Executive Severance, Release and Waiver Agreement

This Executive Severance, Release and Waiver Agreement (the “Agreement”) is made
between BioFuel Energy Corp., a Delaware corporation, (the “Company”) and Daniel
J. Simon (the “Executive,” and collectively, the “Parties”) and shall be
effective on the Effective Date, as defined in Section 6(c) below.

WHEREAS, Company and Executive have determined that is in their mutual best
interests that Executive’s employment relationship with Company be severed;

NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained and other good and valuable consideration, the Parties hereby agree as
follows:

1. 
Termination Date.  The Parties agree that as of  June 30, 2010, (the
“Termination Date”) the employment relationship between Executive and Company
will be terminated.

2.
Existing Company Obligations.  Company is responsible for fulfilling the
following obligations.

 
a.
 Salary.  On the Termination Date, Company will pay to Executive any accrued,
unpaid compensation through the Termination Date at his base salary rate,
subject to standard payroll deductions and tax withholdings.

 
b.
 Bonus.  Executive shall be eligible to earn a bonus in an amount of up to Fifty
Thousand Dollars ($50,000), based upon a successful transition of his duties on
or before the Termination Date and in lieu of any performance bonus that would
otherwise have been accrued or payable, which shall be determined by the
Company’s Chief Executive Officer in his sole discretion and shall be payable on
the Termination Date, subject to standard payroll deductions and tax
withholdings.

 
c.
Expenses.  Company will reimburse Executive for any unreimbursed business
expenses.  Executive has notified Company in writing of all expenses for which
he is entitled to, but has not yet received, reimbursement.  The list of such
unreimbursed expenses is attached below as Schedule A.

 
d.
Equity and Options.  Nothing in this Agreement shall impair Executive’s rights
regarding any vested equity interests, options, warrants or other equity related
rights, and any such rights continue to be fully enforceable.  Further, the
Company and Executive agree that, for purposes of vesting under the Company’s
2007 Equity Incentive Compensation Plan (the “Equity Plan”), Executive shall be
considered a “consultant” for the period during which the Company is obligated
to pay Severance (as defined below), such that any awards that are unvested or
partially vested as of the Termination Date shall continue to vest according to
the terms of the Equity Plan or any applicable award agreements during such
period.  The Company shall also take whatever steps are reasonably necessary
(e.g., to cause Company counsel to issue legal opinions under Rule 144
promulgated under the Securities Act of 1933) to remove any restrictive legends
on any of Executive’s existing equity interests in the Company upon lapse of any
restrictions thereon.

 
Executive Severance, Release and Waiver Agreement
 
 
 

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e.
No Other Obligations.  Except as set forth in this Section 2, Executive
acknowledges that he is not entitled to any other compensation, benefits or
other form of remuneration, including the Severance payment described in Section
4, except for the fact that he has executed, delivered and declined to revoke
this Agreement.

3.
Existing Executive Obligations.  Executive represents and warrants that he has
returned to Company any and all of Company’s tangible or intangible property
that has been in his possession.  This includes, but is not limited to, any cell
phone, pager, computer or computer accessory, software, computer files, paper
files, customer information, product or service data, and confidential Company
information, data, correspondence, or work-product.  To the extent that
Executive still has possession of, or has not returned to Company, any Company
property, that property is listed below in Schedule B.  Property listed on
Schedule B will be returned to Company within 7 days of the Termination Date,
unless otherwise noted on Schedule B.  Notwithstanding the foregoing, Executive
may retain copies of his employment related documents, and other documents
directly pertaining to Executive’s employment rights and indemnity rights, and
doing so shall not be considered a violation of this provision.

4.
Severance.  Provided that Executive signs and does not revoke this Agreement,
Company will pay to Executive the sum of Two Hundred Seventy Thousand
($270,000.00), subject to standard payroll deductions and tax withholdings (the
“Severance”).  The Severance will be paid to Executive in equal installments
corresponding with the Company’s payroll dates beginning with the first payroll
date following the Termination Date  and ending on the first anniversary of such
payroll date.

