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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001144204-08-022363.txt : 20080415
<SEC-HEADER>0001144204-08-022363.hdr.sgml : 20080415
<ACCEPTANCE-DATETIME>20080415132304
ACCESSION NUMBER:		0001144204-08-022363
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20080508
FILED AS OF DATE:		20080415
DATE AS OF CHANGE:		20080415
EFFECTIVENESS DATE:		20080415

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AE Biofuels, Inc.
		CENTRAL INDEX KEY:			0000738214
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL ORGANIC CHEMICALS [2860]
		IRS NUMBER:				840925128
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			0131

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-51354
		FILM NUMBER:		08756643

	BUSINESS ADDRESS:	
		STREET 1:		20400 STEVENS CREEK BLVD
		STREET 2:		SUITE 700
		CITY:			CUPERTINO
		STATE:			CA
		ZIP:			95014
		BUSINESS PHONE:		561-798-2907

	MAIL ADDRESS:	
		STREET 1:		20400 STEVENS CREEK BLVD
		STREET 2:		SUITE 700
		CITY:			CUPERTINO
		STATE:			CA
		ZIP:			95014

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MARWICH II LTD
		DATE OF NAME CHANGE:	19840123
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>v108246_def14a.htm
<TEXT>
<html>
  <head>
    <title>

</title>
</head>
  <body bgcolor="#ffffff"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Washington,
      D.C. 20549</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SCHEDULE
      14A INFORMATION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Proxy
      Statement Pursuant to Section 14(a) of </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>the
      Securities Exchange Act of 1934</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed
      by
      the Registrant <font style="DISPLAY: inline; FONT-FAMILY: Wingdings">x</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed
      by
      a Party other than the Registrant <font style="FONT-FAMILY: Wingdings">o</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the
      appropriate box:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font></font></font></td>
            <td align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preliminary
              Proxy Statement</font></td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">o</font></font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Confidential,
                for Use of the Commission Only (as permitted by <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Rule
                14a-6(e)(2))</font></font></div>
            </td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="FONT-FAMILY: Wingdings" size="2">x</font></td>
            <td align="left">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Definitive
                Proxy Statement</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">o</font></font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Definitive
                Additional Materials</font></div>
            </td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">o</font></font></td>
            <td align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
              Material Pursuant to Section 240.14a-12</font></td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;">&#160;</td>
            <td align="left">&#160;</td>
          </tr>

      </table>
    </div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AE
      BIOFUELS, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
      <div>
        <hr style="COLOR: black" align="center" noshade size="1" width="15%">
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Name
      of
      Registrant as Specified In Its Charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
      <div>
        <hr style="COLOR: black" align="center" noshade size="1" width="15%">
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Name
      of
      Person(s) Filing Proxy Statement if other than the Registrant)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payment
      of Filing Fee (Check the appropriate box):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">x</font></font></font></td>
            <td align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
              fee required.</font></td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">o</font></font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fee
                computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)</font></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Title
      of
      each class of securities to which transaction applies:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Aggregate
      number of securities to which transaction applies:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Per
      unit
      price or other underlying value of transaction computed pursuant to Exchange
      Act
      Rule 0-11 (set forth the amount on which the filing fee is calculated and state
      how it was determined):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proposed
      maximum aggregate value of transaction:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
      fee
      paid:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;

      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font></font></font></td>
            <td align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fee
              paid previously with preliminary
              materials.</font></td>
          </tr>

      </table>
    </div>
    <div>&#160;</div>
    <div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">o</font></font>&#160;&#160;&#160;&#160;&#160;&#160;
        <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 offsetting fee was paid previously. Identify
        the previous filing by registration statement number, or the Form or Schedule
        and the date of its filing.</font></font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt"></font>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amount
      Previously Paid:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form,
      Schedule or Registration Statement No.:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filing
      Party:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
      Filed:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ANNUAL
      MEETING OF STOCKHOLDERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TO
      BE HELD ON MAY 8, 2008</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">April
      14,
      2008</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dear
      Stockholder:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;You
      are
      invited to attend the Annual Meeting of Stockholders of AE Biofuels, Inc. (the
      &#8220;Company,&#8221; &#8220;we&#8221; or &#8220;our&#8221;), which will be held at our corporate offices at 20400
      Stevens Creek Blvd., Suite 700, Cupertino, CA 95014, on Thursday, May 8, 2008,
      at 10:00 a.m. (Pacific Standard Time). </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      discuss the matters to be acted upon at the meeting in more detail in the
      attached Notice of Annual Meeting and Proxy Statement. There are three specific
      items for which you are being asked to vote: (i) the election of a full slate
      of
      six (6) directors to the Board of Directors of the Corporation; (ii) the
      ratification of the Company&#8217;s independent auditors for 2008 and (iii)
      the&#160;approval and amendment of the Company&#8217;s 2007 Stock Plan. Your Board of
      Directors recommends that you vote &#8220;FOR&#8221; the six (6) individuals nominated,
&#8220;FOR&#8221; ratification of the independent auditors and &#8220;FOR&#8221; approval and amendment
      of the Company&#8217;s 2007 Stock Plan. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Included
      with the Proxy Statement is a copy of our Annual Report on Form&#160;10-K for
      the fiscal year ended December 31, 2007. We encourage you to read the
      Form&#160;10-K. It includes our audited financial statements and information
      about our operations, markets and products.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">You
      can
      vote by signing and returning the enclosed proxy card in the postage prepaid
      envelope provided or </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">via
      facsimile. Returning the proxy card by mail or by facsimile will ensure your
      representation at the meeting but does not deprive you of your right to attend
      the meeting and to vote your shares in person. The Proxy Statement explains
      more
      about how to vote by proxy. Please read it carefully. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      hope
      that you can attend the Annual Meeting. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>You
      will be required to present photo identification to gain admission to the Annual
      Meeting. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Whether
      or not you plan to attend, you can be sure that your shares are represented
      at
      the meeting by promptly voting by one of the methods provided. Any stockholder
      attending the Annual Meeting may vote in person, even if that stockholder has
      returned a proxy. Your vote is important, whether you own a few shares or
      many.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
      you
      have questions concerning the Annual Meeting or your stock ownership, please
      call our Corporate Secretary, William Maender, at (408) 213-0940. Thank you
      for
      your continued support of AE Biofuels, Inc.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div align="right">
      <table border="0" cellpadding="0" cellspacing="0" width="50%">

          <tr>
            <td align="justify" valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Very
                truly yours,</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                Eric A. McAfee</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eric
                A. McAfee </font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                Executive Officer</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      document is dated April 8, 2008 and is being first mailed to stockholders of
      AE
      Biofuels, Inc. on or about April 8, 2008.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20400
      Stevens Creek Blvd., Suite 700, Cupertino, CA 95014</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tel.:
      (408) 213-0940 Fax: Fax: (408) 252-8044</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">www.aebiofuels.com&#160;</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTICE
      OF ANNUAL MEETING OF STOCKHOLDERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TO
      BE HELD ON MAY 8, 2008</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">April
      14,
      2008</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      the
      Stockholders of</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
      BIOFUELS, INC.:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTICE
      IS
      HEREBY given that the 2008 Annual Meeting of Stockholders (the &#8220;Annual Meeting&#8221;)
      of AE Biofuels, Inc. (the &#8220;Company&#8221;) will be held at our corporate offices at
      20400 Stevens Creek Blvd., Suite 700, Cupertino, CA 95014, on Thursday, May
      8,
      2008 at 10:00 a.m. (Pacific Standard Time) for the following
      purposes:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                elect six (6) members of the Board of Directors to hold office until
                the
                Annual Meeting of Stockholders in 2009, and until their successors
                are
                duly elected and qualified;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                ratify the appointment of BDO Seidman, LLP as our independent auditors
                the
                fiscal year ending December 31,
                2008;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                approve and amend the 2007 Stock Plan;
                and</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                transact such other business as may properly come before the meeting
                and
                any adjournment or postponement
                thereof.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">More
      information about these business items is described in the proxy statement
      accompanying this notice. Any of the above matters may be considered at the
      Annual Meeting at the date and time specified above or at an adjournment or
      postponement of such meeting. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Your
      vote
      is important. Whether or not you plan to attend the meeting in person, it is
      important that your shares be represented. Please vote as soon as possible.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div align="right">
      <table border="0" cellpadding="0" cellspacing="0" width="50%">

          <tr>
            <td align="justify" valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BY
                ORDER OF THE BOARD OF DIRECTORS</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                William J. Maender</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">William
                J. Maender</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Corporate
                Secretary</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>YOUR
      VOTE IS IMPORTANT. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WHETHER
      OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN
      THE PROXY CARD AS INSTRUCTED. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20400
      Stevens Creek Blvd., Suite 700, Cupertino, CA 95014</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tel.:
      (408) 213-0940 Fax: Fax: (408) 252-8044</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">www.aebiofuels.com&#160;</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AE
      BIOFUELS, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROXY
      STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      be
      held May 8, 2008</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TABLE
      OF CONTENTS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="66%">&#160;</td>
            <td valign="top" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="middle" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">General</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="middle" width="66%">
              <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Questions
                and Answers About the Proxy Materials and our Annual
                Meeting</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Board
                of Directors Meetings and Committees</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Security
                Ownership by Certain Beneficial Owners and Management</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proposal
                1: Election of Directors</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proposal
                2: Ratification of Auditors</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proposal
                3: </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approval
                and&#160;Amendment&#160;of the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2007
                Stock Plan</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Equity
                Compensation Plan Information</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">22</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="middle" width="66%">
              <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                Officers</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="middle" width="66%">
              <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                Compensation</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">24</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employment
                Contracts And Termination Of Employment And Change-In-Control
                Arrangements</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
                16(a) Beneficial Ownership Reporting Compliance</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
                Relationships And Related Transactions</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="middle" width="66%">
              <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit
                Committee Report</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                Matters</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">28</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Householding</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">28</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="66%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Appendix
                  A&#160;<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#8211;</font>
                  Audit
                  Committee Charter</font></div>
              </div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A-1</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="66%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Appendix
                B&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8211;</font>
                Amended and Restated 2007 Stock Plan</font></div>
            </td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-1</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AE
      BIOFUELS, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROXY
      STATEMENT FOR 2008 ANNUAL MEETING OF STOCKHOLDERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>General</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">These
      proxy materials are furnished to you for use at the Annual Meeting of
      Stockholders of the Company (the &#8220;Annual Meeting&#8221;) to be held on Thursday, May
      8, 2008 at 10:00 a.m. (Pacific Standard Time), or at any postponement or
      adjournment of the Annual Meeting, for the purposes set forth herein and in
      the
      foregoing Notice of Annual Meeting of Stockholders. The Annual Meeting will
      be
      held at our principal executive offices located at 20400 Stevens Creek Blvd.,
      Suite 700, Cupertino, CA 95014. Stockholders are invited to attend the Annual
      Meeting and are asked to vote on the proposals described in this proxy
      statement. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Copies
      of
      this Proxy Statement and of the Company&#8217;s Annual Report on Form 10-K for the
      fiscal year ended December 31, 2007 have been furnished to brokerage houses,
      fiduciaries and custodians to forward to beneficial owners of common and Series
      B Preferred stock of the Company held in their names. The Company&#8217;s Annual
      Report on Form 10-K for the fiscal year ended December 31, 2007, as filed with
      the Securities and Exchange Commission, is also available from the Company,
      without charge, upon request made in writing to the Company&#8217;s Corporate
      Secretary at 20400 Stevens Creek Blvd., Suite 700, Cupertino, CA 95014, or
      by&#160;downloading it&#160;online at </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>www.aebiofuels.com</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Your
      attention is directed to the financial statements and Management&#8217;s Discussion
      and Analysis in such Annual Report, which provide additional important
      information concerning the Company. This Proxy Statement and the related Proxy
      Forms are being first mailed to stockholders of AE Biofuels, Inc. on or about
      April 14, 2008.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to an Agreement and Plan of Reorganization, On December 7, 2007, American
      Ethanol, Inc. merged with a wholly-owned subsidiary of Marwich II, Ltd., and
      Marwich II, Ltd., issued to the former stockholders of American Ethanol
      84,114,998 shares of its common stock in exchange for all of the outstanding
      shares of American Ethanol common stock and 6,487,491 shares of its Series
      B
      Preferred Stock in exchange for all of the issued and outstanding shares of
      American Ethanol Series B Preferred Stock (the &#8220;Reverse Merger&#8221;). As a result,
      American Ethanol became a wholly-owned subsidiary of the Company and the former
      stockholders of American Ethanol&#160;held approximately 99.5% of the oustanding
      shares&#160;of the Company. On December 7, 2007, the Company amended its
      Articles of Incorporation to change its name to AE Biofuels, Inc.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
      accounting purposes, the Reverse Merger was treated as a reverse acquisition
      with American Ethanol as the acquirer and the Company as the acquired party.
      As
      a result, the business and financial information included in the Company&#8217;s
      Annual Report on Form 10-K is the business and financial information of AE
      Biofuels, Inc. on a consolidated basis.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>QUESTIONS
      AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL
      MEETING</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Q:</strong></font></div>
              </td>
              <td colspan="2" width="77%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>What
                is the purpose of the Annual Meeting?</strong></font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td width="3%">&#160;</td>
              <td align="left" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td colspan="2" width="77%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                vote on the following proposals:</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;
                <font style="FONT-FAMILY: Symbol">&#183;</font></font></td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                  elect six (6) members of the Board of Directors to hold office
                  until the
                  Annual Meeting of Stockholders in 2009, and until their successors
                  are
                  duly elected and qualified; and</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div>&#160;</div>
              </td>
              <td valign="top" width="3%">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#160;&#160;&#160;&#160;
                  &#183;</font>&#160;</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                  ratify the appointment of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">BDO
                  Seidman, LLP as our independent auditors, to audit the financial
                  statements of the Company and its subsidiaries for the year ending
                  December 31, 2008</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">;</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td width="3%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;
                  <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font></font></font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                  approve and amend the 2007 Stock Plan; and</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td width="3%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;
                    <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font></font></font></div>
                </div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                  transact such other business that may properly come before the
                  Annual
                  Meeting or at any adjournment or postponement thereof.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td width="3%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>

