Document:

UNITED
      STATES

     

    SECURITIES
      AND EXCHANGE COMMISSION

    Washington,
      D.C. 20549

     

    
      
        

      

       

    

    FORM
      8-K

     

    
      

    

     

    CURRENT
      REPORT 

     

    Pursuant
      to Section 13 or 15(d) 

     

    of
      the Securities Exchange Act of 1934 

    Date
      of Report (Date of earliest event reported): August 15,
      2006

     

    friendlyway
      Corporation

    (Exact
      name of Registrant as Specified in its Charter) 

     

    
      	
               
                Nevada

            	
              0-20317

            	
              88-0270266

            
	
               
                (State or Other Jurisdiction of 

              Incorporation
                or Organization) 

            	
              (Commission
                file number)

            	
              (I.R.S.
                Employer 

              Identification
                Number)

            

    

     

    7222
      Commerce Center Drive, Suite 240

    Colorado
      Springs, CO 80919 

    (Address
      of Principal Executive Offices including Zip Code) 

     

    (719)
      359-5533 

    (Registrant's
      Telephone Number, Including Area Code) 

     

    Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions:

     

    
      	o	
              Written
                communications pursuant to Rule 425 under the Securities Act (17
                CFR
                230.425)

            

    

     

    
      	o	
              Soliciting
                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12)

            

    

     

    
      	o	
              Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                CFR
                240.14d-2(b))

            

    

     

    
      	o	
              Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                CFR
                240.13e-4(c))

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SECTION
      1 - REGISTRANT’S BUSINESS AND OPERATIONS

    

    SECTION
      3 - SECURITIES AND TRADING MARKETS

     

    
      
        	Item
                3.02.	
                Unregistered
                  Sales of Equity
                  Securities.

              

      

    

    

    The
      Company has reviewed certain historical transactions to determine validity
      of
      company shares previously issued in exchange for consideration. The Company
      has
      not been able to determine the validity or consideration received for the
      issuance of 15,560,000 shares of Company common stock par value $.001.

     

    Therefore,
      due to the lack of consideration for the issued shares, the Company has
      cancelled the issuance of 15,560,000 effective Monday, August 14, 2006. This
      reduces the total issued and outstanding shares of common stock par value $.001
      of the Company by 15,560,000 shares effective that date.

    

    
      
        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    SIGNATURES

    

    Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      registrant has duly caused this Report to be signed on its behalf by the
      undersigned hereunto duly authorized.

    

    
      	
               

            	
              Friendlyway
                Corporation

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
              Date:  August
                15, 2006

            	
              By: 
                

            	
              /s/
                Ken
                Upcraft                  
                

            	
               

            
	
               

            	
               

            	
              Ken
                Upcraft

            	
               

            
	
               

            	
               

            	
              Chief
                Executive OfficerREGISTRATION
      RIGHTS AGREEMENT

     

    This
      REGISTRATION
      RIGHTS AGREEMENT
      (the
“Agreement”),
      dated
      as of April 14, 2006, is made by and among Xethanol Corporation., a Delaware
      corporation (the “Company”),
      Crestview Capital Master, LLC (“Crestview”), and TOIBB Investment, LLC
      (“TOIBB”)
      (each
      of Crestview and TOIBB are referred to herein as a “Holder”).
      Capitalized terms used herein and not otherwise defined shall have the
      respective meanings ascribed to them in the Investment Agreement (as defined
      below). 

     

    RECITALS

     

    WHEREAS,
      the Holder has entered into that certain Investment Agreement (the “Investment
      Agreement”), dated of even date herewith, by and among H2Diesel, Inc., a
      Delaware corporation (“H2”), certain other persons and the Company, whereby the
      Holder may become the owner of shares of the Company’s common stock par value,
      $0.0001 per share (the “Common Stock”), in the event that the Holder elects to
      exercise its Put Right in accordance with the terms and conditions of the
      Investment Agreement; and

     

    WHEREAS,
      if the Holder acquires shares of the Common Stock pursuant to the Investment
      Agreement, the Company desires to provide to the Holder rights to registration
      under the Securities Act (as defined below) of Registrable Securities (as
      defined below), on the terms and subject to the conditions set forth
      herein.

     

    NOW,
      THEREFORE, in consideration of the foregoing recitals and of the mutual promises
      hereinafter set forth, the parties hereto agree as follows:

     

    AGREEMENT

     

    1.   Definitions.
      As used
      in this Agreement, the following capitalized terms have the following respective
      meanings:

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, or any similar federal statute
      then in effect, and a reference to a particular section thereof is deemed to
      include a reference to the comparable section, if any, of any such similar
      federal statute.

