-up effectively, you could lose all or a substantial part of your investment.

We have little to no experience in the ethanol industry, which increases the risk of our inability to build and operate the ethanol plant.

We are presently, and for some time, are likely to continue to be, dependent upon our founding members, some of whom will serve as our initial directors. Most of these individuals are experienced in business generally but most have very little or no experience in raising capital from the public, organizing and building an ethanol plant, and governing and operating a public company. Most of the directors have no expertise in the ethanol industry. In addition, certain directors on our board are presently engaged in business and other activities which impose substantial demand on the time and attention of such directors. You should not purchase units unless you are willing to entrust all aspects of our management to our board of directors.

We will depend on Fagen, Inc. for expertise in beginning operations in the ethanol industry and any loss of this relationship could cause us delay and added expense, placing us at a competitive disadvantage.

We will be dependent on our relationship with Fagen, Inc. and its employees. Any loss of this relationship with Fagen, Inc., particularly during the construction and start-up period for the plant, may prevent us from commencing operations and result in the failure of our business. The time and expense of locating new consultants and contractors would result in unforeseen expenses and delays. Unforeseen expenses and delays may reduce our ability to generate revenue and profitability and significantly damage our competitive position in the ethanol industry such that you could lose some or all of your investment.

Agreements that have not yet been finalized may never be finalized or may significantly change in ways that reduce the value of your investment.

You should be aware that this prospectus makes reference to documents or agreements that are not yet final or executed, and plans that have not been implemented. In some instances such documents or agreements are not even in draft form. The definitive versions of those agreements, documents, plans or proposals may contain terms or conditions that vary significantly from the terms

and conditions described. These tentative agreements, documents, plans or proposals may not materialize or, if they do materialize, may not prove to be profitable.

Our lack of business diversification could result in the devaluation of our units if our revenues from our primary products decrease.

We expect our business to solely consist of ethanol and distillers grains production and sales. We do not have any other lines of business or other sources of revenue if we are unable to complete the construction and operation of the plant. Our lack of business diversification could cause you to lose all or some of your investment if we are unable to generate revenues by the production and sales of ethanol and distillers grains since we do not expect to have any other lines of business or alternative revenue sources.

We have a history of losses and may not ever operate profitably.

For the period of January 4, 2005 through March 31, 2005, we incurred an accumulated net loss of $119,592. We will continue to incur significant losses until we successfully complete construction and commence operations of the plant. There is no assurance that we will be successful in completing this offering or in our efforts to build and operate an ethanol plant. Even if we successfully meet all of these objectives and begin operations at the ethanol plant, there is no assurance that we will be able to operate profitably.

Risks Related to Construction of the Ethanol Plant

We will depend on Fagen, Inc. and ICM, Inc. to design and build our ethanol plant, however, we currently have no binding agreement with them and their failure to perform could force us to abandon business, hinder our ability to operate profitably or decrease the value of your investment.

We will be highly dependent upon Fagen, Inc. and ICM, Inc. to design and build the plant, but we have no definitive binding agreement with either company. We have entered into a non-binding letter of intent with Fagen, Inc. for various design and construction services. Fagen, Inc. has indicated its intention to deliver to us a proposed design-build contract, in which it will serve as our general contractor and will engage ICM, Inc. to provide design and engineering services. We anticipate that we will execute a definitive binding design-build agreement with Fagen, Inc. to construct the plant. However, there is no assurance that such an agreement will be executed.

If we do not execute a definitive, binding design-build agreement with Fagen, Inc., or if Fagen, Inc. terminates its relationship with us after initiating construction, there is no assurance that we would be able to obtain a replacement general contractor. Any such event may force us to abandon our business.

We expect to be highly dependent upon Fagen, Inc.'s and ICM, Inc.'s experience and ability to train personnel in operating the plant. If the plant is built and does not operate to the level anticipated by us in our business plan, we will rely on Fagen, Inc. and ICM, Inc. to adequately address such deficiency. There is no assurance that Fagen, Inc. and/or ICM, Inc. will be able to address such deficiency in an acceptable manner. Their failure to address deficiencies could cause us to halt or discontinue production of ethanol, which could damage ability to generate revenues and reduce the value of your units.

We may need to increase cost estimates for construction of the ethanol plant, and such increase could result in devaluation of our units if ethanol plant construction requires additional capital.

We anticipate that Fagen, Inc. will construct the plant for a fixed contract price, based on the plans and specifications in the anticipated design-build agreement. We have based our capital needs on a design for the plant that will cost approximately $98,000,000 with additional start-up and development

costs of approximately $36,650,000 for a total project completion cost of approximately $134,650,000. This price includes construction period interest. The estimated cost of the plant is based on preliminary discussions, and there is no assurance that the final cost of the plant will not be higher. There is no assurance that there will not be design changes or cost overruns associated with the construction of the plant. The rising price of steel could affect the final cost of construction of the ethanol plant. In addition, shortages of steel could affect the final completion date of the project. Any significant increase in the estimated construction cost of the plant could delay our ability to generate revenues and reduce the value of your units because our revenue stream may not be able to adequately support the increased cost and expense attributable to increased construction costs.

Construction delays could result in devaluation of our units if our production and sale of ethanol and its by-products are similarly delayed.

We currently expect our plant to be operating in summer 2007; however, construction projects often involve delays in obtaining permits, construction delays due to weather conditions, or other events that delay the construction schedule. In addition, changes in interest rates or the credit environment or changes in political administrations at the federal, state or local level that result in policy change towards ethanol or this project, could cause construction and operation delays. If it takes longer to construct the plant than we anticipate, it would delay our ability to generate revenue and make it difficult for us to meet our debt service obligations. This could reduce the value of the units.

Defects in plant construction could result in devaluation of our units if our plant does not produce ethanol and its by-products as anticipated.

There is no assurance that defects in materials and/or workmanship in the plant will not occur. Under the terms of the anticipated design-build agreement with Fagen, Inc., we expect Fagen, Inc. to warrant that the material and equipment furnished to build the plant will be new, of good quality and free from material defects in material or workmanship at the time of delivery. Though we expect the design-build agreement to require Fagen, Inc. to correct all defects in material or workmanship for a period of one year after substantial completion of the plant, material defects in material or workmanship may still occur. Such defects could delay the commencement of operations of the plant, or, if such defects are discovered after operations have commenced, could cause us to halt or discontinue the plant's operation. Halting or discontinuing plant operations could delay our ability to generate revenues and reduce the value or your units.

The plant site may have unknown environmental problems that could be expensive and time consuming to correct, which may delay or halt plant construction and delay our ability to generate revenue.

We have secured four options to purchase real estate located near Fairmont, Nebraska, two of which constitute our primary site and two of which we acquired as a potential alternative site. Our board of directors reserves the right to change the location of the plant site, in their sole discretion, for any reason. There can be no assurance that we will not encounter hazardous conditions at the Fairmont site or any alternative site that may delay the construction of the plant. We do not anticipate Fagen, Inc. will be responsible for any hazardous conditions encountered at the plant site. Upon encountering a hazardous condition, Fagen, Inc. may suspend work in the affected area. If we receive notice of a hazardous condition, we may be required to correct the condition prior to continuing construction. The presence of a hazardous condition will likely delay construction of the plant and may require significant expenditure of our resources to correct the condition. In addition, Fagen, Inc. will be entitled to an adjustment in price and time of performance if it has been adversely affected by the hazardous condition. If we encounter any hazardous conditions during construction that require time or money to correct, such event could delay our ability to generate revenues and reduce the value or your units.

Any delay or unanticipated cost in providing rail infrastructure to the plant could significantly impact our ability to operate the plant and reduce the value of your investment.

Rail service is available in Fairmont, Nebraska from the Burlington Northern Santa Fe Railroad (BNSF). However, we have not negotiated the purchase of a rail spur and right-of-way owned by Fillmore Western, which is located near our primary proposed plant site. If we are unable to secure an option to purchase this spur and right-of-way, we may have to move our site to an alternate location currently being considered by our board of directors or some other yet to be determined location. Our budget currently includes $2,350,000 in rail infrastructure costs. Increased costs for rail access or a delay in obtaining rail access could significantly impact our ability to operate the plant since we expect to ship most or all of our ethanol and DDGS by rail. As a result, the value of your investment could decline.

Risks Related to Ethanol Production

Our financial performance will be dependent on corn prices and market prices for ethanol and distillers dried grains, and the value of your investment in us may be directly affected by changes in these market prices.

Our results of operations and financial condition will be significantly affected by the cost and supply of corn and by the selling price for ethanol and distillers grains. Changes in the price and supply of these commodities are subject to and determined by market forces over which we have no control. The availability and price of corn will significantly influence our financial performance. We will purchase our corn in the cash market and hedge corn price risk through futures contracts and options to reduce short-term exposure to price fluctuations. See "DESCRIPTION OF BUSINESS—Corn Feedstock Supply." Generally, higher corn prices will produce lower profit margins. This is especially true if market conditions do not allow us to pass through increased corn costs to our customers. There is no assurance that we will be able to pass through higher corn prices. If a period of high corn prices were to be sustained for some time, such pricing may reduce our ability to generate revenues because of the higher cost of operating and could potentially lead to the loss of some or all of your investment.

Our revenues will be exclusively dependent on the market prices for ethanol and distillers grains. These prices can be volatile as a result of a number of factors. These factors include the overall supply and demand, the price of gasoline, level of government support, and the availability and price of competing products. For instance, the price of ethanol tends to increase as the price of gasoline increases, and the price of ethanol tends to decrease as the price of gasoline decreases. Any lowering of gasoline prices will likely also lead to lower prices for ethanol, which may decrease our ethanol sales and reduce revenues, causing a reduction in the value of your investment.

We believe that ethanol production is expanding rapidly at this time. Increased production of ethanol may lead to lower prices. The increased production of ethanol could have other adverse effects. For example, the increased production could lead to increased supplies of by-products from the production of ethanol, such as distillers grains. Those increased supplies could outpace demand, which would lead to lower prices for those by-products. Also, the increased production of ethanol could result in increased demand for corn. This could result in higher prices for corn and corn production creating lower profits. There can be no assurance as to the price of ethanol or distillers grains in the future. Any downward changes in the price of ethanol and/or distillers grains may result in less income which would decrease our revenues and you could lose some or all of your investment as a result.

Our ability to successfully operate is dependent on the availability of energy and water at anticipated prices.

Adequate energy and water is critical to plant operations. We have not yet entered into any definitive agreements to obtain energy and water resources and we may have to pay more than we

expect to access efficient energy and water resources. As a result, our ability to make a profit may decline as a result.

We will depend on others for sales of our products, which may place us at a competitive disadvantage and reduce profitability.

We expect to hire a third-party marketing firm to market all of the ethanol we plan to produce. We currently expect to market our own distillers grains by selling to local livestock, poultry and swine markets. However, if the local markets do not provide an adequate outlet for our distillers grains at the prices we desire, we expect to contract with a broker to market and sell a portion or all of our distillers grains. As a result, we expect to be dependent on the ethanol broker and any distillers grains broker we engage. There is no assurance that we will be able to enter into contracts with any ethanol broker or distillers grains broker on terms that are favorable to us. If the ethanol or distillers grains broker breaches the contract or does not have the ability, for financial or other reasons to market all of the ethanol or distillers grains we produce, we will not have any readily available means to sell our products. Our lack of a sales force and reliance on third parties to sell and market our products may place us at a competitive disadvantage. Our failure to sell all of our ethanol and distillers dried grains feed products may result in less income from sales, reducing our revenue stream, which could reduce the value of your investment.

We have no current plan to sell the raw carbon dioxide we produce to a third party processor, and this will require us to emit it into the air, which could potentially subject us to future environmental claims.

At this time, we have no agreement to sell the raw carbon dioxide we produce. We cannot provide any assurances that we will sell our raw carbon dioxide at any time in the future. If we do not enter into an agreement to sell our raw carbon dioxide, we will have to emit it into the air. This will result in the loss of a potential source of revenue and could subject us to environmental claims in the future.

Changes and advances in ethanol production technology could require us to incur costs to update our ethanol plant or could otherwise hinder our ability to compete in the ethanol industry or operate profitably.

Advances and changes in the technology of ethanol production are expected to occur. Such advances and changes may make the ethanol production technology installed in our plant less desirable or obsolete. These advances could also allow our competitors to produce ethanol at a lower cost than us. If we are unable to adopt or incorporate technological advances, our ethanol production methods and processes could be less efficient than our competitors, which could cause our plant to become uncompetitive or completely obsolete. If our competitors develop, obtain or license technology that is superior to ours or that makes our technology obsolete, we may be required to incur significant costs to enhance or acquire new technology so that our ethanol production remains competitive. Alternatively, we may be required to seek third-party licenses, which could also result in significant expenditures. We cannot guarantee or assure you that third-party licenses will be available or, once obtained, will continue to be available on commercially reasonable terms, if at all. These costs could negatively impact our financial performance by increasing our operating costs and reducing our net income, all of which could reduce the value of your investment.

Risks Related to Ethanol Industry

Competition from the advancement of technology may lessen the demand for ethanol and negatively impact our profitability, which could reduce the value of your investment.

Alternative fuels, gasoline oxygenates and ethanol production methods are continually under development. A number of automotive, industrial and power generation manufacturers are developing more efficient engines, hybrid engines and alternative clean power systems using fuel cells or clean

burning gaseous fuels. Vehicle manufacturers are working to develop vehicles that are more fuel efficient and have reduced emissions using conventional gasoline. Vehicle manufacturers have developed and continue to work to improve hybrid technology, which powers vehicles by engines that utilize both electric and conventional gasoline fuel sources. In the future, the emerging fuel cell industry offers a technological option to address increasing worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns. Fuel cells have emerged as a potential alternative to certain existing power sources because of their higher efficiency, reduced noise and lower emissions. Fuel cell industry participants are currently targeting the transportation, stationary power and portable power markets in order to decrease fuel costs, lessen dependence on crude oil and reduce harmful emissions. If the fuel cell and hydrogen industries continue to expand and gain broad acceptance, and hydrogen becomes readily available to consumers for motor vehicle use, we may not be able to compete effectively. This additional competition could reduce the demand for ethanol, which would negatively impact our profitability, causing a reduction in the value of your investment.

Corn-based ethanol may compete with cellulose-based ethanol in the future, which could make it more difficult for us to produce ethanol on a cost-effective basis and could reduce the value of your investment.

Most ethanol is currently produced from corn and other raw grains, such as milo or sorghum—especially in the Midwest. The current trend in ethanol production research is to develop an efficient method of producing ethanol from cellulose-based biomass, such as agricultural waste, forest residue, municipal solid waste, and energy crops. This trend is driven by the fact that cellulose-based biomass is generally cheaper than corn, and producing ethanol from cellulose-based biomass would create opportunities to produce ethanol in areas which are unable to grow corn. Although current technology is not sufficiently efficient to be competitive, a May 2000 report by the U.S. Department of Energy entitled "Outlook for Biomass Ethanol Production and Demand" indicates that new conversion technologies may be developed in the future. If an efficient method of producing ethanol from cellulose-based biomass is developed, we may not be able to compete effectively. We do not believe it will be cost-effective to convert the ethanol plant we are proposing into a plant which will use cellulose-based biomass to produce ethanol. If we are unable to produce ethanol as cost-effectively as cellulose-based producers, our ability to generate revenue will be negatively impacted and your investment could lose value.

As domestic ethanol production continues to grow, ethanol supply may exceed demand causing ethanol prices to decline and the value of your investment to be reduced.

The number of ethanol plants being developed and constructed in the United States continues to increase at a rapid pace. As these plants begin operations, we expect domestic ethanol production to significantly increase. If the demand for ethanol does not grow at the same pace as increases in supply, we would expect the price for ethanol to decline. Declining ethanol prices will result in lower revenues and may reduce or eliminate profits causing the value of your investment to be reduced.

Competition from ethanol imported from Caribbean basin countries may be a less expensive alternative to our ethanol, which would cause us to lose market share and reduce the value of your investment.

Ethanol produced or processed in certain countries in Central America and the Caribbean region is eligible for tariff reduction or elimination upon importation to the United States under a program known as the Caribbean Basin Initiative. Large ethanol producers, such as Cargill, have expressed interest in building dehydration plants in participating Caribbean Basin countries, such as El Salvador, which would convert ethanol into fuel-grade ethanol for shipment to the United States. Ethanol imported from Caribbean Basin countries may be a less expensive alternative to domestically produced ethanol. Competition from ethanol imported from Caribbean Basin countries may affect our ability to sell our ethanol profitably, which would reduce the value of your investment.

Competition from ethanol imported from Brazil may be a less expensive alternative to our ethanol, which would cause us to lose market share and reduce the value of your investment.

Brazil is currently the world's largest producer and exporter of ethanol. In Brazil, ethanol is produced primarily from sugarcane, which is also used to produce food-grade sugar. Brazil experienced a dramatic increase in ethanol production and trade in 2004, exporting approximately 112 million gallons to the U.S. alone. Ethanol imported from Brazil may be a less expensive alternative to domestically produced ethanol, which is primarily made from corn. Tariffs presently protecting U.S. ethanol producers may be reduced or eliminated. Competition from ethanol imported from Brazil may affect our ability to sell our ethanol profitably, which would reduce the value of your investment.

Risks Related to Regulation and Governmental Action

Loss of favorable tax benefits for ethanol production could hinder our ability to operate at a profit and reduce the value of your investment in us.

The ethanol industry and our business depend on the continuation of federal ethanol tax incentives. These incentives have supported a market for ethanol that might disappear without the incentives. The federal tax incentives were scheduled to expire September 30, 2007. However, pursuant to new legislation enacted in October 2004, the incentives are extended to September 30, 2010. These tax incentives to the ethanol industry may not continue beyond their scheduled expiration date or, if they continue, the incentives may not be at the same level. The elimination or reduction of tax incentives to the ethanol industry could reduce the market for ethanol, which could reduce prices and our revenues by making it more costly or difficult for us to produce and sell ethanol. If the federal tax incentives are eliminated or sharply curtailed, we believe that a decreased demand for ethanol will result, which could result in the failure of the business and the potential loss of some or all of your investment.

A change in environmental regulations or violations thereof could result in the devaluation of our units and a reduction in the value of your investment.

We are in the process of applying for the permits necessary for construction and operation of our plant and do not anticipate a problem receiving all required environmental permits. However, if for any reason any of these permits are not granted, construction costs for the plant may increase, or the plant may not be constructed at all.

Additionally, environmental laws and regulations, both at the federal and state level, are subject to change and changes can be made retroactively. Consequently, even if we have the proper permits at the present time, we may be required to invest or spend considerable resources to comply with future environmental regulations or new or modified interpretations of those regulations, which may reduce our profitability and you may lose some or all of your investment.

Risks Related to the Units

There has been no independent valuation of the units, which means that the units may be worth less than the purchase price.

We have determined the unit purchase price without independent valuation. We established the offering prices based on our estimate of capital and expense requirements, not based on perceived market value, book value, or other established criteria. We did not obtain an independent appraisal

opinion on the valuation of the units. The units may have a value significantly less than the offering prices and there is no guarantee that the units will ever obtain a value equal to or greater than the offering price.

No public trading market exists for our units and we do not anticipate the creation of such a market, which means that it will be difficult for you to liquidate your investment.

There is currently no established public trading market for our units and an active trading market will not develop despite this offering. To maintain partnership tax status, you may not trade the units on an established securities market or readily trade the units on a secondary market (or the substantial equivalent thereof). We, therefore, do not expect to apply for listing of the units on any securities exchange or on the NASDAQ Stock Market. As a result, you should not expect to readily sell your units.

We have placed significant restrictions on transferability of the units, limiting an investor's ability to withdraw from the company.

The units are subject to substantial transfer restrictions pursuant to our amended and restated operating agreement. In addition, transfers of the units may be restricted by state securities laws. As a result, investors may not be able to liquidate their investments in the units and, therefore, may be required to assume the risks of investments in us for an indefinite period of time. See "SUMMARY OF OUR OPERATING AGREEMENT."

To help ensure that a secondary market does not develop, our amended and restated operating agreement prohibits transfers without the approval of our board of directors. The board of directors will not approve transfers unless they fall within "safe harbors" contained in the publicly-traded partnership rules under the tax code, which include, without limitation, the following:

•: transfers by gift to the member's descendants;
•: transfer upon the death of a member;
•: transfers between family members; and
•: transfers that comply with the "qualifying matching services" requirements.

These units will be subordinate to company debts and other liabilities, resulting in a greater risk of loss for investors.

The units are unsecured equity interests and are subordinate in right of payment to all our current and future debt. In the event of our insolvency, liquidation, dissolution or other winding up of our affairs, all of our debts, including winding-up expenses, must be paid in full before any payment is made to the holders of the units. In the event of our bankruptcy, liquidation, or reorganization, all units will be paid ratably with all our other equity holders, and there is no assurance that there would be any remaining funds after the payment of all our debts for any distribution to the holders of the units.

These units will be diluted in value and will be subject to further dilution in value.

As of the close of our seed capital private placement on April 14, 2005, we had issued a total of 150,000 membership units to our founders and seed capital investors for $10 per unit. We also transferred 2,500 unrestricted units to BioEnergy Capital Consultants, LLC. Following completion of our seed capital private placement, we performed a membership unit distribution to all of our unit holders, equal to two additional membership units for every one membership unit issued and outstanding. In addition, we paid a development fee equal to 125,000 restricted membership units to

two of our directors, and we transferred 42,500 restricted units to BioEnergy Capital Consultants, LLC in exchange for consulting services. After we performed the distribution of two units for every one unit issued and outstanding, the distribution to our directors, and the transfer of units to BioEnergy Capital Consultants, LLC, there were 625,000 units outstanding. The issuance of these units is dilutive to the units offered in the registered offering.

All current unit holders will realize an immediate increase of at least $6.63 per unit in the pro forma net tangible book value of their units if the minimum is sold at a price of $10 per unit, and an increase of at least $7.19 if the maximum is sold at a price of $10 per unit. Purchasers of units in this offering will realize an immediate dilution of at least $1.23 per unit in the net tangible book value of their units if the minimum is sold at a price of $10 per unit, and a decrease of at least $0.67 per unit if the maximum is sold at a price of $10 per unit.

Risks Related to Tax Issues

EACH PROSPECTIVE MEMBER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR CONCERNING THE IMPACT THAT HIS OR HER PARTICIPATION IN THE COMPANY MAY HAVE ON HIS OR HER FEDERAL INCOME TAX LIABILITY AND THE APPLICATION OF STATE AND LOCAL INCOME AND OTHER TAX LAWS TO HIS OR HER PARTICIPATION IN THIS OFFERING.

IRS classification of the company as a corporation rather than as a partnership would result in higher taxation and reduced profits, which could reduce the value of your investment in us.

We are a Delaware limited liability company that has elected to be taxed as a partnership for federal and state income tax purposes, with income, gain, loss, deduction and credit passed through to the holders of the units. However, if for any reason the IRS would successfully determine that we should be taxed as a corporation rather than as a partnership, we would be taxed on our net income at rates of up to 35% for federal income tax purposes, and all items of our income, gain, loss, deduction and credit would be reflected only on our tax returns and would not be passed through to the holders of the units. If we were to be taxed as a corporation for any reason, distributions we make to investors will be treated as ordinary dividend income to the extent of our earnings and profits, and the payment of dividends would not be deductible by us, thus resulting in double taxation of our earnings and profits. See "FEDERAL INCOME TAX CONSEQUENCES OF OWNING OUR UNITS—Partnership Status." If we pay taxes as a corporation, we will have less cash to distribute as a distribution to our Unit holders.

The IRS May Classify Your Investment as Passive Activity Income, Resulting in Your Inability to Deduct Losses Associated with Your Investment.

It is likely that an investor's interest in us will be treated as a "passive activity." If an investor is either an individual or a closely held corporation, and if the investor's interest is deemed to be "passive activity," then the investor's allocated share of any loss we incur will be deductible only against income or gains the investor has earned from other passive activities. Passive activity losses that are disallowed in any taxable year are suspended and may be carried forward and used as an offset against passive activity income in future years. These rules could restrict an investor's ability to currently deduct any of our losses that are passed through to such investor.

Income allocations assigned to an investor's units may result in taxable income in excess of cash distributions, which means you may have to pay income tax on your investment with personal funds.

Investors will pay tax on their allocated shares of our taxable income. An investor may receive allocations of taxable income that result in a tax liability that is in excess of any cash distributions we may make to the investor. Among other things, this result might occur due to accounting methodology,

lending covenants that restrict our ability to pay cash distributions, or our decision to retain the cash generated by the business to fund our operating activities and obligations. Accordingly, investors may be required to pay some or all of the income tax on their allocated shares of our taxable income with personal funds.

An IRS audit could result in adjustments to our allocations of income, gain, loss and deduction causing additional tax liability to our members.

The IRS may audit the income tax returns of the Company and may challenge positions taken for tax purposes and allocations of income, gain, loss and deduction to investors. If the IRS were successful in challenging our allocations in a manner that reduces loss or increases income allocable to investors, you may have additional tax liabilities. In addition, such an audit could lead to separate audits of an investor's tax returns, especially if adjustments are required, which could result in adjustments on your tax returns. Any of these events could result in additional tax liabilities, penalties and interest to you, and the cost of filing amended tax returns.

Risks Related to Conflicts of Interest

Our directors and officers have other business and management responsibilities which may cause conflicts of interest in the allocation of their time and services to our project.

Our directors and officers have other management responsibilities and business interests apart from our project. Therefore, our directors and officers may experience conflicts of interest in allocating their time and services between us and their other business responsibilities. In addition, conflicts of interest may arise if the directors and officers, either individually or collectively, hold a substantial percentage of the units because of their position to substantially influence our business and management.

We also entered into a project development fee agreement with two of our directors, Revis L. Stephenson, III and Robert W. Holmes, to pay them together, a total fee equal to one percent of the total project cost. To date, we have issued Revis L. Stephenson, III and Robert W. Holmes, together, a total of 125,000 membership units in exchange for their efforts to organize and develop Advanced BioEnergy. These 125,000 membership units are subject to certain restrictions on ownership. Mr. Stephenson may be entitled to additional units up to 1% of total project cost on the date the plant begins producing ethanol if the actual project development cost exceeds the estimated cost used for purposes of the previous distribution of 125,000 units to Mr. Stephenson and Mr. Holmes.

These arrangements could cause Mr. Porter, Mr. Stephenson and Mr. Holmes conflicts of interest in decision-making related to our financing plan. These conflicts could threaten our ability to capitalize the project if these directors put their personal interests ahead of our best interests related to funding the project.

We may have conflicting financial interests with Fagen, Inc., which could cause Fagen, Inc. to put its financial interests ahead of ours.

Fagen, Inc. is expected to advise our directors and has been, and is expected to be, involved in substantially all material aspects of our formation, capital formation and operations to date. Most of the cost of our project will be paid to Fagen, Inc. for the design and construction of our ethanol plant.

Fagen, Inc. may experience conflicts of interest that cause it to put its financial interest in the design and construction of our plant ahead of our best interests. In addition, because of the extensive roles that Fagen, Inc. and/or ICM, Inc. will have in the construction and operation of the plant, it may be difficult or impossible for us to enforce claims that we may have against Fagen, Inc. and/or ICM, Inc. Such conflicts of interest may reduce our profitability and the value of the units and could result in reduced distributions to investors. See "CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS."

Fagen, Inc. and ICM, Inc., and their affiliates, may also have conflicts of interest because employees or agents of Fagen, Inc. and ICM, Inc. are involved as owners, creditors and in other capacities with other ethanol plants in the United States. Affiliates of Fagen, Inc. have a substantial ownership interest in U.S. BioEnergy. U.S. BioEnergy is currently developing a 100 million gallons per year ethanol plant in Albert City, Iowa, and in the future may develop or acquire other plants in our geographic area. We cannot require Fagen, Inc. or ICM, Inc. to devote their full time or attention to our activities. As a result, Fagen, Inc. and ICM, Inc. may have, or come to have, a conflict of interest in allocating personnel, materials and other resources to our plant.

Investors are not to construe this prospectus as constituting legal or tax advice. Before making any decision to invest in us, investors should read this entire prospectus, including all of its exhibits, and consult with their own investment, legal, tax and other professional advisors.

An investor should be aware that we will assert that the investor consented to the risks and the conflicts of interest described or inherent in this prospectus if the investor brings a claim against us or any of our directors, officers, managers, employees, advisors, agents or representatives.

FORWARD LOOKING STATEMENTS

Throughout this prospectus, we make "forward-looking statements" that involve future events, our future performance, and our expected future operations and actions. In some cases, you can identify forward-looking statements by the use of words such as "may," "should," "plan," "future," "intend," "could," "estimate," "predict," "hope," "potential," "continue," "believe," "expect" or "anticipate" or the negative of these terms or other similar expressions. The forward-looking statements are generally located in the material set forth under the headings "MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS," "PLAN OF DISTRIBUTION," "RISK FACTORS," "USE OF PROCEEDS" and "DESCRIPTION OF BUSINESS," but may be found in other locations as well. These forward-looking statements generally relate to our plans and objectives for future operations and are based upon management's reasonable estimates of future results or trends. Although we believe that our plans and objectives reflected in or suggested by such forward-looking statements are reasonable, we may not achieve such plans or objectives. Actual results may differ from projected results due, but not limited to, unforeseen developments, including developments relating to the following:

•: the availability and adequacy of our cash flow to meet its requirements, including payment of loans;
•: economic, competitive, demographic, business and other conditions in our local and regional markets;
•: changes or developments in laws, regulations or taxes in the ethanol, agricultural or energy industries;
•: actions taken or not taken by third-parties, including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities;
•: competition in the ethanol industry;

•: the loss of any license or permit;
•: the loss of our plant due to casualty, weather, mechanical failure or any extended or extraordinary maintenance or inspection that may be required;
•: changes in our business strategy, capital improvements or development plans;
•: the availability of additional capital to support capital improvements and development; and
•: other factors discussed under the section entitled "RISK FACTORS" or elsewhere in this prospectus.

You should read this prospectus completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements contained in this prospectus have been compiled as of the date of this prospectus and should be evaluated with consideration of any changes occurring after the date of this prospectus. Except as required under federal securities laws and SEC rules and regulations, we will not update forward-looking statements even though our situation may change in the future.

USE OF PROCEEDS

The gross proceeds from this offering, before deducting offering expenses, will be $33,662,500 if the minimum amount of equity offered is sold, and $67,325,000 if the maximum number of units offered is sold for $10 per unit. We estimate the offering expenses to be approximately $627,000. Therefore, we estimate the net proceeds of the offering to be $33,035,500 if the minimum amount of equity is raised, and $66,698,000 if the maximum number of units offered is sold.

	Maximum Offering		Minimum Offering
Offering Proceeds ($10 per unit)	$	67,325,000	$	33,662,500
Less Estimated Offering Expenses	$	627,000	$	627,000
Net Proceeds from Offering	$	66,698,000	$	33,035,500

We intend to use the net proceeds of the offering to construct and operate a 100 million gallons per year ethanol plant. We must supplement the proceeds of this offering with debt financing to meet our stated goals. We estimate that the total expenditures for the construction of the plant and start up expenses will be approximately $134,650,000. We expect to pay Fagen, Inc. $98,000,000 to build our ethanol plant.

DETERMINATION OF OFFERING PRICE

There is no established market for our units. We established the offering price without an independent valuation of the units. We established the offering price based on our estimate of capital and expense requirements, not based on perceived market value, book value, or other established criteria. The units may have a value significantly less than the offering price and there is no guarantee that the units will ever obtain a value equal to or greater than the offering price.

DILUTION

As of the date of this prospectus, we have a total of 625,000 units outstanding. The following chart sets forth the units issued since our inception through the date of this prospectus:

Issuance Event		Number of Units Issued
Seed Capital Private Placement		150,000
Transfer to BioEnergy Capital Consultants, LLC		2,500
2 for 1 Unit Distribution to Seed Capital Investors and BioEnergy Capital Consultants, LLC		305,000
Transfer to Stephenson and Holmes pursuant to Project Development Agreement		125,000
Transfer to BioEnergy Capital Consultants, LLC pursuant to Consulting Agreement		42,500

TOTAL:		625,000

As of March 31, 2005 (the date of our audited financial statements) our seed capital members had contributed $1,025,000 in exchange for 102,500 seed capital units at a purchase price of $10 per unit. The 102,500 units outstanding at March 31, 2005 had a net tangible book value of $836,893 or $8.16 per unit. The net tangible book value per unit represents members' equity less intangible assets which includes deferred offering costs, divided by the number of units outstanding. Subsequent to March 31, 2005, we sold 50,000 additional seed capital units to seed capital members at a purchase price of $10 per unit for additional seed capital proceeds of $500,000.

Our seed capital private placement closed on April 14, 2005. As of the date of this prospectus, our seed capital members have contributed a total of $1,500,000 in exchange for 150,000 units at a purchase

price of $10 per unit. We have distributed an additional 305,000 units through a distribution to our seed capital investors equal to two units for every one unit issued and outstanding, 125,000 units through a transfer to Mr. Stephenson and Mr. Holmes pursuant to the project development agreement and a total of 50,000 units to BioEnergy Capital Consultants, LLC.

The total number of units outstanding as of the date of this prospectus is 625,000. The units, as of April 14, 2005, had a net tangible book value of $1,336,893 or $2.14 per unit. The net tangible book value per unit represents members' equity less intangible assets which includes deferred offering costs, divided by the number of units outstanding. Other than the additional seed capital contributions of $500,000, which we received subsequent to March 31, 2005, the net tangible book value does not take into account any other changes subsequent to March 31, 2005.

An investor purchasing units in this offering will receive units diluted by the purchases of units by our seed capital investors, the distribution to our seed capital investors equal to two units for every one unit issued and outstanding and the other unit issuances occurring prior to the date of this offering as described above. The presence of these previously sold units will dilute the relative ownership interests of the units sold in this offering because these earlier investors received a relatively greater share of our equity for less consideration than investors are paying for units issued in this offering. Generally, all investors in this offering will notice immediate dilution. We have and will continue to use this previously contributed capital to finance development costs and for initial working capital purposes. We intend to use any remaining balance for the same purposes as those of this offering.

The following table illustrates the increase to existing unit holders and the dilution to purchasers in the offering in the net tangible book value per unit assuming the minimum or the maximum number of units is sold. Other than the additional seed capital contributions occurring subsequent to March 31, 2005, the table does not take into account any other changes in the net tangible book value of our units occurring after March 31, 2005, or offering expenses related to this offering.

	Minimum			Maximum
Pro forma net tangible book value per unit at April 14, 2005	$	2.14		$	2.14
Increase in pro forma net tangible book value per unit attributable to the sale of 3,366,250 (minimum) and 6,732,500 (maximum) units at $10 per unit.	$	6.63		$	7.19
Net tangible book value per unit at April 14, 2005, as adjusted for the sale of units	$	8.77		$	9.33
Dilution per unit to new investors in this offering	$	(1.23	)	$	(0.67	)

We may seek additional equity financing in the future, which may cause additional dilution to investors in this offering and a reduction in their equity interest. The holders of the units purchased in this offering will have no preemptive rights on any units to be issued by us in the future in connection with any such additional equity financing. We could be required to issue warrants to purchase units to a lender in connection with our debt financing. If we sell additional units or warrants to purchase additional units, the sale or exercise price could be higher or lower than what investors are paying in this offering. If we sell additional units at a lower price it could lower the value of an existing investor's units.

CAPITALIZATION

We have issued a total of 150,000 units to our seed capital investors at a price of $10 per unit, for total unit proceeds of $1,500,000. In addition, we distributed 2,500 units to BioEnergy Capital Consultants for services provided as our project development consultant. Following the close of the seed capital private placement, we issued an additional 305,000 units as a result of a distribution of two units for every one unit issued and outstanding to all of the unit holders, payment of a total project development fee to Revis Stephenson and Robert Holmes equal to 125,000 restricted units in, and the transfer of 42,500 restricted units to BioEnergy Capital Consultants, LLC for a total of 50,000 units to that consultant. If the minimum offering of $33,662,500 is attained, we will have received total membership proceeds, including proceeds from our previous seed capital private placement, of $35,162,500 at the end of this offering, less offering expenses. If the maximum offering of $67,325,000 is attained, we will have total membership proceeds of $68,825,000 at the end of this offering, less offering expenses.

Capitalization Table

The following table sets forth our capitalization at March 31, 2005 on an actual and pro forma basis to reflect the units offered in this offering.

		Pro Forma(1)
		Actual		Minimum			Maximum
Long-term Debt		$		$	100,987,500		$	67,325,000
Unit holders' equity:			1,025,000		33,662,500			67,325,000
	Accumulated deficit		119,592		(119,592	)		(119,592	)
Total Unit holder's equity (deficit)			905,408		33,542,908			67,205,408
Total Capitalization		$	978,133	$	134,530,408		$	134,530,408

(1): As adjusted to reflect the anticipated amount of long-term debt and receipt of gross proceeds from this offering prior to deducting offering expenses.

Our seed capital private placement was made directly by us without use of an underwriter or placement agent and without payment of commissions or other remuneration. The aggregate sales proceeds, after payment of offering expenses in immaterial amounts, were applied to our working capital and other development and organizational purposes.

With respect to the exemption from registration of issuance of securities claimed under Rule 506 and Section 4(2) of the Securities Act, neither we nor any person acting on our behalf offered or sold the securities by means of any form of general solicitation or advertising. Prior to making any offer or sale, we had reasonable grounds to believe and believed that each prospective investor was capable of evaluating the merits and risks of the investment and were able to bear the economic risk of the investment. Each purchaser represented in writing that the securities were being acquired for investment for such purchaser's own account, and agreed that the securities would not be sold without registration under the Securities Act or exemption therefrom. Each purchaser agreed that a legend was placed on each certificate evidencing the securities stating the securities have not been registered under the Securities Act and setting forth restrictions on their transferability.

DISTRIBUTION POLICY

Following completion of the seed capital private placement, the initial board of directors authorized a unit distribution to all of our unit holders equal to two units for every one unit issued and outstanding in order to compensate those initial unit holders for the risk associated with each of their seed capital investments in Advanced BioEnergy. In addition, we made distributions of restricted units

to our project development consultant and two of our directors in exchange for project development services. You should not rely on our past unit distributions for an indication of our future distribution policy. We have not made any cash distributions since our inception and we do not intend to declare any additional unit distributions or any cash distributions until after we begin generating revenue and satisfy any loan covenants required by our lenders. We do not expect to generate earnings until the proposed ethanol plant is operational, which is expected to occur approximately 14 to 16 months after we close the offering. After operation of the proposed ethanol plant begins, it is anticipated, subject to any loan covenants or restrictions with any senior and term lenders that we will distribute "net cash flow" to our members in proportion to the units that each member holds relative to the total number of units outstanding. "Net cash flow," means our gross cash proceeds less any portion, as determined by the board of directors in their sole discretion, used to pay or establish reserves for operating expenses, debt payments, capital improvements, replacements and contingencies. However, there can be no assurance that we will ever be able to pay any distributions to the unit holders including you. Additionally, our lenders may further restrict our ability to make distributions during the initial period of the term debt.

SELECTED FINANCIAL DATA

The following table summarizes important financial information from our March 31, 2005 audited financial statements. You should read this table in conjunction with the financial statements and the notes included elsewhere in this prospectus.

		From Inception (January 4, 2005) to March 31, 2005
Statement of Operations Data:
Revenue		$	—
Operating expenses:
	Start up expenses		72,480
	Accounting		1,680
	Consulting fees		10,683
	Legal		19,519
	Directors meetings and expenses		12,221
	Office		1,806
	Utilities		1,181
	Miscellaneous		22
Deficit accumulated during the development stage		$	(119,592	)

		March 31, 2005
Balance Sheet Data:
Assets:
	Cash	$	894,618
	Land option deposits		15,000
	Deferred Offering costs		68,515
Total Assets		$	978,133
Liabilities and members' equity:
	Current liabilities	$	72,725
Members' equity

	Contributed Capital		1,025,000
	Deficit accumulations during development stage		(119,592	)
Total liabilities and members' equity			905,408

		$	978,133

MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

Overview

This prospectus contains forward-looking statements that involve risks and uncertainties. Actual events or results may differ materially from those indicated in such forward-looking statements. The following discussion of the financial condition and results of our operations should be read in conjunction with the financial statements and related notes thereto included elsewhere in this prospectus.

We are a start-up Delaware limited liability company formed on January 4, 2005, for the purpose of constructing and operating a 100 million gallons per year ethanol plant to produce ethanol and distillers grains near Fairmont, Nebraska. We do not expect to generate any revenue until the plant is completely constructed and operational. We expect to build the plant on a site located near Fairmont, Nebraska. Our board of directors reserves the right to change the location of the plant site, in their sole discretion, for any reason. We anticipate the final plant site will have access to both truck and rail transportation.

Based upon engineering specifications produced by Fagen, Inc., the plant will annually consume approximately 37.0 million bushels of corn and annually produce approximately 100 million gallons of fuel grade ethanol and 321,429 tons of distillers grains for animal feed. We currently estimate that it will take 14 to 16 months from the date that we close the offering, which includes obtaining our debt financing, and obtaining all necessary permits, to complete the construction of the plant.

We expect the project will cost approximately $134,650,000 to complete. This includes approximately $98,000,000 to build the plant and an additional $36,650,000 in other capital expenditures, start-up costs, working capital and interest. We are still in the development phase, and until the proposed ethanol plant is operational, we will generate no revenue. We anticipate that accumulated losses will continue to increase until the ethanol plant is operational.

Plan of Operations Until Start-Up of Ethanol Plant

We expect to spend the next 12 months focused on three primary activities: (1) project capitalization; (2) site acquisition and development; and (3) plant construction. Assuming the successful completion of this offering and the related debt financing, we expect to have sufficient cash on hand to cover all costs associated with construction of the project, including, but not limited to, site acquisition and development, utilities, construction and equipment acquisition. In addition, we expect our seed capital proceeds to supply us with enough cash to cover our costs through this period, including staffing, office costs, audit, legal, compliance and staff training. We estimate that we will need approximately $134,650,000 to complete the project.

Project capitalization

We will not close the offering until we receive subscriptions for the minimum aggregate offering amount of $33,662,500 however, offering must end by [one year from the effective date of this registration]. Even if we successfully sell the minimum by [one year from the effective date of this registration] , we will only release funds from escrow, once we have secured a written debt financing commitment for debt financing ranging from a minimum of $67,325,000 to a maximum of $100,987,500 depending on the level of equity raised and any grant funding received. A debt financing commitment only obligates the lender to lend us the debt financing that we need if we satisfy all the conditions of the commitment. These conditions may include, among others, the total cost of the project being within a specified amount, the receipt of engineering and construction contracts acceptable to the lender, evidence of the issuance of all permits, acceptable insurance coverage and title commitment, the contribution of a specified amount of equity and attorney opinions. At this time, we do not know what

business and financial conditions will be imposed on us. We may not satisfy the loan commitment conditions before closing, or at all. If this occurs we may:

•: commence construction of the plant using all or a part of the equity funds raised while we seek another debt financing source;
•: hold the equity funds raised indefinitely in an interest-bearing account while we seek another debt financing source; or
•: return the equity funds, if any, to investors with accrued interest, after deducting the currently indeterminate expenses of operating our business or partially constructing the plant before we return the funds.

In any of these situations, we may not successfully construct and commence operations of our proposed plant and may terminate operations. As a result, you could lose all or part of your investment.

Site acquisition and development

During and after the offering, we expect to continue work principally on the preliminary design and development of our proposed ethanol plant, obtaining the necessary construction permits, identifying potential sources of debt financing and negotiating the corn supply, ethanol and distillers grains marketing, utility and other contracts. We plan to fund these initiatives using the $1,500,000 of seed capital that we raised. We believe that our existing funds will permit us to continue our preliminary activities through the end of this offering. If we are unable to close on this offering by that time or otherwise obtain other funds, we may need to discontinue operations.

Plant construction and start-up of plant operations

We expect to complete construction of the proposed plant and commence operations approximately 14 to 16 months after construction commences. Our work will include completion of the final design and development of the plant. We also plan to negotiate and execute finalized contracts concerning the construction of the plant, provision of necessary electricity, natural gas and other power sources and marketing agreements for ethanol and distillers grains. Assuming the successful completion of this offering and our obtaining the necessary debt financing, we expect to have sufficient cash on hand to cover construction and related start-up costs necessary to make the plant operational. We estimate that we will need approximately $98,000,000 to construct the plant and a total of approximately $134,650,000 to cover all capital expenditures necessary to complete the project, make the plant operational and produce revenue.

Trends and Uncertainties Impacting the Ethanol Industry and Our Future Operations

If we are able to build the plant and begin operations, we will be subject to industry-wide factors that affect our operating and financial performance. These factors include, but are not limited to, the available supply and cost of corn from which our ethanol and distillers grains will be processed; the cost of natural gas, which we will use in the production process; dependence on our ethanol marketer and distillers grains marketer to market and distribute our products; the intensely competitive nature of the ethanol industry; possible legislation at the federal, state and/or local level; changes in federal ethanol tax incentives and the cost of complying with extensive environmental laws that regulate our industry.

We expect ethanol sales to constitute the bulk of our future revenues. The supply of ethanol is currently outpacing ethanol demand. Recent market values for ethanol have fallen 30% to 40% from the values experienced in the last quarter. Demand increases may continue to lag production maintaining downward pressure on ethanol prices in the short to mid term. Based upon the number of

new ethanol plants scheduled to begin production and the expansion of current plants, we do not expect a return to strong ethanol prices in the short to mid term. Areas where demand may increase are new markets in Atlanta, Nashville, Baton Rouge and Houston. Minnesota may also generate additional demand due to the recent passage of state legislation mandating a 20% ethanol blend in its gasoline.

Potential increases in demand do not include national implementation of a Renewable Fuels Standard or similar legislation, which could cause increases in demand to be greater than currently projected. If the use of MTBE is phased out on a national level in the next few years and the reformulated gasoline oxygenate requirement remains unchanged, the anticipated growth may yield increased ethanol demand sooner than currently anticipated. However, even as new markets develop, the industry continues to grow rapidly and national production is expected to rise by 750 million gallons over the next year from 3.4 billion gallons to 4.15 billion gallons annually. In addition, none of these new markets is assured nor is the timing of any other new demand in the ethanol industry.

We expect to benefit from federal ethanol supports and federal tax incentives. Changes to these supports or incentives could significantly impact demand for ethanol. In March 2005, a bi-partisan bill containing a proposed Renewable Fuels Standard ("RFS") was introduced in the U.S. Senate. The RFS bill would require the use of 4 billion gallons of renewable fuels in 2006 increasing to 8 billion gallons by 2012. The bill is a national flexible program that does not require that any renewable fuels be used in any particular area or state, allowing refiners to use renewable fuel blends in those areas where it is most cost-effective. In addition, the bill eliminates the reformulated gasoline ("RFG") oxygenate standard, enhances RFG air quality requirements and improves the credit and waiver provisions of the RFS package. There is no assurance or guarantee that Congress will pass RFS legislation or that any RFS legislation approved by Congress will contain provisions sufficiently favorable to the ethanol industry to cause a sustainable increase in ethanol demand.

Demand for ethanol may also increase as a result of increased consumption of E85 fuel. E85 fuel is a blend of 70% to 85% ethanol and gasoline. According to the Energy Information Administration, E85 consumption is projected to increase from a national total of 11 million gallons in 2003 to 47 million gallons in 2025. E85 is used as an aviation fuel and as a hydrogen source for fuel cells. In the U.S., there are currently about 3 million flexible fuel vehicles capable of operating on E85 and 400 retail stations supplying it. Automakers have indicated plans to produce an estimated 2 million more flexible fuel vehicles per year.

Ethanol production continues to grow as additional plants become operational. Demand for ethanol has been supported by higher oil prices and its refined components and by clean air standards mandated by federal agencies have required highly populated areas to blend ethanol into their gasoline supplies as an oxygenate. The intent of the air standards is to reduce harmful emissions into the atmosphere. These mandates have been challenged in several metropolitan areas, and are currently being reviewed by the courts. In the future, the combination of additional supply, successful challenges to the clean air standards and stagnant or reduced demand may damage our ability to generate revenues and maintain positive cash flows.

Technology Developments

A new technology has recently been introduced, to remove corn oil from concentrated thin stillage (a by-product of "dry milling" ethanol processing facilities) which would be used as an animal feed supplement or possibly as an input for bio-diesel production. Although the recovery of oil from the thin stillage may be economically feasible, it fails to produce the advantages of removing the oil prior to the fermentation process. The FWS Group of Companies, headquartered out of Canada with offices in the United States, is currently working on a starch separation technology that would economically separate a corn kernel into its main components. The process removes the germ, pericarp and tip of the kernel

leaving only the endosperm of kernel for the production of ethanol. This technology has the capability to reduce drying costs and the loading of volatile organic compounds. The separated germ would also be available through this process for other uses such as high oil feeds or bio-diesel production. Each of these new technologies is currently in its early stages of development. There is no guarantee that either technology will be successful or that we will be able to implement the technology in our ethanol plant.

Trends and Uncertainties Impacting the Corn and Natural Gas Markets and Our Future Cost of Goods Sold

We expect our future cost of goods sold will consist primarily of costs relating to the corn and natural gas supplies necessary to produce ethanol and distillers grains for sale. The 2004 corn crop was the largest corn crop on record with national production at approximately 11.8 billion bushels. The 2005 corn supply is expected to outpace demand by approximately 1 billion bushels. This has caused national corn prices to remain relatively low. However, as the spring and summer corn growing season begins, we expect the grain market to begin focusing on prospects for the 2005 corn crop. Variables such as planting dates, rainfall, and temperatures will likely cause market uncertainty and create corn price volatility throughout the year. Although we do not expect to begin operations until summer 2007, we expect these same factors will continue to cause volatility in the price of corn, which will significantly impact our cost of goods sold.

Natural gas is also an important input commodity to our manufacturing process. We estimate that our natural gas usage will be approximately 10% to 15% of our annual total production cost. We use natural gas to dry our distillers grain products to moisture contents at which they can be stored for long periods of time, and can be transported greater distances. Dried distillers grains have a much broader market base, including the western cattle feedlots, and the dairies of California and Florida. Recently, the price of natural gas has risen along with other energy sources. Natural gas prices are considerably higher than the 10-year average. We look for continued volatility in the natural gas market. Any ongoing increases in the price of natural gas will increase our cost of production and negatively impact our future profit margins.

Liquidity and Capital Resources

As of March 31, 2005, we have total assets of $978,133 consisting primarily of cash and current liabilities of $72,725 consisting primarily of our accounts payable. Since our inception through March 31, 2005, we have an accumulated deficit of $119,592. Total members' equity as of March 31, 2005, was $905,408. Since our inception, we have generated no revenue from operations. For the period from inception to March 31, 2005, we had a net loss of $119,592, primarily due to start-up business costs.

Based on our business plan and current construction cost estimates, we believe the total project will cost approximately $134,650,000. We are seeking to raise a minimum of $33,662,500 and a maximum of $67,325,000 of equity in this offering. Depending on the level of equity raised in this offering and the amount of grants awarded to us, we expect to require debt financing ranging from a minimum of $67,325,000 to a maximum of $100,987,500.

We hope to attract the senior bank loan from a major bank, with participating loans from other banks, to construct the proposed ethanol plant. We expect the senior loan will be a construction loan secured by all of our real property, including receivables and inventories. We plan to pay near prime rate on this loan, plus annual fees for maintenance and observation of the loan by the lender, however, there is no assurance that we will be able to obtain debt financing or that adequate debt financing will be available on the terms we currently anticipate. If we are unable to obtain senior debt in an amount necessary to fully capitalize the project, we may have to seek subordinated debt financing which could require us to issue warrants. The issuance of warrants could reduce the value of our units.

We do not have contracts or commitments with any bank, lender or financial institution for debt financing and there is no assurance that we will be able to secure such financing. Completion of the project relies entirely on our ability to attract these loans and close on this offering.

Critical Accounting Policies

Management uses estimates and assumptions in preparing our financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.

We will defer offering costs until the sale of units is completed. Upon issuance of the units, these costs will be netted against the proceeds received. If the offering is not completed, such costs will be expensed.

Grants, Government Programs, Tax Credits and Tax Increment Financing

We are seeking approximately $8,000,000 in tax increment financing from the City of Fairmont, Nebraska. Tax increment financing is a program created by state statute and provides city councils the power to use all of the real property tax resulting from the increase in taxable valuation due to the construction of new industrial or commercial facilities to provide economic incentives. We must obtain approval from the city council of the City of Fairmont, Nebraska, or any other governing body of the city in which we locate the plant in order to receive tax increment financing. There is no guarantee that tax increment financing will be approved. If it is not approved, we will require additional equity.

We plan to apply for a $500,000 Community Development Block Grant, which must be used for infrastructure costs. We are also in the process of negotiating a low interest loan for rail infrastructure costs from a federal loan program administered by the Nebraska. We have not yet received firm commitments or approvals for either of these sources and we have no assurance that these funds will be available to us.

We plan to apply for a project development grant from the USDA. Although we may apply under several programs simultaneously and may be awarded grants or other benefits from more than one program, it must be noted that some combinations of programs are mutually exclusive. Under some state and federal programs, awards are not made to applicants in cases where construction on the project has started prior to the award date. There is no guarantee that applications will result in awards of grants or loans.

The state of Nebraska has established a production tax credit of 18 cents per gallon of ethanol produced during a 96 consecutive month period by newly constructed facilities in production prior to June 30, 2004. The tax credit is only available to offset Nebraska motor fuels excise taxes. The tax credit is transferable to third parties. No producer is eligible to receive tax credits for more than 15,625,000 gallons of ethanol produced in one year and no producer will receive tax credits for more than 125 million gallons of ethanol produced over the consecutive 96 month period. As the program is currently structured, we are not eligible for these production tax credits since our plant did not become operational by the June 30, 2004 production deadline. This may cause our plant to be less competitive than other Nebraska plants that are eligible to participate in the program and receive tax credits or cash payments in exchange for transfer of the credits. The program is scheduled to expire on June 30, 2012.

As of the date of this prospectus, a legislative bill has been introduced in the Nebraska legislature that would offer Nebraska ethanol producers a tax credit of 8 cents per gallon of ethanol up to 75 million gallons over 72 consecutive months with a maximum credit of $6,000,000 per plant. If passed, the program would be effective as of January 1, 2006 and continue through June 30, 2009.

There is no assurance that the Nebraska legislature will approve this ethanol incentive legislation or any other type of ethanol incentive legislation. In addition, we cannot guarantee that our project will be able to benefit from any ethanol incentive program that may be enacted by the Nebraska legislature.

ESTIMATED SOURCES OF FUNDS

The following tables set forth various estimates of our sources of funds, depending upon the amount of units sold to investors and based upon various levels of equity that our lenders may require. The information set forth below represents estimates only and actual sources of funds could vary significantly due to a number of factors, including those described in the section entitled, "RISK FACTORS" and elsewhere in this prospectus.

Sources of Funds(1)	Maximum 6,732,500 Units Sold			Percent of Total
Unit Proceeds	$	67,325,000		50.00	%
Seed Capital Proceeds		1,500,000	(2)	1.11	%
Members in Kind Services		500,000	(3)	0.37	%
Community Development Block Grant		500,000		0.37	%
Term Debt Financing		64,825,000		48.14	%

Total Sources of Funds	$	134,650,000		100.00	%

Sources of Funds(1)	If 5,121,000 Units Sold			Percent of Total
Unit Proceeds	$	51,210,000		38.03	%
Seed Capital Proceeds		1,500,000	(2)	1.11	%
Members in Kind Services		500,000	(3)	0.37	%
Community Development Block Grant		500,000		0.37	%
Term Debt Financing		80,940,000		59.89	%

Total Sources of Funds	$	134,650,000		100.00	%

Sources of Funds(1)	Minimum 3,366,250 Units Sold			Percent of Total
Unit Proceeds	$	33,662,500		25.00	%
Seed Capital Proceeds		1,500,000		1.11	%
Members in Kind Service		500,000(3	)	0.37	%
Community Development Block Grant		500,000		0.37	%
Term Debt Financing		98,487,500		73.14	%

Total Sources of Funds	$	134,650,000		100.00	%

(1): We have assumed grants of $500,000 from the Community Development Block Grant Program, however, we have not yet entered into any written definitive agreement for this grant. We have not included in this calculation any funds that we may be eligible to receive from tax increment financing.
(2): This also includes an additional 50,000 units which were sold in the seed capital private placement subsequent to our March 31, 2005 audited financial statements.
(3): Includes 50,000 units issued to BioEnergy Capital Consultants in return for services.

ESTIMATED USE OF PROCEEDS

We intend to use the net proceeds of the offering to develop, construct and operate a 100 million gallons per year ethanol plant near Fairmont, Nebraska. We must supplement the proceeds of this offering with debt financing to meet our stated goals. We estimate total expenditures for the construction and start-up of the plant, including real estate costs, will be approximately $134,650,000.

The following table describes our proposed use of proceeds. The actual use of funds is based upon contingencies, such as the estimated cost of plant construction, the suitability and cost of the proposed site, the regulatory permits required and the cost of debt financing and inventory costs, which are driven by the market. Therefore, the following figures are intended to be estimates only, and the actual use of funds may vary significantly from the descriptions given below depending on contingencies such as those described above. However, we anticipate that any variation in our use of proceeds will occur in the level of proceeds attributable to a particular use (as set forth below) rather than a change from one of the uses set forth below to a use not identified in this prospectus.

Use of Proceeds		Amount		Percent
Plant construction		$	98,000,000	72.781	%
Steamtube Dryers—6		$	7,000,000	5.199	%
Land & site development costs			5,830,000	4.329	%
Railroad Infrastructure			2,350,000	1.745	%
Fire Protection / Water Supply			310,000	0.230	%
Water treatment system			470,000	0.349	%
Administrative Building			350,000	0.260	%
Office Equipment			100,000	0.074	%
Computers, Software, Network			180,000	0.134	%
Construction performance bond			550,000	0.408	%
Construction insurance costs			200,000	0.149	%
Construction contingency			1,000,000	0.743	%
Capitalized interest			2,000,000	1.485	%
Rolling stock			400,000	0.297	%
Start up costs:
	Financing costs		800,000	0.594	%
	Organization costs		1,660,000	1.233	%
	Pre Production period costs		950,000	0.706	%
	Inventory—Spare parts		600,000	0.446	%
	Inventory—Working capital		5,300,000	3.936	%
	Inventory—corn		3,200,000	2.377	%
	Inventory—chemicals and ingredients		400,000	0.297	%
	Inventory—Ethanol and DDGS		3,000,000	2.228	%
	Inventory—Corn Hedged		—

Total		$	134,650,000	100	%

We expect the total funding required for the plant to be $134,650,000, which includes $98,000,000 to build the plant and $36,650,000 for other project development costs including land, site development, utilities, start-up costs, capitalized fees and interest, inventories and working capital. Our use of proceeds is measured from our date of inception and we have already incurred some of the related expenditures. If the plant is constructed near Fairmont, Nebraska, we expect the land to cost approximately $1,700,000. We have already secured four options near Fairmont, Nebraska. Two of these options make up the site which we are considering as our primary site and the other two make up our alternate site which we are considering, and may use, depending on the resolution of certain development issues and whether we are able to complete the purchase of a rail spur related to the

primary site. We reserve the right to chose either site or a completely different site in the discretion of our board of directors. We anticipate site development to cost an additional $4,130,000. The construction of the plant itself is by far the single largest expense at $98,000,000. If the plant is constructed near Fairmont, Nebraska, rail improvements, such as siding and switches may need to be installed at an estimated cost of $2,350,000. The estimated cost of the administration building and furnishings is $450,000. Total estimated construction costs including bringing utilities and rail to the site are $111,730,000 or approximately $1.12 per gallon of annual denatured ethanol production capacity, assuming full capacity production.