        </table>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Q:</strong></font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>What
                  are the Board of Directors&#8217; recommendations?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  Board recommends a vote:</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;&#160;&#160;
                  </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FOR
                  the election of the six (6) nominees as directors;</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;&#160;&#160;
                  </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FOR
                  the ratification of the appointment of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">BDO
                  Seidman, LLP as our independent auditors for the fiscal year ending
                  December 31, 2008;</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;
                  </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FOR
                  the approval and amendment of the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2007
                  Stock Plan; and</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FOR
                  or AGAINST other matters that properly come before the Annual Meeting,
                  as
                  the proxy holders deem advisable.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Q:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Who
                  is entitled to vote at the meeting?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Stockholders
                  Entitled to Vote.</em>&#160;&#160;Stockholders who our records show owned
                  shares of AE Biofuels, Inc. as of the close of business on March
                  26, 2008
                  (the &#8220;Record Date&#8221;) may vote at the Annual Meeting. On the Record Date, we
                  had a total of 84,785,920 shares of Common Stock issued and outstanding,
                  which were held of record by 144 stockholders and 6,270,491 shares
                  of
                  Series B Preferred Stock issued and outstanding held of record
                  by&#160;132
                  stockholders. The stock transfer books will not be closed between
                  the
                  Record Date and the date of the meeting. Each share of AE Biofuels,
                  Inc.
                  Common Stock and Series B Preferred Stock is entitled to one
                  vote.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Registered
                  Stockholders. </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
                  your shares are registered directly in your name with AE Biofuels
                  transfer
                  agent, you are considered, with respect to those shares, the stockholder
                  of record, and these proxy materials are being sent to you by AE
                  Biofuels,
                  Inc. As the stockholder of record, you have the right to grant
                  your voting
                  proxy directly to the individuals listed on the proxy card or to
                  vote in
                  person at the Annual Meeting.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Street
                  Name Stockholders. </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
                  your shares are held in a stock brokerage account or by a bank
                  or other
                  nominee, you are considered the beneficial owner of shares held
                  in street
                  name. These proxy materials are being forwarded to you by your
                  broker or
                  nominee, who is considered, with respect to those shares, the record
                  holder. As the beneficial owner, you have the right to direct your
                  broker
                  or nominee how to vote, and you are also invited to attend the
                  Annual
                  Meeting. However, since you are not the record holder, you may
                  not vote
                  these shares in person at the Annual Meeting unless you follow
                  your
                  broker&#8217;s procedures for obtaining a legal proxy. Your broker or nominee
                  has enclosed a voting instruction card for you to use.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Q:</strong></font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Can
                  I attend the meeting in person?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">You
                  are invited to attend the Annual Meeting if you are a registered
                  stockholder or a street name stockholder as of March 26, 2008.
                  In
                  addition, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">you
                  will be required to present photo identification, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">such
                  as a driver&#8217;s license or passport,</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                  to
                  gain admission to the Annual Meeting</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Q:</strong></font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>How
                  can I vote my shares?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Registered
                  Stockholders:</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;Registered
                  stockholders may vote in person at the Annual Meeting or by one
                  of the
                  following methods:</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>By
                  Mail. </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Complete,
                  sign and date the enclosed proxy card and return it in the prepaid
                  envelope provided;</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>By
                  Fax.</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                  Complete, sign and date the enclosed proxy card and fax to Corporate
                  Stock
                  Transfer at </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(303)
                  282-5800</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">;</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Please
                  note that voting facilities for registered stockholders will close
                  at
                  12:00&#160;p.m. Pacific Time on Wednesday, May 7,
                  2008.</font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Street
                  Name Stockholders:</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                  If
                  your shares are held by a broker, bank or other nominee, you must
                  follow
                  the instructions on the form you receive from your broker, bank
                  or other
                  nominee in order for your shares to be voted. Please follow their
                  instructions carefully. Also, please note that if the holder of
                  record of
                  your shares is a broker, bank or other nominee and you wish to
                  vote at the
                  Annual Meeting, you must request a legal proxy from the bank, broker
                  or
                  other nominee that holds your shares and present that proxy and
                  proof of
                  identification at the Annual Meeting to vote your
                  shares.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Based
                  on the instructions provided by the broker, bank or other holder
                  of record
                  of their shares, street name stockholders may generally vote by
                  one of the
                  following methods:</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>By
                  Mail.</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                  You may vote by signing, dating and returning your voting instruction
                  card
                  in the enclosed pre-addressed envelope; </font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>By
                  Methods Listed on Voting Instruction Card.</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                  Please refer to your voting instruction card or other information
                  forwarded by your bank, broker or other holder of record to determine
                  whether you may vote by mail or fax, and follow the instructions
                  on the
                  voting instruction card or other information provided by the record
                  holder; or</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>In
                  Person with a Proxy from the Record Holder.</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                  A
                  street name stockholder who wishes to vote at the Annual Meeting
                  will need
                  to obtain a legal proxy from his or her bank or brokerage firm.
                  Please
                  consult the voting instruction card sent to you by your bank or
                  broker to
                  determine how to obtain a legal proxy in order to vote in person
                  at the
                  Annual Meeting.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Q:</strong></font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>If
                  I sign a proxy, how will it be voted?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">When
                  proxies are properly dated, executed and returned, the shares represented
                  by such proxies will be voted at the Annual Meeting in accordance
                  with the
                  instructions of the stockholder. However, if no specific instructions
                  are
                  given, the shares will be voted in accordance with the above
                  recommendations of our Board of Directors. If any matters not described
                  in
                  the Proxy Statement are properly presented at the Annual Meeting,
                  the
                  proxy holders will use their own judgment to determine how to vote
                  your
                  shares. If the Annual Meeting is adjourned, the proxy holders can
                  vote
                  your shares on the new meeting date as well, unless you have revoked
                  your
                  proxy instructions, as described below under &#8220;Can I change my
                  vote?&#8221;</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Q:</strong></font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>What
                  should I do if I get more than one proxy or voting instruction
                  card?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders
                  may receive more than one set of voting materials, including multiple
                  copies of these proxy materials and multiple proxy cards or voting
                  instruction cards. For example, stockholders who hold shares in
                  more than
                  one brokerage account may receive a separate voting instruction
                  card for
                  each brokerage account in which shares are held. Stockholders of
                  record
                  whose shares are registered in more than one name will receive
                  more than
                  one proxy card. You should sign and return all proxies and voting
                  instruction cards you receive relating to our Annual Meeting to
                  ensure
                  that all of your shares are voted.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Q:</strong></font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Can
                  I change my vote?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">You
                  may change your vote at any time prior to the vote at the Annual
                  Meeting.
                  To revoke your proxy instructions and change your vote if you are
                  a
                  stockholder of record, you must (i)&#160;attend the Annual Meeting and
                  vote your shares in person, (ii)&#160;advise </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">William
                  Maender</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
                  the Company&#8217;s Corporate Secretary, at our principal executive
                  office&#160;in writing before the proxy holders vote your shares, or
                  (iii)&#160;deliver later dated and signed proxy instructions before the
                  proxy holders vote your shares.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Q:</strong></font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>What
                  happens if I decide to attend the Annual Meeting but I have already
                  voted
                  or submitted a proxy covering my shares?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">You
                  may attend the meeting and vote in person even if you have already
                  voted
                  or submitted a proxy. Please be aware that attendance at the Annual
                  Meeting will not, by itself, revoke a proxy. If a bank, broker
                  or other
                  nominee holds your shares and you wish to attend the Annual Meeting
                  and
                  vote in person, you must obtain a &#8220;legal proxy&#8221; from the record holder of
                  the shares giving you the right to vote the shares.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Q:</strong></font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>How
                  are votes counted?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  Annual Meeting will be held if a majority of the outstanding shares
                  of
                  Common Stock entitled to vote is represented in person or by proxy
                  at the
                  meeting. If you have returned valid proxy instructions or attend
                  the
                  Annual Meeting in person, your Common Stock will be counted for
                  the
                  purpose of determining whether there is a quorum, even if you wish
                  to
                  abstain from voting on some or all matters at the
                  meeting.</font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares
                that are voted &#8220;WITHHELD&#8221; or &#8220;ABSTAIN&#8221; are treated as being present for
                purposes of determining the presence of a quorum and as entitled
                to vote
                on a particular subject matter at the Annual Meeting. If you hold
                shares
                of AE Biofuels, Inc. common stock in street name through a bank,
                broker or
                other nominee holder, the nominee holder may only vote your shares
                in
                accordance with your instructions. If you do not give specific
                instructions to your nominee holder as to how you want your shares
                voted,
                your nominee will indicate that it does not have authority to vote
                on the
                proposal, which will result in what is called a &#8220;broker non-vote.&#8221; All
                shares of AE Biofuels common stock represented at the Annual Meeting,
                including broker non-votes and abstentions, will be counted for purposes
                of determining the presence of a quorum.</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Q:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Who
                  will tabulate the votes?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
                  Biofuels will designate Corporate Stock Transfer as the Inspector
                  of
                  Election who will tabulate the votes.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Q:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Who
                  is making this solicitation?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
                  proxy is being solicited on behalf of AE Biofuels&#8217; Board of
                  Directors.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Q:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Who
                  pays for the proxy solicitation process?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
                  Biofuels will pay the cost of preparing, assembling, printing,
                  mailing and
                  distributing these proxy materials and soliciting votes. We do
                  not plan to
                  retain a solicitor to assist with the solicitation. We may, on
                  request,
                  reimburse brokerage firms and other nominees for their expenses
                  in
                  forwarding proxy materials to beneficial owners. In addition to
                  soliciting
                  proxies by mail, we expect that our directors, officers and employees
                  may
                  solicit proxies in person or by facsimile. None of these individuals
                  will
                  receive any additional or special compensation for doing this,
                  although we
                  will reimburse these individuals for their reasonable out-of-pocket
                  expenses.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Q:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>May
                  I propose actions for consideration at next year&#8217;s annual meeting of
                  stockholders or nominate individuals to serve as
                  directors?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">You
                  may present proposals for action at a future meeting only if you
                  comply
                  with the requirements of the proxy rules established by the Securities
                  and
                  Exchange Commission (&#8220;SEC&#8221;) and our bylaws. In order for a stockholder
                  proposal to be included in our Proxy Statement and form of Proxy
                  relating
                  to the meeting for our 2008 Annual Meeting of Stockholders under
                  rules set
                  forth in the Securities Exchange Act of 1934, as amended (the &#8220;Securities
                  Exchange Act&#8221;), the proposal must be received by us no later than
                  </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5:00
                  p.m. (Pacific Standard Time) not less&#160;than the 120th calendar day
                  prior to the first anniversary of the mailing of the notice for
                  the
                  preceding year&#8217;s annual meeting. Accordingly, stockholder proposals
                  intended to be presented in our proxy materials for the 2008 Annual
                  Meeting must be received by&#160;the Company's Corporate Secretary, on
                  or&#160;before December 19, 2008, and must satisfy the requirements of
                  the
                  proxy rules promulgated by the Securities and Exchange
                  Commission.</font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div>&#160;</div>
    <div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Q:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>How
                  do I obtain a separate set of proxy materials or request a single
                  set for
                  my household?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
                  you share an address with another stockholder and&#160;have the same last
                  name, you will receive only one set of proxy materials (including
                  our
                  Annual Report on Form 10-K and proxy statement). If you wish to
                  receive a
                  separate proxy statement at this time, please request the additional
                  copy
                  by contacting our transfer agent, Corporate Stock Transfer by telephone
                  at
                  (303) 282-4800, or by facsimile at </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(303)
                  282-5800</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">You
                  may also request to receive a separate Annual Report and a separate
                  proxy
                  statement by contacting our Corporate Secretary at (408) 213-0940,
                  by
                  email at wmaender@aebiofuels.com, or by writing to: AE Biofuels,
                  Inc.,
                  20400 Stevens Creek Blvd., Suite 700, Cupertino, CA
                  95014.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Q:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>What
                  if I have questions about lost stock certificates or need to change
                  my
                  mailing address?</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">&#160;</td>
              <td align="justify" valign="top" width="74%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A:</font></div>
              </td>
              <td align="justify" valign="top" width="74%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">You
                  may contact our transfer agent, Corporate</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                  Stock Transfer</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
                  by telephone </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">at
                  (303) 282-4800</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                  or
                  by facsimile at </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(303)
                  282-5800</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
                  if you have lost your stock certificate or need to change your
                  mailing
                  address.</font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BOARD
      OF DIRECTORS MEETINGS AND COMMITTEES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      Board of
      Directors is presently composed of six (6) members: Eric A. McAfee, Surendra
      Ajjarapu, Harold Sorgenti, Michael DeLong, Laird Cagan, and Michael Peterson.
      Mr. McAfee serves as Chairman of the Board of Directors. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company has adopted the independence standards promulgated by the American
      Stock
      Exchange. Based on these standards, the Board has determined that </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">each
      of
      the directors other than Messrs. McAfee, Ajjarapu and Cagan is an independent
      director within the meaning set forth in the rules of the American Stock
      Exchange, as currently in effect. There are no family relationships between
      any
      director and executive officer.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      Board of
      Directors of American Ethanol, Inc. held&#160;8 meetings during fiscal year
      2007, all of which were special meetings. No meetings were held by AE Biofuels,
      Inc. until January 2008. Each director attended 100% of the aggregate number
      of
      meetings of our Board of Directors and the committees on which each director
      served during fiscal year 2007 and was eligible to attend.<a name="103"/></font></div><a name="103"/>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Information
      About the Directors and Nominees</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Set
      forth
      below is information regarding our directors and the nominees as of April 8,
      2008:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="bottom" width="20%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name</strong></font></div>
            </td>
            <td valign="top" width="3%">&#160;</td>
            <td valign="bottom" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Age</strong></font></div>
            </td>
            <td valign="top" width="3%">&#160;</td>
            <td valign="bottom" width="36%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Position</strong></font></div>
            </td>
            <td valign="top" width="2%">&#160;</td>
            <td valign="bottom" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Director</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Since*</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eric
                A. McAfee</font></div>
            </td>
            <td valign="top" width="3%">&#160;</td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">45</font></div>
            </td>
            <td valign="top" width="3%">&#160;</td>
            <td valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                Executive Officer and Chairman</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;of
                the Board</font></div>
            </td>
            <td valign="top" width="2%">&#160;</td>
            <td valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Surendra
                Ajjarapu</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">President
                and Director</font></div>
            </td>
            <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2007</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harold
                Sorgenti</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">73</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
            </td>
            <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2007</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                DeLong</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">63</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
            </td>
            <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2007</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Laird
                Cagan</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">49</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
            </td>
            <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                Peterson</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">46</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
            </td>
            <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*Date
      the
      board member was elected to the Board of American Ethanol, Inc.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Eric
      A. McAfee</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      co-founded American Ethanol, Inc. in 2005 and has served as its Chairman of
      the
      Board since February 2006. Mr. McAfee was appointed American Ethanol's Chief
      Executive Officer in February 2007. Mr. McAfee has been an entrepreneur,
      merchant banker, venture capitalist and farmer/dairyman for over 20 years.
      Since
      1998, Mr. McAfee has been a principal of Berg McAfee Companies, an investment
      company. Since 2000, Mr. McAfee has been a principal of Cagan McAfee Capital
      Partners (&#8220;CMCP&#8221;) through which Mr. McAfee has founded or acquired ten energy
      and technology companies. In 2003, Mr. McAfee co-founded Pacific Ethanol, Inc.
      (Nasdaq PEIX), a West Coast ethanol producer and marketer. Mr. McAfee received
      a&#160;B.S. in Management from Fresno State University in 1986. Mr. McAfee is a
      graduate of the Harvard Business School Private Equity and Venture Capital
      Program, and is a 1993 graduate of the Stanford Graduate School of Business
      Executive Program.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Surendra
      Ajjarapu</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      has been
      with American Ethanol since December 2005, most recently as President and
      chairman of our Subsidiary, International Biofuels, Inc. Mr. Ajjarapu is an
      entrepreneur who has successfully started several companies in the U.S. and
      India. In 1995, Mr. Ajjarapu formed an information technology consulting firm
      in
      the U.S. and grew the business to Europe and Asia. Mr. Ajjarapu has more than
      11
      years of executive management and board experience while operating successful
      and profitable businesses in both U.S. and abroad. In 2005, Mr. Ajjarapu
      co-founded Wahoo Ethanol and Sutton Ethanol in central Nebraska, where he was
      active in site identification and capital raising. Mr. Ajjarapu was
      President/Director for Sutton Ethanol and Director of Wahoo. Mr. Ajjarapu
      currently sits on the board of Global Information Technology, Inc. Global
      Information Technology, a private information technology consulting company,
      filed for bankruptcy in September 2002 and emerged from bankruptcy in October
      2003. Mr. Ajjarapu has previously held several other board memberships including
      but not limited to Connor Information Technology Pvt. Ltd.&#160;LTD/INDIA and
      Global Exim, Inc. Mr. Ajjarapu is a graduate of South Dakota State University,
      Brookings, SD with a&#160;M.S. in Environmental Engineering. He also received an
      M.B.A. in finance and international management from the University of South
      Florida, Tampa, Florida in 2006 and is a graduate of the Harvard Business School
      Private Equity and Venture Capital Program.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Harold
      Sorgenti</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      was
      appointed to the Board of Directors of American Ethanol in November 2007. Since
      1998, Mr. Sorgenti has been the principal of Sorgenti Investment Partners,
      a
      company engaged in pursuing chemical investment opportunities. Sorgenti
      Investment Partners acquired the French ethanol producer Societ&#232; d'Ethanol de
      Synth&#235;se (SODES) in partnership with Donaldson, Lufkin &amp; Jenrette in 1998.
      Prior to forming Sorgenti Investment Partners, Mr. Sorgenti served a
      distinguished career that included the presidency of ARCO Chemical Company,
      including leadership of the 1987 initial public offering of the company. Mr.
      Sorgenti is also the founder of Freedom Chemical Company. Mr. Sorgenti is a
      former member of the board of directors of Provident Mutual Life Insurance
      Co.
      and Crown Cork &amp; Seal. Mr. Sorgenti received his B.S. in Chemical
      Engineering from City College of New York in 1956 and his M.S. from Ohio State
      University in 1959. Mr. Sorgenti is the recipient of honorary degrees from
      Villanova, St. Joseph's, Ohio State, and Drexel Universities.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Michael
      DeLong</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      was
      appointed to the Board of Directors of American Ethanol on October 1, 2007.
      Lieutenant General DeLong is currently the President of Boeing Middle East
      Ltd.
      and VP International Business Development Middle East of the Boeing Company.
      Prior to his position with the Boeing Company,&#160;LtGen DeLong USMC
      (Ret)&#160;was a Senior Vice President of The Shaw Group Inc., a vertically
      integrated provider of comprehensive technology, engineering, procurement,
      construction, maintenance, pipe fabrication and consulting services to the
      energy and chemicals industries and a leading provider of consulting,
      engineering, construction, remediation and facilities management services to
      the
      environmental, infrastructure and homeland security markets. LtGen
      DeLong&#160;was also the President of Shaw CentCom Services, LLC a joint venture
      with The Shaw Group, Inc., an Executive Vice President of Shaw Environmental
      &amp; Infrastructure, Inc. and the Vice Chairman, of Shaw Arabia Limited
      responsible for providing and directing the contracting staff for the Saudi
      Environmental Agency and the clean up of the Saudi Coast and Terrestrial Areas.
      Prior to joining The Shaw Group in 2003, LtGen DeLong completed a distinguished,
      36-year military career, last serving as Deputy Commander, United States Central
      Command (USCENTCOM) headquartered at MacDill Air Force Base in Tampa, Florida.
      LtGen DeLong is a member of the Board of Directors of Sykes Enterprises,
      Incorporated, a publicly traded company that is a global leader in providing
      outsourced customer contact management solutions and services in the business
      process outsourcing arena. LtGen DeLong earned a B.S. in Aeronautical
      Engineering from the U.S. Naval Academy at Annapolis, MD in 1967; a&#160;M.S. in
      Industrial Management from the Central Michigan University in 1975; and
      a&#160;Ph.D. (Honorary), Strategic Intelligence from the Joint Military
      Intelligence College in Anacostia, MD in 2002. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Laird
      Cagan </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">co-founded
      American Ethanol in 2005 and has served as a member of its Board of Directors
      since February 2006. Mr. Cagan is a co-founder and is a Managing Director,
      of
      Cagan McAfee Capital Partners, LLC, a merchant bank in Cupertino, California.
      He
      also serves as Chairman of the Board of Directors for Evolution Petroleum,
      Inc.
      (AMEX: EPM) and as President of Cagan Capital, LLC, an investment firm he formed
      in 1990. Mr. Cagan serves on the boards of Pacific Asia Petroleum, Inc. (PK:
      PFAP), an oil and gas company, and TWL Corporation (PK: TWLO), a workplace
      training company. From 1999 to 2001, he served as Chairman and Chief Executive
      Officer of BarterNet Corporation, a worldwide Internet B2B exchange. Mr. Cagan
      has been involved over the past 20 years as a venture capitalist, investment
      banker and principal in a wide variety of financings, mergers, acquisitions
      and
      investments of high growth companies in a wide variety of industries. At Goldman
      Sachs and Drexel Burnham Lambert Mr. Cagan was involved in over $14 billion
      worth of transactions. Mr. Cagan attended M.I.T. then received a B.S. and an
      M.S. degree in Engineering and an M.B.A., from Stanford University. He is a
      member of the Stanford University Athletic Board of Directors as well as
      Chairman of the South Bay Chapter of the Young Presidents Organization. Mr.
      Cagan is also a registered representative and Principal of Chadbourn Securities,
      Inc., one of the Company&#8217;s placement agents. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Michael
      Peterson</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      has
      served as a member of American Ethanol's Board of Directors since February
      2006.
      Mr. Peterson has worked in the securities industry in various capacities for
      approximately 19 years. From 1989 to 2000, he was employed by Goldman Sachs
      &amp; Co. including as a vice president with responsibility for a team of
      professionals that advised and managed over $7 billion in assets for high net
      worth individuals and institutions. Mr. Peterson joined Merrill Lynch in 2001
      to
      form and help launch its Private Investment Group and was with Merrill Lynch
      until July 2004. From July 2004 until January 2005, Mr. Peterson was a
      self-employed financial consultant. In January 2005, Mr. Peterson joined
      American Institutional Partners, L.L.C. as a managing partner. On December
      31,
      2005, Mr. Peterson founded his own investment firm, Pascal Management LLC.
      Mr.
      Peterson received a B.S. in Computer Science and Statistics from Brigham Young
      University in 1985 and an M.B.A. from the Marriott School of Management at
      Brigham Young University in 1989.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Committees
      of the Board of Directors</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      Board of
      Directors has the following standing committees: Audit and Governance,
      Compensation and Nominating. The Board of Directors has adopted a written
      charter for each of these committees, copies of which can be found on our
      website at www.aebiofuels.com in the Corporate Governance section of our
      investor relations webpage. All members of the committees appointed by the
      Board
      of Directors are non-employee directors and are independent directors within
      the
      meaning set forth in the rules of the American Stock Exchange, as currently
      in
      effect.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      following
      chart details the current membership of each committee. As the committees were
      constituted in 2008, no meetings of the committees were held in
      2007.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div align="left">
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td valign="bottom" width="25%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name
                of Director</font></div>
            </td>
            <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="bottom" width="13%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit</font></div>
            </td>
            <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="bottom" width="40%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Governance,
                Compensation and </font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nominating</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="25%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                Peterson</font></div>
            </td>
            <td align="left" valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">C</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">M</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="25%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harold
                Sorgenti</font></div>
            </td>
            <td align="left" valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">M</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">M</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="25%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                DeLong</font></div>
            </td>
            <td align="left" valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">M</font></div>
            </td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">C</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="25%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>M
                = Member</strong></font></div>
            </td>
            <td align="left" valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr>
            <td align="left" valign="top" width="25%">
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                = Chair</strong></font></div>
            </td>
            <td align="left" valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<u>Audit
      Committee</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      On
      February 21, 2008, the Board of Directors appointed an Audit Committee chaired
      by Michael Peterson with Michael DeLong and Harold Sorgenti as committee
      members. The Audit Committee adopted a charter which provides that the
      Committee, (i)&#160;oversees our accounting, financial reporting and audit
      processes; (ii) appoints, determines the compensation of, and oversees, the
      independent auditors; (iii) pre-approves audit and non-audit services provided
      by the independent auditors; (iv) reviews the results and scope of audit and
      other services provided by the independent auditors; (v) reviews the accounting
      principles and practices and procedures used in preparing our financial
      statements; and (vi) reviews our internal controls, a copy of which is attached
      as Appendix A to this Proxy Statement.&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      Audit
      Committee works closely with management and our independent auditors. The Audit
      Committee also meets with our independent auditors without members of management
      present, on a quarterly basis, following completion of our auditors&#8217; quarterly
      reviews and annual audit and prior to our earnings announcements, to review
      the
      results of their work. The Audit Committee also meets with our independent
      auditors to approve the annual scope and fees for the audit services to be
      performed. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Each
      of the
      Audit Committee members is an independent director within the meaning set forth
      in the rules of the SEC, as currently in effect. In addition, the Board of
      Directors has determined that Mr. Peterson is an &#8220;audit committee financial
      expert&#8221; as defined by SEC rules. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      Audit
      Committee Report is included in this proxy statement on page 22. A copy of
      the
      Audit Committee&#8217;s written charter is attached as Appendix A to this proxy
      statement and is also available on our website at www.aebiofuels.com in the
      Investor Relations section.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Governance,
      Compensation and Nominating Committee </u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;On
      February
      21, 2008, the Board of Directors appointed a Governance, Compensation and
      Nominating Committee chaired by Michael DeLong with Michael Peterson and Harold
      Sorgenti as committee members. The Governance, Compensation and Nominating
      Committee adopted a charter which provides that the Committee,&#160;(i) reviews
      and approves corporate goals and objectives relevant to the CEO&#8217;s compensation,
      evaluates the CEO&#8217;s performance relative to goals and objectives and sets the
      CEO&#8217;s compensation annually; (ii) makes recommendations annually to the Board of
      Directors with respect to non-CEO compensation; (iii) considers and periodically
      reports on matters relating to the identification, selection and qualification
      of the Board of Directors and candidates nominated to the Board of Directors
      and
      its committees; (iv) develops and recommends governance principles applicable
      to
      the Company; (v) oversees the evaluation of the Board of Directors and
      management from a corporate governance perspective; and (vi) oversees, considers
      and approves related party transactions. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Each
      current
      member of the Governance, Compensation and Nominating Committee is an
      independent director within the meaning set forth in the rules of the American
      Stock Exchange, as currently in effect. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;As
      the
      Governance, Compensation and Nominating Committee has only recently been
      constituted, it&#160;is in the process of considering the&#160;specific process
      for identifying and evaluating potential candidates, and the minimum
      qualifications that must be met by a nominee. The Committee is authorized to
      adopt its own rules of procedure and guidelines not inconsistent with its
      charter, the Company&#8217;s Bylaws or the laws of the State of Nevada. In addition,
      the Governance Compensation and Nominating&#160;Committee is considering whether
      it will consider candidates recommended by stockholders. If such a policy is
      adopted by the Committee, the policy and the procedures by which a stockholder
      wishing to recommend a director candidate for consideration by the Committee
      will be posted in the Investor Relations section of our website.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;In
      addition, the
      Committee is in the process of considering the procedures to determine director
      and executive officer compensation, including the scope of authority and the
      extent to which it delegates its authority, the role of executive officers
      in
      determining or recommending executive and director compensation, and any role
      of
      compensation consultants in determining or recommending executive and director
      compensation.</font></div><br>
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        </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
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        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;A
      copy of the
      Committee&#8217;s written charter is available on our website at www.aebiofuels.com in
      the Investor Relations section of our website. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<u>Code
      of
      Ethics</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      A Code
      of Business Conduct and Ethics is a written standard designed to deter
      wrongdoing and to promote (a) honest and ethical conduct, (b) full, fair,
      accurate, timely and understandable disclosure in regulatory filings and public
      statements, (c) compliance with applicable laws, rules and regulations, (d)
      the
      prompt reporting violation of the code and (e) accountability for adherence
      to
      the Code. We are not currently subject to any law, rule or regulation requiring
      that we adopt a Code of Ethics. However, we have adopted a code of ethics that
      applies to our principal executive officer, chief financial officer, principal
      accounting officer or controller, or persons performing similar functions.
      Such
      code of ethics will be provided to any person without charge, upon request,
      a
      copy of such code of ethics by sending such request to us at our principal
      office. </font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
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        Proceeding</u></font></div>
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        McAfee is a
        founding shareholder or principal investor in 11 publicly traded companies
        and
        approximately 20 private companies. Mr. McAfee served as the vice chairman
        of
        the Board of Directors of Verdisys, Inc., a publicly traded company, in 2003.
        To
        resolve potential litigation and to provide resolution of any issues, Mr.
        McAfee
        and the SEC entered into a settlement agreement under which Mr. McAfee neither
        admitted nor denied causing any action by Verdisys, Inc. to fail to comply
        with
        Section 10(b) of the Exchange Act and Rule 10b-5 and agreed to a payment
        of
        $25,000.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2"><u>Shareholder
        Communications</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
        Company's Board
        of Director is considering the process by which security holders may communicate
        with the Board of Directors. If such a policy is by the Board of Directors,
        the
        policy and procedure will be posted in the Investor Relations section of
        our
        website.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Compensation
      Committee Interlocks and Insider Participation </u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;During
      fiscal
      year 2007, no member of the Governance, Compensation and Nominating Committee
      was an officer or employee of the Company. In addition, no member of the
      Governance, Compensation and Nominating Committee or executive officer of the
      Company served as a member of the Board of Directors or Compensation Committee
      of any entity that has an executive officer serving as a member of our Board
      of
      Directors or Governance, Compensation and Nominating Committee.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Director
      Compensation </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      following
      table provides information regarding all compensation awarded to, earned by
      or
      paid to each person who served as a director of AE Biofuels, Inc. or its
      subsidiary company, American Ethanol, Inc., for some portion or all of 2007.
      Other than as set forth in the table and described more fully below, neither
      AE
      Biofuels, Inc. nor American Ethanol, Inc. paid any fees, made any equity or
      non-equity awards,&#160;or paid any other compensation, to its non-employee
      directors. All compensation paid to its employee directors is set forth in
      the
      tables summarizing executive officer compensation below.</font></div>
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            <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
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                Cagan</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                Peterson <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">119,250</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">44,512</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">163,762</font></div>
                </div>
              </div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="57%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">LtGen
                Michael DeLong (3)</font></div>
            </td>
            <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">20,000</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">44,512</font></div>
              </div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">64,512</font></div>
              </div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harold
                Sorgenti (4)</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6,250</font></div>
              </div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">44,512</font></div>
              </div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">50,762</font></div>
              </div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pro-rated
        in 2007 based on date director was appointed to the Company&#8217;s Board of
        Directors.</font></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(1)
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      amounts in this column represent the amount recognized for financial statement
      reporting purposes under Statement 123R. The assumptions made when calculating
      the amounts in this table are found in Note 11&#160;to AE Biofuels<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#8217;</font> consolidated
      financial statements included in the Company&#8217;s Annual Report on Form 10-K for
      the fiscal year ended December 31, 2007.</font></div><br>
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        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>(2)</sup></font>&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          November 26, 2007, the Company granted Mr. Peterson an option to purchase
          100,000 shares of the Company&#8217;s common stock at an exercise price of $3.00 per
          share in consideration for his services on the Company&#8217;s Board of Directors. The
          option vests quarterly over two years subject to Mr. Peterson&#8217;s continuing
          service on the Company&#8217;s Board of Directors. All awards remained outstanding at
          December 31, 2008.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>(3)
          </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">LtGen
          DeLong was appointed to the Company&#8217;s Board of Directors on October 1, 2007. In
          consideration for his services on the Company&#8217;s Board of Directors, on October
          1, 2007, the Company granted LtGen DeLong an option to purchase 40,000
          shares of
          the Company&#8217;s common stock at an exercise price of $3.00 per share. The option
          vests quarterly over two years subject to LtGen DeLong&#8217;s continuing service on
          the Company&#8217;s Board of Directors. On November 26, 2007, LtGen DeLong was awarded
          an additional option to purchase 60,000 shares of the Company&#8217;s common stock at
          an exercise price of $3.00 per share. The option vests quarterly over two
          years
          subject to LtGen DeLong&#8217;s continuing service on the Company&#8217;s Board of
          Directors. All awards remained outstanding at December 31, 2008.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>(4)</sup></font>&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harold
          Sorgenti was appointed to the Company&#8217;s Board of Directors on November 26, 2007.
          In consideration for his services on the Company&#8217;s Board of Directors, on
          November 26, 2007, the Company granted Mr. Sorgenti an option to purchase
          100,000 shares of the Company&#8217;s common stock at an exercise price of $3.00 per
          share. The option vests quarterly over two years subject to Mr. Sorgenti&#8217;s
          continuing service on the Company&#8217;s Board of Directors. All awards remained
          outstanding at December 31, 2008.</font></div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      2007,
      the Board of Directors of the Company adopted a director compensation policy
      pursuant to which each non-employee director other than Laird Cagan,&#160;will
      be paid an annual cash retainer of $75,000 and will receive a cash payment
      of
      $250 per Board or committee meeting attended telephonically and a cash payment
      of $500 per Board or committee meeting attended in person. In addition, each
      non-employee director is initially granted an option exercisable for 100,000
      shares of the Company&#8217;s common stock, which vests quarterly over two years
      subject to continuing services to the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition, an annual cash retainer of $10,000 will be paid to the chairman of
      the
      Governance, Compensation and Nominating Committee and an annual cash retainer
      of
      $20,000 will be paid to the chairman of the Audit Committee.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITY
      OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following tables set forth information as of March 26, 2008, regarding the
      beneficial ownership of our each class of our voting&#160;stock, (a) each
      stockholder who is known by the Company to own beneficially in excess of 5%
      of&#160;each class of our voting&#160;stock; (b) each director; (c) the
      Company&#8217;s chief executive officer; and (d) the executive officers and directors
      as a group. Except as otherwise indicated, all persons listed below have (i)
      sole voting power and investment power with respect to their shares of stock,
      except to the extent that authority is shared by spouses under applicable law,
      and (ii) record and beneficial ownership with respect to their shares of stock.
      The percentage of beneficial ownership of common stock is based upon 84,785,920
      shares of common stock outstanding as of March 26, 2008. <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      percentage of beneficial ownership of Series B preferred stock is based upon
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6,270,491</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      shares
      of Series B preferred stock outstanding as of March 26,
      2008.&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
      otherwise identified, the address of the directors and officers of the Company
      is 20400 Stevens Creek Blvd., Suite 700, Cupertino, CA 95014.&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div>
        <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" colspan="5" valign="bottom" width="26%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Common
                  Shares</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td colspan="5" valign="bottom" width="25%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Series
                  B Preferred</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name
                  and Address</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Amount&#160;and&#160;</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Nature&#160;of&#160;</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Beneficial&#160;</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Ownership</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Percentage</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>of&#160;Class</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Amount&#160;and&#160;</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Nature&#160;of&#160;</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Beneficial&#160;</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Ownership</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Percentage</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>of&#160;Class</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Officers
                  and Directors</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="12%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eric
                  A. McAfee</font></div>
              </td>
              <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,000,000
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15.3</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Surendra
                  Ajjarapu</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,215,000
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8.5</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Laird
                  Q. Cagan</font></div>
              </td>
              <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">14,683,721
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17.1</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                  L. Peterson</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,225,000
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.4</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">LtGen
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              </td>
              <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,000
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">*</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harold
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              <td width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,000
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(6)</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">*</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Andrew
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              <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">365,000
                  </font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(7)</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">*</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
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            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">William
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              <td width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">*</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>All
                  officers and directors as a group (8) persons</strong></font></div>
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              <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">37,353,721</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">43.3</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
                </div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>5%
                  Holders</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cagan
                  McAfee Capital Partners, LLC</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10600
                  N. De Anza Boulevard, Suite 250</font></div>
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                  CA 95014</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><br></font>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1</font></div>
                </div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;"><br>
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cagan
                  Capital, LLC</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10600
                  N. De Anza Boulevard, Suite 250</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cupertino,
                  CA 95014</font></div>
              </td>
              <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><br>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3</font></div>
                </div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;"><br>
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><br></font>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3</font></div>
                </div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;"><br>
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Telecom
                  Investments Holding Limited</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">c/o
                  Mr. Sapan Shirmal</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AVL
                  Ethanol Energy Inc.</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">263
                  McLaws Circles Suite 103</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Williamsburg,
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,100,000</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9.6</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            </tr>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Liviakis
                  Financial Communications</font></div>
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                  Old Redwood Hwy. #395</font></div>
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                  Valley, CA 94941</font></div>
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              <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,400,000</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.2</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">
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            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2">3300
                  Oak Lawn Ave., Suite 650</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2">Dallas,
                  TX 75219</font></div>
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              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;"><font size="2">999,999</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" size="2">16.0</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
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            </tr>
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              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cordillera
                  Fund LP</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2">810
                  Preston Road, Suite 400<br>Dallas, TX
                  75225</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
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              <td align="right" valign="bottom" width="11%" style="border-bottom: white;"><font size="2">583,334</font></td>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9.3</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                  C Brown Trust dated June 30, 2000</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2">34
                  Meadowview Drive</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2">Northfield,
                  IL 60093</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;"><font size="2">8.5</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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      <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*Less
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    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(1)
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Includes
      (i) 6,200,000 shares held by McAfee Capital, LLC, a fund owned by Mr. McAfee
      and
      his wife; (ii) 800,000 shares owned by P2 Capital, LLC, a fund owned by Mr.
      McAfee&#8217;s wife and children, and (iii) 12,000,000 shares held by Cagan McAfee
      Capital Partners, LLC, of which Mr. McAfee is a 50% owner. Mr. McAfee disclaims
      beneficial ownership over 50% of the shares held by Cagan McAfee Capital
      Partners, LLC except to the extent of his pecuniary interest therein.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(2)
        </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Includes
        315,000 shares issuable pursuant to options exercisable within 60 days of
        March
        26, 2008. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(3)
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Includes
      (i) 6,907,000 shares held by Cagan Capital, LLC, a fund owned by Mr. Cagan;
      (ii)
      400,000 shares owned by KRC Trust and 400,000 shares owned by KQC Trust, trusts
      for Mr. Cagan&#8217;s daughters for which Mr. Cagan is trustee; (iii) 12,000,000
      shares held by Cagan McAfee Capital Partners, LLC, of which Mr. Cagan is a
      50%
      owner; and (iv) 976,721 shares of common stock issuable pursuant to outstanding
      warrants. Mr. Cagan is a registered representative of Chadbourn Securities,
      Inc.
      and received 95% of the placement agent warrants received by Chadbourn
      Securities, Inc. in connection with securities issued by AE Biofuels, Inc.
      Mr.
      Cagan disclaims beneficial ownership over 50% of the shares held by Cagan McAfee
      Partners, LLC except to the extent of his pecuniary interest therein.
</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2"><sup>(4)</sup><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Address:
      17 Canary Court, Danville, California 94526. Includes 1,000,000 shares of common
      stock held by Pascal Investment Partners Equity Fund. Mr. Peterson holds 41%
      of
      Pascal Investment Partners Equity Fund and 100% of Pascal Management LLC, which
      is its sole general partner, and therefore may be deemed to beneficially own
      the
      shares held by Pascal Investment Partners Equity Fund. Mr. Peterson disclaims
      beneficial ownership except to the extent of his pecuniary interest therein.
      Also includes 25,000 shares issuable pursuant to options exercisable within
      60
      days of March 26, 2008. </font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(5)
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Includes
      25,000 shares issuable pursuant to options exercisable within 60 days of March
      26, 2008. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>(6)
          </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Includes
          25,000 shares issuable pursuant to options exercisable within 60 days of
          March
          26, 2008. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(7)</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Includes
      165,000 shares issuable pursuant to options exercisable within 60 days of March
      26, 2008. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>(8)</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Includes
      15,000 shares issuable pursuant to options exercisable within 60 days of March
      26, 2008. <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
      Maender&#8217;s Restricted Purchase Agreement and provides for the sale to Mr. Maender
      of 800,000 shares of American Ethanol common stock, at a nominal price per
      share, with 200,000 shares immediately vesting and the remaining shares subject
      to American Ethanol&#8217;s right of repurchase decreasing at the rate of 200,000
      shares per year. </font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
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        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
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      ONE</strong></font><font style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ELECTION
      OF DIRECTORS</strong></font><font style="DISPLAY: inline; FONT-SIZE: 1pt; FONT-FAMILY: Times New Roman, serif">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Board
      of Directors currently consists of six (6) directors. At each annual meeting
      of
      stockholders, directors are elected annually and until their respective
      successors are duly qualified and elected to succeed those directors whose
      terms
      expire on the annual meeting dates or such earlier date of resignation or
      removal. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="112"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Board
      Independence</strong></font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Board
      of Directors has determined that all of its current directors, including all
      directors standing for reelection, except Messrs. McAfee, Ajjarapu and Cagan,
      are independent directors within the meaning set forth in the Rules of The
      American Stock Exchange, as currently in effect. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="113"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Nominees</strong></font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Board
      of Directors approved Eric A. McAfee, Surendra Ajjarapu, Harold Sorgenti,
      Michael DeLong, Laird Cagan, and Michael Peterson as nominees for election
      at
      the Annual Meeting to the Board of Directors. If elected, Eric A. McAfee,
      Surendra Ajjarapu, Harold Sorgenti, Michael DeLong, Laird Cagan, and Michael
      Peterson will serve as directors until our annual meeting in 2008, and until
      a
      successor is qualified and elected or earlier resignation or removal. Each
      of
      the nominees is currently a director of the Company. Please see &#8220;Nominees for
      Election&#8221; as Directors on page 5 of this Proxy Statement for information
      concerning our incumbent directors standing for re-election. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
      otherwise instructed, the proxy holders will vote the proxies received by them
      FOR the nominees set forth above. If the nominees are unable or decline to
      serve
      as a director at the time of the Annual Meeting, the proxies will be voted
      for
      another nominee designated by the Board of Directors. We are not aware of any
      reason that a nominee would be unable or unwilling to serve as a director.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="114"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Vote
      Required</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
      a
      quorum is present, the nominees receiving the highest number of votes will
      be
      elected to the Board of Directors. Abstentions and broker non-votes will have
      no
      effect on the election of directors. Proxies may not be voted for a greater
      number of persons than the number of nominees named.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
      MEMBERS OF YOUR BOARD OF DIRECTORS RECOMMENDS </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>A
      VOTE &#8220;FOR&#8221; THE ELECTION OF THESE NOMINEES.</strong></font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROPOSAL
      TWO:</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RATIFICATION
      OF AUDITORS </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Audit
      Committee has selected BDO Seidman, LLP, independent auditors, to audit the
      financial statements of the Company and its subsidiaries for the year ending
      December 31, 2007 and recommends that stockholders vote for ratification of
      such
      appointment. Although action by stockholders is not required by law, the Company
      has determined that it is desirable to request approval of this selection by
      the
      stockholders. Notwithstanding the selection, the Audit Committee, in its
      discretion, may direct the appointment of new independent auditors at any time
      during the year, if the Audit Committee feels that such a change would be in
      the
      best interest of the Company and its stockholders. In the event of a negative
      vote on ratification, the Audit Committee will reconsider its selection.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">BDO
      Seidman, LLP was first appointed in fiscal year 2006, and has audited our
      financial statements for fiscal years 2006 and 2007. We expect that
      representatives of BDO Seidman, LLP will be present at the Annual Meeting to
      respond to appropriate questions and to make a statement if they so desire.
      The
      aggregate fees billed for services rendered by BDO Seidman, LLP during the
      years
      ended December 31, 2007 and 2006 are described below under the caption
&#8220;Principal Accountant Fees and Services.&#8221;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Principal
      Accountant Fees and Services</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Auditor
      Fees and Services in Our 2007 and 2006 Fiscal Years</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Our
      registered independent public accounting firm is BDO Seidman, LLP. The fees
      billed by BDO Seidman, LLP in 2007 and 2006 were as follows:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

