Document:

Technology Access Agreement

     

    Exhibit
      10.4

    

    TECHNOLOGY
      ACCESS AGREEMENT

    

    This
      Technology Access Agreement (the “Agreement”) is made by and between H2Diesel,
      Inc., a Delaware corporation (hereinafter “H2Diesel”) and Xethanol Corporation,
      a Delaware corporation (hereinafter “Xethanol”), effective as of the
      15th
      day of
      June, 2006 (the “Effective Date”). 

    

    WHEREAS,
      pursuant to an Exclusive
      License Agreement dated March 20, 2006 between Ferdinando Petrucci as Licensor
      and H2Diesel
      as
      Licensee,
      H2Diesel
      is the licensee of certain intellectual property rights that relate to the
      composition and manufacture of a
      certain
      chemical additive for use in making bio-fuel for internal combustion engines
      (the “Additive”, as more fully defined below);
      and

    

    WHEREAS,
      H2Diesel
      and Xethanol are parties to a Sublicense Agreement entered into as of the
      14th
      day of
      April, 2006 (the “Sublicense Agreement”), pursuant to which H2Diesel granted a
      license to Xethanol with respect to intellectual property rights relating to
      the
      use of the Additive
      in
      making bio-fuel for internal combustion engines (the “Product”, as more fully
      defined below);
      and

    

    WHEREAS,
      as of
      the date of this Agreement, the parties have agreed to amend and restate the
      Sublicense Agreement (as so amended and restated, the “Amended Sublicense
      Agreement”); and

    

                
      WHEREAS,
      Xethanol intends to construct and operate facilities to manufacture Product
      using the Additive, and to invest substantial time and resources in doing so;
      and

    

    WHEREAS,
      in
      order to induce Xethanol to amend and restate the Sublicense Agreement and
      to
      construct and operate facilities for the manufacture of Product, and to ensure
      Xethanol that it will be able to manufacture the Additive if H2Diesel is
      unwilling or unable to do so, H2Diesel wishes to provide Xethanol with
      information regarding the composition, manufacture and use of the Additive,
      which information is to be received, held in confidence and used by Xethanol
      on
      the terms and conditions contained in this Agreement.

    

               
      NOW, THEREFORE,
      in
      consideration of the mutual covenants and terms expressed herein, and other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, Parties hereby agree, covenant, and undertake as
      follows:

    

    1. DEFINITIONS.
      In
      addition to other capitalized terms defined elsewhere herein, the following
      terms as used in this Agreement shall have the meanings set forth below. Any
      capitalized terms that are not defined herein but that are defined in the
      Amended Sublicense Agreement shall have the meanings set forth in the Amended
      Sublicense Agreement.

    

    “Additive”
      means a
      certain chemical additive for use in making bio-fuel for internal combustion
      engines, as to which the formula and intellectual property relating its
      manufacture are licensed to H2Diesel
      pursuant
      to the Exclusive License Agreement.

     

    “Affiliate”
means
      any person or entity directly or indirectly Controlling or having the power
      to
      Control, or Controlled by or being under common Control with another person
      or
      entity.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Amended
      Sublicense Agreement”
      means
      the Amended Sublicense Agreement entered into between H2Diesel and Xethanol
      as
      of the 9th
      day of
      June, 2006, as amended through and including the date hereof.

     

    “Change
      of Control”
      of
H2Diesel
      means
      (a) the sale or other disposition of all or substantially all the shares or
      assets of H2Diesel,
      including a sale or disposition by means of a
      merger,
      consolidation, reorganization or similar corporate transaction or (b) a complete
      liquidation or dissolution of H2Diesel.
      A“Change
      of Control” does not include any transaction the purpose of which is to
      reorganize the corporate structure of H2Diesel,
      reincorporate H2Diesel
      in
      another jurisdiction or undertake any other action which does not materially
      affect the ownership and control of H2Diesel
      at the
      time of such transaction.

    

     “Control”
      means
      the direct or indirect possession of power to direct or cause the direction
      of
      the management or policies of such party, whether through ownership of stock
      or
      other securities, by contract or otherwise. Ownership of more than fifty percent
      (50%) of the beneficial interest of an entity shall be conclusive evidence
      that
      control exists.

     

            “Escrow
      Materials”
      means a
      complete copy of all written materials that relate to or are or may be useful
      in
      connection with, the production of the Additive including, without limitation,
      the formula for the Additive and all Know-How related to the production of
      the
      Additive, as the same now exist or as the same may exist from time to time
      during the Term of this Agreement.

     

    “Event
      of Default”
      means
      (i) the wrongful failure by H2Diesel
      to
      supply Xethanol with the Additive as and when required by the Amended Sublicense
      Agreement, (ii) a Change of Control of H2Diesel
      in which the acquiror or resulting entity (x) is a competitor of Xethanol,
      (y)
      does not have a reasonably demonstrable financial capacity to perform the
      obligations of H2Diesel under the Amended Sublicense Agreement, or (z) fails
      to
      assume in writing this Agreement and the Amended Sublicense Agreement and all
      obligations of H2Diesel thereunder, or
      (iii)
      (x) any voluntary proceeding being commenced by H2Diesel
      under
      Chapter 7 of the U.S. Bankruptcy Code or (y) a voluntary proceeding under
      Chapter 11 of the U.S. Bankruptcy Code (A) in which H2Diesel seeks to reject
      the
      Amended Sublicense or this Agreement as an executory contract or (B) after
      the
      commencement of which H2Diesel wrongfully fails to supply Xethanol with the
      Additive as and when required by the Amended Sublicense Agreement, or (iv)
      any
      involuntary proceeding being commenced against H2Diesel
      under
      (x) Chapter 7 of the U.S. Bankruptcy Code which proceeding is not dismissed
      or
      stayed within thirty (30) days after commencement, or (y) under Chapter 11
      of
      the U.S. Bankruptcy Code (A) in which H2Diesel seeks to reject the Amended
      Sublicense or this Agreement as an executory contract or (B) after the
      commencement of which H2Diesel wrongfully fails to supply Xethanol with the
      Additive as and when required by the Amended Sublicense Agreement. 

    

    “Exclusive
      License Agreement”
      means
      the Exclusive License Agreement between Ferdinando Petrucci as Licensor and
      H2Diesel as Licensee, dated March 20, 2006.

     

    “H2Diesel”
      means
      H2Diesel, Inc., a Delaware corporation

     

    “Improvement”
means
      any enhancement, refinement, discovery, invention, trade secret or additional
      technology, whether patentable or non-patentable under the laws of any country
      (including, without limitation, any test or other proprietary data, experience,
      methods, processes, know-how, new apparatus, equipment, machinery, products,
      specifications, designs and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    information)
      of or related to the Know-How, the Additive or any Product developed, conceived
      or otherwise arising after the date hereof. 

     

    “Know-How”
means
      technical information, including without limitation trade secrets, whether
      or
      not patentable, relating to, used in, or useful in connection with, the
      manufacture of the Additive and the use of the Additive for production of a
      Product including, without limitation, the formula for the Additive, methods
      for
      production of the Additive, and suggested plans and chemical plant
      configurations for the manufacture of the Additive and the Product.

    

    “License”
means
      the license granted in Section 3.2 hereof.

    

              “Licensor”
      means
      Ferdinando Petrucci.

    

    “Patent
      Rights”
means
      all claims of such patent applications and issued patents that are directed
      to
      the Additive, Know-How or Improvements (each as defined herein) hereafter filed
      or issued to which H2Diesel may acquire rights during the term of this
      Agreement. 

    

    “Product(s)”
means
      any fuel or chemical which is manufactured using the Additive. 

    

    “Xethanol”
      means
      Xethanol Corporation, a Delaware corporation.

    

    
      	
              2.

            	
              Delivery
                of Intellectual Property to
                Xethanol

            

    

    

    2.1.
      Not
      later than June 30, 2006,
      H2Diesel shall deliver to Xethanol the following:

    

    a. The
      formula for the composition of the Additive, together with all information
      in
      its possession or under its control that relates to the manufacture of the
      Additive, and

    

    b. All
      Know-How in its possession, under its control or available to it from
      Licensor.

