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<SEC-DOCUMENT>0001003297-06-000012.txt : 20060106
<SEC-HEADER>0001003297-06-000012.hdr.sgml : 20060106
<ACCEPTANCE-DATETIME>20060106160723
ACCESSION NUMBER:		0001003297-06-000012
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20060103
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Completion of Acquisition or Disposition of Assets
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060106
DATE AS OF CHANGE:		20060106

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PRO DEX INC
		CENTRAL INDEX KEY:			0000788920
		STANDARD INDUSTRIAL CLASSIFICATION:	SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
		IRS NUMBER:				841261240
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-14942
		FILM NUMBER:		06516629

	BUSINESS ADDRESS:	
		STREET 1:		MICRO MOTORS, INC.
		STREET 2:		151 EAST COLUMBINE
		CITY:			SANTA ANA
		STATE:			CA
		ZIP:			92707
		BUSINESS PHONE:		714-241-4411

	MAIL ADDRESS:	
		STREET 1:		MICRO MOTORS INC.
		STREET 2:		151 EAST COLUMBINE
		CITY:			SANTA ANA
		STATE:			CA
		ZIP:			92707
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>pdex8k1.htm
<TEXT>
<html>

<head>


<title>Pro-Dex, Inc. Form 8-K by www.edgar2.com</title>



</head>

<body lang=EN-US link=blue vlink=purple>



<p><b>&nbsp;</b></p>

<p><b>&nbsp;</b></p>









<p align="center"><b>UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION<br>
Washington,
 D.C.&nbsp; 20549</b></p>





<p align=center style='text-align:center'><b>FORM 8-K</b></p>

<p align="center"><b>CURRENT REPORT<br>
Pursuant to Section 13 or 15(d) of the<br>
Securities Exchange Act of 1934</b></p>





<p align=center style='text-align:center'>Date of Report <br>
<font size="2">(Date of earliest event reported)</font><b><font size="2"> <br>
</font>January 3, 2006</b></p>





<p align=center style='text-align:center'><b>PRO-DEX, INC.<br>
</b><font size="2">(Exact name of registrant as specified in its charter)</font></p>
<div align="center">
	<table border="0" width="740" id="table1" cellspacing="0" cellpadding="0">
		<tr>
			<td width="229" align="center">





<p align=center style='text-align:center'><b>COLORADO</b></p></td>
			<td align="center" width="264"><b>0-14942</b></td>
			<td align="center"><b>84-1261240</b></td>
		</tr>
		<tr>
			<td width="229" align="center"><font size="2">(State or other<br>
			jurisdiction of<br>
			incorporation)</font></td>
			<td align="center" width="264"><font size="2">(Commission File
			Number)</font></td>
			<td align="center"><font size="2">(IRS
Employer <br>
			Identification Number)</font></td>
		</tr>
		<tr>
			<td width="229" align="center"><font size="2">&nbsp;&nbsp; </font>
			</td>
			<td align="center" width="264">&nbsp;</td>
			<td align="center">&nbsp;</td>
		</tr>
	</table>
</div>

<p align=center style='text-align:center'><b>151 East Columbine Avenue<br>
Santa Ana</b><b>, California </b><b>92707<br>
</b><font size="2">(Address of Principal Executive Offices)</font></p>

<p align=center style='text-align:center'><b>(714) 241-4411<br>
</b><font size="2">(Registrant's Telephone Number, Including Area Code)</font></p>





<p style='text-autospace:none' align="justify"><font size="2">Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions ( <i>see </i>General
Instruction A.2. below): </font> </p>



<p style='text-autospace:none; margin-top:0; margin-bottom:0.001pt'>
<font size="2">[&nbsp;&nbsp; ] &nbsp;Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
</font> </p>

<p style='text-autospace:none; margin-top:0; margin-bottom:0.001pt'>
<font size="2">[&nbsp;&nbsp; ] &nbsp;Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </font> </p>

<p style='margin-left:20.0pt;text-indent:-20.0pt;text-autospace:
none; margin-top:0; margin-bottom:0.001pt'><font size="2">[&nbsp;&nbsp; ] &nbsp;Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) </font> </p>

<p style='text-autospace:none; margin-top:0; margin-bottom:0.001pt'>
<font size="2">[&nbsp;&nbsp; ] &nbsp;Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) </font> </p>
<p style='text-autospace:none; margin-top:0; margin-bottom:0.001pt'>&nbsp;</p>
<p style='text-autospace:none; margin-top:0; margin-bottom:0.001pt'>&nbsp;</p>



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<b><u><br
clear=all style='page-break-before:always'>
</u></b>













<p style='margin-left:72.0pt;text-indent:-72.0pt'><b>Item 1.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Entry into a Material Definitive
Agreement</b></p>

<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On
January 5, 2006, Pro-Dex Astromec, Inc., a Nevada corporation (the
&quot;Subsidiary&quot;), a wholly-owned subsidiary of Pro-Dex, Inc. (the &quot;Company&quot;),
entered into an Asset Purchase Agreement (the &quot;Asset Purchase Agreement&quot;) with
Astromec, Inc., a Nevada corporation (&quot;Astromec&quot;) whereby the Subsidiary
purchased from Astromec substantially all of the assets related to Astromec's
factional horsepower DC motor development and manufacturing business (the
&quot;Assets&quot;).&nbsp; The Subsidiary was formed under the laws of the State of Nevada on December&nbsp;27, 2005.&nbsp;
Since the Subsidiary is a wholly-owned subsidiary of the Company, the financial
investments and transactions of both companies are presented on a consolidated
basis.&nbsp; M.D. Glover, Inc., a Nevada corporation (&quot;Glover, Inc.&quot;),
and Malcolm D. Glover, Jr., as principal shareholders of Astromec, and Malcolm
D. Glover, Sr., as sole shareholder of Glover, Inc., are each party to the
Asset Purchase Agreement with respect to customary and standard representations
and warranties and indemnity obligations of Astromec.</p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
purchase price for the Assets consisted of $2,700,000 in cash payable to
Astromec, $100,000 of which shall be held back until July 5, 2006 to cover any
adjustments in the purchase price that might be required pursuant to:</p>



<ul style='margin-top:0pt' type=disc>
 <li class=MsoNormal style='text-align:justify'>a
     post-closing review of the balance sheet of Astromec as of January 5, 2005
     (which balance sheet shall be prepared on or before March 6, 2006), and/or
     </li>
 <li class=MsoNormal style='margin-top:12.0pt;text-align:justify'>any indemnity obligations of Astromec under the
     Asset Purchase Agreement that arise prior to or on July 5, 2006, if any. </li>
</ul>

<p style='margin-top:12.0pt;' align="justify">The Company paid $1,600,000 of the purchase price out
of cash on hand.&nbsp; The remaining $1,000,000 was paid with cash borrowed from
Wells Fargo Bank pursuant to the Loan Agreement and Term Note described in more
detail below.</p>



<p style='margin-left:0pt;text-indent:0pt' align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On
January 3, 2006, the Company entered into a Purchase and Sale Agreement and
Escrow Instructions (the &quot;Real Property Purchase Agreement&quot;) with Glover, Inc.,
whereby pending the close of escrow, the Company shall purchase 4.4 acres of
real property and a 20,000 square foot industrial building and related
improvements located in Carson City, Nevada.&nbsp; Glover, Inc., the majority
shareholder of Astromec, is the current owner of the property.&nbsp; The property
comprises the facilities where Astromec conducted its business prior to the
close of the Asset Purchase Agreement, and the Company currently plans to
continue factional horsepower DC motor development and manufacturing operations
at the property.&nbsp; Upon the close of escrow, the Company shall pay $2,200,000
for the property.&nbsp; The Company plans to pay $600,000 of the purchase price out
of cash on hand and anticipates that the remaining $1,600,000 will be paid for out
of proceeds from a $1,600,000 ten-year first mortgage on the property.</p>
<p style='margin-left:0pt;text-indent:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt' align="center">-2-</p>



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<p style='margin-left:0pt;text-indent:0pt' align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On
January 4, 2006, the Company entered into a Term Note and related Loan
Agreement (the Term Note and Loan Agreement collectively referred to as the
&quot;Loan Documents&quot;) with Wells Fargo Bank, National Association (the &quot;Bank&quot;),
whereby the Company borrowed the principal sum of $1,000,000 (collectively, the
&quot;Loan&quot;).&nbsp; The proceeds from the Loan were applied to the purchase price for the
Assets of Astromec described above.&nbsp; The principal balance of the Loan bears
interest either:</p>



<ul>
	<li>
	<p>at a fluctuating rate per annum equal to the Bank's Prime Rate as
in effect from time to time, or</p></li>
	<li>
	<p style='margin-top:12.0pt;margin-right:0pt;
margin-bottom:0pt;margin-bottom:.0001pt;' align="justify">at a fixed rate per annum determined by the Bank to be 2.50%
above LIBOR in effect on the first day of the applicable fixed rate term.&nbsp;
	</p></li>
</ul>



<p style='margin-left:0pt;text-indent:0pt' align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
fixed rate term may be for a period of either 1, 2, 3 or 6 months as determined
by the Company pursuant to the terms of the Loan Documents.&nbsp; The Company has
chosen that the principal balance initially bear interest based on the 2.50%
above LIBOR rate for a fixed rate term of one month.&nbsp; The principal amount of
the Loan shall be payable on the 4<sup>th</sup> day of each month in
installments of $20,833.33 commencing February 4, 2006 and continuing up to and
including December 4, 2009, with a final installment consisting of all
remaining unpaid principal due and payable in full on January 4, 2010.&nbsp; Accrued
interest under the Loan shall be payable on the 4<sup>th</sup> day of each
month commencing February 4, 2006.</p>



<p style='margin-left:0pt;text-indent:0pt' align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Loan Documents contain customary events of default provisions, which include,
without limitation, the Company's: </p>



<ul>
	<li>
	<p align="justify">failure to timely pay amounts due under the Loan or any other
agreement with the Bank, </p></li>
	<li>
	<p style='margin-top:12.0pt;margin-right:0pt;
margin-bottom:0pt;margin-bottom:.0001pt;' align="justify">breach of its representations or warranties or otherwise violate
or breach the terms of the Loan Documents or any other agreement with the Bank,
	</p></li>
	<li>
	<p style='margin-top:12.0pt;margin-right:0pt;
margin-bottom:0pt;margin-bottom:.0001pt;' align="justify">default of any obligation under any agreement between the Company
and any other person or entity, </p></li>
	<li>
	<p style='margin-top:12.0pt;margin-right:0pt;
margin-bottom:0pt;margin-bottom:.0001pt;' align="justify">being subject to the filing of notice of a judgment lien against
the Company or the institution of a bankruptcy or similar proceeding by or
against the Company, </p></li>
	<li>
	<p style='margin-top:12.0pt;margin-right:0pt;
margin-bottom:0pt;margin-bottom:.0001pt;' align="justify">suffering a material adverse change, as determined by the Bank,
in its financial condition, or </p></li>
	<li>
	<p style='margin-top:12.0pt;margin-right:0pt;
margin-bottom:0pt;margin-bottom:.0001pt;' align="justify">a change in ownership in the aggregate of 25% or more of the
common stock of the Company during the term of the Loan.&nbsp; </p></li>
</ul>

<p style='margin-top:12.0pt;margin-right:0pt;
margin-bottom:0pt;margin-left:0pt;margin-bottom:.0001pt;text-indent:0pt' align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Among
other remedies afforded to the Bank upon an event of default under the Loan
Documents, the Bank may, at its option, cause the entire balance of principal,
interest, fees and other charges under the Loan or any other agreement between
the Company and the Bank to become immediately due and payable.&nbsp; Pursuant to
the terms of the Loan Agreement, the above referenced events of default, as
well as all other provisions of the Loan Agreement, shall apply to all of the
Company's commercial credit accommodations from the Bank, whether now existing
or hereafter established.</p>
<p style='margin-top:12.0pt;margin-right:0pt;
margin-bottom:0pt;margin-left:0pt;margin-bottom:.0001pt;text-indent:0pt'>&nbsp;</p>
<p style='margin-top:12.0pt;margin-right:0pt;
margin-bottom:0pt;margin-left:0pt;margin-bottom:.0001pt;text-indent:0pt' align="center">-3-</p>



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</div>



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style='page-break-before:always'>










<p style='margin-left:0pt;text-indent:0pt' align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
foregoing descriptions of the agreements set forth above do not purport to be a
complete description of all of the terms of such agreements, and are qualified
in their entirety by reference to the full terms of the Asset Purchase
Agreement, the Real Property Purchase Agreement, the Term Note and the Loan
Agreement, copies of which are attached hereto as Exhibits 10.1, 10.2, 10.3 and
10.4, respectively, and incorporated herein by reference.</p>



<p style='margin-left:72.0pt;text-indent:-72.0pt'><b>Item 2.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Completion of Acquisition or
Disposition of Assets</b></p>



<p style='margin-left:0pt;text-indent:0pt' align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As
stated above in Item 1.01, on January 5, 2006, the Subsidiary entered into an
Asset Purchase Agreement with Astromec, whereby the Subsidiary purchased
substantially all of the assets related to Astromec's factional horsepower DC
motor development and manufacturing business.&nbsp; Also as stated above in Item
1.01, on January 3, 2006, the Company entered into a Purchase and Sale
Agreement and Escrow Instructions with Glover, Inc., whereby pending the close
of escrow, the Company shall purchase real property and an industrial building
and related improvements located in Carson City, Nevada.&nbsp; The details of the
acquisition of these assets are described in Item 1.01, which is incorporated
in its entirety by this reference into this Item 2.01.</p>



<p align=left style='margin-left:0pt;text-align:left;
text-indent:0pt'><b>Item 2.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Results of Operations and Financial
Conditions</b></p>



<p style='margin-left:0pt;text-indent:0pt' align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On
January 5, 2006, the Company issued a press release announcing, in addition to
the matters disclosed under Item 1.01, certain non-public information regarding
the Company's results of operations for its second quarter ended December 31,
2005.&nbsp; </p>



<p style='margin-left:0pt;text-indent:0pt' align="justify">The Company
disclosed that its open order backlog, defined as orders or purchase commitments
that have been received in writing from one or more customers, was
approximately $7.0 million.&nbsp; The Company has previously indicated that it uses
open order backlog as a key financial performance indicator, as it quantifies a
large portion of shipments expected in the next 12 months.&nbsp; The company
included the non-GAAP measure in the press release for both Pro-Dex, Inc. and
Astromec, Inc. as of December 31, 2005. &nbsp;A copy of the press release is
attached hereto as Exhibit 99.1 and incorporated herein by reference.</p>



<p align=left style='margin-left:0pt;text-align:left;
text-indent:0pt'><b>Item 2.03&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Creation of a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement of a Registrant</b></p>



<p style='margin-left:0pt;text-indent:0pt' align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As
stated above in Item 1.01, on January 4, 2006, the Company entered into a Term
Note and related Loan Agreement with Wells Fargo Bank, National Association,
whereby the Company borrowed the principal sum of $1,000,000.&nbsp; The details of
this financial obligation are described in Item 1.01, which is incorporated in
its entirety by this reference into this Item 2.03.</p>
<p style='margin-left:0pt;text-indent:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt' align="center">-4-</p>



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<p><b>Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial
Statements and Exhibits</b></p>

<p>&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Financial
Statements of Businesses Acquired</u>.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To be filed under cover of Form 8-K/A on or before
March 21, 2006.</p>



<p>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Pro Forma
Financial Information</u>.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To be filed under cover of Form 8-K/A on or before
March 21, 2006.</p>



<p>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Shell Company
Transactions</u>.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Not applicable.</p>



<p>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Exhibits</u>.</p>

<table border="0" width="100%" id="table2" cellspacing="3" cellpadding="3">
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top"><u>Exhibit
No.</u></td>
		<td width="904" valign="top"><u>Description</u></td>
	</tr>
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top">Exhibit 10.1</td>
		<td width="904" valign="top">
		<p align="justify">Asset Purchase Agreement, dated January 5, 2006, between Pro-Dex
Astromec, Inc., Astromec, Inc., M.D. Glover, Inc., Malcolm D. Glover, Jr., and
Malcolm D. Glover, Sr.</p></td>
	</tr>
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top">Exhibit 10.2</td>
		<td width="904" valign="top">
		<p align="justify">Purchase and Sale Agreement and Escrow Instructions, dated January 3,
2006, between Pro-Dex, Inc. and M.D. Glover, Inc.</p></td>
	</tr>
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top">Exhibit 10.3</td>
		<td width="904" valign="top">
		<p align="justify">Term Note, dated January 4, 2006, by Pro-Dex, Inc. in favor of Wells
Fargo Bank, National Association</p></td>
	</tr>
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top">Exhibit 10.4</td>
		<td width="904" valign="top">
		<p align="justify">Loan Agreement, dated January 4, 2006, between Pro-Dex, Inc. and
Wells Fargo Bank, National Association</p></td>
	</tr>
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top">Exhibit 99.1</td>
		<td width="904" valign="top">
		<p align="justify">Press Release dated January 5, 2006</p></td>
	</tr>
</table>
<p style='margin-top:12.0pt;margin-right:0pt;
margin-bottom:0pt;margin-left:36.0pt;margin-bottom:.0001pt;text-indent:36.0pt'>&nbsp;</p>
<p style='margin-right:0pt;
' align="center">-5-</p>



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<p align=center style='text-align:center'><b>SIGNATURES</b></p>





<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.</p>





<p>Date:&nbsp; January 6, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>PRO-DEX, INC.</b></p>





<p style='margin-left:234.0pt'>By:
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/&nbsp; Patrick Johnson&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Patrick Johnson<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chief Executive Officer</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">-6-</p>



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<p align=center style='text-align:center'><b>INDEX TO EXHIBITS</b></p>