          <tr>
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td width="2%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit
                Fees</font></div>
            </td>
            <td width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">275,500</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">100,000</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit-Related
                Fees</font></div>
            </td>
            <td width="2%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                Audit and Audit-Related Fees</font></div>
            </td>
            <td width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">275,500</font></div>
              </div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">100,000</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tax
                Fees</font></div>
            </td>
            <td width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">62,000</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">28,750
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ccffcc solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
                Other Fees</font></div>
            </td>
            <td width="2%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
              </div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
              </div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ccffcc solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                for independent public audit firms</font></div>
            </td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">337,500</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">128,750</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit&#160;Fees
      consist of fees billed for professional services rendered for the audit of
      the
      Company's consolidated annual financial statements, and review of the interim
      consolidatd financial statements included in quarterly reports and services
      that
      are normally provided by BDO Seidman, LLP in connectin with statutory and
      regulatory filings or engagements.&#160; </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Audit-Related
      Fees include the audits of employee benefit plans and accounting consultations
      related to accounting, financial reporting or disclosure matters not classified
      as "Audit Fees." Tax Fees include tax compliance, tax advice and tax planning
      services. These services related to the preparation of various state and federal
      tax returns and review of Section 409A compliance.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Audit
      Committee's Pre-Approval Policies and Procedures</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Consistent
      with policies of the SEC regarding auditor independence and the Audit Committee
      Charter, the Audit Committee has the responsibility for appointing, setting
      compensation and overseeing the work of the registered independent public
      accounting firm (the &#8220;Firm&#8221;). The Audit Committee's policy is to pre-approve all
      audit and permissible non-audit services provided by the Firm. Pre-approval
      is
      detailed as to the particular service or category of services and is generally
      subject to a specific budget. The Audit Committee may also pre-approve
      particular services on a case-by-case basis. In assessing requests for services
      by the Firm, the Audit Committee considers whether such services are consistent
      with the Firm&#8217;s independence, whether the Firm is likely to provide the most
      effective and efficient service based upon their familiarity with the Company,
      and whether the service could enhance the Company's ability to manage or control
      risk or improve audit quality.</font></div><br>
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        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      Audit
      Committee was constituted in 2008 and all of the audit-related, tax and other
      services to be provided by BDO Seidman LLP in 2008 have been approved in advance
      by the Audit Committee. For the years ended December 31, 2007 and 2006, the
      entire Board performed the functions of an audit committee and the audit-related
      services provided by BDO Seidman LLP in 2007 and 2006 were approved in advance
      by the entire Board.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Vote
      Required</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;If
      a quorum
      is present, the affirmative vote of a majority of the shares present and
      entitled to vote at the Annual Meeting will be required to ratify the selection
      of BDO Seidman, LLP as our independent auditors. Abstentions will have the
      effect of a vote &#8220;against&#8221; the ratification of BDO Seidman, LLP as our
      independent auditors. Broker non-votes will have no effect on the outcome of
      the
      vote.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
      BOARD UNANIMOUSLY RECOMMENDS VOTING &#8220;FOR&#8221; THE RATIFICATION OF BDO SEIDMAN, LLP
      AS THE COMPANY&#8217;S INDEPENDENT AUDITORS.</strong></font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROPOSAL
      THREE:</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>APPROVAL
      OF THE 2007 STOCK PLAN</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company&#8217;s stockholders are being asked to approve the AE Biofuels, Inc. 2007
        Stock Plan, as amended and restated, (the &#8220;2007 Plan&#8221;), assumed by the Company
        upon the consummation of the merger with American Ethanol in December&#160;2007.
        The 2007 Plan was initially adopted by American Ethanol&#8217;s Board of Directors in
        July 2007 and amended and restated by our Board in April 2007, subject to
        stockholder approval at the Annual Meeting. Stockholder approval of the 2007
        Plan requires the affirmative vote of a majority of the Company shares that
        are
        present in person or by proxy and entitled to vote on the proposal at the
        meeting. Our named executive officers and directors have an interest in this
        proposal by virtue of their being eligible to receive equity awards under
        the
        2007 Plan. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        strongly believe that the approval of the 2007 Plan is essential to our
        continued success. Our Board believes that equity awards motivate high levels
        of
        performance, align the interests of employees and stockholders by giving
        employees the perspective of an owner with an equity stake in the Company,
        and
        provide an effective means of recognizing employee contributions to the success
        of the Company. Our Board believes that equity awards are a competitive
        necessity in the environment in which we operate, and are essential to
        recruiting and retaining the highly qualified technical and other key personnel
        who help the Company meet its goals, as well as rewarding and encouraging
        current employees and service providers. The Committee believes that the
        ability
        to grant equity awards will be important to the future success of the
        Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        principal provisions of the 2007 Plan are summarized below. This summary
        is
        qualified in its entirety by reference to the actual 2007 Plan, a copy of
        which
        is attached as&#160;Appendix B</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;to
        this Proxy Statement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Summary
        of the 2007 Plan</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Purpose</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        purpose of the 2007 Plan is to promote the interests of the Company by
        attracting and retaining the best available personnel for positions of
        substantial responsibility, providing additional incentive to eligible persons
        employed by or serving the Company or any subsidiary or parent, and to promote
        the success of the Company&#8217;s business.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Administration
        of the Plan</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        2007 Plan may be administered by either the Board or, at the discretion of
        the
        Board, a committee of the Board (the &#8220;Administrator&#8221;). Subject to the provisions
        of the 2007 Plan, the Administrator determines in its discretion the persons
        to
        whom and the times at which Awards are granted, the types and sizes of such
        Awards, and all of their terms and conditions. All Awards must be evidenced
        by a
        written agreement between us and the participant. The Administrator may amend,
        cancel or renew any Award, waive any restrictions or conditions applicable
        to
        any Award, and accelerate, continue, extend or defer the vesting of any Award.
        The Administrator has the authority to construe and interpret the terms of
        the
        2007 Plan and Awards granted under it.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Types
        of Awards</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Administrator may authorize the following types of awards under the 2007
        Plan:
        (1) incentive stock options, which are options intended to satisfy the
        requirements of Section&#160;422 of the Internal Revenue Code of 1986, as
        amended; (2) nonstatutory stock options, or options that do not qualify as
        incentive stock options; (3) stock appreciation rights; (4) restricted stock;
        (5) restricted stock units; (6) performance shares; and (7) performance units
        (individually, an &#8220;Award&#8221;).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Eligible
        Participants</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        All
        employees, directors, consultants and advisors of the Company, its parent
        and
        any of its subsidiaries are eligible to receive Awards under the 2007 Plan.
        Accordingly, each non-employee member of the Board, each executive officer
        and
        each employee has an interest in this proposal. While we may grant incentive
        stock options only to employees, we may grant nonstatutory stock options,
        stock
        appreciation rights, restricted stock awards, restricted stock units,
        performance shares and performance units to any eligible participant. As
        of
        March&#160;26, 2008, approximately 12 employees (including employee directors
        and executive officers) and three non-employee directors are eligible to
        participate in the 2007 Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Shares
        Subject to the Plan</em></strong>. A total of 4,000,000 shares of our common
        stock were initially authorized and reserved for issuance under the 2007
        Plan.
        The total number of shares of our common stock authorized and reserved for
        issuance under the 2007 Plan will continue to increase on the first day of
        our
        fiscal year beginning with the 2009 fiscal year, in an amount equal to the
        least
        of (i)&#160;1,000,000 shares, (ii) 1% of the number of shares on the last day of
        the immediately preceding fiscal year that (A) are outstanding, and (B) are
        issuable pursuant to outstanding Awards, or (iii)&#160;such number of shares
        determined by our Board. As of March 26, 2008, 1,984,000 shares of our common
        stock were subject to Awards currently outstanding under the 2007 Plan and
        2,016,000 shares of our common stock remain available for issuance.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Appropriate
        adjustments will be made in the number of authorized shares and in outstanding
        Awards to prevent dilution or enlargement of participants&#8217; rights in the event
        of a </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">dividend
        or other distribution (whether in the form of cash, shares, other securities,
        or
        other property), recapitalization, stock split, reverse stock split,
        reorganization, merger, consolidation, split-up, spin-off, combination,
        repurchase, or exchange of shares or other securities of the Company, or
        other
        change in the corporate structure of the Company affecting the shares
        occurs.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        Shares
        subject to Awards which expire or are cancelled or forfeited will again become
        available for issuance under the 2007 Plan. The shares available will not
        be
        reduced by Awards settled in cash or by shares withheld to satisfy tax
        withholding obligations. Only the net number of shares issued upon the exercise
        of stock appreciation rights or options exercised by tender of previously
        owned
        shares will be deducted from the shares available under the 2007 Plan.
</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Stock
        Options</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Administrator may grant nonstatutory stock options, incentive stock options,
        or
        any combination of these. The Administrator will determine the number of
        shares
        of our common stock covered by each option. However, during any fiscal year
        of
        the Company, no participant may be granted options covering more than
        1,000,000</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;shares,
        except that a participant may be granted options covering an
        additional&#160;1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">shares
        during the fiscal year in which the participant first becomes an employee
        of the
        Company. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        exercise price of any option may not be less than the fair market value of
        our
        common stock on the date of grant. Any incentive stock option granted to
        a
        person who owns stock possessing more than 10% of the total combined voting
        power of all classes of our stock or of any parent or subsidiary corporation
        must have an exercise price equal to at least 110% of the fair market value
        of a
        share of our common stock on the date of grant and a term not exceeding five
        years. All other options generally cannot have a term longer than ten years.
        In
        addition, the aggregate fair market value of the shares (determined on the
        grant
        date) covered by incentive stock options which first become exercisable by
        any
        participant during any calendar year may not exceed $100,000. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        exercise price of options may be paid in cash or, with the consent of the
        Administrator, by a full recourse promissory note, delivery of other shares
        of
        common stock (including shares acquired upon exercise of the related options),
        or by cashless exercise, to the extent and subject to applicable regulations.
        At
        the time of exercise, a participant must pay any taxes that the Company is
        required to withhold.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Options
        vest and become exercisable at such times or upon such events and subject
        to
        such terms, conditions, performance criteria or restrictions as specified
        by the
        Administrator. Unless a longer period is provided by the Administrator, an
        option generally will remain exercisable for a minimum of thirty days following
        the participant&#8217;s termination of service, except that if service terminates as a
        result of the participant&#8217;s death or disability, the option generally will
        remain exercisable for a minimum of six months, but in any event not beyond
        the
        expiration of its term. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Stock
        Appreciation Rights</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.&#160;&#160;&#160;&#160;A
        stock appreciation right gives a participant the right to receive the
        appreciation in the fair market value of our common stock between the date
        of
        grant of the Award and the date of its exercise. We may pay the appreciation
        either in cash or in shares of our common stock. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
        any fiscal year of the Company, no participant may be granted freestanding
        stock
        appreciation rights covering more than 1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">shares,
        except that a participant may be granted stock appreciation rights covering
        an
        additional 1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">shares
        during the fiscal year in which the participant first becomes an employee
        of the
        Company.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        The
        maximum term of any stock appreciation right granted under the 2007 Plan
        is ten
        years and the minimum exercise price is the fair market value of our common
        stock on the date of grant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Restricted
        Stock Awards</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.&#160;&#160;&#160;&#160;Awards
        of restricted stock are rights to acquire or purchase shares of our common
        stock, which vest in accordance with the terms and conditions established
        by the
        Administrator in its sole discretion. During any fiscal year of the Company,
        no
        participant may be granted Awards of restricted stock covering more than
        1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">shares,
        except that a participant may be granted Awards of restricted stock covering
        an
        additional 1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">shares
        during the fiscal year in which the participant first becomes an employee
        of the
        Company. The Administrator determines the terms and conditions of restricted
        stock Awards, including the vesting conditions, which may be based on such
        service or performance-based criteria as the Administrator specifies, and
        the
        shares acquired may not be transferred by the participant until vested. Unless
        otherwise determined by the Administrator, a participant will forfeit any
        unvested shares upon a date set forth in the Award agreement, which generally
        will be voluntary or involuntary termination of service with us for any reason,
        including death or disability. Participants holding restricted stock will
        have
        the right to vote the shares and to receive any dividends paid, except that
        dividends or other distributions paid in shares will be subject to the same
        restrictions as the original Award. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Restricted
        Stock Units</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.&#160;&#160;&#160;&#160;Restricted
        stock units granted under the 2007 Plan represent a right to receive shares
        of
        our common stock at a future date determined in accordance with the
        participant&#8217;s Award agreement. No monetary payment is required for receipt of
        restricted stock units or the shares issued in settlement of the Award, the
        consideration for which is furnished in the form of the participant&#8217;s services
        to us. The Administrator may set vesting criteria in its discretion, which
        may
        be based on either service or performance criteria. During any fiscal year
        of
        the Company, no participant may be granted Awards of restricted stock units
        covering more than&#160;1,000,000</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        shares,
        except that a participant may be granted Awards of restricted stock covering
        an
        additional&#160;1,000,000</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        shares
        during the fiscal year in which the participant first becomes an employee
        of the
        Company. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Performance
        Shares and Performance Units</em></strong>.&#160;&#160;&#160;&#160;The
        Administrator may grant performance shares and performance units under the
        2007
        Plan, which are Awards that will result in a payment to a participant only
        if
        specified performance goals are achieved during a specified performance period.
        Awards of performance shares are denominated in shares of our common stock,
        while Awards of performance units are denominated in dollars. For each full
        fiscal year of the Company contained in the performance period for an Award
        of
        performance shares, no participant may be granted more than&#160;1,000,000
        performance shares, except that a participant may be granted an
        additional&#160;1,000,000 shares during the fiscal year in which the participant
        first becomes an employee of the Company. For each full fiscal year of the
        Company contained in the performance period for an Award of performance units,
        no participant may be granted more than $10,000,000 performance units, except
        that a participant may be granted an additional $10,000,000 of performance
        units
        during the fiscal year in which the participant first becomes an employee
        of the
        Company. To the extent earned, Awards of performance shares and units may
        be
        settled in cash, shares of our common stock, or any combination thereof.
        Payments will be made as soon as practicable after the expiration of the
        performance period. On a date set forth in the Award agreement, all unearned
        or
        unvested performance shares or units will be forfeited and available for
        grant
        under the 2007 Plan. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Code
        Section 162(m)</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Pursuant to Code Section&#160;162(m), the Company generally may not deduct for
        federal income tax purposes compensation paid to our Chief Executive Officer
        and
        certain of our highest paid executive officers to the extent that any of
        these
        persons receive more than $1 million in compensation in any single year.
        However, if the compensation qualifies as &#8220;performance-based&#8221; for Code
        Section&#160;162(m) purposes, the Company may deduct for federal income tax
        purposes the compensation paid even if such compensation exceeds $1&#160;million
        in a single year. Awards granted under the 2007 Plan may be designed to qualify
        as &#8220;performance-based&#8221; compensation within the meaning of Section&#160;162(m) of
        the Code. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Administrator will establish the performance goals applicable to each Award
        intended to qualify as &#8220;performance-based compensation&#8221; under Code Section
        162(m), which may include the following: (i)&#160;annual revenue, (ii) cash
        collections, (iii) earnings per Share, (iv) net income, (v) new orders, (vi)
        operating cash flow, (vii)&#160;operating income, (viii) pro forma net income,
        (ix) product shipments, (x) profit after taxes, (xi)&#160;profit before taxes,
        (xii)&#160;return on assets, (xiii)&#160;return on equity, (xiv)&#160;return on
        sales, (xv)&#160;revenue,&#160;(xvi)&#160;total shareholder return, (xvii)
        capital market activity, and (xviii) debt to equity ratio. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
        performance goals may be used to measure the performance of the Company as
        a
        whole or a business unit of the Company and may be measured relative to a
        peer
        group or index. The performance goals may differ from participant to participant
        and from Award to Award. Prior to the determination date, the Administrator
        will
        determine whether any significant elements will be included in or excluded
        from
        the calculation of any performance goal with respect to any
        participant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Change
        in Control</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.&#160;&#160;In
        the event of a merger of the Company with or into another corporation, or
        a
        change in control, each outstanding Award will be assumed or an equivalent
        Award
        substituted by the successor corporation or a parent or subsidiary of the
        successor corporation. In the event that the successor corporation in a merger
        or change in control refuses to assume or substitute for the Award, then
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
        participant will fully vest in and have the right to exercise all of his
        or her
        outstanding options and stock appreciation rights, including shares as to
        which
        such Awards would not otherwise be vested or exercisable, all restrictions
        on
        restricted stock will lapse, and, with respect to restricted stock units,
        performance shares and performance units, all performance goals or other
        vesting
        criteria will be deemed achieved at target levels and all other terms and
        conditions met. In addition, if an option or stock appreciation right is
        not
        assumed or substituted for in the event of a change in control, the
        Administrator will notify the participant in writing or electronically that
        the
        option or stock appreciation right will be fully vested and exercisable for
        fifteen days, and the option or stock appreciation right will terminate upon
        the
        expiration of such period.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Transferability</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Unless
        determined otherwise by the Administrator, Awards granted under the 2007
        Plan
        may not be sold, pledged, assigned, hypothecated, transferred, or disposed
        of in
        any manner other than by will or the laws of descent and distribution, and
        may
        be exercised during the lifetime of the participant, only by the participant.
        If
        the Administrator makes an Award transferable, such Award may only be
        transferred (i) by will, (ii) by the laws of descent and distribution, (iii)
        to
        a revocable trust, or (iii) as permitted by Rule 701 of the Securities Act
        of
        1933, as amended.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Amendments
        to the Plan</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Board may amend, alter, suspend or discontinue the Plan at any time. However,
        amendment, suspension or termination of the 2007 Plan may not adversely affect
        any outstanding Award without the consent of the participant, unless such
        amendment, suspension or termination is necessary to comply with applicable
        law.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Termination
        of the Plan</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Plan shall terminate upon the earlier of (1) the expiration of the ten year
        period measured from the date the Plan is adopted by the Board or (2)
        termination by the Board. All Awards outstanding at the time of the termination
        of the Plan shall continue in effect in accordance with the provisions of
        the
        documents evidencing those Awards.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>New
        Plan Benefits</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        awards to directors, executive officers, employees and consultants are made
        at
        the discretion of the Stock Plan Administrator. Therefore, the benefits and
        amounts that will be received or allocated under the 2007 Plan as amended
        and
        extended are not determinable at this time. The following table is for
        illustrative purposes only and sets forth </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;the
        aggregate number of shares subject to options granted under the 2007 Plan
        during
        the 2007 fiscal year, (b)&#160;the average per share exercise price of such
        options, (c) the aggregate number of shares issued pursuant to awards of
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">restricted
        stock granted under the 2007 Plan during the 2007 fiscal year, and </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
        dollar value of such shares based on $9.50 per share</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
        the
        fair market value on March 26, 2008</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">19</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name
                  and Principal Position</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                  of Options Granted</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Average
                  Per Share Exercise Price of Options</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                  of Shares of Restricted Stock Granted</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Dollar
                  Value of Restricted Stock Grants</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eric
                  A. McAfee</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chairman
                  and Chief Executive Officer</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Timothy
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">390,000</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">William
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">90,000</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.00</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Andrew
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                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
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              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">390,000</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.00</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">870,000</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.00</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Non-Employee
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              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">300,000</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.00</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Non-Executive
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">197,000</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.00</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
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              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Certain
        U.S. Federal Tax Consequences</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following is a brief summary of the principal federal income tax consequences
        of
        awards under the 2007 Plan to U.S. taxpayers and the Company based on applicable
        provisions of the Internal Revenue Code and Treasury Regulations now in
        effect.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following discussion assumes that the fair market value of our common stock
        on
        the date of exercise is greater than the per share exercise price.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Nonstatutory
        Stock Options</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        No
        taxable income is reportable when a nonstatutory stock option with an exercise
        price equal to the fair market value of the underlying stock on the date
        of
        grant is granted to a participant. Upon exercise, the participant will recognize
        ordinary income in an amount equal to the excess of the fair market value
        (on
        the exercise date) of the shares purchased over the exercise price of the
        option. Any taxable income recognized in connection with an option exercise
        by
        an employee of the Company is subject to tax withholding by the Company.
        Any
        additional gain or loss recognized upon any later disposition of the shares
        would be capital gain or loss.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Incentive
        Stock Options.</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        No
        taxable income is reportable when an incentive stock option is granted or
        exercised (except for purposes of the alternative minimum tax, in which case
        taxation is the same as for nonstatutory stock options). If the participant
        exercises the option and then later sells or otherwise disposes of the shares
        more than two years after the grant date and more than one year after the
        exercise date, the difference between the sale price and the exercise price
        will
        be taxed as capital gain or loss. If the participant exercises the option
        and
        then later sells or otherwise disposes of the shares before the end of the
        two-
        or one-year holding periods described above, he or she generally will have
        ordinary income at the time of the sale equal to the fair market value of
        the
        shares on the exercise date (or the sale price, if less) minus the exercise
        price of the option.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Stock
        Appreciation Rights.</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        No
        taxable income is reportable when a stock appreciation right with an exercise
        price equal to the fair market value of the underlying stock on the date
        of
        grant is granted to a participant. Upon exercise, the participant will recognize
        ordinary income in an amount equal to the amount of cash received and the
        fair
        market value of any shares received. Any additional gain or loss recognized
        upon
        any later disposition of the shares would be capital gain or loss.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Restricted
        Stock Awards, Restricted Stock Units, Performance Shares and Performance
        Units.</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
        participant generally will not have taxable income at the time an Award of
        restricted stock, restricted stock units, performance shares, or performance
        units are granted. Instead, he or she will recognize ordinary income in the
        first taxable year in which his or her interest in the shares underlying
        the
        Award becomes either (i) freely transferable, or (ii) no longer subject to
        a
        substantial risk of forfeiture. However, the recipient of an Award of restricted
        stock may elect to recognize income at the time he or she receives the Award
        in
        an amount equal to the fair market value of the shares underlying the Award
        (less any cash paid for the shares on the date the Award is granted).
</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Tax
        Effect for the Company</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        The
        Company generally will be entitled to a tax deduction in connection with
        an
        Award under the 2007 Plan in an amount equal to the ordinary income realized
        by
        a participant and at the time the participant recognizes such income (for
        example, the exercise of a nonstatutory stock option). Special rules limit
        the
        deductibility of compensation paid to the Company&#8217;s Chief Executive Officer and
        to certain of its most highly compensated executive officers. Under Section
        162(m), the annual compensation paid to any of these specified executives
        will
        be deductible only to the extent that it does not exceed $1,000,000. However,
        the Company can preserve the deductibility of certain compensation in excess
        of
        $1,000,000 if the conditions of Section 162(m) are met. These conditions
        include
        stockholder approval of the 2007 Plan, setting limits on the number of Awards
        that any individual may receive and for Awards other than certain stock options,
        establishing performance criteria that must be met before the Award actually
        will vest or be paid. The 2007 Plan has been designed to permit the
        Administrator to grant Awards that qualify as performance-based for purposes
        of
        satisfying the conditions of Section 162(m), thereby permitting the Company
        to
        continue to receive a federal income tax deduction in connection with such
        Awards.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Section
        409A</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        Section
        409A of the Code imposes certain requirements for non-qualified deferred
        compensation arrangements with respect to an individual&#8217;s deferral and
        distribution elections and permissible distribution events. Awards granted
        under
        the 2007 Plan with a deferral feature will be subject to the requirements
        of
        Section 409A. If an Award is subject to and fails to satisfy the requirements
        of
        Section 409A, the recipient of that Award may recognize ordinary income on
        the
        amounts deferred under the Award, to the extent vested, which may be prior to
        when the compensation is actually or constructively received. Also, if an
        Award
        that is subject to Section 409A fails to comply with Section 409A&#8217;s provisions,
        Section 409A imposes an additional 20% federal income tax on compensation
        recognized as ordinary income, as well as interest on such deferred
        compensation. In addition, certain states (such as California) have laws
        similar
        to Section 409A and as a result, failure to comply with such similar laws
        may
        result in additional state income, penalty and interest charges.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
        FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF UNITED STATES FEDERAL INCOME
        TAXATION UPON PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE GRANT AND
        EXERCISE OF AWARDS UNDER THE 2007 PLAN. IT DOES NOT PURPORT TO BE COMPLETE,
        AND
        DOES NOT DISCUSS THE TAX CONSEQUENCES OF A PARTICIPANT&#8217;S DEATH OR THE PROVISIONS
        OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH
        THE PARTICIPANT MAY RESIDE.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EQUITY
        COMPENSATION PLAN INFORMATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Equity
        Compensation Plan Information</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following table provides information as of March&#160;26, 2008 with respect to
        the shares of AE Biofuels, Inc. common stock that may be issued under existing
        equity compensation plans. The category &#8220;Equity compensation plans approved by
        security holders&#8221; in the table below consists solely of the Stock Plan. The
        category &#8220;Equity compensation plans not approved by security holders&#8221; in the
        table below consists of options granted to employees prior to the adoption
        of
        the Stock Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td valign="bottom" width="57%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Plan
                  Category</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                  of securities to be issued upon exercise of outstanding options,
                  warrants
                  and rights</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(a)</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Weighted
                  Average exercise price of outstanding options, warrants and
                  rights</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(b)</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                  of securities remaining available for future issuance under equity
                  compensation plans (excluding securities reflected in column
                  (a))</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(c)</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Equity
                  compensation plans approved by security holders</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%">&#160;</td>
              <td width="2%">&#160;</td>
              <td align="left" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="11%">&#160;</td>
              <td align="left" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="11%">&#160;</td>
              <td align="left" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="11%">&#160;</td>
              <td align="left" valign="bottom" width="1%">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Equity
                  compensation plans not approved by security holders</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,224,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.84</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,016,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%">&#160;</td>
              <td width="2%">&#160;</td>
              <td align="left" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="11%">&#160;</td>
              <td align="left" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="11%">&#160;</td>
              <td align="left" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="1%">&#160;</td>
              <td align="right" valign="bottom" width="11%">&#160;</td>
              <td align="left" valign="bottom" width="1%">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,224,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.84</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,016,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
        BOARD UNANIMOUSLY RECOMMENDS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>VOTING
        &#8220;FOR&#8221; THE ADOPTION OF THE</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007
        STOCK PLAN</strong></font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">22</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXECUTIVE
      OFFICERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Set
      forth
      below is information regarding our executive officers as of April 8,
      2008.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="31%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Age</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="41%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Position</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="31%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eric
                A. McAfee</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="8%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">45</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="41%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                Executive Officer</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="31%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Surendra
                Ajjarapu</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="8%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="41%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">President</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="31%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">William
                J. Maender</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="8%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">61</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="41%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                Financial Officer and Secretary</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="31%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Andrew
                Foster</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="8%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">42</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="41%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                Vice President and Chief Operating
                Officer</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Eric
        A. McAfee</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        co-founded American Ethanol, Inc. in 2005 and has served as its Chairman
        of the
        Board since February 2006. Mr. McAfee was appointed American Ethanol's Chief
        Executive Officer in February 2007. Mr. McAfee has been an entrepreneur,
        merchant banker, venture capitalist and farmer/dairyman for over 20 years.
        Since
        1998, Mr. McAfee has been a principal of Berg McAfee Companies, an investment
        company. Since 2000, Mr. McAfee has been a principal of Cagan McAfee Capital
        Partners (&#8220;CMCP&#8221;) through which Mr. McAfee has founded or acquired ten energy
        and technology companies. In 2003, Mr. McAfee co-founded Pacific Ethanol,
        Inc.
        (Nasdaq PEIX), a West Coast ethanol producer and marketer. Mr. McAfee received
        a&#160;B.S. in Management from Fresno State University in 1986. Mr. McAfee is a
        graduate of the Harvard Business School Private Equity and Venture Capital
        Program, and is a 1993 graduate of the Stanford Graduate School of Business
        Executive Program.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Surendra
        Ajjarapu</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        has been
        with American Ethanol since December 2005, most recently as President and
        chairman of our Subsidiary, International Biofuels, Inc. Mr. Ajjarapu is
        an
        entrepreneur who has successfully started several companies in the U.S. and
        India. In 1995, Mr. Ajjarapu formed an information technology consulting
        firm in
        the U.S. and grew the business to Europe and Asia. Mr. Ajjarapu has more
        than 11
        years of executive management and board experience while operating successful
        and profitable businesses in both U.S. and abroad. In 2005, Mr. Ajjarapu
        co-founded Wahoo Ethanol and Sutton Ethanol in central Nebraska, where he
        was
        active in site identification and capital raising. Mr. Ajjarapu was
        President/Director for Sutton Ethanol and Director of Wahoo. Mr. Ajjarapu
        currently sits on the board of Global Information Technology, Inc. Global
        Information Technology, a private information technology consulting company,
        filed for bankruptcy in September 2002 and emerged from bankruptcy in October
        2003. Mr. Ajjarapu has previously held several other board memberships including
        but not limited to Connor Information Technology Pvt. Ltd.&#160;LTD/INDIA and
        Global Exim, Inc. Mr. Ajjarapu is a graduate of South Dakota State University,
        Brookings, SD with a&#160;M.S. in Environmental Engineering. He also received an
        M.B.A. in finance and international management from the University of South
        Florida, Tampa, Florida in 2006 and is a graduate of the Harvard Business
        School
        Private Equity and Venture Capital Program.</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>William
      J. Maender</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      joined
      American Ethanol as its Chief Financial Officer in January 2006. Prior to
      joining American Ethanol from 2002 through 2005 Mr. Maender was Vice President
      and Chief Financial Officer of Applied Tech Products, a privately held contract
      manufacturer of injection molded plastic and rubber products. Previously he
      held
      the position of Vice President and CFO of Lombard Technologies, Inc. a privately
      held contract metal finishing company, from 2000 to 2002. From 1983 to 1999
      Mr.
      Maender was Vice President, Chief Financial Officer, Secretary and Treasurer
      of
      LaBarge, Inc., a public company and contract manufacturer of electronic devices.
      Mr. Maender holds a B.S. in Accounting from Quincy University and an M.B.A.
      in
      Finance from Southern Illinois University.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Andrew
      Foster</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      joined
      American Ethanol in March 2006 and was appointed Executive Vice President and
      Chief Operating Officer in October 2006. Prior to joining the Company, Mr.
      Foster served as Vice President of Corporate Marketing for Marimba, Inc. an
      enterprise software company, which was acquired by BMC Software in July 2004.
      From July 2004, until April 2005, Mr. Foster served as Vice President of
      Corporate Marketing for the Marimba product line at BMC. In April 2005, Mr.
      Foster was appointed Director of Worldwide Public Relations for BMC and served
      in that capacity until December 2005. From May 2000 until March 2003, Mr. Foster
      served as Director of Corporate Marketing for eSilicon Corporation, a fabless
      semiconductor company. Mr. Foster also served as Associate Director of Political
      Affairs at the White House from 1989 to 1992, and Deputy Chief of Staff to
      Illinois Governor Jim Edgar from 1995 to 1998. Mr. Foster holds a B.A. in
      Political Science from Marquette University in Milwaukee,
      Wisconsin.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXECUTIVE
      COMPENSATION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      following
      table sets forth information concerning all cash and non-cash compensation
      awarded to, earned by or paid to (i) all individuals serving as the Company&#8217;s
      principal executive officer or acting in a similar capacity during the last
      completed fiscal year, regardless of compensation level, and (ii) the Company&#8217;s
      other two most highly compensated executive officers serving at the end of
      the
      last completed fiscal year.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Summary
      Compensation Table</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div align="left">
      <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

