Document:

HYBRID FUELS INC.
                         (Formerly Polo Equities, Inc.)
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                          June 30. 2000, 1999 AND 1998

                           WILLIAM J BUTCHER, CPA P.S.
                ----------Certified Public accountant-----------

                                 1620 3rd Street
                              Marysville, WA 98205
                              Phone (360) 658-8347
                              FAX - (360) 658-1165

<PAGE>
                                TABLE OF CONTENTS

Accountant's Report                                    1

Financial Statements

     Balance Sheet                                     2

     Statement's of Loss and Accumulated Deficit       3

     Statements of Cash Flows                          4

     Statements of Changes in Stockholders' Equity     5

Notes to Financial Statements                        6-8

<PAGE>
<TABLE>
<CAPTION>
                                           Hybrid Fuels, Inc.
                                     (Formerly Polo Equities, Inc.)
                                     (A Development Stage Company)
                                    Statement of Financial Position
                            for the years ended June 30, 2000, 1999 and 1998

                                              ASSETS
                                              ------

CURRENT ASSETS                                         June 30, 2000    June 30, 1999    June 30, 1998
--------------                                        ---------------  ---------------  ---------------
<S>                                                   <C>              <C>              <C>

     Cash                                             $          485   $            0   $       56,976
                                                      ---------------  ---------------  ---------------
          Total Current Assets                                   485                0           56,976

OTHER ASSETS
------------
     Deposit on Plant (Note 5)                               170,561                0                0
     Stockholder Note Receivable (Note 6)                    150,000                0                0
                                                      ---------------  ---------------  ---------------
          Total Other Assets                                 320,561                0                0

TOTAL ASSETS                                                 321,046                0           56,976
                                                      ==============  ===============  ================

                            LIABILITIES AND STOCKHOLDERS EQUITY
                            -----------------------------------

CURRENT LIABILITIES
-------------------
     Accounts Payable                                             39                0                0
     Stockholder Payable (Note 7)                            266,144          293,183          150,580
                                                      ---------------  ---------------  ---------------
          Total Current Liabilities                          266,144          293,183          150,580

STOCKHOLDERS' EQUITY
--------------------
     Common Stock 001 par value
          50,000,000 shares authorized; is, 103,420
          shares issued and outstanding at June 30,
          2000,16,923,600 shares issued and
          outstanding at June 30, 1999, 15,000,000
          shares issued and outstanding at June 30,
          1998. (Note 8)                                      18,103           16,924           15,000

     Additional Paid in Capital                              362,074           15,074            3,398
     Deficit accumulated.                                   (325,275)        (325,181)        (112,002)
                                                      ---------------  ---------------  ---------------
          Total Stockholders' Equity                          54,902         (293,183)         (93,604)

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY             $      321,046   $            0   $       56,976
                                                      ==============  ===============  ================
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       -2-
<PAGE>
<TABLE>
<CAPTION>
                                              Hybrid Fuels, Inc
                                       (Formerly Polo Equities, Inc.)
                                        (A Development Stage Company)
                                 Statement of Losses and Accumulated Deficit
               for the years ended June 30, 2000, 1999 and 1998 and Inception to June 30, 2000

                                                                                                 Inception
                                                                                             February 26, 1960
                                                                                                through
                                           June 30, 2000    June 30, 1999    June 30, 1999    June 30, 2000
                                          ---------------  ---------------  ---------------  -----------------
<S>                                       <C>              <C>              <C>              <C>
REVENUE                                   $                $                $                $
     Sales                                             0                0                0                  0

