Offer of Continued
Employment

      


      Doug
Anderson

      


      
        
          
            
              	
                      Title:

                    	
                      Vice-President,
      Operations

                    
	 
      	 
      
	
                      Location:

                    	
                      Wood
      River, NE

                    
	 
      	 
      
	
                      Direct
      Supervisor:

                    	
                      Scott
      Pearce, Chief Executive Officer

                    
	 
      	 
      
	
                      Targeted
      Start Date:

                    	
                      Immediately

                    
	 
      	 
      
	
                      Base
      Salary:

                    	
                      $225,000
      per annum

                    
	 
      	 
      
	
                      Performance
      Bonus:

                    	
                      You
      will be eligible to participate in the company’s annual bonus program in
      an amount up to 65% of base salary (the “Target Bonus”), based on
      achieving the performance goals set by the Company’s Board of
      Directors.  The bonus will be paid annually, typically in March
      following the completion of a performance review and closing of the
      Company’s financial and operating results in February.  You will
      begin participation in the Performance Bonus program in
      2010.  The terms and conditions, including amount, of the bonus
      plan shall be at the sole discretion of the Board.

                    
	 
      	 
      
	
                      Stock
      Options:

                    	
                      You
      will be eligible to participate in BioFuel Energy’s employee stock
      incentive program, which grants are subject to Board
    approval.

                    
	 
      	 
      
	
                      Vacation:

                    	
                      Senior
      executives are expected to take paid time off to the extent their work
      schedules and executive duties permit.

                    
	 
      	 
      
	
                      Benefits:

                    	
                      Medical,
      dental, life and disability insurances, and the Company 401(k) retirement
      plan.

                    
	 
      	 
      
	
                      Severance:

                    	
                      Upon
      termination of your employment without “Cause” (as defined in the attached
      Exhibit
      A), or upon your termination of employment for “Good Reason” (also
      as defined in the attached Exhibit A), you
      will be entitled to (a) severance equal to 6 months of your base salary
      plus, in addition
      to any earned buy unpaid bonus from the previous year, a portion of your
      annual Target Bonus for the year in which such termination occurs, which
      amount shall be calculated pro rata based on the
      Target Bonus opportunity for such year and the number of weeks of such
      year that have lapsed prior to termination and (b) reimbursement by the
      Company for your continued health benefit coverage pursuant to COBRA for
      six (6) months; provided
      that, if your employment is terminated following a “Change of
      Control” (as defined under the Company’s Change of Control Plan (the
      “Plan”)) you will be entitled to greater of the
      severance provided for Executives under the Plan or the the severance provided
      above.

                    


            

          

        

      


      
        
           


        

        
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                    Release/Non-Compete:

                  	
                    Upon
      termination of your employment, and as a condition to receiving the
      severance payments described above, you will execute a general Release,
      and enter into a non-competition agreement with the Company for six (6)
      months, on terms and conditions reasonably satisfactory to the Company,
      such non-competition agreement to be in addition to, and not a substitute
      for, the Confidentiality undertakings set forth in the Company’s Employee
      Handbook which you previously agreed to upon inception of your
      employment.

                  


          

        

      

      


      The
foregoing terms shall take effect immediately upon acceptance.  This
offer is not intended to create nor should it be interpreted to create an
employment contract between you and the Company and does not alter your
employment at will status with the Company.

      


      Your
signature below confirms that the Company has offered the above offer of
continued employment to you and that you have accepted the offer on the terms
and conditions provided above.

      


      On behalf
of the Company:

      


      
        	
                /s/ Scott Pearce

              	
                August 31, 2010

              
	
                Scott
      H. Pearce, President and CEO

              	
                Date

              


      

      


      By
Executive:

      


      
        	
                /s/ Doug Anderson

              	
                August 31, 2010

              
	
                Douglas
      M. Anderson

              	
                Date

              


      


      
        
           


        

        
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        EXHIBIT
A

      

      


      (a)  “Cause”
means any of the following as determined by the President and CEO, upon
consultation with the Board:

       

      (i)  Executive’s
commission of theft, embezzlement, any other act of dishonesty relating to his
employment with the Company, or any material violation of any law, rules, or
regulations by Executive to the extent that such law, rule or regulations are
applicable to the Company, including, but not limited to, those established by
the Securities and Exchange Commission, or any self-regulatory organization
having jurisdiction or authority over Executive or the Company or any failure by
Executive to inform the Company of any material violation, that Executive has
knowledge of, of any law, rule or regulation by the Company or one of its direct
or indirect subsidiaries;

       

      (ii)  Executive’s
conviction of, or pleading guilty or nolo contendere to, a felony or any lesser
crime having as its predicate element fraud, misappropriation of Company
(including any direct or indirect subsidiaries) property for personal profit, or
moral turpitude, or indictment for any crime involving moral turpitude or
fraud;

       

      (iii)  Executive
has failed to perform his material duties and obligations under this Agreement
(other than during any period of disability) or otherwise materially breaches
this Agreement or fails to follow any reasonable and lawful instructions of the
Board, which failure to perform is not remedied within ten (10) days after
notice thereof to Executive by the Company;

       

      (iv)  Executive’s
appropriation or attempted appropriation of (A) a material business
opportunity of the Company or (B) any of the Company’s funds or property;
or

       

      (v)  Executive’s
commission of an act or acts in the performance of his duties under this
Agreement amounting to gross negligence or willful misconduct, including, but
not limited to, any breach of Sections 7 or 8 of this Agreement.

       

      (b)  “Good
Reason” means any of the following reasons if, after providing ten (10)
days written notice to the Company, which identifies the Good Reason for
Executive’s termination, such “Good Reason” is not remedied:

       

      (i)  Executive’s
removal from his position as  Vice President, General Counsel and
Corporate Secretary, other than for Cause or by death or disability (as
determined under the terms of the Company’s disability insurance in effect at
the time);

       

      (ii)  Any
material and detrimental alteration or change in Executive’s authority, duties,
responsibilities or status (including offices, titles, reporting requirements
and supervisory functions) from those in effect at the time of execution of this
offer without Executive’s prior written consent;


      
        
           


        

        
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      (iii)  Any
reduction in Executive’s Base Salary or any material reduction in Executive’s
Target Bonus opportunity, as set forth in this offer;

       

      (iv)  The
required relocation of Executive’s place of employment to a location in excess
of twenty-five (25) miles from Executive's place of employment at the time of
execution of this offer, Wood River, NE; provided that, Executive may
be required to relocate to the Company’s corporate headquarters in Denver, CO;
or

       

      (v)  The
Company fails to make any payment to Executive required to be made under the
terms of this offer, if the breach is not cured within ten (10) days after
Executive provides written notice to the Company that provides in reasonable
detail the nature of the payment.


      
        
           


        

        
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