GUARANTY
 
In order to induce Payee to extend credit to Makers pursuant to the Secured
Promissory Note issued jointly and severally by Makers on the date hereof (the
“Note”; terms defined therein and not otherwise defined herein being used herein
as therein defined), the undersigned (“Guarantor”) hereby irrevocably and
unconditionally guaranties, as primary obligor and not merely as surety, the due
and punctual payment in full of all Obligations (as hereinafter defined) when
the same shall become due, whether at stated maturity, by acceleration, demand
or otherwise (including amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
§ 362(a)).
 
The term “Obligations” is used herein in its most comprehensive sense and
includes any and all obligations of Makers, joint and several, now or hereafter
made, incurred or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, and however arising under or in connection
with the Note, including those arising under successive borrowing transactions
under the Note which shall either continue such obligations of Makers or from
time to time renew them after they have been satisfied.
 
Guarantor acknowledges that the Obligations are being incurred for and will
inure to the benefit of Guarantor.
 
Any interest on any portion of the Obligations that accrues after the
commencement of any proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of either Maker (or, if interest on any portion of the Obligations ceases to
accrue by operation of law by reason of the commencement of said proceeding,
such interest as would have accrued on such portion of the Obligations if said
proceeding had not been commenced) shall be included in the Obligations because
it is the intention of Guarantor and Payee that the Obligations should be
determined without regard to any rule of law or order that may relieve such
Maker of any portion of such Obligations.
 
In the event that all or any portion of the Obligations is paid by either Maker,
the obligations of Guarantor hereunder shall continue and remain in full force
and effect or be reinstated, as the case may be, in the event that all or any
part of such payment(s) is rescinded or recovered directly or indirectly from
Payee as a preference, fraudulent transfer or otherwise, and any such payments
that are so rescinded or recovered shall constitute Obligations.
 
Upon the failure of Makers to pay any of the Obligations when and as the same
shall become due, Guarantor will upon demand pay, or cause to be paid, in cash,
to Payee an amount equal to the aggregate of the unpaid Obligations.
 
 
 

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Guarantor agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than payment in full of the Obligations.  In furtherance of the foregoing and
without limiting the generality thereof, Guarantor agrees as follows:  (a) this
Guaranty is a guaranty of payment when due and not of collectibility; (b) Payee
may enforce this Guaranty upon the occurrence of an Event of Default under the
Note notwithstanding the existence of any dispute between either Maker and Payee
with respect to the existence of such event; (c) the obligations of Guarantor
hereunder are independent of the obligations of Makers under the Note and the
obligations of any other guarantor of the obligations of Makers under the Note
and a separate action or actions may be brought and prosecuted against Guarantor
whether or not any action is brought against either Maker or any of such other
guarantors and whether or not either Maker is joined in any such action or
actions; (d) Guarantor’s payment of a portion, but not all, of the Obligations
shall in no way limit, affect, modify or abridge Guarantor’s liability for any
portion of the Obligations that has not been paid; (e) Payee may from time to
time, without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any limitation, impairment or
discharge of Guarantor’s liability hereunder, (i) renew, extend, accelerate or
otherwise change the time, place, manner or terms of payment of the Obligations,
(ii) settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations, (iii) request and accept other guaranties of
the Obligations and take and hold security for the payment of this Guaranty or
the Obligations, (iv) release, exchange, compromise, subordinate or modify, with
or without consideration, any security for payment of the Obligations, any other
guaranties of the Obligations, or any other obligation of any Person with
respect to the Obligations, (v) enforce and apply any security now or hereafter
held by or for the benefit of Payee in respect of this Guaranty or the
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that Payee may have against any such security, as Payee in
its discretion may determine consistent with any applicable security agreement,
including foreclosure on any such security pursuant to one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable, and (vi) exercise any other rights available to it under the Note,
at law or in equity; and (f) this Guaranty and the obligations of Guarantor
hereunder shall be valid and enforceable and shall not be subject to any
limitation, impairment or discharge for any reason (other than payment in full
of the Obligations), including without limitation the occurrence of any of the
following, whether or not Guarantor shall have had notice or knowledge of any of
them:  (i) any failure to assert or enforce or agreement not to assert or
enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy with respect to the Obligations or any agreement relating
thereto, or with respect to any other guaranty of or security for the payment of
the Obligations, (ii) any waiver, amendment or modification of, or any consent
to departure from, any of the terms or provisions (including without limitation
provisions relating to events of default) of the Note or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for
the Obligations, (iii) the Obligations, or any agreement relating thereto, at
any time being found to be illegal, invalid or unenforceable in any respect,
(iv) the application of payments received from any source to the payment of
indebtedness other than the Obligations, even though Payee might have elected to
apply such payment to any part or all of the Obligations, (v) any failure to
perfect or continue perfection of a security interest in any collateral which
secures any of the Obligations, (vi) any defenses, set-offs or counterclaims
which either Maker may allege or assert against Payee in respect of the
Obligations, including but not limited to failure of consideration, breach of
warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction and usury, and (vii) any other act or thing or omission, or delay
to do any other act or thing, which may or might in any manner or to any extent
vary the risk of Guarantor as an obligor in respect of the Obligations.  This
Guaranty is a continuing guaranty and shall be binding upon Guarantor and its
successors and assigns, and Guarantor irrevocably waives any right to revoke
this Guaranty as to future transactions giving rise to any Obligations.
 