<p><b>&nbsp;</b></p>

<table border="0" width="100%" id="table3" cellspacing="3" cellpadding="3">
	<tr>
		<td valign="bottom">&nbsp;</td>
		<td width="131" valign="bottom" style="border-bottom: 1px solid #000000">
		<b>Exhibit
<br>
		Number</b></td>
		<td width="904" valign="bottom" style="border-bottom: 1px solid #000000">
		<b>Description</b></td>
	</tr>
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top">Exhibit 10.1</td>
		<td width="904" valign="top">
		<p align="justify">Asset Purchase Agreement, dated January 5, 2006, between Pro-Dex
Astromec, Inc., Astromec, Inc., M.D. Glover, Inc., Malcolm D. Glover, Jr., and
Malcolm D. Glover, Sr.</p></td>
	</tr>
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top">Exhibit 10.2</td>
		<td width="904" valign="top">
		<p align="justify">Purchase and Sale Agreement and Escrow Instructions, dated January 3,
2006, between Pro-Dex, Inc. and M.D. Glover, Inc.</p></td>
	</tr>
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top">Exhibit 10.3</td>
		<td width="904" valign="top">
		<p align="justify">Term Note, dated January 4, 2006, by Pro-Dex, Inc. in favor of Wells
Fargo Bank, National Association</p></td>
	</tr>
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top">Exhibit 10.4</td>
		<td width="904" valign="top">
		<p align="justify">Loan Agreement, dated January 4, 2006, between Pro-Dex, Inc. and
Wells Fargo Bank, National Association</p></td>
	</tr>
	<tr>
		<td valign="top">&nbsp;</td>
		<td width="131" valign="top">Exhibit 99.1</td>
		<td width="904" valign="top">
		<p align="justify">Press Release dated January 5, 2006</p></td>
	</tr>
</table>
<p style='margin-top:12.0pt;margin-right:0pt;margin-bottom:
0pt;margin-left:72.0pt;margin-bottom:.0001pt;text-indent:-54.0pt'>&nbsp;</p>
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0pt;margin-left:72.0pt;margin-bottom:.0001pt;text-indent:-54.0pt'>&nbsp;</p>
<p style='margin-top:12.0pt;margin-right:0pt;margin-bottom:
0pt;margin-left:72.0pt;margin-bottom:.0001pt;text-indent:-54.0pt'>&nbsp;</p>
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0pt;margin-left:72.0pt;margin-bottom:.0001pt;text-indent:-54.0pt'>&nbsp;</p>
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0pt;margin-left:72.0pt;margin-bottom:.0001pt;text-indent:-54.0pt'>&nbsp;</p>
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<title>Exhibit 10.1 - Asset Purchase Agreement </title>


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<p style='margin-top:0pt' align="right"><b>Exhibit 10.1</b></p>












<p align="center"><b>ASSET PURCHASE AGREEMENT</b></p>
<p align="center"><b>BETWEEN</b></p>
<p align="center"><b>PRO-DEX ASTROMEC, INC. (&quot;PURCHASER&quot;)</b></p>
<p align="center"><b>AND</b></p>
<p align="center"><b>ASTROMEC, INC. (&quot;SELLER&quot;)</b></p>

<p align="center"><b>AND </b> </p>

<p align="center"><b>Malcolm D.
Glover, Jr., AND M.D. Glover, Inc.</b></p>
<p align="center"><b>(collectively, the &quot;Seller Shareholders&quot;)</b></p>

<p align="center"><b><br>
DATED</b></p>
<p align="center"><b>January 5, 2006</b></p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
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<p style='margin-top:0pt' align="right">&nbsp;</p>
<p style='margin-top:0pt' align="center"><b>ASSET PURCHASE AGREEMENT</b></p>



<p align="justify" style="text-indent: 0.5in">THIS ASSET PURCHASE AGREEMENT (the &quot;<u>Agreement</u>&quot;) is entered
into as of January 5, 2006, between Pro-Dex Astromec, Inc., a Nevada
corporation with offices located at 151 East Columbine Avenue, Santa Ana,
California 92707 (&quot;<u>Purchaser</u>&quot;), Astromec, a Nevada corporation with
offices located at 2950 Arrowhead Drive, Carson City, Nevada 89706 (&quot;<u>Seller</u>&quot;),
and Malcolm D. Glover, Jr., an individual, and M.D. Glover, Inc., a Nevada
corporation (collectively, the &quot;<u>Seller Shareholders</u>&quot;).</p>

<p align="center"><b><u>R E C I
T A L S</u></b></p>

<p align="justify" style="text-indent: 0.5in">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller owns and operates an electric motor business
(the &quot;<u>Business</u>&quot;).</p>

<p align="justify" style="text-indent: 0.5in">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchaser desires to acquire from Seller, and the
Seller desires to sell to Purchaser, all of the Assets (as defined below) used
by Seller in the operation of the Business.</p>

<p align="justify" style="text-indent: 0.5in">NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:</p>

<p style='margin-left:0pt;' align="center"><b>ARTICLE I</b><br>
<a name="_Toc118881871"><b><u>DEFINED TERMS</u></b></a></p>

<p align="justify" style="text-indent: 0.5in">The following capitalized terms, when used in this Agreement,
shall have the meanings set forth below, unless the context clearly indicates
otherwise.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881872">1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Affiliate</u></b>&quot; means, with
respect to any specified Person, any other Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, such specified Person.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881873">1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Agreement</u></b>&quot; means this Asset
Purchase Agreement.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881874">1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Assets</u></b>&quot; means all right, title and
interest in and to substantially of all of the assets of Seller, including all
of its (a) Purchased Personal Property, (b) Intellectual Property and rights
thereunder, remedies against infringements thereof, and rights to protection of
interests therein under the laws of all jurisdictions, (c) personal property
leases, subleases and rights thereunder, (d)&nbsp;Purchased Contracts, (e)
indentures, mortgages, instruments, security interests, grantees, other similar
arrangements and rights thereunder (but only to the extent Seller has any
right, title or interest in any of the items listed in this
subsection&nbsp;(e)), (f) accounts, notes and other receivables,
(g)&nbsp;claims, deposits, prepayments, refunds, causes of action, chooses in
action, rights of recovery, and rights of setoff, (h) franchises, approvals,
permits, licenses, orders, registrations, certificates, variances, similar
rights obtained from any governments or any Governmental Authority, (i) books,
records, ledgers, files, documents, correspondence, lists, plats, materials,
advertising and promotional materials, studies, reports and other printed or
written materials, and (j) all goodwill; provided, however, that the Assets
shall not include the Excluded Assets.</a></p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Assignment Agreements</u></b>&quot; means the
assignment agreements in the forms attached as <u>Exhibit B</u>, under which
Seller will assign, and Purchaser will assume, all of Seller's right, title and
interest in and to all of those Assets which are contracts, agreements,
Purchased Intellectual Property, licenses and permits.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881876">1.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Assumed Liabilities</u></b>&quot; means the
liabilities set forth on <u>Attachment 1.5</u>, and only the liabilities set
forth on <u>Attachment 1.5</u>.&nbsp; The Assumed Liabilities shall not include any
liability of Seller which is not expressly included on <u>Attachment 1.5</u>.&nbsp;
Without limiting the generality of the foregoing, Purchaser is not assuming (i)
any liability of Seller for income, transfer, sales, use and other taxes
arising in connection with the consummation of the transactions contemplated by
this Agreement (including any income taxes arising because the Seller is
transferring the Assets), (ii) any liability of Seller for unpaid taxes of
Seller or any other party, (iii) any obligation of Seller to indemnify any
person (including any of the shareholders of Seller) by reason of the fact that
such person was a director, officer, employee or agent of Seller or was serving
at the request of any such entity as a partner, trustee, director, officer,
employee, or agent of another entity, (iv) any liability resulting from,
arising out of, relating to, in the nature of or caused by any breach of
contract, tort, infringement or violation of law, (v) any liability of Seller
for costs and expenses incurred in connection with this Agreement and the
transactions contemplated in this Agreement, (vi) any liability or obligation
of Seller under this Agreement or under any other agreement between Seller on
the one hand and Purchaser on the other hand created on or after the date of
this Agreement or (vii) any liability or obligation resulting from any
litigation, arbitration, claim or controversy which Seller or any officer,
director, employee or shareholder of Seller was or is currently a party.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881877">1.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
[intentionally deleted]</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881878">1.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<b><u>Benefit Arrangements</u></b>&quot; shall have
the meaning set forth in <u>Section 4.16</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881879">1.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<b><u>Bill of Sale</u></b>&quot; means the bill of
sale in the form of attached as <u>Exhibit C</u>, under which Seller will sell,
transfer, assign and convey all of its rights, title and interest in and to all
of those Assets which are tangible personal property.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881880">1.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<b><u>Business</u></b>&quot; means the electric motor
business owned and operated by Seller.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881881">1.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Closing</u></b>&quot; means the closing of the
purchase and sale of the Assets in accordance with this Agreement.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881882">1.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Closing Date</u></b>&quot; means
the date on which Closing will take place, as specified in <u>Section 3.1</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881883">1.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Closing Date Balance Sheet</u></b>&quot; shall have the meaning set forth in <u>Section 2.3(a)</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881884">1.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Closing Date Balance Sheet Difference</u></b>&quot;
shall have the meaning set forth in <u>Section 2.3(b)</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881885">1.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Code</u></b>&quot; means the
Internal Revenue Code of 1986, as amended.</a></p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">1.15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&quot;<b><u>Disclosure Schedule</u></b>&quot;
means the disclosure schedules described in the preamble to Article IV and
attached hereto as <u>Exhibit A</u>.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">
<a name="_Toc118800887">1.16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Environmental Law</u></b>&quot;
means all applicable laws, permits, or other binding determinations of any
Governmental Authority relating to, imposing liability under standards
concerning, or otherwise addressing the environment, occupational health or
safety, including, but not limited to, rules of common law, the Comprehensive
Environmental Response, Compensation and Liability Act, the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act, the Emergency
Plan and Community Right to Know Act of 1986, the Clean Air Act, the Clean
Water Act, the Toxic Substances Control Act, the Hazardous Materials
Transportation Act, the Federal Insecticide, Fungicide and Rodenticide Act, the
Federal Safe Drinking Water Act, the Federal Radon and Indoor Air Quality
Research Act, and the Occupational Safety and Health Act, as all such laws or
acts have been amended, including any judicial or administrative
interpretations thereof, and any judicial or administrative orders, consents,
decrees or judgments.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881889">1.17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
[intentionally deleted]</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">1.18&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Excluded Assets</u></b>&quot; means (i) the
assets set forth on <u>Attachment 1.18</u>, (ii)&nbsp;any personal property of
Seller's shareholders and/or employees on the premises of Seller that is not
material to the operation of the Business, (iii) the Seller's corporate
charter, qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign qualifications,
taxpayer and other identification numbers, seals, minute books, stock transfer
books, blank stock certificates, and other documents relating to the
organization, maintenance and existence of Seller as a corporation (provided
Purchaser has the right to make copies of such materials), (iv) copies of
Seller's books and records necessary for preparation and filing of any tax
returns or other documents required by any Governmental Authority (provided
Purchaser has the right to make copies of such materials), and (v) any of the
rights of Seller under this Agreement or under any other agreement between
Seller on the one hand and Purchaser on the other hand entered into on or after
the date of this Agreement.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881890">1.19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Financial Statements</u></b>&quot; means the Financial Statements of Seller referred to in <u>Section
4.4</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881891">1.20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Financial Statement Date</u></b>&quot;
shall have the meaning set forth in <u>Section 4.4</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">
<a name="_Toc118800890">1.21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Governmental Authority</u></b>&quot; shall mean
any federal, state, local or foreign governmental, administrative or regulatory
authority, agency, commission, department, board, bureau, tribunal, court or
other body.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881893">1.22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Hazardous Substance</u></b>&quot; means any substance which is listed or defined as a hazardous
substance, hazardous constituent or solid waste pursuant to any Environmental
Law.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881894">1.23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Holdback Amount</u></b>&quot; shall have the meaning set forth in <u>Section
2.2(b)</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881895">1.24&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;<b><u>Indemnified Party</u></b>&quot; shall
have the meaning set forth in <u>Section 7.6(a)</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881896">1.25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Indemnifying Party</u></b>&quot; shall have the
meaning set forth in <u>Section 7.6(a)</u>.</a></p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">1.26&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Independent Accountant</u></b>&quot; shall have the meaning set forth
in <u>Section 2.3(a)</u>.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">1.27&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Intellectual Property</u></b>&quot; shall have the meaning set forth
in <u>Section 4.15(a)</u>.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881898">1.28&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Liabilities</u></b>&quot; means all
indebtedness, claims, liabilities, obligations, responsibilities, losses,
damages, judgments, punitive damages, economic damages, treble damages, costs
and expenses (including, without limitation, reasonable attorney, expert,
engineering and consulting fees and costs and any fees and costs associated
with any investigation, feasibility, or remedial action studies or
transportation, disposal or other remedial actions), fines, penalties and
monetary sanctions, and interest, whether accrued, absolute or contingent,
known or unknown, and whether or not of a kind required by generally accepted
accounting principles to be set forth on a financial statement or in notes
thereto.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881900">1.29&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&quot;<b><u>Losses</u></b>&quot; means any
demand, claims, actions, suits, proceedings, assessments, judgments, awards,
costs, losses, damages, liabilities and expenses (including, without
limitation, reasonable attorneys' fees and related costs).</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">1.30&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<a
name="_Toc118800895">&quot;<b><u>Person</u></b>&quot; </a>means an individual, a
partnership, a corporation, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization,
or a Governmental Authority.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">1.31&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;<b><u>Pro-Dex</u></b>&quot; means Pro-Dex, Inc., a
Colorado corporation, which owns one hundred percent (100%) of the outstanding
capital stock of Purchaser.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881902">1.32&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;<b><u>Purchase Price</u></b>&quot; means
the purchase price to be paid for the Assets in accordance with <u>Section 2.2</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881903">1.33&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;<b><u>Purchase Price Adjustment</u></b>&quot;
shall have the meaning set forth in <u>Section 2.3(b)</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881904">1.34&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;<b><u>Purchased Contracts</u></b>&quot;
means all of Seller's agreements and contracts (including, without limitation,
those agreements and contracts listed on <u>Schedule 4.8</u>), except those
contracts that are Excluded Assets.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">1.35&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Purchased Personal Property</u></b>&quot; means
all of Seller's tangible personal property such as machinery, computers,
equipment, fixtures and fittings thereon, inventories of raw materials and
supplies, manufactured and purchased parts, goods in process and finished
goods, furniture, automobiles, trucks, tractors, trailers, tools, jigs and
dies, including but not limited to the tangible personal property which is
listed on <u>Attachment 1.35</u>.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881905">1.36&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
&quot;<b><u>Purchaser</u></b>&quot; means
Pro-Dex Astromec, Inc., a Nevada corporation, which is a wholly-owned
subsidiary of Pro-Dex.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881907">1.37&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
&quot;<b><u>Real Property</u></b>&quot; has
the meaning set forth in <u>Section 4.11(a)</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881908">1.38&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Real Property Purchase
Agreement</u></b>&quot; means the purchase agreement whereby Purchaser shall
purchase certain real property located in Carson City, Nevada, owned by M.D.
Glover, Inc., in the form attached hereto as <u>Exhibit D</u>.</a></p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">1.39&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Restricted Period</u></b>&quot;
shall have the meaning set forth in <u>Section 6.6(a)</u>.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881910">1.40&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Restricted Territory</u></b>&quot; means all states, territories, districts, provinces and
commonwealths of the United States, and Canada and throughout the world in
which the Seller has conducted any aspect of the Business, and all states,
territories, districts and commonwealths of the United States, Canada and
throughout the world in which Purchaser conducts its business (including,
without limitation, the Business) hereafter.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881911">1.41&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
[intentionally deleted]</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881912">1.42&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Seller</u></b>&quot; means Astromec, a Nevada
corporation.</a>&nbsp; </p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881913">1.43&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Seller's Knowledge</u></b>&quot; means
the actual knowledge, after reasonable investigation, of any executive officer
or director of Seller.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881914">1.44&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Seller Shareholders</u></b>&quot; means Malcolm D. Glover, Jr., an
individual, and M.D. Glover, Inc., a Nevada corporation.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881915">1.45&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;
[intentionally deleted]</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881916">1.46&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Third Party Claim</u></b>&quot; shall have the meaning set forth in <u>Section
7.6(a)</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881917">1.47&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<b><u>Working Capital</u></b>&quot; means </a>current assets minus current
liabilities, excluding any current portion of any long term debt owed to either
or both of Malcolm D. Glover, Jr., and/or M.D. Glover, Inc., a Nevada
corporation. </p>