    

    2.2.  At
      least
      once during each semi-annual calendar period while the Amended Sublicense
      Agreement is in effect, H2Diesel shall deliver to Xethanol all Improvements
      made
      by H2Diesel through the date of such delivery.

    

    2.3.  Within
      ten (10) days after the date on which H2Diesel first delivers or uses for
      commercial purposes any version of the Additive that is made by H2Diesel using
      a
      new or modified formula, Know-How or other information (as compared to the
      formula, Know-How or other information used to make previous version of the
      Additive most recently delivered or used by H2Diesel), H2Diesel shall deliver
      to
      Xethanol such new formula, Know-How and other information, and all Improvements
      made through the date of such commercial delivery or commercial use of the
      newest version of the Additive.

    

    2.4.  All
      of
      the materials to be delivered to Xethanol pursuant to this Paragraph 2 shall
      be
      delivered in written and in digital form, in such format as shall be reasonably
      acceptable to Xethanol.

    

    2.5.  H2Diesel
      shall provide Xethanol with a certificate of an executive officer of H2Diesel
      at
      any time or times as Xethanol may require, attesting that the formula,
      Know-How

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      and
        information that has been delivered to Xethanol by H2Diesel is in conformity
        with the requirements of this Section 2.

    

     

    
      	3.  	
              Rights
                of Xethanol.

            

    

    

    3.1.  Until
      the
      occurrence of an Event of Default, Xethanol shall have no rights in or with
      respect to the Additive, Know-How, Patent Rights or Improvements, except such
      rights as are granted to Xethanol under the Amended Sublicense Agreement.
      Without limiting the foregoing, until the occurrence of an event of Default,
      Xethanol shall not use the Know-How, Patent Rights or Improvements for any
      purpose except to the extent permitted under the Amended Sublicense
      Agreement.

    

    3.2.  Commencing
      immediately upon the occurrence of an Event of Default and the expiration of
      all
      applicable cure periods, Xethanol, directly or through its controlled Affiliates
      will have a License to produce and have produced solely for itself such
      quantities of the Additive as Xethanol and such Affiliates need to meet their
      Product supply obligations to their customers, and shall continue to be
      obligated to comply with the terms of the Amended Sublicense Agreement,
      including, without limitation, the obligation to pay Royalties, discounted
      by
      the excess costs, if any, incurred by Xethanol and such Affiliates in producing
      or obtaining Additive over the price that it would have paid to H2Diesel under
      the Amended Sublicense Agreement for the quantities of the Additive required
      to
      produce the applicable quantities of Products produced by Xethanol and its
      Affiliates. If such excess costs exceed the Royalties payable under the Amended
      Sublicense, then Xethanol shall, in addition to the right of set off described
      above, be entitled to exercise all other legal and equitable remedies in respect
      of the Event of Default giving rise to the License set forth in this Section
      3.2. Xethanol shall not have the right to sell the Additive except as a
      component of Product that it sells.
      The term
      of the License granted in this Section 3.2 shall be coextensive with the term
      of
      Xethanol’s right to make, have made, use and sell Products pursuant to the
      Amended Sublicense Agreement. 

    

    3.3.  
      If an
      Event of Default described in clause (iii)(x) or (iv)(x) of the definition
      of
      Event of Default in Section 1 of this Agreement occurs, then Xethanol is hereby
      granted the right to enforce against the Licensor all rights of H2Diesel and
      obligations of the Licensor under the Exclusive License Agreement insofar as
      such rights and obligations relate to or affect Xethanol’s enjoyment of its
      rights under the Amended Sublicense Agreement, including, without limitation,
      the right to obtain indemnification for breaches of representations and
      warranties of Licensor under the Exclusive License Agreement as if such
      representations and warranties were made to and for the benefit of Xethanol.
      

    

     

    4.  Obligations
      on Termination of License. 

    

    4.1.  Promptly,
      but in any event within thirty (30) business days after the termination of
      the
      License, Xethanol and its Affiliates shall either (a) return to H2Diesel
      all
      copies of all materials that have been delivered to Xethanol pursuant to the
      terms of this Agreement, (b) destroy all such materials or (c) return some
      of
      such materials and destroy the rest. At the end of such thirty (30) business
      day
      period, Xethanol shall deliver to H2Diesel
      a
      certificate of an executive officer of Xethanol that states that all such
      materials have been returned or destroyed.

    

    4.2.  Upon
      termination of the License, Xethanol shall reassign the Exclusive License
      Agreement to H2Diesel.
      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      

      4.3.    Xetrhanol
        shall not use any of the materials or information provided by
H2Diesel
        pursuant
        to this Agreement after Xethanol is no longer entitled to make, have made,
        use
        or sell Products as provided in the Amended
        Sublicense Agreement.

      
 

    

    5.  Ownership.
      Xethanol acknowledges that H2Diesel
      claims
      to own or have an exclusive license under the Exclusive License Agreement to
      intellectual property rights with respect to the Product, including the Patent
      Rights, Know-How and Improvements. Xethanol’s rights in such intellectual
      property rights are limited to those set forth in this Agreement and in the
      Amended
      Sublicense Agreement.

    

    6.  Confidentiality. 

    

    Xethanol
      acknowledges that all information received by it from H2Diesel
      concerning the Additive, including the Know-How and the Improvements,
      constitutes Confidential Information belonging to H2Diesel
      or
      Licensor. Xethanol hereby agrees to receive all such Confidential Information
      in
      strict confidence and not to directly or indirectly divulge, reveal or
      communicate any such Confidential Information to any person, firm, corporation
      or entity whatsoever, or use, pursue or exploit any such Confidential
      Information for its own benefit or for the benefit of others, except to the
      extent expressly permitted by this Agreement or the Amended Sublicense Agreement
      or to its employees and contractors to the extent necessary to exploit the
      License and the license granted in the Amended Sublicense Agreement (and then
      only if such persons have entered into written agreements to protect the
      Confidential Information in the same manner and to the same extent as required
      of Xethanol hereunder). Xethanol shall maintain the confidence of the
      Confidential Information with the same degree of care as it uses with respect
      to
      its own comparable information and, in any event, with a degree of care that
      is
      reasonable in light of the nature of the Confidential Information.

    

    The
      foregoing restrictions shall not apply to the extent that such
      information:

     

    (i) is
      or
      becomes public knowledge (other than by breach of this Section);

     

    (ii) was
      obtained by the Xethanol from a third party having the right to disclose it,
      without the obligation to keep such information confidential; or

     

    (iii)  is
      required to be provided by law (including, without limitation, the rules and
      regulations of the Securities and Exchange Commission), legal process (including
      subpoena, civil investigative demand or similar process) or any regulatory
      authority; provided, that Xethanol shall promptly notify H2Diesel
      in
      writing so that H2Diesel
      may seek
      a protective order and/or other motion to prevent or limit the production of
      such Information. 

    

    7.  Term
      of the Agreement.The
      Term
      of this Agreement shall commence on the Effective Date and end on the date
      that
      Xethanol is no longer entitled to make, have made, use or sell Products as
      provided in the Amended Sublicense Agreement.

    

    8.  Remedies.
      Each
      party acknowledges and agrees that any violation of this Agreement by the other
      would result in irreparable harm to the other party. Accordingly, each party
      consents and agrees that, if it violates any of the provisions of this
      Agreement, the other party shall be entitled, in addition to other remedies
      available to it, to an injunction to be issued by any court of competent
      jurisdiction restraining it from committing or continuing any violation of
      this
      Agreement, without the need for posting any bond or any other
      undertaking.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9.  Notices. Any
      notice permitted or required under this Agreement shall be in writing, and
      shall
      be sent or delivered to the receiving party at the address set forth below
      or at
      such address as either party may from time to time designate in writing.

     

    

      

      
        	
                If
                  to H2Diesel, to:

              	
                If
                  to Xethanol, to:

              
	 	 
	
                H2Diesel,
                  Inc.

