Document:

Exhibit 10.7

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                            ASSET PURCHASE AGREEMENT

                                     among:

                              LITHIUM CORPORATION,
                              A Nevada corporation,

                                 PATHION, INC.,
                             a Delaware corporation,

                                       and

                              PATHION MINING INC.,
                              a Nevada corporation

                          ----------------------------

                           Dated as of August 15, 2014

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                                Table Of Contents

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1.  Sale of Assets; Related Transactions...................................   1

    1.1      Sale of Assets................................................   1

    1.2      Purchase Price................................................   2

    1.3      Sales Taxes...................................................   4

    1.4      Allocation of the Purchase Price..............................   5

    1.5      Closing.......................................................   5

2.  Representations and Warranties of the Stockholders and the Seller......   5

    2.1      Capitalization................................................   5

    2.2      Due Organization; No Subsidiaries; Etc........................   6

    2.3      Articles of Incorporation and Bylaws; Records.................   6

    2.4      Financial Statements..........................................   7

    2.5      Absence Of Changes............................................   7

    2.6      Title To Assets...............................................   8

    2.7      Bank Accounts.................................................   9

    2.8      Receivables...................................................   9

    2.9      Inventory.....................................................   9

    2.10     Equipment, Etc................................................   9

    2.11     Contracts.....................................................  10

    2.12     Real Property.................................................  11

    2.13     Intellectual Property.........................................  11

    2.14     Agreements; Action............................................  15

    2.15     Major Customers and Suppliers.................................  16

    2.16     Compliance with Other Instruments.............................  16

    2.17     Governmental Consents.........................................  16

    2.18     Tax Matters...................................................  17

    2.19     Employee And Labor Matters....................................  17

    2.20     Employee Benefit Plans and Compensation.......................  18

    2.21     Environmental Matters.........................................  18

    2.22     Insurance.....................................................  18

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                                Table Of Contents
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    2.23     Related Party Transactions....................................  18

    2.24     Authority; Binding Nature Of Agreements.......................  18

    2.25     Brokers.......................................................  18

    2.26     Full Disclosure...............................................  19

    2.27     Litigation.  .................................................  19

    2.28     Permits.......................................................  19

    2.29     Manufacturing and Marketing Rights............................  19

3.  Representations and Warranties of the Purchaser........................  19

    3.1      Authority; Binding Nature Of Agreements.......................  19

    3.2      Valid Issuance................................................  20

    3.3      Organization, Standing and Power..............................  20

    3.4      Brokers.......................................................  20

4.  Pre-Closing Covenants of the Stockholders and the Seller...............  20

    4.1      Access And Investigation......................................  20

    4.2      Operation Of Business.........................................  20

    4.3      Filings and Consents..........................................  22

    4.4      Notification; Updates to Disclosure Schedule..................  22

    4.5      No Negotiation................................................  23

    4.6      Best Efforts..................................................  23

    4.7      Confidentiality...............................................  23

    4.8      [FIRPTA Matters...............................................  23

5.  Additional Covenants and agreements....................................  24

    5.1      Expenses......................................................  24

    5.2      Tax Treatment.................................................  24

    5.3      Press Releases................................................  24

    5.4      Projections...................................................  24

    5.5      Restrictions on Transfer......................................  24

    5.6      Change Of Name................................................  25

    5.7      Stockholder Support...........................................  25

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                                Table Of Contents
                                   (continued)

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6.  Conditions to Obligations of Each Party................................  25

7.  Conditions Precedent to the Purchaser's Obligation to Close............  26

    7.1      Representations and Compliance................................  26

    7.2      Consents and Approvals........................................  26

    7.3      Due Diligence.................................................  26

    7.4       Additional Documents.........................................  26

8.  Conditions Precedent  to the Seller's Obligation to Close..............  28

    8.1      Representations and Compliance................................  28

    8.2      Consents and Approvals........................................  28

    8.3      Additional Documents..........................................  28

9.  Termination............................................................  28

    9.1      Termination Events............................................  28

    9.2      Termination Procedures........................................  29

    9.3      Effect Of Termination.........................................  29

    9.4      Nonexclusivity Of Termination Rights..........................  29

10. Indemnification, Etc...................................................  30

    10.1     Survival Of Representations And Covenants.....................  30

    10.2     Indemnification By The Stockholders And The Seller............  30

    10.3     Setoff........................................................  31

    10.4     Nonexclusivity Of Indemnification Remedies....................  32

    10.5     Defense of Third Party Claims.................................  32

    10.6     Exercise Of Remedies By Persons Other Than an Indemnitee......  33

11. General Provisions.....................................................  33

    11.2     Joint And Several Liability...................................  34

    11.3     Notices.......................................................  34

    11.4     Counterparts..................................................  34

    11.5     Governing Law.................................................  34

    11.6     Mandatory Arbitration.........................................  34

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                                Table Of Contents
                                   (continued)

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    11.7     Successors And Assigns; Parties In Interest...................  36

    11.8     Waiver........................................................  36

    11.9     Amendments....................................................  36

    11.10    Severability..................................................  36

    11.11    Entire Agreement..............................................  37

EXHIBIT A    Definitions
EXHIBIT B    Contracts
EXHIBIT C    Escrow Agreement
EXHIBIT D    Assumption Agreement
EXHIBIT E    Excluded Liabilities
EXHIBIT F    Non-competition Agreement
EXHIBIT G    Bill of Sale
EXHIBIT H    Excluded Assets
EXHIBIT I    Restricted Stock Purchase Agreement
EXHIBIT J    Expenditures to be Reimbursed at Closing

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                            ASSET PURCHASE AGREEMENT

     THIS ASSET  PURCHASE  AGREEMENT  (the  "AGREEMENT")  is entered  into as of
August___,  2014, by and between: LITHIUM CORPORATION, a Nevada corporation (the
"Seller"),  PATHION,  INC.,  a  Delaware  corporation  (the  "PARENT")  and  its
wholly-owned   subsidiary  PATHION  MINING,  INC.,  a  Nevada  corporation  (the
"PURCHASER").  Certain  capitalized  terms used in this Agreement are defined in
Exhibit A.

                                    RECITALS

     A. The Seller owns and operates a business  that owns  certain  lithium and
graphite mining claims (the "BUSINESS").

     B. The Boards of Directors of the Seller (the "SELLER'S BOARD"),  Purchaser
(the  "PURCHASER'S  Board")  and Parent have  determined  that it is in the best
interests  of  the  Seller,  Purchaser  and  Parent,  respectively,   and  their
respective  stockholders  to consummate the purchase of certain of the assets of
the Seller and the assumption of certain liabilities (the "ACQUISITION").

     C. The Seller  wishes to  provide  for the sale of certain of the assets of
the Seller to the Purchaser, and Purchaser wishes to acquire such assets, on the
terms set forth in this Agreement.

                                    AGREEMENT

     The parties to this  Agreement,  intending  to be legally  bound,  agree as
follows:

1. SALE OF ASSETS; RELATED TRANSACTIONS.

     1.1  SALE  OF  ASSETS.  The  Seller  shall  cause  to  be  sold,  assigned,
transferred, conveyed and delivered to the Purchaser, at the Closing (as defined
below),  good and valid  title to the Assets  (as  defined  below),  free of any
Encumbrances,  on the  terms and  subject  to the  conditions  set forth in this
Agreement. For purposes of this Agreement,  "Assets" shall mean and include: (a)
the properties,  rights,  interests and other tangible and intangible  assets of
the Seller located in and referred to as Fish Lake Valley (in Esmeralda  County,
Nevada), San Emidio (in Washoe County, Nevada) and BC Sugar (in Shuswap, British
Columbia)  and  whether  or not  required  to be  reflected  on a balance  sheet
prepared in accordance with generally accepted accounting principles), including
any assets acquired by the Seller during the Pre-Closing Period required for the
continued conduct of the Business as it relates to the Assets; and (b) any other
assets that are owned by any of the Seller or any other  Related  Party and that
are needed for the conduct of, or are useful in connection  with,  the Assets of
the Seller;  PROVIDED,  HOWEVER,  that the Assets shall not include any Excluded
Assets.  Without  limiting the  generality  of the  foregoing,  the Assets shall
include:

     (1) all of  Seller's  lithium  and  graphite  mining  claims  related to or
connected  in any way with or  located  in the Fish Lake  Valley,  in  Esmeralda
County, San Emidio, in Washoe County, and BC Sugar, in Shuswap, British Columbia
as identified in Part 2.5 of the Seller Disclosure Schedule;

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     (2) all inventories and work-in-progress of the Seller;

     (3) all  equipment,  materials,  prototypes,  tools,  machinery,  supplies,
vehicles,  furniture, real property,  fixtures,  improvements and other tangible
assets of the Seller  (including the tangible  assets  identified in Part 2.8 of
the Seller Disclosure Schedule);

     (4) all advertising and promotional materials possessed by the Seller;

     (5) all  Intellectual  Property  Assets and related  goodwill of the Seller
(including  the  Intellectual  Property  Assets  identified  in Part 2.11 of the
Seller Disclosure Schedule);

     (6) all rights of the Seller under the Seller's  Contracts  (including  the
Contracts identified in Exhibit B of the Seller Disclosure Schedule and all open
sales orders of Seller);

     (7) all  Governmental  Authorizations  held by the  Seller  (including  the
Governmental  Authorizations  identified  in Part 2.15 of the Seller  Disclosure
Schedule);

     (8) all claims (including claims for past infringement or  misappropriation
of Intellectual  Property Assets or Intellectual  Property Rights) and causes of
action of the Seller  against other Persons  (regardless  of whether or not such
claims and causes of action have been asserted by the Seller), and all rights of
indemnity, warranty rights, rights of contribution, rights to refunds, rights of
reimbursement and other rights of recovery  possessed by the Seller  (regardless
of whether such rights are currently exercisable);

     (9) all other  assets  that are related to or used in  connection  with the
Assets that are owned by the Seller, any affiliate of the Seller,; and

     (10) all books, records, files and data of the Seller, except the corporate
records of the Seller.

     1.2 PURCHASE PRICE.

     (A) As consideration for the sale of the Assets to the Purchaser:

     (I)  Purchaser  shall  pay  to  Seller   consideration  in  the  amount  of
$2,250,000, and the "Purchase Price" shall be an amount equal to (i) $1,250,000,
less (ii) the amount of the Closing  Indebtedness  (as defined in Section  2.3),
plus  (iii) any  amount  remaining  after  any  Liabilities,  excluding  Assumed
Liabilities,  are paid from the  $1,000,000  deposited  into  Escrow  Amount (as
defined below) according to the terms of this Agreement. In addition to the cash
consideration,  the Purchase Price shall include  500,000 shares of common stock
of the  Parent,  all of which  shall be  issued to the  Seller  at the  Closing,
subject to the terms and  conditions of this  Agreement and Parent's  Restricted
Stock Purchase Agreement. Item (i) above less item (ii) above and 500,000 shares
of common  stock of the  Parent is  referred  to  herein  as the  "Closing  Date

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Payment." At the Closing,  the Purchaser  shall deposit  $1,000,000 (the "Escrow
Fund") in an escrow  account (the "Escrow  Account") to be established as of the
Closing  Date (as  defined  below)  pursuant  to an Escrow  Agreement  among the
Seller, the Purchaser,  the Parent and an entity mutually  acceptable to all the
parties hereto (the "Escrow Agent"), in substantially the form of Exhibit C (the
"Escrow Agreement");

     (II) prior to the Closing, the Seller shall provide to Buyer payoff letters
(with valid payoff  amounts  through the Closing Date) in customary form for all
Closing  Indebtedness.  Upon the terms and  subject  to the  conditions  of this
Agreement,  on the Closing  Date,  simultaneously  with the Closing,  Buyer,  on
behalf of the Seller, shall pay or otherwise discharge all Closing Indebtedness,
excluding any assumed  indebtedness.  Effective  upon such payment or discharge,
substantially  simultaneously with the Closing, the Seller shall obtain releases
of all  liens,  security  interests  and  similar  encumbrances  on the  assets,
properties  and capital stock of the Seller  securing the  indebtedness  paid or
discharged by Buyer.

     (III) at the Closing, the Purchaser shall assume the Assumed Liabilities by
delivering to the Seller an Assumption  Agreement in  substantially  the form of
Exhibit D (the  "Assumption  Agreement").  At the Closing,  the Purchaser  shall
reimburse  the Seller  for any  expenditures  made by the  Seller  for  expenses
indicated pursuant to Exhibit J.

     (B) For purposes of this Agreement  "Assumed  Liabilities"  shall mean only
the  obligations  of the  Seller  under the  Contracts  identified  on Exhibit B
hereto,  but only to the extent  such  obligations  (A) arise  after the Closing
Date,  (B) do not  arise  from or  relate  to any  Breach  by the  Seller of any
provision  of any of such  Contracts,  (C) do not  arise  from or  relate to any
event,  circumstance  or  condition  occurring  or  existing  on or prior to the
Closing Date that, with notice or lapse of time, would constitute or result in a
Breach  of any of such  Contracts,  and (D) are  ascertainable  (in  nature  and
amount)  solely by reference to the express terms of such  Contracts;  PROVIDED,
HOWEVER, that notwithstanding the foregoing, and notwithstanding anything to the
contrary  contained  in this  Agreement,  the  "Assumed  Liabilities"  shall not
include,  and the  Purchaser  shall not be  required  to assume or to perform or
discharge:

     (I) any Excluded  Liability,  including  without  limitation  any Liability
specifically indicated and set forth on Exhibit E;

     (II)  any  Liability  of  the  Seller  arising  out of or  relating  to the
execution, delivery or performance of any of the Transactional Agreements;

     (III) any  Liability  of the Seller for any fees,  costs or expenses of the
type referred to in Section 5.1 hereof;

     (IV) any  Liability  of the Seller  arising  from or relating to any action
taken  by the  Seller,  or any  failure  on the part of the  Seller  to take any
action, at any time after the Closing Date;

     (V)  any  Liability  of the  Seller  arising  from or  relating  to (x) any
services  performed  by the  Seller  for  any  customer,  or (y)  any  claim  or
Proceeding against the Seller;

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     (VI) any Liability of the Seller for the payment of any Tax;

     (VII) any Liability of the Seller to any employee or former employee of the
Seller with respect to any compensation  earned or vacation accrued prior to the
Closing Date;

     (VIII) any  Liability of the Seller to any  employee or former  employee of
the Seller under or with respect to any Seller  Employee  Plan,  profit  sharing
plan or dental plan or for severance pay;

     (IX) any  Liability  under  any  Contract,  if the  Seller  shall  not have
obtained,  prior to the Closing Date,  any Consent  required to be obtained from
any Person with respect to the  assignment or delegation to the Purchaser of any
rights or obligations under such Contract;

     (X) any Liability  that is  inconsistent  with or constitutes an inaccuracy
in, or that arises or exists by virtue of any Breach of, (x) any  representation
or warranty made by the Seller in any of the  Transactional  Agreements,  or (y)
any covenant or obligation of the Seller  contained in any of the  Transactional
Agreements; or

     (XI) any other  Liability that is not referred to  specifically  in Section
1.2(b).

     1.3 SALES AND  TRANSFER  TAXES.  The Seller  shall bear and pay,  and shall
reimburse  the  Purchaser  and the  Purchaser's  affiliates  for,  any  sales or
transfer taxes that may become payable in connection with the sale of the Assets
to the Purchaser or in connection with any of the other Transactions.

     1.4  ALLOCATION  OF THE PURCHASE  PRICE.  At or prior to the  Closing,  the
Purchaser shall deliver to the Seller a statement  setting forth the Purchaser's
good faith determination of the manner in which the consideration referred to in
Sections  1.2(a)(i),  and  1.2(a)(ii) is to be allocated  among the Assets.  The
allocation prescribed by such statement shall be conclusive and binding upon the
Seller for all  purposes,  and the Seller shall not file any Tax Return or other
document with, or make any statement or declaration  to, any  Governmental  Body
that is inconsistent with such allocation.

     1.5 CLOSING.

     (A) The closing of the sale of the Assets to the Purchaser (the  "Closing")
shall take place at the  offices of  Parent,  16450 Los Gatos  Blvd,  Suite 207,
California,  95032 at 10:00 a.m.,  or on such date or place as the Purchaser may
designate in a written notice delivered to the Seller;  PROVIDED,  HOWEVER, that
if any  condition  set forth in Section 7 has not been  satisfied as of the date
designated  by  the  Purchaser,   then  the  Purchaser  may,  at  its  election,
unilaterally  postpone the Scheduled Closing Time by up to 60 days. For purposes
of this  Agreement,  "Closing Date" shall mean the time and date as of which the
Closing actually takes place.

     (B) At the Closing:

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     (I) Seller shall execute and deliver to the  Purchaser  such bills of sale,
endorsements, assignments and other documents as may (in the reasonable judgment
of the Purchaser or its counsel) be necessary or appropriate to assign,  convey,
transfer and deliver to the Purchaser good and valid title to the Assets free of
any Encumbrances;

     (II) Purchaser shall deliver the Closing Date Payment;

     (III) Purchaser shall deposit the Escrow Fund in the Escrow Account; and

     (IV) Purchaser shall issue to Seller a stock certificate for 500,000 shares
of common stock of the  Purchaser  subject to terms and  conditions  of Parent's
Restricted Stock Purchase Agreement.

2. REPRESENTATIONS AND WARRANTIES OF THE SELLER.

     Except  as set  forth on the  Seller  Disclosure  Schedule  specifying  the
relevant subsection hereof, Seller does hereby represent and warrant, to and for
the benefit of the Indemnitees, as follows:

     2.1 DUE  ORGANIZATION;  NO  SUBSIDIARIES;  ETC. The Seller is a corporation
duly organized,  validly existing and in good standing under the laws of Nevada.
The Seller is not required to be qualified,  authorized,  registered or licensed
to do  business  as a foreign  corporation  in any  jurisdiction  other than the
jurisdictions listed in Part 2.1 of the Seller Disclosure  Schedule.  The Seller
is in good standing as a foreign corporation in each of the jurisdictions listed
in Part 2.1 of the Seller  Disclosure  Schedule.  The  Seller  does not have any
subsidiaries,  and does not own, beneficially or otherwise,  any shares or other
securities  of, or any direct or  indirect  interest of any nature in, any other
Entity. The Seller has never conducted any business under or otherwise used, for
any purpose or in any  jurisdiction,  any fictitious  name,  assumed name, trade
name  or  other  name,   other  than  Lithium   Corporation.

     2.2 ARTICLES OF INCORPORATION AND BYLAWS; RECORDS. The Seller has delivered
to (or made  available for  inspection  by) the Purchaser  accurate and complete
copies of: (i) the  Articles  of  Incorporation  of the  Seller,  including  all
amendments thereto and bylaws of the Seller,  including all amendments  thereto;
(ii) the stock records of the Seller; and (iii) the minutes and other records of
the  meetings  and other  proceedings  (including  any actions  taken by written
consent or otherwise  without a meeting) of the  Stockholders  of the Seller and
the board of  directors  of the  Seller.  There have been no  meetings  or other
proceedings  of the  Stockholders  of the Seller,  the board of directors of the
Seller or any  committee  of the board of  directors  of the Seller that are not
fully  reflected in such minutes or other records.  The books of account,  stock
records,  minute books and other records of the Seller are accurate,  up-to-date
and complete,  and have been  maintained  in  accordance  with sound and prudent
business  practices.  All  of  the  records  of the  Seller  are  in the  actual
possession and direct control of the Seller.

     2.3  FINANCIAL  STATEMENTS.  The Seller has  delivered to the Purchaser the
following financial statements (collectively,  the "FINANCIAL STATEMENTS"):  (a)
the audited  balance sheets of the Seller as of December 31, 2013,  December 31,

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2012 and December 31, 2011,  and the related  statements  of income and retained
earnings and cash flows for the years then ended and the unaudited balance sheet
as of June 30, 2014 and the related  statement of income and  retained  earnings
and cash flow for the three  months then ended.  The  Financial  Statements  are
accurate and complete in all respects,  including without  limitation in setting
forth all debts or indebtedness of any nature whatsoever of the Seller up to the
Closing (the "Closing  Indebtedness"),  and all have been prepared in accordance
with generally  accepted  accounting  principles  applied on a consistent  basis
throughout the periods covered and present fairly the financial  position of the
Seller as of the respective dates thereof and the results of operations and cash
flows of the Seller for the periods covered thereby.  Except as set forth in the
Financial  Statements,  the Seller has no material  liabilities,  contingent  or
otherwise,  other  than (i)  liabilities  incurred  in the  Ordinary  Course  of
Business  subsequent to June 30, 2014 and (ii)  obligations  under Contracts and
commitments  incurred in the Ordinary  Course of Business and not required under
generally  accepted  accounting  principles  to be  reflected  in the  Financial
Statements,  which,  in both cases,  individually  or in the aggregate,  are not
material to the financial  condition or operating results of the Seller.  Except
as  disclosed  in the  Financial  Statements,  the Seller is not a guarantor  or
indemnitor of any  indebtedness of any other person,  firm or  corporation.  The
Seller  maintains and will continue to maintain a standard  system of accounting
established and  administered in accordance with generally  accepted  accounting
principles.

     2.4 ABSENCE OF CHANGES. As it relates to the Assets, Except as set forth in
Part 2.4 of the Seller Disclosure Schedule, since June 30, 2014:

     (A) there has not been any  adverse  change in,  and no event has  occurred
that  might  have  an  adverse  effect  on,  the  business,  condition,  assets,
liabilities,  operations,  financial performance, net income or prospects of the
Seller;

     (B)  there  has not  been  any  loss,  damage  or  destruction  to,  or any
interruption  in the use of,  any of the assets of the  Seller  (whether  or not
covered by insurance);

     (C) the Seller has not  purchased or otherwise  acquired any asset from any
other Person,  except for supplies acquired by the Seller in the Ordinary Course
of Business;

     (D) the Seller has not leased or licensed any asset from any other Person;

     (E) the Seller has not made any capital expenditure;

     (F) the  Seller  has not sold or  otherwise  transferred,  disposed  of, or
leased or licensed, any of the Assets to any other Person;

     (G) the Seller has not written off as  uncollectible,  or  established  any
extraordinary   reserve  with  respect  to,  any  account  receivable  or  other
indebtedness;

     (H) the Seller has not made any loan or advance to any other Person;

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     (I) the Seller has not (i)  established  or adopted any employee  plan,  or
(ii)  paid any  bonus or made any  profit-sharing  or  similar  payment  to,  or
increased the amount of the wages, salary, commissions, fees, fringe benefits or
other compensation or remuneration  payable to, any of its directors,  officers,
employees or independent contractors;

     (J) no  Contract  by which the Seller or any of the Assets of the Seller is
or was bound,  or under which the Seller has or had any rights or interest,  has
been amended or terminated, nor is the Seller in breach of any such Contract;

     (K) the Seller has not incurred, assumed or otherwise become subject to any
Liability,  other than accounts payable (of the type required to be reflected as
current  liabilities in the "liabilities"  column of a balance sheet prepared in
accordance with GAAP) incurred by the Seller in bona fide  transactions  entered
into in the Ordinary Course of Business;

     (L) the Seller has not discharged any Encumbrance or discharged or paid any
indebtedness  or other  Liability,  except  for  accounts  payable  that (i) are
reflected as current  liabilities in the  "liabilities"  column of the Financial
Statements or have been incurred by the Seller since June 30, 2014, in bona fide
transactions entered into in the Ordinary Course of Business, and (ii) have been
discharged or paid in the Ordinary Course of Business;

     (M) the Seller has not forgiven  any debt or  otherwise  released or waived
any right or claim relative to the Assets;

     (N)  the  Seller  has not  changed  any of its  methods  of  accounting  or
accounting practices in any respect;

     (O) the  Seller has not  entered  into any  transaction  or taken any other
action outside the Ordinary Course of Business; and

     (P) the  Seller  has not  agreed,  committed  or  offered  (in  writing  or
otherwise) to take any of the actions referred to in clauses "(c)" through "(p)"
above.

     2.5 TITLE TO ASSETS.  The Seller owns, and has good and valid title to, all
of the Assets  purported to be owned by it,  including:  all Assets reflected on
the Financial Statements; all assets acquired by the Seller since June 30, 2014;
all assets  referred  to in the Seller  Disclosure  Schedule;  all rights of the
Seller  under the  Contracts;  and all other  assets  reflected in the books and
records of the Seller as being owned by the Seller.  Except as set forth in Part
2.5 of the  Seller  Disclosure  Schedule,  all of said  assets  are owned by the
Seller  free and clear of any  Encumbrances.  Part 2.5 of the Seller  Disclosure
Schedule  identifies  all of the assets that are being leased or licensed to the
Seller,  including without  limitation the Assets.  The Assets are sufficient to
allow the Buyer to utilize them in any manner deemed  appropriate  subsequent to
the Closing.  Seller is the legal and beneficial owner of the Assets,  which are
free and clear of any  Encumbrance,  and the SELLERS have full right,  power and
authority to sell, transfer,  assign, convey and deliver all of the Assets to be
sold by it  hereunder,  and  delivery  thereof  will  convey to the Buyer  good,

                                       7
<PAGE>
absolute  and  marketable  title to said  Assets,  free and clear of any and all
Encumbrances.  Upon  delivery  of  the  Assets  to  the  Buyer  pursuant  to the
provisions of this Agreement,  the Buyer will acquire good, valid and marketable
title to the Assets, free and clear of any and all Encumbrances. The Assets will
collectively constitute, as of the Closing Date, all of the properties,  rights,
interests  and other  tangible  and  intangible  assets  necessary to enable the
Seller to conduct its business in the manner in which such business is currently
being  conducted  and in the manner in which such  business  is  proposed  to be
conducted.

     2.6 RECEIVABLES.  Part 2.6 of the Seller  Disclosure  Schedule  provides an
accurate and complete  breakdown  and aging of all  accounts  receivable,  notes
receivable and other  receivables  of the Seller as of June 30, 2014.  Except as
set forth in Part 2.6 of the Seller Disclosure  Schedule,  all existing accounts
receivable of the Seller (including those accounts  receivable  reflected on the
Financial  Statements  that  have  not yet been  collected  and  those  accounts
receivable  that  have  arisen  since  June  30,  2014  and  have  not yet  been
collected):  (i) represent valid  obligations of customers of the Seller arising
from bona fide transactions entered into in the Ordinary Course of Business; and
(ii)  are  current  and  will be  collected  in  full.  Part  2.6 of the  Seller
Disclosure  Schedule  identifies  all  unreturned  security  deposits  and other
deposits made by, or held by any Person for the benefit of, the Seller.

     2.7  INVENTORY.  Part 2.7 of the Seller  Disclosure  Schedule  provides  an
accurate and complete breakdown of all inventory (including raw materials,  work
in process and  finished  goods) of the Seller as of June 30,  2014.  All of the
Seller's  existing  inventory  (including all inventory that is reflected on the
Financial  Statements and that has not been disposed of by the Seller since June
30,  2014):  (a) is of such quality and quantity as to be usable and saleable by
the Seller in the Ordinary Course of Business;  (b) has been priced at the lower
of cost or market value using the "first-in,  first-out" method; and (c) is free
of any defect or deficiency.  The inventory levels  maintained by the Seller (i)
are not excessive in light of the Seller's normal operating  requirements,  (ii)
are adequate for the conduct of the Seller's  operations in the Ordinary  Course
of Business,  and (iii) are  comparable  to the inventory  levels  maintained by
other companies of similar size and business.

