Document:

EXHIBIT 4.1

                       SENIOR SECURED ROYALTY INCOME NOTE
                       ----------------------------------

$___________                                                    January __, 2005
New York, New York

         FOR VALUE RECEIVED, the undersigned, XETHANOL BIOFUELS, LLC (the
"Maker"), hereby promises to pay to the order of _________________ (the "Payee")
the principal sum of ___________ ($________) Dollars, together with interest as
hereinafter provided. All payments of principal and/or interest shall be paid as
set forth below, and, except as hereinafter provided, each such payment shall be
made in lawful money of the United States of America.

         1.     Payments of Principal and Interest.
                -----------------------------------

                (a)   The entire principal balance of this Note, together with
all unpaid accrued interest hereunder, shall be due and payable on January __,
2012.

                (b)   This Note shall bear interest, payable semi-annually on or
before June 30 and December 31 of each year commencing June 30, 2005, in an
amount equal to the greater of (i) 5% of the gross revenues (determined in
accordance with generally accepted accounting principles consistently applied)
of the Maker from the sale of ethanol and wet distillers grain at the Maker's
Blairstown, Iowa facility, during the two calendar quarters prior to the subject
June 30 and December 31, but not before the date hereof (each, an "Interest
Period," subject to appropriate pro-ration for the first Interest Period if this
Note is originally issued after January 1, 2005), or (ii) 10% per annum on the
daily outstanding principal amount of this Note. The minimum interest of 10% per
annum shall be paid on or before June 30 and December 31, and if the amount
calculated pursuant to subclause (i) is, upon calculation thereof, greater than
the interest payment, the excess amount shall be paid within 30 days following
such calculation.

                (c)   If and to the extent that any interest payment as
aforesaid shall be deemed in excess of the amount of interest legally permitted
to be charged hereon under applicable law, or shall otherwise be adjudged to be
in violation of any applicable law, then the amount of such excess shall not be
deemed to be interest and shall instead be treated as a royalty on the security
hereof.

         2.     Call and Exchange Option.
                -------------------------

                (a)   The Maker may, at its option, on and after January ___,
2008, upon not less than thirty (30) days prior written notice given to the
Payee (a "Call Notice"), require the Payee to surrender this Note in exchange
for an amount equal to the sum of (i) 130% of the then-outstanding principal
balance of this Note, plus (ii) all accrued but unpaid interest hereunder.

                (b)   Within thirty (30) days after the Payee's receipt of a
Call Notice, the Payee shall, by written election delivered to the Maker, elect
either (i) to accept, in exchange for this Note, all (but not part) of the
amount described in paragraph 2(a) above, or (ii) to convert this Note in
accordance with the provisions of Section 6 below in lieu of the exchange in
respect of the amount to be converted. The Payee shall surrender this Note for
cancellation on the date fixed for exchange, against delivery of the amount to
be paid or certificates for Conversion Shares (as such term is defined in
Section 6 below).

                                       1
<PAGE>

                (c)   Except as provided in this Section 2, the Maker shall have
no right to prepay the principal of this Note at any time.

         3.     Events of Default.

         The following are Events of Default hereunder:

                (a)   any failure by the Maker to pay when due all or any
principal or accrued interest hereunder; or

                (b)   if the Maker shall (i) apply for or consent to the
appointment of a receiver, trustee, custodian or liquidator for itself or any of
its property, (ii) admit in writing its inability to pay its debts as they
mature, (iii) make a general assignment for the benefit of creditors, (iv) be
adjudicated a bankrupt or insolvent or be the subject of an order for relief
under any applicable bankruptcy or insolvency law, or (v) file a voluntary
petition in bankruptcy or a petition or an answer seeking reorganization or an
arrangement with creditors or to take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute, or an answer admitting the material allegations of a petition filed
against it in any proceeding under any such law, or (vi) take any action in
furtherance of or for the purpose of effecting any of the foregoing; or