              	
                Xethanol
                  Corporation

              
	
                17698
                  Foxborough Lane

              	
                1185
                  Avenue of the Americas, 20th
                  Floor

              
	
                Boca
                  Raton, Florida 33496

              	
                New
                  York, New York 10036

              
	
                Attention:
                  Lee Rosen, CEO

              	
                Attention:
                  Christopher
                  d’Arnaud-Taylor, CEO

              
	
                Telephone:
                  (561) 702-5432

              	
                Telephone:
                  (646) 723-4000

              
	
                Facsimile:
                  (212) 805-9425

              	
                Facsimile:
                  (212) 656-1129

              

      

      
10.  Severability.
        Should
        any term or provision of this Agreement be finally determined by a court
        of
        competent jurisdiction to be void, invalid, unenforceable or contrary to
        law or
        equity, the offending term or provision shall be modified and limited (or
        if
        strictly necessary, deleted) only to the extent required to conform to the
        requirements of law and the remainder of this Agreement (or, as the case
        may be,
        the application of such provisions to other circumstances) shall not be affected
        thereby but rather shall be enforced to the greatest extent permitted by
        law.

    

    

    
      	11.  	
              Representations
                And Warranties

            

    

    

    11.1.  Xethanol
      represents and warrants to H2Diesel
      the
      following:

    

    a.  It
      is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of the jurisdiction of its formation, with full power and authority to execute,
      deliver and perform its obligations under this Agreement.

     

    b.  The
      execution, delivery and performance of this Agreement and the consummation
      of
      the transactions contemplated hereby by it has been duly and validly authorized
      and no further authorization is required on its part to consummate the
      transactions contemplated hereby.

     

    c.  This
      Agreement and all other documents executed and delivered by it pursuant to
      this
      Agreement constitute its legal, valid and binding obligations, enforceable
      against it in accordance with their respective terms.

     

    d.  The
      individual executing this Agreement on its behalf has been duly authorized
      and
      empowered to execute this Agreement for the purpose of binding it to this
      Agreement. Its performance of this Agreement does not require any third party
      consents or governmental approvals, filings, registrations or permits that
      have
      not already been obtained. The execution, delivery and performance of this
      Agreement by it does not and will not violate any contract or other arrangement
      between it and any third party, or any applicable law or regulation, or infringe
      or otherwise violate any third party right.

     

    11.2.  H2Diesel
      represents and warrants to Xethanol the following:

     

    a.  It
      is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of the jurisdiction of its formation, with full power and authority to execute,
      deliver and perform its obligations under this Agreement.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    b.  The
      execution, delivery and performance of this Agreement and the consummation
      of
      the transactions contemplated hereby by it has been duly and validly authorized
      and no further authorization is required on its part to consummate the
      transactions contemplated hereby.

     

    c.  This
      Agreement and all other documents executed and delivered by it pursuant to
      this
      Agreement constitute its legal, valid and binding obligations, enforceable
      against it in accordance with their respective terms.

     

    d.  It
      either
      has obtained or does not require the consent of Licensor to perform its
      obligations under this Agreement and to grant the License.

     

    e.  The
      individual executing this Agreement on its behalf has been duly authorized
      and
      empowered to execute this Agreement for the purpose of binding it to this
      Agreement. Its performance of this Agreement does not require any third party
      consents or governmental approvals, filings, registrations or permits that
      have
      not already been obtained. The execution, delivery and performance of this
      Agreement by it does not and will not violate any contract or other arrangement
      between it and any third party.

     

    12.  Non-Transferability.
      Either
      party may assign this Agreement in connection with a permitted assignment of
      the
Amended
      Sublicense Agreement.

    

    
      	13.  	
              Controlling
                Law, Jurisdiction And Venue.

            

    

    

    13.1.  The
      validity, construction, and interpretation of this Agreement shall be solely
      and
      exclusively governed by and construed in accordance with the laws of the State
      of New York, USA, excluding any otherwise applicable rules of conflict of laws
      that would cause the laws of another jurisdiction to apply. 

    

    13.2.  The
      courts of the State of New York shall have sole and exclusive jurisdiction
      over
      the parties with respect to any legal proceedings brought by either party with
      respect to this Agreement. 

    

    13.3.  Each
      party hereby expressly consents to personal jurisdiction in the courts of the
      State of New York with respect to legal proceedings involving this Agreement,
      and expressly waives any right to object to such personal jurisdiction, or
      the
      convenience of such forum. EACH
      PARTY ACKNOWLEDGES THAT A JURY TRIAL IS A CONSTITUTIONAL RIGHT BUT HEREBY WAIVES
      ANY RIGHT TO A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT.
      

    

    13.4.  In
      the
      event that there is a default under this Agreement and it becomes reasonably
      necessary for any party to employ the services of any attorney, either to
      enforce or terminate this Agreement, with or without arbitration, the
      non-defaulting party shall be entitled to collect from the defaulting party
      its
      reasonable attorneys fees and such other costs and expenses as are incurred
      by
      it in enforcing or terminating this Agreement.

    

    
      	14.  	
              Miscellaneous.

            

    

     

    14.1.  Entire
      Agreement. The parties hereto have read this Agreement and agree to be bound
      by
      all its terms. The parties further agree that this Agreement, together with
      the
      Amended Sublicense Agreement and the agreement entered into in connection
      therewith constitutes the full,

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    complete
      and exclusive statement of the agreements between them and supersedes all
      proposals, oral or written, and all other communications between them relating
      to the subject matter of this Agreement

     

    14.2.  Modifications.
      No agreement changing, modifying, amending, extending, superseding, discharging,
      or terminating this Agreement or any provisions hereof shall be valid unless
      it
      is in writing and is dated and signed by duly authorized representatives of
      the
      party against which enforcement is sought.

     

    14.3.  Waiver.
      Failure of any of the parties hereto to enforce any of the provisions of this
      Agreement or any rights with respect thereto or to exercise any election
      provided for therein, shall in no way be considered a waiver of such provisions,
      rights, or election or in any way to affect the validity of this Agreement.
      No
      term or provision hereof shall be deemed waived and no breach excused, unless
      such waiver or consent shall be in writing and signed by the party claimed
      to
      have waived or consented. Any consent by any party to, or waiver of, a breach
      by
      the other, whether express or implied, shall not constitute a consent or waiver
      of, or excuse for any other, different or subsequent breach. All remedies herein
      conferred upon any party shall be cumulative and no one shall be exclusive
      of
      any other remedy conferred herein by law or equity.

     

    14.4.  Binding
      Agreement. This Agreement shall be binding not only upon the parties hereto,
      but
      also upon their respective successors and permitted assigns.

     

    14.5.  Expenses.
      Except as provided elsewhere in this Agreement, all of the legal, accounting,
      and other miscellaneous expenses incurred in connection with this Agreement
      and
      the performance of the various provisions of this Agreement shall be paid by
      the
      party who incurred the expense.

     

    14.6.  Survival.
      All covenants, agreements, representations, warranties, indemnities and
      provisions of this Agreement which by their nature are intended survive the
      termination of this Agreement shall so survive after the effective date of
      termination of this Agreement.

     

    14.7.  Further
      Assurances. Each party agrees to execute and deliver such other and further
      documents and instruments as may be necessary to effectuate the intent and
      purposes of this Agreement upon request by the other party.

     

    14.8.  Construction;
      Counterparts. The headings used in this Agreement are for reference purposes
      only and shall not be considered a part of this Agreement. This Agreement may
      be
      executed in counterparts, each of which shall be deemed to be an original and
      all of which shall constitute one and the same agreement.

     

    14.9.  Force
      Majeure. Neither party shall be deemed in default or otherwise liable for any
      delay in or failure of its performance under this Agreement (other than the
      payment of money) by reason of any act of God, fire, natural disaster, accident,
      riot, terrorism, act of government, strike or labor dispute, shortage of
      materials or supplies, or any other cause beyond the reasonable control of
      such
      party, and which cannot be reasonably circumvented by such party, provided
      that
      the party invoking force majeure (a) gives the other party prompt notice of
      such
      cause, and (b) uses its commercially reasonable best efforts to correct promptly
      such failure or delay in performance. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

    

    

    H2Diesel,
      Inc.

    

    

    By:
      /s/
      Lee Rosen

    Lee
      Rosen, CEO

    

    Xethanol
      Corporation

    

    

    By:
       /s/
      Christopher d’Arnaud-Taylor

    Christopher
      d’Arnaud-Taylor, CEO

    

    

    Consent
      of Licensor

    

    The
      undersigned, Ferdinando
      Petrucci, hereby consents to the provisions of Section 3.3 of the foregoing
      Technology Access Agreement as of the date first above written.