     2.8 EQUIPMENT,  ETC. Part 2.8 of the Seller Disclosure  Schedule accurately
identifies all equipment,  materials,  prototypes,  tools,  supplies,  vehicles,
furniture, fixtures,  improvements and other tangible assets owned by the Seller
used for the  Business,  and  accurately  sets  forth  the date of  acquisition,
original  cost and book  value of each of said  assets.  Part 2.8 of the  Seller
Disclosure Schedule also accurately identifies all tangible assets leased to the
Seller.  Each asset  identified  or required to be identified in Part 2.8 of the
Seller  Disclosure  Schedule:  (i) is  structurally  sound,  free of defects and
deficiencies and in good condition and repair (ordinary wear and tear excepted);
(ii) complies in all respects  with, and is being operated and otherwise used in
full compliance with, all applicable Legal  Requirements;  and (iii) is adequate
and appropriate for the uses to which it is being put. The assets  identified in
Part 2.8 of the Seller  Disclosure  Schedule are adequate for the conduct of the
Business of the Seller in the manner in which such  Business is currently  being
conducted  and in the manner in which such  Business is proposed to be conducted
after the acquisition of the Assets by the Purchaser.

                                       8
<PAGE>
     2.9 CONTRACTS.

     (A) Part 2.9 of the Seller Disclosure  Schedule  identifies and provides an
accurate  and  complete  description  of each  Seller  Contract,  except for any
Immaterial  Contract.  The Seller has  delivered to the  Purchaser  accurate and
complete copies of all Contracts identified in Part 2.9 of the Seller Disclosure
Schedule, including all amendments thereto. Each Seller Contract is valid and in
full force and effect.

     (B) Except as set forth in Part 2.9 of the Seller Disclosure Schedule:  (i)
no Person has violated or breached,  or declared or committed any default under,
any  Seller  Contract;  (ii) no  event  has  occurred,  and no  circumstance  or
condition  exists,  that  might  (with or  without  notice or lapse of time) (A)
result in a violation or breach of any of the provisions of any Seller Contract,
(B) give any Person the right to declare a default or exercise  any remedy under
any Seller Contract, (C) give any Person the right to accelerate the maturity or
performance of any Seller Contract,  or (D) give any Person the right to cancel,
terminate or modify any Seller  Contract;  (iii) the Seller has not received any
notice or other  communication  (in writing or otherwise)  regarding any actual,
alleged,  possible or potential  violation or breach of, or default  under,  any
Seller  Contract;  and (iv) the Seller has not waived any right under any Seller
Contract.

     (C) To the best of the knowledge of the Seller,  each Person  against which
the Seller has or may  acquire any rights  under any Seller  Contract is solvent
and is  able to  satisfy  all of  such  Person's  current  and  future  monetary
obligations and other obligations and Liabilities thereunder.

     (D) Except as set forth in Part 2.9 of the Seller Disclosure Schedule,  the
Seller  has never  guaranteed  or  otherwise  agreed to cause,  insure or become
liable for,  and the Seller has never  pledged any of its assets to secure,  the
performance or payment of any obligation or other Liability of any other Person.

     (E)  The  performance  of the  Seller  Contracts  will  not  result  in any
violation of or failure to comply with any Legal Requirements.

     (F) No Person is renegotiating, or has the right to renegotiate, any amount
paid or  payable to the Seller  under any Seller  Contract  or any other term or
provision of any Seller Contract.

     (G) The  Seller has no  knowledge  of any basis upon which any party to any
Seller  Contract may object to (i) the  assignment to the Purchaser of any right
under such Seller  Contract,  or (ii) the  delegation to or  performance  by the
Purchaser of any obligation  under such Seller  Contract.  The Seller  Contracts
identified in Part 2.9 of the Seller Disclosure Schedule collectively constitute
all of the Seller  Contracts  which require  consent prior to the  assignment of
such Seller Contract to the Purchaser.

     (H) The Contracts  identified in Part 2.9 of the Seller Disclosure Schedule
collectively  constitute all of the Contracts  necessary to enable the Seller to

                                       9
<PAGE>
conduct its  Business in the manner in which such  business is  currently  being
conducted  and in the manner in which such  business is proposed to be conducted
as it relates to the Assets.

     (I) Part 2.9 of the Seller Disclosure  Schedule  identifies and provides an
accurate and complete description of each proposed Contract as to which any bid,
offer,  written  proposal,  term sheet or similar document has been submitted or
received by the Seller.

     2.10 REAL  PROPERTY;  LEASES.  The Seller does not own any real property or
any interest in real property,  except for the leaseholds created under the real
property leases identified in Part 2.10 of the Seller Disclosure Schedule.  Part
2.10 of the  Seller  Disclosure  Schedule  provides  an  accurate  and  complete
description of the premises covered by said leases and the facilities located on
such premises.  The Seller enjoys  peaceful and  undisturbed  possession of such
premises.

     2.11 INTELLECTUAL PROPERTY.

     (A) Unless  otherwise  explicitly  stated and  thereby  excluded,  the term
"Intellectual Property Assets" means all intellectual property owned or licensed
(as licensor or licensee) by Seller in which Seller has a proprietary  interest,
including:

     (I) Seller's  name,  all assumed  fictional  business  names,  trade names,
registered  and   unregistered   trademarks,   service  marks  and  applications
(collectively, "Marks") are explicitly excluded;

     (II) all patents,  patent  applications and inventions and discoveries that
may be patentable (collectively, "Patents");

     (III) all registered and  unregistered  copyrights in both published  works
and unpublished works (collectively, "Copyrights");

     (IV) all know-how, trade secrets,  confidential or proprietary information,
customer lists,  Software,  technical  information,  data,  process  technology,
plans, drawings and blue prints (collectively, "Trade Secrets"); and

     (B) Part  2.11(b)  of the  Disclosure  Schedule  contains  a  complete  and
accurate list and summary description,  including any royalties paid or received
by Seller,  and Seller has delivered to Buyer accurate and complete  copies,  of
all Seller Contracts  relating to the Intellectual  Property Assets,  except for
any license implied by the sale of a product and perpetual, paid-up licenses for
commonly  available  Software  programs  with a value of less than $10,000 under
which  Seller  is the  licensee.  There  are no  outstanding  and,  to  Seller's
Knowledge,  no  threatened  disputes or  disagreements  with respect to any such
Contract.

     (C) (i)  Except as set forth in Part  2.11(c),  the  Intellectual  Property
Assets are all those  necessary for the operation of Seller's  Business as it is
currently  conducted  and as it  relates to the  Assets.  Seller is the owner or
licensee of all right,  title and  interest  in and to each of the  Intellectual
Property Assets,  free and clear of all  Encumbrances,  and has the right to use

                                       10
<PAGE>
without payment to a third party all of the Intellectual  Property Assets, other
than in respect of licenses listed in Part 2.11(c).

     (II)  Except as set forth in Part  2.11(c),  each  Person  who is or was an
employee or  contractor of the Seller and who is or was involved in the creation
or  development  of any Seller  Intellectual  Property Asset has signed a valid,
enforceable  agreement containing an assignment of Intellectual  Property Rights
pertaining to such Seller product or  Intellectual  Property Asset to the Seller
and confidentiality  provisions  protecting the Intellectual  Property Asset. No
current or former shareholder,  officer, director, or employee of the Seller has
any claim,  right (whether or not currently  exercisable),  or interest to or in
any  Intellectual  Property  Asset. No employee of the Seller is (a) bound by or
otherwise subject to any Contract restricting him from performing his duties for
the Seller or (b) in breach of any  Contract  with any former  employer or other
Person concerning  Intellectual  Property Rights or  confidentiality  due to his
activities as an employee of the Seller.

     (D) (i) Part  2.11(d)  contains a complete  and  accurate  list and summary
description of all Patents.

     (II) All of the issued  Patents are  currently  in  compliance  with formal
legal  requirements  (including  payment of filing,  examination and maintenance
fees and  proofs of  working  or use),  are valid and  enforceable,  and are not
subject to any  maintenance  fees or taxes or actions  falling due within ninety
(90) days after the Closing Date.

     (III) No Patent has been or is now involved in any  interference,  reissue,
reexamination,  or opposition  Proceeding.  To Seller's  Knowledge,  there is no
potentially interfering patent or patent application of any third party.

     (IV) Except as set forth in Part 2.11 (d), (A) no Patent is  infringed  or,
to Seller's Knowledge, has been challenged or threatened in any way and (B) none
of the  products  manufactured  or sold,  nor any process or know-how  used,  by
Seller infringes or is alleged to infringe any patent or other proprietary right
of any other Person.

     (V) All products made, used or sold under the Patents have been marked with
the proper patent notice.

     (E) (i) Intentionally omitted.

     (II) Intentionally omitted.

     (III) Intentionally omitted.

     (IV) To Seller's Knowledge,  there is no potentially  interfering trademark
or trademark application of any other Person.

     (V) Intentionally omitted.

     (VI) Intentionally omitted.

                                       11
<PAGE>
     (F) (i) Part  2.11(f)  contains a complete  and  accurate  list and summary
description of all Copyrights.

     (II) All of the  registered  Copyrights  are currently in  compliance  with
formal Legal Requirements, are valid and enforceable, and are not subject to any
maintenance  fees or taxes or actions  falling due within ninety (90) days after
the date of Closing.

     (III) No  Copyright  is  infringed  or,  to  Seller's  Knowledge,  has been
challenged or  threatened  in any way. None of the subject  matter of any of the
Copyrights  infringes or is alleged to infringe any copyright of any third party
or is a derivative work based upon the work of any other Person.

     (IV) All works  encompassed  by the  Copyrights  have been  marked with the
proper copyright notice.

     (G) (i) With respect to each Trade Secret,  the  documentation  relating to
such Trade Secret is current,  accurate and  sufficient in detail and content to
identify and explain it and to allow its full and proper use without reliance on
the knowledge or memory of any individual.

     (II) Seller has taken all  reasonable  precautions  to protect the secrecy,
confidentiality  and value of all Trade Secrets  (including  the  enforcement by
Seller of a policy requiring each employee or contractor to execute  proprietary
information and  confidentiality  agreements  substantially in Seller's standard
form,  and all  current  and former  employees  and  contractors  of Seller have
executed such an agreement).

     (III)  Seller  has good  title to and an  absolute  right to use the  Trade
Secrets.  The Trade  Secrets are not part of the public  knowledge or literature
and, to Seller's Knowledge,  have not been used, divulged or appropriated either
for the benefit of any Person (other than Seller) or to the detriment of Seller.
No Trade  Secret is  subject  to any  adverse  claim or has been  challenged  or
threatened in any way or infringes any intellectual  property right of any other
Person.

     (H) (i) Intentionally omitted.

     (I) None of the software (including firmware and other software embedded in
hardware  devices)  owned,  developed  (or  currently  being  developed),  used,
marketed,  distributed,  licensed, or sold by the Seller (including any software
that is part of, is  distributed  with,  or is used in the design,  development,
manufacturing, production, distribution, testing, maintenance, or support of any
Seller  product or the Business as it relates to the Assets,  but  excluding any
third-party  software that is generally  available on standard  commercial terms
and is licensed to the Seller solely for internal use on a non-exclusive  basis)
(collectively,  "Seller  Software")  (a)  contains  any  bug,  defect,  or error
(including any bug, defect,  or error relating to or resulting from the display,
manipulation,  processing,  storage,  transmission,  or use of date  data)  that
materially and adversely affects the use, functionality,  or performance of such
Seller Software or any product or system  containing or used in conjunction with
such Seller  Software;  or (b) fails to comply with any  applicable  warranty or

                                       12
<PAGE>
other contractual commitment relating to the use, functionality,  or performance
of such Seller  Software or the Seller has provided to the  Purchaser a complete
and accurate list of all known bugs, defects,  and errors in each version of the
Seller Software.

     (J) No Seller Software  contains any "back door," "drop dead device," "time
bomb," "Trojan horse," "virus," or "worm" (as such terms are commonly understood
in the  software  industry) or any other code  designed or intended to have,  or
capable  of  performing,   any  of  the  following  functions:  (a)  disrupting,
disabling,  harming,  or otherwise  impeding in any manner the  operation of, or
providing  unauthorized  access to, a computer system or network or other device
on which such code is stored or  installed;  or (b) damaging or  destroying  any
data or file without the user's consent.

     (K) The source code for all Seller  Software  contains  clear and  accurate
annotations and  programmer's  comments,  and otherwise has been documented in a
professional  manner that is both: (i) consistent with customary code annotation
conventions and best practices in the software industry;  and (ii) sufficient to
independently  enable  a  programmer  of  reasonable  skill  and  competence  to
understand,  analyze,  and interpret program logic,  correct errors and improve,
enhance,  modify and support the Seller Software.  No source code for any Seller
Software has been delivered,  licensed, or made available to any escrow agent or
other  Person who is not, as of the date of this  Agreement,  an employee of the
Seller. The Seller has no duty or obligation  (whether present,  contingent,  or
otherwise) to deliver, license, or make available the source code for any Seller
Software to any escrow  agent or other  Person.  No event has  occurred,  and no
circumstance or condition exists, that (with or without notice or lapse of time)
will, or could  reasonably be expected to, result in the delivery,  license,  or
disclosure of the source code for any Seller Software to any other Person.

     (L) Part 2.11(l) of the Seller Disclosure  Schedule  accurately  identifies
and  describes  (i)  each  item of  Open  Source  Code  that  is  contained  in,
distributed  with,  or used in the  development  of the Seller  products or from
which any part of any Seller product is derived or for use in the conduct of the
Business as it relates to the Assets, (ii) the applicable license terms for each
such item of Open Source Code, and (iii) the Seller  product or Seller  products
to which each such item of Open Source Code relates.

     (M) Intentionally omitted.

     2.12 AGREEMENTS; ACTION.

     (A) Except for  agreements  explicitly  contemplated  hereby,  there are no
agreements,  understandings or proposed  transactions between the Seller and any
of its officers,  directors,  affiliates, or any affiliate thereof except as set
forth on the Balance Sheet.

     (B)  There  are  no  agreements,  understandings,  instruments,  Contracts,
proposed transactions,  judgments,  orders, writs or decrees to which the Seller
is a party or by which it is bound  that  may  involve  (i)  future  obligations
(contingent  or  otherwise)  of, or  payments to the Seller in excess of $10,000
(other than obligations arising from purchase or sale agreements entered into in
the Ordinary Course of Business),  (ii) provisions  restricting or affecting the

                                       13
<PAGE>
development, manufacture or distribution of the Seller's products or services or
conduct of the Business as it relates to the Assets, or (iii) indemnification by
the Seller with  respect to  infringements  of  proprietary  rights  (other than
indemnification  obligations  arising from purchase,  sale or license agreements
entered into in the Ordinary Course of Business).

     (C) The Seller has not (i) declared or paid any  dividends or authorized or
made any distribution upon or with respect to any class or series of its capital
stock,   (ii)  incurred  any  indebtedness  for  money  borrowed  or  any  other
liabilities  (other than with  respect to dividend  obligations,  distributions,
indebtedness and other  obligations  incurred in the Ordinary Course of Business
or as disclosed in the Financial  Statements  individually  in excess of $10,000
or,  in the case of  indebtedness  and/or  liabilities  individually  less  than
$10,000, in excess of $25,000 in the aggregate, (iii) made any loans or advances
to any person,  other than ordinary advances for travel expenses,  or (iv) sold,
exchanged or otherwise  disposed of any of its assets or rights,  other than the
sale of its inventory in the Ordinary Course of Business.

     (D) For the purposes of subsections  (b) and (c) above,  all  indebtedness,
liabilities,  agreements,  understandings,  instruments,  Contracts and proposed
transactions  involving the same person or entity (including persons or entities
the Seller has reason to believe are affiliated  therewith)  shall be aggregated
for the  purpose  of  meeting  the  individual  minimum  dollar  amounts of such
subsections.

     (E) Other than with  Purchaser,  and except as  disclosed  pursuant to Part
2.11(e) of the Seller  Disclosure  Schedule,  the Seller has not  engaged in the
past  three (3)  months in any  discussion  (i) with any  representative  of any
corporation or corporations  regarding the consolidation or merger of the Seller
with or into any such  corporation or  corporations,  (ii) with any corporation,
partnership,  association or other business  entity or any individual  regarding
the sale, conveyance or disposition of all or substantially all of the assets of
the Seller or a transaction or series of related transactions in which more than
fifty  percent  (50%) of the voting power of the Seller is disposed of, or (iii)
regarding any other form of acquisition,  liquidation, dissolution or winding up
of the Seller.

     2.13 MAJOR  CUSTOMERS  AND  SUPPLIERS.  No customer  or  supplier  that was
significant to the Seller during the period covered by the Financial  Statements
or  that  has  been  significant  to  the  Seller  thereafter,  has  terminated,
materially reduced or threatened to terminate or materially reduce its purchases
from or provision of products or services to the Seller, as the case may be.

     2.14 COMPLIANCE WITH OTHER  INSTRUMENTS.  The Seller is not in violation or
default of any provision of its Articles of Incorporation  or Bylaws,  or of any
instrument,  judgment, order, writ, decree or contract to which it is a party or
by which it is bound, or, of any provision of any federal or state statute, rule
or regulation applicable to the Seller. The execution,  delivery and performance
of this Agreement, and the consummation of the transactions contemplated hereby,
will not result in any such violation or be in conflict with or constitute, with
or without the passage of time and giving of notice,  either a default under any
such provision,  instrument,  judgment,  order,  writ,  decree or contract or an
event that results in the creation of any lien,  charge or encumbrance  upon any
assets of the Seller or the suspension,  revocation,  impairment, forfeiture, or

                                       14
<PAGE>
nonrenewal  of  any  material  permit,  license,   authorization,   or  approval
applicable  to the Seller,  its business or  operations  or any of its assets or
properties.

     2.15 GOVERNMENTAL  CONSENTS. No consent,  approval,  order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal,  state or local  governmental  authority  on the part of the  Seller is
required in connection with the consummation of the transactions contemplated by
this Agreement, except filings required pursuant to federal and state securities
laws,  which  filings  will be effected no later than the time such  filings are
required to be filed, or such other post-closing filings as may be required.

     2.16 TAX  MATTERS.  The  Seller  has  filed  all Tax  Returns  and  reports
(including information returns and reports) as required by United States federal
or Nevada  state law.  These Tax Returns and reports are true and correct in all
material  respects.  The  Seller has paid all taxes and other  assessments  due,
except  those  contested  by it in good  faith  that are  listed  in the  Seller
Disclosure  Schedule.  The  provision  for  taxes of the  Seller as shown in the
Financial  Statements  is  adequate  for  taxes  due or  accrued  as of the date
thereof. The Seller is and always has been a Nevada corporation.  The Seller has
never  had  any tax  deficiency  proposed  or  assessed  against  it and has not
executed  any  waiver  of  any  statute  of  limitations  on the  assessment  or
collection  of any tax or  governmental  charge.  None of the  Seller's  federal
income Tax Returns and none of its state income or franchise tax or sales or use
Tax Returns has ever been audited by governmental authorities. Since the date of
the Financial Statements,  the Seller has not incurred any taxes, assessments or
governmental  charges  other than in the  Ordinary  Course of  Business  and the
Seller  has made  adequate  provisions  on its books of  account  for all taxes,
assessments and  governmental  charges with respect to its business,  properties
and operations  for such period.  The Seller has withheld or collected from each
payment made to each of its employees,  the amount of all taxes (including,  but
not limited to, federal income taxes,  Federal Insurance  Contribution Act taxes
and Federal  Unemployment  Tax Act taxes)  required to be withheld or  collected
therefrom,  and has  paid the  same to the  proper  tax  receiving  officers  or
authorized depositories.

     2.17 EMPLOYEE AND LABOR  MATTERS.  The Seller is not bound by or subject to
(and none of its assets or  properties is bound by or subject to) any written or
oral,  express or implied,  contract,  commitment or arrangement  with any labor
union,  and no  labor  union  has  requested  or,  to the  best of the  Seller's
Knowledge,  has sought to represent  any of the  employees,  representatives  or
agents of the Seller.  There is no strike or other labor  dispute  involving the
Seller pending, or to the best of the Seller's Knowledge, threatened, that could
have a Material Adverse Effect on the properties,  assets, affairs,  operations,
financial  condition,  operating  results,  or  business  of the Seller (as such
business  is  presently  conducted  and  as  it  is  presently  proposed  to  be
conducted), nor is the Seller aware of any labor organization activity involving
its employees. The Seller is not aware that any officer or key employee, or that
any group of key  employees,  intends to  terminate  their  employment  with the
Seller, nor does the Seller have a present intention to terminate the employment
of any of the  foregoing.  The  employment  of each  officer and employee of the
Seller is terminable  at the will of the Seller.  The Seller has complied in all
material  respects  with all  applicable  state  and  federal  equal  employment
opportunity  and other laws related to employment.  The Seller is not a party to
or bound by any currently effective employment contract,  deferred  compensation

                                       15
<PAGE>
agreement,   bonus  plan,  incentive  plan,  profit  sharing  plan,   retirement
agreement,  or other  employee  compensation  agreement,  other  than the Seller
Option  Plan.  The Seller is not aware that any of its  employees  is  obligated
under any contract or other  agreement,  or subject to any  judgment,  decree or
order of any court or  administrative  agency,  that would materially  interfere
with the use of his or her  efforts to promote  the  interests  of the Seller or
that would  conflict  with the  Seller's  business as  presently  conducted.  No
officer or employee of the Seller has entered into an employment  agreement with
the  Seller  or  is  entitled  to  any  compensation  following  termination  of
employment with the Seller.

     2.18 EMPLOYEE BENEFIT PLANS AND COMPENSATION.  The Seller does not have any
Employee Benefit Plan as defined in the Employee  Retirement Income Security Act
of 1974.

     2.19 ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.

     (A) Each of Seller,  and their  respective  predecessors and affiliates has
complied  and is in  compliance  with  all  Environmental,  Health,  and  Safety
Requirements.

     (B) Without limiting the generality of the foregoing,  Each of Seller,  and
their respective affiliates has obtained and complied with, and is in compliance
with, all permits,  licenses and other authorizations that are required pursuant
to  Environmental,  Health,  and Safety  Requirements  for the occupation of its
facilities  and the operation of its  business;  and a list of all such permits,
licenses  and  other  authorizations  is set  forth on Part  2.19 of the  Seller
Disclosure Schedule.

     (I) Neither Seller,  nor their  respective  predecessors or affiliates have
received any written or oral notice,  report or other information  regarding any
actual or alleged violation of Environmental,  Health, and Safety  Requirements,
or  any  Liabilities,  including  any  investigatory,   remedial  or  corrective
obligations,  relating  to  any  of  them  or  their  facilities  arising  under
Environmental, Health, and Safety Requirements.

     (C) None of the  following,  as it  relates  to the  Assets,  exists at any
property or facility owned or operated by Seller: (1) underground storage tanks,
(2)  asbestos-containing  material in any form or  condition,  (3)  materials or
equipment  containing  polychlorinated  biphenyls,  or  (4)  landfills,  surface
impoundments, or disposal areas.

     (D) Neither  Seller,  nor its  respective  predecessors  or affiliates  has
treated,  stored,  disposed  of,  arranged  for or  permitted  the  disposal of,
transported,  handled,  manufactured,  distributed,  or released any  substance,
including without limitation any hazardous  substance,  or owned or operated any
property or facility  (and no such property or facility is  contaminated  by any
such  substance)  so as to  give  rise to any  current  or  future  Liabilities,
including any Liability for fines, penalties,  response costs, corrective action
costs, personal injury, property damage, natural resources damages or attorneys'
fees,  pursuant to the Comprehensive  Environmental  Response,  Compensation and
Liability Act of 1980, as amended  ("CERCLA"),  the Solid Waste Disposal Act, as
amended, or any other Environmental, Health, and Safety Requirements.

                                       16
<PAGE>
     (E) Neither this Agreement nor the  consummation of the  transactions  that
are the  subject  of this  Agreement  will  result in any  obligations  for site
investigation or cleanup,  or notification to or consent of government  agencies
or third parties,  pursuant to any of the so-called  "transaction-triggered"  or
"responsible property transfer" Environmental, Health, and Safety Requirements.

     (F) Neither  Seller,  nor its  respective  predecessors  or affiliates  has
designed,  manufactured,  sold, marketed,  installed, or distributed products or
other items  containing  asbestos,  and none of such  entities is or will become
subject to any Asbestos Liabilities.

     (G) Neither  Seller,  nor its  respective  predecessors  or affiliates  has
assumed,  undertaken or otherwise  become  subject to any  Liability,  including
without  limitation any obligation  for  corrective or remedial  action,  of any
other Person relating to Environmental, Health, and Safety Requirements.

     (H) No  facts,  events  or  conditions  relating  to the  past  or  present
facilities,  properties  or  operations  of  Seller,  or any  of its  respective
predecessors  or affiliates will prevent,  hinder or limit continued  compliance
with  Environmental,   Health,  and  Safety  Requirements,   give  rise  to  any
investigatory,  remedial or corrective  obligations  pursuant to  Environmental,
Health, and Safety Requirements,  or give rise to any other Liabilities pursuant
to Environmental,  Health, and Safety Requirements, including without limitation
any relating to on-site or off-site releases or threatened releases of hazardous
materials,  substances or wastes,  personal  injury,  property damage or natural
resources damage.

     (I) Seller has  furnished to Buyer all  environmental  audits,  reports and
other material environmental  documents relating to their or their predecessors'
or affiliates' past or current properties, facilities, or operations that are in
their possession or under their reasonable control.

     2.20 INSURANCE.  The Seller does not have in full force and effect fire and
casualty  insurance  policies,  with  extended  coverage,  sufficient  in amount
(subject to reasonable  deductibles)  to allow it to replace any of its material
properties that might be damaged or destroyed.  The Seller does not have in full
force and effect general liability and errors and omissions insurance in amounts
customary for similarly situated  companies.  The Seller agrees to indemnify the
Parent and Purchaser  from any and all actions that might arise from the conduct
of the Business as it relates to the Assets prior to the Closing Date.

     2.21 RELATED PARTY TRANSACTIONS.  No employee,  officer, or director of the
Seller or member of his or her immediate  family is indebted to the Seller,  nor
is the  Seller  indebted  (or  committed  to make  loans or extend or  guarantee
credit)  to any of them,  other  than for (a)  payment  of salary  for  services
rendered,  (b) reimbursement  for reasonable  expenses incurred on behalf of the
Seller, and (c) other standard employee benefits made generally available to all
employees.  To the best of the Seller's Knowledge,  none of such persons has any
direct or indirect  ownership interest in any firm or corporation with which the
Seller is  affiliated or with which the Seller has a business  relationship,  or
any firm or corporation  that competes with the Seller,  except that  employees,
officers, or directors of the Seller and members of their immediate families may
own stock in publicly traded companies that may compete with the Seller.  Except

                                       17
<PAGE>
as disclosed pursuant to Part 2.21 of the Seller Disclosure Schedule,  no member
of the immediate  family of any officer or director of the Seller is directly or
indirectly interested in any material Contracts with the Seller.

     2.22 AUTHORITY;  BINDING NATURE OF AGREEMENTS.  The Seller has the absolute
and  unrestricted  right,  power and  authority to enter into and to perform its
obligations  under each of the  Transactional  Agreements  to which it is or may
become a party; and the execution, delivery and performance by the Seller of the
Transactional  Agreements  to which it is or may  become a party  have been duly
authorized  by  all  necessary  action  on  the  part  of  the  Seller  and  its
Stockholders,  board of directors and officers.  This Agreement  constitutes the
legal,  valid and  binding  obligation  of the Seller,  enforceable  against the
Seller in  accordance  with its terms.  Upon the  execution of each of the other
Transactional  Agreements  at the  Closing,  each  of such  other  Transactional
Agreements to which the Seller is a party will  constitute the legal,  valid and
binding  obligation of the Seller and will be enforceable  against the Seller in
accordance with its terms.

