SEPARATION AGREEMENT

         THIS SEPARATION AGREEMENT is made and entered into this 8th day of
January 1998, by and between Alain J-M Clenet ("Clenet") and ASHA Corporation
(the "Corporation").

                              W I T N E S S E T H :

         WHEREAS, Clenet has agreed to resign as an officer and director of
the Corporation effective on the sale of 1,677,978 shares of common stock of
the Corporation held by him; and

         WHEREAS, Clenet desires to continue to support the business
activities of the Corporation; and

         WHEREAS, the Corporation desires to protect the Corporation from any
competition from Clenet.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, THE PARTIES AGREE AS FOLLOWS:

         1.   Resignation.  Clenet hereby resigns as a Director of the
Corporation and as Chief Executive Officer and any and all other offices held
by him with the Corporation effective immediately on the effectiveness of this
Agreement.

         2.   Prior Agreements.  This Agreement replaces and supersedes all
prior agreements, oral or written, between the Corporation and Clenet
including, but not limited to, an employment agreement dated November 6, 1991,
as amended on April 21, 1995.

         3.   Assignment of Rights.  Clenet hereby assigns to the Corporation
all patent and other rights to intellectual properties currently held in his
name, or jointly with the Corporation or others.  Clenet agrees to execute
additional assignments and/or other documents necessary or prudent to
effectuate the transfer of these rights.

         4.   Non-Compete.  During the five year period commencing on the
effective date of this Agreement, Clenet shall not, without the prior written
consent of the Corporation, compete with the Corporation in its business areas
which are hereby defined to include designing, manufacturing and marketing
traction control systems for all vehicles worldwide and developing and
exploiting a commercially feasible manufacturing process for modularly-based
vehicles worldwide.  Notwithstanding the foregoing sentence, if Clenet
determines to engage in any of the business areas set forth therein and he
offers a right of first refusal to the Corporation in accordance with the
provisions of paragraph 8 below, and the Corporation does not accept the offer
within 30 days of such offer, then Clenet shall be free to engage in such
business.  Clenet will be deemed to be in competition with the Corporation if
he directly or indirectly, owns, manages, operates, or participates in the
ownership, management, operation or control of, or is a director or 5% or
greater stockholder or an employee of, or a consultant to, any business,
corporation or entity which is conducting any business which competes with the
Corporation's business areas defined above.  As a violation by Clenet of this
paragraph 4 could cause irreparable injury to the Corporation, the Corporation
shall have the right, in addition to any other remedies available to it at law
or in equity, to enjoin Clenet in a court of equity for violating such
provision.

         5.   Confidentiality.  During the five year period commencing on the
effective date of this Agreement, Clenet shall not, without the prior written
consent of the Corporation, disclose to any person or entity any of the
Corporation's trade secrets or use to any person's benefit other than that of
the Corporation, information gained as a result of being an employee, officer
or director of the Corporation.  As a violation by Clenet of the provisions of
this paragraph 5 could cause irreparable injury to the Corporation and there
is no adequate remedy at law for such violation, the Corporation shall have
the right, in addition to any other remedies available to it, at law or in
equity, to enjoin Clenet in a court of equity for violating such provisions.

         6.   No Contacts with Customers.  Clenet agrees that he will not
contact any licensees, customers or clients of the Corporation for a period of
five years commencing on the effective date of this Agreement, without the
prior written consent of the Corporation, which consent will not be
unreasonably withheld.

         7.   No Contacts with Other Businesses.   Without the prior written
consent of the Corporation, which consent will not be unreasonably withheld,
Clenet agrees that for a period of five years from the effective date of this
Agreement he will not contact, or attempt to do business with or for any
business or entity with which the Corporation has had contact during the
twelve month period prior to the effective date of this Agreement for the
purpose of considering a merger or acquisition or for the purpose of engaging
in any business activity in the areas of business described in paragraph 4
above.

         8.   Right of First Refusal.  During the five year period commencing
on the effective date of this Agreement, the Corporation shall have a right of
first refusal to purchase, license or otherwise acquire rights to any
automotive related concepts, inventions, and/or product designs that Clenet
may, from time to time, conceive or develop.  Prior to selling, licensing or
otherwise granting rights to any third parties during such period, Clenet
shall first offer such rights to the Corporation.  If the Corporation does not
accept the offer within 30 days of such offer, Clenet may develop and market
such automotive related concepts, inventions and/or product designs himself
(directly or through dealers or distributors) or may offer such concepts,
inventions and/or product designs to third parties provided that the terms
offered third parties, considered as a whole, are not materially less
favorable to the third party than the terms last offered by Clenet to the
Corporation, unless the Corporation is offered the third party terms for at
least 20 days.  The non-compete provisions of paragraph 4 of this agreement
and the no contact provisions of paragraphs 6 and 7 of this Agreement shall
not apply to Clenet contacting and negotiating with third parties in
accordance with the terms of this paragraph.