5.
Health Insurance.  The Company will reimburse Executive for the cost of
healthcare continuation under COBRA, upon presentation by Executive of
reasonable documentation of prior payment, for the twelve (12) months beginning
with the first month following the Termination Date. The Executive will then be
eligible to continue receiving health insurance benefits pursuant to federal
COBRA law, or, if applicable, state insurance laws, and by Company’s current
health insurance policy.  Executive will receive from Company further
information regarding COBRA rights.  Executive will be responsible for all
premiums to be paid under any COBRA extension of Executive’s health insurance
benefits that Executive may elect.

 
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6.
Release.   In consideration of the payment of Severance by the Company,
Executive, for himself, his heirs, personal representatives and assigns, and any
other person or entity that could or might act on behalf of his, including,
without limitation, his counsel (all of whom are collectively referred to as
“Releasers”), hereby fully and forever releases and discharges the Company, its
present and future affiliates and subsidiaries, and each of their past, present
and future officers, directors, employees, shareholders, independent
contractors, attorneys, insurers and any and all other persons or entities that
are now or may become liable to any Releaser due to any Releasee’s act or
omission, all of whom are collectively referred to as “Releasees,” of and from
any and all actions, causes of action, claims, demands, costs and expenses,
including attorney’s fees, of every kind and nature whatsoever, in law or in
equity, whether now known or unknown, that 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 on or before the Termination Date,
without regard to present actual knowledge of such acts or omissions, including
specifically, but not by way of limitation, matters which may arise at common
law, such as breach of contract, express or implied, promissory estoppels,
wrongful discharge, tortuous interference with contractual rights, infliction of
emotional distress, defamation, or under federal, state or local laws, such as
the Fair Labor Standards Act, the Executive Retirement Income Security Act, the
National Labor Relations Act, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Rehabilitation Act of 1973, the Equal Pay
Act, the Americans with Disabilities Act, and any state civil rights or
anti-discrimination acts; EXCEPT for the rights and obligations created by this
agreement.  Executive hereby warrants that he has not assigned or transferred to
any person any portion of any claim which is released, waived and discharged
above.  Executive further states and agrees that he has not experienced any
illness, injury, or disability compensable and recoverable under the worker’s
compensation law of any state that was not reported to the Company before the
Termination Date, and Executive agrees that he will not file a worker’s
compensation claim asserting the existence of any such illness, injury, or
disability.  Executive understands and agrees that by signing this Agreement he
is giving up his right to bring any legal claim against the Company concerning,
directly or indirectly, Executive’s employment relationship with the Company,
including his separation from employment.  Executive 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 Executive
may have against the Company, except as specifically provided otherwise in this
agreement.  Executive covenants never to institute any action or other
proceeding based in whole or part upon any right or claim released by this
agreement.  Notwithstanding the foregoing or anything else contained herein to
the contrary, Executive shall be entitled to seek, and the Company agrees not to
contest, any benefits that may otherwise be available to Executive under state
or federal unemployment insurance programs.

6.
Waiver of ADEA Claims.  Executive acknowledges that he understands the language
used in this Agreement and the Agreement’s legal effect.  Executive further
acknowledges that he understands that, by signing this Agreement, he is giving
up the right to sue Company for age discrimination.  The Parties agree that this
waiver and release does not apply to any rights that may arise under the ADEA
after the Effective Date of this Agreement.  Executive acknowledges that the
consideration given for this waiver and release was given by Company in addition
to any wages, benefits, bonuses, or other things of value to which Executive
would otherwise have been entitled.  Further, Executive acknowledges that he has
been advised here in writing as follows:

 
a.
Executive has been advised to consult with an attorney before signing this
Agreement.

