<SEC-DOCUMENT>0001019687-13-004192.txt : 20131112
<SEC-HEADER>0001019687-13-004192.hdr.sgml : 20131111
<ACCEPTANCE-DATETIME>20131112115825
ACCESSION NUMBER:		0001019687-13-004192
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20131216
FILED AS OF DATE:		20131112
DATE AS OF CHANGE:		20131112
EFFECTIVENESS DATE:		20131112

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SAVE THE WORLD AIR INC
		CENTRAL INDEX KEY:			0001103795
		STANDARD INDUSTRIAL CLASSIFICATION:	MOTOR VEHICLE PARTS & ACCESSORIES [3714]
		IRS NUMBER:				522088326
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-29185
		FILM NUMBER:		131208736

	BUSINESS ADDRESS:	
		STREET 1:		235 TENNANT AVE #5
		CITY:			MORGAN HILL
		STATE:			CA
		ZIP:			95037
		BUSINESS PHONE:		818-487-8000

	MAIL ADDRESS:	
		STREET 1:		235 TENNANT AVE #5
		CITY:			MORGAN HILL
		STATE:			CA
		ZIP:			95037
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>stwa_def14a.htm
<DESCRIPTION>SAVE THE WORLD AIR, INC.
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>UNITED&nbsp;STATES </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Washington,&nbsp;D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SCHEDULE 14A </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Proxy Statement Pursuant to Section&nbsp;14(a)
of the Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 50%; padding: 1.5pt 1.5pt 3pt 8.5pt; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT>&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;Filed
by a Party other than the Registrant</FONT></td></tr>
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<table cellspacing="0" cellpadding="0" style="border: black 1pt outset; font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td colspan="2" style="border-top: black 1pt solid; border-right: black 1pt solid; border-left: black 1pt solid; border-bottom: black 1pt inset; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font-family: Times New Roman, Times, Serif"><b>Check the appropriate box: </b></font></td></tr>
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    <td style="width: 8%; border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt; text-align: center"><FONT STYLE="font-family: Wingdings 2"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></FONT></td>
    <td style="width: 92%; border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Preliminary
Proxy Statement &nbsp; </FONT></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE&nbsp;14A-6(E)(2))</font></td></tr>
<tr>
    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt; text-align: center"><FONT STYLE="font-family: Wingdings 2">&#83;</FONT></td>
    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Definitive Proxy Statement</font></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt; text-align: center"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></td>
    <td style="vertical-align: bottom; border: black 1pt inset; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Definitive Additional Materials</font></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt; text-align: center"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></td>
    <td style="vertical-align: bottom; border: black 1pt inset; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Soliciting Material Pursuant to ss.240.14a-12</font></td></tr>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><B>SAVE THE WORLD AIR, INC.<BR>
</B><I>(Name of Registrant
as Specified In Its Charter) </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-bottom: 0pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-bottom: 0pt">_____________________________________________<BR>
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-bottom: 3pt"><I>&nbsp;</I></P>

<table cellspacing="0" cellpadding="0" style="border: black 1pt outset; font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom; background-color: #EEEEEE">
    <td colspan="2" style="border-top: black 1pt solid; border-right: black 1pt solid; border-left: black 1pt solid; border-bottom: black 1pt inset; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font-family: Times New Roman, Times, Serif"><b>Payment of Filing Fee (Check the appropriate box): </b></font></td></tr>
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    <td style="vertical-align: top; width: 6%; border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt; text-align: center"><FONT STYLE="font-family: Wingdings 2">&#83;</FONT></td>
    <td style="width: 94%; border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>No fee required.</b> </font></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(4) and 0-11.</b> </font></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">(1)&nbsp;Title of each class of securities to which transaction applies:</font></td></tr>
<tr>
    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">(2)&nbsp;Aggregate number of securities to which transaction applies:</font></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">(3)&nbsp;Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule&nbsp;0-11 (set&nbsp;forth&nbsp;the&nbsp;amount on which the filing fee is calculated and state how it was determined):</font></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">(4) Proposed maximum aggregate value of transaction:</font></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">(5) Total fee paid:</font></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fee paid previously with preliminary materials.</b> </font></td></tr>
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    <td rowspan="5" style="vertical-align: top; border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt; text-align: center"><FONT STYLE="font: 9pt Sans-Serif"><b><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></b></font></td>
    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the&nbsp;offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or&nbsp;Schedule and the date of its filing.</b> </font></td></tr>
<tr>
    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">(1)&nbsp;Amount Previously Paid:</font></td></tr>
<tr>
    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">(2)&nbsp;Form, Schedule or Registration Statement No.:</font></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">(3)&nbsp;Filing Party:</font></td></tr>
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    <td style="border: black 1pt solid; padding: 1.5pt 1.5pt 3pt 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif">(4)&nbsp;Date Filed:</font></td></tr>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><IMG SRC="image_001.jpg" ALT="" STYLE="height: 181px; width: 228px"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">To Our Shareholders,</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">It is my great
pleasure to report that this past year has been one marked by strong forward movement in the commercialization of our AOT&trade;
Viscosity Reduction Systems technology and, equally important, in the strengthening of the Company&rsquo;s fiscal and patent/license
protection structures. Due to the Company&rsquo;s tight focus on ensuring our equipment is optimized for commercial deployment,
we believe we are exceptionally well positioned to supply the multi-billion dollar oil and energy industries with technologies
uniquely capable of solving the pressing challenges facing today&rsquo;s leaner, efficiency-minded energy suppliers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">Market conditions
within the oil and gas industry continue to move in a highly favorable direction for our solutions with U.S. crude oil production
in August 2013 hitting its highest monthly level in 24 years, according to the Short-Term Energy Outlook report issued by the
U.S. Energy Information Administration. New Enhanced Oil Recovery (EOR) techniques are making possible the largest annual growth
in the history of the U.S. oil industry (up 15.1% to 7.47 million barrels a day thus far this year), creating significant pipeline
capacity and related logistical bottlenecks for both the upstream and midstream operator and supplier markets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">The
progress we&rsquo;ve made since our 2012 Annual Shareholders&rsquo; Meeting is further evidenced by several significant milestones
in the Company&rsquo;s history:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">During
the first quarter of 2013, we entered into two new non-disclosure agreements, increasing the number of multi-national companies
with which we are jointly evaluating the deployment of AOT&trade; technologies from five to seven, including entities dominant
in emerging nations with fast-growing oil consumption. These agreements are indicative of the efficacy of our business development
strategy with upstream and midstream operators in North America, South America, Africa, Austral-Asia, Asia and the Middle East.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">To
further generate overseas awareness and in our efforts to generate new business for the Company, the Company&rsquo;s executives
<FONT STYLE="background-color: white">conducted a series of institutional investor meetings in Geneva and Zurich and met with
senior management decision-makers from a $20 billion market cap UK-based energy company with operational holdings on multiple
continents. During this trip, we also hosted an informal investor gathering in London, England.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">We&rsquo;re
pleased to announce that STWA has entered into a regional relationship with newly formed <FONT STYLE="color: #222222; background-color: white">North
African energy equipment distributor Energy Tech Africa (ETA) to make our products available to oil producers in Africa and the
Middle East. U</FONT>nder ETA&rsquo;s founder and CEO&rsquo;s (Mr. Timothy Nimmo) leadership, ETA has made a commitment to provide
oil samples to us from a number of leading candidates for AOT&trade; technology in South Sudan, Egypt and Qatar.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt; background-color: white">In
one of the Company&rsquo;s most noteworthy accomplishments to date, we signed a contract with a $30 billion midstream oil pipeline
operator (8-K on file) to integr<FONT STYLE="color: Black">ate AOT&trade; technology into their flagship pipeline located in North
America. Under this agreement we have been engaged in an intensive design, engineering and review process. The goal of these collaborative
efforts is for deployment of AOT&trade; beginning in Q1 2014. This venture has enabled us to mature as a technology and equipment
provider to the energy industry and to become accepted as a peer supplier and approved vendor within the industry<I>. </I>This
pivotal moment moved us from being a purely R&amp;D company to a revenue-producing entity for the first time, marking the successful
culmination of a long-term business strategy set in motion beginning early 2012.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">Earlier
this year our technical team developed a hydraulic analysis software tool designed to perform predicative analysis of pipeline
systems and networks. This home-grown application enables our executive team to identify and quantify the financial and environment
benefits that can be derived from deployment of AOT&trade; flow <FONT STYLE="background-color: white">optimization technology,
providing a</FONT> key resource during the negotiation process with large midstream and upstream energy companies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt; background-color: white">Our
long-term relationship with Temple University continues to yield useful data for the further refinement of our AOT&trade; technology.
Ongoing oil sample testing by Dr. Rongjia Tao and his team provide us with invaluable insight into the paraffin profile of the
world&rsquo;s high yield hot spots. We appreciate the dedicated efforts of Dr. Tao and Stephen G. Nappi of Temple University.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">To
protect the Company&rsquo;s AOT&trade; technology assets and our portfolio of licenses and 47 patents and additional pending patents,
we have engaged C. Dean Domingue, former senior patent counsel for Halliburton. As Special Counsel of the Business &amp; Commercial
Litigation Practice Group of Jones Walker LP, one of the largest law firms in the nation, Mr. Domingue will be working directly
with our senior managers and engineering team as we continue to build intellectual property capital.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; color: #222222"><FONT STYLE="font-size: 10pt; background-color: white">On
the business financials front, we have strengthened our balance sheet, improving the Company's cash position by $2.9 million to
$4.5 million in the six months ended June 30, 2013. The same period also saw a $6.5 million improvement in shareholders' equity,
eradicating a deficit of $2.9 million, and generating instead a positive shareholders&rsquo; equity of $3.6 million. This positive
move was due in large part to the exercise of $5.7 million in warrants and expiration of additional warrants, resulting in the
write-off of $3.2 million in derivative liabilities. This increase in assets and equity has positioned us to fund the manufacture
of AOT&trade; units, actively pursue a variety of strategic expansion initiatives and make material advancements towards up-listing
our stock on NASDAQ. As indicated in our prior SEC filings, it is our intention to move from&nbsp;over-the-counter (OTC)&nbsp;status
to a larger and more liquid platform for the trading of our stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">As
part of our compliance obligations in anticipation of uplisting our stock to an exchange or NASDAQ, we increased our Board by
three independent directors: former Montana State Senator Ryan Zinke, Don Dickson and Mark Stubbs, providing the Company with
the margin necessary for an independent director majority. For counsel in our efforts to uplist to an exchange or NASDAQ, we have
retained Sichenzia Ross Friedman Ference LLP of New York, New York.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">Our
newly elected board members bring significant industry experience and managerial depth to our board. Oil and gas veteran Don<FONT STYLE="background-color: white">
Dickson is currently the Chief Executive Officer for Advanced Pipeline Services, a leading builder of new pipelines and facilities
in North America, and Mark Stubbs is the Chief Financial Officer for London Stock Exchange-listed&nbsp;BBA Aviation, a multi-billion
dollar global aviation services and aftermarket support provider. Mr. Stubbs will serve </FONT>as Chair of our Audit Committee.
The Board also elected Gregg Bigger, our President and Chief Financial Officer as a non-independent member.</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&ldquo;In
accepting election to the STWA Board I&rsquo;d like to thank the members for their vote of confidence and STWA&rsquo;s visionary
leader Cecil Bond Kyte for the opportunity to help make a difference in the world&rsquo;s largest business sector,&rdquo; Mr.