    

    

    /s/Ferdinando
      Petrucci

    Ferdinando
      PetrucciEmployment Agreement with D. Gillespie

     

    Exhibit
      10.5

    
 

    EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT
      (this
“Agreement”),
      is
      entered into on October 18, 2006, by and between H2Diesel, Inc., a Delaware
      corporation its successors and assigns (collectively the “Company”),
      and
      David A. Gillespie (the “Executive”).

     

    WHEREAS,
      the
      Company desires to employ Executive, and Executive desires to be employed by
      the
      Company, upon the terms and conditions hereinafter set forth.

     

    NOW,
      THEREFORE,
      in
      consideration of the covenants herein contained, and other good and valuable
      consideration, the receipt and adequacy of which are hereby forever
      acknowledged, the parties, with the intent of being legally bound hereby, agree
      as follows:

     

    1.  Term

     

    .
      Subject
      to Section 5 hereof, the term of this Agreement shall commence on October 18,
      2006 (the “Effective
      Date”)
      and
      shall end on December 31, 2009 (the “Initial
      Term”);
      provided, however, that the term of this Agreement shall automatically be
      extended beyond the Initial Term for a one year period, effective on December
      31, 2009 (the “Renewal
      Term”)
      unless
      the Company notifies the Executive or the Executive notifies the Company by
      a
      date which is 270 days prior to the expiration of the Initial Term that the
      Company or the Executive, as the case may be, desires not to extend the Initial
      Term. This Agreement shall continue for successive one-year Renewal Terms unless
      and until the Company gives 270 days’ notice to the Executive or the Executive
      gives 270 days’ notice to the Company that the Company or the Executive, as the
      case may be, desires not to extend term of this Agreement beyond the end of
      the
      then-current Renewal Term. The term of this Agreement, whether during the
      Initial Term or any Renewal Term, shall be referred to as the “Term.”

     

    2.  Position
      and Responsibilities.

     

    2.1  Position.  
      Executive will be employed by the Company to render services to the Company
      in
      the position of President and Chief Executive Officer. In that capacity, the
      Executive shall solely, under supervision of the Chairman of the Board (the
      “Chairman”)
      and
      the Board of Directors of the Company (the “Board”),
      have
      responsibility for the overall management and operation of the Company’s
      businesses, affairs, operations, and administration and perform other duties
      reasonably assigned to the Executive from time to time by the Chairman or the
      Board provided the duties relate to the business of the Company and are
      consistent with the Executive’s position as President and Chief Executive
      Officer, as well as Executive’s background and experience. The Executive shall
      diligently perform all such services. The Executive shall report directly to
      the
      Chairman. Executive shall, in all material respects, abide by all material
      and
      written Company rules, policies, and practices as adopted or modified, from
      time
      to time, in the Company’s sole discretion, and of which the Executive is made
      aware, and Executive shall attempt to use his best efforts in the performance
      of
      his duties hereunder.

     

    2.2  Other
      Activities. 
       While employed by the Company, Executive shall devote substantially all of
      his business time, attention, and skill to perform his assigned duties,
      services, and responsibilities hereunder, and shall act at all times in the
      furtherance of the Company’s business and interests. Executive shall not, during
      the term of this Agreement engage, directly or

     

    
      
         

         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    indirectly,
      in any other business activity (whether
      or not pursued for pecuniary advantage) which materially interferes with
      Executive’s duties and responsibilities hereunder or create a conflict of
      interest with the Company. The foregoing limitations shall not prohibit
      Executive from making and managing his personal and family investments in such
      form or manner as will neither require Executive’s services in the operation or
      affairs of the companies or enterprises in which such investments are made
      nor
      materially interfere with the performance of the Executive’s duties hereunder.
      The Company acknowledges that Executive will from time-to-time serve on the
      boards of corporations, advisory committees, trade organizations, philanthropic
      organizations or other entities. Accordingly, the foregoing limitations shall
      not prohibit Executive from serving on the boards of corporations, advisory
      committees, trade organizations, philanthropic organizations or other entities,
      provided that such service does not create a material conflict of interest
      with
      the Company. Notwithstanding the foregoing, the Company acknowledges and accepts
      that the Executive has an ongoing consulting obligation to the San Diego Unified
      Port District of San Diego, California, through December 31, 2006. The Company
      further acknowledges that the Executive’s fulfillment of this obligation will
      not cause him to be in breach of the Agreement.

     

    2.3  No
      Conflict. 
       Executive represents and warrants that Executive’s execution of this
      Agreement, Executive’s employment with the Company, and the performance of
      Executive’s proposed duties under this Agreement shall not violate any
      obligations Executive may have to any other employer, person, or entity,
      including but not limited to any obligations with respect to non-competition
      and
      not disclosing any proprietary or confidential information of any other person
      or entity.

     

    3.  Compensation
      and Benefits.

     

    3.1  Base
      Salary. 
       In consideration of the services to be rendered under this Agreement, the
      Company shall pay Executive an initial base salary of Twenty Thousand Dollars
      ($20,000.00) per month (“Base
      Salary”)
      in
      accordance with the Company’s standard payroll practices. Such Base Salary shall
      be subject to such withholding or deductions as may be mutually agreed between
      the Company and Executive or as required by law. Executive’s Base Salary will be
      reviewed annually, and may be adjusted (upward, but not downward) at the
      discretion of the Compensation Committee of the Board.

     

    3.2  Stock
      Options.
      In
      consideration of the services to be rendered under this Agreement:

     

    (a)
      The
      Company hereby grants to the Executive options to purchase 800,000 shares of
      the
      Company’s Common Stock at a price of $1.50 per share, of which 200,000 options
      shall vest on the date hereof and the remainder shall vest in annual tranches
      as
      follows (collectively, the “Time Based Options”):

     

    Options
      to purchase 200,000 shares shall vest on the first anniversary of the Effective
      Date;

    
      
         

         

        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Options
      to purchase 200,000 shares shall vest on the second anniversary of the Effective
      Date; and

    Options
      to purchase 200,000 shares shall vest on the third anniversary of the Effective
      Date.

     

    (b)
      The
      Company hereby grants to the Executive options to purchase up to 1,200,000
      shares of the Company’s Common Stock at a price of $1.50 per share which options
      shall vest in annual tranches if certain annual performance targets (the
“Performance Targets”) to be mutually established in good faith by the Executive
      and the Compensation Committee of the Board (the “Compensation Committee”) are
      met, as more fully set forth below (collectively, the “Performance Options”):

                    

      Options
        to purchase up to 400,000 shares shall vest in respect of the fiscal year
        ending
        December 31, 2007 if the Performance Targets for such year are met;

       

    

                    Options
      to purchase
      up to 400,000 shares shall vest in respect of the fiscal year ending December
      31, 2008 if the Performance Targets for such year are met; and

    
Options
      to purchase up to 400,000 shares shall vest in respect of the fiscal year ending
      December 31, 2009 if the Performance Targets for such year are met.

    

    It
      is
      contemplated by the parties that the Company may be acquired by an existing
      publicly traded entity by means of a reverse merger. In the event of such a
      merger, the Company shall require such publicly traded to assume the Time Based
      Options and the Performance Options and to provide that they will be converted
      to an equivalent number of options for the common stock of such publicly traded
      company.

    

    Commencing
      with the fiscal year ending December 31, 2007, the Performance Targets for
      each
      fiscal year shall be established by the Compensation Committee not later than
      February 28 of such fiscal year. The Compensation Committee shall determine
      whether the Performance Targets for the preceding fiscal year have been met
      not
      later than seven days after the date that the Company’s audited financial
      statements in respect of such fiscal year become available. If such Performance
      Targets are determined to have been met, the Performance Options in respect
      of
      such fiscal year shall be deemed to be vested as of such date of determination.
      The Time Based Options and the Performance Options shall be more fully
      documented in one or more Stock Option Agreement(s) containing customary terms
      and conditions and shall expire on the tenth (10th)
      anniversary of the Effective Date. 

