**EXECUTION
        COPY**
  **R** **EGISTRATION
        RIGHTS AGREEMENT**
  **REGISTRATION
        RIGHTS AGREEMENT** (this
“ Agreement ”),
        made
        as of the ____ day of _______, 2007 (the “ Effective
        Date ”),
        by
        and between H2Diesel Holdings, Inc., a Florida corporation (the “ Company ”),
        and
        each of the persons and entities listed on Exhibit A attached
        hereto (the “ Holders ”).
  **W
        I T N E S S E T H**
  **WHEREAS** ,
        the
        Company has agreed to provide the registration rights set forth in this
        Agreement.
  **NOW,
        THEREFORE** ,
        for
        good and valuable consideration, the receipt and sufficiency of which are
        hereby
        acknowledged, the parties hereby agree as follows:
  **AGREEMENT**
  1.  Definitions
  .
        As used
        in this Agreement, the following capitalized terms have the following respective
        meanings:
  “ Business
        Day ”
means
        a
        day other than a Saturday or Sunday or any day on which banking institutions
        in
        Miami, Florida and New York City, New York are authorized or obligated by
        law or
        executive order to close.
  “ Common
        Stock ”
means
        the Common Stock of the Company, par value $.001 per share.
  “ 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.
  “ Majority
        of Holders ”
means
        Holders holding more than 50% in aggregate principal amount of the Registrable
        Securities outstanding at the time of any determination in
        question.
  “ Person ”
means
        any individual, corporation, partnership, limited partnership, limited liability
        company, syndicate, trust, association or other entity.
  “ Preferred
        Stock ”
means
        the Series A Cumulative Convertible Preferred Stock of the Company, par value
        $.001 per share.
  “ Prospectus ”
means
        the prospectus included in any Shelf Registration Statement, as amended or
        supplemented by any Prospectus supplement with respect to the terms of the
        offering of any portion of the Registrable Securities covered by such Shelf
        Registration Statement and all other amendments and supplements to the
        Prospectus, including post-effective amendments, and all material incorporated
        by reference in such Prospectus.
  “ Registrable
        Securities ”
means
        any shares of Common Stock issued or issuable to a Holder (i) upon conversion
        of
        any shares of Preferred Stock, (ii) as dividends on any shares of Preferred
        Stock, (iii) upon the exercise of any Warrants, (iv) any shares of Common
        Stock
        that may be issued or distributed in respect thereof by way of stock dividend
        or
        stock split or other distribution, recapitalization or reclassification and
        any
        shares of Common Stock described in Section
        2(c) of this
        Agreement.
   
  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. For the avoidance
        of doubt, the Company is under no obligation to register the resale of any
        Preferred Stock, Warrants or Options.
  “ 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, (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, and (vi) the reasonable fees
        and
        disbursements of counsel selected pursuant to Section
        5(b) hereof.
  “ 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 or brokerage discounts and commissions and transfer taxes, if
        any,
        applicable to the sale of Registrable Securities.
  “ Underwritten
        Offering ”
means
        an offering pursuant to the Shelf Registration Statement in which Registrable
        Securities are sold to an underwriter for reoffering to the public.
  “ Warrants ”
shall
        mean any warrants issued to a Holder by the Company in connection with the
        Holder’s purchase of shares of Preferred Stock from the Company.
  2.  Shelf
        Registration .
  (a)  The
        Company shall:
  (i)  not
        later
        than 60 days after the Effective Date (the “ Shelf
        Filing Deadline ”),
        cause
        to be filed a registration statement on an appropriate form pursuant to
        Rule 415 (or any successor rule) under the Securities Act (together with
        any amendments thereto, and including any documents incorporated by reference
        therein if permitted by such form, the “ Shelf
        Registration Statement ”),
        which
        Shelf Registration Statement shall provide for resales of all Registrable
        Securities held by Holders that have provided the information required pursuant
        to the terms of Section 2(b) hereof;
   2
  