 
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b.
Executive has had at least 21 days to consider this Agreement before signing
it.  If Executive signed this Agreement within 21 days of the date that the
Agreement was offered to Executive, then Executive’s choice not to wait for the
full 21-day period to expire was made knowingly and voluntarily, and was in no
way induced by Company by means of intimidation, fraud, duress, or any other
threat to withdraw the terms offered under this Agreement.

c. 
For a period of seven (7) calendar days after signing the Agreement, Executive
may, in his sole discretion, rescind this Agreement, by delivering a written
notice of recision to the Company to the attention of Mark Zoeller, General
Counsel.  If Executive rescinds this Agreement within seven calendar days after
signing it, this Agreement shall be void, all actions taken pursuant to this
Agreement shall be reversed, and neither this Agreement nor the fact of or
circumstances surrounding its execution shall be admissible for any purpose
whatsoever in any proceeding between the parties, except in connection with a
claim or defense involving the validity or effective rescission of this
Agreement.  If Executive does not rescind this Agreement within seven calendar
days after signing, this Agreement shall become final and binding and shall be
irrevocable upon the eighth day after the Executive signs it (the “Effective
Date”).

7.
Mutual Non-Disparagement.  To the extent permitted by law, Executive
acknowledges and agrees that, as a condition for Company’s payment of the
Severance, and of the promises made by Company in this Agreement, Executive
shall not make any disparaging, derogatory or detrimental statements to anyone,
including but not limited to any media outlet, industry group, financial
institution, current or former employee, consultant, client or customer of
Company, regarding Company or any of its directors, officers, employees, agents,
affiliates, consultants or representatives or about Company's business affairs
and financial condition, any statements that disparage any person, product,
service, finances, financial condition, capability or any other aspect of
Company’s business, and will not engage in any conduct which is intended to harm
professionally or personally the reputation of Company (including its officers,
directors, and employees). Company agrees to instruct its officers and directors
not to make any disparaging, derogatory or detrimental statements to anyone,
including but not limited to any media outlet, industry group, or current or
future employee about Executive; about Executive’s employment with Company; or
about Executive’s separation from Company.

 
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8.
Nondisclosure.

 
a.
The Company has provided Executive with some or all of the Company’s various
trade secrets and confidential or proprietary information, consisting of, but
not limited to, information relating to:  (a) business operations and methods;
(b) existing and proposed investments and investment strategies; (c) financial
performance; (d) compensation, severance arrangements and amounts (whether
relating to the Company or to any of its employees, including Executive);
(e) contractual relationships (including the terms of this Agreement);
(f) business partners and relationships; (g) limited partners and prospective
limited partners of the Company’s funds; (h) marketing strategies;
(i) intellectual property and technology, software, systems, methods,
apparatuses, inventions, discoveries, improvements, designs, techniques, code,
procedures, development tools, formulas, research, developments, objects, agents
and components thereof, subroutines and other programs and (j) lists with
information related to existing or prospective customers, partners or investors,
including, but not limited to particular investments, investment strategies,
investment patterns and amounts (collectively, “Confidential
Information”).  Confidential Information shall not include:  (i) information
that Executive may furnish to third parties regarding his obligations under
Sections 8 and 9; (ii) information that becomes generally available to the
public by means other than Executive’s breach of Section 8; or (iii) information
that Executive is required by law, regulation, court order or discovery demand
to disclose; provided, however, that in the case of clause (iii), Executive
gives the Company reasonable notice prior to the disclosure of the Confidential
Information and the reasons and circumstances surrounding such disclosure to
provide the Company an opportunity to seek a protective order or other
appropriate request for confidential treatment of the applicable Confidential
Information.

 
b.
Executive agrees that all Confidential Information, whether prepared by
Executive or otherwise coming into his possession prior to or during the term of
Executive’s employment by the Company, shall remain the exclusive property of
the Company.  Executive further agrees that Executive shall not, without the
prior written consent of the Company, use or disclose to any third party any of
the Confidential Information described herein, directly or indirectly, except as
permitted by the Company in writing or as necessary to defend any claim against
him or to enforce any rights he may have as an equity holder of the Company.