     

    3.3  Equity
      Compensation. 
       To the extent that the Board and the stockholders of the Company approve
      an equity compensation or incentive plan (the “Plan”),
      the
      Executive shall be eligible to participate in such plan. The amount of any
      equity awards to the Executive and terms and conditions thereof shall be
      determined not less frequently than annually by a committee of the Board
      appointed pursuant to the Plan, or by the Board, in its discretion and pursuant
      to the Plan.

     

    
      
         

         

        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3.4  Benefits. 
       Executive shall be entitled to participate in the pension and health,
      welfare and disability benefit plans and perquisites that the Company generally
      makes available to its employees or other executives, at a level commensurate
      with his position (the “Executive
      Benefits”).

     

    3.5  Vacation.
      During
      the Term, Executive shall be entitled to vacation each year in accordance with
      the Company’s policies in effect from time to time, but in no event less than
      four (4) weeks paid vacation per calendar year. The Executive shall also be
      entitled to such periods of sick leave as is customarily provided by the Company
      for its senior executive employees. Such vacation time and sick time can be
      carried over from year to year; provided that the Executive may not take in
      excess of six weeks of vacation in any calendar year without the express prior
      consent of the Board.

     

    3.6  Business
      Expenses. 
       Throughout the term of Executive’s employment hereunder, the Company shall
      reimburse Executive for all reasonable and necessary travel, entertainment,
      promotional, and other business expenses that may be incurred by Executive
      in
      the course of performing Executive’s duties. Such expenses shall be reimbursed
      by the Company in accordance with policies and practices adopted, from time
      to
      time, by the Company concerning expense reimbursement for employees and shall
      be
      reimbursed upon timely presentation to the Company of an itemized expense
      statement with respect thereto, including substantiation of expenses incurred
      and such other documentation as may be required by the Company’s reimbursement
      policies from time to time and in accordance with Internal Revenue Service
      guidelines.

     

    3.7  Bonus
      Plan. 
       The Executive shall be eligible to participate in an annual cash bonus
      plan established by the Compensation Committee (the “Bonus
      Plan).
      The
      Executive’s bonus in respect of the fiscal year ending December 31, 2007 shall
      be targeted to a maximum of 50% of the Executive’s Base Salary and thereafter be
      set by the Compensation Committee. Commencing with the fiscal year ending
      December 31, 2007, the Bonus Plan and the performance targets (the “Bonus
      Plan Targets”)
      for
      each fiscal year shall be mutually established in good faith by the Compensation
      Committee in consultation with the Executive not later than February 28 of
      such
      fiscal year. The Compensation Committee shall determine whether the Bonus Plan
      Targets for the preceding fiscal year have been met not later than seven days
      after the date that the Company’s audited financial statements in respect of
      such fiscal year become available and the bonus in respect of such fiscal year,
      if earned, shall be payable promptly after such determination. Any bonus paid
      under this Section shall be paid at the next regularly scheduled pay period
      and
      subject to required withholdings.

     

    3.8  Relocation
      Expenses  The
      Executive hereby agrees to relocate once within 50 miles of the Company’s
      executive offices, which will be established at a location to be determined
      by
      the Board, currently anticipated to be at or adjacent the Company’s initial
      bio-fuel production plant. The Company will reimburse the Executive in an amount
      of up to $50,000 for all reasonable and necessary actual out-of-pocket
      relocation expenses paid or incurred by the Executive. Relocation expenses
      shall
      include expenses incurred in connection with the following:

     

    (a) physical
      packing, moving and unpacking of household goods;

     

    
      
         

         

        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (b) storage
      of household goods, if necessary;

     

    (c) real
      estate brokerage and closing costs and reasonable attorney’s fees (if any) in
      connection with the purchase and / or sale of a residence; 

     

    (d) the
      physical transport of the Executive’s personal vehicles to the Executive’s new
      residence; 

     

    (e) travel,
      meals, and lodging expenses for the Executive and his immediate family in
      transit from Houston, TX to the Executive’s new residence; and

     

    (e) travel,
      meals, and lodging expenses for the Executive and his immediate family for
      two
      house hunting trips not to exceed a total of ten days.

     

    4.  Nondisclosure
      of Confidential and Proprietary Information. 
       At all times before and after the termination of Executive’s service (for
      any reason by the Company or by Executive), Executive agrees to keep all
      Confidential or Proprietary Information in strict confidence and secrecy, and
      not to disclose or use the Confidential or Proprietary Information in any way
      outside of Executive’s assigned responsibilities for the Company. “Confidential
      or Proprietary Information” means any non-public information or idea (whether or
      not a trade secret) relating to the business of the Company that is not
      generally known outside the Company or not generally known in the industry
      or by
      persons engaged in businesses similar to that of the Company (including
      information which may be available from sources outside the Company, but not
      in
      the form, arrangement, or compilation in which it exists within the Company)
      that the Company considers confidential, including, but not limited to: (i)
      customer lists and records of current, former, and prospective customers; (ii)
      special needs and characteristics of current, former, or prospective customers;
      (iii) present or future business plans; (iv) trade secrets, proprietary, or
      confidential information of any customer or other entity to which the Company
      owes an obligation not to disclose such information; (v) marketing, financing,
      business development, or strategic plans; (vi) sales methods, practices, and
      procedures; (vii) personnel information; (viii) research and development data
      and projections; (ix) information or data concerning the Company’s competitive
      position in its various lines of business; (x) existing, new, or envisioned
      products, programs, services, methods, techniques, processes, projects, or
      systems; and (xi) sales, pricing, billing, costs, and other financial data
      and
      projections. All documents containing this information will be considered
      Confidential or Proprietary Information whether or not marked with any
      proprietary or confidential notice or legend. Notwithstanding the foregoing,
      nothing herein shall prohibit the Executive from disclosing any information:
      (1)
      in connection with performance of his duties hereunder as he deems in good
      faith
      to be necessary or desirable; (2) if compelled pursuant to the order of a court
      or other governmental or legal body having jurisdiction over such matter; or
      (3)
      if such information has otherwise become public through no wrongful act of
      the
      Executive. In the event Executive is compelled by order of a court or other
      governmental or legal body to communicate or divulge any such information,
      knowledge or data, he shall promptly notify the Company.

     

    
      
         

         

        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    5.    
      Termination; Rights and Obligations on Termination.
      The
      Executive’s employment under this Agreement may be terminated in any one of the
      followings ways:

     

    (a)  Death. 
       The death of Executive shall immediately and automatically terminate the
      Executive’s employment under this Agreement. If Executive dies while employed by
      the Company, any vested options may be exercised on or before the option’s
      expiration date. Any option that remains unexercised after this period shall
      be
      forfeited. Upon the Executive’s death, the Executive’s legal representative
      shall receive: (1) any compensation earned but not yet paid, including and
      without limitation, any bonus if declared or earned but not yet paid for a
      completed fiscal year, any amount of Base Salary earned but unpaid, any accrued
      vacation pay, and any unreimbursed business expenses, which amounts shall be
      promptly paid in a lump sum, and (2) any other amounts or benefits owing to
      the
      Executive under the then applicable employee benefit plans, long term incentive
      plans or equity plans and programs of the Company which shall be paid or treated
      in accordance with the terms of such plans and programs (subsections (1) and
      (2)
      shall be collectively referred to as, the “Accrued
      Amounts”).
      Other
      than the benefits described above, no further compensation or benefits shall
      be
      due or owing upon the Executive’s death.

     

    (b)  Disability. 
       If as a result of incapacity due to physical or mental illness or injury,
      Executive shall have been absent from Executive’s duties hereunder for six (6)
      consecutive months, then thirty (30) days after receiving written notice (which
      notice may occur before or after the end of such six (6) month period, but
      which
      shall not be effective earlier than the last day of such six (6) month period),
      the Company may terminate Executive’s employment hereunder provided Executive is
      unable to substantially perform his duties hereunder at the conclusion of such
      notice period (a “Disability”),
      as
      determined by a physician mutually selected by the parties hereto. In the event
      the Executive’s employment is terminated as a result of Disability, Executive
      shall receive from the Company, in a lump-sum payment due within ten (10) days
      of the effective date of termination, an amount equal to the sum of the Base
      Salary that would have been paid to Executive through the end of the then
      remaining Term if the Executive were not disabled or for six (6) months,
      whichever is less (assuming that Executive would have received no further
      increases in his Base Salary). The Executive shall also be entitled to the
      Accrued Amounts. Additionally, if Executive is terminated due to a Disability,
      the next unvested tranche of Performance Options will vest if the applicable
      Performance Targets are actually met. Any vested options may be exercised on
      or
      before the option’s expiration date. Any option that remains unexercised after
      this period shall be forfeited. Other than the benefits described above, no
      further compensation or benefits shall be due or owing upon the Executive’s
      termination due to a Disability.