<p style='margin-left:0pt;' align="center"><b>ARTICLE II</b><br>
<a name="_Toc118881918"><b><u>PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF
LIABILITIES</u></b></a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881919">2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Sale of Assets</u></b>.&nbsp; Subject to the
terms and conditions set forth in this Agreement, Purchaser agrees to purchase
from Seller, and Seller agrees to sell, transfer, convey and deliver to
Purchaser, all of the Assets at the Closing for the consideration specified in <u>Section
2.2</u> below, subject to the adjustment in <u>Section 2.3</u> below.&nbsp; In
addition, at the Closing, Purchaser agrees to assume and become responsible for
all of the Assumed Liabilities.&nbsp; Purchaser will not assume or have any
responsibility, however, with respect to any other obligation or liability of
Seller not specifically included within the definition of Assumed Liabilities.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881920">2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Purchase Price</u></b>.&nbsp; The Purchase Price
for the Assets shall be payable as follows:</a></p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Two Million Seven Hundred Thousand Dollars ($2,700,000), less One
Hundred Thousand Dollars ($100,000) (the &quot;<u>Holdback Amount</u>&quot;), in cash to
Seller at Closing.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Holdback Amount, less any Purchase Price Adjustment due to Purchaser
and not paid by Seller in accordance with <u>Section 2.3(b)</u> (if any) and
any amount offset by Purchaser pursuant to <u>Section 7.4</u> (if any), in cash
to Seller on the six month anniversary of the Closing Date.</p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Purchase Price Adjustment</u></b>. &nbsp;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Within five (5) business days after the Closing
Date (time being of the essence), Seller shall deliver to Moss Adams LLP (the &quot;<u>Independent
Accountant</u>&quot;) copies of all documents and materials necessary for the
Independent Accountant to prepare a balance sheet of the Seller at and
as of the Closing Date (the &quot;<u>Closing Date Balance Sheet</u>&quot;) to be
delivered to both Purchaser and Seller within sixty (60) days of the Closing
Date.&nbsp; The Closing Date Balance Sheet shall be prepared in accordance with
generally accepted accounting principals.&nbsp; Purchaser shall bear the fees and
expenses incurred in the preparation and audit of the Closing Date Balance
Sheet.&nbsp; Both Seller and Purchaser shall work in good faith with the Independent
Auditor and provide the Independent Auditor with such additional documents and
information, as the Independent Auditor shall reasonably request, in order for
the Independent Auditor to deliver the Closing Date Balance Sheet within sixty
(60) days of the Closing Date.&nbsp; The Independent Auditor's determinations as set
forth on the Closing Date Balance Sheet shall be conclusive, final and binding
upon both Purchaser and Seller.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Purchase Price shall be adjusted as follows (the &quot;<u>Purchase Price
Adjustment</u>&quot;): The &quot;<u>Closing Date Balance Sheet Difference</u>&quot; shall
equal Seller's Working Capital as reflected on the Financial Statements balance
sheet minus Seller's Working Capital on the Closing Date Balance Sheet.&nbsp; In the
event the Closing Date Balance Sheet Difference is a negative number, within
two (2) business days of receipt of the Closing Date Balance Sheet, Purchaser
shall pay to Seller in cash an amount equal to the absolute value of the
Closing Date Balance Sheet Difference by wire transfer of immediately available
funds to an account designated in writing by Seller to Purchaser.&nbsp; In the event
the Closing Date Balance Sheet Difference is a positive number, within two (2)
business days of receipt of the Closing Date Balance Sheet, Seller shall pay to
Purchaser in cash an amount equal to the Closing Date Balance Sheet Difference
by wire transfer of immediately available funds to an account designated in
writing by Purchaser to Seller.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">
<a name="_Toc115780193">2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Purchase Price Allocation; Taxes</u></b>.&nbsp;
The parties agree to allocate the Purchase Price among the Assets for all
purposes (including financial accounting and tax purposes) in accordance with
the allocation schedule attached to this Agreement as <u>Attachment&nbsp;2.4</u>.&nbsp;
Any transfer, documentary, sales, use or other taxes assessed upon or with
respect to the transfer of the Assets to Purchaser, and any recording or filing
fees with respect thereto, shall be the responsibility of Seller.</a></p>

<p style='margin-left:0pt;' align="center"><b>ARTICLE III</b><br>
<a name="_Toc118881923"><b><u>CLOSING</u></b></a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881924">3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Closing Date</u></b>.&nbsp; The Closing shall
occur at a time convenient to the parties; provided that all conditions to
Closing herein set forth will have been satisfied; and further provided that
Closing will occur not later than January 5, 2006, (the &quot;<u>Closing Date</u>&quot;),
unless the parties agree in writing to an extension of the Closing Date.</a>&nbsp; Closing shall be deemed effective on the Closing Date
at 11:59 p.m. in each time zone in which Assets are located.</p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Place of Closing</u></b>.&nbsp; Closing will
take place at the offices of Robison, Belaustegui, Sharp &amp; Low, 71
Washington Street, Reno, Nevada 89503 or at such other place as the parties may
agree in writing.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881926">3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Performance by Seller at Closing</u></b>.&nbsp;
At Closing, the Seller will deliver to Purchaser the following:</a></p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Assignment Agreements, in the form attached as <u>Exhibit B</u>,
duly executed by Seller;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Bill of Sale, in the form attached as <u>Exhibit C</u>, duly
executed by Seller;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Real Property Purchase Agreement, in the form attached as <u>Exhibit
D</u>, shall have been previously duly executed by M.D. Glover, Inc. and
delivered to Pro-Dex;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Copies of resolutions of both the board of directors and the
shareholders of Seller authorizing and approving this Agreement and all
transactions and agreements contemplated hereby, certified by the Secretary of
Seller;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A certificate of the Nevada Secretary of State verifying the good
standing of Seller on a date within fifteen (15) days prior to the Closing
Date;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A UCC search report, dated within fifteen (15) days of the Closing Date
and certified by the Nevada Secretary of State, which verifies the
representations set forth in <u>Section 4.12</u>; and</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Evidence of all third party notices and/or consents (including, without
limitation, all notices and consents set forth on <u>Schedule 4.3</u>) which
may be necessary, in the reasonable opinion of Purchaser and its counsel, for
the sale, transfer and conveyance of the Assets to Purchaser.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881927">3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Performance by Purchaser at Closing</u></b>.&nbsp;
At Closing, Purchaser will deliver to Seller the following:</a></p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The cash portion of the Purchase Price, less the Holdback Amount, by
cashier's check or wire transfer, payable to Seller as provided in <u>Section
2.2(a)</u>;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Assignment Agreements, in the form attached as <u>Exhibit B</u>,
duly executed by Purchaser;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Bill of Sale, in the form attached as <u>Exhibit C</u>, duly
executed by Purchaser;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Real Property Purchase Agreement, in the form attached as <u>Exhibit
D</u>, shall have been previously duly executed by Pro-Dex and delivered to
M.D. Glover, Inc.;</p>
<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">&nbsp;</p>
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<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A certificate of the Nevada Secretary of State verifying the formation
of Purchaser, dated within fifteen (15) days prior to the Closing Date; and</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Copies of resolutions of the board of directors of Purchaser authorizing
and approving this Agreement and all transactions and agreements contemplated
hereby, certified by Secretary of Purchaser.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881928">3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Approval of Documents</u></b>.&nbsp; Unless
otherwise provided herein, all instruments and documents to be delivered will
be dated as of the Closing Date and will be reasonably satisfactory to the
parties and their respective counsel, as to form and content.</a></p>

<p style='margin-left:0pt;' align="center"><b>ARTICLE IV</b><br>
<a name="_Toc118881929"><b><u>REPRESENTATIONS AND WARRANTIES BY SELLER</u></b></a></p>

<p align="justify" style="text-indent: 0.5in">Seller, each Seller Shareholder and Malcolm D. Glover, Sr.,
hereby jointly and severally represents and warrants to Purchaser that the
following statements are true and correct on the date hereof, except as set
forth in the disclosure schedule delivered by Seller to Purchaser on the date
hereof and attached hereto as <u>Exhibit&nbsp;A</u> (the &quot;<u>Disclosure
Schedule</u>&quot;):</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881930">4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Corporate Status</u></b>.&nbsp; Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada, and has all requisite corporate power and
authority and all licenses, permits and authorizations necessary to own or
lease its properties and to carry on its business as it is now being conducted.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881931">4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Corporate Documents</u></b>.&nbsp; Seller has
provided Purchaser true, correct and complete copies of its Articles of
Incorporation and Bylaws, including all amendments thereto, and true, correct
and complete copies of the minutes of all directors' and shareholders' meetings
and the stock record books and stock certificate books of Seller.</a></p>
<p style='margin-left:0pt; text-indent:0.5in' align="justify">4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Authority to Perform Agreement</u></b>.&nbsp;
Seller has the power to enter into this Agreement and to carry out its
obligations hereunder, and the execution, delivery and performance of this
Agreement by Seller has been duly authorized by all necessary corporate action
on the part of the shareholders and board of directors of Seller.&nbsp; The
execution and performance of this Agreement does not violate, or result in a
beach of, or constitute a default under, any judgment, order or decree to which
Seller or any of the Assets may be subject.&nbsp; Such execution or performance does
not constitute a violation of or conflict with any duty to which Seller is
subject or any provision of the Articles of Incorporation or Bylaws of Seller.&nbsp;
Neither the exercise and delivery of this Agreement, nor the consummation of
the transactions contemplated herein, nor compliance with the terms and
provisions hereof, will result in the creation or imposition of any lien,
charge or encumbrance upon any of the property of Seller pursuant to the terms
of, or conflict in any way with the provisions of, or constitute a default
under, or require the consent of any other party to, any indenture, mortgage,
deed of trust, agreement, lease, or other instrument to which Seller is a party
or by which it may be bound or to which it, the Business or any of the Assets
may be subject, except for the consents or approvals of those Persons
identified on <u>Schedule 4.3</u>, which consents or approvals have been
obtained.&nbsp; Except as set forth on <u>Schedule 4.3</u>, neither the execution of
this Agreement nor consummation of the sale of the Assets hereunder (a)
requires notice to or the approval or consent of any (i)&nbsp;Governmental
Authority having jurisdiction over the Business or (ii)&nbsp;any party to any
agreement with Seller, as a condition to (A) the continuance of Seller's
conduct of its business or (B)&nbsp;the continuance by Purchaser of the
Business, nor (b), to Seller's Knowledge, adversely affects relationships, as
historically enjoyed up to the Closing Date, with current customers of the Business
after the sale, transfer and conveyance of the Assets in accordance with this
Agreement.</p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881933">4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Financial Statements</u></b>.&nbsp; Seller has
provided Purchaser with a balance sheet of Seller as of June 30, 2005 (the &quot;<u>Financial
Statement Date</u>&quot;), prepared in house by Seller, a copy of which is attached
hereto as <u>Schedule 4.4</u> (the &quot;<u>Financial Statements</u>&quot;), and such
other financial information, corporate records and documents material to the
operation of Seller's business as Purchaser has reasonably requested.&nbsp; The
Financial Statements are true and correct in all material respects and present
fairly the financial condition and results of operations of Seller for the
period specified.&nbsp; The books of account from which the Financial Statements
were prepared accurately reflect all of the items of income and expense, all
assets and liabilities, and all accruals.&nbsp; Seller has no undisclosed
depreciable assets, and all depreciation and investment credit taken for tax
purposes is disclosed on the Financial Statements.</a>&nbsp; Purchaser acknowledges Seller has permitted Purchaser's
representative full access to examine and test Seller's books of account from
which the Financial Statements were prepared.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881934">4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Liabilities</u></b>.&nbsp; Seller has no
liabilities or obligations of any nature or of any amount whatsoever, whether
accrued, absolute, liquidated or unliquidated, contingent or otherwise, and
there is no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against Seller which might
give rise to obligations or liabilities of Seller, except:</a></p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to the extent reflected in the Financial Statements and not already paid
or discharged,</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;those that have been or will be incurred in or as a result of the normal
and ordinary course of business consistent with past custom and practice since
the Financial Statement Date, and</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;those expressly approved in writing by Purchaser. </p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881935">4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Litigation</u></b>.&nbsp; Except as set forth on
<u>Schedule 4.6</u>, there are no actions, suits, claims, proceedings or
investigations pending or, to Seller's Knowledge, threatened against or
affecting Seller at law or in equity or before or by any Governmental
Authority.&nbsp; Except as set forth on <u>Schedule 4.6</u>, Seller is not subject
to or in default with respect to any order, writ, injunction or decree of any
Governmental Authority.&nbsp; Seller has complied in all material respects with all
laws, regulations and orders applicable to its business or properties.&nbsp; None of
the actions, suits, claims, proceedings and investigations disclosed on <u>Schedule
4.6</u> could result in any adverse change in the business, financial
condition, operations, results of operations or future prospects of the
Business, or impair the value of the Assets.</a></p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Stockholder, Officer and Employee Claims</u></b>.&nbsp; No stockholder, officer or employee of Seller has any claim
or claims against Seller, and Seller is not obligated or liable to any such
persons in any way or for any amounts except compensation due to employees in
the ordinary course of business and except as disclosed in the Financial
Statements.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881937">4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Contracts</u></b>.&nbsp; <u>Schedule 4.8</u>
lists the following contracts and other agreements to which Seller is a party:</a></p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any agreement (or group of related agreements) for the lease of personal
property to or from any person providing for lease payments in excess of $1,000
per year;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any agreement (or group of related agreements) for the purchase or sale
of raw materials, commodities, supplies, products or other personal property,
or for the furnishing or receipt of services, the performance of which will
extend over a period of time of more than one year, result in a material loss
to Seller, or involve the payment of consideration in excess of $1,000 during
the term of such agreement;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any agreement concerning a partnership or joint venture;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any agreement concerning any license, sublicense or other permission in
or to the Purchased Intellectual Property;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any outstanding purchase orders;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any agreement (or group of related agreements) under which Seller has
created, incurred, assumed or guaranteed any indebtedness for borrowed money,
or any lease obligation, in excess of $1,000 or under which it has imposed or
granted a security interest on any of its assets, tangible or intangible;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any agreement concerning confidentiality or noncompetition;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any profit sharing, stock option, stock purchase, stock appreciation,
deferred compensation, severance, or other plan or arrangement for the benefit
of its current or former directors, officers or employees;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any collective bargaining agreement;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any agreement for the employment of any individual on a full-time,
part-time, consulting or other basis providing annual compensation in excess of
$1,000, or providing severance benefits, or which requires more than thirty
(30) days notice of termination;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any agreement under which it has advanced or loaned any amount to any of
its directors, officers and employees;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any agreement under which the consequences of the default or termination
could have a material adverse affect on the business, financial condition,
operations, results of operations or future prospects of Seller; or</p>
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<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any other agreement (or group of related agreements), the performance of
which involves consideration in excess of $1,000.</p>