          <tr>
            <td valign="bottom" width="49%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name
                and Principal Position</strong></font></div>
            </td>
            <td width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Year</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Salary
                ($)</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Bonus
                ($)</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Option
                Awards(1)&#160;($)</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Compensation</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>($)</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="49%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eric
                McAfee, Chief Executive Officer</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="6%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2007</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">120,000</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">120,000</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="49%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2006</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="49%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Timothy
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            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="6%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,023</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,023</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="49%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2006</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">191,667</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">125,000</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">316,667</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="49%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Surendra
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            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="6%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2007</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">190,000</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">515,678</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">705,678</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="49%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2006</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">172,500</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,000</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">252,500</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="49%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">William
                J. Maender, Chief Financial Officer and Secretary(3)</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="6%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2007</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">180,000</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
              </div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,393</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">181,393</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="49%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2006</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">172,500</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100,000</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">272,500</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="49%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Andrew
                Foster, Executive Vice President and Chief Operating
                Officer</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="top" width="6%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2007</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">200,000</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)
        These
        amounts reflect the value determined by the Company for accounting purposes
        for
        these awards and do not reflect whether the recipient has actually realized
        a
        financial benefit from the awards (such as by exercising stock options).
        This
        column represents the dollar amount recognized for financial statement reporting
        purposes for fiscal year 2007 for stock option awards granted to each of
        the
        named executive officers in fiscal year 2007 as well as prior fiscal years,
        in
        accordance with FAS 123R. Pursuant to SEC rules, the amounts shown exclude
        the
        impact of estimated forfeitures related to service-based vesting conditions.
        No
        stock option awards were forfeited by any of the named executive officers
        in
        fiscal year 2007. For additional information, see Note 11 of our financial
        statements in the Form 10-K for the year ended December 31, 2007, as filed
        with
        the SEC. For information on the valuation assumptions for grants made prior
        to
        fiscal year 2007, see the notes in our financial statements in the Form 10-K
        for
        the respective year. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)
          Mr.
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      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)
          The
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Outstanding
      Equity Awards at Fiscal Year End</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      following
      table sets forth information with respect to the value of all vested and
      unvested awards&#160;held by the Company&#8217;s named executive officers at December
      31, 2007. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div align="center">
      <table bgcolor="white" cellpadding="0" cellspacing="0" id="ftable" width="100%">