  (ii)  use
        its
        commercially reasonable efforts to cause the Shelf Registration Statement
        to be
        declared effective by the SEC as promptly as is practicable after the date
        it is
        first filed with the SEC, but in no event later than 210 days after the
        Effective Date (the “ Effectiveness
        Target Date ”);
        and
  (iii)  use
        its
        commercially reasonable efforts to keep the Shelf Registration Statement
        continuously effective, supplemented and amended as required by the provisions
        of Section 4 hereof
        to the extent necessary to ensure that: (A) it is available for resales by
        the Holders of Registrable Securities entitled to the benefit of this Agreement
        and (B) conforms with the requirements of this Agreement and the Securities
        Act, in each case, for a period (the “ Effectiveness
        Period ”)
        that
        will terminate upon the earlier of (x) the 395 days after of the Effective
        Date and (y) when all Registrable Securities cease to be Registrable
        Securities in accordance with this Agreement.
  (b)  To
        have
        its Registrable Securities included in the Shelf Registration Statement pursuant
        to this Agreement, each Holder shall complete the Selling Shareholder Notice
        and
        Questionnaire, the form of which is contained in Exhibit B to this
        Agreement (the “ Questionnaire ”).
        The
        Company shall mail the Questionnaire to each Holder not less than 10 Business
        Days (but not more than 60 Business Days) prior to the time the Company intends
        in good faith to have the Shelf Registration Statement declared effective
        by the
        SEC. Holders are required to complete and deliver the Questionnaire to the
        Company prior to or on the 20th Business Day after the date of a written
        request
        therefor by the Company (which request shall include a copy of the
        Questionnaire) (such deadline, the “ Questionnaire
        Deadline ”).
        Holders that do not complete and deliver the Questionnaire will not be named
        as
        selling shareholders in the Prospectus. Prior to such time, each Holder may
        complete the Questionnaire and deliver it to the Company prior to such request
        and, as a result, shall be entitled to have its Registrable Securities included
        in the initial Shelf Registration Statement filed with the SEC. In addition,
        upon receipt of written request for additional information from the Company,
        each Holder who intends to be named as a selling shareholder in the Shelf
        Registration Statement shall furnish to the Company in writing, within 20
        Business Days after such Holder’s receipt of such request, such additional
        information regarding such Holder and the proposed distribution by such Holder
        of its Registrable Securities, in connection with the Shelf Registration
        Statement or Prospectus or preliminary Prospectus included therein and in
        any
        application to be filed with or under state securities law, as the Company
        may
        reasonably request. Each Holder as to which the Shelf Registration Statement
        is
        being effected agrees to furnish promptly to the Company all information
        required to be disclosed in order to make information previously furnished
        to
        the Company by such Holder not materially misleading.
  (c)  The
        Company shall be entitled to include in the Shelf Registration Statement
        other
        shares of Common Stock (i) to be sold for its own account or (ii) which the
        Company is obligated to register for resale by others, and such shares shall
        be
        Registrable Securities for all purposes hereof.
  (d)  Notwithstanding
        anything contained herein to the contrary, subject to Section
        3 ,
        the
        Company shall be entitled to exclude from any Shelf Registration Statement
        such
        number of Registrable Securities as the Company determines is necessary to
        obtain the availability of Rule 415 under the Securities Act in response
        to
        comments from the staff of the SEC which would, but for such exclusion; prohibit
        the Company from filing the Shelf Registration Statement under such rule.
        To the
        extent any Registrable Securities are so excluded, the Company agrees to
        register such shares in accordance with this Section
        2 as
        promptly as practicable.
   3
  3.  Additional
        Shares .
  (a)  The
        Company and the Subscribers agree that the Subscribers will suffer damages
        if
        the Company fails to fulfill its obligations under Section 2 hereof
        and that it would not be feasible to ascertain the extent of such damages
        with
        precision. Accordingly, if:
  (i)  except
        as
        provided in Section
        4(b)(i) hereof,
        the Shelf Registration Statement is not filed with the SEC prior to or on
        the
        Shelf Filing Deadline;
  (ii)  except
        as
        provided in Section
        4(b)(i) hereof,
        the Shelf Registration Statement has not been declared effective by the SEC
        prior to or on the Effectiveness Target Date;
  (iii)  except
        as
        provided in Section
        4(b)(i) hereof,
        the Shelf Registration Statement is filed and declared effective but, during
        the
        Effectiveness Period, shall thereafter cease to be effective or fail to be
        usable for its intended purpose without such disability being cured within
        ten
        Business Days by an effective post-effective amendment to the Shelf Registration
        Statement, a supplement to the Prospectus or a report filed with the SEC
        pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that
        cures such failure; or
  (iv)  (A) prior
        to or on the 45 th or
        60 th day, as
        may be permitted under Section
        4(b) ,
        of any
        Suspension Period (as such term is defined herein), such suspension has not
        been
        terminated or (B) Suspension Periods exceed an aggregate of 120 days in any
        360-day period, (each such event referred to in foregoing clauses (i)
        through (iv), a “ Registration
        Default ”),
        the
        Company hereby agrees to issue to each Subscriber additional shares of Common
        Stock (“ Penalty
        Shares ”)
        in an
        amount equal to 1.0% of the number of Registrable Securities held by such
        Subscriber on the 30 th day
        following the Effective Date (the “ Subject
        Shares ”)
        for
        each full 30 day period (each, a “ Penalty
        Period ”)
        that
        elapses during the period beginning on and including the day following the
        Registration Default and ending on but excluding the day on which the
        Registration Default has been cured; provided, however, that in no event
        shall
        the number of Penalty Shares exceed an aggregate of 6.0% of the number of
        Subject Shares, and, provided further, a Subscriber will not be entitled
        to
        Penalty Shares unless it has provided all information requested by the
        Questionnaire prior to the deadline specified therein.
  (b)  Any
        Penalty Shares issuable in respect of Subject Shares pursuant to clause (a)
        of this Section 3 will be issued not later than 20 days after the end of
        the Penalty Period in respect of which such Penalty Shares are issuable to
        each
        Subscriber in whose name such Subject Shares are registered on the books
        of the
        Company or its transfer agent.
  (c)  Except
        as
        set forth in Section
        9 hereto,
        the Penalty Shares to be issued pursuant to this Section 3 shall be the
        exclusive remedy available to Subscribers for such Registration
        Default.
  4.  Registration
        Procedures .
  (a)  In
        connection with the Shelf Registration Statement, the Company shall comply
        with
        all the provisions of Section 4(b) hereof
        and shall use its reasonable best efforts to effect such registration to
        permit
        the sale of the Registrable Securities being sold in accordance with the
        intended method or methods of distribution thereof, and pursuant thereto,
        shall
        expeditiously prepare and file with the SEC a Shelf Registration Statement
        relating to the registration on any appropriate form under the Securities
        Act.
  (b)  In
        connection with the Shelf Registration Statement and any Prospectus required
        by
        this Agreement to permit the sale or resale of Registrable Securities, the
        Company shall:
   4
   (i)  Subject
        to any notice by the Company in accordance with this Section 4(b) of the
        existence of any fact or event of the kind described in Section
        4(b)(iii)(D) ,
        use its
        best efforts to keep the Shelf Registration Statement continuously effective
        during the Effectiveness Period; upon the occurrence of any event that would
        cause the Shelf Registration Statement or the Prospectus contained therein
        (A) to contain a material misstatement or omission or (B) not be
        effective and usable for the resale of Registrable Securities during the
        Effectiveness Period, the Company shall file promptly an appropriate amendment
        to the Shelf Registration Statement, a supplement to the Prospectus or a
        report
        filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the
        Exchange Act, in the case of clause (A), correcting any such misstatement
        or omission, and, in the case of either clause (A) or (B), use its best
        efforts to cause any such amendment to be declared effective and the Shelf
        Registration Statement and the related Prospectus to become usable for their
        intended purposes as soon as practicable thereafter. Notwithstanding anything
        to
        the contrary contained herein, the Company may delay the filing or declaration
        of effectiveness, and/or suspend the effectiveness, of the Shelf Registration
        Statement by written notice to the Holders for a period (each such period,
        a
“ Suspension
        Period ”)
        not to
        exceed an aggregate of 45 days in any 90-day period, and not to exceed an
        aggregate of 120 days in any 360-day period, if:
  (x)  an
        event
        occurs and is continuing as a result of which the Shelf Registration Statement
        would, in the Company’s reasonable judgment, contain an untrue statement of a
        material fact or omit to state a material fact required to be stated therein
        or
        necessary to make the statements therein not misleading; and
  (y)  the
        Company reasonably determines that the disclosure of such event at such time
        would be seriously detrimental to the Company or its business;
  provided *,* that in
        the event that the disclosure relates to a previously undisclosed proposed
        or
        pending material business transaction, the disclosure of which would impede
        the
        Company’s ability to consummate such transaction, the Company may extend a
        Suspension Period from 45 days to 60 days during any 90-day period.
  (ii)  Notify
        in
        writing each selling Holder of the effectiveness of the Shelf Registration
        Statement and prepare and file with the SEC such amendments and post-effective
        amendments to the Shelf Registration Statement as may be necessary to keep
        the
        Shelf Registration Statement continuously effective during the Effectiveness
        Period; cause the Prospectus to be supplemented by any required prospectus
        supplement, and as so supplemented to be filed pursuant to Rule 424 under
        the Securities Act, and to comply fully with the applicable provisions of
        Rules 424 and 430A under the Securities Act in a timely manner; and comply
        with the provisions of the Securities Act with respect to the disposition
        of all
        securities covered by the Shelf Registration Statement during the applicable
        period in accordance with the intended method or methods of distribution
        by the
        sellers thereof set forth in the Shelf Registration Statement or supplement
        to
        the Prospectus.
  (iii)  Advise
        the underwriter(s), if any, and selling Holders promptly (but in any event
        within two Business Days) and, if requested by such Persons, to confirm such
        advice in writing:
  (A)  when
        the
        Prospectus or any prospectus supplement or post-effective amendment has been
        filed, and, with respect to the Shelf Registration Statement or any
        post-effective amendment thereto, when the same has become
        effective,
  (B)  of
        any
        request by the SEC for amendments to the Shelf Registration Statement or
        amendments or supplements to the Prospectus or for additional information
        relating thereto,
   5
  (C)  of
        the
        issuance by the SEC of any stop order suspending the effectiveness of the
        Shelf
        Registration Statement under the Securities Act or of the suspension by any
        state securities commission of the qualification of the Registrable Securities
        for offering or sale in any jurisdiction, or the initiation of any proceeding
        for any of the preceding purposes,
  (D)  of
        a
        pending proceeding against the Company under Section 8A of the Securities
        Act in
        connection with the offering of the Registrable Securities, or
  (E)  of
        the
        existence of any fact or the happening of any event, during the Effectiveness
        Period, that makes any statement of a material fact made in the Shelf
        Registration Statement, the Prospectus, any amendment or supplement thereto,
        or
        any document incorporated by reference therein, untrue, or that requires
        the
        making of any additions to or changes in the Shelf Registration Statement
        or the
        Prospectus in order to make the statements therein not misleading. Each Holder
        of Registrable Securities, by accepting the same, agrees to hold any
        communication from the Company pursuant to this Section 4(b)(iii) in
        confidence.
  If
        at any
        time the SEC shall issue any stop order suspending the effectiveness of the
        Shelf Registration Statement, or any state securities commission or other
        regulatory authority shall issue an order suspending the qualification or
        exemption from qualification of the Registrable Securities under state
        securities or “blue sky” laws, the Company shall use its best efforts to obtain
        the withdrawal or lifting of such order at the earliest possible time and
        will
        provide to the each Holder who is named in the Shelf Registration Statement
        prompt notice of the withdrawal of any such order.
  (iv)  Furnish
        to each selling Holder and to each of the underwriter(s), if any, and their
        respective counsel, if any, before filing with the SEC, a copy of the Shelf
        Registration Statement and copies of any Prospectus included therein or any
        amendments or supplements to the Shelf Registration Statement or Prospectus
        (other than documents incorporated by reference after the initial filing
        of the
        Shelf Registration Statement), which documents will be subject to the review
        of
        such selling Holders, underwriter(s) and counsel for a period of at least
        five
        Business Days, and the Company will not file the Shelf Registration Statement
        or
        Prospectus or any amendment or supplement to the Shelf Registration Statement
        or
        Prospectus (other than documents incorporated by reference) to which a selling
        Holder of Registrable Securities covered by the Shelf Registration Statement
        or
        the selling Holders, underwriter(s), if any, shall reasonably object within
        five
        Business Days after the receipt thereof. The Company shall also furnish to
        each
        of the underwriter(s), if any, and their respective counsel, if any, before
        filing with the SEC, if reasonably practicable, or otherwise promptly after
        filing with the SEC, copies of any amendments to the Shelf Registration
        Statement or supplements to the Prospectus (other than documents incorporated
        by
        reference after the initial filing of the Shelf Registration Statement),
        and
        make the Company’s representatives available for discussion of such amendments
        or supplements and make such changes in such amendments or supplements prior
        to
        the filing thereof, if reasonably practicable, or prepare and file further
        amendments or supplements, as the selling Holders, underwriter(s), if any,
        or
        their respective counsel, if any, may reasonably request. An objection by
        a
        selling Holder or an underwriter or by counsel to a selling Holder or an
        underwriter shall be deemed to be a reasonable objection to such filing if
        the
        Shelf Registration Statement, amendment, Prospectus or supplement, as
        applicable, as proposed to be filed, would contain a material misstatement
        or
        omission.
   6
  