     

    (c)  Cause. 
       The Company may terminate this Agreement immediately upon written notice
      to Executive for “Cause,” which shall mean: (i) the Executive’s willful,
      material, and irreparable breach of this Agreement; (ii) Executive’s willful
      misconduct in the performance of any of his material duties and responsibilities
      hereunder that has a material adverse effect on the Company; (iii) Executive’s
      intentional and continued non-performance (other than by reason of disability
      or
      incapacity) of any of the Executive’s material duties and responsibilities
      hereunder which
      continues for ten (10) days after receipt by Executive of written notice from
      the Company except when Executive is diligently working to cure such
      non-performance and the cure requires greater than ten (10) days; (iv)
      Executive’s material and willful dishonesty or fraud with regard

     

    
      
         

         

        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    to
      the
      Company (other than good faith expense account disputes) that has a material
      adverse effect on the Company (whether to the business or reputation of the
      Company; or (v) Executive’s conviction of a felony (other than as a result of
      vicarious liability or a traffic related offense). For purposes of this
      paragraph, no act, or failure to act, on Executive’s part shall be considered
“willful” unless done or omitted to be done, by him not in good faith and
      without reasonable belief that his action or omission was in the best interests
      of the Company. In the event of the Executive’s termination of employment by the
      Company for Cause the Executive shall receive the Accrued Amounts and the
      Executive may exercise his vested options for a period of thirty (30) days
      following termination for Cause.

     

    Notwithstanding
      the foregoing, following the Executive’s receipt of written notice from the
      Company of any of the events described in subsections (i) through (iv) above,
      the Executive shall have ten (10) days in which to cure the alleged conduct
      (if
      curable), except when Executive is diligently working to cure such
      non-performance and the cure requires greater than ten (10) days.

     

    (d)  Without
      Cause. 
       At any time after Executive’s commencement of employment, the Company may,
      without Cause, terminate the Executive’s employment, effective thirty (30) days
      after written notice is provided to Executive. In the event Executive is
      terminated by the Company without Cause, Executive shall receive from the
      Company within ten (10) days after such termination, in a lump sum payment,
      an
      amount equal to the sum of the Base Salary and bonus, if any, that would have
      been paid to Executive through the end of the then remaining Term if the
      Executive had not been terminated or for twelve (12) months, whichever is less
      (assuming that Executive would have received no further increases in his Base
      Salary). For the purpose of this paragraph all applicable Bonus Plan targets
      will be deemed to have been achieved. The Executive shall also receive the
      Accrued Amounts. Additionally, if Executive is terminated by the Company without
      Cause, all of the unvested Time Based Options will vest and the next tranche
      of
      unvested Performance Options will vest as if the applicable Performance Targets
      had been meet. Any vested options may be exercised on or before the option’s
      expiration date. Any option that remains unexercised after this period shall
      be
      forfeited.

     

    (e)  Resignation
      for Good Reason. 
       At any time after Executive’s commencement of employment, the Executive
      may resign for Good Reason (as defined below) effective thirty (30) days after
      written notice is provided to the Company. Upon the Executive’s termination of
      employment for Good Reason, the Executive shall be entitled to all payments
      and
      benefits as if his employment was terminated by the Company without Cause as
      provided in subsection (d) above. For purposes of this Agreement, Good Reason
      means: (i) any
      adverse change in the Executive’s position, title or reporting relationship or a
      material diminution of his duties, responsibilities or authority or the
      assignment to Executive of duties or responsibilities that are inconsistent
      with
      the Executive’s position; (ii) the
      failure by the Company to continue in effect any material compensation or
      benefit plan or arrangement in which Executive participates unless an equitable
      and substantially comparable arrangement (embodied in a substitute or
      alternative plan) has been made with respect to such plan or arrangement, or
      the
      failure by the Company to continue Executive’s participation therein (or in such
      substitute or alternative plan or arrangement) on a basis not less favorable,
      both in terms of the amount of benefits provided and the level of participation
      relative to other participants, as existed at the time of the Executive’s
      termination of employment; (iii) any
      material breach of this Agreement (or any other written

     

    
      
         

         

        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    agreement
      entered into between the Executive and the Company) by the Company; (iv) failure
      of any successor to the Company (whether direct or indirect and whether by
      merger, acquisition, consolidation or otherwise) to assume in a writing
      delivered to Executive upon the assignee becoming such, the obligations of
      the
      Company hereunder;
      or (v)
      the Company requires the Executive to relocate to a location greater than 100
      miles from his new residence established pursuant to paragraph 3.8; provided,
      however, that the Company shall not require such relocation if the Executive
      can
      commute to his principal office via a non-stop commercial flight and the Company
      agrees to reimburse the Executive for the cost of weekly round trip
      airfare.

     

    Notwithstanding
      the foregoing, following the Company’s receipt of written notice from the
      Executive of any of the events described in subsections (i) through (iv) above,
      the Company shall have ten (10) days in which to cure the alleged conduct (if
      curable).

     

    (f)  Change
      in Control of the Company. 
       In the event that a Change of Control (as defined below) in the Company
      shall occur during the Term of this Agreement, and within 12 months thereafter
      the Executive’s employment shall be terminated without Cause pursuant to Section
      5(d) above or for Good Reason pursuant to Section 5(e) above, then the
      Executive’s severance compensation will be as set forth above for termination
      without Cause or Good Reason, as the case maybe; provided, however, that all
      unvested Time Based Options and Performance Options will vest and remain
      exercisable for the balance of the option term. The Company shall have no
      further liability under this Agreement.

     

    For
      purposes of this Agreement, the term “Change of Control” shall
      mean:

     

    (i) approval
      by the stockholders of the Company of (x) a reorganization, merger,
      consolidation or other form of corporate transaction or series of transactions
      (other than the issuance by the Company of equity securities to investors
      whether in private placements or public offerings (an “Equity
      Offering”)),
      in
      each case, with respect to which persons who were the stockholders of the
      Company immediately prior to such reorganization, merger or consolidation or
      other transaction do not, immediately thereafter, own more than 50% of the
      combined voting power entitled to vote generally in the election of directors
      of
      the reorganized, merged or consolidated company’s then outstanding voting
      securities, in substantially the same proportions as their ownership immediately
      prior to such reorganization, merger, consolidation or other transaction, or
      (y)
      a liquidation or dissolution of the Company or (z) the sale of all or
      substantially all of the assets of the Company (unless such reorganization,
      merger, consolidation or other corporate transaction, liquidation, dissolution
      or sale is subsequently abandoned). For the purpose of this Agreement
“substantially all’ shall mean the assets of the Company from which was
      generated 75% of the Company’s revenues or 60% of the of the Company’s net
      income during the prior fiscal year;

     

    (ii) individuals
      who, as of the Effective Date of this Agreement, constitute the Board (the
      “Incumbent
      Board”)
      cease
      for any reason to constitute at least a majority of the Board, provided that
      any
      person becoming a director subsequent to the Effective Date of this Agreement
      whose election, or nomination for election by the Company’s stockholders, was
      approved by a vote of at least a majority of the directors then comprising
      the
      Incumbent Board (other than an election or nomination of an individual whose
      initial assumption of office is in connection with an actual or threatened
      election contest relating to the election of the directors of the
      Company)

     

    
      
         

         

        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    shall
      be,
      for purposes of this Agreement, considered as though such person were a member
      of the Incumbent Board; or 

     

    (iii) the
      acquisition (other than from the Company) by any person, entity or “group”,
      within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
      Act of 1934, as amended (the “Securities
      Exchange Act”),
      of
      beneficial ownership within the meaning of Rule 13-d promulgated under the
      Securities Exchange Act of more than 50% of either the then outstanding shares
      of the Company’s common stock or the combined voting power of the Company’s then
      outstanding voting securities entitled to vote generally in the election of
      directors (hereinafter referred to as the ownership of a “Controlling
      Interest”)
      excluding, for this purpose, any acquisitions by (1) the Company or its
      subsidiaries, (2) any person, entity or “group” that as of the Effective Date of
      this Agreement owns beneficial ownership (within the meaning of Rule 13d-3
      promulgated under the Securities Exchange Act) of a Controlling Interest, (3)
      any employee benefit plan of the Company or its subsidiaries, or (4) any
      acquisition in one or more Equity Offerings.

