Exhibit
      10.32

     

    FIRST
      AMENDMENT TO ORGANIZATION AGREEMENT

    AND
      OPERATING AGREEMENT

     

    THIS
      First Amendment to Organizational Agreement and Operating Agreement (the
“Amendment”
or
      “Agreement”)
      is
      entered into as of August 22, 2006, by and between CoastalXethanol, LLC
      (“CX”),
      Xethanol Corporation (“Xethanol”)
      and
      Coastal Energy Development, Inc. (“CED”).

    


    WHEREAS,
      Xethanol and CED entered into that Organizational Agreement dated May 30, 2006
      (the “Organizational
      Agreement”)
      concerning the organization, management and financing of CX and entered into
      that operating Agreement of CX dated May 30, 2006 (the “Operating
      Agreement”);
      and

    


    WHEREAS,
      contemporaneously herewith, CX has executed and delivered to Xethanol that
      promissory note (the “Note”)
      dated
      August 22, 2006, in the principal amount of $8,500,000 by CX, as maker, in
      favor
      of Xethanol, as holder, a copy of which note is attached hereto as
      Exhibit “A”;
      and

    


    WHEREAS,
      the Note provides for five (5) annual payments of principal and interest with
      the first annual payment due on the first anniversary of the date upon which
      Augusta Biofuels, LLC (“AB”),
      a
      wholly owned subsidiary of Maker, begins producing saleable ethanol at AB’s
      facility in Augusta, Georgia (such date hereinafter referred to as the
“Production
      Date”);
      and

    


    WHEREAS,
      on the terms set forth below, the parties to this Amendment desire to amend
      such
      Organization Agreement Operating Agreement to reflect certain agreements of
      the
      parties made in connection with the Note.

    


    NOW
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, the parties agree that the Organizational
      Agreement Operating Agreement each is hereby amended as of August 22, 2007,
      as
      necessary to provide for the following:

    


    1.  During
      each one-year period beginning on the Production Date and each anniversary
      of
      such date thereafter, CX agrees to use any distributions CX may receive from
      AB
      with respect to CX’s membership interest in AB to pay (or prepay) the payment
      which will be due under the Note at the end of such one-year period. From the
      distributions CS may receive from AB with respect to CX’s membership interests
      in AB, CX shall not make any distributions to its members with respect to their
      membership interests in CX during any such one-year period unless and until
      the
      payment which will be due under the Note at the end of such one-year period
      has
      been fully paid by CX. Once the payment which will be due under the Note at
      the
      end of such one-year period has been fully paid by CX, CX shall distribute
      to
      its members any remaining distributions CX may receive in such one-year period
      from AB with respect to CX’s membership interest in AB.

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

     

    2.  In
      the
      event that any distributions with respect to CX’s membership interests in AB
      remain available for distribution during any one-year period after the payment
      which is due under the Note at the end of such one-year period has been fully
      paid by CX, such distributions from AB shall be made to Xethanol and CED with
      respect to their membership interests in CX, as follows, notwithstanding the
      fact that Xethanol owns an 80% membership interest in CX and CED owns a 20%
      membership interest in CX:

    


    (A) So
      long
      as any amounts remain outstanding under the Note, distributions of amounts
      received by CX from AB which are made by CX with respect to membership interests
      in CX shall be governed by the following rules:

     

    (i)  Initially,
      Xethanol shall receive an extra ten percent (10%) of any distributions which
      are
      made by CX with respect to membership interests in CX, so that Xethanol will
      receive ninety percent (90%) of any such distributions, and CED shall receive
      ten percent (10%) of any such distributions.

     

    (ii)  However,
      as the amount of principal outstanding under the Note decreases, the extra
      ten
      percent which Xethanol is entitled to receive above its ownership share of
      80%
      shall be reduced proportionately based on the current (at the time of
      distribution) amount of principal outstanding under the Note as compared to
      the
      original principal amount of the Note. For example, if CX is prepared to make
      a
      distribution to its members at a time when the principal balance of the loan
      is
      one-half of the original balance, then Xethanol would receive 85% and CED would
      receive 15%.

     

    3.  Notwithstanding
      anything to the contrary, CX shall distribute amounts received from sources
      other than AB to CX’s members on a pro rata basis according to CX’s members’
respective ownership percentage which currently is as follows: (i) Xethanol
      owns
      an 80% membership interest in CX; and (ii) CED owns a 20% membership interest
      in
      CX. The distribution scheme described in Item 2 above only applies with respect
      to amounts distributed to CX by AB with respect to CX’s membership interests in
      AB.

     

    4.  Except
      as
      modified hereby, the Organizational Agreement and the Operating Agreement shall
      otherwise remain in full force and effect in accordance with its terms, the
      parties hereto hereby ratifying and confirming same in all
      respects.

     

    5.  Without
      limitation, all terms and conditions of the Organizational Agreement and the
      Operating Agreement are incorporated herein by this express reference for all
      purposes, and where a conflict exists between this instrument either of the
      Organizational Agreement and the Operating Agreement, the terms and conditions
      of the Organizational Agreement or the Operating Agreement, as the context
      so
      provides, shall control. This agreement constitutes the entire and complete
      agreement between the parties hereto and supersedes any prior oral or written
      agreement between the parties hereto and supersedes any prior oral or written
      agreement between the parties with respect to the subject matter hereof. There
      are no verbal understandings or agreements which in any way change the terms,
      covenants, and conditions herein set forth, and that no modification of this
      Agreement and no waiver or release of any obligation or right of any party
      hereto shall be valid and enforceable unless made in writing and duly


    
      
         

        
        

      

      
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executed by all parties hereto. This Agreement shall inure
    to the benefit
    of and be binding upon the heirs, estates, guardians, personal and legal
    representatives, successors and permitted assigns of the parties hereto.
     

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      remainder of this page is blank. The next page is the execution
      page.]

    
      
         

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
      day
      and year first set out above.

     

    
      	
              Xethanol
                Corporation

               

              By:   /s/
                Lawrence S. Bellone 

              Title:   CFO 

            	
              Coastal
                Energy Development 

              Corporation,
                Inc.

               

              By:   /s/
                Chandler Hadlock 

              Title:
                President
                and CEO 

            
	
              Coastal
                Xethanol, LLC

               

              By::   /s/
                Lawrence S. Bellone 

              Title:   Manager 

            	 


    

    


    
      
         

      

      
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