  (v)  Make
        available at reasonable times for inspection by one or more representatives
        of
        the selling Holders designated in writing by a Majority of Holders whose
        Registrable Securities are included in the Shelf Registration Statement,
        any
        underwriter participating in any distribution pursuant to the Shelf Registration
        Statement, and any attorney or accountant retained by such selling Holders
        or
        any of the underwriter(s), all financial and other records, pertinent corporate
        documents and properties of the Company as shall be reasonably necessary
        to
        enable them to exercise any applicable due diligence responsibilities, and
        cause
        the Company’s officers, directors, managers, employees and independent
        accountants to supply all information reasonably requested by any such
        representative or representatives of the selling Holders, underwriter, attorney
        or accountant in connection with the Shelf Registration Statement after the
        filing thereof and before its effectiveness, provided, however, that any
        information designated by the Company as confidential at the time of delivery
        of
        such information shall be kept confidential by the recipient thereof; and
        provided, further, that in no event shall the Company be required to furnish
        any
        material nonpublic information pursuant to this
        subsection (v).
  (vi)  If
        requested by any selling Holders or the underwriter(s), if any, promptly
        incorporate in the Shelf Registration Statement or Prospectus, pursuant to
        a
        supplement or post-effective amendment if necessary, such information as
        such
        selling Holders and underwriter(s), if any, may reasonably request to have
        included therein, including, without limitation: (A) information relating
        to the “Plan of Distribution” of the Registrable Securities,
        (B) information with respect to the number of Registrable Securities being
        sold, (C) the purchase price being paid therefor and (D) any other
        terms of the offering of the Registrable Securities to be sold in such offering;
        provided, however, that with respect to any information requested for inclusion
        by a selling Holder, this clause (vi) shall apply only to such information
        that relates to the Registrable Securities to be sold by such selling Holder;
        and make all required filings of such prospectus supplement or post-effective
        amendment as soon as reasonably practicable after the Company is notified
        of the
        matters to be incorporated in such prospectus supplement or post-effective
        amendment.
  (vii)  Furnish
        to each selling Holder and each of the underwriter(s), if any, without charge,
        at least one copy of the Shelf Registration Statement, as first filed with
        the
        SEC, and of each amendment thereto (and any documents incorporated by reference
        therein or exhibits thereto (or exhibits incorporated in such exhibits by
        reference) as such Person may request).
  (viii)  Deliver
        to each selling Holder and each of the underwriter(s), if any, without charge,
        as many copies of the Prospectus (including each preliminary prospectus)
        and any
        amendment or supplement thereto as such Persons reasonably may request; subject
        to any notice by the Company in accordance with this Section 4(b) of the
        existence of any fact or event of the kind described in Section
        4(b)(iii)(D) ,
        the
        Company hereby consents to the use of the Prospectus and any amendment or
        supplement thereto by each of the selling Holders and each of the
        underwriter(s), if any, in connection with the offering and the sale of the
        Registrable Securities covered by the Prospectus or any amendment or supplement
        thereto.
  (ix)  If
        an
        underwriting agreement is entered into in connection with the registration,
        the
        Company shall:
  (A)  upon
        request, furnish to each selling Holder and each underwriter, in such substance
        and scope as they may reasonably request and as are customarily made by issuers
        to underwriters in primary underwritten offerings for selling security holders,
        upon the date of closing of any sale of Registrable Securities in an
        Underwritten Offering:
   7
  (1)  opinions,
        each dated the date of such closing, of counsel to the Company covering such
        of
        the matters as are customarily covered in legal opinions to underwriters
        in
        connection with underwritten offerings of securities; and
  (2)  customary
        comfort letters, dated the date of such closing, from the Company’s independent
        accountants, in the customary form and covering matters of the type customarily
        covered in comfort letters to underwriters in connection with primary
        underwritten offerings of securities;
  (B)  set
        forth
        in full in the underwriting agreement, if any, indemnification provisions
        and
        procedures which provide rights no less protective than those set forth in Section 6 hereof
        with respect to all parties to be indemnified; and
  (C)  deliver
        such other documents and certificates as may be reasonably requested by such
        parties to evidence compliance with clause (A) above and with any customary
        conditions contained in the underwriting agreement or other agreement entered
        into by the selling Holders pursuant to this clause (ix).
  (x)  Before
        any public offering of Registrable Securities, use its best efforts to register
        or qualify the Registrable Securities under the securities or Blue Sky laws
        of
        such jurisdictions in the United States as the selling Holders or
        underwriter(s), if any, may reasonably request and do any and all other acts
        or
        things necessary or advisable to enable the disposition in such jurisdictions
        of
        the Registrable Securities covered by the Shelf Registration Statement;
        provided, however, that the Company shall not be required (A) to register
        or qualify as a foreign corporation or a dealer of securities where it is
        not
        now so qualified or to take any action that would subject it to the service
        of
        process in any jurisdiction where it is not now so subject or (B) to
        subject itself to taxation in any such jurisdiction if it is not now so
        subject.
  (xi)  Cooperate
        with the selling Holders and the underwriter(s), if any, to facilitate the
        timely preparation and delivery of certificates representing Registrable
        Securities to be sold and not bearing any restrictive legends (unless required
        by applicable securities laws) and enable such Registrable Securities to
        be in
        such denominations and registered in such names as the Holders or the
        underwriter(s), if any, may request at least two Business Days before any
        sale
        of Registrable Securities.
  (xii)  Use
        its
        best efforts to cause the Registrable Securities covered by the Shelf
        Registration Statement to be registered with or approved by such other U.S.
        governmental agencies or authorities as may be necessary to enable the seller
        or
        sellers thereof or the underwriter(s), if any, to consummate the disposition
        of
        such Registrable Securities.
  (xiii)  Subject
        to Section
        4(b)(i) hereof,
        if any fact or event contemplated by Section
        4(b)(iii)(E) hereof
        shall exist or have occurred, use its reasonable best efforts to prepare
        a
        supplement or post-effective amendment to the Shelf Registration Statement
        or
        related Prospectus or any document incorporated therein by reference or file
        any
        other required document so that, as thereafter delivered to the purchasers
        of
        Registrable Securities, the Prospectus will not contain an untrue statement
        of a
        material fact or omit to state any material fact required to be stated therein
        or necessary to make the statements therein, in light of the circumstances
        in
        which they were made, not misleading.
  (xiv)  Provide
        a
        transfer agent and registrar for all such Registrable Securities not later
        than
        the effective date of the Shelf Registration Statement.
   8
   (xv)  Enter
        into such customary agreements (including underwriting agreements in customary
        form) and take all such other actions as a Majority of Holders or the
        underwriters, if any, reasonably request in order to expedite or facilitate
        the
        disposition of Registrable Securities (including effecting a stock split
        or
        combination of shares).
  (xvi)  Cooperate
        and assist in any filings required to be made with the NASD and in the
        performance of any due diligence investigation that is required to be retained
        in accordance with the rules and regulations of the NASD.
  (xvii)  Otherwise
        use its commercially reasonable efforts to comply with all applicable rules
        and
        regulations of the SEC and all reporting requirements of the Exchange
        Act.
  (xviii)  Cause
        all
        Registrable Securities covered by the Shelf Registration Statement to be
        listed
        or quoted, as the case may be, on each securities exchange or automated
        quotation system on which similar securities issued by the Company are then
        listed or quoted.
  (xix)  Provide
        promptly to each Holder upon written request each document filed with the
        SEC
        pursuant to the requirements of Section 13 and Section 15 of the
        Exchange Act during the Effectiveness Period.
  (xx)  If
        reasonably requested by the underwriter(s), make appropriate officers of
        the
        Company reasonably available to the underwriter(s) for meetings with prospective
        purchasers of the Registrable Securities and prepare and present to potential
        investors customary “road show” or marketing material in a manner consistent
        with other new issuances of other securities similar to the Registrable
        Securities.
  (xxi)  File
        each
        Shelf Registration Statement and Prospectus required to be filed in accordance
        with this Agreement and any amendments and/or supplements thereto electronically
        on EDGAR.
  (c)  Each
        Holder agrees that, upon receipt of any notice (a “ Suspension
        Notice ”)
        from
        the Company of the existence of any fact of the kind described in Section 4(b)(x) or Section
        4(b)(iii)(E) hereof,
        such Holder will, and will use its reasonable efforts to cause any
        underwriter(s) in an Underwritten Offering to, forthwith discontinue disposition
        of Registrable Securities pursuant to the Shelf Registration Statement
        until:
  (i)  such
        Holder has received copies of the supplemented or amended Prospectus
        contemplated by Section 4(b)(xiii) hereof;
        or
  (ii)  such
        Holder is advised in writing by the Company that the use of the Prospectus
        may
        be resumed, and has received copies of any additional or supplemental filings
        that are incorporated by reference in the Prospectus.
  If
        so
        directed by the Company, each Holder will deliver to the Company (at the
        Company’s expense) all copies, other than permanent file copies then in such
        Holder’s possession, of the Prospectus covering such Registrable Securities that
        was current at the time of receipt of such notice of suspension.
   9
  