     2.23 BROKERS.  The Seller has not agreed or become obligated to pay, or has
taken any action  that might  result in any Person  claiming  to be  entitled to
receive, any brokerage commission,  finder's fee or similar commission or fee in
connection with any of the Transactions.

     2.24 FULL DISCLOSURE. None of the Transactional Agreements contains or will
contain any untrue statement of fact; and none of the  Transactional  Agreements
omits  or  will  omit  to  state  any  fact   necessary   to  make  any  of  the
representations, warranties or other statements or information contained therein
not  misleading.  All of the  information  set  forth in the  Seller  Disclosure
Schedule,  and all other  information  regarding  the Seller  and the  Business,
condition,  assets, liabilities,  operations,  financial performance, net income
and prospects that has been furnished to the Purchaser or any of the Purchaser's
Representatives  by or on behalf of the Seller or by any  Representative  of the
Seller, is accurate and complete in all respects.

     2.25  LITIGATION.  There is no action,  suit  proceeding  or  investigation
pending or, to the Seller's Knowledge,  currently  threatened against the Seller
that  questions  the validity of this  Agreement,  or the right of the Seller to
enter  into this  Agreement,  or to  consummate  the  transactions  contemplated
hereby, or that could reasonably be expected to result,  either  individually or
in the  aggregate,  in a Material  Adverse  Effect in the business,  properties,
affairs, assets,  operations or financial condition of the Seller, or any change
in the current  equity  ownership  of the Seller,  nor is the Seller  aware that
there  is  any  basis  for  the  foregoing.  The  foregoing  includes,   without
limitation,  actions,  suits,  proceedings or investigations  pending or, to the
Seller's  Knowledge,  threatened  (or any basis  therefor  known to the  Seller)
involving the prior  employment of any of the Seller's  employees,  their use in
connection with the Seller's business of any information or techniques allegedly
proprietary to any of their former  employers,  or their  obligations  under any
agreements  with  prior  employers.  The Seller is not a party or subject to the
provisions of any order,  writ,  injunction,  judgment or decree of any court or
government agency or instrumentality.  There is no action,  suit,  proceeding or
investigation  by the Seller  currently  pending  or that the Seller  intends to
initiate.

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<PAGE>
     2.26 PERMITS.  The Seller has all franchises,  permits,  licenses,  and any
similar  authority  necessary for the conduct of the Business,  as it relates to
the Assets, as now being conducted by it, and the Seller believes it can obtain,
without  undue burden or expense,  any similar  authority for the conduct of the
Business, as it relates to the Assets, as planned to be conducted. The Seller is
not in default in any material  respect under any of such  franchises,  permits,
licenses, or other similar authority.

     2.27  MANUFACTURING AND MARKETING RIGHTS. The Seller has not granted rights
to manufacture,  produce,  assemble,  license,  market,  or sell its products or
conduct its  Business as it relates to the Assets to any other person and is not
bound by any  agreement  that affects the Seller's  exclusive  right to develop,
manufacture,  assemble,  distribute,  market or sell its products or conduct its
Business as it relates to the Assets.

3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND PARENT.

     Except as set forth on the Purchaser  Disclosure  Schedule  specifying  the
relevant  subsection hereof, the Purchaser and Parent represent and warrant,  to
and for the benefit of the Seller, as follows:

     3.1 AUTHORITY;  BINDING NATURE OF AGREEMENTS. The Purchaser and Parent each
has the absolute and unrestricted  right,  power and authority to enter into and
perform its obligations under this Agreement and under the Assumption Agreement,
and the execution and delivery of this Agreement by the Purchaser and Parent and
the  Assumption  Agreement by the  Purchaser  have been duly  authorized  by all
necessary  action on the part of the Purchaser  and Parent and their  respective
boards of directors.  This Agreement  constitutes  the legal,  valid and binding
obligation of the Purchaser and Parent,  enforceable  against each in accordance
with its terms.  Upon the execution and delivery of the Assumption  Agreement at
the Closing,  the  Assumption  Agreement will  constitute  the legal,  valid and
binding  obligations  of the  Purchaser,  enforceable  against the  Purchaser in
accordance with their terms.

     3.2 ORGANIZATION, STANDING AND POWER. Purchaser and Parent are corporations
duly  organized,  validly  existing and in good  standing  under the laws of the
States of Nevada and Delaware, respectively, and each has the corporate power to
own its  properties  and to carry on its business as now being  conducted and is
duly  qualified to do business and is in good standing in each  jurisdiction  in
which the failure to be so qualified and in good standing  would have a material
adverse effect on Purchaser or Parent, respectively.

     3.3 BROKERS.  Neither the Purchaser nor Parent has become obligated to pay,
and has not taken any action  that might  result in any  Person  claiming  to be
entitled  to  receive,  any  brokerage  commission,   finder's  fee  or  similar
commission or fee in connection with any of the Transactions.

4. PRE-CLOSING COVENANTS OF THE SELLER.

     4.1 ACCESS AND  INVESTIGATION.  The Seller shall ensure that,  at all times
during the Pre-Closing  Period: (a) the Seller and its  Representatives  provide
the Purchaser, Parent and their Representatives with free and complete access to
the Seller's  Representatives,  personnel and assets and to all existing  books,

                                       19
<PAGE>
records,  Tax Returns,  work papers and other documents and information relating
to the Seller and its  Business as it relates to the Assets;  (b) the Seller and
its Representatives provide the Purchaser, Parent and their Representatives with
such copies of  existing  books,  records,  Tax  Returns,  work papers and other
documents  and  information  relating  to the  Seller  and its  business  as the
Purchaser may request in good faith; and (c) the Seller and its  Representatives
compile and provide the Purchaser,  Parent and their  Representatives  with such
additional  financial,  operating and other data and information relating to the
Seller and its business as the Purchaser or Parent may request in good faith.

     4.2  OPERATION  OF  BUSINESS.  The Seller  shall  ensure  that,  during the
Pre-Closing Period:

     (A) the Seller  conducts its operations  exclusively in the Ordinary Course
of Business and in the same manner as such  operations have been conducted prior
to the date of this Agreement;

     (B) the Seller (i) preserves intact its current business organization, (ii)
keeps  available  the  services of its current  officers  and  employees,  (iii)
maintains its relations and good will with all suppliers,  customers, landlords,
creditors, licensors,  licensees,  employees,  independent contractors and other
Persons  having  business  relationships  with the  Seller,  and  (iv)  promptly
repairs, restores or replaces any Assets that are destroyed or damaged;

     (C) the Seller keeps in full force all  insurance  policies  identified  in
Part 2.20 of the Seller Disclosure Schedule;

     (D)  the  officers  of the  Seller  confer  regularly  with  the  Purchaser
concerning  operational  matters and otherwise report regularly to the Purchaser
concerning the status of the Seller's Business as it relates to the Assets;

     (E) the Purchaser is notified immediately of any inquiry, proposal or offer
from any Person relating to any Acquisition Transaction;

     (F) the Seller and its  officers use their best efforts to cause the Seller
preserve its assets and financial position;

     (G) the Seller does not (i) declare,  accrue, set aside or pay any dividend
or make any other  distribution  in respect  of any  shares of capital  stock or
other securities,  or (ii) repurchase,  redeem or otherwise reacquire any shares
of capital stock or other securities;

     (H) the Seller does not sell or otherwise issue any shares of capital stock
or any other securities;

     (I) the  Seller  does not  effect  or  become  a party  to any  Acquisition
Transaction;

                                       20
<PAGE>
     (J) intentionally omitted;

     (K) the  Seller  does not  make any  capital  expenditure  relative  to the
Business as it relates to the Assets;

     (L) the  Seller  does not enter  into or permit any of the Assets to become
bound or encumbered by any Contract;

     (M) the Seller does not incur,  assume or otherwise  become  subject to any
Liability,  except for current liabilities (of the type required to be reflected
in the "liabilities" column of a balance sheet prepared in accordance with GAAP)
incurred in the Ordinary Course of Business;

     (N) the  Seller  does  not  change  any of its  methods  of  accounting  or
accounting practices in any respect;

     (O) the Seller does not commence or settle any  Proceeding for the Business
as it relates to the Assets;

     (P) the Seller does not enter into any transaction or take any other action
of the type referred to in Section 2.4;

     (Q) the Seller does not enter into any transaction or take any other action
relative to the Assets outside the Ordinary Course of Business;

     (R) the Seller does not enter into any transaction or take any other action
that might cause or constitute a Breach of any  representation  or warranty made
by the Seller in this Agreement if (A) such  representation or warranty had been
made as of the time of such transaction or action, (B) such transaction had been
entered into, or such action had been occurred,  on or prior to the date of this
Agreement  or (C)  such  representation  or  warranty  had  been  made as of the
Closing;

     (S) the Seller does not agree, commit or offer (in writing or otherwise) to
take any of the actions described in clauses "(i)" through "(r)" of this Section
4.2.

     4.3 FILINGS AND  CONSENTS.  The Seller shall ensure that:  (a) all filings,
notices  and  Consents  required  to be made,  given  and  obtained  in order to
consummate the  Transactions are made, given and obtained on a timely basis; and
(b) during the  Pre-Closing  Period,  the Seller and its  Representatives  shall
cooperate  with the  Purchaser  and with the  Purchaser's  Representatives,  and
prepare and make  available  such  documents  and take such other actions as the
Purchaser may request in good faith,  in connection  with any filing,  notice or
Consent that the Purchaser is required or elects to make, give or obtain.

     4.4 NOTIFICATION;  UPDATES TO DISCLOSURE  SCHEDULE.  During the Pre-Closing
Period,  the Seller shall  promptly  notify the Purchaser in writing of: (a) the
discovery  by the  Seller of any event,  condition,  fact or  circumstance  that
occurred or existed on or prior to the date of this Agreement and that caused or
constitutes  a Breach of any  representation  or warranty  made by the Seller in

                                       21
<PAGE>
this Agreement;  (b) any event,  condition,  fact or  circumstance  that occurs,
arises  or exists  after  the date of this  Agreement  and that  would  cause or
constitute a Breach of any representation or warranty made by the Seller in this
Agreement if (i) such representation or warranty had been made as of the time of
the  occurrence,  existence  or  discovery  of such  event,  condition,  fact or
circumstance,  or (ii) such event, condition, fact or circumstance had occurred,
arisen or existed on or prior to the date of this  Agreement;  (c) any Breach of
any covenant or obligation of the Seller; and (d) any event, condition,  fact or
circumstance that may make the timely  satisfaction of any of the conditions set
forth in Section 6 or Section 7 impossible or unlikely. If any event, condition,
fact or circumstance  that is required to be disclosed  pursuant to this Section
4.4 requires any change in the Seller Disclosure Schedule, or if any such event,
condition,  fact or circumstance would require such a change assuming the Seller
Disclosure  Schedule were dated as of the date of the  occurrence,  existence or
discovery of such event, condition, fact or circumstance,  then the Seller shall
promptly deliver to the Purchaser and Parent an update to the Seller  Disclosure
Schedule specifying such change. No such update shall be deemed to supplement or
amend the Seller  Disclosure  Schedule  for the purpose of (i)  determining  the
accuracy of any  representation or warranty made by the Seller in this Agreement
or in the Closing Certificate, or (ii) determining whether any of the conditions
set forth in Section 7 has been satisfied.

     4.5 NO  NEGOTIATION.  The Seller shall ensure that,  during the Pre-Closing
Period,  neither the Seller nor any  Representative  of the Seller,  directly or
indirectly:  (a) solicits or encourages the initiation of any inquiry,  proposal
or offer from any Person  (other than the Parent or  Purchaser)  relating to any
Acquisition  Transaction;  (b)  participates  in any discussions or negotiations
with,  or provides any  non-public  information  to, any Person  (other than the
Parent or Purchaser) relating to any proposed  Acquisition  Transaction;  or (c)
considers  the merits of any  unsolicited  inquiry,  proposal  or offer from any
Person  (other  than  the  Parent  or  Purchaser)  relating  to any  Acquisition
Transaction.

     4.6 BEST EFFORTS.  During the Pre-Closing Period, the Seller shall use best
efforts  to cause the  conditions  set forth in Section 7 to be  satisfied  on a
timely basis.

     4.7  CONFIDENTIALITY.  The Seller shall ensure that, during the Pre-Closing
Period: (a) neither the Seller nor any  Representative of the Seller,  issues or
disseminates  any  press  release  or other  publicity  or  otherwise  makes any
disclosure  of any nature (to any  supplier,  customer,  landlord,  creditor  or
employee of the Seller or to any other Person) regarding any of the Transactions
or the  existence  or terms of this  Agreement,  except to the  extent  that the
Seller is required by law to make any such disclosure;  and (b) if the Seller is
required by law to make any such disclosure,  the Seller shall advise the Parent
and Purchaser, at least five business days before making such disclosure, of the
nature and content of the intended disclosure.

     4.8  FIRPTA  MATTERS.  Unless  waived in  writing  by the  parties,  at the
Closing, (a) the Seller shall deliver to the Purchaser a statement (in such form
as may be reasonably  requested by counsel to the  Purchaser)  conforming to the
requirements  of  Section  1.897 -  2(h)(1)(i)  of the  United  States  Treasury
Regulations,  and (b)  the  Seller  shall  deliver  to the IRS the  notification
required   under  Section  1.897  -  2(h)(2)  of  the  United  States   Treasury
Regulations.

                                       22
<PAGE>
5. ADDITIONAL COVENANTS AND AGREEMENTS.

     5.1 EXPENSES. Except as otherwise provided in this Agreement, all costs and
expenses  incurred  in  connection  with  this  Agreement  and the  transactions
contemplated  hereby  shall  be paid  by the  party  incurring  such  costs  and
expenses.

     5.2 TAX TREATMENT. Neither Purchaser, Parent nor the Seller shall knowingly
take any action which would  disqualify the  Acquisition  as a  "reorganization"
that would be tax free to the  stockholders of Purchaser and the Seller pursuant
to Section 368(a) of the Code.

     5.3 PRESS RELEASES.  The Seller, Parent and Purchaser shall agree with each
other as to the form and substance of any press  release or public  announcement
related to this Agreement or the  transactions  contemplated  hereby;  provided,
however,  that nothing  contained herein shall prohibit either party,  following
notification to the other party, from making any disclosure which is required by
law or  regulation.  If any such  press  release  or public  announcement  is so
required,  the party making such  disclosure  shall consult with the other party
prior to making  such  disclosure,  and the  parties  shall  use all  reasonable
efforts, acting in good faith, to agree upon a text for such disclosure which is
satisfactory to both parties.

     5.4 PROJECTIONS. Purchaser, Parent and the Seller acknowledge that each has
provided the other with certain  financial and business  projections  related to
their respective  businesses.  The parties agree that such projections were only
good faith estimates and the failure of any such projections to come to fruition
shall not independently give rise to any liability for any party hereto.

6. CONDITIONS TO OBLIGATIONS OF EACH PARTY.

     The  respective  obligations  of each  party  to  effect  the  transactions
contemplated hereby shall be subject to the fulfillment or waiver at or prior to
the Closing Date of the following conditions:

     (A) NO  INJUNCTION.  No  injunction  or other  order  entered by a state or
federal  court of  competent  jurisdiction  shall have been issued and remain in
effect which would prohibit or make illegal the consummation of the transactions
contemplated hereby.

     (B) NO PROHIBITIVE  CHANGE OF LAW.  There shall have been no law,  statute,
rule or  regulation,  domestic or foreign,  enacted or  promulgated  which would
prohibit  or make  illegal the  consummation  of the  transactions  contemplated
hereby.

     (C)  GOVERNMENTAL  ACTION.  There  shall not be any  action  taken,  or any
statute,  rule,  regulation,  judgment,  order or injunction proposed,  enacted,
entered, enforced,  promulgated, issued or deemed applicable to the transactions
contemplated  hereby  by any  federal,  state  or  other  court,  government  or
governmental  authority or agency, which could reasonably be expected to result,
directly or indirectly, in any Material Adverse Effect.

                                       23
<PAGE>
7. CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATION TO CLOSE.

     The  Purchaser's  obligation  to purchase  the Assets and to take the other
actions  required to be taken by the  Purchaser at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:

     7.1 REPRESENTATIONS  AND COMPLIANCE.  The representations and warranties of
the Seller under  section 2 of this  Agreement  shall have been  accurate in all
material respects as of the date of this Agreement, and shall be accurate in all
material  respects as of the  Closing as if made at and as of the  Closing  Date
(without giving effect to any supplement to the Purchaser Disclosure  Schedule),
except  where the  failure to be true and correct  would not have,  or would not
reasonably  be expected to have, a Material  Adverse  Effect on the Seller.  The
Seller shall have performed each obligation and agreement and complied with each
covenant to be performed  and  complied  with by it hereunder at or prior to the
Closing Date.

     7.2 CONSENTS AND  APPROVALS.  All consents and approvals  necessary for the
Seller to consummate the transactions  contemplated by this Agreement shall have
been  obtained,  including,  but not limited to, those set forth on Part 2.9 and
Part 2.15 of the Seller Disclosure Schedule.

     7.3 DUE  DILIGENCE.  Due  diligence  investigation  of Seller and  Seller's
business shall have been completed to the  satisfaction of Purchaser in its sole
discretion.

     7.4 ADDITIONAL  DOCUMENTS.  The Purchaser shall have received the following
documents:

     (A) OFFICERS'  CERTIFICATE.  The Seller shall have furnished to Purchaser a
certificate of the Chief Executive  Officer and the Chief  Financial  Officer of
the Seller,  dated as of the Closing Date, in which such officers  shall certify
that,  the  conditions  set forth in Sections 6 (with respect to the Seller) and
7.1, 7.2 and 7.4(c) and (e) (g) have been fulfilled.

     (B) SECRETARY'S  CERTIFICATE.  The Seller shall have furnished to Purchaser
(i) copies of the text of the  resolutions by which the corporate  action on the
part of the Seller  necessary to approve this  Agreement,  and the  transactions
contemplated  hereby and thereby were taken,  (ii) a certificate dated as of the
Closing Date executed on behalf of the Seller by its corporate  secretary or one
of its assistant corporate secretaries  certifying to Purchaser that such copies
are  true,  correct  and  complete  copies  of such  resolutions  and that  such
resolutions  were duly adopted and have not been amended or rescinded,  (iii) an
incumbency  certificate  dated as of the Closing Date  executed on behalf of the
Seller by its corporate secretary or one of its assistant corporate  secretaries
certifying the signature and office of each officer of the Seller executing this
Agreement,  or any other  agreement,  certificate or other  instrument  executed
pursuant hereto by the Seller,  and (iv) a copy of the Articles of Incorporation
of the Seller,  certified by the Secretary of State of Nevada,  and  certificate
from the Secretary of State of Nevada evidencing the good standing of the Seller
in such jurisdiction.

     (C) BOARD  APPROVAL.  This  Agreement and the  Acquisition  shall have been
approved by the Requisite Board Vote.

                                       24
<PAGE>
     (D)   NON-COMPETITION   AGREEMENTS.   Purchaser   shall  have   received  a
non-competition  agreement,  substantially in the form of Exhibit F, executed by
the Seller.

     (E)  DELIVERY  OF  CLOSING  BALANCE  SHEET.  The  Seller  shall  deliver to
Purchaser  the  Closing  Balance  Sheet  in  a  form  reasonably  acceptable  to
Purchaser,  with sufficient  back-up detail  necessary for Purchaser to evaluate
the accuracy of the Closing  Balance  Sheet  (including  schedules  showing aged
accounts payable,  aged accounts  receivable,  and  documentation  verifying all
special payment terms).

     (F) LEGAL  OPINION.  Purchaser and Parent shall have received an opinion of
counsel  to  the  Seller,  dated  as of the  Closing,  in  the  form  reasonably
acceptable to Purchaser and Parent.

     (G) ADDITIONAL  AGREEMENTS.  The Seller and Purchaser shall have executed a
Bill of Sale, Assignment and Assumption Agreement, attached substantially in the
form of Exhibits G and D, respectively.

     (H)  Purchaser  may  request in good faith  such  other  documents  for the
purpose of (i) evidencing the accuracy of any representation or warranty made by
the  Seller,  (ii)  evidencing  the  compliance  by  the  Seller  with,  or  the
performance  by the Seller  of, any  covenant  or  obligation  set forth in this
Agreement,  (iii) evidencing the satisfaction of any condition set forth in this
Section 7, or (iv) otherwise facilitating the consummation or performance of any
of the Transactions.

     (I) Seller shall have discharged all accrued payroll  obligations to Seller
employees and related payroll tax and other employment  liabilities  relative to
the Assets as of the Closing Date.

8. CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATION TO CLOSE.

     The Seller's  obligation  to sell the Assets and to take the other  actions
required  to  be  taken  by  the  Seller  at  the  Closing  is  subject  to  the
satisfaction, at or prior to the Closing, of each of the following conditions:

     8.1 REPRESENTATIONS  AND COMPLIANCE.  The representations and warranties of
the  Purchaser and Parent under Section 3 hereof shall have been accurate in all
material  respects as of the date of this Agreement and shall be accurate in all
material  respects as of the  Closing as if made at and as of the  Closing  Date
(without  giving effect to any  supplement to the Seller  Disclosure  Schedule),
except  where the  failure to be true and correct  would not have,  or would not
reasonably  be expected to have, a Material  Adverse  Effect on the Purchaser or
Parent.  The  Purchaser  and Parent shall have  performed  each  obligation  and
agreement  and complied  with each covenant to be performed and complied with by
it hereunder at or prior to the Closing Date.

     8.2 CONSENTS AND  APPROVALS.  All consents and approvals  necessary for the
Purchaser  and  Parent  to  consummate  the  transactions  contemplated  by this
Agreement  shall have been  obtained,  except  where the  failure to obtain such

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<PAGE>
consents  would not  result  (individually  or in the  aggregate)  in a Material
Adverse Effect on the business of the Purchaser or Parent, as the case may be.

     8.3  ADDITIONAL  DOCUMENTS.  The Seller shall have  received the  following
documents:

     (A)  OFFICERS'  CERTIFICATE.  The  Purchaser  and  Parent  shall  each have
furnished to Seller a certificate  of the an Executive  Officer of the Purchaser
and Parent,  respectively,  dated as of the Closing Date, in which such officers
shall certify that,  the conditions set forth in Sections 6 (with respect to the
Seller) and 8.1 and 8.2 have been fulfilled.

     (B) SECRETARY'S  CERTIFICATE.  The Purchaser shall have furnished to Seller
(i) copies of the text of the  resolutions by which the corporate  action on the
part of the Purchaser necessary to approve this Agreement,  and the transactions
contemplated  hereby and thereby were taken, and (ii) a certificate  dated as of
the Closing Date executed on behalf of the Purchaser by its corporate  secretary
or one of its assistant corporate secretaries  certifying to Purchaser that such
copies are true,  correct and complete copies of such  resolutions and that such
resolutions were duly adopted and have not been amended or rescinded.

9. TERMINATION.

     9.1  TERMINATION  EVENTS.  This  Agreement may be  terminated  prior to the
Closing:

     (A) by the  Purchaser  or Parent if (i) there is a  material  Breach of any
covenant or  obligation  of the Seller and such Breach shall not have been cured
within ten (10) days after the delivery of notice thereof to the Seller, or (ii)
the  Purchaser  reasonably  determines  that  the  timely  satisfaction  of  any
condition  set forth in Section 7 has become  impossible or  impractical  (other
than as a result of any failure on the part of the  Purchaser  to comply with or
perform its covenants and obligations set forth in this Agreement);

     (B) by the  Seller if (i) there is a  material  Breach of any  covenant  or
obligation  of the Purchaser or Parent and such Breach shall not have been cured
within ten (10) days after the delivery of notice thereof to the  Purchaser,  or
(ii) the  Seller  reasonably  determines  that the  timely  satisfaction  of any
condition set forth in Section 8 has become  impossible  (other than as a result
of any failure on the part of the Seller to comply with or perform any  covenant
or obligation set forth in this Agreement);

     (C) by the Parent or  Purchaser  if the  Closing  has not taken place on or
before  September 30, 2014 (other than as a result of any failure on the part of
the Purchaser to comply with or perform its covenants and obligations under this
Agreement);

     (D) by the Seller if the Closing has not taken place on or before September
30,  2014  (other  than as a result of any  failure on the part of the Seller to
comply with or perform any covenant or obligation set forth in this  Agreement);
or

     (E) by the mutual written consent of the Parent, Purchaser and the Seller.

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<PAGE>
     9.2 TERMINATION PROCEDURES.  If the Parent or Purchaser wishes to terminate
this Agreement pursuant to Section 9.1(a) or Section 9.1(c), the Purchaser shall
deliver to the Seller a written notice stating that the Purchaser is terminating
this  Agreement and setting forth a brief  description of the basis on which the
Purchaser is terminating this Agreement.  If the Seller wishes to terminate this
Agreement pursuant to Section 9.1(b) or Section 9.1(d), the Seller shall deliver
to the Purchaser a written notice  stating that the Seller is  terminating  this
Agreement  and  setting  forth a brief  description  of the basis on which it is
terminating this Agreement.

     9.3 LEGAL EFFECT OF TERMINATION.  If this Agreement is terminated  pursuant
to Section  9.1, all further  obligations  of the parties  under this  Agreement
shall terminate;  PROVIDED, HOWEVER, that: (a) no party shall be relieved of any
obligation  or other  Liability  arising  from any  Breach by such  party of any
provision of this Agreement;  (b) the parties shall, in all events, remain bound
by and continue to be subject to the provisions set forth in Section 11; and (c)
the Seller shall,  in all events,  remain bound by and continue to be subject to
Section 4.7.

     9.4 TERMINATION FEE. In the event that (A) a proposal to acquire the Assets
or the Business,  or the shares thereof via purchase,  merger or  reorganization
("Acquisition  Proposal") (whether or not conditional) or statement of intention
to make an Acquisition  Proposal  (whether or not  conditional)  shall have been
made  directly to the Seller's  stockholders,  otherwise  publicly  disclosed or
otherwise  communicated  to  senior  management  of the  Seller  or the board of
directors of the Seller,  (B) this  Agreement is  thereafter  terminated  by the
Seller  pursuant to any provision  except for Sections  9.1(b) or 9.1(e) and (C)
within twelve (12) months after the date of such termination,  the Seller enters
into, or submits to its  stockholders  for adoption,  an agreement in respect of
any Acquisition  Proposal or a transaction in respect of an Acquisition Proposal
is consummated  (which, in each case, need not be the same Acquisition  Proposal
that  shall  have  been  made,  publicly  disclosed  or  communicated  prior  to
termination  hereof) then the Seller  shall be required to pay to the  Purchaser
the Termination Fee.

     9.5  NONEXCLUSIVITY OF TERMINATION  RIGHTS. The termination rights provided
in Section 9.1 shall not be deemed to be exclusive. Accordingly, the exercise by
any party of its right to terminate this Agreement pursuant to Section 9.1 shall
not be  deemed  to be an  election  of  remedies  and  shall  not be  deemed  to
prejudice, or to constitute or operate as a waiver of, any other right or remedy
that such party may be entitled to exercise (whether under this Agreement, under
any other  Contract,  under any  statute,  rule or other Legal  Requirement,  at
common law, in equity or otherwise).