Bigger commented.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;This
has been a watershed period of growth for STWA in every respect,&rdquo; Cecil Bond Kyte, <FONT STYLE="background-color: white">Chairman
and Chief Executive Officer of STWA, Inc. stated. &ldquo;Until last year, our business developments efforts were primarily collaborations
with oil equipment distributors and other trusted partners. We have begun positioning the Company&rsquo;s investment profile to
institutions and analysts to develop further market support<B>,</B> which has been well received at our recent meetings in the
United Kingdom and Switzerland. Furthermore, due to the maturation of our AOT&trade; technology and our well-earned status as
a certified vendor and approved supplier to the global oil and gas industry, we are now working directly with tier-one oil producers
and pipeline transportation companies throughout the world. Awareness of our solutions has never been higher within the industry
and continues to grow rapidly.&rdquo;</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt; background-color: white">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">We want to express
our sincere gratitude to our loyal shareholders for their support and confidence. Please join us at our annual shareholders&rsquo;
meeting on Monday, December 16th for a reception at 9:00AM and Annual Shareholder Meeting from 10:00AM to 12:00PM at the Fess
Parker Santa Barbara Doubletree Hotel and Resort in the <FONT STYLE="background-color: white">Santa&nbsp;Rosa-San&nbsp;Miguel
Rooms</FONT>. For directions to the hotel or other information, the front desk can be reached at <FONT STYLE="background-color: white">(805)
564-4333. For shareholder related questions, please contact Jeremy Roe of Integra Consulting Group, LLC, at (925) 262-8305.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt; background-color: white">To
register your e-mail address to receive</FONT><FONT STYLE="font-size: 10pt"> automated news alerts, regulatory filings, monthly
and quarterly reports, a video overview of AOT&trade; technology and other IR content, visit STWA&rsquo;s Investor Information
webpage.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Warmest Regards,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify; background-color: white">/s/ Cecil Bond
Kyte</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Cecil Bond Kyte</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Chief Executive Officer
and Chairman of the Board</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><IMG SRC="image_002.jpg" ALT="" STYLE="height: 66px; width: 188px"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SAVE THE WORLD AIR, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>735 State Street, Suite 500</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Santa Barbara, California 93101</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><U></U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>NOTICE OF 2013 ANNUAL MEETING OF STOCKHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>To Be Held on December 16, 2013</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">To Our Stockholders:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">You are cordially invited
to attend the 2013 annual Meeting of Stockholders (the &ldquo;2013 Annual Meeting&rdquo;) of Save the World Air, Inc. (the &ldquo;Company&rdquo;
or &ldquo;our&rdquo;), which will be held at the Fess Parker Santa Barbara Doubletree Hotel and Resort, 633 E. Cabrillo Blvd.,
Santa Barbara, California 93101 at 10:00 a.m. on Monday, December 16, 2013, for the purposes of considering and voting upon:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">1. &#9;A proposal to elect
seven (7) directors to our Board of Directors (the &ldquo;Board&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">2. &#9;A proposal to ratify
the appointment of Weinberg &amp; Co., P.A., as our independent auditor for the fiscal year ending December 31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">3.&#9;A proposal to increase
the number of authorized shares of common stock of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> 4.&#9;A proposal
to hold a non-binding advisory vote on executive compensation. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> 5.&#9;A proposal
to hold a non-binding advisory vote on executive compensation every one, two or three years. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These matters are
described more fully in the proxy statement accompanying this notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our stockholders will also
act upon such other business as may properly come before the meeting or any adjournment or postponement thereof. The Board is not
aware of any other business to be presented to a vote of the stockholders at the 2013 Annual Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Board has fixed the
close of business on October 17, 2013, as the record date (the &ldquo;Record Date&rdquo;) for determining those stockholders who
will be entitled to notice of and to vote at the 2013 Annual Meeting. A list of stockholders entitled to vote at the 2013 Annual
Meeting will be available at the 2013 Annual Meeting and at the offices of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Representation of at least
a majority in voting interest of our common stock either in person or by proxy is required to constitute a quorum for purposes
of voting at the 2013 Annual Meeting. Accordingly, it is important that your shares be represented at the 2013 Annual Meeting.
<B>WHETHER OR NOT YOU PLAN TO ATTEND THE 2013 ANNUAL MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN
IT IN THE ENCLOSED ENVELOPE.</B> Your proxy may be revoked at any time prior to the time it is voted at the 2013 Annual Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Please read the accompanying
proxy material carefully. Your vote is important and we appreciate your cooperation in considering and acting on the matters presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 60%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 40%"><font style="font: 10pt Times New Roman, Times, Serif">By Order of the Board of Directors,</font></td></tr>
<tr>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<tr>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<tr>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">/s/ Cecil Bond Kyte</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">Cecil Bond Kyte</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">Chief Executive Officer</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">November 7, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Santa Barbara, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Stockholders Should Read the Entire Proxy Statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Carefully Prior to Returning Their Proxies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">This Proxy Statement and our Annual Report</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">on Form 10K are available at www.sec.gov.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PROXY STATEMENT FOR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>2013 ANNUAL MEETING OF STOCKHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SAVE THE WORLD AIR, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>To Be Held on December 16, 2013</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; color: green"><FONT STYLE="color: Black">This
proxy statement is furnished in connection with the solicitation by our Board of Directors (the &ldquo;Board&rdquo;) of proxies
to be voted at the 2013 Annual Meeting of Stockholders (the &ldquo;2013 Annual Meeting&rdquo;) of Save the World Air, Inc. (the
&ldquo;Company&rdquo;), which will be held at 10:00 a.m. on Monday, December 16, 2013 at the Fess Parker Doubletree Hotel and
Resort, 633 E. Cabrillo Blvd, Santa Barbara, California 93101, or at any adjournments or postponements thereof, for the purposes
set forth in the accompanying Notice of the 2013 Annual Meeting of Stockholders (the &ldquo;Notice&rdquo;). This proxy statement
and the proxy card are first being delivered or mailed to stockholders on or about November 14, 2013. Our Annual Report for the
year ended December 31, 2012, on Form 10-K (the &ldquo;10-K&rdquo;) is being mailed to stockholders concurrently with this proxy
statement. Our Annual Report to Stockholders on Form 10-K is not to be regarded as proxy soliciting material or as a communication
by means of which any solicitation of proxies is to be made.</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>VOTING RIGHTS AND SOLICITATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">The
close of business on October 17, 2013, is the record date (the &ldquo;Record Date&rdquo;) for stockholders entitled to notice
of and to vote at the 2013 Annual Meeting. As of the Record Date, we had 167,704,567 shares of common stock, par value $.001 per
share issued and outstanding, and only those shares are entitled to vote on each of the proposals to be voted upon at the 2013
Annual Meeting. Holders of the common stock of record entitled to vote at the 2013 Annual Meeting will have one vote for each
share of common stock so held with regard to each matter to be voted upon.</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">All votes will be tabulated
by the inspector of elections appointed for the 2013 Annual Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The holders of a majority
in voting interest of the common stock outstanding and entitled to vote at the 2013 Annual Meeting shall constitute a quorum for
the transaction of business at the 2013 Annual Meeting. The voting interest of shares of the common stock represented in person
or by proxy will be counted for purposes of determining whether a quorum is present at the 2013 Annual Meeting. Shares which abstain
from voting as to a particular matter will be treated as shares that are present and entitled to vote for purposes of determining
the voting interest present and entitled to vote with respect to any particular matter, but will not be counted as votes cast on
such matter. If a broker or nominee holding stock in &ldquo;street name&rdquo; indicates on a proxy that it does not have discretionary
authority to vote as to a particular matter, those shares will not be counted as a vote cast on such matter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; color: green"><FONT STYLE="color: Black">In
voting with regard to the proposal to elect directors (Proposal 1), stockholders may vote in favor of all the nominees, withhold
their votes as to all nominees or withhold their votes as to a specific nominee. The vote required by Proposal 1 is governed by
Nevada law and is a plurality of the votes cast by the holders of shares entitled to vote (i.e., nominees receiving the highest
number of votes will be elected to the Board), provided a quorum is present. As a result, in accordance with Nevada law, votes
that are withheld and broker non-votes will not be counted and will have no effect on the voting for election of directors.</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In voting with regard to
the proposal to ratify the appointment of our independent auditor (Proposal 2), stockholders may vote in favor of such proposal
or against such proposal or may abstain from voting. The vote required to approve Proposal 2 is governed by Nevada law, and the
minimum vote required is a majority of the total votes cast on such proposal, provided a quorum is present. As a result, in accordance
with Nevada law, abstentions and broker non-votes will not be counted and will have no effect on the outcome of the vote on this
proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In the event of a broker
non-vote with respect to Proposal 3, related to the amendment of the Company&rsquo;s Articles of Incorporation to increase the
number of authorized shares of common stock of the Company, the broker non-vote will have the effect of a vote against Proposal
3 inasmuch as adoption of Proposal 3 requires the affirmative vote of a majority of the outstanding shares of common stock of the
Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The non-binding
advisory vote on executive compensation (Proposal 4) will be determined by a vote of the majority of the total votes cast on such
proposal, provided a quorum is present. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The non-binding
advisory vote on the frequency (Proposal 5) of non-binding advisory votes on executive compensation will also be determined by
a vote of the majority of the total votes cast on such proposal, provided a quorum is present. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Under the rules of The
New York Stock Exchange (the &ldquo;NYSE&rdquo;) that govern most domestic stock brokerage firms, member brokerage firms that hold
shares in &ldquo;street name&rdquo; for beneficial owners may, to the extent that such beneficial owners do not furnish voting
instructions with respect to any or all proposals submitted for stockholder action, vote in their discretion upon proposals which
are considered &ldquo;discretionary&rdquo; proposals under the rules of the NYSE. Member brokerage firms that have received no
instructions from their clients as to &ldquo;non-discretionary&rdquo; proposals do not have discretion to vote on these proposals.
Such broker non-votes will not be considered as votes cast in determining the outcome of any proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Shares of our common stock
represented by proxies in the accompanying form which are properly executed and returned to us will be voted at the 2013 Annual
Meeting in accordance with the stockholders&rsquo; instructions contained therein. In the absence of contrary instructions, shares
represented by such proxies will be voted FOR each of Proposal 1, Proposal 2 and Proposal 3. Management does not know of any matters
to be presented at the 2013 Annual Meeting other than those set forth in this proxy statement and in the Notice accompanying this
proxy statement. If other matters should properly come before the 2013 Annual Meeting, the proxy holders will vote on such matters
in accordance with their best judgment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Any stockholder has the
right to revoke his, her or its proxy at any time before it is voted at the 2013 Annual Meeting by giving written notice to our
Secretary, and by executing and delivering to the Secretary a duly executed proxy card bearing a later date, or by appearing at
the 2013 Annual Meeting and voting in person; <I>provided, however</I>, that under the rules of the NYSE, any beneficial owner
whose shares are held in &ldquo;street name&rdquo; by a member brokerage firm may revoke his, her or its proxy and vote his, her
or its shares in person at the 2013 Annual Meeting only in accordance with the applicable rules and procedures of the NYSE.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The entire cost of soliciting
proxies will be borne by the Company. Proxies will be solicited principally through the use of the mails, but, if deemed desirable,
may be solicited personally or by telephone or by e-mail, or special letter by our officers and regular employees for no additional
compensation. Arrangements may be made with brokerage houses and other custodians, nominees and fiduciaries to send proxies and
proxy material to the beneficial owners of our common stock, and such persons may be reimbursed for their expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PROPOSAL 1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>ELECTION OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Composition of Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our bylaws provide that
the Board shall consist of between one and eight directors, as determined by the Board from time to time. The Board currently consists
of seven (7) members. The Board has fixed the size of the Board to be elected at the 2013 Annual Meeting at seven (7) members.
Our directors are elected by our stockholders at each annual meeting of stockholders and will serve until their successors are
elected and qualified, or until their earlier resignation or removal. There are no family relationships among any of our current
directors, the nominees for directors or our executive officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The proxy holders named
on the proxy card intend to vote all proxies received by them in the accompanying form for the election of the nominees listed
below, unless instructions to the contrary are marked on the proxy. These nominees have been selected by the Board. The nominees
are currently members of the Board. If elected, each nominee will serve until the annual meeting of stockholders to be held in
2014 or until his or her successor has been duly elected and qualified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In the event that a nominee
is unable or declines to serve as a director at the time of the 2013 Annual Meeting, the proxies will be voted for any nominee
who shall be designated by the present Board to fill the vacancy, or the size of the Board may be reduced. In the event that additional
persons are nominated for election as directors, the proxy holders intend to vote all proxies received by them for the nominees
listed below, unless instructions are given to the contrary. As of the date of this proxy statement, the Board is not aware of
any nominee who is unable or will decline to serve as a director. The Board may at an appropriate later date increase or decrease
the size of the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Nominees for Election as Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following is certain
information as of October 17, 2013, regarding the nominees for election as directors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td style="width: 29%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Name </u></font></td>
    <td style="width: 8%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Age</u></font></td>
    <td style="width: 28%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Position </u></font></td>
    <td style="width: 35%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Director Since</u></font></td></tr>
<tr>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<tr style="background-color: white">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Cecil Bond Kyte<sup> (3)</sup></font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">42</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Chief Executive Officer,&nbsp;&nbsp;Chairman&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">2006</font></td></tr>
<tr style="background-color: white">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<tr style="background-color: white">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Charles R. Blum<sup>(1) (2)(3)</sup></font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">74</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Director&nbsp;&nbsp;</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">2007</font></td></tr>
<tr style="background-color: white">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<tr style="background-color: white">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Nathan Shelton<sup>(1)(2)(3)</sup></font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">64</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Director </font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">2007</font></td></tr>
<tr style="background-color: white">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="background-color: white">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Ryan Zinke</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">51</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Director</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">2012</font></td></tr>
<tr style="background-color: white">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="background-color: white">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Greggory M. Bigger</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">45</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">Chief Financial Officer, President, Director</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr>
<tr style="background-color: white">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="background-color: white">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Mark Stubbs<sup>(1)(2)</sup></font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">43</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Director</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr>
<tr style="background-color: white">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="background-color: white">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Don Dickson</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">57</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Director</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">_______________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">(1)&#9;Member of the Audit Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">(2)&#9;Member of the Compensation Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">(3)&#9;Member of the Nominating and Corporate Governance
Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Biographical Information Regarding Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B><I>Cecil Bond Kyte
</I></B>became a shareholder in Spring 2000, and has served as a director since February 21, 2006. In December 2007, Mr. Kyte
was elected by the Board of Directors to serve as Chairman of the Board. On January 30, 2010, he was appointed to serve as Chief
Executive Officer, replacing Charles R. Blum. &nbsp;Mr. Kyte spearheaded the restructuring and rebuilding of the Company. &nbsp;Mr.
