Unassociated Document


    STOCK
      PURCHASE AND TERMINATION AGREEMENT

     

    This
      Stock Purchase and Termination Agreement (the “Agreement”),
      dated
      as of October 5, 2007, is entered into by and among H2Diesel Holdings, Inc.,
      a
      Florida corporation (“Holdings”),
      H2Diesel, Inc., a Delaware corporation and wholly-owned subsidiary of Holdings
      (“H2Diesel”),
      and
      Xethanol Corporation, a Delaware corporation (“Xethanol”).

     

    RECITALS

     

    WHEREAS,
      Xethanol beneficially owns 5,850,000 shares of common stock, par value $0.001
      per share, of Holdings; and

     

    WHEREAS,
      Xethanol desires to sell 5,460,000 shares (the “Shares”) and to retain 390,000
      shares (the “Retained Shares”) of such common stock; and 

     

    WHEREAS,
      H2Diesel and Xethanol are parties to an Amended and Restated Sublicense
      Agreement, dated June 15, 2006 (the “Sublicense
      Agreement”),
      a
      Technology Access Agreement, dated June 15, 2006 (the “Technology
      Access Agreement”),
      and a
      Letter Agreement regarding Registration Rights, dated October 16, 2006 (the
      “Letter
      Agreement”,
      together with the Sublicense Agreement and Technology Access Agreement, the
      “H2Diesel/Xethanol
      Agreements”);
      and

     

    WHEREAS,
      Holdings desires to purchase and Xethanol desires to sell to Holdings all the
      Shares beneficially owned by Xethanol and all parties desire to terminate the
      H2Diesel/Xethanol Agreements; and

     

    WHEREAS,
      the parties hereto desire to effect the releases and waivers contemplated hereby
      in connection with the sale and purchase hereunder.

     

    NOW
      THEREFORE, for good and adequate consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, Holdings, H2Diesel and Xethanol agree as
      follows:

     

    TERMS

     

    1. PURCHASE
      AND SALE OF SHARES

     

    Subject
      to the terms and conditions set forth in this Agreement, in reliance on the
      respective representations, warranties and covenants contained herein and in
      consideration for the releases set forth herein:

     

    1.1 At
      the
      Closing (as hereinafter defined), Xethanol will sell, convey, assign and
      transfer to Holdings free and clear of all Liens (as hereinafter defined),
      and
      Holdings will purchase and redeem from Xethanol, all of the Shares for an
      aggregate purchase price equal to $7,000,000 (the “Purchase
      Price”);
      and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2 Upon
      execution of this Agreement, Holdings will pay Xethanol a non-refundable deposit
      of $250,000, which amount will be deducted from the Purchase Price payable
      at
      the Closing.

     

    2. CLOSING

     

    2.1 Condition
      to Closing.
      The
      Closing (as hereinafter defined) is conditioned upon the closing of a
      transaction in which Holdings obtains a minimum of $10,000,000 of new financing
      (the “Financing
      Transaction”).
      Holdings may waive this condition in its sole discretion by providing written
      notice to the other parties.

     

    2.2 Closing
      Date.
      The
      Closing will occur simultaneously with or at a reasonably prompt time after
      the
      closing of the Financing Transaction, or at such date, time and location as
      mutually agreed upon by all parties in writing (the “Closing”).

     

    2.3 Termination.
      If the
      Closing does not occur on or before November 9, 2007, or such later date as
      may
      be agreed by the parties in writing, each party shall have an independent right
      to terminate this Agreement upon ten (10) calendar days’ written notice to the
      other party. No party shall incur any obligation to the other party as a result
      of such termination, unless such termination results from a failure to close
      arising from a breach by a party of its obligations hereunder, in which case
      the
      non-breaching party shall be entitled to pursue remedies at law or equity.
      The
      failure of Holdings to satisfy the condition specified in Section 2.1 shall
      not
      be a breach. However, in the event of a termination other than as a result
      of a
      breach by Xethanol of its obligations hereunder, Xethanol shall retain the
      non-refundable deposit of $250,000.