                (c)   if any order, judgment or decree shall be entered, without
the application, approval or consent of the Maker, by any court of competent
jurisdiction, approving a petition seeking reorganization of the Maker or
appointing a receiver, trustee, custodian, liquidator or other such official of
the Maker, or of all or a substantial part of its assets, and such order,
judgment or decree shall continue unstayed and in effect for any period of sixty
(60) days; or

                (d)   if the Maker hereafter pays any dividends (other than
dividends paid solely in the form of capital stock of the Maker) on any of its
capital stock, or hereafter effects any redemption of any of its capital stock,
or hereafter lends any funds to any of its officers, directors or equity holders
(other than loans or advances for business purposes in the ordinary course of
business), in any case, unless the Maker has, at the time of and after giving
effect to such dividend, redemption payment or loan, an unrestricted cash
balance of $1,000,000 or more; or

                (e)   if the Maker shall be in breach of any of its obligations
under the Security Agreement described in Section 5 below, and such breach is
not cured within thirty (30) days after the occurrence thereof; or if the liens
and security interests pursuant to such Security Agreement shall cease to be
first priority liens with respect to any material portion of the collateral
purported to be covered by such Security Agreement; or

                (f)   any use of the proceeds of the loan evidenced by this Note
in violation of the subscription letter executed by the Payee and the Maker in
connection with the original issuance of this Note; or

                (g)   any dissolution, liquidation or winding-up of the Maker
(provided that any merger or consolidation involving the Maker, or any sale of
assets by the Maker which does not have the practical effect of liquidating or
winding-up the Maker's business, shall not be deemed a dissolution, liquidation
or winding-up for purposes of this Section 3(g)).

                  4. Remedies on Default.
                     -------------------

                  If any Event of Default shall occur and be continuing, then
(a) if such event is of the type described in Section 3(b) or 3(c) above, this
Note shall automatically become due and payable, or (b) in any other such event,
and at any time thereafter, if such event shall then be continuing, the holder
of this Note may, by written notice to the Maker, declare

                                       2
<PAGE>

due and payable the principal of, and interest on, this Note, whereupon the same
shall be immediately due and payable. In the event that this Note becomes or is
declared due and payable prior to its stated maturity, the same shall become due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived.

         5.     Security.
                --------

         This Note, and the Maker's obligations hereunder, are secured by
certain land, buildings and site improvements, mechanical and process equipment
and personal property as provided in the Security Agreement of even date
herewith by and between the Maker and Payee.

         6.     Conversion.
                ----------

                (a)   The Payee shall have the right, exercisable at any time to
convert all (but not part) of the principal and/or unpaid accrued interest of
this Note into fully paid and non-assessable shares of common Stock ("Common
Stock") of Xethanol Corporation or its public successor (the "Parent"), with the
Common Stock being valued for purposes hereof at $4.00 per share (the
"Conversion Price"). In order to exercise this conversion option, the Payee
shall give written notice thereof to the Maker setting forth the outstanding
amount of this Note to be converted and the Payee's calculation of the number of
shares of Common Stock issuable upon such conversion (the "Conversion Shares"),
and such notice shall be accompanied by the original of this Note.

                (b)   No fractional shares will be issued upon any conversion of
this Note, but if the conversion results in a fraction, the fair market value of
such fractional share of Common Stock (which shall be the closing price of such
shares on the exchange or market on which the Common Stock is then traded) will
be paid by the Maker in cash. This right of conversion shall cease upon payment
in full of all principal and interest and other amounts due in respect of this
Note. The Conversion Price of the Conversion Shares shall be appropriately
adjusted in the event of a stock split, stock dividend or similar transaction.

                (c)   The Maker shall deliver or cause to be delivered to the
Payee a certificate or certificates for the applicable number of Conversion
Shares as soon as practicable after surrender of this Note for conversion, but
the person or persons to whom such certificates are issuable shall be considered
the holder of record of the Conversion Shares from the time this Note is
surrendered for conversion. Except as described above, this Note is not
otherwise convertible into shares of Common Stock.