 
c.
Subject to the exceptions set forth elsewhere in this Agreement,Executive agrees
that all Confidential Information and other files, documents, materials,
records, notebooks, customer lists, business proposals, contracts, agreements
and other repositories containing information concerning the Company or the
business of the Company (including all copies thereof) in Executive’s
possession, custody or control, whether prepared by Executive or others, shall
remain with or be returned to the Company promptly (within twenty-four (24)
hours, to the extent practicable) after the Termination Date.

9.
Noncompete and Nonsolicitation.  In consideration of the payment of Severance by
the Company, Executive agrees as follows:

 
 
a.
Business Relationships and Goodwill.  Executive acknowledges and agrees that, as
the Executive Vice President and Chief Operating Officer of the Company,
Executive has been given Confidential Information and that his services have
been unique and extraordinary.  Executive acknowledges and agrees that this
creates a special relationship of trust and confidence between the Company,
Executive and the Company’s current and prospective customers, members, and
investors.  Executive further acknowledges and agrees that there is a high risk
and opportunity for any person given such responsibility, specialized training,
and Confidential Information to misappropriate the relationship and goodwill
existing between the Company and the Company’s current and prospective
customers, members, vendors and investors.  Executive therefore acknowledges and
agrees that it is fair and reasonable for the Company to take steps to protect
itself from the risk of such misappropriation.  Consequently, Executive agrees
to the following noncompetition and nonsolicitation covenants.

 
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b.
Scope of Noncompetition Obligations.  Executive acknowledges and agrees that the
period commencing with the Effective Date of this Agreement and ending one (1)
year after the Termination Date will constitute the non-compete, non-solicit and
non-divert period (the “Non-Interference Period”).  Notwithstanding the
foregoing, in the event the Company does not pay the Severance to Executive that
is otherwise due to Executive under Section 4 of this Agreement by reason of
bankruptcy, dissolution or insolvency of the Company, the Non-Interference
Period shall terminate on the date such Severance Payment would otherwise have
been due.

 
 
i.
During the Non-Interference Period, Executive will not, directly or indirectly,
participate in the ownership, management, operation, financing or control of, or
be employed by or consult for or otherwise render services to, any Competitor in
the States of New York, Colorado, Minnesota, or Nebraska, or in any other state
within the United States of America, or in any country in the world.  The term
“Competitor” means any person or entity who is engaged in the business that the
Company or any subsidiary of the Company engages in at or preceding the time of
termination of employment, including building and operating facilities to be
used for the production of corn-based ethanol and engaging in commercial sales
of corn-based ethanol. For purposes of clarity, a Competitor does not include
any entity that engages in the manufacture or sale of ethanol or other bio-fuel
products that are derived from biomass sources other than corn.

 
 
ii.
During the Non-Interference Period, Executive will not divert away or attempt to
divert away any business from the Company to another company, business, or
individual.  Additionally, Executive shall not, during the Non-Interference
Period, solicit, divert away or attempt to divert away business from any Company
Customer, either directly or indirectly. “Company Customer” is defined as any
person, company, or business that Executive has on behalf of the Company
contacted, solicited, serviced, or had access to Confidential Information about.
“Solicit” is defined as soliciting, inducing, attempting to induce, or assisting
any other person, firm, entity, business or organization, whether direct or
indirect, in any such solicitation, inducement or attempted inducement, in all
cases regardless of whether the initial contact was by Executive, the Company
Customer, or any other person, firm, entity, business, or organization.