In addition to the cost to build the ethanol plant and bring rail and utilities to the site, we will need to incur other significant costs to build and operate the facility successfully. Start-up inventories of ethanol, corn, distillers grains, chemicals, yeast, denaturant and spare parts and working capital are estimated to be $12,500,000. Preproduction costs are estimated to be $950,000. We estimate operating costs, including office labor and insurance coverage to be $983,000.

For purposes of estimating capitalized interest and financing costs, we have assumed debt financing of approximately $81,000,000. We determined this amount of debt financing based upon an assumed equity amount of $51,210,000, grants totaling $500,000, no tax increment financing, seed capital proceeds of $1,500,000 and member equity from in kind services of $500,000. If any of these assumptions changes, we will need to revise the level of term debt accordingly. Loan interest during construction will be capitalized and is estimated to be $2,000,000, based upon term debt of $80,790,000. We have estimated our financing costs of $800,000 based upon this same level of term debt.

Organizational costs, including, but not limited to, offering expenses of $627,000, are estimated to be $1,660,000 (this number does not include pre-production period costs of $950,000). The total project cost is estimated at $134,650,000 or approximately $1.35 per gallon of annual denatured ethanol production capacity at 100,000,000 gallons per year.

DESCRIPTION OF BUSINESS

We are a development-stage Delaware limited liability company formed for the purpose of raising capital to develop, construct, own and operate a 100 million gallons per year dry mill corn-based ethanol plant near Fairmont, Nebraska. The ethanol plant is expected to annually process approximately 37.0 million bushels of corn per year into 100 million gallons of denatured fuel grade ethanol, 321,429 tons of dried distillers grains with solubles and 296,000 tons of raw carbon dioxide gas.

The following diagram depicts the plant we anticipate building:

Primary Product—Ethanol

Ethanol is a chemical produced by the fermentation of sugars found in grains and other biomass. Ethanol can be produced from a number of different types of grains, such as wheat and milo, as well as from agricultural waste products such as rice hulls, cheese whey, potato waste, brewery and beverage wastes and forestry and paper wastes. However, according to the Renewable Fuels Association, approximately 85 percent of ethanol in the United States today is produced from corn, and approximately 90 percent of ethanol is produced from a corn and other input mix. Corn produces large quantities of carbohydrates, which convert into glucose more easily than most other kinds of biomass. The U.S. Department of Energy estimated domestic ethanol production at approximately 3.25 billion gallons in 2004. We anticipate entering into an agreement with a company to market our ethanol.

We anticipate that our business will be that of the production and marketing of ethanol and distillers dried grains. We do not have any other lines of business or other sources of revenue if we are unable to complete the construction and operation of the plant, or if we are not able to market ethanol and its by-products.

Description of Dry Mill Process

Our plant will produce ethanol by processing corn or possibly other raw grains such as grain sorghum or milo. The corn and other grains will be received by rail and by truck, then weighed and unloaded in a receiving building. It will then be transported to storage bins. Thereafter, it will be converted to a scalper to remove rocks and debris before it is transported to a hammermill or grinder where it is grounded into a mash and conveyed into a slurry tank for enzymatic processing. Then, water, heat and enzymes are added to break the ground grain into a fine slurry. The slurry will be heated for sterilization and pumped to a liquefaction tank where additional enzymes are added. Next, the grain slurry is pumped into fermenters, where yeast is added, to begin a batch fermentation process. A vacuum distillation system will divide the alcohol from the grain mash. Alcohol is then transported through a rectifier column, a side stripper and a molecular sieve system where it is dehydrated. The 200 proof alcohol is then pumped to farm shift tanks and blended with five percent denaturant, usually gasoline, as it is pumped into storage tanks. The 200 proof alcohol and five percent denaturant constitute ethanol.

Corn mash from the distillation stripper is pumped into one of several decanter-type centrifuges for dewatering. The water ("thin stillage") is then pumped from the centrifuges to an evaporator where it is dried into thick syrup. The solids that exit the centrifuge or evaporators (the "wet cake") are conveyed to the distillers dried grains dryer system. Syrup is added to the wet cake as it enters the dryer, where moisture is removed. The process will produce distillers grains, which is processed corn mash that can be used as animal feed.

The following flow chart illustrates the dry mill process:

Source: Renewable Fuels Association

Thermal Oxidizer

Ethanol plants such as ours may produce odors in the production of ethanol and its primary by-product, distillers dried grains with solubles, which some people may find to be unpleasant. We intend to eliminate odors by routing dryer emissions through thermal oxidizers. We expect thermal oxidation to significantly reduce any unpleasant odors caused by the ethanol and distillers grains manufacturing process. We expect thermal oxidation, which burns emissions, will eliminate a significant amount of the volatile organic carbon compounds in emissions that cause odor in the drying process and allow us to meet the applicable permitting requirements. We also expect this addition to the ethanol plant to reduce the risk of possible nuisance claims and any related negative public reaction against us.

By-Products

The principal by-product of the ethanol production process is distillers grains, a high protein, high-energy animal feed supplement primarily marketed to the dairy and beef industry and also to the poultry and swine markets. Distillers grains contain bypass protein that is superior to other protein supplements such as cottonseed meal and soybean meal. According to a 1986 study by the University of Nebraska reported in "Nebraska Company Extension Study MP51—Distillers Grains," bypass proteins are more digestible to the animal, thus generating greater lactation in milk cows and greater weight gain in beef cattle. Dry mill ethanol processing creates three forms of distillers grains: distillers wet grains with solubles ("distillers wet grains"), distillers modified wet grains with solubles ("distillers modified wet grains") and distillers dry grains. Distillers wet grains is processed corn mash that contains approximately 70% moisture and has a shelf life of approximately three days. Therefore, it can be sold only to farms within the immediate vicinity of an ethanol plant. Distillers modified wet grains are distillers wet grains that have been dried to approximately 50% moisture. It has a slightly longer shelf life of approximately three weeks and is often sold to nearby markets. Distillers dried grains are distillers wet grains that have been dried to 10% moisture. Distillers dried grains has an almost indefinite shelf life and may be sold and shipped to any market regardless of its proximity to an ethanol plant.

We plan to initially market our distillers grains to the local livestock poultry and swine markets surrounding the plant, however, if the local markets prove insufficient to absorb our distillers grains at the prices we desire, we will engage a company to market our distillers grains nationally.

The plant is expected to produce approximately 296,000 tons annually of raw carbon dioxide as another by-product of the ethanol production process. At this time, we do not intend to capture and market our carbon dioxide gas.

Corn Feedstock Supply

We anticipate that our plant will need approximately 37.0 million bushels of grain per year for our dry milling process. The corn supply for our plant will be obtained primarily from local markets. Traditionally, corn grown in the area has been fed locally to livestock or exported for feeding or processing. In the year 2003, in the nine county area surrounding the anticipated location of our plant,

corn production was approximately 186 million bushels. The chart below describes the amount of corn grown in Fillmore and surrounding counties for 2000 through 2003:

County	2003 Corn Production (bushels)	2002 Corn Production (bushels)	2001 Corn Production (bushels)	2000 Corn Production (bushels)
Clay, NE	23,195,000	21,941,000	23,235,000	19,886,000
Fillmore, NE	27,122,000	23,981,000	24,886,000	23,944,000
Hamilton, NE	34,891,000	34,123,000	32,212,000	29,637,000
Jefferson, NE	9,411,000	7,358,000	10,264,000	7,332,000
Nuckolls, NE	8,864,000	7,377,000	9,060,000	6,789,000
Saline, NE	13,228,000	12,044,000	13,192,000	11,018,000
Seward, NE	18,102,000	14,304,000	17,491,000	15,604,000
Thayer, NE	16,672,000	14,389,000	16,430,000	13,186,000
York, NE	34,973,000	31,077,000	32,978,000	30,451,000
Total	186,458,000	166,594,000	179,748,000	157,847,000

We will be dependent on the availability and price of corn. The price at which we will purchase corn will depend on prevailing market prices. Although the area surrounding the plant produces a significant amount of corn and we do not anticipate problems sourcing corn, there is no assurance that a shortage will not develop, particularly if there are other ethanol plants competing for corn, an extended drought or other production problem. In addition, our financial projections assume that we can purchase grain for prices near the ten-year average for corn in the area of the plant. We have determined that the average price of corn in this same nine-county area over the last ten years is $2.36 per bushel. The following chart shows the ten-year average corn price in the nine-county area surrounding our plant:

County	10-Year Average Corn Price ($/Bu.)
Clay, NE	$	2.36
Fillmore, NE	$	2.36
Hamilton, NE	$	2.38
Jefferson, NE	$	2.35
Nuckolls, NE	$	2.37
Saline, NE	$	2.36
Seward, NE	$	2.33
Thayer, NE	$	2.37
York, NE	$	2.37
Total / Avg.	$	2.36

Grain prices are primarily dependent on world supply and demand and on U.S. and global corn crop production, which can be volatile as a result of a number of factors, the most important of which are weather, current and anticipated stocks and prices, export prices and supports and the government's current and anticipated agricultural policy. The price of grain has fluctuated significantly in the past and may fluctuate significantly in the future. Because the market price of ethanol is not related to grain prices, ethanol producers are generally not able to compensate for increases in the cost of grain feedstock through adjustments in prices charged for their ethanol. We, therefore, anticipate that our plant's profitability will be negatively impacted during periods of high corn prices.

Grain origination and risk management

We anticipate establishing ongoing business relationships with local farmers and grain elevators to acquire the corn needed for the project. We have no contracts, agreements or understandings with any

grain producer in the area. Although we anticipate procuring grains from these sources, there can be no assurance that such grains can be procured on acceptable terms, or if at all.

We expect to hire a commodities manager to ensure the consistent scheduling of corn deliveries and to establish and fill forward contracts through grain elevators. The commodities manager will utilize forward contracting and hedging strategies, including certain derivative instruments such as futures and option contracts, to manage our commodity risk exposure and optimize finished product pricing on our behalf. We anticipate that most of our grain will be acquired in this manner. We intend to use forward contracting and hedging strategies to help guard against price movements that often occur in corn markets. Hedging means protecting the price at which we buy corn and the price at which we will sell our products in the future. It is a way to attempt to reduce the risk caused by price fluctuation. The effectiveness of such hedging activities will depend on, among other things, the cost of corn and our ability to sell enough ethanol and distillers grains to use all of the corn subject to futures and option contracts we have purchased as part of our hedging strategy. Although we will attempt to link hedging activities to sales plans and pricing activities, such hedging activities themselves can result in costs because price movements in corn contracts are highly volatile and are influenced by many factors that are beyond our control. We may incur such costs and they may be significant.

Ethanol Markets

Ethanol has important applications. Primarily, ethanol can be used as an oxygenate capable of reducing air pollution and improving automobile performance. The ethanol industry is heavily dependent on several economic incentives to produce ethanol.

Local ethanol markets

Local markets will be limited and must be evaluated on a case-by-case basis. Although local markets will be the easiest to service, they may be oversold, which depresses the ethanol price.

Regional ethanol markets

Typically, a regional market is one that is outside of the local market, yet within the neighboring states. This market will likely be serviced by rail, and is within a 450-mile radius of the ethanol plant. Because ethanol use results in less air pollution than regular gasoline, regional markets typically include large cities that are subject to anti-smog measures in either carbon monoxide or ozone non-attainment areas, such as Chicago, St. Louis, Denver, and Minneapolis.

Generally, the regional market is good business to develop. The freight is reasonable, the competition, while aggressive, is not too severe, and the turn-around time on rail cars is favorable. Regional pricing tends to follow national pricing less the freight difference. As with national markets, the use of a group-marketing program or a broker is advantageous, especially in the first one to three years of operation.

In addition to rail, we may try to service this market by truck. Occasionally, there are opportunities to obtain backhaul rates from local trucking companies. These are rates that are reduced since the truck is loaded both ways. Normally, the trucks drive to the refined fuels terminals empty and load gasoline product for delivery. A backhaul is the opportunity to load the truck with ethanol to return to the terminal.

National ethanol markets

After implementing a methyl tertiary butyl ether ("MTBE") ban to curtail further water contamination, the states of California, New York and Connecticut now account for more than 1.4 billion gallons of annual ethanol demand. MTBE is a commonly used oxygenate used in fuels for

compliance with Federal Clean Air Act mandates, and is a major competitor of ethanol. Ethanol is the most readily available substitute for MTBE in this market. Twenty other state legislatures have phased out MTBE. We expect ethanol to replace MTBE as the oxygenate in the federal reformulated gasoline program, however, other MTBE replacements may capture a portion or all of these potential markets.

In June 2001, California requested a waiver from the reformulated gasoline ("RFG") oxygenate requirement under the Clean Air Act. This means that rather than using ethanol as an alternative oxygenate to MTBE, California is seeking to be released from federal requirements to use any oxygenates at all. The Environmental Protection Agency ("EPA") initially denied the request. However, the U.S. Court of Appeals for the Ninth Circuit's July 2003 decision overturned that denial and remanded the decision back to the EPA for further review. Since the Court's decision, California has reissued its appeal to the EPA. The EPA has yet to deliver a decision on the California waiver request.

The states of New York and Georgia have also filed requests for waiver of the oxygenate requirement. New York's request is still pending. The EPA denied Georgia's request for a waiver. Georgia has appealed the decision in both the district court and the 11th Circuit Court of Appeals. In November 2004, the district court affirmed the EPA's decision to impose a RFG requirement in Atlanta but stayed the program until the 11th Circuit Court could hear the state's appeal. The cases have been consolidated and a ruling is anticipated by the end of 2005. Until a ruling is issued, the RFG program in Atlanta will be delayed. Atlanta's ethanol market is currently estimated to be approximately 250 million gallons per year.

General Ethanol Demand and Supply

Demand for ethanol is currently estimated at more than 3.57 billion gallons per year and is expected to grow to at least 4 billion gallons per year by the year 2012 according to the National Corn Growers Association. This estimated increase in demand does not take into account the implementation of a Renewable Fuels Standard or similar legislation, which could cause the increase in demand to be greater than currently projected. Such legislation has not been enacted. If the use of MTBE is phased out on a national level in the next few years and the RFG oxygenate requirement remains unchanged, the anticipated growth may yield an increase in ethanol demand sooner than anticipated.

We will expect to benefit from federal ethanol supports and federal tax incentives. Changes to these supports or incentives could significantly impact demand for our ethanol. If a Renewable Fuels Standard bill or similar legislation is adopted, we expect it will create a substantial long-term market for our ethanol as required volumes increase over time. Renewable Fuels Standard legislation is currently being considered in both the U.S. House of Representatives and U. S. Senate. The current legislative proposals would eliminate the oxygen content requirement in the federal reformulated gasoline program, phase out the use of MBTE as a gasoline additive and establish a specific baseline volume of renewable fuel to be used in gasoline on a nationwide basis. The renewable fuels standard would largely be met by adding ethanol to gasoline. There is no assurance or guarantee that either the U.S. House of Representatives or U.S. Senate will pass RFS legislation or that any RFS legislation approved by Congress will contain provisions sufficiently favorable to the ethanol industry to increase demand.

The following chart illustrates the Energy Information Administration's estimated ethanol demand through year 2025, assuming no Renewable Fuels Standard legislation is enacted. These estimates could change significantly depending on changes in federal and state legislation and other market forces:

Ethanol production and consumption have been steadily increasing over the last six years. Within the last 18 months, the increase has accelerated as additional plants became operational. The chart below, prepared by the U.S. Department of Energy, illustrates the increase in ethanol stocks and consumption since 1996:

In the future, the combination of additional supply, successful challenges to the clean air standards and stagnant or reduced demand may adversely affect our profit margin and our ability to maintain positive cash flows. Figure 100 illustrates the Energy Information Administration's projected ethanol production through year 2025 including ethanol produced from cellulose biomass such as wood and agricultural residues:

Ethanol supply is also affected by ethanol produced or processed in certain countries in Central America and the Caribbean region. Ethanol produced in these countries is eligible for tariff reduction or elimination upon importation to the United States under a program known as the Caribbean Basin Initiative ("CBI"). Large ethanol producers, such as Cargill, have expressed interest in building dehydration plants in participating Caribbean Basin countries, such as El Salvador, which would convert ethanol into fuel-grade ethanol for shipment to the United States. Ethanol imported from Caribbean Basin countries may be a less expensive alternative to domestically produced ethanol. The International Trade Commission recently announced the 2005 CBI import quota of 240.4 million gallons of ethanol. Last year, legislation was introduced in the Senate that would limit the transshipment of ethanol through the CBI. It is possible that similar legislation will be introduced this year, however, there is no assurance or guarantee that such legislation will be introduced or that it will be successfully passed.

In addition, ethanol produced in Brazil affects ethanol supply. Brazil is currently the world's largest ethanol producer and exporter. Ethanol in Brazil is produced primarily from sugar cane, which is also used to produce food-grade sugar. Brazil experienced a dramatic increase in ethanol production and trade in 2004, exporting approximately 112 million gallons to the U.S. alone, largely attributed to the country's relatively weak sugar market in 2004. Ethanol imported from Brazil may be a less expensive alternative to domestically produced ethanol, which is primarily made from corn. In addition, hydrous ethanol produced in Brazil can be shipped to dehydration plants in CBI countries for conversion into fuel-grade ethanol, which allows Brazilian ethanol to benefit from the tariff reduction granted to CBI countries for shipment to the United States. Competition from ethanol imported from Brazil may affect our ability to sell our ethanol profitably, which would reduce the value of your investment.

Ethanol Pricing

Historically, ethanol prices tended to track the wholesale gasoline price plus the federal tax incentive. However, in recent months gas prices have steadily increased while ethanol prices have declined. The following chart, taken from the Chicago Board of Trade's March 23, 2005 presentation

on the ethanol industry, shows price histories for the Chicago cash ethanol, unleaded gasoline nearby futures, and crude oil nearby futures:

Ethanol price histories for the nearby regional markets for our proposed plant are presented in the following table:

Ethanol Average Prices

State	City	5 Year 1999-2003		3 Year 2001-2003		1 Year 2003		Recent 52 Weeks 09/23/04
NE	Omaha	$	1.25	$	1.31	$	1.30	$	1.58
NE	Lincoln	$	1.28	$	1.32	$	1.31	$	1.61
MN	Minneapolis	$	1.28	$	1.32	$	1.31	$	1.60
ND	Fargo	$	1.26	$	1.30	$	1.31	$	1.60
	Average	$	1.27	$	1.31	$	1.31	$	1.60

Source: Hart's Renewable-Fuel News

Historic prices may not be indicative of future prices. On March 23, 2005, the Chicago Board of Trade ("CBOT") launched the CBOT Denatured Fuel Ethanol futures contract. The new contract is designed to address the growing demand for an effective hedging instrument for domestically produced ethanol. Since we expect to engage a third party marketing firm to sell all of our ethanol we do not expect to directly use the new ethanol futures contract. However, it is possible that any ethanol marketing firm we engage may use the new ethanol futures contracts to manage ethanol price volatility.

Federal Ethanol Supports

Ethanol has important applications, primarily as a high quality octane enhancer and an oxygenate capable of reducing air pollution and improving automobile performance. Ethanol contains 35% oxygen by weight. When combined with gasoline, ethanol acts as an oxygenate. As a result, the gasoline burns cleaner, and releases less carbon monoxide and other exhaust emissions into the atmosphere. The

federal government encourages the use of oxygenated gasoline as a measure to protect the environment. Oxygenated gasoline is commonly referred to as reformulated gasoline.

The ethanol industry is heavily dependent on several economic incentives to produce ethanol, including federal ethanol supports. Ethanol sales have been favorably affected by the Clean Air Act amendments of 1990, particularly the Federal Oxygen Program which became effective November 1, 1992. The Federal Oxygen Program requires the sale of oxygenated motor fuels during the winter months in certain major metropolitan areas to reduce carbon monoxide pollution. Ethanol use has increased due to a second Clean Air Act program, the Reformulated Gasoline Program. This program became effective January 1, 1995, and requires the sale of reformulated gasoline in nine major urban areas to reduce pollutants, including those that contribute to ground level ozone, better known as smog. Increasingly stricter EPA regulations are expected to increase the number of metropolitan areas deemed in non-compliance with Clean Air Standards, which could increase the demand for ethanol.

During 2003 and 2004, the 108th Congress considered passage of a comprehensive federal energy bill. The former proposed legislation would have established a Renewable Fuels Standard ("RFS") that would have served as a catalyst for investment in renewable fuel processing fuels and new technologies. The legislation would have determined the specific baseline volume of ethanol to be used in gasoline on a nationwide basis. Controversial parts of the legislation would have phased out the use of MTBE nationally in exchange for limiting producer liability for environmental cleanup expenses. Although the legislation passed in the U.S. House of Representatives, it stalled in the U.S. Senate and expired with the close of the 108th Congress in December 2004.

However, the 109th Congress has again begun consideration of a RFS with the introduction of legislation in both the U.S. House of Representative and the U.S. Senate (H.R. 1608 and S. 606 and S. 650, respectively). The current RFS legislation would ban the use of MTBE in gasoline by 2010, with the exception that individual states could choose to continue to allow the use of MTBE by notifying the administrator of the EPA. In addition, the legislation would eliminate the requirement under current law for motor fuel to contain oxygenates and would require that all motor fuels sold by a refiner, blender, or importer contain a minimum volume of renewable fuels. Under S. 606, the required volume of renewable fuel would start at 3.8 billion gallons in 2006 and grow at a rate of approximately 300 million gallons per year to 6 billion gallons by 2012. H.R. 1608 and S. 650 provide for a minimum of 4 billion in 2006 and increase to 8 billion gallons in 2012. The RFS would largely be met by adding ethanol to gasoline.

On April 21, 2005, the U.S. House of Representatives passed the Energy Policy Act of 2005, which contained RFS provisions. This energy bill provides for a RFS implementation schedule beginning in 2006 at 3.8 billion gallons, increasing to 5.3 billion gallons in 2010 and 6 billion gallons in 2012. The legislation also eliminates the oxygen content requirement in the federal reformulated gasoline program and phases out the use of MTBE as a gasoline additive by 2014. The energy bill also includes a provision which, if passed, will shield U.S. refiners and makers of MTBE from liability lawsuits for contaminating water supplies. This measure is considered highly controversial because MTBE has been blamed for contaminating groundwater supplies in a number of states and inclusion of this measure may stall passage of the draft energy bill.

The first legislative session of the 109th Congress is currently scheduled to end in September 2005. As of the date of this prospectus, no further action has been taken on the above-described RFS legislation in either the U.S. House of Representatives or the U.S. Senate. However, Congress is expected to continue to debate, and possibly vote on, one or more of the bills described above during the second and third quarter of 2005. There is no assurance or guarantee that either the U.S. House of Representatives or U.S. Senate will pass any RFS legislation during the this legislative session or that any RFS legislation approved by Congress will contain provisions sufficiently favorable to the ethanol industry to increase demand.

The government's regulation of the environment changes constantly. It is possible that more stringent federal or state environmental rules or regulations could be adopted, which could increase our operating costs and expenses. It also is possible that federal or state environmental rules or regulations could be adopted that could have an adverse effect on the use of ethanol. For example, changes in the environmental regulations regarding the required oxygen content of automobile emissions could have an adverse effect on the ethanol industry. Furthermore, plant operations likely will be governed by the Occupational Safety and Health Administration ("OSHA"). OSHA regulations may change such that the costs of the operation of the plant may increase. Any of these regulatory factors may result in higher costs or other materially adverse conditions effecting our operations, cash flows and financial performance.

The use of ethanol as an oxygenate to blend with fuel to comply with federal mandates also has been aided by federal tax policy. The Energy Tax Act of 1978 exempted ethanol blended gasoline from the federal gas tax as a means of stimulating the development of a domestic ethanol industry and mitigating the country's dependence on foreign oil. As amended, the federal tax exemption allowed the market price of ethanol to compete with the price of domestic gasoline. The exemption for a 10% ethanol blend was the equivalent of providing a per gallon "equalization" payment that allowed blenders to pay more for ethanol than the wholesale price of gasoline and still retain profit margins equal to those received upon the sale of gasoline that is not blended with ethanol. The federal gasoline tax exemption for a 10% ethanol blend was 5.2 cents per gallon. This exemption was scheduled to gradually drop to 5.1 cents per gallon in 2005, however, as of January 1, 2005, this federal tax incentive has been replaced by a new volumetric ethanol excise tax credit discussed below.

On October 22, 2004, President Bush signed H.R. 4520, which contained the Volumetric Ethanol Excise Tax Credit ("VEETC") and amended the federal excise tax structure effective as of January 1, 2005. Prior to VEETC, ethanol-blended fuel was taxed at a lower rate than regular gasoline (13.2 cents on a 10% blend). Under VEETC, the ethanol excise tax exemption has been eliminated, thereby allowing the full federal excise tax of 18.4 cents per gallon of gasoline to be collected on all gasoline and allocated to the highway trust fund. This is expected to add approximately $1.4 billion to the highway trust fund revenue annually. In place of the exemption, the bill creates a new volumetric ethanol excise tax credit of 5.1 cents per gallon of ethanol blended at 10%. Refiners and gasoline blenders apply for this credit on the same tax form as before only it is a credit from general revenue, not the highway trust fund. Based on volume, the VEETC is expected to allow much greater refinery flexibility in blending ethanol since it makes the tax credit available on all ethanol blended with all gasoline, diesel and ethyl tertiary butyl ether ("ETBE"), including ethanol in E-85 and the proposed E-20 in Minnesota. The VEETC is scheduled to expire on December 31, 2010.

The ethanol industry and our business depend upon continuation of the federal ethanol supports discussed above. These incentives have supported a market for ethanol that might disappear without the incentives. Alternatively, the incentives may be continued at lower levels than at which they currently exist. The elimination or reduction of such federal ethanol supports would make it more costly for us to sell our ethanol and would likely reduce our net income and the value of your investment.

Project Location and Proximity to Markets

We anticipate building our plant near Fairmont, Nebraska, in southeastern Nebraska. We reserve the right, in the sole discretion of our board of directors, to select a different location for the plant . We have purchased four real estate options. Two of these options make up our primary plant site. The remaining two options make up our alternative site, which is approximately one mile from our primary site.

On February 7, 2005, we acquired a real estate option from Duane V. Lott, a resident of Nebraska, to purchase approximately 87 acres of land near Fairmont, Nebraska. We paid $5,000 for this option. Under the option agreement, we may purchase approximately 87 acres at a total purchase price of $478,500.00. We have until August 1, 2006 to exercise the option. On February 18, 2005, we acquired a real estate option from WDB, Inc., a Nebraska corporation, to purchase between 75 and 112 acres of land near Fairmont, Nebraska. We paid $10,000 for this option. This option allows us to purchase between 75 and 112 acres for $6,000 per acre. We have until August 1, 2006 to exercise this option. On April 26, 2005, we acquired a real estate option from Doris Gwen Ogden to purchase approximately 148 acres in Fillmore County, Nebraska. We paid $10,000 for this option. This option agreement allows us to purchase approximately 148 acres for a total purchase price of $740,000. We have until August 1, 2006 to exercise this option. On April 13, 2005 we acquired a real estate option from L&K Land, Inc. to purchase approximately 103 acres in Fillmore County, Nebraska. We paid $5,000 for this option. Under this option, we may purchase approximately 103 acres for $566,500.00. We have until August 1, 2006 to exercise this option. Each of these options allows us to apply the option price towards the total purchase price in the event we exercise the option.

We selected our anticipated primary plant site because of the site's location relative to existing grain production, accessibility to road and rail transportation, and its proximity to major population centers. The site is near the mainline BNSF railroad. In addition, the site is also in close proximity the intersection of U.S. Highways 6 and 81.

The map below shows the approximate location of our proposed primary plant site:

There can be no assurance that we will not encounter hazardous conditions at the plant site. We are relying on Fagen, Inc. to determine the adequacy of the site for construction of the ethanol plant. We may encounter hazardous conditions at the chosen site that may delay the construction of the ethanol plant. We do not expect that Fagen, Inc. will be responsible for any hazardous conditions encountered at the site. Upon encountering a hazardous condition, Fagen, Inc. may suspend work in the affected area. If we receive notice of a hazardous condition, we may be required to correct the condition prior to continuing construction. The presence of a hazardous condition will likely delay construction of the ethanol plant and may require significant expenditure of our resources to correct the condition. In addition, it is anticipated that Fagen, Inc. will be entitled to an adjustment in price if it has been adversely affected by the hazardous condition. If we encounter any hazardous conditions during construction that require time or money to correct, such event may have a material adverse effect on our operations, cash flows and financial performance.

Transportation and delivery

The plant is expected to have the facilities to receive grain by truck and rail and to load ethanol and distillers grains onto trucks and rail cars. In terms of freight rates, rail is considerably more cost effective than truck transportation to the more distant markets. We expect that the BNSF Railroad will provide rail service to the proposed site. However, we will still need to establish rail access directly to the plant from the main rail line if we proceed with the purchase of our primary site. We are negotiating the purchase of a rail spur and right of way near this site. We may or may not be successful in these negotiations. Our cost of rail infrastructure is currently estimated at approximately $2,350,000. This estimate may change depending on whether or not we are able to purchase the rail spur and right of way or that if we do if the purchase is on favorable terms. We are in the process of negotiating a low interest loan for rail infrastructure costs, through a federal loan program that is administered by Nebraska. We have not entered into any written agreements for this low interest loan and there is no assurance that we will do so or that if we do that the terms will be as favorable as discussed.

We have engaged TranSystems Corporation of Kansas City, Missouri, to assist us with the rail engineering and design services necessary to install rail infrastructure for a 100 million gallons per year ethanol plant.

Utilities

The production of ethanol is a very energy intensive process that uses significant amounts of electricity and natural gas. Water supply and quality are also important considerations. On April 5, 2005, we entered into an Energy Management Agreement and an Agency Authorization Agreement with U.S. Energy Services, Inc. to manage our energy supplies for our ethanol plant. As a part of this agreement, U.S. Energy Services, Inc. has agreed to solicit bids and negotiate, execute and administer energy supply contracts, interstate transportation contracts and LDC transportation contracts on our behalf. We plan to enter into agreements with local gas, electric, and water utilities to provide our needed energy and water. There can be no assurance that those utilities will be able to reliably supply the gas, electricity, and water that we need.

If there is an interruption in the supply of energy or water for any reason, such as supply, delivery, or mechanical problems, we may be required to halt production. If production is halted for an extended period of time, it may have a material adverse effect on our operations, cash flows, and financial performance.

Natural gas

The plant will produce process steam from its own boiler system and dry the distillers dried grains by-product via a direct gas-fired dryer. U.S. Energy is examining alternatives and will assist us with selecting a natural gas supplier. The price we will pay for natural gas has not yet been determined.

Electricity

In the State of Nebraska, electricity is supplied by Nebraska Public Power District, a utility owned by the people of Nebraska. Nebraska Public Power District has high voltage 69kV level transmission lines located on easements on our anticipated plant site that may be available to supply us with an on-site substation at primary voltage. We have not entered into any agreements with Nebraska Public Power District to provide electricity to the site. We have entered into an agreement with U.S. Energy Services, Inc. to help manage our energy supplies. The price at which we will be able to purchase electric services has not yet been determined.

Water

We will require a significant supply of water. We anticipate that we will have adequate water supply from the agricultural wells located on the primary and alternate site. Each site has two agricultural wells that are currently used for pivot irrigation purposes. These well will have to be converted from agricultural to industrial uses prior to our use.

Much of the water used in an ethanol plant is recycled back into the process. There are, however, certain areas of production where fresh water is needed. Those areas include boiler makeup water and cooling tower water. Boiler makeup water is treated on-site to minimize all elements that will harm the boiler and recycled water cannot be used for this process. Cooling tower water is deemed non-contact water because it does not come in contact with the mash, and, therefore, can be regenerated back into the cooling tower process. The makeup water requirements for the cooling tower are primarily a result of evaporation. Depending on the type of technology utilized in the plant design, much of the water can be recycled back into the process, which will minimize the discharge water. This will have long-term effect of lowering wastewater treatment costs. Many new plants today are zero or near zero effluent facilities. We anticipate our plant design incorporating the ICM/Phoenix Bio-Methanator wastewater treatment process resulting in a zero discharge of plant process water.

Our Primary Competition

We will be in direct competition with numerous other ethanol producers, many of whom have greater resources than we do. We also expect that additional ethanol producers will enter the market if the demand for ethanol continues to increase. Our plant will compete with other ethanol producers on the basis of price, and to a lesser extent, delivery service. We believe that we can compete favorably with other ethanol producers due to our proximity to ample grain supplies at favorable prices.

According to the Renewable Fuels Association, during the last 20 years, ethanol production capacity in the United States has grown from almost nothing to an estimated 3.8 billion gallons per year. Plans to construct new plants or to expand existing plants have been announced which would increase capacity by approximately 891 million gallons per year. This increase in capacity may continue in the future. We cannot determine the effect of this type of an increase upon the demand or price of ethanol.

The ethanol industry has grown to over 90 production facilities in the United States. The largest ethanol producers include Abengoa Bioenergy Corp., Archer Daniels Midland, Aventine Renewable Energy, Inc., Cargill, Inc., New Energy Corp. and VeraSun Energy Corporation, all of which are capable of producing more ethanol than we expect to produce. In addition, there are several regional

entities recently formed, or in the process of formation, of similar size and with similar resources to ours. Nebraska currently has 11 ethanol plants producing an aggregate of 527 million gallons of ethanol per year. In addition, there are a number of ethanol plants in Nebraska under construction or in the planning stage. This includes a 50 million gallons per year plant currently planned for Adams, Nebraska, which is approximately 60 miles from our anticipated plant site.

The following table identifies most of the producers in the United States along with their production capacities.

U.S. FUEL ETHANOL PRODUCTION CAPACITY

million gallons per year (mmgy)

COMPANY	LOCATION	FEEDSTOCK	Current Capacity (mmgy)	Under Construction/ Expansions (mmgy)
Abengoa Bioenergy Corp.	York, NE	Corn/milo	55
	Colwich, KS		25
	Portales, NM		15	15
ACE Ethanol, LLC	Stanley, WI	Corn	30
Adkins Energy, LLC*	Lena, IL	Corn	40
AGP*	Hastings, NE	Corn	52
Agra Resources Coop. d.b.a EXOL*	Albert Lea, MN	Corn	40
Agri-Energy, LLC*	Luverne, MN	Corn	21
Alchem Ltd. LLLP	Grafton, ND	Corn	10.5
Al-Corn Clean Fuel*	Claremont, MN	Corn	30
Amaizing Energy, LLC*^	Denison, IA	Corn		40
Archer Daniels Midland	Decatur, IL	Corn	1070
	Cedar Rapids, IA	Corn
	Clinton, IA	Corn
	Columbus, NE	Corn
	Marshall, MN	Corn
	Peoria, IL	Corn
	Wallhalla, ND	Corn/barley
Aventine Renewable Energy, Inc.	Pekin, IL	Corn	100
	Aurora, NE	Corn	40
Badger State Ethanol, LLC*	Monroe, WI	Corn	48
Big River Resources, LLC*	West Burlington, IA	Corn	40
Broin Enterprises, Inc.	Scotland, SD	Corn	9
Bushmills Ethanol*^	Atwater, MN	Corn		40
Cargill, Inc.	Blair, NE	Corn	85
	Eddyville, IA	Corn	35
Central Iowa Renewable Energy, LLC*^	Goldfield, IA	Corn		50
Central MN Ethanol Coop*	Little Falls, MN	Corn	20.5
Central Wisconsin Alcohol	Plover, WI	Seed corn	4
Chief Ethanol	Hastings, NE	Corn	62
Chippewa Valley Ethanol Co.*	Benson, MN	Corn	45
Commonwealth Agri-Energy, LLC*	Hopkinsville, KY	Corn	23
Corn Plus, LLP*	Winnebago, MN	Corn	44
Dakota Ethanol, LLC*	Wentworth, SD	Corn	50
DENCO, LLC*	Morris, MN	Corn	21.5

East Kansas Agri-Energy, LLC*^	Garnett, KS	Corn		35
ESE Alcohol Inc.	Leoti, KS	Seed corn	1.5
Ethanol2000, LLP*	Bingham Lake, MN	Corn	30
Frontier Ethanol, LLC^	Gowrie, IA	Corn		60
Glacial Lakes Energy, LLC*	Watertown, SD	Corn	50
Golden Cheese Company of California*	Corona, CA	Cheese whey	5
Golden Grain Energy L.L.C.*	Mason City, IA	Corn	40
Golden Triangle Energy, LLC*	Craig, MO	Corn	20
Grain Processing Corp.	Muscatine, IA	Corn	20
Granite Falls Energy, LLC^	Granite Falls, MN	Corn		45
Great Plains Ethanol, LLC*	Chancellor, SD	Corn	50
Hawkeye Renewables, LLC	Iowa Falls, IA	Corn	45	50
	Fairbank, IA	Corn		100
Heartland Corn Products*	Winthrop, MN	Corn	36
Heartland Grain Fuels, LP*	Aberdeen, SD	Corn	8
	Huron, SD	Corn	14
Horizon Ethanol, LLC^	Jewell, IA	Corn		60
Husker Ag, LLC*	Plainview, NE	Corn	24
Illinois River Energy, LLC^	Rochelle, IL	Corn		50
Iowa Ethanol, LLC*	Hanlontown, IA	Corn	55
James Valley Ethanol, LLC	Groton, SD	Corn	50
KAAPA Ethanol, LLC*	Minden, NE	Corn	40
Land O' Lakes*	Melrose, MN	Cheese whey	2.6
Lincolnland Agri-Energy, LLC*	Palestine, IL	Corn	40
Lincolnway Energy, LLC*^	Nevada, IA	Corn		50
Liquid Resources of Ohio^	Medina, OH	Waste beverage		4
Little Sioux Corn Processors, LP*	Marcus, IA	Corn	49
Merrick/Coors	Golden, CO	Waste beer	1.5
MGP Ingredients, Inc.	Pekin, IL	Corn/wheat starch	78
	Atchison, KS
Michigan Ethanol, LLC	Caro, MI	Corn	50
Mid-Missouri Energy, Inc.*	Malta Bend, MO	Corn	45
Midwest Grain Processors*	Lakota, IA	Corn	50	45
Midwest Renewable Energy, LLC	Sutherland, NE	Corn	15
Miller Brewing Co.	Olympia, WA	Brewery waste	0.7
Minnesota Energy*	Buffalo Lake, MN	Corn	18
New Energy Corp.	South Bend, IN	Corn	102
North Country Ethanol, LLC*	Rosholt, SD	Corn	20
Northeast Missouri Grain, LLC*	Macon, MO	Corn	40
Northern Lights Ethanol, LLC*	Big Stone City, SD	Corn	50
Northstar Ethanol, LLC^	Lake Crystal, MN	Corn	50
Otter Creek Ethanol, LLC*	Ashton, IA	Corn	55

Panhandle Energies of Dumas, LP^	Dumas, TX	Corn/Grain Sorghum		30
Parallel Products	Louisville, KY	Beverage Waste	5.4
	R. Cucamonga, CA
Permeate Refining	Hopkinton, IA	Sugars & starches	1.5
Phoenix Biofuels^	Goshen, CA	Corn		25
Pine Lake Corn Processors, LLC*	Steamboat Rock, IA	Corn	20
Platte Valley Fuel Ethanol, L.L.C.	Central City, NE	Corn	40
Pro-Corn, LLC*	Preston, MN	Corn	40
Quad-County Corn Processors*	Galva, IA	Corn	23
Reeve Agri-Energy	Garden City, KS	Corn/milo	12
Siouxland Energy & Livestock Coop*	Sioux Center, IA	Corn	22
Sioux River Ethanol, LLC*	Hudson, SD	Corn	55
Sterling Ethanol, LLC^	Sterling, CO	Corn		42
Tall Corn Ethanol, LLC*	Coon Rapids, IA	Corn	49
Tate & Lyle	Loudon, TN	Corn	67
Trenton Agri Products, LLC	Trenton, NE	Corn	30
United WI Grain Producers, LLC*	Friesland, WI	Corn	40
U.S. Energy Partners, LLC	Russell, KS	Milo/wheat starch	40
Utica Energy, LLC	Oshkosh, WI	Corn	48
VeraSun Energy Corporation	Aurora, SD	Corn	102
VeraSun Fort Dodge, LLC^	Ft. Dodge, IA	Corn		110
Voyager Ethanol, LLC*	Emmetsburg, IA	Corn	50
Western Plains Energy, LLC*	Campus, KS	Corn	30
Western Wisconsin Renewable Energy, LLC*^	Boyceville, WI	Corn		40
Wyoming Ethanol	Torrington, WY	Corn	5
Total Existing Capacity			3850.7

Total Under Construction/ Expansions				891.0

Total Capacity			4741.7

*		farmer-owned		Renewable Fuels Association
^		under construction		Last Updated: May 2005

Competition from Alternative Fuel Additives

Alternative fuels, gasoline oxygenates and ethanol production methods are continually under development by ethanol and oil companies with far greater resources. New ethanol products or methods of ethanol production developed by larger and better-financed competitors could provide them competitive advantages and harm our business.

We will also compete with producers of other gasoline additives having similar octane and oxygenate values as ethanol. Ethers are composed of isobutylene, which is a product of the refining industry, and ethanol or methanol. The products are ethyl tertiary butyl ether ("ETBE"), or methyl

tertiary butyl ether ("MTBE"). We expect to compete with producers of MTBE, a petrochemical derived from methanol that costs less to produce than ethanol. MTBE is a commonly used oxygenate used in fuels for compliance with Federal Clean Air Act mandates, and is a major competitor of ethanol. Many major oil companies produce MTBE and because it is petroleum-based, its use is strongly supported by major oil companies. Alternative fuels, gasoline oxygenates and alternative ethanol production methods are also continually under development. The major oil companies have significantly greater resources than we have to market MTBE, to develop alternative products, and to influence legislation and public perception of MTBE and ethanol. Despite this fact, the use of MTBE may become legally restricted as a pollutant in several, and possibly most, states, according to a study prepared by the Renewable Fuels Association entitled, "Infrastructure Requirements for an Expanded Ethanol Industry." California already banned the use of MTBE as of January 1, 2004. Twenty other states have enacted legislation prohibiting the sale of gasoline containing certain levels of MTBE or phasing out the use of MTBE.

Demand for ethanol is expected to rise, as ethanol is the most readily available substitute for MTBE in these markets. Additional ethanol production capacity would need to come from existing plant expansions and new plant construction. Furthermore, the United States' petroleum industry is pursuing a repeal of all federal oxygenated fuel requirements. If such a repeal is successful, whether limited to or expanded beyond California, the demand for ethanol would not increase and could diminish. These companies also have sufficient resources to begin production of ethanol should they choose to do so. Competition from these companies may have a material adverse effect on our operations, cash flows and financial performance.

ETBE's advantages over ethanol include its low affinity for water and low vapor pressure. Because petroleum pipelines and storage tanks contain water in various amounts, ETBE's low affinity for water allows it to be distributed through existing pipeline systems, as contrasted with ethanol, which is best shipped via transport truck or rail car. In addition, blending ETBE with gasoline reduces the overall vapor pressure of the blend thereby reducing the normal volatile organic compound evaporative emissions. ETBE is not widely commercially available yet, and it may suffer from the same negative environmental effects as MTBE. Scientific research to better define the properties of ETBE as it relates to the environment is underway.

Employees

Prior to completion of the plant construction and commencement of operations, we intend to hire approximately 45 full-time employees. Approximately five of our employees will be involved primarily in management and administration and the remainder will be involved primarily in plant operations. As of the date of this prospectus, we have not hired any employees.

The following table represents some of the anticipated positions within the plant and the minimum number of individuals we expect will be full-time personnel:

Position		# Full-Time Personnel
General Manager		1
Plant Manager		1
Bookkeeper		1
Secretary		1
Commodity Specialist		1
Lab Manager		1
Lab Assistant		2
Utilities, Maintenance and Safety Manager		1
Licensed Boiler Operator		2
Welder		1
Electrician		1
Electrician Technician		1
Maintenance Worker		4
Production Team Leaders		6
Team Production I		6
Team Production II		6
Rail Attendant		2
Truck Attendant		4
Grain Sampling & Records		1
Entry Level Floater		2
	TOTAL	45

The positions, titles, job responsibilities and number allocated to each position may differ when we begin to employ individuals for each position.

We intend to enter into written confidentiality and assignment agreements with our officers and employees. Among other things, these agreements will require such officers and employees to keep all proprietary information developed or used by us in the course of our business strictly confidential.

Our success will depend in part on our ability to attract and retain qualified personnel at a competitive wage and benefit level. We must hire qualified managers, accounting, human resources and other personnel. We operate in a rural area with low unemployment. There is no assurance that we will be successful in attracting and retaining qualified personnel at a wage and benefit structure at or below those we have assumed in our project. If we are unsuccessful in this regard, we may not be competitive with other ethanol plants and your investment may lose value.

Strategic Partners

Fagen, Inc.

We have entered into a non-binding letter of intent with Fagen, Inc. in connection with the design, construction and operation of the proposed plant. Fagen, Inc. has been involved in the construction of more ethanol plants than any other company in this industry. The expertise of Fagen, Inc. in integrating process and facility design into a construction and operationally efficient facility is very important. Fagen, Inc. also has knowledge and support to assist our management team in executing a successful start-up. Fagen, Inc. is a meaningful project participant because of its investment and desire to facilitate the project's successful transition from start-up to day-to-day profitable operation.

Letter of intent with Fagen, Inc.

We have not entered into any legally binding agreements with Fagen, Inc. or ICM, Inc. We have executed a letter of intent with Fagen, Inc. who has agreed to enter into good faith negotiations with us to prepare definitive agreements for financial, design and construction services. We expect to pay Fagen, Inc. $98,000,000 in exchange for the following services:

•: Providing a preliminary design and construction schedule and a guaranteed maximum price for the design and construction of the plant;
•: Assisting us with site evaluation and selection;
•: Designing and building the plant; and
•: Assisting us in locating appropriate operational management for the plant.

We will be responsible for fees and expenses related to financing, such as printing and publication expenses, legal fees, ratings, credit enhancements, trustee or agent fees and any registration fees.

ICM, Inc.

ICM, Inc. is a full-service engineering, manufacturing and merchandising firm based in Colwich, Kansas and is expected to be the principal subcontractor for the plant. ICM, Inc. is expected to provide the process engineering operations for Fagen, Inc. ICM, Inc.'s merchandising operation currently procures and markets various grain products.

ICM, Inc. personnel have over 60 years of combined dry and wet mill operation and design experience. They have been involved in the research, design and construction of ethanol plants for many years. Principals of ICM, Inc. have over twenty years of experience in the ethanol industry and have been involved in the design, fabrication and operations of many ethanol plants.

Construction and timetable for completion of the project

Assuming this offering is successful, and we are able to complete the debt portion of our financing, we estimate that the project will be completed approximately 14 to 16 months after we close on this offering. This schedule further assumes that two months of detailed design will occur prior to closing and a 14 to 16 month construction schedule followed by two months of commissioning. This schedule also assumes that weather, interest rates, and other factors beyond our control do not upset our timetable. There can be no assurance that the timetable that we have set will be followed, and factors or events beyond our control could hamper our efforts to complete the project in a timely fashion.

Regulatory Permits

We will be subject to extensive air, water and other environmental regulations and we will need to obtain a number of environmental permits to construct and operate the plant. In addition, it is likely that our senior debt financing will be contingent on our ability to obtain the various required environmental permits. We are anticipating engaging ICM, Inc. to coordinate and assist us with obtaining all environmental permits, and to advise us on general environmental compliance. We are anticipating that Fagen, Inc. will be responsible for all necessary construction permits.

Of the permits described below, we must obtain the Minor Construction Permit for air emissions and the Construction Storm Water Discharge Permit prior to starting construction. The remaining permits will be required shortly before or shortly after we can begin to operate the plant. If for any reason any of these permits are not granted, construction costs for the plant may increase, or the plant may not be constructed at all. In addition to the state requirements, the United States Environmental Protection Agency ("EPA") could impose conditions or other restrictions in the permits that are

detrimental to us or which increase permit requirements or the testing protocols and methods necessary to obtain a permit either before, during or after the permitting process. The State of Nebraska and the EPA could also modify the requirements for obtaining a permit. Any such event would likely have a material adverse impact on our operations, cash flows and financial performance.

Even if we receive all required permits from the State of Nebraska, we may also be subject to regulations on emissions from the EPA. Currently, the EPA's statutes and rules do not require us to obtain separate EPA approval in connection with the construction and operation of the proposed plant. Additionally, environmental laws and regulations, both at the federal and state level, are subject to change, and changes can be made retroactively. Consequently, even if we have the proper permits at the present time, we may be required to invest or spend considerable resources to comply with future environmental regulations or new or modified interpretations of those regulations to the detriment of our financial performance.

Minor construction permit for air emissions

Our preliminary estimates indicate that this facility will be considered a minor source of regulated air pollutants. There are a number of emission sources that are expected to require permitting. These sources include the boiler, ethanol process equipment, storage tanks, scrubbers, and baghouses. The types of regulated pollutants that are expected to be emitted from our plant include PM10, CO, NOx and VOCs. The activities and emissions mean that we are expected to obtain a minor construction permit for the facility emissions. Because of regulatory requirements, we anticipate that we will agree to limit production levels to a certain amount, which may be slightly higher than the production levels described in this document (currently projected at 100 million gallons per year at the nominal rate with the permit at a slightly higher rate) in order to avoid having to obtain Title V air permits. These production limitations will be a part of the minor construction permit. If we exceed these production limitations, we could be subjected to very expensive fines, penalties, injunctive relief and civil or criminal law enforcement actions. Exceeding these production limitations could also require us to pursue a Title V air permit. There is also a risk that further analysis prior to construction, a change in design assumptions or a change in the interpretation of regulations may require us to file for a Title V air permit. If we must obtain a Title V air permit, then we will experience significantly increased expenses and a significant delay in obtaining a subsequently sought Title V air permit. There is also a risk that the State might reject a Title V air permit application and request additional information, further delaying startup and increasing expenses. Even if we obtain a minor construction permit prior to construction, the air quality standards may change, thus forcing us to later apply for a Title V air permit. There is also a risk that the area in which the plant is situated may be determined to be a nonattainment area for a particular pollutant. In this event, the threshold standards that require a Title V permit may be changed, thus requiring us to file for and obtain a Title V air permit. The cost of complying and documenting compliance should a Title V air permit be required is also higher. It is also possible that in order to comply with applicable air regulations or to avoid having to obtain a Title V permit, we would have to install additional air pollution control equipment such as additional or different scrubbers.

Air pollution standard

There are a number of standards which may affect the construction and operation of the plant going forward. The Prevention of Significant Deterioration ("PSD") regulation creates more stringent and complicated permit review procedures for construction permits. It is possible, but not expected, that the plant may exceed applicable PSD levels for NOx, CO, and VOCs.

Waste Water National Pollutant Discharge Elimination System Permits (INPDES Permits)

We expect that we will use water to cool our closed circuit systems in the proposed plant. Although the water in the cooling system will be re-circulated to decrease facility water demands, a certain amount of water will be continuously replaced to make up for evaporation and to maintain a high quality of water in the cooling tower. In addition, there will be occasional blowdown water that will have to be discharged. The exact details regarding the source of water and the amount of non-process and other wastewater that needs to be discharged will not be known until tests confirm the water quality and quantity for the site. Although unknown at this time, the quality and quantity of the water source and the specific requirements imposed by the Nebraska DEQ for discharge will materially affect the financial performance of the Company. We expect to apply for a Nebraska Pretreatment Permit (NPP) for the discharge of the non-process waste water. We expect to file for a permit to allow the discharge of wastewater from a manufacturing or commercial operation. We expect to apply for a NPDES wastewater construction site permit prior to construction. This permit will require submission of plans and specifications with the Nebraska DEQ. We do not expect to require a permit for the land application or discharge of process wastewater based on the design proposed by our engineers. There can be no assurances that these permits will be granted to us. If these permits are not granted, then our plant may not be allowed to operate. However, we anticipate receiving the permits because Nebraska has no statute or regulation governing or limiting the withdrawal of water from wells, and because we will not be transferring water from one water district or basin to another, no well withdrawal permit will be sought or required.

Storm Water Discharge Permit and Storm Water Pollution Prevention Program (General NPDES Permits)

Before we can begin construction of our proposed ethanol plant, we must obtain a construction storm water discharge permit from the Nebraska Department of Environmental Quality ("General Permit NER 100000"). This permit application must be filed 90 days before construction begins. In connection with this permit, we must have a Pollution Prevention Plan in place that outlines various measures we plan to implement to prevent storm water pollution. The plan must be submitted, but need not be approved by the Nebraska Department of Environmental Quality. We anticipate, but there can be no assurances, that we will be able to obtain a General Permit NER 100000. We must also file a separate application for a General Permit NER000000 for industrial storm water discharges. The application for the General Permit for industrial storm water discharges, NER000000, must be filed 24 hours prior to the start of operations. We anticipate, but there can be no assurances, that we will be able to obtain a General Permit NER000000 storm water discharge permit. HDR Engineering, Inc. is expected to assist us in obtaining this permit.

New source performance standards

The plant will be subject to New Source Performance Standards for both the plant's distillation processes and the storage of volatile organic compounds used in the denaturing process. These duties include initial notification, emissions limits, compliance, monitoring requirements, and record keeping requirements.

Spill prevention, control, and countermeasures plan

Before we can begin operations, we must prepare and implement a Spill Prevention Control and Countermeasure ("SPCC") plan in accordance with federal guidelines. This plan will address oil pollution prevention regulations and must be reviewed and certified by a professional engineer. The SPCC must be reviewed and updated every three years.

Bureau of Alcohol, Tobacco, and Firearms Requirements

Because ethanol is made from potentially human-consumable alcohol, we must comply with applicable Bureau of Alcohol, Tobacco and Firearms regulations before we can begin operations. These regulations require that we first make application for and obtain an alcohol fuel producer's permit. The application must include information identifying the principal persons involved in our venture and a statement as to whether any of them have ever been convicted of a felony or misdemeanor under federal or state law. The term of the permit is indefinite until terminated, revoked or suspended. The permit also requires that we maintain certain security measures. We must also secure an operations bond. There are other taxation requirements related to special occupational tax and a special stamp tax. We expect to apply for this permit prior to commencement of construction of the plant.

Risk management plan

We are currently in the process of determining whether anhydrous ammonia or aqueous ammonia will be used in our production process. Under the Clean Air Act, stationary sources with processes that contain more than a threshold quantity of a regulated substance are required to prepare and implement a Risk Management Plan. If we use anhydrous ammonia, we must establish a plan to prevent spills or leaks of the ammonia and an emergency response program in the event of spills, leaks, explosions or other events that may lead to the release of the ammonia into the surrounding area. The same requirement may also be true for denaturant. This determination will be made as soon as the exact chemical makeup of the denaturant is obtained. We will need to conduct a hazardous assessment and prepare models to assess the impact of an ammonia and/or denaturant release into the surrounding area. The program will be presented at one or more public meetings. However, if we use aqueous ammonia, the risk management program will only be needed for the denaturant. In addition, it is likely that we will have to comply with the prevention requirements under OSHA's Process Safety Management Standard. These requirements are similar to the Risk Management Plan requirements. The Risk Management Plan should be filed before use.

Environmental Protection Agency

Even if we receive all Nebraska environmental permits for construction and operation of the plant, we will also be subject to oversight activities by the EPA. There is always a risk that the EPA may enforce certain rules and regulations differently than Nebraska's environmental administrators. Nebraska or EPA rules and regulations are subject to change, and any such changes may result in greater regulatory burdens.

Nuisance

Ethanol production has been known to produce an odor to which surrounding residents could object. Ethanol production may also increase dust in the area due to operations and the transportation of grain to the plant and ethanol and distillers dried grains from the plant. Such activities may subject us to nuisance, trespass, or similar claims by employees or property owners or residents in the vicinity of the plant. To help minimize the risk of nuisance claims based on odors related to the production of ethanol and its by-products, we intend to install a thermal oxidizer in the plant. See "DESCRIPTION OF BUSINESS—Thermal Oxidizer" for additional information. Nonetheless, any such claims or increased costs to address complaints may have a material adverse effect on us, our operations, cash flows, and financial performance.

We are not currently involved in any litigation involving nuisance or any other claims.

Endangered Species

Nebraska's Nongame and Endangered Species Conservation Act requires that the Nebraska Department of Natural Resources review a proposed site to determine if it will have a negative impact on endangered species. It is possible that this review will result in requirements being imposed in order to reduce or eliminate the impact on an endangered or threatened species. It is possible that such requirements might increase costs and reduce our profitability and the value of your investment.

Archeological and Historical Sites

State Historic Preservation Office of the Nebraska State Historical Society will be asked to review the site plan and proposed use of the site to determine if it will negatively impact any archeological or historical site. It is possible that this review will result in requirements being imposed in order to reduce or eliminate the impact on an archaeological or historical site. It is possible that such requirements might increase costs and reduce our profitability and the value of your investment.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Our amended and restated operating agreement provides that our initial board of directors will be comprised of no fewer than three and no more than 13 members. However, at the first annual or special meeting of the members following the date on which substantial operations of the ethanol plant commences, the number of directors shall be reduced and become fixed at nine. The initial board of directors will serve until the first annual or special meeting of the members following the date on which substantial operations of the ethanol plant commences. The amended and restated operating agreement provides that if the reduction in the number of directors at the first annual or special meeting requires the removal of any director, John T. Porter, Robert W. Holmes and Revis L. Stephenson, III shall not be included in the directors removed at that time. The amended and restated operating agreement further provides for a staggered board of directors, where, upon the expiration of the initial board, the first group of directors shall serve for one year, the second group shall serve for two years, and the third group shall serve for three years. The successors for each group of directors shall be elected for a 3-year term and at that point, one-third of the total number of directors will be elected by the members each year. The directors shall be placed into groups by resolution of the initial board of directors prior to the expiration of the initial term. Our amended and restated operating agreement provides that John T. Porter will be in Group I; Robert W. Holmes will be in Group II; and Revis L. Stephenson, III will be in Group III. The groups for the remaining directors will be determined at a later date.

Identification of Directors, Executive Officers and Significant Employees

The following table shows our directors and officers as of the date of this prospectus:

Board Member		Office
Revis L. Stephenson, III		Chairman and Director
Robert W. Holmes		Treasurer and Director
Larry L. Cerny		Secretary and Director
Troy Otte		Director
John E. Lovegrove		Director
Robert E. Bettger		Director
John T. Porter		Director
Richard W. Hughes		Director
Keith E. Spohn		Director

Business Experience of Directors and Officers

The following is a brief description of the business experience and background of our officers and directors.

Revis L. Stephenson III , Chairman—Age 39, 1850 Fox Ridge Road, Orono, MN.

Mr. Stephenson has 15 years experience in the investment industry and currently holds series 7, series 63 and series 65 licenses. During his career he has gained experience in the public and private markets where his responsibilities included placement of equity and debt, assisting with structuring, and pricing. Mr. Stephenson been Vice President Institutional Sales, for the fixed income originations group of a New York based financial services firm since June of 2002. Prior to that, he was Vice President Investments for MJSK Securities for 5 years. He was also with Piper Jaffray Inc., where he left as Managing Director, Investments, for 7 years before joining MJSK Securities. Mr. Stephenson received a bachelors of Science from the University of Minnesota in Economics.

Mr. Stephenson has served as our director since our inception.

Robert W. Holmes , Treasurer—Age 58, 206 Dawnee Street, Tomah, WI.

