VU1
CORPORATION

     

    AND

     

    Milan
Gottwald

     

      
        

      

    

     

    DEED
OF GUARANTEE

     

    
      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    CONTENTS

     

    
      
        
          
            	
                    Clause

                  	 
      	 
      	
                    Page

                  
	 	 	 	 
	
                    1.

                  	
                    DEFINITIONS
      AND INTERPRETATION

                  	 
      	
                    1

                  
	
                    2.

                  	
                    GUARANTEE
      AND INDEMNITY

                  	 
      	
                    2

                  
	
                    3.

                  	
                    CONTINUING
      GUARANTEE

                  	 
      	
                    2

                  
	
                    4.

                  	
                    ADDITIONAL
      SECURITY

                  	 
      	
                    3

                  
	
                    5.

                  	
                    PRESERVATION
      OF RIGHTS

                  	 
      	
                    3

                  
	
                    6.

                  	
                    IMMEDIATE
      RECOURSE

                  	 
      	
                    4

                  
	
                    7.

                  	
                    REINSTATEMENT

                  	 
      	
                    4

                  
	
                    8.

                  	
                    DEFERRAL
      OF GUARANTOR'S RIGHTS

                  	 
      	
                    5

                  
	
                    9.

                  	
                    REPRESENTATIONS

                  	 
      	
                    5

                  
	
                    10.

                  	
                    TAX
      GROSS-UP

                  	 
      	
                    6

                  
	
                    11.

                  	
                    NOTICES

                  	 
      	
                    6

                  
	
                    12.

                  	
                    PARTIAL
      INVALIDITY

                  	 
      	
                    7

                  
	
                    13.

                  	
                    LAW

                  	 
      	
                    7

                  
	
                    14.

                  	
                    JURISDICTION

                  	 
      	
                    7

                  
	
                    15.

                  	
                    AMENDMENTS

                  	 
      	
                    7

                  
	
                    16.

                  	
                    COUNTERPARTS

                  	 
      	
                    7

                  


          

        

      

    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    This Deed
of Guarantee ("Guarantee") is made
on   [●], 2008
between:

     

    
      	
              (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”).

            


    

     

    WHEREAS:

     

    
      	
              (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.

            


    

     

    NOW THIS DEED
WITNESSES:

     

    
      	
               
      

            	
              1.

            	
              DEFINITIONS AND
      INTERPRETATION

            


    

     

    
      	
               
      

            	
              (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.

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              2.

            	
              GUARANTEE AND
      INDEMNITY

            


    

     

    The
Guarantor hereby irrevocably and unconditionally:

     

    
      	
               
      

            	
              (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;

            


    

     

    The
written demand shall be delivered personally or sent by registered post, telex
or facsimile. The demand shall state the date of this Guarantee and that the
amount set out in the demand is due and payable under Art. III (2) (i) and (ii)
of the Purchase Agreement and has remained unpaid for a continuous period of 5
(five) business days after demand having been made on SENDIO.

     

    
      	
               
      

            	
              3.

            	
              CONTINUING
      GUARANTEE

            


    

     

    This
Guarantee is a continuing guarantee and will extend to the maximum amount of CZK
13,500,000 (thirteen million and five hundred thousand Czech crowns)
(hereinafter the "Total
Guaranteed Amount") as payable by SENDIO under Art. III (2) (i) and (ii)
of the Purchase Agreement. The Total Guaranteed Amount shall be gradually
automatically reduced by the individual advance payments on the Purchase Price
paid by SENDIO pursuant to Art. III (2) (i) and (ii) of the Purchase
Agreement.

     

    This
Guarantee shall expire upon the full payment of the individual advance payments
on the Purchase Price by SENDIO pursuant to Art. III (2) (i) and (ii) of the
Purchase Agreement.

     

    The
original Deed of the Guarantee has to be returned to the Guarantor at the expiry
of the Guarantee. However, should this Deed of the Guarantee not be returned to
the Guarantor, this shall not affect in any manner the expiry terms of the
Guarantee set out under this Clause.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              4.

            	
              ADDITIONAL
      SECURITY

            


    

     

    This
Guarantee shall be in addition to and shall not be in any way prejudiced or
affected by any collateral or other security hereafter held by the Beneficiary
for any or all the moneys payable or expressed to be payable by SENDIO under the
Finance Documents nor shall such collateral or other security or any lien to
which the Beneficiary may be otherwise entitled or the liability of any person
or persons for all or any part of such moneys be in any manner prejudiced or
affected by this Guarantee.

