[BIOFUELS LETTERHEAD]
 
CONFIDENTIAL AND PROPRIETARY
 
June 30, 2011
 
Cargill, Incorporated
15407 McGinty Road, West MS 62
Wayzata, MN  55391
Attn: Dan Dye/Tim Claver
 
Re:  BioFuel DDG Marketing Agreements
 
Dear Mr. Dye and Mr. Claver:
 
We direct your attention to (a) the following agreements by and among Cargill,
Incorporated ( “Cargill”) and our subsidiary, Buffalo Lake Energy, LLC (“BLE”):
(i) the Distillers Grains Marketing Agreement, dated as of September 25, 2006
(the “BLE Distillers Grains Marketing Agreement”); and (ii) that certain
Agreement and Omnibus Amendment  dated as of July 30, 2009 as modified and
amended by that certain Letter Agreement dated as of September 23, 2010 (the
“BLE Omnibus Agreement” and, together with the BLE Distillers Grains Marketing
Agreement, the “BLE Agreements) and (b) the following agreements by and between
Cargill and our subsidiary, Pioneer Trail Energy, LLC (“PTE”): (i) the
Distillers Grains Marketing Agreement, dated as of September 25, 2006 (the “PTE
Distillers Grains Marketing Agreement”); and (ii) that certain Agreement and
Omnibus Amendment  dated as of July 30, 2009 as modified and amended by that
certain Letter Agreement dated as of September 23, 2010 (the “PTE Omnibus
Agreement” and, together with the PTE Distillers Grains Marketing Agreement, the
“PTE Agreements”).
 
In consideration of the mutual agreements contained in this letter and our
discussions regarding the resolution of certain payment and performance
obligations, respectively, of each of the parties hereto, the parties agree to
the following:
 
1.  
Notwithstanding anything to the contrary contained in the BLE Agreements or the
PTE Agreements, effective as of the end of business on July 1, 2011, the BLE
Distillers Grains Marketing Agreement and the PTE Distillers Grains Marketing
Agreement are hereby terminated in their entireties; provided that, the Producer
under each respective Distillers Grains Marketing Agreement shall after the
termination date continue to produce and sell to Cargill and deliver any DDG
that Cargill has contracted to sell to third parties, as set forth on the
attached “Schedule A”, or, as mutually agreed by each of Producer and Cargill,
Producer shall take an assignment of such contracts and be responsible for their
full performance thereafter or such contracts shall be terminated and Producer
or its new marketer Gavilon shall enter replacement contracts with such parties
on the same terms; and provided further, that, subject to the last sentence of
Section 2 below, Cargill will pay the Producers for all invoices either
outstanding as of the date hereof, or as may arise in the future due to the
Producers complying with the immediately preceding proviso, in each case in
accordance with the terms set forth in the BLE Agreements and the PTE Agreements
and Producers shall pay Cargill commissions on all tons of DDG sales entered
into by Cargill, regardless of whether such sales are delivered, assigned to
Producer or Gavilon, or cancelled and a replacement contract entered into by
Producer/Gavilon.

 
 
 

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Letter Agreement re: Distillers Grains Marketing Agreements
Cargill, Inc.
June 30, 2011
 
2.  
BLE and PTE shall pay to Cargill $277,000 in satisfaction in full of all of the
outstanding Deferred DG Commission Payments that have been accrued under the
Omnibus Agreements (as defined therein).  The amount payable by BLE and PTE
shall be collected by Cargill by setting off and short-paying the last-dated
outstanding (as of the date of the termination of the BLE Distillers Grains
Marketing Agreement and the PTE Distillers Grains Marketing Agreement) invoices
for DDG.

 
The foregoing shall take effect as of the end of business on July 1, 2011,
provided that Cargill may arrange for deliveries on June contracts into the
first week of July.  All of the other terms and conditions of the BLE Agreements
and PTE Agreements shall remain in full force and effect unless terminated,
amended or modified in writing as provided herein.  The parties hereto further
agree to cooperate in good faith with each other to transfer any existing DDG
sales contracts, to facilitate pending or future deliveries of DDG thereunder,
and to execute such further documentation concerning the understandings set
forth herein and any issues relating thereto as may be reasonably necessary and
mutually acceptable to the parties.

BioFuel Energy Corp., BioFuel Energy, LLC, BLE, PTE and Cargill, on behalf of
themselves and their respective successors, assigns, executors and
administrators, acknowledge and agree that in mutually terminating the BLE
Distillers Grains Marketing Agreement and the PTE Distillers Grains Marketing
Agreement no party admits liability of any kind.  Except for each party’s
obligations to each other as set forth herein with regard to the execution of
existing DDG sales contracts and the payments of the amounts referenced above,
BioFuel Energy Corp., BioFuel Energy, LLC, BLE, and PTE hereby agree to fully
release Cargill, its affiliates, directors, officers and shareholders  from any
and all liabilities, obligations and responsibilities under the BLE Distillers
Grains Marketing Agreement and the PTE Distillers Grains Marketing Agreement,
and any claims based upon or related thereto, and Cargill hereby agrees to fully
release BLE and PTE, their affiliates, directors, officers and shareholders,
from any and all liabilities, obligations and responsibilities under the BLE
Distillers Grains Marketing Agreement and the PTE Distillers Grains Marketing
Agreement, and any claims based upon or related thereto.

If this letter comports with your understanding of our agreement, please sign
below as the properly designated representative of Cargill and return to me (via
pdf or fax) no later than June 30, 2011.

Sincerely,

BioFuel Energy Corp.

Scott Pearce
President and CEO
 
 
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Letter Agreement re: Distillers Grains Marketing Agreements
Cargill, Inc.
June 30, 2011

BFE Operating Company, LLC

By:                                                 
Its:  Authorized
Representative                                                      

Pioneer Trail Energy, LLC

By:                                                 
Its:  Authorized
Representative                                                      

Buffalo Lake Energy, LLC

By:                                                 
Its: Authorized
Representative                                                      

Agreed to as of the date first set forth above:

Cargill, Incorporated

_____________________________
Name:
Title:

 
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EXHIBIT “A”
 
[See attached schedule(s) of open contracts.]
 
 
Page A-1

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