     

    “Person”
means
      any individual, corporation, partnership, limited partnership, limited liability
      company, syndicate, trust, association or other entity.

     

    “Prior
      Agreements”
means
      a
      Securities Purchase Agreement among the Company and certain investors and a
      Registration Rights among the same parties, each of which is dated April 3,
      2006.

     

    “Prior
      Registration Statement”
means
      a
      registration statement filed with the Securities and Exchange Commission
      pursuant to the Prior Agreements.

     

    “Registrable
      Securities”
means
      any shares of Common Stock acquired by the Holder pursuant to the Investment
      Agreement and any shares of Common Stock which may be issued or distributed
      in
      respect thereof by way of stock dividend or stock split or other distribution,
      recapitalization or reclassification. Any particular Registrable Securities
      that
      are issued will cease to be Registrable Securities when (i) a registration
      statement with respect to the sale by the Holder of such securities becomes
      effective under the Securities Act and such securities have been disposed of
      in
      accordance with such registration statement, (ii) such securities have been
      distributed to the public pursuant to Rule 144 (or any successor provision)
      under the Securities Act, (iii) all of the Registrable Securities then owned
      by
      such Holder could be sold pursuant to Rule 144(k), or (iv) such securities
      have
      ceased to be outstanding.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    “Registration
      Expenses”
means
      any and all expenses incident to performance of or compliance with this
      Agreement, including, without limitation, (i) all SEC and stock exchange or
      National Association of Securities Dealers, Inc. (the “NASD”)
      registration and filing fees (including, if applicable, the fees and expenses
      of
      any “qualified independent underwriter,” as such term is defined in NASD conduct
      rule 2720, and of its counsel), (ii) all fees and expenses of complying with
      securities or blue sky laws (including fees and disbursements of counsel for
      the
      underwriters in connection with blue sky qualifications of the Registrable
      Securities), (iii) all printing, messenger and delivery expenses, (iv) all
      fees
      and expenses incurred in connection with the listing of the Registrable
      Securities on any securities exchange pursuant to clause (vi) of Section
‎4
      and all
      rating agency fees, (v) the fees and disbursements of counsel for the Company
      and of its independent public accountants, including the expenses of any special
      audits and/or “cold comfort” letters required by or incident to such performance
      and compliance, (vi) the reasonable fees and disbursements of counsel selected
      pursuant to Section ‎7
      hereof
      by the Holder in connection with each such registration and (vii) other
      reasonable out-of-pocket expenses of Holder (provided
      that
      such expenses will not include expenses of counsel other than those provided
      for
      in clause (vi) above).

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, or any similar federal statute then
      in
      effect, and a reference to a particular section thereof will be deemed to
      include a reference to the comparable section, if any, of any such similar
      federal statute.

     

    “SEC”
means
      the Securities and Exchange Commission or any other federal agency at the time
      administering the Securities Act or the Exchange Act.

     

    “Selling
      Expenses”
means
      underwriting discounts and commissions and transfer taxes, if any, applicable
      to
      the sale of Registrable Securities.

     

    2.   Incidental
      Registrations. 

     

    (a)  Right
      to Include Registrable Securities.
      If the
      Company, at any time after the Holder owns any Registrable Securities, proposes
      to register shares of its stock under the Securities Act (other than (i) a
      registration statement on Form S-4 or S-8, or any successor or other forms
      promulgated for similar purposes, or (ii) a registration statement with respect
      to corporate reorganizations or other transactions under Rule 145 of the
      Securities Act or any successor rule promulgated for similar purposes or (iii)
      the registration statement contemplated by the Prior Agreements), whether or
      not
      for sale for its own account (including, without limitation, any registration
      effected pursuant to Section ‎3
      hereof),
      in a manner which would permit registration of Registrable Securities for sale
      to the public under the Securities Act, it will, at each such time, give prompt
      written notice to the Holder of its intention to do so and will afford each
      the
      Holder an opportunity to include in such registration all or part of the
      Registrable Securities held by the Holder. Upon the written request of the
      Holder made within fifteen (15) days after the receipt of any such notice (which
      request will specify the Registrable Securities intended to be disposed of
      by
      the Holder), the Company will, subject to Section ‎2‎(c)
      below,
      use its reasonable best efforts to effect the registration under the Securities
      Act of all Registrable Securities which the Company has been so requested to
      register by the Holder to the extent requisite to permit the disposition of
      the
      Registrable Securities so to be registered; provided that (i) if, at any time
      after giving written notice of its intention to register any securities and
      prior to the effective date of the registration statement filed in connection
      with such registration, the Company determines for any reason not to proceed
      with the proposed registration of the securities to be sold by it, the Company
      may, at its election, give written notice of such determination to the Holder
      and, thereupon, will be relieved of its obligation to register any Registrable
      Securities in connection with such registration, and (ii) if such registration
      involves an underwritten offering, the Holder requesting to be included in
      the
      Company’s registration must sell its Registrable Securities to the underwriters
      selected by the Company on the same terms and conditions as apply to the Company
      (including entering into an underwriting agreement in customary form with the
      underwriter or underwriters selected for such offering by the Company), as
      may
      be customary or appropriate in combined primary and secondary offerings. If
      a
      registration requested pursuant to this Section ‎2‎(a)
      involves
      an underwritten public offering, the Holder may elect, in writing at least
      thirty (30) days prior to the effective date of the registration statement
      filed
      in connection with such registration, not to register such securities in
      connection with such registration. 