     

    
      	
               
      

            	
              5.

            	
              PRESERVATION OF
      RIGHTS

            


    

     

    The
obligations of the Guarantor hereunder will not be affected by any act,
omission, matter or thing which, but for this Clause, would reduce, release or
prejudice any of its obligations hereunder (without limitation and whether or
not known to it) including:

     

    
      	
               
      

            	
              (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.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    In case
of the Guarantor’s bankruptcy, insolvency, composition, liquidation,
reorganisation, dissolution, amalgamation, reconstruction or any analogous
proceeding relating thereto the Guarantor shall be obliged to take any and all
actions, to the maximum extent allowed by the applicable law, to avoid any
adverse effect of such proceeding on the obligations of the Guarantor
hereunder.

     

    
      	
               
      

            	
              6.

            	
              IMMEDIATE
      RECOURSE

            


    

     

    The
Guarantor shall make payment under this Guarantee on first written demand of the
Beneficiary and the Beneficiary shall not be obliged before enforcing any of its
rights or remedies conferred upon it by this Guarantee or by law:

     

    
      	
               
      

            	
              (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.

            	
              REINSTATEMENT

            


    

     

    If any
payment by SENDIO or any discharge given by the Beneficiary (whether in respect
of the obligations of SENDIO or any security for those obligations or otherwise)
is avoided or reduced as a result of insolvency or any similar
event:

     

    
      	
               
      

            	
              (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.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              8.

            	
              DEFERRAL OF GUARANTOR'S
      RIGHTS

            


    

     

    Until all
amounts which may be or become payable by SENDIO under or in connection with
Art. III (2) (i) and (ii) of the Purchase Agreement have been irrevocably paid
in full, the Guarantor will not exercise any rights whatsoever which it may have
by reason of performance by it of its obligations hereunder, including any
right:

     

    
      	
               
      

            	
              (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.

            	
              REPRESENTATIONS

            


    

     

    The
Guarantor hereby warrants and represents that:

     

    
      	
               
      

            	
              (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:

            


    

     

     
any law or regulation applicable to it;

     

     
its constitutional documents; or

     

     
any agreement or instrument binding upon it or any of its assets.

     

    
      	
               
      

            	
              (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.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              10.

            	
              TAX
    GROSS-UP

            


    

     

    
      	
               
      

            	
              (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.

            	
              NOTICES

            


    

     

    Any
notice, request or other communication required to be given under or in
connection with this Guarantee (a "Notice"):

     

    
      	
               
      

            	
              (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:

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      VU1
Corporation

    

    557 Roy
Street, Suite 125, Seattle,

    WA 98109,
USA

    


    
      Facsimile:
___________________

    

    
      Attention: ___________________

    

     

    
      Milan
Gottwald

    

    
      Náklo
334, Postal Code: 783 32

    

    
      Czech
Republic

       

    

    
      Facsimile:
+420587436124

    

    Attention: Milan
Gottwald

     

    


    
      	
               
      

            	
              12.

            	
              PARTIAL
      INVALIDITY

            


    

     

    If at any
time any provision hereof is or becomes illegal, invalid or unenforceable in any
respect under the law of any jurisdiction neither the legality validity or
enforceability of the remaining provisions hereof nor the legality validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.

     

    
      	
               
      

            	
              13.

            	
              LAW

            


    

     

    This
Guarantee shall be governed by and construed in accordance with the laws of the
State of Washington.

     

    
      	
               
      

            	
              14.

            	
              JURISDICTION

            


    

     

    
      	
              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.

            	
              AMENDMENTS

            


    

     

    No
variation of this Guarantee is valid unless it is in writing and signed by or on
behalf of each party.

     

    16.           COUNTERPARTS

     

    This
Guarantee may be executed in two counterparts. Each party shall receive one
counterpart.


    
      
         


      

      
        7

        
          

        

      

      
         


      

    

     

    EXECUTED AND DELIVERED as a
Deed on the date set out above.

     

    Executed
as a Deed on behalf of

    VU1
Corporation


     

    Signed by  ___________________

     

    _________________________

     

     

    
      Signed by
___________________

         

      

    

    ________________________

     

    Executed
as a Deed on behalf of

    Milan
Gottwald

     

    Signed
by Milan
Gottwald

     

    ________________________


    
      
         


      

      
        8