     Cost of Sales                                     0                0                0                  0
                                          ---------------  ---------------  ---------------  -----------------
     Gross Profit                                      0                0                0                  0
EXPENSES
     Accounting Fees                                   0           13,650                0             13,650
     Advertising                                       0              147                0                147
     Automobile                                        0                0              545                545
     Banking                                          55              119              261                435
     Commissions                                       0            3,307                0              3,307
     Contract Labor                                    0            1,961                0              1,961
     Executive Compensation                            0           62,818           55,757            118,575
     Filing & Registration fees                        0                0            5.000              5,000
     General & Administration                          0                0                0             18,398
     Insurance                                         0              450            2,635              3,085
     Legal Fees                                        0            8,500                0              8,500
     License & Permits                                 0              125                0                125
     Marketing                                         0            2,664            2,923              5,587
     Miscellaneous                                     0              749              400              1,149
     Office Expense                                   39            3.114              468              3,621
     Postage & Delivery                                0            6,241              431              6,671
     Printing & Reproduction                           0           11,004            6,566             17,570
     Professional Fees                                 0           70,755           12,459             83,214
     Rent                                              0           13,457            1,793             15,249
     Security                                          0            1,142              106              1,248
     Telephone                                         0           11,694            1,746             13,440
     Travel & Entertainment                            0            1,284            2,515              3,799
                                          ---------------  ---------------  ---------------  -----------------
     Total operating Expenses                         94          213,180           93,604            325,275
                                          ---------------  ---------------  ---------------  -----------------
Net (Loss)                                           (94)        (213,180)         (93,604)  $       (325,275)
                                                                                             =================
Accumulated Deficit beginning of period         (325,181)        (112,002)         (18,398)

Accumulated Deficit end of period         $     (325,275)  $      325,181   $     (112,002)
                                          ===============  ===============  ===============
</TABLE>

   The accompanying Dotes arc an integral part of these financial statements.

                                       -3-
<PAGE>
<TABLE>
<CAPTION>
                                                        Hybrid Fuels, Inc.
                                                  (Formerly Polo Equities. Inc.)
                                                   (A Development Stage Company)
                                                  Statement of Cash Flows for the
                             years ended June 30, 2000, 1999, arid 1998 and Inception to June 30, 2000

                                                                                                                     Inception
                                                                                                                 February 26, 1960
                                                                                                                      through
                                                               June 30, 2000      June 30, 1999    June 30, 1998    June 30, 2000
                                                            ------------------  ----------------  ---------------  ---------------
<S>                                                         <C>                  <C>              <C>              <C>
CASH FLOWS PROM OPERATING ACTIVITIES                                       (94)  $     (213,180)  $      (93,604)  $     (325,275)
     Net Loss
     Adjustments to reconcile net loss to cash
          used in operating activities
          Changes in assets and liabilities

               Accounts Payable                                             39                0                0               39

                    Net cash used in operating activities                  (55)        (213,180)         (93.604)        (325,236)

CASH FLOWS FROM IN VESTING ACTIVITIES

     Loan to Blue Mountain                                                  61                0                0         (170,56l)

          Net cash provided (used) by investing activities            (170,561)               0                0         (170,561)
                                                            ------------------  ----------------  ---------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES

     Shareholder Note Receivable                                      (150,000)               0                0         (150,000)

     Shareholder Loans Payable                                         (27,078)         142,603          150,580          277,602

     Sale of common stock                                              348,179           13.600                0          368,680
                                                            ------------------  ----------------  ---------------  ---------------
          Net cash provided (used) by financing activities             171,101          156,203          150,580          496,282

NET INCREASE (DECREASE) IN CASH                                            485          (56,976)          56,976              485

CASH AT BEGINNING OF PERIOD                                                  0           56,976                0                0
                                                            ------------------  ----------------  ---------------  ---------------
CASH AT END OF PERIOD                                       $              485                0           56,976   $          485
                                                            ==================  ================  ===============  ===============
</TABLE>

      The accompanying notes are an integral part of these financial statements.