     

    
      
         

      

      
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    (b)  Expenses.
      The Company will pay all Registration Expenses incurred in connection with
      each
      registration of Registrable Securities pursuant to this Section ‎2.
      Each
      Holder will pay all Selling Expenses incurred in connection with the sale of
      its
      of Registrable Securities. 

     

    (c)  Priority
      in Incidental Registrations. If a registration pursuant to this Section
‎2
      involves
      an underwritten offering and the managing underwriter determines in good faith
      that marketing factors require a limitation on the number of securities to
      be
      underwritten, the number of securities that may be included will be limited
      to
      the number of securities that, in the opinion of such underwriter, should be
      included and the securities to be included in the registration will be allocated
      first, to the Company, and second, to other holders of the Company’s securities
      (including the Holder), pro rata based on the number of shares requested by
      the
      Holder to be included.

     

    (d)  If
      the
      Incidental Registration is made pursuant to another registration rights
      agreement with subsequent purchasers of the Company’s securities, then the
      Holders shall be deemed to have the same rights as such other purchasers under
      such other registration rights agreement.

     

    3.   Registration
      on Request. 

     

    (a)  At
      anytime after the Holder acquires the Registrable Securities, upon the written
      request of the Holder (the “Demand Party”) requesting that the Company effect
      the registration under the Securities Act of all or part of the Registrable
      Securities held by the Holder (a “Demand”); and specifying the amount and
      intended method of disposition thereof, the Company thereupon will, as
      expeditiously as possible, subject to the limitations of this Section
‎3,
      use its
      reasonable best efforts to effect the registration under the Securities Act
      of
      (i) such Registrable Securities which the Company has been so requested to
      register by the Demand Party, and (ii) any shares of Company stock that the
      Company desires to include in such registration, in each case, to the extent
      necessary to permit the disposition (in accordance with the intended method
      thereof as aforesaid) of the Registrable Securities so to be
      registered.

     

    (b)  Expenses.
      The Company will pay all Registration Expenses incurred in connection with
      each
      registration of Registrable Securities pursuant to this Section ‎3.
      Each
      Holder will pay all Selling Expenses incurred in connection with the sale of
      its
      Registrable Securities pursuant.

     

    (c)  Priority
      in Requested Registrations. If a requested registration pursuant to this Section
      ‎3
      involves
      an underwritten offering and the managing underwriter determines in good faith
      that marketing factors require a limitation on the number of securities to
      be
      underwritten, the number of securities that may be included will be limited
      to
      the number of securities that, in the opinion of such managing underwriter,
      should be included and the securities to be included in the registration will
      be
      allocated first, to the Demand Party, and second, to the Company. 

     

    
      
         

      

      
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    (d)  Limitation
      on Registration on Request. Notwithstanding anything in this Section
‎3
      to the
      contrary, (i) the Company will not be obligated to take any action to effect
      any
      registration pursuant to this Section ‎3
      if the
      Company has previously effected a number of registrations upon the request
      of a
      Demand Party pursuant to this Section ‎3
      equaling
      or exceeding two (2) registrations, in the case of the Demand Party, and (ii)
      the Company will not be obligated to effect more than two (2) registrations
      pursuant to this Section ‎3
      in any
      year; provided, however, that no registration effected pursuant to this Section
      ‎3
      will
      count towards the foregoing numerical limits on the number of registrations
      that
      may be requested by the Demand Party pursuant to this Section ‎3
      if the
      Registrable Securities proposed to be sold by the Demand Party in such
      registration were cut back from an earlier registration request pursuant
      to Section ‎3‎(c).
      