<p align="justify" style="text-indent: 0.5in">Seller has delivered to Purchaser a correct, complete and fully
executed copy of each written agreement listed in <u>Schedule 4.8</u>, and a
written summary setting forth the terms and conditions of each oral agreement
referred to in <u>Schedule 4.8</u>.&nbsp; With respect to each such agreement:&nbsp; (i)
the agreement is legal, valid, binding, enforceable and in full force and
effect; (ii)&nbsp;the agreement will continue to be legal, valid, binding,
enforceable and in full force and effect on identical terms following the
consummation of the transactions contemplated in this Agreement; (iii) no party
is in breach or default under the agreement, and to the Seller's Knowledge, no
events or circumstances have occurred which could reasonably be anticipated to
create a default under the agreement; and (iv) no party has reputed any
provision of the agreement.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881938">4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Tax Returns</u></b>.&nbsp; Seller has filed with
the appropriate Governmental Authorities all tax and related returns required
to be filed by it, and such returns accurately reflect the taxes payable.&nbsp; All
federal, state, local, county, franchise, sales, use, excise, property and
other taxes which are due and payable have been duly paid; and no reserves for
unpaid taxes have been set up or are required on the basis of the facts and in
accordance with generally accepted accounting principles, except as reflected
in the Financial Statements.&nbsp; There are no unpaid assessments or proposed
assessments of federal income taxes pending against Seller; and there are no
federal, state or local tax audits or disputes pending or threatened.&nbsp; Seller
has never filed a consent under Section 341(f) of the Internal Revenue Code.&nbsp; Seller
has withheld and paid all taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party.&nbsp; No claim has been made by an
authority in a jurisdiction where Seller does not file tax returns that Seller
may be subject to taxation by that jurisdiction.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881939">4.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Leases</u></b>.&nbsp; Seller does
not own, and has never owned, any real property.&nbsp; All properties currently
leased by Seller are set forth on <u>Schedule 4.10</u>.&nbsp; None of the buildings,
structures or other appurtenances or improvements on said real property (or any
equipment therein), nor the operation or maintenance thereof, violates any
restrictive covenant or any provision of any federal, state or local law,
ordinance, rule or regulation or encroaches on property of others.&nbsp; No
condemnation proceeding is pending or threatened which would preclude or impair
the use of any of such real property for the purpose for which it is currently
used.&nbsp; Each lease set forth on <u>Schedule 4.10</u> is in full force and
effect, all rents and additional rents due to date have been paid, no default
thereunder exists or has been claimed, and the consummation of the transactions
contemplated by this Agreement will not create a default thereunder.</a>&nbsp;
</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881940">4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Environmental</u></b>.&nbsp; All real
properties leased currently or at any time in the past by Seller (the &quot;<u>Real
Property</u>&quot;), are identified by address on <u>Schedule 4.11</u>.&nbsp; Except as set forth on <u>Schedule 4.11</u></a>:</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the Real Property has been maintained and operated by Seller in
compliance with all applicable Environmental Laws;</p>
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<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all notices, permits, licenses or similar authorizations, if any,
required to be obtained or filed by Seller under any Environmental Law in
connection with the Real Property have been obtained or filed;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;there are no past, pending or, to Seller's Knowledge, threatened
investigations, proceedings, notice of violation or other claims against Seller
with respect to any Real Property relating to the presence, release, threatened
release or remediation of any Hazardous Material or pollutant for
non-compliance with any Environmental Law or the environmental condition of any
such property; Seller is not, and, to Seller's Knowledge, no prior owner or
operator of any Real Property is, the subject of any liabilities under
Environmental Laws; and there are no liens, deed restrictions, notice or
registration requirements or other limitations applicable to the Real Property
based upon any Environmental Laws;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;during any period in which Seller leased or otherwise controlled the
Real Property, no conditions or circumstances at any time in, at, on, under, a
part of, involving or otherwise related to the Real Property exist or have
existed, including without limitation the off-site disposal of Hazardous
Materials, that could currently or in the future give rise to any remedial
action against Seller or Purchaser under, or impose any liability on Seller or
Purchaser with respect to, any Environmental Law; there are no underground
storage tanks located in, at, on, or under the Real Property; and there are no
PCBs, lead paint, asbestos, and materials, articles and products containing
PCBs, lead paint or asbestos located in, at, on or under the Real Property;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller has not received any notice or claim that Seller is or may be liable
to any Person as a result of any Hazardous Material generated, treated or
stored in connection with the ownership, use or operation of the Real Property;
and</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;no conditions or circumstances exist or have existed, and no activities
are occurring or have occurred, that are resulting or have resulted in the
exposure of any person or property to a Hazardous Material such that Seller or
Purchaser may in the future be liable to such person or to the owners of such
property for personal or other injuries or damages resulting from such
exposure.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881941">4.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Title to Assets</u></b>.&nbsp; Except as
disclosed on <u>Schedule 4.12</u>, Seller has good and marketable title to all
of the Assets, free and clear of any and all mortgages, liens, pledges,
privileges, charges or encumbrances of every kind, nature and description; all
tangible properties which comprise the Assets are in Seller's possession or
custody or under its control; and all of its operating properties which
comprise Assets are in good operating condition and repair.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881942">4.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Accounts Receivable</u></b>.&nbsp; All the
accounts receivable of Seller reflected in the Financial Statements have been
collected or are good and collectable in the aggregate recorded amounts thereof
(less a reasonable amount for doubtful accounts), can reasonably be anticipated
to be paid in full after good faith collection efforts, and are subject to no
set-offs or counterclaims.&nbsp; Seller will be obligated to reimburse Purchaser for
uncollectible accounts which are included in the Assets in accordance with <u>Section
6.1</u> below.</a> </p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">4.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Inventory</u></b>.&nbsp; All of the inventory of
Seller reflected in the Financial Statements was in existence at the date
thereof.&nbsp; All such inventory and all inventory items acquired since the date of
the Financial Statements are of good and merchantable quality and are usable in
the ordinary course of Seller's business except for damage or deterioration
adequately covered by insurance or by claims against financially responsible
third parties.&nbsp; Such inventories were valued at the lower of cost or net
realizable value and were determined in accordance with generally accepted
accounting principles consistently applied.&nbsp; </p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881944">4.15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Intellectual Properties</u></b>.&nbsp; </a></p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;<u>Intellectual Property</u>&quot; shall mean any or all of the following:
(i) works of authorship including, without limitation, computer programs,
algorithms, routines, source code and executable code, whether embodied in
software or otherwise, documentation, designs, files, records and data; (ii)
inventions (whether or not patented or patentable), improvements, and
technology; (iii) proprietary and confidential information, including technical
data and customer and supplier lists, trade secrets, show how, know how and
techniques; (iv) databases, data compilations and collections and technical
data; (v)&nbsp;processes, devices, prototypes, schematics, bread boards, net
lists, mask works, test methodologies and hardware development tools; (vi)
logos, trade names, trade dress, trademarks, service marks, and other
indicators of origin of products and services (whether or not any of the items
listed in this subsection (vi) are registered or registerable and including,
without limitation, all right, title and interest in and to the name
&quot;Astromec&quot;); (vii)&nbsp;World Wide Web addresses, uniform resource locators and
domain names, tools, methods and processes; and (viii) all instantiations of
the foregoing in any form and embodied in any media.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each item of Intellectual Property
owned or used by Seller immediately prior to the Closing will be owned or
available for use by Purchaser on identical terms and conditions immediately
following the Closing.&nbsp; Seller has taken all necessary action to maintain and
protect each item of Intellectual Property owned or used by it.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Seller does not own or use any Intellectual
Property that is the subject of an application, certificate, filing,
registration or other document issued by, filed with, or recorded by, any
private, state, government or other public legal authority at any time,
including, without limitation, the United States Patent and Trademark Officer
or any foreign equivalent.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Schedule
4.15</u>
lists all Intellectual Property that the Seller has the right to use
pursuant to license, sublicense, agreement or permission. Seller has delivered
to Purchaser true, correct and complete copies of all licenses, agreements and
permissions for the Intellectual Property listed on <u>Schedule 4.15</u>.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Seller is not infringing or
otherwise acting adversely to the right of any other Person under, or in
respect to, any Intellectual Property including, without limitation, any
patent, license, trademark, trade name, service mark, copyright or similar
intangible right of any other Person.</p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">4.16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Employees Benefits</u></b>.&nbsp; <u>Schedule
4.16</u> lists all pension, retirement, profit sharing, deferred compensation,
employee stock ownership, stock option, severance, bonus, commission,
incentive, life insurance, health and benefit plans or arrangements
established, maintained or adopted by Seller that are currently in force (&quot;<u>Benefit
Arrangements</u>&quot;).&nbsp; Complete, accurate copies of all documents relating to the
establishment, terms or funding of such Benefit Arrangements (including
contracts or agreements with trustees and insurance companies) have been
provided to Purchaser.&nbsp; No accumulated funding deficiency exists and no waiver
of the minimum funding standards of Section 412 of the Code has been requested
with respect to a Pension Plan (as defined in Section 3(2) of ERISA) that is
subject to Section 412 of the Code.&nbsp; Seller has received no notice of a claim
of &quot;withdrawal liability&quot; as defined in Section 4201 of ERISA.&nbsp; No employee
Benefit Plan (within the meaning of Section 3(3) of ERISA) has engaged or
become involved in a prohibited transaction (as defined in Section 406 of ERISA
or Section 4975 of the Code) to which an exemption did not apply.&nbsp; No Welfare
Plan (as defined is Section 3(1) of ERISA) provides benefits for former
employees or their dependents except as required by Section 4980B of the Code.&nbsp;
Each Benefit Arrangement has been and is maintained, operated and administered
in all material respects in compliance with its terms and any related documents
or agreements, and in all material respects in compliance with all applicable
laws and regulations, including the due submission of all required filings and
reports.&nbsp; To the Seller's Knowledge, there is no pending or threatened
assessment, complaint, proceeding, or investigation of any kind with respect to
any Benefit Arrangement, or any material claims for benefits or expenses under
such arrangements.&nbsp; With respect to each of the Employee Benefit Plans, Seller
has delivered to Purchaser true and complete copies of each of the following
documents:&nbsp; (i) a copy of the plan (including all amendments thereto); (ii) a
copy of the annual report, if required under ERISA, with respect to the plan
for the last two years; (iii) a copy of the actuarial report, if required under
ERISA, with respect to the plan for the last two years; (iv) a copy of the most
recent Summary Plan Description, together with each Summary of Material
Modification, if required under ERISA, with respect to the plan, and all
material employee communications relating to such plan; (v) if the plan is
funded through a trust or any third party funding vehicle, a copy of the trust
or other funding agreement (including all amendments thereto) and the latest
financial statements thereof; (vi) all contracts relating to the plan,
including without limitation service provider agreements, insurance contracts,
investment management agreements, subscription and participation agreements and
record keeping agreements; and (vii) the most recent determination letter
received from the IRS with respect to the plan, if any.&nbsp; Each Employee Benefit
Plan intended to qualify under Section 401(a) of the Code is so qualified, and
each trust maintained in connection with such plan is exempt from tax under
Section 501(a) of the Code.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881946">4.17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Employment Practices</u></b>.&nbsp; <u>Schedule
4.17</u> lists all of the employees of Seller, and their current compensation
rates.&nbsp; Seller has not received notice of any material violation of any federal
or state law respecting employment or employment practices, terms and
conditions of employment and wages and hours.&nbsp; Seller is not engaged in any
unfair labor practice.&nbsp; There are no collective bargaining agreements which
restrict Seller from carrying out the terms of this Agreement; and Seller has
no contract with any of its employees which cannot be terminated without
penalty on no more than ten (10) days' notice.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881947">4.18&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>No Broker</u></b>.&nbsp; Seller has not employed
any broker, finder or agent, nor otherwise become in any way obligated for any
broker's, finder's or agent's or similar fee with respect to the transactions
contemplated by this Agreement.</a></p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">4.19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Insurance</u></b>.&nbsp; <u>Schedule 4.19</u>
sets forth the following information with respect to each insurance policy
(including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which Seller has
been a party, a named insured, or otherwise the beneficiary of coverage at any
time within the past three (3) years:</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the name, address, and telephone number of the agent;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the name of the insurer, the name of the policyholder, and the name of
each covered insured;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the policy number and the period of coverage;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the scope (including an indication of whether the coverage was on a
claim made, occurrence, or other basis) and amount (including a description of
how deductibles and ceilings are calculated and operate) of coverage; and</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a description of any retroactive premium adjustments or other
loss-sharing arrangements.</p>

<p align="justify" style="text-indent: 0.5in">With respect to each such insurance policy:&nbsp; (i) the policy is
legal, valid, binding, enforceable, and in full force and effect; (ii) the
policy will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby; (iii) neither Seller nor any other party to
the policy is in breach or default (including with respect to the payment of
premiums or the giving or notices), and no event has occurred which, with
notice or the lapse of time, would constitute such a breach or default, or
permit termination, modification, or acceleration, under the policy; and (iv)
no party to the policy has repudiated any provision thereof.&nbsp; Seller has been
covered during the past six (6) years by insurance in scope and amount customary
and reasonable for the businesses in which it has engaged during the
aforementioned period.&nbsp; <u>Schedule 4.19</u> describes any self-insurance
arrangements affecting Seller.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881949">4.20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Subsidiaries</u></b>.&nbsp; Seller does not own
any capital stock of any other corporation or any interest in any other Person.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881950">4.21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Licenses, Permits, Etc</u></b>.&nbsp; Except as
disclosed in <u>Schedule 4.21</u>, the conduct of the Business is not dependent
on any governmental or private license, permit or other authorization, and the
consummation of the transactions contemplated by this Agreement will not
terminate or adversely affect any such license, permit or authorization.</a></p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">4.22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Absence of Certain Events, Circumstances, Etc</u></b>.&nbsp; Since the Financial Statement Date, Seller has not (a)
incurred any obligation or liability, whether absolute or contingent, except
obligations and liabilities incurred in the ordinary course of Seller's
business; (b)&nbsp;discharged or satisfied any lien or encumbrances or paid any
obligation or liability whether absolute or contingent, other than current
liabilities having become due and payable since that date in the ordinary
course of Seller's business and obligations and liabilities under contracts
referred to in the exhibits annexed hereto; (c) made or agreed to make any
wage, salary or employee benefit increases for full time employees; (d) sold or
transferred any of its tangible or intangible assets or canceled any debts or
claims, except, in each case, in the ordinary course of business; (e) sold,
assigned or transferred any patents, patent applications, patent rights,
licenses, trademarks, trademark applications, trademark rights, trade names,
trade name rights, service marks, service mark rights, copyrights, copyright
applications or any similar rights; (f) suffered any losses that would have a materially
adverse effect on the business or financial condition of Seller, or waived any
rights of substantial value; (g) suffered any loss, damage or destruction to
any of its properties due to fire or other casualty whether or not insured,
which loss, damage or destruction materially and adversely affects its
business, properties or operations; (h) issued or sold or agreed to issue or
sell any shares of its capital stock or any other securities or reclassified or
agreed to reclassify its capital stock; (i) mortgaged, pledged or subjected to
lien, charge or other encumbrance any of its tangible or intangible assets,
except the lien of current real and personal property taxes not yet due and
payable or purchase money or similar liens incurred in the ordinary course of
business; (j) made or agreed to make capital expenditures; (k) declared or paid
a dividend or transferred property or loaned any money or agreed to loan money
to any of its directors, officers or employees; (l) amended its Articles of
Incorporation or Bylaws; (m) conducted its business otherwise than in its
ordinary and usual manner; or (n) become aware of an event, transaction or
circumstance which does or could materially adversely affect its condition
(financial or otherwise), assets, liabilities, earnings, business or
operations.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881952">4.23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Disclosure</u></b>.&nbsp; Neither this Agreement
nor any of the Attachments, Schedules or Exhibits attached to this Agreement
contains any untrue statement of any material fact or omits to state any
material fact required to be stated herein or therein, or necessary in order to
make the statements contained herein or therein not misleading.&nbsp; To the
Seller's Knowledge, there is no fact which materially adversely affects, or in
the future may (so far as Seller can now reasonably foresee) materially
adversely affect the Assets or the prospects or condition (financial or
otherwise) of the Business, which fact has not been disclosed in writing to
Purchaser prior to the date hereof or set forth herein or in the Schedules
attached to this Agreement.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881953">4.24&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Directors and Officers</u></b>.&nbsp; <u>Schedule 4.24</u> lists as of the date of this Agreement
all of the directors and officers of Seller.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881954">4.25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Powers of Attorney</u></b>.&nbsp; There are no
outstanding powers of attorney executed on behalf of Seller.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881955">4.26&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Condition of Buildings and Equipment</u></b>.&nbsp; All of the buildings leased by Seller and all of the
equipment of Seller are in good operating condition and repair and to the
Seller's Knowledge are in conformity with all applicable ordinances and
regulations and building, zoning, and other laws.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">4.27&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b> <u>Purchase of Astro Mec Motors Assets</u></b>.&nbsp; On or around November 5, 1985, Seller consummated a
transaction with Astro Mec Motors, Inc., a California corporation (&quot;<u>Astro
Mec CA</u>&quot;) whereby Seller purchased substantially all of the assets of Astro
Mec CA (the &quot;<u>Astro Mec CA Transaction</u>&quot;).&nbsp; Seller has no documentation
regarding the Astro Mec CA Transaction, except for a copy of the Bill of Sale
without copies of exhibits referenced therein.&nbsp; Seller has good and marketable
title to all of the assets purchased in the Astro Mec CA Transaction, free and
clear of any and all mortgages, liens, pledges, privileges, charges or
encumbrances of every kind, nature and description. </p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">4.28&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
<b><u>Bulk Sales Law</u></b>.&nbsp;
Seller is not subject to the bulk sales laws of any jurisdiction in connection with
the transactions contemplated by this Agreement.</p>

<p style='margin-left:0pt;' align="center"><b>ARTICLE V</b><br>
<a name="_Toc118881957"><b><u>REPRESENTATIONS AND WARRANTIES BY PURCHASER</u></b></a></p>

<p align="justify" style="text-indent: 0.5in">Purchaser represents and warrants to Seller that the following
statements are true and correct on the date hereof:</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881958">5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Organization in Good Standing</u></b>.&nbsp;
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881959">5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Authority to Perform Agreement</u></b>.&nbsp;
Purchaser has the corporate power to enter into this Agreement and to carry out
its obligations hereunder.&nbsp; The execution and delivery of this Agreement, the
payments provided for herein, and the consummation of transactions contemplated
hereby, have been duly authorized by Purchaser's board of directors, and no
other corporate proceeding on the part of Purchaser is necessary to authorize
Purchaser's officers to perform this Agreement and the transactions
contemplated herein.</a></p>

<p style='margin-left:0pt;' align="center"><b>ARTICLE VI</b><br>
<a name="_Toc118881960"><b><u>COVENANTS</u></b></a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881961">6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Reimbursement for Uncollectible Accounts</u></b>.&nbsp; Seller will indemnify and hold Purchaser harmless from any
accounts receivable included in the Assets which become more than one hundred
eighty (180) days past due (in addition to any obligation to indemnify created
under <u>Article&nbsp;VII</u> below), to the extent such uncollectible accounts
exceed reserves for bad debts as reflected in Seller's Financial Statements.&nbsp;
Purchaser may, at its option, offset against the Holdback any and all amounts
to which Purchaser is entitled pursuant to this <u>Section 6.1</u> in
accordance with <u>Section 7.4</u>, provided Purchaser has in good faith
attempted to collect any account receivable it proposes to offset.&nbsp; If an
account receivable is offset pursuant to the preceding sentence, such account
receivable shall be assigned by Purchaser to Seller.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881962">6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
<b><u>Further Action</u></b>.&nbsp; If at any time
after Closing any further action is necessary or desirable to carry out the
purposes of this Agreement, Purchaser and Seller will take such further action
(including the execution and delivery of such further instruments and
documents) as the other party to this Agreement reasonably may request, all at
the sole cost and expense of the requesting party unless the requesting party
is entitled to indemnification thereof under <u>Article&nbsp;VII</u> below.&nbsp;
Seller acknowledges and agrees that from and after the Closing, Purchaser will
be entitled to possession of all documents, books, records, tax records,
agreements and financial data of any sort relating to the Assets.</a></p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
<b><u>Litigation Support</u></b>.&nbsp; If and for so
long as any party actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Business or the Assets, the other party will
cooperate with it and its counsel in the contest or defense, make available its
personnel, and provide such testimony and access to its books and records as may
be necessary or desirable in connection with the contest or defense, all at the
sole cost and expense of the contesting or defending party, unless the
contesting or defending party is entitled to indemnification therefor under <u>Article
VII</u> below.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881964">6.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;
<b><u>Transition</u></b>.&nbsp; Seller will not take
any action that is designed or intended to have the effect of discouraging any
lessor, licensor, customer, supplier, or other business associate of Seller
from maintaining the same business relationships with Purchaser after the Closing
as such party maintained with Seller prior to the Closing.&nbsp; Seller will refer
all customer inquiries relating to the Business to Purchaser from and after
Closing.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881965">6.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
<b><u>Employees</u></b>.&nbsp; Purchaser
may need to contract with various key personnel of Seller as of or after the
Closing.&nbsp; Seller shall take all actions reasonably required by Purchaser to
assist in this process including, without limitation, providing Purchaser
access to all Seller's organizational charts, personnel records (but only to
the extent a particular employee has executed a written release with respect to
providing Purchaser such personnel records) and payroll records and by allowing
and encouraging Seller's employees to meet with Purchaser's representatives.&nbsp;
Notwithstanding anything to the contrary in this Agreement, Purchaser shall
have no obligation of any kind with respect to any of Seller's employees.
Seller shall be solely responsible for the termination and any related costs of
all Seller's employees who are terminated or whose employment is otherwise
adversely affected by Seller's execution of this Agreement or the transactions
contemplated hereby.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881966">6.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;
<b><u>Non-Competition</u></b>.</a>&nbsp; </p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As further consideration for the purchase and
sale of the Assets and the other transactions contemplated by this Agreement, during
the period commencing on the Closing Date, and ending on the date which is four
(4) years thereafter (the &quot;<u>Restricted Period</u>&quot;), neither the Seller nor
any Seller Shareholder nor Malcolm D. Glover, Sr. nor William Rhea Gustafson
(Seller Shareholders, Malcolm D. Glover, Sr., and William Rhea Gustafson,
collectively, the &quot;<u>Non-Competing Shareholders</u>&quot;) shall, in any Restricted
Territory, directly or indirectly:</p>