                                       -4-
<PAGE>
<TABLE>
<CAPTION>
                                                Hybrid Fuels, Inc.
                                          (Formerly Polo Equities, mc,)
                                          (A Development Stage Company)
                                  Statement of Changes in Stockholders' Equity
                               for the years ended June 30, 2000, 1999 and 1998

                                                        Common Stock                         Deficit
                                                   ---------------------------              Accumulated
                                                                                 Additional  during the
                                                                   Par Value      Paid-in   development
                                                      Shares        Amount       Capital        stage     Total
                                                   -------------  -----------  ------------  ---------  ---------
<S>                                                <C>            <C>          <C>           <C>        <C>
Balance at June 30,1997                            $ 15,000,000       15,000         3,398    (18,398)         0
                                                   ============  ===========  ============  =========  ==========
Net loss June 30. 1997                                                                        (93,604)   (93,604)
                                                                                             ---------  ---------

Balance at June 30, 1998                             15,000.000       15,000         3,398   (112,002)   (93,604)
                                                   ============  ===========  ============  =========  ==========
Issuance of 1,000,000 shares common stock on
Aug 4,1998, (Note 8)                                  1,000,000        1,000        (1,000)         0          0

Issuance of 2,400 shares common stock on Sept.
19, 1998 for cash.                                        2,400            3         3,597          0       3600

Issuance of 21,200 shares common stock on Nov
24, 1998 for cash                                        21,200           21         9,979          0     10,000

Issuance of 900,000 shares common stock on
March 23, 1999, (Note 8)                                900,000          900          (900)         0          0

Net loss June 30. 1999                                                                  0    (213,180)  (213,180)
                                                   -------------  -----------  ------------  ---------  ---------

Balance at June 30, 1999                             16,923,600       16,924        15,074   (325,181)  (293,183)
                                                   ============  ===========  ============  =========  ==========

Issuance of 5,000 shares common stock on Sept 1,
1999 for cash                                             5,000            5         2,495          0      2,500

Issuance of 15,000 shares common stock on Oct 8,
1999 for cash                                            15,000           15         7,485          0      7,500

Cancellation of August 4, 1998 1,000,000 share
issuance and March 23, 1999 900,000 share
issuance (Note 8)                                    (1,900,000)      (1,900)        1,900          0          0

Issuance of 29,050 shares common stock on Jan 6,
2000 for cash                                            29,050           29        16,971          0      1,700

Issuance of 17.730 shares common stock on Feb 7,
2000 for cash                                            17,730           18        12,662          0     12,680

Issuance of 13.040 shams common stock on March
17, 2000 for cash                                        13,040           13         8,487          0      8,500

Issuance of 1,500,000 shares common stock on
February 17. 2000 pursuant to subscription
agreement                                             1,500,000        1,500       148,500          0    150,000

Issuance of 1,500,000 shares common stock on
February 17, 2000 pursuant to subscription
agreement                                             1,500,000        1,500       148,500          0    150,000

Net loss June 30, 2000                                        -            -             0        (94)       (94)
                                                   -------------  -----------  ------------  ---------  ---------

Balance at June 30,2000                              18,103,420       18,103       362,074    325,275     54,902
                                                   ============  ===========  ============  =========  ==========
</TABLE>

      The accompanying notes are an integral part of these financial statements.

                                       -5-
<PAGE>
                               HYBRID FUELS, INC.
                         (Formerly Polo Equities, Inc.)
                          NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE  1.  THE  COMPANY
----------------------

The  Company was originally incorporated in the state of Florida on February 16,
1960  as  Fiberglass  industries Corporation of America. On August 29, 1966, the
Company  changed  its  name  to Rocket-Atlas Corp. and again changed its name on
November  21,  1966  to Rocket Industries, Corporation. On January 27, 1984, the
Company  changed  it's name to Polo Investment Corp. of Missouri, Inc. On August
2,  1985  the  name was changed to Medical Advanced Systems, Inc. and on June 3,
1993  the  Company  changed  its  name  to  Polo  Equities,  Inc

In May 1998, the Company caused a Nevada corporation to be formed under the name
Polo  Equities,  Inc., (a Nevada corporation), (Polo) with authorized capital of
50,000,000  shares of $.001 par value common stock. The Company then merged with
Polo  pursuant  to  Articles  of  Merger adopted May 28, 1998 and filed with the
State  of  Nevada  on  June  10,  1998,  which  changed  its domicile to Nevada.