Kyte has been an owner, investor and manager of petroleum exploration and production assets in North America for over two decades,
and an investor in residential real estate projects. &nbsp;For the past 25 years, Mr. Kyte has been a pilot in various capacities,
including airline captain and flight academy instructor and continues to hold his pilot&rsquo;s license. &nbsp;Mr. Kyte received
a B.S. Degree in Accounting from Long Beach State University.<B> </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B><I>Charles R. Blum
</I></B>was appointed on July 25, 2007, to the Board of directors and engaged at that time as the President and Chief Executive
Officer of the Company. On January 30, 2009, Mr. Blum resigned his position as Chief Executive Officer of the Company and on September
6, 2012, resigned as President of the Company. Mr. Blum spent 22 years as the President/CEO of the Specialty Equipment Market
Association (SEMA). SEMA is a trade group representing 6500 business members who are actively engaged in the manufacture and distribution
of automotive parts and accessories. SEMA produces the world&rsquo;s largest automotive aftermarket trade show which is held annually
in Las Vegas, Nevada. Mr. Blum led the association as its members grew from a handful of small entrepreneurial companies into
an industry membership that sells over 31 billion dollars of product at the retail level annually. Mr. Blum has a proven record
of accomplishment as a senior executive and brings a broad knowledge of the business and administration to the Company. Mr. Blum
attended Rutgers University.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B><I>Nathan Shelton</I></B>
has served as one of our directors since February 12, 2007. Mr. Shelton has a long and distinguished career with a number of diverse
successful companies primarily related to the automotive industry, holding prominent positions. In 1987 he joined K&amp;N Engineering
as President and part owner and built the company into an industry leader. In 2002 he sold his interest in K&amp;N Engineering
and founded S&amp;S Marketing, which is engaged in the automotive aftermarket parts rep business, which he currently operates.
Mr. Shelton is the recipient of numerous industry related prestigious awards, and, in 1992, Specialty Equipment Market Association
(SEMA) invited him to join its board of directors, which included serving in capacity as its Chairman from 2002 to 2004. Mr. Shelton
served honorably in the United States Seabees from 1968 to 1972. He attended Chaffey Junior College.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in"><B><I>Greggory M.
Bigger</I></B> was appointed Chief Financial Officer on February 1, 2012 replacing Eugene E. Eichler, and appointed President on
September 6, 2012, replacing Charles R. Blum. Most recently Mr. Bigger was a Founder and Partner with Rocfin Advisors, a Strategic
Management Consulting Company providing strategic advice and direction to a variety of clients including banks and wealth managers,
corporations, municipalities and startups in critical areas such as business and strategic plan development, operational efficiency
design and management support, financial modeling and analysis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">Prior to Rocfin
Advisors, Mr. Bigger was the Founder and a member of the Board of Directors of the Bank of Santa Barbara. Mr. Bigger orchestrated
the launch of the bank, raised the necessary capital, recruited and organized the Board of Directors, executive team and staff,
assisted in developing the banks credit policies, and was responsible for execution of the banks business strategy, growth and
success in the region. The bank was sold to a private investment group in 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">Earlier in his
career, Mr. Bigger held a variety of key management and leadership positions including U.S. Trust as a vice-president in the Private
Client Group, and First Republic Bank as a vice-president and manager in the Private Banking Group.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">Mr. Bigger has served
on numerous non-profit boards including the Breast Cancer Resource Center, The Wildlife Care Network and Speaking of Stories; in
addition Mr. Bigger has served on the board of the Bank of Santa Barbara and as special advisor to Be Green Packaging LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 0.5in">Mr. Bigger served in the United States
Marine Corps in Special Operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in"><B><I>Ryan
Zinke</I></B> is a former state senator of Montana from 2009 to 2012. He has a distinguished military career which began
in 1985 when he graduated from Officer Candidate School and attended SEAL training (class 136). He was then assigned to
SEAL Team ONE in Coronado, CA where he led counter-insurgency and contingency operations in the Persian Gulf and the
Pacific theater of operations. From 1990-93 and again from 1996-99, he was selected to SEAL TEAM SIX where he was a Team
Leader, Ground Force Commander, Task Force Commander and Current Operations Officer in support of National Command
Authority missions. He then served as the Special Operations Officer in Europe and led the first exercise between former
Soviet Special Forces and NSW forces, and served as the SEAL Commander of Joint Task Force TWO in support of Special
Operations missions in Bosnia-Herzegovina, Croatia and Kosovo. In 2004, Mr. Zinke was assigned as Deputy and acting
Commander, Combined Joint Special Operations Task Force-Arabian Peninsula in support of Operation IRAQI FREEDOM where he led
a force of over 3500 Special Operations personnel in Iraq in the conduct of 360 combat patrols, 48 Direct Action missions,
and hundreds of sensitive operations. In 2006, he was awarded two Bronze Stars for combat. Mr. Zinke's final Naval
assignment was establishing the Naval Special Warfare Advanced Training Command. He retired from active duty 2008 after
serving 23 years as a US Navy SEAL. Mr. Zinke is CEO of two (2) business development firms that specialize in advanced
technology with clients including Raytheon, Northrop Grumman, General Dynamics, Sierra Nevada, Unmanned Systems INC, and
Katmai among others. He also serves as the Director of the Montana Unmanned Aircraft Systems (UAS) Center for Remote
Integration, a founding Director of the Montana Firearms Institute (MFI), and is the President and Founder of the Great
Northern Veterans Peace Park Foundation. Mr. Zinke attended the University of Oregon on an athletic scholarship and graduated
with a B.S. in Geology. Mr. Zinke is a Disabled Veteran and holds a MBA in Finance and a Masters of Science in Global
Leadership from the University of San Diego.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in"><B><I>Mark Stubbs
</I></B>currently serves as Chief Financial Officer for London Stock Exchange listed BBA Aviation's Aftermarket Services Division,
a leading global aviation services and aftermarket support provider. Prior to joining BBA in 2012, Mr. Stubbs served as Chief
Financial Officer and Interim Chief Executive Officer for CallWave, Inc., which was then a NASDAQ-listed company and a global
provider of enhanced telecommunications software and services. From 2005 to 2006, Mr. Stubbs was Chief Financial Officer of Sound
ID, a privately held consumer electronics company. Prior to Sound ID, Mr. Stubbs held a number of executive positions including
Vice President Global Supply Chain and Vice President and Managing Director EMEA (Europe, Middle East and Africa) at Somera, Inc.,
which at the time was a NASDAQ-listed company and a leading global provider of telecommunications infrastructure and services.
Previously, Mr. Stubbs held a number of financial management positions at Kinko's Inc., which has since been acquired by NYSE-listed
FedEx. Mr. Stubbs earned a BA in Finance and MBA from Cal Poly San Luis Obispo and is a Certified Public Account (CPA).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in"><B><I>Don Dickson</I></B>
currently serves as Chief Executive Officer for Advanced Pipeline Services (APS). &nbsp; APS was established for the purpose of
providing a full range of services to the oil and gas industry. &nbsp;Core business areas are in new construction of pipeline and
facilities, horizontal directional drilling, painting /coating and pipeline integrity/rehabilitation. &nbsp;Prior to APS, Mr. Dickson
worked for Kinder Morgan in the natural gas operations, retiring after twenty-six years. &nbsp;During his time at Kinder Morgan
served in different engineering capacities including as Director of Operations on two major pipeline projects: &nbsp;the 42&rdquo;
(REX) Rockies Mountain Express through the state of Illinois, and the 42&rdquo; (MEP) Midcontinent Express Pipeline through the
state of Louisiana. &nbsp;Other employment include Director of Operations with Tetra Resources completing various oil and gas wells
both onshore and offshore throughout the United States and as Senior Engineer with Halliburton Services located at the largest
service facility at that time in Burns Flat, Oklahoma. &nbsp;Mr. Dickson earned his B.S. in Engineering from Oklahoma State University.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Executive Officers&#9;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets
forth certain information regarding our executive officers as of October 17, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="width: 18%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Name</u></font></td>
    <td style="width: 11%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Age</u></font></td>
    <td style="width: 71%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Position</u></font></td></tr>
<tr>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<tr style="background-color: white">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Cecil Bond Kyte</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">42 </font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Chief Executive Officer</font></td></tr>
<tr style="background-color: white">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<tr style="background-color: white">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Greggory M. Bigger </font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">45</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Chief Financial Officer, President</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>For the biographies
of Cecil Bond Kyte and Greggory M. Bigger, please see above under &ldquo;Biographical Information Regarding Directors.&rdquo;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>CORPORATE GOVERNANCE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We maintain a corporate
governance page on our corporate website at <I><U>www.stwa.com</U></I>, which includes information regarding the Company&rsquo;s
corporate governance practices. Our codes of business conduct and ethics, Board committee charters and certain other corporate
governance documents and policies and code of business conduct are posted on our website. In addition, we will provide a copy
of any of these documents without charge to any stockholder upon written request made to Corporate Secretary, Save the World Air,
Inc., 735 State Street, Suite 500, Santa Barbara, California 93101. The information on our website is not, and shall not be deemed
to be, a part of this proxy statement or incorporated by reference into this or any other filing we make with the Securities and
Exchange Commission (the &ldquo;SEC&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 17%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 83%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Director Independence</i></b></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Our Board of Directors currently consists
of seven (7) members. We believe the nominated seven (7) directors for the 2013 Annual Meeting are independent with the exception
of Mr. Kyte, our Chief Executive Officer, Mr. Bigger, our Chief Financial Officer and President and Mr. Blum, our former Chief
Executive Officer and President.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 17%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 83%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Meetings of the Board</i></b></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Board held eight (8)
meetings during 2012, and six (6) meetings to date in 2013. The Audit Committee held five (5) meetings during 2012, and four (4)
meetings to date in 2013. Each of the directors<B> </B>attended 75% or more of the aggregate number of meetings of the Board and
Committees on which the director served in 2012 and 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Each of our directors is
encouraged to attend the Company&rsquo;s 2013 Annual Meeting and to be available to answer any questions posed by stockholders
to such director. Because our Board holds one of its regular meetings in conjunction with our Annual Meeting of stockholders, we
anticipate that all of the members of the Board will be present for the 2013 Annual Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 17%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 83%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Communications with the Board</i></b></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following procedures
have been established by the Board in order to facilitate communications between our stockholders and the Board:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Stockholders may send correspondence,
which should indicate that the sender is a stockholder, to the Board or to any individual director, by mail to Corporate Secretary,
Save the World Air, Inc., 735 State Street, Suite 500, Santa Barbara, California 93101 or by e-mail to questions @.stwa.com.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Our Secretary will be responsible for
the first review and logging of this correspondence and will forward the communication to the director or directors to whom it
is addressed unless it is a type of correspondence which the Board has identified as correspondence which may be retained in our
files and not sent to directors. The Board has authorized the Secretary to retain and not send to directors communications that:
(a) are advertising or promotional in nature (offering goods or services), (b) solely relate to complaints by customers with respect
to ordinary course of business customer service and satisfaction issues or (c) clearly are unrelated to our business, industry,
management or Board or committee matters. These types of communications will be logged and filed but not circulated to directors.
Except as set forth in the preceding sentence, the Secretary will not screen communications sent to directors.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The log of stockholder correspondence
will be available to members of the Board for inspection. At least once each year, the Secretary will provide to the Board a summary
of the communications received from stockholders, including the communications not sent to directors in accordance with the procedures
set forth above.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our stockholders may also
communicate directly with the non-management directors, individually or as a group, by mail c/o Corporate Secretary, Save the World
Air, Inc., 735 State Street, Suite 500, Santa Barbara, California 93101 or by e-mail to <U>questions@stwa.com.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Audit Committee has
established procedures, as outlined in the Company&rsquo;s policy for <B>&ldquo;</B>Procedures for Accounting and Auditing Matters,<B>&rdquo;
</B>for the receipt, retention and treatment of complaints regarding questionable accounting, internal controls, and financial
improprieties or auditing matters. Any of the Company&rsquo;s employees may confidentially communicate concerns about any of these
matters by calling (805) 845-3581. Upon receipt of a complaint or concern, a determination will be made whether it pertains to
accounting, internal controls or auditing matters and if it does, it will be handled in accordance with the procedures established
by the Audit Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 17%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 83%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Committees of the Board</i></b></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Board has a standing
Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. Each of these committees operates under
a written charter. Copies of these charters, and other corporate governance documents, are available on our website, www.stwa.com.