          <tr bgcolor="white">
            <td align="left" valign="bottom" width="29%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="14" valign="bottom" width="48%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Option
                Awards</font></strong></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="5" valign="bottom" width="18%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                Awards</font></strong></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="29%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name</strong></font></td>
            <td width="2%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>No.
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                exercisable</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>No.
                of securities underlying unexercised options (#)
                unexercisable</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Equity
                incentive plan awards: # of securities underlying unexercised unearned
                options (#)</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Option
                exercise price ($)</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            </td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Option
                expiration date</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                of shares or units of stock that have not vested
                (#)</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Market
                value of shares or units of stock that have not vested ($)<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="29%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="29%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Surendra
              Ajjarapu</font></td>
            <td width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">300,000</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.00</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7/16/17</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="29%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15,000</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">75,000</font></td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11/26/12</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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              Foster</font></td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">150,000</font></td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.00</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: white;">
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            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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            <td align="left" valign="bottom" width="29%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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            <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></td>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11/26/12</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)
      The
      market value of the unvested shares was determined by multiplying the closing
      market price of AE Biofuel&#8217;s stock at December 31, 2007, the end of its last
      completed fiscal year ($12.50), by the number of shares of stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        July
        17, 2007, the Company granted Mr. Ajjarapu an option to purchase 300,000
        shares
        of the Company&#8217;s common stock at an exercise price of $3.00 per share. All of
        the shares subject to the option were exercisable on the date of
        grant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        November 26, 2007, the Company granted Mr. Ajjarapu an option to purchase
        90,000
        shares of the Company&#8217;s common stock at an exercise price of $3.00 per share.
        One-twelfth (1/12) of the shares subject to the option vest every three months
        from the date of grant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        July
        17, 2007, the Company granted Mr. Foster an option to purchase 300,000 shares
        of
        the Company&#8217;s common stock at an exercise price of $3.00 per share. Fifty
        percent (50%) of the shares subject to the option were exercisable on the
        date
        of grant and twenty-five percent (25%) of the shares subject to the option
        vest
        on the anniversary of the date of grant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(5)&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        November 26, 2007, the Company granted Mr. Foster an option to purchase 90,000
        shares of the Company&#8217;s common stock at an exercise price of $3.00 per share.
        One-twelfth (1/12) of the shares subject to the option vest every three months
        from the date of grant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left"><font size="2">(6)
        On January 12, 2006, Mr. Foster entered into a
        Restricted Purchase Agreement with the Company pursuant to which the Company
        sold to Mr. Foster 200,000 shares of the Company's common stock, at a&#160;
nominal price per share, with 50,000 shares immediately vested and the remaining
        shares vesting at the rate of 50,000 shares per year.</font></div>
    </div>
    <div>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">24</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EMPLOYMENT
      CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
      ARRANGEMENTS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;We
      are party
      to the following agreements with our named executive officers.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Eric
        McAfee</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;On
          January
          29, 2006, we entered into an Executive Chairman Agreement, pursuant to
          which we
          pay Mr. McAfee $10,000 per month and reimburse Mr. McAfee for business-related
          expenses incurred with respect to the Company. This agreement is for a
          term of
          three years expiring January 29, 2009, however, either party may terminate
          the
          agreement at any time upon written notice to the other party; provided,
          however,
          that if we terminate the agreement we agree to pay Mr. McAfee an amount
          equal to
          the amount Mr. McAfee would have earned had he continued to be paid for
          an
          additional 6 months after termination. In addition, we agreed to indemnify
          Mr.
          McAfee for any damages arising out of Mr. McAfee&#8217;s services under this
          agreement.</font></div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Surendra
      Ajjarapu</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;On
      January
      12, 2006, we entered into an Employment Agreement with Surendra Ajjarapu, which
      Employment Agreement was amended on July 17, 2007, pursuant to which the Company
      engaged Mr. Ajjarapu as its President. Pursuant to the Employment Agreement,
      Mr.
      Ajjarapu receives an annual salary of $200,000, a discretionary bonus of up
      to
      $80,000 per year, and a severance package consisting of six months of base
      salary and continuing benefits. Mr. Ajjarapu also entered into a Restricted
      Purchase Agreement with the Company pursuant to which the Company sold to Mr.
      Ajjarapu 6,800,000 shares of the Company&#8217;s common stock at a nominal price. In
      addition, on July 17, 2007, Mr. Ajjarapu was granted an option for 300,000
      shares of the Company&#8217;s common stock at an exercise price of $3.00 per share.
      The option was fully vested on the date of grant. On November 26, 2007, Mr.
      Ajjarapu was granted an option for 90,000 shares of the Company&#8217;s common stock
      at an exercise price of $3.00 per share. One-twelfth (1/12</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)
      of the
      shares subject to the option vest every three months from the date of
      grant.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2"><strong>William
      J. Maendar</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2">On
      January 12, 2006, we entered into a three year
      Executive Employment Contract with William J. Maender to serve as American
      Ethanol's Chief Financial Officer. Under Mr. Maender's employment contract,
      Mr.
      Maender receives an annual salary of $180,000 and a discretionary annual bonus
      of up to $50,000. Mr. Maender also entered into a Restricted Purchase Agreement
      with the Company pursuant to which the Company sold to Mr. Maender 800,000
      shares of American Ethanol's common stock, at a nominal price per share, with
      200,000 shares immediately vested and the remaining shares subject to the
      Company's right of repurchase decreasing at the rate of 200,000 shares per
      year.
      On November 26, 2007, Mr. Maender was granted an option for 90,000 shares of
      the
      Company's common stock at an exercise price of $3.00 per share. One-twelfth
      (1/12<sup>th</sup>) of the shares subject to the option vest every three months
      from the date of grant.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2">If,
      prior to a Change in Control (as defined in the
      agreement), Mr. Maender is terminated other than for Cause or as a result of
      his
      death or total disability or is Constructively Terminated (as defined in the
      agreement), then provided he signs a release of claims, Mr. Maender is entitled
      to severance benefits of (i) cash payments equal to his monthly base salary
      for
      a period of six months, (ii) company-paid health, dental, and vision insurance
      coverage for him and his dependents until the earlier of six (6) months or
      until
      such time as Mr. Maender is covered under another employer's group policy for
      such benefits; and (iii) full vesting acceleration for all of his unvested
      restricted stock. If, following a Change of Control, Mr. Maender is terminated
      other than for Cause or as a result of his death or total disability or is
      Constructively Terminated, then provided he signs a release of claims, all
      of
      his then unvested restricted stock shall be immediately vested.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="S1eolPage75"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Andrew
      Foster</strong></font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;In
      May 2007,
      the Company entered into a three year Executive Employment Contract with Mr.
      Foster to serve as the Company&#8217;s Executive Vice President and Chief Operating
      Officer. Under Mr. Foster&#8217;s employment contract, Mr. Foster receives an annual
      salary of $180,000 and a discretionary annual bonus of up to $50,000. On July
      17, 2007, Mr. Foster was granted an option for 300,000 shares of the Company&#8217;s
      common stock at an exercise price of $3.00 per share. Fifty percent (50%) of
      the
      shares subject to the option vested on the date of grant and the 25% of the
      shares subject to the option vest on each anniversary of the date of grant.
      On
      November 26, 2007, Mr. Foster was granted an option for 90,000 shares of the
      Company&#8217;s common stock at an exercise price of $3.00 per share. One-twelfth
      (1/12</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)
      of the
      shares subject to the option vest every three months from the date of
      grant.</font></div><br>
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        </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
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        </div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If,
        prior
        to a Change in Control (as defined in the agreement), Mr. Foster is terminated
        other than for Cause or as a result of his death or total disability or is
        Constructively Terminated (as defined in the agreement), then provided he
        signs
        a release of claims, Mr. Foster is entitled to severance benefits of (i)
        cash
        payments equal to his monthly base salary for a period of six months, and
        (ii)
        company-paid health, dental, and vision insurance coverage for him and his
        dependents until the earlier of six (6) months or until such time as Mr.
        Foster
        is covered under another employer&#8217;s group policy for such benefits. If,
        following a Change of Control, Mr. Foster is terminated other than for Cause
        or
        as a result of his death or total disability or is Constructively Terminated,
        then provided he signs a release of claims, in addition to the severance
        benefits provided above, all of his then unvested restricted stock or stock
        options shall be immediately vested. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECTION
        16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
        16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
        officers and directors and persons who own more than 10% of a registered
        class
        of our equity securities to file with the Securities and Exchange Commission
        initial statements of beneficial ownership, reports of changes in ownership
        and
        annual reports concerning their ownership of our common stock and other equity
        securities, on Forms 3, 4 and 5 respectively. Executive officers, directors
        and
        greater than 10% shareholders are required by the Securities and Exchange
        Commission regulations to furnish our Company with copies of all Section
        16(a)
        reports they file. We believe that, during fiscal 2007, our directors, executive
        officers and 10% stockholders complied with all Section 16(a) filing
        requirements. In making this statement, we have relied upon examination of
        the
        copies of Forms 3, 4 and 5, and amendments thereto, provided to AE Biofuels,
        Inc. and the written representations of its directors and executive officers.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="middle" width="49%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CERTAIN
                  RELATIONSHIPS AND RELATED
                  TRANSACTIONS</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
        for the compensation agreements and other arrangements that are described
        under
&#8220;Employment Contracts and Termination of Employment and Change-in-Control
        Arrangements&#8221;, and except as set forth below, there was not during fiscal year
        2007 nor is there currently proposed, any transaction or series of similar
        transactions to which AE Biofuels was or is to be a party in which the amount
        involved exceeds $120,000 and in which any director, executive officer, five
        percent stockholder or any member of the immediate family of any of the
        foregoing persons had or will have a direct or indirect material interest.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Governance, Compensation and Nominating Committee is responsible for reviewing
        and approving in advance any proposed related person transactions. The
        Governance, Compensation and Nominating Committee is also responsible for
        reviewing the Company&#8217;s policies with respect to related person transactions and
        overseeing compliance with such policies. Those transactions described below
        entered into prior to the appointment of the Governance, Compensation and
        Nominating Committee were approved by the entire Board of Directors.
</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eric
        A.
        McAfee, the Chief Executive Officer and Chairman of the Board of the Company,
        and the Company are parties to an Executive Chairman Agreement, pursuant
        to
        which we pay Mr. McAfee $10,000 per month and reimburse Mr. McAfee for
        business-related expenses incurred with respect to the Company. This agreement
        is for a term of three years expiring January 29, 2009, however, either party
        may terminate the agreement at any time upon written notice to the other
        party;
        provided, however, that if we terminate the agreement we agree to pay Mr.
        McAfee
        an amount equal to the amount Mr. McAfee would have earned had he continued
        to
        be paid for an additional 6 months after termination. In addition, we agreed
        to
        indemnify Mr. McAfee for any damages arising out of Mr. McAfee&#8217;s services under
        this agreement. For the fiscal year ended December 31, 2007, we paid Mr.
        McAfee
        $120,000 under this agreement. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eric
        A.
        McAfee and Laid Cagan are the Managing Directors of Cagan McAfee Capital
        Partners (&#8220;CMCP&#8221;). Mr. Cagan is also a registered representative of Chadbourn
        Securities, Inc., which acted as placement agent in connection with the Series
        A
        Preferred and Series B Preferred offerings of American Ethanol, Inc. We paid
        Chadbourn Securities Inc. a total of $1,701,092 and issued Warrants exercisable
        for 800,000 shares of Common Stock and 386,875 shares of Series B Preferred
        Stock in connection with our Series A and Series B Preferred Stock offerings.
        On
        January 30, 2006, we entered into an Advisory Services Agreement with CMCP
        pursuant to which CMCP provides the Company with certain administrative
        financial modeling, merger and acquisition, executive travel coordination
        and
        board of directors support services. We pay CMCP an advisory fee equal to
        $7,500
        per payroll period plus CMCP&#8217;s actual and reasonable expenses for travel,
        printing, legal or other services. The term of the agreement is three years.
        For
        the fiscal year ended December 31, 2007, we paid CMCP $360,584 under this
        agreement. </font></div>
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          </div>
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      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;We
      entered
      into a consulting agreement with Liviakis Financial Communications, LLC to
      provide investor relations services to us in consideration for the issuance
      of
      4.4 million shares of our common stock plus reimbursement of
      expenses.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;We
      have
      entered into an agreement with CM Consulting, LLC, pursuant to which we prepaid
      $360,000 to CM Consulting, representing a prepayment for 20 hours per month
      of
      expense reimbursement at the rate of $750 per hour for the use of CM
      Consulting&#8217;s $3.2 million 2005 Pilatus PC-12 plane. The market rate for the
      charter of a 2005 Pilatus PC-12 is approximately $1,200 per hour, with two
      hour
      daily minimums, pilot salary, overnight charges and other costs and restrictions
      that are not included in the CM Consulting agreement. McAfee Capital, LLC,
      which
      is owned by Eric McAfee and his wife, is a 50% owner of CM Consulting, LLC.
      This
      agreement expired February 2008.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;On
      November
      16, 2006, we entered into a short-term loan agreement with Laird Cagan, a member
      of its Board of Directors, pursuant to which we borrowed $1.25 million at 10%
      interest per annum for a period of six months or until funds raised through
      a
      private placement were sufficient to pay the loan amount. As of&#160;December
      31, 2007&#160;all amounts have been paid in full.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Between
      February 8, 2008 and March 27, 2008, we&#160;borrowed $1.7
      million&#160;from&#160;Laird Cagan,&#160;a member of our Board of Directors. The
      loan bears interest&#160;at a 10% interest per annum due and payable on December
      31, 2008 to finance our demonstration plant in Butte, Montana. The Governance,
      Compensation and Nominating Committee approved this credit
      facility.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AUDIT
      COMMITTEE REPORT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;The
      following
      is the report of the Audit Committee of the Board of Directors. The Audit
      Committee has reviewed and discussed our audited financial statements for the
      fiscal year ended December 31, 2007 with our management. In addition, the Audit
      Committee has discussed with BDO Seidman LLP, our independent auditors, the
      matters required to be discussed by Statement on Auditing Standards No.
      61,&#160;as amended&#160;(Communications with Audit Committee). The Audit
      Committee also has received the written disclosures and the letter from BDO
      Seidman LLP as required by the Independence Standards Board Standard No. 1
      (Independence Discussions with Audit Committees) and the Audit Committee has
      discussed the independence of BDO Seidman LLP with that firm. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Based
      on
      the Audit Committee&#8217;s review of the matters noted above and its discussions with
      our independent auditors and our management, the Audit Committee recommended
      to
      the Board of Directors that the financial statements be included in our Annual
      Report on Form 10-K for the fiscal year ended December 31, 2007. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Respectfully
      submitted by: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
      Peterson (Chair)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
      DeLong</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harold
      Sorgenti</font></div><br>
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        </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
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      </div>
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    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OTHER
      MATTERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Management
      does not know of any matter to be brought before the Meeting, other than the
      matters described in the Notice of Annual Meeting accompanying this Proxy
      Statement. The persons named in the form of proxy solicited by the Board will
      vote all proxies which have been properly executed, and if any matters not
      set
      forth in the Notice of Annual Meeting are properly brought before the meeting,
      such persons will vote thereon in accordance with their best judgment</font><a name="142"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>HOUSEHOLDING</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;We
      have
      adopted a procedure approved by the Securities and Exchange Commission called
      &#8220;householding.&#8221; Under this procedure, a householding notice will be sent to
      stockholders who have the same address and last name and they will receive
      only
      one copy of our annual report and proxy statement unless one or more of these
      stockholders notifies us that they wish to continue receiving individual copies.
      This procedure reduces our printing costs and postage fees. Each stockholder
      who
      participates in householding will continue to receive a separate proxy
      card.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;If
      any
      stockholders in your household wish to receive a separate annual report and
      a
      separate proxy statement, they may call our Corporate Secretary, William
      Maender, at (408) 213-0940 or write to AE Biofuels, Inc. at 20400 Stevens Creek
      Blvd., Suite 700, Cupertino, CA 95014. They may also send an email to our
      Corporate Secretary at wmaender@aebiofuels.com. Other stockholders who have
      multiple accounts in their names or who share an address with other stockholders
      can authorize us to discontinue mailings of multiple annual reports and proxy
      statements by calling or writing to Investor Relations.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">BY
      ORDER
      OF THE BOARD OF DIRECTORS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">William
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">April
      14,
      2008</font></div><br>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Annual
      Meeting of Stockholders</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thursday
      , May 8, 2008</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10:00
      a.m., Pacific Standard Time</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20400
      Stevens Creek Blvd., Suite 700</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cupertino,
      CA 95014</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><br></font>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="justify" valign="top" width="22%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
                  BIOFUELS, INC. &#160;&#160;</font></div>
              </td>
              <td align="justify" valign="top" width="8%">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
              </td>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">______________________________________________________</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>This
      Proxy is solicited by the Board of Directors</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      for use
      at the Annual Meeting on Thursday, May 8, 2008.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      shares of common and&#160;Series B Preferred&#160;stock you hold in your account
      as of record on March 26, 2008, will be voted as you specify on the reverse
      side.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
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      3.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By
      signing the Proxy, you revoke all prior Proxies and appoint </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eric
      A.
      McAfee, Surendra Ajjarapu, Harold Sorgenti, Michael DeLong, Laird Cagan, and
      Michael Peterson</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      and
      each of them, with full power of substitution, to vote your shares on the
      matters shown on the reverse side and any other matters which may come before
      the Annual Meeting or any adjournment or postponement thereof.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
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      REVERSE SIDE FOR VOTING INSTRUCTIONS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;There
      are two ways to vote your Proxy.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">VOTE
      BY
      FAX</font></div>
    <div>&#160;</div>
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          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
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            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Complete,
                sign and date the enclosed proxy card and fax front and back to Corporate
                Stock Transfer at </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(303)
                282-5800</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">;</font></div>
            </td>
          </tr>

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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
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      BY
      MAIL</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mark,
                sign and date your Proxy Card and return it in the postage-paid envelope
                provided or return it to AE Biofuels, Inc., c/o Corporate Stock Transfer
                3200 Cherry Creek Dr. South, Suite 430, Denver, CO
                80209.</font></div>
            </td>
          </tr>

      </table>
    </div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
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        </div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PLEASE
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Mark
      only one box below)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div>
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          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.
                Election of Directors</font></div>
            </td>
            <td align="left" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td align="left" valign="top" width="30%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">01Eric
                A. McAfee</font></div>
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            <td align="left" valign="top" width="38%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">__
                FOR the nominees (except as marked below)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td align="left" valign="top" width="30%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">02
                </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Surendra
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            </td>
            <td align="left" valign="top" width="38%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">
            </td>
            <td align="left" valign="top" width="30%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">03
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            </td>
            <td align="left" valign="top" width="38%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">__
                WITHHOLD AUTHORITY to vote for the </font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">
            </td>
            <td align="left" valign="top" width="30%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">04
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            </td>
            <td align="left" valign="top" width="38%">
              <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nominees</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">&#160;</td>
            <td align="left" valign="top" width="30%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">05
                </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Laird
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            <td align="left" valign="top" width="38%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">&#160;</td>
            <td align="left" valign="top" width="30%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">06
                </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
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            </td>
            <td align="left" valign="top" width="38%">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div align="left">
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="45%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Instruction:
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">for
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                or number(s) of the nominee(s) on </font></div>
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                line provided to the right. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>If
                this Proxy </strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>is
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>election
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            </td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="40%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
                </div>
            </td>
            <td width="13%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ratification
                of BDO Seidman, LLP, independent auditors.
</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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      FOR</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 288pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 288pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">__
      AGAINST</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 288pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 288pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">__
      ABSTAIN</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 288pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                approve the 2007 Stock Plan.</font></div>
            </td>
          </tr>

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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 288pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">__
      FOR</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 288pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 288pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">__
      AGAINST</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 288pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 288pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">__
      ABSTAIN</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon
                such other matters as may come before said meeting or any adjournments
                thereof, in the discretion of the Proxy
                holders.</font></div>
            </td>
          </tr>

      </table>
    </div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
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        </div>
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        </div>
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        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div align="left">
      <table border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td colspan="2" width="60%">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
                Proxy, when properly executed, will be voted in the manner
                directed</font></div>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">by
                the undersigned stockholder(s). </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>If
                no direction </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>is
                made, this Proxy </strong></font></div>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>will
                be voted &#8220;FOR&#8221; each proposal. </strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td width="5%">&#160;</td>
            <td align="left" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                </font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="40%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td width="5%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:&#160;</font></td>
            <td align="left" valign="top" width="55%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="40%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td width="5%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="top" width="55%" style="border-bottom: #ffffff thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="40%" style="border-bottom: #ffffff solid;">
            </td>
            <td colspan="2" width="60%" style="border-bottom: black thin solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td width="5%">&#160;</td>
            <td align="left" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Signature</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
    <div align="left">
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="40%" style="border-bottom: #ffffff solid;">
            </td>
            <td colspan="2" width="60%" style="border-bottom: black thin solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td width="5%">&#160;</td>
            <td align="left" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Signature</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td colspan="2" width="60%">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Please
                sign exactly as name(s) appear on this Proxy. Joint owners should
                </font></div>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">each
                sign personally. Corporation Proxies should be signed by authorized
                </font></div>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">officer.
                When signing as executors, administrators, trustees, etc., give full
                title.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Address
      Change? Mark box and indicate changes above. ___</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>APPENDIX
        A</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><img src="logo.jpg" alt=""></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>AUDIT
          COMMITTEE CHARTER</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
          of
          February 21, 2008</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>COMMITTEE
          MEMBERSHIP:</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>&#160;</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Audit
          Committee of AE Biofuels, Inc. (the "Company") shall be comprised of at
          least
          three directors,</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">each
          of
          whom the Company&#8217;s Board (the "Board") has determined has no material
          relationship with the Company and each of whom is</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">otherwise
          "independent" under Rule 10A-3 of the Securities</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exchange
          Act of 1934. The Board shall also determine that each member is "financially
          literate," and that one</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">member
          of
          the Audit Committee has "accounting or related financial management expertise,"
          as such qualifications</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">are
          interpreted by the Board in its business judgment, and whether any member
          of the
          Audit Committee</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">is
          an
          "audit committee financial expert," as defined by the rules of Securities
          and
          Exchange Commission (the</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;"</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SEC").
          If
          the Board has determined that a member of the Audit Committee is an audit
          committee financial expert,</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">it
          may
          presume that such member has accounting or related financial management
          expertise.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
          director may serve as a member of the Audit Committee if such director
          serves on
          the audit committees of more</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">than
          two
          other public companies unless the Board determines that such simultaneous
          service would not</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">impair
          the ability of such director to effectively serve on the Audit Committee,
          and
          discloses this determination in</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
          Company&#8217;s annual proxy statement.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Members
          shall be appointed by the Board and shall serve at the pleasure of the
          Board and
          for such term or terms as</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
          Board
          may determine.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>COMMITTEE
          PURPOSES:</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>&#160;</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          purposes of the Audit Committee are to:</font></div>
        <div>&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                </td>
                <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></td>
                <td align="left">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Assist
                    Board oversight of (i) the integrity of the Company&#8217;s financial
                    statements, (ii) the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Company&#8217;s
                    compliance with legal and regulatory requirements, (iii) the
                    independent
                    auditors&#8217; qualifications and independence, and (iv) the performance of
                    the
                    independent auditors and the Company&#8217;s internal audit function; and
                    </font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prepare
                    the report required to be prepared by the Audit Committee pursuant
                    to the
                    rules of the SEC for inclusion in the Company&#8217;s annual proxy
                    statement.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Review
                    and approve merger and acquisition transactions and investment
                    transactions proposed by the Company's management. The Audit
                    Committee is
                    authorized to approve merger and acquisition transactions and
                    investment
                    transactions by the Company valued in an amount not to exceed,
                    for any
                    particular acquisition or investment, $150 million in cash, stock
                    or a
                    combination thereof.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A-1</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
            Biofuels, Inc.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit
            Committee Charter</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
            2
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
            7</font></div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          function of the Audit Committee is oversight. The management of the Company
          is
          responsible for the preparation, presentation and integrity of the Company&#8217;s
          financial statements. Management is responsible for maintaining appropriate
          accounting and financial reporting policies and internal controls and procedures
          that provide for compliance with accounting standards and applicable laws
          and
          regulations. The independent auditors are responsible for planning and
          carrying
          out a proper audit of the Company&#8217;s consolidated annual financial statements,
          reviews of the Company&#8217;s consolidated quarterly financial statements prior to
          the filing of each quarterly report on Form 10-Q, and other procedures.
          In
          fulfilling their responsibilities hereunder, it is recognized that members
          of
          the Audit Committee are not full-time employees of the Company and are
          not, and
          do not represent themselves to be, performing the functions of auditors
          or
          management. As such, it is not the duty or responsibility of the Audit
          Committee
          or its members to conduct &#8220;field work&#8221; or other types of auditing or accounting
          reviews or procedures or to set auditor independence standards. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          independent auditors shall submit to the Audit Committee annually a formal
          written statement (the &#8220;Auditors&#8217; Statement&#8221;) describing: the auditors&#8217; internal
          quality-control procedures; any material issues raised by the most recent
          internal quality-control review or peer review of the auditors, or by any
          inquiry or investigation by governmental or professional authorities, within
          the
          preceding five years, respecting one or more independent audits carried
          out by
          the auditors, and any steps taken to deal with any such issues; and, to
          assess
          the auditors&#8217; independence, all relationships between the independent auditors
          and the Company, including the matters set forth in Independence Standards
          Board
          Standard No. 1.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>COMMITTEE
          DUTIES AND RESPONSIBILITIES: </u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
          carry
          out its purposes, the Audit Committee shall have the following duties and
          responsibilities:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 54pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">With
                  respect to the independent auditors, </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">i.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  be directly responsible for the appointment, compensation, retention
                  and
                  oversight of the work of the independent auditors (including the
                  resolution of disagreements between management and the independent
                  auditors regarding financial reporting), who shall report directly
                  to the
                  Audit Committee; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  pre-approve, or to adopt appropriate procedures to pre-approve,
                  all audit
                  and non-audit services to be provided by the independent auditors;
                  </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  ensure that the independent auditors prepare and deliver annually
                  an
                  Auditors&#8217; Statement (it being understood that the independent auditors are
                  responsible for the accuracy and completeness of this Statement),
                  and to
                  discuss with the independent auditors any relationships or services
                  disclosed in this Statement that may impact the quality of audit
                  services
                  or the objectivity and independence of the Company&#8217;s independent auditors;
                  </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A-2</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
            Biofuels, Inc.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit
            Committee Charter</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
            3&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
            7</font></div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iv.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  obtain from the independent auditors a timely report relating to
                  the
                  Company&#8217;s annual audited and unaudited quarterly financial statements
                  describing all critical accounting policies and practices used,
                  all
                  alternative treatments of financial information within generally
                  accepted
                  accounting principles that have been discussed with management,
                  ramifications of the use of such alternative disclosures and treatments,
                  and the treatment preferred by the independent auditors, and any
                  material
                  written communications between the independent auditors and management,
                  such as any &#8220;management&#8221; letter or schedule of unadjusted differences;
                  and</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">v.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  take into account the opinions of management and the Company&#8217;s director of
                  internal audit in assessing the independent auditors&#8217; qualifications,
                  performance and independence.</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 54pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">With
                  respect to financial reporting principles and policies and internal
                  controls and procedures:</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">i.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  advise management, the director of internal audit and the independent
                  auditors that </font></div>
              </td>
            </tr>