         9.   Consulting Agreement.  Clenet agrees that if the Corporation
desires his consulting services in the future for advanced engineering design
in automotive related areas, he will make a reasonable good faith effort to
make himself available to perform such services.  Such services will be
performed pursuant to a consulting agreement and for compensation to be
negotiated in good faith by the parties hereto.

         10.  Salary Extension; Other Benefits.  The Corporation shall pay
Clenet a salary and provide other benefits as follows:

              a.   The Corporation shall continue to pay Clenet his full
salary through December 31, 1997.

              b.   The Corporation shall transfer its ownership in the 1997
Tahoe to Clenet effective January 1, 1998, and make the lease payments for the
remaining term of the lease.  At the completion of the lease on this vehicle,
the Corporation will pay the "buy out" on the lease.  Clenet shall be
responsible for insurance on the vehicle effective January 1, 1998.

              c.   The Corporation will end its participation in Clenet's
membership in the La Cumbre Country Club after December 31, 1997.

              d.   The Corporation will cease all insurance payments on life,
medical, automobile, key man and other insurance policies for the benefit of
Clenet after December 31, 1997.

              e.   The Corporation will transfer ownership to Clenet of the
computer which he currently uses.

              f.   Clenet shall retain his option to purchase 8,278 shares of
common stock.

         11.  Effective Date.  This Agreement shall become effective on the
closing of the sale of 1,677,978 shares of Common Stock to several investors
including Donna Cohen.

         12.  Representation.  Once this Agreement is effective, Clenet shall
not, without the prior written consent of the Corporation, hold himself out as
being a representative of the Corporation.

         13.  No Disparagement.  Clenet shall not make any disparaging or
derogatory statements, whether verbal or written, regarding the Corporation or
its shareholders, directors, officers, employees, agents or products; and the
Corporation, and its officers and directors shall not make any disparaging or
derogatory statements, whether verbal or written, regarding Clenet.

         14.  Release by Clenet.  Clenet hereby releases and discharges the
Corporation (its officers, directors, and agents) from all claims, demands,
rights, liabilities, charges and causes of action (hereinafter referred to as
"claims") which he ever had, now has, or hereafter may have arising out of or
related to his employment with the Corporation, this Separation Agreement, or
any other matter through the date this Agreement is signed, including, but not
limited to, all tort claims, contract claims, employment discrimination
claims, and claims under the Age Discrimination in Employment Act or any other
federal, state, or local law.

         15.  Release by Corporation.  The Corporation hereby releases and
discharges Clenet from all claims, demands, rights, liabilities, charges and
causes of action (hereinafter referred to as "claims") which it ever had, now
has, or hereafter may have arising out of or related to Clenet's employment
with the Corporation, this Separation Agreement, or any other matter through
the date this Agreement is signed, including, but not limited to, all tort
claims and contract claims except that Clenet shall not be released from any
liability for any intentional misconduct or gross negligence.

         16.  Corporation Property.  After the Effective Date, Clenet shall
deliver to the Corporation any of the Corporation's credit cards he holds and
any other property belonging to the Corporation, including designs, drawings
or other documents.

         17.  Enforceability.  The parties hereto covenant and agree that to
the extent any provisions or portion of this Agreement shall be held, found or
deemed to be unreasonable, unlawful or unenforceable, then the parties hereto
expressly covenant and agree that any such provision or portion thereof shall
be modified to the extent necessary in order that any such provision or
portion thereof shall be legally enforceable to the fullest extent permitted
by applicable law and that any court of competent jurisdiction shall, and the
parties hereto do hereby expressly authorize any court of competent
jurisdiction to, enforce any such provision or portion thereof or to modify
any such provision or portion thereof in order that any such provision or
portion thereof shall be enforced by such court to the fullest extent
permitted by applicable law.

         18.  Binding Effect.  The terms of this Agreement shall inure to the
benefit of and be binding upon the Corporation, its successors and assigns,
and upon Clenet, his heirs and personal and legal representatives.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement on
the
day and year first above written.

WITNESS:

/s/ William R. Rogers                       /s/ Alain J-M Clenet
William R. Rogers                           Alain J-M Clenet

WITNESS:                                    ASHA CORPORATION, a Delaware
                                            Corporation

/s/ William R. Rogers                       By: /s/ John C. McCormack
William R. Rogers                              John C. McCormack