VU1CORPORATION AND MilanGottwald DEEDOF GUARANTEE CONTENTS

(1)

VU1 Corporation, a company organised and existing under the laws of the State of California, whose registered office is at 557 Roy Street, Suite 125, Seattle, WA 98109, , USA (the "Guarantor"), and

(2)

Milan Gottwald, birth identification number 750219/5327, residing at: Náklo 334, Postal Code: 783 32, Czech Republic (the “Beneficiary”).

(A)

The Beneficiary shall in November 25, 2008 enter into a purchase agreement with SENDIO s.r.o., a company organised and existing under the laws of the Czech Republic, Id. No.: 281 64 440, whose registered office is at Olomouc, Holická 156/49, PSČ 77900, Czech Republic (“SENDIO”), whereby SENDIO is obliged, among others, to pay into the Escrow Account the advance payments of the Purchase Price pursuant to Art. III (2) (i) and (ii) thereof in the total amount of CZK 13,500,000 (thirteen million and five hundred thousand Czech crowns) (the “Purchase Agreement”).

(B)

The Guarantor is the sole shareholder in SENDIO.

(C)

According to Art. VI (2) of the Purchase Agreement SENDIO agrees to submit to the Beneficiary, on the date of conclusion thereof, a valid and binding guarantor’s declaration issued by the Guarantor, in order to secure the SENDIO’s obligations following from Art. III (2) (i) and (ii) of the Purchase Agreement.

 

1.

 

(a)

Unless otherwise defined in this Guarantee terms defined in the Purchase Agreement shall have the same meaning when used in this Guarantee.

 

(b)

Any reference to a Clause shall mean a Clause of this Guarantee unless otherwise stated.

 

(c)

Titles and headings of Clauses in this Guarantee are for reference only and shall not affect its interpretation or construction.

 

(d)

Words importing persons shall include firms, companies and corporations and vice versa.

 

(e)

For the purposes of this Guarantee the “Finance Documents” mean Purchase Agreement and this Guarantee.

 

2.

 

(a)

guarantees to the Beneficiary punctual performance by SENDIO of the SENDIO’s obligations under Art. III (2) (i) and (ii) of the Purchase Agreement;

 

(b)

undertakes with the Beneficiary that whenever SENDIO does not pay any amount when due under Art. III (2) (i) and (ii) of the Purchase Agreement, the Guarantor shall within 5 business days from receipt of a written demand pay that amount into the Escrow Account as if it was the principal obligor;

 

3.

 

4.

 

5.

 

(a)

any time, waiver or consent granted to, or composition with, SENDIO or other person;

 

(b)

the release of SENDIO or any other person under the terms of any composition or arrangement with any creditor of SENDIO;

 

(c)

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, SENDIO or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

 

(d)

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of SENDIO or any other person;

 

(e)

any unenforceability, illegality or invalidity of any obligation of any person under the Purchase Agreement or any other document or security;

 

(f)

the amalgamation or reorganisation of the Guarantor.

 

(g)

the bankruptcy, insolvency, liquidation, reorganisation, dissolution, amalgamation, reconstruction or any analogous proceeding relating to SENDIO or any other person or any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status function control or ownership of SENDIO or any other person; or

 

(h)

any amendment to or variation or replacement of the Purchase Agreement (whether or not such amendment or variation shall increase the liabilities of SENDIO thereunder or the Guarantor hereunder) or by anything that SENDIO or the Beneficiary may do or omit or neglect to do (including but without limitation the assertion or failure or delay to assert any right or remedy of the Beneficiary or the pursuit of any rights or remedies by the Beneficiary or the giving by SENDIO of any security or the release, modification, failure, delay or forbearance in enforcing or exchange of any such security) which but for this provision might exonerate the Guarantor.

 

6.

 

(a)

to grant any time or indulgence to SENDIO;

 

(b)

to take any legal proceedings or action or obtain any judgment against SENDIO in any Court;

 

(c)

to make or file any claim in any bankruptcy, liquidation, winding-up or dissolution of SENDIO; or

 

(d)

to pursue or exhaust any other right or remedy against SENDIO, and the liabilities of the Guarantor under this Agreement may be enforced irrespective of whether any legal proceedings are being or have been taken against SENDIO.

 

7.

 

(a)

the liability of SENDIO shall continue as if the payment, discharge, avoidance or reduction had not occurred; and

 

(b)

the Beneficiary shall be entitled to recover the value or amount of that security or payment from SENDIO, as if the payment, discharge, avoidance or reduction had not occurred.

 

8.

 

(a)

to be indemnified by SENDIO;

 

(b)

to claim any contribution from any other guarantor of SENDIO’s obligations under the Purchase Agreement; and/or

 

(c)

to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Beneficiary under the Purchase Agreement or of any other guarantee or security taken pursuant to, or in connection with, the Purchase Agreement.

 

9.

 

(a)

it is a company incorporated in the State of California with power to enter into this Guarantee and to exercise its rights and perform its obligations hereunder and all corporate and other action required to authorise its execution of this Guarantee has been duly taken;

 

(b)

the obligations expressed to be assumed by it in this Guarantee are legal and valid obligations binding on it in accordance with the terms hereof;

 

(c)

all acts, conditions and things required to be done fulfilled and performed in order (a) to enable it lawfully to enter into, exercise its rights under and perform and comply with the obligations expressed to be assumed by it hereunder and (b) to ensure that the obligations expressed to be assumed by it hereunder are legal, valid and binding have been done, fulfilled and performed;

 

(d)

the entry into and performance by it of  this Guarantee do not and will not conflict in any material respect with:

 

(e)

it has not taken any corporate action or have any other steps been taken or legal proceedings been started against it for its winding-up, dissolution, administration, or re-organisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer.

 

10.

 

(a)

The Guarantor shall make all payments to be made by it without any deduction or withholding for or on account of any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) (the “Tax Deduction”), unless a Tax Deduction is required by law.

 

(b)

If a Tax Deduction is required by law to be made by the Guarantor, the amount of the payment due from the Guarantor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

 

(c)

If the Guarantor is required to make a Tax Deduction, it shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

 

(d)

Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Guarantor shall deliver to the Beneficiary evidence reasonably satisfactory to the Beneficiary that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

 

(e)

The Guarantor shall, promptly upon becoming aware of the same, notify the Beneficiary of any Tax Deduction which would be required to be made from any payment to be made by it under any Finance Document.

 

11.

 

(a)

shall be in writing;

 

(b)

shall be in the English language; and

 

(c)

shall be delivered personally or sent by facsimile, established courier service or telex to the party to which it is required or permitted to be given or made at the address specified below or at such other address as such party shall have designated by Notice to the party giving or making such Notice:

 

12.

 

13.

 

14.

14.1

The parties hereto expressly agree that all disputes arising out of or in connection with the present Guarantee shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the said Rules. The governing law of the arbitration shall be the law of the State of Washington (USA). The arbitration shall take place in Vienna. The language of the arbitration shall be English.

14.2

This Clause 14 is for a benefit of the Beneficiary only. As a result, the Beneficiary shall not be prevented from taking proceedings relating to this Guarantee in any other courts with jurisdiction. To the extent allowed by law, the Beneficiary may take concurrent proceedings in any number of jurisdictions.

 

15.