     10. INDEMNIFICATION, ETC.

     10.1 SURVIVAL OF REPRESENTATIONS AND COVENANTS.

     (A)  Notwithstanding  any investigation  made by or on behalf of any of the
parties hereto or the results of any such investigation and  notwithstanding the
participation of such party in the Closing, the representations,  warranties and
covenants  contained  in  Sections  1, 2, 4 and 5 hereof  (including  all of its
subsections)  shall terminate  thirty-six (36) months following the Closing Date
(the  "CLAIM   TERMINATION   DATE"),   except  with  respect  to  the  following
representations  and  warranties  of  Seller,  contained  in  the  Agreement  in
Sections:   2.1  (organization),   2.2   (incorporation),   2.5  (title),   2.11
(intellectual property), 2.16 (Tax), 2.19 (Environment),  2.22 (Authority), 2.23

                                       27
<PAGE>
(Brokers),  2.24 (Disclosure),  2.26 (Permits),  which shall survive the Closing
(even if the damaged  party knew or had reason to know of any  misrepresentation
or breach of  warranty at the time of  Closing)  and  continue in full force and
effect until the  expiration of any applicable  statutes of  limitations  (after
giving effect to any  extensions or waivers) plus 60 days.  The covenants of the
Seller (or any transferee with respect thereto) shall survive the Closing.

     (B) Nothing  contained in this Section 10.1 or elsewhere in this  Agreement
shall limit any rights or remedy of Seller, Parent or Purchaser for claims based
on intentional misrepresentation or fraud.

     10.2 INDEMNIFICATION BY THE SELLER.

     (A) The Seller shall hold  harmless and indemnify  each of the  Indemnitees
from and against,  and shall  compensate and reimburse  each of the  Indemnitees
for, any Damages that are directly or indirectly  suffered or incurred by any of
the Indemnitees or to which any of the Indemnitees may otherwise  become subject
at any time (regardless of whether or not such Damages relate to any third-party
claim) and that arise  directly  or  indirectly  from or as a direct or indirect
result of, or are directly or indirectly connected with:

     (I) any Breach of any representation or warranty made by the Seller in this
Agreement  as of the  date of  this  Agreement  (without  giving  effect  to any
qualification as to materiality contained or incorporated in such representation
or warranty,  and without  giving effect to any update to the Seller  Disclosure
Schedule);

     (II) any Breach of any  representation  or  warranty  made by the Seller in
this Agreement as if such representation and warranty had been made on and as of
the Closing Date (without giving effect to any  qualification  as to materiality
contained or incorporated in such representation or warranty, and without giving
effect to any update to the Seller Disclosure Schedule);

     (III) any Breach of any representation, warranty, statement, information or
provision contained in the Seller Disclosure  Schedule,  the Closing Certificate
or in any other  document  delivered or otherwise  made available to the Parent,
Purchaser or any of their  Representatives  by or on behalf of the Seller or any
Representative of the Seller;

     (IV) any Breach of any covenant or  obligation  of the Seller  contained in
any of the Transactional Agreements;

     (V) any  Liability  of the Seller or of any Related  Party,  other than the
Assumed Liabilities;

     (VI) any  Liability  (other  than the  Assumed  Liabilities)  to which  the
Purchaser,  Parent or any of the other  Indemnitees  may become subject and that
arises directly or indirectly from or relates  directly or indirectly to (A) any
product  produced  or sold or any  services  performed  by or on  behalf  of the
Seller,  (B) the presence of any Hazardous  Material at any site owned,  leased,
occupied  or  controlled  by the Seller on or at any time  prior to the  Closing

                                       28
<PAGE>
Date, (C) the generation, manufacture, production, transportation,  importation,
use, treatment, refinement, processing, handling, storage, discharge, release or
disposal of any Hazardous  Material  (whether  lawfully or  unlawfully) by or on
behalf of the Seller,  (D) the operation by the Seller of its  business,  or (E)
any failure to comply with any bulk transfer law or similar Legal Requirement in
connection with any of the Transactions;

     (VII)  any  matter  identified  or  referred  to in the  Seller  Disclosure
Schedule; or

     (VIII) any  Proceeding  relating  directly  or  indirectly  to any  Breach,
alleged  Breach,  Liability or matter of the type  referred to in clause  "(i),"
"(ii),"  "(iii),"  "(iv),"  "(v)",   "(vi)"  or  "(vii)"  above  (including  any
Proceeding  commenced by any  Indemnitee for the purpose of enforcing any of its
rights under this Section 10).

     (B) Subject to Section  10.2(c),  the Seller  shall not be required to make
any  indemnification  payment  pursuant to Sections  10.2(a)(i),  10.2(a)(ii) or
10.2(a)(iii) for any Breach as set forth in such Sections until such time as the
total amount of all Damages  (including the Damages arising from such Breach and
all other  Damages  arising from any other  Breaches of any  representations  or
warranties)  that have been directly or  indirectly  suffered or incurred by any
one or more of the  Indemnitees,  or to which any one or more of the Indemnitees
has or have otherwise become subject,  exceeds $25,000.  (If the total amount of
such  Damages  exceeds  the  $25,000,  the  Indemnitees  shall be entitled to be
indemnified against and compensated and reimbursed for the entire amount of such
Damages, and not merely the portion of such Damages exceeding $25,000.)

     (C) The limitation on the indemnification obligations of the Seller that is
set forth in Section  10.2(b) shall not apply to any Breach arising  directly or
indirectly  from any  circumstance of which the Seller had knowledge on or prior
to the Closing Date.

     10.3  SETOFF.  In addition to any rights of setoff or other rights that the
Purchaser,  Parent or any of the  other  Indemnitees  may have at common  law or
otherwise,  the Purchaser and Parent shall have the right to withhold and deduct
any sum that may be owed to any Indemnitee under this Section 10 from any amount
otherwise payable by any Indemnitee to the Seller. The withholding and deduction
of any such sum shall  operate for all purposes as a complete  discharge (to the
extent of such sum) of the  obligation to pay the amount from which such sum was
withheld and deducted.

     10.4  NONEXCLUSIVITY  OF  INDEMNIFICATION   REMEDIES.  The  indemnification
remedies and other  remedies  provided in this Section 10 shall not be deemed to
be exclusive. Accordingly, the exercise by any Person of any of its rights under
this  Section 10 shall not be deemed to be an election of remedies and shall not
be deemed to  prejudice,  or to  constitute or operate as a waiver of, any other
right or remedy that such Person may be entitled to exercise (whether under this
Agreement,  under any other  Contract,  under any  statute,  rule or other Legal
Requirement, at common law, in equity or otherwise).

     10.5  DEFENSE  OF THIRD  PARTY  CLAIMS.  In the event of the  assertion  or
commencement  by  any  Person  of  any  claim  or  Proceeding  (whether  against
Purchaser,  Parent,  the Seller,  or any other Person) with respect to which the

                                       29
<PAGE>
Seller may become obligated to hold harmless, indemnify, compensate or reimburse
an Indemnitee  pursuant to Section 10,  Indemnitee  shall have the right, at its
election,  to proceed  with the defense of such claim or  Proceeding  on its own
with counsel  reasonably  satisfactory to the Seller.  If Indemnitee so proceeds
with the defense of any such claim or Proceeding:

     (A) subject to the other provisions of Section 10, all reasonable  expenses
relating  to the  defense  of such claim or  Proceeding  shall be borne and paid
exclusively by the Seller;

     (B) the  Seller  shall make  available  to  Indemnitee  any  documents  and
materials in its  possession  or control that may be necessary to the defense of
such claim or Proceeding; and

     (C) Indemnitee  shall have the right to settle,  adjust or compromise  such
claim or Proceeding;  PROVIDED,  HOWEVER, that if Indemnitee settles, adjusts or
compromises any such claim or Proceeding without the consent of the Seller, such
settlement,  adjustment  or compromise  shall not be conclusive  evidence of the
amount of  Damages  incurred  by  Indemnitee  in  connection  with such claim or
Proceeding  (it being  understood  that if  Indemnitee  requests that the Seller
consent  to a  settlement,  adjustment  or  compromise,  the  Seller  shall  not
unreasonably withhold or delay such consent).

     (D) Indemnitee  shall give the Seller prompt notice of the  commencement of
any such Proceeding against Indemnitee or the Seller,  PROVIDED,  HOWEVER,  that
any failure on the part of  Indemnitee  to so notify the Seller  shall not limit
any of the obligations of the Seller under Section 10 (except to the extent such
failure  materially  prejudices the defense of such  Proceeding).  If Indemnitee
does not elect to proceed with the defense of any such claim or Proceeding,  the
Seller may proceed  with the defense of such claim or  Proceeding  with  counsel
reasonably  satisfactory to Indemnitee;  PROVIDED,  HOWEVER, that the Seller may
not settle,  adjust or compromise any such claim or Proceeding without the prior
written consent of Indemnitee (which consent may not be unreasonably withheld or
delayed).

     10.6  EXERCISE OF REMEDIES BY PERSONS OTHER THAN AN  INDEMNITEE.  No Person
(other than an Indemnitee or any successor  thereto or assign  thereof) shall be
considered a third party beneficiary of the agreements in this Section 10 and no
such person shall be permitted to assert any  indemnification  claim or exercise
any other remedy under this  Agreement.  Without  limiting the generality of the
foregoing,  (i) no  employee  of the Seller  shall  have any  rights  under this
Agreement  or  under  any of the  other  Transactional  Agreements,  and (ii) no
creditor of the Seller shall have any rights under this  Agreement or any of the
other Transactional Agreements.

11. GENERAL PROVISIONS

     11.1 NOTICES.  Unless  otherwise  provided  herein,  any notice required or
permitted under this Agreement shall be deemed effective upon the earlier of (a)
actual  receipt or (b) (i) one (1)  business  day after  delivery  by  confirmed
facsimile  transmission,  (ii) one (1)  business  day after the  business day of
deposit  with a nationally  recognized  overnight  courier  service for next day
delivery,  freight prepaid,  or (iii) three (3) business days after deposit with
the United  States Post Office for delivery by  registered  or  certified  mail,
postage prepaid.  Any such notice shall be addressed to the party to be notified

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<PAGE>
at the address  indicated  for such party  indicated on the  signature  pages or
exhibits  hereto,  or at such other  address as such party may  designate by ten
(10) days' advance written notice to the other parties.

     11.2 COUNTERPARTS.  This Agreement may be executed in several counterparts,
each of  which  shall  constitute  an  original  and all of  which,  when  taken
together, shall constitute one agreement.

     11.3 GOVERNING LAW. This Agreement  shall be construed in accordance  with,
and governed in all respects  by, the internal  laws of the State of  California
(without giving effect to principles of conflicts of laws).

     11.4 MANDATORY ARBITRATION.

     (A) If Purchaser and Parent on one hand, and the Seller and Stockholders on
the other hand, are unable to resolve any dispute relating to this Agreement (an
"ARBITRABLE  DISPUTE") then the dispute shall be settled by binding  arbitration
in San Jose,  California,  in accordance  with JAMS'  Comprehensive  Arbitration
Rules and Procedures (the "JAMS RULES") then in effect.  However, in all events,
the provisions  contained  herein shall govern over any conflicting  rules which
may now or hereafter be contained in the JAMS Rules.  The arbitrator  shall have
the authority to grant any equitable and legal  remedies that would be available
if any judicial proceeding was instituted to resolve an Arbitrable Dispute.  The
final  decision of the  arbitrator  will be furnished by the  arbitrator  to the
Seller,  Purchaser and Parent in writing and will constitute a final, conclusive
and  non-appealable  determination  of the issue in  question,  binding upon the
Seller,  Purchaser and Parent,  and an order with respect thereto may be entered
in any court of competent jurisdiction.

     (B) Any such arbitration  will be conducted before a single  arbitrator who
will be  compensated  for his or her services at a rate to be  determined by the
parties hereto or by JAMS, but based upon reasonable  hourly or daily consulting
rates for the arbitrator in the event the parties are not able to agree upon his
or her rate of compensation.

     (C) The arbitrator shall be mutually agreed upon by Purchaser,  Parent, and
Seller.  In the event such parties are unable to agree within 20 days  following
submission  of the  dispute  to JAMS by one of the  parties,  JAMS will have the
authority to select an  arbitrator  from a list of  arbitrators  who satisfy the
criteria set forth in clause "(d)" hereof.

     (D) No arbitrator shall have any past or present family,  business or other
relationship  with the parties  hereto,  "affiliate" (as such term is defined in
Rule 12b-2 of the Exchange Act),  director or officer thereof,  unless following
full disclosure of all such  relationships,  the parties hereto agree in writing
to waive such  requirement  with respect to an individual in connection with any
dispute.

     (E) The arbitrator shall be instructed to hold up to an eight hour, one day
hearing  regarding the disputed  matter within 60 days of his or her designation
and to render an award (without written opinion) no later than 10 days after the
conclusion of such hearing,  in each case unless  otherwise  mutually  agreed in
writing by the parties hereto.

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<PAGE>
     (F) No discovery other than an exchange of relevant  documents may occur in
any arbitration  commenced under the provisions of this Section 11.4. Purchaser,
Parent,  and Seller  agree to act in good faith to  promptly  exchange  relevant
documents.

     (G) Purchaser and Parent on one hand and the Seller on the other hand, will
each pay 50% of the initial  compensation  to be paid to the  arbitrator  in any
such  arbitration  and 50% of the  costs of  transcripts  and other  normal  and
regular expenses of the arbitration  proceedings;  PROVIDED,  HOWEVER, that: (A)
the  prevailing  party  in any  arbitration  will be  entitled  to an  award  of
attorneys' fees and costs;  and (B) all costs of  arbitration,  other than those
provided for above, will be paid by the losing party, and the arbitrator will be
authorized  to  determine  the identity of the  prevailing  party and the losing
party.

     (H) The arbitrator chosen in accordance with these provisions will not have
the power to alter,  amend or  otherwise  affect the terms of these  arbitration
provisions or any other provisions contained in this Agreement.

     (I) Except as specifically otherwise provided in the Agreement, arbitration
will be the sole and exclusive remedy of the parties for any Arbitrable  Dispute
or any other dispute arising out of or relating to the Agreement.

     11.5 SUCCESSORS AND ASSIGNS; PARTIES IN INTEREST.

     (A) This Agreement shall be binding upon: the Seller and its successors and
assigns (if any),  the Purchaser and its successors and assigns (if any) and the
Parent and its  successors and assigns (if any).  This Agreement  shall inure to
the benefit of the Seller,  the Purchaser,  the Parent and the other Indemnitees
(subject to Section 10.6); and the respective successors and assigns (if any) of
the foregoing.

     (B) The  Purchaser  may freely  assign any or all of its rights  under this
Agreement  (including its indemnification  rights under Section 10), in whole or
in part,  to any other Person  without  obtaining the consent or approval of any
other  Person.  The Seller  shall not be  permitted  to assign any of his or its
rights or delegate any of his or its  obligations  under this Agreement  without
the Purchaser's prior written consent.

     11.6 WAIVER.  At any time prior to or following the Closing Date, any party
hereto may (a) extend the time for the  performance of any of the obligations or
other acts of the other  party  hereto or (b) waive  compliance  with any of the
agreements of the other party or with any conditions to its own obligations,  in
each case only to the extent such  obligations,  agreements  and  conditions are
intended for its benefit.  Any such  extension or waiver shall only be effective
if made in writing and duly  executed  by the party  giving  such  extension  or
waiver.

     11.7 AMENDMENTS.  This Agreement may not be amended,  modified,  altered or
supplemented  other  than by means of a written  instrument  duly  executed  and
delivered on behalf of the Purchaser, Parent, and Seller.

     11.8 SEVERABILITY.  Any term or provision of this Agreement that is invalid
or  unenforceable  in any  situation  in any  jurisdiction  shall not affect the
validity or  enforceability  of the remaining terms and provisions hereof or the

                                       32
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validity or  enforceability  of the  offending  term or  provision  in any other
situation  or in any other  jurisdiction.  If the final  judgment  of a court of
competent  jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties hereto agree that the court making such determination
shall have the power to limit the term or provision, to delete specific words or
phrases,  or to replace any invalid or  unenforceable  term or provision  with a
term or  provision  that is valid and  enforceable  and that  comes  closest  to
expressing the intention of the invalid or unenforceable term or provision,  and
this Agreement shall be enforceable as so modified. In the event such court does
not exercise the power granted to it in the prior  sentence,  the parties hereto
agree to replace such invalid or  unenforceable  term or provision  with a valid
and enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term.

     11.9 ENTIRE AGREEMENT.  This Agreement sets forth the entire  understanding
of the parties  relating to the subject  matter thereof and supersedes all prior
agreements,  letters of intent and  understandings  among or between  any of the
parties relating to the subject matter thereof.

     11.10  EXPENSES.  Whether  or not  the  transactions  contemplated  by this
Agreement  are  consummated,  each party will pay its own expenses in connection
with  the  negotiation,   execution  and  performance  of  this  Agreement,  the
transactions  contemplated  by this Agreement and all things required to be done
in connection  with this  Agreement,  including  attorneys'  fees,  brokerage or
financial advisor fees, filing fees and accounting fees.

     11.11  INCORPORATION OF SCHEDULES AND EXHIBITS.  All Schedules and Exhibits
referred to in this Agreement are specifically  incorporated into this Agreement
by  reference.  Capitalized  terms not  otherwise  defined in the  Schedules  or
Exhibits  to  this  Agreement  will  have  the  meanings  given  to them in this
Agreement.

     11.12 THIRD PARTY BENEFICIARIES.  With the exception of the parties to this
Agreement,  there  will  exist  no  right of any  Person  to claim a  beneficial
interest in this Agreement or any rights occurring by virtue of this Agreement.

     11.13 NO CONSTRUCTION AGAINST DRAFTER. This Agreement is being entered into
between  competent  parties,  who are experienced in business and represented by
counsel, and has been reviewed by the parties and their counsel.  Therefore, any
ambiguous  language in this Agreement will not necessarily be construed  against
any particular party as the drafter of such language.

     11.14  FURTHER  ASSURANCES.  From  time  to  time  after  the  date of this
Agreement,  without further consideration,  the parties will cooperate with each
other and will  execute and deliver  such  documents  to the other party as such
other  party  may  reasonably  request  to  carry  out  any of the  transactions
contemplated by this Agreement.

                                       33
<PAGE>
     The parties to this Agreement have caused this Agreement to be executed and
delivered as of August 13, 2014.

                                 LITHIUM CORPORATION,
                                 A Nevada corporation

                                 /s/ Brian Goss
                                 -----------------------------------------------
                                 , President

                                 /s/ Brian Goss
                                 -----------------------------------------------
                                 , Secretary

                                 ADDRESS:

                                 5976 LINGERING BREEZE ST.
                                 LAS VEGAS, NV 89148

                                 PATHION MINING, INC.
                                 a Nevada corporation

                                 By: /s/Daryl Stemm
                                    --------------------------------------------
                                 Title: CEO
                                       -----------------------------------------

                                 ADDRESS:
                                 16450 Los Gatos Blvd, Suite 207
                                 Los Gatos, CA 95032
                                 Fax: (408) 356-3828

                                       34
<PAGE>
                                 PATHION, INC.
                                 a Delaware corporation

                                 By: /s/Michael Liddle
                                    --------------------------------------------

                                 Title: CEO
                                       -----------------------------------------

                                 ADDRESS:
                                 16450 Los Gatos Blvd, Suite 207
                                 Los Gatos, CA 95032
                                 Fax: (408) 356-3828

                                       35
<PAGE>
                                    EXHIBIT A

                               CERTAIN DEFINITIONS

     For purposes of the Agreement (including this Exhibit A):

     "ACQUISITION  TRANSACTION"  shall mean any transaction  involving:  (a) the
sale or other disposition of all or any portion of the business or assets of the
Seller (other than in the Ordinary Course of Business);  (b) the issuance,  sale
or other disposition of (i) any capital stock or other securities of the Seller,
(ii) any option, call, warrant or right (whether or not immediately exercisable)
to acquire any capital  stock or other  securities  of the Seller,  or (iii) any
security,  instrument or obligation  that is or may become  convertible  into or
exchangeable for any capital stock or other securities of the Seller; or (c) any
merger, consolidation,  business combination, share exchange,  reorganization or
similar transaction involving the Seller.

     "ASBESTOS  LIABILITIES" means any Liabilities arising from, relating to, or
based on the  presence or alleged  presence  of asbestos or  asbestos-containing
materials  in any  product  or  item  designed,  manufactured,  sold,  marketed,
installed,  stored,  transported,  handled,  or  distributed  at  any  time,  or
otherwise   based  on  the   presence   or  alleged   presence  of  asbestos  or
asbestos-containing  materials at any property or facility or in any  structure,
including without limitation, any Liabilities arising from, relating to or based
on any personal or bodily injury or illness.

     "BREACH" means a breach of a representation, warranty, covenant, obligation
or other  provision  if there is or has  been (a) any  inaccuracy  in or  breach
(including any inadvertent or innocent breach) of, or any failure (including any
inadvertent failure) to comply with or perform,  such representation,  warranty,
covenant,  obligation  or other  provision,  or (b) any claim (by any Person) or
other  circumstance  that is inconsistent  with such  representation,  warranty,
covenant,  obligation or other provision;  and the term "Breach" shall be deemed
to refer to any such inaccuracy, breach, failure, claim or circumstance.

     "CLOSING  BALANCE  SHEET" means the pro forma balance sheet of the Business
dated as of the Closing Date.

     "CONSENT"  shall  mean any  approval,  consent,  ratification,  permission,
waiver or authorization (including any Governmental Authorization).

     "CONTRACT" shall mean any written, oral, implied or other agreement,  lease
(of both real and  personal  property),  contract,  understanding,  arrangement,
instrument,   note,  guaranty,   indemnity,   representation,   warranty,  deed,
assignment,  power  of  attorney,  certificate,   purchase  order,  work  order,
insurance policy, benefit plan, commitment,  covenant,  assurance or undertaking
of any nature.

                                      A-1
<PAGE>
     "DAMAGES" shall include any loss,  damage,  injury,  decline in value, lost
opportunity,  Liability,  claim,  demand,  settlement,  judgment,  award,  fine,
penalty,  Tax,  fee  (including  any legal fee,  expert fee,  accounting  fee or
advisory fee), charge,  cost (including any cost of investigation) or expense of
any nature.

     "ENCUMBRANCE" shall mean any lien, pledge, hypothecation, charge, mortgage,
security  interest,  encumbrance,  equity,  trust,  equitable  interest,  claim,
preference,  right  of  possession,   lease,  tenancy,  license,   encroachment,
covenant,  infringement,  interference,  Order,  proxy,  option,  right of first
refusal,   preemptive  right,  community  property  interest,   legend,  defect,
impediment,  exception,  reservation,  limitation,  impairment,  imperfection of
title,  condition or restriction of any nature (including any restriction on the
transfer of any asset, any restriction on the receipt of any income derived from
any asset,  any  restriction on the use of any asset and any  restriction on the
possession,  exercise or transfer of any other  attribute  of  ownership  of any
asset).

     "ENTITY" shall mean any corporation (including any non-profit corporation),
general partnership,  limited partnership,  limited liability partnership, joint
venture,  estate,  trust,  cooperative,  foundation,  society,  political party,
union,  Seller (including any limited liability company or joint stock company),
firm or other enterprise, association, organization or entity.

     "ENVIRONMENTAL, HEALTH, AND SAFETY REQUIREMENTS" shall mean, as amended and
as now and hereafter in effect, all federal, state, local, and foreign statutes,
regulations, ordinances, and other provisions having the force or effect of law,
all judicial  and  administrative  orders and  determinations,  all  contractual
obligations,  and all common law  concerning  public  health and safety,  worker
health and safety,  pollution,  or  protection  of the  environment,  including,
without  limitation,  all  those  relating  to the  presence,  use,  production,
generation,    handling,    transportation,    treatment,   storage,   disposal,
distribution,  labeling,  testing,  processing,  discharge,  release, threatened
release,  control, or cleanup of any substances,  or wastes, chemical substances
or mixtures, pesticides,  pollutants,  contaminants,  toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls, noise, or radiation
or other Hazardous Materials.

     "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

     "EXCLUDED  ASSETS"  shall mean the assets  identified  on Exhibit H (to the
extent owned by the Seller on the Closing Date).

     "GAAP" shall mean generally accepted accounting principles.

     "GOVERNMENTAL   AUTHORIZATION"   shall  mean  any:  (a)  permit,   license,
certificate, franchise, concession, approval, consent, ratification, permission,
clearance,  confirmation,   endorsement,  waiver,  certification,   designation,
rating,  registration,  qualification or authorization issued, granted, given or
otherwise made available by or under the authority of any  Governmental  Body or
pursuant  to any Legal  Requirement;  or (b) right under any  Contract  with any
Governmental Body.

                                      A-2
<PAGE>
     "GOVERNMENTAL  BODY"  shall  mean any:  (a)  nation,  principality,  state,
commonwealth,  province,  territory,  county,  municipality,  district  or other
jurisdiction of any nature; (b) federal,  state,  local,  municipal,  foreign or
other government; (c) governmental or quasi-governmental authority of any nature
(including any governmental division,  subdivision,  department, agency, bureau,
branch, office, commission, council, board, instrumentality,  officer, official,
representative,  organization,  unit,  body or  Entity  and any  court  or other
tribunal); (d) multi-national organization or body; or (e) individual, Entity or
body exercising, or entitled to exercise, any executive, legislative,  judicial,
administrative, regulatory, police, military or taxing authority or power of any
nature.

     "HAZARDOUS  MATERIAL"  shall include:  (a) any petroleum,  waste oil, crude
oil, asbestos, urea formaldehyde or polychlorinated biphenyl; (b) any waste, gas
or other  substance  or  material  that is  explosive  or  radioactive;  (c) any
"hazardous substance," "pollutant," "contaminant," "hazardous waste," "regulated
substance,"  "hazardous  chemical" or "toxic chemical" as designated,  listed or
defined (whether expressly or by reference) in any statute,  regulation or other
Legal   Requirement   (including  the  Comprehensive   Environmental   Response,
Compensation   and  Liability  Act  and  any  other  so-called   "superfund"  or
"superlien" law and the respective regulations promulgated thereunder);  (d) any
other substance or material (regardless of physical form) or form of energy that
is subject to any Legal Requirement which regulates or establishes  standards of
conduct in connection  with, or which  otherwise  relates to, the  protection of
human  health,  plant life,  animal  life,  natural  resources,  property or the
enjoyment of life or property from the presence in the environment of any solid,
liquid,  gas,  odor,  noise or form of energy;  and (e) any  compound,  mixture,
solution,  product or other substance or material that contains any substance or
material referred to in clause "(a)", "(b)", "(c)" or "(d)" above.

     "INDEMNITEES" shall mean the following Persons: (a) the Purchaser;  (b) the
Parent; (c) the Purchaser's and Parent's current and future affiliates;  (d) the
respective  Representatives  of the Persons referred to in clauses "(a), " "(b)"
and "(c)" above;  and (e) the  respective  successors and assigns of the Persons
referred to in clauses "(a)", "(b)", "(c)" and ("d") above.

     "INTELLECTUAL  PROPERTY  RIGHTS"  shall mean and  include all rights of the
following  types,  which  may  exist  or  be  created  under  the  laws  of  any
jurisdiction  in the world:  (a)  rights  associated  with works of  authorship,
including  exclusive  exploitation  rights,  copyrights,  moral rights, and mask
works; (b) trademark and trade name rights and similar rights;  (c) trade secret
rights; (d) Patents and industrial property rights; (e) other proprietary rights
in intellectual  property of every kind and nature;  and (f) all  registrations,
renewals, extensions, continuations, divisions, or reissues of, and applications
for, any of the rights referred to in clauses (a) through (e) above.

     "KNOWLEDGE" shall mean the actual knowledge of the Seller's, Purchaser's or
Parent's  directors and officers,  and that such person has no reason to believe
that such fact or other  matter is other  than what is  represented  after  such
investigation  that  such  director  or  officer,  as the  case  may be,  should
reasonably be expected to conduct through the exercise of reasonable care in the
conduct of the business of the Seller, Purchaser or Parent and in preparation of
this  Agreement,  the  Transactional  Agreements  and the  disclosure  schedules
contemplated hereby.