                (d)   If, at the time of issuance of the Conversion Shares, no
registration statement is in effect with respect to such shares under applicable
provisions of the United States Securities Act of 1933, as amended, the Maker
and/or the Parent may at its election require that the Payee provide the Maker
and/or the Parent with written confirmation of the Payee's investment intent and
that any stock certificate delivered to the Payee upon conversion of this Note
shall bear a legend reading substantially as follows:

         THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE U.S. SECURITIES ACT OF 1933, AND MAY NOT BE SOLD,
         TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
         EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 OR AN
         OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS CERTIFICATE THAT
         REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

                (e)   The Conversion Shares will be afforded the same
registration rights as all shares of Common Stock sold by Parent in the private
offering to be consummated on or about the date hereof.

                                       3
<PAGE>

         7.     Certain Waivers.
                ---------------

         Except as otherwise expressly provided in this Note, the Maker hereby
waives diligence, demand, presentment for payment, protest, dishonor,
nonpayment, default, and notice of any and all of the foregoing.

         8.     Amendments.
                ----------

         This Note may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.

         9.     Governing Law; Waiver of Jury Trial.
                -----------------------------------

         This Note shall be deemed to be a contract made under the laws of the
State of New York and shall be governed by, and construed in accordance with,
the laws of the State of New York. THE MAKER HEREBY WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING FOR THE ENFORCEMENT OR COLLECTION OF THIS NOTE.

         10.    Collection Costs.
                ----------------

         In the event that the Payee shall, after the occurrence and during the
continuance of an Event of Default, turn this Note over to an attorney for
collection, the Maker shall further be obligated to the Payee for the Payee's
reasonable attorneys' fees and expenses incurred in connection with such
collection.

         11. Transfer.
             --------

         This Note shall be non-negotiable and non-transferable except to
entities controlled by, controlling or under common control with the Payee, as
to whom this Note may be assigned without the Maker's consent.

                                      XETHANOL BIOFUELS, LLC

                                      By: //
                                          -------------------------------------
                                          Name:
                                          Title:

The undersigned, being the Parent named in the foregoing Note, hereby confirms
to the Payee, the Parent's (a) commitment to reserve and keep available, out of
its authorized but unissued common stock, a sufficient number of shares of
Common Stock to satisfy the Maker's obligation to deliver Conversion Shares upon
any conversion of the foregoing Note, (b) commitment to issue such Conversion
Shares to the Payee upon conversion of the foregoing Note in accordance with the
terms thereof, (c) commitment to register the Conversion Shares with the shares
of Common Stock sold by Parent in the private offering to be consummated on or
about the date hereof, (d) commitment to maintain the effectiveness of any such
registration of Conversion Shares, and (e) representation and warranty that (i)
the issuance of Conversion Shares in respect hereof and in accordance herewith
has been duly authorized by all necessary company action on the part the Parent,
and (ii) all Conversion Shares, when issued hereunder, shall be validly issued,
fully paid and non-assessable.

                                       4
<PAGE>

                                        XETHANOL CORPORATION

                                        By: //
                                           -------------------------------------
                                           Name:
                                           Title:

                                       5
<PAGE>EXHIBIT 10.1

                               SECURITY AGREEMENT

         SECURITY AGREEMENT (this "Agreement"), made this ___ day of January
2005, by and between LUCAS ENERGY TOTAL RETURN PARTNERS, LLC, a ___________
limited liability company, having offices at
________________________________________, and LUCAS ENERGY TOTAL RETURN OFFSHORE
LTD, a ___________ ___________, having offices at
________________________________________ (collectively, the "Secured Party"),
and XETHANOL BIOFUELS, LLC, a Delaware limited liability company having its
principal offices c/o Xethanol Corporation, 1185 Avenue of the Americas, 20th
Floor, New York, New York 10036 (the "Debtor").