  (d)  If
        a
        Holder is identified in the Shelf Registration Statement as an “underwriter”
(any such Holder, an “ Identified
        Holder ”),
        then
        at the request of such Identified Holder the Company shall furnish to such
        Identified Holder, on the date of the effectiveness of the Shelf Registration
        Statement and thereafter from time to time on such dates as such Identified
        Holder may reasonably request, (i) a letter, dated such date, from the Company’s
        independent certified public accountants in form and substance as is customarily
        given by independent certified public accountants to underwriters in an
        underwritten public offering, addressed to such Identified Holder, and (ii)
        an
        opinion, dated as of such date, of counsel representing the Company for purposes
        of the Shelf Registration Statement, in form, scope and substance as is
        customarily given in an underwritten public offering, addressed to such
        Identified Holder.
  (e)  Notwithstanding
        anything herein to the contrary, no Holder shall be designated as an
“underwriter” by the Company in the Shelf Registration Statement without the
        consent of such Holder unless otherwise required by law. In connection with
        the
        due diligence efforts of any Identified Holder, the Company shall make available
        for inspection during business hours and upon reasonable advance request
        by (i)
        any Identified Holder, (ii) counsel for the holders of majority of the
        Registrable Securities held by all Identified Holders and (iii) one firm
        of
        accountants or other agents retained by holders of a majority of Registrable
        Securities held by the Identified Holders (collectively, the “ Inspectors ”),
        all
        pertinent financial and other records, and pertinent corporate documents
        and
        properties of the Company (collectively, the “ Records ”),
        as
        shall be reasonably deemed necessary by each Inspector, and cause the Company’s
        officers, directors and employees to supply all information which any Inspector
        may reasonably request; provided, however, that each Inspector shall agree
        in
        writing to hold in strict confidence and shall not make any disclosure (except
        to a Identified Holder) or use of any Record or other information which the
        Company determines in good faith to be confidential, and of which determination
        the Inspectors are so notified, unless (a) the disclosure of such Records
        is
        necessary to avoid or correct a misstatement or omission in the Shelf
        Registration Statement or is otherwise required under the Securities Act,
        (b)
        the release of such Records is ordered pursuant to a final, non-appealable
        subpoena or order from a court or government body of competent jurisdiction,
        or
        (c) the information in such Records has been made generally available to
        the
        public other than by disclosure in violation of this or any other agreement
        of
        which the Inspector has knowledge. Each Holder agrees that it shall, upon
        learning that disclosure of such Records is sought in or by a court or
        governmental body of competent jurisdiction or through other means, give
        prompt
        notice to the Company and allow the Company, at its expense, to undertake
        appropriate action to prevent disclosure of, or to obtain a protective order
        for, the Records deemed confidential. Nothing herein (or in any other
        confidentiality agreement between the Company and any Holder) shall be deemed
        to
        limit the Holders’ ability to sell Registrable Securities in a manner that is
        otherwise consistent with applicable laws and regulations.
  5.  Registration
        Expenses .
  (a)  The
        Company shall pay all Registration Expenses incident to the Company’s
        performance of or compliance with this Agreement. The Company shall bear
        its
        internal expenses (including, without limitation, all salaries and expenses
        of
        its officers and employees performing legal, accounting or other duties),
        the
        expenses of any annual audit or quarterly review, the expense of any liability
        insurance and the fees and expenses of any Person, including special experts,
        retained by the Company.
   10
  
