STOCK PURCHASE AND TERMINATION AGREEMENT
This
Stock Purchase and Termination Agreement (the “Agreement”),
dated
as of October 5, 2007, is entered into by and among H2Diesel Holdings, Inc.,
a
Florida corporation (“Holdings”),
H2Diesel, Inc., a Delaware corporation and wholly-owned subsidiary of Holdings
(“H2Diesel”),
and
Xethanol Corporation, a Delaware corporation (“Xethanol”).
RECITALS
WHEREAS,
Xethanol beneficially owns 5,850,000 shares of common stock, par value $0.001
per share, of Holdings; and
WHEREAS,
Xethanol desires to sell 5,460,000 shares (the “Shares”) and to retain 390,000
shares (the “Retained Shares”) of such common stock; and
WHEREAS,
H2Diesel and Xethanol are parties to an Amended and Restated Sublicense
Agreement, dated June 15, 2006 (the “Sublicense
Agreement”),
a
Technology Access Agreement, dated June 15, 2006 (the “Technology
Access Agreement”),
and a
Letter Agreement regarding Registration Rights, dated October 16, 2006 (the
“Letter
Agreement”,
together with the Sublicense Agreement and Technology Access Agreement, the
“H2Diesel/Xethanol
Agreements”);
and
WHEREAS,
Holdings desires to purchase and Xethanol desires to sell to Holdings all the
Shares beneficially owned by Xethanol and all parties desire to terminate the
H2Diesel/Xethanol Agreements; and
WHEREAS,
the parties hereto desire to effect the releases and waivers contemplated hereby
in connection with the sale and purchase hereunder.
NOW
THEREFORE, for good and adequate consideration, the receipt and sufficiency
of
which is hereby acknowledged, Holdings, H2Diesel and Xethanol agree as
follows:
TERMS
1. PURCHASE
AND SALE OF SHARES
Subject
to the terms and conditions set forth in this Agreement, in reliance on the
respective representations, warranties and covenants contained herein and in
consideration for the releases set forth herein:
1.1 At
the
Closing (as hereinafter defined), Xethanol will sell, convey, assign and
transfer to Holdings free and clear of all Liens (as hereinafter defined),
and
Holdings will purchase and redeem from Xethanol, all of the Shares for an
aggregate purchase price equal to $7,000,000 (the “Purchase
Price”);
and
1.2 Upon
execution of this Agreement, Holdings will pay Xethanol a non-refundable deposit
of $250,000, which amount will be deducted from the Purchase Price payable
at
the Closing.
2. CLOSING
2.1 Condition
to Closing.
The
Closing (as hereinafter defined) is conditioned upon the closing of a
transaction in which Holdings obtains a minimum of $10,000,000 of new financing
(the “Financing
Transaction”).
Holdings may waive this condition in its sole discretion by providing written
notice to the other parties.
2.2 Closing
Date.
The
Closing will occur simultaneously with or at a reasonably prompt time after
the
closing of the Financing Transaction, or at such date, time and location as
mutually agreed upon by all parties in writing (the “Closing”).
2.3 Termination.
If the
Closing does not occur on or before November 9, 2007, or such later date as
may
be agreed by the parties in writing, each party shall have an independent right
to terminate this Agreement upon ten (10) calendar days’ written notice to the
other party. No party shall incur any obligation to the other party as a result
of such termination, unless such termination results from a failure to close
arising from a breach by a party of its obligations hereunder, in which case
the
non-breaching party shall be entitled to pursue remedies at law or equity.
The
failure of Holdings to satisfy the condition specified in Section 2.1 shall
not
be a breach. However, in the event of a termination other than as a result
of a
breach by Xethanol of its obligations hereunder, Xethanol shall retain the
non-refundable deposit of $250,000.
2.4 Deliveries
at Closing.
At the
Closing,
(a) Xethanol
shall deliver to Holdings
|
(i)
|
The
stock certificates representing the Shares, duly endorsed in blank
or
accompanied by assignments separate from the certificates duly endorsed
in
blank;
|
|
(ii)
|
Any
other documents necessary to transfer to Holdings good, valid and
marketable title to the Shares, and
|
|
(iii)
|
Originals
of all promissory notes and instruments, each marked cancelled, evidencing
any and all debt owed by Holdings or H2Diesel to Xethanol (the
“Debt”);
and
|
|
(iv)
|
Such
other documents as may reasonably be requested by Holdings or
H2Diesel to further document the termination and release occurring
effective as of the Closing.
|
(b) Holdings
shall deliver to Xethanol $6,750,000, which is the Purchase Price for the Shares
minus the $250,000 deposit previously delivered to Xethanol upon execution
of
the Agreement, by wire transfer of immediately available funds to a bank account
previously designated by Xethanol. Holdings and H2Diesel
shall also deliver such
other
documents as may reasonably be requested by Xethanol to
further document the termination and release occurring effective as of the
Closing.