In addition, we will provide a copy of any of these documents without charge to any stockholder upon written request made to Corporate
Secretary, Save the World Air, Inc., 735 State Street, Suite 500, Santa Barbara, California 93101.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The composition, functions
and general responsibilities of each committee are summarized below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 17%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 83%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Audit Committee</i></b></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Audit Committee consists
of Messrs. Stubbs (chairperson), Shelton, and Blum. The Board has determined that Mr. Stubbs and Mr. Shelton are independent under
rules of the SEC. The Audit Committee held a total of five (5) meetings during 2012, and a total of four (4) meetings to date during
2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Audit Committee operates
under a written charter. The Audit Committee&rsquo;s duties include responsibility for reviewing our accounting practices and audit
procedures. In addition, the Audit Committee has responsibility for reviewing complaints about, and investigating allegations of,
financial impropriety or misconduct. The Audit Committee works closely with management and our independent auditors. The Audit
Committee also meets with our independent auditors on a quarterly basis, following completion of their quarterly reviews and annual
audit, to review the results of their work. The Audit Committee also meets with our independent auditors to approve the annual
scope of the audit services to be performed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As part of its responsibility,
the Audit Committee is responsible for engaging our independent auditor, as well as pre-approving audit and non-audit services
performed by our independent auditor in order to assure that the provision of such services does not impair the independent auditor&rsquo;s
independence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Please see &ldquo;Audit
Committee Report&rdquo; below, which provides further details of many of the duties and responsibilities of the Audit Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 17%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 83%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Compensation Committee</i></b></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Compensation Committee
currently consists of Messrs. Shelton, Stubbs and Blum (chairperson). The Board believes that Messrs. Shelton and Stubbs are independent.
None of our executive officers served on the compensation committee of another entity or on any other committee of the board of
directors of another entity performing similar functions during 2012 and 2013. The Compensation Committee held one (1) meeting
during 2012 and one (1) meeting during 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Compensation Committee
operates under a written charter. The Compensation Committee establishes the compensation and benefits of our executive officers.
The Compensation Committee also administers our employee benefit plans, including the Company&rsquo;s 2004 Stock Option Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Please see &ldquo;Compensation
Committee Report&rdquo; below, which details the Compensation Committee&rsquo;s report on our executive compensation for 2012 and
2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 17%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 83%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Nominating and Corporate Governance Committee</i></b></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Nominating and Corporate
Governance Committee currently consists of Messrs. Shelton (chairperson), Blum and Kyte<B>. </B> The Board believes that Mr. Shelton
is independent under SEC rules. The Nominating and Corporate Governance Committee held one (one) meeting during 2012 and has not
met during 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Nominating and Corporate
Governance Committee operates under a written charter. The Nominating and Corporate Governance Committee has the primary responsibility
for overseeing the Company&rsquo;s corporate governance compliance practices, as well as supervising the affairs of the Company
as they relate to the nomination of directors. The principal ongoing functions of the Nominating and Corporate Governance Committee
include developing criteria for selecting new directors, establishing and monitoring procedures for the receipt and consideration
of director nominations by stockholders and others, considering and examining director candidates, developing and recommending
corporate governance principles for the Company and monitoring the Company&rsquo;s compliance with these principles and establishing
and monitoring procedures for the receipt of stockholder communications directed to the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Nominating and Corporate
Governance Committee is also responsible for conducting an annual evaluation of the Board to determine whether the Board and its
committees are functioning effectively. In performing this evaluation, the Nominating and Corporate Governance Committee receives
comments from all directors and reports annually to the Board with the results of this evaluation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Director Nominations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Nominating and Corporate
Governance Committee seeks out appropriate candidates to serve as directors of the Company, and the Nominating and Corporate Governance
Committee interviews and examines director candidates and makes recommendations to the Board regarding candidate selection. In
considering candidates to serve as director, the Nominating and Corporate Governance Committee evaluates various minimum individual
qualifications, including strength of character, maturity of judgment, relevant technical skills or financial acumen, diversity
of viewpoint and industry knowledge, as well as the extent to which the candidate would fill a present need on the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Nominating and Corporate
Governance Committee will consider, without commitment, stockholder nominations for director. Nominations for director submitted
to this committee by stockholders are evaluated according to the Company&rsquo;s overall needs and the nominee&rsquo;s knowledge,
experience and background. A nominating stockholder must give appropriate notice to the Company of the nomination not less than
90 days prior to the first anniversary of the preceding year&rsquo;s annual meeting. In the event that the date of the annual meeting
is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the preceding year&rsquo;s annual
meeting, the notice by the stockholder must be delivered not later than the close of business on the later of the 60th day prior
to such annual meeting or the tenth day following the day on which public announcement of the date of such annual meeting is first
made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The stockholders&rsquo;
notice shall set forth, as to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; background-color: white; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 5%">&nbsp;</td>
    <td style="width: 5%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td>
    <td style="width: 90%; padding-right: 5.8pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">each person whom the stockholder proposes to nominate for election as a director;</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td>
    <td style="padding-right: 5.8pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">the name, age, business address and residence address of such person;</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td>
    <td style="padding-right: 5.8pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">the principal occupation or employment of the person;</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td>
    <td style="padding-right: 5.8pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">the class and number of shares of the Company which are beneficially owned by such person, if any;</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">any other information relating to such person which is required to be disclosed in solicitations for proxies for election of directors pursuant to Regulation&nbsp;14A under the Exchange Act and the rules thereunder;&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">the name and record address of the stockholder and the class and number of shares of the Company which are beneficially owned by the stockholder;</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which nomination(s) are to be made by such stockholder;&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">a representation that such stockholder intends to appear in person
    or by proxy at the meeting to nominate the persons named in its notice; and,</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">any other information relating to such person which is required to
    be disclosed in solicitations for proxies for election of directors pursuant to Regulation&nbsp;14A under the Exchange
    Act and the rules thereunder.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The notice must be accompanied
by a written consent of the proposed nominee to be named as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our directors are compensated
for their services as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in; color: green"><FONT STYLE="color: Black">(i)&#9;Effective
July 3, 2013, each member of the Board, except Cecil Bond Kyte, Charles Blum, Gregg Bigger and Don Dickson, received a fully vested
grant of restricted shares (&ldquo;Shares&rdquo;) of common stock of the Company, equal to the quotient of $25,000, divided by
the market value of the Company&rsquo;s shares as reported on the OTCBB, on July 3, 2013. The value of the Company&rsquo;s shares
on July 3, 2013, was $1.09 per share. Thus, each member of the Board, with the exceptions as noted, received a grant of 22,936
Shares.</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">(ii)&#9;Effective
January 1 of each year, each member of the Board shall be entitled to receive additional fully vested grants of restricted shares
of common stock of the Company, calculated as described above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">(iii)&#9;Effective
August 6, 2013, Don Dickson received a fully vested grant of 14,620 shares of common stock of the Company based on the above-described
formula and a share price of $1.71 per share, as reported on the OTCBB on August 6, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">(iv)&#9;Effective
September 16, 2013, Cecil Bond Kyte, Charles Blum and Greggory Bigger each received a fully vested grant of 21,009 shares of common
stock of the Company based on the above-described formula and a share price of $1.19 per share, as reported on the OTCBB on September
16, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">(v)&#9;Additionally,
effective July 3, 2013, each member of the Board, except Cecil Bond Kyte, Charles Blum, Gregg Bigger and Don Dickson, received
a grant of an unqualified option (&ldquo;Option&rdquo;) to purchase a number of shares of common stock of the Company equal to
the quotient of $25,000 divided by the market value of the Company&rsquo;s shares on July 3, 2013, as reported on the OTCBB, i.e.,
as noted above, $1.09 per Share. Thus, each member of the Board, with the noted exceptions received an Option grant to purchase
22,936 restricted shares of common stock of the Company. The Option vests one (1) year following the grant and shall expire ten
(10) years after the day of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">(vi)&#9;Effective
January 1 of each year, each member of the Board shall be entitled to receive additional grants of Options, calculated as described
above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in; color: green"><FONT STYLE="color: Black">(vii)&#9;Effective
August 6, 2013, Don Dickson received an Option grant to purchase 14,620 shares of common stock of the Company, based on the above
Option grant formula and a share price of $1.71 per Share, as reported on the OTCBB on August 6, 2013.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">(viii)&#9;Effective
September 16, 2013, Cecil Bond Kyte, Charles Blum and Gregg Bigger each received an Option grant to purchase 21,009 shares of common
stock of the Company based on the above Option grant formula and a share price of $1.19 per Share, as reported on the OTCBB on
September 16, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">(ix)&#9;Additionally,
effective July 3, 2013, each member of a Committee of the Board shall receive monthly compensation of $500.00, plus
reimbursement of reasonable travel and lodging expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">(x)&#9;Additionally,
the Chairman of the Audit Committee (Mark Stubbs) shall also receive, effective July 3, 2013, an immediately vested grant of Options,
and thereafter, an annual grant of Options, effective January 1 of each year to purchase 25,000 shares of common stock of the Company
at an exercise price equal to the market value of the Company&rsquo;s shares, as reported on the OTCBB, on the day of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Recommendation of the Board</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>The Board unanimously
recommends that stockholders vote FOR election of each of the nominees identified above.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PROPOSAL 2</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>RATIFICATION OF APPOINTMENT OF INDEPENDENT
AUDITORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Audit Committee has
selected Weinberg &amp; Company, P.A. to audit our financial statements for the fiscal year ending December 31, 2013. Although
ratification by stockholders is not required by law, the Board has determined that it is desirable to request ratification of this
selection by the stockholders. Notwithstanding its selection, the Audit Committee, in its discretion, may appoint new independent
auditors at any time during the year if the Audit Committee believes that such a change would be in the best interest of the Company
and its stockholders. If the stockholders do not ratify the appointment of Weinberg &amp; Company, P.A. the Audit Committee may
reconsider its selection.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Weinberg &amp; Company,
P.A. was first appointed in fiscal year 2003, and has audited our financial statements for fiscal years 2002 through 2012. The
Board expects that representatives of Weinberg &amp; Company, P.A. will be present at the 2013 Annual Meeting to respond to appropriate
questions and to make a statement if they so desire.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Audit and Other Fees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table summarizes
the fees charged by Weinberg &amp; Company, P.A. for certain services rendered to the Company during 2011 and 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;&#9;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>&nbsp;</b></font></td>
    <td colspan="5" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount Billed</b></font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif"><b>&nbsp;</b></font></td></tr>
<tr style="vertical-align: bottom">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td colspan="5"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: black 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Type of Fee</b></font></td>
    <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>&nbsp;</b></font></td>
    <td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fiscal Year<BR>
 2011</b></font></td>
    <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>&nbsp;</b></font></td>
    <td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fiscal Year <BR>
2012</b></font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif"><b>&nbsp;</b></font></td></tr>
<tr style="vertical-align: bottom">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td colspan="2"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td colspan="2"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <td style="width: 73%; padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif">Audit<sup>(1)</sup></font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="width: 11%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">83,162</font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="width: 11%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">121,340</font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif">Audit Related<sup>(2)</sup></font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif">Tax<sup>(3)</sup></font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">7,693</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,430</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif">All Other<sup>(4)</sup></font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="border-bottom: black 2.25pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">90,855</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="border-bottom: black 2.25pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">127,770</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">___________________</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 5%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(1)</font></td>
    <td style="width: 95%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">This category consists of fees for the audit of our annual financial statements included in the Company&rsquo;s annual report on Form 10-K and review of the financial statements included in the Company&rsquo;s quarterly reports on Form 10-Q. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements, statutory audits required by non-U.S. jurisdictions and the preparation of an annual &ldquo;management letter&rdquo; on internal control matters.</font></td></tr>
<tr>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(2) </font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Represents services that are normally provided by the independent auditors in connection with statutory and regulatory filings or engagements for those fiscal years, aggregate fees charged for assurance and related services that are reasonably related to the performance of the audit and are not reported as audit fees. These services include consultations regarding Sarbanes-Oxley Act requirements, various SEC filings and the implementation of new accounting requirements.</font></td></tr>
<tr>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(3) </font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Represents aggregate fees charged for professional services for tax compliance and preparation, tax consulting and advice, and tax planning.</font></td></tr>
<tr>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(4) </font></td>
    <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Represents aggregate fees charged for products and services other than those services previously reported.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">If a quorum is present,
the affirmative vote of a majority of the shares present and entitled to vote at the 2013 Annual Meeting will be required to ratify
the appointment of Weinberg &amp; Company, P.A. as our independent auditors. Abstentions will have the effect of a vote &ldquo;against&rdquo;
the ratification of Weinberg &amp; Company, P.A. as our independent auditors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Recommendation of the Board</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>The Board unanimously
recommends that stockholders vote FOR the proposal to ratify the appointment of Weinberg &amp; Co., P.A. as our independent auditor
for the fiscal year ending December 31, 2013.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PROPOSAL 3</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>INCREASE IN AUTHORIZED SHARES OF COMMON STOCK</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Board of Directors
has approved a proposal&nbsp;to amend the Company&rsquo;s Articles of Incorporation to increase the number of authorized shares
of the Company&rsquo;s common stock from 200 million to 300 million. The proposed amendment would replace the first paragraph of
Article Four of the Articles of Incorporation of the Company with the following language:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> &ldquo;The corporation shall
have authority to issue an aggregate of Three Hundred Million (300,000,000) Common Capital Shares, par value one mill ($0.001)
per share for total par value of Three Hundred Thousand Dollars ($300,000).&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; color: green"><FONT STYLE="color: Black">The