  (b)  In
        connection with the Shelf Registration Statement required by this Agreement,
        including any amendment or supplement thereto, and any other documents delivered
        to any Holders, the Company shall reimburse the Holders of Registrable
        Securities being registered pursuant to the Shelf Registration Statement,
        as
        applicable, for the reasonable fees and disbursements of not more than one
        counsel (including local counsel), which shall be chosen by a Majority of
        Holders for whose benefit the Shelf Registration Statement is being prepared.
        The Company shall not be required to pay any underwriting discount, commission
        or similar fee related to the sale of any securities.
  (c)  Each
        Holder shall bear its Selling Expenses.
  6.  Indemnification
        and Contribution .
  (a)  The
        Company shall indemnify and hold harmless, to the fullest extent permitted
        by
        law, each Holder, such Holder’s officers, directors, members, agents, partners
        and employees and each person, if any, who controls such Holder within the
        meaning of the Securities Act (each, an “ Indemnified
        Holder ”),
        from
        and against any loss, claim, damage, liability or expense, joint or several,
        or
        any action in respect thereof (including, but not limited to, any loss, claim,
        damage, liability, expense, or action relating to resales of the Registrable
        Securities), together with reasonable costs and expenses (including reasonable
        attorney’s fees) to which such Indemnified Holder may become subject, insofar as
        any such loss, claim, damage, liability, expense or action arises out of,
        or is
        based upon:
  (i)  any
        untrue statement or alleged untrue statement of a material fact contained
        in
        (A) the Shelf Registration Statement or Prospectus or any amendment or
        supplement thereto or (B) any blue sky application or other document or any
        amendment or supplement thereto prepared or executed by the Company (or based
        upon written information furnished by or on behalf of the Company expressly
        for
        use in such blue sky application or other document or amendment on supplement)
        filed in any jurisdiction specifically for the purpose of qualifying any
        or all
        of the Registrable Securities under the securities law of any state or other
        jurisdiction (such application or document being hereinafter called a
“ Blue
        Sky Application ”);
        or
  (ii)  the
        omission or alleged omission to state therein any material fact required
        to be
        stated therein or necessary to make the statements therein, in the light
        of the
        circumstances under which they were made, not misleading, and shall promptly
        reimburse each Indemnified Holder promptly upon demand for any legal or other
        expenses reasonably incurred by such Indemnified Holder in connection with
        investigating or defending or preparing to defend against any such loss,
        claim,
        damage, liability, expense or action as such expenses are incurred; provided,
        however, that the Company shall not be liable in any such case to the extent
        that any such loss, claim, damage, liability, expense or action arises out
        of,
        or is based upon, (A) any untrue statement or alleged untrue statement or
        omission or alleged omission made in the Shelf Registration Statement or
        Prospectus or amendment or supplement thereto or Blue Sky Application or
        other
        document referred to in Section 6(a)(i) hereof
        in reliance upon and in conformity with written information furnished to
        the
        Company by or on behalf of any Holder (or its related Indemnified Holder)
        specifically for use therein or (B) the failure by the Holder or
        Indemnified Holder to deliver to any purchaser of its Registrable Securities
        the
        Prospectus and any supplement or amendment thereto after the Company has
        furnished such Holder or Indemnified Holder with a sufficient number of copies
        of the same. The foregoing indemnity agreement is in addition to any liability
        that the Company may otherwise have to any Indemnified Holder.
   11
  