<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
engage in any business, activity, or enterprise competitive with or
substantially similar to the Business, including, without limitation, in the
manufacture, production, design, engineering, importation, purchase, marketing,
sale, distribution, research or development of any electric motor, or engage or
invest in, own, manage, operate, finance, control, solicit business related to,
or participate in the ownership, management, operation, financing, or control
of, be employed by, lend its name or any similar name, or lend its credit to,
or render services or advice to, any Person engaged in any business, activity
or enterprise competitive with the Business including, without limitation, in
the manufacture, production, design, engineering, importation, purchase,
marketing, sale, distribution, research or development of any electric motor;</p>
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<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
on behalf of itself or any other Person, recruit or solicit any person
who has been an employee, representative, consultant or agent of Purchaser or
former employee of Seller hired by Purchaser, to terminate his or her
employment with Purchaser;</p>

<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
solicit, call upon, or attempt to communicate with any customer, former
customer, or prospective customer of Purchaser or Seller for the purposes of
manufacture, production, design, engineering, importation, purchase, marketing,
sale, distribution, research or development of any electric motor; provided,
however, that Seller or a Non-Competing Shareholder may solicit, call upon, or
attempt to communicate with any customer, former customer, or prospective
customer of Purchaser or Seller pursuant to specific written authorization from
an officer of Purchaser.&nbsp; For purposes of this paragraph, &quot;contact&quot; means
interaction between Seller, a Non-Competing Shareholder, or any officers,
directors, employees or agents (directly or indirectly) of Seller or a
Non-Competing Shareholder, and the customer, former customer or prospective
customer which takes place to further the business relationship, or performing
of services, on behalf of Seller or a Non-Competing Shareholder.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Seller and Non-Competing Shareholders shall be deemed to be competing with
Purchaser in violation of <u>Section 6.9(a)</u> if any thereof, or any
Affiliate of the Seller or Non-Competing Shareholders, is engaged or
participates in any activity or activities described in <u>Section 6.9(a)</u>,
directly or indirectly, whether for its own account or for that of any other
Person, and whether as a shareholder, partner or investor controlling any such
entity or as principal, agent, representative, proprietor or partner, or in any
other capacity; <u>provided</u>, <u>however</u>, that nothing herein shall
prohibit purely passive investments in any business so long as the aggregate
interest represented by such investments does not exceed one percent (1%) of
any class of the outstanding debt or equity securities of said business.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Because a breach, or failure to comply with, this <u>Section 6.9</u>
will cause irreparable injury to Purchaser for which there is no adequate
remedy at law and the exact amount of which will be difficult to ascertain, if
Seller, a Non-Competing Shareholder or any Affiliate of Seller or of a Non-Competing
Shareholder, should in any way breach, or fail to comply with, the terms of
this <u>Section 6.9</u>, Purchaser shall be entitled to seek and obtain an
injunction restraining such Seller, Non-Competing Shareholder and/or its
Affiliate(s), as applicable, from any such breach or failure without having to
prove monetary damages.&nbsp; All remedies expressly provided for herein are
cumulative of any and all other remedies now existing at law or in equity, to
the extent permitted under applicable law.&nbsp; Purchaser shall, in addition to the
remedies herein provided, be entitled to avail itself of all such other
remedies as may now or hereafter exist at law or in equity for compensation,
and for the specific enforcement of the covenants contained herein without the
necessity of proving actual damages.&nbsp; Resort to any remedy provided for
hereunder or provided for by law shall not preclude or bar the concurrent or
subsequent employment of any other appropriate remedy or remedies, or preclude
the recovery by Purchaser of monetary damages and compensation, including,
without limitation, its right to indemnification pursuant to <u>Article VII</u>.</p>
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<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If any provision of this <u>Section&nbsp;6.9</u> shall finally be
judicially determined to be invalid, ineffective or unenforceable, such
determination shall apply only in the jurisdiction in which such adjudication
is made and every other provision of this <u>Section&nbsp;6.9</u> shall remain
in full force and effect.&nbsp; The invalid, ineffective or unenforceable provision
shall, without further action by the parties, be automatically amended, to the
extent permitted under applicable law, to effect the original purpose and
intent of the invalid, ineffective or unenforceable provision (and if such
provision governs the duration of the Restricted Period or geographic scope of
the Restricted Territory, such provision shall be amended to reduce such
duration or scope, as applicable, as minimally as possible so that such
provision is valid, effective and enforceable for the longest period of time
and fullest geographic area as is adjudged permissible for such provision to be
valid, effective and enforceable); <u>provided</u>, <u>however</u>, that such
amendment shall apply only with respect to the operation of such provision in
the particular jurisdiction in which such adjudication is made.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller and each Non-Competing Shareholder acknowledges that the duration
of the Restricted Period, the geographic scope of the Restricted Territory, and
the scope of restricted activities described in <u>Section&nbsp;6.9(a)</u> are
reasonable and necessary to protect the legitimate business interests of
Purchaser in view of the nature of the Business, the nature of the business in
which Purchaser is engaged, and the nature of the transactions contemplated by
this Agreement.&nbsp; Seller and Non-Competing Shareholders understand that the
foregoing restrictions will significantly limit or bar its or his ability to
engage in business related to the Business, but nevertheless believes that it
or he has received and will receive, directly or indirectly, sufficient
consideration and other benefits pursuant to this Agreement to clearly justify
such restrictions.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">6.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Name Change</u></b>.&nbsp; Within two (2) business days of the Closing
Date, Seller shall stop using the name &quot;Astromec,&quot; &quot;Astro Mec&quot; or similar
names, or any other trade <a name="_Toc98312507">names or trademarks being
purchased by Purchaser hereunder, and from and after such date, Seller shall
not use such name or any similar names.</a>&nbsp; Within such two (2) business day
period, Seller shall file an amendment to its Articles of Incorporation with
the Nevada Secretary of State changing its name in accordance with the first
sentence of this <u>Section 6.7</u>.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify">6.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Audit Preparation</u></b>.&nbsp; Seller and each Seller Shareholder
shall provide or otherwise make available to Purchaser any and all instruments,
documents and information reasonably necessary, and provide such other
assistance as may be reasonably requested by Purchaser, for Purchaser's
auditors to prepare audited financial statements in compliance with generally
accepted accounting principles (including, without limitation, an audited
balance sheet and statement of income) for Seller's fiscal year ended December
31, 2005.</p>

<p style='margin-left:0pt;' align="center"><b>ARTICLE VII</b><br>
<a name="_Toc118881967"><b><u>INDEMNIFICATION OF PURCHASER</u></b></a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881968">7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Survival of Representations, Warranties and Covenants</u></b>.&nbsp; The representations, warranties and covenants contained in
this Agreement shall survive the Closing.</a></p>
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<p style='margin-left:0pt; text-indent:0.5in' align="justify">7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Indemnity for the Benefit of Purchaser</u></b>.&nbsp; Seller, each Seller Shareholder, and Malcolm D.
Glover, Sr., jointly and severally agree to and shall
indemnify Purchaser and hold Purchaser harmless from and against the following:</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For a period of two (2) years from the Closing Date:</p>

<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;any and all Losses or Liabilities resulting from any misrepresentation
made, or breach of warranty given or covenant made by Seller in this Agreement,
except those set forth in <u>Sections 4.9, 4.11, 4.12 and 4.15</u>; </p>

<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any and all Losses or Liabilities resulting from any action, suit,
claim, proceeding or investigation disclosed on Schedule 4.6; and</p>

<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any and all Losses or Liabilities incurred by, arising out of, or
relating in any way to matters pertaining to the conduct of the Business which
have arisen or may arise because or as a result of any fact, event or
transaction existing or occurring on or before the Closing Date, regardless of
when the cause of action thereof shall be deemed to arise.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the applicable statute of limitations: </p>

<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any and all Losses or Liabilities resulting from any misrepresentation
made, or breach of warranty given or covenant made in <u>Sections 4.9, 4.11,
4.12 and 4.15</u>.&nbsp; The indemnity of Seller, each Seller Shareholder and
Malcolm D. Glover, Sr., hereunder shall extend to any federal, state or local
tax liability of Seller of any nature whatsoever, including but not limited to
any deficiency or governmental charge which arises by virtue of the adjustment,
disallowance or inclusion of any item for tax purposes, and which is occasioned
by adjustments for tax years (or portions thereof) prior to the Closing Date.&nbsp;
The indemnification for tax liabilities contained herein shall bind the Seller,
notwithstanding any qualifications to Seller's representations under <u>Section
4.9</u>, or any other provision of this Agreement;</p>

<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
notwithstanding the representations and warranties set forth in <u>Section&nbsp;4.11</u>
or any disclosures on the Disclosure Schedule related thereto, any and all
Losses or Liabilities resulting from or related to any Environment Law with
respect to any Real Property or the Business, whether such Loss or Liability
results from acts or activities of any Person prior to, on or after the Closing
Date, except to the extent such Loss or Liability results from the activities
of Purchaser after the Closing Date with respect to the Real Property or the
Business; and</p>

<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any and all Losses and Liabilities resulting from fraud or a knowing and intentional misrepresentation on the
part of Seller.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881970">7.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Indemnity for the Benefit of Seller</u></b>.&nbsp;
Purchaser agrees to and shall indemnify Seller and hold Seller harmless from
and against the following:</a></p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For a period of two (2) years from
the Closing Date:</p>
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<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any and all Losses and Liabilities resulting from any misrepresentation
made or breach of warranty given or covenant made by Purchaser in this
Agreement; and </p>

<p align="justify" style="text-indent: 0.75in; margin-left: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any and all Losses and Liabilities incurred by, arising out of, or
relating in any way to matters pertaining to the conduct of the business of
Purchaser which may arise because or as a result of any fact, event or
transaction occurring after the Closing Date, except for claims which are
subject to Seller's indemnification obligations under <u>Section 7.2</u>. </p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the applicable statute of limitations, any and all Losses and
Liabilities resulting from fraud or a knowing and
intentional misrepresentation on the part of Purchaser.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881971">7.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Right of Offset</u></b>.&nbsp; In addition to
any other remedies which Purchaser may have against the Seller, Seller
Shareholders or Malcolm D. Glover, Sr. at law, in
equity or pursuant to this Agreement, Purchaser may, at its option, offset
against the Holdback Amount any and all amounts with respect to which Purchaser
is entitled to indemnification pursuant to this <u>Article VII</u>, regardless
of when the claim for indemnification shall be deemed to arise.&nbsp; Purchaser
shall exercise its right of offset by notifying Seller that Purchaser is
reducing the Holdback Amount anytime prior to the payment of the Holdback
Amount to Seller in accordance with <u>Section&nbsp;2.2(b)</u>.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881972">7.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Notice</u></b>.&nbsp; If a party shall claim any
right of indemnity under <u>Sections 7.2 or 7.3</u>, the party shall give the
other party a written notice of such claim, setting forth in reasonable detail
the facts giving rise to the claim and the amount of liability asserted by
reason thereof.</a></p>

<p style='margin-left:0pt;page-break-after:avoid; text-indent:0.5in' align="justify"><a name="_Toc118881973">7.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Matters Involving Third Parties</u></b>.</a></p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If any third party shall notify either party to this Agreement (the &quot;<u>Indemnified
Party</u>&quot;) with respect to any matter (a &quot;<u>Third Party Claim</u>&quot;) which may
give rise to a claim for indemnification against any other party to this
Agreement (the &quot;<u>Indemnifying Party</u>&quot;) under this <u>Article VII</u>, then
the Indemnified Party shall promptly notify the Indemnifying Party thereof in
writing; provided, however, that no delay on the part of the Indemnified Party
in notifying the Indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.</p>
<p align="center">-22-</p>



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<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Indemnifying Party will have the right to defend the Indemnified
Party against the Third Party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party so long as (i) the Indemnifying Party
notifies the Indemnified Party that the Indemnifying Party will indemnify the
Indemnified Party from the Third Party Claim, (ii) the Indemnifying Party
provides the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the financial resources
to defend against the Third Party Claim and fulfill its indemnification
obligations hereunder, (iii) the Third Party Claim involves only money damages
and does not seek an injunction or other equitable relief, (iv) settlement of,
or an adverse judgment with respect to, the Third Party Claim is not, in the
good faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice materially adverse to the continuing business
interests of the Indemnified Party, and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
So long as the Indemnifying Party is conducting the defense of the Third
Party Claim in accordance with <u>Section 7.6(b)</u> above, (i) the Indemnified
Party may retain separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim, (ii) the Indemnified Party
will not consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnifying Party, which shall not be unreasonably withheld, and (iii) the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnified Party, which shall not be withheld unreasonably.</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If any of the conditions in <u>Section 7.6(b)</u> above is or becomes
unsatisfied, however, (i) the Indemnified Party may defend against, and consent
to the entry of any judgment or enter into any settlement with respect to, the
Third Party Claim in any manner it reasonably may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (ii) the Indemnifying Party will
reimburse the Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys' fees and
expenses), and (iii) the Indemnifying Party will remain responsible for any
Losses and Liabilities the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to
the fullest extent provided in this <u>Article VII</u>.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881974">7.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Amount of Damages</u></b>.&nbsp; Each party
agrees that the amount of any Liabilities or Losses claimed by it under the
indemnity provided in this <u>Article VII</u><b> </b>shall be a net amount
after adjustment for any benefit to such party from insurance receipts from
third parties or offsetting tax advantages.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881975">7.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Resolution of Disputes</u></b>.&nbsp; Any
dispute arising under or related to this Agreement shall be resolved by
arbitration submitted before the </a>Judicial Arbitration and Mediation
Services, Inc. (&quot;JAMS&quot;) in accordance with the
Streamlined Arbitration Rules &amp; Procedures of JAMS, in Orange County,
California.&nbsp; The arbitration hearing shall be conducted by a single neutral
arbitrator, who shall be an active California State Bar member in good
standing.&nbsp; In addition to all other powers, the arbitrator shall have the right
to determine all issues of arbitrability and shall have the authority to issue
subpoenas.&nbsp;&nbsp;&nbsp; The parties shall be entitled to only the following
limited discovery:</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
each party shall exchange all documents relevant to the subject matter
of the dispute;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
each party shall be entitled to one deposition limited to four hours;</p>
<p align="center">-23-</p>



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<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
each party may serve one set of interrogatories limited to 15
interrogatories including subparts;</p>

<p align="justify" style="text-indent: 0.5in; margin-left: 0.75in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
each party may make application to the arbitrator to order the
deposition of a witness to be taken for use as evidence and not for discovery
if (i) the witness cannot be compelled to attend the hearing, or, (ii) if such
exceptional circumstances exist as to make it desirable in the interest of
justice and with due regard to the importance of presenting the testimony of
witnesses at the hearing to allow the deposition to be taken.</p>

<p align="justify" style="text-indent: 0.5in">All discovery shall be completed within
ninety (90) calendar days after the request for arbitration is filed with the
appropriate authorities and the first hearing date shall be set for no later
than thirty (30) calendar days after the completion of discovery.&nbsp; The
arbitrator may extend such period for any reason, including, without
limitation, legal objections raised to such discovery or unavailability of a
witness due to absence or illness.&nbsp; The deposition set forth in subsection (b)
above may be taken by either party upon seven (7) calendar days written
notice.&nbsp; All disputes relating to discovery that cannot be resolved by the
parties shall be submitted to the arbitrator, whose decision shall be
conclusive, final and binding upon the parties.&nbsp; The prevailing party in any
such arbitration shall be entitled to any award of its reasonable attorneys'
fees and costs.&nbsp; Any party shall be entitled to file an action in Orange County
Superior Court, or in any other court which shall have jurisdiction over the
parties of this Agreement, to compel or aid in the arbitration, or for
injunctive relief.&nbsp; Judgment on any arbitration award may be entered in any
court of competent jurisdiction.</p>

<p style='margin-left:0pt;' align="center"><b>ARTICLE VIII</b><br>
<a name="_Toc118881977"><b><u>MISCELLANEOUS</u></b></a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881978">8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Notices</u></b>.&nbsp; All notices, requests,
demands, and other communications called for by this Agreement shall be in
writing and shall be deemed to have been given if delivered or mailed first
class, postage prepaid:</a></p>

<p align=left style='margin-left:108.0pt;text-align:justify'>If to
Seller, to:<br>
Astromec<br>
5 University Circle<br>
Rancho Mirage, California 92270<br>
Attn: Malcolm Glover</p>

<p align=left style='margin-left:108.0pt;text-align:justify'>With
copy to:<br>
Malcolm Glover, Jr.<br>
9475 King Road<br>
Loomis, California&nbsp; 95650</p>

<p align=left style='margin-left:108.0pt;text-align:justify'>And a
copy to:<br>
Robison, Belaustegui, Sharp &amp; Low <br>
71 Washington Street<br>
Reno, Nevada 89503<br>
Attn: F. DeArmond Sharp, Esq.</p>
<p align=left style='text-align:center'>-24-</p>



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<p align=left style='margin-left:108.0pt;text-align:justify;
page-break-after:avoid'>If to Purchaser, to:<br>
Pro-Dex, Inc.<br>
151 East Columbine Avenue<br>
Santa Ana, California 92707<br>
Attn: Patrick Johnson</p>

<p align=left style='margin-left:108.0pt;text-align:justify'>With
copy to:<br>
Rutan &amp; Tucker, LLP<br>
611 Anton Blvd., 14<sup>th</sup> Floor<br>
Costa Mesa, California 92626-1931<br>
Attn: Thomas J. Crane</p>

<p align="justify" style="text-indent: 0.5in">A party's notice address set forth above may be changed by
providing written notice to the other party of such change in accordance with
this <u>Section 8.1</u>.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881979">8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Counterparts</u></b>.&nbsp; For the convenience
of the parties hereto, this Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881980">8.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Headings</u></b>.&nbsp; The headings of the
several articles and sections herein are inserted for convenience of reference
only and are not intended to be a part of, or affect the meaning or
interpretation of, this Agreement.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881981">8.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>&nbsp;Parties in Interest</u></b>.&nbsp; This
Agreement shall benefit and bind the parties and their respective successors,
heirs and assigns.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881982">8.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Governing Law</u></b>.&nbsp; This Agreement
shall be construed and enforced in accordance with the laws of the State of
California, without reference to the choice of law principles thereof.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881983">8.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Amendment</u></b>.&nbsp; This Agreement may be
amended at any time by written instrument executed by both Seller and
Purchaser.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881984">8.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Entire Agreement</u></b>.&nbsp; This Agreement,
including the agreements contemplated hereby and attached as Exhibits hereto,
contain the entire understanding of the parties relating to the subject matter
hereof and supersede any prior agreements, written or oral, with respect to the
same subject matter.&nbsp; The Attachments, Exhibits and Schedules identified in
this Agreement are incorporated in and made a part of this Agreement by
reference.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881985">8.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Expenses</u></b>.&nbsp; Each party shall
separately bear the expenses incurred by it in connection with this Agreement;
provided, however, that if either party shall commence legal action to
specifically enforce or otherwise seek redress under or for breach of this
Agreement, the prevailing party in such action shall be entitled to recover its
costs and reasonable attorneys' fees therein, including costs and fees incurred
in any appellate proceeding.</a>&nbsp; </p>
<p style='margin-left:0pt' align="center">-25-</p>