     

    (e)  Postponements
      in Requested Registrations. (i) If the Company at any time furnishes to the
      Demand Party a certificate signed by its chairman of the board, chief executive
      officer, president or any other of its authorized officers stating that the
      filing of such registration statement would be materially detrimental to the
      Company or its stockholders, the Company may postpone the filing of a
      registration statement required by this Section ‎3
      for up
      to one hundred twenty (120) days and (ii) if the Board of Directors of the
      Company determines in its good faith judgment that the registration and offering
      otherwise required by this Section ‎3
      would
      have an adverse effect on a then contemplated public offering of the Company’s
      stock, the Company may postpone the filing of a registration statement required
      by this Section ‎3,
      during
      the period starting with the sixtieth (60th)
      day
      immediately preceding the date of the anticipated filing of, and ending on
      a
      date one hundred eighty (180) days following the effective date of, the
      registration statement relating to such other public offering. The Company
      will
      promptly give the Demand Party requesting registration thereof pursuant to
      this
      Section ‎3
      written
      notice of any postponement made in accordance with the preceding sentence.
      

     

    (f) Coordination
      of Registrations.
      Regardless of when a Demand is made pursuant to this Section 4, the Company
      shall not be required to file a Registration Statement with respect to the
      Registrable Securities until after Prior Registration Statement is declared
      effective by the Securities and Exchange Commission. If a Demand is made and
      the
      registration statement required by this Section 3 is not filed on or before
      the
      day that is thirty (30) days after the later of the date of the Demand or the
      date that the Prior Registration Statement is declared effective by the
      Securities and Exchange Commission (the “Required
      Filing Date”),
      or if
      such registration statement is not declared effective by the Securities and
      Exchange Commission on or before the day that is ninety (90) days after the
      later of such dates (the “Required
      Effective Date”),
      then
      the Company shall pay to the Holder which gave the Demand an amount equal to
      (i)
      the dollar amount invested by such Holder in H2Diesel, Inc. pursuant to the
      Prior Agreements, multiplied by (ii) a fraction, the number of which is the
      number of shares of Common Stock to which the Demand relates and the denominator
      of which is the number of shares of Common Stock acquired by such party pursuant
      to the Investment Agreement, multiplied by (iii) the sum of the number of full
      calendar months beyond the Required Filing Date on which the required
      registration is filed and the number of full calendar months beyond the Required
      Effective Date on which the required registration statement is declared
      effective, but not more than 9 (provided, that for these purposes neither the
      Required Filing Date nor the Required Effective Date shall be extended if the
      filing of the registration statement can be, and is, delayed pursuant to the
      provisions of Section 3(g)), multiplied by (iv) 0.02.

     

    4.   Registration
      Procedures.
      If and
      whenever the Company is required to use its reasonable best efforts to effect
      or
      cause the registration of any Registrable Securities under the Securities Act
      as
      provided in this Agreement, the Company will (to the extent not relieved of
      such
      obligation as provided in Section ‎2
      hereof),
      as expeditiously as possible:

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (a)  prepare
      and, in any event within sixty (60) days after the end of the period within
      which a request for registration may be given to the Company pursuant to Section
      ‎2
      or
‎3,
      file
      with the SEC a registration statement with respect to such Registrable
      Securities and use its reasonable best efforts to cause such registration
      statement to become effective and, upon the request of the Holder, keep such
      Registration Statement effective for up to one hundred eighty (180) days or,
      if
      earlier, until the Holder has completed the distribution described in the
      registration statement related thereto;

     

    (b)  prepare
      and file with the SEC such amendments and supplements to such registration
      statement and the prospectus used in connection therewith as may be necessary
      to
      keep such registration statement effective for the period set forth in paragraph
      (i) above and to comply with the provisions of the Securities Act, the Exchange
      Act and the rules and regulations of the SEC thereunder with respect to the
      disposition of all securities covered by such registration statement during
      such
      period in accordance with the intended methods of disposition by the seller
      or
      sellers thereof set forth in such registration statement; 

     

    (c)  furnish
      to the Holder such number of copies of the prospectus included in such
      registration statement (including each preliminary prospectus and summary
      prospectus), in conformity with the requirements of the Securities Act, and
      such
      other documents as the Holder may reasonably request in order to facilitate
      its
      disposition of the Registrable Securities;

     

    (d)  use
      its
      reasonable best efforts to register or qualify such Registrable Securities
      covered by such registration under such other securities or blue sky laws in
      such jurisdictions as the Holder reasonably requests, except that the Company
      will not for any such purpose be required to qualify generally to do business
      as
      a foreign corporation in any jurisdiction where, but for the requirements of
      this clause (iv), it would not be obligated to be so qualified, to subject
      itself to taxation in any such jurisdiction or to consent to general service
      of
      process in any such jurisdiction;

     