     

    (g)  Resignation
      without Good Reason or Retirement by Executive. 
       The Executive may resign without Good Reason or retire upon 90 days’
written notice, and upon such termination of employment he shall receive the
      Accrued Amounts.

     

    (h)  Superseding
      Agreement.
      This
      Agreement shall be terminated immediately and automatically if the parties
      enter
      into another employment agreement which supersedes this Agreement. In the event
      the parties enter into a superseding agreement, no severance pay or other
      compensation shall be due to Executive with respect to the termination of this
      Agreement.

     

    6.  Use
      and Return of Company Property.  
      Executive acknowledges the Company’s proprietary rights and interests in its
      tangible and intangible property. Accordingly, Executive agrees that upon
      termination of Executive’s employment with the Company, for any reason, and at
      any time, Executive shall deliver to the Company all Company property,
      including: (a) all documents, contracts, writings, disks, diskettes, computer
      files or programs, computer-generated materials, information, documentation,
      or
      data stored in any medium, recordings and drawings pertaining to trade secrets,
      proprietary or confidential information, or other inventions and works of the
      Company; (b) all records, designs, plans, sketches, specifications, patents,
      business plans, financial statements, accountings, flow charts, manuals,
      notebooks, memoranda, lists, and other property delivered to or compiled by
      Executive, by or on behalf of the Company or any of its representatives,
      vendors, or customers which pertain to the business of the Company, all of
      which
      shall be and remain the property of the Company, and shall be subject, at all
      times, to its discretion and control; (c) all equipment, devices, products,
      and
      tangible property entrusted to Executive by the Company; and (d) all
      correspondence, reports, records, notes, charts, advertisement materials, and
      other similar data pertaining to the business, activities, or future plans
      of
      the Company, in the possession or control of Executive, shall be delivered
      promptly to the Company without request by it. Executive shall certify to the
      Company, in writing, within five (5) days of any request by the Company, that
      all such materials have been returned to the Company. Notwithstanding the
      foregoing, the Executive may retain his rolodex and similar address and
      telephone directories (whether in writing or electronic format).

     

    
      
         

         

        
        

      

      
        9

        
          

        

      

      
        
        

      

    

            6.1 
      Non-competition. 
       At all times while the Executive is employed by the Company and for a
      period of: (i) two (2) years after any termination of the Executive’s employment
      for Cause or the Executive’s termination of his employment without Good Reason;
      (ii) one (1) year after any termination of the Executive’s employment by the
      Company without Cause or the Executive’s termination for Good Reason; and (iii)
      one (1) year following the non-renewal of this Agreement, the Executive shall
      not, directly or indirectly, engage in or have any interest in any person
      (whether as an employee, officer, director, partner, agent, security holder,
      creditor, consultant or otherwise) that directly or indirectly (or through
      any
      affiliated entity) competes with the Company’s Business (as defined below);
      provided that such provision shall not apply to the Executive’s ownership of
      securities of the Company or the acquisition by the Executive, solely as an
      investment, of securities of any issuer that is registered under Section 12(b)
      or 12(g) of the Securities Exchange Act and that are listed or admitted for
      trading on any United States national securities exchange or that are quoted
      on
      the National Association of Securities Dealers Automated Quotations System,
      or
      any similar system or automated dissemination of quotations of securities prices
      in common use, so long as the Executive does not control, acquire a controlling
      interest in or become a member of a group which exercises direct or indirect
      control of, more than five percent of any class of capital stock of such issuer.
      For purposes of this Section
      6.1,
      the
      term “Business” shall mean the Business and any other business in which the
      Company is engaged prior to the delivery of a notice of termination by the
      Company or the Executive hereunder and which business the Company is engaged
      at
      the date of termination of the Executive’s employment.

     

    6.2  Non-Solicitation.  
      At all times while the Executive is employed by the Company and for a period
      of:
      (i) two (2) years after any termination of the Executive’s employment for Cause
      or the Executive’s termination of his employment without Good Reason; (ii) the
      lesser of one (1) year or the remainder of the Term after any termination of
      the
      Executive’s employment by the Company without Cause or the Executive’s
      termination for Good Reason; and (iii) one (1) year following the non-renewal
      of
      this Agreement, the Executive shall not, directly or indirectly, for himself
      or
      for any other person (a) employ or attempt to employ or enter into any
      contractual arrangement with any employee or former employee of the Company,
      or
      (b) call on or solicit any of the actual or targeted prospective customers
      or
      suppliers of the Company on behalf of any person in connection with any business
      that competes with the Business of the Company nor shall the Executive make
      known the names and addresses of such customers or suppliers or any information
      relating in any manner to the Company’s trade or business relationships with
      such customers or suppliers, other than in connection with the performance
      of
      Executive’s duties under this Agreement.

     

    6.3  Reasonable
      Restrictions.
      Executive hereby acknowledges and agrees that the limits on his ability to
      engage in activities that are competitive with the Company, as defined above,
      are warranted in order to protect the Company’s trade secrets and Confidential
      or Proprietary Information, and further, are warranted to protect the Company
      in
      developing and maintaining its reputation, goodwill, and status in the
      marketplace. Executive specifically agrees that the time period, geographic
      scope, and nature of the restrictions set forth in Sections 6.1 and 6.2 are
      reasonable and necessary to protect the Company’s legitimate business interests
      and do not impose any limitations greater than those necessary to protect those
      interests.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    6.4.    
      Remedies.  
      Executive hereby acknowledges and agrees that the services Executive has
      rendered and will continue to render to the Company are of a special and unique
      character, which gives this Agreement a peculiar value to the Company, and
      further acknowledges and agrees that the loss of those services to a direct
      competitor or the direct competition by Executive against the Company cannot
      be
      reasonably or adequately compensated for by damages in an action at law.
      Executive further acknowledges and agrees that any material breach by Executive
      of any provision of Sections 4 or 6 of this Agreement shall cause irreparable
      harm to the Company, which harm cannot be reasonably or adequately compensated
      for by damages in an action at law. Accordingly, without prejudice to the rights
      and remedies otherwise available to the Company, Executive agrees that, in
      addition to any other right or remedy the Company may have, upon adequate proof
      of a material breach the Company shall be entitled to a temporary restraining
      order and to a preliminary and permanent injunction enjoining or restraining
      the
      breach of this Agreement by Executive, without the necessity of proving the
      inadequacy of monetary damages or the posting of any bond or security. Executive
      acknowledges and agrees that the preceding remedies shall be in addition to
      any
      and all other rights available to the Company at law or in equity. The failure
      of the Company to promptly institute legal action upon any breach of this
      Agreement shall not constitute a waiver of that or any other breach
      hereof.

     

    7.  Indemnification;
      Insurance.

     

    7.1  Indemnification
      of Executive. 
       Except as otherwise provided by applicable law, while the Executive is
      employed by the Company and thereafter while potential liability exists (but
      in
      no event less than three (5) years after termination), in the event Executive
      is
      made a party to any threatened, pending, or contemplated action, suit, or
      proceeding, whether civil, criminal, administrative, or investigative (other
      than an action by the Company against Executive), by reason of the fact that
      Executive is or was performing services under this Agreement, then the Company
      shall indemnify Executive to the fullest extent permitted by applicable law
      against all expenses (including attorneys’ fees), judgments, fines, and amounts
      paid in settlement, as actually and reasonably incurred by Executive in
      connection therewith. In the event that both Executive and the Company are
      made
      a party to the same third party action, complaint, suit, or proceeding, the
      Company will engage competent legal representation, and Executive will use
      the
      same representation, provided that if counsel selected by the Company shall
      have
      a conflict of interest that prevents such counsel from representing Executive,
      then the Company may engage separate counsel on Executive’s behalf, and subject
      to the provisions of this Section
      7,
      the
      Company will pay all attorneys’ fees of such separate counsel.