  (b)  Each
        Holder, severally and not jointly, shall indemnify and hold harmless, to
        the
        fullest extent permitted by law, the Company, each other Holder, their
        respective officers, directors, agents and employees and each person, if
        any,
        who controls the Company or such other Holder within the meaning of the
        Securities Act, from and against any loss, claim, damage, liability or expense,
        joint or several, or any action in respect thereof, to which the Company,
        such
        other Holder or any such officer, director, agent, employee or controlling
        person may become subject, insofar as any such loss, claim, damage, liability,
        expense or action arises out of, or is based upon:
  (i)  any
        untrue statement or alleged untrue statement of any material fact contained
        in
        the Shelf Registration Statement or Prospectus or any amendment or supplement
        thereto or any Blue Sky Application or other document referred to in Section
        6(a)(i) hereof;
        or
  (ii)  the
        omission or the alleged omission to state therein any material fact required
        to
        be stated therein or necessary to make the statements therein, in light of
        the
        circumstances under which they were made, not misleading,
  but
        in
        each case only 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 prepared and furnished to the Company
        by or
        on behalf of such Holder (or its related Indemnified Holder) specifically
        for
        use therein, and shall reimburse the Company and any such officer, employee
        or
        controlling person promptly upon demand for any legal or other expenses
        reasonably incurred by the Company or any such officer, employee or controlling
        person in connection with investigating or defending or preparing to defend
        against any such loss, claim, damage, liability, expense or action as such
        expenses are incurred, provided that the obligation to indemnify will be
        individual, not joint and several, for each Holder and shall be limited to
        the
        net amount of proceeds receive by such Holder from the sale of Registrable
        Securities pursuant to Shelf Registration Statement.
  (c)  Promptly
        after receipt by an indemnified party under this Section 6 of notice of any
        claim or the commencement of any action, the indemnified party shall, if
        a claim
        in respect thereof is to be made against the indemnifying party under this
        Section 6, notify the indemnifying party in writing of the claim or the
        commencement of that action; provided, however, that the failure to notify
        the
        indemnifying party shall not relieve the indemnifying party from any liability
        which it may have under this Section 6 except to the extent the
        indemnifying party has been prejudiced by such failure. If any such claim
        or
        action shall be brought against an indemnified party, and it shall notify
        the
        indemnifying party thereof, the indemnifying party shall be entitled to
        participate therein and, to the extent that it wishes, jointly with any other
        similarly notified indemnifying party, to assume the defense thereof with
        counsel satisfactory to the indemnified party. After notice from the
        indemnifying party to the indemnified party of its election to assume the
        defense of such claim or action, the indemnifying party shall not be liable
        to
        the indemnified party under this Section 6 for any
        legal or other expenses subsequently incurred by the indemnified party in
        connection with the defense thereof other than reasonable costs of
        investigation; provided, however, that a Majority of Holders shall have the
        right to employ at the expense of such Holders a single counsel to represent
        jointly the Holders and their respective directors, officers, members, agents,
        partners, employees and controlling persons who may be subject to liability
        arising out of any claim in respect of which indemnity may be sought by Holders
        against the Company under this Section 6; and provided, further, that if a
        Majority of Holders shall have reasonably concluded that there may be one
        or
        more legal defenses available to them and their respective officers, employees
        and controlling persons that are different from or additional to those available
        to the Company and its officers, directors, employees and controlling persons,
        then the fees and expenses of such single separate counsel shall be paid
        for by
        the indemnifying party. No indemnifying party shall:
   12
   (i)  without
        the prior written consent of the indemnified parties (which consent shall
        not be
        unreasonably withheld or delayed) settle or compromise or consent to the
        entry
        of any judgment with respect to any pending or threatened claim, action,
        suit or
        proceeding in respect of which indemnification or contribution may be sought
        hereunder (whether or not the indemnified parties are actual or potential
        parties to such claim or action) unless such settlement, compromise or consent
        includes an unconditional release of each indemnified party from all liability
        arising out of such claim, action, suit or proceeding, or
  (ii)  be
        liable
        for any settlement of any such action effected without its written consent
        (which consent shall not be unreasonably withheld or delayed), but if settled
        with its written consent or if there be a final judgment for the plaintiff
        in
        any such action, the indemnifying party agrees to indemnify and hold harmless
        any indemnified party from and against any loss or liability by reason of
        such
        settlement or judgment.
  (d)  If
        the
        indemnification provided for in this Section
        6 shall
        for any reason be unavailable or insufficient to hold harmless an indemnified
        party under Section 6(a) or 6(b) in
        respect of any loss, claim, damage, liability or expense (or action in respect
        thereof) referred to therein, each indemnifying party shall, in lieu of
        indemnifying such indemnified party, contribute to the amount paid or payable
        by
        such indemnified party as a result of such loss, claim, damage or liability
        (or
        action in respect thereof):
  (i)  in
        such
        proportion as is appropriate to reflect the relative fault of the Company
        on the
        one hand and the Holders on the other, or
  (ii)  if
        the
        allocation provided by clause
        (6)(d)(i) is not
        permitted by applicable law, in such proportion as is appropriate to reflect
        not
        only the relative fault referred to in clause
        6(d)(i) but also
        the relative benefits received by the Company from the offering and sale
        of the
        Registrable Securities on the one hand and a Holder with respect to the sale
        by
        such Holder of the Registrable Securities on the other in connection with
        the
        statements or omissions or alleged statements or alleged omissions that resulted
        in such loss, claim, damage or liability (or action in respect thereof),
        as well
        as any other relevant equitable considerations.
  The
        relative benefits received by the Company on the one hand and a Holder on
        the
        other with respect to such offering and such sale shall be deemed to be in
        the
        same proportion as the total net proceeds from the offering of the Registrable
        Securities (before deducting expenses) received by the Company, on the one
        hand,
        bear to the total proceeds received by such Holder (before deducting expenses)
        with respect to its sale of Registrable Securities on the other. The relative
        fault of the parties shall be determined by reference to, among other things,
        whether the untrue or alleged untrue statement of a material fact or the
        omission or alleged omission to state a material fact relates to information
        supplied by the Company on the one hand or the Holders on the other, the
        intent
        of the parties and their relative knowledge, access to information and
        opportunity to correct or prevent such statement or omission. The Company
        and
        each Holder agree that it would not be just and equitable if the amount of
        contribution pursuant to this Section 6(d) were
        determined by *pro*  *rata* allocation (even if the selling Holders were treated as one entity for such
        purpose) or by any other method of allocation that does not take into account
        the equitable considerations referred to in the first sentence of this
        paragraph (d). The amount paid or payable by an indemnified party as a
        result of the loss, claim, damage, liability or expense, or action in respect
        thereof, referred to above in this Section 6 shall be deemed to include,
        for purposes of this Section 6 and subject to the limitations set forth
        above, any legal or other expenses reasonably incurred by such indemnified
        party
        in connection with investigating or defending or preparing to defend any
        such
        action or claim.
   13
  Notwithstanding
        the provisions of this Section 6, no Holder shall be required to contribute
        any amount in excess of the amount by which net proceeds received by such
        Holder
        from the sale of Registrable Securities covered by the Shelf Registration
        Statement exceeds the amount of any damages which such Holder has otherwise
        been
        required to pay by reason of any untrue or alleged untrue statement or omission
        or alleged omission. No person guilty of fraudulent misrepresentation (within
        the meaning of Section 11(f) of the Securities Act) shall be entitled to
        contribution from any person who was not guilty of such fraudulent
        misrepresentation. The Holders’ obligations to contribute as provided in this Section 6(d) are
        several and not joint.
  7.  Participation
        in Underwritten Offerings .
  No
        Holder
        may participate in any Underwritten Offering hereunder unless such
        Holder:
  (a)  agrees
        to
        sell such Holder’s Registrable Securities on the basis provided in any
        underwriting arrangements approved by the Persons entitled hereunder to approve
        such arrangements; and
  (b)  completes
        and executes all reasonable and customary questionnaires, powers of attorney,
        custody agreements, indemnities, underwriting agreements, lock-up letters
        and
        other documents required under the terms of such underwriting arrangements,
        provided that no Holder shall be required to make any representations or
        warranties to the Company or the underwriters (other than representations
        and
        warranties regarding such Holder and such Holder’s intended method of
        distribution) or to undertake any indemnification obligations to the Company
        or
        the underwriters with respect thereto, except as otherwise provided in
        Section 6 hereof.
  8.  Selection
        of Underwriters .
  The
        Holders of Registrable Securities covered by the Shelf Registration Statement
        who desire to do so may sell such Registrable Securities in an Underwritten
        Offering. ****** In
        any
        such Underwritten Offering, the investment banking firm or firms and manager
        or
        managers that will administer the offering will be selected by a Majority
        of
        Holders whose Registrable Securities are included in such offering; provided ,
        that
        such investment banking firms must be reasonably satisfactory to the
        Company.
  9.  Miscellaneous .
  (a)  Remedies .
        The
        Company acknowledges and agrees that any failure by the Company to comply
        with
        its obligations under Section 2 hereof
        may result in material irreparable injury to the Purchasers or the Holders
        for
        which there is no adequate remedy at law, that it will not be possible to
        measure damages for such injuries precisely and that, in the event of any
        such
        failure, the Purchasers or any Holder may obtain such relief as may be required
        to specifically enforce the Company’s obligations under Section 2 hereof.
        The Company further agrees to waive the defense in any action for specific
        performance that a remedy at law would be adequate.
  (b)  Amendments
        and Waivers .
        This
        Agreement may not be amended, modified or supplemented, and waivers or consents
        to or departures from the provisions hereof may not be given, unless the
        Company
        has obtained the written consent of a Majority of Holders.
  (c)  Notices .
        All
        notices and other communications provided for or permitted hereunder shall
        be
        made in writing by hand-delivery, first-class mail (registered or certified,
        return receipt requested), telex, telecopier, or air courier guaranteeing
        overnight delivery:
   14
  (i)  if
        to a
        Holder, at the address set forth on the records Company of or the transfer
        agent
        of the Registrable Securities, as the case may be; and
  (ii)if
                  to the Company:
              H2Diesel
                  Holdings, Inc.
                11111
                  Katy Freeway, Suite 910
                Houston,
                  Texas 77079
                Tel:
                  (713) 973-5720
                Fax:
                  (713) 973-5777
                Attn:
                  Lee S. Rosenwith
                  a copy to:
              Greenberg
                  Traurig, P.A.
                1221
                  Brickell Avenue
                Miami,
                  FL 33131
                Tel:
                  (305) 579-0500
                Fax:
                  (305) 5791-0717
                Attn:Ira
                  N. Rosner, Esq.
 
 All
        such
        notices and communications shall be deemed to have been duly given at: the
        time
        delivered by hand, if personally delivered; five Business Days after being
        deposited in the mail, postage prepaid, if mailed; when answered back, if
        telexed; when receipt acknowledged, if transmitted by facsimile; and on the
        next
        Business Day, if timely delivered to an air courier guaranteeing overnight
        delivery.
  (d)  Successors
        and Assigns .
        This
        Agreement shall inure to the benefit of and be binding upon the successors
        and
        assigns of each of the parties, including without limitation subsequent Holders
        of Registrable Securities; provided, however, that (i) this Agreement shall
        not inure to the benefit of or be binding upon a successor or assign of a
        Holder
        unless and to the extent such successor or assign acquired Registrable
        Securities from such Holder and agreed in writing to be bound by the terms
        of
        this Agreement and (ii) nothing contained herein shall be deemed to permit
        any assignment, transfer or other disposition of Registrable Securities in
        violation of any Subscription Agreement or other agreement with the Company
        which restricts the sale or disposition of Registrable Securities. If any
        transferee of any Holder shall acquire Registrable Securities, in any manner,
        whether by operation of law or otherwise, such Registrable Securities shall
        be
        held subject to all of the terms of this Agreement, and by taking and holding
        such Registrable Securities such person shall be conclusively deemed to have
        agreed to be bound by and to perform all of the terms and provisions of this
        Agreement.
  (e)  Counterparts .
        This
        Agreement may be executed in any number of counterparts and by the parties
        hereto in separate counterparts, each of which when so executed shall be
        deemed
        to be an original and all of which taken together shall constitute one and
        the
        same agreement.
  (f)  Headings .
        The
        headings in this Agreement are for convenience of reference only and shall
        not
        limit or otherwise affect the meaning hereof.
  (g)  Governing
        Law .
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Florida without regard to its principles of conflict of laws that
        would
        cause the laws of another jurisdiction to apply.
   15
  
  (h)  Severability .
        If any
        one or more of the provisions contained herein, or the application thereof
        in
        any circumstance, is held invalid, illegal or unenforceable, the validity,
        legality and enforceability of any such provision in every other respect
        and of
        the remaining provisions contained herein shall not be affected or impaired
        thereby.
  (i)  Entire
        Agreement .
        This
        Agreement is intended by the parties as a final expression of their agreement
        and intended to be a complete and exclusive statement of the agreement and
        understanding of the parties hereto in respect of the subject matter contained
        herein. There are no restrictions, promises, warranties or undertakings,
        other
        than those set forth or referred to herein, with respect to the registration
        rights granted by the Company with respect to the Registrable Securities.
        This
        Agreement supersedes all prior agreements and understandings between the
        parties
        with respect to such subject matter.
  