3. TERMINATION
AND RELEASE
3.1 Termination
of H2Diesel/Xethanol
Agreements.
Effective as of the occurrence of the Closing, but not in the event that this
Agreement terminates prior to the Closing occurring, the H2Diesel/Xethanol
Agreements are hereby terminated, and are of no further force and effect, and
no
party thereto shall have any further rights or obligations
thereunder; provided, however, that all provisions regarding confidential
information shall survive such termination, including but not limited to section
2.6 of the Sublicense Agreement regarding intellectual property rights and
any
defined terms included therein, and all confidential information given by
Holdings or H2Diesel to Xethanol is returned within thirty days from the
Closing.
3.2 Release
by Holdings and H2Diesel.
Effective as of the occurrence of the Closing, but not in the event that this
Agreement terminates prior to the Closing occurring, Holdings and H2Diesel,
on
their own behalf and on behalf of their officers, directors, employees, agents,
representatives, predecessors, successors and assigns (collectively,
“Representatives”),
hereby irrevocably, unconditionally and forever (i) waive and relinquish any
rights granted to H2Diesel pursuant to the H2Diesel/Xethanol
Agreements
and the other agreements and documents contemplated thereby, and
(ii) release and discharge Xethanol and its Representatives from any and
all manner of claims, liabilities and obligations whatsoever, whether known
or
unknown, accrued or not accrued, direct or indirect, in law or equity, arising
from any source or manner whatsoever, including without limitation those arising
from or relating to the H2Diesel/Xethanol Agreements
or the other agreements and documents contemplated thereby, which may exist
as
of the date hereof or as of the date of Closing, or which may arise in the
future based upon events that have occurred or documents signed at any time
prior to the date hereof or the date of Closing.
3.3 Release
by Xethanol.
Effective as of the occurrence of the Closing, but not in the event that this
Agreement terminates prior to the Closing occurring, Xethanol, on behalf of
itself and its Representatives, hereby irrevocably, unconditionally and forever
(i) waives and relinquishes any rights it may have against or with respect
to
Holdings or H2Diesel or their Representatives pursuant to the H2Diesel/Xethanol
Agreements
and the other agreements and documents contemplated thereby, (ii) waives and
relinquishes any right to repayment of principal and interest on any and all
Debt, which the parties believe to be an aggregate amount of $50,000, and (iii)
releases and discharges Holdings and H2Diesel and their respective
Representatives from any and all manner of claims, liabilities and obligations
whatsoever, whether known or unknown, accrued or not accrued, direct or
indirect, in law or equity, arising from any source or manner whatsoever,
including without limitation those arising from or relating to the H2Diesel/Xethanol
Agreements
or the other agreements and documents contemplated thereby, which may exist
as
of the date hereof or as of the date of Closing, or which may arise in the
future based upon events that have occurred or documents signed at any time
prior to the date hereof or the date of Closing.
3.4 Effectiveness
of Termination and Release.
For the
avoidance of doubt, the parties agree that the terminations, waivers and
releases in this Article 3 shall be effective immediately when, but only when,
the sale and purchase of the Shares and payment therefor has taken place at
the
Closing. In the event this Agreement terminates prior to the Closing the
terminations, waivers and releases in this Article 3 shall be of no force or
effect, and the H2Diesel/Xethanol Agreements
shall continue in full force and effect.
4. REPRESENTATIONS
AND WARRANTIES
4.1 Representations
and Warranties of Xethanol.
Xethanol
represents and warrants to to Holdings and H2Diesel both on the date hereof
and
on the date of the Closing as follows:
(a) Xethanol
has the requisite power and authority to execute, deliver and carry out the
terms and provisions of this Agreement and to consummate the transactions
contemplated hereby, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement;
(b) The
execution of this Agreement by Xethanol does not, and the performance by
Xethanol of its obligations hereunder will not, constitute a violation of,
conflict with or result in a default under any contract, commitment, agreement,
understanding, arrangement or restriction of any kind to which Xethanol is
a
party or by which Xethanol is bound or any judgment, decree or order applicable
to Xethanol;
(c) To
the
best of its knowledge, neither the execution and delivery of this Agreement
nor
the performance by Xethanol of its obligations hereunder will violate any
provision of law applicable to Xethanol or require any consent or approval
of,
or filing with or notice to any public body or authority under any provision
of
law applicable to Xethanol other than notices or filings pursuant to the federal
securities laws; and
(d) Xethanol
is the sole record and beneficial owner (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) of the Shares, has good and
marketable title to all of the Shares, and there exist no liens, claims,
options, proxies, voting agreements, charges, security interests, or
encumbrances of whatever nature (“Liens”) affecting such Shares. Upon transfer
of the Shares to Holdings by Xethanol, Holdings will have good and marketable
title to the Shares free and clear of all Liens. Other than the Shares and
the
Retained Shares, Xethanol and its subsidiaries or affiliates do not beneficially
own any other securities of Holdings or H2Diesel and do not have any outstanding
option, warrant or other right to acquire, directly or indirectly, any
securities of Holdings or H2Diesel which are or may by their terms become
entitled to vote or any securities which are convertible or exchangeable into
or
exercisable for any securities of Holdings or H2Diesel which are or may by
their
terms become entitled to vote, and Xethanol is not subject to any offer,
contract, arrangement, understanding or relationship (whether or not legally
enforceable) which allows or obligates Xethanol to vote, dispose of or acquire
any securities of Holdings or H2Diesel.