Mr. Holmes founded Timberwood Bank in 2003, where he is currently Chairman of the Board, President and a principal shareholder. For 5 years prior, he managed an insurance agency which he also founded.

Mr. Holmes has served as our director since our inception.

Larry L. Cerny , Secretary—Age 64, 810 N 8 ^th Street., Geneva, NE.

Mr. Cerny owned and operated a supermarket in Geneva for 35 years. He was part-owner of supermarkets in Minden, Waverly, Falls City, Hickman, and Neligh, NE, and Sabetha, KS. In 1972, he co-founded Geotechnical Services Inc., a geotech and environmental engineering firm, with offices in Omaha, Lincoln, and Grand Island, NE, Wichita, KS, and Des Moines, IA where Mr.Cerny has served as Chairman of the Board for the past 20 years.

Mr. Cerny has served as our director since April 6, 2005.

Robert E. Bettger , Director—Age 57, 910 9 ^th Street, Fairmont, NE.

For the past 5 years, Mr. Bettger has owned and operated a farm near Fairmont that consists of 5000 acres of irrigated corn and soybeans, including hybrid seed production for Pioneer Hybrid International.

Mr. Bettger has served as our director since April 6, 2005.

Richard W. Hughes , Director—Age 52, 810 N 1st St., Geneva, NE.

For the past 5 years, Mr. Hughes has owned and operated a family farm in the Geneva area consisting of 1500 acres of corn and soybeans. Mr. Hughes is active in Boy Scouts and Rotary Club.

Mr. Hughes has served as our director since April 6, 2005.

John E. Lovegrove , Director—Age 50, 902 Road F, Fairmont, NE.

Mr. Lovegrove has been a life long farmer in Fillmore County, NE. He operates a family farm along with two brothers consisting of 8000 acres of irrigated corn, soybeans and Pioneer Hy-Brid International seed corn. Mr. Lovegrove has been a member of the Fairmont School Board and active on the Community Church Board.

Mr. Lovegrove has served as our director since April 6, 2005.

Troy Otte , Director—Age 37, 429 Florida Court, York, NE.

Mr. Otte has been an active farmer in the Fillmore County, NE area since 1990. His current operation consists of 1600 acres of corn, soybeans, and wheat, with both irrigated and dry land acres.

Mr. Otte has served as our director since April 6, 2005.

John T. (Jack) Porter , Director—Age 64, 4424 South 179 ^th Street, Omaha, NE.

Mr. Porter and Paul Casper are equal owners of BioEnergy Capital Consultants, LLC a South Dakota Limited Liability Company, which they formed in January of 2004. BioEnergy Capital Consultants specializes in providing consulting services to ethanol plants. In 2003, Jack worked for Value Add Ventures and from 2000 through 2002 he had his own agricultural consulting firm called Evergreen Consulting Group.

Mr. Porter has served as our director since our inception.

Keith E. Spohn , Director—Age 56, 706 Road C, Friend, NE.

Mr. Spohn has been farming since 1969. For the past 5 years his farming operations have included 4,000 acres of corn, soybeans and seed corn.

Mr. Spohn has served as our director since April 6, 2005.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

The following table sets forth certain information regarding the beneficial ownership of our units as of the date of this prospectus, by each person or entity known by us to be the beneficial owner of more than five percent of the outstanding units:

Title of Class	Name and Address	Amount and nature of beneficial owner	Percent of Class
Membership Unit	Revis L. Stephenson, III 1850 Fox Ridge Road Orono, MN 55356	205,000	32.8	%
Membership Unit	Holmes Residuary Trust 206 Dawnee Street Tomah, WI 54660	115,000	18.4	%
Membership Unit	BioEnergy Capital Consultants, LLC 44095 212 ^th Street Lake Preston, SD 57249	50,000	8.0	%

Security Ownership of Management

As of the date of this prospectus, our directors and officers own membership units as follows:

UNITS BENEFICIALLY OWNED BY DIRECTORS AND OFFICERS

						Percentage of Total After the Offering(2)
Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner(1)		Percent of Class Prior to Offering		Maximum Units Sold in Offering		Minimum Units Sold in Offering
Membership Units	Revis L. Stephenson, III 1850 Fox Ridge Road Orono, MN 55356	205,000	(3)	32.8	%	2.8	%	5.1	%
Membership Units	Robert W. Holmes(4) 206 Dawnee Street Tomah, WI 54660	115,000	(5)	18.4	%	1.6	%	2.9	%
Membership Units	John T. Porter(6) 44095 212 ^th Street Lake Preston, SD 57249	50,000	(7)	8.0	%	0.68	%	1.3	%
Membership Units	Troy Otte 429 Florida Court York, NE 68467	19,500		3.1	%	0.27	%	0.49	%
Membership Units	Richard Hughes(9) 801 N. 1 ^st Geneva, NE 68361	19,500		3.1	%	0.27	%	0.49	%
Membership Units	Robert Bettger 910 9 ^th Avenue Fairmont, NE 68354	18,000		2.9	%	0.24	%	0.45	%
Membership Units	John E. Lovegrove 902 Road F Fairmont, NE 68354	18,000		2.9	%	0.24	%	0.45	%
Membership Units	Larry L. Cerny(8) 810 N. Street Geneva, NE 68361	15,000		2.4	%	0.20	%	0.38	%
Membership Units	Keith Spohn 706 County Road C Friend, NE 68359	15,000		2.4	%	0.20	%	0.38	%
Membership Units	All Directors and Officers as a Group	475,000		76.0	%	6.5	%	11.94	%

(1): Includes the units issued to the directors and officers through the close of the seed capital private placement on April 14, 2005; the units distributed to directors and officers in the unit distribution to all of our unit holders; and units issued to directors and officers in exchange for consulting and project development services.
(2): Assumes no additional purchases in this offering.
(3): Units are owned by the Holmes Residuary Trust.
(4): Includes restricted units.
(5): Includes restricted units.
(6): Units are owned by BioEnergy Capital Consultants, LLC.
(7): Includes restricted units.

(8): Units are owned by the Larry L. Cerny Trust.
(9): Units are owned by Richard and Kay Hughes.

EXECUTIVE COMPENSATION

Revis L. Stephenson, III is currently serving as our chairman and Robert W. Holmes is currently serving as our Treasurer. We entered into a project development fee agreement with Revis L. Stephenson, III and Robert W. Holmes, to pay them together, a total fee equal to one percent of the total project cost. Upon completion of our seed capital private placement and subsequent to performing the unit distribution equal to two units for every one unit issued and outstanding, we paid Revis L. Stephenson, III and Robert W. Holmes, together, a total development fee equal to 125,000 membership units in exchange for their efforts to organize and develop Advanced BioEnergy. These 125,000 membership units are subject to the following restrictions:

•: upon the dissolution, bankruptcy or insolvency of Advanced BioEnergy generally to pay debts as they become due, or an assignment by Advanced BioEnergy for the benefit of creditors, or the commencement of any case or proceeding in respect of Advanced BioEnergy under any bankruptcy, insolvency or similarly laws, Mr. Holmes and Mr. Stephenson shall return the restricted units to Advanced BioEnergy without payment of consideration by Advanced BioEnergy and the restricted units shall be deemed to have been forfeited by Mr. Holmes and Mr. Stephenson;
•: upon voluntary resignation as a member of Advanced BioEnergy's board of directors by Mr. Holmes and/or Mr. Stephenson, Mr. Holmes and/or Mr. Stephenson shall return the restricted units to Advanced BioEnergy without payment of consideration by Advanced BioEnergy and such restricted units shall be deemed to have been forfeited by Mr. Holmes and/or Mr. Stephenson; and
•: the restricted units may not be sold, transferred, assigned, pledged, encumbered or otherwise alienated or hypothecated unless the restrictions have lapsed.

All of the above restrictions on the units shall lapse on the date upon which our ethanol plant begins producing ethanol for sale. Additionally, the number of units subject to the restriction concerning voluntary resignation of Mr. Stephenson and/or Mr. Holmes shall be reduced by one-third following the filing of this Form SB-2, the execution of definitive debt financing documents, and the production of ethanol for sale.

Mr. Stephenson may be entitled to additional units up to 1% of total project cost on the date the plant begins producing ethanol if the actual project development cost exceeds the estimated cost used for purposes of the previous distribution of 125,000 units to Mr. Stephenson and Mr. Holmes. However, if the actual project cost is less than the estimated cost used for purposes of the initial distribution, Mr. Stephenson is required to forfeit units back to Advanced BioEnergy.

We entered into a consulting agreement with BioEnergy Capital Consultants, LLC, Lake Preston, South Dakota, as a project development consultant. BioEnergy Capital Consultants is owned and operated by one of our directors, John T. Porter, along with Paul Casper of Lake Preston, South Dakota. In exchange for services and as provided in our agreement, we transferred 2,500 unrestricted membership units in Advanced BioEnergy to BioEnergy Capital Consultants, LLC. Following our previous seed capital private placement, we performed a unit distribution to all unit holders, including BioEnergy Capital Consultants, LLC equal to two additional membership units for every one membership unit issued and outstanding. Subsequent to performing this distribution, BioEnergy Capital Consultants, LLC received an additional 42,500 membership units in Advanced BioEnergy for a total of 50,000 membership units. The additional 42,500 membership units are restricted and will be returned to Advanced BioEnergy without payment of consideration if construction of the ethanol plant has not

commenced on or before December 31, 2007 and if Advanced BioEnergy is no longer actively pursuing the ethanol plant project, or if Advanced BioEnergy files Articles of Dissolution prior to beginning construction of the ethanol plant.

Employment Agreements

In the future, we may enter into employment agreements with our executive officers or other employees that we may hire.

Reimbursement of Expenses

We reimburse our officers and directors for expenses incurred in connection with their service. Our reimbursement policy is to reimburse our officers and directors for out-of-pocket expenses.

INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Our amended and restated operating agreement provides that none of our directors or members will be liable to us for any breach of their fiduciary duty. This could prevent both us and our unit holders from bringing an action against any director for monetary damages arising out of a breach of that director's fiduciary duty or grossly negligent business decisions. This provision does not affect possible injunctive or other equitable remedies to enforce a director's duty of loyalty for acts or omissions not taken in good faith, involving willful misconduct or a knowing violation of the law, or for any transaction from which the director derived an improper financial benefit. It also does not eliminate or limit a director's liability for participating in unlawful payments or distributions or redemptions, or for violations of state or federal securities laws. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is contrary to public policy as expressed in the Securities Act of 1933, and is, therefore, unenforceable.

Under Delaware law, no member or director will be liable for any of our debts, obligations or liabilities merely because he or she is a member or director. In addition, Delaware law permits, and our amended and restated operating agreement contains, extensive indemnification provisions which require us to indemnify any officer or director who was or is party, or who is threatened to be made a party to a current or potential legal action because he or she is our director or officer. Our amended and restated operating agreement provides that we must also indemnify against expenses, including attorney fees, judgments, claims, costs and liabilities actually and reasonably incurred by these individuals in connection with any legal proceedings, including legal proceedings based upon violations of the Securities Act of 1933 or state securities laws. Our indemnification obligations may include criminal or other proceedings.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Fagen, Inc.

On March 28, 2005, we entered into a letter of intent with Fagen, Inc. in which Fagen Inc. would design and build an ethanol plant for a price of $98,000,000. Under the terms of the letter of intent, Fagen, Inc. agrees to enter into definitive agreements to provide design and construction related services to us. The letter of intent does not constitute a binding agreement, but the parties are obligated to enter into good faith negotiations to prepare definitive agreements. Prior to negotiating definitive agreements, any party could withdraw from the terms of the letter of intent. Under the letter of intent, Fagen, Inc. agrees to provide services to us in the following areas:

•: providing a preliminary schedule and guaranteed maximum price and design-build contract for the design and construction of our plant;
•: assisting in all phases of the permitting process, including taking a lead role in obtaining all required permits for the construction and operation of the proposed plant;
•: designing and building the proposed plant in accordance with a design-build contract, based upon the Design-Build Institute of America form contract; and
•: assisting in identifying appropriate operational management for our plant.

Transactions with Revis L. Stephenson, III and Robert W. Holmes

the total project cost. Following completion of our seed capital private placement, we paid these two directors a development fee equal to 125,000 restricted membership units based on the estimated project cost, in exchange for their efforts to organize and develop our company. These units are restricted pursuant to the Project Development Fee Agreement between us and Mr. Stephenson and Mr. Holmes. We may be obligated to pay additional unit to Mr. Stephenson upon substantial completion of the project if the actual total cost of the project exceeds the estimated total project cost. Likewise, Mr. Stephenson may be required to forfeit units back to Advanced BioEnergy if the actual total project cost is less than the estimated total project cost

Robert W. Holmes is currently the president of our primary bank depository, Timberwood Bank of Tomah, Wisconsin.

Transaction with BioEnergy Capital Consultants, LLC

We entered into a consulting agreement with BioEnergy Capital Consultants, LLC, Lake Preston, South Dakota, as a project development consultant. BioEnergy Capital Consultants is owned and operated by one of our directors, John T. Porter, along with Paul Casper of Lake Preston, South Dakota. In exchange for services, we transferred 2,500 unrestricted membership units to BioEnergy Capital Consultants, LLC. Following our previous seed capital private placement, we performed a unit distribution to all of our unit holders, including BioEnergy Capital Consultants equal to two membership units for every one membership unit issued and outstanding. Subsequent to the distribution of two units for every one unit issued and outstanding, BioEnergy Capital Consultants, LLC received an additional 42,500 membership units for a total of 50,000 membership units. The additional 42,500 membership units are restricted and will be returned to us without payment of consideration if construction of the ethanol plant has not commenced on or before December 31, 2007, and if we are no longer actively pursuing the ethanol plant project, or if we file Articles of Dissolution prior to beginning construction of the Project.

PLAN OF DISTRIBUTION

Before purchasing any units, an investor must execute a subscription agreement, a promissory note and security agreement and sign our amended and restated operating agreement. The subscription agreement will contain, among other provisions, an acknowledgement that the investor received a prospectus, such as this, and that the investor agrees to be bound by our amended and restated operating agreement. All subscriptions are subject to approval by our directors and we reserve the right to reject any subscription agreement.

The Offering

We are offering, on a best efforts basis, a maximum of 6,735,500 units and a minimum of 3,366,250 units at a purchase price of $10 per unit. You must purchase a minimum of 2,500 units to participate in the offering. Following the initial minimum purchase, you may purchase additional units in increments of 100 units. Our board of directors determined the offering price for the units arbitrarily, without any consultation with third parties. The offering price of the units is not, therefore, based on customary valuation or pricing techniques for new issuances. We anticipate our directors, as listed on page 6 of this prospectus, will sell our units in this offering, without the use of an underwriter. We will not pay commissions to our directors for these sales.

Our minimum offering amount is $33,662,500 and our maximum offering amount is $67,325,000. The offering will close upon the earliest occurrence of (1) our acceptance of subscriptions for units equaling the maximum amount of $67,325,000; (2) on [one year from the effective date of this registration statement] . However, we may close the offering any time after the acceptance of subscriptions for units equaling the minimum amount of $33,662,500; or (3) we may elect to abandon

or terminate the offering. After the offering, there will be 7,357,500 units issued and outstanding if we sell the maximum number of units offered in this offering and 3,991,250 units issued and outstanding if we sell the minimum number of units offered in this offering. This includes 625,000 units previously issued in our seed capital private placement.

Our directors and officers will be allowed to purchase the units that are being offered. These units may be purchased for the purpose of satisfying the minimum amount of units required to close the offering. Units purchased by these individuals and entities will be subject to the same restrictions regarding transferability as described in this prospectus and our amended and restated operating agreement, and will, therefore, be purchased for investment, rather than resale.

You should not assume that we will sell the $33,662,500 minimum only to unaffiliated third party investors. We may sell units to affiliated or institutional investors that may acquire enough units to influence the manner in which we are managed. These investors may influence the business in a manner more beneficial to them than to other investors.

We plan to register the offering in the following states: Florida, Iowa, Kansas, Nebraska, South Dakota, Texas and Wisconsin, state securities regulatory bodies. We may also offer or sell our units in other states in reliance on exemptions from the registration requirements of the laws of those other states. However, we may not generally solicit investors in any jurisdictions other than Florida, Iowa, Kansas, Nebraska, South Dakota, Texas and Wisconsin. This limitation may result in the offering being unsuccessful.

We are expecting to incur expenses, including organization costs and pre production period costs in the amount of approximately $2,610,000 to complete this offering.

Suitability of Investors

Investing in the units offered hereby involves a high degree of risk. Accordingly, the purchase of units is suitable only for persons of substantial financial means that have no need for liquidity in their investments and can bear the economic risk of loss of any investment in the units. Units will be sold only to persons that meet these and other requirements. You cannot invest in this offering unless you meet one of the following 5 suitability tests: (1) You regularly participate in the operations or management of a farming operation and file a Schedule F as part of your annual Form 1040 or 1041 filing with the Internal Revenue Service; (2) You have at least 150 acres of agricultural farmland under production; (3) You are a shareholder, member, manager or director of a family farm corporation, family farm limited liability company or family farm partnership; (4) you have annual income from whatever source of at least $45,000 and you have a net worth of at least $45,000 exclusive of home, furnishings and automobiles; or (5) you have a net worth of at least $100,000 exclusive of home, furnishings and automobiles. For married persons, the tests will be applied on a joint husband and wife basis regardless of whether the purchase is made by one spouse or the husband and wife jointly. Even if you represent that you meet the suitability standards set forth above, the board of directors reserves the right to reject any subscription for any reason, including if the board determines that the units are not a suitable investment for you.

Each subscriber must make written representations that he/she/it:

•: is purchasing such units for the purpose of investment and not for resale;
•: has been encouraged to rely upon the advice of such subscriber's legal counsel and accountants or other financial advisers with respect to the tax and other considerations relating to the purchase of units; and

•: will acquire the units for the subscriber's own account without a view to public distribution or resale and that such subscriber has no contract, undertaking, agreement or arrangement to sell or otherwise transfer or dispose of any units or any portion thereof to any other person.

Subscription Period

The offering must close upon the earlier occurrence of (1) our acceptance of subscriptions for units equaling the maximum amount of $67,325,000; (2) on [one year from the effective date of this registration statement] . However, we may close the offering any time prior to [one year from the effective date of this registration statement] upon the sale of the minimum aggregate offering amount of $33,662,500; or (3) we may elect to abandon or terminate the offering. We may admit members and continue to offer any remaining units to reach the maximum number to be sold until the offering closes. We reserve the right to cancel or modify the offering, to reject subscriptions for units in whole or in part and to waive conditions to the purchase of units. Additionally, in our sole discretion, we may also determine that it is not necessary to sell all available units.

This offering may be terminated for a variety of reasons, most of which are discussed in detail in the section entitled "RISK FACTORS." In the event of termination of this offering prior to its successful closing, funds invested with us will be returned with nominal interest, less escrow fees. In that event, we intend to return those funds by the close of the next business day or as soon as possible after the termination of the offering.

Subscription Procedures

Before purchasing any units, you must complete the subscription agreement included as exhibit C to this prospectus, draft a check payable to "Geneva State Bank, Escrow Agent for Advanced BioEnergy, LLC" in the amount of not less than 10% of the amount due for the units for which subscription is sought, which amount will be deposited in the escrow account; sign a full recourse promissory note and security agreement; and deliver to us these items and an executed copy of the signature page of our amended and restated operating agreement. In the subscription application, an investor must make representations to us concerning, among other things, that he or she has received our prospectus and any supplements, agrees to be bound by the amended and restated operating agreement and understands that the units are subject to significant transfer restrictions. The subscription application also requires information about the nature of your desired ownership, your state of residence, and your taxpayer identification or Social Security Number. We encourage you to read the subscription agreement carefully.

Once we receive subscriptions for the minimum amount of the offering, we will mail written notice to our investors that full payment under the promissory note is due within 20 days. We will deposit funds paid in satisfaction of the promissory notes into our escrow account where they will be held until we satisfy the conditions for releasing funds from escrow. Unpaid amounts will accrue interest at a rate of 12% per year and each investor will agree to reimburse us for amounts we must spend to collect the outstanding balance. In the event that a subscriber defaults on the promissory note, we intend to pursue that defaulting subscriber for payments of the amount due by any legal means, including, but not limited to, retention of the initial 10% payment and acquisition of a judgment against the subscriber.

If you subscribe to purchase units after we have received subscriptions for the aggregate minimum offering amount of $33,662,500, you will be required to pay the full purchase price immediately upon subscription.

We might not consider acceptance or rejection of your application until after we have received applications totaling at least $33,662,500 from investors or until a future date near the end of this offering. If we accept your subscription and meet the conditions for releasing funds from escrow, your

subscription will be credited to your capital account in accordance with our amended and restated operating agreement and we will issue to you a membership unit certificate signifying the ownership of your membership units. If we reject your subscription, we will return your subscription, check, and signature page within thirty days of rejection.

Changes in the offering's material terms after the registration statement's effectiveness will terminate the original offer and subscribers would then be entitled to a refund. Material changes include the following: (1) extension of the offering beyond the year currently contemplated; (2) change in the offering price other than that disclosed in this prospectus; (3) change in the minimum purchase required of investors; (4) change in the amount of proceeds necessary to release the proceeds in escrow; and (5) material change in the application of proceeds.

If you are deemed the beneficial owner of 5% or more of our issued and outstanding units you may have reporting obligations under Section 13 and Section 16 of the Securities and Exchange Act. If you anticipate being a beneficial owner of 5% or more of our outstanding units you should consult legal counsel to determine what filing and reporting obligations may be required under the federal securities laws.

Escrow Procedures

Proceeds from subscriptions for the units will be deposited in an interest-bearing escrow account that we have established with the Geneva State Bank, as escrow agent under a written escrow agreement. We will not release funds from the escrow account until specific conditions are satisfied. The conditions are (1) the subscription proceeds in the escrow account equals or exceeds $33,662,500, exclusive of interest; (2) our receipt of a written debt financing commitment for debt financing ranging from $67,325,000 to $100,987,500, depending on the amount necessary to fully capitalize the project; (3) we elect, in writing, to terminate the escrow agreement; and (4) we have sent an affidavit prepared by our escrow agent to the states in which our units are registered stating that conditions (1) and (2) have been met.

We will invest the escrow funds in short-term certificates of deposit issued by a bank, short-term securities issued by the United States government, money market funds, repurchase agreements or other financial vehicles including those available through the escrow agent. Even if we are successful in releasing funds from escrow, we intend to allow the offering to continue until [one year from date of effectiveness of this registration statement] or some earlier date, at our discretion. If we sell units for the aggregate minimum offering price of $33,662,500 prior to [one year from the effective date of this registration statement] , we may demand and collect the balance of the purchase price payable on these units after [one year from the effective date of this registration statement]. We may terminate the offering prior to closing the offering in which event we will return your investment, with interest, less escrow fees, by the close of the next business day or as soon as possible after the termination of the offering under the following scenarios:

•: if we determine in our sole discretion to terminate the offering prior to [one year from effective date of this registration statement] ; or
•: if we do not raise the $33,662,500 minimum aggregate offering amount by [one year from effective date of this registration statement] .

Delivery of Unit Certificates

If we satisfy the conditions for releasing funds from escrow, we will issue certificates for the units subscribed in the offering upon such release. Unless otherwise specifically provided in the subscription agreement, we will issue certificates for any subscription signed by more than one subscriber as joint tenants with full rights of survivorship. We will imprint the certificates with a conspicuous legend

referring to the restrictions on transferability and sale of the units. See "DESCRIPTION OF MEMBERSHIP UNITS—Restrictive Legend on Membership Certificates."

Summary of Promotional and Sales Material

In addition to and apart from this prospectus, we may use certain sales material in connection with this offering. The material may include a brochure, question-and-answer booklet, speech for public seminars, invitations to seminars, news articles, public advertisements and audio-visual materials. In certain jurisdictions, such sales materials may not be available. This offering is made only by means of this prospectus and other than as described herein, we have not authorized the use of any other sales material. Although the information contained in such sales materials does not conflict with any of the information contained in this prospectus, such material does not purport to be complete and should not be considered as a part of this prospectus or of the registration statement of which this prospectus is a part, or as incorporated in this prospectus or the registration statement by reference.

DESCRIPTION OF MEMBERSHIP UNITS

An investor in us is both a holder of units and a member of the limited liability company at the time of acceptance of the investment. As a unit holder, an investor will be entitled to certain economic rights, such as the right to the distributions that accompany the units. As a member of the limited liability company, an investor will be entitled to certain other rights, such as the right to vote at our member meetings. Although an investor will usually play both the role of member and unit holder, these roles may be separated upon termination of membership in the limited liability company. The separation of such roles may include the loss of certain rights, such as voting rights.

Membership Units

Ownership rights in us are evidenced by units. There is one class of membership units in Advanced BioEnergy. Each unit represents a pro rata ownership interest in our capital, profits, losses and distributions. Unit holders who are also members have the right to vote and participate in our management as provided in the amended and restated operating agreement. We maintain a membership register at our principal office setting forth the name, address, capital contribution and number of units held by each member.

Restrictive Legend on Membership Certificate

We will place restrictive legends on your membership certificate or any other document evidencing ownership of our units. The language of the legend will be similar to the following:

The transferability of the units represented by this certificate is restricted. Such units may not be sold, assigned, or transferred, nor will any assignee, vendee, transferee or endorsee thereof be recognized as having acquired any such units for any purposes, unless and to the extent such sale, transfer, hypothecation or assignment is permitted by, and is completed in strict accordance with, applicable state and federal law and the terms and conditions set forth in the Operating Agreement.

The securities represented by this certificate may not be sold, offered for sale or transferred in the absence of an effective registration under the Securities Act of 1933, as amended, and under applicable state securities laws, or an opinion of counsel satisfactory to the Company that such transaction is exempt from registration under the Securities Act of 1933, as amended, and under applicable state securities laws.

Voting Limitations

Each member is entitled to one vote per unit owned. Members may vote units in person or by proxy at a meeting of the unit holders, on all matters coming before a member vote. Members do not have cumulative voting or pre-emptive rights.

Separable Interests

Although we are managed by our directors, our amended and restated operating agreement provides that certain transactions, such as amending our amended and restated operating agreement or dissolving the company, require member approval. Each member has the following rights:

•: to receive a share of our profits and losses;
•: to receive distributions of our assets, if and when declared by our directors;
•: to participate in the distribution of our assets in the event we are dissolved or liquidated;
•: to access information concerning our business and affairs at our place of business; and
•: to vote on matters coming before a vote of the members.

Our amended and restated operating agreement provides that if your membership is terminated, regardless of whether you transfer your units or we admit a substitute member, then you will lose all your rights to vote your units and the right to access information concerning our business and affairs at our place of business. Under our amended and restated operating agreement, information that will be available exclusively to members includes state and federal tax returns and a current list of the names, addresses and capital account information of each member and unit holder. This information is available upon request by a member for purposes reasonably related to that person's interest as a member. In addition, a member's use of this information is subject to certain safety, security and confidentiality procedures established by us.

Unit holders who are not members will continue to have the right to a share of our profits and losses and the right to receive distributions of our assets and to participate in the distribution of our assets in the event we are dissolved or liquidated. Unit holders will also have access to company information that is periodically submitted to the Securities and Exchange Commission. See "DESCRIPTION OF BUSINESS."

Your membership interest may be terminated in accordance with the Delaware Limited Liability Company Act. In addition, if you are an individual, you will cease to be a member upon your death or if you have been declared incompetent by a court of law. If you are a corporation, trust, limited liability company, or partnership, you will cease to be a member at the time your existence is terminated. If you are an estate, then your membership will terminate when the fiduciary of the estate distributes all of your units. Accordingly, it is possible to be a unit holder of Advanced BioEnergy, but not a member.

If you transfer your units, and the transfer is permitted by the amended and restated operating agreement, or has been approved by the board of directors, then the transferee will be admitted as a new member of Advanced BioEnergy only if the transferee:

•: agrees to be bound by our amended and restated operating agreement;
•: pays or reimburses us for legal, filing and publication costs that we incur relating to admitting such transferee as a new member, if any;
•: delivers, upon our request, any evidence of the authority such person or entity has to become a member of Advanced BioEnergy; and
•: delivers, upon our request, any other materials needed to complete transferee's transfer.

The board of directors, in its discretion, may prohibit the transferee from becoming a member if he or she does not comply with these requirements.

Distributions

Distributions are payable at the discretion of our board of directors, subject to the provisions of the Delaware Limited Liability Company Act, our amended and restated operating agreement and the requirements of our creditors. Our board has no obligation to distribute profits, if any, to members. Following completion of the seed capital private placement, the initial board of directors authorized a unit distribution to the all of our unit holders equal to two units for every one unit issued and outstanding in order to compensate those initial unit holders for the risk associated with each of their seed capital investments in Advanced BioEnergy. In addition, we made distributions of restricted units to our project development consultant and two of our directors in exchange for project development services. We have not made any cash distributions since our inception and we do not intend to declare any additional unit distributions or any cash distributions until after we begin generating revenue and satisfy any loan covenants required by our lenders.

Unit holders are entitled to receive distributions of cash or property if and when a distribution is declared by our directors. Distributions will be made to investors in proportion to the number of units investors own as compared to all of our units that are then issued and outstanding. Our directors have the sole authority to authorize distributions based on available cash (after payment of expenses and resources), however, we will attempt to distribute an amount approximating the additional federal and state income tax attributable to investors as a result of profits allocated to investors.

We do not expect to generate revenues until the proposed plant is operational. After operation of the proposed plant begins, we anticipate, subject to any loan covenants or restrictions with our senior and subordinated lenders, distributing a portion of our net cash flow to our members in proportion to the units held and in accordance with our amended and restated operating agreement. By net cash flow, we mean our gross cash proceeds received less any portion, as determined by our directors in their sole discretion, used to pay or establish reserves for our expenses, debt payments, capital improvements, replacements and contingencies. Our board may elect to retain future profits to provide operational financing for the plant, debt retirement and possible plant expansion.

We do not know the amount of cash that we will generate, if any, once we begin operations. At the start, we will generate no revenues and do not expect to generate any operating revenue until the proposed ethanol plant is operating fully. Cash distributions are not assured, and we may never be in a position to make distributions. Whether we will be able to generate sufficient cash flow from our business to make distributions to members will depend on numerous factors, including:

•: successful and timely completion of construction since we will not generate any revenue until our plant is constructed and operational;
•: required principal and interest payments on any debt and compliance with applicable loan covenants which will reduce the amount of cash available for distributions;
•: our ability to operate our plant at full capacity which directly impacts our revenues;
•: adjustments and amounts of cash set aside for reserves and unforeseen expenses; and
•: state and federal regulations and subsidies, and support for ethanol generally which can impact our profitability and the cash available for distributions.

Capital Accounts and Contributions

The purchase price paid for our units constitutes a capital contribution for purposes of becoming a unit holder and will be credited to your capital account. As a unit holder, your capital account will be increased according to your share of our profits and other applicable items of income or gain specially allocated to you pursuant to the special allocation rules described below. In addition, we will increase your capital account for the amount of any of our liabilities that are assumed by you or are secured by any property which we distribute to you. We will decrease your capital account for your share of our losses and other applicable items of expenses or losses specially allocated to you pursuant to the special allocation rules described below. We will also decrease your capital account in an amount equal to the value of any property we distribute to you. In addition, we will decrease your capital account for the amount of any of your liabilities that are assumed by us or are secured by property you have contributed to us. In the event you transfer your units and we have approved such transfer, then your capital account, to the extent it relates to the units transferred, will be transferred to the transferee. Our amended and restated operating agreement does not require you to make additional capital contributions to us. Interest will not accrue on your capital contributions, and you have no right to withdraw or be repaid your capital contributions made to us.

Allocation of Profits and Losses

Except as otherwise provided in the special allocation rules described below, profits and losses that we recognize will be allocated to you in proportion to the number of units you hold. Our profits and losses will be determined by our directors on either a daily, monthly, quarterly or other basis permitted under the Internal Revenue Code, as amended, and corresponding Treasury Regulations.

Special Allocation Rules

The amount of profits and losses that we allocate to you is subject to a number of exceptions referred to as special allocations. These include special allocations required by the Internal Revenue Code and Treasury Regulations aimed at highly leveraged limited liability companies that allocate taxable losses in excess of a unit holder's actual capital contributions. Our amended and restated operating agreement also requires that our directors make offsetting special allocations in any manner they deem appropriate that, after such offsetting allocations are made, each Unit holder's capital account balance is equal to the capital account balance that that unit holder would have had if special allocations required by the Internal Revenue Code and Treasury Regulations were not made to that unit holder's capital account.

Restrictions on Transfers of Units

The units will be subject to certain restrictions on transfers pursuant to our amended and restated operating agreement. In addition, transfers of the units may be restricted by state securities laws. As a result, investors may not be able to liquidate their investments in the units and therefore may be required to assume the risks of investing in us for an indefinite period of time. Investment in us should be undertaken only by those investors who can afford an illiquid investment.

We have restricted the ability to transfer units to ensure that we are not deemed a "publicly traded partnership" and thus taxed as a corporation. Under our amended and restated operating agreement, no transfer may occur without the approval of the board of directors. The board of directors will only permit transfers that fall within "safe harbors" contained in the publicly traded partnership rules under the Internal Revenue Code, to include the following:

•: transfers by gift to the member's descendants;
•: transfers upon the death of a member;

•: certain other transfers provided that for the applicable tax year, the transfers in the aggregate do not exceed 2% of the total outstanding units; and
•: transfers that comply with the "qualified matching services" requirements.

Any transfer in violation of the publicly traded partnership requirements or our amended and restated operating agreement will be null and void. Furthermore, there is no public or other market for these securities. We do not anticipate such a market will develop.

The units are unsecured equity interests and are subordinate in right of payment to all of our current and future debt. In the event of our insolvency, liquidation, dissolution or other winding up of our affairs, all of our debts, including winding-up expenses, must be paid in full before any payment is made to the unit holders. There is no assurance that there would be any remaining funds for distribution to the unit holders, after the payment of all of our debts.

SUMMARY OF OUR AMENDED AND RESTATED OPERATING AGREEMENT

Statements contained in this section of the prospectus regarding the contents of our Amended and Restated Operating Agreement, which is discussed as our operating agreement throughout this prospectus, are not necessarily complete, and reference is made to the copy of our Operating Agreement filed as exhibit B to this prospectus.

Binding Nature of the Agreement

We will be governed primarily according to the provisions of our amended and restated operating agreement and the Delaware Limited Liability Company Act. Among other items, our amended and restated operating agreement contains provisions relating to the election of directors, restrictions on transfers, member voting, and other company governance matters. If you invest in Advanced BioEnergy, you will be bound by the terms of this agreement. Its provisions may not be amended without the approval the affirmative vote of the holders of a majority of the units constituting a quorum, represented either in person or by proxy or mail ballot, at any regular or special meeting of the members.

Management

Initially, the total number of initial directors of Advanced BioEnergy shall be a minimum of three and a maximum of 13. At the first annual or special meeting of the Members following the date on which substantial operations of the ethanol plant commences, the number of directors shall be reduced and become fixed at nine. If this reduction in the number of directors requires the removal of any director, John T. Porter, Robert W. Holmes and Revis L. Stephenson, III shall not be included in the directors removed at that time. This means that you will not have any direct control over the management or operation of our business. The current directors and their business experience are set out in further detail in "DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS."

No matter may be submitted to the members for approval without the prior approval of the board of directors. This means that the board of directors controls virtually all of our affairs. We do not expect to develop a vacancy on the board of directors until after substantial operation of the ethanol plant commences.

Our amended and restated operating agreement is unlike the articles of incorporation or bylaws of typical public companies whose shares trade on NASDAQ or a stock exchange. Our units do not trade on an exchange and we are not governed by the rules of NASDAQ or a stock exchange concerning company governance.

The directors must elect a chairman who will preside over any meeting of the board of directors, and a vice-chairman who shall assume the chairman's duties in the event the chairman is unable to act.

According to our amended and restated operating agreement, the directors may not take the following actions without the unanimous consent of the members:

•: cause or permit Advanced BioEnergy to engage in any activity that is inconsistent with our purposes;
•: knowingly act in contravention or the amended and restated operating agreement or act in a manner that would make it impossible for us to carry on our ordinary business, except as otherwise provided in the amended and restated operating agreement;
•: possess our property or assign rights in specific company property other than for Advanced BioEnergy's purpose; or
•: cause us to voluntarily take any action that would cause our bankruptcy.

In addition, without the consent of a majority of the membership voting interests the directors do not have the authority to cause Advanced BioEnergy to:

•: merge, consolidate, exchange or otherwise dispose of at one time, all or substantially all of our property, except for a liquidating sale of the property in connection with our dissolution;
•: confess a judgment against us in an amount in excess of $500,000;
•: issue units at a purchase price of less than $10 per unit;
•: issue more than 10,000,000 units; or
•: cause us to acquire any equity or debt securities of any director or any of its affiliates, or otherwise make loans to any director or any of its affiliates.

Replacement of Directors

Our board of directors is presently controlled by our founders, and replacing the directors may be difficult to accomplish under our amended and restated operating agreement. Pursuant to the amended and restated operating agreement, our initial board of directors will be comprised of no fewer than three and no more than 13 members. However, at the first annual or special meeting of the members following the date on which substantial operations of the ethanol plant commences, the number of directors shall be reduced and become fixed at nine. The amended and restated operating agreement provides that if the reduction in the number of directors at the first annual or special meeting requires the removal of any director, John T. Porter, Robert W. Holmes and Revis L. Stephenson, III shall not be included in the directors removed at that time.

Our amended and restated operating agreement defines a procedure to replace the board in staggered terms, where, upon the expiration of the initial board, the first group of directors shall serve for one year, the second group shall serve for two years, and the third group shall serve for three years. The successors for each group of directors shall be elected for a 3-year term and, at that point, one-third of the total number of directors will be elected by the members each year. The directors shall be placed into groups by resolution of the initial board of directors prior to the expiration of the initial term. The amended and restated operating agreement provides that John T. Porter will be in Group I, Robert W. Holmes will be in Group II and Revis L. Stephenson will be in Group III. These procedures provide that replacement directors may be nominated either by the board of directors or by the members upon timely delivery of a petition signed by investors holding at least five percent of the outstanding units, provided that the members also meet other requirements, all of which are described in our amended and restated operating agreement. In order for a petition to be considered timely, it

must be delivered to our secretary not more than 90 days, nor less than 60 days prior to the annual meeting of our members.

Members' Meetings and Other Members' Rights

There will be an annual meeting of members at which the board of directors will give our annual company report. Members will address any appropriate business including the election of directors to those director seats becoming vacant under the then adopted staggered term format. In addition, members owning an aggregate of 30% of the units may demand in writing that the board call a special meeting of members for the purpose of addressing appropriate member business. The board of directors may also call a special meeting of members at any time.

Member meetings shall be at the place designated by the board or members calling the meeting. Members of record will be given notice of member meeting neither more than 60 days nor less than five days in advance of such meetings.

In order to take action at a meeting, members holding at least 25% of the outstanding units must be represented in person, by proxy or by mail ballot. Voting by proxy or by mail ballot shall be permitted on any matter if it is authorized by our directors. Assuming a quorum is present, members take action by a vote of the majority of the units represented at the meeting (in person, by proxy or by mail ballot) and entitled to vote on the matter, unless the vote of a greater or lesser proportion or numbers is otherwise required by our amended and restated operating agreement or by the Delaware Limited Liability Company Act.

For the purpose of determining the members entitled to notice of or to vote at any members' meeting, members entitled to receive payment of any distribution, or to make a determination of members for any other purpose, the date on which notice of the meeting is mailed (or otherwise delivered) or the date on which the resolution declaring the distribution is adopted, as the case may be, shall be the record date for determination of the members.

Members do not have dissenter's rights. This means that in the event we merge, consolidate, exchange or otherwise dispose of all or substantially all of our property, unit holders do not have the right to dissent and seek payment for their units.

We will maintain our books, accountings and records at our principal office. A member may inspect them during normal business hours. Our books and accountings will be maintained in accordance with generally accepted accounting principles.

Unit Transfer Restrictions

A unit holder's ability to transfer units is restricted under the amended and restated operating agreement. Unit holders may not transfer their units prior to the time that our ethanol plant is substantially operational unless such transfer is:

•: to the investor's administrator or trustee to whom such units are transferred involuntarily by operation of law, such as death; or
•: made without consideration to or in trust for the investor's descendants or spouse.

Once we begin substantial operation of the proposed ethanol plant, investors may transfer their units to any person or organization only if such transfer meets the conditions precedent to a transfer under our amended and restated operating agreement and:

•: has been approved by our directors in accordance with the terms of the amended and restated operating agreement; or

•: the transfer is made to any other member or to any affiliate or related party of another member or the transferring member.

To maintain partnership tax status, the units may not be traded on an established securities market or readily tradable on a secondary market. We do not intend to list the units on the New York Stock Exchange, the NASDAQ Stock Market or any other stock exchange. To help ensure that a market does not develop, our amended and restated operating agreement prohibits transfers without the approval of the directors. The directors will generally approve transfers so long as the transfers fall within "safe harbors" contained in the publicly traded partnership rules under the Internal Revenue Code. If any person transfers units in violation of the publicly traded partnership rules or without our prior consent, the transfer will be null and void. These restrictions on transfer could reduce the value of an investor's units.

Amendments

Our amended and restated operating agreement may be amended by the affirmative vote of the holders of a majority of the units constituting a quorum, represented either in person or by proxy or mail ballot, at any regular or special meeting of the members. No amendment may adversely affect a member's economic interest or modify the liability of a member, without that member's consent. The amended and restated operating agreement defines economic interest as a member's share of profits and losses, the right to receive distributions of the company's assets and the right to information concerning the business and affairs of the company.

Dissolution

Our amended and restated operating agreement provides that a voluntary dissolution of Advanced BioEnergy may be affected only upon the prior approval of a 75% super majority of all units entitled to vote.

FEDERAL INCOME TAX CONSEQUENCES OF OWNING OUR UNITS

This section of the prospectus describes some of the more important federal income tax risks and consequences of your participation in Advanced BioEnergy. No information regarding state and local taxes is provided. EACH PROSPECTIVE MEMBER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR CONCERNING THE IMPACT THAT HIS OR HER INVESTMENT IN ADVANCED BIOENERGY MAY HAVE ON HIS OR HER FEDERAL INCOME TAX LIABILITY AND THE APPLICATION OF STATE AND LOCAL INCOME AND OTHER TAX LAWS TO HIS OR HER INVESTMENT IN ADVANCED BIOENERGY. Although we will furnish unit holders with such information regarding Advanced BioEnergy as is required for income tax purposes, each unit holder will be responsible for preparing and filing his or her own tax returns.

The following summary of the tax aspects is based on the Internal Revenue Code of 1986, as amended (the "Code"), existing Treasury Department regulations ("Regulations"), and administrative rulings and judicial decisions interpreting the Code. Significant uncertainty exists regarding certain tax aspects of limited liability companies. Such uncertainty is due, in part, to continuing changes in federal tax law that have not been fully interpreted through regulations or judicial decisions. Tax legislation may be enacted in the future that will affect Advanced BioEnergy and a unit holder's investment in Advanced BioEnergy. Additionally, the interpretation of existing law and regulations described here may be challenged by the Internal Revenue Service during an audit of our information return. If successful, such a challenge likely would result in adjustment of a unit holder's individual return.

The tax opinion contained in this section and the opinion attached as exhibit 8.1 to the registration statement constitutes the opinion of our tax counsel, Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, P.L.C., regarding our classification for federal income tax purposes. An opinion of legal

counsel represents an expression of legal counsel's professional judgment regarding the subject matter of the opinion. It is neither a guarantee of any indicated result nor an undertaking to defend any indicated result should that result be challenged by the Internal Revenue Service. This opinion is in no way binding on the Internal Revenue Service or on any court of law.

In the opinion attached as exhibit 8.1 to the registration statement, our tax counsel has also confirmed as correct their representation to us that the statements and legal conclusions contained in this section regarding general federal income tax consequences of owning our units as a result of our partnership tax classification are accurate in all material respects. The tax consequences to us and our members are highly dependent on matters of fact that may occur at a future date and are not addressed in our tax counsel's opinion. With the exception of our tax counsel's opinion that we will be treated as a partnership for federal income tax purposes, this section represents an expression of our tax counsel's professional judgment regarding general federal income tax consequences of owning our units, insofar as it relates to matters of law and legal conclusions. This section is based on the assumptions and qualifications stated or referenced in this section. It is neither a guarantee of the indicated result nor an undertaking to defend the indicated result should it be challenged by the Internal Revenue Service. No rulings have been or will be requested from the Internal Revenue Service concerning any of the tax matters we describe. Accordingly, you should know that the opinion of our tax counsel does not assure the intended tax consequences because it is in no way binding on the Internal Revenue Service or any court of law. The Internal Revenue Service or a court may disagree with the following discussion or with any of the positions taken by us for federal income tax reporting purposes, and the opinion of our tax counsel may not be sufficient for an investor to use for the purpose of avoiding penalties relating to a substantial understatement of income tax under Section 6662(d). See "FEDERAL INCOME TAX CONSEQUENCES OF OWNING OUR units—Interest on Underpayment of Taxes; Accuracy-Related Penalties; Negligence Penalties" below.

Investors are urged to consult their own tax advisors with specific reference to their own tax and financial situations, including the application and effect of state, local and other tax laws, and any possible changes in the tax laws after the date of this prospectus. This section is not to be constructed as a substitute for careful tax planning.

Partnership Status

Our tax counsel has opined that, assuming we do not elect to be treated as a corporation, we will be treated as a partnership for federal income tax purposes. This means that we will not pay any federal income tax and the unit holders will pay tax on their shares of our net income. Under recently revised Treasury regulations, known as "check-the-box" regulations, an unincorporated entity such as a limited liability company will be taxed as partnership unless the entity is considered a publicly traded limited partnership or the entity affirmatively elects to be taxed as a corporation.

We will not elect to be taxed as a corporation and will endeavor to take steps as are feasible and advisable to avoid classification as a publicly traded limited partnership. Congress has shown no inclination to adopt legislation that would jeopardize the tax classification of the many entities that have acted in reliance on the check-the-box regulations.

As a partnership, if we fail to qualify for partnership taxation, we would be treated as a "C corporation" for federal income tax purposes. As a C corporation, we would be taxed on our taxable income at corporate rates, currently at a maximum rate of 35%. Distributions would generally be taxed again to unit holders as corporate dividends. In addition, unit holders would not be required to report their shares of our income, gains, losses or deductions on their tax returns until such are distributed. Because a tax would be imposed upon us as a corporate entity, the cash available for distribution to unit holders would be reduced by the amount of tax paid, in which case the value of the units would be reduced.

Publicly Traded Partnership Rules

To qualify for taxation as a partnership, we cannot be a publicly traded partnership under Section 7704 of the Internal Revenue Code. Generally, Section 7704 provides that a publicly traded partnership will be taxed as a corporation if its interests are:

•: traded on an established securities market; or
•: readily tradable on a secondary market or the substantial equivalent.

Although there is no legal authority on whether a limited liability company is subject to these rules, in the opinion of our counsel, it is probable that we are subject to the publicly traded partnership rules because we elected to be classified and taxed as a partnership.

We will seek to avoid being treated as a publicly traded partnership. Under Section 1.7704-1(d) of the Treasury Regulations, interests in a partnership are not considered traded on an established securities market or readily tradable on a secondary market unless the partnership participates in the establishment of the market or the inclusion of its interests in a market, or the partnership recognizes any transfers made on the market by redeeming the transferor partner or admitting transferee as a partner.

We do not intend to list the units on the New York Stock Exchange, the NASDAQ Stock Market or any other stock exchange. In addition, with limited exception, our amended and restated operating agreement prohibits any transfer of units without the approval of our directors. Our directors intend to approve transfers that fall within safe harbor provisions of the Treasury Regulations, so that we will not be classified as a publicly traded partnership. These safe harbor provisions generally provide that the units will not be treated as readily tradable on a secondary market, or the substantial equivalent, if the interests are transferred:

•: in "private" transfers;
•: pursuant to a qualified matching service; or
•: in limited amounts that satisfy a two percent test.

Private transfers include, among others:

•: transfers by gifts in which the transferee's tax basis in the units is determined by reference to the transferor's tax basis in the interests transferred;
•: transfers at death, including transfers from an estate or testamentary trust;
•: transfers between members of a family as defined in Section 267(c)(4) of the Internal Revenue Code;
•: transfers from retirement plans qualified under Section 401(a) of the Internal Revenue Code or an IRA; and
•: "block transfers." A block transfer is a transfer by a unit holder and any related persons as defined in the Internal Revenue Code in one or more transactions during any thirty-calendar-day period of units that in the aggregate represents more than two percent of the total interests in partnership capital or profits.

Transfers through a qualified matching service are also disregarded in determining whether interests are readily tradable. A matching service is qualified only if:

•: it consists of a computerized or printed system that lists customers' bid and/or ask prices in order to match unit holders who want to sell with persons who want to buy;

•: matching occurs either by matching the list of interested buyers with the list of interested sellers or through a bid and ask process that allows interested buyers to bid on the listed interest;
•: the seller cannot enter into a binding agreement to sell the interest until the 15 ^th calendar day after his interest is listed, which time period must be confirmable by maintenance of contemporaneous records;
•: the closing of a sale effectuated through the matching service does not occur prior to the 45 ^th calendar day after the interest is listed;
•: the matching service displays only quotes that do not commit any person to buy or sell an interest at the quoted price (nonfirm price quotes), or quotes that express an interest in acquiring an interest without an accompanying price (nonbinding indications of interest), and does not display quotes at which any person is committed to buy or sell an interest at the quoted price;
•: the seller's information is removed within 120 days of its listing and is not reentered into the system for at least 60 days after its deletion; and
•: the sum of the percentage interests transferred during the entity's tax year, excluding private transfers, cannot exceed ten percent of the total interests in partnership capital or profits.

In addition, interests are not treated as readily tradable if the sum of the percentage of the interests transferred during the entity's tax year, excluding private transfers, do not exceed two percent of the total interests in partnership capital or profits. We expect to use a combination of these safe harbor provisions to avoid being treated as a publicly traded partnership.

Tax Treatment of Our Operations; Flow-Through of Taxable Income and Loss.

We expect to pay no federal income tax. Instead, as members, investors will be required to report on investors' income tax return investors' allocable share of the income, gains, losses and deductions we have recognized without regard to whether cash distributions are received.

Tax Consequences to Our Unit Holders

We have adopted a fiscal year ending October 31 for accounting and tax purposes. As a unit holder, for your taxable year with which or within which our taxable year ends you will be required to report on your own income tax return, your distributive share of our income, gains, losses and deductions regardless of whether you receive any cash distributions. To illustrate, a unit holder reporting on a calendar year basis will include his or her share of our taxable income or loss for our taxable year ending October 31, 2005 on his or her 2005 income tax return. A unit holder with a June 30 fiscal year will report his share of our October 31, 2005 taxable income or loss on his income tax return for the fiscal year ending June 30, 2006. We will provide each unit holder with an annual Schedule K-1 indicating such holder's share of our income, loss and separately stated components.

Tax Treatment of Distributions

Distributions made by us to a member will not be taxable to the member for federal income tax purposes as long as distributions do not exceed the member's basis in his or her units immediately before the distribution. Cash distributions in excess of unit basis, which is unlikely to occur, are treated as gain from the sale or exchange of the units under the rules described below for unit dispositions.

Initial Tax Basis of Units and Periodic Basis Adjustments

Under Section 722 of the Internal Revenue Code, investors' initial basis in the units investors purchase will be equal to the sum of the amount of money investors paid for investors' units. Here, an investor's initial basis in each unit purchased will be $10.

An investor's' initial basis in the units will be increased to reflect the investor's distributive share of our taxable income, tax-exempt income, gains and any increase in the investor's share of recourse and qualified non-recourse indebtedness. If the investor makes additional capital contributions at any time, the adjusted basis of the investor's units will be increased by the amount of any cash contributed or the adjusted basis in any property contributed if additional units are not distributed to investors.

The basis of an investor's units will be decreased, but not below zero, by:

•: the amount of any cash we distribute to the investors;
•: the basis of any other property distributed to the investor;
•: the investor's distributive share of losses and nondeductible expenditures that are "not properly chargeable to capital account;" and
•: any reduction in the investor's share of certain items of our debt.

The unit basis calculations are complex. A member is only required to compute unit basis if the computation is necessary to determine his tax liability, but accurate records should be maintained. Typically, basis computations are necessary at the following times:

•: the end of a taxable year during which we suffered a loss, for the purpose of determining the deductibility of the member's share of the loss;
•: upon the liquidation or disposition of a member's interest, or
•: upon the non-liquidating distribution of cash or property to an investor, in order to ascertain the basis of distributed property or the taxability of cash distributed.

Except in the case of a taxable sale of a unit or Advanced BioEnergy's liquidation, exact computations usually are not necessary. For example, a unit holder who regularly receives cash distributions that are less than or equal to his or her share of our taxable income will have a positive unit basis at all times. Consequently, no computations are necessary to demonstrate that cash distributions are not taxable under Section 731(a)(1) of the Internal Revenue Code. The purpose of the basis adjustments is to keep track of a member's tax investment in us, with a view toward preventing double taxation or exclusion from taxation of income items upon ultimate disposition of the units.

Tax Credits to Unit Holders

Small Ethanol Producer Tax Credit

"Small Ethanol Producers" are allowed a 10-cents-per-gallon production income tax credit on up to 15 million gallons of production annually. Under current law, small ethanol producers are those ethanol producers producing less than 30 million gallons per year. We do not expect to be classified as a small ethanol producer for purposes of the tax credit because we expect to produce approximately 100 million gallons of ethanol per year.

Although we do not qualify to receive the credit under current law, federal tax legislation has been introduced, which, if enacted, would change the definition of a "Small Ethanol Producer" (H.R. 36 and S. 610, 109 ^th Cong.). Specifically, producers producing up to 60 million gallons of ethanol per year would become eligible to receive the credit. If we do become eligible to receive the credit, because we expect to be classified as a partnership for tax purposes, we would expect to pass the tax credits

through to our unit holders. Unit holders would then be able to report and utilize the tax credits on their own income tax returns. However, there is no assurance that the tax legislation will be passed by the Congress or enacted into law by the President. Further, even if such legislation is enacted, our production may still exceed production limits, making us ineligible for the credit.

Under current law, the small ethanol producer tax credit is a "passive" credit. This means that unit holders will be able to utilize the tax credits only to reduce the tax on passive activity income. See "FEDERAL INCOME TAX CONSEQUENCES OF OWNING OUR UNITS—Passive Activity Income." Although we would generate passive income for our unit holders, there can be no assurance when, if ever, we will generate passive income allowing the use of credits. Further, each unit holder may have other sources of passive activity income or loss that will affect the ability to utilize the credits. Unused credits may be carried forward to offset tax on passive activity income in future years. However, if the proposed tax legislation were enacted, unit holders would be allowed to utilize the tax credits to reduce their tax on income from other than passive sources. However, there is no assurance that the tax legislation will be passed by the Congress or enacted into law by the President.

Historically, the small ethanol producer tax credit did not apply to reduce the alternative minimum tax, "AMT." As a result, although the tax credit would otherwise apply, certain unit holders did not realize the full benefit of the tax credit due to the application of the AMT. The American Jobs Creation Act of 2004 changed the tax law for tax years beginning after December 31, 2004, to allow the credit to reduce the AMT.

Under current law, unit holders utilizing the small ethanol producer tax credit would be required to increase taxable income by the amount of the credit in their gross income before utilizing the credit to reduce any tax on their passive income. This means that although the credits may reduce the tax liability resulting from a unit holder's passive income, the net result would not reduce the unit holder's total tax liability on a dollar-for-dollar basis. Instead, the net-benefit would be a lesser amount. Unit holders in higher marginal income tax brackets generally would benefit less than unit holders in lower marginal tax brackets. The proposed tax legislation, if enacted, would repeal the present rule requiring the amount of the credit to be included in income. However, there is no assurance that the tax legislation will be passed by the Congress or enacted into law by the President.

The small ethanol producers tax credit originally scheduled to expire in 2007 has been extended through 2010. Although Congress may further extend or make permanent the credit, there is no assurance that the tax credit will be extended beyond 2010.

Deductibility of Losses; Basis, At-Risk and Passive Loss Limitations

Generally, a unit holder may deduct losses allocated to him, subject to a number of restrictions. An investor's ability to deduct any losses we allocate to the investor is determined by applying the following three limitations dealing with basis, at-risk and passive losses:

Basis. An investor may not deduct an amount exceeding the investor's adjusted basis in the investor's units pursuant to Internal Revenue Code Section 704(d). If the investor's share of the Company's losses exceed the investor's basis in the investor's units at the end of any taxable year, such excess losses, to the extent that they exceed the investor's adjusted basis, may be carried over indefinitely and deducted to the extent that at the end of any succeeding year the investor's adjusted basis in the investor's units exceeds zero.

At-Risk Rules. Under the "at-risk" provisions of Section 465 of the Internal Revenue Code, if an investor is an individual taxpayer, including an individual partner in a partnership, or a closely-held corporation, the investor may deduct losses and tax credits from a trade or business activity, and thereby reduce the investor's taxable income from other sources, only to the extent the investor is considered "at risk" with respect to that particular activity. The amount an investor is considered to

have "at risk" includes money contributed to the activity and certain amounts borrowed with respect to the activity for which the investor may be liable.

Passive Loss Rules. Section 469 of the Internal Revenue Code may substantially restrict an investor's ability to deduct losses and tax credits from passive activities. Passive activities generally include activities conducted by pass-through entities, such as a limited liability company, certain partnerships or S corporations, in which the taxpayer does not materially participate. Generally, losses from passive activities are deductible only to the extent of the taxpayer's income from other passive activities. Passive activity losses that are not deductible may be carried forward and deducted against future passive activity income or may be deducted in full upon disposition of a unit holder's entire interest in us to an unrelated party in a fully taxable transaction. It is important to note that "passive activities" do not include dividends and interest income that normally is considered to be "passive" in nature. For unit holders who borrow to purchase their units, interest expense attributable to the amount borrowed will be aggregated with other items of income and loss from passive activities and subjected to the passive activity loss limitation. To illustrate, if a unit holder's only passive activity is our limited liability company, and if we incur a net loss, no interest expense on the related borrowing would be deductible. If that unit holder's share of our taxable income were less than the related interest expense, the excess would be nondeductible. In both instances, the disallowed interest would be suspended and would be deductible against future passive activity income or upon disposition of the unit holder's entire interest in our limited liability company to an unrelated party in a fully taxable transaction.

Passive Activity Income

If we are successful in achieving our investment and operating objectives, investors may be allocated taxable income from us. To the extent that an investor's share of our net income constitutes income from a passive activity, as described above, such income may generally be offset by the investor's net losses and credits from investments in other passive activities.

Alternative Minimum Tax

Individual taxpayers are subject to an "alternative minimum tax" if such tax exceeds the individual's regular income tax. Generally, alternative minimum taxable income is the taxpayer's adjusted gross income increased by the amount of certain preference items less certain itemized deductions. We may generate certain preference items. Depending on a member's other items of income, gain, loss, deduction and credit, the impact of the alternative minimum tax on a member's overall federal income tax liability may vary from no impact to a substantial increase in tax. Accordingly, each prospective investor should consult with his tax advisor regarding the impact of an investment in Advanced BioEnergy on the calculation of his alternative minimum tax, as well as on his overall federal income tax liability.