On  May 29, 1998 the Company changed its name to Hybrid Fuels, Inc., the current
name.

In  May  of  1998,  in  a  stock for stock exchange, the Company acquired Hybrid
Fuels,  USA,  Inc.  and 330420 B.C. Ltd., which changed its name to Hybrid Fuels
(Canada)  Inc.,  As part of the acquisition, the Company acquired the technology
necessary for the Company's current operations. The Company operates through its
wholly  owned subsidiaries, Hybrid Fuels, U.S.A., Inc, and Hybrid Fuels (Canada)
Inc.

Prior to the acquisition of Hybrid Fuels, U.S.A., Inc, and Hybrid Fuels (Canada)
Inc.  the  Company  had  no  significant  operations  and was seeking a business
opportunity.

NOTE  2.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
--------------------------------------------------------

This  summary  of  significant  accounting  policies  of Hybrid Fuels, Inc. (the
Company)  is  presented  to  assist  in  understanding  the  Company's financial
statements.  The  financial  statements  and  notes  are  representations of the
Company's  management  who  is  responsible for their integrity and objectivity.
These  accounting  policies  conform to generally accepted accounting principles
and  have  been  consistently  applied  in  the  preparation  of  the  financial
statements.

NATURE  OF  OPERATIONS
----------------------

See  The  Company  above

CASH  AND  CASH  EQUIVALENTS
----------------------------

For  purposes  of  the  statement  of  cash  flows,  the  Company  considers all
short-term  debt securities purchased with a maturity of three months or less to
be  cash  equivalents.

PROPERTY  AND  EQUIPMENT
------------------------

Property  and  equipment  are  stated at the lower of cost or fair market value.
Depreciation is computed for financial statement purposes as well as for federal
income  tax purposes using the MACRS (Modified Accelerated Cost Recovery System)
method  of  depreciation.  Equipment is depreciated over five years. Software is
amortized  over  five  years.

INCOME  TAXES
-------------

The Company has not filed any tax returns. It is anticipated that if tax returns
were  filed, the company would have net operating losses. The current deficit of
$325,275 at June 30, 2000 would potentially create a similar net operating loss,
which  could  begin  expiring  for  tax  purposes  in  2004.

                                       -6-
<PAGE>
                               HYBRID FUELS, INC.
                         (Formerly Polo Equities, Inc.)
                          NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

USE  OF  ESTIMATES
------------------

The  preparation  of  financial  statement in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
effect  certain  reported  amounts  and disclosures. Accordingly, actual results
could  differ  from  those  estimates.

FOREIGN  EXCHANGE
-----------------

Some financial activity was based on Canadian dollars and translated on June 30.
2000  using  the  rate  of  (C$/US$)  1.468  or  a  multiplier  of  .6812.

NOTE  3.  GOING  CONCERN
------------------------

Because  of  a  deficiency  in working capital and significant operating losses,
there  is doubt about the ability of the Company to continue in existence unless
additional working capital is obtained. The Company currently has plans to raise
sufficient  working capital through equity financing and through the acquisition
of  companies having sufficient assets and cash flow to enable the Company to be
self-sufficient and profitable. The Company has acquired an option to purchase a
Beef  Packing  Plant  which  it  anticipates  will  begin  operations  about the
beginning  of  November,  2000.  See  NOTE  5

NOTE  4.  COMPANY  FACILITIES
-----------------------------

The  Company  currently  uses office space at #214-2791 Hwy 97 N, Kelowna, B.C.,
VIX4J8,  which  is  provided  by  a  shareholder  at no cost to the Company. The
President  also  maintains  an  office  in  his  home at no cost to the Company.