4.2 Representations
and Warranties of Holdings and H2Diesel.
Holdings
and H2Diesel represent and warrant to Xethanol both on the date hereof and
on
the date of the Closing as follows:
(a) Holdings
and H2Diesel have the requisite corporate power and authority to execute,
deliver and to consummate the transactions contemplated hereby, and have taken
all necessary corporate action to authorize the execution, delivery and
performance of this Agreement; and
(b) The
execution of this Agreement by Holdings and H2Diesel does not, and the
performance by Holdings and H2Diesel of their obligations hereunder will not,
to
the best of their knowledge, constitute a violation of, conflict with or result
in a default under any contract, commitment, agreement, understanding,
arrangement or restriction of any kind to which the Holdings or H2Diesel is
a
party or by which Holdings or H2Diesel is bound.
(c) To
the
best of their knowledge, neither the execution and delivery of this Agreement
nor the performance by Holdings and H2Diesel of their obligations hereunder
will
violate any provision of law applicable to Holdings and H2Diesel or require
any
consent or approval of, or filing with or notice to any public body or authority
under any provision of law applicable to Holdings and H2Diesel other than
notices or filings pursuant to the federal securities laws.
5. MISCELLANEOUS.
5.1 Entire
Agreement.
This
Agreement sets forth the entire agreement and supersedes any and all prior
agreements of the parties with respect to the transactions set forth herein.
5.2 Amendment,
Waiver.
No
change, amendment or modification of any provision of this Agreement shall
be
valid unless set forth in a written instrument signed by the parties hereto,
and
no waiver of any provision of this Agreement shall be valid unless set forth
in
a written instrument signed by the party subject to enforcement of such
waiver.
5.3 Governing
Law.
The
validity, construction and interpretation of this Agreement shall be governed
by
the laws of the State of New York, excluding any otherwise applicable rules
of
conflict that would cause the laws of another jurisdiction to
apply.
5.4 Further
Assurances.
Each
party shall take such action (including, the execution, acknowledgment and
delivery of documents) as may reasonably be requested by any other party for
the
implementation or continuing performance of this Agreement.
5.5 Construction;
Severability.
In the
event that any provision of this Agreement conflicts with the law under which
this Agreement is to be construed or if any such provision is held invalid
by a
court with jurisdiction over the parties to this Agreement, (i) such provision
shall be deemed to be restated to reflect as nearly as possible the original
intentions of the parties in accordance with applicable law, and (ii) the
remaining terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect.
5.6 Headings;
Interpretation.
The
captions and headings used in this Agreement are inserted for convenience only
and shall not affect the meaning or interpretation of this Agreement. Whenever
the words “include”, “includes,” or “including” are used in this Agreement, they
shall be deemed followed by the words “without limitation.”
5.7 Confidentiality.
Each
Party agrees to keep any Confidential Information of the other parties
confidential and agrees not to disclose such information. Notwithstanding the
foregoing, the parties may make disclosures to the extent required by law or
by
the applicable rules and regulations of a securities exchange or national market
system on which a disclosing Party’s shares are listed or traded.
5.8 Counterparts;
Facsimile.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same document.
This Agreement, and written amendments hereto, may be executed by
facsimile.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
above first written.
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxxxxx | |
|
Name:
Xxxxx X. Xxxxxxxxx
|
||
|
Title: President
|
||
|
H2DIESEL,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxxxxx | |
|
Name:
Xxxxx X. Xxxxxxxxx
|
||
|
Title: President
|
||
|
XETHANOL
CORPORATION
|
||
| |
|
|
| By: | /s/ Xxxxx Xxxx | |
|
Name:
Xxxxx Xxxx
|
||
|
Title: Chief
Executive Officer
|
||
