Exhibit
        10.1

    

     

    MUTUAL
      TERMINATION AGREEMENT

    


    MUTUAL
      TERMINATION AGREEMENT
      (the
“Agreement”), dated as of November 14, 2007, by and between XETHANOL
      CORPORATION,
      a
      Delaware
      corporation (the “Company”), and FUSION
      CAPITAL FUND II, LLC, an
      Illinois limited liability company (the “Buyer”).

    


    WHEREAS,
      the
      Buyer and the Company mutually desire to terminate the Common Stock Purchase
      Agreement dated as of October 18, 2005, by and between the Company and the
      Buyer
      (the “Purchase Agreement”) and certain other related documents. All capitalized
      terms used in this Agreement that are not defined in this Agreement shall have
      the meanings set forth in the Purchase Agreement;

    


    NOW
      THEREFORE,
      the
      Company and the Buyer hereby agree as follows:

    


    1. TERMINATION
      OF THE PURCHASE AGREEMENT. 

    


    The
      Purchase Agreement and the other Transaction Documents (including the
      Registration Rights Agreement also dated as of October 18, 2005) between the
      Buyer and the Company related to the Purchase Agreement (other than this
      Agreement) are hereby terminated effective as of the date hereof, and any and
      all rights, duties and obligations arising thereunder or in connection with
      the
      Purchase Agreement and the other Transaction Documents (other than this
      Agreement) are now and hereafter fully and finally terminated, provided,
      however, that (i) the representations and warranties of the Buyer and Company
      contained in Sections 2 and 3 of the Purchase Agreement, (ii) the
      indemnification provisions set forth in Section 8 of the Purchase Agreement,
      and
      (iii) the agreements and covenants set forth in Sections 11 of the Purchase
      Agreement shall survive such termination and shall continue in full force and
      effect (the “Surviving Obligations”).

    


    2. MUTUAL
      GENERAL RELEASE. 

    


    Except
      as
      may arise under or in connection with this Agreement and the Surviving
      Obligations, the Company and the Buyer hereby release and forever discharge
      each
      party hereto and its predecessors, successors and assigns, employees,
      shareholders, partners, managing members, officers, directors, agents,
      subsidiaries, divisions and affiliates from any and all claims, causes of
      actions, suits, demands, debts, dues, accounts, bonds, covenants, contracts,
      agreements, judgments whatsoever in law or in equity, whether known or unknown,
      including, but not limited to, any claim arising out of or relating to the
      transactions described in the Purchase Agreement and Transaction Documents
      (other than the Surviving Obligations) which any party hereto had, now has
      or
      which its heirs, executors, administrators, successors or assigns, or any of
      them, hereafter can, shall or may have, against any party hereto or such parties
      predecessors, successors and assigns, employees, shareholders, partners,
      managing members, officers, directors, agents, subsidiaries, divisions and
      affiliates, for or by reason of any cause, matter or thing whatsoever, whether
      arising prior to, on or after the date hereof, provided, however, that (i)
      this
      Agreement, and (ii) the Surviving Obligations shall continue in full force
      and
      effect as the legal, valid and binding obligation of each party thereto
      enforceable against each such party in accordance with its terms.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3. MISCELLANEOUS.

    


    (a) Governing
      Law; Jurisdiction; Jury Trial.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by the internal laws of the State of
      Illinois, without giving effect to any choice of law or conflict of law
      provision or rule (whether of the State of Illinois or any other jurisdictions)
      that would cause the application of the laws of any jurisdictions other than
      the
      State of Illinois. Each party hereby irrevocably submits to the exclusive
      jurisdiction of the state and federal courts sitting in the City of Chicago,
      for
      the adjudication of any dispute hereunder or under the other Transaction
      Documents or in connection herewith or therewith, or with any transaction
      contemplated hereby or discussed herein, and hereby irrevocably waives, and
      agrees not to assert in any suit, action or proceeding, any claim that it is
      not
      personally subject to the jurisdiction of any such court, that such suit, action
      or proceeding is brought in an inconvenient forum or that the venue of such
      suit, action or proceeding is improper. Each party hereby irrevocably waives
      personal service of process and consents to process being served in any such
      suit, action or proceeding by mailing a copy thereof to such party at the
      address for such notices to it under this Agreement and agrees that such service
      shall constitute good and sufficient service of process and notice thereof.
      Nothing contained herein shall be deemed to limit in any way any right to serve
      process in any manner permitted by law. EACH
      PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
      CONTEMPLATED HEREBY.