NOTE  5.  DEPOSIT
-----------------

The  Company  deposited  $250,000  Canadian  Dollars  ($170,561  USD),  to  Mega
Holdings,  Ltd.,  pursuant  to  an agreement to purchase a beef processing plant
owned  by  Mega  Holdings,  Ltd.  The  Company  has  agreed to purchase the beef
processing plant facility including land, buildings and equipment for $3,000,000
Canadian  Dollars.  The property, buildings and related equipment were appraised
in  1996 at a replacement value of $4,990,000 Canadian Dollars, during a time in
which  the  plant  was  dormant  and  in need of repair.  The purchase agreement
requires  an  additional  payment of $150,000 Canadian Dollars within 45 days of
acceptance,  which  made  it  due  on  June 24, 2000, the parties have agreed to
extend  the deadline for the payment.  Upon completion of the purchase this beef
processing  plant  will be operated by Blue Mountain Packers, Ltd.,  The Company
intends  to  acquire the issued and outstanding shares of stock of Blue Mountain
Packers,  Ltd.  and operate this corporation as a wholly owned subsidiary.  Blue
Mountain  Packers,  Ltd.  recently  received  certification by the Canadian Food
Inspection Agency of the Government of Canada, Department of Agriculture for the
processing  of  Canadian  beef.

NOTE  6.  STOCKHOLDERS  LOAN  RECEIVABLE
----------------------------------------

On  February  17,  2000  the  Company executed a subscription agreement and note
whereby  the  Company  would receive $150,000 for 1,500,000 shares common stock.
The  note  was  interest  free  and is to be received within one (1) week of the
Company  being  re-listed  on  the  OTC:BB  or  other  suitable  exchange.

NOTE  7.  NOTE  RECEIVABLE  BLUE  MOUNTAIN
------------------------------------------

On  September  15,  2000, the Company issued a note to Douglas Dickie dba Deelay
Holdings  for  $33,638  USD due and payable on or before September 15, 2001 plus
interest  in  the  amount  of  $2,691  USD  and passed this loan through to Blue
Mountain  Pakers  Ltd.,  which  executed  a  note  at  the  same  terms.

                                      - 7 -
<PAGE>
                               HYBRID FUELS, INC.
                         (Formerly Polo Equities, Inc.)
                          NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE  8.  STOCKHOLDERS  LOAN  PAYABLE
-------------------------------------

Advanced  by the controlling shareholder of the Company;  The money was advanced
to  the  Company  with  no  specific  term  of  repayment.

NOTE  9.  DIRECTOR  PAYABLE
---------------------------

The President and Director Clay Larson, has paid office and related expenses for
the  Company,  from his personal funds in the amount of $2,187 USD.  The Company
has  agreed  to  reimburse  him  for  these  expenses.

NOTE  10.  STOCKHOLDERS  EQUITY
-------------------------------

The  issuer was originally incorporated in Florida as Fiberglass Industries Corp
of  America  in  February, 1960 with authorized capital of 500,000 shares with a
par  value  of  $.10  per  share.

In October, 1964, the Company changed its authorized capital to 1,500,000 shares
of  common  stock  with  a  par  value  of  $.10  per  share

On  November  21,  1966,  the  Company  changed  its  name to Rocket Industries,
Corporation.  and  at  that  time  authorized capital was increased to 3,000,000
shares  and  par  value  was  changed  to  $.05  per  share.

On  January  27,  1984,  the Company changed its name to Polo Investment Corp of
Missouri  Inc.  and  increased  its  authorized  capital  to  30,000,000 shares.

On  June  3,  1993,  the  Company  changed  its  name to Polo Equities, Inc. and
increased  its  authorized  capital to 50,000,000 shares common stock with a par
value  of  $.001  per  share.

In May 1998, the Company caused a Nevada corporation to be formed under the name
Polo  Equities,  Inc.,  (  a  Nevada  corporation),  with  authorized capital of
50,000,000 shares of $.001 par value common stock.  The Company then merged with
Polo  pursuant  to  Articles  of  Merger adopted May 28, 1998 and filed with the
State  of  Nevada  on  June  10,  1998,  which  changed  its domicile to Nevada.