     

    2.4 Deliveries
      at Closing.
      At the
      Closing, 

     

    (a) Xethanol
      shall deliver to Holdings

     

    
      	 	
              (i)

            	
              The
                stock certificates representing the Shares, duly endorsed in blank
                or
                accompanied by assignments separate from the certificates duly endorsed
                in
                blank; 

            


    

     

    
      	 	
              (ii)

            	
              Any
                other documents necessary to transfer to Holdings good, valid and
                marketable title to the Shares, and

            


    

     

    
      	 	
              (iii)

            	
              Originals
                of all promissory notes and instruments, each marked cancelled, evidencing
                any and all debt owed by Holdings or H2Diesel to Xethanol (the
                “Debt”);
                and

            


    

     

    
      	 	
              (iv)

            	
              Such
                other documents as may reasonably be requested by Holdings or
                H2Diesel to further document the termination and release occurring
                effective as of the Closing.

            


    

     

    (b) Holdings
      shall deliver to Xethanol $6,750,000, which is the Purchase Price for the Shares
      minus the $250,000 deposit previously delivered to Xethanol upon execution
      of
      the Agreement, by wire transfer of immediately available funds to a bank account
      previously designated by Xethanol. Holdings and H2Diesel
      shall also deliver such
      other
      documents as may reasonably be requested by Xethanol to
      further document the termination and release occurring effective as of the
      Closing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. TERMINATION
      AND RELEASE

     

    3.1 Termination
      of H2Diesel/Xethanol
      Agreements.
      Effective as of the occurrence of the Closing, but not in the event that this
      Agreement terminates prior to the Closing occurring, the H2Diesel/Xethanol
      Agreements are hereby terminated, and are of no further force and effect, and
      no
      party thereto shall have any further rights or obligations
      thereunder; provided, however, that all provisions regarding confidential
      information shall survive such termination, including but not limited to section
      2.6 of the Sublicense Agreement regarding intellectual property rights and
      any
      defined terms included therein, and all confidential information given by
      Holdings or H2Diesel to Xethanol is returned within thirty days from the
      Closing. 

     

    3.2 Release
      by Holdings and H2Diesel.
      Effective as of the occurrence of the Closing, but not in the event that this
      Agreement terminates prior to the Closing occurring, Holdings and H2Diesel,
      on
      their own behalf and on behalf of their officers, directors, employees, agents,
      representatives, predecessors, successors and assigns (collectively,
“Representatives”),
      hereby irrevocably, unconditionally and forever (i) waive and relinquish any
      rights granted to H2Diesel pursuant to the H2Diesel/Xethanol
      Agreements
      and the other agreements and documents contemplated thereby, and
      (ii) release and discharge Xethanol and its Representatives from any and
      all manner of claims, liabilities and obligations whatsoever, whether known
      or
      unknown, accrued or not accrued, direct or indirect, in law or equity, arising
      from any source or manner whatsoever, including without limitation those arising
      from or relating to the H2Diesel/Xethanol Agreements
      or the other agreements and documents contemplated thereby, which may exist
      as
      of the date hereof or as of the date of Closing, or which may arise in the
      future based upon events that have occurred or documents signed at any time
      prior to the date hereof or the date of Closing.

     