Allocations of Income and Losses

Your distributive share of our income, gain, loss or deduction for federal income tax purposes generally is determined in accordance with our amended and restated operating agreement. Under Section 704(b) of the Internal Revenue Code, however, the Internal Revenue Service will respect our allocation, or a portion of it, only if it either has "substantial economic effect" or is in accordance with the "partner's interest in the partnership." If the allocation or portion thereof contained in our amended and restated operating agreement does not meet either test, the Internal Revenue Service may reallocate these items in accordance with its determination of each member's economic interest in us. Treasury Regulations contain guidelines as to whether partnership allocations have substantial economic effect. The allocations contained in the amended and restated operating agreement are intended to comply with the Treasury Regulations' test for having substantial economic effect. New unit

holders will be allocated a proportionate share of income or loss for the year in which they became unit holders. The amended and restated operating agreement permits our directors to select any method and convention permissible under Internal Revenue Code Section 706(d) for the allocation of tax items during the time any person is admitted as a unit holder. In addition, the amended and restated operating agreement provides that upon the transfer of all or a portion of a unit holder's units, other than at the end of the fiscal year, the entire year's net income or net loss allocable to the transferred units will be apportioned between the transferor and transferee.

Tax Consequences Upon Disposition of Units

Gain or loss will be recognized on a sale of our units equal to the difference between the amount realized and the unit holder's basis in the units sold. The amount realized includes cash and the fair market value of any property received plus the member's share of our debt. Although unlikely, since debt is included in an investor's basis, it is possible that an investor could have a tax liability upon the sale of the investor's units that exceeds the proceeds of sale.

Gain or loss recognized by a unit holder on the sale or exchange of a unit held for more than one year generally will be taxed as long-term capital gain or loss. A portion of this gain or loss, however, will be separately computed and taxed as ordinary income or loss under Internal Revenue Code Section 751 to the extent attributable to depreciation recapture or other "unrealized receivables" or "substantially appreciated inventory" owned by us. We will adopt conventions to assist those members that sell units in apportioning the gain among the various categories.

Effect of Tax Code Section 754 Election on Unit Transfers

The adjusted basis of each unit holder in his units, "outside basis," initially will equal his proportionate share of our adjusted basis in our assets, "inside basis." Over time, however, it is probable that changes in unit values and cost recovery deductions will cause the value of a unit to differ materially from the unit holder's proportionate share of the inside basis. Section 754 of the Internal Revenue Code permits a partnership to make an election that allows a transferee who acquires units either by purchase or upon the death of a unit holder to adjust his share of the inside basis to fair market value as reflected by the unit price in the case of a purchase or the estate tax value of the unit in the case of an acquisition upon death of a unit holder. Once the amount of the transferee's basis adjustment is determined, it is allocated among our various assets pursuant to Section 755 of the Internal Revenue Code.

A Section 754 election is beneficial to the transferee when his outside basis is greater than his proportionate share of the entity's inside basis. In this case, a special basis calculation is made solely for the benefit of the transferee that will determine his cost recovery deductions and his gain or loss on disposition of property by reference to his higher outside basis. The Section 754 election will be detrimental to the transferee if his outside basis is less than his proportionate share of inside basis.

If we make a Section 754 election, Treasury Regulations require us to make the basis adjustments. In addition, these regulations place the responsibility for reporting basis adjustments on us. We must report basis adjustments by attaching statements to our partnership returns. In addition, we are required to adjust specific partnership items in light of the basis adjustments. Consequently, amounts reported on the transferee's Schedule K-1 are adjusted amounts.

Transferees are subject to an affirmative obligation to notify us of their bases in acquired interests. To accommodate concerns about the reliability of the information provided, we are entitled to rely on the written representations of transferees concerning either the amount paid for the partnership interest or the transferee's basis in the partnership interest under Section 1014 of the Internal Revenue Code, unless clearly erroneous.

Our amended and restated operating agreement provides our directors with authority to determine whether or not a Section 754 election will be made. Depending on the circumstances, the value of units may be affected positively or negatively by whether or not we make a Section 754 election. If we decide to make a Section 754 election, the election will be made on a timely filed partnership income tax return and is effective for transfers occurring in the taxable year of the return in which the election is made. Once made, the Section 754 election is irrevocable unless the Internal Revenue Service consents to its revocation.

Our Dissolution and Liquidation may be Taxable to Investors Unless our Properties are Distributed In-Kind

Our dissolution and liquidation will involve the distribution to investors of the assets, if any, remaining after payment of all of our debts and liabilities. Upon dissolution, investors' units may be liquidated by one or more distributions of cash or other property. If investors receive only cash upon the dissolution, gain would be recognized by investors to the extent, if any, that the amount of cash received exceeds investors' adjusted bases in investors' units. We will recognize no gain or loss if we distribute our own property in a dissolution event. However, since our primary asset will likely be the ethanol plant, it is unlikely that we will make a distribution in kind.

Reporting Requirements

The IRS requires a taxpayer who sells or exchanges a membership unit to notify the Company in writing within 30 days, or for transfers occurring on or after December 16 of any year, by January 15 of the following year. Although the IRS reporting requirement is limited to Section 751(a) exchanges, it is likely that any transfer of a Company membership unit will constitute a Section 751(a) exchange. The written notice required by the IRS must include the names and addresses of both parties to the exchange, the identifying numbers of the transferor, and if known, of the transferee, and the exchange date. Currently the IRS imposes a penalty of $50 for failure to file the written notice unless reasonable cause can be shown.

Tax Information to Members

We will annually provide each member with a Schedule K-1 (or an authorized substitute). Each member's Schedule K-1 will set out the holder's distributive share of each item of income, gain, loss, deduction or credit to be separately stated. Each member must report all items consistently with Schedule K-1 or, if an inconsistent position is reported, must notify the IRS of any inconsistency by filing Form 8062 "Notice of Inconsistent Treatment or Administrative Adjustment Request" with the original or amended return in which the inconsistent position is taken.

Audit of Income Tax Returns

The Internal Revenue Service may audit our income tax returns and may challenge positions taken by us for tax purposes and may seek to change our allocations of income, gain, loss and deduction to investors. If the IRS were successful in challenging our allocations in a manner that reduces loss or increases income allocable to investors, investors may have additional tax liabilities. In addition, such an audit could lead to separate audits of an investor's tax returns, especially if adjustments are required, which could result in adjustments on an investors' tax returns. Any of these events could result in additional tax liabilities, penalties and interest to investors, and the cost of filing amended tax returns.

Generally, investors are required to file their tax returns in a manner consistent with the information returns filed by us, such as Schedule K-1, or investors may be subject to possible penalties, unless they file a statement with their tax returns describing any inconsistency. In addition, we will select a "tax matters member" who will have certain responsibilities with respect to any Internal

Revenue Service audit and any court litigation relating to us. Investors should consult their tax advisors as to the potential impact these procedural rules may have on them.

Prior to 1982, regardless of the size of a partnership, adjustments to a partnership's items of income, gain, loss, deduction or credit had to be made in separate proceedings with respect to each partner individually. Because a large partnership sometimes had many partners located in different audit districts, adjustments to items of income, gains, losses, deductions or credits of the partnership had to be made in numerous actions in several jurisdictions, sometimes with conflicting outcomes. The Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA") established unified audit rules applicable to all but certain small partnerships. These rules require the tax treatment of all "partnership items" to be determined at the partnership, rather than the partner, level. Partnership items are those items that are more appropriately determined at the partnership level than at the partner level, as provided by regulations. Since we will be taxed as a partnership, the TEFRA rules are applicable to our members and us.

The Internal Revenue Service may challenge the reporting position of a partnership by conducting a single administrative proceeding to resolve the issue with respect to all partners. But the Internal Revenue Service must still assess any resulting deficiency against each of the taxpayers who were partners in the year in which the understatement of tax liability arose. Any partner of a partnership can request an administrative adjustment or a refund for his own separate tax liability. Any partner also has the right to participate in partnership-level administrative proceedings. A settlement agreement with respect to partnership items binds all parties to the settlement. The TEFRA rules establish the "Tax Matters Member" as the primary representative of a partnership in dealings with the Internal Revenue Service. The Tax Matters Member must be a "member-manager" which is defined as a company member who, alone or together with others, is vested with the continuing exclusive authority to make the management decisions necessary to conduct the business for which the organization was formed. In our case, this would be a member of the board of directors who is also a unit holder of the company. Our amended and restated operating agreement provides for board designation of the Tax Matters Member. Currently, Revis L. Stephenson, III is serving as our Tax Matters Member. The Internal Revenue Service generally is required to give notice of the beginning of partnership-level administrative proceedings and any resulting administrative adjustment to all partners whose names and addresses are furnished to the Internal Revenue Service.

Interest on Underpayment of Taxes; Accuracy-Related Penalties; Negligence Penalties

If we incorrectly report an investor's distributive share of our net income, such may cause the investor to underpay his taxes. If it is determined that the investor underpaid his taxes for any taxable year, the investor must pay the amount of taxes he underpaid plus interest on the underpayment and possibly penalties from the date the tax was originally due. Under recent law changes, the accrual of interest and penalties may be suspended for certain qualifying individual taxpayers if the IRS does not notify an investor of amounts owing within 18 months of the date the investor filed his income tax return. The suspension period ends 21 days after the Internal Revenue Service sends the required notice. The rate of interest is compounded daily and is adjusted quarterly.

Under Section 6662 of the Internal Revenue Code, penalties may be imposed relating to the accuracy of tax returns that are filed. A 20% penalty is imposed with respect to any "substantial understatement of income tax" and with respect to the portion of any underpayment of tax attributable to a "substantial valuation misstatement" or to "negligence." All those penalties are subject to an exception to the extent a taxpayer had reasonable cause for a position and acted in good faith.

The Internal Revenue Service may impose a 20% penalty with respect to any underpayment of tax attributable to negligence. An underpayment of taxes is attributable to negligence if such underpayment results from any failure to make a reasonable attempt to comply with the provisions of the Code, or

any careless, reckless, or intentional disregard of the federal income tax rules or regulations. In addition, regulations provide that the failure by a taxpayer to include on a tax return any amount shown on an information return is strong evidence of negligence. The disclosure of a position on the taxpayer's return will not necessarily prevent the imposition of the negligence penalty.

State and Local Taxes

In addition to the federal income tax consequences described above, investors should consider the state and local tax consequences of an investment in us. This prospectus makes no attempt to summarize the state and local tax consequences to an investor. Investors are urged to consult their own tax advisors regarding state and local tax obligations.

LEGAL MATTERS

The validity of the issuance of the units offered will be passed upon for us by Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, P.L.C.

We are not a party to any pending legal proceedings.

EXPERTS

McGladrey & Pullen, LLP, independent registered public accounting firm, has audited our financial statements as of March 31, 2005 and for the period then ended as stated in their report appearing elsewhere in this prospectus and registration statement. We have included our financial statements in the prospectus and elsewhere in this registration statement in reliance on the report from McGladrey & Pullen, LLP, given on their authority as experts in accounting and auditing.

TRANSFER AGENT

We will serve as our transfer agent and registrar.

ADDITIONAL INFORMATION

We filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form SB-2 (the "Registration Statement") under the Securities Act, with respect to the offer and sale of membership units pursuant to this prospectus. This prospectus, filed as a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules thereto in accordance with the rules and regulations of the Commission and no reference is hereby made to such omitted information. Statements made in this prospectus concerning the contents of any contract, agreement or other document filed as an exhibit to the registration statement are summaries of the terms of such contracts, agreements or documents and are not necessarily complete. Reference is made to each such exhibit for a more complete description of the matters involved and such statements shall be deemed qualified in their entirety by such reference. The registration statement and the exhibits and schedules thereto filed with the Commission may be inspected, without charge, and copies may be obtained at prescribed rates, at the public reference facility maintained by the Commission at its principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission.

As of effectiveness of our registration statement, we will be required to file periodic reports with the Securities and Exchange Commission ("SEC") pursuant to Section 13 of the Securities Exchange Act of 1934. Our quarterly reports will be made on Form 10-QSB, and our annual reports are made on Form 10-KSB. As of the date of this prospectus, our filings will be made pursuant to Regulation S-B for small business filers. We will also make current reports on Form 8-K. Except for our duty to deliver audited annual financial statements to our members pursuant to our amended and restated operating agreement, we are not required to deliver an annual report to security holders and currently have no plan to do so. However, each filing we make with the SEC is immediately available to the public for inspection and copying at the Commission's public reference facilities and the web site of the Commission referred to above or by calling the SEC at 1-800-SEC-0330.

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INDEX TO FINANCIAL STATEMENTS

[INSERT FINANCIAL STATEMENT]

		Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F-2
FINANCIAL STATEMENTS
	BALANCE SHEET	F-3
	STATEMENT OF OPERATIONS	F-4
	STATEMENT OF MEMBERS' EQUITY	F-5
	STATEMENT OF CASH FLOWS	F-6
	NOTES TO FINANCIAL STATEMENTS	F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors
Advanced BioEnergy, LLC
Fairmont, Nebraska

We have audited the accompanying balance sheet of Advanced BioEnergy, LLC (a development stage company) (the Company) as of March 31, 2005, and the related statements of operations, changes in members' equity and cash flows for the period from January 4, 2005 (date of inception) to March 31, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Advanced BioEnergy, LLC as of March 31, 2005, and the results of its operations and its cash flows for the period from January 4, 2005 (date of inception) to March 31, 2005, in conformity with U.S. generally accepted accounting principles.

Des Moines, Iowa
May 2, 2005

F-2

ADVANCED BIOENERGY, LLC
(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET

March 31, 2005

ASSETS
CURRENT ASSETS
	Cash	$	894,618

OTHER ASSETS
	Land option deposits		15,000
	Deferred offering costs		68,515

			83,515

TOTAL ASSETS		$	978,133

LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES
	Accounts payable	$	72,725

MEMBERS' EQUITY
	Contributed capital, $10 par value, authorized 150,000 units, issued and outstanding 102,500 units		1,025,000
	Deficit accumulated during development stage		(119,592	)

			905,408

TOTAL LIABILITIES AND MEMBERS' EQUITY		$	978,133

See accompanying notes to financial statements.

F-3

ADVANCED BIOENERGY, LLC
(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF OPERATIONS

Period from January 4, 2005 (Date of Inception)
to March 31, 2005

REVENUES		$	—
OPERATING EXPENSES
	Start up expenses		72,480
	Accounting		1,680
	Consulting fees		10,683
	Legal		19,519
	Directors meetings and expenses		12,221
	Office		1,806
	Utilities		1,181
	Miscellaneous		22

			119,592

DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE		$	(119,592	)

Weighted Average Units Outstanding			36,034

Net Loss Per Unit—Basic and Diluted		$	(3.32	)

See accompanying notes to financial statements.

F-4

ADVANCED BIOENERGY, LLC
(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN MEMBERS' EQUITY

Period from January 4, 2005 (Date of Inception)

to March 31, 2005

MEMBERS' EQUITY—January 4, 2005	$	—
Issuance of 102,500 membership units		1,025,000
Deficit accumulated during development stage		(119,592	)

MEMBERS' EQUITY—March 31, 2005	$	905,408

See accompanying notes to financial statements.

F-5

ADVANCED BIOENERGY, LLC
(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS

Period from January 4, 2005 (Date of Inception)

to March 31, 2005

OPERATING ACTIVITIES
	Deficit accumulated during development stage		$	(119,592	)
		Increase in Accounts payable		49,331

NET CASH USED IN OPERATING ACTIVITIES				(70,261	)

INVESTING ACTIVITIES
	Payment of land option deposits			(15,000	)

FINANCING ACTIVITIES
	Contributed capital			1,000,000
	Payment of deferred offering costs			(20,121	)

NET CASH PROVIDED BY FINANCING ACTIVITIES				979,879

NET INCREASE IN CASH				894,618
CASH—beginning of period				—

CASH—end of period			$	894,618

SUPPLEMENTAL DISCLOSURE OF NONCASH OPERATING AND FINANCING ACTIVITIES
		Accounts payable incurred for deferred offering costs	$	23,394
		Consulting services classified as deferred offering costs received in exchange for 2500 membership units	$	25,000

See accompanying notes to financial statements.

F-6

ADVANCED BIOENERGY, LLC
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

March 31, 2005

NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPAL BUSINESS ACTIVITY— Advanced BioEnergy, LLC is a development stage Delaware limited liability company (the Company). The Company was organized in January 2005 to pool investors to build a 100 million gallons per year ethanol plant to be located near Fairmont, Nebraska. Construction is projected to begin in 2006. As of March 31, 2005, the Company is in the development stage with its efforts being principally devoted to organizational and equity raising activities.

USE OF ESTIMATES —The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.

FISCAL REPORTING PERIOD —The Company has adopted a fiscal year ending October 31 for financial reporting purposes.

CASH AND CASH EQUIVALENTS —The Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents. The Company's cash balances are maintained in bank depositories and exceed federally insured limits. The Company has not experienced losses in such accounts.

DEFERRED OFFERING COSTS —The Company defers costs incurred to raise equity financing until that financing occurs. At the time of issuance of such new equity, these costs will be netted against the proceeds received. If the financing does not occur, such costs will be expensed. These costs totaled $68,515 at March 31, 2005.

INCOME TAXES —The Company is organized as a limited liability company under Delaware law. Under this type of organization, the Company is treated as a partnership for federal and state income tax purposes with its earnings or losses passing through to the members and subject to taxation at the member level. Accordingly, no income tax provision or benefit is reflected in these financial statements.

ORGANIZATIONAL AND START UP COSTS —The company expenses all organizational and start up costs as they are incurred.

EARNINGS (LOSS) PER UNIT —Basic and diluted earnings (loss) per unit are computed using the weighted-average number of units outstanding during the period. Diluted loss per unit is the same as basic loss per unit as no equivalent units existed at March 31, 2005.

RECENTLY ISSUED ACCOUNTING PROUNCEMENTS —The Financial Accounting Standards Board (FASB) has issued Statement No. 123 (Revised), Share-Based Payment (FAS123(R)). This Statement establishes standards for accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which and entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments, or that may be settled by the issuance of those equity instruments. Statement No. 123(R) covers a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. FAS 123(R) replaces existing requirements under FASB Statement No. 123 and eliminates the ability to account for share-based compensation transactions using the intrinsic value method prescribed by APB Opinion No. 25. For the Company, FAS 123(R) is effective as of the first interim or annual reporting period that begins after December 15, 2005.

F-7

NOTE B: MEMBERS' EQUITY

The Company was formed on January 4, 2005 to have a perpetual life. It was initially capitalized by its members who contributed an aggregate of $550,000 for 55,000 membership units. The Company will initially have one class of membership units with the board of directors having the authority to create additional classes of units if deemed necessary.

As specified in its amended and restated operating agreement, the Company is authorized to issue up to 10,000,000 membership units with any additional units requiring the consent of a majority of the members.

The Company issued a confidential private placement memorandum (seed capital offering) in February 2005, for the sale of 150,000 membership units, including the 55,000 originally contributed, at $10 per unit or $1,500,000, with no stated minimum requirement. The minimum investment for a potential investor is 5,000 units or $50,000, with increments of 500 units or $5,000, thereafter. The entire purchase amount is due upon subscribing. As of March 31, 2005 the Company had collected $1,000,000, including the $550,000 originally contributed, for 100,000 membership units and issued an additional 2,500 units for services to be provided. Subsequent to March 31, 2005 the Company received subscriptions for the balance of the $1,500,000 and closed the offering on April 14, 2005 for the purpose of funding the development, organizational and offering expenses.

The initial board of directors authorized a unit distribution to the seed capital members equal to two additional units for every one unit issued and outstanding at the time the seed capital offering is closed.

The Company intends to file a Form SB-2 Registration Statement with the Securities and Exchange Commission (SEC) in May 2005. Management anticipates that this offering will be for a minimum of 3,366,250 and a maximum of 6,732,500 membership units for sale at $10 per unit. However, there can be no assurance that such units will be sold.

Income and losses are allocated to all members based upon their respective percentage of units held.

The transfer of units is restricted by the Company's operating agreement. Generally, unless a transfer is permitted under our operating agreement or by operation of law, such as upon death, units cannot be transferred without the prior written approval of a majority of directors.

NOTE C: RELATED PARTY TRANSACTIONS

The Company pays a member for project coordination services during the development stage and related equity financing activities. As of March 31, 2005 the Company had incurred consulting charges of $31,750 that has been included in deferred offering costs. See the consulting agreement terms in Note D.

The Company had accounts payable to related parties totaling $3,631 as of March 31, 2005.

A member of the Company is currently the president of the Company's primary bank depository.

NOTE D: COMMITMENTS AND CONTINGENCIES

Design build

The total cost of the project, including the construction of the ethanol plant and start-up expenses, is expected to approximate $134,650,000. The Company anticipates funding the development of the ethanol plant by raising equity of at least $53,860,000 and securing financing for up to $80,790,000. The amount of debt financing needed depends on the amount of equity raised in the offering. Currently, the Company has signed a letter of intent with an unrelated contractor to design and build the ethanol plant at a total contract price of approximately $98,000,000 which is contingent upon raising the equity and obtaining adequate financing.

F-8

The Company has no contracts or commitments with any bank, lender, or financial institution for this debt financing. There are no assurances that the Company will be able to obtain the necessary debt financing, other financing or grants sufficient to capitalize the project

Land Options

In February 2005, the Company entered into a contract to have the option to purchase approximately 87 acres of land in Fillmore County, Nebraska, for $478,500. The Company deposited $5,000 of earnest money with an unrelated party for this option. The initial option shall extend until August 1, 2006. If the option is exercised during the time permitted, the $5,000 deposit will be applied to the purchase price.

During February 2005, the Company entered into another agreement to have the option to purchase up to 112 acres of land in Fillmore County, Nebraska, for $6,000 per acre. The Company deposited $10,000 of earnest money with an unrelated party for this option. The initial option shall extend until August 1, 2006. If the option is exercised during the time permitted, the $10,000 deposit will be applied to the purchase price.

Consulting

In March 2005, the Company signed an agreement with a related party for assistance with raising equity and securing financing. The agreement begins upon execution and shall continue through the closing date as defined in the agreement. The development consultant will receive compensation as follows: 2,500 unrestricted membership units (valued at $25,000) at execution, $1,500 per week from execution through the closing of the equity financing and $375 per day after the closing of the equity financing, plus reimbursement of approved expenses up to a weekly maximum reimbursement of $750.

In addition, the development consultant will receive a bonus of 42,500 restricted membership units within 30 days of the close of the seed capital offering. If the Company does not begin construction of the project on or before December 31, 2007 or files Articles of Dissolution before beginning construction of the project, the consultant is required to return the restricted units to the Company without payment of consideration.

The Company may only terminate this agreement for cause as defined in the consulting agreement. The consultant may terminate this agreement with fourteen days' written notice.

In March 2005, the Company signed an agreement with an unrelated party for initial railroad engineering services. The estimated cost of the services is $7,000, which is to be billed on an actual time and materials basis. As of March 31, 2005 the Company had incurred charges of $6,889 which are included in accounts payable.

The Company signed an agreement with an unrelated entity for consulting and energy management services relative to supplies of natural gas and electricity of the plant commencing April 1, 2005 and continuing for twenty-four months after the plant's completion date. This agreement may be terminated by either party after the initial term by sixty days' written notice. The fees include $35,000 payable upon the April 1, 2005 commencement and $3,500 per month beginning after start up of the plant plus approved travel expenses.

In March 2005, the Company signed a planting agreement, in concurrence with the land purchase options, with an unrelated agricultural producer for $190 per acre plus specified actual expenses for loss of profit and fertilizer costs incurred to the date of the agreement from a requested crop rotation change. As of March 31, 2005, the Company has included $20,900 of these expenses in accounts payable. In addition, the Company is responsible for any crop damages that may occur as a result of plant site exploration subsequent to the planting of the crop.

F-9

The Company has an agreement to compensate the original two members of the Company for development fees in a total sum of 1% of the total project cost to be paid in member units in exchange for their efforts to organize and develop the Company. These fees are currently estimated at $1,346,500 or 134,650 units of which 125,000 units were issued subsequent to March 31, 2005 and any additional units will be issued upon substantial completion of construction of the plant based on the actual project costs. These membership units will be considered restricted until certain requirements within the agreement are reached.

If the Company files Articles of Dissolution or another event prevents successful ethanol production by the Company, these members will be required to return the restricted units to the Company without payment of consideration.

NOTE E: SUBSEQUENT EVENT

In April 2005, the Company entered into two contracts to have the option to purchase approximately 103 acres and 148 acres of land in Fillmore County, Nebraska, for $566,500 and $740,000, respectively. The Company deposited $5,000 and $10,000 of earnest money with an unrelated party for these options. The options extend until August 1, 2006. If the options are exercised during the time permitted, the deposits will be applied to the purchase price.

F-10

MINIMUM 3,366,250 UNITS
MAXIMUM 6,732,500 UNITS

PROSPECTUS

May , 2005

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, units only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common shares.

No action is being taken in any jurisdiction outside the United States to permit a public offering of the units or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to that jurisdiction.

Through and including , 2005 (the 90 ^th day after the effective date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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PART II—INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Directors and officers of Advanced BioEnergy, LLC may be entitled to benefit from the indemnification provisions contained in our amended and restated operating agreement and the Delaware Limited Liability Company Act. The general effect of these provisions is summarized below.

Our amended and restated operating agreement provides that to the maximum extent permitted under the Delaware Limited Liability Company Act and any other applicable law, no member or director of Advanced BioEnergy shall be personally liable for any debt, obligation or liability of Advanced BioEnergy merely by reason of being a member or director or both. No director of Advanced BioEnergy shall be personally liable to Advanced BioEnergy or its members for monetary damages for a breach of fiduciary duty by such director; provided that the provision shall not eliminate or limit the liability of a director for the following: (1) receipt of an improper financial benefit to which the director is not entitled; (2) liability for receipt of distributions in violation of the articles of organization, operating agreement, or the Delaware Limited Liability Company Act; (3) a knowing violation of law; or (4) acts or omissions involving fraud, bad faith or willful misconduct. To the maximum extent permitted under the Delaware Limited Liability Company Act and other applicable law, Advanced BioEnergy, its receiver, or its trustee (however in the case of a receiver or trustee only to the extent of Company property) is required to indemnify, save, and hold harmless and pay all judgments and claims against each director relating to any liability or damage incurred by reason of any act performed or omitted to be performed by such director or officer in connection with the business of Advanced BioEnergy. The indemnification includes reasonable attorneys' fees incurred by a director or officer in connection with the defense of any action based on covered acts or omissions. Attorneys' fees may be paid as incurred, including those for liabilities under federal and state securities laws, as permitted by law. To the maximum extent permitted by law, in the event of an action by a unit holder against any director, including a derivative suit, we must indemnify, hold harmless and pay all costs, liabilities, damages and expenses of the director, including attorneys' fees incurred in the defense of the action. Notwithstanding the foregoing provisions, no director shall be indemnified by Advanced BioEnergy in contradiction of the Delaware Limited Liability Company Act. Advanced BioEnergy may purchase and maintain insurance on behalf of any person in his or her official capacity against any liability asserted against and incurred by the person arising from the capacity, regardless of whether Advanced BioEnergy would otherwise be required to indemnify the person against the liability.

Generally, under Delaware law, a member or manager is not personally obligated for any debt or obligation of a company solely because they are a member or manager of a company. However, Delaware law allows a member or manager to agree to become personally liable for any or all debts, obligations, and liabilities if the operating agreement provides.

The principles of law and equity supplement the Delaware Limited Liability Company Act, unless displaced by particular provisions of the Act.

There is no pending litigation or proceeding involving a director, officer, employee or agent of Advanced BioEnergy as to which indemnification is being sought. We are not aware of any other threatened litigation that may result in claims for indemnification by any director, officer, member, manager, employee or agent.

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ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*

Securities and Exchange Commission registration fee	$	7,924
Legal fees and expenses		205,000
Consulting Fees		200,000
Accounting fees		40,000
Blue Sky filing fees		41,290
Printing expenses		35,000
Advertising		140,000
Miscellaneous expenses		10,000
Total	$	679,214	*

*: All of the above items except the registration fee and blue sky filing fees are estimated.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

During the time period beginning on our formation on January 4, 2005 and ending on April 14, 2005, we issued and sold 150,000 membership units to our seed capital investors at a purchase price of $10 per unit, without registering the units with the Securities and Exchange Commission. We also transferred 2,500 unrestricted units to BioEnergy Capital Consultants, LLC. Following completion of our seed capital private placement, we performed a membership unit distribution to all of our membership units holders, including BioEnergy Capital Consultants, LLC, equal to two membership units for every one membership unit issued and outstanding. In addition, we paid a total development fee equal to 125,000 membership units to two of our directors, Revis Stephenson, III and Robert W. Holmes, and we transferred 42,500 restricted units to BioEnergy Capital Consultants, LLC in exchange for consulting services for a total of 50,000 units. The units transferred to Mr. Stephenson, Mr. Holmes and to BioEnergy Capital Consultants, LLC are subject to certain restrictions that require the return of the units to Advanced BioEnergy upon the occurrences of certain events. As of the date of this prospectus, there are 625,000 units outstanding.

All sales were made pursuant to Rule 506 of Regulation D. Each of these sales was deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) and Rule 506 of the Securities Act of 1933 as transactions by an issuer not involving a public offering. No underwriting discounts or commissions were paid in these transactions and we conducted no general solicitation in connection with the offer or sale of the securities. The purchasers of the securities in each transaction made representations to us regarding their status as accredited investors as defined in Regulation C and their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof. Appropriate legends were affixed to unit certificates and instruments issued in such transactions. All purchasers were provided a private placement memorandum containing all material information concerning our company and the offering. All purchases were made with cash and the total amount of cash consideration for those securities was $1,500,000.

ITEM 27. EXHIBITS.

3.1		Certificate of Formation
3.2		Amended and Restated Operating Agreement of the registrant
4.1		Form of Membership Unit Certificate
4.2		Form of Subscription Agreement of registrant
4.3		Form of Escrow Agreement

II-3

5.1		Form of Opinion of Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, P.L.C. as to certain securities matters
8.1		Form of Opinion of Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, P.L.C. as to certain tax matters
10.1		Option to Purchase Real Estate from Duane V. Lott dated February 7, 2005
10.2		Option to Purchase Real Estate from WDB, Inc. dated February 18, 2005
10.3		Option to Purchase Real Estate from Doris Gwen Ogden dated April 26, 2005
10.4		Option to Purchase Real Estate from L&K Land, Inc. dated April 13, 2005
10.5		Letter of Intent dated March 28, 2005 between Advanced BioEnergy, LLC and Fagen, Inc.
10.6		Trans Systems Corporation Professional Services Agreement dated March 7, 2005
10.7		U.S. Energy Energy Management Agreement dated April 5, 2005
10.8		ICM Environmental Permitting Proposal and Service Agreement dated April 14, 2005
10.9		Consulting Agreement with BioEnergy Capital Consultants, LLC dated March 22, 2005
10.10		Project Development Fee Agreement dated May 19, 2005
23.1		Consent of Independent Registered Public Accounting Firm.

ITEM 28. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

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(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) To deem, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the registered securities which remain unsold at the end of the offering.

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SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Minneapolis, Minnesota.

		ADVANCED BIOENERGY, LLC
Date:	5/24/05	/s/ REVIS L. STEPHENSON, III Revis L. Stephenson, III Chairman and Director (Principal Executive Officer)
Date:	5/25/05	/s/ ROBERT W. HOMES Robert W. Holmes Treasurer and Director (Principal Financial and Accounting Officer)

In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated:

Date:	5/24/05	/s/ REVIS L. STEPHENSON, III Revis L. Stephenson, III, Chairman and Director
Date:	5/25/05	/s/ ROBERT W. HOLMES Robert W. Holmes, Treasurer and Director
Date:	5/25/05	/s/ LARRY L. CERNY Larry L. Cerny, Secretary and Director
Date:	5/25/05	/s/ TROY OTTE Troy Otte, Director
Date:	5/25/05	/s/ JOHN E. LOVEGROVE John E. Lovegrove, Director
Date:	5/25/05	/s/ ROBERT E. BETTGER Robert E. Bettger, Director
Date:	5/25/05	/s/ JOHN T. PORTER John T. Porter, Director
Date:	5/25/05	/s/ RICHARD W. HUGHES Richard W. Hughes, Director
Date:	5/26/05	/s/ KEITH E. SPOHN Keith E. Spohn, Director

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QuickLinks

PROSPECTUS SUMMARY
RISK FACTORS
FORWARD LOOKING STATEMENTS
USE OF PROCEEDS
DETERMINATION OF OFFERING PRICE
DILUTION
CAPITALIZATION
DISTRIBUTION POLICY
SELECTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
ESTIMATED SOURCES OF FUNDS
ESTIMATED USE OF PROCEEDS
DESCRIPTION OF BUSINESS
U.S. FUEL ETHANOL PRODUCTION CAPACITY
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
UNITS BENEFICIALLY OWNED BY DIRECTORS AND OFFICERS
EXECUTIVE COMPENSATION
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PLAN OF DISTRIBUTION
DESCRIPTION OF MEMBERSHIP UNITS
SUMMARY OF OUR AMENDED AND RESTATED OPERATING AGREEMENT
FEDERAL INCOME TAX CONSEQUENCES OF OWNING OUR UNITS
LEGAL MATTERS
EXPERTS
TRANSFER AGENT
ADDITIONAL INFORMATION
INDEX TO FINANCIAL STATEMENTS
ADVANCED BIOENERGY, LLC (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET March 31, 2005
ADVANCED BIOENERGY, LLC (A DEVELOPMENT STAGE COMPANY) STATEMENT OF OPERATIONS Period from January 4, 2005 (Date of Inception) to March 31, 2005
ADVANCED BIOENERGY, LLC (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CHANGES IN MEMBERS' EQUITY Period from January 4, 2005 (Date of Inception) to March 31, 2005
ADVANCED BIOENERGY, LLC (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CASH FLOWS Period from January 4, 2005 (Date of Inception) to March 31, 2005
ADVANCED BIOENERGY, LLC (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS March 31, 2005
PART II—INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES

Exhibit 3.1

CERTIFICATE OF FORMATION

ADVANCED BIOENERGY, LLC

This Certificate of Formation of Advanced BioEnergy, LLC (the "Company"), dated as of December 29, 2004, is being duly executed and filed by Revis Stephenson, an Authorized Person, to form a limited liability company under the Delaware Limited Liability Company Act, Del. Code, tit. 6, Section 18-101 ET SEQ., as amended from time to time (the "Act").

1. NAME. The name the limited liability company formed hereby is "Advanced BioEnergy, LLC."

2. REGISTERED OFFICE. The address of the initial registered office of the Company in the State of Delaware is The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.

3. REGISTERED AGENT. The name and address of the registered agent for service of process on the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation as of the date first above written.

AUTHORIZED PERSON

       /s/Revis L. Stephenson
----------------------------------
Revis Stephenson

State of Delaware
Secretary of State
Division of Corporations
Delivered 08:00 AM: 01/04/2005
Filed 08:00 AM 01/04/2005
SRV 050003702 - 3907248 FILE

Exhibit 3.2

AMENDED AND RESTATED OPERATING AGREEMENT

ADVANCED BIOENERGY, LLC

DATED EFFECTIVE MAY 19, 2005

ADVANCED BIOENERGY, LLC
AMENDED AND RESTATED OPERATING AGREEMENT

TABLE OF CONTENTS

                                                                                                   Page
SECTION 1: THE COMPANY...............................................................................1
     1.1 Formation...................................................................................1
     1.2 Name........................................................................................1
     1.3 Purpose; Powers.............................................................................1
     1.4 Principal Place of Business.................................................................2
     1.5 Term........................................................................................2
     1.6 Registered Agent............................................................................2
     1.7 Title to Property...........................................................................2
     1.8 Payment of Individual Obligations...........................................................2
     1.9 Independent Activities; Transactions With Affiliates........................................2
     1.10 Definitions................................................................................3

SECTION 2. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS...................................................9
     2.1 Original Capital Contributions..............................................................9
     2.2 Additional Capital Contributions; Additional Units..........................................9
     2.3 Capital Accounts............................................................................9

SECTION 3. ALLOCATIONS..............................................................................10
     3.1 Profits....................................................................................10
     3.2 Losses.....................................................................................10
     3.3 Special Allocations........................................................................10
     3.4 Curative Allocations.......................................................................12
     3.5 Loss Limitation............................................................................12
     3.6 Other Allocation Rules.....................................................................12
     3.7 Tax Allocations: Code Section 704(c).......................................................13
     3.8 Tax Credit Allocations.....................................................................13

SECTION 4. DISTRIBUTIONS............................................................................13
     4.1 Net Cash Flow..............................................................................13
     4.2 Amounts Withheld...........................................................................13
     4.3 Limitations on Distributions...............................................................14

SECTION 5. MANAGEMENT...............................................................................14
     5.1 Directors..................................................................................14
     5.2 Number of Total Directors..................................................................14
     5.3 Election of Directors......................................................................14
     5.4 Committees.................................................................................16
     5.5 Authority of Directors.....................................................................16
     5.6 Director as Agent..........................................................................18
     5.7 Restriction on Authority of Directors......................................................18

     5.8 Director Meetings and Notice...............................................................19
     5.9 Action Without a Meeting...................................................................19
     5.10 Quorum; Manner of Acting..................................................................19
     5.11 Voting; Potential Financial Interest......................................................19
     5.12 Duties and Obligations of Directors.......................................................19
     5.13 Chairman and Vice Chairman................................................................20
     5.14 President and Chief Executive Officer.....................................................20
     5.15 Chief Financial Officer...................................................................20
     5.16 Secretary; Assistant Secretary............................................................20
     5.17 Vice President............................................................................21
     5.18 Delegation................................................................................21
     5.19 Execution of Instruments..................................................................21
     5.20 Limitation of Liability; Indemnification of Directors.....................................21
     5.21 Compensation; Expenses of Directors.......................................................22
     5.22 Loans.....................................................................................22

SECTION 6. ROLE OF MEMBERS..........................................................................22
     6.1 One Membership Class.......................................................................22
     6.2 Members....................................................................................22
     6.3 Additional Members.........................................................................22
     6.4 Rights or Powers...........................................................................23
     6.5 Voting Rights of Members...................................................................23
     6.6 Member Meetings............................................................................23
     6.7 Conduct of Meetings........................................................................23
     6.8 Notice of Meetings; Waiver.................................................................23
     6.9 Quorum and Proxies.........................................................................23
     6.10 Voting; Action by Members.................................................................23
     6.11 Record Date...............................................................................23
     6.12 Termination of Membership.................................................................24
     6.13 Continuation of the Company...............................................................24
     6.14 No Obligation to Purchase Membership Interest.............................................24
     6.15 Waiver of Dissenters Rights...............................................................24

SECTION 7. ACCOUNTING, BOOKS AND RECORDS............................................................24
     7.1 Accounting, Books and Records..............................................................24
     7.2 Delivery to Members and Inspection.........................................................25
     7.3 Reports....................................................................................25
     7.4 Tax Matters................................................................................25

SECTION 8. AMENDMENTS...............................................................................26
     8.1 Amendments.................................................................................26

SECTION 9. TRANSFERS................................................................................26
     9.1 Restrictions on Transfers..................................................................26
     9.2 Permitted Transfers........................................................................26
     9.3 Conditions Precedent to Transfers..........................................................27
     9.4 Prohibited Transfers.......................................................................28

     9.5 No Dissolution or Termination..............................................................29
     9.6 Prohibition of Assignment..................................................................29
     9.7 Rights of Unadmitted Assignees.............................................................29
     9.8 Admission of Substituted Members...........................................................29
     9.9 Representations Regarding Transfers........................................................30
     9.10 Distribution and Allocations in Respect of Transferred Units..............................30
     9.11 Additional Members........................................................................31

SECTION 10.  DISSOLUTION AND WINDING UP.............................................................31
     10.1 Dissolution...............................................................................31
     10.2 Winding Up................................................................................31
     10.3 Compliance with Certain Requirements of Regulations; Deficit Capital Accounts.............32
     10.4 Deemed Distribution and Recontribution....................................................32
     10.5 Rights of Unit Holders....................................................................32
     10.6 Allocations During Period of Liquidation..................................................33
     10.7 Character of Liquidating Distributions....................................................33
     10.8 The Liquidator............................................................................33
     10.9 Forms of Liquidating Distributions........................................................33

SECTION 11. MISCELLANEOUS...........................................................................33
     11.1 Notices...................................................................................33
     11.2 Binding Effect............................................................................34
     11.3 Construction..............................................................................34
     11.4 Headings..................................................................................34
     11.5 Severability..............................................................................34
     11.6 Incorporation By Reference................................................................34
     11.7 Variation of Terms........................................................................34
     11.8 Governing Law.............................................................................34
     11.9 Waiver of Jury Trial......................................................................34
     11.10 Counterpart Execution....................................................................34
     11.11 Specific Performance.....................................................................34

iii

AMENDED AND RESTATED OPERATING AGREEMENT
OF
ADVANCED BIOENERGY, LLC

THIS AMENDED AND RESTATED OPERATING AGREEMENT (the "Agreement") is entered into and shall be effective as of the Effective Date (as hereinafter defined), by and among Advanced BioEnergy, LLC, a Delaware limited liability company (the "Company"), each of the Persons (as hereinafter defined) who are identified as Members on the attached Exhibit "A" and who have executed a counterpart of this Agreement and a Subscription Agreement, and any other Persons as may from time-to-time be subsequently admitted as a Member of the Company in accordance with the terms of this Agreement. Capitalized terms not otherwise defined herein shall have the meaning set forth in Section 1.10.

WHEREAS, the Company's organizers caused to be filed with the State of Delaware, a Certificate of Formation dated January 4, 2005, pursuant to the Delaware Limited Liability Company Act (the "Act"); and

WHEREAS, the Company's organizers adopted an Operating Agreement of the Company dated February 18, 2005, pursuant to the Act; and

WHEREAS, the Members desire to amend and restate the Operating Agreement to revise and set forth their respective rights, duties, and responsibilities with respect to the Company and its business and affairs.

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. THE COMPANY

1.1 FORMATION. The initial Members formed the Company as a Delaware limited liability company by filing a Certificate of Formation with the Delaware Secretary of State, Division of Corporations on January 4, 2005, pursuant to the provisions of the Act. To the extent that the rights or obligations of any Member are different by reason of any provision of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control.

1.2 NAME. The name of the Company shall be "Advanced BioEnergy, LLC" and all business of the Company shall be conducted in such name.

1.3 PURPOSE; POWERS. The nature of the business and purposes of the Company are: (i) to own, construct, operate, lease, finance, contract with, and/or invest in ethanol production and co-product production facilities as permitted under the applicable laws of the State of Delaware; (ii) to engage in the processing of corn, grains and other feedstock into ethanol and any and all

related co-products, and the marketing of all products and co-products from such processing; and (iii) to engage in any other business and investment activity in which a Delaware limited liability company may lawfully be engaged, as determined by the Directors. The Company has the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or in furtherance of the purpose of the Company as set forth in this Section 1.3 and has, without limitation, any and all powers that may be exercised on behalf of the Company by the Directors pursuant to Section 5 hereof.

1.4 PRINCIPAL PLACE OF BUSINESS. The Company shall continuously maintain a principal place of business in Nebraska. The principal place of business of the Company shall be at 4424 South 179th Street, Omaha, Nebraska, 68135, or elsewhere as the Directors may determine. Any documents required by the Act to be kept by the Company shall be maintained at the Company's principal place of business.

1.5 TERM. The term of the Company commenced on the date the Certificate of Formation (the "Certificate") of the Company was filed with the Delaware Secretary of State, Division of Corporations, and shall continue until the winding up and liquidation of the Company and its business is completed following a Dissolution Event as provided in Section 10 hereof.

1.6 REGISTERED AGENT. The Company shall continuously maintain a registered office and a registered agent for service of process in the State of Delaware. The name and address of the Registered Agent shall be The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.

1.7 TITLE TO PROPERTY. All Property owned by the Company shall be owned by the Company as an entity and no Member shall have any ownership interest in such Property (as hereinafter defined) in his/her/its individual name. Each Member's interest in the Company shall be personal property for all purposes. At all times after the Effective Date, the Company shall hold title to all of its Property in the name of the Company and not in the name of any Member.

1.8 PAYMENT OF INDIVIDUAL OBLIGATIONS. The Company's credit and assets shall be used solely for the benefit of the Company, and no asset of the Company shall be Transferred or encumbered for, or in payment of, any individual obligation of any Member.

1.9 INDEPENDENT ACTIVITIES; TRANSACTIONS WITH AFFILIATES. The Directors shall be required to devote such time to the affairs of the Company as may be necessary to manage and operate the Company, and shall be free to serve any other Person or enterprise in any capacity that the Director may deem appropriate in its discretion. Neither this Agreement nor any activity undertaken pursuant hereto shall (i) prevent any Member or Director or its Affiliates, acting on its own behalf, from engaging in whatever activities it chooses, whether the same are competitive with the Company or otherwise, and any such activities may be undertaken without having or incurring any obligation to offer any interest in such activities to the Company or any Member; or (ii) require any Member or Director to permit the Company or Director or Member or its Affiliates to participate in any such activities, and as a material part of the consideration for the execution of this Agreement by each Member, each Member hereby waives, relinquishes, and renounces any such right or claim of participation. To the extent permitted by applicable law

and subject to the provisions of this Agreement, the Directors are hereby authorized to cause the Company to purchase Property from, sell Property to or otherwise deal with any Member (including any Member who is also a Director), acting on its own behalf, or any Affiliate of any Member; provided that any such purchase, sale or other transaction shall be made on terms and conditions which are no less favorable to the Company than if the sale, purchase or other transaction had been made with an independent third party.

1.10 DEFINITIONS. Capitalized words and phrases used in this Agreement have the following meanings:

(a) "Act" means the Delaware Limited Liability Company Act, as amended from time to time (or any corresponding provision or provisions of any succeeding law).

(b) "Adjusted Capital Account Deficit" means, with respect to any Unit Holder, the deficit balance, if any, in such Unit Holder's Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments: (i) Credit to such Capital Account any amounts which such Unit Holder is deemed to be obligated to restore pursuant to the next to the last sentences in Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and
(ii) Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the Regulations. The foregoing definition is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.

(c) "Affiliate" means, with respect to any Person: (i) any Person directly or indirectly controlling, controlled by or under common control with such Person; (ii) any officer, director, general partner, member or trustee of such Person; or (iii) any Person who is an officer, director, general partner, member or trustee of any Person described in clauses (i) or (ii) of this sentence. For purposes of this definition, the terms "controlling," "controlled by" or "under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person or entity, whether through the ownership of voting securities, by contract or otherwise, or the power to elect at least 50% of the directors, members, or persons exercising similar authority with respect to such Person or entities.

(d) "Agreement" means this Amended and Restated Operating Agreement of Advanced BioEnergy, LLC, as amended from time to time.

(e) "Assignee" means a transferee of Units who is not admitted as a substituted member pursuant to Section 9.8.

(f) "Capital Account" means the separate capital account maintained for each Unit Holder in accordance with Section 2.3.

(g) "Capital Contributions" means, with respect to any Member, the amount of money (US Dollars) and the initial Gross Asset Value of any assets or property (other than money) contributed by the Member (or such Member's predecessor in interest) to the Company (net of liabilities secured by such contributed property that the Company is considered to assume

or take subject to under Code Section 752) with respect to the Units in the Company held or purchased by such Member, including additional Capital Contributions.

(h) "Certificate" means the Certificate of Formation of the Company filed with the Delaware Secretary of State, Division of Corporations.

(i) "Code" means the United States Internal Revenue Code of 1986, as amended from time to time.

(j) "Company" means Advanced BioEnergy, LLC, a Delaware limited liability company.

(k) "Company Minimum Gain" has the meaning given the term "partnership minimum gain" in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.

(l) "Debt" means (i) any indebtedness for borrowed money or the deferred purchase price of property as evidenced by a note, bonds, or other instruments; (ii) obligations as lessee under capital leases; (iii) obligations secured by any mortgage, pledge, security interest, encumbrance, lien or charge of any kind existing on any asset owned or held by the Company whether or not the Company has assumed or become liable for the obligations secured thereby;
(iv) any obligation under any interest rate swap agreement; (v) accounts payable; and (vi) obligations under direct or indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i),
(ii), (iii), (iv) and (v), above provided that Debt shall not include obligations in respect of any accounts payable that are incurred in the ordinary course of the Company's business and are not delinquent or are being contested in good faith by appropriate proceedings.

(m) "Depreciation" means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Directors.

(n) "Director" means any Person who (i) is referred to as such in
Section 5.1 of this Agreement or has become a Director pursuant to the terms of this Agreement, and (ii) has not ceased to be a Director pursuant to the terms of this Agreement. "Directors" mean all such Persons. For purposes of the Act, the Directors shall be deemed to be the "managers" (as such term is defined and used in the Act) of the Company.

(o) "Dissolution Event" shall have the meaning set forth in
Section 10.1 hereof.

(p) "Effective Date" means May 19, 2005.

(q) "Facilities" shall mean the ethanol production and co-product production facilities in Nebraska or such other location as may be determined by the Directors to be constructed and operated by the Company pursuant to the Business Plan.

(r) "Fiscal Year" means (i) any twelve-month period commencing on November 1 and ending on October 31 and (ii) the period commencing on the immediately preceding November 1 and ending on the date on which all Property is distributed to the Unit Holders pursuant to Section 10 hereof, or, if the context requires, any portion of a Fiscal Year for which an allocation of Profits or Losses or a distribution is to be made.

(s) "GAAP" means generally accepted accounting principles in effect in the United States of America from time to time.

(t) "Gross Asset Value" means with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (i) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by the Directors provided that the initial Gross Asset Values of the assets contributed to the Company pursuant to Section 2.1 hereof shall be as set forth in such section; (ii) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values (taking Code Section 7701(g) into account), as determined by the Directors as of the following times: (A) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (B) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the Company; and (C) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), provided that an adjustment described in clauses (A) and (B) of this paragraph shall be made only if the Directors reasonably determine that such adjustment is necessary to reflect the relative economic interests of the Members in the Company; (iii) The Gross Asset Value of any item of Company assets distributed to any Member shall be adjusted to equal the gross fair market value (taking Code Section 7701(g) into account) of such asset on the date of distribution as determined by the Directors; and (iv) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the definition of "Profits" and "Losses" or Section 3.3(c) hereof; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Profits and Losses.

(u) "Issuance Items" has the meaning set forth in Section 3.3(h) hereof.

(v) "Liquidation Period" has the meaning set forth in Section 10.6 hereof.

(w) "Liquidator" has the meaning set forth in Section 10.8 hereof.

(x) "Losses" has the meaning set forth in the definition of "Profits" and "Losses."

(y) "Member" means any Person (i) whose name is set forth as such on Exhibit "A" initially attached hereto or has become a Member pursuant to the terms of this Agreement, and (ii) who is the owner of one or more Units.

(z) "Members" means all such Members.

(aa) "Membership Economic Interest" means collectively, a Member's share of "Profits" and "Losses," the right to receive distributions of the Company's assets, and the right to information concerning the business and affairs of the Company provided by the Act. The Membership Economic Interest of a Member is quantified by the unit of measurement referred to herein as "Units."

(bb) "Membership Interest" means collectively, the Membership Economic Interest and Membership Voting Interest.

(cc) "Membership Register" means the membership register maintained by the Company at its principal office or by a duly appointed agent of the Company setting forth the name, address, the number of Units, and Capital Contributions of each Member of the Company, which shall be modified from time to time as additional Units are issued and as Units are transferred pursuant to this Agreement.

(dd) "Membership Voting Interest" means collectively, a Member's right to vote as set forth in this Agreement or required by the Act. The Membership Voting Interest of a Member shall mean as to any matter to which the Member is entitled to vote hereunder or as may be required under the Act, the right to one
(1) vote for each Unit registered in the name of such Member as shown in the Membership Register.

(ee) "Net Cash Flow" means the gross cash proceeds of the Company less the portion thereof used to pay or establish reserves for all Company expenses, debt payments, capital improvements, replacements, and contingencies, all as reasonably determined by the Directors. "Net Cash Flow" shall not be reduced by depreciation, amortization, cost recovery deductions, or similar allowances, but shall be increased by any reductions of reserves previously established.

(ff) "Nonrecourse Deductions" has the meaning set forth in Section 1.704-2(b)(1) of the Regulations.

(gg) "Nonrecourse Liability" has the meaning set forth in Section 1.704-2(b)(3) of the Regulations.

(hh) "Officer" or "Officers" has the meaning set forth in Section 5.18 hereof.

(ii) "Permitted Transfer" has the meaning set forth in Section 9.2 hereof.

(jj) "Person" means any individual, partnership (whether general or limited), joint venture, limited liability company, corporation, trust, estate, association, nominee or other entity.

(kk) "Profits and Losses" mean, for each Fiscal Year, an amount equal to the Company's taxable income or loss for such Fiscal Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication): (i) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall be added to such taxable income or loss; (ii) Any expenditures of the Company described in Code Section 705(a)(2)(b) or treated as Code Section 705(a)(2)(b) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall be subtracted from such taxable income or loss; (iii) In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; (iv) Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Gross Asset Value; (v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year, computed in accordance with the definition of Depreciation;
(vi) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required, pursuant to Regulations Section 1.704-(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Unit Holder's interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and
(vii) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 3.3 and Section 3.4 hereof shall not be taken into account in computing Profits or Losses. The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Sections 3.3 and Section 3.4 hereof shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above.

(ll) "Property" means all real and personal property acquired by the Company, including cash, and any improvements thereto, and shall include both tangible and intangible property.

(mm) "Regulations" means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations are amended from time to time.

(nn) "Regulatory Allocations" has the meaning set forth in Section 3.4 hereof.

(oo) "Related Party" means the adopted or birth relatives of any Person and such Person's spouse (whether by marriage or common law), if any, including without limitation great-grandparents, grandparents, parents, children (including stepchildren and adopted children), grandchildren, and great-grandchildren thereof, and such Person's (and such Person's spouse's) brothers, sisters, and cousins and their respective lineal ancestors and descendants, and any other ancestors and/or descendants, and any spouse of any of the foregoing, each trust created for the exclusive benefit of one or more of the foregoing, and the successors, assigns, heirs, executors, personal representatives and estates of any of the foregoing.

(pp) "Securities Act" means the Securities Act of 1933, as amended.

(qq) "Tax Matters Member" has the meaning set forth in Section 7.4 hereof.

(rr) "Transfer" means, as a noun, any voluntary or involuntary transfer, sale, pledge or hypothecation or other disposition and, as a verb, voluntarily or involuntarily to transfer, give, sell, exchange, assign, pledge, bequest or hypothecate or otherwise dispose of.

(ss) "Units" or "Unit" means an ownership interest in the Company representing a Capital Contribution made as provided in Section 2 in consideration of the Units, including any and all benefits to which the holder of such Units may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement.

(tt) "Unit Holders" means all Unit Holders.

(uu) "Unit Holder" means the owner of one or more Units.

(vv) "Unit Holder Nonrecourse Debt" has the same meaning as the term "partner nonrecourse debt" in Section 1.704-2(b)(4) of the Regulations.

(ww) "Unit Holder Nonrecourse Debt Minimum Gain" means an amount, with respect to each Unit Holder Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Unit Holder Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Regulations.

(xx) "Unit Holder Nonrecourse Deductions" has the same meaning as the term "partner nonrecourse deductions" in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.

SECTION 2. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS

2.1 ORIGINAL CAPITAL CONTRIBUTIONS. The name, address, original Capital Contribution, and initial Units quantifying the Membership Interest of each Member are set out in Exhibit A attached hereto, and shall also be set out in the Membership Register.

2.2 ADDITIONAL CAPITAL CONTRIBUTIONS; ADDITIONAL UNITS. No Unit Holder shall be obligated to make any additional Capital Contributions to the Company or to pay any assessment to the Company, other than any unpaid amounts on such Unit Holder's original Capital Contributions, and no Units shall be subject to any calls, requests or demands for capital. Subject to Section 5.7, additional Membership Economic Interests quantified by additional Units may be issued in consideration of Capital Contributions as agreed to between the Directors and the Person acquiring the Membership Economic Interest quantified by the additional Units. Each Person to whom additional Units are issued shall be admitted as a Member in accordance with this Agreement. Upon such Capital Contributions, the Directors shall cause Exhibit A and the Membership Register to be appropriately amended.

2.3 CAPITAL ACCOUNTS. A Capital Account shall be maintained for each Unit Holder in accordance with the following provisions:

(a) To each Unit Holder's Capital Account there shall be credited (i) such Unit Holder's Capital Contributions; (ii) such Unit Holder's distributive share of Profits and any items in the nature of income or gain which are specially allocated pursuant to Section 3.3 and Section 3.4; and (iii) the amount of any Company liabilities assumed by such Unit Holder or which are secured by any Property distributed to such Unit Holder;

(b) To each Unit Holder's Capital Account there shall be debited (i) the amount of money and the Gross Asset Value of any Property distributed to such Unit Holder pursuant to any provision of this Agreement; (ii) such Unit Holder's distributive share of Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 3.3 and 3.4 hereof; and
(iii) the amount of any liabilities of such Unit Holder assumed by the Company or which are secured by any Property contributed by such Unit Holder to the Company;

(c) In the event Units are Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Transferred Units; and

(d) In determining the amount of any liability for purposes of subparagraphs (a) and (b) above there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. In the event the Directors shall determine that it is prudent to modify the manner in which the Capital Accounts, or any

debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Company or any Unit Holders), are computed in order to comply with such Regulations, the Directors may make such modification, provided that it is not likely to have a material effect on the amounts distributed to any Person pursuant to Section 10 hereof upon the dissolution of the Company. The Directors also shall (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Unit Holders and the amount of capital reflected on the Company's balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b).

SECTION 3. ALLOCATIONS

3.1 PROFITS. After giving effect to the special allocations in Section 3.3 and Section 3.4 hereof, Profits for any Fiscal Year shall be allocated among the Unit Holders in proportion to Units held.

3.2 LOSSES. After giving effect to the special allocations in Section 3.3 and 3.4 hereof, Losses for any Fiscal Year shall be allocated among the Unit Holders in proportion to Units held.

3.3 SPECIAL ALLOCATIONS. The following special allocations shall be made in the following order:

(a) Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(f) of the Regulations, notwithstanding any other provision of this
Section 3, if there is a net decrease in Company Minimum Gain during any Fiscal Year, each Unit Holder shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Unit Holder's share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Unit Holder pursuant thereto. The items to be so allocated shall be determined in accordance with sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Section 3.3(a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith.

(b) Unit Holder Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of this Section 3, if there is a net decrease in Unit Holder Nonrecourse Debt Minimum Gain attributable to a Unit Holder Nonrecourse Debt during any Fiscal Year, each Unit Holder who has a share of the Unit Holder Nonrecourse Debt Minimum Gain attributable to such Unit Holder Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Unit Holder's share of the net decrease in Unit Holder Nonrecourse Debt Minimum Gain, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the

respective amounts required to be allocated to each Unit Holder pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Section 3.3(b) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith.

(c) Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit as soon as practicable, provided that an allocation pursuant to this Section 3.3(c) shall be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 3 have been tentatively made as if this Section 3.3(c) were not in the Agreement.

(d) Gross Income Allocation. In the event any Member has a deficit Capital Account at the end of any Fiscal Year which is in excess of the sum of
(i) the amount such Member is obligated to restore pursuant to any provision of this Agreement; and (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 3.3(d) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this
Section 3 have been made as if Section 3.3(c) and this Section 3.3(d) were not in this Agreement.

(e) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year or other period shall be specially allocated among the Members in proportion to Units held.

(f) Unit Holder Nonrecourse Deductions. Any Unit Holder Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Unit Holder who bears the economic risk of loss with respect to the Unit Holder Nonrecourse Debt to which such Unit Holder Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1).

