Exhibit 10.5

 

SEPARATION, CONSULTING AND MUTUAL RELEASE AGREEMENT

THIS SEPARATION, CONSULTING AND MUTUAL RELEASE AGREEMENT (the “Agreement”) is
between BioFuel Energy Corp., a Delaware corporation, together with its
subsidiaries (the “Company”) and Eric D. Streisand (“Streisand”) (collectively,
the “Parties”).

I. COVENANTS

In consideration of the mutual promises and covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, it is hereby agreed by and between the parties, as follows:

A. Separation. The Parties mutually agree that Streisand will cease all of his
duties as an officer and employee with the Company as of 5:00 P.M., Mountain
Standard Time on August 31, 2007 (the “Effective Date”).

(1) As a result of this separation, Streisand shall be legally-entitled to
receive:

(a) Payment for all unpaid, accrued salary, net of applicable taxes and
withholdings, earned by Streisand in connection with his employment with the
Company through the Effective Date.

(b) Payment for thirteen (13) accrued, unused vacation days, net of applicable
taxes and withholdings through the Effective Date.

(c) After the Effective Date, Streisand shall be eligible for continuation of
medical and dental insurance coverage for eighteen (18) months or such longer
period as covered under the Consolidated Omnibus Budget Reconciliation Act, as
amended (“COBRA”) or similar applicable state laws and the insurance policies
and rules applicable to the Company. If Streisand does not elect to continue
medical and dental coverage under COBRA, Streisand’s current coverage elections
will end on August 31, 2007 and Streisand will not be eligible to receive
insurance or any other form of benefit from the Company after the Effective
Date. Provided that Streisand elects to continue medical and dental coverage
under COBRA, Streisand’s current coverage elections will be continued and paid
for by the Company through a date no later than June 30, 2008 (such date to be
determined under Section C below) and may be continued at Streisand’s expense
thereafter until the end of Streisand’s eligibility under COBRA.

(2) All other benefits provided by the Company, including 401(k) plan, life
insurance, AD & D insurance, LTD insurance and any other benefit offered by the
Company, will terminate as of the Effective Date. All unvested options under the
Company’s 2007 Equity Incentive Compensation Plan as of the Effective Date shall
be terminated, forfeited and/or cancelled, and Streisand shall have no right to
compensation, remuneration, distributions or dividends with respect to such
unvested options.

 

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B. Consulting Agreement.

(1) The Company agrees to engage Streisand to provide consulting services to the
Company from September 1, 2007 through December 31, 2007 (the “Consultancy
Period”) and to pay him in connection therewith the total sum of an amount equal
to four (4) months’ salary (the “Consultancy Payment”) to be paid in equal
monthly installments on the last day of each month through the end of the
Consultancy Period;

(2) During the Consultancy Period, Streisand agrees to make himself available,
upon reasonable notice, to assist the Company with discrete tasks which it may
reasonably request on an as-needed basis;

(3) During the Consultancy Period, the Company agrees to permit Streisand to
continue the use of his Company e-mail account to receive incoming messages to
be forwarded to Streisand’s personal e-mail account;

(4) During the Consultancy Period, the Company agrees to permit Streisand to
continue the use of a Company voicemail account at the Denver office with a
mutually agreed upon outgoing message;

(5) During the Consultancy Period, the Company agrees to permit Streisand to
continue the use of his Company laptop;

(6) Streisand may terminate the Consultancy Period at any time for any reason by
providing the Company with two (2) days written notice of his intent to do so;
the Company may terminate the Consultancy Period at any time for any reason by
providing Streisand with thirty (30) days written notice of its intent to do so;
and

(7) Should the Consultancy Period be terminated by Streisand, only any unpaid
balance of the Consultancy Payment through the date of the termination shall be
paid to Streisand; should the Consultancy Period be terminated by the Company,
the unpaid balance of the total Consultancy Payment remaining at the time of
termination shall be paid to Streisand; all payments hereunder shall be made as
soon as administratively practicable following any such termination.

C. COBRA Payment. The Company agrees to pay the COBRA premium for Streisand
through a date no later than June 30, 2008 (the “COBRA Payment”) subject to the
following: if Streisand accepts other employment prior to June 30, 2008 which
provides medical and dental benefits, then the COBRA Payment will cease as of
the date Streisand becomes covered under the new health policy.