 
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iii.
Executive further agrees that, during the Non-Interference Period, he will not
directly or indirectly:  (a) solicit, entice, persuade or induce any employee,
agent or representative of the Company, who was an employee, agent or
representative of the Company upon the termination or expiration of this
Agreement, to terminate such person’s relationship with the Company or to become
employed by any business or person other than the Company; (b) approach any such
person for any of the foregoing purposes; (c) authorize, solicit or assist in
the taking of such actions by any third party; or (d) hire or retain any such
person, in each instance other than any (x) employee whose employment was
terminated by the Company or any direct or indirect subsidiary of the Company or
(y) employee, agent, representative or other person who independently responded
to a general solicitation for employment by Executive or any third party which
was not specifically targeted to or reasonably expected to target the Company.

 
 
c.
Acknowledgement.  Executive acknowledges that the compensation, specialized
training, and the Confidential Information provided to Executive pursuant to his
employment with the Company give rise to the Company’s interest in restraining
Executive from competing with the Company, that the noncompetition and
nonsolicitation covenants are designed to enforce such consideration and that
any limitations as to time, geographic scope and scope of activity to be
restrained as defined herein are reasonable and do not impose a greater
restraint than is necessary to protect the goodwill or other business interest
of the Company.

 
d.
Survival of Covenants.  Executive agrees not to challenge the enforceability or
scope of Sections 8 and 9.  Executive further agrees to notify all future
persons or businesses with which he becomes affiliated or employed, of the
restrictions set forth in Sections 8 and 9, prior to the commencement of any
such affiliation or employment.

 
e.
Permitted Ethanol Investments.  Notwithstanding anything herein to the contrary,
during the Non-Interference Period Executive may own a passive equity interest
of less than one percent in any public corn-based ethanol companies; provided,
that Executive does not participate in the management of such corn-based ethanol
company in any capacity (including, but not limited to, director, officer or
manager).  No such ownership restrictions shall apply to investments in
companies that are not engaged in the manufacture of corn-based ethanol or any
other line of business in which the Company is engaged at the time of such
investment, so long as such Executive does not participate in the management of
such company in any capacity.

 
f.
Severability and Reformation.  If any one or more of the terms, provisions,
covenants or restrictions of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions shall remain in full force and
effect, and the invalid, void or unenforceable provisions shall be deemed
severable.  Moreover, if any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be reformed by limiting and
reducing it to the minimum extent necessary, so as to be enforceable to the
extent compatible with the applicable law as it shall then appear.

 
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11.
Denial of Liability.  The parties understand and agree that this Agreement shall
not be construed as an admission of liability on the part of any person or
entity, liability being expressly denied.

12.
Governing Law.  This Agreement shall be construed in accordance with, and
governed in all respects by, the laws of the State of Colorado, without regard
to conflicts of law principles.  Every dispute arising from or relating to this
Agreement shall be tried only in the state or federal courts situated in Denver,
Colorado metropolitan area.  The parties consent to venue in those courts, and
agree that those courts shall have personal jurisdiction over them in, and
subject matter jurisdiction concerning, any such action.

13.
Counterparts.   This Agreement may be executed in several counterparts, each of
which shall constitute an original and all of which, when taken together, shall
constitute one agreement.

14.
Assignment.   Neither Company nor Executive may assign its respective rights or
obligations under this Agreement without prior written consent from Company and
Executive, except that such rights and obligations may be assigned without such
prior written consent if the assignment is in connection with a sale or transfer
of control of Company.

15.
Severability.   If any part or parts of this Agreement shall be held
unenforceable for any reason, the remainder of this Agreement shall continue in
full force and effect. If any provision of this Agreement is deemed invalid or
unenforceable by any court of competent jurisdiction, and if limiting such
provision would make the provision valid, then such provision shall be deemed to
be construed as so limited.

16.
Notice.   Any notice required or otherwise given pursuant to this Agreement
shall be in writing and mailed certified return receipt requested, postage
prepaid, or delivered by overnight delivery service, addressed as follows:

 
If to the Company:
BioFuel Energy Corp.
   