(g) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset, pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Unit Holder in complete liquidation of such Unit Holder's interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Unit Holders in accordance with their interests in the Company in the event Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Unit Holder to whom such distribution was made in the event Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

(h) Allocations Relating to Taxable Issuance of Company Units. Any income, gain, loss or deduction realized as a direct or indirect result of the issuance of Units by the Company to a Unit Holder (the "Issuance Items") shall be allocated among the Unit Holders so that, to the extent possible, the net amount of such Issuance Items, together with all other allocations under this Agreement to each Unit Holder shall be equal to the net amount that would have been allocated to each such Unit Holder if the Issuance Items had not been realized.

3.4 CURATIVE ALLOCATIONS. The allocations set forth in Sections 3.3(a), 3.3(b), 3.3(c), 3.3(d), 3.3(e), 3.3(f), 3.3(g) and 3.5 (the "Regulatory Allocations") are intended to comply with certain requirements of the Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 3.4. Therefore, notwithstanding any other provision of this Section 3 (other than the Regulatory Allocations), the Directors shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Sections 3.1, 3.2, and 3.3(h).

3.5 LOSS LIMITATION. Losses allocated pursuant to Section 3.2 hereof shall not exceed the maximum amount of Losses that can be allocated without causing any Unit Holder to have an Adjusted Capital Account Deficit at the end of any Fiscal Year. In the event some but not all of the Unit Holders would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 3.2 hereof, the limitation set forth in this Section 3.5 shall be applied on a Unit Holder by Unit Holder basis and Losses not allocable to any Unit Holder as a result of such limitation shall be allocated to the other Unit Holders in accordance with the positive balances in such Unit Holder's Capital Accounts so as to allocate the maximum permissible Losses to each Unit Holder under Section 1.704-1(b)(2)(ii)(d) of the Regulations.

3.6 OTHER ALLOCATION RULES.

(a) For purposes of determining the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Directors using any permissible method under Code Section 706 and the Regulations thereunder.

(b) The Unit Holders are aware of the income tax consequences of the allocations made by this Section 3 and hereby agree to be bound by the provisions of this Section 3 in reporting their shares of Company income and loss for income tax purposes.

(c) Solely for purposes of determining a Unit Holder's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Regulations Section 1.752-3(a)(3), the Unit Holders' aggregate interests in Company profits shall be deemed to be as provided in the capital accounts. To the extent permitted by Section 1.704-2(h)(3) of the Regulations, the Directors shall endeavor to treat distributions of Net Cash Flow as having been

made from the proceeds of a Nonrecourse Liability or a Unit Holder Nonrecourse Debt only to the extent that such distributions would cause or increase an Adjusted Capital Account Deficit for any Unit Holder.

(d) Allocations of Profits and Losses to the Unit Holders shall be allocated among them in the ratio which each Unit Holder's Units bears to the total number of Units issued and outstanding.

3.7 TAX ALLOCATIONS: CODE SECTION 704(c). In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction with respect to any Property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Unit Holders so as to take account of any variation between the adjusted basis of such Property to the Company for federal income tax purposes and its initial Gross Asset Value (computed in accordance with the definition of Gross Asset Value). In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder. Any elections or other decisions relating to such allocations shall be made by the Directors in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 3.7 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Unit Holder's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

3.8 TAX CREDIT ALLOCATIONS. All credits against income tax with respect to the Company's property or operations shall be allocated among the Members in accordance with their respective membership interests in the Company for the Fiscal Year during which the expenditure, production, sale, or other event giving rise to the credit occurs. This Section 3.8 is intended to comply with the applicable tax credit allocation principles of section 1.704-1(b)(4)(ii) of the Regulations and shall be interpreted consistently therewith.

SECTION 4. DISTRIBUTIONS

4.1 NET CASH FLOW. The Directors, in their discretion, shall make distributions of Net Cash Flow, if any, to the Members. Except as otherwise provided in Section 10 hereof, Net Cash Flow, if any, shall be distributed to the Unit Holders in proportion to Units held subject to, and to the extent permitted by, any loan covenants or restrictions on such distributions agreed to by the Company in any loan agreements with the Company's lenders from time to time in effect. In determining Net Cash Flow, the Directors shall endeavor to provide for cash distributions at such times and in such amounts as will permit the Unit Holders to make timely payment of income taxes.

4.2 AMOUNTS WITHHELD. All amounts withheld pursuant to the Code or any provision of any state, local or foreign tax law with respect to any payment, distribution or allocation to the Company or the Unit Holders shall be treated as amounts paid or distributed, as the case may be,

to the Unit Holders with respect to which such amount was withheld pursuant to this Section 4.2 for all purposes under this Agreement. The Company is authorized to withhold from payments and distributions, or with respect to allocations, to the Unit Holders and to pay over to any federal, state and local government or any foreign government, any amounts required to be so withheld pursuant to the Code or any provisions of any other federal, state or local law or any foreign law, and shall allocate any such amounts to the Unit Holders with respect to which such amount was withheld.

4.3 LIMITATIONS ON DISTRIBUTIONS. The Company shall make no distributions to the Unit Holders except as provided in this Section 4 and Section 10 hereof. Notwithstanding any other provision, no distribution shall be made if it is not permitted to be made under the Act.

SECTION 5. MANAGEMENT

5.1 DIRECTORS. Except as otherwise provided in this Agreement, the Directors shall direct the business and affairs of the Company, and shall exercise all of the powers of the Company except such powers as are by this Agreement conferred upon or reserved to the Members. The Directors shall adopt such policies, rules, regulations, and actions not inconsistent with law or this Agreement as it may deem advisable. Subject to Section 5.7 hereof or any other express provisions hereof, the business and affairs of the Company shall be managed by or under the direction of the Directors and not by its Members. The amendment or repeal of this section or the adoption of any provision inconsistent therewith shall require the approval of a majority of the Membership Voting Interests.

5.2 NUMBER OF TOTAL DIRECTORS. The total number of initial Directors of the Company shall be a minimum of three (3) and a maximum of thirteen (13). At the first annual or special meeting of the Members following the date on which substantial operations of the Facilities commence, the number of Directors shall be reduced and become fixed at nine (9). The Members may increase or decrease this fixed number of Directors last approved and may change from a fixed number to a variable range or visa versa by majority vote at any annual or special meeting.

5.3 ELECTION OF DIRECTORS.

(a) ELECTION OF DIRECTORS AND TERMS. The initial Directors shall be appointed by the initial Members and shall include the individuals set forth on Exhibit "B" attached hereto. The initial Directors shall serve until the first special or annual meeting of the Members following the date on which substantial operations of the Facilities commence, and in all cases until a successor is elected and qualified, or until the earlier death, resignation, removal or disqualification of any such Director. In accordance with Section 5.2, at the first annual or special meeting of the Members following the date on which substantial operations of the Facilities commence, the number of Directors shall be reduced and become fixed at nine (9). If this reduction in the number of Directors requires the removal of any Director, John T. Porter, Robert W. Holmes and Revis L. Stephenson, III shall not be included in the Directors removed at that time. After the expiration of the initial terms of the Directors, at each annual meeting of the Members, Directors shall be elected by the Members for staggered terms of three (3) years and until a successor is elected and qualified. The initial Directors shall conduct a lottery to

separately identify the Director positions to be elected and so classify each such Director position as Group I, Group II or Group III, with such classification to serve as the basis for the staggering of terms among the elected Directors. Notwithstanding the foregoing, John T. Porter shall be classified in Group I; Robert W. Holmes shall be in classified in Group II and Revis L. Stephenson, III shall be classified in Group III. The terms of Group I Directors shall expire first (initial term of one year with successors elected to three year terms thereafter), followed by those of Group II Directors (initial term of two years with successors elected to three year terms thereafter), and then Group III Directors (initial and subsequent terms of three years).

(b) NOMINATIONS FOR DIRECTORS. One or more nominees for Director positions up for election shall be named by the then current Directors or by a nominating committee established by the Directors. Nominations for the election of Directors may also be made by any Member entitled to vote generally in the election of Directors. However, any Member that intends to nominate one or more persons for election as Directors at a meeting may do so only if written notice of such Member's intent to make such nomination or nominations has been given, either by personal delivery or by United Stated mail, postage prepaid, to the Secretary of the Company not less than sixty (60) days nor more than ninety (90) days prior to the annual meeting of the Company. Each such notice to the Secretary shall set forth:

(i) the name and address of record of the Member who intends to make the nomination;
(ii) a representation that the Member is a holder of record of Units of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;
(iii) the name, age, business and residence addresses, and principal occupation or employment of each nominee;
(iv) a description of all arrangements or understandings between the Member and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the Members;
(v) such other information regarding each nominee proposed by such Member as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission;
(vi) the consent of each nominee to serve as a Director of the Company if so elected; and
(vii) a nominating petition signed an dated by the holders of at least five percent (5%) of the then outstanding Units and clearly setting forth the proposed nominee as a candidate of the Director's seat to be filled at the next election of Directors.

The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as a Director of the Company. The presiding Officer of the meeting may, if the facts warrant, determine that a nomination was not made in accordance with the foregoing procedures, and if he should so determine, he shall so declare to the meeting and the defective nomination

shall be disregarded. The amendment or repeal of this Section or the adoption of any provision inconsistent therewith shall require the approval of a majority of the Membership Voting Interests. Whenever a vacancy occurs other than from expiration of a term of office or removal from office, a majority of the remaining Directors shall appoint a new Director to fill the vacancy for the remainder of such term.

5.4 COMMITTEES. A resolution approved by the affirmative vote of a majority of the Directors may establish committees having the authority of the Directors in the management of the business of the Company to the extent consistent with this Agreement and provided in the resolution. A committee shall consist of one or more persons, who need not be Directors, appointed by affirmative vote of a majority of the Directors present. Committees may include a compensation committee and/or an audit committee, in each case consisting of one or more independent Directors or other independent persons. Committees are subject to the direction and control of the Directors and vacancies in the membership thereof shall be filled by the Directors. A majority of the members of the committee present at a meeting is a quorum for the transaction of business, unless a larger or smaller proportion or number is provided in a resolution approved by the affirmative vote of a majority of the Directors present.

5.5 AUTHORITY OF DIRECTORS. Subject to the limitations and restrictions set forth in this Agreement, the Directors shall direct the management of the business and affairs of the Company and shall have all of the rights and powers which may be possessed by a "manager" under the Act including, without limitation, the right and power to do or perform the following and, to the extent permitted by the Act or this Agreement, the further right and power by resolution of the Directors to delegate to the Officers or such other Person or Persons to do or perform the following:

(a) Conduct its business, carry on its operations and have and exercise the powers granted by the Act in any state, territory, district or possession of the United States, or in any foreign country which may be necessary or convenient to effect any or all of the purposes for which it is organized;

(b) Acquire by purchase, lease, or otherwise any real or personal property which may be necessary, convenient, or incidental to the accomplishment of the purposes of the Company;

(c) Operate, maintain, finance, improve, construct, own, grant operations with respect to, sell, convey, assign, mortgage, and lease any real estate and any personal property necessary, convenient, or incidental to the accomplishment of the purposes of the Company;

(d) Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and operation of the business, or in connection with managing the affairs of the Company, including, executing amendments to this Agreement and the Certificate in accordance with the terms of this Agreement, both as Directors and, if required, as attorney-in-fact for the Members pursuant to any power of attorney granted by the Members to the Directors;

(e) Borrow money and issue evidences of indebtedness necessary, convenient, or incidental to the accomplishment of the purposes of the Company, and secure the same by mortgage, pledge, or other lien on any Company assets;

(f) Execute, in furtherance of any or all of the purposes of the Company, any deed, lease, mortgage, deed of trust, mortgage note, promissory note, bill of sale, contract, or other instrument purporting to convey or encumber any or all of the Company assets;

(g) Prepay in whole or in part, refinance, recast, increase, modify, or extend any liabilities affecting the assets of the Company and in connection therewith execute any extensions or renewals of encumbrances on any or all of such assets;

(h) Care for and distribute funds to the Members by way of cash income, return of capital, or otherwise, all in accordance with the provisions of this Agreement, and perform all matters in furtherance of the objectives of the Company or this Agreement;

(i) Contract on behalf of the Company for the employment and services of employees and/or independent contractors, such as lawyers and accountants, and delegate to such Persons the duty to manage or supervise any of the assets or operations of the Company;

(j) Engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to Company assets and Directors' and Officers' liability) necessary or incidental to, or in connection with, the accomplishment of the purposes of the Company, as may be lawfully carried on or performed by a limited liability company under the laws of each state in which the Company is then formed or qualified;

(k) Take, or refrain from taking, all actions, not expressly proscribed or limited by this Agreement, as may be necessary or appropriate to accomplish the purposes of the Company;

(l) Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Company, the Members or the Directors or Officers in connection with activities arising out of, connected with, or incidental to this Agreement, and to engage counsel or others in connection therewith;

(m) Purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign corporations, associations, general or limited partnerships, other limited liability companies, or individuals or direct or indirect obligations of the United States or of any government, state, territory, government district or municipality or of any instrumentality of any of them;

(n) Agree with any Person as to the form and other terms and conditions of such Person's Capital Contribution to the Company and cause the Company to issue Membership Economic Interests and Units in consideration of such Capital Contribution; and

(o) Indemnify a Member or Directors or Officers, or former Members or Directors or Officers, and to make any other indemnification that is authorized by this Agreement in accordance with, and to the fullest extent permitted by, the Act.

5.6 DIRECTOR AS AGENT. Notwithstanding the power and authority of the Directors to manage the business and affairs of the Company, no Director shall have authority to act as agent for the Company for the purposes of its business (including the execution of any instrument on behalf of the Company) unless the Directors have authorized the Director to take such action. The Directors may also delegate authority to manage the business and affairs of the Company (including the execution of instruments on behalf of the Company) to such Person or Persons (including to any Officers) designated by the Directors, and such Person or Persons (or Officers) shall have such titles and authority as determined by the Directors.

5.7 RESTRICTIONS ON AUTHORITY OF DIRECTORS.

(a) The Directors shall not have authority to, and they covenant and agree that they shall not, do any of the following acts without the unanimous consent of the Members:

(i) Cause or permit the Company to engage in any activity that is not consistent with the purposes of the Company as set forth in Section 1.3 hereof;

(ii) Knowingly do any act in contravention of this Agreement or which would make it impossible to carry on the ordinary business of the Company, except as otherwise provided in this Agreement;

(iii) Possess Company Property, or assign rights in specific Company Property, for other than a Company purpose; or

(iv) Cause the Company to voluntarily take any action that would cause a bankruptcy of the Company.

(b) The Directors shall not have authority to, and they covenant and agree that they shall not cause the Company to, without the consent of a majority of the Membership Voting Interests:

(i) Merge, consolidate, exchange or otherwise dispose of at one time all or substantially all of the Property, except for a liquidating sale of the Property in connection with the dissolution of the Company;

(ii) Confess a judgment against the Company in an amount in excess of $500,000;

(iii) Issue Units at a purchase price of less than $10.00 per Unit;

(iv) Issue more than an aggregate of 10,000,000 Units; and

(v) Cause the Company to acquire any equity or debt securities of any Director or any of its Affiliates, or otherwise make loans to any Director or any of its Affiliates.

The actions specified herein as requiring the consent of the Members shall be in addition to any actions by the Director that are specified in the Act as requiring the consent or approval of the Members. Any such required consent or approval may be given by a vote of a majority of the Membership Voting Interests.

5.8 DIRECTOR MEETINGS AND NOTICE. Meetings of the Directors shall be held at such times and places as shall from time to time be determined by the Directors. Meetings of the Directors may also be called by the Chairman of the Company or by any two or more Directors. If the date, time, and place of a meeting of the Directors has been announced at a previous meeting, no notice shall be required. In all other cases, five (5) days' written notice of meetings, stating the date, time, and place thereof and any other information required by law or desired by the Person(s) calling such meeting, shall be given to each Director. Any Director may waive notice of any meeting. A waiver of notice by a Director is effective whether given before, at, or after the meeting, and whether given orally, in writing, or by attendance. The attendance of a Director at any meeting shall constitute a waiver of notice of such meeting, unless such Director objects at the beginning of the meeting to the transaction of business on the grounds that the meeting is now lawfully called or convened and does not participate thereafter in the meeting.

5.9 ACTION WITHOUT A MEETING. Any action required or permitted to be taken by the Directors may also be taken by a written action signed by one hundred percent (100%) of all Directors authorized to vote on the matter as provided by this Agreement, provided that a copy of such written action shall be promptly given to all such Directors. The Directors may participate in any meeting of the Directors by means of telephone conference or similar means of communication by which all persons participating in the meeting can simultaneously hear each other.

5.10 QUORUM; MANNER OF ACTING. Not less than fifty percent (50%) of the Directors authorized to vote on a matter as provided by this Agreement shall constitute a quorum for the transaction of business at any Directors' meeting. Each Director shall have one (1) vote at meetings of the Directors. The Directors shall take action by the vote of a majority of the number of Directors constituting a quorum as provided by this Agreement.

5.11 VOTING; POTENTIAL FINANCIAL INTEREST. No Director shall be disqualified from voting on any matter to be determined or decided by the Directors solely by reason of such Director's (or his/her Affiliate's) potential financial interest in the outcome of such vote, provided that the nature of such Director's (or his/her Affiliate's) potential financial interest was reasonably disclosed at the time of such vote.

5.12 DUTIES AND OBLIGATIONS OF DIRECTORS. The Directors shall cause the Company to conduct its business and operations separate and apart from that of any Director or any of its Affiliates. The Directors shall take all actions which may be necessary or appropriate (i) for the

continuation of the Company's valid existence as a limited liability company under the laws of the State of Delaware and each other jurisdiction in which such existence is necessary to protect the limited liability of Members or to enable the Company to conduct the business in which it is engaged, and (ii) for the accomplishment of the Company's purposes, including the acquisition, development, maintenance, preservation, and operation of Company Property in accordance with the provisions of this Agreement and applicable laws and regulations. Each Director shall have the duty to discharge the foregoing duties in good faith, in a manner the Director believes to be in the best interests of the Company, and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. The Directors shall be under no other fiduciary duty to the Company or the Members to conduct the affairs of the Company in a particular manner.

5.13 CHAIRMAN AND VICE CHAIRMAN. Unless provided otherwise by a resolution adopted by the Directors, the Chairman shall preside at meetings of the Members and the Directors; shall see that all orders and resolutions of the Directors are carried into effect; may maintain records of and certify proceedings of the Directors and Members; and shall perform such other duties as may from time to time be prescribed by the Directors. The Vice Chairman shall, in the absence or disability of the Chairman, perform the duties and exercise the powers of the Chairman and shall perform such other duties as the Directors or the Chairman may from time to time prescribe. The Directors may designate more than one Vice Chairmen, in which case the Vice Chairmen shall be designated by the Directors so as to denote which is most senior in office.

5.14 PRESIDENT AND CHIEF EXECUTIVE OFFICER. Until provided otherwise by a resolution of the Directors, the Chairman shall also act as the interim President and CEO of the Company (herein referred to as the "President"; the titles of President and CEO shall constitute a reference to one and the same office and Officer of the Company), and the Chairman may exercise the duties of the office of Chairman using any such designations. The Directors shall appoint someone other than the Chairman as the President of the Company not later than the commencement of operations of the Facilities, and such President shall perform such duties as the Directors may from time to time prescribe, including without limitation, the management of the day-to-day operations of the Facilities.

5.15 CHIEF FINANCIAL OFFICER. Unless provided otherwise by a resolution adopted by the Directors, the Chief Financial Officer of the Company shall be the Treasurer of the Company and shall keep accurate financial records for the Company; shall deposit all monies, drafts, and checks in the name of and to the credit of the Company in such banks and depositories as the Directors shall designate from time to time; shall endorse for deposit all notes, checks, and drafts received by the Company as ordered by the Directors, making proper vouchers therefore; shall disburse Company funds and issue checks and drafts in the name of the Company as ordered by the Directors, shall render to the President and the Directors, whenever requested, an account of all such transactions as Chief Financial Officer and of the financial condition of the Company, and shall perform such other duties as may be prescribed by the Directors or the President from time to time.

5.16 SECRETARY; ASSISTANT SECRETARY. The Secretary shall attend all meetings of the Directors and of the Members and shall maintain records of, and whenever necessary, certify all

proceedings of the Directors and of the Members. The Secretary shall keep the required records of the Company, when so directed by the Directors or other person or person authorized to call such meetings, shall give or cause to be given notice of meetings of the Members and of meetings of the Directors, and shall also perform such other duties and have such other powers as the Chairman or the Directors may prescribe from time to time. An Assistant Secretary, if any, shall perform the duties of the Secretary during the absence or disability of the Secretary.

5.17 VICE PRESIDENT. The Company may have one or more Vice Presidents. If more than one, the Directors shall designate which is most senior. The most senior Vice President shall perform the duties of the President in the absence of the President.

5.18 DELEGATION. Unless prohibited by a resolution of the Directors, the President, Chief Financial Officer, Vice President and Secretary (individually, an "Officer" and collectively, "Officers") may delegate in writing some or all of the duties and powers of such Officer's management position to other Persons. An Officer who delegates the duties or powers of an office remains subject to the standard of conduct for such Officer with respect to the discharge of all duties and powers so delegated.

5.19 EXECUTION OF INSTRUMENTS. All deeds, mortgages, bonds, checks, contracts and other instruments pertaining to the business and affairs of the Company shall be signed on behalf of the Company by (i) the Chairman; or (ii) when authorized by resolutions(s) of the Directors, the President; or (iii) by such other person or persons as may be designated from time to time by the Directors.

5.20 LIMITATION OF LIABILITY; INDEMNIFICATION OF DIRECTORS. To the maximum extent permitted under the Act and other applicable law, no Member, Director or Officer of this Company shall be personally liable for any debt, obligation or liability of this Company merely by reason of being a Member, Director, Officer or all of the foregoing. No Director or Officer of this Company shall be personally liable to this Company or its Members for monetary damages for a breach of fiduciary duty by such Director or Officer; provided that this provision shall not eliminate or limit the liability of a Director or Officer for any of the following: (i) for any breach of the duty of loyalty to the Company or its Members; (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law; or (iii) for a transaction from which the Director or Officer derived an improper personal benefit or a wrongful distribution in violation of Section 807 of the Act. To the maximum extent permitted under the Act and other applicable law, the Company, its receiver, or its trustee (in the case of its receiver or trustee, to the extent of Company Property) shall indemnify, save and hold harmless, and pay all judgments and claims against each Director or Officer relating to any liability or damage incurred by reason of any act performed or omitted to be performed by such Director, or Officer, in connection with the business of the Company, including reasonable attorneys' fees incurred by such Director in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, including all such liabilities under federal and state securities laws as permitted by law. To the maximum extent permitted under the Act and other applicable law, in the event of any action by a Unit Holder against any Director or Officer, including a derivative suit, the Company shall indemnify, save harmless, and pay all costs, liabilities, damages and expenses of such Director or Officer, including reasonable attorneys' fees incurred in the defense

of such action. Notwithstanding the foregoing provisions, no Director or Officer shall be indemnified by the Company to the extent prohibited or limited (but only to the extent limited) by the Act. The Company may purchase and maintain insurance on behalf of any Person in such Person's official capacity against any liability asserted against and incurred by such Person in or arising from that capacity, whether or not the Company would otherwise be required to indemnify the Person against the liability.

5.21 COMPENSATION; EXPENSES OF DIRECTORS. No Member or Director shall receive any salary, fee, or draw for services rendered to or on behalf of the Company merely by virtue of their status as a Member or Director, it being the intention that, irrespective of any personal interest of any of the Directors, the Directors shall have authority to establish reasonable compensation of all Directors for services to the Company as Directors, Officers, or otherwise. Except as otherwise approved by or pursuant to a policy approved by the Directors, no Member or Director shall be reimbursed for any expenses incurred by such Member or Director on behalf of the Company. Notwithstanding the foregoing, by resolution by the Directors, the Directors may be paid as reimbursement therefor, their expenses, if any, of attendance at each meeting of the Directors. In addition, the Directors, by resolution, may approve from time to time, the salaries and other compensation packages of the Officers of the Company.

5.22 LOANS. Any Member or Affiliate may, with the consent of the Directors, lend or advance money to the Company. If any Member or Affiliate shall make any loan or loans to the Company or advance money on its behalf, the amount of any such loan or advance shall not be treated as a contribution to the capital of the Company but shall be a debt due from the Company. The amount of any such loan or advance by a lending Member or Affiliate shall be repayable out of the Company's cash and shall bear interest at a rate not in excess of the prime rate established, from time to time, by any major bank selected by the Directors for loans to its most creditworthy commercial borrowers, plus four percent (4%) per annum. If a Director, or any Affiliate of a Director, is the lending Member, the rate of interest and the terms and conditions of such loan shall be no less favorable to the Company than if the lender had been an independent third party. None of the Members or their Affiliates shall be obligated to make any loan or advance to the Company.

SECTION 6. ROLE OF MEMBERS

6.1 ONE MEMBERSHIP CLASS. There shall initially be one class of Membership Interests and one class of Units.

6.2 MEMBERS. Each Person who desires to become a Member must complete and execute a signature page to this Agreement in the form of Exhibit "C" attached hereto and such other documents as may be required by the Directors. Each prospective Member must be approved and admitted to the Company by the Board of Directors. The Membership Interests of the Members shall be set forth on Exhibit "A" to this Agreement.

6.3 ADDITIONAL MEMBERS. No Person shall become a Member without the approval of the Directors. The Directors may refuse to admit any Person as a Member in their sole discretion. Any such admission must comply with the requirements described in this Agreement and will be

effective only after such Person has executed and delivered to the Company such documentation as determined by the Directors to be necessary and appropriate to effect such admission including the Member's agreement to be bound by this Agreement.

6.4 RIGHTS OR POWERS. Except as otherwise expressly provided for in this Agreement, the Members shall not have any right or power to take part in the management or control of the Company or its business and affairs or to act for or bind the Company in any way.

6.5 VOTING RIGHTS OF MEMBERS. The Members shall have voting rights as defined by the Membership Voting Interest of such Member and in accordance with the provisions of this Agreement. Members do not have a right to cumulate their votes for any matter entitled to a vote of the Members, including election of Directors.

6.6 MEMBER MEETINGS. Meetings of the Members shall be called by the Directors, and shall be held at the principal office of the Company or at such other place as shall be designated by the person calling the meeting. Members representing an aggregate of not less than thirty percent (30%) of the Membership Voting Interests may also in writing demand that the Directors call a meeting of the Members. Regular meetings of the Members shall be held not less than once per Fiscal Year.

6.7 CONDUCT OF MEETINGS. Subject to the discretion of the Directors, the Members may participate in any meeting of the Members by means of telephone conference or similar means of communication by which all persons participating in the meeting can simultaneously hear and speak with each other.

6.8 NOTICE OF MEETINGS; WAIVER. Notice of the meeting, stating the place, day and hour of the meeting, shall be given to each Member in accordance with
Section 11.1 hereof at least five (5) days and no more than sixty (60) days before the day on which the meeting is to be held. A Member may waive the notice of meeting required hereunder by written notice of waiver signed by the Member whether given before, during or after the meeting. Attendance by a Member at a meeting is waiver of notice of that meeting, unless the Member objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and thereafter does not participate in the meeting.

6.9 QUORUM AND PROXIES. The presence (in person or by proxy or mail ballot) of Members representing an aggregate of at least twenty-five percent (25%) of the Membership Voting Interests is required for the transaction of business at a meeting of the Members. Voting by proxy or by mail ballot shall be permitted on any matter if authorized by the Directors.

6.10 VOTING; ACTION BY MEMBERS. If a quorum is present, the affirmative vote of a majority of the Membership Voting Interests represented at the meeting and entitled to vote on the matter (including units represented in person, by proxy or by mail ballot) shall constitute the act of the Members, unless the vote of a greater or lesser proportion or numbers is otherwise required by this Agreement.

6.11 RECORD DATE. For the purpose of determining Members entitled to notice of or to vote at any meeting of Members or any adjournment of the meeting, or Members entitled to receive

payment of any distribution, or to make a determination of Members for any other purpose, the date on which notice of the meeting is mailed (or otherwise delivered) or the date on which the resolution declaring the distribution is adopted, as the case may be, shall be the record date for determination of Members.

6.12 TERMINATION OF MEMBERSHIP. The membership of a Member in the Company shall terminate upon the occurrence of events described in the Act, including registration and withdrawal. If for any reason the membership of a Member is terminated, the Member whose membership has terminated loses all Membership Voting Interests and shall be considered merely as Assignee of the Membership Economic Interest owned before the termination of membership, having only the rights of an unadmitted Assignee provided for in Section 9.7 hereof.

6.13 CONTINUATION OF THE COMPANY. The Company shall not be dissolved upon the occurrence of any event that is deemed to terminate the continued membership of a Member. The Company's affairs shall not be required to be wound up. The Company shall continue without dissolution.

6.14 NO OBLIGATION TO PURCHASE MEMBERSHIP INTEREST. No Member whose membership in the Company terminates, nor any transferee of such Member, shall have any right to demand or receive a return of such terminated Member's Capital Contributions or to require the purchase or redemption of the Member's Membership Interest. The other Members and the Company shall not have any obligation to purchase or redeem the Membership Interest of any such terminated Member or transferee of any such terminated Member.

6.15 WAIVER OF DISSENTERS RIGHTS. Each Member hereby disclaims, waives and agrees, to the fullest extent permitted by law or the Act, not to assert dissenters' or similar rights under the Act.

SECTION 7. ACCOUNTING, BOOKS AND RECORDS

7.1 ACCOUNTING, BOOKS AND RECORDS. The books and records of the Company shall be kept, and the financial position and the results of its operations recorded, in accordance with GAAP. The books and records shall reflect all the Company transactions and shall be appropriate and adequate for the Company's business. The Company shall maintain at its principal place of business all of the following: (i) A current list of the full name and last known business or residence address of each Member and Assignee set forth in alphabetical order, together with the Capital Contributions, Capital Account and Units of each Member and Assignee; (ii) The full name and business address of each Director;
(iii) A copy of the Certificate and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which the Certificate or any amendments thereto have been executed; (iv) Copies of the Company's federal, state, and local income tax or information returns and reports, if any, for the six most recent taxable years; (v) A copy of this Agreement and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which this Agreement or any amendments thereto have been executed; and (vi) Copies of the financial statements of the Company, if any, for the six most recent Fiscal Years. The Company shall use the accrual

method of accounting in preparation of its financial reports and for tax purposes and shall keep its books and records accordingly.

7.2 DELIVERY TO MEMBERS AND INSPECTION. Any Member or its designated representative shall have reasonable access during normal business hours to the information and documents kept by the Company pursuant to Section 7.1. The rights granted to a Member pursuant to this Section 7.2 are expressly subject to compliance by such Member with the safety, security and confidentiality procedures and guidelines of the Company, as such procedures and guidelines may be established from time to time. Upon the request of any Member for purposes reasonably related to the interest of that Person as a Member, the Directors shall promptly deliver to the requesting Member, at the expense of the requesting Member, a copy of the information required to be maintained under
Section 7.1. Each Member has the right, upon reasonable request for purposes reasonably related to the interest of the Person as a Member and for proper purposes, to: (i) inspect and copy during normal business hours any of the Company records described in Section 7.1; and (ii) obtain from the Directors, promptly after their becoming available, a copy of the Company's federal, state, and local income tax or information returns for each Fiscal Year. Each Assignee shall have the right to information regarding the Company only to the extent required by the Act.

7.3 REPORTS. The chief financial officer of the Company shall be responsible for causing the preparation of financial reports of the Company and the coordination of financial matters of the Company with the Company's accountants. The Company shall cause to be delivered to each Member the financial statements listed below, prepared, in each case (other than with respect to Member's Capital Accounts, which shall be prepared in accordance with this Agreement) in accordance with GAAP consistently applied. As soon as practicable following the end of each Fiscal Year (and in any event not later than one hundred and twenty
(120) days after the end of such Fiscal Year) and at such time as distributions are made to the Unit Holders pursuant to Section 10 hereof following the occurrence of a Dissolution Event, a balance sheet of the Company as of the end of such Fiscal Year and the related statements of operations, Unit Holders' Capital Accounts and changes therein, and cash flows for such Fiscal Year, together with appropriate notes to such financial statements and supporting schedules, all of which shall be audited and certified by the Company's accountants, and in each case, to the extent the Company was in existence, setting forth in comparative form the corresponding figures for the immediately preceding Fiscal Year end (in the case of the balance sheet) and the two (2) immediately preceding Fiscal Years (in the case of the statements).

7.4 TAX MATTERS. The Directors shall, without any further consent of the Unit Holders being required (except as specifically required herein), make any and all elections for federal, state, local, and foreign tax purposes as the Directors shall determine appropriate and represent the Company and the Unit Holders before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company or the Unit Holders in their capacities as Unit Holders, and to file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Unit Holders with respect to such tax matters or otherwise affect the rights of the Company and the Unit Holders. The Directors shall designate a Person to be specifically authorized to act as the "Tax Matters Member" under the Code and in any similar capacity under state or local law; provided,

however, that the Directors shall have the authority to designate, remove and replace the Tax Matters Member who shall act as the tax matters partner within the meaning of and pursuant to Regulations Sections 301.6231(a)(7)-1 and -2 or any similar provision under state or local law. Necessary tax information shall be delivered to each Unit Holder as soon as practicable after the end of each Fiscal Year of the Company but not later than three (3) months after the end of each Fiscal Year.

SECTION 8. AMENDMENTS

8.1 AMENDMENTS. Amendments to this Agreement may be proposed by the Board of Directors or any Member. Following such proposal, the Board of Directors shall submit to the Members a verbatim statement of any proposed amendment, providing that counsel for the Company shall have approved of the same in writing as to form, and the Board of Directors shall include in any such submission a recommendation as to the proposed amendment. The Board of Directors shall seek the written vote of the Members on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. A proposed amendment shall be adopted and be effective as an amendment hereto only if approved by the affirmative vote of a majority of the Membership Voting Interests constituting the quorum. Notwithstanding any provision of this Section 8.1 to the contrary, this Agreement shall not be amended without the consent of each Member adversely affected if such amendment would modify the limited liability of a Member, or alter the Membership Economic Interest of a Member.

SECTION 9. TRANSFERS

9.1 RESTRICTIONS ON TRANSFERS. Except as otherwise permitted by this Agreement, no Member shall Transfer all or any portion of its Units. In the event that any Member pledges or otherwise encumbers all or any part of its Units as security for the payment of a Debt, any such pledge or hypothecation shall be made pursuant to a pledge or hypothecation agreement that requires the pledgee or secured party to be bound by all of the terms and conditions of this
Section 9. In the event such pledgee or secured party becomes the Unit Holder hereunder pursuant to the exercise of such party's rights under such pledge or hypothecation agreement, such pledgee or secured party shall be bound by all terms and conditions of this Operating Agreement and all other agreements governing the rights and obligations of Unit Holders. In such case, such pledgee or secured party, and any transferee or purchaser of the Units held by such pledgee or secured party, shall not have any Membership Voting Interest attached to such Units unless and until the Directors have approved in writing and admitted as a Member hereunder, such pledgee, secured party, transferee or purchaser of such Units.

9.2 PERMITTED TRANSFERS. Subject to the conditions and restrictions set forth in this Section 9, a Unit Holder may:

(a) at any time Transfer all or any portion of its Units:

(i) to the transferor's administrator or trustee to whom such Units are transferred involuntarily by operation of law or judicial decree, or;

(ii) without consideration to or in trust for descendants or the spouse of a Member; and

(b) at any time following the date on which substantial operations of the Facilities commence, Transfer all or any portion of its Units:

(i) to any Person approved by the Directors in writing,
(ii) to any other Member or to any Affiliate or Related Party of another Member; or
(iii) to any Affiliate or Related Party of the transferor.

Any such Transfer set forth in this Section 9.2 and meeting the conditions set forth in Section 9.3 below is referred to in this Agreement as a "Permitted Transfer."

9.3 CONDITIONS PRECEDENT TO TRANSFERS. In addition to the conditions set forth above, no Transfer of a Membership Interest shall be effective unless and until all of the following conditions have been satisfied:

(a) Except in the case of a Transfer involuntarily by operation of law, the transferor and transferee shall execute and deliver to the Company such documents and instruments of Transfer as may be necessary or appropriate in the opinion of counsel to the Company to effect such Transfer. In the case of a Transfer of Units involuntarily by operation of law, the Transfer shall be confirmed by presentation to the Company of legal evidence of such Transfer, in form and substance satisfactory to counsel to the Company. In all cases, the transferor and/or transferee shall pay all reasonable costs and expenses connected with the Transfer and the admission of the Transferee as a Member and incurred as a result of such Transfer, including but not limited to, legal fees and costs.

(b) The transferor and transferee shall furnish the Company with the transferee's taxpayer identification number, sufficient information to determine the transferee's initial tax basis in the Units transferred, and any other information reasonably necessary to permit the Company to file all required federal and state tax returns and other legally required information statements or returns. Without limiting the generality of the foregoing, the Company shall not be required to make any distribution otherwise provided for in this Agreement with respect to any transferred Units until it has received such information.

(c) Except in the case of a Transfer of any Units involuntarily by operation of law, either (i) such Units shall be registered under the Securities Act, and any applicable state securities laws, or (ii) the transferor shall provide an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Directors, to the effect that such Transfer is exempt from all applicable registration requirements and that such Transfer will not violate any applicable laws regulating the Transfer of securities.

(d) Except in the case of a Transfer of Units involuntarily by operation of law, the transferor shall provide an opinion of counsel, which opinion and counsel shall be reasonably

satisfactory to the Directors, to the effect that such Transfer will not cause the Company to be deemed to be an "investment company" under the Investment Company Act of 1940.

(e) Unless otherwise approved by the Directors and Members representing in the aggregate a 75% majority of the Membership Voting Interests, no Transfer of Units shall be made except upon terms which would not, in the opinion of counsel chosen by and mutually acceptable to the Directors and the transferor Member, result in the termination of the Company within the meaning of Section 708 of the Code or cause the application of the rules of Sections 168(g)(1)(B) and 168(h) of the Code or similar rules to apply to the Company. If the immediate Transfer of such Unit would, in the opinion of such counsel, cause a termination within the meaning of Section 708 of the Code, then if, in the opinion of such counsel, the following action would not precipitate such termination, the transferor Member shall be entitled to (or required, as the case may be) (i) immediately Transfer only that portion of its Units as may, in the opinion of such counsel, be transferred without causing such a termination and (ii) enter into an agreement to Transfer the remainder of its Units, in one or more Transfers, at the earliest date or dates on which such Transfer or Transfers may be effected without causing such termination. The purchase price for the Units shall be allocated between the immediate Transfer and the deferred Transfer or Transfers pro rata on the basis of the percentage of the aggregate Units being transferred, each portion to be payable when the respective Transfer is consummated, unless otherwise agreed by the parties to the Transfer. In the case of a Transfer by one Member to another Member, the deferred purchase price shall be deposited in an interest-bearing escrow account unless another method of securing the payment thereof is agreed upon by the transferor Member and the transferee Member(s).

(f) No notice or request initiating the procedures contemplated by
Section 9.3 may be given by any Member after a Dissolution Event has occurred. No Member may sell all or any portion of its Units after a Dissolution Event has occurred.

(g) No Person shall Transfer any Unit if, in the determination of the Directors, such Transfer would cause the Company to be treated as a "publicly traded partnership" within the meaning of Section 7704(b) of the Code.

The Directors shall have the authority to waive any legal opinion or other condition required in this Section 9.3 other than the Member approval requirement set forth in Section 9.3(e).

9.4 PROHIBITED TRANSFERS. Any purported Transfer of Units that is not permitted under this Section shall be null and void and of no force or effect whatsoever; provided that, if the Company is required to recognize such a Transfer (or if the Directors, in their sole discretion, elect to recognize such a Transfer), the Units Transferred shall be strictly limited to the transferor's Membership Economic Interests as provided by this Agreement with respect to the transferred Units, which Membership Economic Interests may be applied (without limiting any other legal or equitable rights of the Company) to satisfy any debts, obligations, or liabilities for damages that the transferor or transferee of such Interest may have to the Company. In the case of a Transfer or attempted Transfer of Units that is not permitted under this Section, the parties engaging or attempting to engage in such Transfer shall be liable to indemnify and hold harmless the Company and the other Members from all cost, liability, and damage that any of such

indemnified Members may incur (including, without limitation, incremental tax liabilities, lawyers' fees and expenses) as a result of such Transfer or attempted Transfer and efforts to enforce the indemnity granted hereby.

9.5 NO DISSOLUTION OR TERMINATION. The transfer of a Membership Interest pursuant to the terms of this Article shall not dissolve or terminate the Company. No Member shall have the right to have the Company dissolved or to have such Member's Capital Contribution returned except as provided in this Agreement.

9.6 PROHIBITION OF ASSIGNMENT. Notwithstanding the foregoing provisions of this Article, Transfer of a Membership Interest may be made if the Membership Interest sought to be sold, exchanged or transferred, when added to the total of all other Membership Interests sold, exchanged or transferred within the period of twelve (12) consecutive months prior thereto, would result in the termination of the company under Section 708 of the Internal Revenue Code. In the event of a transfer of any Membership Interests, the Members will determine, in their sole discretion, whether or not the Company will elect pursuant to Section 754 of the Internal Revenue Code (or corresponding provisions of future law) to adjust the basis of the assets of the Company.

9.7 RIGHTS OF UNADMITTED ASSIGNEES. A Person who acquires Units but who is not admitted as a substituted Member pursuant to Section 9.8 hereof shall be entitled only to the Membership Economic Interests with respect to such Units in accordance with this Agreement, and shall not be entitled to the Membership Voting Interest with respect to such Units. In addition, such Person shall have no right to any information or accounting of the affairs of the Company, shall not be entitled to inspect the books or records of the Company, and shall not have any of the rights of a Member under the Act or this Agreement.

9.8 ADMISSION OF SUBSTITUTED MEMBERS. As to Permitted Transfers, a transferee of Units shall be admitted as a substitute Member provided that such transferee has complied with the following provisions: (a) The transferee of Units shall, by written instrument in form and substance reasonably satisfactory to the Directors; (i) accept and adopt the terms and provisions of this Agreement, including this Section 9, and (ii) assume the obligations of the transferor Member under this Agreement with respect to the transferred Units. The transferor Member shall be released from all such assumed obligations except (x) those obligations or liabilities of the transferor Member arising out of a breach of this Agreement, (y) in the case of a Transfer to any Person other than a Member or any of its Affiliates, those obligations or liabilities of the transferor Member based on events occurring, arising or maturing prior to the date of Transfer, and (z) in the case of a Transfer to any of its Affiliates, any Capital Contribution or other financing obligation of the transferor Member under this Agreement; (b) The transferee pays or reimburses the Company for all reasonable legal, filing, and publication costs that the Company incurs in connection with the admission of the transferee as a Member with respect to the Transferred Units; and (c) Except in the case of a Transfer involuntarily by operation of law, if required by the Directors, the transferee (other than a transferee that was a Member prior to the Transfer) shall deliver to the Company evidence of the authority of such Person to become a Member and to be bound by all of the terms and conditions of this Agreement, and the transferee

and transferor shall each execute and deliver such other instruments as the Directors reasonably deem necessary or appropriate to effect, and as a condition to, such Transfer.

9.9 REPRESENTATIONS REGARDING TRANSFERS.

(a) Each Member hereby covenants and agrees with the Company for the benefit of the Company and all Members, that (i) it is not currently making a market in Units and will not in the future make a market in Units, (ii) it will not Transfer its Units on an established securities market, a secondary market (or the substantial equivalent thereof) within the meaning of Code Section 7704(b) (and any Regulations, proposed Regulations, revenue rulings, or other official pronouncements of the Internal Revenue Service or Treasury Department that may be promulgated or published thereunder), and (iii) in the event such Regulations, revenue rulings, or other pronouncements treat any or all arrangements which facilitate the selling of Company interests and which are commonly referred to as "matching services" as being a secondary market or substantial equivalent thereof, it will not Transfer any Units through a matching service that is not approved in advance by the Company. Each Member further agrees that it will not Transfer any Units to any Person unless such Person agrees to be bound by this Section 9 and to Transfer such Units only to Persons who agree to be similarly bound.

(b) Each Member hereby represents and warrants to the Company and the Members that such Member's acquisition of Units hereunder is made as principal for such Member's own account and not for resale or distribution of such Units. Each Member further hereby agrees that the following legend, as the same may be amended by the Directors in their sole discretion, may be placed upon any counterpart of this Agreement, the Certificate, or any other document or instrument evidencing ownership of Units:

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

THE UNITS REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, OFFERED FOR SALE, OR TRANSFERRED IN ABSENCE OF AN EFFECTIVE REGISTRATION OR EXEMPTION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE STATE SECURITIES LAWS.

9.10 DISTRIBUTION AND ALLOCATIONS IN RESPECT OF TRANSFERRED UNITS. If any Units are Transferred during any Fiscal Year in compliance with the provisions of this Section 9, Profits, Losses, each item thereof, and all other items attributable to the Transferred Units for such Fiscal Year shall be divided and allocated between the transferor and the transferee by taking into

account their varying interests during the Fiscal Year in accordance with Code
Section 706(d), using any conventions permitted by law and selected by the Directors. All distributions on or before the date of such Transfer shall be made to the transferor, and all distributions thereafter shall be made to the transferee. Solely for purposes of making such allocations and distributions, the Company shall recognize such Transfer to be effective as of the first day of the month following the month in which all documents to effectuate the transfer have been executed and delivered to the Company, provided that, if the Company does not receive a notice stating the date such Units were transferred and such other information as the Directors may reasonably require within thirty (30) days after the end of the Fiscal Year during which the Transfer occurs, then all such items shall be allocated, and all distributions shall be made, to the Person, who according to the books and records of the Company, was the owner of the Units on the last day of such Fiscal Year. Neither the Company nor any Member shall incur any liability for making allocations and distributions in accordance with the provisions of this Section 9.10 whether or not the Directors or the Company has knowledge of any Transfer of ownership of any Units.

9.11 ADDITIONAL MEMBERS. Additional Members may be admitted from time to time upon the approval of the Directors. Any such additional Member shall pay such purchase price for his/her/its Membership Interest and shall be admitted in accordance with such terms and conditions, as the Directors shall approve. All Members acknowledge that the admission of additional Members may result in dilution of a Member's Membership Interest. Prior to the admission of any Person as a Member, such Person shall agree to be bound by the provisions of this Agreement and shall sign and deliver an Addendum to this Agreement in the form of Exhibit C, attached hereto. Upon execution of such Addendum, such additional Members shall be deemed to be parties to this Agreement as if they had executed this Agreement on the original date hereof, and, along with the parties to this Agreement, shall be bound by all the provisions hereof from and after the date of execution hereof. The Members hereby designate and appoint the Directors to accept such additional Members and to sign on their behalf any Addendum in the form of Exhibit C, attached hereto.

SECTION 10. DISSOLUTION AND WINDING UP

10.1 DISSOLUTION. The Company shall dissolve and shall commence winding up and liquidating upon the first to occur of any of the following (each a "Dissolution Event"): (i) The affirmative vote of a 75% majority in interest of the Membership Voting Interests to dissolve, wind up, and liquidate the Company; or
(ii) The entry of a decree of judicial dissolution pursuant to the Act. The Members hereby agree that, notwithstanding any provision of the Act, the Company shall not dissolve prior to the occurrence of a Dissolution Event.

10.2 WINDING UP. Upon the occurrence of a Dissolution Event, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Members, and no Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company's business and affairs, PROVIDED that all covenants contained in this Agreement and obligations provided for in this Agreement shall continue to be fully binding upon the Members until such time as the Property has been distributed pursuant to this Section 10.2 and the Certificate has been canceled pursuant to the Act. The Liquidator shall be responsible for overseeing the

prompt and orderly winding up and dissolution of the Company. The Liquidator shall take full account of the Company's liabilities and Property and shall cause the Property or the proceeds from the sale thereof (as determined pursuant to Section 10.8 hereof), to the extent sufficient therefor, to be applied and distributed, to the maximum extent permitted by law, in the following order: (a) First, to creditors (including Members and Directors who are creditors, to the extent otherwise permitted by law) in satisfaction of all of the Company's Debts and other liabilities (whether by payment or the making of reasonable provision for payment thereof), other than liabilities for which reasonable provision for payment has been made; and (b) Second, except as provided in this Agreement, to Members in satisfaction of liabilities for distributions pursuant to the Act;
(c) Third, the balance, if any, to the Unit Holders in accordance with the positive balance in their Capital Accounts calculated after making the required adjustment set forth in clause (t) of the definition of Gross Asset Value in
Section 1.10 of this Agreement, after giving effect to all contributions, distributions and allocations for all periods.

10.3 COMPLIANCE WITH CERTAIN REQUIREMENTS OF REGULATIONS; DEFICIT CAPITAL ACCOUNTS. In the event the Company is "liquidated" within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Section 10 to the Unit Holders who have positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2). If any Unit Holder has a deficit balance in his Capital Account (after giving effect to all contributions, distributions and allocations for all Fiscal Years, including the Fiscal Year during which such liquidation occurs), such Unit Holder shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever. In the discretion of the Liquidator, a pro rata portion of the distributions that would otherwise be made to the Unit Holders pursuant to this Section 10 may be: (a) Distributed to a trust established for the benefit of the Unit Holders for the purposes of liquidating Company assets, collecting amounts owed to the Company, and paying any contingent or unforeseen liabilities or obligations of the Company. The assets of any such trust shall be distributed to the Unit Holders from time to time, in the reasonable discretion of the Liquidator, in the same proportions as the amount distributed to such trust by the Company would otherwise have been distributed to the Unit Holders pursuant to Section 10.2 hereof; or (b) Withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Company, provided that such withheld amounts shall be distributed to the Unit Holders as soon as practicable.

10.4 DEEMED DISTRIBUTION AND RECONTRIBUTION. Notwithstanding any other provision of this Section 10, in the event the Company is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Dissolution Event has occurred, the Property shall not be liquidated, the Company's Debts and other liabilities shall not be paid or discharged, and the Company's affairs shall not be wound up.

10.5 RIGHTS OF UNIT HOLDERS. Except as otherwise provided in this Agreement, each Unit Holder shall look solely to the Property of the Company for the return of its Capital Contribution and has no right or power to demand or receive Property other than cash from the Company. If the assets of the Company remaining after payment or discharge of the debts or liabilities of the

Company are insufficient to return such Capital Contribution, the Unit Holders shall have no recourse against the Company or any other Unit Holder or Directors.

10.6 ALLOCATIONS DURING PERIOD OF LIQUIDATION. During the period commencing on the first day of the Fiscal Year during which a Dissolution Event occurs and ending on the date on which all of the assets of the Company have been distributed to the Unit Holders pursuant to Section 10.2 hereof (the "Liquidation Period"), the Unit Holders shall continue to share Profits, Losses, gain, loss and other items of Company income, gain, loss or deduction in the manner provided in Section 3 hereof.

10.7 CHARACTER OF LIQUIDATING DISTRIBUTIONS. All payments made in liquidation of the interest of a Unit Holder in the Company shall be made in exchange for the interest of such Unit Holder in Property pursuant to Section 736(b)(1) of the Code, including the interest of such Unit Holder in Company goodwill.

10.8 THE LIQUIDATOR. The "Liquidator" shall mean a Person appointed by the Directors(s) to oversee the liquidation of the Company. Upon the consent of a majority in interest of the Members, the Liquidator may be the Directors. The Company is authorized to pay a reasonable fee to the Liquidator for its services performed pursuant to this Section 10 and to reimburse the Liquidator for its reasonable costs and expenses incurred in performing those services. The Company shall indemnify, save harmless, and pay all judgments and claims against such Liquidator or any officers, Directors, agents or employees of the Liquidator relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the Liquidator, or any officers, Directors, agents or employees of the Liquidator in connection with the liquidation of the Company, including reasonable attorneys' fees incurred by the Liquidator, officer, Director, agent or employee in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, except to the extent such liability or damage is caused by the fraud, intentional misconduct of, or a knowing violation of the laws by the Liquidator which was material to the cause of action.

10.9 FORMS OF LIQUIDATING DISTRIBUTIONS. For purposes of making distributions required by Section 10.2 hereof, the Liquidator may determine whether to distribute all or any portion of the Property in-kind or to sell all or any portion of the Property and distribute the proceeds therefrom.

SECTION 11. MISCELLANEOUS

11.1 NOTICES. Any notice, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered, given, and received for all purposes (i) if delivered personally to the Person or to an officer of the Person to whom the same is directed, or (ii) when the same is actually received, if sent by regular or certified mail, postage and charges prepaid, or by facsimile, if such facsimile is followed by a hard copy of the facsimile communication sent promptly thereafter by registered or certified mail, postage and charges prepaid, addressed as follows, or to such other address as such Person may from time to time specify by notice to the Members and the Directors: (a) If to the Company, to the address determined pursuant to Section 1.4 hereof; (b) If to the Directors, to

the address set forth on record with the company; (c) If to a Member, either to the address set forth in Section 2.1 hereof or to such other address that has been provided in writing to the Company.

11.2 BINDING EFFECT. Except as otherwise provided in this Agreement, every covenant, term, and provision of this Agreement shall be binding upon and inure to the benefit of the Members and their respective successors, transferees, and assigns.

11.3 CONSTRUCTION. Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Member.

11.4 HEADINGS. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof.

11.5 SEVERABILITY. Except as otherwise provided in the succeeding sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. The preceding sentence of this Section 11.5 shall be of no force or effect if the consequence of enforcing the remainder of this Agreement without such illegal or invalid term or provision would be to cause any Member to lose the material benefit of its economic bargain.

11.6 INCORPORATION BY REFERENCE. Every exhibit, schedule, and other appendix attached to this Agreement and referred to herein is incorporated in this Agreement by reference unless this Agreement expressly otherwise provides.

11.7 VARIATION OF TERMS. All terms and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.

11.8 GOVERNING LAW. The laws of the State of Delaware shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties arising hereunder.

11.9 WAIVER OF JURY TRIAL. Each of the Members irrevocably waives to the extent permitted by law, all rights to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement.

11.10 COUNTERPART EXECUTION. This Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute one agreement.

11.11 SPECIFIC PERFORMANCE. Each Member agrees with the other Members that the other Members would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy

to which the nonbreaching Members may be entitled, at law or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof.

IN WITNESS WHEREOF, the parties have executed and entered into this Amended and Restated Operating Agreement of the Company as of the day first set forth above.

COMPANY:

ADVANCED BIOENERGY, LLC

By:   /s/ Revis Stephenson, III
     -------------------------------
Its: Chairman

EXHIBIT "A"
MEMBERSHIP LIST

Revis L. Stephenson, III                                                 205,000
1850 Fox Ridge Road
Orono, MN 55356

Holmes Residuary Trust                                                   115,000
206 Dawnee Street
Tomah, WI 54660

BioEnergy Capital Consultants, LLC                                        50,000
44095 212th Street
Lake Preston, SD  57249

Troy Otte                                                                 19,500
429 Florida Court
York, NY 68467

Richard W. and Kay Hughes                                                 19,500
801 N. 1st
Geneva, NE 68361

Robert E. Bettger                                                         18,000
910 9th Street
Fairmont, NE 68354

John E. Lovegrove                                                         18,000
902 Road F
Fairmont, NE 68354

Larry L. Cerny Trust                                                      15,000
810 N. Street
Geneva, NE 68361

Keith E.Spohn                                                             15,000
706 Road C
Friend, NE 68359

Joan Blonigan-Christanson                                                 30,000
P.O. Box 108, 18750 Hwy 715
Blomkest, MN 56216

Terry and Jill Bonk (JTROS)                                               30,000
2494 Canton Court
Mendota Heights, MN 55120

PetMer Partnership                                                        15,000
c/o Piper Jaffray
Gary Petrucci
800 Nicollet Mall J06S01
Minneapolis, MN 55402

Netsch Limited Partnership                                                30,000
1001 Cross Timbers Road
Suite 2014
Flower Mound, TX 75028

Robert and Janet Mackey (JTROS)                                           30,000
916 East Gregory Street
Pensacola, FL 32502

Ray Habelman                                                              15,000
16237 Hwy 21
Tomah, WI 54660

TOTAL                                                                    625,000
                                                                         -------

EXHIBIT "B"
INITIAL BOARD OF DIRECTORS

       INITIAL                                              ADDRESSES OF
   BOARD OF DIRECTORS                                INITIAL BOARD OF DIRECTORS
   ------------------                                --------------------------
Revis L. Stephenson, III                                 1850 Fox Ridge Road
                                                         Orono, MN 55356

Robert W. Holmes                                         206 Dawnee Street
                                                         Tomah, WI 54660

John T. Porter                                           4424 South 179th Street
                                                         Omaha, NE 68135

Robert E. Bettger                                        910 9th Street
                                                         Fairmont, NE 68354

Larry L. Cerny                                           810 N 8th Street
                                                         Geneva, NE 68361

Richard W. Hughes                                        810 N. 1st Street
                                                         Geneva, NE 68361

John E. Lovegrove                                        902 Road F
                                                         Fairmont, NE 68354

Troy Otte                                                429 Florida Court
                                                          York, NE 68467

Keith E. Spohn                                           706 Road C
                                                         Friend, NE 68359

EXHIBIT "C"

MEMBER SIGNATURE PAGE

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

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

INDIVIDUALS:                                              ENTITIES:



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



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Signature of Individual                                   Print Name and Title of Officer



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



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Signature of Joint Individual Member

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

ADVANCED BIOENERGY, LLC

By:

Its:

Exhibit 4.1

CERTIFICATE OF MEMBERSHIP UNITS

Membership

Number Units

ADVANCED BIOENERGY, LLC
A LIMITED LIABILITY COMPANY ORGANIZED UNDER THE LAWS OF THE STATE OF DELAWARE

THIS CERTIFIES THAT ______________________________________ is/are the owner(s) of _____________________________________ UNITS (__________) of the Membership Units of Advanced BioEnergy, LLC, a Delaware limited liability company. Changes in the actual Membership Units held by the Members are reflected in the Certificate of Registration of the Company.

The Membership Units represented by this Certificate may not be transferred or assigned except in compliance with the Amended and Restated Operating Agreement of the Company, a copy of which is available at the principal office of the Company.

IN WITNESS WHEREOF, the Company has caused this Certificate to be signed by its duly authorized Chairman and Treasurer as of this __________ day of ___________, 20 .

Revis L. Stephenson, III, Chairman Robert W. Holmes, Treasurer

FOR VALUE RECEIVED, _________ HEREBY SELL, ASSIGN, AND TRANSFER UNTO ____

UNITS REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT ________________________________________________ ATTORNEY TO TRANSFER THE SAID UNITS ON THE BOOKS OF THE WITHIN NAMED COMPANY WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.

DATED _________________________________, ______________.

IN PRESENCE OF

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

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

Exhibit 4.2

ADVANCED BIOENERGY, LLC

SUBSCRIPTION AGREEMENT

Limited Liability Company Membership Units

$10.00 PER UNIT

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

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

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

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

B. NUMBER OF UNITS PURCHASED. You must purchase at least 250 units. We presently have 634,650 units outstanding. The maximum number of units to be sold is 6,732,500.