    


    (b) Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party;
      provided that a facsimile signature shall be considered due execution and shall
      be binding upon the signatory thereto with the same force and effect as if
      the
      signature were an original, not a facsimile signature.

    


    (c) Headings.
      The
      headings of this Agreement are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Agreement.

    


    (d) Severability.
      If any
      provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction.

    


    (e) Notices.
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered: (i) upon receipt, when delivered personally; (ii) upon
      receipt, when sent by facsimile (provided confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one Trading Day after deposit with a nationally recognized overnight
      delivery service, in each case properly addressed to the party to receive the
      same. The addresses and facsimile numbers for such communications shall be
      :

    


    
      
         

      

      
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    If
      to the
      Company:

    Xethanol
      Corporation

    1185
      Avenue of the Americas, 20th
      Floor

    New
      York,
      NY 10036 

    Telephone:
       646-723-4000

    Facsimile: 646-723-4001

    Attention:
       CEO

    


    With
      a
      copy to:

    Nelson
      Mullins Riley & Scarborough LLP

    Atlantic
      Station

    201
      17th
      Street, N.W. 

    Atlanta,
      Georgia 30363 

    Telephone:
       404-322-6000

    Facsimile: 404-322-6085
      

    Attention:
       Charles
      D. Vaughn

    


    If
      to the
      Buyer:

    Fusion
      Capital Fund II, LLC

    222
      Merchandise Mart Plaza, Suite 9-112

    Chicago,
      IL 60654

    Telephone: 312-644-6644

    Facsimile: 312-644-6244

    Attention: Steven
      G.
      Martin

    


    or
      at
      such other address and/or facsimile number and/or to the attention of such
      other
      person as the recipient party has specified by written notice given to each
      other party three (3) Trading Days prior to the effectiveness of such change.
      (The addresses and facsimile numbers provided above shall supersede those given
      in the Purchase Agreement.) Written confirmation of receipt (A) given by the
      recipient of such notice, consent, waiver or other communication, (B)
      mechanically or electronically generated by the sender's facsimile machine
      containing the time, date, and recipient facsimile number or (C) provided by
      a
      nationally recognized overnight delivery service, shall be rebuttable evidence
      of personal service, receipt by facsimile or receipt from a nationally
      recognized overnight delivery service in accordance with clause (i), (ii) or
      (iii) above, respectively.

    


    (f) Publicity;
      Non-Disclosure.
      The
      Company agrees to file with the SEC a Current Report on Form 8-K containing
      the
      following language regarding this Agreement:

    


     

    
      
         

      

      
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    "ITEM
      1.02 TERMINATION OF MATERIAL DEFINITIVE AGREEMENT

     

    On
      November 13, 2007, Xethanol Corporation entered into a Mutual Termination
      Agreement with Fusion Capital Fund II, LLC ("Fusion"), terminating (1) a Common
      Stock Purchase Agreement with Fusion Capital Fund II, LLC and (2) a Registration
      Rights Agreement with Fusion, each dated as of October 18, 2005." 

    


    The
      Company further agrees to file this Agreement as an exhibit to the Current
      Report on Form 8-K.