                                      A-3
<PAGE>
     "LEGAL  REQUIREMENTS"  shall mean any  federal,  state,  local,  municipal,
foreign or other law, statute,  legislation,  constitution,  principle of common
law,  resolution,   ordinance,  code,  edict,  decree,   proclamation,   treaty,
convention,  rule, regulation,  ruling, directive,  pronouncement,  requirement,
specification,   determination,  decision,  opinion  or  interpretation  issued,
enacted, adopted, passed, approved,  promulgated, made, implemented or otherwise
put into effect by or under the authority of any Governmental Body.

     "LIABILITY"  OR  "LIABILITIES"  shall  mean any debt,  obligation,  duty or
liability  of  any  nature  (including  any  unknown,  undisclosed,   unmatured,
unaccrued, unasserted,  contingent,  indirect, conditional,  implied, vicarious,
derivative,  joint, several or secondary liability),  regardless of whether such
debt,  obligation,  duty or  liability  would be required to be  disclosed  on a
balance  sheet  prepared  in  accordance  with  generally  accepted   accounting
principles and regardless of whether such debt, obligation, duty or liability is
immediately due and payable.

     "MATERIAL  ADVERSE  EFFECT"  shall,  with  respect to an  entity,  mean any
condition, event, change or occurrence,  individually or collectively,  that has
had or may  reasonably  be  expected  to have a material  adverse  effect on the
business,  operations,  results of  operations  or  financial  condition of such
entity on a consolidated basis.

     "OPEN  SOURCE  CODE" shall mean any software  code that is  distributed  as
"free software" or "open source software" or is otherwise  distributed  publicly
in source code form under terms that permit  modification and  redistribution of
such  software.  Open Source Code includes  software code that is licensed under
the GNU General  Public  License,  GNU Lesser General  Public  License,  Mozilla
License, Common Public License,  Apache License, BSD License,  Artistic License,
or Sun Community Source License.

     "ORDER" shall mean any: (a) order,  judgment,  injunction,  edict,  decree,
ruling,  pronouncement,  determination,  decision,  opinion, verdict,  sentence,
subpoena,  writ or award issued,  made, entered,  rendered or otherwise put into
effect by or under the  authority of any court,  administrative  agency or other
Governmental  Body or any arbitrator or arbitration  panel; or (b) Contract with
any Governmental Body entered into in connection with any Proceeding.

     "ORDINARY COURSE OF BUSINESS" shall mean an action taken by or on behalf of
the  Seller  shall not be deemed to have been taken in the  "Ordinary  Course of
Business" unless:

               (a) such action is recurring in nature,  is  consistent  with the
     past  practices  of the Seller and is taken in the  ordinary  course of the
     normal day-to-day operations of the Seller;

               (b) such  action is taken in  accordance  with sound and  prudent
     business practices;

               (c)  such  action  is  not  required  to  be  authorized  by  the
     Stockholders  of the Seller,  the board of  directors  of the Seller or any
     committee  of the board of directors of the Seller and does not require any
     other separate or special authorization of any nature; and

                                      A-4
<PAGE>
               (d) such  action is similar in nature  and  magnitude  to actions
     customarily taken,  without any separate or special  authorization,  in the
     ordinary course of the normal day-to-day operations of comparable companies
     of the same size and within the same industry.

     "PERSON" shall mean any individual, Entity or Governmental Body.

     "PRE-CLOSING  PERIOD"  shall mean the period from the date of the Agreement
through the Closing Date.

     "PURCHASER  DISCLOSURE  SCHEDULE" shall mean the disclosure schedule (dated
as of the date of this Agreement) delivered to Seller on behalf of the Purchaser
and prepared in accordance with Article 3 of this Agreement.

     "PROCEEDING"  shall  mean  any  action,  suit,   litigation,   arbitration,
proceeding  (including any civil,  criminal,  administrative,  investigative  or
appellate  proceeding  and  any  informal  proceeding),   prosecution,  contest,
hearing,  inquiry,  inquest,  audit,  examination  or  investigation  commenced,
brought,   conducted  or  heard  by  or  before,  or  otherwise  involving,  any
Governmental Body or any arbitrator or arbitration panel.

     "RELATED  PARTY" shall mean: (a) each  individual who is, or who has at any
time been,  an officer of the  Seller;  (b) each member of the family of each of
the  individuals  referred to in clause "(a)" above;  and (c) any Entity  (other
than the  Seller)  in which any one of the  individuals  referred  to in clauses
"(a)"  and  "(b)"  above  holds  or held  (or in  which  more  than  one of such
individuals collectively hold or held), beneficially or otherwise, a controlling
interest or a material voting, proprietary or equity interest.

     "REPRESENTATIVES"  shall  mean  officers,  directors,   employees,  agents,
attorneys, accountants, advisors and representatives.

     "REQUISITE  SELLER  STOCKHOLDER  VOTE" shall mean the affirmative  vote, or
written consent,  of the holders of a majority of the outstanding  Seller Common
Stock.

     "RESTRICTED  STOCK PURCHASE  AGREEMENT"  shall mean that certain  agreement
executed by Seller and Parent,  which governs the Parent  securities  (including
without limitation restrictions on transfer,  repurchase rights,  securities law
compliance,  and  right of first  refusal)  issued to  Seller  pursuant  to this
Agreement, and executed at the Closing.

     "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

     "SELLER DISCLOSURE  SCHEDULE" shall mean the disclosure  schedule (dated as
of the date of this  Agreement)  delivered to the  Purchaser on behalf of Seller
and prepared in accordance with Article 2 of this Agreement.

     "SELLER  EMPLOYEE" shall mean any current or former  employee,  independent
contractor or director of the Seller or any Person under common control with the
Seller within the meaning of Sections 414(b),  (c), (m) and (o) of the Code, and
the regulations issued thereunder.

                                      A-5
<PAGE>
     "SELLER  EMPLOYEE  AGREEMENT"  shall  mean  each  management,   employment,
severance,  consulting,  relocation,  repatriation or expatriation  agreement or
other  Contract  between  the  Seller or any  Seller  Affiliate  and any  Seller
Employee,  other than any such management,  employment,  severance,  consulting,
relocation,  repatriation  or  expatriation  agreement or other  Contract with a
Seller Employee which is terminable "at will" without any obligation on the part
of the Seller or any  Seller  Affiliate  to make any  payments  or  provide  any
benefits in connection with such termination.

     "SELLER  EMPLOYEE  PLAN" shall mean any plan,  program,  policy,  practice,
Contract or other arrangement providing for compensation, severance, termination
pay, deferred  compensation,  performance awards, stock or stock-related awards,
fringe benefits or other employee benefits or remuneration of any kind,  whether
written,  unwritten or otherwise,  funded or unfunded,  including each "employee
benefit plan," within the meaning of Section 3(3) of ERISA (whether or not ERISA
is applicable to such plan), that is or has been maintained,  contributed to, or
required to be  contributed  to, by the Seller or any Seller  Affiliate  for the
benefit  of any  Seller  Employee,  or with  respect  to which the Seller or any
Seller  Affiliate  has or may have any  liability  or  obligation,  except  such
definition shall not include any Seller Employee Agreement.

     "TAX" shall mean any tax (including any income tax,  franchise tax, capital
gains tax,  estimated tax, gross receipts tax,  value-added tax, surtax,  excise
tax, ad valorem tax,  transfer tax, stamp tax, sales tax, use tax, property tax,
business tax,  occupation tax, inventory tax, occupancy tax,  withholding tax or
payroll  tax),  levy,  assessment,   tariff,  impost,  imposition,   toll,  duty
(including  any customs  duty),  deficiency  or fee,  and any related  charge or
amount  (including any fine,  penalty or interest),  that is, has been or may in
the future be (a) imposed,  assessed or  collected by or under the  authority of
any Governmental  Body, or (b) payable pursuant to any tax-sharing  agreement or
similar Contract.

      "TAX RETURN" shall mean any return  (including  any  information  return),
report, statement, declaration,  estimate, schedule, notice, notification, form,
election,  certificate or other document or information that is, has been or may
in the future be filed with or  submitted  to, or  required  to be filed with or
submitted  to,  any  Governmental  Body in  connection  with the  determination,
assessment,  collection  or  payment  of  any  Tax  or in  connection  with  the
administration,  implementation  or enforcement of or compliance  with any Legal
Requirement relating to any Tax.

     "TERMINATION FEE" shall mean an amount equal to Two Hundred-Fifty  Thousand
Dollars ($250,000.00), payable according to the terms of Section 9.4 hereof.

     "TRANSACTIONAL   AGREEMENTS"  shall  mean:  (a)  this  Agreement;  (b)  the
Assumption  Agreement;  (c)  the  Non-competition  Agreement;  (d)  the  Closing
Certificate,  (e) the Bill of Sale, (f) the Restricted Stock Purchase Agreement,
(g) the Escrow Agreement,  and any other related agreement(s) referenced in this
Agreement,   and/or  which  are  necessary  to  complete  the  Closing  and  the
Transactions contemplated hereunder.

     "TRANSACTIONS"  shall mean (a) the execution and delivery of the respective
Transactional  Agreements,  and (b) all of the transactions  contemplated by the
respective  Transactional  Agreements,  including: (i) the sale of the Assets by

                                      A-6
<PAGE>
the  Seller  to the  Purchaser  in  accordance  with  the  Agreement;  (ii)  the
assumption  of  the  Assumed  Liabilities  by  the  Purchaser  pursuant  to  the
Assumption  Agreement;  (iii) the issue of 500,000 shares of Common Stock of the
Parent to be  subscribed  to by the  Seller;  and (iii) the  performance  by the
Seller and the Purchaser of their respective obligations under the Transactional
Agreements, and the exercise by the Seller and the Purchaser of their respective
rights under the Transactional Agreements.

                                      A-7
<PAGE>
                                 EXHIBIT B

                         LIST OF ASSUMED CONTRACTS

(San  Emidio)  Claimant  Association  Agreement  dated 1  September  2009 by and
between Lithium Corporation, Tom Lewis, Simona G. Marie and John E. Hiner

(Fish Lake  Valley)  Lease  Purchase  Agreement  dated 1 June 2009 by between an
association   of  mining   claimants:   Nevada  Mining  Co.,   Inc.,  (a  Nevada
Corporation),  Robert  Craig,  Barbara  Craig and  Elizabeth  Dickman  (formerly
Elizabeth Craig), (collectively, the "Seller") and Lithium Corporation

(BC Sugar)  Trust  Agreement  dated 30 August  2013 by and between Tom Lewis and
Lithium Corporation

                                       B-1
<PAGE>
                                    EXHIBIT C

                            FORM OF ESCROW AGREEMENT

     THIS ESCROW  AGREEMENT  (this  "Escrow  Agreement")  is entered  into as of
[Month __],  2014,  by and among  Pathion  Mining,  Inc.,  a Nevada  corporation
("Purchaser"),   Pathion,  Inc.,  a  Delaware  corporation  ("Parent"),  Lithium
Corporation,  a Nevada  corporation  ("Seller"),  and  [_________]  (the "Escrow
Agent").  Each of Purchaser,  the Escrow Agent and Seller are referred to herein
individually as a "Party" and  collectively as the "Parties".  Unless  otherwise
defined herein,  capitalized  terms used herein shall have the meanings assigned
to them in the Asset Purchase Agreement (as defined below).

     WHEREAS, Purchaser, Seller and the other parties named therein have entered
into the Asset  Purchase  Agreement,  dated as of August  ___,  2014 (the "Asset
Purchase  Agreement"),  providing  for,  among  other  things,  the  purchase by
Purchaser of Assets of Seller;

     WHEREAS,  the Asset Purchase Agreement provides that the Escrowed Funds (as
defined below) will be held in escrow in an escrow account established  pursuant
hereto to partially  secure the payment of (i) the post-closing  adjustment,  if
any, pursuant to Section 1.2(a)(i) of the Asset Purchase  Agreement and (ii) the
indemnity  obligations of the Seller Parties pursuant to Section 10 of the Asset
Purchase Agreement; and

     WHEREAS,  the Parties desire to establish the terms and conditions pursuant
to which the escrow account shall be established and maintained and the Escrowed
Funds shall be held and distributed.

     NOW,   THEREFORE,   in   consideration   of  the  promises  and  respective
representations,  warranties,  covenants and  agreements  set forth herein,  the
Parties agree as follows:

     1. Escrow.

     1.1 Escrow Deposit.  Upon the Closing and pursuant to Section  1.2(a)(i) of
the Asset Purchase Agreement,  Purchaser shall deposit with the Escrow Agent the
sum of One Million Dollars ($1,000,000.00) (the "Escrow Deposit").

     1.2 Escrowed Funds. The escrowed funds (the "Escrowed Funds") shall consist
of the following,  whether now or hereafter  acquired,  together,  in each case,
with the  proceeds  thereof:  (x)(i) the  Escrow  Deposit;  plus (ii)  interest,
dividends  and other  income,  if any,  resulting  from the  investment  of such
amounts  and  earnings  thereon;  less (y) in each case,  any  amounts  actually
distributed  to the  Purchaser  Indemnified  Parties  pursuant  to  this  Escrow
Agreement  and the Asset  Purchase  Agreement  and any amount  withdrawn  by the
Escrow Agent  hereunder.  The Escrow  Agent shall hold the  Escrowed  Funds in a
separate account and, subject to the terms and conditions  hereof,  shall invest
and reinvest  the Escrowed  Funds as directed in Section 2. Seller shall have no
right to any accrued interest.

                                      C-1
<PAGE>
     2. Escrow Agent Provisions.

     2.1 Escrow Agent.  Purchaser,  Parent and Seller hereby  appoint the Escrow
Agent as their escrow agent for the  purposes set forth  herein,  and the Escrow
Agent hereby accepts such  appointment  under the terms and conditions set forth
herein.

     2.2 Investments. During the term of this Escrow Agreement, the Escrow Agent
shall retain the Escrowed Funds in a separate  account  subject to the terms and
conditions  hereof.  Instructions  to make any  other  investment  ("Alternative
Investment")  must be in writing and shall  specify the type and identity of the
investments  to be  purchased  and/or  sold.  The  Escrow  Agent  or  any of its
affiliates may receive  compensation with respect to any Alternative  Investment
directed  hereunder,  including,  without  limitation,  charging any  applicable
agency fee in connection  with each  transaction.  Purchaser,  Parent and Seller
recognize  and  agree  that  the  Escrow  Agent  will not  provide  supervision,
recommendations  or advice  relating to either the  investment of moneys held in
the Escrowed Funds or the purchase,  sale, retention or other disposition of any
investment  described herein.  The Escrow Agent shall not have any liability for
any loss sustained as a result of any investment in an investment  made pursuant
to the terms of this Escrow  Agreement or as a result of any  liquidation of any
investment in accordance  with the terms of this Escrow  Agreement that is prior
to its  maturity or for the failure of  Purchaser  and Seller to give the Escrow
Agent  instructions to invest or reinvest the Escrowed  Funds.  The Escrow Agent
shall have the right to liquidate any investments held in order to provide funds
necessary to make required  payments  under this Escrow  Agreement.  The Parties
agree  that the  Escrowed  Funds  shall be  registered,  held in the name of and
treated as owned by Purchaser  unless and until  released to Seller  pursuant to
Section 5 hereof.

     2.3 Fees and  Expenses.  Purchaser  and Parent  agree (a) to pay the Escrow
Agent upon execution of this Escrow  Agreement and from time to time  thereafter
reasonable  compensation for the services to be rendered  hereunder,  along with
any fees or charges for  accounts,  including  those levied by any  governmental
authority  which the Escrow  Agent may  impose,  charge or  pass-through,  which
unless  otherwise agreed in writing shall be as described in Schedule 1 attached
hereto,  and (b) to pay or  reimburse  the  Escrow  Agent upon  request  for all
expenses, disbursements and advances, including, without limitation,  reasonable
attorney's  fees and  expenses,  incurred or made by it in  connection  with the
performance,  modification and termination of this Escrow Agreement. The payment
and  reimbursement  obligations  set forth in this Section 2.3 shall survive the
resignation,  replacement  or removal of the Escrow Agent or the  termination of
this Agreement.

     2.4 Exculpation.

     (a) The Escrow Agent shall have only those duties as are  specifically  and
expressly  provided herein,  which shall be deemed purely ministerial in nature,
and no other  duties  shall be  implied.  The  Escrow  Agent  shall  neither  be
responsible for, nor chargeable with, knowledge of, nor have any requirements to
comply with,  the terms and  conditions  of any other  agreement,  instrument or
document between Purchaser,  Parent and Seller, in connection herewith,  if any,
including, without limitation, the Asset Purchase Agreement nor shall the Escrow
Agent be required to  determine  if any person or entity has  complied  with the
Asset Purchase  Agreement,  nor shall any  additional  obligations of the Escrow
Agent be inferred from the terms of the Asset  Purchase  Agreement,  even though

                                      C-2
<PAGE>
reference  thereto may be made in this Escrow  Agreement.  The Escrow  Agent may
rely upon and shall not be liable for acting or refraining  from acting upon any
written notice,  document,  instruction or request furnished to it hereunder and
believed by it to be genuine and to have been signed or  presented  by Purchaser
(or  Parent) or Seller  without  inquiry and  without  requiring  substantiating
evidence of any kind. The Escrow Agent shall not be liable to Purchaser, Parent,
Seller,  any  beneficiary  or other person for  refraining  from acting upon any
instruction setting forth, claiming, containing, objecting to, or related to the
transfer or distribution of the Escrowed Funds, or any portion  thereof,  unless
such  instruction  shall have been  delivered to the Escrow Agent in  accordance
with Section 8.3 below and the other express provisions of this Escrow Agreement
and the Escrow Agent has been able to satisfy any applicable security procedures
as may be  required  thereunder.  The  Escrow  Agent  shall  be under no duty to
inquire  into or  investigate  the  validity,  accuracy  or  content of any such
document, notice, instruction or request. The Escrow Agent shall have no duty to
solicit  any  payments  which may be due it or the  Escrowed  Funds,  including,
without limitation,  the Escrow Deposit nor shall the Escrow Agent have any duty
or  obligation to confirm or verify the accuracy or  correctness  of any amounts
deposited with it hereunder.

     (b) The Escrow Agent shall not be liable for any action taken,  suffered or
omitted  to be taken  by it in good  faith  except  to the  extent  that a final
adjudication  of a court of competent  jurisdiction  determines  that the Escrow
Agent's gross negligence,  bad faith or willful  misconduct was the cause of any
loss to  Purchaser,  Parent or Seller.  The Escrow  Agent may execute any of its
powers and perform any of its duties hereunder directly or through affiliates or
agents. The Escrow Agent may consult with counsel, accountants and other skilled
persons to be selected  and retained by it. The Escrow Agent shall not be liable
for any action taken,  suffered or omitted to be taken by it in accordance with,
or in reliance upon,  the advice or opinion of any such counsel,  accountants or
other skilled persons.  In the event that the Escrow Agent shall be uncertain or
believe  there is some  ambiguity as to its duties or rights  hereunder or shall
receive instructions,  claims or demands from Purchaser,  Parent or Seller that,
in its opinion, conflict with any of the provisions of this Escrow Agreement, it
shall be  entitled  to refrain  from  taking any action and its sole  obligation
shall be to keep safely all  property  held in escrow  until it shall be given a
direction in writing by Purchaser  (or Parent) and Seller that  eliminates  such
ambiguity or uncertainty to the  satisfaction  of Escrow Agent or by a final and
non-appealable  order  or  judgment  of  a  court  of  competent   jurisdiction.
Purchaser,  Parent  and  Seller  agree to pursue  any  redress  or  recourse  in
connection with any dispute without making the Escrow Agent a party to the same.
Anything in this Escrow Agreement to the contrary  notwithstanding,  in no event
shall the Escrow Agent be liable for special, incidental,  punitive, indirect or
consequential loss or damage of any kind whatsoever (including,  but not limited
to, lost  profits),  even if the Escrow Agent has been advised of the likelihood
of such loss or damage and regardless of the form of action.

     2.5 Indemnification.

     (a)  As to the  Escrow  Agent,  the  Purchaser,  Parent  and  Seller  shall
indemnify,  defend and save  harmless  the Escrow Agent and its  affiliates  and
their respective successors,  assigns,  agents and employees (the "Indemnitees")
from and against any and all losses, damages,  claims,  liabilities,  penalties,
judgments,   settlements,   litigation,   investigations,   costs  or   expenses
(including,  without  limitation,  the fees and expenses of outside  counsel and

                                      C-3
<PAGE>
experts and their staffs and all expense of document  location,  duplication and
shipment)(collectively  "Losses"),  arising out of or in connection with (i) the
Escrow Agent's execution and performance of this Escrow Agreement, tax reporting
or withholding, the enforcement of any rights or remedies under or in connection
with this Escrow  Agreement,  or as may arise by reason of any act,  omission or
error of the Indemnitee, except in the case of any Indemnitee to the extent that
such Losses are finally adjudicated by a court of competent jurisdiction to have
been primarily caused by the gross negligence,  bad faith or willful  misconduct
of such Indemnitee,  or (ii) its following any instructions or other directions,
whether  joint or  singular,  from the  Parties,  except to the extent  that its
following any such instruction or direction is expressly  forbidden by the terms
hereof.  Solely among  themselves,  Purchaser,  Parent and Seller agree that the
indemnity  obligations set forth in this Section 2.5(a) shall be shared equally,
one-half (1/2) by Purchaser (or Parent) and one-half (1/2) by Seller,  and shall
survive  the  resignation,  replacement  or removal  of the Escrow  Agent or the
termination of this Escrow Agreement.

     (b)  Purchaser,  Parent and Seller hereby grant the Escrow Agent a lien on,
right of set-off  against and security  interest in, the Escrowed  Funds for the
payment of any claim for indemnification,  fees, expenses and amounts due to the
Escrow Agent or an Indemnitee. In furtherance of the foregoing, the Escrow Agent
is expressly  authorized  and directed,  but shall not be  obligated,  to charge
against  and  withdraw  from the  Escrowed  Funds for its own account or for the
account of an Indemnitee any amounts due to the Escrow Agent or to an Indemnitee
under either  Sections 2.3,  2.5(a) or 2.6(a) of this  Agreement.  To the extent
that any such amounts  that are due to the Escrow  Agent under such  sections of
this  Escrow  Agreement  are  payable  by  Purchaser,  Parent or Seller  but are
nevertheless  paid  from the  Escrowed  Funds,  such  amounts  shall  thereafter
promptly be deposited by such Party with the Escrowed Funds. This Section 2.5(b)
will not affect the Parties' payment  obligations under Sections 2.3 and 2.5(a),
or the  right of either  Party to  recover  amounts  paid on behalf of the other
Party pursuant to this Section 2.5(b).

     2.6 Resignation or Removal of Escrow Agent.

     (a) The  Escrow  Agent may  resign  and be  discharged  from its  duties or
obligations  hereunder by giving  thirty (30) days advance  notice in writing of
such  resignation  to Purchaser,  Parent and Seller  specifying a date when such
resignation  shall take effect.  If Purchaser (or Parent) and Seller have failed
to appoint a successor  escrow agent prior to the expiration of thirty (30) days
following  receipt of the notice of  resignation,  the Escrow Agent may petition
any court of competent  jurisdiction  for the appointment of a successor  escrow
agent or for other appropriate relief, and any such resulting  appointment shall
be  binding  upon  all  of  the  Parties   hereto.   The  Escrow   Agent's  sole
responsibility after such thirty (30) day notice period expires shall be to hold
the Escrowed  Funds (without any obligation to reinvest the same) and to deliver
the same to a designated  substitute escrow agent, if any, or in accordance with
the   directions  of  a  final  order  or  judgment  of  a  court  of  competent
jurisdiction, at which time of delivery the Escrow Agent's obligations hereunder
shall cease and  terminate,  subject to the  provisions  of Section  2.6(b).  In
accordance  with Section 2.6(b) below,  the Escrow Agent shall have the right to
withhold an amount equal to any amount due and owing to the Escrow  Agent,  plus
any costs and expenses the Escrow Agent shall reasonably believe may be incurred
by the Escrow Agent in connection with the termination of this Escrow Agreement.

                                      C-4
<PAGE>
     (b) Any entity into which the Escrow  Agent may be merged or  converted  or
with which it may be  consolidated,  or any entity to which all or substantially
all the escrow business may be transferred, shall be the Escrow Agent under this
Escrow Agreement without further act.

     3. No Inquiry by Escrow  Agent into Asset  Purchase  Agreement.  The Escrow
Agent shall not, nor shall it be required to,  inquire into or consider  whether
any Escrow Claims or any accrued interest has been determined in accordance with
the requirements of the Asset Purchase Agreement.

     4. Escrow  Claims.  Purchaser  (or Parent) shall be entitled to make claims
against the Escrowed Funds under Section 10 of the Asset  Purchase  Agreement as
set forth in this Section 4 ("Escrow Claims") at any time after the date of this
Escrow Agreement and prior to 11:59 p.m.,  Eastern Time, on the Release Date (as
defined  below).  Any Escrow  Claim shall be  presented  to the Escrow  Agent as
follows:

     4.1  Notice.  Escrow  Claims  against the  Escrowed  Funds shall be made by
Purchaser  (or  Parent) on its own behalf or on behalf of any other  Indemnified
Party.  No Person other than  Purchaser  (or Parent)  shall be permitted to make
Escrow Claims against the Escrowed Funds under this Section 4.

     4.2 Amount of Escrow Claims.  Purchaser (or Parent) shall notify the Escrow
Agent and Seller in writing of any amounts that an Indemnified Party asserts are
subject  to Escrow  Claims  under  Section 10 of the Asset  Purchase  Agreement.
Purchaser (or Parent)  shall be entitled in any Escrow Claims to include  claims
for potential or contingent Damages where the full amount of Damages is not then
readily  determinable  if the Escrow Claim sets forth a good faith basis for any
such potential or contingent  Damages.  Purchaser shall have the right to offset
the amount set forth in any Escrow  Claim  against any  portion of the  Escrowed
Funds by (i) instructing the Escrow Agent to immediately establish and set aside
from the Escrowed  Funds a reserve in an amount equal to the good faith estimate
of the  Damages,  as shall be set  forth in such  Escrow  Claim  (the  "Reserved
Amount"),  and (ii)  requesting  that the Escrow  Agent either (A) make a prompt
distribution  to the  Indemnified  Party of the Reserved  Amount (subject to the
time periods set forth in Section 4.4) and/or (B) with respect to any  potential
or contingent  Damages,  establish  and set aside the Reserved  Amount until the
amount of the Escrow Claim is determinable and resolved, or not disputed, as set
forth  herein.  From time to time,  Purchaser  (or  Parent)  may amend any prior
Escrow Claim to reflect  additional  Damages under such Escrow Claim. The amount
set aside or reserved for any Escrow Claim shall be available to be set aside or
reserved for one or more other  Escrow  Claims at the same time.  The  aggregate
amount of all Escrow Claims at any time may exceed the  aggregate  amount of the
Escrowed Funds.

     4.3 Contest. Seller may contest any Escrow Claim by giving the Escrow Agent
and Purchaser (or Parent) written notice of such contest within thirty (30) days
after  receipt of such  Escrow  Claim.  The notice of  contest  shall  include a
statement  of the grounds of such contest in  reasonable  detail and shall state
the amount of any such Escrow Claim by an Indemnified Party that Seller does not
dispute.  If such Escrow Claim remains in dispute and unresolved for thirty (30)
days following  receipt of the written notice of contest,  Purchaser (or Parent)
and Seller shall notify the Escrow Agent that the disputed portion of the Escrow

                                      C-5
<PAGE>
Claim shall be resolved in  accordance  with Section 11.4 of the Asset  Purchase
Agreement,  and the Escrow Agent shall continue to hold the disputed  portion of
the Escrow Claim in accordance with Sections 4.4, 4.5 and 5.2.