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clear=all style='page-break-before:always'>
</u></b>









<p style='margin-left:0pt; text-indent:0.5in' align="justify">8.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><u>Waiver</u></b>.&nbsp; Any of the terms or
conditions of this Agreement may be waived at any time by the party which is
entitled to the benefit thereof.&nbsp; All such waivers shall be in writing and no
waiver by any party of any default, misrepresentation, or breach of
representation, warranty or covenant hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of representation, warranty or covenant hereunder
or affect in any way any rights arising by virtue of any prior or subsequent
such occurrence.</p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><a name="_Toc118881987">8.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;
<b><u>Construction</u></b>.&nbsp; The
parties have participated jointly in the negotiation and drafting of this
Agreement.&nbsp; In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
an no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of the Agreement.&nbsp;
Any reference to any federal, state, local or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise.&nbsp; The parties intend that each
representation, warranty and covenant contained in this Agreement shall have
independent significance.&nbsp; If any party has breached any representation,
warranty or covenant contained herein in any respect, the fact that there
exists another representation, warranty or covenant relating to the same
subject matter (regardless of their relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or covenant.</a></p>

<p style='margin-left:0pt; text-indent:0.5in' align="justify"><b>8.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Termination</u></b>.&nbsp; Should the sale not close on or before
January 5, 2006 (which date may be extended by written agreement between the
parties), the parties shall each be relieved of any obligation to the other and
each party shall be responsible solely for the payment of its own costs and
attorneys' fees.</p>

<p align="center">[SIGNATURE PAGE FOLLOWS]</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">-26-</p>



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<p style='page-break-after:avoid; text-indent:0.5in' align="justify">IN WITNESS WHEREOF, Purchaser,
Seller and Seller Shareholders have executed this Asset Purchase Agreement as
of the date and year first above written.</p>

<table border="0" width="100%" id="table1">
	<tr>
		<td width="529">

<p align=left style='text-align:justify;
page-break-after:avoid'>PURCHASER:&nbsp; <br>
<br>
<br>
<br>
<br>
</p>

		</td>
		<td>PRO-DEX
ASTROMEC, INC.,<br>
a Nevada corporation<p>&nbsp;</p>
		<p><u>/s/ Patrick Johnson&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u><br>
Patrick Johnson, President</td>
	</tr>
	<tr>
		<td width="529">&nbsp;</td>
		<td>&nbsp; </td>
	</tr>
	<tr>
		<td width="529">

<p align=left style='text-align:justify;
'>SELLER:&nbsp;&nbsp;
<br>
<br>
<br>
</p>

		</td>
		<td>ASTROMEC,
INC., a Nevada corporation<p><u>/s/ William Rhea Gustafson&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		</u><br>
William Rhea Gustafson, President and Secretary<br>
		</td>
	</tr>
	<tr>
		<td width="529">

<p align=left style='text-align:justify;
'>SELLING SHAREHOLDERS:&nbsp;
<br>
</p>

		</td>
		<td> <u>/s/&nbsp;&nbsp;Malcolm D. Glover, Jr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		</u><br>
Malcolm D. Glover, Jr.</td>
	</tr>
	<tr>
		<td width="529">

&nbsp;</td>
		<td> &nbsp; </td>
	</tr>
	<tr>
		<td width="529">

<p align=left style='text-align:justify;
text-indent:0.5in'>&nbsp;</p>

		</td>
		<td>M.D. Glover, Inc., a Nevada corporation</td>
	</tr>
	<tr>
		<td width="529">

<p align=left style='margin-top:0pt;margin-right:0pt;
margin-bottom:0pt;margin-bottom:.0001pt;text-align:justify;
text-indent:0.5in'>&nbsp;</p>

		</td>
		<td>
<u>/s/&nbsp; Malcolm D. Glover, Sr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>
</u>Malcolm D. Glover, Sr., President, Secretary and Treasurer</td>
	</tr>
</table>
<p align=left style='text-align:justify'>The undersigned hereby
agrees to his performance pursuant to <u>Section 6.6</u>, <u>Article&nbsp;IV</u>
and <u>Article&nbsp;VII</u> of this Agreement.</p>
<table border="0" width="100%" id="table2">
	<tr>
		<td width="529">&nbsp;</td>
		<td> <u>/s/&nbsp;&nbsp;Malcolm D. Glover, Sr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>
		</u>Malcolm D. Glover, Sr.</td>
	</tr>
</table>

<p align=left>The undersigned hereby
agrees to his performance pursuant to <u>Section 6.6</u> of this Agreement.<br>
<br>
</p>
<table border="0" width="100%" id="table3">
	<tr>
		<td width="529">&nbsp;</td>
		<td><u>&nbsp;/s/&nbsp;&nbsp;William Rhea Gustafson&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>
		</u>William Rhea Gustafson</td>
	</tr>
</table>

<p align=left style='margin-left:216.0pt;text-align:justify;
text-indent:0.5in'>
<br>
</p>
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<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>ex10-2.htm
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<title>Exhibit 10.2 - PURCHASE AND SALE AGREEMENT</title>



</head>

<body lang=EN-US>



<p class=MsoNormal align=center style='text-align:right'><b>&nbsp;Exhibit 10.2</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>PURCHASE AND SALE AGREEMENT<br>
AND</b><b> ESCROW
INSTRUCTIONS</b></p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>













<p class=MsoNormal align=center style='text-align:center'>By and Between</p>







<p class=MsoNormal align=center style='text-align:center'><b>M. D. GLOVER, INC.,<br>
a Nevada corporation,<br>
</b>as Seller,</p>



<p class=MsoNormal align=center style='text-align:center'>and</p>



<p class=MsoNormal align=center style='text-align:center'><b>PRO-DEX, INC.,<br>
a Colorado corporation,<br>
</b>as Buyer.</p>









<p class=MsoNormal align=center style='text-align:center'>Dated for Reference Purposes As Of
<br>
January 3, 2006</p>









<p class=MsoNormal align=center style='text-align:center'>Property Located At:</p>



<p class=MsoNormal align=center style='text-align:center'><b>2950 Arrowhead Drive<br>
City of Carson City<br>
State of Nevada</b></p>

<p class=MsoFooter>&nbsp;</p>

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clear=all style='page-break-before:always'>














<p class=MsoNormal align=center style='text-align:center'><b>PURCHASE AND SALE AGREEMENT<br>
AND</b><b> ESCROW
INSTRUCTIONS</b></p>





<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>This PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (this <b>&quot;Agreement&quot;</b>) is dated for reference purposes only
as of January 3, 2006, and is made to be effective as of the Effective Date (as
hereafter defined), by and between <b>M. D. GLOVER, INC., a Nevada corporation </b>(<b>&quot;Seller&quot;</b>),
and <b>PRO-DEX, INC., a Colorado corporation </b>(<b>&quot;Buyer&quot;</b>).</p>



<p class=MsoNormal align=center style='text-align:center'><b><u>R E C I T A L S</u></b><b> :</b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Seller is the owner of the Property (as
hereafter defined), which consists of an industrial building together with
related improvements, located at 2950 Arrowhead Drive, Carson City, Nevada, as
more particularly described in <b><u>Exhibit A</u></b>.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Property currently is being used for the
business operations of <b>ASTROMEC, INC., a Nevada corporation</b> (<b>&quot;Astromec&quot;</b>),
whose business and substantial assets (the <b>&quot;Business&quot;</b>) are
intended to be&nbsp; purchased by Buyer from Astromec pursuant to and in accordance
with a separate purchase agreement entered into between Buyer and Astromec (the
<b>&quot;Business Purchase Transaction&quot;</b>).</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Buyer desires to purchase the Property from
Seller in connection with the Business Purchase Transaction, and Seller desires
to sell the Property to Buyer, on the terms and conditions set forth herein.</p>



<p class=MsoNormal align=center style='text-align:center'><b><u>A G R E E M E N T</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>NOW, THEREFORE, in consideration of the foregoing and
the mutual agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Buyer hereby agree as follows:</p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE I</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>EFFECTIVE DATE</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>This Agreement shall be effective on the day (the <b>&quot;Effective
Date&quot;</b>) when a fully executed copy of this Agreement (or a fully
executed copy in counterparts) is deposited with Escrow Holder (as hereafter
defined).&nbsp; Escrow Holder is hereby instructed to immediately notify each party
to this Agreement of the Effective Date.</p>
<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>&nbsp;</p>





<p class=MsoNormal align="center">1.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE II</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>DEFINITIONS</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>The following terms and references shall have the
meanings indicated below (such meanings to be equally applicable to both the
singular and plural forms of the terms defined and to verbs of any tense):</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;ALTA POLICY&quot;</b> means an American Land Title Association extended
coverage owner's policy of title insurance.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Balance&quot;</b> shall have the meaning set forth in <u>Section
4.2(b)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Bill of Sale&quot;</b> means a bill of sale as defined in <u>Article III(c)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Business Day&quot;</b> means any day other than a Saturday, Sunday or a Holiday.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Closing&quot;</b> means the consummation of the transactions
contemplated by this Agreement.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>&quot;Closing Date&quot;</b> means the date the Deed is recorded in the official
records of <b>Carson City</b><b>, Nevada</b><b>.</b></p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;CLTA Policy&quot; </b>means a standard coverage owner's policy of title
insurance.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Contracts&quot;</b> shall have the meaning set forth in <u>Article
III(d)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>&quot;Contract
Assignment&quot;</b> shall have the
meaning set forth in <u>Article III(d)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>
(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Deed&quot;</b> shall have the meaning set forth in <u>Article
III(a)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Deposit&quot;</b> shall have the meaning set forth in <u>Section
4.2(a)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>&quot;Documents&quot;</b> means the transfer documents attached as Exhibits to
this Agreement.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Effective Date&quot;</b> shall have the meaning set forth in <u>Article I</u>.</p>





<p class=MsoNormal align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">2.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<b><br clear=all style='page-break-before:always'>
</b>









<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Environmental Laws&quot;</b> shall mean any and all presently existing federal,
state and local laws (whether under common law, statute, rule, regulation or
otherwise), requirements under permits issued with respect thereto, and other
requirements of any federal, state or local governmental agency, court, board,
bureau or other authority having jurisdiction with respect to or relating to
the environment, to any Hazardous Materials or to any activity involving
Hazardous Materials, and shall include, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
9601, <u>et seq</u>.), the Federal Resource Conservation and Recovery Act (42
U.S.C. Section 6901, <u>et seq</u>.) and all amendments thereto in effect as of
the Closing Date.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Escrow Holder&quot;</b> means the company where escrow shall be established,
whose address for this transaction shall be:</p>



<p class=MsoBodyTextIndent style="margin-left: 1.4in">First American Title Insurance Company
<br>
5310 Kietzke Lane, Suite 100<br>
Reno, NV &nbsp;89511</p>



<p class=MsoNormal style='text-align:justify;margin-left:1.4in'><u>Attn</u>:&nbsp;&nbsp;&nbsp; Michelle
Molnar<br>
Telephone No.:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (775) 823-6200<br>
Facsimile No.:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (775) 823-4261</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Escrow Period&quot; </b>means the period from and after the Effective Date
through the Closing Date or any earlier termination of this Agreement.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;FF&amp;E&quot;</b> means furniture, fixtures, equipment, machinery,
appliances, fittings, and other removable articles of personal property of
every kind and nature that are owned by Seller and used in the operation of the
Property, including, without limitation, (i) furnishings, furniture, and
equipment, (ii) art work and other decorative items, (iii) built-in appliances,
and (iv) office furniture and equipment.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;General
Intangibles&quot; </b>means the Offsite
Rights, the Permits, the Repair Warranties, and other intangible personal
property rights of whatever nature (other than the rights evidenced by the
Contracts) owned by Seller and used in the operation and maintenance of the
Property.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">3.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<b><br clear=all style='page-break-before:always'>
</b>









<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Hazardous
Materials&quot;</b> shall mean and
include any chemical, compound, material, mixture, waste or substance that is
now or hereafter defined or listed in, or otherwise classified pursuant to, any
Environmental Laws as a &quot;hazardous substance,&quot; &quot;hazardous
material,&quot; &quot;hazardous waste,&quot; &quot;extremely hazardous
waste,&quot; &quot;infectious waste,&quot; &quot;toxic substance,&quot;
&quot;toxic pollutant&quot; or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, or toxicity including
any petroleum, natural gas, natural gas liquids, liquefied natural gas, or
synthetic gas usable for fuel (or mixture of natural gas and such synthetic
gas).&nbsp; &quot;Hazardous Materials&quot; shall include, without limitation, any
hazardous or toxic substance, material or waste or any chemical, compound or
mixture which is (i) asbestos, (ii) motor oil, gasoline, petroleum or any
petroleum by-product, (iii) designated as a &quot;hazardous substance&quot;
pursuant to Section 1317 of the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 <u>et seq</u>.), (iv) defined as a &quot;hazardous waste&quot;
pursuant to Section 6903 of the Federal Resource Conservation and Recovery Act,
(42 U.S.C. Section 6901 <u>et seq</u>., (v) defined as &quot;hazardous
substances&quot; pursuant to Section 9601 of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 <u>et seq</u>.),
or (vi) listed in the United States Department of Transportation Table (49 CFR 172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR part 302); or in any and all amendments thereto in effect as of the Closing Date; or such
chemicals, compounds, mixtures, substances, materials or wastes otherwise
regulated under any applicable local, state or federal Environmental Laws.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Holiday&quot;</b> means any day on which banking institutions in the
State of Nevada, are authorized or obligated by law or executive order to
close.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Improvements&quot;</b> shall have the meaning set forth in <u>Article
III(b)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Information&quot; </b>means all documents, reports, studies, and other
information or materials (including, without limitation, the Records) delivered
or disclosed to Buyer by Seller or its agents.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(w)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp;&quot;Inspection Period&quot;</b> means the period from and after the Effective Date
and ending at 5:00 p.m., Pacific Time, on the 23rd day of January, 2006.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Land&quot;</b> shall have the meaning set forth in <u>Article
III(a)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Loss Threshold&quot;</b> shall have the meaning set forth in <u>Section
13.1(a)(i)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(z)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Offsite Rights&quot; </b>means any lease, license, or other agreement (other
than a recorded easement) providing for the use of another's real property in
conjunction with the operation of the Property (as, by way of illustration and
not limitation, use for vehicular parking and/or access).</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(aa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp;&nbsp;&nbsp; &quot;Owner's Title
Policy&quot; </b>means, at Buyer's
election, an ALTA or&nbsp; CLTA&nbsp; Policy, in the amount of the Purchase Price.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(bb)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp;&nbsp; &quot;Permit&quot; </b>means any permit, certificate, license, or other form
of authorization or approval issued by a governmental agency or authority and
legally required for the proper operation and use of the Property (including,
without limitation, any certificates of occupancy with respect to the
Improvements, elevator permits, conditional use permits, and zoning variances)
to the extent held and assignable by Seller or otherwise transferable with the
Property.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(cc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp;&nbsp; &quot;Permitted
Exceptions&quot; </b>shall have the
meaning set forth in <u>Section 6.1</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(dd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp;&nbsp;&nbsp; &quot;Personal Property&quot;</b> shall have the meaning set forth in <u>Article
III(c)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(ee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Plans and
Specifications&quot; </b>shall have the
meaning set forth in <u>Section 7.2(a)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(ff)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp;&quot;Property&quot;</b> shall have the meaning set forth in <u>Article III</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(gg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Prorations&quot; </b>shall have the meaning set forth in <u>Section 9.7(a)</u>.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">4.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<b><br clear=all style='page-break-before:always'>
</b>