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

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

____________________________________    =   _________________________________    +    _____________________________

D. GENERAL INSTRUCTIONS FOR SUBSCRIBERS:

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

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

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

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

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

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

Advanced BioEnergy, LLC            Geneva State Bank
910 9th Street                     Attn:  Aaron Schardt
Fairmont, Nebraska 68354           896 "G" Street
                                   Geneva, Nebraska  68361

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

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

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

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

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

Advanced BioEnergy, LLC 910 9th Street
Fairmont, Nebraska 68354

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

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

     Director             Phone Number
     --------             ------------
John T. Porter            402-432-5247

Troy Otte                 402-362-3885

John E. Lovegrove         402-366-4484

Robert E. Bettger         402-268-3101

Larry L. Cerny            402-759-1165

Richard W. Hughes         402-759-4615

Keith E. Spohn            402-947-8061

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

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

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

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

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

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

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

Address: _______________________________________

4. STATE OF RESIDENCE.

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

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

a                      b.                     c.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

l. understands that, to enforce the above legend, Advanced BioEnergy may place a stop transfer order with its registrar and stock transfer agent (if any) covering all certificates representing any of the membership units;
m. has knowledge and experience in business and financial matters as to be able to evaluate the merits and risks of an investment in the Units, believes that the investment in Units is suitable for the subscriber and can bear the economic risk of the purchase of Units including the total loss of the undersigned's investment;
n. may not transfer or assign this subscription agreement, or any of the subscriber's interest herein;
o. has written his, her, or its correct taxpayer identification number under Item 3 on this subscription agreement;
p. is not subject to back up withholding either because he, she or it has not been notified by the Internal Revenue Service ("IRS") that he, she or it is subject to backup withholding as a result of a failure to report all interest or dividends, or the IRS has notified him, her or it that he is no longer subject to backup withholding (Note this clause (p) should be crossed out if the backup withholding box in Item 2 is checked);

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

SIGNATURE OF SUBSCRIBER/JOINT SUBSCRIBER:

DATE:

INDIVIDUALS:                                                  ENTITIES:


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


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


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


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     Signature of Joint Individual Subscriber

ACCEPTANCE OF SUBSCRIPTION BY ADVANCED BIOENERGY, LLC:

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

Dated this_________day of________________________, 200____.

ADVANCED BIOENERGY, LLC

By:

Its:

PROMISSORY NOTE AND SECURITY AGREEMENT

Date of Subscription Agreement: ___________________________________, 200__.

$10.00 PER UNIT

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

_______________ Number of Units subscribed

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

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

_______________ Principal Balance

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

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

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

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

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

Dated: , 200 .

OBLIGOR/DEBTOR:                             JOINT OBLIGOR/DEBTOR:

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


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


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

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

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

Address of Obligor

EXHIBIT "A"

MEMBER SIGNATURE PAGE

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

INDIVIDUALS:                                    ENTITIES:


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


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


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


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Signature of Joint Individual Member

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

ADVANCED BIOENERGY, LLC

By:

Its:

Exhibit 4.3

ESCROW AGREEMENT

This Escrow Agreement (the "Agreement") dated as of May ____, 2005 is by and between, Advanced BioEnergy, LLC, a Delaware limited liability company (the "Company") and the Geneva State Bank (the "Escrow Agent"), (the "Escrow Agent" and the "Company" may also be hereinafter referred to as the "Parties").

RECITALS

WHEREAS, the Company proposes to offer a minimum of 3,366,250 and a maximum of 6,732,500 of its Membership Units (the "Units") at a price of $10.00 per Unit, with a required minimum investment of 2500 Units and in additional increments of 100 Units, in an offering in the States of Nebraska, Iowa, South Dakota, Texas, Wisconsin, Kansas and Florida, and possibly other states, made pursuant to a federal registration under the provisions of the Securities Act of 1933, as amended (the "Offering");

WHEREAS, the Company will file a registration statement (as may be amended) (the "Registration Statement") to register the Units with the Securities and Exchange Commission, the States of Nebraska, Iowa, South Dakota, Texas, Wisconsin, Kansas and Florida and possibly other states;

WHEREAS, the Company will allow investors in the Offering to deliver the purchase price of the subscribed Units in installments;

WHEREAS, the Company desires to comply with the requirements of the Securities Act of 1933 and of the various state regulatory statutes and regulations, and desires to protect the investors in the Offering by providing, under the terms and conditions herein set forth, for the return to subscribers of the money which they may pay on account of purchases of Units in the Offering if the Minimum Escrow Deposit (hereinafter defined) is not deposited with the Escrow Agent; and

NOW, THEREFORE, in consideration of the premises the Parties agree as follows:

1. ACCEPTANCE OF APPOINTMENT: Escrow Agent hereby agrees to act as escrow agent under this Agreement. The Escrow Agent shall have no duty to enforce any provision hereof requiring performance by any other party hereunder.

2. ESTABLISHMENT OF ESCROW ACCOUNT: An escrow account (the "Escrow Account") is hereby established with the Escrow Agent for the benefit of the investors in the Offering. Except as specifically provided in this Agreement, the Escrow Account shall be created and maintained subject to the customary rules and regulations of the Escrow Agent pertaining to such accounts.

3. OWNERSHIP OF ESCROW ACCOUNT: Until such time as the funds deposited in the Escrow Account (the "Deposited Funds") shall equal the Minimum Escrow Deposit (as hereinafter defined), all funds deposited in the Escrow Account by the Company shall not become the property of the Company or be subject to the debts of the Company or any other person but shall be held by the Escrow Agent solely for the benefit of the investors who have purchased Units in the Offering.

4. ESCROW FEES: The Company hereby agrees to pay to the Escrow Agent upon the execution of this Agreement an advance payment for ordinary services rendered hereunder in the amount of $2,500 (the "Escrow Fee"). Thereafter, Company shall pay to Escrow Agent a monthly maintenance fee payable on the last day of each month during the term of this Agreement in the amount of 1/4800 times the average monthly balance of the Escrow Account, which monthly maintenance fees shall be paid from the interest on the Escrow Account only and not from principal.

5. DEPOSIT OF PROCEEDS: All proceeds from sales of Units in the Offering shall be delivered by the Company to the Escrow Agent, within forty-eight hours of the receipt thereof from investors, endorsed (if appropriate) to the order of the Escrow Agent, together with an appropriate written statement setting forth the name, address and social security number/taxpayer identification number of each person or entity purchasing Units, the number of Units purchased, and the amount paid by each such purchaser. Any such proceeds deposited with the Escrow Agent in the form of uncollected checks shall be promptly presented by the Escrow Agent for collection through customary banking and clearing house facilities. As the proceeds of each sale are deposited with the Escrow Agent, the Company shall reserve the number of Units confirmed to the purchaser thereof in connection with such sale. All such deposited proceeds are referred to herein as the "Escrow Funds."

6. INVESTMENT OF ESCROW FUNDS: The Escrow Funds shall be credited by Escrow Agent and recorded in the Escrow Account. The Escrow Agent shall be permitted, and is hereby authorized to deposit transfer, hold and invest all funds received under this Agreement, including principal and interest, in Vanguard Admiral Treasury Money Market Fund (Cusip 921932109 - Symbol VUSXX), with the Company to pay all transactional costs (third party commissions, brokerage fees, or the like) associated with said investment. Any interest received by Escrow Agent with respect to the Escrow Funds shall be paid pursuant to the terms of this Agreement.

7. TERMINATION OF ESCROW: This Agreement and the Escrow created hereunder shall be terminated as provided in paragraph 8 hereof or as of the date in calendar year 2006 (the "Termination Date") one year and one day following the date in calendar year 2005 upon which the Securities and Exchange Commission authorizes the Offering (the "Offering's Effective Date"), provided; however, that if prior to Termination Date, the Company has sold membership units equal to the minimum offering amount and the Company has advised the purchasers of those membership units to remit to the Escrow Agent the balance of the purchase price, then the Escrow may continue beyond the Termination Date until all Funds have been paid and the conditions for releasing the Funds have been satisfied. In no event shall this date be later than three (3) months

following the Termination Date. The Company shall notify Escrow Agent of the Offering's Effective Date within thirty (30) days of the receipt of notice of the Offering's Effective Date from the Securities and Exchange Commission.

8. DISPOSITION OF ESCROW FUNDS: The Escrow Agent shall have the following duties and obligations under this Agreement:

A. The Escrow Agent shall send a written notice acknowledging the receipt of the Deposited Funds every seven days to the Company.

B. The Escrow Agent shall give the Company prompt written notice when the Deposited Funds equal $3,366,250 (exclusive of interest). Following receipt of such notice, the Company will advise the purchasers of Units to remit to the Escrow Agent the balance of the purchase price within twenty (20) days. Thereafter, Escrow Agent shall give the Company written notice acknowledging the receipt of the Deposited Funds every seven days. The Escrow Agent shall give the Company prompt written notice when the Deposited Funds total $33,662,500 (exclusive of interest).

C. At the time (and in the event) that: (a) the Deposited Funds shall, during the term of this Agreement, equal $33,662,500 in subscription proceeds (exclusive of interest) (the "Minimum Escrow Deposit"); (b) the Escrow Agent shall have received written confirmation from the Company that the Company has obtained a written debt financing commitment for debt financing ranging from a minimum of $67,325,000 to a maximum of $100,987,500; (c) the Company has affirmatively elected in writing to terminate this Agreement; and (d) the Escrow Agent shall have provided the Company an affidavit that the Company may file in the states in which the Units have been registered stating that the foregoing requirements (a), (b) and (c) of this subsection 8C have been satisfied, then this Agreement shall terminate, and the Escrow Agent shall promptly disburse the funds on deposit, including interest, to the Company to be used in accordance with the provisions set out in the Registration Statement. The Company will deliver a copy of the Registration Statement to the Escrow Agent upon execution of this Agreement. The Escrow Agent will have no responsibility to examine the Registration Statement with regard to the Escrow Account or otherwise, nor shall Escrow Agent have any duty to ensure that Company complies with the Registration Statement. Upon the making of such disbursement, the Escrow Agent shall be completely discharged and released of any and all further responsibilities hereunder.

D. In the event the Deposited Funds do not equal or exceed the Minimum Escrow Deposit on or before the Termination Date or if the Company has not received a written debt financing commitment as described herein on or before the Termination Date, the Escrow Agent shall return to each of the purchasers of the Units in the Offering, as promptly as possible after such Termination Date and on the basis of its records pertaining to the Escrow Account: (a) the sum which each purchaser initially paid in on account of purchases of the Units in the Offering and (b) each purchaser's portion of the total interest earned on the Escrow Account as of the Termination Date, (c) reduced by the transaction fees provided in paragraph 10 hereof. Computation of any

purchaser's share of the net interest earned will be a weighted average based on the proportion of such purchaser's deposit in the Escrow Account from the Offering to all such purchasers' deposits held by the Escrow Agent and upon the length of time in days such deposit was held in the Escrow Account as compared to all such deposits. All computations with respect to each purchaser's allocable share of net interest shall be made by the Escrow Agent, which determinations shall be final and conclusive. Any amount paid or payable to a purchaser pursuant to this paragraph shall be deemed to be the property of such purchaser, free and clear of any and all claims of the Company or its agents or creditors; and the respective purchases of the Units made and entered into in the Offering shall thereupon be deemed, ipso facto, to be cancelled without any further liability of the purchasers or any of them to pay for the Units purchased. At such time as the Escrow Agent shall have made all the payments called for in this paragraph, the Escrow Agent shall be completely discharged and released of any and all further responsibilities hereunder, and the Units reserved (as provided in paragraph 5) shall be released from such reservation, except that Escrow Agent shall be required to prepare and issue a single IRS Form 1099 to each investor in the event that funds are returned to investors.

9. LIABILITY OF ESCROW AGENT: It is understood and agreed that the duties of the Escrow Agent are purely ministerial in nature. It is further agreed that:

A. The Escrow Agent shall not be required to enforce any of the terms or conditions of any other agreement between the Company and any prospective purchaser or purchaser, nor shall the Escrow Agent be responsible for the performance by the Company of its respective obligations under this Agreement.

B. The Escrow Agent may, at its own discretion, refuse to accept any deposits lacking required documentation or containing discrepancies.

C. The Escrow Agent shall be under no duty collect any check or other payment instrument delivered to it hereunder that is dishonored, but the Escrow Agent shall within a reasonable time return to the Company any such check or other payment instrument together with any information which accompanied such check, draft or other payment instrument. The Company shall have the right to obtain a replacement check for any dishonored check or payment instrument even if the Subscription Period shall have ended, but not later than the tenth (10th) business day after the end of the Subscription Period.

D. The Escrow Agent shall have the right to act in reliance upon any document, instrument or signature believed by it to be genuine and to assume that any person purporting to give any notice or instructions in accordance with this Agreement or in connection with any transaction to which this Agreement relates has been duly authorized to do so. The Escrow Agent shall not be obligated to make any inquiry as to the authority, capacity, existence or identity of any person purporting to give any such notice or instructions.

E. The Escrow Agent shall not be liable for any action taken or omitted hereunder except in the case of its gross negligence or willful misconduct. The Escrow Agent shall be entitled to consult with counsel of its own choosing and shall not be liable for any action taken, suffered or omitted by it in accordance with the advice of such counsel.

F. The Escrow Agent shall have no responsibility at any time to ascertain whether or not any security interest exists in the Escrow Account or any part thereof or to file any financing statement under the Uniform Commercial Code with respect to the Escrow Account or any part thereof.

10. WARRANTIES TO ESCROW AGENT: The Company warrants to and agrees with the Escrow Agent that, unless otherwise expressly set forth in this Agreement, the Company has not granted to any party any lien, claim or security interest in the Escrow Account or any part thereof and has no direct knowledge of any financing statement under the Uniform Commercial Code on file in any jurisdiction claiming a security interest in or describing (whether specially or generally) the Escrow Account or any part thereof.

11. FEES AND EXPENSES: In the event the Deposited Funds do not equal or exceed the Minimum Escrow Deposit before the Termination Date or the Company does not receive a written debt financing commitment as described herein before the Termination Date, the Escrow Agent shall be entitled to a fee of $75 per purchaser, which fees shall be paid from the interest on the Escrow Account only and not from principal. In the event the Escrow Agent renders any service not provided for in this Agreement, or if the Company requests a substantial modification of its terms, or if any controversy arises, or if the Escrow Agent is made a party to, or intervenes in, any litigation pertaining to this escrow or its subject matter, the Escrow Agent shall be reasonably compensated for such extraordinary services and reimbursed for all costs, attorney's fees, including allocated costs of in-house counsel, and expenses occasioned by such default, delay, controversy or litigation and the Escrow Agent shall have the right to retain all documents and/or other things of value at any time held by the Escrow Agent in this escrow until such compensation, fees, costs and expenses are paid. The Company promises to pay these sums upon demand. Unless otherwise provided, the Company will pay all of the Escrow Agent's usual charges and the Escrow Agent may deduct such sums from the interest on the Escrow Account only and not from principal deposited to the Escrow Account.

12. CONTROVERSIES: If any controversy arises between the Parties to this Agreement, or with any other Party, concerning the subject matter of this Agreement, its terms or conditions, the Escrow Agent will not be required to determine the controversy or to take any action regarding it. The Escrow Agent may hold all documents and funds and may wait for settlement of any such controversy by final appropriate legal proceedings or other means as, in the Escrow Agent's discretion, the Escrow Agent may require, despite what may be set forth elsewhere in this Agreement. In such event, the Escrow Agent will not be liable for interest or damage. Furthermore, the Escrow Agent may at its option file an action of interpleader requiring the Parties to answer and litigate any claims and rights among themselves. The Escrow Agent is

authorized to deposit with the clerk of the court all documents and funds held in escrow, except all costs, expenses, charges and reasonable attorney fees incurred by the Escrow Agent due to the interpleader action and which the Company agrees to pay. Upon initiating such action, the Escrow Agent shall be fully released and discharged of and from all obligations and liability imposed by the terms of this Agreement.

13. INDEMNIFICATION OF ESCROW AGENT: The Company and its successors and assigns agree jointly and severally to indemnify and hold the Escrow Agent harmless against any and all losses, claims, damages, liabilities, and expenses, including reasonable costs of investigation, counsel fees, including allocated costs of in-house counsel and disbursements that may be imposed on the Escrow Agent or incurred by the Escrow Agent in connection with the performance of its duties under this Agreement, including but not limited to any litigation arising from this Agreement or involving its subject matter. The Escrow Agent shall have a first lien on the property and papers held under this Agreement for such compensation and expenses.

14. RESIGNATION OF ESCROW AGENT: The Escrow Agent may resign at any time upon giving at least (30) days written notice to the Company provided, however, that no such resignation shall become effective until the appointment of a successor escrow agent which shall be accomplished as follows: The Company shall use its best efforts to obtain a successor escrow agent within thirty (30) days after receiving such notice. If the Company fails to agree upon a successor escrow agent within such time, the Escrow Agent shall have the right to appoint a successor escrow agent authorized to do business in the state of Nebraska. The successor escrow agent shall execute and deliver an instrument accepting such appointment and it shall without further acts, be vested with all the estates, properties, rights, powers, and duties of the predecessor escrow agent as if originally named as escrow agent. The Escrow Agent shall thereupon be discharged from any further duties and liability under this Agreement.

15. AUTOMATIC SUCCESSION: Any company into which the Escrow Agent may be merged or with which it may be consolidated, or any company to whom the Escrow Agent may transfer a substantial amount of its global escrow business, shall be the Successor to the Agent without the execution or filing of any paper or any further act on the part of any of the Parties, anything herein to the contrary notwithstanding.

16. MISCELLANEOUS:

(a) GOVERNING LAWS: This Agreement is to be construed and interpreted according to Nebraska law.

(b) COUNTERPART: 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. The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties

and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes.

(c) NOTICES: All instructions, notices and demands herein provided for shall be in writing and shall be deemed to have been duly given (a) on the date of service if served personally on the party to whom notice is to be given; (b) on the day of transmission if sent by facsimile transmission to the facsimile number given below and telephonic confirmation of receipt is promptly obtained after completion of transmission; (c) on the next day on which such deliveries are made in Omaha, Nebraska, when delivery is to Federal Express or similar overnight courier or the Express Mail service maintained by the United States Postal Service; or (d) on the fifth day after mailing if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid and properly addressed, return receipt requested, to the party as follows:

If to the Company:                            If to the Escrow Agent:

Advanced BioEnergy, LLC                       Geneva State Bank
Attn:  Robert E. Bettger                      Attn:  Aaron Schardt
910 9th Street                                896 "G" Street
Fairmont, NE 68354                            Geneva, NE 68361
Fax: (402) 268-4811                           Fax: (402) 759-3837
Telephone: (402) 268-3101                     Telephone: (402) 759-3114

With a required copy to:

Brown, Winick, Graves, Gross, Baskerville     Cline Williams Wright Johnson &
and Schoenebaum, P.L.C.                       Oldfather, LLP
666 Grand Avenue, Suite 2000                  233 So. 13 St., Suite 1900
Des Moines, IA  50309                         Lincoln, NE 68508-2095
Attention: Miranda L. Hughes                  Attention: Richard P. Garden, Jr.
Fax:  (515) 283-0231                          Fax: (402) 474-5393
Telephone: (515) 242-2400                     Telephone: (402) 474-6900

(d) AMENDMENTS: This Agreement may be amended or modified and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. Any waiver by any party of any condition or of the breach of any provision, term, covenant, representation or warranty contained in the Agreement, in any one or more instances, shall not be deemed to be nor construed as further or continuing waiver of any such conditions or of the breach of any other provision, term, covenant, representation or warranty of this Agreement.

(e) ENTIRE AGREEMENT: This Agreement contains the entire understanding among the parties hereto with respect to the escrow contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with regard to such escrow.

(f) NON-ENDORSEMENT: The Company represents and agrees that it has not made nor will it in the future make any representation that states or implies that the Escrow Agent has endorsed, recommended or guaranteed the purchase, value, or repayment of the Securities offered for sale by the Company. The Company further agrees that it will insert in any prospectus, offering circular, advertisement, subscription agreement or other document made available to prospective purchasers of the Securities the following statement in bold face type: "Geneva State Bank is acting only as an escrow agent in connection with the Offering described herein, and has not endorsed, recommended or guaranteed the purchase, value or repayment of such Securities," and will furnish to the Escrow Agent a copy of each such prospectus, offering circular, advertisement, subscription agreement or other document at least 5 business days prior to its distribution to prospective Subscribers.

THE UNDERSIGNED ACKNOWLEDGES THAT THE GENEVA STATE BANK IS ACTING ONLY AS AN ESCROW AGENT IN CONNECTION WITH THE OFFERING OF THE SECURITIES DESCRIBED HEREIN, AND HAS NOT ENDORSED, RECOMMENDED OR GUARANTEED THE PURCHASE, VALUE OR REPAYMENT OF SUCH SECURITIES.

IN WITNESS WHEREOF, the parties hereto have hereunto affixed their signatures as of the day and year first above written.

The Company                                   Escrow Agent

Advanced BioEnergy, LLC                       Geneva State Bank

By:                                           By:
   -----------------------------                  --------------------------
    Revis L. Stephenson, III

Its:  Chairman                                Its:
                                                  ---------------------------

Exhibit 5.1

BROWN, WINICK, GRAVES, GROSS,
BASKERVILLE AND SCHOENEBAUM, P.L.C.

ATTORNEYS AT LAW

666 GRAND AVENUE, SUITE 2000 Richard W. Baskerville Sean P. Moore Valerie D. Bandstra Patents and Trademarks
DES MOINES, IOWA 50309-2510 Bruce Graves Nancy S. Boyd Alexander M. Johnson G. Brian Pingel
Steven C. Schoenebaum James L. Pray James S. Niblock Camille L. Urban
Harold N. Schneebeck Brenton D. Soderstrum Ann Holden Kendell
TELEPHONE: (515) 242-2400 Paul D. Hietbrink Michael D. Treinen Rebecca A. Brommel
FACSIMILE: (515) 283-0231 William C. Brown Scott L. Long Mark E. Roth
Richard K. Updegraff Ronni F. Begleiter Tina R. Thompson
Paul E. Carey Miranda L. Hughes Brian M. Green
URL: www.ialawyers.com Douglas E. Gross Kelly D. Hamborg Dustin D. Smith
John D. Hunter William E. Hanigan Adam W. Jones Of Counsel:
James H. Gilliam Mary A. Ericson Catherine C. Cownie Marvin Winick
Robert D. Andeweg Barbara B. Burnett Erick D. Prohs
Offices in: Alice Eastman Helle Michael J. Green Laura N. Martino
West Des Moines, Iowa Michael R. Blaser Michael A. Dee Amy R. Piepmeier
Pella, Iowa Thomas D. Johnson Danielle Dixon Smid Walter R. Brown (1921-2000)
Christopher R. Sackett Brian P. Rickert
WRITER'S DIRECT DIAL NO.
(515) 242-2477
WRITER'S E-MAIL ADDRESS
hughes@ialawyers.com

May 24, 2005

Board of Directors
Advanced BioEnergy, LLC
910 9th Street
Fairmont, NE 68354

Re: 2005 Registration

Dear Sirs:

In connection with the proposed offer and sale of up to 6,732,500 units of the membership interests (the "Membership Units") of Advanced BioEnergy, LLC (the "Company"), we have made such legal examination and inquiries as we have deemed advisable or necessary for the purpose of rendering this opinion and have examined originals or copies of the following documents and corporate records:

1. The Company's Certificate of Formation;
2. The Company's Amended and Restated Operating Agreement;
3. The Company's resolutions of the Board of Directors authorizing the issuance of units; and
4. The Company's Registration Statement, as filed by Advanced BioEnergy, LLC with the United States Securities and Exchange Commission on May ___, 2005.

In rendering our opinions we have relied upon, with the consent of the Company and its members: (i) the representations of the Company and its members and other representatives as set forth in the aforementioned documents as to factual matters; and (ii) certificates and assurances from public officials and from members and other representatives of the Company as we have deemed necessary for purposes of expressing the opinions expressed herein. We have not undertaken any independent investigation to determine or verify any information and representations made by the Company and its members and representatives in the foregoing documents or in such certificates, and we have relied upon such information and representations in expressing our opinions.

May 24, 2005

Page 2

We have assumed in rendering these opinions that no person or party has taken any action inconsistent with the terms of the above-described documents or prohibited by law.

The opinions expressed herein shall be effective only as of the date of this opinion letter. The opinions set forth herein are based upon existing law and regulations, all of which are subject to change prospectively and retroactively. Our opinions are based on the facts and the above documents as they exist on the date of this letter, and we assume no obligation to revise or supplement such opinions as to future changes of law or fact. This opinion letter is limited to the matters stated herein and no opinions are to be implied or inferred beyond the matters expressly stated herein.

Based on our examination and inquiry, we are of the opinion that, upon effectiveness of the Registration Statement, and when issued and sold in the manner referred to in the Registration Statement and under the applicable subscription agreement(s), the Membership Units will be duly authorized, fully paid and non-assessable

Sincerely,

Miranda L. Hughes

Exhibit 8.1

BROWN, WINICK, GRAVES, GROSS,
BASKERVILLE AND SCHOENEBAUM, P.L.C.

ATTORNEYS AT LAW

666 GRAND AVENUE, SUITE 2000 Richard W. Baskerville Sean P. Moore Brian P. Rickert Patents and Trademarks
DES MOINES, IOWA 50309-2510 Bruce Graves Nancy S. Boyd Valerie D. Bandstra G. Brian Pingel
Steven C. Schoenebaum James L. Pray Alexander M. Johnson Camille L. Urban
Harold N. Schneebeck Brenton D. Soderstrum James S. Niblock
TELEPHONE: (515) 242-2400 Paul D. Hietbrink Michael D. Treinen Ann Holden Kendell
FACSIMILE: (515) 283-0231 William C. Brown Scott L. Long Rebecca A. Brommel
Richard K. Updegraff Ronni F. Begleiter Kelly K. Helwig
Paul E. Carey Miranda L. Hughes Mark E. Roth
URL: www.ialawyers.com Douglas E. Gross Kelly D. Hamborg Tina R. Thompson
John D. Hunter William E. Hanigan Brian M. Green
James H. Gilliam Mary A. Ericson Dustin D. Smith Of Counsel:
Robert D. Andeweg Barbara B. Burnett Adam W. Jones Marvin Winick
Offices in: Alice Eastman Helle Michael J. Green Catherine C. Cownie
West Des Moines, Iowa Michael R. Blaser Michael A. Dee Erick D. Prohs
Pella, Iowa Thomas D. Johnson Danielle Dixon Smid Laura N. Martino
Christopher R. Sackett Deborah J. Schmudlach Amy R. Piepmeier Walter R. Brown (1921-2000)

WRITER'S DIRECT DIAL NO.
(515) 242-2416
WRITER'S E-MAIL ADDRESS
carey@ialawyers.com

May 24, 2005

Board of Directors
Advanced BioEnergy, LLC
910 9th Street
Fairmont, NE 68354

Re: 2005 Registration Statement on Form SB-2; Tax Matters

Dear Sirs:

As counsel for Advanced BioEnergy, LLC, (the "Company"), we furnish the following opinion in connection with the proposed issuance by the Company of up to 6,732,500 of its membership interests (the "Units").

We have acted as legal counsel to the Company in connection with its offering of the Units. As such, we have participated in the preparation and filing with the Securities and Exchange Commission under the Securities Act of 1933, as amended, of a Form SB-2 Registration Statement dated May ___, 2005 relating to that offering (the "Registration Statement").

You have requested our opinion as to matters of federal tax law that are described in the Registration Statement. We are assuming that the offering will be consummated and that the operations of the Company will be conducted in a manner consistent with that described in the Registration Statement. We have examined the Registration Statement and such other documents as we have deemed necessary to render our opinion expressed below.

Based on the foregoing, all statements as to matters of law and legal conclusions contained in the Registration Statement under the heading "Federal Income Tax Consequences of Owning Our Units" reflect our opinion unless otherwise noted. That section of the Registration Statement is a general description of the principal federal income tax consequences that are expected to arise from the ownership and disposition of Units, insofar as it relates to matters of law and legal conclusions. That section also addresses all material federal income tax consequences to prospective unit holders of the ownership and disposition of units.

May 24, 2005

Page 2

Our opinion extends only to matters of law and does not extend to matters of fact. With limited exceptions, the discussion relates only to individual citizens and residents of the United States and has limited applicability to corporations, trusts, estates or nonresident aliens. The opinion expressed herein shall be effective only as of the date of this opinion letter. The opinion set forth herein is based upon known facts and existing law and regulations, all of which are subject to change prospectively and retroactively. We assume no obligation to revise or supplement such opinions as to future changes of law or fact.

An opinion of legal counsel represents an expression of legal counsel's professional judgment regarding the subject matter of the opinion. It is neither a guarantee of the indicated result nor is it an undertaking to defend the indicated result should it be challenged by the Internal Revenue Service. This opinion is in no way binding on the Internal Revenue Service or on any court of law.

We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm in the Registration Statement.

Yours truly,

Paul E. Carey

Exhibit 10.1

WHEN RECORDED RETURN TO:
Michael J. Green
Regency West 5
4500 Westown Parkway, Suite 277
West Des Moines, Iowa 50266

PREPARER
INFORMATION Michael J. Green    4500 Westown Pkwy., Ste. 277 West Des Moines, IA   (515) 242-2431
            --------------------------------------------------------------------   --------------
            Individual's Name      Street Address             City                     Phone

SPACE ABOVE THIS LINE FOR RECORDER

REAL ESTATE OPTION AGREEMENT

THIS AGREEMENT is made this 7th day of February, 2005, by and between Duane V. Lott, (hereinafter referred to as "Optionor") and Advanced BioEnergy, LLC, a Delaware limited liability company (hereinafter referred to as "Optionee").

W I T N E S S E T H:

WHEREAS, Optionor is the owner of real estate described in full at paragraph 1 below and is desirous of securing a future purchaser of said real property under defined terms; and

WHEREAS, Optionee desires to acquire said property from Optionor in accordance with the terms and conditions set forth hereafter.

IN CONSIDERATION of the covenants and promises contained hereafter, it is agreed:

1. PREMISES: That Optionor hereby grants to Optionee the exclusive option to purchase real property, together with all improvements thereon, if any, in Fillmore County, Nebraska, more specifically described as follows:

North half of the Northwest quarter of Section 25-8-3, approximately 87 acres, Fillmore County, Nebraska.

2. OPTION CONSIDERATION: As consideration for the option grant provided in paragraph 1 above, Optionee agrees to pay to Optionor at the time of the execution of this Option Agreement the sum of $5,000.00. The parties agree that there is valid and sufficient consideration for this Agreement based on this sum, the mutual obligations herein contained and other good and valuable consideration. In addition, Optionor agrees not to enter into any other Purchase, Lease or Agreement of any kind with any

other party relating to the subject property while this Option Agreement is in place.

3. TERM: This option shall commence on the date of the execution of this Option Agreement and continue to the 1st day of August, 2006, at 12:00 midnight at which time it expires and is null and void if not exercised.

4. PURCHASE TERMS: Pursuant to the terms of this option, Optionor agrees to sell and Optionee agrees to purchase the above-described real property with improvements thereon under the following terms and conditions:

a. PURCHASE PRICE: The purchase price shall be: $478,500.00.

The Optionee agrees to pay in cash at closing the relevant amount as set forth above. Optionee shall be credited against said purchase price with the full amount paid in cash as the option consideration hereunder.

b. ABSTRACT: Optionor shall promptly after receipt of notice of exercise of option provide a title commitment showing title to be marketable in accordance with this Agreement, the land title laws of the State of Nebraska and the Nebraska Title Standards of the Nebraska State Bar Association. If closing is delayed due to Optionor's inability to provide marketable title, then Optionee may rescind this Agreement after giving 14 days written notice to the other party and the broker if any. Cost of title insurance split one-half to the Optionor and one-half to the Optionee.

c. WARRANTY DEED: At closing, upon receipt of the full purchase price set forth above, Optionor shall execute and deliver to Optionee an appropriate Warranty Deed, Declaration of Value and Hazard Statement for recording by Optionee.

d. TAXES: Optionor shall pay all real estate taxes prorated to the date of closing. If the amount of any such tax to be prorated cannot be ascertained, proration shall be computed on the amount for the preceding year.

e. SPECIAL ASSESSMENTS: The Optionor shall pay all special assessments which are a lien and due and payable on said property and can be paid as of the date of closing.

f. EMINENT DOMAIN: In the event the property or any part thereof is taken or threatened to be taken pursuant to eminent domain after the notice of exercise of the above option, but prior to closing, the Optionee shall have the right at its election to cancel and terminate this agreement or to complete the purchase as set forth above with the Optionee being entitled to receive all condemnations proceeding against the real property.

g. CLOSING: Closing shall be held on a date agreeable to the parties not later than 90 days from the date of the notice of demand to close.

h. DEFAULT: In the event Optionor has fulfilled all of its obligations hereunder and all conditions precedent and concurrent to closing for which it is responsible and Optionee fails to fulfill its obligations hereunder and continues to fail and refuses to fulfill its obligations hereunder for more than 30 days after receipt of written notice of such default from Optionor may either: 1) terminate this Agreement in which event it shall be entitled to retain the option money deposits and any other monies paid hereunder and such termination and retainage shall be the sole remedy and damages available to the Optionee; or 2) pursue any legal and/or equitable remedy available to it. In the event Optionee fulfills all of its obligations hereunder and meets all conditions precedent and concurrent to closing for which it is responsible and Optionor is unable, fails or refuses to meet its obligations hereunder for more than 30 days after receipt of written notice of such default, Optionee may either:
1) terminate this Agreement in which event it shall be entitled to receive refund of all of its option money deposits and any other monies paid hereunder and such termination and refund shall be the sole remedy and damages available to the Optionee; or 2) pursue any legal and/or equitable remedy available to it.

i. PERSONAL PROPERTY: Optionor understands and agrees that Optionee shall have the right under the Purchase Agreement to retain the well, pump, engine, gearbox, water rights and any other equipment necessary to get water out of the ground on the subject property. Optionee further agrees that Optionor shall have the right to retain the pivot located on the property and shall have a reasonable time period for removal of the same at Optionor's expense.

j. CROP DAMAGE: In the event that Optionee's due diligence and/or closing and conveyance of the Property to Optionee shall occur after Optionor plants crops, but before harvest of those crops, the parties hereto mutually agree that Optionor shall have the right, upon notice to the Optionee and at the Optionee's convenience, to harvest any crops not destroyed by the Optionee in the process of its due diligence and/or its constructing of the ethanol plant and related improvements thereto. The Optionee shall have no duty to preserve any of such crops, and the Optionor accepts as liquidated damages (in lieu of any and all other damages) an amount equal to 120% of the University of Nebraska estimated per acre crop input cost for Fillmore County, Nebraska for the applicable crop year multiplied by the number of acres, or fractional acres, of crop destroyed on the Property by the Optionee prior to the harvest of such crop acres by the Optionor. The number of such acres destroyed shall be measured by a third-party as the parties hereto may mutually identify.

5. RECORDING OF OPTION: The parties hereto agree that this Option Agreement shall be recorded.

6. INSPECTION RIGHTS: Optionee shall, during the term of this Option Agreement, have the unrestricted rights to enter upon the subject property for purposes of performing any and all due diligence necessary to Optionee's determination to purchase the subject property including, but not limited to, the taking of soil samples. Optionee understands and agrees that during the term of this Option Agreement Optionor shall have the full and unrestricted right to plant irrigated corn on the subject property. Should Optionee, as a part of its inspection, damage any of the growing crop on the subject property, Optionee shall be responsible for the payment of the fair market value thereof to Optionor.

7. NOTICES: Any notice, demand or other document which either party is required or may desire to give or deliver to or make upon the other party shall be given in writing and served either personally or given by prepaid United States certified mail, return receipt requested, and addressed to the following addresses:

If to Optionor:          Duane V. Lott
                         1020 Road C
                         Fairmont, Nebraska 68354

If to Optionee:          Advanced BioEnergy, LLC
                         c/o Brown, Winick, Graves, Gross, Baskerville
                         and Schoenebaum, P.L.C.
                         Attn:  William E. Hanigan
                         666 Grand Avenue, Suite 2000
                         Des Moines, Iowa 50309-2510

Either party hereto may designate a different address for itself, or additional persons to whom copies thereof are to be sent, by notice similarly given.

8. REAL ESTATE BROKERS: The parties hereto represent that, absent specific disclosure in writing, no real estate brokers have been employed, utilized or relied upon by either party as a result of the grant of this option or the real estate sale contemplated therein.

9. TIME: Time is of the essence as to the performance of all of the terms and conditions of this Agreement.

10. ATTORNEY FEES: Any action required of the Optionor hereunder to enforce its rights to this Agreement shall entitle the Optionor to the recovery of its reasonable attorney fees, costs and expenses incurred and necessary to the enforcement of said rights.

11. GENERAL: This Agreement shall be deemed to have been made and shall be construed and interpreted in accordance with the laws of the State of Nebraska. This

Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their successors and assigns. The captions and titles herein are for reference only and are not to be considered a part of this Agreement or in the interpretation hereof. This Agreement shall not be valid until signed by both parties. The phrase "execution and delivery hereof," as used above, shall be the date the last party hereto signs this Agreement and serves it upon the other party in the same manner as set forth for notices. Time is of the essence.

IN WITNESS WHEREOF, said parties hereto subscribe their names.

OPTIONOR: OPTIONEE:

DUANE V. LOTT ADVANCED BIOENERGY, LLC

      /s/ Duane V. Lott                       By    /s/ Revis L. Stephenson
------------------------------------            --------------------------------
Duane V. Lott                                       Member
                                                --------------------------------

STATE OF Nebraska                )

)SS:
COUNTY OF Fillmore )

On this 7th day of February, 2005, before me, the undersigned, a Notary Public in and for the State of Nebraska, personally appeared Duane V. Lott to me know to be the identical person named in and who executed the within and foregoing instrument and acknowledged that he executed the same as his voluntary act and deed.

[notary seal]                          /s/ Tammi J. Naber
                                      ------------------------------------------
                                      Notary Public in and for the State of NE

STATE OF _____________________ )

)SS:

COUNTY OF_____________________ )

On this 22 day of February, 2005, before me, the undersigned, a Notary Public in and for the State of MN, personally appeared R. Stephenson to me personally known, who being by me duly sworn, did say that he is the Member of Advanced BioEnergy, LLC, a limited liability company, executing the within and foregoing instrument; that no seal has been procured by the said limited liability company; that said instrument was signed on behalf of the limited liability company by authority of its members; and that Revis Stephenson, as Member, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the limited liability company, by it and by him voluntarily executed.

[notary seal]                                 /s/Marie DeVoe White
                                      ------------------------------------------
                                      Notary Public in and for the State of MN

Exhibit 10.2

PD: $30.50                                                                      Reg ______
                                                                                Index______
                                                                                G. Index____
WHEN RECORDED RETURN TO:                State of Nebraska, County of Fillmore   RE Cards___
Michael J. Green                        Filed for Record On April 27 2005       C. Map____
Regency West 5                          At 4:10 O'Clock P M And Record in       MF ______
4500 Westown Parkway, Suite 277         Book 48 Of Misc On Page 390             Xerox ____
West Des Moines, Iowa  50266            Carol Vejraska County Clerk             Paged ____

PREPARER
INFORMATION Michael J. Green     4500 Westown Pkwy., Ste. 277 West Des Moines, IA   (515) 242-2431
            ----------------------------------------------------------------------  --------------
            Individual's Name           Street Address             City                    Phone

SPACE ABOVE THIS LINE FOR RECORDER

REAL ESTATE OPTION AGREEMENT

THIS AGREEMENT is made this 26th day of April, 2005, by and between Doris Gwen Ogden, (hereinafter referred to as "Optionor") and Advanced BioEnergy, LLC, a Delaware limited liability company (hereinafter referred to as "Optionee").

W I T N E S S E T H:

WHEREAS, Optionor is the owner of real estate described in full at paragraph 1 below and is desirous of securing a future purchaser of said real property under defined terms; and

WHEREAS, Optionee desires to acquire said property from Optionor in accordance with the terms and conditions set forth hereafter.

IN CONSIDERATION of the covenants and promises contained hereafter, it is agreed:

1. PREMISES: That Optionor hereby grants to Optionee the exclusive option to purchase real property, together with all improvements thereon, including, but not limited to, the "old farmhouse" on the property, in Fillmore County, Nebraska, more specifically described as follows:

Southeast quarter of Section 36-8-3, approximately 148 acres, Fillmore County, Nebraska.

390 - 1/6

3. obligations herein contained and other good and valuable consideration. In addition, Optionor agrees not to enter into any other Purchase, Lease or Agreement of any kind with any other party relating to the subject property while this Option Agreement is in place.

4. TERM: This option shall commence on the date of the execution of this Option Agreement and continue to the 1st day of August, 2006, at 12:00 midnight at which time it expires and is null and void if not exercised.

5. PURCHASE TERMS: Pursuant to the terms of this option, Optionor agrees to sell and Optionee agrees to purchase the above-described real property with improvements thereon under the following terms and conditions:

a. PURCHASE PRICE: The purchase price shall be: $740,000.00, calculated at $6,000.00 per acre for the Western 74 acres and $4,000.00 per acre for the Eastern 74 acres.

e. SPECIAL ASSESSMENTS: The Optionor shall pay all special assessments which are a lien and due and payable on said property and can be paid as of the date of closing.

390 - 2/6

election to cancel and terminate this agreement or to complete the purchase as set forth above with the Optionee being entitled to receive all condemnations proceeding against the real property.

g. CLOSING: Closing shall be held on a date agreeable to the parties not later than 90 days from the date of the notice of demand to close.

i. PERSONAL PROPERTY: Optionor understands and agrees that Optionee shall have the right under the Purchase Agreement to retain the well, pump, engine, gearbox, water rights, pivot and any other equipment necessary to get water out of the ground on the subject property.

390 - 3/6

5. RECORDING OF OPTION: The parties hereto agree that this Option Agreement shall be recorded.

6. INSPECTION RIGHTS: Optionee shall, during the term of this Option Agreement, have the unrestricted rights to enter upon the subject property for purposes of performing any and all due diligence necessary to Optionee's determination to purchase the subject property including, but not limited to, the taking of soil samples. Optionee understands and agrees that during the term of this Option Agreement Optionor shall have the full and unrestricted right to plant irrigated corn or soybeans on the subject property. Should Optionee, as a part of its inspection, damage any of the growing crops on the subject property, Optionee shall be responsible for the payment of the fair market value thereof to Optionor.

If to Optionor:          Doris Gwen Ogden
                         c/o Thomas P. Boyer
                         Farmers State Bank
                         P.O. Box 16
                         Fairmont, NE  68354

If to Optionee:          Advanced BioEnergy, LLC
                         c/o Brown, Winick, Graves, Gross, Baskerville
                         and Schoenebaum, P.L.C.
                         Attn:  William E. Hanigan
                         666 Grand Avenue, Suite 2000
                         Des Moines, Iowa 50309-2510

Either party hereto may designate a different address for itself, or additional persons to whom copies thereof are to be sent, by notice similarly given.

9. TIME: Time is of the essence as to the performance of all of the terms and conditions of this Agreement.

390 - 4/6

rights.

11. GENERAL: This Agreement shall be deemed to have been made and shall be construed and interpreted in accordance with the laws of the State of Nebraska. This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their successors and assigns. The captions and titles herein are for reference only and are not to be considered a part of this Agreement or in the interpretation hereof. This Agreement shall not be valid until signed by both parties. The phrase "execution and delivery hereof," as used above, shall be the date the last party hereto signs this Agreement and serves it upon the other party in the same manner as set forth for notices. Time is of the essence.

IN WITNESS WHEREOF, said parties hereto subscribe their names.

OPTIONOR: OPTIONEE:

ADVANCED BIOENERGY, LLC

By    /s/Doris Gwen Ogden               By  /s/Revis L. Stephenson III
  ----------------------------------      -------------------------------------
Doris Gwen Ogden, a widow               Revis L. Stephenson III, Chairman

STATE OF Nebraska    )

)SS:
COUNTY OF Fillmore )

On this 26th day of April, 2005, before me, the undersigned, a Notary Public in and for the State of Nebraska, personally appeared Doris Gwen Ogden to me known to be the identical person named in and who executed the within and foregoing instrument and acknowledged that he executed the same as his voluntary act and deed.

[NOTARY SEAL]                              /s/Jean Engle
                                        ----------------------------------------
                                        Notary Public in and for the State of NE

                                                                       390 - 5/6

Exhibit 10.3

WHEN RECORDED RETURN TO:
Michael J. Green
Regency West 5
4500 Westown Parkway, Suite 277
West Des Moines, Iowa 50266

PREPARER
INFORMATION Michael J. Green        4500 Westown Pkwy., Ste. 277 West Des Moines, IA       (515) 242-2431
            ----------------------------------------------------------------------------   --------------
            Individual's Name             Street Address             City                      Phone

SPACE ABOVE THIS LINE FOR RECORDER

REAL ESTATE OPTION AGREEMENT

THIS AGREEMENT is made this 18th day of February, 2005, by and between WDB, Inc., a Nebraska corporation, (hereinafter referred to as "Optionor") and Advanced BioEnergy, LLC, a Delaware limited liability company (hereinafter referred to as "Optionee").

W I T N E S S E T H:

WHEREAS, Optionor is the sole owner of real estate described in full at paragraph 1 below and is desirous of securing a future purchaser of said real property under defined terms; and

WHEREAS, Optionee desires to acquire said property from Optionor in accordance with the terms and conditions set forth hereafter.

IN CONSIDERATION of the covenants and promises contained hereafter, it is agreed:

A part of the 112 acres, further described as the North half of the Northeast quarter and Southwest quarter of Northeast quarter of
Section 36-8-3, being not less than 75 acres, calculated as part of the 80 acres of the Northwest quarter and Southwest quarter less railroad right-of-way and a part or all of the Northeast quarter including the well and pump operation located thereon. If Optionor requests more than 75 acres, Optionee, at its sole discretion, can cause Optionor to include the entire 112 acre parcel as the premises.

2. OPTION CONSIDERATION: As consideration for the option grant provided in paragraph 1 above, Optionee agrees to pay to Optionor at the time of the execution of this Option Agreement the sum of $10,000.00. The parties agree that there is valid and sufficient consideration for this Agreement based on this sum, the mutual obligations herein contained and other good and valuable consideration subject to the terms of paragraph 4(k) hereafter. In addition, Optionor agrees not to enter into any other Purchase, Lease or Agreement of any kind with any other party relating to the subject property while this Option Agreement is in place.

a. PURCHASE PRICE: The purchase price shall be: $6,000.00 per acre after final survey. In any event, if this Option is exercised, not less than seventy-five (75) acres shall be purchased. Purchaser shall have a credit for the option consideration of $10,000.00.

c. WARRANTY DEED: At closing, upon receipt of the full purchase price set forth above, Optionor shall execute and deliver to Optionee an appropriate Warranty Deed, subject to easements and restrictions of record, Declaration of Value and Hazard Statement for recording by Optionee.

e. SPECIAL ASSESSMENTS: The Optionor shall pay all special assessments which are a lien and due and payable on said property and can be paid as of the date of closing.

g. CLOSING: Closing shall be held on a date agreeable to the parties not later than 90 days from the date of the notice of demand to close.

i. PERSONAL PROPERTY: Optionor understands and agrees that Optionee shall have the right under the Purchase Agreement to retain the well, pump, engine, water rights and any other equipment necessary to get water out of the ground on the subject property. Optionee further agrees that Optionor shall have the right to retain the pivot located on the property and shall have a reasonable time period for removal of the same at Optionor's expense.

j. GROUND LEASE: Optionor shall cause, at Optionor's expense, the lease of the subject property to be terminated as to lease years 3, 4 and 5 and Optionor shall modify, with Optionee's consent at Optionee's expense, the lease for year 2 so as to comply with and allow for the terms of paragraph 4(k) hereafter. Failure to provide evidence of said change within fourteen (14) days of the date hereof shall

entitle the Optionee to the return to it of the full amount of the option consideration and the termination of this Agreement.

k. CROP DAMAGE: In the event that Optionee's due diligence and/or closing and conveyance of the Property to Optionee shall occur after Optionor plants crops, but before harvest of those crops, the parties hereto mutually agree that Optionor shall have the right, upon notice to the Optionee and at the Optionee's convenience, to harvest any crops not destroyed by the Optionee in the process of its due diligence and/or its constructing of the ethanol plant and related improvements thereto. The Optionee shall have no duty to preserve any of such crops, and the Optionor accepts as liquidated damages (in lieu of any and all other damages) an amount equal to 120% of the University of Nebraska estimated per acre crop input cost for Fillmore County, Nebraska for the applicable crop year multiplied by the number of acres, or fractional acres, of crop destroyed on the Property by the Optionee prior to the harvest of such crop acres by the Optionor. The number of such acres destroyed shall be measured by a third-party as the parties hereto may mutually identify.

5. RECORDING OF OPTION: The parties hereto agree that this Option Agreement shall be recorded.

6. INSPECTION RIGHTS: Optionee shall, during the term of this Option Agreement, have the unrestricted rights to enter upon the subject property for purposes of performing any and all due diligence necessary to Optionee's determination to purchase the subject property in its sole discretion including, but not limited to, the taking of soil samples. Optionee understands and agrees that during the term of this Option Agreement Optionor shall have the full and unrestricted right to plant irrigated corn on the subject property. Should Optionee, as a part of its inspection, damage any of the growing crop on the subject property, Optionee shall be responsible for the payment of the fair market value thereof to Optionor as calculated under the terms of paragraph 4(k) above.

If to Optionor:          WDB, Inc.
                         c/o Kelly Thomas
                         Svehla Law Offices
                         408 Platte Avenue, Suite A
                         York, Nebraska 68467

If to Optionee:          Advanced BioEnergy, LLC
                         c/o Brown, Winick, Graves, Gross, Baskerville

                              4

                         and Schoenebaum, P.L.C.
                         Attn:  William E. Hanigan
                         666 Grand Avenue, Suite 2000
                         Des Moines, Iowa 50309-2510

Either party hereto may designate a different address for itself, or additional persons to whom copies thereof are to be sent, by notice similarly given.

9. TIME: Time is of the essence as to the performance of all of the terms and conditions of this Agreement.

10. ATTORNEY FEES: Any action required of either party hereunder to enforce its rights to this Agreement shall entitle said party to the recovery of its reasonable attorney fees, costs and expenses incurred and necessary to the enforcement of said rights.

IN WITNESS WHEREOF, said parties hereto subscribe their names.

OPTIONOR:                                     OPTIONEE:

WDB, INC.                                     ADVANCED BIOENERGY, LLC


By:  /s/ William Bettger                      By  /s/Revis L. Stephenson
----------------------------------              --------------------------------
William Bettger, President


By:  /s/Susan L. Bettger                          Chairman
   -------------------------------            ----------------------------------
Its:  Secretary
    ------------------------------

STATE OF Arizona    )
                    )SS:
COUNTY OF Maricopa  )

On this 18th day of February, 2005, before me, the undersigned, a Notary Public in and for said County and State, personally appeared William Bettger and Susan L. Bettger to me personally known, who, being by me duly sworn, did say that they are the President and Secretary, respectively, of said corporation executing the within and foregoing instrument; that said instrument was signed on behalf of said corporation by authority of its Board of Directors; and that the said William Bettger, President and Susan L. Bettger, Secretary as such officers acknowledged the execution of said instrument to be the voluntary act and deed of said corporation, by it and by them voluntarily executed.

[NOTARY SEAL]

        /s/Robert Coopersmith
---------------------------------------------
Notary Public in and for the State of Arizona

STATE OF Minnesota   )
                     )SS:
COUNTY OF Hennipen   )

On this 8 day of March, 2005, before me, the undersigned, a Notary Public in and for the State of Minnesota, personally appeared Revis L. Stephenson to me personally known, who being by me duly sworn, did say that he is the Chairman of Advanced BioEnergy, LLC, a limited liability company, executing the within and foregoing instrument; that no seal has been procured by the said limited liability company; that said instrument was signed on behalf of the limited liability company by authority of its members; and that Revis L. Stephenson, as Chairman, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the limited liability company, by it and by him voluntarily executed.

                                               /s/Marie DeVoe White
                                        ----------------------------------------
                                        Notary Public in and for the State of MN
[NOTARY SEAL]

Exhibit 10.4

PD: $30.50                                                                      Reg ______
                                                                                Index______
                                                                                G. Index____
WHEN RECORDED RETURN TO:                State of Nebraska, County of Fillmore   RE Cards___
Michael J. Green                        Filed for Record On April 27 2005       C. Map____
Regency West 5                          At 4:11 O'Clock P M And Record in       MF ______
4500 Westown Parkway, Suite 277         Book 48 Of Misc On Page 391             Xerox ____
West Des Moines, Iowa  50266            Carol Vejraska County Clerk             Paged ____

PREPARER
INFORMATION Michael J. Green     4500 Westown Pkwy., Ste. 277 West Des Moines, IA  (515) 242-2431
            ---------------------------------------------------------------------  --------------
            Individual's Name           Street Address             City                 Phone

SPACE ABOVE THIS LINE FOR RECORDER

REAL ESTATE OPTION AGREEMENT

THIS AGREEMENT is made this 13th day of April, 2005, by and between L & K Land, Inc., a Nebraska corporation, (hereinafter referred to as "Optionor") and Advanced BioEnergy, LLC, a Delaware limited liability company (hereinafter referred to as "Optionee").

W I T N E S S E T H:

WHEREAS, Optionor is the owner of real estate described in full at paragraph 1 below and is desirous of securing a future purchaser of said real property under defined terms; and

WHEREAS, Optionee desires to acquire said property from Optionor in accordance with the terms and conditions set forth hereafter.

IN CONSIDERATION of the covenants and promises contained hereafter, it is agreed:

North half of the Northeast quarter of Section 26-8-3, approximately 103 acres, Fillmore County, Nebraska.

391 - 1/6

agrees not to enter into any other Purchase, Lease or Agreement of any kind with any other party relating to the subject property while this Option Agreement is in place.

a. PURCHASE PRICE: The purchase price shall be: $566,500.00.

e. SPECIAL ASSESSMENTS: The Optionor shall pay all special assessments which are a lien and due and payable on said property and can be paid as of the date of closing.

391 - 2/6

g. CLOSING: Closing shall be held on a date agreeable to the parties not later than 90 days from the date of the notice of demand to close.

5. RECORDING OF OPTION: The parties hereto agree that this Option Agreement shall be recorded.

391 - 3/6

6. INSPECTION RIGHTS: Optionee shall, during the term of this Option Agreement, have the unrestricted rights to enter upon the subject property for purposes of performing any and all due diligence necessary to Optionee's determination to purchase the subject property including, but not limited to, the taking of soil samples. Optionee understands and agrees that during the term of this Option Agreement Optionor shall have the full and unrestricted right to plant irrigated corn or soybeans on the subject property. Should Optionee, as a part of its inspection, damage any of the growing crops on the subject property, Optionee shall be responsible for the payment of the fair market value thereof to Optionor.

If to Optionor:          L & K Land, Inc.
                         c/o Stanley L. Schepers
                         745 Turtle Beach
                         Marquette, Nebraska 68854

If to Optionee:          Advanced BioEnergy, LLC
                         c/o Brown, Winick, Graves, Gross, Baskerville
                         and Schoenebaum, P.L.C.
                         Attn:  William E. Hanigan
                         666 Grand Avenue, Suite 2000
                         Des Moines, Iowa 50309-2510

Either party hereto may designate a different address for itself, or additional persons to whom copies thereof are to be sent, by notice similarly given.

9. TIME: Time is of the essence as to the performance of all of the terms and conditions of this Agreement.

391 - 4/6

IN WITNESS WHEREOF, said parties hereto subscribe their names.

OPTIONOR: OPTIONEE:

L & K LAND, INC. ADVANCED BIOENERGY, LLC

By   /s/Stanley L. Schepers, President        By   /s/Revis L. Stephenson III
  ---------------------------------------       --------------------------------
     Stanley L. Schepers, President                Revis L. Stephenson III,

Chairman

By   /s/Kathryn J. Schepers, Secretary
  ---------------------------------------
     Kathryn J. Schepers, Secretary

STATE OF  Nebraska     )
                       )SS:
COUNTY OF   Menrick    )

On this 13th day of April, 2005, before me, the undersigned, a Notary Public in and for said County and State, personally appeared Stanley L. Schepers and Kathryn J. Schepers, to me personally known, who, being by me duly sworn, did say that they are the President and Secretary, respectively, of said corporation executing the within and foregoing instrument; that said instrument was signed on behalf of said corporation by authority of its Board of Directors; and that the said President and Secretary as such officers acknowledged the execution of said instrument to be the voluntary act and deed of said corporation, by it and by them voluntarily executed.

[NOTARY SEAL]                                           /s/Ina Cotner
                                                --------------------------------
                                 Notary Public in and for the State of Iowa


                                                                       391 - 5/6

STATE OF  Minnesota    )
                       )SS:
COUNTY OF   Hennepin   )

On this 26th day of April, 2005, before me, the undersigned, a Notary Public in and for the State of Minnesota, personally appeared Revis L. Stephenson III to me personally known, who being by me duly sworn, did say that he is the Chairman of Advanced BioEnergy, LLC, a limited liability company, executing the within and foregoing instrument; that no seal has been procured by the said limited liability company; that said instrument was signed on behalf of the limited liability company by authority of its members; and that Revis L. Stephenson III, as Chairman, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the limited liability company, by it and by him voluntarily executed.

[NOTARY SEAL]                                /s/Marie DeVoe White
                                   ---------------------------------------------
                                   Notary Public in and for the State of MN


                                                                       391 - 6/6

Exhibit 10.5

LETTER OF INTENT

Date: March 24, 2005

Parties: Fagen, Inc., a Minnesota Corporation, of Granite Falls, MN ("Fagen") and Advanced BioEnergy, LLC, a Delaware limited liability company

("Owner")

WHEREAS, Owner is an entity organized to facilitate the development and building of a 100 MGY gas-fired fuel ethanol plant near Fairmont, Nebraska (the "Facility" or "Project");

WHEREAS, Fagen is an engineering and construction firm capable of providing development assistance, as well as designing and constructing the Facility being considered by Owner; and

WHEREAS, this Letter of Intent supercedes and replaces any prior Letter of Intent between Fagen and Owner relating to the Project.

NOW, THEREFORE, in consideration of the promises and mutual covenants set forth herein, Owner and Fagen agree to use best efforts in jointly developing this Project under the following terms:

1. Owner agrees that Fagen will design-build the Facility if determined by Owner to be feasible and if adequate, financing is obtained. Should Owner choose to develop or pursue a relationship with a company other than Fagen to provide the preliminary engineering or design-build services for the project, then Owner shall reimburse Fagen for all expenses Fagen has incurred in connection with the Project based upon Fagen's standard rate schedule plus all third party costs incurred from the date of this Letter of Intent. Such expenses include, but are not limited to, labor rates and reimbursable expenses such as legal charges for document review and preparation, travel expenses, reproduction costs, long distance phone cost, and postage. In the event Fagen's services are terminated by Owner, title to the technical data, which may include preliminary engineering drawings and layouts and proprietary process related information, shall remain with Fagen; however, Owner shall, upon payment of the foregoing expenses, have the limited license to use the above described technical data, excluding proprietary process related information, for construction, operation, repair and maintenance of the Project.

If Fagen intentionally or by gross negligence fails or refuses to comply with its commitments contained in this Letter of Intent, Fagen shall absorb all of its own expenses, and Owner shall have the right to terminate the Letter of Intent immediately upon written notice to Fagen, and Owner shall be released from its obligations to pay or reimburse Fagen as described above.

Page 1 of 3

2. Fagen will provide Owner with assistance in evaluating, from both a technical and business perspective:

- Owner organizational options;
- The appropriate location of the proposed Facility; and
- Business plan development.

Fagen assumes no risk or liability of representation or advice to Owner by assisting in evaluating the above. All decisions made regarding feasibility, financing, and business risks are the Owner's responsibility and liability.

3. Fagen agrees to design-build the Facility, utilizing ICM, Inc. technology in the plant process, for a lump sum price of $98,000,000.00. This lump sum price shall remain firm by Fagen to Owner until December 31, 2005, and may be subject to revision by Fagen after such date.