        </table>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 54pt;">&#160;</td>
                <td style="width: 18pt;">&#160;</td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">they
                    are expected to provide to the Audit Committee a timely analysis
                    of
                    significant financial reporting issues and practices;
                    </font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  consider any reports or communications (and management&#8217;s and/or internal
                  audit&#8217;s responses thereto) submitted to the Audit Committee by the
                  independent auditors required by or referred to in SAS 61 (as codified
                  by
                  AU Section 380), as it may be modified or supplemented, including
                  reports
                  and communications related to: </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">deficiencies
                  noted in the audit in the design or operation of internal
                  controls;</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">consideration
                  of fraud in a financial statement audit; detection of illegal
                  acts;</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                  independent auditors&#8217; responsibility under generally accepted auditing
                  standards; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
                  restriction on audit scope; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">significant
                  accounting policies; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">significant
                  issues discussed with the national office respecting auditing or
                  accounting issues presented by the engagement;
</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">management
                  judgments and accounting estimates; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
                  accounting adjustments arising from the audit that were noted or
                  proposed</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A-3</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
            Biofuels, Inc.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit
            Committee Charter</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
            4
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
            7</font></div><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">by
                  the auditors but were passed (as immaterial or otherwise);
                  </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">disagreements
                  with management; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">consultation
                  by management with other accountants; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">difficulties
                  encountered with management in performing the audit;
                  </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                  independent auditors&#8217; judgments about the quality of the entity&#8217;s
                  accounting principles; and</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">reviews
                  of interim financial information conducted by the independent auditors;
                  and </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  meet with the management, and the independent auditors:
                  </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  discuss the annual audited financial statements and quarterly financial
                  statements, including the Company&#8217;s disclosures under &#8220;Management&#8217;s
                  Discussion and Analysis of Financial Condition and Results of Operations&#8221;;
                  </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  discuss the scope of the annual audit;</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  discuss any significant matters arising from any audit, including
                  any
                  audit problems or difficulties, whether raised by management or
                  the
                  independent auditors, relating to the Company&#8217;s financial statements;
                  </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  discuss any difficulties the independent auditors encountered in
                  the
                  course of the audit, including any restrictions on their activities
                  or
                  access to requested information and any significant disagreements
                  with
                  management;</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  discuss any &#8220;management&#8221; or &#8220;internal control&#8221; letter issued, or proposed
                  to be issued, by the independent auditors to the Company; to review
                  the
                  form of opinion the independent auditors propose to render to the
                  Board
                  and shareholders; and</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 90pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  discuss, as appropriate: (a) any major issues regarding accounting
                  principles and financial statement presentations, including any
                  significant changes in the Company&#8217;s selection or application of
                  accounting principles, and major issues as to the adequacy of the
                  Company&#8217;s internal controls and any special audit steps adopted in light
                  of material control deficiencies; (b) analyses prepared by management
                  and/or the independent auditors setting forth significant financial
                  reporting issues and judgments made in connection with the preparation
                  of
                  the financial statements, including analyses of the effects of
                  alternative
                  GAAP methods on the financial statements; and (c) the effect of
                  regulatory
                  and accounting initiatives, as well as off- balance sheet structures,
                  on
                  the financial statements of the Company; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A-4</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
            Biofuels, Inc.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit
            Committee Charter</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
            5
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
            7</font></div><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iv.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  inquire of the Company&#8217;s chief executive officer and chief financial
                  officer as to the existence of any significant deficiencies and
                  material
                  weaknesses in the design or operation of internal control over
                  financial
                  reporting which are reasonably likely to adversely affect the Company&#8217;s
                  ability to record, process, summarize and report financial information
                  and
                  any fraud, whether or not material, that involves management or
                  other
                  employees who have a significant role in the Company&#8217;s internal control
                  over financial reporting; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">v.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  discuss guidelines and policies governing the process by which
                  senior
                  management of the Company and its subsidiaries assess and manage
                  the
                  Company&#8217;s exposure to risk, and to discuss the Company&#8217;s major financial
                  risk exposures and the steps management has taken to monitor and
                  control
                  such exposures; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">vi.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  discuss with senior management of the Company any significant legal,
                  compliance or regulatory matters that may have a material effect
                  on the
                  financial statements or the Company&#8217;s business, financial statements or
                  compliance policies, including material notices to or inquiries
                  received
                  from governmental agencies; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">vii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  discuss the type and presentation of information to be included
                  in
                  earnings press releases:</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">viii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  establish procedures for the receipt, retention and treatment of
                  complaint
                  received by the Company regarding accounting, internal accounting
                  controls
                  or auditing matters, and for the confidential, anonymous submission
                  by
                  Company employees of concerns regarding questionable accounting
                  or
                  auditing matters; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ix.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  review and discuss any reports concerning material violations submitted
                  to
                  it by Company attorneys or outside counsel pursuant to the SEC
                  attorney
                  professional responsibility rules (17 C.F.R. Part 205), or otherwise;
                  and
                  </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">x.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  establish hiring policies for employees or former employees of
                  the
                  independent auditors; </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 54pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">With
                  respect to Merger and Acquisition
                  activities,</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">i.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  review acquisition strategies with the Company's management and
                  investigate acquisition candidates on behalf of the
                  Company.</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  recommend acquisition strategies and candidates to the Company's
                  Board, as
                  appropriate.</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  authorize and approve acquisitions and investments by the Company
                  valued
                  in an amount not to exceed, for any particular acquisition or investment,
                  $150 million in cash, stock or a combination
                  thereof.</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A-5</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
          <div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
              Biofuels, Inc.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit
              Committee Charter</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
              6&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
              7</font></div>
          </div>
          <div>&#160;</div>
        </div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iv.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  have full access to the Company's management and other Company
                  executives
                  as necessary to carry out its
                  responsibilities.</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">v.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  have all such other rights and powers as may be lawfully delegated
                  to it
                  by the Board, not in conflict with specific powers conferred by
                  the Board
                  upon any other committee appointed by it.</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">vi.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  review this Committee Charter from time to time for adequacy and
                  recommend
                  any changes to the Board.</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">vii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  perform any other activities consistent with this Charter, the
                  Company's
                  Bylaws and governing law as the Committee or the Board deems necessary
                  or
                  appropriate.</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">viii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  report all of its actions to the Board and keep the Board apprised
                  of its
                  proposed investments</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 54pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">With
                  respect to reporting and recommendations,</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">i.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  prepare any report or other disclosures, including any recommendation
                  of
                  the Audit Committee, required by the rules of the SEC to be included
                  in
                  the Company&#8217;s annual proxy statement;</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  prepare and issue the evaluation required under &#8220;Performance Evaluation&#8221;
                  below; and</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iii.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
                  report its activities to the full Board on a regular basis and
                  to make
                  such recommendations with respect to the above and other matters
                  as the
                  Audit Committee may deem necessary or
                  appropriate.</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>COMMITTEE
          STRUCTURE AND OPERATIONS: </u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Audit
          Committee shall designate one member of the Committee as its chairperson.
          The
          Audit Committee shall meet once every quarter, or more frequently if
          circumstances dictate, to discuss with management the annual audited financial
          statements and quarterly financial statements, as applicable. The Audit
          Committee should meet separately periodically with management and the
          independent auditors to discuss any matters that the Audit Committee or
          any of
          these persons or firms believe should be discussed privately. The Audit
          Committee may request any officer or employee of the Company or the Company&#8217;s
          outside counsel or independent auditors to attend a meeting of the Audit
          Committee or to meet with any members of, or consultants to, the Audit
          Committee. Members of the Audit Committee may participate in a meeting
          of the
          Audit Committee by means of conference call or similar communications equipment
          by means of which all persons participating in the meeting can hear each
          other.
</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A-6</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
          <div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AE
              Biofuels, Inc.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit
              Committee Charter</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
              7
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
              7</font></div>
          </div>
          <div>&#160;</div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>PERFORMANCE
          EVALUATION: </u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Audit
          Committee shall prepare and review with the Board an annual performance
          evaluation of the Audit Committee, which evaluation shall compare the
          performance of the Audit Committee with the requirements of this charter.
          The
          performance evaluation shall also recommend to the Board any improvements
          to the
          Audit Committee&#8217;s charter deemed necessary or desirable by the Audit Committee.
          The performance evaluation by the Audit Committee shall be conducted in
          such
          manner as the Audit Committee deems appropriate. The report to the Board
          may
          take the form of an oral report by the chairperson of the Audit Committee
          or any
          other member of the Audit Committee designated by the Audit Committee to
          make
          this report. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>RESOURCES
          AND AUTHORITY OF THE AUDIT COMMITTEE: </u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Audit
          Committee shall have the resources and authority appropriate to discharge
          its
          duties and responsibilities, including the authority to select, retain,
          terminate, and approve the fees and other retention terms of special or
          independent counsel, accountants or other experts and advisors, as it deems
          necessary or appropriate, without seeking approval of the Board or management.
          </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Company shall provide for appropriate funding, as determined by the Audit
          Committee, in its capacity as a committee of the Board, for payment of:
          </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Compensation
                  to the independent auditors and any other public accounting firm
                  engaged
                  for the purpose of preparing or issuing an audit report or performing
                  other audit, review or attest services for the Company;
                  </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Compensation
                  of any advisers employed by the Audit Committee; and
                  </font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.&#160;&#160;</font></td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ordinary
                  administrative expenses of the Audit Committee necessary or appropriate
                  in
                  carrying out its duties.</font></div>
              </td>
            </tr>