Board of Directors believes it is in the best interest of the Company to increase the number of authorized shares of common stock
in order to give the Company greater flexibility in considering and planning for future corporate needs, including, but not limited
to, stock dividends, grants of stock, grants of equity compensation, grants under equity compensation plans, grants of options
and warrants, stock splits, financings, potential strategic transactions, including mergers, acquisitions, and business combinations,
as well as other general corporate transactions, and to satisfy the issuance of shares of our common stock on the exercise of
prior grants of our options and warrants. The Board believes that additional authorized shares of common stock will enable the
Company to take timely advantage of market conditions and favorable financing and acquisition opportunities that become available
to the Company without the delay and expense associated with convening a special meeting of the Company&rsquo;s stockholders.</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> The Company has no
current plan, commitment, arrangement, understanding or agreement regarding the issuance of additional shares of common stock
that will result from the Company&rsquo;s adoption of the proposed amendment, and will issue additional shares only when the Company
believes it would be in the Company&rsquo;s best interest to do so, and only in accordance with the Company&rsquo;s Board&rsquo;s
fiduciary responsibilities to the Company and its shareholders. Except as otherwise required by law, the newly authorized
shares of common stock will be available for issuance at the discretion of the Board (without further action by the stockholders)
for various future corporate needs, including those outlined above. While adoption of the proposed amendment would not have any
immediate dilutive effect on the proportionate voting power or other rights of the Company&rsquo;s existing stockholders, any
future issuance of additional authorized shares of the Company&rsquo;s common stock may, among other things, dilute the earnings
per share of the common stock and the equity and voting rights of those holding common stock at the time the additional shares
are issued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In addition to the corporate
purposes mentioned above, an increase in the number of authorized shares of the Company&rsquo;s common stock may make it more difficult
to, or discourage an attempt to, obtain control of the Company by means of a takeover bid that the Board determines is not in the
best interest of the Company and its stockholders. However, the Board does not intend or view the proposed increase in the number
of authorized shares of the Company&rsquo;s common stock as an anti-takeover measure and is not aware of any attempt or plan to
obtain control of the Company.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Any newly authorized shares
of the Company&rsquo;s common stock will be identical to the shares of common stock now authorized and outstanding. The proposed
amendment will not affect the rights of current holders of the Company&rsquo;s common stock, none of whom has preemptive or similar
rights to acquire the newly authorized shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>The Board of Directors
unanimously recommends a vote FOR the proposed amendment to increase the number of authorized shares of the Company&rsquo;s Common
Stock from 200 million to 300 million.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> PROPOSAL 4 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> ADVISORY VOTE ON EXECUTIVE COMPENSATION </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> In accordance with recent legislation
and the rules of the Securities and Exchange Commission, we are providing stockholders with a non-binding advisory vote on compensation
for our named executive officers. This non-binding advisory vote is commonly referred to as a &ldquo;say on pay&rdquo; vote. The
non-binding advisory vote on compensation for our named executive officers, as disclosed in this proxy statement, will be determined
by the vote of a majority of the voting power of the shares present or represented at the 2013 Annual Meeting and voting affirmatively
or negatively on the proposal. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> Stockholders are urged to read the &ldquo;Executive
Compensation&rdquo; section of this proxy statement and the &ldquo;Compensation Committee Report&rdquo; of this proxy statement,
which discusses how our executive compensation policies and procedures implement our compensation philosophy and contains tabular
information and narrative discussion about the compensation of our named executive officers. The compensation committee and the
Board of Directors believe that these policies and procedures are effective in implementing our compensation philosophy and in
achieving our goals. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"> </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> As an advisory vote, this proposal is
not binding. However, our Board of Directors and compensation committee, which is responsible for designing and administering
our executive compensation program, value the opinions expressed by stockholders in their vote on this proposal, and will consider
the outcome of the vote when making future compensation decisions for our named executive officers. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B> The Board of Directors recommends
a vote FOR the approval, on a non-binding advisory basis, of the compensation committee&rsquo;s executive compensation philosophy,
policies and determinations, and of compensation for our named executive officers, as described in the &ldquo;Executive Compensation&rdquo;
and &ldquo;Compensation Committee Report&rdquo; sections of this proxy statement. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> PROPOSAL 5 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> &nbsp; </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> ADVISORY VOTE ON THE FREQUENCY OF
AN ADVISORY VOTE ON EXECUTIVE COMPENSATION </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> In addition to providing stockholders
with a non-binding advisory vote on the compensation and compensation program for our named executive officers, and in accordance
with recent legislation and the rules of the Securities and Exchange Commission (SEC), we are also providing our stockholders
with the opportunity to cast a non-binding advisory vote on how frequently we should seek an advisory vote on the compensation
and compensation program for our named executive officers. This non-binding advisory vote is commonly referred to as a &ldquo;say
on frequency&rdquo; vote. Under this proposal, our stockholders may cast a non-binding advisory vote on whether they would prefer
to have a vote on the compensation and our compensation program for our named executive officers every year, every two years or
every three years. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> Our Board of Directors believes that
the non-binding advisory vote on the compensation and compensation program for our named executive officers should be conducted
every three years, for the following reasons: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%"> &nbsp; </TD>
    <TD STYLE="width: 5%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> &#9679; </FONT></TD>
    <TD STYLE="width: 90%; padding-right: 5.8pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> A
    substantial portion of executive compensation is in the form of long-term equity awards. A vote every three years will allow
    our stockholders to evaluate the effectiveness of such long-term compensation strategies and related business outcomes of
    our Company for the corresponding period, while avoiding over-emphasis on short-term variations in compensation and business
    results. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: justify"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp;&#9679; </FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> We believe a vote every three years
    vote complements our goal of establishing compensation and creating a compensation program that enhances long-term stockholder
    value. </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> Stockholders are not voting to approve
or disapprove the recommendation of our Board of Directors. Instead, stockholders may cast a vote on their preferred voting frequency
by choosing any of the following four options with respect to this proposal: &ldquo;one year,&rdquo; &ldquo;two years,&rdquo;
&ldquo;three years&rdquo; or &ldquo;Abstain.&rdquo; For the reasons discussed above, we are asking our stockholders to vote for
a frequency of &ldquo;three years.&rdquo; The option that receives the most votes cast at the 2013 Annual Meeting will be considered
by the Board of Directors in determining the preferred frequency with which we will hold a stockholder vote to approve the compensation
of our named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation
Committee Report, the compensation tables, and the related narrative disclosure. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> As an advisory vote, this proposal is
not binding. However, our Board of Directors and compensation committee, which is responsible for designing and administering
our executive compensation and executive compensation program, value the opinions expressed by stockholders in their vote on this
proposal, and will consider the option that receives the most votes in determining the frequency of future votes on compensation
for our named executive officers. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B> The Board of Directors recommends
a vote FOR the option of a vote every three years on the compensation for our named executive officers. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets
forth certain information regarding the beneficial ownership of our common stock as of October 17, 2013, for.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">each person, or group of affiliated persons, known by us to be the
beneficial owner of 5% or more of the outstanding shares of our common stock;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 1.3pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-right: 1.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">each of our directors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: left; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: left; margin-bottom: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: left; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">our Chief Executive Officer and each of our two other most highly-compensated
executive officers serving as such as of October 17, 2013, whose total annual salary and bonus exceeded $100,000, for services
rendered in all capacities to the Company (such individuals are hereafter referred to as the &ldquo;Named Executive Officers&rdquo;),
and all of our directors and executive officers serving as a group.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-indent: -27pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="3" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td style="border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">Name and Address of Beneficial Owner<sup>(1)</sup> &#9;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td colspan="2" style="border-bottom: black 1pt solid; padding-bottom: 1.5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Number of<BR>
Shares of<BR>
Common Stock<BR>
Beneficially<BR>
 Owned<SUP>(2)</SUP></P></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td colspan="2" style="border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Percentage of</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Shares<BR>
Beneficially<BR>
Owned<SUP>(2)</SUP></P></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<tr style="vertical-align: bottom">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td colspan="2"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td colspan="2"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <td><font style="font: 10pt Times New Roman, Times, Serif">Named Executive Officers and Directors</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td colspan="2"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td colspan="2"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="width: 72%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Cecil Bond Kyte, Chief Executive Officer, Director<sup>(3)</sup>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 11%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,450,206</font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 11%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6.51%</font></td>
    <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <td style="text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Charles R. Blum , Director<sup>(4)</sup> </font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,987,021</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1.17%</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Greggory M. Bigger, Chief Financial Officer, President, Director<sup>(5)</sup> </font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,121,009</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.66%</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <td style="text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Nathan Shelton, Director<sup>(6)</sup></font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">519,873</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.31%</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Ryan Zinke, Director<sup>(7)</sup></font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22,936</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.01%</font></td>
    <td>&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <td style="text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Mark Stubbs, Director<sup>(8)</sup></font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">47,936</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.03%</font></td>
    <td>&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Don Dickson, Director<sup>(9)</sup></font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">14,620</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.01%</font></td>
    <td>&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <td style="text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">All directors and executive officers as a group </font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,163,601</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">8.48%</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-indent: -27pt">___________________</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt">(1)</TD><TD>Unless otherwise indicated, the address of each listed person is c/o Save the World Air, Inc., 735 State Street, Suite 500,
Santa Barbara, California 93101.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt">(2)</TD><TD><P STYLE="margin: 0">Percentage of beneficial ownership is based upon 167,704,567 shares of our common stock outstanding as of
October 17, 2013. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment
power with respect to securities. Shares of common stock subject to options and warrants currently exercisable or convertible,
or exercisable or convertible within 60 days, are deemed outstanding for determining the number of shares beneficially owned and
for computing the percentage ownership of the person holding such options or warrants, but are not deemed outstanding for computing
the percentage ownership of any other person. Except as indicated by footnote, and subject to community property laws where applicable,
the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially
owned by them.</P>


</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt">(3)</TD><TD>Includes options to purchase 8,140,000 shares of our common stock exercisable currently. Mr. Kyte holds options to purchase
18,721,009 shares of our common stock, of which 8,140,000 shares are currently vested. In accordance with managements&rsquo; representations,
Mr. Kyte has agreed to defer the exercisability of his options such that the exercise of options would not cause the Company&rsquo;s
outstanding shares to exceed authorized shares on a fully diluted basis. The exercise of Mr. Kyte&rsquo;s currently vested options
would not cause the Company&rsquo;s outstanding shares to exceed current authorized shares on a fully diluted basis and are therefore
exercisable currently.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt">(4)</TD><TD>Includes options to purchase 1,588,679 shares of our common stock exercisable currently, and warrants to purchase 22,000 shares
of our common stock.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt">(5)</TD><TD>Includes options to purchase 1,000,000 shares of our common stock exercisable currently. Mr. Bigger holds options to purchase
4,021,009 shares of our common stock, of which 1,000,000 shares are currently vested. In accordance with managements&rsquo; representations,
Mr. Bigger has agreed to defer the exercisability of his options such that the exercise of options would not cause the Company&rsquo;s
outstanding shares to exceed authorized shares on a fully diluted basis. The exercise of Mr. Bigger&rsquo;s currently vested options
would not cause the Company&rsquo;s outstanding shares to exceed current authorized shares on a fully diluted basis and are therefore
exercisable currently.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt">(6)</TD><TD>Includes options to purchase 304,585 shares of our common stock exercisable currently.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-indent: -27pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt">(7)</TD><TD>Mr. Zinke holds no warrants or options to purchase shares of our common stock exercisable currently.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 27pt; text-indent: -27pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt">(8)</TD><TD>Includes options to purchase 25,000 shares of our common stock exercisable currently.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt">(9)</TD><TD>Mr. Dickson holds no warrants or options to purchase shares of our common stock exercisable currently.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EXECUTIVE COMPENSATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets
forth certain information regarding the compensation earned during the last three fiscal years by the Named Executive Officers:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Summary Compensation Table</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1pt"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="text-align: center; border-bottom: Black 1pt solid">Long-Term Compensation Awards</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; border-bottom: Black 1pt solid">Name and Principal Position</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">Fiscal <BR>Year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Annual</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Compensation</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Salary ($)</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Restricted</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Stock</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Awards</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">($)</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Securities</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Underlying&nbsp;</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Options</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(#)</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">All</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Other</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Compensation</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">($)</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 37%; text-align: left">Cecil Bond Kyte (1)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: center">2012</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">300,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">216,978</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 22pt; text-indent: -11pt">Chief Executive Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">208,333</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,600,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">87,838</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&nbsp;0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Greggory Bigger (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">172,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">31,567</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left; padding-left: 22pt; text-indent: -11pt">Chief Financial Officer, President</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Mr.