D. Nondisparagement. Streisand agrees not to disparage the Company or its
officers, directors, shareholders, or employees, and the Company agrees not to
disparage Streisand, in any matter likely to be harmful to the other party or
their personal or business reputation. The parties

 

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further agree that notwithstanding this non-disparagement agreement, each party
shall respond accurately and fully to any question, inquiry, or request for
information required by legal or administrative process, or, in the case of the
Company, to fulfill any standard or legally required reporting or disclosure
requirements. In response to any request concerning employment references for
Streisand or any written or verified background check regarding Streisand, the
Company shall provide the following information if requested: (i) Streisand’s
dates of employment; (ii) Streisand’s rate of compensation at Two Hundred and
Forty Thousand Dollars and No Cents ($240,000.00) per year; (iii) eligibility
for receipt of an annual cash bonus; and (iv) Streisand’s last job title, Vice
President-Corporate Development. Streisand authorizes, and the Company
designates, Thomas J. Edelman, Scott H. Pearce and David J. Kornder to respond
to any request concerning employment references for Streisand or any background
check into Streisand’s employment.

E. Public Statements. The Parties agree that the language set forth on Exhibit A
will be filed by the Company on a Form 8-K to disclose Streisand’s separation
from the Company.

F. Release of All Claims by Streisand. In consideration of the promises and
covenants made herein, Streisand, on behalf of Streisand and Streisand’s heirs,
executors, administrators, personal representatives and assigns, does hereby
RELEASE, ACQUIT AND FOREVER DISCHARGE the Company and its past, present and
future affiliates, parents, subsidiaries and successors, and each of their past,
present and future officers, directors, shareholders, employees, agents,
representatives, attorneys, insurers and their respective successors and assigns
(all of whom are hereinafter collectively referred to as “Releasees”) from any
and all actions, causes of action, claims, demands, cost and expenses, including
attorneys’ fees and liabilities of any kind or and nature whatsoever, in law or
equity, whether known or unknown, accrued or to accrue hereafter, which
Streisand ever had, now has or may hereafter have against Releasees, as of the
date of this Agreement and through the Effective Date, arising out of any act,
omission, transaction or occurrence, including, without limitation, those
related to Streisand’s employment by the Company or the termination thereof.
Without limiting the generality of the foregoing, it is understood and agreed
that this Release constitutes a release of any claim or cause of action (i) in
tort, including but not limited to claims for slander, libel, negligence, gross
negligence, negligent supervision or training, conspiracy, intentional or
negligent infliction of emotional distress, mental anguish, invasion of privacy,
assault, battery, false imprisonment, tortious interference with contractual
relations, wrongful discharge, pain and suffering, breach of covenant of good
faith and fair dealing, invasion of privacy and (ii) for breach of any
employment or other agreement existing between Streisand and the Company or
(iii) otherwise related, in any way, to Streisand’s employment by the Company,
including claims under Title VII of the Civil Rights Act of 1964 (and all of its
amendments), the Age Discrimination in Employment Act, the Older Workers Benefit
Protection Act, the Americans with Disabilities Act, as amended, the Fair Credit
Reporting Act, the Sarbanes-Oxley Act, the Colorado Civil Rights Act, the
Colorado Wage Act, any applicable New York law or statute and any other statute
or regulation governing the employment relationship or Streisand’s rights, or
the Company’s obligations, in connection therewith. This Release also includes a
release of any right to bring an administrative claim or charge against the
Company regarding any matter relating to the Company, its business operations,
or Streisand’s employment to the maximum

 

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extent permitted by law. Streisand agrees that this legal release is intended to
be interpreted in the broadest possible manner in favor of the Company, to
include all actual or potential legal claims that Streisand may have against the
Company, except as specifically provided otherwise in this Agreement. Streisand
covenants never to institute any action or other proceeding based in whole or
part upon any right or claim released by this Agreement and acknowledges that if
he does so, the Company is entitled to recover from Streisand any attorneys’
fees it expends to defend any such action or proceeding. Streisand hereby
warrants that he has not assigned or transferred to any person any portion of
any claim that is released, waived and discharged above.