                              W I T N E S S E T H:

         WHEREAS, on the date hereof, the Debtor is issuing two Senior Secured
Royalty Income Notes in the aggregate principal amount of $5,000,000 (the
"Notes"); and

         WHEREAS, in order to induce the Secured Party to provide to the Debtor
the loans evidenced by the Notes, the Debtor has agreed to grant to the Secured
Party a first priority lien and security interest in the Collateral hereinafter
described, in accordance with the terms and conditions of this Agreement;

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

         1. Definitions.

                  (a) All references to the Secured Party and the Debtor herein,
or to any other person herein, shall include their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns. The
words "hereof," "herein," "hereunder," "this Agreement" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not any particular provision of this Agreement and as this Agreement now exists
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.

                  (b) In addition to those capitalized terms defined elsewhere
in this Agreement, the following terms shall have the following respective
meanings wherever used in this Agreement:

<PAGE>

         "Collateral" shall have the meaning set forth in Section 2 below.

         "Equipment" shall mean all mechanical and process and personal property
now or hereafter acquired located at the Debtor's facility in Blairstown, Iowa.

         "Event of Default" shall have the meaning ascribed thereto in the
Notes.

         "Holders" shall mean the holders of Notes (including any replacement
Notes from time to time) as same are constituted from time to time.

         "Obligations" shall mean the collective reference to all principal,
interest, collection costs, expenses and other amounts owing or payable from
time to time under the Notes and/or this Agreement, whether arising before or
after the commencement of any bankruptcy or insolvency case with respect to the
Debtor (including, without limitation, the payment of interest and other amounts
which would accrue and become due but for the commencement of such case).

         "Person" or "person" shall mean any individual, sole proprietorship,
partnership, limited partnership, limited liability company, corporation,
business trust, unincorporated association, joint stock corporation, trust,
joint venture or other entity or any government or any agency or instrumentality
or political subdivision thereof.

         "Records" shall mean all of the Debtor's present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Collateral, together with
the tapes, disks, diskettes and other data and software storage media and
devices, file cabinets or containers in or on which the foregoing are stored
(including any rights of the Debtor with respect to the foregoing maintained
with or by any other Person).

         "Security Interests" shall mean the liens and security interests
granted by the Debtor to the Secured Party, and all rights and remedies in
respect thereof, pursuant to this Agreement.

         2. The Security Interests.

         In order to secure the due and punctual payment and performance of all
Obligations from time to time, the Debtor hereby grants to the Secured Party a
continuing lien and security interest in, and hereby assigns to the Secured
Party as collateral security, the following described property and interests of
the Debtor, whether now owned or hereafter acquired or existing, and wherever
located (collectively, the "Collateral"):

                  (a) all Equipment;

                  (b) all Records; and

                  (c) all products and proceeds of the foregoing, in any form,
including, without limitation, insurance proceeds and all claims against third
parties for loss or damage to or destruction of any or all of the foregoing.

                                       2
<PAGE>

         3. Filing; Further Assurances.

         The Debtor will, at its expense, execute, deliver, file and record (in
such manner and form as the Secured Party shall require), or permit the Secured
Party to file and record, (a) all financing statements, (b) all carbon,
photographic or other reproductions of financing statements or this Agreement
(which shall be sufficient as a financing statement hereunder), (c) all
endorsements to title to any vehicles or other Collateral as may be required in
order to perfect the Security Interests therein, and (d) all specific
assignments or other papers that may be necessary or desirable, or that the
Secured Party may request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Secured Party to exercise and enforce its
rights hereunder with respect to any of the Collateral. The Debtor hereby
appoints the Secured Party as the Debtor's attorney-in-fact to execute and file,
in the name and on behalf of the Debtor, such additional financing statements
and other assignments and documents as the Secured Party may request. In
addition, in the event and to the extent that any of Collateral consists of or
is represented by instruments or other evidences of ownership such as would
require physical possession of same in order to perfect the Security Interests
therein under applicable law, the Debtor will promptly, at its expense, deliver
same to the Secured Party, with any necessary endorsements thereon.

         4. Representations and Warranties of the Debtor.

         The Debtor hereby represents and warrants as follows:

                  (a) That the Debtor is the valid and lawful owner of all of
the Collateral, free from any and all adverse liens, security interests or
encumbrances.