On May 29, 1998, the Company changed its name to Hybrid Fuels, Inc., the current
name.

In  accordance  with  the  terms  of an acquisition agreement, 12,000,000 of the
15,000,000 shares outstanding at the time, were canceled and 12,000,000 treasury
shares  were issued in a share for share exchange by which the issuer became the
owner  of all of the issued and outstanding shares of Hybrid Fuels, USA Inc. and
330420  B.C.  LTD.  That Company changed it's name to Hybrid Fuels (Canada) Inc.
By  acquiring  control  of  that  company,  this  Company  gained control of the
intellectual  property.

On  August 4, 1998, the Company 's Board of Directors authorized the issuance of
1,000,000  shares  common  stock to individuals without consideration.  On March
23,  1999, the Company's Board of Directors issued an  additional 900,000 shares
common  stock,  also  without  consideration.  On  August 21, 1999, the Board of
Directors resolved that share certificates numbered 10166 through 10174 totaling
1,000,000  shares  common  stock  and  certificates numbered 10212 through 10220
totaling  900,00  shares common stock were issued without adequate consideration
being  paid to the Company and were therefore not fully paid and non-assessable.
The Company cancelled the share certificates and indemnified the transfer agent,
Standard  Registrar and Transfer Company Inc., for any costs or liability it may
incur in any way arising out of the cancellation of such shares and the transfer
agent  removed  the  1,900,000  shares  from  the  stockholder  list effectively
reversing  the  issuance.  Six  of  the  canceled certificates, totaling 550,000
shares,  have  been  endorsed  and  returned  to  the  Company for cancellation.

                                      - 8 -
<PAGE>
                               HYBRID FUELS, INC.
                         (Formerly Polo Equities, Inc.)
                          NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE  11. U.S.A. SECURITIES  AND  EXCHANGE  COMMISSION
------------------------------------------------------

On November 7, 2000, the Company filled a Form SB-2 Registration Statement under
The  Securities  Act  of  1933  with  the  Securities  and  Exchange Commission.
Registration  File  Number  333-49424.  The  Company  has  been  advised  by the
Securities  and Exchange Commission that the June 30, 2000, Financial Statements
needed  to  be  updated  and  resubmitted  as  an  amended  submission.

                                       -9-
<PAGE>SHARE  EXCHANGE  AND  PURCHASE  AGREEMENT

Between Power Save International,  Inc., a Nevada Corporation located at 5800 NW
64 Ave.Bldg.26 #1091 Tamarac, FL 33319, hereafter referred to as PSI, and Mirage
Air Systems,  Inc. hereafter referred to as MAS. Located at 265 McCormick Drive,
Bohemia, NY 11716

1) MAS has been  engaged in the HVAC  business  for 10 years.  The company had a
nominal  $6,000,000 in annual  revenues for the last fiscal year with a recasted
B/T/E of $800,000.

2) PSI has  executed  an  Underwriting  and Selling  agreement  with a NASD SIPC
Member firm and is in the  process of  preparing  a full SB-2  Underwriting  for
submittal to the SEC with a projected completion date of around May 15, 2000.

3) PSI has been  engaged  for the past 11 years  in the  development  of  Engine
Driven  Co-Generation,  Air  Conditioning,  Refrigeration,  Thermal recovery and
other energy saving systems.

4) The  operation  and  ownership  of these  systems  in  qualified  sites as an
example:  Hospitals  and  other  Industrial,   Commercial  sites  will  generate
substantial positive cash flow in the form of utility cost savings.  These sites
will be the source of a continued  stream of  positive  cash flow on a long-term
basis.

5) PSI wishes to establish a Marketing  Installation  and Servicing  presence in
certain desired  geographical areas of the U.S.to emerge from the development of
these Systems into full- scale marketing and production.

6) During this interim ramp-up  period,  PSI wishes to do a rollup at completion
of the Underwriting and acquire one or more HVAC operating companies with a good
cash  flow  history,  and a  qualified  management  team in  place to act as the
initial cash flow revenue base for PSI.