     4.4  Distribution.  If (i) a  certificate  executed by both  Purchaser  (or
Parent)  and  Seller  is  delivered  to  the  Escrow  Agent  instructing  that a
distribution  should be made from the  Escrowed  Funds or (ii) the Escrow  Agent
does not receive written notice from Seller contesting  distribution pursuant to
the Escrow Claim  within  thirty (30) days after the Escrow  Agent's  receipt of
such Escrow Claim,  then the Escrow Agent shall promptly deliver to Purchaser an
amount from the Escrowed Funds equal to the dollar amount of the Escrow Claim as
instructed or as set forth in the Escrow Claim, as the case may be.

     4.5 Distribution  Following Contest.  If Seller timely contests such Escrow
Claim pursuant to Section 4.3 above, the Escrow Agent shall (A) promptly deliver
to Purchaser  (or Parent) an amount from the Escrowed  Funds equal to the dollar
amount  claimed by  Purchaser  (or  Parent) in its written  notice  which is not
subject to such contest and (B) deliver an additional  amount,  if any, from the
Escrowed Funds to Purchaser (or Parent)  promptly upon receipt of either:  (i) a
copy of a written  settlement  agreement  signed by  Purchaser  (or  Parent) and
Seller, (ii) a copy of an arbitration award or report, as applicable,  certified
by the  presenting  party  as being  final  and no  longer  subject  to  further
proceedings  or appeal and  having  been  awarded  pursuant  to the  arbitration
procedures set forth in Section 11.4 of the Asset Purchase  Agreement or (iii) a
copy of a final  order or  judgment by a court of  competent  jurisdiction  from
which no appeal  may be taken or for which the time to  appeal  has  expired  as
certified by the presenting  party.  The amount to be delivered to Purchaser (or
Parent) by the Escrow Agent under this  Section  4.5, if any,  shall be equal to
the dollar amount as set forth in such settlement  agreement,  arbitration award
or judgment, as applicable.

     5. Release of Escrowed Funds.

     5.1 Release  Date.  The date that is twelve  (12) months  after the Closing
Date shall be the "Release  Date" Within two (2) business days after the Release
Date and receipt by the Escrow Agent of joint written  instructions of Purchaser
(or Parent) and Seller, and subject to Section 5.2 below, the Escrow Agent shall
disburse  to Seller an amount  (which  shall be set forth in such  instructions)
equal to the residual  amount of the Escrowed  Funds,  if any, less any Reserved
Amount or any other  pending  Escrow  Claims made by Purchaser (or Parent) which
have not been resolved (a "Pending Claim Amount") as of the Release Date.

     5.2 Pending  Claim  Amount.  Any Pending Claim Amount shall be released (in
whole or in part) to Purchaser  (or Parent) or Seller,  as the case may be, upon
receipt of any of the following:  (i) a copy of a written  settlement  agreement
signed by Purchaser (or Parent) and Seller,  (ii) a copy of an arbitration award
or report,  as applicable,  pursuant to the arbitration  procedures set forth in
Section 11.4 of the Asset Purchase Agreement or (iii) a copy of a final order or
judgment by a court of competent  jurisdiction from which no appeal may be taken
or for which the time to appeal  has  expired.  The  amount to be  delivered  to
Purchaser  (or Parent) or Seller,  as the case may be, by the Escrow Agent under
this  Section 5.2, if any,  shall be equal to the dollar  amount as set forth in
such settlement  agreement,  arbitration  award,  arbitration  report,  order or
judgment,  as  applicable.  If some but not all of the Pending  Claim  Amount is

                                      C-6
<PAGE>
released,  the Escrow Agent shall  continue to hold the remaining  Pending Claim
Amount until such time as it receives  further  joint  instructions,  settlement
agreement,  arbitration award or a final order or judgment,  as described in the
foregoing sentence.

     5.3 Distributions Upon Written Instructions.  Notwithstanding anything else
to the  contrary  herein,  the Escrow  Agent shall make  distributions  from the
Escrowed Funds at any time and from time to time upon,  and in accordance  with,
joint written instructions from Purchaser (or Parent) and Seller.

     5.4 Security  Procedures.  Notwithstanding  anything to the contrary as set
forth in Section 8.3, any  instructions  setting  forth,  claiming,  containing,
objecting  to, or in any way related to the transfer or  distribution  of funds,
including,  but not limited to, any such funds  transfer  instructions  that may
otherwise be set forth in a written instruction  permitted pursuant to Section 4
of this Escrow  Agreement,  may be given to the Escrow  Agent only by  confirmed
facsimile and no instruction  for or related to the transfer or  distribution of
the  Escrowed  Funds,  or any portion  thereof,  shall be deemed  delivered  and
effective  unless the Escrow Agent actually shall have received such instruction
by  facsimile  at the number  provided  to  Purchaser,  Parent and Seller by the
Escrow  Agent in  accordance  with  Section  8.3 and as further  evidenced  by a
confirmed transmittal to that number.

     (a) In the event funds  transfer  instructions  are  received by the Escrow
Agent by facsimile,  the Escrow Agent is authorized to seek confirmation of such
instructions  by  telephone  call-back  to the person or persons  designated  on
Schedule 2 hereto, and the Escrow Agent may rely upon the confirmation of anyone
purporting to be the person or persons so designated.  The persons and telephone
numbers for  call-backs may be changed only in a writing  actually  received and
acknowledged by the Escrow Agent. The Escrow Agent and the beneficiary's bank in
any  funds  transfer  may  rely  solely  upon any  account  numbers  or  similar
identifying numbers provided by Purchaser,  Parent or Seller to identify (i) the
beneficiary,  (ii) the  beneficiary's  bank or (iii) an  intermediary  bank. The
Escrow  Agent may  apply any of the  Escrowed  Funds  for any  payment  order it
executes using any such  identifying  number,  even when its use may result in a
person other than the beneficiary being paid, or the transfer of funds to a bank
other than the beneficiary's bank or an intermediary bank designated.

     (b) The Parties  acknowledge that the Escrow Agent is authorized to use the
following funds transfer instructions to disburse any funds due to Purchaser (or
Parent) under this Escrow Agreement  without a verifying  call-back as set forth
in Section 5.4(a) above:

          Bank Name: Bank of America
          Bank Address: 780 Blossom Hill Road, Los Gatos, CA 95032
          ABA Number:
          Account Name: Pathion, Inc.
          Account Number:

     (c) The Parties  acknowledge that the Escrow Agent is authorized to use the
following funds transfer  instructions to disburse any funds due to Seller under
this  Escrow  Agreement  without a verifying  call-back  as set forth in Section
5.4(a) above:

                                      C-7
<PAGE>
     Seller's Bank account information:   Bank name:
                                          Bank Address:
                                          ABA number:
                                          Account name:
                                          Account number:

     (d) The Parties  acknowledge that the security procedures set forth in this
Section 5.4 are commercially reasonable.

     6. Termination.  Unless terminated  earlier with the written consent of the
Parties  hereto,  this Escrow  Agreement  shall  remain in full force and effect
until all of the Escrowed Funds shall have been released in accordance  with the
terms hereof.

     7. Patriot Act Disclosure/Taxpayer Identification Numbers/Tax Reporting.

     7.1 Patriot Act  Disclosure.  Section 326 of the Uniting and  Strengthening
America by  Providing  Appropriate  Tools  Required to  Intercept  and  Obstruct
Terrorism Act of 2001 ("USA PATRIOT Act") requires the Escrow Agent to implement
reasonable  procedures  to verify the  identity  of any person  that opens a new
account with it. Accordingly,  Purchaser and Seller acknowledge that Section 326
of the USA PATRIOT Act and the Escrow Agent's identity  verification  procedures
require  the  Escrow  Agent to obtain  information  which may be used to confirm
Purchaser's,  Parent's and Seller's identities,  including,  without limitation,
name,  address  and  (for  entities)   organizational   documents  ("identifying
information").  Purchaser,  Parent and Seller  agree to provide the Escrow Agent
with and  consent to the Escrow  Agent  obtaining  from third  parties  any such
identifying  information  required as a condition  of opening an account with or
using any service provided by the Escrow Agent.

     7.2 Certification and Tax Reporting.

     (a) Each of Purchaser, Parent and Seller has provided to the Escrow Agent a
fully executed  Internal  Revenue  Service ("IRS") Form W-8, or W-9 and/or other
required documentation relating to tax reporting and withholding as requested by
the Escrow Agent.

     (b) To the extent  permitted  by  applicable  law,  for the purpose of U.S.
Federal  and all other  applicable  Taxes  based on income,  the Parties and the
Escrow Agent shall treat Purchaser as the owner of the Escrowed Funds unless and
until released to Seller pursuant to Section 4 or to the Escrow Agent. Purchaser
will include in computing its taxable income all interest or other income earned
on the  Escrowed  Funds  through  the date of  release  of such  funds to Seller
pursuant to Section 5 under this Escrow Agreement as income and the Escrow Agent
shall consistently report such income to the IRS, or any other Taxing Authority,
on IRS Form  1099-INT  or  1042-S  (or  other  appropriate  form) to the  extent
required  by law,  whether or not said income has been  distributed  during such
year.  The Escrow  Agent shall  disburse on request of Purchaser  forty  percent
(40%) of such items of income.

     (c)  Prior  to any  disbursement  of the  Escrowed  Funds  to  Seller,  the
Purchaser shall provide to the Escrow Agent a schedule indicating the allocation

                                      C-8
<PAGE>
of such  disbursement  between (i)  principal  and (ii)  imputed  interest to be
reported on IRS Form 1099-INT or 1042S or original issue discount to be reported
on IRS Form 1099-OID,  along with any other information necessary for the Escrow
Agent to properly  prepare any such  required  Tax  reporting.  The Escrow Agent
shall (x) properly  report the amount of any  disbursement of the Escrowed Funds
on IRS Form 1099-B, 1099-INT,  1099-OID, 1042-S or other appropriate form as may
be required by law based upon the  information  so provided,  (y) withhold  from
such disbursement any amount that it deems appropriate under applicable Tax laws
to be withheld with respect to such  disbursement  and (z) timely remit all such
withheld amounts to the appropriate Taxing  Authorities.  The Escrow Agent shall
be entitled to rely on such  information  provided by the Purchaser and shall be
indemnified by the Purchaser and Parent for any tax, interest or penalty arising
from the  inaccuracy of such  information  or late filing caused by a failure to
timely provide such information to the Escrow Agent.

     (d) Purchaser, Parent and Seller each hereby represents and warrants to the
Escrow  Agent that Seller shall have  executed and  delivered to Purchaser on or
before the  Closing  Date a FIRPTA  certification  meeting  the  requirement  of
Treasury Regulations Section 1.1445-2(b)(2).

     8. Miscellaneous.

     8.1 No Liability.  Seller on the one hand, and Purchaser on the other hand,
acknowledges  that the other  Party  shall not have any  liability  for any act,
omission or default by the Escrow Agent in performing its obligations  hereunder
or for any loss on any  investments  of the  Escrowed  Funds,  and agrees not to
assert any claims  against the other Party with respect to any such matters.  No
Party to this Agreement is liable to any other Party for losses due to, or if it
is unable to perform its  obligations  under the terms of this Escrow  Agreement
because of, acts of God,  fire,  war,  terrorism,  floods,  strikes,  electrical
outages,  equipment or transmission  failure,  or other causes reasonably beyond
such Party's control.

     8.2 Governing Law. This Escrow Agreement shall be governed by and construed
under the laws of the State of  California,  regardless  of the laws that  might
otherwise govern under applicable  principles of conflicts of law thereof.  With
respect  to  any  dispute  by or  against  the  Escrow  Agent,  (a)  each  Party
irrevocably waives any objection on the grounds of venue,  forum  non-conveniens
or any similar grounds and irrevocably consents to service of process by mail or
in any other manner permitted by applicable law and consents to the jurisdiction
of the courts located in the State of California,  (b) to the extent that in any
jurisdiction  either  Purchaser  or Seller may now or  hereafter  be entitled to
claim for itself or its assets, immunity from suit, execution attachment (before
or after judgment),  or other legal process,  such Party shall not claim, and it
hereby  irrevocably  waives,  such  immunity,  and (c) each Party further hereby
waives  any right to a trial by jury with  respect to any  lawsuit  or  judicial
proceeding  arising or relating to this Escrow Agreement.  All other disputes or
matters  involving  any of  Purchaser  or Seller  shall be governed by the Asset
Purchase Agreement.

     8.3 Notices.  All notices and other  communications  hereunder  shall be in
writing and (except for communications from the Parties setting forth, claiming,
containing,  objecting to, or in any way related to the transfer or distribution
of funds,  including,  but not limited to, funds transfer  instructions,  all of
which shall be specifically  governed by Section 8.3 below) shall be deemed duly

                                      C-9
<PAGE>
given  after it has been  received  if it is sent or  served  (a) on the date of
confirmation  of receipt (or, the first  Business Day following  such receipt if
the date is not a Business  Day) of  transmission  by fax, or (b) on the date of
confirmation  of receipt (or, the first  Business Day following  such receipt if
the date is not a Business Day) if delivered by a nationally  recognized courier
service,  or (c) by prepaid  registered  mail,  return  receipt  requested.  All
notices  hereunder  shall be  delivered  as set forth  below or pursuant to such
other  instructions as may be designated in writing by the party to receive such
notice:

          If to Purchaser:

          Pathion Mining Inc. c/o Pathion, Inc.
          16450 Los Gatos Blvd., Ste 207
          Los Gatos, CA 95032

          with a copy to:

          Holden W. Stein
          Stein Law Group
          505 Sansome Street, Ste 1200
          San Francisco, CA 94111

          If to Seller:

          [__________________]

          with a copy to:

          [__________________]

          If to the Escrow Agent:

          [__________________]

     Notwithstanding  the above, in the case of communications  delivered to the
Escrow Agent, such communications shall be deemed to have been given on the date
received by an officer of the Escrow  Agent or any  employee of the Escrow Agent
who reports directly to any such officer at the above-referenced  office. In the
event that the Escrow Agent,  in its sole  discretion,  shall determine that any
emergency exists,  the Escrow Agent may use such other means of communication as
the Escrow Agent deems appropriate. Any notices or communications received after
5pm ET,  shall be deemed to have been  received on the next  Business  Day.  For
purposes  of this  Agreement,  "Business  Day"  shall  mean any day other than a
Saturday,  Sunday  or any other day on which the  Escrow  Agent  located  at the
notice  address set forth above is  authorized  or required by law or  executive
order to remain closed.

                                      C-10
<PAGE>
     8.4  Settlement  of  Disputes.  The  Escrow  Agent  shall  be under no duty
whatsoever to institute or defend any proceedings in connection with any dispute
by or among the parties hereto. Prior to the settlement of any such dispute, the
Escrow Agent is  authorized  and directed to retain in its  possession,  without
liability to anyone,  that portion of the Escrowed Funds which is the subject of
such dispute.

     8.5  Compliance  with Court Orders.  In the event that any escrow  property
shall be attached,  garnished or levied upon by any court order, or the delivery
thereof  shall be  stayed  or  enjoined  by an order of a court,  or any  order,
judgment  or decree  shall be made or entered by any court order  affecting  the
property  deposited  under this  Escrow  Agreement,  the Escrow  Agent is hereby
expressly authorized, in its sole discretion, to obey and comply with all writs,
orders or decrees so entered or issued,  which it is advised by legal counsel of
its own choosing is binding upon it, whether with or without  jurisdiction,  and
in the event that the Escrow Agent obeys or complies  with any such writ,  order
or decree it shall  not be liable to any of the  parties  hereto or to any other
person,   entity,   firm  or   corporation,   by  reason   of  such   compliance
notwithstanding such writ, order or decree be subsequently  reversed,  modified,
annulled, set aside or vacated.

     8.6 Headings. The headings in this Escrow Agreement are intended solely for
convenience  of reference  and shall be given no effect in the  construction  or
interpretation of this Escrow Agreement.

     8.7   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together  shall  constitute one and the same  instrument.  All signatures of the
Parties to this Escrow  Agreement  may be  transmitted  by  facsimile,  and such
facsimile will, for all purposes, be deemed to be the original signature of such
Party whose signature it reproduces, and will be binding upon such Party.

     8.8  Inconsistencies.  In the event that any claim of inconsistency  arises
between this Escrow Agreement and the terms of the Asset Purchase Agreement,  as
they may from time to time be amended, the terms of the Asset Purchase Agreement
shall  control,  except  with  respect to the  duties,  liabilities  and rights,
including compensation and indemnification, of the Escrow Agent as escrow agent,
which shall be controlled by the terms of this Escrow Agreement.

     8.7  Entire  Agreement.  This  Escrow  Agreement  and  the  Asset  Purchase
Agreement,  together with the schedules and exhibits  hereto and thereto and the
other  agreements  among the parties  hereto as  contemplated  by or referred to
herein and  therein,  constitute  the entire  agreement  among the Parties  with
respect to the subject  matter  hereof and supersede  all prior  agreements  and
understandings,  both  written and oral,  among the parties  with respect to the
subject matter hereof.

     8.8   Modifications,   Waivers.   Except  for  change  to  funds   transfer
instructions as provided in Section 5.3, the provisions of this Escrow Agreement
may be waived, altered, amended or supplemented,  in whole or in part, only by a
writing signed by all of the Parties.

                                      C-11
<PAGE>
     8.9 Benefit;  Assignment.  This Escrow  Agreement shall be binding upon and
inure  to the  benefit  of the  Parties  and  their  respective  successors  and
permitted  assigns.  Neither  this  Escrow  Agreement  nor any right or interest
hereunder  may be assigned in whole or in part by the Escrow Agent or any Party,
except as provided in Section 2.6, without the prior consent of the Escrow Agent
and the other Parties.

     8.10 Specific  Performance.  If any Party hereto refuses to comply with, or
at any time  violates or attempts to violate,  any term,  covenant or  agreement
contained in this Escrow  Agreement,  any other Party hereto may, by  injunctive
action,  compel the defaulting  party to comply with, or refrain from violating,
such term, covenant or agreement, and may, by injunctive action, compel specific
performance of the obligations of the defaulting party.

     8.12  Enforceability.   If  any  provision  of  this  Escrow  Agreement  is
determined to be prohibited or  unenforceable by reason of any applicable law of
a  jurisdiction,  then  such  provision  shall,  as  to  such  jurisdiction,  be
ineffective  to the  extent  of such  prohibition  or  unenforceability  without
invalidating  the remaining  provisions  thereof,  and any such  prohibition  or
unenforceability   in  such   jurisdiction   shall  not   invalidate  or  render
unenforceable such provisions in any other  jurisdiction.  A person who is not a
party to this  Agreement  shall have no right to enforce any term of this Escrow
Agreement.  Purchaser and Seller each represent,  warrant and covenant that each
document,  notice,  instruction or request  provided by such Party to the Escrow
Agent shall comply with applicable laws and  regulations.  Where,  however,  the
conflicting provisions of any such applicable law may be waived, they are hereby
irrevocably waived by the parties hereto to the fullest extent permitted by law,
to the end that this Escrow Agreement shall be enforced as written.

     8.13 Remedies.  Except as expressly provided in Section 2.5 above,  nothing
in this Escrow Agreement, whether express or implied, shall be construed to give
to any person or entity  other than the  Parties any legal or  equitable  right,
remedy,  interest or claim under or in respect of this Escrow  Agreement  or any
funds escrowed hereunder.

     8.14 Further  Assurances.  Subject to the terms and conditions hereof, each
of the Parties  shall use its best efforts to take,  or cause to be taken,  such
action to execute and  deliver,  or cause to be  executed  and  delivered,  such
additional  documents and instruments and to do, or cause to be done, all things
reasonably  necessary,  proper or advisable  under the provisions of this Escrow
Agreement  and  under  applicable  law to  consummate  and  make  effective  the
transactions contemplated by this Escrow Agreement.

                    [Signatures appear on following page(s).]

                                      C-12
<PAGE>
     IN WITNESS WHEREOF,  the parties hereto have executed this Escrow Agreement
as of the date first set forth above.

                                 PURCHASER:

                                 Pathion Mining, Inc.
                                 a Nevada corporation

                                 By:
                                    --------------------------------------------
                                 Name:  Daryl Stemm
                                 Title: CEO

                                 PARENT:

                                 Pathion, Inc.
                                 a Delaware corporation

                                 By:
                                    --------------------------------------------
                                 Name:  Mike Liddle
                                 Title: CEO

                                 ESCROW AGENT:

                                 [---------]

                                 By:
                                    --------------------------------------------
                                 Name:
                                 Title:

                                 SELLER:

                                 Lithium Corporation
                                 a Nevada corporation

                                 By:
                                    --------------------------------------------
                                 Name:
                                 Title: President

                                 By:
                                    --------------------------------------------
                                 Name:
                                 Title: Secretary

                                      C-13
<PAGE>
                                   SCHEDULE 1

                                      C-14
<PAGE>
                                   SCHEDULE 2

              Telephone Number(s) and authorized signature(s) for
            Person(s) Designated to give Funds Transfer Instructions

If from Purchaser:

     Name                        Telephone Number           Signature
     ----                        ----------------           ---------

1. Daryl Stemm                   (408) 484-9016         __________________

2. Michael Liddle                (408) 484-9015         __________________

3. [______________]              [____________]         __________________

If from Seller:

     Name                        Telephone Number           Signature
     ----                        ----------------           ---------

1. [______________]              [____________]         __________________

                     Telephone Number(s) for Call-Backs and
           Person(s) Designated to Confirm Funds Transfer Instructions

If from Purchaser:

     Name                        Telephone Number
     ----                        ----------------

1. Daryl Stemm                   (408) 484-9016

2. Michael Liddle                (408) 484-9015

If from Seller:

     Name                        Telephone Number
     ----                        ----------------

1. [______________]              [____________]

                                      C-15
<PAGE>
                                   EXHIBIT D

                              ASSUMPTION AGREEMENT

     This Assumption Agreement (the "Agreement"), effective as of [Month] , 2014
(the  "Effective  Date"),  is by  and  between  Lithium  Corporation,  a  Nevada
corporation   ("Seller"),   and  Pathion  Mining,  Inc.,  a  Nevada  corporation
("Purchaser").

     A.  Seller  and  Purchaser  have  entered  into a  certain  Asset  Purchase
Agreement,  dated  as of  August  ___,  2014  (the  "Purchase  Agreement").  All
capitalized  terms used in this  Agreement but not otherwise  defined herein are
given the meanings set forth in the Purchase Agreement.

     B. Under the Purchase Agreement,  among other things,  Seller has agreed to
sell,  convey,  transfer,  assign and deliver to  Purchaser,  all of its rights,
title and  interests  in the Assets  (subject to the Assumed  Liabilities),  and
Purchaser  has  agreed  to accept  the  Assets  and  assume  all of the  Assumed
Liabilities under the Contracts set out in Exhibit B to the Agreement.

     NOW,  THEREFORE,  in  consideration  of the  mutual  covenants,  terms  and
conditions set forth herein, and for other good and valuable consideration,  the
receipt and sufficiency of which are hereby  acknowledged,  the parties agree as
follows:

     1.  Assumption.  Purchaser  hereby assumes all of the Assumed  Liabilities,
which are limited to Seller's  duties and obligations  under the Contracts,  and
agrees to pay, perform and discharge, as and when due, all of the obligations of
Seller under the Assumed Contracts accruing on and after the Effective Date.

     2. Terms of the Purchase  Agreement.  The terms of the Purchase  Agreement,
including,  but not  limited  to, the  representations,  warranties,  covenants,
agreements and  indemnities  relating to the Assets are  incorporated  herein by
this   reference.   The   parties   hereto   acknowledge   and  agree  that  the
representations,  warranties, covenants, agreements and indemnities contained in
the Purchase  Agreement shall not be superseded  hereby but shall remain in full
force and effect to the extent provided therein. In the event of any conflict or
inconsistency  between the terms of the Purchase Agreement and the terms hereof,
the terms of the Purchase Agreement shall govern.

     3.  Governing  Law.  This  Agreement  shall be governed by and construed in
accordance  with the internal  laws of the State of  California  without  giving
effect to any choice or conflict of law  provision or rule (whether of the State
of California or any other jurisdiction).

     4.  Counterparts.  This Agreement may be executed in counterparts,  each of
which shall be deemed an original,  but all of which together shall be deemed to
be one and the same  agreement.  A signed copy of this  Agreement  delivered  by
facsimile,  email or other means of electronic  transmission  shall be deemed to
have the same  legal  effect as  delivery  of an  original  signed  copy of this
Agreement.

     5.  Further  Assurances.  Each of the  parties  hereto  shall  execute  and
deliver,  at the reasonable  request of the other party hereto,  such additional
documents, instruments, conveyances and assurances and take such further actions
as such other party may reasonably  request to carry out the  provisions  hereof
and give effect to the transactions contemplated by this Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                      D-1
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties  have  executed  this  Agreement  to be
effective as of the Effective Date.

                                 SELLER:

                                 Lithium Corporation,
                                 A Nevada corporation

                                 -----------------------------------------------
                                 __________, President

                                 -----------------------------------------------
                                 __________, Secretary

                                 Address:
                                 5976 Lingering Breeze St.
                                 Las Vegas, NV 89148

                                 PURCHASER:

                                 Pathion Mining, Inc.
                                 a Nevada corporation

                                 By: /s/Daryl Stemm
                                    --------------------------------------------
                                 Title: CEO

                                 Address:
                                 16450 Los Gatos Blvd, Suite 207
                                 Los Gatos, CA 95032
                                 Fax: (408) 356-3828

                                      D-2
<PAGE>
                                    EXHIBIT E

                              EXCLUDED LIABILITIES

                                      None.

                                      E-1
<PAGE>
                                   EXHIBIT F

                            NONCOMPETITION AGREEMENT

     This Noncompetition Agreement (the "Agreement"),  effective as of [Month ],
2014 (the "Effective  Date"),  is by and between Lithium  Corporation,  a Nevada
Corporation   ("Seller")  and  Pathion  Mining,   Inc.,  a  Nevada   corporation
("Purchaser").

     A.  Seller  and  Purchaser  have  entered  into a  certain  Asset  Purchase
Agreement,  dated  as  of  July  ___,  2014  (the  "Purchase  Agreement").   All
capitalized  terms used in this  Agreement but not otherwise  defined herein are
given the meanings set forth in the Purchase Agreement.

     B. Seller  consistent with and according to the terms and conditions of the
Purchase  Agreement  has  agreed to  restrict  his  business  activities  in the
Lithium-Graphite  industries  according to the terms and conditions set forth in
this Agreement.

     NOW,  THEREFORE,  in  consideration  of the  mutual  covenants,  terms  and
conditions set forth herein, and in connection with the sale of the Assets under
the  Purchase  Agreement,  other  payments  under the  Purchase  Agreement,  the
covenants,  and conditions to be paid, performed, and observed by Purchaser, and
this Agreement,  and for other good and valuable consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Noncompetition.

     (a) Seller shall not, directly or indirectly,  carry on or engage in, as an
owner,  manager,  operator,  employee,  salesman,  agent,  consultant,  or other
participant, the business of Lithium or Graphite mining or any similar business.
This  restriction  shall terminate one (1) year(s) from the date of execution of
this  Agreement.  The previous  statements  notwithstanding,  the Purchaser does
consent to the Seller's  continued  ownership of the Mt.  Heimdal mining claims,
however,  the Seller  shall not  perform any  development  work on that block of
claims for a period that shall terminate one (1) year from the date of execution
of this Agreement.