                  (b) That the Debtor has full right, power and authority to
grant to the Secured Party the Security Interests pursuant to the terms of this
Agreement, and that the Security Interests do not conflict with any rights of
any other persons or any commitments of the Debtor to any other persons.

                  (c) That no financing statement or other evidence of liens
covering any of the Collateral is on file in any public office, other than
financing statements and other filings filed pursuant to this Agreement.

                  (d) That all additional information, representations and
warranties contained in Exhibit A annexed hereto and made a part hereof are
true, accurate and complete on the date hereof.

         5. Covenants of the Debtor.

         The Debtor hereby covenants and agrees as follows:

                  (a) That the Debtor will defend the Collateral and the
Security Interests against all claims and demands of all Persons at any time
claiming any adverse interest therein or thereagainst.

                                       3
<PAGE>

                  (b) That the Debtor will give written notice thereof to the
Secured Party at least thirty (30) days prior to (i) any change in the location
of the principal office of the Debtor or the office where the Debtor maintains
its books and records pertaining to any Collateral, (ii) any change in any of
the information contained in Exhibit A annexed hereto, and (iii) the movement or
location of any Collateral to or at any address other than as set forth in said
Exhibit A.

                  (c) That the Debtor will promptly pay any and all taxes,
assessments and governmental charges upon the Collateral prior to the date that
penalties may attach thereto or same become a lien on any of the Collateral,
except to the extent that such taxes, assessments and charges shall be contested
by the Debtor in good faith and through appropriate proceedings.

                  (d) That the Debtor will immediately notify the Secured Party
of any event causing a material loss or diminution in the value of the
Collateral, and the amount (or the Debtor's best estimate of the amount) of such
loss or diminution.

                  (e) That the Debtor will at all times have and maintain
insurance (i) with respect to all insurable Collateral in amounts and of types
as are customarily maintained by other companies of comparable size and type of
business, each of which insurance policies shall name the Secured Party as a
loss payee as its interests may appear, and (ii) with respect to the conduct and
operation of the Debtor's business, against such liabilities and in such amounts
as are customarily maintained by businesses of similar size, scope and location,
each of which insurance policies shall name the Secured Party as an additional
insured. All policies of insurance shall provide for a minimum of thirty (30)
days' written notice to the Secured Party prior to any cancellation,
modification or non-renewal thereof. The Debtor shall, on the date hereof and
from time to time upon request hereafter, furnish the Secured Party with
certificates or other evidence satisfactory to the Secured Party of compliance
with the foregoing insurance provisions.

                  (f) That the Debtor will keep all of the Collateral free from
any and all adverse liens, security interests or encumbrances and in good order
and repair, reasonable wear and tear excepted, and will not waste or destroy the
Collateral or any part thereof.

                  (g) That the Debtor will not operate or use any of the
Collateral in violation of any  applicable law.

         6. Records Relating to Collateral.

         The Debtor will keep and maintain complete and accurate records
concerning the Collateral at its principal executive office as set forth in
Exhibit A annexed hereto, or at such other place(s) of business as the Secured
Party may approve in writing. The Debtor will (a) faithfully hold and preserve
such records and chattel paper, (b) permit representatives of the Secured Party,
at any time during normal business hours, upon reasonable notice, and without
undue material disruption of the Debtor's business, to examine and inspect the
Collateral and to make copies and abstracts of such records and chattel paper,
and (c) furnish to the Secured Party such information and reports regarding the
Collateral as the Secured Party may from time to time reasonably request.

                                       4
<PAGE>

         7.       General Authority.

                  (a) In the event that the Secured Party shall at any time be
required to take action to defend the Security Interests, or the Debtor shall
fail to satisfy its obligations under Section 5(c) or 5(e) hereof, then the
Secured Party shall have the right, but shall not be obligated, to take such
steps and make such payments as may be required in order to effect compliance,
and the Secured Party shall have the right either to demand and receive
immediate reimbursement from the Debtor for all costs and expenses incurred by
the Secured Party in connection therewith, and/or to add such costs and expenses
to the Obligations.