G. Release of Claims by the Company. In consideration of the promises and
covenants made herein, the Company, for itself, its affiliates, and any other
person or entity that could or might act on behalf of it including, without
limitation, its attorneys (all of whom are collectively referred to as “Company
Releasers”), does hereby RELEASE, ACQUIT AND FOREVER DISCHARGE Streisand, his
heirs, representatives, assigns, attorneys, and any and all other persons or
entities that are now or may become liable to any Company Releaser on account of
Streisand’s employment with the Company or separation therefrom, all of whom are
collectively referred to as “Company Releasees,” of and from any and all
actions, causes of action, claims, demands, costs and expenses, including
attorneys’ fees, of every kind and nature whatsoever, in law or in equity,
whether now known or unknown, that Company Releasers, or any person acting under
any of them, may now have, or claim at any future time to have, based in whole
or in part upon any act or omission occurring as of the date of this Agreement
and through the Effective Date, without regard to present actual knowledge of
such acts or omissions; EXCEPT for claims based on any fraudulent actions by
Streisand and EXCEPT as specifically provided otherwise in this Agreement. The
Company understands and agrees that by signing this Agreement, it is giving up
its right to bring any legal claim against Streisand concerning, directly or
indirectly, Streisand’s employment relationship with the Company. The Company
agrees that this legal release is intended to be interpreted in the broadest
possible manner in favor of Streisand, to include all actual or potential legal
claims that the Company may have against Streisand, except as specifically
provided otherwise in this Agreement.

H. Indemnification of Streisand. Notwithstanding the foregoing, the Company
agrees to defend and indemnify Streisand against any legal action, arbitration,
proceeding, claim or charge, action and/or proceeding against Streisand,
individually and/or with others, to the same extent that Streisand would have
been entitled to be defended and/or indemnified had he continued his employment
with the Company.

II. CONFIDENTIAL INFORMATION

A. Protection of Trade Secrets and Confidential Information.

(1) Definition of “Confidential Information.” “Confidential Information” means
all nonpublic information relating to or arising from the Company’s business,
including, without limitation, trade secrets used, developed or acquired by the
Company in connection with its business. Without limiting the generality of the
foregoing, “Confidential Information” shall

 

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specifically include all information concerning the manner and details of the
Company’s operation, organization and management; financial information and/or
documents and nonpublic policies, procedures and other printed, written or
electronic material generated or used in connection with the Company’s business;
the Company’s business plans and strategies, including but not limited to all
information associated with any ethanol project which the Company formed an
intention to develop, form or acquire prior to the end of the Consultancy
Period. “Confidential Information” does not include information that is in the
public domain through no wrongful act on the part of Streisand or known to
Streisand prior to employment with the Company.

(2) Streisand’s Use of Confidential Information. Except in connection with and
in furtherance of Streisand’s work on the Company’s behalf, Streisand shall not,
without the Company’s prior written consent, at any time, directly or
indirectly: (i) use any Confidential Information for any purpose; or (ii)
disclose or otherwise communicate any Confidential Information to any person or
entity; or (iii) participate in any business opportunity that inevitably will
result in the disclosure or use of any Confidential Information.

(3) Acknowledgments. Streisand acknowledges that during his employment with the
Company, Streisand had access to Confidential Information, all of which was made
accessible to Streisand only in strict confidence; that unauthorized disclosure
of Confidential Information will damage the Company’s business; that
Confidential Information would be susceptible to immediate competitive
application by a competitor of the Company’s; that the Company’s business is
substantially dependent on access to and the continuing secrecy of Confidential
Information; that Confidential Information is novel, unique to the Company and
known only to Streisand, the Company and certain key employees and contractors
of the Company; that the Company shall at all times retain ownership and control
of all Confidential Information; and that the restrictions contained in this
agreement are reasonable and necessary for the protection of the Company’s
legitimate business interests.

(4) Records Containing Confidential Information and Return of Company Property.
“Confidential Records” means all documents and other records, whether in paper,
electronic or other form, that contain or reflect any Confidential Information.
All Confidential Records prepared by or provided to Streisand are and shall
remain Company property. Streisand shall not, at any time, directly or
indirectly: (i) copy or use any Confidential Record for any purpose; or (ii)
show, give, sell, disclose or otherwise communicate any Confidential Record or
the contents of any Confidential Record to any person or entity. Upon the
termination of Streisand’s employment with the Company on the Effective Date,
Streisand shall immediately deliver to the Company (and shall not keep in
Streisand’s possession or deliver to any other person or entity) all
Confidential Records and all other Company property in Streisand’s possession or
control, including the return of the Company’s cellphone and files in
Streisand’s possession; provided, however, that Streisand shall have access to
such Confidential Records as necessary to provide consulting services during the
Consultancy Period. This Agreement shall not prohibit Streisand from complying
with any subpoena or court order, provided that Streisand shall at the earliest
practicable date provide a copy of the subpoena or court order to the

 

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Company’s President, it being the parties’ intention to give the Company a fair
opportunity to take appropriate steps to prevent the unnecessary and/or improper
use or disclosure of Confidential Information and Confidential Records, as
determined by the Company in its sole discretion.

