CONFIDENTIAL SEVERANCE AGREEMENT
AND RELEASE OF CLAIMS

This Confidential Severance Agreement and Release of Claims (the “Agreement”) is
made and entered into by and between Phil Wonderley (“Employee”) and BioFuel
Technologies, Inc. (“Employer”), as well as any affiliated or related entities,
subsidiaries, or divisions, and the shareholders, directors, officers,
employees, and agents thereof (collectively referred to as “Employer”).

THE PARTIES acknowledge the following:

WHEREAS, Employee was employed by Employer until August 31, 2009, when the
employment relationship was terminated by mutual agreement (the “Termination
Date”); and

WHEREAS, Employee desires to receive severance benefits provided pursuant to
this Agreement, and Employer is willing to provide these benefits to Employee on
the condition that Employee enters into this Agreement.

THEREFORE, in consideration of the mutual agreements and promises set forth
within this Agreement, the receipt and sufficiency of which are hereby
acknowledged, Employee and Employer agree as follows:

1.           Definitions.

Unless the context plainly requires otherwise, the term “Employee” includes Phil
Wonderley, his respective agents, investigators, attorneys, spouse, relatives,
heirs, executors, administrators, successors, and assigns.  The term “Employer”
includes BioFuel Technologies, Inc., together with its past, present and future
parent and affiliated companies and entities, as well as the past, present, and
future officers, directors, administrators, shareholders, employees, agents,
successors, subsidiaries, parents, assigns, representatives, attorneys insureds,
and insurers thereof.

2.           Severance Benefits.

 
a.
Severance Payment.  In consideration of Employee’s agreements and promises set
forth below, Employer shall pay to Employee the sum of ONE HUNDRED EIGHTY-FIVE
THOUSAND AND NO/100THS ($185,000.00) Dollars (less standard statutory deductions
for federal and state taxes and withholdings) as severance pay (the “Severance
Payment”), which shall be paid in lump sum pursuant to Employer’s established
payroll procedures as set forth in this Agreement.  The Severance Payment will
be made within ten (10) business days following BioFuel’s receipt of capital
commitments totaling at least TWO MILLION FIVE HUNDRED THOUSAND AND NO/100THS
($2,500,000.00) Dollars, provided Executive has executed and not revoked this
Agreement as set forth herein.  The Severance Payment may not be accelerated or
deferred in any regard.

 
Employee’s Initials_______
 
 
 

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b.
Payment for Equipment.  In further consideration of this Agreement, Employer
shall pay to Employee the sum of FIFTEEN THOUSAND AND NO/100THS ($15,000.00)
Dollars in payment for certain equipment provided to Employer.  This payment
shall be made to Employee simultaneously with the Severance Payment described in
Paragraph 2(a) above, provided Employee has executed and not revoked this
Agreement as set forth herein.

 
c.
Effect of Payments. Employee agrees that the payments to him by Employer
pursuant to this Paragraph 2 of the Agreement do not constitute compensation for
purposes of calculating the amount of any benefits Employee may be entitled to
under the terms of any pension or other benefit plan of Employer, or for the
purpose of accruing any benefit, receiving any allocation of any contribution,
or having the right to defer any income in any employee pension or benefit plan.

 
d.
Issuance of Shares.  In further consideration of this Agreement, Employer shall
issue to Employee 500,000 shares of Employer’s common stock (or any successor in
interest to BioFuel class of common stock), no par value per share (the
“Restricted Stock”), following the expiration of the revocation period described
herein.  Employee’s rights and obligations with respect to the Restricted Stock
shall be subject to and governed exclusively by the Investment Representation
Letter and Lock Up Leak Out Agreement attached as Exhibits A and B,
respectively, to this Agreement, and incorporated herein by reference.  Employer
(or any successor in interest to Employer) shall deliver to Employee a
certificate evidencing the Restricted Stock within sixty (60) days following the
expiration of the revocation period described herein.

3. 
Legal Obligations.

Employer has no prior legal obligations to make the payments or issue the
Restricted Stock as described in Paragraph 2 of this Agreement, which
consideration is expressly conditioned upon the promises of Employee
herein.  Except as otherwise provided herein, Employee shall be solely
responsible for any and all federal and state tax liability or consequences
(including, but not limited to, taxes, contributions, withholdings, fines,
penalties, and interest) which could arise as a result of the payment provided
to him pursuant to this Agreement.

4.
Nonadmission.

By entering into this Agreement, Employer does not admit any wrongdoing or that
it has breached any obligation with respect to Employee’s employment.
 
Employee’s Initials_______
 
 
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5. 
Full Release of Claims.