    (e)  notify
      the Holder, at any time when a prospectus relating to its Registrable Securities
      is required to be delivered under the Securities Act within the appropriate
      period mentioned in clause (i) of this Section ‎4,
      of the
      Company’s becoming aware that the prospectus included in such registration
      statement, as then in effect, includes an untrue statement of a material fact
      or
      omits to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading in the light of the circumstances
      then existing;

     

    (f)  use
      its
      reasonable best efforts to list such Registrable Securities on any securities
      exchange or electronic market on which the Company’s stock is then listed if
      such Registrable Securities are not already so listed and if such listing is
      then permitted under the rules of such exchange or electronic market;

     

    (g)  in
      the
      event of an underwritten public offering, enter into an underwriting agreement
      in usual and customary form with the managing underwriter(s) of such
      offering;

     

    (h)  in
      the
      event of an underwritten public offering, use its reasonable best efforts to
      furnish, on the date that such Registrable Securities are delivered to the
      underwriters for sale, a “cold comfort” letter from the Company’s independent
      public accounts in form and substance as is customarily given by independent
      public accountants to underwriters in an underwritten public
      offering;

     

    (i)  in
      the
      event of an underwritten public offering, use its reasonable best efforts to
      furnish, on the date that such Registrable Securities are delivered to the
      underwriters for sale, an opinion of counsel for the Company, dated as of such
      date, in form and substance as is customarily given to underwriters in an
      underwritten public offering; and

     

    
      
         

      

      
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    (j)  cooperate
      and assist with any filings required to be made with the NASD.

     

    The
      Company may require the Holder to furnish the Company with such information
      regarding itself and pertinent to the disclosure requirements relating to the
      registration and the distribution of such securities as the Company may from
      time to time reasonably request.

     

    The
      Holder agrees that, upon receipt of any notice from the Company of the happening
      of any event of the kind described in clause (v) of this Section ‎4,
      the
      Holder will forthwith discontinue disposition of Registrable Securities pursuant
      to the registration statement covering such Registrable Securities until the
      Holder’s receipt of the copies of the supplemented or amended prospectus
      contemplated by clause (v) of this Section ‎4,
      and, if
      so directed by the Company, the Holder will deliver to the Company (at the
      Company’s expense) all copies of the prospectus covering such Registrable
      Securities current at the time of receipt of such notice. In the event the
      Company gives any such notice, the period mentioned in clause (i) of this
      Section ‎4
      will be
      extended by the number of days during the period from and including the date
      of
      the giving of such notice pursuant to clause (v) of this Section ‎4
      and to
      and including the date when the Holder’s Registrable Securities covered by such
      registration statement receives the copies of the supplemented or amended
      prospectus contemplated by clause (v) of this Section ‎4.

     

    5.   Indemnification. 

     

    (a)  Indemnification
      by the Company. In
      the
      event of any registration of any securities of the Company under the Securities
      Act pursuant to Sections ‎2
      or
‎3
      hereof,
      the Company will indemnify and hold harmless, to the extent permitted by law,
      the seller of any Registrable Securities covered by such registration statement,
      each affiliate of such seller and their respective directors and officers,
      stockholders, members or general and limited partners (including any director,
      officer, affiliate, employee, agent and controlling Person of any of the
      foregoing), each other Person who participates as an underwriter in the offering
      or sale of such securities and each other Person, if any, who controls such
      seller or any such underwriter within the meaning of the Securities Act, against
      any and all losses, claims, damages or liabilities, joint or several, and
      expenses (including reasonable attorney’s fees and reasonable expenses of
      investigation) to which such indemnified party may become subject under the
      Securities Act, common law or otherwise, insofar as such losses, claims, damages
      or liabilities (or actions or proceedings in respect thereof, whether or not
      such indemnified party is a party thereto) arising out of or are based upon
      (a)
      any untrue statement or alleged untrue statement of any material fact contained
      in any registration statement under which such securities were registered under
      the Securities Act, any preliminary, final or summary prospectus contained
      therein, or any amendment or supplement thereto, or (b) any omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein (in the case of a prospectus, in light
      of the circumstances under which they were made) not misleading, and the Company
      will reimburse such indemnified party for any legal or any other expenses
      reasonably incurred by it in connection with investigating or defending against
      any such loss, claim, liability, action or proceeding; provided that the Company
      will not be liable to any indemnified party in any such case to the extent
      that
      any such loss, claim, damage, liability (or action or proceeding in respect
      thereof) or expense arises out of or is based upon any untrue statement or
      alleged untrue statement or omission or alleged omission made in such
      registration statement or amendment or supplement thereto or in any such
      preliminary, final or summary prospectus or a document incorporated by reference
      into any of the foregoing in reliance upon and in conformity with written
      information furnished to the Company by such seller specifically for use in
      the
      preparation thereof; and provided, further, that the Company will not be liable
      to any indemnified person under the indemnity agreement in this Section
‎5‎(a)
      with
      respect to any preliminary prospectus or the final prospectus or the final
      prospectus as amended or supplemented, as the case may be, to the extent that
      any such loss, claim, damage or liability of such indemnified person results
      from the fact that an underwriter sold Registrable Securities to a Person to
      whom there was not sent or given, at or prior to the written confirmation of
      such sale, a copy of the final prospectus or of the final prospectus as then
      amended or supplemented, whichever is most recent, if the Company has previously
      furnished copies thereof to such underwriter. 