    3.3 Release
      by Xethanol.
      Effective as of the occurrence of the Closing, but not in the event that this
      Agreement terminates prior to the Closing occurring, Xethanol, on behalf of
      itself and its Representatives, hereby irrevocably, unconditionally and forever
      (i) waives and relinquishes any rights it may have against or with respect
      to
      Holdings or H2Diesel or their Representatives pursuant to the H2Diesel/Xethanol
      Agreements
      and the other agreements and documents contemplated thereby, (ii) waives and
      relinquishes any right to repayment of principal and interest on any and all
      Debt, which the parties believe to be an aggregate amount of $50,000, and (iii)
      releases and discharges Holdings and H2Diesel and their respective
      Representatives from any and all manner of claims, liabilities and obligations
      whatsoever, whether known or unknown, accrued or not accrued, direct or
      indirect, in law or equity, arising from any source or manner whatsoever,
      including without limitation those arising from or relating to the H2Diesel/Xethanol
      Agreements
      or the other agreements and documents contemplated thereby, which may exist
      as
      of the date hereof or as of the date of Closing, or which may arise in the
      future based upon events that have occurred or documents signed at any time
      prior to the date hereof or the date of Closing.

     

    3.4 Effectiveness
      of Termination and Release.
      For the
      avoidance of doubt, the parties agree that the terminations, waivers and
      releases in this Article 3 shall be effective immediately when, but only when,
      the sale and purchase of the Shares and payment therefor has taken place at
      the
      Closing. In the event this Agreement terminates prior to the Closing the
      terminations, waivers and releases in this Article 3 shall be of no force or
      effect, and the H2Diesel/Xethanol Agreements
      shall continue in full force and effect. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4. REPRESENTATIONS
      AND WARRANTIES

     

    4.1 Representations
      and Warranties of Xethanol.
      Xethanol
      represents and warrants to to Holdings and H2Diesel both on the date hereof
      and
      on the date of the Closing as follows:

     

    (a) Xethanol
      has the requisite power and authority to execute, deliver and carry out the
      terms and provisions of this Agreement and to consummate the transactions
      contemplated hereby, and has taken all necessary action to authorize the
      execution, delivery and performance of this Agreement;

     

    (b) The
      execution of this Agreement by Xethanol does not, and the performance by
      Xethanol of its obligations hereunder will not, constitute a violation of,
      conflict with or result in a default under any contract, commitment, agreement,
      understanding, arrangement or restriction of any kind to which Xethanol is
      a
      party or by which Xethanol is bound or any judgment, decree or order applicable
      to Xethanol;

     

    (c) To
      the
      best of its knowledge, neither the execution and delivery of this Agreement
      nor
      the performance by Xethanol of its obligations hereunder will violate any
      provision of law applicable to Xethanol or require any consent or approval
      of,
      or filing with or notice to any public body or authority under any provision
      of
      law applicable to Xethanol other than notices or filings pursuant to the federal
      securities laws; and

     

    (d) Xethanol
      is the sole record and beneficial owner (within the meaning of Rule 13d-3 under
      the Securities Exchange Act of 1934, as amended) of the Shares, has good and
      marketable title to all of the Shares, and there exist no liens, claims,
      options, proxies, voting agreements, charges, security interests, or
      encumbrances of whatever nature (“Liens”) affecting such Shares. Upon transfer
      of the Shares to Holdings by Xethanol, Holdings will have good and marketable
      title to the Shares free and clear of all Liens. Other than the Shares and
      the
      Retained Shares, Xethanol and its subsidiaries or affiliates do not beneficially
      own any other securities of Holdings or H2Diesel and do not have any outstanding
      option, warrant or other right to acquire, directly or indirectly, any
      securities of Holdings or H2Diesel which are or may by their terms become
      entitled to vote or any securities which are convertible or exchangeable into
      or
      exercisable for any securities of Holdings or H2Diesel which are or may by
      their
      terms become entitled to vote, and Xethanol is not subject to any offer,
      contract, arrangement, understanding or relationship (whether or not legally
      enforceable) which allows or obligates Xethanol to vote, dispose of or acquire
      any securities of Holdings or H2Diesel.