Attn:  Mark Zoeller, General Counsel
   
1600 Broadway, Suite 2200
   
Denver, CO  80202

 
If to the Executive:
Daniel J. Simon
   
39000 CR 44
   
Steamboat Springs, CO 80487

17.
Headings.   The headings for sections herein, or lack thereof, are for
convenience only and shall not affect the meaning of the provisions of this
Agreement.

 
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18. 
 Indemnification.

 
(a)           The Company agrees that (i) if Executive is made a party, or is
threatened to be made a party, to any threatened or actual action, suit or
proceeding, whether civil, criminal, administrative, investigative, appellate or
other (each, a “Proceeding”) by reason of the fact that he is or was a director,
officer, employee, agent, manager, consultant or representative of the Company
or is or was serving at the request of the Company as a director, officer,
member, employee, agent, manager, consultant or representative of another entity
or (ii) if any claim, demand, request, investigation, dispute, controversy,
threat, discovery request or request for testimony or information (each, a
“Claim”) is made, or threatened to be made, that arises out of or relates to
Executive’s service in any of the foregoing capacities, then Executive shall
promptly be indemnified and held harmless by the Company to the fullest extent
legally permitted or authorized by the Company’s certificate of formation,
limited liability company agreement or resolutions of the Board or, if greater,
by the laws of the State of Delaware, against any and all reasonable costs,
expenses, liabilities and losses (including, without limitation, attorney’s
fees, judgments, interest, expenses of investigation, penalties, fines, or
penalties and amounts paid or to be paid in settlement) incurred or suffered by
Executive in connection therewith, and such indemnification shall continue as to
Executive even if he has ceased to be a director, member, employee, agent,
manger, consultant or representative of the Company or other entity and shall
inure to the benefit of Executive’s heirs, executors and administrators. The
Company shall advance to Executive all costs and expenses incurred by him in
connection with any such Proceeding or Claim within fifteen (15) days after
receiving written notice requesting such an advance, provided that if he is
ultimately determined by a court of competent jurisdiction not to be entitled to
indemnification for such Proceeding and Claim, Executive will promptly repay the
amount advanced.
 
(b) Neither the failure of the Company (including the Board, independent legal
counsel or stockholders) to have made a determination in connection with any
request for indemnification or advancement under Section 18(a) that Executive
has satisfied any applicable standard of conduct, nor a determination by the
Company (including the Board, independent legal counsel or stockholders) that
Executive has not met any applicable standard of conduct, shall create a
presumption that Executive has not met an applicable standard of conduct.

 
(c) Up until the Termination Date, and for a period of three (3) years
thereafter, the Company shall keep in place a directors’ and officers’ liability
insurance policy or (policies) providing comprehensive coverage to Executive at
least equal to the coverage that the Company provides for any other present or
former senior executive or director of the Company.
 
(d) Nothing in this Agreement is intended to waive, release or compromise
Executive’s rights to indemnity or contribution under applicable law, the
Company’s By-Laws, the Company’s Articles of Incorporation, or otherwise.
 
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19.
Entire Agreement.   This Agreement and any other agreements and other documents
specifically referenced herein, including equity option awards and agreements,
constitutes the entire agreement between Company and Executive, and supersedes
any prior understanding or representation of any kind preceding the date of this
Agreement. There are no other promises, conditions, understandings or other
agreements, whether oral or written, relating to the subject matter of this
Agreement.

Executive:
Daniel J. Simon
 
BIOFUEL ENERGY CORP.
 
(Name)
 
(Company Name)
         
Signature:
/s/ Daniel J. Simon
 
Signature:
/s/ Scott Pearce
 
(Executive Signature)
   
(Authorized Signature)
           
Title:
CEO
         
Date:
6/2/10
 
Date:
June 2, 2010

 
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Schedule A
Unreimbursed Business Expenses

Expense report to be submitted prior to June 30.
 
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Schedule B
Company Property Not Returned to the Company

 
1.
Laptop Computer.

 
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