     

    
      
         

      

      
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    (b)  Indemnification
      by the Seller. In the event of any registration of any securities of the Company
      under the Securities Act pursuant to Sections ‎2
      or
‎3
      hereof,
      each seller of Registrable Securities included in such registration will
      indemnify and hold harmless (in the same manner and to the same extent as set
      forth in Section ‎5‎(a))
      the
      Company, each affiliate of the Company and their respective directors, officers,
      stockholders, members or general and limited partners (including any director,
      officer, affiliate, employee, agent and controlling Person of any of the
      foregoing), each other Person who participates as an underwriter in the offering
      or sale of such securities and all other sellers of Registrable Securities
      covered by such registration statement, each affiliate of such seller and their
      respective directors, officers, stockholders, members or general and limited
      partners (including any director, officer, affiliate, employee, agent and
      controlling Person of any of the foregoing) and each other Person, if any,
      who
      controls the Company or such underwriter or such seller within the meaning
      of
      the Securities Act, with respect to any untrue statement or alleged untrue
      statement in or omission or alleged omission from such registration statement,
      any preliminary, final or summary prospectus contained therein, or any amendment
      or supplement, to the extent that such untrue statement or alleged untrue
      statement or omission or alleged omission was made in reliance upon and in
      conformity with written information furnished to the Company by such seller
      specifically for use in the preparation of such registration statement,
      preliminary, final or summary prospectus or amendment or supplement, or a
      document incorporated by reference into any of the foregoing. In no event will
      the liability of any seller of Registrable Securities hereunder be greater
      in
      amount than the dollar amount of the net proceeds received by such Holder upon
      the sale of the Registrable Securities giving rise to such indemnification
      obligation.

     

    (c)  Notices
      of Claims, Etc. Promptly after receipt by an indemnified party hereunder of
      written notice of the commencement of any action or proceeding with respect
      to
      which a claim for indemnification may be made pursuant to this Section
‎5,
      such
      indemnified party will, if a claim in respect thereof is to be made against
      an
      indemnifying party, give written notice to the latter of the commencement of
      such action; provided that the failure of the indemnified party to give notice
      as provided herein will not relieve the indemnifying party of its obligations
      under this Section ‎5,
      except
      to the extent that the indemnifying party is actually prejudiced by such failure
      to give notice. In case any such action is brought against an indemnified party,
      the indemnifying party will be entitled to participate in and to assume the
      defense thereof, with counsel reasonably satisfactory to such indemnified party.
      No indemnifying party will consent to entry of any judgment or enter into any
      settlement which does not include, as an unconditional term thereof, the giving
      by the claimant or plaintiff to such indemnified party of a release from all
      liability in respect to such claim or litigation.

     

    (d)  Contribution.
      If the indemnification provided for in this Section ‎5
      from the
      indemnifying party is unavailable to an indemnified party hereunder in respect
      of any losses, claims, damages, liabilities or expenses referred to herein,
      then
      the indemnifying party, in lieu of indemnifying such indemnified party, will
      contribute to the amount paid or payable by such indemnified party as a result
      of such losses, claims, damages, liabilities or expenses in such proportion
      as
      is appropriate to reflect the relative fault of the indemnifying party and
      such
      indemnified party in connection with the actions which resulted in such losses,
      claims, damages, liabilities or expenses, as well as any other relevant
      equitable considerations. The relative fault of such indemnifying party and
      such
      indemnified party will be determined by reference to, among other things,
      whether any action in question, including any untrue or alleged untrue statement
      of a material fact or omission or alleged omission to state a material fact,
      has
      been made by, or relates to information supplied by, such indemnifying party
      or
      indemnified parties, and the parties’ relative intent, knowledge, access to
      information and opportunity to correct or prevent such action. The amount paid
      or payable by a party under this Section ‎5‎(d)
      as a
      result of the losses, claims, damages, liabilities and expenses referred to
      above will be deemed to include any legal or other fees or expenses reasonably
      incurred by such party in connection with any investigation or
      proceeding.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section ‎5‎(d)
      were
      determined by pro rata allocation or by any other method of allocation which
      does not take account of the equitable considerations referred to in the
      immediately preceding paragraph. No Person guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the Securities Act)
      will be entitled to contribution from any Person who was not guilty of such
      fraudulent misrepresentation.