  **[THE
        REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]**
   16
  **IN
        WITNESS WHEREOF** ,
        the
        parties have executed this Agreement as of the date first written
        above.
  **H2Diesel
        Holdings, Inc.**
   Name:
 Title:
 
  [Purchaser
        Signature Page Follows]
 
  17
  **EXECUTION
          COPY**
 **Holder
        Signature Page**
  **Registration
        Rights Agreement - H2Diesel Holdings Inc.**
  The
        foregoing Agreement is hereby confirmed and accepted as of the date first
        above
        written.
  
 ______________________
 [Name
        of
        Holder]
 
 By:
 Name:
 Title:
 
 
  **EXHIBIT
        A**
  **HOLDERS**
  
  
  
  [Names
        of
        each Holder shall be inserted upon the Closing]
  
  **EXHIBIT
        B**
  **NOTICE
        AND QUESTIONNAIRE**
 
 **(TIME
        SENSITIVE MATERIAL)**
  **THIS
        NOTICE AND QUESTIONNAIRE MUST BE RETURNED TO H2DIESEL HOLDINGS, INC. (AT
        THE
        ADDRESS LISTED BELOW) ON OR BEFORE THE 20TH BUSINESS DAY FOLLOWING DELIVERY
        OF
        THE NOTICE AND QUESTIONNAIRE BY H2DIESEL TO THE REGISTERED
        HOLDER.**
  **Capitalized
        terms used but not defined herein shall have the respective meanings set
        forth
        in the Registration Rights Agreement, dated as of _______ ___, 2007 (the
        “** **Registration
        Rights Agreement** **”),
        between the Company and Holders named therein.**
  **Form
        of Selling Securityholder Notice and Questionnaire**
  The
        undersigned Holder of the Registrable Securities of the Company understands
        that
        the Company has filed, or intends to file, with the SEC a Shelf Registration
        Statement for the registration and resale under Rule 415 of the Securities
        Act,
        Registrable Securities in accordance with the terms of the Registration Rights
        Agreement. A copy of the Registration Rights Agreement is available from
        the
        Company upon request at the address set forth below.
  Each
        beneficial owner of Registrable Securities that has agreed in writing to
        be
        bound by the Registration Rights Agreement is entitled to the benefits of
        the
        Registration Rights Agreement. In order to sell or otherwise dispose of any
        Registrable Securities pursuant to the Shelf Registration Statement, a
        beneficial owner of Registrable Securities generally will be required to
        be
        named as a selling securityholder in the related Prospectus, deliver a
        Prospectus either to purchasers of Registrable Securities or, if relying
        on Rule
        172 of the Securities Act, confirm that a current prospectus is deemed delivered
        in connection with the sale of Registrable Securities, and be bound by those
        provisions of the Registration Rights Agreement applicable to such beneficial
        owner (including certain indemnification provisions, as described below).
        Beneficial owners are encouraged to complete and deliver this Notice and
        Questionnaire prior to the effectiveness of the Shelf Registration Statement
        so
        that such beneficial owners may be named as selling securityholders in the
        related prospectus.
  Certain
        legal consequences arise from being named as a selling securityholder in
        the
        Shelf Registration Statement and the related Prospectus. Accordingly, holders
        and beneficial owners of Registrable Securities are advised to consult their
        own
        securities law counsel regarding the consequences of being named or not being
        named as a selling securityholder in the Shelf Registration Statement and
        the
        related Prospectus.
  **NOTICE**
  The
        undersigned Holder (the “ Selling
        Securityholder ”)
        of
        Registrable Securities hereby gives notice to the Company of its intention
        to
        sell or otherwise dispose of Registrable Securities beneficially owned by
        it and
        listed below in Item 3 (unless otherwise specified under Item 3)
        pursuant to the Shelf Registration Statement. The undersigned, by signing
        and
        returning this Notice and Questionnaire, understands that it will be bound
        by
        the terms and conditions of this Notice and Questionnaire and the Registration
        Rights Agreement.
   B-2
  Pursuant
        to Section 6(b) of the Registration Rights Agreement, the undersigned has
        agreed
        to indemnify and hold harmless the Company and certain other persons, from
        and
        against certain losses arising in connection with statements concerning the
        undersigned made in the Shelf Registration Statement or the related Prospectus
        in reliance upon the information provided in this Notice and
        Questionnaire.
  The
        undersigned hereby provides the following information to the Company and
        represents and warrants that such information is accurate and
        complete:
  **QUESTIONNAIRE**
  **1.**  **Information
        Regarding Selling Securityholder**
  (a)  Full
        legal name of Selling Securityholder:
  (b)
              Full
                  legal name of registered holder (if not the same as (a) above)
                  through
                  which Registrable Securities listed in Item (3) below are
                  held:
  (c)
              Full
                  legal name of Natural Control Person (which means a natural person
                  who
                  directly or indirectly alone or with others has power to vote or
                  dispose
                  of the securities covered by the
                  questionnaire):
  (d)
              Is
                  the Selling Securityholder an SEC-reporting company? If the Selling
                  Security-holder is not an SEC-reporting company, list below the
                  individual
                  or individuals who exercise the voting and/or dispositive powers
                  with
                  respect to the Securities:
  (e)
              Are
                  you a broker-dealer registered pursuant to Section 15 of the Exchange
                  Act?
  oYes.
  oNo.
  *Note* :
        If yes,
        the SEC’s staff has indicated that you should be identified as an underwriter in
        the Shelf Registration Statement.
  (f)
              If
                  your response to Item 1(e) above is “no,” are you an “affiliate” of a
                  broker-dealer registered pursuant to Section 15 of the Exchange
                  Act?
 oYes.
  oNo.
 B-3
  
  For
        purposes of this Item 1(f), an “affiliate” of a registered broker-dealer shall
        include any company that directly, or indirectly through one or more
        intermediaries, controls, or is controlled by, or is under common control
        with,
        such broker-dealer, and does not include any individuals employed by such
        broker-dealer or its affiliates.
  (g)
              If
                  you are an affiliate of a broker-dealer, do you certify that you
                  bought
                  the Registrable Securities to be resold, and at the time of the
                  purchase
                  of the Registrable Securities to be resold, you had no agreements
                  or
                  understandings, directly or indirectly, with any person to distribute
                  the
                  Registrable Securities?
 oYes.
  oNo.
  *Note* :
        If no,
        the SEC’s staff has indicated that you should be identified as an underwriter in
        the Shelf Registration Statement.
  (h)
              Full
                  legal name of person through which you hold the Registrable Securities
                  -
                  (i.e. name of your broker or the DTC participant, if applicable,
                  through
                  which your Registrable Securities are
                  held):
  Name
        of
        broker: ___________________________________
  DTC
        No:
        ________________________________________
  Contact
        person: ___________________________________
  Telephone
        No. (including area code):  ___________________
  