                  (b) The Debtor hereby irrevocably appoints the Secured Party
the true and lawful attorney for the Debtor, with full power of substitution, in
the name of the Debtor, the Secured Party or otherwise, for the sole use and
benefit of the Secured Party, but at the Debtor's expense, to the extent
permitted by law to exercise, at any time and from time to time during the
continuance of an Event of Default, any or all of the following powers with
respect to any or all of the Collateral (which powers shall be in addition and
supplemental to any powers, rights and remedies of the Secured Party described
herein):

                  (i) to demand, sue for, collect, receive and give acquittance
for any and all monies due or to become due upon or by virtue thereof; and

                  (ii) to receive, take, endorse, assign and deliver any and all
checks, notes, drafts, documents and other negotiable and non-negotiable
instruments and chattel paper taken or received by the Secured Party in
connection therewith; and

                  (iii) to settle, compromise, discharge, extend, compound,
prosecute or defend any action or proceeding with respect thereto; and

                  (iv) to sell, transfer, assign or otherwise deal in or with
same, or the proceeds or avails thereof, as fully and effectually as if the
Secured Party were the absolute owner thereof; and

                  (v) to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference thereto; and

                  (vi) to discharge any taxes, liens, security interests or
other encumbrances at any time placed thereon.

Anything hereinabove contained to the contrary notwithstanding, the Secured
Party shall give the Debtor not less than ten (10) days' prior written notice of
the time and place of any sale or other intended disposition of any of the
Collateral, except any Collateral which is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market.

         8. Remedies Upon Event of Default.

         If any Event of Default shall have occurred and be continuing, then the
Secured Party may exercise all of the rights and remedies of a secured party
under applicable law, and, in addition, the Secured Party may, without being
required to give any notice, except as herein

                                       5
<PAGE>

provided or as may be required by mandatory provisions of law, (a) apply the
cash, if any, then held by it as Collateral in the manner specified in Section
10 hereof, and (b) if there shall be no such cash or if such cash shall be
insufficient to pay all of the Obligations in full, sell the Collateral, or any
part thereof, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Secured Party may deem satisfactory. The Secured Party
may require the Debtor to assemble all or any part of the Collateral and make it
available to the Secured Party at a place to be designated by the Secured Party
which is reasonably convenient to the Debtor and the Secured Party. Any holder
of an Obligation may be the purchaser of any or all of the Collateral so sold at
any public sale (or, if the Collateral is of a type customarily sold on a
recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale) and thereafter hold same,
absolutely free from any right or claim of whatsoever kind. Upon any such sale,
the Secured Party shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. Each purchaser at any such sale shall
hold the Collateral so sold absolutely, free from any claim or right of
whatsoever kind, including any equity or right of redemption of the Debtor. To
the extent permitted by law, the Debtor hereby specifically waives all rights of
redemption, stay or appraisal which it has or may have under any rule of law or
statute now existing or hereafter adopted. The Secured Party shall give the
Debtor not less than ten (10) days' prior written notice of its intention to
make any such public or private sale or sales at a broker's board or on a
securities exchange. Such notice, in case of a public sale, shall state the time
and place fixed for such sale, and in case of sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or the portion thereof being sold,
will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Secured Party may fix in the notice of such sale. At any
such sale, the Collateral may be sold in one lot as an entirety or in separate
parcels, as the Secured Party may determine. The Secured Party shall not be
obligated to make such sale pursuant to any such notice. The Secured Party may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be adjourned. In case of any sale of all or any part of the Collateral
on credit or for future delivery, the Collateral so sold may be retained by the
Secured Party until the selling price is paid by the purchaser thereof, but the
Secured Party shall not incur any liability in the case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice. The Secured Party,
instead of exercising the power of sale herein conferred upon it, may proceed by
a suit or suits at law or in equity to foreclose the Security Interests and sell
the Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.