     (b) This covenant not to compete is intended as a separate covenant. If any
one of the covenants in this Agreement is declared invalid for any reason,  this
ruling shall not affect the  validity of the  remainder  of the  covenants.  The
other  covenants in the Agreement shall remain in effect as if the provision had
been executed  without the invalid  covenants.  The parties  hereby declare that
they  intend  that the  remaining  covenants  of the  provision  continue  to be
effective without any covenants that have been declared invalid.

     (c) If Seller  breaches the  obligation not to compete as set forth in this
Section,  Seller  shall  pay to  Purchaser  as  liquidated  damages  the  sum of
Twenty-five  Thousand Dollars ($25,000) per month for the period in which Seller
continues to breach the  obligation not to compete.  Seller and Purchaser  agree
that  the  amount  stated  as  liquidated   damages  is  reasonable   under  the
circumstances existing at the time that this Agreement was executed.

     2. Right of First Refusal on Battery Material Mining Assets.  Seller hereby
grants to Purchaser a right of first refusal for battery material mining assets.
In the event that within five (5) years  following  the date of this  Agreement,
Seller  receives  a bona  fide  offer  from a third  party to  purchase  battery
material  mining assets or a partial  interest  therein from the Seller,  Seller

                                      F-1
<PAGE>
shall promptly notify Purchaser in writing of the offer, including the amount of
payment  proposed,  and other terms and  conditions of the offer.  The Purchaser
shall have fifteen (15)  business  days within which to notify Seller in writing
whether  Purchaser  agrees to match the terms and conditions of the  third-party
offer, and shall have thirty (30) additional business days after such notice, to
tender  a  contract  memorializing  such  terms  and  conditions.  In the  event
Purchaser  fails to give written notice of its decision to match the third party
offer  within the time  required  under this  Section 2, Seller shall be free to
accept the bona fide third party offer.

     3. Terms of the Purchase  Agreement.  The terms of the Purchase  Agreement,
including,  but not  limited  to, the  representations,  warranties,  covenants,
agreements and  indemnities  relating to the Assets are  incorporated  herein by
this   reference.   The   parties   hereto   acknowledge   and  agree  that  the
representations,  warranties, covenants, agreements and indemnities contained in
the Purchase  Agreement shall not be superseded  hereby but shall remain in full
force and effect to the extent provided therein. In the event of any conflict or
inconsistency  between the terms of the Purchase Agreement and the terms hereof,
the terms of the Purchase Agreement shall govern.

     4.  Governing  Law.  This  Agreement  shall be governed by and construed in
accordance  with the internal  laws of the State of  California  without  giving
effect to any choice or conflict of law  provision or rule (whether of the State
of California or any other jurisdiction).

     5.  Counterparts.  This Agreement may be executed in counterparts,  each of
which shall be deemed an original,  but all of which together shall be deemed to
be one and the same  agreement.  A signed copy of this  Agreement  delivered  by
facsimile,  email or other means of electronic  transmission  shall be deemed to
have the same  legal  effect as  delivery  of an  original  signed  copy of this
Agreement.

     6.  Further  Assurances.  Each of the  parties  hereto  shall  execute  and
deliver,  at the reasonable  request of the other party hereto,  such additional
documents, instruments, conveyances and assurances and take such further actions
as such other party may reasonably  request to carry out the  provisions  hereof
and give effect to the transactions contemplated by this Agreement.

     7.  Remedies.  In the  event of a breach  or  default  by any  party in the
performance of its obligations hereunder, the non-defaulting party(ies) shall be
entitled  to  exercise  any and all  available  remedies,  at law or in  equity,
including, without limitation, an action for specific performance.

                            [SIGNATURE PAGE FOLLOWS]

                                      F-2
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties  have  executed  this  Agreement  to be
effective as of the Effective Date.

                                 SELLER:

                                 Lithium Corporation,
                                 A Nevada corporation

                                 -----------------------------------------------
                                 __________, President

                                 -----------------------------------------------
                                 __________, Secretary

                                 Address:
                                 5976 Lingering Breeze St.
                                 Las Vegas, NV 89148

                                 PURCHASER:

                                 Pathion Mining, Inc.
                                 a Nevada corporation

                                 By: /s/Daryl Stemm
                                    --------------------------------------------
                                 Title: CEO

                                 Address:
                                 16450 Los Gatos Blvd, Suite 207
                                 Los Gatos, CA 95032
                                 Fax: (408) 356-3828

                                      F-3
<PAGE>
                                   EXHIBIT G

                            BILL OF SALE AND ASSIGNMENT

     This  Bill of Sale  ("Bill  of  Sale")  is  executed  and  delivered  as of
[Month_______],  2014, by LITHIUM CORPORATION,  a Nevada corporation ("Seller").
This Bill of Sale relates to an Asset Purchase  Agreement of August_____,  2014,
between PATHION MINING, INC., a Nevada corporation ("Purchaser") and Seller (the
"Agreement").  Capitalized terms used herein without  definition are used herein
as defined in the Agreement.

     For good and valuable consideration,  Seller hereby transfers,  assigns and
conveys to Purchaser,  all of Seller's right title and interest in, to and under
the Assets sold to Purchaser as set forth in the Agreement.

     Seller  represents  and  warrants  to  Purchaser  that  Seller has good and
marketable  title to all of the Assets  free and clear of any liens,  claims and
encumbrances of any other person except as set forth in the Agreement.

     Seller,  by its execution of this Bill of Sale, and the  Purchaser,  by its
acceptance  of this Bill of Sale,  each  hereby  acknowledges  and  agrees  that
neither the  representations  and  warranties nor the rights and remedies of any
party under the Agreement shall be deemed to be enlarged, modified or altered in
any way by this instrument.

     EXCEPT AS EXPRESSLY PROVIDED IN THE AGREEMENT, THE ASSETS SOLD TO PURCHASER
ARE BEING  SOLD ON AN "AS IS" BASIS  WITHOUT  WARRANTY  OF ANY KIND,  AND SELLER
DISCLAIMS  ALL  WARRANTIES  WHETHER  EXPRESS OR IMPLIED,  WRITTEN OR ORAL,  WITH
RESPECT TO THE ASSETS SOLD TO PURCHASER,  INCLUDING ALL  WARRANTIES OF TITLE AND
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

                             [SIGNATURE PAGE FOLLOWS]

                                      G-1
<PAGE>

     IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of the day and
year first above written.

                                 SELLER:
                                 Lithium Corporation,
                                 a Nevada corporation

                                 -----------------------------------------------
                                 __________, President

                                 -----------------------------------------------
                                 __________, Secretary

                                 Address:
                                 5976 Lingering Breeze St.
                                 Las Vegas, NV 89148

                                 PURCHASER:
                                 Pathion Mining, Inc.,
                                 a Nevada corporation

                                 By: /s/Daryl Stemm
                                    --------------------------------------------
                                 Title: CEO

                                 Address:
                                 16450 Los Gatos Blvd, Suite 207
                                 Los Gatos, CA 95032
                                 Fax: (408) 356-3828

                                       G-2
<PAGE>
                                    EXHIBIT H

                                 EXCLUDED ASSETS

                                      None.

                                      H-1
<PAGE>
                                    EXHIBIT I

                                     FORM OF

                                  PATHION, INC.

                       RESTRICTED STOCK PURCHASE AGREEMENT

     This Restricted  Stock Purchase  Agreement (the  "Agreement") is made as of
the ____ day of  __________,  20__ by and  between  Pathion,  Inc.,  a  Delaware
corporation  (the  "Company"),  and Lithium  Corporation,  a Nevada  corporation
(individually, the "Stockholder," and collectively, the "Stockholders").

     In  consideration of the mutual  covenants and  representations  herein set
forth, the Company and Stockholder agree as follows:

     1. Purchase and Sale of the Shares; Restrictions.

     (a) Purchase and Sale of the Shares. Subject to the terms and conditions of
this  Agreement,  the  Company  hereby  agrees  to  sell  to  Stockholder,   and
Stockholder agrees to purchase from the Company, five-hundred thousand (500,000)
shares of the Company's  common stock (the "Shares") in  consideration of and in
exchange for assets owned by Stockholder (the "Assets"),  according to the terms
of  that  certain  Asset  Purchase  Agreement  by and  among  the  Company,  the
Stockholder,  and Pathion  Mining,  Inc., a Nevada  corporation  (the  "Purchase
Agreement")  at the price set forth in the  Purchase  Agreement  (the  "Purchase
Price").  The Shares  delivered  by Company  are partial  consideration  for the
Assets in addition to cash as set forth in the Purchase Agreement.

     (b)  Closing.  The purchase and sale of the Shares shall occur at a closing
(the  "Closing")  to be held  concurrently  with  the  closing  of the  Purchase
Agreement,  where the  Stockholder  shall  deliver to the Company  the  Purchase
Price.  The Company will,  promptly after execution of this  Agreement,  issue a
stock  certificate  representing  the  Shares  registered  in  the  name  of the
Stockholder.

     (c) Restrictions On Transfer. Except as may expressly be provided otherwise
in this  Agreement,  no  Stockholder  shall  transfer  any  Shares  held by such
Stockholder  or any rights or interests  therein,  unless the transfer meets the
requirements  of this  Agreement.  For  purposes  of this  Agreement,  the  term
"transfer" shall include a voluntary or involuntary sale, assignment, grant of a
security interest, alienation, pledge, encumbrance, gift or other disposition of
Shares or any rights or interest therein. Any purported transfer in violation of

                                      I-1
<PAGE>
any provision of this Agreement shall be void ab initio and shall not operate to
transfer any interest or title to the purported transferee.

     2. Sale of Shares to Third Party.

     (a)  Transfers.  Before  a  Stockholder  (the  "Selling  Stockholder")  may
transfer  any Shares to a third  party,  such  Stockholder  must obtain  written
approval  from the  Company  approving  any such sale.  All Shares  owned by the
Selling  Stockholder (the "Offered Shares") must first be offered to the Company
and then to the other Stockholders (the "Nonselling Stockholders") in the manner
set forth in the following provisions of this Section 2.

     (b) Option Notice.  The Selling  Stockholder shall deliver a written notice
(the "Option Notice") to the Company and the Nonselling  Stockholders expressing
such Selling  Stockholder's  desire to transfer the Offered  Shares,  naming the
proposed  transferee and specifying the number of Shares to be transferred,  the
price of such Shares, and all other terms and conditions of the transfer. A copy
of the  signed,  bona fide offer to  purchase  shall be  attached  to the Option
Notice.

     (c) Company's  Option.  For a period of forty-five  (45) days following the
date of receipt  of the  Option  Notice,  the  Company  shall have the option to
approve the purchase,  disapprove of the purchase, or purchase any or all of the
Offered Shares for the price and upon the terms  specified in the Option Notice.
The right of the  Company to  exercise  its option and to  purchase  the Offered
Shares is subject to any applicable  legal  restrictions  governing the right of
the  Company  to  purchase  its own  stock  as are now or may  hereafter  become
effective.

     (d) Stockholders' Option. To the extent that the Company approves the sale,
but does not exercise its option to purchase  all of the Offered  Shares  within
the  forty-five  (45)-day  period  referred to in Section 2(c),  the  Nonselling
Stockholders  shall have the option to  purchase  all of the  remaining  Offered
Shares as hereinafter  provided,  for the price and upon the terms  specified in
the Option Notice, for a period ending seventy-five (75) days following the date
of receipt by the  Company of the Option  Notice.  If there is more than one (1)
Nonselling Stockholder,  then each Nonselling Stockholder's option rights to the
available  Offered Share shall be on a pro rata basis,  determined by the amount
in percentages by which the Shares owned and held by such Nonselling Stockholder
bears to one hundred  percent  (100%) of the Shares owned and held by all of the
Nonselling  Stockholders who have exercised their right to elect to purchase the

                                      I-2
<PAGE>
Offered  Shares.  In the event  the  Company  fails to  exercise  its  option to
purchase  all of the  Offered  Shares  within  the  forty-five  (45)-day  period
referred to in Section 2(c),  the Company shall  deliver  notice  thereof to the
Nonselling  Stockholders,  who shall have the option to purchase  the  remaining
Offered Shares.  In order to exercise his/her  purchase  rights,  the Nonselling
Stockholders  shall,  within such seventy-five  (75)-day period,  deliver to the
Selling  Stockholder,  a written  election to purchase so many of such available
Offered Shares as such Nonselling  Stockholders may desire to elect to purchase.
If the  Nonselling  Stockholders  fail to exercise the option to purchase all of
the remaining Offered Shares, then the provisions of Section 2(f) below shall be
applicable.

     (e)  Exercise  of  Option.  Upon the  exercise  of the  options  granted in
Sections 2(c) and 2(d) above for all of the Offered  Shares,  the Company and/or
the  Nonselling  Stockholders  shall  execute and deliver a written  notice (the
"Exercise Notice") thereof to the Selling Stockholder.  The Offered Shares shall
then be  delivered  and the  purchase  price paid  pursuant  to the terms of the
Option Notice.

     (f) Failure to Exercise. If the Company and/or the Nonselling  Stockholders
fail to exercise the option to purchase all of the Offered  Shares,  the Selling
Stockholder  shall  have the  right for a period  of sixty  (60) days  following
expiration of all options to transfer the Offered Shares as provided in Sections
2(c) and 2(d) above to the named transferee on the terms set forth in the Option
Notice;  provided that the right of the Selling  Stockholder  to transfer all or
any portion of the Offered Shares to such  transferee is  conditioned  upon such
transferee's  (a)  receiving  and  holding  such  Shares  subject  to all of the
provisions and restrictions of this Agreement; (b) executing a document agreeing
to be so bound and agreeing to become a "Stockholder" by this Agreement; and (c)
the transferee's  spouse,  if any,  executing a consent of spouse.  In addition,
such  transaction  shall be null and void if;  (i) it would  have the  effect of
violating the provisions,  if any, of the Articles of Incorporation or Bylaws of
the Company;  (ii) it purports to sell and transfer the Offered  Shares,  or any
part of them, at a lower price or on terms more favorable to the transferee than
otherwise  presented in the Option Notice;  or (iii) it would have the effect of
violating  any  applicable  federal  and/or  state  securities  laws,  rules  or
regulations, or any applicable provisions of the Delaware General Corporate Law.
After said sixty (60)-day period, or if the terms contained in the Option Notice
are changed in any material  respect,  no transfer of the Offered  Shares may be
made without again following each and every procedure  specified in this Section
2.

                                      I-3
<PAGE>
     3. Bankruptcy.

     (a)  Bankruptcy,  Etc. If: (a) a Stockholder  is adjudicated as bankrupt or
files  a  petition  for  relief  or  reorganization  under  any  Chapter  of the
Bankruptcy Code or makes an assignment for the benefit of his creditors;  or (b)
a writ  of  attachment,  execution  or  other  charging  order  is  levied  on a
Stockholder's  Shares or a portion  thereof  and is not  released  or  satisfied
within twenty (20) days; or (c) a receiver, trustee or other person is appointed
with  authority to take  possession  or control of a  Stockholder's  Shares or a
portion  thereof and such  authority is not revoked  within twenty (20) days; or
(d) any Stockholder  commences an action to dissolve the Company  voluntarily or
involuntarily;  or (e) a  Stockholder  is in  default  under  the  terms of this
Agreement,  any of such events shall cause the options  under Section 2 to arise
as if the Stockholder effected by such events had given an Option Notice.

     (b) Price;  Terms of Payment;  Notice. The price and terms of payment under
this Section 3 shall be those specified in Section 4. Each Stockholder agrees to
give the Company and the other  Stockholders  notice within ten (10) days of any
event  specified in Section 3(a) Notice by any  Stockholder  or his successor to
the other  party of the  occurrence  of any such event shall be  considered  the
Option Notice.  An Exercise Notice shall be given by an exercising  party to the
Stockholder effected by such event or to his successor in interest.

     4. Purchase Price - Payment.

     (a) Shares.  The  purchase  price of the Shares  shall be the "Fair  Option
Price" of the Shares as determined under this Section 4 and determined as of the
"Option Date." "Option Date" means the date of the occurrence giving rise to the
option to  purchase.  "Fair  Option  Price"  means the cash price that a willing
buyer would pay to a willing seller when neither is acting under  compulsion and
when both have  reasonable  knowledge of the  relevant  facts on the Option Date
taking into account appropriate  minority and marketability  discounts.  Each of
the selling and  purchasing  parties  shall use his,  her or its best efforts to
mutually agree upon the Fair Option Price. If the parties are unable to so agree
within 30 days of the Option Date,  the selling party shall  appoint,  within 40
days of the Option Date, one appraiser,  and the purchasing  party shall appoint
within 40 days of the Option  Date,  one  appraiser.  The two  appraisers  shall
within a period of five  additional  days,  agree upon and appoint an additional
appraiser,  who shall have experience in valuing businesses such as the Company.
The three  appraisers  shall,  within 60 days after the appointment of the third

                                      I-4
<PAGE>
appraiser,  determine  the Fair Option Price of the Shares in writing and submit
their report to all the parties.

     The Fair Option Price shall be determined by  disregarding  the appraiser's
valuation  that  diverges  the greatest  from each of the other two  appraisers'
valuations,  and the arithmetic mean of the remaining two appraisers' valuations
shall be the Fair Option Price. Each purchasing party shall pay for the services
of the  appraiser  selected by it, plus one half of the fee charged by the third
appraiser, and one half of all other costs relating to the determination of Fair
Option Price.  The Fair Option Price as so  determined  shall be payable in cash
within 30 days after the  determination  of the final Fair Option Price  against
delivery of the Shares being  purchased,  which Shares shall be delivered to the
purchasing party or parties free and clear of all Encumbrances.

     5.  Representations  of Stockholder.  In connection with the  Stockholder's
purchase  of the  Shares,  Stockholder  hereby  represents  and  warrants to the
Company as follows:

     (a) Investment Intent; Capacity to Protect Interests.

     (i) The Stockholder is purchasing the Shares solely for his own account for
investment  and  not  with  a  view  to or  for  sale  in  connection  with  any
distribution  of the  Shares or any  portion  thereof  and not with any  present
intention of selling, offering to sell or otherwise disposing of or distributing
the Shares or any portion  thereof in any  transaction  other than a transaction
exempt from  registration  under the  Securities  Act of 1933,  as amended  (the
"Securities  Act").  The  Stockholder  also represents that the entire legal and
beneficial interest of the Shares is being purchased,  and will be held, for the
Stockholder's  account  only,  and  neither  in whole  or in part for any  other
person.  The  Stockholder  either  has  a  pre-existing   business  or  personal
relationship  with the  Company  or one or more of its  officers,  directors  or
controlling  persons or by reason of the  Stockholder's  business  or  financial
experience  or  the  business  or  financial  experience  of  the  Stockholder's
professional  advisors who are unaffiliated  with and who are not compensated by
the  Company or any  affiliate  or selling  agent of the  Company,  directly  or
indirectly,  could be  reasonably  assumed to have the  capacity to evaluate the
merits  and  risks  of  an   investment  in  the  Company  and  to  protect  the
Stockholder's own interests in connection with this transaction.

     (ii)  The  Stockholder  represents,  warrants  and  acknowledges  that  the
Stockholder:  (i) has had an opportunity to ask questions of and receive answers
from a  Company  representative  concerning  the terms  and  conditions  of this
investment;  (ii) is acquiring the Shares with the  Stockholder's own funds, for

                                      I-5
<PAGE>
the Stockholder's own account for the purpose of investment, and not with a view
to any resale or other distribution  thereof in violation of the Securities Act;
(iii) is a  corporation  with more than  $5,000,000  in  assets,  and is able to
evaluate  the  merits  and risks of an  investment  in the  Shares  and that the
Stockholder  is able to and must bear the economic risk of the investment in the
Shares  for an  indefinite  period  of time  because  the  Shares  have not been
registered  under the Securities  Act, and therefore,  cannot be offered or sold
unless they are subsequently registered under the Securities Act or an exemption
from such registration is available.  Furthermore, the Company may place legends
on any stock  certificate  representing  the Shares with the securities laws and
contractual restrictions thereon and issue related stop transfer instructions.

     (b)  Residence.  The  Stockholder's  principal  place of business is as set
forth on the signature page hereof.

     (c) Information  Concerning Company. The Stockholder is knowledgeable about
the Company's plans, operations and financial condition,  knows that the Company
is  a  highly  speculative   business  and  has  heretofore  received  all  such
information as the  Stockholder  has deemed  necessary and appropriate to enable
the  Stockholder to evaluate the financial risk inherent in making an investment
in the Shares,  and the Stockholder has  satisfactory  and complete  information
concerning the business and financial condition of the Company.

     (d) Economic Risk. The Stockholder realizes that the purchase of the Shares
will be a highly speculative  investment and involves a high degree of risk, and
the Stockholder is able, without impairing his financial condition,  to hold the
Shares for an  indefinite  period of time and to suffer a  complete  loss on the
Stockholder's investment.

     (e) Restricted  Securities.  The Stockholder  understands and  acknowledges
that:

     (i) The sale of the Shares  has not been  registered  under the  Securities
Act, and the Shares must be held  indefinitely  unless  subsequently  registered
under the  Securities Act or an exemption  from such  registration  is available
(such as Rule 144 or the resale provisions of Rule 701 under the Securities Act)
and the Company is under no obligation to register the Shares;

     (ii) The Stockholder  understands that the share  certificate  representing
the Shares will be stamped with the legends specified in Section 7 hereof; and

                                      I-6
<PAGE>
     (iii) The Stockholder  understands that the Company will make a notation in
its records of the aforementioned restrictions on transfer and legends.

     (f) Disposition under the Securities Act. The Stockholder  understands that
the Shares are restricted  securities within the meaning of Rule 144 promulgated
under the Securities  Act; that the exemption from  registration  under Rule 144
will  not be  available  in any  event  for at least  one year  from the date of
purchase  and  payment  of the Shares  (unless  Rule 701  promulgated  under the
Securities Act is available),  and even then will not be available  unless (i) a
public  trading  market then exists for the Common  Stock of the  Company,  (ii)
adequate information concerning the Company is then available to the public, and
(iii) other terms and  conditions  of Rule 144 are complied  with;  and that any
sale of the Shares may be made only in limited  amounts in accordance  with such
terms and  conditions.  The  Stockholder  further  understands  that the  resale
provisions  of Rule 701,  if  available,  will not apply until 90 days after the
Company  becomes  subject  to the  reporting  obligations  under the  Securities
Exchange Act of 1934, as amended (the "Exchange Act"). There can be no assurance
that the  requirements  of Rule 144 or Rule 701 will be met,  or that the  stock
will ever be saleable.

     (g) Further  Limitations  on  Disposition.  Without in any way limiting the
representations set forth above, the Stockholder further agrees that Stockholder
shall in no event  make any  disposition  of all or any  portion  of the  Shares
unless and until:

     (i) There is then in effect a Registration  Statement  under the Securities
Act  covering  such  proposed  disposition  and  such  disposition  is  made  in
accordance with said Registration  Statement;  (B) the resale provisions of Rule
701 or Rule 144 are  available  in the  opinion of counsel  to the  Company;  or
(C)(1)  the  Stockholder  shall  have  notified  the  Company  of  the  proposed
disposition  and shall have  furnished the Company with a detailed  statement of
the  circumstances  surrounding  the proposed  disposition,  (2) the Stockholder
shall have furnished the Company with an opinion of the Stockholder's counsel to
the effect that such  disposition  will not require  registration of such Shares
under the  Securities  Act,  and (3) such opinion of the  Stockholder's  counsel
shall have been  concurred with by counsel for the Company and the Company shall
have advised the Stockholder of such concurrence; and,

     (ii) Any  transferee  of the  Shares  agrees in  writing to be bound by all
terms of this Agreement,  including the "market stand-off"  provisions set forth
in Section 8 hereof.

                                      I-7
<PAGE>
     (h) Valuation of Common Stock. The Stockholder  understands that the Shares
have been valued by the Board of Directors  and that the Company  believes  this
valuation  represents a fair attempt at reaching an accurate  appraisal of their
worth.  The  Stockholder  understands,  however,  that the  Company  can give no
assurances that such price is in fact the fair market value of the Shares.

     6.  Rights as  Stockholder.  Subject  to the terms and  conditions  of this
Agreement,  the Stockholder shall have all of the rights of a stockholder of the
Company with respect to the Shares from and after the date that the  Stockholder
delivers full payment for the Shares until such time as the Stockholder disposes
of the Shares. Upon such exercise or disposition,  the Stockholder shall have no
further  rights  as a holder  of the  Shares so  purchased  except  the right to
receive payment for the Shares so purchased in accordance with the provisions of
this  Agreement,  and the Stockholder  shall forthwith cause the  certificate(s)
evidencing the Shares so purchased to be surrendered to the Company for transfer
or cancellation.

     7. Restrictive Legends and Stop-Transfer Orders.

     (a) Legends. The Stockholder  understands and agrees that the Company shall
cause the legends set forth below or legends  substantially  equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by other  agreements and by state or
federal securities laws:

1933 Act Legend

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT
BE SOLD OR TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE
COMPANY  RECEIVES  AN OPINION OF COUNSEL  REASONABLY  ACCEPTABLE  TO THE COMPANY
STATING  THAT  SUCH  SALE OR  TRANSFER  IS  EXEMPT  FROM  THE  REGISTRATION  AND
PROSPECTUS DELIVERY  REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENT,  IF ANY,
COVERING  THE  PURCHASE OF THESE SHARES AND  RESTRICTING  THEIR  TRANSFER MAY BE

                                      I-8
<PAGE>
OBTAINED  AT NO COST BY  WRITTEN  REQUEST  MADE BY THE  HOLDER OF RECORD OF THIS
CERTIFICATE  TO THE  SECRETARY OF THE  CORPORATION  AT THE  PRINCIPAL  EXECUTIVE
OFFICES OF THE CORPORATION.

California Legend

IT IS  UNLAWFUL TO  CONSUMMATE  A SALE OR  TRANSFER  OF THE  SECURITIES,  OR ANY
INTEREST  THEREIN OR TO RECEIVE ANY  CONSIDERATION  THEREFOR,  WITHOUT THE PRIOR
WRITTEN CONSENT OF THE  COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

     Stop-Transfer  Notices.  The  Stockholder  agrees that,  in order to ensure
compliance  with the  restrictions  referred  to herein,  the  Company may issue
appropriate stop transfer  instructions to its transfer agent, if any, and that,
if the Company transfers its own securities,  it may make appropriate  notations
to the same effect in its own records.

     (b) Refusal to Transfer.  The Company shall not be required (i) to transfer
on its  books  any  Shares  that have  been  sold or  otherwise  transferred  in
violation of any of the  provisions of this  Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay  dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.

     8. Market Stand-off Agreement. The Stockholder hereby agrees, to the extent
requested by the managing  underwriters  in the initial  public  offering of the
Company's  capital  stock,  that,  without  the prior  written  consent  of such
managing  underwriters,  the Stockholder will not offer, sell, contract to sell,
grant any option to purchase,  make any short sale or otherwise dispose of, make
a distribution  of, or otherwise  reduce the economic risk of owning any capital
stock of the Company  held by or on behalf of the  Stockholder  or  beneficially
owned by the  Stockholder  in accordance  with the rules and  regulations of the
Securities and Exchange Commission for a period of up to 180 days after the date
of the final prospectus relating to the Company's initial public offering.  This
restriction shall be binding on any transferee of shares from the Stockholder.

                                      I-9
<PAGE>
     9. Adjustment for Stock Split. All references to the number of Shares,  the
Purchase Price of the Shares in this Agreement shall be  appropriately  adjusted
to reflect any stock split, stock dividend, combination, reclassification or the
like applicable to the Shares which may be made by the Company after the date of
this Agreement.