    


    The
      Company hereby unconditionally agrees that without the prior written consent
      of
      the Buyer, the Company shall not issue any press release or make any other
      public disclosure of any kind whatsoever with respect to (i) the Buyer, its
      employees, its managers, or any of its affiliates, (ii) the Purchase Agreement
      or the transactions contemplated under the Purchase Agreement, (iii) this
      Agreement, and (iv) the termination of the Purchase Agreement. In addition,
      the
      Company hereby unconditionally agrees that without the prior written consent
      of
      the Buyer, the Company shall not make any other written or verbal communication
      of any kind whatsoever with respect to (i) the Buyer, its employees, its
      managers, or any of its affiliates, (ii) the Purchase Agreement or the
      transactions contemplated under the Purchase Agreement, (iii) this Agreement,
      and (iv) the termination of the Purchase Agreement. Notwithstanding the
      foregoing, the Company may continue to refer to the Purchase Agreement and
      its
      termination in its SEC filings if and to the extent that the Company deems
      required under the federal securities laws. 

    


    (g) Rule
      144.
      With a
      view to making available to the Buyer the benefits of Rule 144 promulgated
      under
      the 1933 Act or any other similar rule or regulation of the SEC that may at
      any
      time permit the Buyer to sell any of its shares of Common Stock to the public
      without registration ("Rule
      144"),
      the
      Company agrees to fully cooperate in the prompt removal of restrictive legend
      from any Common Stock share certificates delivered to the Company by the Buyer
      together with an opinion of Buyer’s counsel in customary form that registration
      is not required under the Securities Act of 1933 or similar state laws in
      compliance with Rule 144

    


    (h) Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and assigns. The Company shall not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of the Buyer, including by merger or consolidation. The Buyer may not
      assign its rights or obligations under this Agreement.

    


    (i) No
      Third Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person.

    


    (j) Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement.

    


    
      
         

      

      
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    (k) No
      Strict Construction.
      The
      language used in this Agreement is the language chosen by the parties to express
      their mutual intent, and no rules of strict construction will be applied against
      any party.

    


    (l) Changes
      to the Terms of this Agreement.
      This
      Agreement and any provision hereof may only be amended by an instrument in
      writing signed by the Company and the Buyer. The term "Agreement" and all
      reference thereto, as used throughout this instrument, shall mean this
      instrument as originally executed, or if later amended or supplemented, then
      as
      so amended or supplemented.

    


    (m) Failure
      or Indulgence Not Waiver.
      No
      failure or delay in the exercise of any power, right or privilege hereunder
      shall operate as a waiver thereof, nor shall any single or partial exercise
      of
      any such power, right or privilege preclude other or further exercise thereof
      or
      of any other right, power or privilege.

    


    (n) Entire
      Agreement.
      This
      Agreement supersedes all other prior oral or written agreements between the
      Buyer, the Company, their affiliates and persons acting on their behalf with
      respect to the matters discussed herein, and this Agreement, the other
      Transaction Documents and the instruments referenced herein contain the entire
      understanding of the parties with respect to the matters covered herein and
      therein and, except as specifically set forth herein or therein, neither the
      Company nor the Buyer makes any representation, warranty, covenant or
      undertaking with respect to such matters. The Company acknowledges and agrees
      that is has not relied on, in any manner whatsoever, any representations or
      statements, written or oral, other than as expressly set forth in this
      Agreement.

    


    


    *
      * * *

    


    
      
         

      

      
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    IN
      WITNESS WHEREOF,
      the
      Buyer and the Company have caused this Mutual Termination Agreement to be duly
      executed as of the date first written above.

    


    


    
      	 	 	
              THE
                COMPANY:

              


              XETHANOL
                CORPORATION

              


               

              By: /s/
                David R. Ames

              Name: David
                R. Ames

              Title: President
                and Chief Executive Officer

              


              BUYER:

              


              FUSION
                CAPITAL FUND II, LLC

              BY:
                FUSION CAPITAL PARTNERS, LLC

              BY:
                SGM HOLDINGS CORP.

              


              


              By: /s/
                Steven G. Martin

              Name: Steven
                G. Martin

              Title: President

            
	 	 	
               

            


    

     

     

    
      
         

      

      
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