         9. Right of Secured Party to Use and Operate Collateral.

         Upon the occurrence and during the continuance of any Event of Default,
to the extent permitted by law, the Secured Party shall have the right and
power, with or without legal process, to enter upon any or all of the premises
where the Equipment is located and/or any other location at which any Equipment
may be maintained, to take possession of all or any part of the Equipment, and
to exclude the Debtor and all persons claiming under the Debtor wholly or partly
therefrom, and thereafter to sell same in accordance herewith and/or hold,
store, and/or use,

                                       6
<PAGE>

operate, manage and control the same. Upon any such taking of possession, the
Secured Party may, from time to time, at the expense of the Debtor, make all
such repairs, replacements, alterations, additions and improvements to the
Collateral as the Secured Party may deem proper. The Secured Party shall further
have the right to manage and control the Collateral, and to carry on the
business and to exercise all rights and powers of the Debtor in respect thereof
as the Secured Party shall deem proper, including the right to enter into any
and all such agreements with respect to the leasing and/or operation of the
Collateral or any part thereof, and/or the sale of Equipment, as the Secured
Party may see fit; and the Secured Party shall be entitled to collect and
receive all rents, issues, profits, fees, revenues and other income of the same
and every part thereof. Such rents, issues, profits, fees, revenues and other
income shall be applied to pay the expenses of holding and operating the
Collateral and of conducting the business thereof, and of all maintenance,
repairs, replacements, alterations, additions and improvements, and to make all
payments which the Secured Party may be required or may elect to make, if any,
for taxes, assessments, insurance and other charges upon the Collateral or any
part thereof, and all other payments which the Secured Party may be required or
authorized to make under any provision of this Agreement (including legal costs
and reasonable attorneys' fees). The remainder of such rents, issues, profits,
fees, revenues and other income shall be applied in accordance with Section 10
below, and, unless otherwise provided or required by law or by a court of
competent jurisdiction, any surplus shall be paid over to the Debtor. The Debtor
shall, upon request of the Secured Party, cooperate with the Secured Party in
all lawful respects in connection with any exercise by the Secured Party of its
rights hereunder. Anything elsewhere contained in this Agreement to the contrary
notwithstanding, no use or operation of any of the Collateral, or the conduct of
any business associated with any of the Collateral, shall constitute an
assumption by the Secured Party of any liabilities or obligations relating to
such Collateral or the conduct of such business, and the Secured Party hereby
disclaims any responsibility for or in respect of any such liabilities and
obligations.

         10. Application of Collateral and Proceeds.

         The proceeds of any sale of, or other realization upon, all or any part
of the Collateral shall be applied in the following order of priorities:

                  (a) first, to pay the expenses of such sale or other
realization, and all expenses, liabilities and advances incurred or made by or
on behalf of the Secured Party in connection therewith, and any other
unreimbursed expenses for which the Secured Party is to be reimbursed pursuant
to Section 11 hereof;

                  (b) second, to the payment of the Obligations to the Holders
thereof, ratably in proportion to the respective amounts of Obligations held by
such Holders; and

                  (c) finally, to pay to the Debtor, or its successors or
assigns, or as a court of competent jurisdiction may direct, any surplus then
remaining from such proceeds.

         11. Expenses; Secured Party's Lien.

         The Debtor will, forthwith upon demand, pay to the Secured Party:

                                       7
<PAGE>

                  (a) the amount of any taxes or other charges which the Secured
Party may have been required to pay by reason of the Security Interests
(including any applicable transfer taxes) or to free any of the Collateral from
any lien thereon; and

                  (b) the amount of any and all reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of its counsel and of
any agents not regularly in its employ, which the Secured Party may incur in
connection with (i) the operation, collection, sale or other disposition of any
of the Collateral, (ii) the exercise by the Secured Party of any of the powers
conferred upon it hereunder, and/or (iii) any default on the Debtor's part
hereunder.