  **2.**  **Address
        for Notices to Selling Securityholder**
  Telephone:
        _______________________________________
  Fax:
        _____________________________________________
  Contact
        Person: ____________________________________
  Email
        address: _____________________________________
  **3.**  **Beneficial
        Ownership of Registrable Securities**
  Number
        of
        shares of Registrable Securities of the Company beneficially owned:
        _____________________________________
  CUSIP No(s). of such Registrable Securities beneficially owned:
        _________________________________________________
   B-4
 **4. **Nature
          of Beneficial Ownership****
  (a)
              Check
                  if the Selling Securityholder set forth in your response to Item
                  1(a) is
                  any of the below:
  (A)
              A
                  reporting company under the Exchange Act. o
  (B)
              A
                  majority owned subsidiary of a reporting company under the Exchange
                  Act.
                  o
  (C)
              A
                  registered investment fund under the Investment Company Act of
                  1940. o
  (b)
              If
                  the Selling Securityholder set forth in your response to Item 1(a)
                  above
                  is a limited partnership, state the names of the general partners
                  of such
                  limited partnership:
  
  
  (A)
              With
                  respect to each general partner listed in Item 4(b) above who is
                  not a
                  natural person, and is not publicly-held, name each shareholder
                  (or holder
                  of partnership interests, if applicable) of such general partner.
                  If any
                  of these named shareholders are not natural persons or publicly-held
                  entities, please provide the same information. This process should
                  be
                  repeated until you reach natural persons or a publicly-held
                  entity.
  
  (c)
              Name
                  your controlling shareholder(s) (the “Controlling
                  Entity”).
                  If the Controlling Entity is not a natural person and is not a
                  publicly-held entity, name each shareholder of such Controlling
                  Entity. If
                  any of these named shareholders are not natural persons or publicly-held
                  entities, please provide the same information. This process should
                  be
                  repeated until you reach natural persons or a publicly-held
                  entity.
  (A)  (i)  Full
        legal name of Controlling Entity(ies) or natural person(s) who have sole
        or
        shared voting or dispositive power over the Registrable Securities:
  
 
  (ii)  Business
        address (including street address) (or residence if no business address),
        telephone number and facsimile number of such person(s):
  Address:  __________________________________
  
  
  B-5
  (iii)  Name
        of
        shareholders:
  (B)  (i)  Full
        legal name of Controlling Entity(ies):
  (ii)  Business
        address (including street address) (or residence if no business address),
        telephone number and facsimile number of such person(s):
  Address:
  Telephone
        No.:
  Fax
        No.:
  (iii)  Name
        of
        shareholders:
  **5.**
              **Beneficial
                  Ownership of the Company’s Securities Owned by the Selling
                  Securityholder**
  Except
        as
        set forth below in this Item (5), the undersigned is not the beneficial or
        registered owner of any securities of the Company other than the Registrable
        Securities listed above in Item (3) (“ Other
        Securities ”).
  Type
        and
        amount of Other Securities beneficially owned by the Selling
        Securityholder:
  
  CUSIP
        No(s). of such Other Securities beneficially owned:
 
  **6.**
              **Relationship
                  with the Company**
  Except
        as
        set forth below, neither the undersigned nor any of its affiliates, officers,
        directors or principal equity holders (5% or more) has held any position
        or
        office or has had any other material relationship with the Company (or its
        predecessors or affiliates) during the past three years.
  State
        any
        exceptions here:
 
 **7.**
              **Plan
                  of Distribution**
  Except
        as
        set forth below, the undersigned (including its donees or pledgees) intends
        to
        distribute the Registrable Securities listed above in Item (3) pursuant to
        the Shelf Registration Statement only as follows (if at all). Such Registrable
        Securities may be sold from time to time directly by the undersigned or,
        alternatively, through underwriters, broker-dealers or agents. If the
        Registrable Securities are sold through underwriters or broker-dealers, the
        Selling Securityholder will be responsible for underwriting discounts or
        commissions or agent’s commissions. Such Registrable Securities may be sold in
        one or more transactions at fixed prices, at prevailing market prices at
        the
        time of sale, at varying prices determined at the time of sale, or at negotiated
        prices. Such sales may be effected in transactions (which may involve crosses
        or
        block transactions):
  (a)  on
        any
        national securities exchange or quotation service on which the Registrable
        Securities may be listed or quoted at the time of sale;
  (b)  in
        the
        over-the-counter market;
  (c)  in
        transactions otherwise than on such exchanges or services or in the
        over-the-counter market; or
  (d)  through
        the writing of options.
  In
        connection with sales of the Registrable Securities or otherwise, the
        undersigned may enter into hedging transactions with broker-dealers, which
        may
        in turn engage in short sales of the Registrable Securities and deliver
        Registrable Securities to close out such short positions, or loan or pledge
        Registrable Securities to broker-dealers that in turn may sell such
        securities.
  State
        any
        exceptions here:
  *Note* :
        In no
        event will such method(s) of distribution take the form of an underwritten
        offering of the Registrable Securities without the prior agreement of the
        Company.
  **8.**
              **Acknowledgments**
  The
        undersigned acknowledges that it understands its obligation to comply with
        the
        provisions of the Exchange Act and the rules thereunder relating to stock
        manipulation, particularly Regulation M thereunder (or any successor rules
        or
        regulations), in connection with any offering of Registrable Securities pursuant
        to the Shelf Registration Statement. The undersigned agrees that neither
        it nor
        any person acting on its behalf will engage in any transaction in violation
        of
        such provisions.
  The
        Selling Securityholder hereby acknowledges its obligations under the
        Registration Rights Agreement to indemnify and hold harmless certain persons
        as
        set forth therein. Pursuant to the Registration Rights Agreement, the Company
        has agreed under certain circumstances to indemnify the Selling Securityholders
        against certain liabilities.
  In
        accordance with the undersigned’s obligation under the Registration Rights
        Agreement to provide such information as may be required by law for inclusion
        in
        the Shelf Registration Statement, the undersigned agrees to promptly notify
        the
        Company of any inaccuracies or changes in the information provided herein
        that
        may occur subsequent to the date hereof at any time while the Shelf Registration
        Statement remains effective. All notices hereunder and pursuant to the
        Registration Rights Agreement shall be made in writing at the address set
        forth
        below.
   B-6
  
  By
        signing below, the undersigned consents to the disclosure of the information
        contained herein in its answers to items (1) through (7) above and the inclusion
        of such information in the Shelf Registration Statement and the related
        Prospectus. The undersigned understands that such information will be relied
        upon by the Company in connection with the preparation or amendment of the
        Shelf
        Registration Statement and the related Prospectus.
  Once
        this
        Notice and Questionnaire is executed by the undersigned and received by the
        Company, the terms of this Notice and Questionnaire, and the representations
        and
        warranties contained herein, shall be binding on, shall inure to the benefit
        of
        and shall be enforceable by the respective successors, heirs, personal
        representatives and assigns of the Company and the undersigned with respect
        to
        the Registrable Securities beneficially owned by the undersigned and listed
        in
        Item (3) above.
  This
        Notice and Questionnaire shall be governed in all respects by the laws of
        the
        State of Florida.
   B-7
  **IN
        WITNESS WHEREOF** ,
        the
        undersigned, by authority duly given, has caused this Notice and Questionnaire
        to be executed and delivered either in person or by its duly authorized
        agent.
  Beneficial
        Owner
  By:
        _______________________________
 Name:
        ________________________
 Title:
        _________________________
 Dated:_____________
  **PLEASE
        RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO H2DIESEL HOLDINGS,
        INC. NOT LATER THAN THE 20TH BUSINESS DAY AFTER THIS NOTICE AND QUESTIONNAIRE
        HAVE BEEN DELIVERED TO THE REGISTERED HOLDER AT:**
  **H2Diesel
        Holdings, Inc.**
 **11111
        Katy Freeway, Suite 910**
 **Houston,
        Texas 77079**
 **Tel:
        (713) 973-5720**
 **Fax:
        (713) 973-5777**
 
 
 
 B-8