     10. Successors and Assigns.  The Company may assign any of its rights under
this Agreement to single or multiple  assignees,  and this Agreement shall inure
to the  benefit of the  successors  and assigns of the  Company.  Subject to the
restrictions on transfer herein set forth,  this Agreement shall be binding upon
the Stockholder and his or her heirs, executors, administrators,  successors and
assigns.

     11.  Interpretation.  Any  dispute  regarding  the  interpretation  of this
Agreement shall be submitted by the  Stockholder or by the Company  forthwith to
the  Company's  Board of  Directors  which shall review such dispute at its next
regular  meeting.  The  resolution of such a dispute by the Board shall be final
and binding on the Company and on the Stockholder.

     12.  Governing Law;  Severability.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California, excluding that
body of law  pertaining  to  conflicts  of law.  Should  any  provision  of this
Agreement be  determined by a court of law to be illegal or  unenforceable,  the
other   provisions  shall   nevertheless   remain  effective  and  shall  remain
enforceable.

     13. Notices. Any notice,  demand, offer or request required or permitted to
be given by either the Company or the Stockholder  pursuant to the terms of this
Agreement shall be in writing and shall be deemed  effectively given the earlier
of (i) when received, (ii) when delivered personally, (iii) one (1) business day
after being delivered by facsimile  (with receipt of appropriate  confirmation),
(iv) one (1)  business  day after  being  deposited  with an  overnight  courier
service or (v) four (4) days after being deposited in the U.S. mail, First Class

                                      I-10
<PAGE>
with postage prepaid,  and addressed to the parties at the addresses provided to
the Company  (which the Company  agrees to  disclose to the other  parties  upon
request) or such other  address as a party may request by notifying the other in
writing.

     14.  Further  Instruments.  The  parties  agree  to  execute  such  further
instruments  and to take such further  action as may be reasonably  necessary to
carry out the purposes and intent of this Agreement.

     15. Entire  Agreement.  This Agreement  constitutes the entire agreement of
the parties and supersedes in its entirety all prior undertakings and agreements
of the Company and the Stockholder with respect to the subject matter hereof.

     16. Counterparts.  This Agreement may be executed in counterparts,  each of
which will be deemed an original,  but all of which together will constitute one
and the same agreement.

                            [Signature Page Follows]

                                      I-11
<PAGE>
     By the Stockholder's  signature below, the Stockholder  represents that the
Stockholder  hereby  accepts  this  Agreement  subject  to all of the  terms and
provisions thereof. The Stockholder has reviewed this Agreement in its entirety,
has had an  opportunity  to obtain the advice of the  Stockholder's  own counsel
prior to executing this Agreement and fully  understands  all provisions of this
Agreement.

STOCKHOLDER                                 COMPANY
LITHIUM CORPORATION,                        PATHION, INC.,
a Nevada corporation                        a Delaware corporation

------------------------------------        ------------------------------------
Signature                                   Michael Liddle, CEO

------------------------------------        ------------------------------------
Print Name

Address: 5976 Lingering Breeze St.          Address: 16450 Los Gatos Blvd.,
         Las Vegas, NV 89148                         Suite 207
                                                     Los Gatos, CA 95032

                                      I-12
<PAGE>
                                    EXHIBIT J

                        COSTS TO BE REIMBURSED AT CLOSING

1.   BLM Maintenance Payments Scheduled for September 1, 2014

     a.   Fish Lake Valley $24,800

     b.   San Emidio $12,400

2.   BC Sugar Assessment Fees due November NN, 2014 $4,110

3.   Further  assessment & development fees on Fish Lake Valley,  San Emidio and
     BC Sugar, not to exceed $8,690

                                      J-1Exhibit 10.1

 

INVESTMENT
ADVISORY AND MANAGEMENT AGREEMENT

 

This Agreement (“Agreement”)
is made as of November 7, 2012 by and between OFS CAPITAL CORPORATION, a Delaware corporation (the “Company”),
and OFS CAPITAL MANAGEMENT, LLC, a Delaware limited liability company (“OFS Advisor”).

 

WITNESSETH:

 

WHEREAS, the Company is a closed-end non-diversified
management investment company that has elected to be treated as a business development company under the Investment Company Act
of 1940, as amended (the “Investment Company Act”);

 

WHEREAS, OFS Advisor is an investment adviser
that has registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”); and

 

WHEREAS, the Company desires to retain OFS
Advisor to furnish investment advisory services to the Company, and OFS Advisor wishes to be retained to provide such services,
on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises
and the covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company and OFS Advisor hereby agree as follows:

 

		1.	Duties of OFS Advisor.

 

(a)               
Employment of OFS Advisor. The Company hereby employs OFS Advisor to act as the investment adviser to the
Company and to manage the investment and reinvestment of the assets of the Company, subject to the supervision of the Board of
Directors of the Company (the “Board”), during the term hereof and upon the terms and conditions herein set
forth, in accordance with:

 

(i)                 
the investment objectives, policies and restrictions that are determined by the Board from time to time and disclosed
to OFS Advisor, which objectives, policies and restrictions shall initially be those set forth in the Company’s Registration
Statement on Form N-2, initially filed with the Securities and Exchange Commission (the “SEC”) on April 29,
2010, and as amended from time to time;

 

(ii)               
 the Investment Company Act and the Advisers Act; and

 

(iii)              
all other applicable federal and state laws, rules and regulations, and the Company’s charter and bylaws.

 

OFS Advisor hereby accepts such employment
and agrees during the term hereof to render such services, subject to the payment of compensation provided for herein.

 

(b)              
Certain Services. Without limiting the generality of Section 1(a), OFS Advisor shall:

 

    	 

    	 

    

  

(i)                 
determine the composition of the portfolio of the Company, the nature and timing of the changes thereto and the manner
of implementing such changes;

 

(ii)               
assist the Company in determining the securities that the Company will purchase, retain, or sell;

 

(iii)              
identify, evaluate and negotiate the structure of the investments made by the Company (including performing due diligence
on the Company’s prospective portfolio companies);

 

(iv)             
execute, close, service and monitor the Company’s investments; and

 

(v)               
provide the Company with such other investment advisory, management, research and related services as the Company
may, from time to time, reasonably require for the investment of its funds.

 

OFS Advisor shall have the power and authority
on behalf of the Company to effectuate its investment decisions for the Company, including the execution and delivery of all documents
relating to the Company’s investments and the placing of orders for other purchase or sale transactions on behalf of the
Company. In the event that the Company determines to incur debt financing, OFS Advisor shall arrange for such financing on the
Company’s behalf, subject to the oversight and any required approval of the Board. If it is necessary for OFS Advisor to
make investments on behalf of the Company through a special purpose vehicle, OFS Advisor shall have authority to create or arrange
for the creation of such special purpose vehicle and to make such investments through such special purpose vehicle in accordance
with the Investment Company Act.

 

(c)               
Sub-Advisers. Subject to the requirements of the Investment Company Act (including any approval by the vote
of holders of a majority of outstanding voting securities of the Company required under Section 15(a) of the Investment Company
Act), OFS Advisor is hereby authorized to enter into one or more sub-advisory agreements with other investment advisers (each,
a “Sub-Adviser”) pursuant to which OFS Advisor may obtain the services of the Sub-Adviser(s) to assist OFS Advisor
in providing the investment advisory services required to be provided by OFS Advisor under this Agreement. Specifically, OFS Advisor
may retain a Sub-Adviser to recommend specific securities or other investments based upon the Company’s investment objectives,
policies and restrictions, and work, along with OFS Advisor, in structuring, negotiating, arranging or effecting the acquisition
or disposition of such investments and monitoring investments on behalf of the Company, subject to the oversight of OFS Advisor
and the Board. Any sub-advisory agreement entered into by OFS Advisor shall be in accordance with the requirements of the Investment
Company Act and other applicable federal and state law. The Company, and not OFS Advisor, shall be responsible for any compensation
payable to any Sub-Adviser.

 

    	2

    	 

    

  

(d)              
Independent Contractors. OFS Advisor, and any Sub-Adviser, shall for all purposes herein each be deemed to
be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent
the Company in any way or otherwise be deemed an agent of the Company.

 

(e)               
Books and Records. OFS Advisor shall keep and preserve for the period required by the Investment Company Act
any books and records relevant to the provision of its investment advisory services to the Company and shall specifically maintain
all books and records with respect to the Company’s portfolio transactions and shall render to the Board such periodic and
special reports as the Board may reasonably request. OFS Advisor agrees that all records that it maintains for the Company are
the property of the Company and shall surrender promptly to the Company any such records upon the Company’s request; provided
that OFS Advisor may retain a copy of such records.

 

		2.	Allocation of Costs and Expenses.

 

(a)               
Expenses Payable by OFS Advisor. All investment professionals of OFS Advisor and/or its affiliates, when and
to the extent engaged in providing investment advisory services required to be provided by OFS Advisor under this Agreement, and
the compensation and routine overhead expenses of such personnel allocable to such services, shall be provided and paid for by
OFS Advisor and not by the Company.

 

(b)              
Expenses Payable by the Company. Other than those expenses specifically assumed by OFS Advisor pursuant to
Section 2(a), the Company shall bear all costs and expenses that are incurred in its operation, administration and transactions,
including those relating to:

 

(i)                 
organization of the Company;

 

(ii)               
calculating the Company’s net asset value (including the cost and expenses of any independent valuation firm);

 

(iii)              
fees and expenses incurred by OFS Advisor payable to third parties, including agents, consultants or other advisors
(including Sub-Advisers), in monitoring financial and legal affairs for the Company and in monitoring the Company’s investments
and performing due diligence on its prospective portfolio companies or otherwise relating to, or associated with, evaluating and
making investments;

 

(iv)             
interest payable on debt, if any, incurred to finance the Company’s investments;

 

(v)               
sales and purchases of the Company’s common stock and other securities;

 

(vi)             
distributions on the Company’s common stock and other securities;

 

    	3

    	 

    

  

(vii)            
investment advisory and management fees, including in respect of the operations of OFS Capital WM, LLC and Tamarix
Capital Partners, L.P. and any future subsidiaries;

 

(viii)          
administration fees and expenses, if any, payable under the Administration Agreement (the “Administration
Agreement”) between the Company and OFS Capital Services, LLC, the Company’s administrator (“OFS Services”),
including payments based upon the Company’s allocable portion of OFS Services’ overhead in performing its obligations
under the Administration Agreement, including rent, necessary software licenses and subscriptions and the allocable portion of
the cost of the Company’s officers, including a chief executive officer, chief financial officer, chief compliance officer,
chief accounting officer, if any, and their respective staffs;

 

(ix)             
the allocated costs incurred by OFS Services as administrator in providing managerial assistance to those portfolio
companies of the Company that request it;

 

(x)               
transfer agent, dividend paying and reinvestment agent and custodial fees and expenses;

 

(xi)             
federal and state registration fees;

 

(xii)            
all costs of registration and listing the Company’s shares on any securities exchange;

 

(xiii)          
federal, state and local taxes;

 

(xiv)          
independent directors’ fees and expenses;

 

(xv)           
costs of preparing and filing reports or other documents required by the SEC or other regulators;

 

(xvi)          
costs of any reports, proxy statements or other notices to stockholders, including
printing costs;

 

(xvii)        
the Company’s allocable portion of any fidelity bond, directors and officers/errors and omissions liability
insurance, and any other insurance premiums;

 

(xviii)       
indemnification payments;

 

(xix)          
direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial
and other staff, independent auditors and outside legal costs;

 

(xx)           
proxy voting expenses; and

 

(xxi)          
all other expenses incurred by the Company or OFS Services in connection with administering the Company’s business.

 

    	4

    	 

    

  

3.                 
Compensation of OFS Advisor. The Company agrees to pay, and OFS Advisor agrees to accept, as compensation
for the services provided by OFS Advisor hereunder, a base management fee (the “Base Management Fee”) and an
incentive fee consisting of two parts (collectively, the “Incentive Fee”) as hereinafter set forth. The Company
shall make any payments due hereunder to OFS Advisor or to OFS Advisor’s designee as OFS Advisor may otherwise direct. To
the extent permitted by applicable law, OFS Advisor may elect, or the Company may adopt a deferred compensation plan pursuant to
which OFS Advisor may elect, to defer all or a portion of its fees hereunder for a specified period of time.

 

(a)               
Base Management Fee.

 

(i)                 
The Base Management Fee shall be calculated and payable quarterly in arrears based on the average value of the Company’s
total assets (other than cash or cash equivalents but including assets purchased with borrowed amounts and including assets owned
by any consolidated entity) at the end of the two most recently completed calendar quarters. From the Closing Date (as defined
below), through October 31, 2013, the Base Management Fee shall be 0.219% per quarter (0.875% annualized) of such average value.
After October 31, 2013, the Base Management Fee shall be 0.4375% per quarter (1.75% annualized) of such average value. The Base
Management Fees shall be adjusted for any share issuances or repurchases during the calendar quarter, and the Base Management Fees
for any partial quarter shall be prorated based on the number of days in such quarter.

 

(b)              
Incentive Fee – Income-Based Fee.

 

(i)                 
The first part of the Incentive Fee (the “Income-Based Fee”) shall be calculated and payable quarterly
in arrears based on the Company’s pre-Incentive Fee net investment income for the calendar quarter. For purposes of this
Agreement, pre-Incentive Fee net investment income for any given calendar quarter is calculated as (A) the sum of interest
income, dividend income and any other income (including any other fees, including commitment, origination and sourcing, structuring,
diligence and consulting fees or other fees that the Company receives from portfolio companies, but excluding fees for providing
managerial assistance) accrued by the Company during such quarter, minus (B) the Company’s operating expenses for such
quarter (including the Base Management Fee, any expenses payable under the Administration Agreement and any interest expense and
dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee net investment
income shall not include any realized capital gains, realized capital losses, unrealized capital appreciation or unrealized capital
depreciation. Pre-Incentive Fee net investment income shall include, in the case of investments with a deferred interest feature
(such as original issue discount, debt instruments with paid-in-kind interest and zero coupon securities), accrued income that
the Company has not yet received in cash.

 

(ii)               
In calculating the Income-Based Fee for any given calendar quarter, the Company’s pre-Incentive Fee net investment
income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar
quarter (the “Rate of Return”), shall be compared to a hurdle rate of 2.0% per quarter (8.0% annualized) (the
“Hurdle Rate”). For purposes of this Agreement, net assets is calculated as total assets less indebtedness and
before taking into account any Incentive Fees payable during the relevant period.

 

    	5

    	 

    

  

(iii)              
Subject to Section 3(b)(iv), the Company shall pay OFS Advisor an Income-Based Fee with respect to the Company’s
pre-Incentive Fee net investment income in each calendar quarter as follows:

 

(A)             
no Income-Based Fee if the Rate of Return does not exceed the Hurdle Rate in such quarter;

 

(B)             
100% of that portion of the Company’s pre-Incentive Fee net investment income, if any, with respect to which
the Rate of Return exceeds the Hurdle Rate but is less than 2.5% in such quarter (10.0% annualized); and

 

(C)             
20.0% of that portion of the Company’s pre-Incentive Fee net investment income, if any, with respect to which
the Rate of Return exceeds 2.5% in such quarter (10.0% annualized).

 

There shall be no accumulation of amounts
on the Hurdle Rate from quarter to quarter, no claw back of amounts previously paid if the Rate of Return in any subsequent quarter
is below the Hurdle Rate and no delay of payment if the Rate of Return in any prior quarters was below the Hurdle Rate. Income-Based
Fees shall be adjusted for any share issuances or repurchases during the calendar quarter, and Income-Based Fees for any partial
quarter shall be prorated based on the number of days in such quarter.

 

(c)               
Incentive Fee - Capital Gains Fee.

 

(i)                 
The second part of the Incentive Fee (the “Capital Gains Fee”) shall be calculated and payable
in arrears at the end of each calendar year (or, upon termination of this Agreement pursuant to Section 9, as of the termination
date) based on the Company’s net capital gains. For purposes of this Agreement, net capital gains are calculated by subtracting
(A) the sum of the Company’s cumulative aggregate realized capital losses and aggregate unrealized capital depreciation
from (B) the Company’s cumulative aggregate realized capital gains. If such amount is positive at the end of the relevant
calendar year, then the Capital Gains Fee for such year shall be equal to 20.0% of such amount, less the aggregate amount of Capital
Gains Fees paid in all prior years. If such amount is negative, then there shall be no Capital Gains Fee for such year. If this
Agreement shall terminate as of a date that is not a calendar-year end, the termination date shall be treated as though it were
a calendar-year end for purposes of calculating and paying a Capital Gains Fee. Any Capital Gains Fee for any partial year shall
be prorated based on the number of days in such year.

 

    	6

    	 

    

  

(ii)               
For purposes of this Agreement:

 

(A)             
cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (1)
the net sales price of each investment in the Company’s portfolio when sold and (2) the accreted or amortized cost basis
of such investment;

 

(B)             
cumulative aggregate realized capital losses are calculated as the sum of the differences, if negative, between (1)
the net sales price of each investment in the Company’s portfolio when sold and (2) the accreted or amortized cost basis
of such investment; and

 

(C)             
aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (1) the
valuation of each investment in the Company’s portfolio as of the end of the relevant year and (2) the accreted or amortized
cost basis of such investment.

 

(d)              
Calculation of Fees During the Interim Period. Notwithstanding anything to the contrary herein, with respect
to services rendered during the period commencing on the closing date of the Company’s initial public offering (the “Closing
Date”) through and including the last day of the calendar quarter ending immediately after the closing of the Company’s
initial public offering (the “Interim Period”) and, in the case of the Base Management Fee, during the first
full calendar quarter thereafter (the “First Full Quarter”):

 

(i)                 
the Base Management Fee (A) for the Interim Period shall be calculated based on the average value of the Company’s
total assets (other than cash or cash equivalents but including assets purchased with borrowed funds and including assets owned
by any consolidated entity) on the Closing Date and the last day of the Interim Period, and shall be appropriately prorated, and
(B) for the First Full Quarter shall be calculated based on the average value of the Company’s total assets (other than
cash or cash equivalents but including assets purchased with borrowed funds and including assets owned by any consolidated entity)
on the last day of the Interim Period and the last day of the First Full Quarter;

 

(ii)               
the Income-Based Fee for the Interim Period shall be calculated based on the Company’s pre-Incentive Fee net
investment income for the Interim Period, and shall be appropriately prorated; and

 

(iii)              
the Capital Gains Fee as of December 31, 2012 shall be calculated for a period of shorter than 12 calendar months
to take into account realized capital gains, realized capital losses, unrealized capital appreciation and unrealized capital depreciation
since the Closing Date, and shall be appropriately prorated.

 

4.                 
Representations, Warranties and Covenants of OFS Advisor. OFS Advisor represents and warrants that it is registered
as an investment adviser under the Advisers Act. OFS Advisor agrees that its activities shall at all times be in compliance in
all material respects with all applicable federal and state laws governing its operations and investments, including the Investment
Company Act and the Advisers Act.

 

    	7

    	 

    

  

5.                 
Excess Brokerage Commissions. OFS Advisor is hereby authorized, to the fullest extent now or hereafter permitted
by law, to cause the Company to pay a member of a national securities exchange, broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of commission another member of such exchange, broker or dealer would have charged
for effecting that transaction, if OFS Advisor determines in good faith, taking into account such factors as price (including the
applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm
and the firm’s risk and skill in positioning blocks of securities, that such amount of commission is reasonable in relation
to the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of either that
particular transaction or its overall responsibilities with respect to the Company’s portfolio, and constitutes the best
net results for the Company.

 

6.                 
Activities of OFS Advisor. The services of OFS Advisor to the Company are not exclusive, and OFS Advisor and/or
any of its affiliates may engage in any other business or render similar or different services to others, including the direct
or indirect sponsorship or management of other investment-based accounts or commingled pools of capital, however structured, having
investment objectives similar to those of the Company, so long as its services to the Company hereunder are not materially impaired
thereby, and nothing in this Agreement shall limit or restrict the right of any member, manager, partner, officer or employee of
OFS Advisor or any such affiliate to engage in any other business or to devote his or her time and attention in part to any other
business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith (including
fees for serving as a director of, or providing consulting services to, one or more of the Company’s portfolio companies,
subject to applicable law). So long as this Agreement or any extension, renewal or amendment remains in effect, OFS Advisor shall
be the only investment adviser for the Company, subject to OFS Advisor’s right to enter into sub-advisory agreements. OFS
Advisor assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood
that directors, officers, employees and stockholders of the Company are or may become interested in OFS Advisor and its affiliates,
as directors, officers, employees, partners, stockholders, members, managers or otherwise, and that OFS Advisor and directors,
officers, employees, partners, stockholders, members and managers of OFS Advisor and its affiliates are or may become similarly
interested in the Company as directors, officers, employees, stockholders or otherwise.

 

7.                 
Responsibility of Dual Directors, Officers and/or Employees. If any person who is a member, manager, partner,
officer or employee of OFS Advisor or OFS Services is or becomes a director, officer and/or employee of the Company and acts as
such in any business of the Company, then such member, manager, partner, officer and/or employee of OFS Advisor or OFS Services
shall be deemed to be acting in such capacity solely for the Company, and not as a member, manager, partner, officer or employee
of OFS Advisor or OFS Services or under the control or direction of OFS Advisor or OFS Services, even if paid by OFS Advisor or
OFS Services.

 

8.                 
Limitation of Liability of OFS Advisor; Indemnification. OFS Advisor and its affiliates and its and its affiliates’
respective directors, officers, employees, members, managers, partners and stockholders, each of whom shall be deemed a third party
beneficiary hereof (collectively, the “Indemnified Parties”), shall not be liable to the Company or its subsidiaries
or its and its subsidiaries’ respective directors, officers, employees, members, managers, partners or stockholders for any
action taken or omitted to be taken by OFS Advisor in connection with the performance of any of its duties or obligations under
this Agreement or otherwise as an investment adviser of the Company, except to the extent specified in Section 36(b) of the Investment
Company Act concerning loss resulting from a breach of fiduciary duty (as the same is finally determined by judicial proceedings)
with respect to the receipt of compensation for services. The Company shall indemnify, defend and protect the Indemnified Parties
and hold them harmless from and against all claims or liabilities (including reasonable attorneys’ fees) and other expenses
reasonably incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation
or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of or in
connection with the performance of any of OFS Advisor’s duties or obligations under this Agreement or otherwise as an investment
adviser of the Company. Notwithstanding the foregoing provisions of this Section 8 to the contrary, nothing contained herein shall
protect or be deemed to protect the Indemnified Parties against, or entitle or be deemed to entitle the Indemnified Parties to
indemnification in respect of, any liability to the Company or its security holders to which the Indemnified Parties would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of such Indemnified Party’s
duties or by reason of such Indemnified Party’s reckless disregard of its obligations and duties under this Agreement (as
the same shall be determined in accordance with the Investment Company Act and any interpretations or guidance by the SEC or its
staff thereunder).

 

    	8

    	 

    

  

9.                 
Effectiveness, Duration and Termination.

 

(a)               
This Agreement shall become effective as of the first date above written. This Agreement shall remain in effect for
two years after such date, and thereafter shall continue automatically for successive annual periods; provided that such continuance
is specifically approved at least annually by:

 

(i)                 
the vote of the Board, or by the vote of holders of a majority of the outstanding voting securities of the Company;
and

 

(ii)               
the vote of a majority of the Company’s directors who are not “interested persons” (as such term
is defined in Section 2(a)(19) of the Investment Company Act) of any party hereto, in accordance with the requirements of the Investment
Company Act.

 

(b)              
This Agreement may be terminated at any time, without the payment of any penalty, upon 60 days’ written notice,
by (i) the vote of holders of a majority of the outstanding voting securities of the Company, (ii) the vote of the Board or (iii)
OFS Advisor.

 

(c)               
This Agreement shall automatically terminate in the event of its “assignment” (as such term is defined
for purposes of Section 15(a)(4) of the Investment Company Act); provided that nothing herein shall cause this Agreement to terminate
upon or otherwise restrict a transaction that does not result in a change of actual control or management of OFS Advisor.

 

    	9

    	 

    

  

(d)              
The provisions of Section 8 of this Agreement shall remain in full force and effect, and apply to OFS Advisor and
its representatives as and to the extent applicable, and OFS Advisor shall remain entitled to the benefits thereof, notwithstanding
any termination or expiration of this Agreement. Further, notwithstanding the termination or expiration of this Agreement as aforesaid,
OFS Advisor shall be entitled to any amounts owed under Section 3 through the date of termination or expiration.

 

10.             
Termination of Interim Agreement. The Company and OFS Advisor hereby terminate the Interim Investment Advisory
and Management Agreement, dated as of September 28, 2010, between the Company and OFS Advisor, effective as of the date hereof.

 

11.             
Third Party Beneficiaries. Nothing in this Agreement, either express or implied, is intended to or shall confer
upon any person other than the parties hereto and the Indemnified Parties any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.

 

12.             
Amendments of this Agreement. This Agreement may not be amended or modified except by an instrument in writing
signed by both parties hereto, and upon the consent of stockholders of the Company in conformity with the requirements of the Investment
Company Act.

 

13.             
Governing Law; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, including Sections 5-1401 and 5-1402 of the New York General Obligations Law and New York Civil
Practice Laws and Rules 327(b), and the applicable provisions of the Investment Company Act, if any. To the extent that the applicable
laws of the State of New York, or any of the provisions herein, conflict with the applicable provisions of the Investment Company
Act, if any, the latter shall control. The parties hereto unconditionally and irrevocably consent to the exclusive jurisdiction
of the federal and state courts located in the State of New York and waive any objection with respect thereto, for the purpose
of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. EACH PARTY
HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY. The agreement of each party to waive its right to a jury trial will be binding on its
successors and assigns and will survive the termination of this Agreement.

 

14.             
No Waiver. The failure of either party hereto to enforce at any time for any period the provisions of or any
rights deriving from this Agreement shall not be construed to be a waiver of such provisions or rights or the right of such party
thereafter to enforce such provisions, and no waiver shall be binding unless executed in writing by all parties hereto.

 

15.             
Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced
by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse
to either party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated
to the greatest extent possible.

 

    	10

    	 

    

  

16.             
Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall
not affect in any way the meaning or interpretation of this Agreement.

 

17.             
Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall
be deemed to be an original instrument and all of which taken together shall constitute one and the same agreement.

 

18.             
Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and
shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier
service (with signature required), by facsimile, or by registered or certified mail (postage prepaid, return receipt requested)
to the parties hereto at their respective principal executive office addresses.

 

19.             
Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, between the parties hereto with
respect to such subject matter.

 

20.             
Certain Matters of Construction.

 

(a)               
The words “hereof”, “herein”, “hereunder” and words of similar import shall refer
to this Agreement as a whole and not to any particular Section or provision of this Agreement, and reference to a particular Section
of this Agreement shall include all subsections thereof.

 

(b)              
Definitions shall be equally applicable to both the singular and plural forms of the terms defined, and references
to the masculine, feminine or neuter gender shall include each other gender.

 

(c)               
The word “including” shall mean including without limitation.

 

 

[REMAINDER
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    	11

    	 

    

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.

 

	 	OFS CAPITAL CORPORATION
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Robert S. Palmer
	 	 	Name:	Robert S. Palmer
	 	 	Title:	Chief Financial Officer
	 	 	 	 
	 	 	 	 
	 	OFS CAPITAL MANAGEMENT, LLC
	 	 	 	 
	 	 	 	 
	 	By:	Orchard First Source Asset Management, LLC, its Manager
	 	 	 	 
	 	By:	/s/ Kathi J. Inorio
	 	 	Name:	Kathi J. Inorio
	 	 	Title:	Secretary

 

 

 

[Signature Page to Investment Advisory Agreement]

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