Kyte was appointed Chief Executive Officer in January 2009.&nbsp; In 2010, Mr. Kyte earned and was paid $200,000. In
addition, Mr. Kyte received $33,333 in accrued back pay, and on December 8, 2011, he received a bonus of $54,505. In connection
with the Amendment to Mr. Kyte&rsquo;s Employment Agreement dated March 1, 2011, Mr. Kyte received options for 17,600,000 shares
of common stock, and, options for 181,118 shares of common stock previously granted were cancelled. On December 1, 2011, the Board
approved Amendment Number 2 to Mr. Kyte&rsquo;s Employment Agreement and increased his salary to $300,000 per year. Effective
on September 1, 2013, the Board approved Amendment #3 to Mr. Kyte&rsquo;s Employment Agreement increasing his annual salary to
$350,000. Please see the section below under the title Employment Agreements for greater detail concerning Mr. Kyte&rsquo;s Employment
Agreement with the Company.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(2)</TD><TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0; color: green"><FONT STYLE="color: Black">Mr.
                                                                Bigger was appointed Chief Financial Officer on February 1, 2012,
                                                                and President on September 6, 2012. Effective on September 1,
                                                                2013, the Board approved an Amendment to Mr. Bigger&rsquo;s Employment
                                                                Agreement increasing his annual salary to $290,000. Please see
                                                                the section below under the title Employment Agreements for greater
                                                                detail concerning Mr. Bigger&rsquo;s Employment Agreement with
                                                                the Company.</FONT></P>


</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: -0.25in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>OPTION GRANTS IN LAST FISCAL YEAR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table sets
forth information concerning the stock option grants made to each of the Named Executive Officers during the 2012 fiscal year.
No stock appreciation rights were granted to any of the Named Executive Officers during the 2012 fiscal year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="12" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Individual Grants</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Name</b></P></td>
    <td>&nbsp;</td>
    <td colspan="2" style="border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Number of</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Securities</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Underlying</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Options</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Granted</b></P></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Percent of</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Total Options</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Granted to</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Employees in</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Fiscal
2012</B></P></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Exercise or</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Base Price</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Per Share</b></P></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Expiration</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Date</b></P></td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
    <td style="width: 39%; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">Greggory Bigger</font></td>
    <td style="width: 2%">&nbsp;</td>
    <td style="width: 2%; border-bottom: black 1pt solid">&nbsp;</td>
    <td style="width: 11%; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">4,000,000</font></td>
    <td style="width: 2%">&nbsp;</td>
    <td style="width: 2%">&nbsp;</td>
    <td style="width: 2%; border-bottom: black 1pt solid">&nbsp;</td>
    <td style="width: 11%; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">82.3%</font></td>
    <td style="width: 2%">&nbsp;</td>
    <td style="width: 2%">&nbsp;</td>
    <td style="width: 2%; border-bottom: black 1pt solid">&nbsp;</td>
    <TD STYLE="width: 11%; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$0.25</font></td>
    <td style="width: 2%">&nbsp;</td>
    <td style="width: 10%; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">02/01/2022</font></td></tr>
<tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>AND YEAR-END OPTION VALUES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">No options were exercised
by any of the Named Executive Officers during the 2012 fiscal year. The following table sets forth the number of shares of our
common stock subject to exercisable and unexercisable stock options which the Named Executive Officers held at the end of the 2012
fiscal year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="background-color: white">
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Value</b></font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td colspan="4" style="vertical-align: bottom; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Number of Securities</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Underlying Unexercised</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Options at</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Fiscal Year-End (#)</b></P></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="6" style="vertical-align: bottom; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Value of Unexercised</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>In-the-Money Options
        ($)<sup>(1)</sup></b></P></td>
    <td style="vertical-align: top">&nbsp;</td></tr>
<tr style="background-color: white">
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Acquired on</b></font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Realized</b></font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td colspan="4" style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="6" style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td></tr>
<tr style="background-color: white">
    <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Name</b></font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercise (#)</b></font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>($)</b></font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercisable</b></font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unexercisable</b></font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercisable</b></font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unexercisable</b></font></td>
    <td style="vertical-align: top">&nbsp;</td></tr>
<tr style="background-color: #EEEEEE">
    <td style="vertical-align: bottom; width: 30%"><font style="font: 10pt Times New Roman, Times, Serif">Cecil Bond Kyte</font></td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 1%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 8%">&nbsp;</td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&mdash;</font></td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 1%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 11%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,520,000</font></td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 1%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">14,080,000</font></td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,569,600</font></td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,278,400</font></td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td></tr>
<tr style="background-color: #EEEEEE">
    <td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">Greggory Bigger</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&mdash;</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">500,000</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,500,000</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">365,600</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,555,000</font></td>
    <td style="vertical-align: top">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt 0.2pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top; background-color: white">
    <td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif">(1 &nbsp;</font></td>
    <td style="width: 98%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">)&nbsp;&nbsp;Market value of our common stock at fiscal year-end minus the exercise price. The closing price of our common stock on December&nbsp;31, 2012 the last trading day of the year was $0.98&nbsp;per share.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;&nbsp;&nbsp; </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EQUITY COMPENSATION PLAN INFORMATION FOR
2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The
following table sets forth information regarding outstanding options and shares reserved for future issuance under our equity compensation
plans as of December&nbsp;31, 2012:</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="background-color: white">
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Plan Category</b></font></td>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</td>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Number of Securities</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>to be Issued upon</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Exercise of</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Outstanding Options,</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Warrants and Rights</b></P></td>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</td>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Weighted-Average</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Exercise Price of</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Outstanding Options,</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Warrants and Rights</b></P></td>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</td>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Number of Securities</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Remaining Available</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>for Future Issuance</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Under Equity</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Compensation Plans</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>(Excluding Securities</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Reflected in the</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>First Column)</b></P></td>
    <td style="vertical-align: top">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="2">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="2">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="2">&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
    <td style="width: 46%"><font style="font: 10pt Times New Roman, Times, Serif">Equity compensation plans approved by security holders</font></td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 2%">&nbsp;</td>
    <td style="width: 14%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">4,267,892</font></td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="width: 14%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.52</font></td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 2%">&nbsp;</td>
    <td style="width: 14%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,732,108</font></td>
    <td style="width: 1%">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="background-color: #EEEEEE">
    <td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">Equity compensation plans not approved by security holders</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;24,800,000</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.26</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">N/A</font></td>
    <td style="vertical-align: top">&nbsp;</td></tr>
<tr style="background-color: white">
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
    <td style="padding-left: 9pt; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">29,067,892</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.30</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">N/A</font></td>
    <td>&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.25in"><B><I>Employment agreements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B><I>Agreement with Cecil
Bond Kyte. </I></B>On January 30, 2009 (the &ldquo;Effective Date&rdquo;), the Company entered into an employment agreement with
Cecil Bond Kyte, pursuant to which he serves as our Chief Executive Officer.&nbsp;&nbsp;The initial term of the agreement became
effective on January 30, 2009, and expires on January 30, 2010, and renews automatically for addition one-year periods unless either
party has given notice of non-extension prior to October 30, 2010.&nbsp;&nbsp;The agreement provides for a base compensation of
$200,000 per year.&nbsp;&nbsp;Mr. Kyte is eligible to participate in the Company&rsquo;s incentive and benefit plans, including
eligibility to receive grants of stock options under the 2004 plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Mr. Kyte shall be eligible
to receive an annual cash bonus in an amount equal to 2% of the Company&rsquo;s net profit, if any, for its most recently completed
fiscal year, computed in accordance with generally accepted accounting principles applied consistently with prior periods.&nbsp;&nbsp;The
bonus shall be payable, if at all, on the anniversary date of employment each year of the term; provided that no bonus shall be
paid if Mr. Kyte is not, on such payment date, in the employ of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Mr. Kyte shall also receive
an option (the &ldquo;Option&rdquo;) to purchase a number of shares (the &ldquo;Option Shares&rdquo;) of the Company&rsquo;s common
stock equal to the result of (A) 100,000 divided by (B) the closing price per share of the Company&rsquo;s Common Stock on the
first anniversary of the Effective Date.&nbsp;&nbsp;The Option shall be an incentive stock option, shall be exercisable at the
closing price per share on the first anniversary of the Effective Date, shall be exercisable for ten years from the date of grant
and shall vest on the second anniversary of the Effective Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B><I>Amendment #1 of Kyte
Employment Agreement</I></B>. On March 1, 2011, the Board of Directors of the Company approved an amendment (the &ldquo;Amendment&rdquo;)
to Mr. Kyte employment agreement. The Company and Mr. Kyte have agreed to an amendment of the Employment Agreement, providing for
non-cash performance compensation in the form of nonqualified stock options. Mr. Kyte has agreed to continue to serve in the role
of CEO of the Company through at least January 29, 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Board determined to
grant Mr. Kyte nonqualified stock options to acquire shares of common stock of the Company under the following terms and conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Stock Option Grant (&ldquo;Grant&rdquo;) of
17,600,000 Shares at an Exercise Price of&nbsp;&nbsp;$0.25 per share exercisable for 10 years, which will expire on January 30,
2021.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Twenty percent
(20%) of the Option shall vest on the first anniversary of the Effective Date (i.e. January 30, 2011); twenty percent (20%) on
the second anniversary of the Effective Date; twenty percent (20%) on the third anniversary of the Effective Date; twenty percent
(20%) on the fourth anniversary of the Effective Date; and, twenty percent (20%) on the fifth anniversary of the Effective Date;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in"><B><I>Amendment
#2 of Kyte Employment Agreement</I></B>. The Second Amendment to Mr. Kyte&rsquo;s Employment Agreement was made and entered into
by and between the Company, and Mr. Kyte effective as of December 1, 2011. Compensation for Mr. Kyte was increased to a base salary
of $300,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in"><B><I>Amendment
#3 of Kyte Employment Agreement</I></B>. The Third Amendment to the Kyte Employment Agreement was made and entered into by and
between the Company and Mr. Kyte effective as of September 1, 2013. Annual Base Salary for Mr. Kyte was increased to $350,000.
Mr. Kyte is also eligible to receive an annual cash bonus, within the discretion of the Company&rsquo;s Board. In exercising its
discretion, the Board shall consider, among other things, the Company&rsquo;s: (a)&nbsp;revenue; (b)&nbsp;earnings; (c)&nbsp;contracts;
(d) cash position; (e) liquidity; (f)&nbsp;customers; (g) NASDAQ or other exchange listings; (h) market capitalization; (i) general
financial condition; and (j) achievement of goals set forth in management&rsquo;s yearly budgets, plans and projections. Any award
of bonus shall be paid no later than forty-five (45) days following the filing of the Company&rsquo;s Form 10-K with the SEC. Mr.