 
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Guarantor hereby waives, for the benefit of Payee:  (a) any right to require
Payee, as a condition of payment or performance by Guarantor, to (i) proceed
against either Maker, any other guarantor of the Obligations or any other
Person, (ii) proceed against or exhaust any security held from either Maker, any
other guarantor of the Obligations or any other Person, (iii) proceed against or
have resort to any balance of any deposit account or credit on the books of
Payee in favor of either Maker or any other Person, or (iv) pursue any other
remedy in the power of Payee whatsoever; (b) any defense arising by reason of
the incapacity, lack of authority or any disability or other defense of either
Maker including, without limitation, any defense based on or arising out of the
lack of validity or the unenforceability of the Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
either or both Makers from any cause other than payment in full of the
Obligations; (c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (d) any defense based
upon Payee’s errors or omissions in the administration of the Obligations,
except behavior which amounts to bad faith; (e) (i) any principles or provisions
of law, statutory or otherwise, which are or might be in conflict with the terms
of this Guaranty and any legal or equitable discharge of Guarantor’s obligations
hereunder, (ii) the benefit of any statute of limitations affecting Guarantor’s
liability hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that Payee protect, secure, perfect or insure any security interest
or lien or any property subject thereto; (f) notices, demands, presentments,
protests, notices of protest, notices of dishonor and notices of any action or
inaction, including acceptance of this Guaranty, notices of default under the
Note or any agreement or instrument related thereto, notices of any renewal,
extension or modification of the Obligations or any agreement related thereto,
notices of any extension of credit to either Maker and notices of any of the
matters referred to in the preceding paragraph and any right to consent to any
thereof; and (g) to the fullest extent permitted by law, any defenses or
benefits that may be derived from or afforded by law which limit the liability
of or exonerate guarantors or sureties, or which may conflict with the terms of
this Guaranty.
 
Until the Obligations shall have been paid in full, Guarantor shall withhold
exercise of (a) any claim, right or remedy, direct or indirect, that Guarantor
now has or may hereafter have against either Maker or any of its assets in
connection with this Guaranty or the performance by Guarantor of its obligations
hereunder, in each case whether such claim, right or remedy arises in equity,
under contract, by statute, under common law or otherwise and including without
limitation (i) any right of subrogation, reimbursement or indemnification that
Guarantor now has or may hereafter have against either Maker, (ii) any right to
enforce, or to participate in, any claim, right or remedy that Payee now has or
may hereafter have against either Maker, and (iii) any benefit of, and any right
to participate in, any collateral or security now or hereafter held by Payee,
and (b) any right of contribution Guarantor now has or may hereafter have
against any other guarantor of any of the Obligations.  Guarantor further agrees
that, to the extent the agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement or indemnification Guarantor
may have against either Maker or against any collateral or security, and any
rights of contribution Guarantor may have against any such other guarantor,
shall be junior and subordinate to any rights Payee may have against either
Maker, to all right, title and interest Payee may have in any such collateral or
security, and to any right Payee may have against such other guarantor.
 
 
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Any indebtedness of either Maker now or hereafter held by Guarantor is hereby
subordinated in right of payment to the Obligations, and any such indebtedness
of such Maker to Guarantor collected or received by Guarantor after an Event of
Default has occurred and is continuing shall be held in trust for Payee and
shall forthwith be paid over to Payee to be credited and applied against the
Obligations.
 
Guarantor agrees to pay, or cause to be paid, on demand, and to save Payee
harmless against liability for, any and all costs and expenses (including fees
and disbursements of counsel) incurred or expended by Payee in connection with
the enforcement of or preservation of any rights under this Guaranty.
 