4. Fagen will. assist Owner in locating appropriate management for the Facility.

5. Fagen will assist Owner in presenting information to potential investors, potential lenders, and various entities or agencies that may provide project development assistance.

6. During the term of this Letter of Intent the Owner agrees that Fagen will be the exclusive Developer and Design-Builder for the Owner in connection with matters covered by this Letter of Intent, and Owner shall not disclose any information related to this Letter of Intent to a competitor or prospective competitor of Fagen.

7. This Letter of Intent shall terminate on December 31, 2005 unless the basic size and design of the Facility have been determined and mutually agreed upon, and a specific site or sites have been determined and mutually agreed upon, and at least 10% of the necessary equity has been raised. Furthermore, this Letter of Intent shall terminate on December 31, 2006 unless financing for the Facility has been secured. Either of the aforementioned dates may be extended upon mutual written agreement of the Parties.

8. Fagen and Owner agree to negotiate in good faith and enter into a definitive lump sum design-build agreement, including Exhibits thereto, acceptable to the Parties. Upon execution of such agreement, this Letter of Intent becomes null and void.

9. The Parties will jointly agree on the timing and content of any public disclosure, including, but not limited to, press releases, relating to Fagen's involvement in Owner's Project, and no such disclosure shall be made without mutual consent and approval, except as may be required by applicable law.

Page 2 of 3

10. The Parties agree that this Letter of Intent may be modified only by written agreement by the Parties.

11. This Letter of Intent may be executed in one or more counterparts, each of which when so executed and delivered shall be deemed an original, but all of which taken together constitute one and the same instrument. Signatures which have been affixed and transmitted by facsimile shall be binding to the same extent as an original signature, although the Parties contemplate that a fully executed counterpart with original signatures will be delivered to each Party.

ADVANCED BIOENERGY, LLC FAGEN, INC.

By:      /s/Revis L. Stephenson               By:      /s/O. Wayne Mitchell
    --------------------------------                ----------------------------

Its:     Chairman                             Its:     Sr. V.P.
      ------------------------------                ----------------------------

Date:          3/24/05                        Date:    3/28/05

Page 3 of 3

Exhibit 10.6

AGREEMENT BETWEEN
US BIO ALBERT CITY, LLC AND
TRANSYSTEMS CORPORATION
FOR PROFESSIONAL SERVICES

THIS AGREEMENT is made this 7th day of March, 2005, by and between ADVANCED BIO ENERGY (hereafter referred to as "CLIENT") and TRANSYSTEMS CORPORATION (hereafter referred to as "TRANSYSTEMS").

Whereas CLIENT intends to design and construct the following described project:

PERFORM SITE VISIT, REVIEW FACILITY SPACE AND ALIGNMENT NEEDS, IDENTIFY POTENTIAL CONCEPTS FOR TRACK LAYOUT, IDENTIFY FEASIBILITY OF EXISTING SHORT LINE EXTENSION FOR UTILIZATION; ALL PER ATTACHED SCOPE LETTER. (hereinafter collectively called the "Project").

Whereas CLIENT desires to engage TRANSYSTEMS to provided and perform certain professional services in connection with the Project and TRANSYSTEMS desires to provide and perform said professional services, all on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and their mutual covenants hereinafter set forth, CLIENT and TRANSYSTEMS agree as follows:

SECTION 1 BASIC SERVICES OF TRANSYSTEMS

SECTION 1.1 BASIC SERVICES. In connection with the Project, TRANSYSTEMS shall provide for CLIENT the professional services and perform, furnish or obtain from others the work and services expressly described in, referred to and limited to those set forth in Exhibit A, attached hereto and incorporated herein by reference (collectively the "Basic Services"). TRANSYSTEMS shall provide the Basic Services for CLIENT in all phases of the Project to which this Agreement applies, all as more particularly set forth in Exhibit A.

SECTION 1.2 TRANSYSTEMS' DUTIES. In addition to the general duties, obligations and responsibilities set forth elsewhere in this Agreement, the specific duties and responsibilities of TRANSYSTEMS in performing the Basic Services under this Agreement are set forth in Exhibit A. In addition to the specific duties and responsibilities of TranSystems in performing the basic services under this Agreement as set forth in Exhibit A, the following specific provisions shall apply to TranSystems' duties.

Advanced Bio Energy
Revised January 7, 2005 1

SECTION 2 ADDITIONAL SERVICES OF TRANSYSTEMS

SECTION 2.1. ADDITIONAL SERVICES. In connection with the Project, TRANSYSTEMS may be called on to perform, provide, furnish or obtain from others services or work which are not part of, or are in addition to, the Basic Services ("Additional Services"). If authorized in writing by CLIENT and agreed to by TRANSYSTEMS, TRANSYSTEMS shall perform, provide, furnish or obtain from others the agreed upon Additional Services. TRANSYSTEMS shall not be obligated to perform, provide, furnish or obtain any Additional Services without the prior written authorization of CLIENT. Except to the extent expressly provided otherwise in Exhibit A or as otherwise agreed in writing by the parties hereto, compensation to TRANSYSTEMS for Additional Services will be paid for by CLIENT as indicated in Section 5.

Additional Services may be any service or work not included as part of the Basic Services and may include, but are not limited to, services or work in connection with environmental or funding assistance, investigations not specifically required herein, services resulting from changes in the scope, extent or character of the project providing renderings or computer models, services to develop alternate bids or sequencing of work, outside CONSULTANT services not specifically required herein, out-of-town travel, and preparing to serve or serving as a CONSULTANT or witness in any litigation, arbitration or other legal or administrative proceeding. "Basic Services" and "Additional Services" are sometimes collectively referred to herein as "Services".

SECTION 2.2 CHANGES IN THE SERVICES.

SECTION 2.2.1 AGREED UPON CHANGES IN THE SERVICES. It is the desire of the parties to keep changes in the Scope of Services at a minimum, but the parties recognize that such changes may become necessary and agree that CLIENT may initiate deletions, modifications or changes to the Services by advising TRANSYSTEMS in writing of the change believed to be necessary. As soon thereafter as practicable, TRANSYSTEMS shall prepare a cost estimate of the change and shall inform CLIENT of the adjustment in the compensation due TRANSYSTEMS under Section 5 hereof ("TRANSYSTEMS' Compensation") and/or the Completion Date set forth in Section 4 hereof, if any, applicable to such requested change. CLIENT shall then advise TRANSYSTEMS in writing of its approval or disapproval of the change. If CLIENT approves the change, a written contract amendment shall be executed by both parties and TRANSYSTEMS shall perform the Services as changed and the adjustment in TRANSYSTEMS' Compensation and/or the Completion Date set forth in the executed contract amendment shall become effective. TRANSYSTEMS may initiate changes in the Services by advising CLIENT in writing that in its opinion a change is necessary. If CLIENT approves, it shall so advise TRANSYSTEMS and, thereafter, the change shall be handled as if initiated by CLIENT. If a change is not approved, or if a written contract amendment is not executed, by both CLIENT and TRANSYSTEMS, the change shall not become effective and TRANSYSTEMS shall not be obligated to perform the change.

Advanced Bio Energy
Revised January 7, 2005 2

SECTION 2.2.2 CONSTRUCTIVE CHANGES AND OTHER ADDITIONAL COSTS. In the event of (1) the CLIENT's addition to, modification or change of or deletion from the Services to be performed by TRANSYSTEMS (other than additions, modifications, changes or deletions handled through the provisions of Section 2.1 or Section 2.2.1 above); (2) a request for or approval from CLIENT of performance of Services in excess of TRANSYSTEMS' standard work day or work week or such shorter times as are provided by applicable collective bargaining agreements, or on a holiday customarily observed by TRANSYSTEMS; (3) the discovery of any subsurface or other conditions, which differ materially from those shown in or reasonably inferable from the documents or other information on which this Agreement is based and/or those ordinarily encountered and generally recognized as inherent in the locality of the Project; (4) a modification of applicable law by which TRANSYSTEMS is required to pay increased or additional taxes, government-regulated transportation costs, insurance or other amounts which are not required as of the date of this Agreement; (5) delay, suspension of, acceleration of or interference with, TRANSYSTEMS' performance of the Services by CLIENT or by any other person or entity including, but not limited to national, state or local governments; (6) wage, benefit or payroll tax increases due to governmental action or area agreements;
(7) modification to or delay in furnishing design criteria or other information supplied by any person or entity, other than TRANSYSTEMS, if TRANSYSTEMS' performance of the Services under this Agreement depends upon such criteria or information; and/or (8) any other increase in TRANSYSTEMS' costs, or the time required for completion of the Services due to "Force Majeure Event" as set forth in Section 4 hereof, a change in applicable law or any other cause beyond TRANSYSTEMS' reasonable control, then the TRANSYSTEMS' Compensation and/or the Completion Date, if any, shall be equitably adjusted and TRANSYSTEMS shall be paid, and TRANSYSTEMS' Compensation shall be adjusted by, an amount equal to the additional costs to TRANSYSTEMS resulting therefrom.

Advanced Bio Energy
Revised January 7, 2005 3

SECTION 3 CLIENT'S RESPONSIBILITIES

Client shall do the following in a timely manner so as not to delay the performance of the Services by TRANSYSTEMS:

SECTION 3.1 CLIENT REPRESENTATIVE. Designate a person to act as Client's representative with respect to the Services to be rendered under this Agreement. Such person shall have complete authority to transmit instructions, receive information, interpret, and define CLIENT'S policies and decisions with respect to TRANSYSTEMS' Services for the Project.

SECTION 3.2 PROJECT INFORMATION. Provide all criteria, all available information pertinent to the Project, and full information as to CLIENT'S requirements for the Project. CLIENT agrees that TRANSYSTEMS shall be entitled to rely upon the accuracy and completeness of all such information.

SECTION 3.3 PROJECT ACCESS. Arrange for access to and make all provisions for TRANSYSTEMS to enter upon public and private property as required for TRANSYSTEMS to perform services under this Agreement. All such access shall be provided without condition or restriction unacceptable to TRANSYSTEMS nor shall TRANSYSTEMS be required to indemnify or insure any third party as a condition to such access.

SECTION 3.4 CLIENT PARTICIPATION. Examine all studies, reports, sketches, drawings, specification, proposals, and other documents presented by TRANSYSTEMS, obtain advice of an attorney, insurance counselor and other CONSULTANT as CLIENT deems appropriate for such examination and render in writing decisions pertaining thereto within a reasonable time so as not to delay the services of TRANSYSTEMS.

SECTION 3.5 NOTICES. Give prompt written notice to TRANSYSTEMS whenever CLIENT observes or other wise becomes aware of any development that affects the scope or timing of TRANSYSTEMS' Services, or any defect or non-conformance in the Services by TRANSYSTEMS (or its independent professional associates or CONSULTANTS) or in the work of any contractor or other party performing or providing work or services in connection with the Project.

SECTION 3.6 ADDITIONAL SERVICES. When CLIENT deems it necessary or appropriate for Additional Services to be performed in connection with any phase of the Project, CLIENT shall furnish or direct TRANSYSTEMS to provide, Additional Services as stipulated in Section 2 of this Agreement or other services as required.

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SECTION 3.7 LICENSES, PERMITS, ETC. Provide TRANSYSTEMS with any necessary governmental allocations or priorities, obtain all permits and licenses required to be taken out in the name of CLIENT which are necessary for the performance of the Services and, except where such permits, processes or licenses are by the terms of Exhibit A the responsibility of TRANSYSTEMS, obtain any permits, processes and other licenses which are required for the Project or the Services.

SECTION 3.8 OTHER DUTIES. Perform any other duties, obligations or responsibilities of the CLIENT set forth elsewhere in this Agreement, including, but not limited to, the obligation to make the payments called for under Section 5 hereof and perform any responsibilities and duties of the Client which may identified on Exhibit B, if any.

SECTION 3.9 DEFECTS IN SERVICES. The Client shall promptly report to TRANSYSTEMS any defects or suspected defects in TRANSYSTEMS' services of which the Client becomes aware, so that TRANSYSTEMS may take measures to minimize the consequences of such a defect. The Client further agrees to impose a similar notification requirement on all contractors in its Client/Contractor contract and shall require all subcontracts at any level to contain a like requirement. Failure by the Client and the Client's contractors or subcontractors to notify TRANSYSTEMS shall relieve TRANSYSTEMS of the costs of remedying the defects above the sum such remedy would have cost had prompt notification been given when such defects were first discovered.

SECTION 3.10 TAXES. Pay for and be responsible for all taxes incurred in connection with the Project, regardless of whether such taxes are assessed against CLIENT, TRANSYSTEMS or others.

SECTION 3.11 CONTRACTOR INSURANCE AND INDEMNITY REQUIREMENTS. The Client agrees, in any construction contracts in connection with this Project, to require all contractors of any tier to carry statutory Workers Compensation, Employers Liability Insurance and appropriate limits of Commercial General Liability Insurance (CGL). The Client further agrees to require all contractors to have their CGL policies endorsed to name the Client, TRANSYSTEMS and its subconsultants as Additional Insureds and to provide Contractual Liability coverage sufficient to insure the hold harmless and indemnity obligations assumed by the contractors. The Client shall require all contractors to furnish to the Client and TRANSYSTEMS certificates of insurance as evidence of the required insurance prior to commencing work and upon renewal of each policy during the entire period of construction. In addition, the Client shall require that all contractors will, to the fullest extent permitted by law, indemnify and hold harmless the Client, TRANSYSTEMS and its subconsultants from and against any damages, liabilities or costs, including reasonable attorneys' fees and defense costs, arising out of or in any way connected with the Project, including all claims by employees of the contractors.

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SECTION 3.12 UNAUTHORIZED CHANGES. In the event the Client, the Client's contractors or subcontractors, or anyone for whom the Client is legally liable makes or permits to be made any changes to any reports, plans, specifications or other construction documents prepared by TRANSYSTEMS without obtaining TRANSYSTEMS's prior written consent, the Client shall assume full responsibility for the results of such changes. therefore the Client agrees to waive any claim against TRANSYSTEMS and to release TRANSYSTEMS from any liability arising directly or indirectly from such changes.

In addition, the Client agrees, to the fullest extent permitted by law, to indemnify and hold harmless TRANSYSTEMS from any damages, liabilities or costs, including reasonable attorneys' fees and costs of defense, arising from such changes.

In addition, the Client agrees to include in any contracts for construction appropriate language that prohibits the Contractor or any subcontractors of any tier from making any changes or modifications to TRANSYSTEMS' construction documents without the prior written approval of TRANSYSTEMS and that further requires the Contractor to indemnify both TRANSYSTEMS and the Client from any liability or cost arising from such changes made without such proper authorization.

SECTION 3.13 CONSTRUCTION MANAGEMENT. If the Client elects to employ a construction manager, the Client will promptly notify TRANSYSTEMS of the duties, responsibilities and authority of the construction manager and their relationship to the duties, responsibilities and authority of TRANSYSTEMS.

If the employment of such construction manager by the Client results in additional time or expense to TRANSYSTEMS to prepare for, coordinate with or respond to the construction manager, TRANSYSTEMS shall be entitled to an equitable adjustment in fees and time for performance of these services.

SECTION 3.14 COSTS. Bear all costs incident to compliance with the requirements of this Section 3.

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SECTION 4 PERIODS OF SERVICE, COMPLETION DATE, FORCE MAJEURE

SECTION 4.1 PERIOD OF SERVICE. The provisions of this Section 4 and the various rates of compensation for TRANSYSTEMS' Services provided for elsewhere in this Agreement have been agreed to in anticipation of the orderly and continuous progress of the Project. TRANSYSTEMS' obligation to render Basic Services hereunder will extend for a period which may reasonably be required for the Project including any Additional Services, extra or changed work and required extensions thereto.

SECTION 4.2 COMPLETION DATE. It is estimated, but not guaranteed, that the Basic Services will be completed on or about 30 March 2005 (the "Completion Date"). If the Completion Date is exceeded through no fault of TRANSYSTEMS, all rates, measures and compensation provided herein shall be subject to equitable adjustment. The Completion Date (and TRANSYSTEMS' obligation to complete the Basic Services by such date) is subject to reasonable extensions for the performance of Additional Services, Constructive Changes or other extra work and is subject to reasonable extensions for a Force Majeure Event.

SECTION 4.3 TIMELINESS OF PERFORMANCE. The Client and TRANSYSTEMS are aware that many factors outside TRANSYSTEMS' control may affect TRANSYSTEMS' ability to complete the services to be provided under this Agreement. TRANSYSTEMS will perform these services with reasonable diligence and expediency consistent with sound professional practices.

SECTION 4.4 NOTICE OF DELAY. If TRANSYSTEMS becomes aware of delays due to time allowances for review and approval being exceeded, delay by the Contractor, the Client, TRANSYSTEMS or any other cause beyond the control of TRANSYSTEMS, which will result in the schedule for performance of TRANSYSTEMS' services not being met, TRANSYSTEMS shall promptly notify the Client. If the Client becomes aware of any delays or other causes that will affect TRANSYSTEMS' schedule, the Client shall promptly notify TRANSYSTEMS. In either event, TRANSYSTEMS' schedule for performance of its services shall be equitably adjusted.

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SECTION 4.5 FORCE MAJEURE. For purposes hereof, a "Force Majeure Event" shall mean the occurrence of a failure or delay due to circumstances beyond TRANSYSTEMS' control including, without limitation, acts of God, acts of a public enemy, fires, floods, earthquakes, wars, civil disturbances, sabotage, accidents, insurrection, blockages, embargoes, storms, explosions, catastrophes, epidemics, damage to the Project, lack of access to Project, unavailable utilities and power, water, labor disputes, CLIENT's failure to timely perform its obligations under this Agreement or other causes beyond TRANSYSTEMS' control.

SECTION 5 TRANSYSTEMS' COMPENSATION

SECTION 5.1 COMPENSATION FOR SERVICES AND EXPENSES OF TRANSYSTEMS IN CONNECTION WITH BASIC SERVICES

SECTION 5.1.1 FOR BASIC SERVICES. As compensation for the performance of the Basic Services rendered by TRANSYSTEMS under Section 1, CLIENT shall pay TRANSYSTEMS, in accordance with the provisions of Section 5.4, as follows:

SECTION 5.1.2 FOR REIMBURSABLE EXPENSES IN CONNECTION WITH BASIC SERVICES. In addition to payments provided for in paragraph 5.1.1, CLIENT shall pay TRANSYSTEMS for all "Reimbursable Expenses" incurred by TRANSYSTEMS in connection with the Basic Services at the rates or in amounts set forth on TRANSYSTEMS' Schedule of Rates and Expenses which is then in effect. For purposes of this Agreement, "Reimbursable Expenses" are those costs and expenses incurred by TRANSYSTEMS in connection with the performance of the Services under this Agreement, including, but not limited to, the costs and expenses incurred by TRANSYSTEMS for travel, reproduction, mailing costs, computer time, supplies and materials, taxes, transportation, telephone or communications, independent professional associates, CONSULTANTS, SUBCONSULTANTS and any other expense items which are described on TRANSYSTEMS' Schedule of Rates and Expenses which is then in effect.]

SECTION 5.2 COMPENSATION FOR SERVICES AND EXPENSES OF TRANSYSTEMS IN CONNECTION WITH ADDITIONAL SERVICES

SECTION 5.2.1 FOR ADDITIONAL SERVICES. As compensation for the performance of the Additional Services rendered by TRANSYSTEMS under Section 2, CLIENT shall pay TRANSYSTEMS, in accordance with the provisions of Section 5.4, as follows:

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Additional Services of TRANSYSTEMS principals and employees engaged directly on the Project and rendered pursuant to Section 2, on the basis of TRANSYSTEMS' Schedule of Rates and Expenses then in effect.

SECTION 5.2.2 FOR REIMBURSABLE EXPENSES IN CONNECTION WITH ADDITIONAL SERVICES. In addition to payments provided for in paragraph 5.2.1., CLIENT shall pay TRANSYSTEMS for all Reimbursable Expenses incurred in connection with all Additional Services at the rates or in amounts set forth on TRANSYSTEMS' Schedule of Rates and Expenses in effect at the time such Additional Services are performed.

SECTION 5.3 TRANSYSTEMS' SCHEDULE OF RATES AND EXPENSES. TRANSYSTEMS' initial Schedule of Rates and Expenses is attached hereto as Schedule 1. The rates and expense provisions set forth on this initial Schedule of Rates and Expenses shall be the rates and expense provisions in effect from the date of this Agreement until December 31 of this year. TRANSYSTEMS will revise the Schedule of Rates and Expenses annually and will submit the revised Schedule of Rates and Expenses to CLIENT in December of each year that this Agreement is in effect and such revised Schedule of Rates and Expenses shall automatically become effective with regard to this Agreement and the Services performed under this Agreement on January 1st of the next calendar year.

SECTION 5.4 MONTHLY INVOICES. TRANSYSTEMS shall submit monthly statements for Basic and Additional Services rendered and for Reimbursable Expenses incurred. The statements will be based upon the amount of time spent and costs and expenses incurred by TRANSYSTEMS during the period covered by each such statement. CLIENT shall make prompt monthly payments in response to TRANSYSTEMS' monthly statements.

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SECTION 5.5 OTHER PROVISIONS CONCERNING PAYMENTS.

SECTION 5.5.1 INTEREST, SUSPENSION OF SERVICES. If CLIENT fails to make any payment due TRANSYSTEMS for services and expenses within thirty (30) days after receipt of TRANSYSTEMS' statement therefor, TRANSYSTEMS shall be entitled interest on the unpaid amounts due TRANSYSTEMS at the lesser of: i) 1.5 % per month; or, ii) the highest rate of interest allowed under applicable law. The entire unpaid balance due TRANSYSTEMS shall bear said rate of interest from the thirtieth day after CLIENT's receipt of TRANSYSTEMS' statement, until the entire unpaid balance has been paid to TRANSYSTEMS. In addition to being entitled to interest, TRANSYSTEMS may, after giving seven (7) days written notice to CLIENT, suspend services under this Agreement until TRANSYSTEMS has been paid in full all amounts due for Services, expenses, and charges.

SECTION 5.5.2 PAYMENTS AFTER TERMINATION BY CLIENT. In the event of termination by CLIENT under paragraph 7.1 upon the completion of any phase of the Basic Services, payments due TRANSYSTEMS for all Services rendered and expenses incurred through such phase shall constitute total payment for such Basic Services. In the event of such termination by CLIENT during any phase of the Basic Services, TRANSYSTEMS will be paid for Services rendered and expenses incurred during that phase through the date of termination on the basis of TRANSYSTEMS' Schedule of Rates and Expenses. In the event of any such termination (whether at the completion of a phase or otherwise), TRANSYSTEMS shall also be reimbursed for the charges of independent professional associates and CONSULTANTS employed by TRANSYSTEMS to render Basic Services or Additional Services and all reasonable demobilization costs incurred by TRANSYSTEMS, including any cancellation charges by independent professional associates, CONSULTANTS and others performing or furnishing Services on the Project through TRANSYSTEMS, and TRANSYSTEMS shall be paid for all Additional Services performed and unpaid Reimbursable Expenses incurred through the date of the termination.

SECTION 5.5.3 PAYMENTS AFTER TERMINATION BY TRANSYSTEMS. In the event of termination by TRANSYSTEMS under paragraph 7.1, TRANSYSTEMS will be paid for all Services rendered and expenses incurred during that phase through the date of termination on the basis of TRANSYSTEMS' Schedule of Rates and Expenses. In addition, TRANSYSTEMS shall also be reimbursed for the charges of independent professional associates and CONSULTANTS employed by TRANSYSTEMS to render Basic Services or Additional Services and all reasonable demobilization costs incurred by TRANSYSTEMS, including any cancellation charges by independent professional associates, CONSULTANTS and others performing or furnishing Services on the Project through TRANSYSTEMS, and TRANSYSTEMS shall be paid for all Additional Services performed and unpaid Reimbursable Expenses incurred through the date of the termination.

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SECTION 5.5.4 RECORDS. Records of TRANSYSTEMS' salary costs pertinent to TRANSYSTEMS' compensation under this Agreement will be kept in accordance with generally accepted accounting practices. If Client desires to have copies of such records, copies will be made available to CLIENT upon Client's request prior to final payment for TRANSYSTEMS' services. TRANSYSTEMS shall be reimbursed the cost of any such copies by CLIENT.

SECTION 5.5.5 COST FACTORS. Whenever a factor is applied to salary costs or other expenses in determining compensation payable to TRANSYSTEMS that factor will be adjusted periodically and equitably to reflect changes in the various elements that comprise such factor. All such adjustments will be in accordance with generally accepted accounting practices as applied on a consistent basis by TRANSYSTEMS and consistent with TRANSYSTEMS' overall compensation practices and procedures.

SECTION 6 OPINIONS OF COST AND SCHEDULE

SECTION 6.1 OPINIONS OF COST AND SCHEDULE. Since TRANSYSTEMS has no control over the cost of labor, materials, equipment or services furnished by others, or over the resources provided by others to meet construction or other Project schedules, or over the methods of others in determining prices, or over competitive bidding or market conditions, TRANSYSTEMS' opinions of probable costs (including probable Total Project Costs and Construction Cost) and of Project schedules shall be made on the basis of TRANSYSTEMS' experience and qualifications and represent TRANSYSTEMS' best judgment as an experienced and qualified professional engineer, familiar with the construction industry; but TRANSYSTEMS cannot and does not guarantee that proposals, bids or actual Project costs (including Total Project Costs or Construction Costs) will not vary from opinions of probable cost prepared by TRANSYSTEMS or that actual schedules will not vary from the projected schedules prepared by TRANSYSTEMS. TRANSYSTEMS makes no warranty, express or implied, that the bids or the negotiated cost of the work will not vary from TranSystems' opinion of probable construction cost.

SECTION 7 GENERAL CONSIDERATIONS

SECTION 7.1 TERMINATION. The obligation to provide further services under this Agreement may be terminated by either party upon thirty (30) days written notice to the other party in the event of substantial failure by the other party to perform in accordance with the terms hereof through no fault of the terminating party.

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SECTION 7.1.1 REPLACEMENT OF TRANSYSTEMS. If TRANSYSTEMS for any reason is not allowed to complete all the services called for by this Agreement, TRANSYSTEMS shall not be held responsible for the accuracy, completeness or constructability of the construction documents prepared by TRANSYSTEMS if used, changed or completed by the Client or by another party. Accordingly, the Client agrees, to the fullest extent permitted by law, to indemnify and hold harmless TRANSYSTEMS, its officers, directors, employees and subconsultants (collectively, TRANSYSTEMS) from any damages, liabilities or costs, including reasonable attorneys' fees and defense costs, arising or allegedly arising from such use, change or completion by any other party of any construction documents prepared by TRANSYSTEMS.

SECTION 7.2 REUSE OF DOCUMENTS. All documents, drawings, sketches, studies, analysis, information, schedules, estimates, reports and other items prepared or furnished by TRANSYSTEMS (or TRANSYSTEMS' independent professional associates and CONSULTANTS) pursuant to this Agreement, including, but not limited to Drawings and Specifications, are instruments of service in respect of the Project and TRANSYSTEMS shall retain an ownership and property interest therein whether or not the Project is completed. Provided, however, that such documents, drawings, sketches, studies, analysis, information, schedules, estimates, reports and other items are not intended or represented to be suitable for reuse by CLIENT or others on extensions of the Project or on any other project. Any reuse without written verification or adaptation by TRANSYSTEMS for the specific purpose intended will be at CLIENT's sole risk and without liability or legal exposure to TRANSYSTEMS, or to TRANSYSTEMS' independent professional associates or CONSULTANTS, and CLIENT does hereby, to the fullest extent permitted by law, indemnify and hold harmless TRANSYSTEMS, TRANSYSTEMS' officers, employees and agents and TRANSYSTEMS' independent professional associates and CONSULTANTS from all claims, suits, demands, damages, liabilities, losses, expenses and costs, including but not limited to reasonable attorney's fees and other costs of defense, arising out of or resulting therefrom. The provisions of this Section 7.2 shall survive the termination of this Agreement.

SECTION 7.3 DELIVERY OF ELECTRONIC FILES. In the event that Client requests any electronic deliverables under this agreement, TRANSYSTEMS and Client shall execute a separate CADD agreement. Otherwise, in accepting and utilizing any drawings, reports and data on any form of electronic media generated and furnished by TRANSYSTEMS, the Client agrees that all such electronic files are instruments of service of TRANSYSTEMS, who shall be deemed the author, and shall retain all common law, statutory law and other rights, including copyrights.

The Client agrees not to reuse these electronic files, in whole or in part, for any purpose other than for the Project. The Client agrees not to transfer these electronic files to others without the prior written consent of TRANSYSTEMS. The Client further agrees to waive all claims against TRANSYSTEMS resulting in any way from any unauthorized changes to or reuse of the electronic files for any other project by anyone other than TRANSYSTEMS.

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Electronic files furnished by either party shall be subject to an acceptance period of sixty (60) days during which the receiving party agrees to perform appropriate acceptance tests. The party furnishing the electronic file shall correct any discrepancies or errors detected and reported within the acceptance period. After the acceptance period, the electronic files shall be deemed to be accepted and neither party shall have any obligation to correct errors or maintain electronic files.

The Client is aware that differences may exist between the electronic files delivered and the printed hard-copy construction documents. In the event of a conflict between the signed construction documents prepared by TRANSYSTEMS and electronic files, the signed or sealed hard-copy construction documents shall govern.

In addition, the Client agrees, to the fullest extent permitted by law, to indemnify and hold harmless TRANSYSTEMS, its officers, directors, employees and subconsultants (collectively, TRANSYSTEMS) against all damages, liabilities or costs, including reasonable attorneys' fees and defense costs, arising from any changes made by anyone other than TRANSYSTEMS or from any reuse of the electronic files without the prior written consent of TRANSYSTEMS.

Under no circumstances shall delivery of electronic files for use by the Client be deemed a sale by TRANSYSTEMS, and TRANSYSTEMS makes no warranties, either express or implied, of merchantability and fitness for any particular purpose. In no event shall TRANSYSTEMS be liable for indirect or consequential damages as a result of the Client's use or reuse of the electronic files.

SECTION 7.4 STANDARD OF PRACTICE, WARRANTIES. Services performed by the TRANSYSTEMS under this Agreement will be conducted in a manner consistent with the level of care, diligence and skill ordinarily possessed and exercised by members of the profession currently practicing in the same locality under similar conditions. Except as expressly set forth above, no other representations, expressed or implied, and no warranty or guarantee, express or implied, is included in this Agreement, or in any document, drawing, sketch, study, analysis, schedule, estimate, report, opinion, specification and other item prepared or furnished by TRANSYSTEMS (or TRANSYSTEMS' independent professional associates and TRANSYSTEMSs) pursuant to this Agreement.

SECTION 7.5 LIMITATION OF RESPONSIBILITY, JOB SITE SAFETY/TECHNIQUES. Neither the professional activities of TRANSYSTEMS, nor the presence of TRANSYSTEMS or its employees and subconsultants at a construction/project site, shall relieve the General Contractor of its obligations, duties and responsibilities including, but not limited to, construction means, methods, sequence, techniques or procedures necessary for performing, superintending and coordinating the Work in accordance with the contract documents and any health or safety precautions required by any regulatory agencies. TRANSYSTEMS and its personnel have no authority to exercise any control over any construction contractor or its employees in connection with their work or any health or safety programs or procedures. The Client agrees that the General Contractor shall be solely responsible for jobsite safety, and warrants that this intent shall be carried out in the Client's contract with the General Contractor. The Client also agrees that the Client, TRANSYSTEMS and the

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TRANSYSTEMS' subconsultants shall be indemnified by the General Contractor and shall be made additional insureds under the General Contractor's policies of general liability insurance. In addition, TranSystems shall not be responsible for (i) the failure of any other project party to fulfill their respective contractual responsibilities and obligations to client or to comply with Federal, State or local laws, rules, regulations or codes; (ii) for the schedules of any of the other project parties or the failure of any of the other project parties to carry out their work in accordance with their respective agreements. TranSystems shall not have control over or charge of and shall not be responsible for acts or omissions of the other project parties, or their agents or employees, or of any other persons performing portions of the work on the project.

SECTION 7.6 INSURANCE.

SECTION 7.6.1 TRANSYSTEMS INSURANCE. TRANSYSTEMS shall maintain throughout the duration of this Agreement insurance in the following amounts and will, upon request of the CLIENT furnish a copy of certification thereof:

(a) Worker's Compensation and Employer's Liability Worker's Compensation Statutory Employer's Liability $500,000/$500,000/$500,000

(b) Comprehensive Automobile Liability $1,000,000 combined single limit Bodily Injury and Property Damage

$1,000,000 -  per occurrence
$2,000,000 -  annual aggregate
$2,000,000 -  product / completed operations per occurrence
$1,000,000 -  personal injury / advertising liability

(d) Umbrella/Excess Liability $1,000,000 - per occurrence $1,000,000 - annual aggregate

(e) Professional Liability Insurance in an amount of $1,000,000 per claim and annual aggregate.

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SECTION 7.6.2 CLIENT INSURANCE. If, pursuant to the provisions of Exhibit B, CLIENT is required to obtain certain insurance coverages, CLIENT agrees to obtain and maintain throughout the duration of this Agreement (or, as applicable, cause its contractors to obtain and maintain) such insurance in the coverages and the amounts specified on Exhibit B. CLIENT will furnish TRANSYSTEMS with a copy of certification of such insurance. TRANSYSTEMS' interests shall be covered under any such insurance coverage.

SECTION 7.7 LIABILITY AND INDEMNIFICATION.

SECTION 7.7.1 GENERAL. Having considered the potential liabilities that may exist during the performance of the Services, the benefits of the Project, and TRANSYSTEMS' Compensation for the performance of the Services, and in consideration of the promises contained in this Agreement, CLIENT and TRANSYSTEMS agree to allocate and limit such liabilities in accordance with the provisions of this Section 7.7.

SECTION 7.7.2 TRANSYSTEMS INDEMNIFICATION.

TRANSYSTEMS agrees, to the fullest extent permitted by law, to indemnify and hold the CLIENT harmless from any damage, liability or cost (including reasonable attorney's fees and costs of defense) to the extent caused by TRANSYSTEMS' negligent acts, errors or omissions in the performance of professional services under this Agreement and those of its subconsultants or anyone for whom TRANSYSTEMS is legally liable. TRANSYSTEMS is not obligated to indemnify the CLIENT in any manner whatsoever for the CLIENT'S own negligence.

SECTION 7.7.3 CLIENT INDEMNIFICATION. The CLIENT agrees, to the fullest extent permitted by law, to indemnify and hold TRANSYSTEMS harmless from any damage, liability or cost (including reasonable attorney's fees and costs of defense) to the extent caused by the CLIENT'S negligent acts, errors or omissions and those of its contractors, subcontractors or consultants or anyone for whom the CLIENT is legally liable, and arising from the project that is the subject of this Agreement. The CLIENT is not obligated to indemnify TRANSYSTEMS in any manner whatsoever for TRANSYSTEMS' own negligence.

SECTION 7.7.4 CONTRACTORS INDEMNIFICATION. CLIENT agrees to cause each of its other contractors on the Project to include an indemnification provision in CLIENT's contract with each such contractor that indemnifies and holds harmless TRANSYSTEMS and any of its officers or employees from all loss, damage, cost or expense to the extent caused by such contractors (or its employees or subcontractors) negligence or willful misconduct.

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SECTION 7.7.5 EMPLOYEE CLAIMS. TRANSYSTEMS shall indemnify CLIENT against any loss, damage, cost or expense arising out of claims by TRANSYSTEMS' employees (unless such claim arises out of or as a result of the negligence of CLIENT, its employees, agents or contractors). CLIENT shall indemnify TRANSYSTEMS against any loss, damage, cost or expense arising out of claims by CLIENT'S employees (unless such claim arises out of or as a result of the negligence of TRANSYSTEMS, it's employees, agents or subcontractors).

SECTION 7.7.6 CONSEQUENTIAL DAMAGES. To the fullest extent permitted by law, TRANSYSTEMS shall not, in any event, be liable to CLIENT for any special, indirect, incidental or consequential damages, including, but not limited to, damages from delay, distribution, loss of product, loss of use, loss of profits or revenue or increased cost of operation, the cost of capital or the cost of purchased or replacement equipment, systems or power.

SECTION 7.7.7 LIMITATION OF LIABILITY. To the fullest extent permitted by law, TRANSYSTEMS' total liability to CLIENT for all claims, losses, damages and expenses resulting or arising in any way from the performance of the Services (including TRANSYSTEMS' indemnity obligations hereunder) shall not exceed the total compensation received by TRANSYSTEMS under this Agreement or the limits of any professional liability requirements set forth in Section 7.6.1(e) whichever is less.

SECTION 7.7.8 SURVIVAL. The terms and conditions of this Section 7.7 shall survive the termination of this Agreement and/or the completion of the Services.

SECTION 7.7.9 BETTERMENT. If, due to TRANSYSTEMS's negligence, a required item or component of the Project is omitted from TRANSYSTEMS's construction documents, TRANSYSTEMS shall not be responsible for paying the cost required to add such item or component to the extent that such item or component would have been required and included in the original construction documents. In no event will TRANSYSTEMS be responsible for any cost or expense that provides betterment or upgrades or enhances the value of the Project.

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SECTION 7.7.10 PROTECTION FROM SUPPLANTING CONSULTANT. In consideration of the risks and rewards involved in this Project, the Client agrees, to the maximum extent permitted by law, to indemnify and hold harmless TRANSYSTEMS from any damages, liabilities or costs, including reasonable attorneys' fees and defense costs, arising or allegedly arising from any negligent acts, errors or omissions by any prior consultants employed by the Client on this project and from any claims of copyright or patent infringement by TRANSYSTEMS arising from the use of any documents prepared or provided by the Client or any prior consultants of the Client. The Client warrants that any documents provided to TRANSYSTEMS by the Client or by the prior consultants may be relied upon as to their accuracy and completeness without independent investigation by the supplanting consultant and that the Client has the right to provide such documents to the supplanting consultant free of any claims of copyright or patent infringement or violation of any other party's rights in intellectual property.

SECTION 8 SPECIAL PROVISIONS, EXHIBITS AND SCHEDULES

SECTION 8.1 SPECIAL PROVISIONS. THIS AGREEMENT IS SUBJECT TO NO SPECIAL PROVISIONS. ALL TERMS ARE IDENTIFIED IN THE CONTRACT AND THE ATTACHED PROPOSAL LETTER.

SECTION 8.2 CONTRACT DOCUMENTS. This Agreement consists of this contract document and the following Exhibits and Schedules, which are attached to and made a part of this Agreement:

Exhibit A - Project Description and Basic Services Exhibit B - TRANSYSTEMS' Schedule of Rates and Expenses

SECTION 8.3 ENTIRE AGREEMENT. This Agreement together with the Exhibits and Schedules identified above constitute the entire agreement between CLIENT and TRANSYSTEMS and supersede all prior written or oral understandings. This Agreement and said Exhibits and Schedules may only be amended, supplemented, modified, or canceled by a duly executed written instrument.

Nothing contained in this Agreement shall create a contractual relationship with or a cause of action in favor of a third party against either the Client or TRANSYSTEMS. TRANSYSTEMS' services under this Agreement are being performed solely for the Client's benefit, and no other party or entity shall have any claim against TRANSYSTEMS because of this Agreement or the performance or nonperformance of services hereunder. The Client and TRANSYSTEMS agree to require a similar provision in all contracts with contractors, subcontractors, subconsultants, vendors and other entities involved in this Project to carry out the intent of this provision.

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TRANSYSTEMS shall not be required to execute any documents subsequent to the signing of this Agreement that in any way might, in the sole judgment of TRANSYSTEMS, increase the Consultant's contractual or legal obligations or risks, or adversely affect the availability or cost of its professional or general liability insurance.

SECTION 8.4 HAZARDOUS MATERIALS. Unless otherwise provided in this Agreement, TRANSYSTEMS shall have no responsibility for the discovery, presence, handling, removal or disposal of or exposure of persons to hazardous materials in any form at the Project site. However, TRANSYSTEMS shall report to CLIENT the presence and location of any hazardous material which it notices or which an engineer of similar skill and experience should have noticed.

SECTION 8.5 ATTORNEYS FEES. In the event that either party hereto employs an attorney to enforce any provision of this Agreement or to collect damages for default or breach of this Agreement, or pursue claims in litigation or arbitration, the prevailing party in any such action shall be entitled to recover from the other such attorneys' fees and costs of collection as the prevailing party may expend or incur with respect thereto. In the event that a settlement is reached between the parties before a final decision in any such litigation or arbitration, then neither party shall be entitled to recover its attorneys fees or costs from the other and neither party shall be responsible for the other party's attorney's fees or costs, unless otherwise agreed by the parties.

SECTION 8.6 DISPUTES. In the event a dispute arises between TRANSYSTEMS and CLIENT regarding the application or interpretation of any provision of this Agreement, or quality of Services by TRANSYSTEMS, the aggrieved party shall promptly notify the other party to this Agreement of the dispute, but in no event more than 20 days after such dispute arises. If the parties fail to resolve the dispute within 20 days after receipt of such notice, each party shall, within five days thereafter, proceed to non-binding mediation, with each party to bear its own costs and attorneys' fees (except as otherwise provided in
Section 8,5 above) and the parties shall share equally in the cost of the mediator. In the event that the mediation is unsuccessful, the aggrieved party may elect to litigate its dispute with the other party. All disputes shall be governed by the laws of the State of Missouri and the jurisdiction and venue for litigation between the parties shall be solely and exclusively in Jackson County, Missouri, or the United States District Court for the Western District of Missouri.

It is intended by the parties to this Agreement that TRANSYSTEMS' services in connection with the Project shall not subject TRANSYSTEMS' individual employees, officers or directors to any personal legal exposure for the risks associated with this Project. Therefore, and notwithstanding anything to the contrary contained herein, the Client agrees that as the Client's sole and exclusive remedy, any claim, demand or suit shall be directed and/or asserted only against TRANSYSTEMS, an interstate corporation, and not against any of TRANSYSTEMS' individual employees, officers or directors.

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SECTION 8.7 INDEPENDENT CONTRACTOR. TRANSYSTEMS shall be an independent contractor with respect to the Services to be performed hereunder. Neither TRANSYSTEMS, nor its independent professional associates, CONSULTANTS or subcontractors, nor the employees of any of the foregoing, shall be deemed to be the servants, employees or agents of CLIENT.

SECTION 8.8 REPRESENTATIONS AND REMEDIES. TRANSYSTEMS makes no representations, covenants, warranties or guarantees, express or implied, other than those expressly set forth herein. IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE SPECIFICALLY EXCLUDED. The parties' rights, liabilities, responsibilities and remedies with respect to the Services, whether in contract or otherwise, shall be exclusively those expressly set forth in this Agreement.

SECTION 8.9 ASSIGNMENT, SUBCONTRACTORS. This Agreement shall not be assignable by either party without the prior written consent of the other party hereto, except that it may be assigned without such consent to the successor of either party, or to a person, firm or corporation acquiring all or substantially all of the business assets of such party or to a wholly owned subsidiary of either party, but such assignment shall not relieve the assigning party of any of its obligations under this Agreement. No assignment of this Agreement shall be valid until this Agreement shall have been assumed by the assignee. This Agreement shall be binding upon and shall inure to the benefit of the TRANSYSTEMS' and CLIENT's respective successors and assigns. Nothing in this
Section 8.9 shall prevent or be deemed to prevent TRANSYSTEMS from employing, contracting with or engaging independent professional associates, CONSULTANTS and other subcontractors to perform or assist in the performance of the Services.

SECTION 8.10 NOTICES. All notices or communications pertaining to this Agreement shall be in writing and shall be sufficient when mailed or delivered to the address specified below:

If to CLIENT:
Advanced Bio Energy
1850 Foxridge Road
Orono, MN 55356
Attn: Revis Stephenson

If to TRANSYSTEMS:
TranSystems Corporation
2400 Pershing Road, Suite 400
Kansas City, MO 64108
Attn: Tim Rock

Advanced Bio Energy
Revised January 7, 2005 19

Nothing in this Section 8.10 shall be construed to restrict the transmission of routine communications between representatives of CLIENT and TRANSYSTEMS.

SECTION 8.11 INTERPRETATION.

(a) This Agreement shall be governed by and interpreted in accordance with the laws of Missouri.

(b) Headings and titles of sections, paragraphs and other subparts of this Agreement are for convenience of reference only and shall not be considered in interpreting the text of this Agreement. Modifications or amendments to this Agreement must be in writing and executed by duly authorized representatives of each party.

(c) Unless specifically stated to the contrary therein, indemnities against, releases from and limitations on liability expressed in this Agreement shall apply even in the event of the fault, negligence or strict liability of the party indemnified or released or whose liability is limited and shall extend to the officers, directors, employees, agents, licensors and related entities of such party.

(d) In the event that any portion or all of this Agreement is held to be void or unenforceable, the parties agree to negotiate in good faith to reach an equitable agreement which shall effect the intent of the parties as set forth in this Agreement.

SECTION 8.12 CERTIFICATES, GUARANTEES AND WARRANTIES. TRANSYSTEMS shall not be required to sign any documents, no matter by whom requested, that would result in TRANSYSTEMS having to certify, guarantee or warrant the existence of conditions whose existence TRANSYSTEMS cannot ascertain. The Client also agrees not to make resolution of any dispute with TRANSYSTEMS or payment of any amount due to TRANSYSTEMS in any way contingent upon TRANSYSTEMS signing any such certification.

As used herein, the word "certify" shall mean an expression of TRANSYSTEMS' professional opinion to the best of its information, knowledge and belief, and does not constitute a warranty or guarantee by TRANSYSTEMS.

SECTION 8.13 EXECUTION OF DOCUMENTS. TRANSYSTEMS shall not be required to execute any documents subsequent to the signing of this Agreement that in any way might, in the sole judgment of TRANSYSTEMS, increase the TRANSYSTEMS' risk or the availability or cost of its professional or general liability insurance.

Advanced Bio Energy
Revised January 7, 2005 20

IN WITNESS WHEREOF, the parties hereto have made and executed this Agreement as of the 5th day of MARCH 2005.

Advanced Bio Energy TranSystems Corporation

By:   /s/Revis L. Stephenson, III       By:   /s/Timothy P. Rock
   ------------------------------          -------------------------------------

Printed Name: Revis L. Stephenson III   Printed Name:  TIMOTHY P. ROCK
              -----------------------                 --------------------------

Title:        Chairman                  Title:  Asst. Vice President
       ---------------------------            ----------------------------------

Advanced Bio Energy
Revised  January 7, 2005                21

EXHIBIT "A"
BASIC SERVICES

Advanced Bio Energy
Revised January 7, 2005 22

March 7, 2005

Mr. Revis Stephenson
Advanced Bio Energy
1850 Foxridge Road
Orono, MN 55356

RE: Fairmont Nebraska Ethanol Facility Engineering - Concept

Mr. Stephenson,

On February 25, 2005, TranSystems was contacted by yourself, to look at a potential location for an Ethanol facility in Fairmont, Nebraska. It is our understanding, per phone conversation, that it is your intent to procure the old short line railroad (Filmore and Western) that would lead into your primary site for an ethanol facility. Additionally, it is your intent to use the existing Filmore and Western right-of-way to add the necessary trackage to service your planned facility. It is also our understanding that this line is currently serviced by the BNSF.

Since this phone call, we have prepared an aerial of the location and are prepared to perform additional services necessary to start to develop some concepts to service your planned facility.

At this time, we would like to have enter into contract with Advanced Bio Energy for the initial concept phase of work associated with this Fairmont Nebraska Ethanol facility. Upon acknowledgement of this contract and scope of services, we are prepared to provide the following:

- Perform Site visit of location
- Perform cursory investigation into BNSF requirements and Filmore and Western
- Exhibit with Filmore and Western right-of-way and track to support facility
- Exhibit with other track options (as necessary)
- Cost estimates for design and construction of track.
- Identification of additional scope items necessary to pursue the procurement of the Filmore and Western line.

The exhibits will provide a conceptual view of a track design over an aerial of the area. The concepts drawings will be laid out to allow for a capacity that will match your requirements and the requirements set forth by the BNSF.

To execute this work, our estimated fee based on the standard rate sheet attached to this service agreement is $7,000.00. This fee will be based on actual time and materials spent to perform the scope of work outlined above. I am confident, we can provide the services required to make this a successful project. We have standing relationships with all the Class I railroads and have a ready and capable staff to meet your needs. We appreciate the opportunity to work on this project for you and look forward to taking this project to the next phase.

Respectfully Submitted,

Timothy P. Rock
Asst Vice President
TranSystems Corporation

Advanced Bio Energy
Revised January 7, 2005 23

EXHIBIT "B"
SCHEDULE OF RATES AND EXPENSES

                                                               2005 HOURLY RATES
--------------------------------------------------------------------------------
PRINCIPAL/ENGINEER V                                                 $  216
ENGINEER IV                                                          $  159
ENGINEER III                                                         $  114
ENGINEER II                                                          $   93
ENGINEER I                                                           $   78
ARCHITECT IV                                                         $  155
ARCHITECT III                                                        $  103
PLANNER IV                                                           $  161
PLANNER III                                                          $  119
PLANNER II                                                           $   77
PLANNER I                                                            $   67
SCIENTIST IV                                                         $  159
SCIENTIST III                                                        $   98
SCIENTIST II                                                         $   77
SCIENTIST I                                                          $   67
TECHNICIAN V                                                         $  132
TECHNICIAN IV                                                        $   90
TECHNICIAN III                                                       $   76
TECHNICIAN II                                                        $   63
TECHNICIAN I                                                         $   54
SURVEYOR IV                                                          $  105
SURVEYOR III                                                         $   76
SURVEYOR II                                                          $   55
SURVEYOR I                                                           $   47
THREE-PERSON SURVEY CREW                                             $  180
TWO-PERSON SURVEY CREW                                               $  128
INSPECTOR V                                                          $  162
INSPECTOR IV                                                         $  102
INSPECTOR III                                                        $   76
INSPECTOR II                                                         $   63
INSPECTOR I                                                          $   53
ADMINISTRATOR IV                                                     $  158
ADMINISTRATOR III                                                    $  120
ADMINISTRATOR II                                                     $   59
ADMINISTRATOR I                                                      $   51
CLERICAL III                                                         $   67
CLERICAL II                                                          $   57
CLERICAL I                                                           $   45

SUB-CONTRACTED LABOR, MATERIAL TESTING EQUIPMENT, PRINTING AND TECHNICAL PHOTOGRAPHY, AND ALL OTHER DIRECT JOB COSTS TO BE PAID AT COST. VEHICLE MILEAGE TO BE PAID AT THE CURRENT IRS RATE PER MILE. THE RATES SET FORTH ON THIS INITIAL SCHEDULE OF RATES SHALL BE THE RATES PROVISIONS IN EFFECT FROM THE DATE OF THIS AGREEMENT UNTIL DECEMBER 31 OF THIS YEAR. TRANSYSTEMS WILL REVISE THE SCHEDULE OF RATES ANNUALLY AND WILL SUBMIT THE REVISED SCHEDULE OF RATES WHICH SHALL AUTOMATICALLY BECOME EFFECTIVE WITH REGARD TO THIS AGREEMENT AND THE SERVICES PERFORMED UNDER THIS AGREEMENT ON JANUARY 1st OF THE NEXT CALENDAR YEAR.

Advanced Bio Energy
Revised January 7, 2005 24

Exhibit 10.7

(U.S. ENERGY LOGO)

ENERGY MANAGEMENT AGREEMENT
(Site Development and Operations)

The purpose of this Agreement is to set forth the understanding and agreement between U.S. Energy Services, Inc. ("U.S. Energy") and Advanced Bio Energy ("Client") related to the provision of energy management services.

PROJECT DESCRIPTION,: Client is developing a 100 million gallon per year ethanol plant ("Plant") to be located near Fairmont, Nebraska. The Plant will have peak electric usage of approximately 9 MW and will consume approximately 9,000 MMBtu of natural gas per day.

U.S. ENERGY RESPONSIBILITIES,: U.S. Energy will provide consulting and energy management services for supplies of natural gas and electricity for the Plant. These services will be provided during the construction of the Plant ("Construction Period"), and after the Construction Period when the Plant has been placed in service ("Completion Date"). The Completion Date shall be determined when the Plant begins producing ethanol. These services will be provided to Client upon request:

A. Energy Infrastructure Advisory Services During the Construction Period

1. Provide an economic comparison of receiving natural gas distribution service. U.S. Energy will provide preliminary engineering cost estimates, route drawings, and project timeline related to constructing pipeline facilities.

In the event that a direct connect pipeline option is selected, U.S. Energy will submit a tap request to the pipeline. In addition, U.S. Energy will also attempt to negotiate an option for Client to minimize interconnect costs through the purchase of firm transportation to the Plant. Engineering and construction management services related to constructing a pipeline may be provided by U.S. Energy's sister company U.S. Energy Engineering, Inc. on a fee basis.

2. Determine whether firm, interruptible, or a blend of transportation entitlement will provide the lowest burnertip cost. Factors that will be considered include pipeline credits for the new interconnect, cost of an alternate fuel system, and availability of specific receipt point capacity.

3. Provide advisory services to Client regarding electric pricing and service agreements.

a. Analyze the electric service proposals along with primary, secondary and generation options and, recommend an electric sourcing strategy and plan. The plan may include a combination of electric supplier agreement and/or installation of on-site generation.

/S/RLS

                                               U.S. Energy Initials /s/GM
                                                                    -----
                                                          Initials /s/RLS
                                                                   ------

b.     Negotiate final electric service agreements that meet the pricing
       and reliability requirements of Client, including options for
       third party access to electric metering.

c. Prepare and implement a regulatory strategy, if required and if an alternative power supplier is selected. Any attorney fees required for the specific purpose of obtaining regulatory approval for an alternative power supplier, if any, will be over and above U.S. Energy's monthly fee herein, and must be pre-approved by Client.

4. Evaluate the proposed electric distribution infrastructure (substation) for reliability, future growth potential and determination of the division of ownership of facilities between the utility and the Plant.

5. Investigate economic development rates, utility grants, equipment rebates and other utility programs that may be available.

B. On-Going Energy Management Services Following the Completion Period

U.S. Energy will provide the following services at Client's request:

1. Provide natural gas supply information to minimize the cost of natural gas purchased. This will include acquiring multiple supply quotes and reporting to Client the various supply index and fixed prices. U.S. Energy will not take title to Client gas supplies, but will communicate supply prices and potential buying strategies.

2. Negotiate with pipelines, utilities, other shippers, and suppliers to provide transportation, balancing, and supply agreements that meet Client's performance criteria at the lowest possible cost.

3. Develop and implement a price risk management plan that is consistent with Client's pricing objectives and 'risk profile.

4. Provide daily nominations to the suppliers, pipeline, and other applicable shippers for natural gas deliveries to the Plant. This will include daily electronic confirmations to Client of all nominations and actual daily usage. U.S. Energy will utilize customer or utility supplied telemetering to obtain actual usage data.

5. Provide a consolidated monthly invoice to Client that reflects all applicable natural gas and electric energy costs. U.S. Energy will be responsible for reviewing, reconciling and paying all shipper, supplier and utility invoices.

6. Provide a monthly usage report of electric energy consumption and costs. Also, where applicable and available from the utility, obtain monthly interval electric load data and provide monthly load profile graphs.

-2-

                                                      U.S. Energy Initials /s/GM
                                                                           -----
                                                                 Initials /s/RLS
                                                                          ------

7.     On-going review and renegotiation of electric service costs, as required.
       This may include:

a. Completing and evaluating annual proposals to identify the most reliable and economic third party electric energy supply.

b. Identifying new service tariffs or opportunities to renegotiate the service agreement to provide lower costs.

c. Identifying on-site generation opportunities as market conditions change.

d. Provide a monthly projection of energy (natural gas and electricity) and annual summaries.

8. Provide natural gas and electric energy operating budgets for the Plant.

9. Perform initial sales tax exemption audits for energy consumption costs as required and allowed by NEBRASKA tax laws.

TERM: The initial term of this Agreement shall commence on April 1, 2005 and continue until twenty-four (24) months after the Plant's Completion Date. The Agreement shall be month-to-month after the initial term. This Agreement may be terminated by either party effective after the initial term upon sixty (60) days prior written notice. Client shall remain responsible for payment and performance associated with any and all transportation, supply, and storage transactions entered into by U.S. Energy and authorized by Client, prior to termination.

FEES: U.S. Energy's fee for services described under Section A above (Energy Infrastructure Advisory Services During the Construction Period) shall be $35,000, payable upon execution of this Agreement. Once the plant is operational and services are provided under Section B (On-Going Energy Management Services Following the Completion Period), the fee will be $3,500 per month, plus pre-approved travel expenses.

U.S. Energy's fee will increase 4% per year on the annual anniversary date of the Plant's Completion Date.

BILLING AND PAYMENT: On the first of the month, U.S. Energy shall invoice Client for the work to be completed that month and Client shall pay U.S. Energy within ten (10) days of receipt of invoice.

TAX: Client will be responsible for payment of all taxes including, but not limited to, all sales, use, excise, BTU, heating value and other taxes associated with the purchase and/or transport of natural gas or electricity and the provision of services hereunder.

CONFIDENTIALITY: U.S. Energy shall not divulge to any other person or party any information developed by U.S. Energy hereunder or revealed to U.S. Energy pursuant to

-3-

                                                      U.S. Energy Initials /s/GM
                                                                           -----
                                                         _______ Initials /s/RLS
                                                                          ------

this Agreement, unless such information is (a) already in U.S. Energy's
possession and such information is not known by U.S. Energy to be subject to
another Confidentiality Agreement, or (b) is or becomes generally available to
the public other than as a result of an unauthorized disclosure by U.S. Energy,
its officers, employees, directors, agents or its advisors, or (c) becomes
available to U.S. Energy on a non-confidential basis from a source which is not
known to be prohibited from disclosing such information to U.S. Energy by legal,
contractual or fiduciary obligation to the supplier, or (d) is required by U.S.
Energy to be disclosed by court order, or (e) is permitted by Client. All such
information shall be and remain the property of Client unless such information
is subject to another Confidentiality Agreement, and upon the termination of
this Agreement, U.S. Energy shall return all such information upon Client's
request. Notwithstanding anything to the contrary herein, U.S. Energy shall not
disclose any information which is in any way related to this Agreement or U.S.
Energy's services hereunder without first discussing such proposed disclosure
with Client.

NOTICES: Any formal notice, request or demand which a party hereto may desire to give to the other respecting this Agreement shall be in writing and shall be considered as duly delivered as of the postmark date when mailed by ordinary, registered or certified mail by said party to the addresses listed below. Either party may, from timeto-time, identify alternate addresses at which they may receive notice during the term of this Agreement by providing written notice to the other party of such alternate addresses.

Client:                    Revis L. Stephenson
                           Advanced Bio Energy

                           Attn:  1850 Fox Ridge Road, Orono, MN 55356
                                  ------------------------------------

U.S. Energy:               U.S. Energy Services, Inc.
       (Payment)           c/o US Bank SDS 12-1449
                           Account #: 173100561153 P.O.
                           Box 86
                           Minneapolis, MN 55486

       (Notices):          U.S. Energy Services, Inc. 1000
                           Superior Blvd, Suite 201 Wayzata,
                           MN 55391
                           Attn: Contract Administration

ASSIGNMENT OR AMENDMENT: The Agreement may not be assigned or amended without the written consent of U.S. Energy and Client.

APPLICABLE LAW: The Agreement shall be construed in accordance with the laws of the State of Minnesota.

-4-

                                                      U.S. Energy Initials /s/GM
                                                                           -----
                                                         _______ Initials /s/RLS
                                                                          ------

ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement-among the
parties pertaining to the subject matter hereof and supersedes all prior
Agreements and understanding pertaining hereto.