Kyte is also entitled to receive paid vacation of six (6) weeks per year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">Additionally, in
the event any person, including all affiliates of such person, directly or indirectly, becomes the beneficial owner of 50% or more
of the combined voting power of the Company&rsquo;s outstanding shares, and otherwise on a Change of Control event as defined in
Mr. Kyte&rsquo;s Employment Agreement, Mr. Kyte&rsquo;s Employment Agreement and all amendments thereto shall be terminated whereupon
Mr. Kyte shall be paid an amount equal to four (4) times his annual Base Salary as in effect on the date of the Change of Control
event, and all of Mr. Kyte&rsquo;s unvested stock options and warrants shall immediately vest effective on the date of the Change
of Control event.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">Additionally, if
Mr. Kyte is terminated by the Company without cause or if he resigns for &ldquo;good reason,&rdquo; he shall be paid an amount
equal to three (3) times his annual Base Salary as in effect on the date of the termination, payable, at the discretion of the
Company, in one lump sum or in equal monthly installments during a term not to exceed thirty-six (36) months, less applicable withholding
taxes. Additionally, all of Mr. Kyte&rsquo;s unvested options and warrants shall vest to the same extent as he would have become
vested if he had remained employed by the Company for an additional three (3) years. &ldquo;Good Reason&rdquo; is defined to mean
any reduction in Mr. Kyte&rsquo;s then current annual Base Salary of ten percent (10%) or more, or relocation of the Company&rsquo;s
principal executive office to a location more than twenty-five (25) miles outside of Santa Barbara, California, or a substantial
change in Mr. Kyte&rsquo;s then current duties and responsibilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">Additionally, in
the event of Mr. Kyte&rsquo;s termination for Cause, Mr. Kyte shall be entitled to receive only his Base Salary accrued through
the date of such termination, and nothing more, and all of Mr. Kyte&rsquo;s unvested options and warrants shall be canceled.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">Additionally, the
Board awarded Mr. Kyte a discretionary cash bonus of $100,000 effective June 11, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Board, with Mr. Kyte&rsquo;s consent, has determined to freeze Mr. Kyte&rsquo;s
salary at its current level for the balance of the calendar year 2013, and for the calendar year 2014, and will not grant
Mr. Kyte any bonus or grants of stock, options or warrants, or any other compensation for the balance of calendar year 2013, and
for calendar year 2014. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in"><B><I>Agreement
with Greggory M. Bigger</I></B>. On February 1, 2012 (the &ldquo;Effective Date&rdquo;), the Company entered into an employment
agreement with Greggory M. Bigger, pursuant to which he serves as our Chief Financial Officer. The initial term of the agreement
is for one year and is renewable for successive one year periods unless either party shall give written notice to the other, not
later than December 1<SUP>st</SUP> of the then-current year of the Term that this Agreement shall not be renewed (the &ldquo;Expiration
Date&rdquo;). The Agreement provides for a base compensation of $120,000 per year and a one-time acceptance bonus of $10,000. Mr.
Bigger is eligible to participate in the Company&rsquo;s incentive and benefit plans, including eligibility to receive grants of
stock options under the 2004 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">Mr. Bigger shall
also receive a grant of options, effective February 1, 2012 (the &ldquo;Effective Date of Grant&rdquo;) to vest over a four (4)
year period as follows subject to his continued employment with the Company: 500,000 options shall vest on the Effective Date
of Grant; 500,000 options shall vest on February 1, 2013; 1,000,000 options shall vest on February 1, 2014; 1,000,000 shares shall
vest on February 1, 2015 and 1,000,000 shares shall vest on February 1, 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">Effective September
1, 2013, Mr. Bigger&rsquo;s Employment Agreement, in recognition of his additional responsibilities as President of the Company,
was amended, as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">(i)&#9;Annual Base
Salary for Mr. Bigger was increased to $290,000. Mr. Bigger is also eligible to receive an annual cash bonus, within the discretion
of the Company&rsquo;s Board. In exercising its discretion, the Board shall consider, among other things, the Company&rsquo;s:
(a)&nbsp;revenue; (b)&nbsp;earnings; (c)&nbsp;contracts; (d) cash position; (e) liquidity; (f)&nbsp;customers; (g) NASDAQ or other
exchange listings; (h) market capitalization; (i) general financial condition; and (j) achievement of goals set forth in management&rsquo;s
yearly budgets, plans and projections. Any award of bonus shall be paid no later than forty-five (45) days following the filing
of the Company&rsquo;s Form 10-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">(ii)&#9;Additionally,
in the event any person, including all affiliates of such person, directly or indirectly, becomes the beneficial owner of 50% or
more of the combined voting power of the Company&rsquo;s outstanding shares, and otherwise on a Change of Control event as defined
in Mr. Bigger&rsquo;s Employment Agreement, Mr. Bigger&rsquo;s Employment Agreement and all amendments thereto shall be terminated
whereupon Mr. Bigger shall be paid an amount equal to two (2) times his annual Base Salary as in effect on the date of the Change
of Control event, and all of Mr Bigger&rsquo;s unvested stock options and warrants shall immediately vest effective on the date
of the Change of Control event.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">(iii)&#9;Additionally,
if Mr. Bigger is terminated by the Company without cause or if he resigns for &ldquo;good reason,&rdquo; he shall be paid an amount
equal to three (3) times his annual Base Salary as in effect on the date of the termination, payable, at the discretion of the
Company, in one lump sum or in equal monthly installments during a term not to exceed thirty-six (36) months, less applicable withholding
taxes. Additionally, all of Mr. Bigger&rsquo;s unvested options and warrants shall vest to the same extent as he would have become
vested if he had remained employed by the Company for an additional three (3) years. &ldquo;Good Reason&rdquo; shall be defined
to mean any reduction in Mr. Bigger&rsquo;s then current annual Base Salary of ten percent (10%) or more, or relocation of the
Company&rsquo;s principal executive office to a location more than twenty-five (25) miles outside of Santa Barbara, California,
or a substantial change in Mr. Bigger&rsquo;s then current duties and responsibilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">(iv)&#9;Additionally,
in the event of Mr. Bigger&rsquo;s termination for Cause, Mr. Bigger shall be entitled to receive only his Base Salary accrued
through the date of such termination, and nothing more, and all of Mr. Bigger&rsquo;s unvested options and warrants shall be canceled.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">The Board awarded
Mr. Bigger a discretionary cash bonus of $50,000, effective June 11, 2013. Effective July 15, 2013, the Board awarded Mr. Bigger
an additional discretionary bonus in the form of 100,000 restricted shares of common stock of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>COMPENSATION COMMITTEE REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Compensation Committee
has furnished this report on executive compensation for the 2012 fiscal year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Compensation Committee
administers the Company&rsquo;s executive compensation program. The Compensation Committee has the authority to review and determine
the salaries and bonuses of the executive officers of the Company, including the Chief Executive Officer and the other executive
officers named in the Summary Compensation Table (the &ldquo;Named Executive Officers&rdquo;) appearing elsewhere in this proxy
statement, and to establish the general compensation policies for such individuals. The Compensation Committee also has the sole
and exclusive authority to make discretionary option grants to all of the Company&rsquo;s employees, including, without limitation,
under the Company&rsquo;s 2004 Stock Option Plan (the &ldquo;2004 Plan&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Compensation Committee
currently consists of Messrs. Blum (chairperson), Shelton and Stubbs. The Board believes that all three (3) members of the Compensation
Committee meets the independence requirement. None of our executive officers served on the compensation committee of another entity
or on any other committee of the board of directors of another entity performing similar functions during 2012. The Compensation
Committee held one (1) meeting during 2012 and held one (1) meeting to date during 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Compensation Committee
operates under a written charter. The charter reflects these various responsibilities, and the Committee is charged with periodically
reviewing the charter. In addition, the Committee has the authority to engage the services of outside advisors, experts and others,
including independent compensation consultants who do not advise the Company, to assist the Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Compensation Committee
believes that the compensation programs for the Company&rsquo;s executive officers should reflect the Company&rsquo;s performance
and the value created for the Company&rsquo;s stockholders. In addition, the compensation programs should support the short-term
and long-term strategic goals and values of the Company, reward individual contribution to the Company&rsquo;s success and align
the interests of the Company&rsquo;s officers with the interests of its stockholders. The committee believes that the Company&rsquo;s
success depends upon its ability to attract and retain qualified executives through the competitive compensation packages it offers
to such individuals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The principal factors
that were taken into account in establishing each executive officer&rsquo;s compensation package for the 2012 fiscal year are
described below. However, the Compensation Committee may in its discretion apply entirely different factors, such as different
measures of financial performance, for future fiscal years. Moreover, all of the Company&rsquo;s Named Executive Officers have
entered into employment agreements with the Company and many components of each such person&rsquo;s compensation are set by such
agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Equity-Based Compensation.</I>
The Committee believes in linking long-term incentives to an increase in stock value. Accordingly, it awards stock options, including
options under the 2004 Plan with an exercise price equal to the fair market value of the underlying stock on the date of grant
that vest and become exercisable over time. The Committee believes that these options encourage employees to continue to use their
best efforts and to remain in the Company&rsquo;s employed. Options granted to executive officers under the 2004 Plan generally
vest and become exercisable in annual 25% increments over a four-year period after grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Committee relies substantially
on management of the Company to make specific recommendations regarding which individuals should receive option grants and the
amounts of such grants. In 2011, the Committee granted 17,600.000 options to Cecil Bond Kyte, the Chief Executive Officer as a
condition of his employment contract and agreed to cancel 181,818 options previously granted. Charles R. Blum, then President and
Eugene E. Eichler, then Interim Chief Financial Officer were each granted 1,000,000 options. The Named Executive Officers were
individually awarded the number of stock options shown in the table headed &ldquo;Option Grants in Last Fiscal Year&rdquo; appearing
elsewhere in this proxy statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Compliance with Code
Section 162(m).</I> Section 162(m) of the Code disallows a tax deduction to publicly-held companies for compensation paid to certain
of their executive officers, to the extent that compensation exceeds $1 million per covered officer in any fiscal year. The limitation
applies only to compensation which is not considered to be performance based. Non-performance based compensation paid to the Company&rsquo;s
executive officers for the 2012 fiscal year did not exceed the $1 million limit per officer, and the Compensation Committee does
not anticipate that the non-performance based compensation to be paid to the Company&rsquo;s executive officers for the 2012 fiscal
year will exceed that limit. Because it is unlikely that the cash compensation payable to any of the Company&rsquo;s executive
officers in the foreseeable future will approach the $1 million limit, the Compensation Committee has decided at this time not
to take any action to limit or restructure the elements of cash compensation payable to the Company&rsquo;s executive officers.
The Compensation Committee will reconsider this decision should the individual cash non-performance based compensation of any executive
officer ever approach the $1 million level.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Board did not modify
any action or recommendation made by the Compensation Committee with respect to executive compensation for the 2012 fiscal year.