<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(hh)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp; &quot;PTR&quot;</b> means a current preliminary title report concerning
the Real Property issued by the Title Company.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&quot;Purchase Price&quot; </b>shall have the meaning set forth in <u>Section 4.1</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(jj)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>&quot;Real Property&quot; </b>shall have the meaning set forth in <u>Article III(a)</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(kk)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp;&quot;Records&quot; </b>means all books, records, correspondence, and other
files that have been received or generated and maintained in the course of
operating the Property that are in Seller's possession or control.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(ll)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>&quot;Repair Warranties&quot;</b> means any written guaranties, warranties, or other
obligations of any contractor, manufacturer, or vendor for the repair or
maintenance of any of the Improvements or FF&amp;E, to the extent assignable by
Seller.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(mm)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp;&nbsp;&nbsp; &quot;Service Contract&quot; </b>means any contract or other arrangement, written or
oral, for the continuing provision of services relating to the improvement,
maintenance, repair, protection, or operation of the Property.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:36.0pt'>(nn)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp; &quot;Title Company&quot; </b>means First American Title Insurance Company.</p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE III</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>PROPERTY SUBJECT TO AGREEMENT</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>Seller hereby agrees to sell to Buyer, and Buyer
hereby agrees to purchase from Seller, subject to the terms and conditions set
forth herein, all of Seller's right, title, and interest in the following
(collectively, the <b>&quot;Property&quot;</b>):</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>Land</b> - that certain land described
in <b><u>Exhibit A</u></b>, and all appurtenant rights, privileges, and
easements thereto owned by Seller (collectively, the <b>&quot;Land&quot;</b>).&nbsp;
The Land and the Improvements (collectively, the <b>&quot;Real Property&quot;</b>)
shall be conveyed from Seller to Buyer pursuant to a Grant, Bargain and Sale
Deed (the <b>&quot;Deed&quot;</b>) substantially in the form of <b><u>Exhibit B</u></b>.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Improvements</b> - all buildings,
structures, fixtures, and other improvements located on the Land (collectively,
the <b>&quot;Improvements&quot;</b>).</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Personal Property</b> - all personal
property, if any, owned by Seller and used by Seller in the operation,
maintenance, and management of the Real Property as of the Closing Date,
including, without limitation, the FF&amp;E, the Records, and the General
Intangibles (collectively, the <b>&quot;Personal Property&quot;</b>).&nbsp; The
Personal Property shall be conveyed from Seller to Buyer pursuant to a Bill of
Sale (the <b>&quot;Bill of Sale&quot;</b>) substantially in the form of <b><u>Exhibit
C</u></b>.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">5.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Contracts - </b>all contracts and
agreements in effect on the Closing Date, if any, including, without
limitation, the Service Contracts (collectively, the <b>&quot;Contracts&quot;</b>).&nbsp;
Seller's interest in the Contracts shall be conveyed to Buyer pursuant to an
Assignment and Assumption of Contracts, Permits and Other Rights (the <b>&quot;Contract
Assignment&quot;</b>) substantially in the form of <b><u>Exhibit D</u></b>.</p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE IV</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>PURCHASE PRICE, PAYMENT OF<br>
<u>PURCHASE PRICE AND LIQUIDATED DAMAGES</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Purchase Price.&nbsp; </b>Subject to the
terms and conditions of this Agreement, Buyer agrees to pay, and Seller agrees
to accept, as consideration for conveyance&nbsp; of the Property from Seller to
Buyer, the sum of <b>Two Million Two Hundred Thousand and No/100ths Dollars
($2,200,000.00)</b> (the <b>&quot;Purchase Price&quot;</b>).</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Deposit</b>.</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Upon the full execution of this Agreement
by Buyer and Seller, Buyer shall tender to Escrow Holder an earnest money
deposit in the amount of <b>Ten Thousand and No/100ths Dollars ($10,000.00)</b>
(the <b>&quot;Deposit&quot;</b>).&nbsp; The Deposit shall be tendered by certified
check or cashier's check made payable to Escrow Holder or by wire transfer of
current federal funds received and credited to the account of Escrow Holder.</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Upon
the satisfaction, or waiver of Buyer of all of Buyer's conditions precedent to
closing as set forth in <u>Article VII</u>, the Deposit shall become
non-refundable to Buyer, except upon a failure of Seller to consummate the
transactions contemplated by this Agreement in accordance with the terms and
provisions hereof, or the failure, unless waived in writing by Buyer, of any
other condition provided for in this Agreement for the benefit of Buyer, or the
termination of this Agreement by Buyer in accordance with the terms and
provisions of <u>Article XIII</u>.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Payment of Purchase Price.&nbsp; </b>The
Purchase Price shall be paid by Buyer as follows:</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Purchase Price less the amount of the
Deposit, subject to adjustments as provided in <u>Sections 9.7</u> and <u>9.8</u>
hereof (the <b>&quot;Balance&quot;</b>), shall be placed into Escrow by wire
transfer of cash or other immediately available funds or in other good funds
acceptable to the Title Company by 4:00 p.m., Pacific time, on the last
Business Day prior to the Closing Date. </p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Investment of Deposit.&nbsp; </b>Escrow
Holder shall place the Deposit&nbsp; in an interest-bearing account with a bank or
savings association, the deposits of which are federally insured (up to the
amount of<b> One Hundred Thousand and No/100ths Dollars ($100,000.00)</b>), as
directed in writing by Buyer, with notice to Seller.&nbsp; All references in this
Agreement to the Deposit shall include the interest thereon.&nbsp; </p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">6.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Deposit As Liquidated Damages.</b>&nbsp; IF
THE SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER IS NOT CONSUMMATED BECAUSE
OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER, ESCROW HOLDER, WITHOUT
ANY FURTHER INSTRUCTION FROM EITHER SELLER OR BUYER, SHALL PAY TO SELLER THE
DEPOSIT AND SELLER SHALL RETAIN THE DEPOSIT AND ALL INTEREST EARNED THEREON AS
LIQUIDATED DAMAGES.&nbsp; THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN
THE EVENT OF A DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE
TO DETERMINE.&nbsp; THEREFORE, BY PLACING THEIR SIGNATURES BELOW, THE PARTIES
EXPRESSLY AGREE AND ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.&nbsp; THE
PARTIES FURTHER ACKNOWLEDGE THAT SELLER'S RETENTION OF THE DEPOSIT AND ALL INTEREST EARNED THEREON HAS BEEN AGREED UPON AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER
IN THE EVENT OF A DEFAULT ON THE PART OF BUYER, OTHER THAN THE ADDITIONAL AND SEPARATE OBLIGATIONS OF BUYER UNDER <u>SECTIONS 5.3, 5.5, 15.2(b)</u>, AND <u>15.10</u> HEREOF, WHICH OBLIGATIONS SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.&nbsp; IN
ADDITION, BUYER SHALL PAY ALL TITLE AND ESCROW CANCELLATION CHARGES IN THE
EVENT OF A DEFAULT BY BUYER.</p>



<p class=MsoNormal style='text-align:justify;page-break-after:avoid'>&quot;Seller&quot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Buyer&quot;</p>



<p class=MsoNormal style='text-align:justify;page-break-after:avoid'><b>M. D. GLOVER, INC.,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PRO-DEX,
INC.,<br>
a Nevada corporation&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a
  Colorado corporation</b></p>

<p class=MsoNormal style='text-align:justify;page-break-after:avoid'><b>&nbsp;</b></p>

<p class=MsoNormal style='text-align:justify;page-break-after:avoid'><b>&nbsp;</b></p>

<p class=MsoNormal style='text-align:justify;page-break-after:avoid'><b>&nbsp;</b></p>

<p class=MsoNormal style='text-align:justify;page-break-after:avoid'><b>By:</b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ <b>
M. D. GLOVER</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By:</b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>/s/
PATRICK JOHNSON</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; M. D. GLOVER&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PATRICK
JOHNSON<br>
Its:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; President&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Its:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; President</b></p>







<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE V</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>INSPECTION</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Due Diligence Review.</b>&nbsp; Buyer, at its
sole cost and expense, shall have the right to a Due Diligence Review in
accordance with the following terms and conditions.&nbsp; A <b>&quot;Due Diligence
Review&quot;</b> means (a) an inspection, examination and evaluation of the
Information, and (b) the conduct of physical tests, inspections and other
investigations on the Property and all portions thereof leased by tenants (<b>&quot;Inspection
Studies&quot;</b>), all in order that Buyer may determine, in its sole and
absolute judgment and discretion, whether the Property is acceptable to Buyer.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">7.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Right to Terminate.</b>&nbsp; Notwithstanding
anything to the contrary in this Agreement, Buyer may terminate this Agreement
by giving notice of termination to Seller on or before the termination of the
Inspection Period.&nbsp; If Buyer duly exercises that right, then Escrow Agent is
hereby instructed to return the Deposit to Buyer without further instruction
from either Buyer or Seller.&nbsp; If Buyer does not give the notice of termination,
this Agreement shall continue in full force and effect, subject, however, to
Buyer's other termination rights hereunder.&nbsp; Seller acknowledges that Buyer
may, but is not obligated to, expend time, money, and other resources in
connection with the Due Diligence Review of the Property, and that,
notwithstanding the fact that this Agreement may terminate pursuant to this <u>Section
5.2</u> and other applicable provisions of this Agreement, such time, money,
and other resources that may be expended constitute adequate consideration for
Seller's execution of and entry into this Agreement.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Access and Inquiries. </b></p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Buyer and its representatives, agents and
contractors, upon the giving of not less than one (1) Business Day's prior
notice in each instance, shall have reasonable access to the Property for the
purpose of causing a survey of the Land and Improvements to be performed by a
licensed surveyor, and conducting architectural, engineering, geotechnical, and
environmental inspections and tests (including intrusive inspection and
sampling), feasibility studies, and any other inspections, studies, or tests
reasonably required by Buyer; provided, however, that Buyer shall not undertake
any intrusive inspection or sampling without first obtaining the written
consent of Seller, which consent shall not be withheld unreasonably.&nbsp; Buyer
shall keep the Property free and clear of any liens as a result of any entry on
the Property pursuant to this <u>Section 5.3(a)</u>.</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; During the pendency of this Agreement,
Seller shall make available to Buyer, and Buyer and its representatives, agents
and contractors shall have a continuing right of reasonable access to and the
right to examine and make copies of, all books and records; construction plans;
correspondence; documents; contracts; agreements; and other materials relating
to the Property in Seller's possession or control, including, without
limitation, the right to conduct a &quot;walk-through&quot; of the Property
prior to the Closing.</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the course of its Due Diligence Review,
Buyer may make inquiries to third parties including, without limitation,
Tenants, lenders, contractors, property managers, parties to the Information
and Contracts, and municipal, local, and other government officials and
representatives, and Seller consents to such inquiries.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>New Agreements.</b>&nbsp; During the period
from the Effective Date until the Closing Date, and as a condition to Buyer's
obligations to purchase the Property, Seller shall not, without the prior
written consent of Buyer in each instance (such consent not to be unreasonably
withheld), enter into any commitment, contract, option or other agreement of
any kind with respect to the repair, maintenance or operation of the Property,
unless such contracts, etc. have terms that expire prior to Closing.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">8.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Conduct of Inspections.</b></p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any entry by Buyer onto the Property shall
be subject to, and conducted in accordance with, all applicable laws, statutes,
rules and regulations and in a manner so as to avoid any material interference
with the operations and occupancy of the Property.&nbsp; Buyer shall promptly
restore the Property to its previous condition before any such inspections,
studies, or tests were performed.</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Buyer or its agents may undertake borings
or other disturbances of the soil with Seller's prior written approval,
provided that the soil borings and other disturbances shall be sealed and
closed using materials and techniques that conform with all applicable laws,
statutes, rules and regulations and industry and governmental standards, and
the soil shall be recompacted to the condition immediately before any such
borings were undertaken.</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(c) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notwithstanding any general liability or
other insurance that may be maintained by Buyer, Buyer hereby agrees to
indemnify, defend and hold harmless Seller and its partners and its and their
partners, shareholders, directors, officers, employees, and agents from and
against any claims, losses or damages (including attorneys' fees and costs)
arising directly from or in connection with the due diligence and inspection
activities conducted on the Property by Buyer and or its agents, including,
without limitation, any damages to the Property arising from or relating to any
inspections, studies or tests performed by Buyer or its agents.&nbsp;&nbsp;
Notwithstanding the foregoing, Buyer shall have no liability of any kind for
conditions discovered (but not caused by) Buyer's inspections, studies or
tests.&nbsp; The foregoing indemnification obligation of Buyer shall survive any
termination of this Agreement or the delivery of the Deed and the transfer of
title to the Property.&nbsp; If this Agreement is terminated, Buyer shall deliver to
Seller, at no cost to Seller, the results and copies of any and all surveys,
reports, tests or studies made by or for Buyer with respect to the Property.</p>



<p class=MsoNormal style='text-align:center;page-break-after:avoid'><b>ARTICLE
VI</b></p>

<p class=MsoNormal style='text-align:center;page-break-after:avoid'><b><u>TITLE
TO PROPERTY</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Title.&nbsp; </b>At the Closing, Seller shall
convey to Buyer title to the Real Property by execution and delivery of the
Deed.&nbsp; The Owner's Title Policy shall show title as subject to no exceptions
other than the following (collectively, the <b>&quot;Permitted Exceptions&quot;</b>):</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The lien for real estate taxes and
assessments not yet delinquent; and</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Such other exceptions as may be approved or
deemed approved by Buyer pursuant to <u>Section 7.1</u> hereof.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">9.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Title Insurance.</b>&nbsp; Buyer's obligation
to purchase the Property shall be subject to the irrevocable commitment of the
Title Company to issue the Owner's Title Policy upon payment of its normal premium
on the Closing Date.&nbsp; In addition, and provided Buyer satisfies any
requirements of the Title Company therefor prior to the Closing Date, the
Owner's Title Policy shall be issued together with such endorsements thereto as
Buyer may request; provided, however, that if any such endorsements are
required to change an exception to title to which Buyer has objected, and which
Seller has agreed to cure, into a Permitted Exception, then the cost of such
endorsement shall be paid by Seller.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Personal Property and Contracts.</b>&nbsp; At
the Closing, Seller shall transfer to Buyer title to the Personal Property and
Seller's interest in the Contracts by execution and delivery of the Bill of
Sale and the Contract Assignment.&nbsp; Buyer shall assume the performance of all of
Seller's obligations under the Contracts arising after the Closing Date, but
only as to those Contracts listed on <u>Schedule I</u> to the Contract
Assignment.</p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE VII</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>BUYER'S ADDITIONAL CONDITIONS PRECEDENT TO CLOSING</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>Buyer's obligation to purchase the Property shall be
conditioned upon the fulfillment of each of the following conditions precedent:</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Approval of Title</b>.</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Buyer shall have reviewed and approved,
within the time period and in the manner provided below, the PTR, including copies of all documents referred to in the PTR (other than encumbrances to be
discharged by Seller on or before Closing).</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Seller shall request the Title Company to
cause the PTR and legible copies of all supporting materials, including copies
of all exception documents referred to in the PTR to be delivered to Buyer by
5:00 p.m., Pacific time, on or before the fifth (5th) Business Day after the
Effective Date (the <b>&quot;Title Delivery Date&quot;</b>).&nbsp; On or before the
fifth (5th) Business Day from and after delivery to Buyer of the PTR and all supporting materials, Buyer shall notify Seller and Escrow Holder in writing which
exceptions to title shown in the PTR, if any, will not be accepted by Buyer
(collectively, the <b>&quot;Disapproved Title Matters&quot;</b>); all other
matters and exceptions to title shown in the PTR shall be deemed approved by
Buyer.&nbsp; If Buyer fails to notify Seller and Escrow Holder within the required
time period of any Disapproved Title Matters, Buyer shall be deemed to have
approved the condition to the Real Property as to such title matters.&nbsp; If Buyer
notifies Seller of any Disapproved Title Matters, Seller shall have until 5:00 p.m., Pacific time, on the fifth (5th) day after Seller's receipt of such notice to
notify Buyer and Escrow Holder in writing that:</p>



<p class=MsoNormal style='text-align:justify;text-indent:108.0pt'>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Seller shall use its reasonable efforts
to either (A) cause any Disapproved Title Matters to be removed by the Closing,
or (B) obtain, at Seller's expense, an endorsement or other curative effect
acceptable to Buyer in Buyer's sole and absolute discretion (in which case,
Seller may extend the Closing Date for such period as shall be required to
effect such cure, but not beyond ten (10) calendar days); or</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">10.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:108.0pt'>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Seller elects not to cause any such
Disapproved Title Matters to be removed.</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If Seller gives Buyer and Escrow Holder
notice under subsection (b)(ii) above, or if Seller gives notice under
subsection (b)(ii) above, but later provides notice to Buyer that Seller has
been unable to cure or remove the applicable Disapproved Title Matter, then
Buyer shall have until 5:00 p.m., Pacific time, on the fifth (5th) Business Day
after Buyer's receipt of either such notice to notify Seller and Escrow Holder
that (i) Buyer revokes its disapproval of such exceptions(s) and will proceed
with the purchase without any reduction in the Purchase Price and take title to
the Property subject to such exception(s), or (ii) Buyer will terminate this
Agreement.&nbsp; The foregoing procedure shall also be applicable to any new matters
which are disclosed in any updates, supplements or amendment to the PTR.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Approval of Other Matters.&nbsp;
</b></p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By 5:00 p.m., Pacific time, on or before
the 5th Business Day after the Effective Date, Seller will deliver to Buyer, or
allow Buyer reasonable access to, at the Property, at Seller's place of business,
or at such other location as Seller may reasonably indicate, during reasonable
times agreed upon in advance by Buyer and Seller, copies of the following,
expressly subject to such items being in the possession of or reasonably
available to Seller or its manager for the Property:</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:108.0pt'>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; copies of all Contracts;</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:108.0pt'>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a schedule of all Personal
Property;</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:108.0pt'>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
copies of the most recent
property tax bills for the Property;</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:108.0pt'>(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;plans and specifications
(as-builts, if available) for construction of the Improvements (the <b>&quot;Plans
and Specifications&quot;</b>);</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:108.0pt'>(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;copies of certificate(s) of
occupancy, and any governmental licenses and permits regarding the Property;</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:108.0pt'>(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;copies of environmental reports,
studies and assessments within Seller's possession or control covering the
Property;</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:108.0pt'>(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
copies of all soil reports and
analyses within Seller's possession or control pertaining to the soils,
seismological, geological and drainable conditions of the Property;</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:108.0pt'>(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
copies of construction and
equipment warranties within Seller's possession; and</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:108.0pt'>(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; all other material,
non-proprietary materials, reports and information relevant to the Property.</p>