     

    4.2 Representations
      and Warranties of Holdings and H2Diesel.
      Holdings
      and H2Diesel represent and warrant to Xethanol both on the date hereof and
      on
      the date of the Closing as follows:

     

    (a) Holdings
      and H2Diesel have the requisite corporate power and authority to execute,
      deliver and to consummate the transactions contemplated hereby, and have taken
      all necessary corporate action to authorize the execution, delivery and
      performance of this Agreement; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) The
      execution of this Agreement by Holdings and H2Diesel does not, and the
      performance by Holdings and H2Diesel of their obligations hereunder will not,
      to
      the best of their knowledge, constitute a violation of, conflict with or result
      in a default under any contract, commitment, agreement, understanding,
      arrangement or restriction of any kind to which the Holdings or H2Diesel is
      a
      party or by which Holdings or H2Diesel is bound.

     

    (c) To
      the
      best of their knowledge, neither the execution and delivery of this Agreement
      nor the performance by Holdings and H2Diesel of their obligations hereunder
      will
      violate any provision of law applicable to Holdings and H2Diesel or require
      any
      consent or approval of, or filing with or notice to any public body or authority
      under any provision of law applicable to Holdings and H2Diesel other than
      notices or filings pursuant to the federal securities laws.

     

    5. MISCELLANEOUS.

     

    5.1 Entire
      Agreement.
      This
      Agreement sets forth the entire agreement and supersedes any and all prior
      agreements of the parties with respect to the transactions set forth herein.
      

     

    5.2 Amendment,
      Waiver.
      No
      change, amendment or modification of any provision of this Agreement shall
      be
      valid unless set forth in a written instrument signed by the parties hereto,
      and
      no waiver of any provision of this Agreement shall be valid unless set forth
      in
      a written instrument signed by the party subject to enforcement of such
      waiver.

     

    5.3 Governing
      Law.
      The
      validity, construction and interpretation of this Agreement shall be governed
      by
      the laws of the State of New York, excluding any otherwise applicable rules
      of
      conflict that would cause the laws of another jurisdiction to
      apply.

     

    5.4 Further
      Assurances. 
      Each
      party shall take such action (including, the execution, acknowledgment and
      delivery of documents) as may reasonably be requested by any other party for
      the
      implementation or continuing performance of this Agreement.

     

    5.5 Construction;
      Severability.
      In the
      event that any provision of this Agreement conflicts with the law under which
      this Agreement is to be construed or if any such provision is held invalid
      by a
      court with jurisdiction over the parties to this Agreement, (i) such provision
      shall be deemed to be restated to reflect as nearly as possible the original
      intentions of the parties in accordance with applicable law, and (ii) the
      remaining terms, provisions, covenants and restrictions of this Agreement shall
      remain in full force and effect.

     

    5.6 Headings;
      Interpretation.
      The
      captions and headings used in this Agreement are inserted for convenience only
      and shall not affect the meaning or interpretation of this Agreement. Whenever
      the words “include”, “includes,” or “including” are used in this Agreement, they
      shall be deemed followed by the words “without limitation.”

     

    5.7 Confidentiality.
      Each
      Party agrees to keep any Confidential Information of the other parties
      confidential and agrees not to disclose such information. Notwithstanding the
      foregoing, the parties may make disclosures to the extent required by law or
      by
      the applicable rules and regulations of a securities exchange or national market
      system on which a disclosing Party’s shares are listed or traded.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.8 Counterparts;
      Facsimile.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original and all of which together shall constitute one and the same document.
      This Agreement, and written amendments hereto, may be executed by
      facsimile. 

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      above first written.


     

    
      	 	 	 
	 	
              H2DIESEL
                HOLDINGS, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              David A. Gillespie
	 	
              

              Name:
                David A. Gillespie

            
	 	
              Title:   President

            


    

     

    
      	 	 	 
	 	
              H2DIESEL,
                INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/ David A. Gillespie
	 	
              

              
                Name:
                  David A. Gillespie

              

            
	 	
              
                Title:   President

              

            


    

     

    
      	 	 	 
	 	
              XETHANOL
                CORPORATION

            
	 
 	 
 	 
 
	 	By:  	/s/ David Ames
	 	
              

              Name:
                David Ames

            
	 	
              
                Title:   Chief
                  Executive Officer