        </table>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">***</font></div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A-7</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>APPENDIX
        B</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AMENDED
        AND RESTATED 2007 STOCK PLAN</strong></font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AE
        BIOFUELS, INC.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007
        STOCK PLAN</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(As
        Amended and Restated April 8, 2008)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Purposes
        of the Plan</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        purposes of this Plan are to attract and retain the best available personnel
        for
        positions of substantial responsibility, to provide additional incentive
        to
        Employees, Directors and Consultants and to promote the success of the Company&#8217;s
        business. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Plan
        permits the grant of Incentive Stock Options, Nonstatutory Stock Options,
        Stock
        Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
        Units, Performance Shares and other stock or cash awards as the Administrator
        may determine.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Definitions</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        As used
        herein, the following definitions shall apply:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Administrator</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the Board or any of its Committees as shall be administering the Plan in
        accordance with Section&#160;4 hereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Applicable
        Laws</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the requirements relating to the administration of equity-based awards under
        U.S. state corporate laws, U.S. federal and state securities laws, the Code,
        any
        stock exchange or quotation system on which the Common Stock is listed or
        quoted
        and the applicable laws of any other country or jurisdiction where Awards
        are,
        or will be, granted under the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Award</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">means,
        individually or collectively, a grant under the Plan of Options, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
        Appreciation Rights, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
        Stock, Restricted Stock Units, Performance Units, Performance Shares and
        other
        stock or cash awards as the Administrator may determine.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Award
        Agreement</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the written or electronic agreement setting forth the terms and provisions
        applicable to each Award granted under the Plan. The Award Agreement is subject
        to the terms and conditions of the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Board</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the Board of Directors of the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Change
        in Control</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the occurrence of any of the following events:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
        change
        in the ownership of the Company</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">which
        occurs on the date that any one person, or more than one person acting as
        a
        group, (&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Person</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
        acquires ownership of the stock of the Company that, together with the stock
        held by such Person, constitutes more than fifty percent (50%) of the total
        voting power of the stock of the Company; provided, however, that for purposes
        of this subsection (i), the acquisition of additional stock by any one Person,
        who is considered to own more than fifty percent (50%) of the total voting
        power
        of the stock of the Company will not be considered a Change in Control; or
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
        change
        in the ownership of a substantial portion of the Company&#8217;s assets which occurs
        on the date that any Person acquires (or has acquired during the twelve (12)
        month period ending on the date of the most recent acquisition by such person
        or
        persons) assets from the Company that have a total gross fair market value
        equal
        to or more than fifty percent (50%) of the total gross fair market value
        of all
        of the assets of the Company immediately prior to such acquisition or
        acquisitions; provided, however, that for purposes of this subsection (iii),
        the
        following will not constitute a change in the ownership of a substantial
        portion
        of the Company&#8217;s assets: (A) a transfer to an entity that is controlled by the
        Company&#8217;s stockholders immediately after the transfer, or (B) a transfer of
        assets by the Company to: (1) a stockholder of the Company (immediately before
        the asset transfer) in exchange for or with respect to the Company&#8217;s stock, (2)
        an entity, fifty percent (50%) or more of the total value or voting power
        of
        which is owned, directly or indirectly, by the Company, (3) a Person, that
        owns,
        directly or indirectly, fifty percent (50%) or more of the total value or
        voting
        power of all the outstanding stock of the Company, or (4) an entity, at least
        fifty percent (50%) of the total value or voting power of which is owned,
        directly or indirectly, by a Person described in this subsection (iii)(B)(3).
        For purposes of this subsection (iii), gross fair market value means the
        value
        of the assets of the Company, or the value of the assets being disposed of,
        determined without regard to any liabilities associated with such
        assets.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-1</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
        purposes of this Section 2(f), persons will be considered to be acting as
        a
        group if they are owners of a corporation that enters into a merger,
        consolidation, purchase or acquisition of stock, or similar business transaction
        with the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(g)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Code</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the Internal Revenue Code of 1986, as amended. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(h)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Committee</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        a
        committee of Directors or of other individuals satisfying Applicable Laws
        appointed by the Board in accordance with Section&#160;4 hereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Common
        Stock</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the Common Stock of the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(j)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#8220;<u>Company</u>&#8221;
        means AE Biofuels, Inc., a Nevada corporation, or any successor
        thereto.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(k)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Consultant</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        any person who is engaged by the Company or any Parent or Subsidiary to render
        consulting or advisory services to such entity.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(l)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Determination
        Date</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the latest possible date that will not jeopardize the qualification of an
        Award
        granted under the Plan as &#8220;performance-based compensation&#8221; under Section 162(m)
        of the Code.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(m)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Director</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        a
        member of the Board.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(n)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Disability</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        total and permanent disability as defined in Section&#160;22(e)(3) of the Code,
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
        provided that in the case of Awards other than Incentive Stock Options, the
        Administrator in its discretion may determine whether a permanent and total
        disability exists in accordance with uniform and non-discriminatory standards
        adopted by the Administrator from time to time</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(o)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Employee</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        any person, including Officers and Directors, employed by the Company or
        any
        Parent or Subsidiary of the Company. Neither service as a Director nor payment
        of a director&#8217;s fee by the Company shall be sufficient to constitute
&#8220;employment&#8221; by the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(p)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exchange
        Act</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the Securities Exchange Act of 1934, as amended.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(q)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exchange
        Program</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        a
        program under which (i) outstanding Awards are surrendered or cancelled in
        exchange for Awards of the same type (which may have lower exercise prices
        and
        different terms), Awards of a different type, and/or cash, (ii) Participants
        would have the opportunity to transfer any outstanding Awards to a financial
        institution or other person or entity selected by the Administrator, and/or
        (iii) the exercise price of an outstanding Award is reduced. The Administrator
        will determine the terms and conditions of any Exchange Program in its sole
        discretion.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(r)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Fair
        Market Value</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means,
        as of any date, the value of Common Stock determined as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        the
        Common Stock is listed on any established stock exchange or a national market
        system, including without limitation the Nasdaq National Market or The Nasdaq
        SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be
        the
        closing sales price for such stock (or the closing bid, if no sales were
        reported) as quoted on such exchange or system on the day of determination,
        as
        reported in </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>The
        Wall Street Journal</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        or such
        other source as the Administrator deems reliable;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        the
        Common Stock is regularly quoted by a recognized securities dealer but selling
        prices are not reported, its Fair Market Value shall be the mean between
        the
        high bid and low asked prices for the Common Stock on the day of determination;
        or</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        the
        absence of an established market for the Common Stock, the Fair Market Value
        thereof shall be determined in good faith by the Administrator.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(s)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Fiscal
        Year</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the fiscal year of the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(t)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Incentive
        Stock Option</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        an Option that by its terms qualifies and is otherwise intended to qualify
        as an
        incentive stock option within the meaning of Section&#160;422 of the Code and
        the regulations promulgated thereunder.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(u)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Nonstatutory
        Stock Option</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        an Option not intended to qualify as an Incentive Stock Option.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(v)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Officer</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        a
        person who is an officer of the Company within the meaning of Section&#160;16 of
        the Exchange Act and the rules and regulations promulgated
        thereunder.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(w)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Option</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        a
        stock option granted pursuant to Section 8 of the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(x)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Parent</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        a
&#8220;parent corporation,&#8221; whether now or hereafter existing, as defined in
        Section&#160;424(e) of the Code.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(y)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Participant</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the holder of an outstanding Award.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-3</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(z)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Performance
        Goals</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
will
        have the meaning set forth in Section 13 of the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(aa)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Performance
        Period</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        any Fiscal Year of the Company or such other period as determined by the
        Administrator in its sole discretion.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(bb)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Performance
        Share</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        an Award denominated in Shares which may be earned in whole or in part upon
        attainment of Performance Goals or other vesting criteria as the Administrator
        may determine pursuant to Section 12.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(cc)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Performance
        Unit</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        an Award which may be earned in whole or in part upon attainment of Performance
        Goals or other vesting criteria as the Administrator may determine and which
        may
        be settled for cash, Shares or other securities or a combination of the
        foregoing pursuant to Section 12.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(dd)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Period
        of Restriction</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        the period during which the transfer of Shares of Restricted Stock are subject
        to restrictions and therefore, the Shares are subject to a substantial risk
        of
        forfeiture. Such restrictions may be based on the passage of time, the
        achievement of target levels of performance, or the occurrence of other events
        as determined by the Administrator.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ee)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Plan</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        this 2007 Stock Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ff)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Restricted
        Stock</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">means
        Shares issued pursuant to an Award of Restricted Stock under Section 10 of
        the
        Plan, or issued pursuant to an early exercise of an Option</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(gg)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Restricted
        Stock Unit</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        a
        bookkeeping entry representing an amount equal to the Fair Market Value of
        one
        Share, granted pursuant to Section&#160;11. Each Restricted Stock Unit
        represents an unfunded and unsecured obligation of the Company</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(hh)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Rule
        16b-3</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect
        when
        discretion is being exercised with respect to the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Section&#160;16(b)</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        Section&#160;16(b) of the Exchange Act.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(jj)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Service
        Provider</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        an Employee, Director or Consultant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(kk)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Share</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        a
        share of the Common Stock, as adjusted in accordance with Section&#160;16
        below.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ll)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Stock
        Appreciation Right</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        an Award, granted alone or in connection with an Option, that pursuant to
        Section&#160;9 is designated as a Stock Appreciation Right.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(mm)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Subsidiary</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
means
        a
&#8220;subsidiary corporation,&#8221; whether now or hereafter existing, as defined in
        Section&#160;424(f) of the Code.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-4</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Stock
        Subject to the Plan</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subject
        to the provisions of Section&#160;16 of the Plan, the maximum aggregate number
        of Shares that may be awarded and sold under the Plan is 4,000,000 Shares.
        The
        Shares may be authorized but unissued, or reacquired Common Stock.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;
        <u>Automatic Share Reserve Increase</u>. The number of Shares available for
        issuance under the Plan will be increased on the first day of each Fiscal
        Year
        beginning with the 2009 Fiscal Year, in an amount equal to the least of
        (i)&#160;1,000,000 Shares, (ii)&#160;one percent&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1%)</font>
        of the number of Shares on the last day of the immediately preceding Fiscal
        Year
        that (A) are outstanding, and (B) are issuable pursuant to outstanding Awards,
        or (iii)&#160;such number of Shares determined by the Board.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Lapsed
        Awards</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        If an
        Award expires or becomes unexercisable without having been exercised in full,
        or, with respect to Restricted Stock, Restricted Stock Units, Performance
        Shares
        or Performance Units, is forfeited to or repurchased by the Company, the
        unpurchased Shares (or for Awards other than Options and Stock Appreciation
        Rights, the forfeited or repurchased Shares) which were subject thereto will
        become available for future grant or sale under the Plan (unless the Plan
        has
        terminated). </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon
        exercise of a Stock Appreciation Right settled in Shares, the gross number
        of
        Shares covered by the portion of the Award so exercised will cease to be
        available under the Plan</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Shares
        that have actually been issued under the Plan under any Award will not be
        returned to the Plan and will not become available for future distribution
        under
        the Plan; provided, however, that if unvested Shares of Restricted Stock,
        Restricted Stock Units, Performance Shares or Performance Units are repurchased
        by the Company or are forfeited to the Company, such Shares will become
        available for future grant under the Plan. Shares used to pay the tax and/or
        exercise price of an Award will become available for future grant or sale
        under
        the Plan. To the extent an Award under the Plan is paid out in cash rather
        than
        Shares, such cash payment will not result in reducing the number of Shares
        available for issuance under the Plan. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
        the foregoing provisions of this Section 3(c), subject to adjustment provided
        in
        Section&#160;16, the maximum number of Shares that may be issued upon the
        exercise of Incentive Stock Options will equal the aggregate Share number
        stated
        in Section&#160;3(a), plus, to the extent allowable under Section&#160;422 of
        the Code, any Shares that become available for issuance under the Plan under
        this Section&#160;3(c)</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Administration
        of the Plan</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Administrator</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Plan shall be administered by the Board or a Committee appointed by the Board,
        which Committee shall be constituted to comply with Applicable Laws. Different
        Committees with respect to different groups of Service Providers may administer
        the Plan </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Section&#160;162(m)</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        To the
        extent that the Administrator determines it to be desirable to qualify Awards
        granted hereunder as &#8220;performance-based compensation&#8221; within the meaning of
        Section&#160;162(m) of the Code, the Plan will be administered by a Committee of
        two (2) or more &#8220;outside directors&#8221; within the meaning of Section&#160;162(m) of
        the Code.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-5</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Rule
        16b-3</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        To the
        extent desirable to qualify transactions hereunder as exempt under Rule 16b-3,
        the transactions contemplated hereunder will be structured to satisfy the
        requirements for exemption under Rule 16b-3.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Powers
        of the Administrator</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Subject
        to the provisions of the Plan and, in the case of a Committee, the specific
        duties delegated by the Board to such Committee, and subject to the approval
        of
        any relevant authorities, the Administrator shall have the authority in its
        discretion:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        determine the Fair Market Value;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        select
        the Service Providers to whom Awards may from time to time be granted
        hereunder;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        determine the number of Shares to be covered by each such Award granted
        hereunder;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iv)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        determine the terms and conditions of any, and to institute an Exchange
        Program;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(v)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        approve forms of agreement for use under the Plan;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(vi)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        determine the terms and conditions, not inconsistent with the terms of the
        Plan,
        of any Award granted hereunder. Such terms and conditions include, but are
        not
        limited to, the exercise price, the time or times when Awards may be exercised
        (which may be based on performance criteria), any vesting acceleration or
        waiver
        of forfeiture restrictions, and any restriction or limitation regarding any
        Award or the Common Stock relating thereto, based in each case on such factors
        as the Administrator, in its sole discretion, shall determine;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(vii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        prescribe, amend and rescind rules and regulations relating to the Plan,
        including rules and regulations relating to sub-plans established for the
        purpose of satisfying applicable foreign laws;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(viii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        construe and interpret the terms of the Plan and Awards granted pursuant
        to the
        Plan; </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ix)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        modify
        or amend each Award (subject to Section 18(c) of the Plan)</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">;
        and</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(x)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        make
        all other determinations deemed necessary or advisable for administering
        the
        Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Effect
        of Administrator&#8217;s Decision</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        All
        decisions, determinations and interpretations of the Administrator shall
        be
        final and binding on all Participants.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Eligibility</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock
        Appreciation Rights, Performance Units, Performance Shares, and such other
        cash
        or stock awards as the Administrator determines may be granted to Service
        Providers. Incentive Stock Options may be granted only to
        Employees.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-6</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>At-Will
        Employment</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Neither
        the Plan nor any Award shall confer upon any Participant any right with respect
        to continuing the Participant&#8217;s relationship as a Service Provider with the
        Company, nor shall it interfere in any way with his or her right or the
        Company&#8217;s right to terminate such relationship at any time, with or without
        cause, and with or without notice.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Term
        of Plan</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Subject
        to stockholder approval in accordance with Section&#160;24, the Plan shall
        become effective upon its adoption by the Board. Unless sooner terminated
        under
        Section&#160;19, it shall continue in effect for a term of ten (10)
        years.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Stock
        Options</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Limitations</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Incentive
        Stock Option Limit</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Each
        Option shall be designated in the Award Agreement as either an Incentive
        Stock
        Option or a Nonstatutory Stock Option. However, notwithstanding such
        designation, to the extent that the aggregate Fair Market Value of the Shares
        with respect to which Incentive Stock Options are exercisable for the first
        time
        by the Participant during any calendar year (under all plans of the Company
        and
        any Parent or Subsidiary) exceeds $100,000, such Options shall be treated
        as
        Nonstatutory Stock Options. For purposes of this Section&#160;8(a), Incentive
        Stock Options shall be taken into account in the order in which they were
        granted. The Fair Market Value of the Shares shall be determined as of the
        time
        the Option with respect to such Shares is granted.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Number
        of Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Administrator will have complete discretion to determine the number of Shares
        subject to an Option granted to any Participant, provided that during any
        Fiscal
        Year, no Participant will be granted an Option covering more than&#160;1,000,000
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares.
        Notwithstanding the limitation in the previous sentence, in connection with
        his
        or her initial service as an Employee, an Employee may be granted Options
        covering up to an additional 1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Term
        of Option</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        term of each Option shall be stated in the Award Agreement; provided, however,
        that the term shall be no more than ten (10) years from the date of grant
        thereof. In the case of an Incentive Stock Option granted to a Participant
        who,
        at the time the Option is granted, owns stock representing more than ten
        percent
        (10%) of the voting power of all classes of stock of the Company or any Parent
        or Subsidiary, the term of the Option shall be five (5) years from the date
        of
        grant or such shorter term as may be provided in the Award
        Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Option
        Exercise Price and Consideration</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exercise
        Price</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The per
        share exercise price for the Shares to be issued upon exercise of an Option
        shall be such price as is determined by the Administrator, but shall be subject
        to the following:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 144pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        the
        case of an Incentive Stock Option</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 180pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">granted
        to an Employee who, at the time of grant of such Option, owns stock representing
        more than ten percent (10%) of the voting power of all classes of stock of
        the
        Company or any Parent or Subsidiary, the exercise price shall be no less
        than
        110% of the Fair Market Value per Share on the date of grant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-7</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 180pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">granted
        to any other Employee, the per Share exercise price shall be no less than
        100%
        of the Fair Market Value per Share on the date of grant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 144pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        the
        case of a Nonstatutory Stock Option, the per Share exercise price shall be
        no
        less than 100% of the Fair Market Value per Share on the date of
        grant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
        the foregoing provisions of this Section 6(c), Options may be granted with
        a per
        Share exercise price of less than 100% of the Fair Market Value per Share
        on the
        date of grant pursuant to a transaction described in, and in a manner consistent
        with, Section&#160;424(a) of the Code</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Forms
        of Consideration</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        consideration to be paid for the Shares to be issued upon exercise of an
        Option,
        including the method of payment, shall be determined by the Administrator
        (and,
        in the case of an Incentive Stock Option, shall be determined at the time
        of
        grant). Such consideration may consist of, without limitation, (i)&#160;cash,
        (ii)&#160;check, (iii)&#160;promissory note, (iv) </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">su</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">rrender
        of other Shares which </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(x)
        shall
        be valued at its Fair Market Value on the date of exercise, and (y) must
        be
        owned free and clear of any liens, claims, encumbrances or security interests,
        if </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">accepting
        such Shares, in the sole discretion of the Administrator, shall not result
        in
        any adverse accounting consequences to the Company, (v)&#160;consideration
        received by the Company under a cashless exercise program implemented by
        the
        Company in connection with the Plan, or (vi)&#160;any combination of the
        foregoing methods of payment. In making its determination as to the type
        of
        consideration to accept, the Administrator shall consider if acceptance of
        such
        consideration may be reasonably expected to benefit the Company. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exercise
        of Option</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Procedure
        for Exercise; Rights as a Stockholder</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Any
        Option granted hereunder shall be exercisable according to the terms hereof
        at
        such times and under such conditions as determined by the Administrator and
        set
        forth in the Award Agreement. An Option may not be exercised for a fraction
        of a
        Share.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
        Option
        shall be deemed exercised when the Company receives: (i)&#160;written or
        electronic notice of exercise (in accordance with the Award Agreement) from
        the
        person entitled to exercise the Option, and (ii)&#160;full payment for the
        Shares with respect to which the Option is exercised (together with any
        applicable withholding taxes). Full payment may consist of any consideration
        and
        method of payment authorized by the Administrator and permitted by the Award
        Agreement and the Plan. Shares issued upon exercise of an Option shall be
        issued
        in the name of the Participant or, if requested by the Participant, in the
        name
        of the Participant and his or her spouse. Until the Shares are issued (as
        evidenced by the appropriate entry on the books of the Company or of a duly
        authorized transfer agent of the Company), no right to vote or receive dividends
        or any other rights as a stockholder shall exist with respect to the Shares,
        notwithstanding the exercise of the Option. The Company shall issue (or cause
        to
        be issued) such Shares promptly after the Option is exercised. No adjustment
        will be made for a dividend or other right for which the record date is prior
        to
        the date the Shares are issued, except as provided in Section&#160;16 of the
        Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-8</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercise
        of an Option in any manner shall result in a decrease in the number of Shares
        thereafter available for sale under the Option, by the number of Shares as
        to
        which the Option is exercised.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Termination
        of Relationship as a Service Provider</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        If a
        Participant ceases to be a Service Provider, other than upon the Participant&#8217;s
        termination as the result of the Participant&#8217;s death or Disability, the
        Participant may exercise his or her Option within thirty (30) days of
        termination, or such longer period of time as is specified in the Award
        Agreement to the extent that the Option is vested on the date of termination
        (but in no event later than the expiration of the term of such Option as
        set
        forth in the Award Agreement). In the absence of a specified time in the
        Award
        Agreement, the Option shall remain exercisable for three (3) months following
        the Participant&#8217;s termination. Unless otherwise provided by the Administrator,
        if, on the date of termination, the Participant is not vested as to his or
        her
        entire Option, the Shares covered by the unvested portion of the Option shall
        revert to the Plan. If, after termination, the Participant does not exercise
        his
        or her Option within the time specified by the Administrator, the Option
        shall
        terminate, and the Shares covered by such Option shall revert to the
        Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Disability
        of Participant</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        If a
        Participant ceases to be a Service Provider as a result of the Participant&#8217;s
        Disability, the Participant may exercise his or her Option within six (6)
        months
        of termination, or such longer period of time as is specified in the Award
        Agreement to the extent the Option is vested on the date of termination (but
        in
        no event later than the expiration of the term of such Option as set forth
        in
        the Award Agreement). In the absence of a specified time in the Award Agreement,
        the Option shall remain exercisable for twelve (12) months following the
        Participant&#8217;s termination. Unless otherwise provided by the Administrator, if,
        on the date of termination, the Participant is not vested as to his or her
        entire Option, the Shares covered by the unvested portion of the Option shall
        revert to the Plan. If, after termination, the Participant does not exercise
        his
        or her Option within the time specified herein, the Option shall terminate,
        and
        the Shares covered by such Option shall revert to the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iv)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Death
        of Participant</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        If a
        Participant dies while a Service Provider, the Option may be exercised within
        six (6) months following the Participant&#8217;s death, or within such longer period
        of time as is specified in the Award Agreement to the extent that the Option
        is
        vested on the date of death (but in no event may the Option be exercised
        later
        than the expiration of the term of such Option as set forth in the Award
        Agreement), by the Participant&#8217;s designated beneficiary, provided such
        beneficiary has been designated prior to Participant&#8217;s death in a form
        acceptable to the Administrator. If no such beneficiary has been designated
        by
        the Participant, then such Option may be exercised by the personal
        representative of the Participant&#8217;s estate or by the person(s) to whom the
        Option is transferred pursuant to the Participant&#8217;s will or in accordance with
        the laws of descent and distribution. In the absence of a specified time
        in the
        Award Agreement, the Option shall remain exercisable for twelve (12) months
        following the Participant&#8217;s termination. Unless otherwise provided by the
        Administrator, if, at the time of death, the Participant is not vested as
        to his
        or her entire Option, the Shares covered by the unvested portion of the Option
        shall immediately revert to the Plan. If the Option is not so exercised within
        the time specified herein, the Option shall terminate, and the Shares covered
        by
        such Option shall revert to the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-9</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Stock
        Appreciation Rights</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Grant
        of Stock Appreciation Rights</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Subject
        to the terms and conditions of the Plan, a Stock Appreciation Right may be
        granted to Service Providers at any time and from time to time as will be
        determined by the Administrator, in its sole discretion. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Number
        of Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Administrator will have complete discretion to determine the number of Stock
        Appreciation Rights granted to any Participant, provided that during any
        Fiscal
        Year, no Participant will be granted Stock Appreciation Rights covering more
        than 1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares.
        Notwithstanding the limitation in the previous sentence, in connection with
        his
        or her initial service as an Employee, an Employee may be granted Stock
        Appreciation Rights covering up to an additional 1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exercise
        Price and Other Terms</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Administrator, subject to the provisions of the Plan, will have complete
        discretion to determine the terms and conditions of Stock Appreciation Rights
        granted under the Plan, provided, however, that </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
        exercise price will be not less than 100% of the Fair Market Value of a Share
        on
        the date of grant. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Stock
        Appreciation Right Agreement</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Each
        Stock Appreciation Right grant will be evidenced by an Award Agreement that
        will
        specify the exercise price, the term of the Stock Appreciation Right, the
        conditions of exercise, and such other terms and conditions as the
        Administrator, in its sole discretion, will determine.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Expiration
        of Stock Appreciation Rights</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        A Stock
        Appreciation Right granted under the Plan will expire upon the date determined
        by the Administrator, in its sole discretion, and set forth in the Award
        Agreement</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">;
        provided, however, that the term will be no more than ten (10) years from
        the
        date of grant thereof</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Notwithstanding the foregoing, the rules of Section&#160;8(d) also will apply to
        Stock Appreciation Rights.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Payment
        of Stock Appreciation Right Amount</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Upon
        exercise of a Stock Appreciation Right, a Participant will be entitled to
        receive payment from the Company in an amount determined by
        multiplying:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        difference between the Fair Market Value of a Share on the date of exercise
        over
        the exercise price; times</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 126pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        number of Shares with respect to which the Stock Appreciation Right is
        exercised.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
        the
        discretion of the Administrator, the payment upon Stock Appreciation Right
        exercise may be in cash, in Shares of equivalent value, or in some combination
        thereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Restricted
        Stock</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Grant
        of Restricted Stock</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Subject
        to the terms and provisions of the Plan, the Administrator, at any time and
        from
        time to time, may grant Shares of Restricted Stock to Service Providers in
        such
        amounts as the Administrator, in its sole discretion, will
        determine.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-10</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Restricted
        Stock Agreement</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Each
        Award of Restricted Stock will be evidenced by an Award Agreement that will
        specify the Period of Restriction, the number of Shares granted, and such
        other
        terms and conditions as the Administrator, in its sole discretion, will
        determine. Notwithstanding the foregoing sentence, for restricted stock intended
        to qualify as &#8220;performance-based compensation&#8221; within the meaning of Section
        162(m) of the Code, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">during
        any Fiscal Year no Participant will receive more than an aggregate
        of&#160;1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares
        of
        Restricted Stock. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
        the foregoing limitation, in connection with his or her initial service as
        an
        Employee, for restricted stock intended to qualify as &#8220;performance-based
        compensation&#8221; within the meaning of Section 162(m) of the Code, an Employee
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">may
        be
        granted an aggregate of up to an additional 1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares
        of
        Restricted Stock. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
        the Administrator determines otherwise, Shares of Restricted Stock will be
        held
        by the Company as escrow agent until the restrictions on such Shares have
        lapsed.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Transferability</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Except
        as provided in this Section 10, Shares of Restricted Stock may not be sold,
        transferred, pledged, assigned, or otherwise alienated or hypothecated until
        the
        end of the applicable Period of Restriction.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Other
        Restrictions</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Administrator, in its sole discretion, may impose such other restrictions
        on
        Shares of Restricted Stock as it may deem advisable or appropriate.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Removal
        of Restrictions</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Except
        as otherwise provided in this Section 10, Shares of Restricted Stock covered
        by
        each Restricted Stock grant made under the Plan will be released from escrow
        as
        soon as practicable after the last day of the Period of Restriction.
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Administrator, in its discretion, may accelerate the time at which any
        restrictions will lapse or be removed. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Voting
        Rights</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        During
        the Period of Restriction, Service Providers holding Shares of Restricted
        Stock
        granted hereunder may exercise full voting rights with respect to those Shares,
        unless the Administrator determines otherwise.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(g)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Dividends
        and Other Distributions</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        During
        the Period of Restriction, Service Providers holding Shares of Restricted
        Stock
        will be entitled to receive all dividends and other distributions paid with
        respect to such Shares unless otherwise provided in the Award Agreement.
        If any
        such dividends or distributions are paid in Shares, the Shares will be subject
        to the same restrictions on transferability and forfeitability as the Shares
        of
        Restricted Stock with respect to which they were paid.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(h)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Return
        of Restricted Stock to Company</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        On the
        date set forth in the Award Agreement, the Restricted Stock for which
        restrictions have not lapsed will revert to the Company and again will become
        available for grant under the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Section
        162(m) Performance Restrictions</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        For
        purposes of qualifying grants of Restricted Stock as &#8220;performance-based
        compensation&#8221; under Section&#160;162(m) of the Code, the Administrator, in its
        discretion, may set restrictions based upon the achievement of Performance
        Goals. The Performance Goals will be set by the Administrator on or before
        the
        Determination Date. In granting Restricted Stock which is intended to qualify
        under Section&#160;162(m) of the Code, the Administrator will follow any
        procedures determined by it from time to time to be necessary or appropriate
        to
        ensure qualification of the Award under Section&#160;162(m) of the Code (e.g.,
        in determining the Performance Goals).</font></div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-11</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Restricted
        Stock Units</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Grant</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Restricted Stock Units may be granted at any time and from time to time as
        determined by the Administrator. Each Restricted Stock Unit grant will be
        evidenced by an Award Agreement that will specify such other terms and
        conditions as the Administrator, in its sole discretion, will determine,
        including all terms, conditions, and restrictions related to the grant, the
        number of Restricted Stock Units and the form of payout, which, subject to
        Section&#160;11(d), may be left to the discretion of the Administrator.
        Notwithstanding anything to the contrary in this subsection&#160;(a), for