7) A search will be commenced  by PSI, to identify  other  synergistic  entities
that will be  targeted  for  acquisition  by PSI in order to grow  and/or  fully
utilize the capabilities of the company.

8) Subject to Due  Diligence  PSI hereby  makes an offer to purchase MAS for the
amount of 4.Million Dollars ($4,000,000.00)

<PAGE>
SHARE  EXCHANGE  AND  PURCHASE  AGREEMENT

9) PSI will issue non-dividend,  redeemable  convertible  preferred shares in an
arbitrarily  agreed amount  equaling the agreed  purchase price, in exchange for
100 of the shares of MAS. The understanding is that the preferred shares will be
retired over a mutually agreed period of time, as set forth herein.

10)  All documents  will be held in the trust account of MAS's  Attorney,  until
     payment  satisfactory  to MAS has been made. In the event the  underwriting
     has not been  completed  by August 1,  2000,  Mas will have the  option and
     absolute right to terminate the transaction.

11)  The  principals of MAS will maintain  autonomous  operating  control of MAS
     until a satisfactory  method of payment has been accomplished.  Thereafter,
     it shall be according to the terms and conditions as mutually agreed in the
     employment agreements to be negotiated during the due diligence period.

12)  Additionally,  certain  personnel  of MAS  may  serve  as  part  of the PSI
     Management Team in a manner to be mutually determined.

13)  The 4.Million  Dollar purchase price shall be paid in the following  manner
     1.Million Dollars Cash from the proceeds of the Underwriting.

14)  $1.5 Million  Dollars in NASDAQ Listed Market Value  Registered  PSI Common
     Free Trading shares at that time,  subject to a Selling  Agreement with the
     Underwriter and SEC requirements.

15)  The  remaining  $1.5 Million  Dollars in market  valued common shares to be
     held and released to the Principals  (subject to MAS  maintaining  $800,000
     Dollars  in B/T/E in each of the  forthcoming  3 Years,)  in the  amount of
     $500,000 per year.

16)  For every  $100,000  reduction  from the $800,000  Dollars in B/T/E for any
     given  year,  $150,000 in shares  equaling  that amount will be returned to
     PSI.  This formula is limited to the shares as outlined in  paragraph  (15)
     only.

17)  Loss of Value  Indemnification:  Until  such  time as all of  their  issued
     shares have been released by the Underwriters  from the selling  agreement,
     the principals of MAS as a first PSI founding acquisition company will have
     a  guarantee  from PSI  against  a drop in  market  share  price  causing a
     reduction in their selling price.

<PAGE>
SHARE  EXCHANGE  AND  PURCHASE  AGREEMENT

18)  In such an event PSI would issue sufficient  added shares as  necessary  to
     the  principals  of MAS to make them well  for any  loss  they  would  have
     suffered.

19)  The  exchange  of  shares  between  PSI  and  MAS  will  be  a  non-taxable
     transaction.

20)  After executing a non-disclosure and confidentiality agreement, PSI will be
     provided  full  disclosure  from MAS in order to  complete  due  diligence.
     Receiving  current,  past and future financial or other  information in the
     form  required,  regarding  all  aspects  of the  balance  sheet and income
     statement.

21)  Proceeds of the PSI offering  will be used to complete the purchase of 14AS
     and  any  other  acquisitions  deemed  beneficial,  and  provide  PSI  with
     sufficient   operating   capital  to  fund   continued   expansion   and/or
     acquisitions,  in addition  to any other  added  steps which would  enhance
     Corporate Profits.

22)  Until this  transaction  has been closed at completion of the  Underwriting
     the  relationship  between  MAS and PSI  shall  be  that of  Corporate  and
     Management assistance on an arms length basis.

23)  There will be no inner  mingling of funds or  transfers of assets until the
     transaction has been completed with satisfactory payment to MAS principals.

24)  PSI will supply all the  marketing  and  technical  assistance  for the PSI
     product sales.