Employee hereby releases, acquits, satisfies and forever discharges Employer
from any and all actions, causes of action, claims, demands, losses, claims for
attorneys’ fees, and all other forms of civil damages, occurrences, and
liabilities of any kind whatsoever, both known or unknown, arising out of any
matter, happening, or thing, from the beginning of time to the date of this
Agreement.  This full release of claims specifically includes, but is not
limited to: any and all claims related to the Employee’s employment with
Employer and the termination of Employee’s employment with Employer; claims of
age discrimination pursuant to the Age Discrimination In Employment Act
(“ADEA”), any and all claims for unpaid wages, compensation, bonuses or related
damages; and any and all other claims of any nature whatsoever, whether known or
unknown, and whether based on tort, contract (express or implied), statute,
regulation or ordinance, federal, state or local.

By entering into this Agreement, Employee does not waive any rights or claims
that might arise as a result of any conduct that occurs after the date this
Agreement is signed by the parties, nor shall this Agreement be interpreted to
provide that Employee has entered into any covenant or promise that would be
invalid under applicable federal or state law.

6. 
Covenant not to Sue.

Employee covenants and agrees that he will not bring, commence, institute,
maintain, prosecute, or voluntarily aid or encourage any action or proceeding
against Employer.  Employee further agrees that he will not otherwise prosecute
or sue Employer affirmatively or by way of cross-complaint, defense or
counterclaim, or in any other manner with respect to the claims herein released
and/or waived.  Employee likewise agrees to forfeit any benefit which may accrue
to him as a result of such action against Employer.

The foregoing shall be construed as a covenant not to sue.  This Agreement may
be introduced as evidence at any legal proceeding as a complete defense to any
claims existing as of the date of this Agreement ever asserted by Employee
against Employer.

7. 
No Prior Assignment.

Employee further warrants and covenants, recognizing that the truth of this
warranty and covenant is material to the above consideration having passed, that
he has not assigned, transferred or conveyed at any time to any individual or
entity any alleged rights, claims or causes of action against Employer.

8. 
No Employment Relationship.

The relationship of employer-employee terminated effective as of the date of
Employee’s Termination Date and the relationship created by this Agreement is
purely contractual and no employer-employee relationship is intended or inferred
from the performance of the parties’ obligations under this Agreement.

9.
Nondisparagement.

Employee shall not (except as required by law) communicate to anyone, whether
verbally, in writing, or in any other manner, any statement that is intended to
cause or that reasonably would be expected to cause a person to whom it is
communicated to have a lowered opinion of Employer, including a lowered opinion
of any services provided by Employer.
 
Employee’s Initials_______
 
 
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10.
Nondisclosure.

As a material condition of this Agreement, without which Employer would not have
entered into the Agreement, Employee hereby stipulates and agrees that he shall
not at any time, directly or indirectly, use or disclose to any person,
business, firm, corporation, partnership or other entity, any Trade Secret of
Employer, for any reason or purpose.  Employee further stipulates and agrees
that for a period of one (1) year from the date of this Agreement (the
“Restricted Period”), he shall not, directly or indirectly, use or disclose to
any person, business, firm, corporation, partnership or other entity any
Confidential Information belonging to Employer, for any reason or purpose.

For purposes of this Agreement, “Trade Secret” shall be defined as set forth in
the Georgia Trade Secrets Act of 1990, as amended from time to time.  The term
Confidential Information shall mean any information which Employer uses in its
business and which Employer considers to be confidential or proprietary, but
which does not rise to the level of a Trade Secret, including without
limitation, proprietary information regarding Employer’s customers, customer
lists, costs, prices, pricing structures, methodologies and strategies,
earnings, financial results and financial information, systems, operating
procedures, strategic plans, proprietary computer and systems software,
prospective and executed contracts and other business arrangements, sources of
supply, identity of suppliers and business acquisition strategies.

11. 
Property.

Employee shall immediately return all property of Employer which is in his
possession.  This includes, but is not limited to, the computer provided for his
personal use, all data, documents, records, correspondence, reports, memoranda,
or other property and shall include all copies thereof, including electronically
stored information.

12. 
Performance.

Employer’s obligation to perform under this Agreement is conditioned upon
Employee’s agreements and promises to Employer as set forth herein.  In the
event Employee breaches any such agreements or promises or causes any such
agreements or promises to be breached, Employer’s obligations to perform under
this Agreement shall automatically terminate and Employer shall have no further
obligation to Employee.

13. 
Successors and Assigns.

This Agreement shall inure to and be binding upon the parties hereto and to
their respective heirs, legal representatives, successors, and assigns.
 
Employee’s Initials_______
 

 
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14. 
Governing Law and Forum Selection.

This Agreement shall be construed in accordance with the laws of the state of
Georgia and any applicable federal laws.  Moreover, any dispute between the
parties regarding this Agreement or Employee’s former employment with Employer
shall be decided solely by a court of competent jurisdiction in Fulton County,
Georgia.