        Restricted Stock Units intended to qualify as &#8220;performance-based compensation&#8221;
within the meaning of Section 162(m) of the Code, during any Fiscal Year
        of the
        Company, no Participant will receive more than an aggregate of 1,000,000
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
        Stock Units. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
        the limitation in the previous sentence, for Restricted Stock Units intended
        to
        qualify as &#8220;performance-based compensation&#8221; within the meaning of Section 162(m)
        of the Code, in connection with his or her initial service as an Employee,
        an
        Employee </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">may
        be
        granted an aggregate of up to an additional&#160;1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
        Stock Units.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Vesting
        Criteria and Other Terms</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Administrator will set vesting criteria in its discretion, which, depending
        on
        the extent to which the criteria are met, will determine the number of
        Restricted Stock Units that will be paid out to the Participant. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">After
        the
        grant of Restricted Stock Units, the Administrator, in its sole discretion,
        may
        reduce or waive any restrictions for such Restricted Stock Units. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
        Award of Restricted Stock Units will be evidenced by an Award Agreement that
        will specify the vesting criteria, and such other terms and conditions as
        the
        Administrator, in its sole discretion will determine. The Administrator,
        in its
        discretion, may accelerate the time at which any restrictions will lapse
        or be
        removed.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Earning
        Restricted Stock Units</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Upon
        meeting the applicable vesting criteria, the Participant will be entitled
        to
        receive a payout as specified in the Award Agreement. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Form
        and Timing of Payment</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Payment
        of earned Restricted Stock Units will be made as soon as practicable after
        the
        date(s) set forth in the Award Agreement. The Administrator, in its sole
        discretion, may pay earned Restricted Stock Units in cash, Shares, or a
        combination thereof. Shares represented by Restricted Stock Units that are
        fully
        paid in cash again will be available for grant under the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Cancellation</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        On the
        date set forth in the Award Agreement, all unearned Restricted Stock Units
        will
        be forfeited to the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Section
        162(m) Performance Restrictions</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        For
        purposes of qualifying grants of Restricted Stock Units as &#8220;performance-based
        compensation&#8221; under Section&#160;162(m) of the Code, the Administrator, in its
        discretion, may set restrictions based upon the achievement of Performance
        Goals. The Performance Goals will be set by the Administrator on or before
        the
        Determination Date. In granting Restricted Stock Units which are intended
        to
        qualify under Section&#160;162(m) of the Code, the Administrator will follow any
        procedures determined by it from time to time to be necessary or appropriate
        to
        ensure qualification of the Award under Section&#160;162(m) of the Code (e.g.,
        in determining the Performance Goals).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-12</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Performance
        Units and Performance Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Grant
        of Performance Units/Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Performance Units and Performance Shares may be granted to Service Providers
        at
        any time and from time to time, as will be determined by the Administrator,
        in
        its sole discretion. The Administrator will have complete discretion in
        determining the number of Performance Units/Shares granted to each Participant
        provided that during any Fiscal Year, for Performance Units or Performance
        Shares intended to qualify as &#8220;performance-based compensation&#8221; within the
        meaning of Section 162(m) of the Code, (i) no Participant will receive
        Performance Units having an initial value greater than $10,000,000</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
        and
        (ii)&#160;no Participant will receive more than 1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Performance
        Shares. Notwithstanding the foregoing limitation, for Performance Shares
        intended to qualify as &#8220;performance-based compensation&#8221; within the meaning of
        Section 162(m) of the Code, in connection with his or her initial service,
        a
        Service Provider may be granted up to an additional 1,000,000 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Performance
        Shares.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Value
        of Performance Units/Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Each
        Performance Unit will have an initial value that is established by the
        Administrator on or before the date of grant. Each Performance Share will
        have
        an initial value equal to the Fair Market Value of a Share on the date of
        grant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Performance
        Objectives and Other Terms</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Administrator will set performance objectives or other vesting provisions.
        The
        Administrator may set vesting criteria based upon the achievement of
        Company-wide, business unit, or individual goals (including, but not limited
        to,
        continued employment), or any other basis determined by the Administrator
        in its
        discretion. Each Award of Performance Units/Shares will be evidenced by an
        Award
        Agreement that will specify the Performance Period, and such other terms
        and
        conditions as the Administrator, in its sole discretion, will
        determine</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Administrator, in its sole discretion, may provide at the time of or following
        the date of grant for accelerated vesting for an Award of Performance
        Units/Shares.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Earning
        of Performance Units/Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        After
        the applicable Performance Period has ended, the holder of Performance
        Units/Shares will be entitled to receive a payout of the number of Performance
        Units/Shares earned by the Participant over the Performance Period, to be
        determined as a function of the extent to which the corresponding performance
        objectives or other vesting provisions have been achieved. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">After
        the
        grant of a Performance Unit/Share, the Administrator, in its sole discretion,
        may reduce or waive any performance objectives or other vesting provisions
        for
        such Performance Unit/Share.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Form
        and Timing of Payment of Performance Units/Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Payment
        of earned Performance Units/Shares will be made as soon as practicable after
        the
        expiration of the applicable Performance Period. The Administrator, in its
        sole
        discretion, may pay earned Performance Units/Shares in the form of cash,
        in
        Shares (which have an aggregate Fair Market Value equal to the value of the
        earned Performance Units/Shares at the close of the applicable Performance
        Period) or in a combination thereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-13</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Cancellation
        of Performance Units/Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        On the
        date set forth in the Award Agreement, all unearned or unvested Performance
        Units/Shares will be forfeited to the Company, and again will be available
        for
        grant under the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(g)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Section
        162(m) Performance Restrictions</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        For
        purposes of qualifying grants of Performance Units/Shares as &#8220;performance-based
        compensation&#8221; under Section&#160;162(m) of the Code, the Administrator, in its
        discretion, may set restrictions based upon the achievement of Performance
        Goals. The Performance Goals will be set by the Administrator on or before
        the
        Determination Date. In granting Performance Units/Shares which are intended
        to
        qualify under Section&#160;162(m) of the Code, the Administrator will follow any
        procedures determined by it from time to time to be necessary or appropriate
        to
        ensure qualification of the Award under Section&#160;162(m) of the Code (e.g.,
        in determining the Performance Goals).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Performance-Based
        Compensation Under Code Section 162(m)</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>General</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        If the
        Administrator, in its discretion, decides to grant an Award intended to qualify
        as &#8220;performance-based compensation&#8221; under Code Section 162(m), the provisions of
        this Section 13 will control over any contrary provision in the Plan; provided,
        however, that the Administrator may in its discretion grant Awards that are
        not
        intended to qualify as &#8220;performance-based compensation&#8221; under Section 162(m) of
        the Code to such Participants that are based on Performance Goals or other
        specific criteria or goals but that do not satisfy the requirements of this
        Section 13.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;<u>Performance
        Goals</u>. The granting and/or vesting of Awards of Restricted Stock, Restricted
        Stock Units, Performance Shares and Performance Units and other incentives
        under
        the Plan may be made subject to the attainment of performance goals relating
        to
        one or more business criteria within the meaning of Code Section 162(m) and
        may
        provide for a targeted level or levels of achievement (&#8220;<u>Performance
        Goals</u>&#8221;) including (i)&#160;annual revenue, (ii) cash collections, (iii)
        earnings per Share, (iv) net income, (v) new orders, (vi) operating cash
        flow,
        (vii)&#160;operating income, (viii) pro forma net income, (ix) product
        shipments, (x) profit after taxes, (xi)&#160;profit before taxes,
        (xii)&#160;return on assets, (xiii)&#160;return on equity, (xiv)&#160;return on
        sales, (xv)&#160;revenue,&#160;(xvi)&#160;total shareholder return, (xvii)
        capital market activity, and (xviii) debt to equity ratio. Any Performance
        Goals
        may be used to measure the performance of the Company as a whole or a business
        unit of the Company and may be measured relative to a peer group or index.
        The
        Performance Goals may differ from Participant to Participant and from Award
        to
        Award. Prior to the Determination Date, the Administrator will determine
        whether
        any significant element(s) will be included in or excluded from the calculation
        of any Performance Goal with respect to any Participant. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Procedures</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        To the
        extent necessary to comply with the performance-based compensation provisions
        of
        Code Section 162(m), with respect to any Award granted subject to Performance
        Goals, within the first twenty-five percent (25%) of the Performance Period,
        but
        in no event more than ninety (90) days following the commencement of any
        Performance Period (or such other time as may be required or permitted by
        Code
        Section 162(m)), the Administrator will, in writing, (i) designate one or
        more
        Participants to whom an Award will be made, (ii) select the Performance Goals
        applicable to the Performance Period, (iii) establish the Performance Goals,
        and
        amounts of such Awards, as applicable, which may be earned for such Performance
        Period, and (iv)&#160;specify the relationship between Performance Goals and the
        amounts of such Awards, as applicable, to be earned by each Participant for
        such
        Performance Period. Following the completion of each Performance Period,
        the
        Administrator will certify in writing whether the applicable Performance
        Goals
        have been achieved for such Performance Period. In determining the amounts
        earned by a Participant, the Administrator will have the right to reduce
        or
        eliminate (but not to increase) the amount payable at a given level of
        performance to take into account additional factors that the Administrator
        may
        deem relevant to the assessment of individual or corporate performance for
        the
        Performance Period. A Participant will be eligible to receive payment pursuant
        to an Award for a Performance Period only if the Performance Goals for such
        period are achieved. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-14</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Additional
        Limitations</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Notwithstanding any other provision of the Plan, any Award which is granted
        to a
        Participant and is intended to constitute qualified performance based
        compensation under Code Section 162(m) will be subject to any additional
        limitations set forth in the Code (including any amendment to Section 162(m))
        or
        any regulations and ruling issued thereunder that are requirements for
        qualification as qualified performance-based compensation as described in
        Section 162(m) of the Code, and the Plan will be deemed amended to the extent
        necessary to conform to such requirements.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Leaves
        of Absence</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
        the Administrator provides otherwise, vesting of Awards granted hereunder
        will
        be suspended during any unpaid leave of absence. A Service Provider will
        not
        cease to be an Employee in the case of (i)&#160;any leave of absence approved by
        the Company, or (ii)&#160;transfers between locations of the Company or between
        the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock
        Options, no such leave may exceed three (3) months, unless reemployment upon
        expiration of such leave is guaranteed by statute or contract. If reemployment
        upon expiration of a leave of absence approved by the Company is not so
        guaranteed, then six (6) months and one (1) day following the commencement
        of
        such leave any Incentive Stock Option held by the Participant will cease
        to be
        treated as an Incentive Stock Option and will be treated for tax purposes
        as a
        Nonstatutory Stock Option.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Transferability
        of Awards</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Unless
        determined otherwise by the Administrator, Awards may not be sold, pledged,
        assigned, hypothecated, transferred, or disposed of in any manner other than
        by
        will or the laws of descent and distribution, and may be exercised during
        the
        lifetime of the Participant, only by the Participant. If the Administrator
        makes
        an Award transferable, such Award may only be transferred (i) by will, (ii)
        by
        the laws of descent and distribution, (iii) to a revocable trust, or (iii)
        as
        permitted by Rule 701 of the Securities Act of 1933, as amended. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Adjustments;
        Dissolution or Liquidation; Merger or Change in Control</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Adjustments</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        In the
        event that any dividend or other distribution (whether in the form of cash,
        Shares, other securities, or other property), recapitalization, stock split,
        reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
        combination, repurchase, or exchange of Shares or other securities of the
        Company, or other change in the corporate structure of the Company affecting
        the
        Shares occurs, the Administrator, in order to prevent diminution or enlargement
        of the benefits or potential benefits intended to be made available under
        the
        Plan, shall adjust the number and class of Shares that may be delivered under
        the Plan and/or the number, class, price of Shares covered by each outstanding
        Award, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">and
        the
        numerical Share limits set forth in Sections&#160;3, 8, 9, 10, 11, and
        12</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-15</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Dissolution
        or Liquidation</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        In the
        event of the proposed dissolution or liquidation of the Company, the
        Administrator shall notify each Participant as soon as practicable prior
        to the
        effective date of such proposed transaction. To the extent it has not been
        previously exercised, an Option or Stock Purchase Right will terminate
        immediately prior to the consummation of such proposed action.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Merger
        or Change in Control</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        In the
        event of a merger of the Company with or into another corporation, or a Change
        in Control, each outstanding Award shall be assumed or an equivalent option
        substituted by the successor corporation or a Parent or Subsidiary of the
        successor corporation. In the event that the successor corporation in a merger
        or Change in Control refuses to assume or substitute for the Award, then
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
        Participant will fully vest in and have the right to exercise all of his
        or her
        outstanding Options and Stock Appreciation Rights, including Shares as to
        which
        such Awards would not otherwise be vested or exercisable, all restrictions
        on
        Restricted Stock will lapse, and, with respect to Restricted Stock Units,
        Performance Shares and Performance Units, all Performance Goals or other
        vesting
        criteria will be deemed achieved at target levels and all other terms and
        conditions met. In addition, if an Option or Stock Appreciation Right is
        not
        assumed or substituted for in the event of a Change in Control, the
        Administrator will notify the Participant in writing or electronically that
        the
        Option or Stock Appreciation Right will be fully vested and exercisable for
        fifteen (15) days, and the Option or Stock Appreciation Right will terminate
        upon the expiration of such period.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
        the
        purposes of this Section 16(c), an Award will be considered assumed if,
        following the Change in Control, the Award confers the right to purchase
        or
        receive, for each Share subject to the Award immediately prior to the Change
        in
        Control, the consideration (whether stock, cash, or other securities or
        property) or, in the case of a Stock Appreciation Right upon the exercise
        of
        which the Administrator determines to pay cash or a Performance Share or
        Performance Unit which the Administrator can determine to pay in cash, the
        fair
        market value of the consideration received in the merger or Change in Control
        by
        holders of Common Stock for each Share held on the effective date of the
        transaction (and if holders were offered a choice of consideration, the type
        of
        consideration chosen by the holders of a majority of the outstanding Shares);
        provided, however, that if such consideration received in the Change in Control
        is not solely common stock of the Successor Corporation, the Administrator
        may,
        with the consent of the Successor Corporation, provide for the consideration
        to
        be received upon the exercise of an Option or Stock Appreciation Right or
        upon
        the payout of a Performance Share or Performance Unit, for each Share subject
        to
        such Award (or in the case of Performance Units, the number of implied shares
        determined by dividing the value of the Performance Units by the per share
        consideration received by holders of Common Stock in the Change in Control),
        to
        be solely common stock of the Successor Corporation equal in fair market
        value
        to the per share consideration received by holders of Common Stock in the
        Change
        in Control.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
        anything in this Section 16(c) to the contrary, an Award that vests, is earned
        or paid-out upon the satisfaction of one or more Performance Goals will not
        be
        considered assumed if the Company or its successor modifies any of such
        Performance Goals without the Participant&#8217;s consent; provided, however, a
        modification to such Performance Goals only to reflect the Successor
        Corporation&#8217;s post-Change in Control corporate structure will not be deemed to
        invalidate an otherwise valid Award assumption</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-16</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Time
        of Granting Awards</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        date of grant of an Award shall, for all purposes, be the date on which the
        Administrator makes the determination granting such Award, or such later
        date as
        is determined by the Administrator. Notice of the determination shall be
        given
        to each Service Provider to whom an Award is so granted within a reasonable
        time
        after the date of such grant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Amendment
        and Termination of the Plan</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Amendment
        and Termination</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Board may at any time amend, alter, suspend or terminate the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Stockholder
        Approval</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Board shall obtain stockholder approval of any Plan amendment to the extent
        necessary and desirable to comply with Applicable Laws.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Effect
        of Amendment or Termination</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        No
        amendment, alteration, suspension or termination of the Plan shall impair
        the
        rights of any Participant, unless mutually agreed otherwise between the
        Participant and the Administrator, which agreement must be in writing and
        signed
        by the Participant and the Company. Termination of the Plan shall not affect
        the
        Administrator&#8217;s ability to exercise the powers granted to it hereunder with
        respect to Awards granted under the Plan prior to the date of such
        termination.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">19.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Tax
        Withholding</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Withholding
        Requirements</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Prior
        to the delivery of any Shares or cash pursuant to an Award (or exercise
        thereof), the Company will have the power and the right to deduct or withhold,
        or require a Participant to remit to the Company, an amount sufficient to
        satisfy federal, state, local, foreign or other taxes (including the
        Participant&#8217;s FICA obligation) required to be withheld with respect to such
        Award (or exercise thereof). </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Withholding
        Arrangements</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Administrator, in its sole discretion and pursuant to such procedures as
        it may
        specify from time to time, may permit a Participant to satisfy such tax
        withholding obligation, in whole or in part by (without limitation) (i) paying
        cash, (ii)&#160;electing to have the Company withhold otherwise deliverable cash
        or Shares having a Fair Market Value equal to the minimum amount required
        to be
        withheld, (iii) delivering to the Company already-owned Shares having a Fair
        Market Value equal to the amount required to be withheld, or (iv)&#160;selling a
        sufficient number of Shares otherwise deliverable to the Participant through
        such means as the Administrator may determine in its sole discretion (whether
        through a broker or otherwise) equal to the amount required to be withheld.
        The
        amount of the withholding requirement will be deemed to include any amount
        which
        the Administrator agrees may be withheld at the time the election is made,
        not
        to exceed the amount determined by using the maximum federal, state or local
        marginal income tax rates applicable to the Participant with respect to the
        Award on the date that the amount of tax to be withheld is to be determined.
        The
        Fair Market Value of the Shares to be withheld or delivered will be determined
        as of the date that the taxes are required to be withheld.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-17</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Conditions
        Upon Issuance of Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Legal
        Compliance</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Shares
        shall not be issued pursuant to the exercise of an Award unless the exercise
        of
        such Award and the issuance and delivery of such Shares shall comply with
        Applicable Laws and shall be further subject to the approval of counsel for
        the
        Company with respect to such compliance.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Investment
        Representations</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        As a
        condition to the exercise of an Award, the Administrator may require the
        person
        exercising such Award to represent and warrant at the time of any such exercise
        that the Shares are being purchased only for investment and without any present
        intention to sell or distribute such Shares if, in the opinion of counsel
        for
        the Company, such a representation is required.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>No
        Effect on Employment or Service</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Neither
        the Plan nor any Award will confer upon a Participant any right with respect
        to
        continuing the Participant&#8217;s relationship as a Service Provider with the
        Company, nor will they interfere in any way with the Participant&#8217;s right or the
        Company&#8217;s right to terminate such relationship at any time, with or without
        cause, to the extent permitted by Applicable Laws.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">22.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Inability
        to Obtain Authority</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        inability of the Company to obtain authority from any regulatory body having
        jurisdiction, which authority is deemed by the Company&#8217;s counsel to be necessary
        to the lawful issuance and sale of any Shares hereunder, shall relieve the
        Company of any liability in respect of the failure to issue or sell such
        Shares
        as to which such requisite authority shall not have been obtained.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Reservation
        of Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Company, during the term of this Plan, shall at all times reserve and keep
        available such number of Shares as shall be sufficient to satisfy the
        requirements of the Plan.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">24.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Stockholder
        Approval</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Plan shall be subject to approval by the stockholders of the Company within
        twelve (12) months after the date the Plan is adopted. Such stockholder approval
        shall be obtained in the degree and manner required under Applicable
        Laws.</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-18</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AE
        BIOFUELS, INC.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007
        STOCK PLAN</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>STOCK
        OPTION AWARD AGREEMENT</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
        otherwise defined herein, the terms defined in the 2007 Stock Plan (the &#8220;Plan&#8221;)
        shall have the same defined meanings in this Stock Option Award Agreement
        (the
&#8220;Award Agreement&#8221;).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>I.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>NOTICE
        OF STOCK OPTION GRANT</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name:</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Address:</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        undersigned Participant has been granted an Option to purchase Common Stock
        of
        the Company, subject to the terms and conditions of the Plan and this Award
        Agreement, as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
        of
        Grant&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
_____________________________________________________</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vesting
        Commencement
        Date&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
_____________________________________________________</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercise
        Price per
        Share&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$_____________________________________________________</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
        Number of Shares
        Granted&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
_____________________________________________________</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
        Exercise
        Price&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$_____________________________________________________</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Type
        of
        Option:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">___</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incentive
        Stock Option</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
        <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">___</font></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nonstatutory
        Stock Option</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Term/Expiration
        Date:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;_____________________________________________________</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Vesting
        Schedule</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subject
        to any acceleration provisions contained in the Plan or set forth below,
        this
        Option shall be exercisable, in whole or in part, according to the following
        vesting schedule:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>[25%
        of the Shares subject to the Option shall vest on the one (1) year anniversary
        of the Vesting Commencement Date, and 1/48 of the Option shall vest each
        month
        thereafter, subject to Participant continuing to be a Service Provider through
        such dates.]</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Termination
        Period</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
        Option shall be exercisable for </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>[three
        (3) months]</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        after
        Participant ceases to be a Service Provider. Upon Participant&#8217;s death or
        Disability, this Option may be exercised for </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>[one
        (1) year] </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">after
        Participant ceases to be a Service Provider. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
        the foregoing, in no event may this Option be exercised after the
        Term/Expiration Date as provided above and may be subject to earlier termination
        as provided in Section 16(c) of the Plan</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>II.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>AGREEMENT</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Grant
        of Option</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Plan Administrator of the Company hereby grants to the Participant named
        in the
        Notice of Grant (the &#8220;Participant&#8221;), an option (the &#8220;Option&#8221;) to purchase the
        number of Shares set forth in the Notice of Grant, at the exercise price
        per
        Share set forth in the Notice of Grant (the &#8220;Exercise Price&#8221;), and subject to
        the terms and conditions of the Plan, which is incorporated herein by reference.
        Subject to Section&#160;18(c) of the Plan, in the event of a conflict between
        the terms and conditions of the Plan and this Award Agreement, the terms
        and
        conditions of the Plan shall prevail.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        designated in the Notice of Grant as an Incentive Stock Option (&#8220;ISO&#8221;), this
        Option is intended to qualify as an Incentive Stock Option as defined in
        Section&#160;422 of the Code. Nevertheless, to the extent that it exceeds the
        $100,000 rule of Code Section 422(d), this Option shall be treated as a
        Nonstatutory Stock Option (&#8220;NSO&#8221;). </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exercise
        of Option</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Right
        to Exercise</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        This
        Option shall be exercisable during its term in accordance with the Vesting
        Schedule set out in the Notice of Grant and with the applicable provisions
        of
        the Plan and this Award Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Method
        of Exercise</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        This
        Option shall be exercisable by delivery of an exercise notice in the form
        attached as </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exhibit&#160;A</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        (the
&#8220;Exercise Notice&#8221;) which shall state the election to exercise the Option, the
        number of Shares with respect to which the Option is being exercised, and
        such
        other representations and agreements as may be required by the Company. The
        Exercise Notice shall be accompanied by payment of the aggregate Exercise
        Price
        as to all Exercised Shares. This Option shall be deemed to be exercised upon
        receipt by the Company of such fully executed Exercise Notice accompanied
        by the
        aggregate Exercise Price.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
        Shares
        shall be issued pursuant to the exercise of an Option unless such issuance
        and
        such exercise complies with Applicable Laws. Assuming such compliance, for
        income tax purposes the Shares shall be considered transferred to the
        Participant on the date on which the Option is exercised with respect to
        such
        Shares.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Method
        of Payment</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Payment
        of the aggregate Exercise Price shall be by any of the following, or a
        combination thereof, at the election of the Participant:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">cash
        or
        check;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">consideration
        received by the Company under a formal cashless exercise program adopted
        by the
        Company in connection with the Plan; or </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">surrender
        of other Shares which have a Fair Market Value on the date of surrender equal
        to
        the aggregate Exercise Price of the Exercised Shares, provided that accepting
        such Shares, in the sole discretion of the Administrator, will not result
        in any
        adverse accounting consequences to the Company</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Restrictions
        on Exercise</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        This
        Option may not be exercised until such time as the Plan has been approved
        by the
        stockholders of the Company, or if the issuance of such Shares upon such
        exercise or the method of payment of consideration for such shares would
        constitute a violation of any Applicable Law.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Non-Transferability
        of Option</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        This
        Option may not be transferred in any manner otherwise than by will or by
        the
        laws of descent or distribution and may be exercised during the lifetime
        of
        Participant only by Participant. The terms of the Plan and this Award Agreement
        shall be binding upon the executors, administrators, heirs, successors and
        assigns of the Participant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Term
        of Option</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        This
        Option may be exercised only within the term set out in the Notice of Grant,
        and
        may be exercised during such term only in accordance with the Plan and the
        terms
        of this Option.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Tax
        Obligations</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Withholding
        Taxes</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Notwithstanding any contrary provision of this Award Agreement, no certificate
        representing the Shares will be issued to Participant, unless and until
        satisfactory arrangements (as determined by the Administrator) will have
        been
        made by Participant with respect to the payment of income, employment and
        other
        taxes which the Company determines must be withheld with respect to such
        Shares.
        To the extent determined appropriate by the Company in its discretion, it
        will
        have the right (but not the obligation) to satisfy any tax withholding
        obligations by reducing the number of Shares otherwise deliverable to
        Participant. If Participant fails to make satisfactory arrangements for the
        payment of any required tax withholding obligations hereunder at the time
        of the
        Option exercise, Participant acknowledges and agrees that the Company may
        refuse
        to honor the exercise and refuse to deliver Shares if such withholding amounts
        are not delivered at the time of exercise.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Notice
        of Disqualifying Disposition of ISO Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        If the
        Option granted to Participant herein is an ISO, and if Participant sells
        or
        otherwise disposes of any of the Shares acquired pursuant to the ISO on or
        before the later of (1)&#160;the date two years after the Date of Grant, or
        (2)&#160;the date one year after the date of exercise, the Participant shall
        immediately notify the Company in writing of such disposition. Participant
        agrees that Participant may be subject to income tax withholding by the Company
        on the compensation income recognized by the Participant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Code
        Section 409A</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Under
        Code Section 409A, an option that vests after December 31, 2004 that was
        granted
        with a per Share exercise price that is determined by the Internal Revenue
        Service (the &#8220;IRS&#8221;) to be less than the Fair Market Value of a Share on the date
        of grant (a &#8220;Discount Option&#8221;) may be considered &#8220;deferred compensation.&#8221; A
        Discount Option may result in (i) income recognition by Participant prior
        to the
        exercise of the Discount Option, (ii) an additional twenty percent (20%)
        federal
        income tax, and (iii) potential penalty and interest charges. The Discount
        Option may also result in additional state income, penalty and interest charges
        to the Participant. Participant acknowledges that the Company cannot and
        has not
        guaranteed that the IRS will agree that the per Share exercise price of this
        Option equals or exceeds the Fair Market Value of a Share on the Date of
        Grant
        in a later examination. Participant agrees that if the IRS determines that
        the
        Option was granted with a per Share exercise price that was less than the
        Fair
        Market Value of a Share on the date of grant, Participant will be solely
        responsible for Participant&#8217;s costs related to such a
        determination.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Entire
        Agreement; Governing Law</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Plan is incorporated herein by reference. The Plan and this Award Agreement
        constitute the entire agreement of the parties with respect to the subject
        matter hereof and supersede in their entirety all prior undertakings and
        agreements of the Company and Participant with respect to the subject matter
        hereof, and may not be modified adversely to the Participant&#8217;s interest except
        by means of a writing signed by the Company and Participant. This agreement
        is
        governed by the internal substantive laws but not the choice of law rules
        of
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BACKGROUND-COLOR: #ffff00">[STATE]</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>No
        Guarantee of Continued Service</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
        THE
        VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
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        PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION
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        ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT
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        SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE
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        subject to all of the terms and provisions thereof. Participant has reviewed
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        advice of counsel prior to executing this Option and fully understands all
        provisions of the Option. Participant hereby agrees to accept as binding,
        conclusive and final all decisions or interpretations of the Administrator
        upon
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-22</font></div>
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                <td width="45%"><font size="2">PARTICIPANT</font></td>
                <td width="10%">&#160;</td>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-23</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        A</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007
        STOCK PLAN</strong></font></div>
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        NOTICE</strong></font></div>
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        BIOFUELS, INC.</font></div>
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      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:
        _____________</font></div>
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        Effective as of today, _____________, _____, the undersigned (&#8220;Participant&#8221;)
        hereby elects to exercise Participant&#8217;s option to purchase _________ shares of
        the Common Stock (the &#8220;Shares&#8221;) of AE Biofuels, Inc.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(the
        &#8220;Company&#8221;) under and pursuant to the 2007&#160;Stock Plan (the &#8220;Plan&#8221;) and the
        Stock Option Award Agreement dated ____________, ____ (the &#8220;Award
        Agreement&#8221;).</font></div>
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        Participant herewith delivers to the Company the full purchase price of the
        Shares, as set forth in the Award Agreement, and any and all withholding
        taxes
        due in connection with the exercise of the Option.</font></div>
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        of Participant</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Participant acknowledges that Participant has received, read and understood
        the
        Plan and the Award Agreement and agrees to abide by and be bound by their
        terms
        and conditions.</font></div>
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        as Stockholder</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Until
        the issuance of the Shares (as evidenced by the appropriate entry on the
        books
        of the Company or of a duly authorized transfer agent of the Company), no
        right
        to vote or receive dividends or any other rights as a stockholder shall exist
        with respect to the Shares subject to the Option, notwithstanding the exercise
        of the Option. The Shares shall be issued to the Participant as soon as
        practicable after the Option is exercised in accordance with the Award
        Agreement. No adjustment shall be made for a dividend or other right for
        which
        the record date is prior to the date of issuance except as provided in
        Section&#160;16 of the Plan. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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        Consultation</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Participant understands that Participant may suffer adverse tax consequences
        as
        a result of Participant&#8217;s purchase or disposition of the Shares. Participant
        represents that Participant has consulted with any tax consultants Participant
        deems advisable in connection with the purchase or disposition of the Shares
        and
        that Participant is not relying on the Company for any tax advice.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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        The
        Company may assign any of its rights under this Exercise Notice to single
        or
        multiple assignees, and this Exercise Notice shall inure to the benefit of
        the
        successors and assigns of the Company. Subject to the restrictions on transfer
        herein set forth, this Exercise Notice shall be binding upon Participant
        and his
        or her heirs, executors, administrators, successors and assigns.</font></div>
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        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-24</font></div>
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        review such dispute at its next regular meeting. The resolution of such a
        dispute by the Administrator shall be final and binding on all
        parties.</font></div>
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        jurisdiction to be illegal, unenforceable or void, this Award Agreement will
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        The
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        Notice, the Plan, and the Award Agreement constitute the entire agreement
        of the
        parties with respect to the subject matter hereof and supersede in their
        entirety all prior undertakings and agreements of the Company and Participant
        with respect to the subject matter hereof, and may not be modified adversely
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                  <div><font size="2">Submitted by:</font></div>
                  <div><font size="2">PARTICIPANT</font></div>
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                  <div><font size="2">Accepted by:</font></div>
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                <td width="45%">&#160;</td>
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                <td width="45%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
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                <td width="10%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td width="45%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
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                <td width="10%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td width="45%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
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                <td width="45%">&#160;</td>
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              </tr>
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                <td width="10%">&#160;</td>
                <td width="45%"><font size="2">Date
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