25)  The  equipment  for any sales  made will be drop  shipped  as  ordered  and
     specified by PSI from authorized PSI Component Manufacturer's.

26)  The SB-2  Underwriting  with provisions for simultaneous  NASDAQ listing of
     the PSI shares,  offers  liquidity of equity,  with the ability to minimize
     the tax consequences for the principals of MAS.

27)  The purchase price for MAS will be paid by the issuance of PSI, arbitrarily
     valued non-dividend, redeemable, convertible preferred shares with terms as
     detailed in paragraphs 9,13,14,15,16.

<PAGE>
SHARE  EXCHANGE  AND  PURCHASE  AGREEMENT

28)  The structure of the transaction  shall be such that MAS is insulated from,
     and indemnified against any and all occurrences that could befall PSI which
     could  impact or  adversely  affect  the MAS's  principal's  equity,  until
     satisfactory payment has been made.

29)  Conversion shall be made by issuing sufficient common shares priced, at the
     time  of the  underwriting  equal  to the  value  amount  specified  on the
     preferred shares.

30)  If a default in the terms of this  agreement  should be caused by PSI,  and
     MAS has not  received  satisfactory  payment,  as will be  outlined  in the
     preferred  share  terms  from PSI in the time and manner  agreed:  At MAS's
     option, the return of the preferred shares to PSI shall be accepted by PSI,
     and deemed a full  release and  settlement  of any and all claims,  of each
     against the other.

31)  PSI  understands  that MAS's  business is listed for sale by The Kensington
     Company and until the PSI Due Diligence has been  completed with a definite
     closing  date  stated in  writing  from PSI,  MAS does not have to take the
     business off the market.

32)  Prior to such an  occurrence,  if MAS  were to  receive  a firm  and  valid
     purchase  offer from a third  party,  PSI will be  granted a 30-day,  first
     right of refusal to meet the terms of the offer.  If PSI is unable to match
     the offer, at the option of MAS, PSI will unconditionally  release HAS from
     this Share Exchange and Purchase Agreement with no further claims.

33)  It is understood  and agreed  between the parties,  that certain  presently
     unknown   specifics  may  arise  from  time  to  time,   that  may  require
     modification and adjustments between the parties as circumstance requires.

34)  Acceptance  of these  changes  will be  documented  in writing as  mutually
     agreed.

35)  Each  party  hereby  acknowledges  that in the  event no  agreement  can be
     reached regarding any needed changes by the parties, this agreement will be
     terminated  and there will be no  liabilities  or claims of each to, and/or
     against  the  other  excepting  in  regard to  violations,  if any,  of any
     agreements of confidentiality executed between the parties.

<PAGE>
SHARE  EXCHANGE  AND  PURCHASE  AGREEMENT

36)  Signed evidence of receiving notification of any such termination by United
     Parcel Over Night Service,  Express Mail, or Federal  Express is acceptable
     to both parties.

37)  If  any  term, provision, covenant or condition of this i Agreement is held
     by a court  of competent jurisdiction to be invalid, void or unenforceable,
     the rest of the Agreement  shall  remain in full force and effect and shall
     in no way be affected, impaired or invalidated.

38)  The venue as to any such hearing,  or any litigation between the parties to
     this agreement,  shall be New York or wherever  otherwise  mutually agreed,
     and shall be governed by New York Law.

39)  Each party by their signatures  below,  acknowledge that there are no other
     understandings  or agreements  other than what has been stated herein.  Any
     changes to this  agreement  must be made in writing  and  executed  by both
     parties as an addendum to this  agreement.  If this  agreement has not been
     executed within 15 days,  unless  extended in writing,  it will be null and
     void.

Accepted  this  date     Accepted  this  date'

PURCHASER     SELLER
Scott  Balmer,  Chairman     Auth.Party
Power  Save  International,  Inc.          MAS  Title
Phone:  954-722-1615     Phone:
Fax:  954-722-6417     Fax:     r

<PAGE>

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