15. 
Entire Agreement; Modification.

This Agreement constitutes the entire agreement between the parties hereto and
supersedes and renders null and void all prior agreements, understandings and
arrangements, oral or written, if any, between the parties hereto with respect
to the subject matter hereof, including, without limitation, the Employment
Contract of October 2, 2008.  This Agreement may not be changed orally but only
by an agreement in writing signed by the parties or their respective heirs,
legal representatives, successors, and assigns.

16. 
Validity.

The provisions of this Agreement shall be deemed severable and that the
invalidity or unenforceability of any paragraph of this Agreement, or any
portion or provision thereof, shall not affect the validity or enforceability of
the other portions or provisions.  Any such provision deemed to be unenforceable
shall be stricken and the remaining provisions shall be appropriately limited
and given effect to the extent they may be enforceable.

17.
OWBPA.

Employee acknowledges that it is the mutual intent of the Parties that the full
release contained in this Agreement fully complies with the Older Workers
Benefit Protection Act.  Accordingly, this Agreement requires, and Employee
acknowledges and agrees that: (1) the consideration provided to Employee under
this Agreement exceeds the nature and scope of any consideration to which he
would otherwise have been legally entitled to receive absent his execution of
this Agreement; (2) execution of this Agreement and the full release herein,
which specifically includes a waiver of any claims under the Age Discrimination
in Employment Act, is his knowing and voluntary act; (3) Employee is hereby
advised to consult with an attorney prior to executing this Agreement; (4)
Employee has twenty-one (21) calendar days within which to consider this
Agreement and his signature on this Agreement prior to the expiration of this
twenty-one (21) day period (should he opt not to take the full period offered)
constitutes an irrevocable waiver of said period or its remainder; (5) in the
event Employee signs this Agreement, he has another seven (7) calendar days to
revoke it by delivering a written notice of revocation to the individual
addressee identified in the Notice provision below (Paragraph 18), and this
Agreement does not become effective until the expiration of this seven-day
period; (6) Employee has read and fully understands the terms of this Agreement;
and (7) nothing contained in this Agreement purports to release any of his
rights or claims under the Age Discrimination in Employment Act that may arise
from acts occurring after the date of the execution of this Agreement.
 
Employee’s Initials_______
 
 
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18. 
Notice.

All communications or notices required or permitted by this Agreement shall be
made by Employee to Employer in writing and shall be delivered and addressed as
follows:

Ken Rakestraw
BioFuel Technologies, Inc.
614 Bohannon Road
Fairburn, Georgia 30213

19. 
Arbitration.

Any and all disputes arising out of or in any way related to this Agreement,
Employee’s employment with and separation from employment, or the payments and
benefits described herein, shall be settled by binding arbitration before a
single arbitrator in accordance with the applicable rules of the American
Arbitration Association.  Employee shall not be restricted in terms of the
remedies available and shall not be subject to any costs greater than he would
otherwise have incurred in state or federal court in Georgia.

 
PLEASE READ THIS AGREEMENT CAREFULLY.  IT CONTAINS A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
 
YOU AGREE THAT YOU RECEIVED VALUABLE CONSIDERATION IN EXCHANGE FOR ENTERING INTO
THIS AGREEMENT AND THAT THE COMPANY ADVISED YOU IN WRITING TO CONSULT AN
ATTORNEY PRIOR TO SIGNING THIS AGREEMENT.  YOU PROMISE THAT NO REPRESENTATIONS
OR INDUCEMENTS HAVE BEEN MADE TO YOU EXCEPT AS SET FORTH HEREIN, AND THAT YOU
HAVE SIGNED THE SAME KNOWINGLY AND VOLUNTARILY.
 
 
YOU HAVE BEEN PROVIDED AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER
THIS AGREEMENT AND WAIVE AND RELEASE ALL CLAIMS AND RIGHTS INCLUDING, BUT NOT
LIMITED TO, THOSE ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT.  YOU
SHALL HAVE SEVEN (7) DAYS WITHIN WHICH TO REVOKE THIS AGREEMENT AND THIS
AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THAT REVOCATION PERIOD
HAS EXPIRED.  ANY SUCH REVOCATION MUST BE IN WRITING AND RECEIVED BY THE
COMPANY, IN ACCORDANCE WITH THE NOTICE PROVISIONS SET FORTH IN PARAGRAPH 18
HEREIN, PRIOR TO THE END OF THE REVOCATION PERIOD.
 

[Signature Page Follows]
 
Employee’s Initials_______
 
 
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IN WITNESS WHEREOF, the undersigned have set their hands and seals, or caused
their duly authorized agent to set their hand and seal, on the day and year
written above.

As To Employee:
 
July 20, 2010
 
/s/ Phil Wonderly
Date
 
Phil Wonderley
     
For Employer:
 
BIOFUEL TECHNOLOGIES, INC.
     
July 20, 2010
 
By: 
/s/ Kenneth Rakestraw
Date
                 
Its: 
  President

 
Employee’s Initials_______
 
 
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