Project Development Fee Agreement

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


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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.


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