It is the opinion of the Compensation Committee that the executive compensation policies and plans provide the necessary total
remuneration program to properly align the Company&rsquo;s performance and the interests of the Company&rsquo;s stockholders through
the use of competitive and equitable executive compensation in a balanced and reasonable manner, for both the short and long term.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 60%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 40%"><font style="font: 10pt Times New Roman, Times, Serif">Respectfully submitted by:</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td style="border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">/s/ Charles R. Blum</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Charles R. Blum, Chairman</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: left; margin-bottom: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: left; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>AUDIT COMMITTEE REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Audit Committee
is currently composed of three (3) directors, Messrs. Stubbs (Chairperson), Shelton, and Blum. The Board has determined that
Messrs. Stubbs and  Shelton are independent within the rules of the SEC. The
duties and responsibilities of a member of the Audit Committee are in addition to his duties as a member of the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Audit Committee operates
under a written charter, which is available on the Company&rsquo;s website. The Board and the Audit Committee believe that the
Audit Committee charter complies with the current standards set forth in SEC regulations. There may be further action by the SEC
during the current year on several matters that affect all audit committees. The Board and the Audit Committee continue to follow
closely further developments by the SEC in the area of the functions of audit committees, particularly as it relates to internal
controls for non-accelerated filers, and will make additional changes to the Audit Committee charter and the policies of the Audit
Committee as required or advisable as a result of these new rules and regulations. The Audit Committee met four (4) times during
2012 and four (4) times to date during 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Audit Committee&rsquo;s
primary duties and responsibilities are to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">engage the Company&rsquo;s independent auditor;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">monitor the independent auditor&rsquo;s independence, qualifications
and performance;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">pre-approve all audit and non-audit services;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">monitor the integrity of the Company&rsquo;s financial reporting process
and internal controls system;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">provide an open avenue of communication among the independent auditor,
financial and senior management of the Company and the Board; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">monitor the Company&rsquo;s compliance with legal and regulatory requirements.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Management is responsible
for the Company&rsquo;s internal controls and the financial reporting process. The Company&rsquo;s independent auditor is responsible
for performing an independent audit of the Company&rsquo;s financial statements in accordance with the standards of the Public
Company Accounting Oversight Board and issuing a report thereon. The Audit Committee&rsquo;s responsibility is to monitor and
oversee these processes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company is planning
to form an internal management group, reporting to the Chief Executive Officer and the Audit Committee that is charged with guiding
the Company in meeting the various requirements of Section 404 of the Sarbanes-Oxley Act of 2002. The Audit Committee has begun
to implement procedures to ensure that during the course of each fiscal year it devotes the attention that it deems necessary or
appropriate to each of the matters assigned to it under its charter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In overseeing the preparation
of the Company&rsquo;s financial statements, the Audit Committee held meetings with the Company&rsquo;s independent auditors, both
in the presence of management and privately, to discuss the overall scope and plans for their audit, review and discuss all financial
statements prior to their issuance, and discuss significant accounting issues. Management advised the Audit Committee that all
financial statements were prepared in accordance with accounting principles generally accepted in the United States of America,
and the Audit Committee discussed the statements with both management and the Company&rsquo;s independent auditors. In accordance
with Section 204 of the Sarbanes-Oxley Act and the Statement on Auditing Standards (&ldquo;SAS&rdquo;) No. 61 (Communication With
Audit Committees) as amended by SAS No. 90 (Audit Committee Communications), the Audit Committee has discussed with the Company&rsquo;s
independent auditors all matters required under the Sarbanes-Oxley Act and the foregoing standards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">With respect to the Company&rsquo;s
independent auditors, the Audit Committee, among other things, discussed with Weinberg &amp; Co., P.A., matters relating to its
independence, including the written disclosures made to the Audit Committee as required by the Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees). The Audit Committee also reviewed and approved the audit and non-audit
fees of that firm.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On the basis of these reviews
and discussions, the Audit Committee (i) appointed Weinberg &amp; Co., P.A. as the independent registered public accounting firm
for the 2012 fiscal year and (ii) recommended to the Board that the Board approve the inclusion of the Company&rsquo;s audited
financial statements in the 10-K for filing with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 60%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 40%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Respectfully submitted:</font></td></tr>
<tr>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&#9;</font></td>
    <td style="border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">/s/ Mark Stubbs</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mark Stubbs, Chairman</FONT></td></tr>
<tr style="vertical-align: top">
    <td>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P></td>
    <td style="text-align: justify">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: left; margin-bottom: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: left; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: center"><B>Certain Relationships and Related
Transactions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-indent: 0.5in">Ryan Zinke, a member of our Board, is
a member and the manager&nbsp;of Continental Divide, LLC (&quot;Continental&quot;).&nbsp;We have entered into an Independent Contractor
Agreement&nbsp;with Continental, effective January 1, 2013,&nbsp;in which Continental&nbsp;has agreed to provide us with&nbsp;the
services of Mr. Zinke related to matters concerning our business development and&nbsp;strategies, as well as business and customer&nbsp;opportunities,
among other related matters. We pay Continental the sum of $5,000 per month for these services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center"><B>SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 16(a) of the Exchange
Act requires our directors, executive officers and holders of more than 10% of a registered class of our equity securities to file
with the SEC initial reports of ownership and reports of changes in ownership of our common stock and our other equity securities.
Directors, executive officers and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all
Section 16(a) reports they file. Based solely on our review of the copies of such forms received by us, if any, we believe that
all reporting requirements under Section 16(a) for the 2012 fiscal year were met by our directors, executive officers and greater
than 10% beneficial owners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>STOCKHOLDER PROPOSALS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">From time to time stockholders
present proposals that may be proper subjects for inclusion in a proxy statement and for consideration at an annual meeting. To
be included in the proxy statement for our 2014 annual meeting of stockholders, proposals must be received by us no later than
July 1, 2014, and the stockholder must otherwise comply with our and applicable SEC requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>ANNUAL REPORT ON FORM 10-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We filed our Annual Report
on Form 10-K with the SEC on March 22, 2013. A copy of the 10-K, without exhibits, has been mailed to all stockholders along with
this proxy statement. Stockholders may obtain additional copies of the 10-K and the exhibits thereto, without charge, by writing
to the Corporate Secretary at our principal executive office at 735 State Street, Suite 500, Santa Barbara, California 93101.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>OTHER MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Management does not know
of any matters to be presented at the 2013 Annual Meeting other than those set forth herein and in the Notice accompanying this
proxy statement. If a stockholder vote is necessary to transact any other business at the 2013 Annual Meeting, the proxy holders
intend to vote their proxies in accordance with their best judgment related to such business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">It is important that your
shares be represented at the 2013 Annual Meeting, regardless of the number of shares that you hold. <B>YOU ARE, THEREFORE, URGED
TO EXECUTE PROMPTLY AND RETURN THE ACCOMPANYING PROXY IN THE ENVELOPE THAT HAS BEEN ENCLOSED FOR YOUR CONVENIENCE.</B> Stockholders
who are present at the 2013 Annual Meeting may revoke their proxies and vote in person or, if they prefer, may abstain from voting
in person and allow their proxies to be voted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 55%"><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="width: 45%"><font style="font: 10pt Times New Roman, Times, Serif">By Order of the Board of Directors,</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td>
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td style="border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">/s/ Cecil Bond Kyte</font></td></tr>
<tr style="vertical-align: top">
    <td><font style="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</font></td>
    <td>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Cecil Bond Kyte</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Chief Executive Officer and Chairman</P></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">November 7, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Santa Barbara, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SAVE THE WORLD AIR, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>2013 ANNUAL MEETING OF STOCKHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>December 16, 2013</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">This proxy is solicited by the Board of Directors
for use at the 2013 Annual Meeting of Stockholders of Save the World Air, Inc., (the &ldquo;Company&rdquo;) to be held at the Fess
Parker Santa Barbara Doubletree Hotel and Resort, 633 E. Cabrillo Blvd<FONT STYLE="color: green">.</FONT>, Santa Barbara, California
93101, at 10:00&nbsp;A.M. on December 16, 2013. By signing the proxy, you revoke all prior proxies, acknowledge receipt of the
Notice of 2013 Annual Meeting of Stockholders and the Proxy Statement, and appoint Cecil Bond Kyte or designee with full power
of substitution, to vote all your shares of common stock of Save the World Air, Inc. which you are entitled to vote, on the matters
shown below and any other&nbsp;matters which may come before the Annual Meeting and all adjournments and postponements thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Whether or not a choice is specified, this
proxy, when properly executed, will be voted in the discretion of the proxy holders upon such business as may properly come before
the Annual Meeting or any adjournment or postponement thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The shares of stock you hold in your account
will be voted as you specify below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B> THE COMPANY&rsquo;S BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR PROPOSAL 1 FOR THE ELECTION OF THE DIRECTORS LISTED HEREON, AND A VOTE FOR PROPOSALS 2, 3, 4 and 5 (3 years).
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS LISTED HEREON AND FOR PROPOSALS 2, 3, 4 and
5 (3 years). </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Please mark, sign and date your proxy card and
return it today in the postage-paid envelope provided to:<BR>
<B>Nevada Agency and Transfer Company</B><BR>
<B>50 West Liberty Street, Suite&nbsp;880</B><BR>
<B>Reno, Nevada 89501</B><BR>
<B>Attention: Tiffany Erickson, Proxy Department</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Fax #775-322-5623 or stocktransfer@natco.org</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Properly executed proxies may also be faxed
or e-mailed no later than 48 hours prior to the meeting.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>The Board of Directors recommends a vote
FOR Proposals 1, 2 and 3.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; border: #BFBFBF 1pt solid; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>1.</B>&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="width: 88%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">ELECTION OF DIRECTORS:</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 5%; border: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></FONT></TD>
    <TD STYLE="vertical-align: top; width: 34%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Vote <B>FOR </B>all nominees listed</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 5%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></FONT></TD>
    <TD STYLE="vertical-align: top; width: 47%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Vote <B>WITHHELD </B>from all nominees</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 33%; border: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">01 Cecil Bond Kyte</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 26%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">02 Charles R. Blum</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 26%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">03 Nathan Shelton</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">04 Ryan Zinke</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">05 Greggory M. Bigger</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">06 Mark Stubbs</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">07 Don Dickson</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(to withhold authority to vote for any nominee,
strike a line through the nominee&rsquo;s name above)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; border: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>2.&nbsp;</B></FONT></TD>
    <TD STYLE="width: 88%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">RATIFICATION OF APPOINTMENT OF WEINBERG &amp; CO., P.A. as independent auditors of Save the World Air, Inc. for the fiscal year ending December&nbsp;31, 2013.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 10%; border: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Wingdings 2">&#163;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>FOR</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 10%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 30%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>AGAINST</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 10%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>ABSTAIN</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; border: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>3.&nbsp;</B></FONT></TD>
    <TD STYLE="width: 88%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">AMENDMENT TO ARTICLES OF INCORPORATION OF THE COMPANY to increase the Company&rsquo;s authorized shares of common stock from 200 million to 300 million.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 10%; border: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>FOR</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 10%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 30%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>AGAINST</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 10%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></FONT></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>ABSTAIN</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; border: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B> 4.&nbsp; </B></FONT></TD>
    <TD STYLE="width: 88%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"> On
    a non-binding advisory basis, compensation and compensation program for the Company&rsquo;s named executive officers. </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> &nbsp; </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 10%; border: #BFBFBF 1pt solid; padding-left: 5.4pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"> &nbsp;<FONT STYLE="font-family: Wingdings 2">&#163;</FONT> </FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B> FOR </B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 10%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"> &nbsp;<FONT STYLE="font-family: Wingdings 2">&#163;</FONT> </FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 30%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B> AGAINST </B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 10%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"> &nbsp;<FONT STYLE="font-family: Wingdings 2">&#163;</FONT> </FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B> ABSTAIN </B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; border: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B> 5.&nbsp; </B></FONT></TD>
    <TD STYLE="width: 88%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><P STYLE="margin: 0pt 0"> On
                                                                                                                                                  a
                                                                                                                                                  non-binding
                                                                                                                                                  advisory
                                                                                                                                                  basis,
                                                                                                                                                  whether
                                                                                                                                                  a
                                                                                                                                                  non-binding
                                                                                                                                                  advisory
                                                                                                                                                  vote
                                                                                                                                                  on
                                                                                                                                                  the
                                                                                                                                                  compensation
                                                                                                                                                  and
                                                                                                                                                  compensation
                                                                                                                                                  program
                                                                                                                                                  for
                                                                                                                                                  the
                                                                                                                                                  Company&rsquo;s
                                                                                                                                                  named
                                                                                                                                                  executive
                                                                                                                                                  officers
                                                                                                                                                  should
                                                                                                                                                  be
                                                                                                                                                  held
                                                                                                                                                  every
                                                                                                                                                  one,
                                                                                                                                                  two
                                                                                                                                                  or three
                                                                                                                                                  years. </P>


</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 10%; border: #BFBFBF 1pt solid; padding-left: 5.4pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"> &nbsp;<FONT STYLE="font-family: Wingdings 2">&#163;</FONT> </FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B> 1
    YEAR </B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"> &nbsp;<FONT STYLE="font-family: Wingdings 2">&#163;</FONT> </TD>
    <TD STYLE="vertical-align: top; width: 15%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><B> 2
    YEARS </B></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"> &nbsp;<FONT STYLE="font-family: Wingdings 2">&#163;</FONT> </FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><P STYLE="margin: 0pt 0"><B> 3
                                                                                                                                                                          YEARS </B></P>


</TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 15%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; width: 3%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"> &nbsp;<FONT STYLE="font-family: Wingdings 2">&#163;</FONT> </FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><B> ABSTAIN </B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> &nbsp; </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>THIS PROXY WHEN PROPERLY
    EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF EACH OF THE DIRECTORS LISTED
    HEREON AND IN FAVOR OF PROPOSALS 2, 3, 4 and 5 (3 years), AND IN THE DISCRETION OF THE PROXY HOLDERS ON ALL OTHER MATTERS
    PROPERLY BROUGHT BEFORE THE MEETING.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Date:</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-left: #BFBFBF 1pt solid; border-bottom: windowtext 1pt solid; border-right: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-left: 5.4pt; text-align: center">Signature</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-left: #BFBFBF 1pt solid; border-bottom: windowtext 1pt solid; border-right: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Signature (if joint or common ownership)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; border-left: #BFBFBF 1pt solid; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">Please sign exactly as your name(s) appears on the Proxy. If held in joint tenancy, all persons must sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy. If a partnership, please sign partnership name by authorized person.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 48%; border: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">For address change: Mark Box and indicate changes below:</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 39%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></FONT></FONT></TD>
    <TD STYLE="vertical-align: top; width: 13%; border-top: #BFBFBF 1pt solid; border-right: #BFBFBF 1pt solid; border-bottom: #BFBFBF 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 45%; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 55%; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 5.4pt">&nbsp;</TD></TR>
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