     

    6.   Rule
      144

     

    .With
      a
      view to making available the benefits of certain rules and regulations of the
      SEC which may permit the sale of restricted securities to the public without
      registration, the Company agrees to:

     

    (a)  use
      its
      reasonable best efforts to make and keep public information available as those
      terms are understood and defined in Rule 144 under the Securities Act (“Rule
      144”), at all times from and after ninety (90) days following the effective date
      of the IPO; 

     

    (b)  use
      its
      reasonable best efforts to file with the SEC in a timely manner all reports
      and
      other documents required of the Company under the Securities Act and the
      Exchange Act at any time after it has become subject to such reporting
      requirements; and

     

    (c)  so
      long
      as the Holder owns any Registrable Securities, furnish to the Holder upon
      request, (x) a written statement by the Company as to the status of its
      compliance with the reporting requirements of Rule 144 (at any time from and
      after ninety (90) days following the effective date of the IPO, and of the
      Securities Act and the Exchange Act (at any time after it has become subject
      to
      such reporting requirements), (y) a copy of the most recent annual or quarterly
      report of the Company, and (z) such other reports and documents so filed as
      the
      Holder may reasonably request in availing itself of any rule or regulation
      of
      the SEC allowing the Holder to sell any such securities without
      registration.

     

    7.   Selection
      of Counsel.
      In
      connection with any registration of Registrable Securities pursuant to Sections
      ‎2
      or
‎3
      hereof,
      the Holder may select one counsel to represent it in connection with the
      Registrable Securities covered by such registration.

     

    8.   Miscellaneous. 

     

    (a)  Amendments
      and Waivers.
      This
      Agreement may be amended and the Company may take any action herein prohibited,
      or omit to perform any act herein required to be performed by it, only if the
      Company has obtained the written consent to such amendment, action or omission
      to act, of the Holder. 

     

    (b)  Successors,
      Assigns and Transferees. This Agreement will not be assigned; provided that
      (i)
      the Holder may assign all or part of its rights and obligations under this
      Agreement to any bona fide partner or officer of the Holder who has acquired
      Registrable Securities from the Holder, to the extent that such transferee
      agrees in writing to be bound by the terms of this Agreement. Subject to the
      foregoing restrictions, this Agreement will be binding upon and inure to the
      benefit of the parties hereto and their successors and assigns. 

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (c)  Notices.
      All notices and other communications provided for or permitted hereunder will
      be
      in writing and will be deemed to have been duly given and received when
      delivered by overnight courier or hand delivery, when sent by telecopy, or
      five
      days after mailing if sent by registered or certified mail (return receipt
      requested) postage prepaid, to the Holder at the following address.
      

     

    (i) If
      to the
      Holder(s) at:

     

    Crestview
      Capital Master, LLC

     

    c/o
      Crestview Capital Master, LLC

    95
      Revere
      Drive, Suite A

    Northbrook,
      IL

    Telephone:
      847-559-00600

    Fax:
      847-559-5807

    

     

    TOIBB

     

    Toibb
      Investment LLC

    6355
      Topanga Canyon Blvd # 335

    Woodland
      Hills, CA 91367

    Telephone:
      818-883-3495 

    Fax:
      818-883-0858 

    

    With
      a
      copy to (which will not constitute notice):

     

    Joseph
      A.
      Smith

    Feldman
      Weinstein, LLP

    420
      Lexington Avenue, Suite 2620

    New
      York,
      NY 10170

    Tel:
      212-869-7000

    Fax:
      212-997-4242

    

    (ii) If
      to the
      Company at:

     

    Xethanol
      Corporation

    1185
      Avenue of the Americas, 20th
      Floor

    New
      York,
      New York 10036

    Telephone
      (646) 723-4000

    Fax:
      (212)
      656-1129

    Attention:
      Christopher d'Arnaud-Taylor, CEO

    

    With
      a
      copy to (which will not constitute notice):

     

    Boylan,
      Brown, Code, Vigdor & Wilson, LLP

    2400
      Chase Square

    Rochester,
      NY 14604

    Telephone:
      (585) 232-5300

    Fax:
      (585) 232-3528

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (d)  Descriptive
      Headings.
      The
      headings in this Agreement are for convenience of reference only and will not
      limit or otherwise affect the meaning of terms contained herein.