     

    7.2  Insurance
      Provided by Company.  
      As soon as practicable after the Effective Date, the Company shall obtain a
      directors and officers liability insurance policy covering all directors and
      officers of the Company, including Executive, which insurance policy shall
      provide adequate insurance coverage for each of such persons, as shall be
      approved by the Board. The Executive shall be entitled to such coverage while
      employed and thereafter while potential liability exists.

     

    8.  Assignment;
      Binding Effect.  
      Executive shall have no right to assign this Agreement to another party other
      than by will or by the laws of descent and distribution. This Agreement may
      be
      assigned or transferred by the Company only to an acquirer of all or
      substantially all of the assets of the Company, provided such acquirer promptly
      assumes all of the obligations hereunder

     

    
      
         

         

        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    of
      the
      Company in a writing delivered to the Executive and otherwise complies with
      the
      provisions hereof with regard to such assumption. Nothing in this Agreement
      shall prevent the consolidation, merger, or sale of the Company or a sale of
      any
      or all or substantially all of its assets. Subject to the foregoing restriction
      on assignment by Executive, this Agreement shall be binding upon, inure to
      the
      benefit of, and be enforceable by the parties hereto and their respective heirs,
      legal representatives, successors, and assigns.

     

    9.  Additional
      Provisions.

     

    9.1  Damages. 
       Nothing contained herein shall be construed to prevent the Company or the
      Executive from seeking and recovering from the other damages sustained by either
      or both of them as a result of its or his breach of any term or provision of
      this Agreement. In the event that either party hereto brings suit for the
      collection of any damages resulting from, or the injunction of any action
      constituting, a breach of any of the terms or provisions of this Agreement,
      then
      the party found to be at fault shall pay all reasonable court costs and
      attorneys’ fees of the other.

     

    9.2  Amendments;
      Waivers; Remedies. 
       This Agreement may not be amended, and no provision of this Agreement may
      be waived, except by a writing signed by Executive and by a duly authorized
      representative of the Company. Failure to exercise any right under this
      Agreement shall not constitute a waiver of such right. Any waiver of any breach
      of this Agreement shall not operate as a waiver of any subsequent breaches.
      All
      rights or remedies specified for a party herein shall be cumulative and in
      addition to all other rights and remedies of the party hereunder or under
      applicable law.

     

    9.3  Notices.
      Any
      notice under this Agreement must be in writing and addressed to the Company
      or
      to Executive at the corresponding address below. Notices under this Agreement
      shall be effective upon: (a) hand delivery, when personally delivered; (b)
      written verification of receipt, when delivered by overnight courier or
      certified or registered mail; or (c) acknowledgment of receipt of electronic
      transmission, when delivered via electronic mail or facsimile. Executive shall
      be obligated to notify the Company, in writing, of any change in Executive’s
      address. Notice of change of address shall be effective only when done in
      accordance with this Section
      9.3.

     

    
      	
              Company’s
                Notice Address:

            	
              H2Diesel,
                Inc.

              20283
                State Road 7, Suite 40

              Boca
                Raton, Florida 33498

              Attn.:
                Lee S. Rosen

              Telephone:
                561-807-6325

              Facsimile:
                

            
	
              Executive’s
                Notice Address:

            	
              David
                Gillespie

              664
                West Forest Drive

              Houston,
                TX 77079

              Telephone:
                (281) 531-8021

              Facsimile:
                

            

    

    9.4  Severability. 
      If any provision of this Agreement shall be held by a court of competent
      jurisdiction to be invalid, unenforceable, or void, such provision shall be
      enforced to

     

    
      
         

         

        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    the
      fullest extent permitted by law, and the remainder of this Agreement shall
      remain in full force and effect. In the event that the time period or scope
      of
      any provision is declared by a court of competent jurisdiction to exceed the
      maximum time period or scope that such court deems enforceable, then such court
      shall reduce the time period or scope to the maximum time period or scope
      permitted by law.

     

    9.5  Taxes. 
       All amounts paid under this Agreement (including, without limitation, Base
      Salary) shall be reduced by all applicable state and federal tax withholdings
      and any other withholdings required by any applicable jurisdiction.

     

    9.6  Governing
      Law. 
       The validity, interpretation, enforceability and performance of this
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Florida, without regard to conflict of laws principles that would
      cause
      the laws of another jurisdiction to apply.

     

    9.7  Venue. 
       For the purposes of any suit, action, or other proceeding (collectively, a
      “Proceeding”)
      arising out of this Agreement or any transaction contemplated hereby, each
      of
      the parties hereto irrevocably submits to the exclusive jurisdiction of the
      courts of the State of Florida located (i) in Palm Beach County and the Federal
      Courts of the United States of America located in Palm Beach County, Florida,
      or
      (ii) the county in which the Company’s principal executive offices are located
      at the time any such Proceeding is commenced.

     

    9.8  Interpretation. 
       This Agreement shall be construed as a whole, according to its fair
      meaning, and not in favor of or against any party. Sections and section headings
      contained in this Agreement are for reference purposes only, and shall not
      affect, in any manner, the meaning or interpretation of this Agreement. Whenever
      the context requires, references to the singular shall include the plural and
      the plural the singular.

     

    9.9  Survival. 
       All of those portions of this Agreement that require performance by
      Executive following termination of Executive’s employment hereunder shall
      survive any termination of this Agreement.

     

    9.10  Counterparts.
       This Agreement may be executed in several counterparts (including by means
      of telecopied signature pages), each of which shall be deemed an original but
      all of which shall constitute one and the same instrument.

     

    9.11  Authority.  
      Each party represents and warrants that such party has the right, power, and
      authority to enter into and execute this Agreement and to perform and discharge
      all of the obligations hereunder, and that this Agreement constitutes the valid
      and legally binding agreement and obligation of such party and is enforceable
      in
      accordance with its terms.

     

    9.12  Additional
      Assurances.  
      The provisions of this Agreement shall be self-operative and shall not require
      further agreement by the parties except as may be herein specifically provided
      to the contrary; provided, however, that at the request of the Company,
      Executive shall execute such additional instruments and take such additional
      acts as the Company may deem necessary to effectuate this
      Agreement.

     

    
      
         

         

        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    9.13    
      Entire Agreement. 
       This Agreement is the final, complete, and exclusive agreement of the
      parties with respect to the subject matter hereof and supersedes and merges
      all
      prior or contemporaneous representations, discussions, proposals, negotiations,
      conditions, communications, and agreements, whether written or oral, between
      the
      parties relating to the subject matter hereof and all past courses of dealing
      or
      industry custom. No oral statements or prior written material not specifically
      incorporated herein shall be of any force and effect, and no changes in or
      additions to this Agreement shall be recognized unless incorporated herein
      by
      amendment, as provided herein (such amendment to become effective on the date
      stipulated therein).

     

    9.14  Executive
      Acknowledgment.  
      Executive acknowledges that, before signing this Agreement, Executive was
      advised of his right to consult with an attorney of his choice to review this
      Agreement and that Executive had sufficient opportunity to have an attorney
      review the provisions of this Agreement and negotiate its terms. Executive
      further acknowledges that Executive had a full and adequate opportunity to
      review this Agreement before signing it; that Executive carefully read and
      fully
      understood all the provisions of this Agreement before signing it, including
      the
      rights and obligations of the parties; and that Executive has entered into
      this
      Agreement knowingly and voluntarily.

     

    

     

    [THE
      REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

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

     

    COMPANY:

    

    

    H2DIESEL,
      INC.

    

    

    By:
      /s/
      Lee Rosen

    Name:
      Lee
      Rosen

    Title:
      President

    

    

    

    EXECUTIVE:

    

    /s/
      David Gillespie

    David
      Gillespie

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]