Agreed to and Accepted by:

Advanced Bio Energy

By:      /s/Revis L. Stephenson, III
   -----------------------------------------------------------------


Name:          Revis L. Stephenson III
     ---------------------------------------------------------------
(Print)

Title:   Chairman
       -------------------------------------------------------------

Date:    3/31/05
      --------------------------------------------------------------

U.S. Energy Services, Inc.

By:      /s/Gail Mcminn
    -----------------------------------------------------------

Name:      Gail Mcminn
     ---------------------------------------------------------------
(Print)


Title:     Vice President
       -------------------------------------------------------------


Date:      4-5-05
       -------------------------------------------------------------

-5-

(U.S. ENERGY LOGO)

AGENCY AUTHORIZATION AGREEMENT

ADVANCED BIO ENERGY ("Client"), Fairmont, Nebraska, desires to engage the services of U.S. Energy Services, Inc. ("U.S. Energy") to manage its energy supplies for its facilities.

Client and U.S. Energy agree on the following terms and conditions:

1. APPOINTMENT OF U.S. ENERGY AS CLIENT'S AGENT Client agrees to appoint U.S. Energy as its agent, for purposes of managing its energy supplies for its facilities referred to above. U.S. Energy accepts its appointment as Client's agent for these purposes.

2. LIMITATIONS ON THE AUTHORITY OF U.S. ENERGY U.S. Energy has the authority to deal with third parties on behalf of Client, in connection with energy-related matters, in its capacity as Client's agent.

COMMUNICATION AND INFORMATION SHARING -- U.S. Energy shall keep Client fully informed on a regular basis with regard to U.S. Energy's activities as the manager of Client's energy supplies. At the request of Client, U.S. Energy shall immediately provide Client with any and all or other information related to U.S. Energy's activities as the manager of Client's energy supplies.

4. RELEASE OF ENERGY CONSUMPTION RECORDS AND BILLS -- This Agency Agreement serves as authorization for the release of Client's energy consumption records and bills from utilities, pipelines and suppliers to U.S. Energy.

5. TERM -- This Agreement shall begin upon execution of the Agreement. Either party shall have the right to terminate this Agreement for any reason, with 30 days notice in writing, without recourse to the other party. Client shall remain responsible for payment and performance associated with any and all transportation, supply, and storage transactions entered into by U.S. Energy and authorized by Client, prior to termination.

6. SERVICES -- U.S. Energy shall perform the following services for Client:

(a) Solicit bids for, negotiate, execute and administer energy supply contracts. Administration of said contracts shall include:
- Placing daily and monthly nominations
- Reviewing invoices for accuracy and approving for payment
- Providing timely notices

/s/RLS

Exhibit 10.8

{ICM LOGO} 310 N. FIRST ST.
PO Box 397
COLWICH, KS 67030
PHONE: 316.796.0900
FAX: 316.796.0570

April 14, 2005

Attn:
Revif Stephenson
Advanced BioEnergy, LLC
1850 Fox Ridge
Road Orono, MN 55356

Subject: Environmental Permitting Proposal for a 100 MM (gas) GPY Ethanol Manufacturing Plant in Fairmont, NE

Dear Mr. Stepenson:

Per your request for assistance in securing state approval to start construction, the attached is my estimate to prepare the appropriate environmental applications and plans for a selected site. You will be required to obtain other local permits in order to start construction -- this proposal is strictly for environmental permitting. All billing will be on a Time & Material basis at the following rates:

PERSONNEL                                                RATE
--------------------------------------------------------------------------------
    Engineering Specialist I                             $ 150 per hour
    Process Engineer I                                   $ 150 per hour
    Engineering Specialist II                            $ 110 per hour
    Designer II                                          $ 70 per hour
    Administrative                                       $ 46 per hour

ICM's billing for time is based on the above hourly rates with no additional markup. Travel and travel expenses are billed at cost plus 15%. Other billings may include subcontractor and/or necessary consultant costs and will be billed biweekly on a time & material plus 15% basis. Applicable sales tax, if any, will be added accordingly. Any use, gross receipts, or other excise taxes and charges imposed by any federal, state, or municipal law, ordinance, or regulation upon the provision of services covered under this Agreement are also not included and will be billed as required.

ICM's experience is that a Time & Materials type agreement is generally preferable for the client due to the unexpected circumstances that may arise during environmental permitting. Additional costs may be imposed on the project if ICM is required to address significant public comment and/or assist in lengthy agency negotiations regarding specific permit terms and conditions.

The following costs (if required) are not included in the proposal: permit application fees, amended submittals, ambient air sampling, continuous emission monitoring, health risk assessment, additional air dispersion modeling iterations for additional designs and/or layout changes, water quality sampling and lab analysis, individual permit for storm water associated with construction, Title V operating permit application, acquisition of emission offsets, public hearings, and State requested meetings.

- AIR CONSTRUCTION PERMITS:
It has been determined that the proposed facility will be a synthetic minor source of emissions. If it turns out that the facility is a major source or that it requires ambient air quality simulation modeling, LAER, or BACT analyses, then additional costs will be incurred.

- WATER PERMITS:
It is expected that the proposed facility will be subject to state water discharge regulations. As noted above, my cost estimate assumes that a General Permit for Storm Water Associated with Construction Site Activity will be adequate for the project site construction. In addition, the state program will require that permits be obtained for water supply and discharges for non-contact process wastewater and hydrostatic testing discharges.

ICM appreciates the opportunity to provide this proposal and cost quotation to assist with project environmental permitting. ICM and our subcontractors are extremely well qualified to assist in securing the required environmental permits and approvals for the proposed facility. Our technical strength is our extensive ethanol industry experience, broad understanding of the environmental control requirements impacting the ethanol industry, and solid working knowledge of environmental regulations. I am confident that ICM will provide the necessary technical and regulatory skills to help make your new ethanol plant a success.

Respectfully submitted,

/s/ WILLIAM J. RODDY

William J. Roddy
Manager of Environmental Affairs

AUTHORIZATION TO PROCEED: IF THE ABOVE TERMS AND THE ATTACHED SERVICE AGREEMENT ARE ACCEPTABLE, YOUR SIGNATURE ON THE SIGNATORY PAGE OF THE SERVICES AGREEMENT WILL SIGNIFY YOUR APPROVAL FOR ICM TO PROCEED WITH THE PREPARATION OF THE PERMIT APPLICATION PACKAGES.

ATTACHMENT A

                                                                                                                   Check Box
                                                                                                                    for ICM
                                                                                                                     Task
----------------------------------------------------------------------------------------------------------------------------
BEFORE GROUND BREAKING                                                               ESTIMATED COST                /X/
----------------------------------------------------------------------------------------------------------------------------
    201.  Air Construction Permit       (Modeling Costs Included)                    $15,000 - $25,000             /X/
----------------------------------------------------------------------------------------------------------------------------
    202.  Stormwater Notice of Intent (General Permit) - Construction                $1,000                        /X/
----------------------------------------------------------------------------------------------------------------------------
    203.  Stormwater Pollution Prevention Plan - Construction                        $4,500                        /X/
----------------------------------------------------------------------------------------------------------------------------
    204.  State Historical Society Research                                          $600                          /X/
----------------------------------------------------------------------------------------------------------------------------
    205.  Endangered Species Research                                                $600                          / /
----------------------------------------------------------------------------------------------------------------------------
    206.  Health Risk Assessment (state dependent)                                   $10,000 - $50,000             / /
----------------------------------------------------------------------------------------------------------------------------
          Above Ground Storage Tank General Permit Application                                                     / /
    207.    (state dependent)                                                        $3,000
----------------------------------------------------------------------------------------------------------------------------
    208.  Odor Action Plan (Optional)                                                $2,500                        / /
----------------------------------------------------------------------------------------------------------------------------
    209.  Basic Environmental Assessment (state dependent)                           $6,500 - $10,000              / /
----------------------------------------------------------------------------------------------------------------------------
    211.  Corps of Engineers Section 404 Permit (if wetlands are present)            $1,500 - $5,000               / /
----------------------------------------------------------------------------------------------------------------------------
    295.  Environmental Project Management                                           $1,000 - $5,000               See notes

BEFORE OPERATION
============================================================================================================================
          Industrial Well Permit/Registration
    221.  (ICM recommends application prior to construction)                         $3,000 - $7,000               / /
----------------------------------------------------------------------------------------------------------------------------
          Water Discharge Permit (NPDES, POTW, Irrigation, and/or                    $4,000 - $10,000              / /
          Irrigation                                                                 $2,500                        / /
    222.     Plan)                                                                   $1,200                        / /
----------------------------------------------------------------------------------------------------------------------------
    223.   Hydrostatic Testing Water Discharge Permit                                $5,000                        / /
----------------------------------------------------------------------------------------------------------------------------
    224.  Stormwater Notice of Intent (General Permit) - Industrial                  $10,000 - 20,000              / /
          Operation
----------------------------------------------------------------------------------------------------------------------------
    225.   Stormwater Pollution Prevention Plan - Industrial Operation
----------------------------------------------------------------------------------------------------------------------------
    226.   Risk Management Plan
----------------------------------------------------------------------------------------------------------------------------
          Spill Prevention Controls and Countermeasures Plan                         $6,000 - $12,000              / /
    227.     (Pe Certification Not Included)                                         $3,500                        / /
----------------------------------------------------------------------------------------------------------------------------
    228.   Public Water Supply Permit                                                $1,000                        / /
----------------------------------------------------------------------------------------------------------------------------
    229.   Permit from the Bureau of Alcohol, Tobacco, and Firearms                  $2,500 $3,000                 / /
----------------------------------------------------------------------------------------------------------------------------
    231.   County Health Department Septic System Permit (geological work
    extra)
                                                                                     $8,000 - $12,000
30 DAYS AFTER STARTUP                                                                $2,500                        / /
============================================================================================================================
    241.  Conditionally Exempt Small Quantity Generator Qualification                                              / /
----------------------------------------------------------------------------------------------------------------------------
    242.  Tank Notification (state dependent)

180 DAYS AFTER STARTUP (AFTER EMISSIONS TESTING)
----------------------------------------------------------------------------------------------------------------------------
    251.  Air Permit to Operate                                                      $10,000                       / /

ANNUALLY AFTER STARTUP
----------------------------------------------------------------------------------------------------------------------------
    261.  Annual Emission Inventory                                                  $3,500 per year               / /
----------------------------------------------------------------------------------------------------------------------------
    262.  Tier 2 Reporting                                                           $2,500 per year               / /
----------------------------------------------------------------------------------------------------------------------------
    263.  Form R Reporting                                                           $3,000 per year               / /

GENERAL NOTES:
A.) PROJECT MANAGEMENT COSTS ARE NOT AN OPTION, BUT ARE INCURRED DURING THE COURSE OF PERMIT PREPARATION. SEE EXPLANATION IN ATTACHMENT B.
B.) ALL EXTERNAL SERVICES (I.E. PROFESSIONAL ENGINEER, HYDROGEOLOGIST, LABORATORY TEST, ETC.) WILL BE BILLED AT COST PLUS 15%.
C.) PERMIT APPLICATION FEES, AMENDED SUBMITTALS, AMBIENT AIR SAMPLING, CONTINUOUS EMISSION MONITORING, HEALTH RISK ASSESSMENT, ADDITIONAL AIR DISPERSION MODELING ITERATIONS FOR ADDITIONAL DESIGNS AND/OR LAYOUT CHANGES, TITLE V OPERATING PERMIT APPLICATION, ACQUISITION OF EMISSION OFFSETS, PUBLIC HEARINGS, AND STATE REQUESTED MEETINGS ARE ADDITIONAL.
D.) WATER QUALITY SAMPLING AND LAB ANALYSIS (IF NECESSARY) AND INDIVIDUAL PERMIT FOR STORM WATER ASSOCIATED WITH CONSTRUCTION ARE ADDITIONAL TO THOSE LISTED ABOVE. THE ABOVE RATES ASSUME A REPUTABLE SUPPLIER HAS BEEN SELECTED BY THE CLIENT FOR THE

Project: Advanced BioEnergy, Fairmont NE Confidential - Attachment A 4/14/05

ENTIRE WATER TREATMENT PROGRAM (BOILER, COOLING TOWER, RO, MULTI-MEDIA, WATER SOFTENERS, AND ASSOCIATED EQUIPMENT) REGARDING STATE/LOCAL PERMITTING NEEDS.
E.) IF IT IS DETERMINED THAT A PERMIT, PLAN, OR APPLICATION IS NOT APPLICABLE OR REQUIRED THEN ONLY THE TIME AND MATERIALS FOR MAKING THE DETERMINATION WILL BE BILLED.

Project: Advanced BioEnergy, Fairmont NE Confidential - Attachment A 4/14/05

ATTACHMENT B

EXPLANATION OF PERMITS AND SCOPE OF WORK

201.) AIR CONSTRUCTION PERMIT:
An air construction permit application package will be prepared for the owners review and approval. It will then be submitted to the state for review. The air construction permit allows a company to build, initially operate, and test a new source of air pollution. This permit typically is valid from 12 to 24 months (depending on which state) and extensions may be granted. Application fees for the construction permit vary by state and will be paid by the owner. The air permit must be obtained before construction (pouring concrete) and in some states before dirt work can occur.

202.) STORM WATER NOTICE OF INTENT (GENERAL PERMIT) - CONSTRUCTION
A Storm Water Notice of Intent must be submitted before grading can begin. This Notice is to make the state aware that grading activities are to begin. State and federal storm water programs are in place to protect rainfall, snow melt, and other storm water from becoming contaminated with pollutants. The amount of time that this permit must be submitted prior to work commencing varies by state. ICM will prepare the NOI for the owners review. Any fees associated with the NOI will be paid by the owner.

203.) STORM WATER POLLUTION PREVENTION PLAN - CONSTRUCTION
A Storm Water Pollution Prevention Plan for Construction details how storm waters will be protected from exposure to pollutants. Also, included in this plan are details to prevent excessive soil erosion until vegetation begins growing. Once the final plant footprint and grading plan have been prepared by the civil engineering company, ICM will prepare the construction Plan that must be maintained on the construction site before grading commences.

204.) STATE HISTORICAL SOCIETY RESEARCH
State Historical Society checks for the existence of historical sites (including Indian burial grounds) at the site where construction and industry are to occur. ICM will initiate a historical review in the surrounding area and obtain state approval that there are no historical issues associated with the site. Any filing fees are the owner's responsibility.

205.) ENDANGERED SPECIES RESEARCH
Endangered Species reviews consist of a record of review for protected species (state and federal listed endangered or threatened), rare natural communities, state lands and waters in the project area, including review by personnel representing state parks, preserves, recreation areas, wetlands, fisheries, and wildlife. ICM will initiate an endangered species review in the surrounding area and obtain state approval that there are no endangered species issues associated with the site. Any filing fees are the owner's responsibility.

Project: Advanced BioEnergy, Fairmont NE Confidential - Attachment B 4/14/05

206.) HEALTH RISK ASSESSMENT
A Health Risk Assessment looks at the potential for risks to human health due to the existence and operation of the facility. The requirement for this assessment varies by state. If this is required, ICM will contract with a consultant skilled in the preparation of approvable health risk assessment techniques for the given state. Any filing fees are the owner's responsibility.

207.) ABOVE GROUND STORAGE TANK GENERAL PERMIT APPLICATION,
Storage tanks are typically registered through the state environmental agency and the fire marshal for environmental and fire safety reasons. ICM in cooperation with the tank manufacturing and construction company prepare the required permit application package. Any filing fees are the owner's responsibility.

208.) ODOR ACTION PLAN
An Odor Action Plan is a "Good Neighbor" approach to looking at community concerns regarding odor from a facility. If requested by the owner, ICM will prepare an "Odor Action Plan." The plan typically contains methods of validating the odor complaint and mitigation of the odor.

209.) BASIC ENVIRONMENTAL ASSESSMENT
Some States require that reasonably available environmental data about a project's environmental be researched and presented in a document made available for public review and comment. If required by a state, ICM will prepare the Environmental Assessment. In some cases, experts may need to be retained. Any filing fees are the owner's responsibility.

211.) CORPS OF ENGINEERS SECTION 404 PERMIT
Building on or disturbing land that is wet even part of the year may qualify the land as a "wetland" under federal regulations. The section 404 permit allows and/or restricts activities that can occur with the land. This permit also addresses development of areas in floodplains. ICM will prepare the permit application. Any filing fees are the owner's responsibility.

221.) INDUSTRIAL WELL PERMIT/REGISTRATION,

Industrial Well Permit/Registration is typically required for construction of a new well and use of water in large quantities from a well or body of water so that interference with neighboring wells does not occur. ICM will prepare the permit/registration application. Depending on the state, this permit may require that ICM retain independent and local consultants skilled in water allocation approval. Any filing fees are the owner's responsibility.

222.) WATER DISCHARGE PERMIT (NPDES, POTW, IRRIGATION, AND/OR IRRIGATION PLAN)
These permits are associated with discharging wastewater from the facility (typically process wastewater, cooling tower blow-down, boiler blow-down, etc.) to either a body of water (NPDES), a public treatment system (POTW), and/or to ground applications in the form of irrigation.

If irrigation to crop land occurs an

Project: Advanced BioEnergy, Fairmont NE Confidential - Attachment B 4/14/05

Irrigation Plan is also necessary, and details how the irrigation amounts and contents will affect certain soils and crops. These permits aid in the prevention of pollutants from entering natural waters and crops where natural ecosystems and food supplies can be endangered. ICM will prepare the water discharge permit application package depending on the customer's requirements. Any filing fees are the owner's responsibility.

223.) HYDROSTATIC TESTING WATER DISCHARGE PERMIT
A Hydrostatic Testing Water Discharge Permit allows for the temporary discharge of water used for testing the integrity of vessels and equipment as a part of construction activities. ICM will prepare the discharge permit application package or obtain approval from a facility (POTW) licensed to discharge such water. Any filing fees are the owner's responsibility.

224.) STORM WATER NOTICE OF INTENT (GENERAL PERMIT) -- INDUSTRIAL OPERATION
A Storm Water Pollution Prevention Plan for Industrial Operation is similar to the same permit for construction in that it details how storm waters will be protected from exposure to pollutants after the plant begins operation. Also, included in this plan are details to prevent excessive soil erosion until vegetation begins growing. ICM will prepare the NOI for the owners review. Any fees associated with the NOI will be paid by the owner.

225.) STORM WATER POLLUTION PREVENTION PLAN -- INDUSTRIAL OPERATION
A Storm Water Pollution Prevention Plan for Industrial Operation is similar to the same permit for construction in that it details how storm waters will be protected from exposure to pollutants, however, this plan focuses on normal industrial activities at the site after the plant begins operation. ICM will prepare the Industrial SWPPP for the owner's review.

226.) RISK MANAGEMENT PLAN
This goal of this plan is to prevent the release of chemicals that could cause serious harm to human health or the environment and to reduce the severity of releases that do occur. Included in this plan are an offsite consequence analysis, a five-year accident history, an accident prevention program, and an emergency response program. This plan requires updating at least every five years, and within 6 months of making certain changes onsite. Ethanol plants typically require a risk management plan that covers storing denaturants and/or ammonia. This plan must be in place prior to storage of covered chemicals on-site. ICM will prepare the Risk Management Plan for the owner's review.

227.) SPILL PREVENTION CONTROLS AND COUNTERMEASURES PLAN
Spill Prevention Controls and Countermeasures Plans are written to address the likelihood and prevention of spills of petroleum based substances as well as what actions are to be taken in the event that a spill does occur. Proposed regulations require the plan be in place before storage of denaturant. ICM will prepare the SPCC Plan for the owner's review.

Project: Advanced BioEnergy, Fairmont NE Confidential - Attachment B 4/14/05

228.) PUBLIC WATER SUPPLY PERMIT
There are two reasons to receive a Public Water Supply Permit. One, if there are more than 25 people on a site the access to the public water supply must be permitted, and two, if the process water is going to come from the public water supply, the quantity of water will necessitate a permit. Public water supplies can not always supply quantities required by some industries, and other sources may need to be evaluated. ICM will prepare the Public Water Supply Permit for the owner's review.

229.) PERMIT FROM BUREAU OF ALCOHOL, TOBACCO, AND FIREARMS
This permit allows the facility to manufacture ethanol. In some states, registration with the state agency may also be required. ICM will prepare the BATF permit application for the owner's review. Any filing fees are the owner's responsibility.

231.) COUNTY HEALTH DEPARTMENT SEPTIC SYSTEM PERMIT
A septic system permit must be obtained if the sanitary sewer for a facility is to be tied into a leach field or septic pond instead of a local POTW. ICM will prepare the septic system permit application for the owner's review. Any filing fees are the owner's responsibility.

241.) CONDITIONALLY EXEMPT SMALL QUANTITY GENERATOR QUALIFICATION
The Resource Conservation and Recovery Act covers disposal of solid and hazardous wastes. Typically, ethanol plants generate such a small quantity of hazardous and solid waste that they are either classified as a conditionally exempt small quantity generator (CESQG). The classification is entirely dependent on the amount of hazardous waste generated and can change over time. While a Plan is not required by regulation for CESQG sources, a Plan can be prepared by ICM so that the plant can document on a monthly basis that it is a CESQG and therefore not subject to hazardous waste regulations.

242.) TANK NOTIFICATION
Tank Notifications are required by some states whenever a tank is placed into service, taken out of service, or the materials in the tank changes. ICM will prepare state and EPA notifications for the owner to submit pursuant to the New Source Performance Standards.

251.) AIR PERMIT TO OPERATE
The Air Operation Permit allows the company to operate the pollutant source within certain requirements detailed in the permit. This permit is typically valid for up to five years, and may be renewed. There is an annual fee associated with this permit that is based upon the previous year's actual emissions. ICM will prepare the Air Operating Permit Application package for the owner's review. Any filing fees are the owner's responsibility.

Project: Advanced BioEnergy, Fairmont NE Confidential - Attachment B 4/14/05

261.) ANNUAL EMISSION INVENTORY
This is an annual accounting to the governing agencies of actual pollution generated by the facility. Annual Air Operating Permit Fees are based upon this report. ICM will prepare the annual air emission inventory for the owner's review and submission. Any emission fees are the owner's responsibility.

262.) TIER 2 REPORTING
Tier 2 reporting lists hazardous chemicals stored on-site. The information provides the local emergency officials and the fire department that potential hazards exist at a site. This is an annual requirement. ICM will prepare the annual Tier II report for the owner's review and submission. Any submission fees are the owner's responsibility.

263.) FORM R REPORTING
Form R reporting is required for facilities that process or otherwise use certain listed chemicals above a regulated quantity. Reporting includes documenting all releases to the environment for those chemicals. This is an annual requirement. ICM will prepare the annual Form R report for the owner's review and submission. Any submission fees are the owner's responsibility.

295.) ENVIRONMENTAL PROJECT MANAGEMENT
This category is for ICM's project management costs and includes project management and miscellaneous work that arises during the preparation of deliverables not specifically anticipated. An example could be extended or unpredicted research at the request of the customer or agency.

Project: Advanced BioEnergy, Fairmont NE Confidential - Attachment B 4/14/05

SERVICE AGREEMENT
BETWEEN
ICM, INC.
AND
Advanced BioEnergy, LLC

THIS AGREEMENT is entered into between ICM, INC. hereinafter called "Consultant", and Advanced BioEnergy, LLC, hereinafter called "Client". In consideration of the covenants herein contained and upon subject to the mutual terms and conditions set forth herein, the parties hereto agree as follows:

1. SCOPE OF WORK - Consultant shall provide environmental consulting services for Client as outlined in ICM, INC.'s letter proposal Attachment 'B' to Revif Stephenson dated 4/14/05.

2. PAYMENT - For performance of the Services provided and as outlined in ICM, INC.'s letter proposal dated 4/14/05, Consultant shall invoice the Client according to the attached Schedule of Charges and Client shall pay Consultant at 310 N. 1st Street, Colwich, Kansas 67030 at the time specified herein. Terms for payment are net 30 days with 1.5% per month service charge on balances past due 30 days or more.

3. RESPONSIBILITY OF CONSULTANT - Consultant shall perform the Services as an independent contractor in accordance with its own methods, terms of this Agreement, and applicable laws and regulations. Consultant's liability arising out of or in connection with the Services shall be limited to performing at its own expense Services which are (1) deficient because of Consultant's failure to perform said Services in accordance with normal professional standards for performing services of a similar nature, and (2) reported in writing to Consultant within a reasonable time, not to exceed thirty (30) days from the completion of the Services in accordance with Article 5. Where Clients' project requires public agency approval, Consultant will attempt to assist in facilitating approval. However, Consultant does not assume responsibility for securing approval by such agency.

Because of the nature of the work involved in this proposal, the Client shall indemnify and save and hold harmless from and against any damage, liability, loss, cost or claim, whether occasioned by ICM, INC., its officers, employees and agents or any other person or persons arising out of, resulting from or related to, the performance of the work provided for in this agreement; provided, however, that Client shall not be obligated hereunder to indemnify, save and hold harmless Consultant, its officers, employees or agents against any damage, liability, loss, cost, or claim which arises out of or in connection with the intentional wrongful acts of, or the active negligence of, Consultant, or its officers, employees or agents.

4. ASSIGNMENT AND SUBCONTRACTING - This Agreement shall not be assigned by either party without the prior written approval of the other. Consultant may, subcontract portions of the services to a qualified subcontractor with prior approval of Client. Consultant agrees that Client will incur no duplication of costs as a result of any such subcontract.

5. COMPLETION AND ACCEPTANCE - Upon completion of the Services by Consultant, Client shall promptly provide Consultant with a written listing of any Services not completed. Any Services not listed by Client as incomplete in a listing delivered to Consultant within thirty (30) days of completion of said Services shall be deemed complete and accepted. With respect to Services listed by Client as incomplete, Consultant shall complete such Services and the above acceptance procedure shall be repeated.

SERVICE AGREEMENT
BETWEEN
ICM, INC.
AND
Advanced BioEnergy, LLC

Continued

6. TERMINATION - Client may terminate, with or without cause, upon thirty
(30) days written notice to Consultant. Absent Consultant's breach of this Agreement, Consultant shall be paid for Services rendered to the date of termination. Consultant may suspend or terminate this Agreement upon seven days written notice to Client in the event of substantial failure by Client to perform in accordance with the terms of this Agreement including, but not limited to, nonpayment of amounts owing to Consultant through no fault of Consultant or an unreasonable delay caused by Client or its agents.

7. DELAY; FORCE MAJEURE - Should performance of the Consultant's services be materially hampered by causes beyond its reasonable control, a Force Majeure results. Force Majeure includes, but is not restricted to, acts of contractors (other than Consultant's contractors), fires, floods, labor disturbances, and unusually severe weather.

If a Force Majeure occurs, Consultant will be granted a time extension based upon the effect of the Force Majeure upon Consultant's performance. The parties will also agree upon terms and conditions, including additional compensation, for continuation or termination of this Agreement. If no agreement is reached, a Force Majeure which continues for 120 days from the event of Force Majeure gives Consultant the option to terminate its obligations under this Agreement in accordance with Article 6.

8. GOVERNING LAW - This Agreement is to be governed by and construed in accordance with the laws of Kansas, any action at law or judicial proceeding instituted for the breach of this Agreement shall be resolved only in the State or Federal courts of the County of Sedgwick, State of Kansas.

9. AMENDMENTS - Any amendment to this Agreement shall be in writing and signed by Consultant and Client. In the event that any of the provisions of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the parties shall negotiate an equitable adjustment to the provisions with a view toward effecting the purpose of this Agreement. In the event that any of the provisions of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the parties shall negotiate an Agreement. In such a case, the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected thereby.

10. TESTIMONY - Should Consultant, its directors, officers or employees be required to testify or to submit information to any judicial or administrative hearing concerning matters in accordance with the Cost Schedule then in effect. Should Consultant be required by a third party to testify at such a hearing, Consultant shall notify Client as to the date and time of such hearing. Client agrees to save and hold harmless Consultant from and against all costs incurred as a result of a judicial or administrative hearing concerning the services provided for herein.

SERVICE AGREEMENT
BETWEEN
ICM, INC.
AND
Advanced BioEnergy, LLC

Concluded

11. TIME TO BAR TO LEGAL ACTION

A. PERIOD: All legal actions, including claims for indemnity, by either party against the other for failure to perform or to perform properly under this Agreement or any legal action however denominated essentially based upon such breach shall be barred 2 years from commencement of the period defined in B.

B. COMMENCEMENT OF PERIOD: The period commences when the claimant knew or should have known of its claim. But, in any event, the period commences for:

1. Client claims when Consultant's performance is substantially complete; and

2. Consultant claims when final payment by Client has been made.

12. ENTIRE AGREEMENT - In the event any services provided for herein are authorized by the client to be performed or caused to be performed by Consultant prior to the effective date of this Agreement, such Services shall be deemed to have been performed under this Agreement. This Agreement, including all attachments incorporated herein by reference, constitutes the entire Agreement between the parties. Any oral agreements, understandings, proposals, purchase orders or negotiations are intended to be integrated herein and to be superseded by the terms and conditions of this Agreement.

AUTHORIZATION TO PROCEED:

Advanced BioEnergy, LLC                        ICM, INC.

By:     /s/Revis L. Stephenson, III            By:     /s/William J. Roddy
    -------------------------------------          -----------------------------
Title: CHAIRMAN                                Title: ENV. MGR.
       ----------------------------------             --------------------------
Date:   4/26/05                                 Date: 4-14-05
      -----------------------------------             --------------------------

SCHEDULE OF CHARGES - 2004
(Customer)

PERSONNEL CHARGES

       Title                                             Billing Rate
------------------------------------------------------------------------
Engineering Specialist I                                         $150/hr
Process Engineer I                                               $150/hr
Engineering Specialist II                                        $110/hr
Designer II                                                       $70/hr
Administrative                                                    $46/hr

Expert Testimony rates quoted separately.

OTHER CHARGES

Photocopies (8.5x11)                                       $ 00.15
Photocopies (8.5x11)                                       $ 00.20
Facsimile transmissions (8.5x11)                           $ 00.15
Automobile (per mile)                                      $ 00.375

Outside services, equipment and facilities not furnished directly by ICM, INC., will be billed at cost plus 15%. Services may include, but are not limited to the following:

Rental of equipment and vehicles,
Outside laboratory testing,
Special fees, permits, insurance, etc., Transportation on public carriers,
Printing and photographic reproduction, Subcontractors to ICM, Inc.,
Meals, lodging, and
Shipping, telephone & other materials.

Payment Terms: Net thirty (30) days. Thereafter, one and one-half percent (1 1/2%) interest per month on the unpaid balance will be charged.

Exhibit 10.9

CONSULTING AGREEMENT

This Consulting Agreement (the "Agreement") is made this 22nd day of March, 2005 (the "Effective Date"), by and between BioEnergy Capital Consultants, LLC, a South Dakota limited liability company, with an address of 44095 212th Street, Lake Preston, South Dakota 57249 ("BioEnergy"), and Advanced BioEnergy, LLC, a Delaware limited liability company, with an address of 4424 South 177th Street,

Omaha, Nebraska 68135 ("Client").                                 179th /s/jp


                                    RECITALS

A. Client intends to develop, finance and construct an ethanol plant in or near Fairmont, Nebraska, with a capacity to produce 100 million gallons of ethanol per year (the "Project").

B. BioEnergy has a background in the development of value-added agriculture projects and is willing to provide services to Client based on this background.

NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, Client engages BioEnergy, and BioEnergy accepts engagement, upon the terms and conditions hereinafter set forth.

1. TERM. BioEnergy's engagement with Client shall commence as of the Effective Date and shall continue at least through the first day after the Loan Closing Date (as defined in section 3), unless properly terminated as provided herein. BioEnergy may terminate its services upon fourteen (14) days prior written notice to Client. Client may only terminate BioEnergy's services for "Cause". For purposes of this Agreement, "Cause" means BioEnergy's gross negligence or intentional misconduct in the performance of its duties under this Agreement, a known violation of the law, or a material broach of this Agreement by BioEnergy.

2. SERVICES. BioEnergy shall serve as Client's Project consultant. BioEnergy's service providers (described in section 8 of this Agreement) shall perform the following duties incident to that service subject to Client's approval:

a. Assist negotiations of contracts with various service and product providers;

b. Assist the planning of the Client's equity marketing effort, including, without limitation, preparation of written and visual equity marketing materials (including, but not limited to, a power point presentation), and training Client's officers and directors to conduct Client's equity marketing effort;

c. Assist the securing of debt financing for and commencement of construction of the Project;

d. Assist the education of local lenders including, without limitation, the preparation of a "banker's book" tailored to the Project; and

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e. Perform such other reasonably necessary duties as Client may request for the timely and successful securing of debt financing and commencement of construction or the Project, including without limitation, cooperating with the Client's personnel similarly engaged. Notwithstanding the forgoing, neither BioEnergy, its members, managers, officers, employees, nor agents shall itself or themselves be asked to, or actually, solicit an offer to buy, or accept an offer to sell, any equity security to be issued by Client.

Subject to Client's approval, BioEnergy shall determine the manner in which the services are to be performed and the specific hours to be worked by BioEnergy. Client shall rely on BioEnergy to work as many hours as may be reasonably necessary to fulfill BioEnergy's commitments under this Agreement.

3. SUBSEQUENT EQUITY OFFERINGS. If Client successfully reaches financial close of the equity and debt financing necessary to build the Project and this Agreement has not been terminated by Client pursuant to Section 1, Client agrees that BioEnergy shall then have the right to perform for Client the services set forth in Section 2 in the event that Client decides within the next FIVE (5) years from the date of this Agreement to raise a substantial amount of additional equity from individual investors living in or around the geographical area surrounding the Project. In that event, BioEnergy's fees for these additional services shall be negotiated by the parties but shall be commensurate with the fees set forth in this Agreement.

4. PAYMENT.

a. Client shall transfer to BioEnergy without payment therefore, Twenty-five Hundred (2,500) unrestricted membership units in Advanced BioEnergy, LLC (the "Unrestricted Units"), no later than ten (10) days following the Effective Date. Subsequent to the transfer of the Unrestricted Units, Client expects to perform a membership unit dividend wherein additional membership units shall be distributed for every one (1) membership unit issued and outstanding (the "Unit Dividend"). The terms of the Unit Dividend ore expected to be two (2) Units for every one (1) Unit issued and outstanding. However, BioEnergy acknowledges that the terms of the Unit Dividend are subject to change and shall not be finally determined by the Client's Board of Directors until alter the close of the seed capital offering. The Unrestricted Units shall be eligible to participate in the Unit Dividend on the same terms and conditions as all other memberships units issued and outstanding on the date of the Unit Dividend. No later than ten (10) days following the date of the Unit Dividend, Client shall transfer an additional Forty Two Thousand Five Hundred (42,500) membership units (the "Restricted Units") in Advanced BioEnergy, LLC to BioEnergy without payment therefore. If Client does not begin construction of the Project on or before December 31, 2007, and Client is no longer actively pursuing the Project, or if the Client files Articles of Dissolution before beginning construction of the Project, then BioEnergy shall return to Client the Restricted Units, without payment of consideration by Client. In this event, BioEnergy shall be entitled to receive any and all distributions made by the Client to all members with

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respect to the remaining membership units, including the Unrestricted Units and any additional membership units received as a result of the Unit Dividend, in proportion to all outstanding membership units. This restriction shall be noted on the certificates or other instruments evidencing ownership of the Restricted Units. Notwithstanding anything in this Agreement to the contrary, the Restricted Units shall not be transferred until after the date of the Unit Dividend and shall not be entitled to participate in the Unit Dividend.

b. Client shall pay to BioEnergy One Thousand Five Hundred Dollars ($1,500.00) per week as payment for services commencing upon the Effective Date and continuing through the first date after Client's equity drive for the Project has been closed and the patties mutually agree that all administrative details related thereto have been concluded (the "Equity Drive Closing Date"). The Equity Drive Closing Date shall be at least two full weeks following the end of the week in which Client receives the subscription agreement that achieves the equity goal necessary for the successful completion of the Project. Fees required to be paid under this paragraph 4(b) may be interrupted during "seasonal events" such as planting, harvesting and major holiday periods to include Thanksgiving week and the Christmas and New Years' holidays (December 20 through January 5). The planting season is generally identified as April 17 through June 10, and the harvesting season is generally identified as September 20 through October 31. "Seasonal events" shall also occur at such other times as the parties may mutually agree. During these periods, Client shall pay to BioEnergy Three Hundred Seventy Five Dollars ($375.00) per day for the days that services are rendered, not to exceed One Thousand Five Hundred Dollars ($1,500.00) per week (Sunday through Saturday) even though BioEnergy may perform services for more than four days during such weeks.

c. After the Equity Drive Closing Date and continuing through the first date after Client closes a loan transaction to finance construction of the Project (the "Loan Closing Date"), Client shall pay BioEnergy Three Hundred Seventy Five Dollars ($375.00) per day for specifically identified services rendered on certain days. Payments shall be payable within fourteen (14) days of Client's receipt of a detailed invoice from BioEnergy which outlines the services provided during the pay period. Upon termination of this Agreement, payments under this subsection shall cease; provided, however, that BioEnergy shall be entitled to payments for periods or partial periods that occurred prior to the date of termination for which BioEnergy has not been paid.

5. EXPENSES. Client shall reimburse BioEnergy for all reasonable, ordinary and necessary expenses incurred by BioEnergy in performance of its duties hereunder, including without limitation, reimbursement for automobile mileage at the rate periodically set by the Internal Revenue Service. However, in no case shall any such expense reimbursements exceed Seven Hundred Fifty Dollars ($750.00) in any single week.

6. SUPPORT SERVICES. Client shall provide the following support services for the benefit of BioEnergy, as approved by Client: office space, secretarial support, and office supplies.

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7. RELATIONSHIP OF THE PARTIES. The parties understand that BioEnergy is an independent contractor with respect to Client, and not an employee of Client. Client will not provide fringe benefits, including health insurance benefits, paid vacation, or any other employee benefits for the benefit of BioEnergy.

8. SERVICE PROVIDERS. Paul Casper and John T. Porter shall provide the majority of BioEnergy's services under this Agreement. John T. Porter's duties shall include assisting in the development of the Project and the organization of investor meetings. Paul Casper's duties shall include assisting in the organization of investor meetings. Notwithstanding the foregoing, BioEnergy may substitute its other personnel to provide BioEnergy's services under this Agreement on a limited basis as needed, with Client's consent. BioEnergy's employees, members, or agents who perform services for Client under this Agreement shall be bound by the terms of this Agreement,

9. INSURANCE. BioEnergy and .Client shall each obtain, maintain and keep in full force and effect during the term of this Agreement the following insurance coverages:

a. Commercial general liability insurance with policy limits that have a combined single limit of One Million Dollars ($1,000,000.00); and

b. Business automobile liability insurance, covering owned, non-owned and hired vehicles with a combined single limit of One Million Dollars ($1,000,000.00).

All insurance provided for in this section 9 shall be effective under valid and enforceable policies issued by insurers of recognized responsibility, licensed to do business in states where the respective parties currently conduct business. Each party shall name the other as an additional insured with respect to each policy. Each party shall furnish the other with proof of the payment of all premiums due on said policies of insurance and that the policies of insurance are in full force and effect. Each policy or certificate of insurance shall contain an agreement by the insurer that coverages shall not be cancelled for any reason without at least 30 days prior written notice to the other party.

10. INDEMNIFICATION. Client shall indemnify and defend BioEnergy and its employees, members, managers, officers, and agents against expenses actually and reasonably incurred in connection with the defense of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (a "Proceeding"), in which BioEnergy and/or its employees, members, managers, officers or agents are made a party by reason of performing services for Client or acting in any manner pursuant to this Agreement, except that Client shall have no obligation to indemnify and defend BioEnergy and/or its employees, members or agents for its and/or their act or omission that involve gross negligence, intentional misconduct or a known violation of the law. BioEnergy shall indemnify and defend Client and its employees, members, directors, officers and agents against expenses actually and reasonably incurred in connection with the defense of any Proceeding in which Client and/or its employees, members, directors, officers or agents arc made a party by reason of BioEnergy

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and/or its employees, members, managers, officers or agents commit an act or omission that involves gross negligence, intentional misconduct or a known violation of the law.

11. TAXES. Client shall be solely responsible for payment of all taxes and charges, now or hereafter imposed (whether by federal, state, municipal or other public authority), by reason of this Agreement or its performance, including but not limited to, sales or use taxes, but excluding any income tax imposed upon the net profits of BioEnergy.

12. COPYRIGHT LICENSE. BioEnergy will author written and visual equity marketing materials, Power Point presentations, advertisements, a "banker's book", training materials and other literary works and audio visual works (the "Proprietary Information") in fulfillment of its duties hereunder. BioEnergy hereby grants Client a non-exclusive right and license to use the Proprietary Information for its business and operations only. Client shall not have or acquire any proprietary or other right whatsoever in the Proprietary Information, except as provided herein, all of which rights belong exclusively to BioEnergy. Client shall not sell, assign, gift, sublicense or otherwise transfer to any third party any rights in the Proprietary Information without the prior written consent of BioEnergy, with the granting of said consent to be in BioEnergy's sole discretion.

13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon Client and BioEnergy, their respective heirs, executors, administrators, successors in interest or assigns, including without limitation, any partnership, corporation or other entity into which Client may be merged or by which it may be acquired (whether directly, indirectly or by operation of law), or to which it may assign its rights under this Agreement. Notwithstanding the foregoing, any assignment by BioEnergy of this Agreement or of any interest herein, or of any money due to or to become due by reason of the terms hereof without the prior written consent of Client shall be void, unless such engagement is made to Paul Casper or John T. Porter, or any entity in which either Paul Casper, John T. Porter or BioEnergy own a majority ownership interest.

14. WAIVER. The waiver by either party of its rights under this Agreement or the failure of a party to promptly enforce any provision hereof shall not be construed as a waiver of any subsequent breach of the same or any other covenant, term or provision.

15, NOTICES. Any notice required to be given hereunder shall be in writing and shall be deemed to be sufficiently served by either party on the other party if such notice is delivered personally or is sent by certified or first class mail addressed as follows, or such substitute street addresses as the parties may provide to writing:

To BioEnergy:                      BioEnergy Capital Consultants, LLC
                                   Attn: Paul Casper
                                   44095 212th Street
                                   Lake Preston, SD 57249

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 To Client:                        Advanced BioEnergy, LLC
                                   Attn:  Revis L. Stephenson, III
                                   1850 Fox Ridge Road
                                   Orono, MN  55356

16. APPLICABLE LAW. This Agreement and all obligations created hereunder or required to be created hereby shall be governed by and construed and enforced in accordance with the laws of the State of Nebraska, and the parties hereby consent that the District Court situated in Fillmore County, Nebraska, shall be the exclusive jurisdiction and venue of any disputes relating to this Agreement.

17. DEFAULTS. In the event of the failure of either of the parties to comply with any or the terms and provisions of this Agreement, or in the event either party has violated any of the warranties and representations made herein by that party, then such party shall be deemed to be in default hereunder and the other party shall be given written notice of such noncompliance and shall give the defaulting party seven (7) days from the date of such notice within which to correct such noncompliance. If such default has not been corrected, or an arrangement satisfactory to the complaining party has not been made by the end of the notice period, then the complaining party may take whatever action is necessary, and exercise all remedies available in order to protect the complaining party's rights under the terms and conditions of this Agreement. The parties agree that the remedies set forth in this section 17 shall not be exclusive, but they shall be cumulative with all other rights and remedies available, at law or in equity, to the parties. In the event of any dispute between the parties resulting from this Agreement or any provisions hereunder, the prevailing party in any such dispute shall be entitled to recover reasonable attorneys' fees and such other costs incurred therewith.

18. SEVERABILITY. In the event that any term, condition, or provision of this Agreement is held to be invalid by any court of competent jurisdiction, such holding or holdings shall not invalidate or make unenforceable any other term, condition or provision of this Agreement. The remaining terms, conditions and provisions shall be flatly severable, and shall be construed and enforced as if such invalid term, condition or provision had never been inserted in this Agreement initially.

19. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement between the parties hereto with regard to the subject matter hereof, and there are no agreements, understandings, specific restrictions, warranties or representations relating to said subject matter between the parties other than those set forth herein or herein provides for. No amendment or modification of this Agreement shall be valid or binding unless in writing and signed by the party against whom such amendment or modification is to enforced.

20. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be considered an original document, but all of which shall be considered one and the same agreement and shall become binding when one or more counterparts have been signed by each of the parties.

/s/RLS
/s/JP
/s/PWC

-6-

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the Effective Date.

BIOENERGY CAPITAL ADVANCED BIOENERGY, LLC
CONSULTANTS, LLC

By    /s/ Paul W. Casper                  By   /s/ Revis L. Stephenson, III
  ---------------------------------         ------------------------------------
      Paul Casper, Member                 Revis L. Stephenson III, Chairman

 and

By    /s/John T. Porter
  ----------------------------------------
      John T. Porter, Member
      3/22/05


                                                                  /s/RLS
                                                                  /s/JP
                                                                  /s/PWC

-7-

Exhibit 10.10

PROJECT DEVELOPMENT FEE AGREEMENT

THIS PROJECT DEVELOPMENT FEE AGREEMENT ("Agreement") is entered into as of this 19th day of May, 2005 ("Effective Date"), by and between Robert W. Holmes, an individual ("Mr. Holmes"), Revis L. Stephenson, III, an individual ("Mr. Stephenson"), and Advanced Bio-Energy, LLC ("Company"), a Delaware limited liability limited company.

WHEREAS, Mr. Holmes and Mr. Stephenson organized the Company for the purpose of developing, owning and operating a 100 million gallon dry mill ethanol plant near Fairmont, Nebraska (the "Project" or "Ethanol Plant");

WHEREAS, Mr. Holmes and Mr. Stephenson have provided project development services to the Company in the past and intend to provide such services in the future;

WHEREAS, as disclosed in the seed capital prospectus and seed capital subscription agreement used by the Company in its seed offering closed on April 14, 2005, the Company has agreed to pay development fees to Mr. Holmes and Mr. Stephenson in exchange for their efforts to organize the Company and assist in development of the Ethanol Plant; and

WHEREAS, the Members desire to memorialize that agreement and set forth in this Agreement, the manner in which the development fees shall be allocated and distributed.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows:

1. DEVELOPMENT SERVICES. Company hereby retains Mr. Holmes and Mr. Stephenson for the purpose of providing organizational and developmental services with respect to the Project ("Development Services"). Development Services shall include all services performed on behalf of the Company by Mr. Holmes and Mr. Stephenson to date and all services performed on behalf of and at the reasonable request of the Company through the termination of this Agreement. Development Services shall not include effecting or attempting to effect purchases or sales of the Company's securities.

2. DEVELOPMENT FEE. In consideration for the Development Services to be provided to Company, Company shall pay Mr. Holmes and Mr. Stephenson (collectively) a total development fee equal to .01 percent (1%) of the total Project cost (the "Development Fee") payable in accordance with Section 3.

3. PAYMENT TERMS. For purposes of this Agreement, the Development Fee will initially be estimated at 125,000 membership units in the Company ("Estimated Development Fee"). Mr. Holmes shall receive 25,000 of the Estimated Development Fee and Mr. Stephenson shall receive 100,000 of the Estimated Development Fee for a total of 125,000 membership units of the Company. Said units shall be subject to the unit restrictions set forth in Section 4 of this Agreement ("Restricted Units"). On the date on which substantial operations of the Ethanol

Plant commence, the actual Project costs shall be calculated by the Company ("Actual Project Cost"). If the Actual Project Cost is greater than $125,000,000, and if on that date Mr. Stephenson has not forfeited his Restricted Units in accordance with Section 4 of this Agreement, then Mr. Stephenson shall receive additional units (non-restricted) in the Company valued at .01 percent (1%) of the difference between the Actual Project Cost and $125,000,000. If the Actual Project Cost is less than $125,000,000, and if on that date Mr. Stephenson has not forfeited his Restricted Units, then Mr. Stephenson shall return the number of Restricted Units to the Company valued at .01 percent (1%) of the difference between $125,000,000 and the Actual Project Cost and all Mr. Stephenson's rights in the Restricted Units returned to the Company shall be deemed to have been forfeited. Mr. Holmes shall receive no additional units and shall not be required to forfeit units as provided in this
Section 3. Notwithstanding anything in this section to the contrary, in no event shall Mr. Stephenson receive or forfeit a fractional unit of the Company. In lieu of issuance or forfeiture of a fractional unit, the number of units shall be rounded to the nearest unit.

4. UNIT RESTRICTIONS. The Restricted Units paid to Mr. Holmes and Mr. Stephenson pursuant to this Agreement are subject to the following restrictions:

(a) Upon the dissolution, bankruptcy or insolvency of the Company, or the inability or failure of the Company generally to pay debts as they become due, or an assignment by the Company for the benefit of creditors, or the commencement of any case or proceeding in respect of the Company under any bankruptcy, insolvency or similar laws, Mr. Holmes and Mr. Stephenson shall return the Restricted Units to the Company without payment of consideration by the Company and the Restricted Units shall be deemed to have been forfeited by Mr. Holmes and Mr. Stephenson. Notwithstanding anything in this Agreement to the contrary, in no event shall Restricted Units be returned to the Company to the extent that this restriction shall have lapsed in accordance with Section 6.

(b) Upon the voluntary resignation as a member of the Company's board of directors by Mr. Holmes and/or Mr. Stephenson, Mr. Holmes and/or Mr. Stephenson shall return the Restricted Units to the Company without payment of consideration by the Company and such Restricted Units shall be deemed to have been forfeited by Mr. Holmes and/or Mr. Stephenson. Notwithstanding the foregoing, if only one individual (i.e., either Mr. Holmes or Mr. Stephenson) resigns, then only the Restricted Units held by that resigning individual must be returned to the Company and the non-resigning individual has no obligation to return his Restricted Units. Notwithstanding anything in this Agreement to the contrary, in no event shall Restricted Units be returned to the Company to the extent that this restriction shall have lapsed in accordance with Section 6.

(c) The Restricted Units may not be sold, transferred, assigned, pledged, encumbered or otherwise alienated or hypothecated, unless, until and then only to the extent that said restrictions shall have lapsed in accordance with Section 6 of this Agreement.

5. LEGEND ON MEMBERSHIP CERTIFICATE. Certificates evidencing such Restricted Units shall be issued in the sole and respective names of Mr. Holmes and Mr. Stephenson (but shall be held by the Company until the restrictions have lapsed in accordance herewith) and shall bear a legend which, in part, shall provide that:

The membership units of Advanced BioEnergy, LLC, evidenced by this certificate are subject to the terms and restrictions of the Project Development Fee Agreement between Advanced BioEnergy, LLC, Revis L. Stephenson, III, and Robert W. Holmes dated on or about May 19, 2005 ("Agreement"); such units are subject to forfeiture or cancellation under the terms of said Agreement; and such units shall not be sold, transferred, assigned, pledged, encumbered or otherwise alienated or hypothecated except pursuant to the provisions of said Agreement, a copy of which is available from Advanced BioEnergy, LLC upon request.

6. LAPSE OF RESTRICTIONS. The restrictions in Section 4 of this Agreement shall lapse as follows:

(a) Restrictions in Section 4(a) shall lapse with respect to the Restricted Units issued pursuant to this Agreement and held in the name of Mr. Holmes or Mr. Stephenson on the date upon which the Ethanol Plant begins producing ethanol for sale. Upon lapse of this restriction, such units shall no longer be subject to forfeiture to the Company pursuant to
Section 4(a).

(b) Restrictions in Section 4(b) shall lapse as follows:

(i) With respect to one-third of the total Restricted Units issued pursuant to this Agreement and held in the name of Mr. Holmes and with respect to one-third of the total Restricted Units issued pursuant to this Agreement and held in the name of Mr. Stephenson, the date upon which the Company first files a Form SB-2 with the Securities and Exchange Commission. Upon lapse of this restriction in accordance with this section, such units shall no longer be subject to forfeiture to the Company pursuant to Section 4(b).

(ii) With respect to one-third of the total Restricted Units issued pursuant to this Agreement and held in the name of Mr. Holmes and with respect to one-third of the total Restricted Units issued pursuant to this Agreement and held in the name of Mr. Stephenson, the date upon which the Company executes definitive documents for debt financing needed to complete the Project. Upon lapse of this restriction in accordance with this section, such units shall no longer be subject to forfeiture to the Company pursuant to Section 4(b).

(iii) With respect to the remaining Restricted Units issued pursuant to this Agreement and held in the name of Mr. Holmes or Mr. Stephenson, the date upon which the Ethanol Plant begins producing ethanol for sale. Upon lapse of this restriction in accordance with this section, such units shall no longer be subject to forfeiture to the Company pursuant to Section 4(b).

(iv) Notwithstanding anything in this Agreement to the contrary, restrictions in Section 4(b) with respect to Restricted Units issued pursuant to this Agreement shall lapse in the event of the Recipient's respective death or disability and shall no longer be subject to forfeiture to the Company pursuant to Section 4(b).

(c) The Company may at any time in its sole discretion, accelerate or waive all or any portion of restrictions remaining with respect to any of the Restricted Units issued pursuant to this Agreement. The Company may exercise this right with respect to either Mr. Holmes or Mr. Stephenson. Mr. Holmes and Mr. Stephenson shall abstain from any vote by the directors to accelerate or waive restrictions in accordance with this section.

7. RIGHTS AS A MEMBER. Upon issuance of the certificates evidencing the Restricted Units and subject to the restrictions contained in Section 4 hereof, Mr. Holmes and Mr. Stephenson shall have all the rights as a member of the Company with respect to the membership interest represented by said Restricted Units, including the right to vote the units and receive all distributions paid or made with respect thereto.

8. TERM AND TERMINATION OF AGREEMENT. The term of this Agreement shall commence as of the Effective Date and shall terminate upon the sooner of payment in full of the Development Fee, lapse of the restrictions as provided in accordance with Section 6 or return to the Company of the Restricted Units in accordance with this Agreement. For purposes of this Agreement, death or disability shall not terminate this Agreement.

9. INDEMNIFICATION. Company shall indemnify, defend against and advance to Mr. Holmes and/or Mr. Stephenson all expenses actually and reasonably incurred in connection with the defense of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (a "Proceeding"), in which Mr. Holmes and/or Mr. Stephenson are made a party by reason of performing services for Company or acting in any manner pursuant to this Agreement, except that Company shall have no obligation to indemnify and defend Mr. Holmes and/or Mr. Stephenson or their agents for their act or omission that involve gross negligence, willful misconduct or a known violation of the law. Mr. Holmes and/or Mr. Stephenson shall indemnify and defend Company and its employees, members, directors, officers and agents against expenses actually and reasonably incurred in connection with the defense of any Proceeding in which Company and/or its employees, members, directors, officers or agents are made a party by reason of Mr. Holmes and/or Mr. Stephenson committing an act or omission that involves gross negligence, willful misconduct or a known violation of the law.

10. DEFAULT. In the event of the failure of either of the parties to comply with any of the terms and provisions of this Agreement, or in the event either party has violated any of the warranties and representations made herein by that party, then such party shall be deemed to be in default hereunder and the other party shall be given written notice of such noncompliance and shall give the defaulting party thirty (30) days from the date of such notice within which to correct such noncompliance. If such default has not been corrected, or an arrangement satisfactory to the complaining party has not been made by the end of the notice period, then the complaining party may take whatever action is necessary, and exercise all remedies available in

order to protect the complaining party's rights under the terms and conditions of this Agreement. The parties agree that the remedies set forth in this Section 10 shall not be exclusive, but they shall be cumulative with all other rights and remedies available, at law or in equity, to the parties. In the event of any dispute between the parties resulting from this Agreement or any provisions hereunder, the prevailing party in any such dispute shall be entitled to recover reasonable attorneys' fees and related costs and such other costs incurred therewith.

11. SUCCESSORS AND ASSIGNS BOUND. This Agreement shall be binding upon the Company, Mr. Holmes and Mr. Stephenson, their respective heirs, executors, administrators, successors in interest or assigns, including without limitation, any partnership, corporation or other entity into which the Company may be merged or by which it may be acquired (whether directly, indirectly or by operation of law), or to which it may assign its rights under this Agreement. Notwithstanding the foregoing, any assignment by Mr. Holmes or Mr. Stephenson of this Agreement or of any interest herein, or of any money due to or to become due by reason of the terms hereof without the prior written consent of Company shall be void.

12. RELATIONSHIP OF THE PARTIES. The parties understand that Mr. Holmes and Mr. Stephenson are independent contractors with respect to Company, and employees of Company. Company will not provide fringe benefits, including health insurance benefits, paid vacation, or any other employee benefits for the benefit of Mr. Holmes or Mr. Stephenson. The parties also understand that Mr. Holmes and Mr. Stephenson are not partners for purposes of this Agreement and should not be construed to be acting jointly herein, but each in his own right.

13. AUTHORITY. Each of the signatories hereto certifies that such party has all necessary authority to execute this Agreement.

14. AMENDMENTS. This Agreement sets forth the entire understanding of the parties and supersedes any prior agreements, oral or written, as to the subject matter hereof. This Agreement may be amended or modified by, and only by, a written instrument executed by the parties hereto.

15. BINDING EFFECT. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective successors, permitted assigns and personal representatives. This Agreement shall not be assigned by any party hereto except as permitted by its express terms or upon the written consent of the other party. Nothing in this Agreement, express or implied, its intended to confer upon any other person any rights or remedies under or by reason of this Agreement.

16. SEVERABILITY. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement, or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.

17. WAIVER. The failure of any party hereto to insist in any one of more instances upon performance of any term or condition of this Agreement shall not be construed as a waiver of

future performance of any such term, covenant or condition, but the obligation of such party with respect thereto shall continue in full force and effect.

18. CAPTIONS. The captions herein are inserted for convenience of reference only and shall be ignored in the construction or interpretation hereof.

19. NOTICES. Any notice required to be given hereunder shall be in writing and shall be deemed to be sufficiently served by either party on the other party if such notice is delivered personally or is sent by certified or first class mail addressed as follows:

To Mr. Holmes:        Robert W. Holmes
                      206 Dawnee Street
                      Tomah, WI  54660

To Mr. Stephenson:    Revis L. Stephenson, III
                      1850 Fox Ridge Road
                      Orono, MN  55356

To Company:           Advanced BioEnergy, LLC
                      Attention: Robert E. Bettger
                      910 9th Street
                      Fairmont, NE 68354

Copy to:              Brown, Winick, et al.
                      Attention: Bill Hanigan
                      666 Grand Avenue, Ste. 2000
                      Des Moines, Iowa 50309

20. GOVERNING LAW. This Agreement shall be governed and construed in accordance with the laws of the State of Nebraska without reference to its conflict of law rules. Each of the parties hereto irrevocably submits to the jurisdiction of any state or federal court sitting in the State of Nebraska in any action or proceeding brought to enforce or otherwise arising out of or relating to this Agreement.

21. INTERPRETATION. The parties agree that each has had an opportunity to negotiate fully the terms of this Agreement and that this Agreement shall not be interpreted in favor of or against the party drafting the Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate by their duly authorized representatives on the date first above written.

Advanced Bio-Energy, LLC

                                           By:
----------------------------------            ----------------------------------
Revis L. Stephenson, III

                                           Its:
----------------------------------             ---------------------------------
Robert W. Holmes

Exhibit 23.1

McGladrey & Pullen
Certified Public Accountants

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Advanced BioEnergy, LLC
Fairmont, Nebraska

McGladrey & Pullen, LLP

/s/ McGladrey & Pullen

Des Moines, Iowa
May 27, 2005

McGladrey & Pullen, LLP is an independent member firm of RSM International, an affiliation of separate and independent legal entities.