     

    (e)  Severability.
      Whenever possible, each provision of this Agreement will be interpreted in
      such
      manner as to be effective and valid under applicable law, but if any provision
      of this Agreement is held to be invalid, illegal or unenforceable in any respect
      under any applicable law or rule in any jurisdiction, such invalidity,
      illegality or unenforceability will not affect any other provision or any other
      jurisdiction, but this Agreement will be reformed, construed and enforced in
      such jurisdiction as if such invalid, illegal or unenforceable provision had
      never been contained herein.

     

    (f)  Counterparts.
      This Agreement may be executed in any number of counterparts, each of which
      will
      be an original, but all of which together will constitute one instrument. This
      Agreement may be executed by facsimile signature(s).

     

    (g)  Governing
      Law. This Agreement will be governed by, and construed in accordance with,
      the
      laws of the State of Delaware (without giving effect to the choice of law
      principles therein).

     

    (h)  Specific
      Performance; Submission to Jurisdiction.
      The
      parties agree that irreparable damage would occur in the event that any of
      the
      provisions of this Agreement were not performed in accordance with their
      specific terms or were otherwise breached. It is accordingly agreed that the
      parties will be entitled to an injunction or injunctions to prevent breaches
      of
      this Agreement and to enforce specifically the terms and provisions of this
      Agreement in Court of Chancery or other courts of the State of Delaware, this
      being in addition to any other remedy to which such party is entitled at law
      or
      in equity. In addition, each of the parties hereto (i) consents to submit itself
      to the personal jurisdiction of the Court of Chancery or other courts of the
      State of Delaware in the event any dispute arises out of this Agreement or
      any
      of the transactions contemplated by this Agreement, (ii) agrees that it will
      not
      attempt to deny or defeat such personal jurisdiction by motion or other request
      for leave from such court, (iii) agrees that it will not bring any action
      relating to this Agreement or any of the transactions contemplated by this
      Agreement in any court other than the Court of Chancery or other courts of
      the
      State of Delaware and (iv) to the fullest extent permitted by Law, consents
      to
      service being made through the notice procedures set forth in Section
‎8‎(c).
      Each
      party hereto hereby agrees that, to the fullest extent permitted by Law, service
      of any process, summons, notice or document by U.S. registered mail to the
      respective addresses set forth in Section ‎8‎(c)
      will be
      an effective service of process for any suit or proceeding in connection with
      this Agreement or the transactions contemplated hereby. EACH OF THE PARTIES
      HERETO HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION
      OR
      OTHER PROCEEDING BROUGHT IN CONNECTION WITH THIS AGREEMENT, OR ANY OF THE
      TRANSACTIONS CONTEMPLATED HEREBY. NO PARTY HAS AGREED WITH OR REPRESENTED TO
      ANY
      OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED
      IN
      ALL INSTANCES.

     

    (i)  Further
      Assurances. At any time or from time to time after the date hereof, the parties
      agree to cooperate with each other, and at the request of any other party,
      to
      execute and deliver any further instruments or documents and to take all such
      further action as the other party may reasonably request in order to evidence
      or
      effectuate the consummation of the transactions contemplated hereby and to
      otherwise carry out the intent of the parties hereunder.

     

    (j)  Termination.
      The provisions of this Agreement (other than Section ‎5)
      will
      terminate (A) with respect to the Holder, at such time as all of the Registrable
      Securities then owned by the Holder could be sold pursuant to Rule 144(k),
      (B)
      upon execution of a written agreement of the Holder to terminate this Agreement
      or (C) at such time as there are no Registrable Securities
      outstanding.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (k)  Entire
      Agreement. This Agreement (including any and all exhibits, schedules and other
      instruments contemplated thereby) constitutes the entire agreement of the
      Parties with respect to the subject matter hereof.

     

    

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, each of the undersigned has executed this Agreement or caused
      this Agreement to be duly executed on its behalf as of the date first written
      above.

     

    XETHANOL
      CORPORATION

    

    By:
       /s/
      Christopher d’Arnaud-Taylor

    Name: Christopher
      d’Arnaud-Taylor

    Title: President
      and CEO

    

    CRESTVIEW
      CAPITAL MASTER, LLC

    

    By: /s/Robert
      M. Hoyt

    Name: Robert
      M.
      Hoyt

    Title: Managing
      Partner

    

    TOIBB
      INVESTMENT LLC  

    

    By: /s/
      Howard Smuckler

    Name: Howard
      Smuckler

    Title: CFO

    

    

    
      
         

      

      
        12

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