(5) Third-Parties’ Confidential Information. Streisand acknowledges that, during
his employment, the Company has received from third parties confidential or
proprietary information, and that the Company must maintain the confidentiality
of such information and use it only for authorized purposes. Streisand shall not
use or disclose any such information without prior written authorization from
the Company or the third party to whom the information belongs.

III. ADDITIONAL PROVISIONS

A. Streisand’s Voluntary Execution of Agreement. Except as expressly provided
herein, Streisand acknowledges that he will not receive, nor is he entitled to,
any payment or consideration. The mutual covenants, promises and payments
(including the COBRA Payment and the Consultancy Payment) set forth herein are
full and fair consideration for this Agreement including the release provisions
hereof. Streisand acknowledges that in executing this Agreement, he has reviewed
and understands its terms and has had an opportunity to seek advice of counsel
of his own choosing, was fully advised of his rights under law, and has acted
knowingly and voluntarily in the execution of this Agreement. By entering into
this Agreement neither the Company nor Streisand admit any liability to the
other.

B. Cumulative Rights. The Company’s rights and remedies under this Agreement
hereof are cumulative and are in addition to any other rights and remedies the
Company may have at law or in equity.

C. Entire Agreement. This Agreement constitutes the complete, entire, final and
exclusive agreement between Streisand and the Company and supersedes any prior
agreement, whether written or oral, with regard to the subject matter hereof.
This Agreement has been entered into by the Parties without reliance on any
promise or representation, written or oral, other than those expressly contained
herein.

D. Modification of Agreement Only in Writing. This Agreement may not be
modified, except in writing, signed by Streisand and a duly authorized officer
of the Company.

E. Governing Law and Jurisdiction. This Agreement has been drafted in accordance
with and shall be construed and enforced in accordance with and governed by the
laws of the State of Colorado.

F. Severability. The Parties intend that this Agreement be enforced according to
its terms. If any one or more provision of this Agreement is determined to be
invalid, illegal, or unenforceable, in whole or in part, this determination will
not affect or impair any other provision of

 

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this Agreement. Any provision found to be invalid, illegal, or unenforceable
shall be deemed, without further action on the part of the parties, to be
modified, amended, or limited to the minimum extent necessary to render the
provision valid and enforceable.

G. Waiver of Terms and Conditions. Except as specifically set forth in this
Agreement, no waiver of any term or provision of this Agreement will be valid
unless such waiver is in writing, signed by the party against whom enforcement
of the waiver is sought. The waiver of any term or provision of this Agreement
shall not apply to any subsequent breach of this Agreement.

H. Attorneys’ Fees. In the event of any proceeding, claim, or action being filed
or instituted between the parties with respect to this Agreement, the prevailing
party will be entitled to receive from the other party all costs, damages and
expenses, including reasonable attorneys’ fees, incurred by the prevailing party
in connection with that action or proceeding, whether or not the controversy is
reduced to judgment or award. The prevailing party will be that party who may be
fairly said by the trier of fact to have prevailed on the major disputed issues.

I. No Other Representation. The Parties acknowledge that no promise or
representations have been made to induce them to sign this Agreement other than
as expressly set forth herein and that each has signed this Agreement as a free
and voluntary act.

J. Captions. The captions in this Agreement are for convenience and reference
only, and shall not define or limit any of the terms or provisions of this
Agreement.

[SIGNATURES FOLLOW]

 

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SIGNATURE PAGE

IN WITNESS WHEREOF, the Parties execute this Separation, Consulting and Mutual
Release Agreement.

 

 

 

BIOFUEL ENERGY CORP.

 

By: 

/s/ David J. Kornder

 

 

 

Name: David J. Kornder
Title: Executive Vice President & Chief Financial Officer
Date: August 9, 2007

 

 

 

 

 

 

/s/ Eric D. Streisand

 

 

Eric D. Streisand
Date: August 9, 2007

 

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EXHIBIT A

The following (or substantially similar) text shall be included in a Form 8-K to
be filed with the SEC by the Company:

“The Company announced that effective August 31, 2007, Eric D. Streisand, the
Company’s Vice President – Corporate Development, would be leaving the Company
to pursue other business opportunities. The Company and Mr. Streisand have
entered into a consulting agreement to facilitate an orderly transition of his
duties.”

 

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