         12. Termination of Security Interests; Release of Collateral.

         Upon the indefeasible payment in full of all Obligations, the Security
Interests shall terminate and all rights in the Collateral shall revert to the
Debtor. Upon any such termination of the Security Interests or release of
Collateral, the Secured Party will, at the Debtor's expense, execute and deliver
to the Debtor such documents as the Debtor shall reasonably request to evidence
the termination of the Security Interests or the release of such Collateral, as
the case may be.

         13. Notices.

         All notices, demands and other communications hereunder shall be given
or made to the subject party at its address first set forth above, or at such
other address and/or telecopier number as the addressee may hereafter specify
for the purpose by means of written notice to the other party hereto. Such
notices and other communications will be effectively given only if and when
given in writing and personally delivered, when sent by facsimile transmission
to a party's designated facsimile number, one (1) day after being sent by
Federal Express, DHL or other recognized overnight courier service with all
charges prepaid or billed to the account of the sender, or three (3) days after
being mailed by first class mail with all postage prepaid.

         14. Waivers; Non-Exclusive Remedies.

         No failure on the part of the Secured Party to exercise, and no delay
in exercising, and no course of dealing with respect to, any right, power or
remedy under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise by the Secured Party of any right, power or remedy
under this Agreement preclude any exercise of any other right, power or remedy.
The remedies in this Agreement are cumulative and are not exclusive of any other
remedies provided by law, in equity or otherwise.

         15. Changes in Writing.

         Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally but only by a statement in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought.

                                       8
<PAGE>

         16. Governing Law; Waiver of Jury Trial.

                  (a) This Agreement shall (irrespective of where it is
executed, delivered and/or performed) be governed by and construed in accordance
with the laws of New York (without giving effect to principles of conflicts of
law), except as otherwise required by mandatory provisions of law and except to
the extent that remedies provided by the laws of any other jurisdiction are
governed by the laws of such jurisdiction.

                  (b) THE DEBTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING UNDER OR RELATING TO THIS AGREEMENT, AND CONSENTS THAT THE
SECURED PARTY MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE DEBTOR WITH RESPECT TO JURISDICTION AND THE
WAIVER OF THE RIGHT TO TRIAL BY JURY.

         17.      Severability.

         If any provision hereof is held invalid or unenforceable in any
jurisdiction, such provision shall (for purposes of enforcement in such
jurisdiction only) be reduced in scope and effect to the extent necessary to
render same enforceable, and the other provisions hereof shall remain in full
force and effect in such jurisdiction and shall be liberally construed in favor
of the Secured Party.

         18. Headings.

         The captions and Section headings in this Agreement are for convenience
of reference only, and shall not limit or otherwise affect the meaning or
interpretation of any provision hereof.

         19.      Assignment.

         This Agreement may not be assigned by the Debtor without the Secured
Party's prior written consent, but shall otherwise be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

                                       9
<PAGE>

         IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first set forth above.

                                 SECURED PARTY:

                                 LUCAS ENERGY TOTAL RETURN PARTNERS, LLC

                                 By:
                                    --------------------------------------------
                                     Name:
                                     Title:

                                 LUCAS ENERGY TOTAL RETURN OFFSHORE LTD.

                                 By:
                                    --------------------------------------------
                                     Name:
                                     Title:

                                 DEBTOR:

                                 XETHANOL BIOFUELS, LLC

                                 By:
                                    --------------------------------------------
                                     Name:
                                     Title:

                                       10
<PAGE>

EXHIBIT A

                              TO SECURITY AGREEMENT

             Additional Information, Representations and Warranties

(1)  The exact name of the Debtor is as first set forth in the Security
     Agreement.

(2)  The Debtor has no subsidiaries.

(3)  The Debtor owns and uses the following trade names:

                  None.

(4)  The Debtor is a limited liability company duly organized, validly existing
     and in good standing under the laws of Delaware.

(5)  The principal executive office of the Debtor is located c/o Xethanol
     Corporation, 1185 Avenue of the Americas, 20th Floor, New York, New York
     10036, and the books and records pertaining to the Collateral are located
     at such address. The street addresses where the Equipment is located are
     ____________________________________________________________________ and
     ___________________________________________________________________.

                                       11
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]