| **Re:** | **Amendment                  No. 3 (“Amendment No. 3) to the Exclusive License Agreement, dated March                  20, 2006 and as amended September 11, 2006 and December 13, 2006,                  between                  Ferdinando Petrucci (“Petrucci”) and H2Diesel, Inc. (“H2Diesel”), a wholly                  owned subsidiary of H2Diesel Holdings, Inc. (as amended, the “License                  Agreement”)** |
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| 1.   | The                due date for the US$1,500,000 payment required under section 1(b)(i)(C)                of                the License Agreement is extended from October 31, 2007 to November                15,                2007. |
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| 2.   | H2Diesel                will pay Petrucci US$2,000,000 on or before November 15, 2007, with                US$1,500,000 of such payment allocated to the payment formerly due                on                October 31, 2007 and US$500,000 of such payment allocated as a prepayment                of the US$1,000,000 payment due on March 20, 2008 under section 1(b)(i)(D)                of the License Agreement. |
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| 3.   | H2Diesel                will pay Petrucci the remaining US$500,000 of the payment due in                2008                under section 1(b)(i)(D) of the License Agreement on March 20, 2008. |
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|                                                                  |                                                      |
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| By:                                                         | /s/                  David A. Gillespie    |
| Name: David                  A. Gillespie                        |
| Title:                    President and Chief Executive Officer  |

| /s/                  Ferdinando Petrucci   |
|------------------------------------------------------|
| Ferdinando                    Petrucci               |

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