It is not necessary for Payee to inquire into the capacity or powers of
Guarantor or either Maker or the officers, directors or any agents acting or
purporting to act on behalf of any of them.
 
Payee shall have no obligation to disclose or discuss with Guarantor its
assessment, or Guarantor’s assessment, of the financial condition of
Maker.  Guarantor has adequate means to obtain information from each Maker on a
continuing basis concerning the financial condition of such Maker and its
ability to perform its obligations under the Note, and Guarantor assumes the
responsibility for being and keeping informed of the financial condition of each
Maker and of all circumstances bearing upon the risk of nonpayment of the
Obligations.  Guarantor hereby waives and relinquishes any duty on the part of
Payee to disclose any matter, fact or thing relating to the business, operations
or conditions of either Maker now known or hereafter known by Payee.
 
The rights, powers and remedies given to Payee by this Guaranty are cumulative
and shall be in addition to and independent of all rights, powers and remedies
given to Payee by virtue of any statute or rule of law or in the Note or any
agreement between Guarantor and Payee or between either Maker and Payee.  Any
forbearance or failure to exercise, and any delay by Payee in exercising, any
right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.
 
Guarantor hereby represents and warrants to Payee that:  (a) Guarantor is duly
organized, validly existing and in good standing under the laws of Ireland;
(b) Guarantor has the corporate power, authority and legal right to execute,
deliver and perform this Guaranty and has taken all necessary corporate action
to authorize its execution, delivery and performance of this Guaranty; (c) this
Guaranty has been duly executed and delivered by a duly authorized officer of
Guarantor, and this Guaranty constitutes the legally valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with its
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws or equitable
principles relating to or limiting creditors’ rights generally; and (d) the
execution, delivery and performance of this Guaranty will not violate any
provision of any existing law or regulation binding on Guarantor, or any order,
judgment, award or decree of any court, arbitrator or governmental authority
binding on Guarantor, or the certificate of incorporation or bylaws of Guarantor
or any securities issued by Guarantor, or any mortgage, indenture, lease,
contract or other agreement, instrument or undertaking to which Guarantor is a
party or by which Guarantor or any of its assets may be bound, the violation of
which would have a material adverse effect on the business, operations, assets
or financial condition of Guarantor and will not result in, or require, the
creation or imposition of any lien on any of its property, assets or revenues
pursuant to the provisions of any such mortgage, indenture, lease, contract or
other agreement, instrument or undertaking.
 
 
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This Guaranty shall inure to the benefit of Payee and its successors and
assigns.  In case any provision in or obligation under this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
 
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTOR AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
 
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO
THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF DELAWARE, AND BY EXECUTION AND DELIVERY OF THIS
GUARANTY GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
GUARANTY.  Guarantor hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail, return
receipt requested, to Guarantor at its address set forth below its signature
hereto, such service being hereby acknowledged by Guarantor to be sufficient for
personal jurisdiction in any action against Guarantor in any such court and to
be otherwise effective and binding service in every respect.  Nothing herein
shall affect the right to serve process in any other manner permitted by law or
shall limit the right of Payee to bring proceedings against Guarantor in the
courts of any other jurisdiction.
 
GUARANTOR AND, BY THEIR ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY, PAYEE AND
ANY SUBSEQUENT HOLDER OF THE NOTE, HEREBY IRREVOCABLY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS GUARANTY OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS GUARANTY AND THE GUARANTOR/BENEFICIARY RELATIONSHIP THAT
IS BEING ESTABLISHED.  The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims.  Guarantor and, by their acceptance of the benefits of this
Guaranty, Payee and any subsequent holder of the Note, each (i) acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Guaranty or
making the loan evidenced by the Note, as the case may be, and that each will
continue to rely on this waiver in their related future dealings, and
(ii) further warrants and represents that each has reviewed this waiver with its
legal counsel and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel.  THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
OF THIS GUARANTY.  In the event of litigation, this provision may be filed as a
written consent to a trial by the court.
 
This Guaranty shall become effective as to Guarantor upon the execution hereof
by Guarantor and receipt by Payee of written or telephonic notification of such
execution and authorization of delivery thereof.
 
 
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed by its
duly authorized officer as of the date set forth below.
 

 
O2 DIESEL EUROPE PLC
By: ________________________________
Title: _______________________________
Date: _______________________________
Address:____________________________
____________________________
____________________________
Date: _______________________________

 
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