<p class=MsoNormal align="center">11.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On or before the expiration of the
Inspection Period, Buyer shall notify Seller and Escrow Holder in writing if
Buyer objects to any of the matters referred to in subsection (a)&nbsp; above or to
Buyer's own inspection of the Property described in <u>Section 5.1</u> hereof.&nbsp;
If Buyer so notifies Escrow Holder of any objection(s), Seller shall have ten
(10) calendar days, at Seller's option, to attempt to cure Buyer's objection(s);
upon the expiration of such ten (10) day period, Buyer may elect to either
rescind its objection(s) or terminate this Agreement. </p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>7.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Compliance by Seller.&nbsp; </b>Seller shall
have complied with each and every covenant, undertaking and agreement to be kept
or performed by Seller as provided in this Agreement; and each representation
and warranty made in this Agreement by Seller shall remain true and accurate in
all material respects both at the time made and on the Closing Date.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>7.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>No Material Adverse Change in Physical
Condition.</b>&nbsp; As of the Closing Date, there shall have been no material
adverse change in the physical condition of the Property or any material
portion thereof, excepting any event(s) of destruction, damage, or condemnation
described in <u>Section 13.1</u> or <u>13.2</u>.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>7.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>No Insolvency.</b>&nbsp; Neither Seller nor
any of its affiliates (i) shall be in receivership or dissolution, (ii) shall
have made an assignment for the benefit of creditors or admitted in writing its
inability to pay its debts as they mature, or (iii) shall be been adjudicated a
bankrupt or filed a petition in voluntary bankruptcy or a petition or answer
seeking reorganization or an arrangement with creditors under the Federal
bankruptcy law or any other similar law or statute of the United States or any
jurisdiction and no such petition shall have been filed against Buyer or any of
its general partner(s), if any.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>7.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Closing of Business Purchase
Transaction.</b>&nbsp; The Business Purchase Transaction shall have been completed
and closed.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>7.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Waiver.&nbsp; </b>At any time or times on or
before the Closing, at Buyer's election, Buyer may waive any of the foregoing
conditions by written notice to Seller.&nbsp; Other than Buyer's closing the
transaction contemplated by this Agreement which shall waive all such unfulfilled
conditions, no waiver shall be effective unless made in writing specific as to
the conditions or matters so waived.&nbsp; No such waiver shall be inferred or
implied by any act or conduct of Buyer or reduce the rights or remedies of
Buyer arising from any breach of any undertaking, agreement, covenant,
warranty, or representation of Seller under this Agreement.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">12.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>7.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Termination.&nbsp; </b>If any of the
foregoing conditions are neither fulfilled, nor waived as provided above,
Buyer, at its election by written notice to Seller, may terminate this
Agreement and be released from all obligations under this Agreement (other than
those described in this <u>Section 7.8</u> and <u>Sections 5.3, 5.5, 15.2(b)</u>
and <u>15.10 </u>hereof).&nbsp; In the event of such termination by Buyer, the
Deposit and all interest accrued thereon shall be returned immediately to
Buyer, all documents deposited in Escrow by Buyer or Seller shall be returned
to the depositing party, the costs of the Title Company and Escrow Holder shall
be borne equally by Buyer and Seller, and, except as otherwise set forth in
this <u>Article VII</u>, each party hereto shall bear its own costs incurred
herewith.</p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE VIII</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>SELLER'S CONDITIONS PRECEDENT TO CLOSING</u></b></p>

<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>Seller's obligation to sell the Property shall be
conditioned upon the fulfillment of each of the following conditions precedent:</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Compliance By Buyer.</b>&nbsp; Buyer shall
have complied with each and every covenant, undertaking and agreement to be
kept or performed by Buyer as provided in this Agreement; and each
representation and warranty made in this Agreement by Buyer shall remain true
and accurate in all material respects both at the time made and on the Closing
Date.</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Closing
of Business Purchase Transaction.</b>&nbsp; The Business Purchase Transaction shall
have been completed and closed.</p>

<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>8.3<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Termination.</b>&nbsp; If the foregoing
conditions are not fulfilled, then Seller shall have the option to terminate
this Agreement by delivering to Buyer and Escrow Holder written notice of such
termination; <u>provided</u>, <u>however</u>, that Seller may not terminate
this Agreement under this <u>Section 8.3</u> unless Buyer fails to cause any
non-fulfilled condition(s) to be satisfied within three (3) days after written
notice thereof from Seller.&nbsp; If the failure, if any, of the condition set forth
in <u>Section 8.1</u> is the result of a breach by Buyer of its obligations
hereunder, then if Seller elects to terminate this Agreement because of such
breach, Escrow Holder, upon written instruction Seller (with concurrent copy
thereof to Buyer), shall pay to Seller the Deposit.&nbsp; Thereafter, this Agreement
shall be null and void and of no further force or effect and, except as
provided in this <u>Section 8.3</u> and <u>Sections 5.3, 5.5, 15.2(b)</u> and <u>15.10</u>
hereof, neither party shall have any further rights or obligations hereunder,
other than those rights and obligations that, by their terms survive the
termination of this Agreement.&nbsp; In the event of such termination by Seller, all
documents deposited in Escrow by Buyer or Seller shall be returned to the
depositing party, the costs of the Title Company and Escrow Holder shall be
borne equally by Buyer and Seller and each party hereto shall bear its own
costs incurred herewith.</p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE IX</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>ESCROW AND CLOSING</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Deposit With Escrow Holder and Escrow
Instructions.</b>&nbsp; Escrow herein (the <b>&quot;Escrow&quot;</b>) shall be
established with Escrow Holder, at the address listed in <u>Article II(o) </u>above.&nbsp;
Upon execution of this Agreement, the parties shall deposit an executed copy of
this Agreement with Escrow Holder.&nbsp; This Agreement shall serve as the
instructions to Escrow Holder to consummate the purchase and sale contemplated
hereby. </p>





<p class=MsoNormal align="center">13.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Closing.</b>&nbsp; The Closing shall occur on
the same day as the &quot;closing&quot; occurs for the Business Purchase
Transaction (the <b>&quot;Business Purchase Closing Date&quot;</b>); provided,
however, that if any of Buyer's conditions precedent to Closing set forth in <b>Article
 VII</b> has neither been satisfied nor waived by Buyer by the Business
Purchase Closing Date, then the Property shall be leased to Buyer for a period
of no more than ninety (90) days at a rental rate of <b>Ten Thousand and
No/100ths Dollars ($10,000.00)</b> per month (triple net) with such other terms
and conditions as are usual and customary and as shall be negotiated between
the parties in good faith; and provided, further, that if at the end of such
ninety (90) day period the parties are still unable to consummate the Closing,
then the Property shall be leased to Buyer for a period not to exceed an
additional one hundred eighty (180) days at a rental rate of <b>Twenty Thousand
and No/100ths Dollars ($20,000.00)</b>&nbsp; per month (triple net) with such other
terms and conditions as are usual and customary and as shall be negotiated
between the parties in good faith.&nbsp; Upon the expiration of such one hundred
eighty (180) day term, (i) if the parties are unable to consummate the Closing,
then either party may proceed to terminate this Agreement as provided in <b>Section
7.8</b> or <b>8.3</b>, as applicable, and (ii) any holdover by Buyer with the
written consent of Seller shall be on a month to month tenancy basis unless
otherwise agreed in writing between the parties; and any holdover without the
written consent of Seller shall establish a tenancy at sufferance with
Borrower.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.3<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deliveries By Seller.</b>&nbsp; At least one
(1) business day prior to the Closing Date, Seller shall deliver or cause to be
delivered to Escrow Holder the following:</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the Deed, duly executed and acknowledged by
Seller and in recordable form;</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Seller's Non-Foreign Affidavit, in the form
of <b><u>Exhibit E</u></b> attached hereto, duly executed and acknowledged by
Seller; and</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; any other cash, documents, or instruments
called for hereunder to be paid, executed, or delivered by Seller that have not
previously been delivered by Seller to Escrow Holder; and</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; such articles, agreements or certificates
of partnership, resolutions, authorizations, bylaws, certifications or other
corporate, partnership, limited liability company or trust documents or
agreements or other reasonable proof of authority relating to Seller as Buyer
or Escrow Holder shall reasonably require in connection with this transaction.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Deliveries By Buyer.&nbsp; </b>At least one
(1) business day prior to the Closing Date, Buyer shall deliver or cause to be
delivered to Escrow Holder the following:</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; immediately available funds sufficient to
pay the Balance, Buyer's portion of the closing costs, and any other amounts
payable by Buyer in order to permit Escrow Holder to close the Escrow; and</p>





<p class=MsoNormal align="center">14.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; any other cash, documents or instruments
called for hereunder to be paid, executed or delivered by Buyer or that are
required for the Closing hereunder that have not been previously delivered by
Buyer to Escrow Holder.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Additional Deliveries By Buyer and
Seller.</b>&nbsp; At least one (1) business day prior to the Closing Date, Seller
also shall deliver or cause to be delivered to Escrow Holder, and Buyer also
shall deliver or cause to be delivered to Escrow Holder, the following
documents:</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
two (2) originals of the Bill of
Sale, duly executed and acknowledged by Seller and Buyer;</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
two (2) originals of the Contract
Assignment, duly executed and acknowledged by Seller and Buyer;</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a Declaration of Value to be
completed and executed by Escrow Holder and filed with the office of the County
Recorder of the County of Carson City, Nevada; and </p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a closing statement prepared by
Escrow Holder and approved by Buyer and approved by Seller.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Other Instruments.&nbsp; </b>Seller and Buyer
each shall deposit any other documents or instruments that may be reasonably
required by the other party and/or Escrow Holder, or that are otherwise
required to close the Escrow and consummate the purchase and sale of the
Property in accordance with the terms hereof.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>9.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Prorations and
Apportionments.</b></p>

<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All expenses of the Property shall be
prorated and apportioned as of 12:01 a.m., Pacific time, on the Closing Date
(the <b>&quot;Prorations&quot;</b>).&nbsp; Taxes shall be prorated as of the Closing
Date, based on a 365-day year.&nbsp; Seller shall be charged and credited for such
Prorations up to the Closing Date and Buyer shall be charged and credited (or,
at Seller's option, paid by check for unused security or other deposits) for
all of the same on and after the Closing Date.&nbsp; Prior to the Closing, Buyer and
Seller shall review and approve the Prorations.&nbsp; If the actual amounts to be
prorated are not then known, or if any additional expenses are incurred after
the date the Prorations are made, the Prorations shall be made on the basis of
the best evidence then available.&nbsp; When actual figures are later received, a
cash settlement will be made between Seller and Buyer.&nbsp; All utility bills shall
be prorated when the last bill incurred by Seller is received.&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The provisions of this Section shall
survive the Closing.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">15.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Costs and Expenses.&nbsp; </b>Seller shall
pay for the CLTA standard coverage portion of the premium for the Owner's Title
Policy in the amount of the Purchase Price.&nbsp; Seller shall also pay all
recording charges for the Deed, and the cost, if any, to record any corrective
instruments. If Buyer elects that the Owner's policy be an ALTA Policy, then
Buyer shall pay the incremental cost of the extended coverage portion of the
Owner's Policy. If Buyer elects to obtain endorsements for the Owner's Title
Policy, in addition to those necessary to cure title objections as provided for
in <u>Section 6.2</u>, Buyer shall pay all the premiums for such additional
endorsements.&nbsp; Costs and charges of the Escrow and real property transfer tax
shall be borne equally by Seller and Buyer.&nbsp; All other taxes, costs, and
charges for the sale of the Property shall be paid by Seller and/or Buyer, as
the case may be, in accordance with the usual customs and practices in the City
of Carson City, County of Carson City, State of Nevada.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Insurance; Utilities.</b>&nbsp; Buyer
acknowledges that Seller will cause its policies of casualty and liability
insurance to be terminated with respect to the Property as of the Closing
Date.&nbsp; Buyer shall be responsible for obtaining its own insurance as of&nbsp; the
Closing Date and thereafter.&nbsp; Any deposits for utilities made by Seller shall
be refunded to Seller and Buyer shall arrange for any required replacements
therefor and Buyer shall be responsible for obtaining its own utilities as of
the Closing Date and thereafter.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.10&nbsp;&nbsp;&nbsp; <b>Close of Escrow.&nbsp; </b>Provided that (i)
Escrow Holder has received the documents and funds described in <u>Sections
9.3, 9.4</u>, and <u>9.5</u> hereof; (ii) Escrow Holder has not received prior
written notice from either party to the effect that an agreement of either
party made hereunder has not been performed or to the effect that any condition
set forth herein has not been satisfied or waived; (iii) Buyer has not elected
to terminate its rights and obligations hereunder pursuant to <u>Article VII or XIII</u>; and (iv) the Title Company has issued or is unconditionally prepared and
committed to issue the Owner's Title Policy to Buyer, Escrow Holder is
authorized and instructed on the Closing Date to: </p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; cause the Deed to be recorded in the
Official Records of the County of Carson City, State of Nevada;</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; deliver the cash portion of the Purchase
Price to Seller, less Seller's share of closing costs and Prorations (except to
the extend paid to Buyer by check in accordance with <u>Section 9.7</u>
hereof), in the manner specified by Seller in separate instructions to Escrow
Holder;</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; deliver to Buyer an original of each of
the Bill of Sale and the Contract Assignment, and one (1) as-recorded conformed
copy of the Deed; and deliver to Seller an original of each of the Bill and
Sale and the Contract Assignment, and one (1) as-recorded conformed copy of the
Deed; and</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; deliver Seller's Non-Foreign Affidavit to
Buyer.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">16.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.11<b>&nbsp;&nbsp;&nbsp; Notification; Closing Statements.&nbsp; </b>If
Escrow Holder cannot comply with the instructions herein (or as may be provided
later), Escrow Holder is not authorized to cause the recording of any of the
Documents.&nbsp; If Escrow Holder is unable to cause the recording, Escrow Holder
shall notify the parties without delay.&nbsp; Immediately after the Closing, Escrow
Holder shall deliver to Buyer and Seller, respectively, at their addresses
listed in <u>Section 15.1</u> hereof, a true, correct and complete copy of the
Seller's and Buyer's Closing Statements, in forms customarily prepared by
Escrow Holder, as well as all other instruments and documents to be delivered
to Buyer and Seller.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>9.12&nbsp;&nbsp;&nbsp; <b>Default and Remedies</b>.</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If prior to or at Closing, Seller shall
have failed to perform in any material respects any of the covenants and/or
agreements contained herein which are to be performed by Seller, or if any
warranty or representation made by Seller herein is not true and correct in all
material respects, Buyer may, after providing Seller with written notice
thereof and the same remaining uncured for at least five (5) days thereafter,
seek either specific performance of this Agreement or, may bring suit for
damages against Seller but not both.&nbsp; Any such suit for specific performance or
damages must be filed within the earlier of (i) ninety (90) days from and after
the date Buyer has actual knowledge of any material misrepresentation or
failure of warranty and (ii) one (1) year following Seller's breach or shall be
deemed waived for all purposes.&nbsp; Any breach or default by Seller after Closing
shall be subject to the same notice and cure provisions.</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If prior to or at Closing, Buyer shall have
failed to perform in any material respect any of the covenants and/or
agreements contained herein which are to be performed by Buyer or if any
warranty or representation made by Buyer herein is not true and correct in all
material respects, then Seller shall be entitled, after providing Buyer with
written notice thereof and the same remaining uncured for at least five (5)
days thereafter, to exercise the remedies set forth in <u>Section 4.5</u>,
which shall be Seller's sole and exclusive remedies in such event.</p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE X</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>REPRESENTATIONS, WARRANTIES AND COVENANTS</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>10.1&nbsp;&nbsp;&nbsp; <b>Buyer's Representations and Warranties.</b>&nbsp;
Buyer represents and warrants to Seller as follows:</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Colorado,
with full right, power, and authority to take title to the Property, and to
enter into and otherwise perform and comply with the terms of this Agreement;</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This Agreement and all documents executed
by Buyer that are to be delivered to Seller at the Closing are, or at the time
of Closing will be, duly authorized, executed and delivered by Buyer;</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement and all documents executed
by Buyer that are to be delivered to Seller at the Closing are, or at the
Closing will be, legal, valid and binding obligations of Buyer, and do not, and
at the time of Closing will not, violate any provisions of any agreement or
judicial order to which Buyer is a party or to which Buyer is subject; and</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">17.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Buyer shall hold as confidential all
information concerning Seller or the transaction contemplated hereby disclosed
to Buyer in connection with said transaction; and Buyer shall not, prior to
Closing, release any such information to third parties without Seller's prior
written consent, except pursuant to a court order requiring such release or as
otherwise may be required by law.</p>





<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>10.2&nbsp;&nbsp;&nbsp; <b>Seller's Representations and Warranties.&nbsp; </b>Seller
represents and warrants to Buyer as follows:</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Nevada, with full right, power, and authority to convey to Buyer all of
Seller's right, title and interest in and to the Property, and to enter into
and otherwise perform and comply with the terms of this Agreement;</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This Agreement and all documents
executed by Seller that are to be delivered to Buyer at the Closing are, or at
the time of Closing will be, duly authorized, executed and delivered by Seller;
and </p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This Agreement and all documents
executed by Seller that are to be delivered to Buyer at Closing are, or at the
time of Closing will be, legal, valid and binding obligations of Seller, and do
not, and at the time of Closing will not, violate any provisions of any
agreement or judicial order to which Seller is a party or to which Seller or
the Property is subject.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To the best of Seller's
knowledge, Seller has good and marketable title to the Property and at Closing
such title shall be subject only to the Permitted Exceptions.&nbsp; </p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To the best of Seller's
knowledge, other than the Property, there are no items, tangible or intangible,
real or personal, owned by the Seller or any affiliate of Seller as of now or
at any time heretofore and used in conjunction with the Property or any portion
thereof.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To the best of Seller's
knowledge, all of the Property, and the existing uses of the Property, are in
compliance with all applicable laws, ordinances, rules, regulations, and
requirements of all governmental authorities having jurisdiction thereof,
including, without limitation thereto, those pertaining to zoning, land use,
subdivision, building, safety, fire and health.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To the best of Seller's
knowledge, there is no action, suit, proceeding or investigation pending, nor
to Seller's knowledge threatened, before any agency, court, or other
governmental authority which relates to the Seller or the ownership,
maintenance, or operation of the Property.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; There is no condemnation or
eminent domain proceeding affecting the Property or any portion thereof
currently pending nor, to Seller's knowledge, is any such proceeding
threatened.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">18.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>












<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Seller has received no notice of
any default or breach by the Seller under any covenants, conditions,
restrictions, rights-of-way, or easements which may effect the Seller in
respect to the Property or may effect the Property or any portion thereof, and
no such default or breach now exists.&nbsp; </p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the best of Seller's
knowledge, except as disclosed in the PTR, no special or general assessments
have been levied, or to Seller's knowledge are any such assessments threatened
against all or any part of the Property.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To the best of Seller's
knowledge, there has been no default or any claim of default, and no event has
occurred which with notice or lapse of time or both would constitute a default,
under any Lease, and to Seller's knowledge no Tenant has asserted or has any
defense, set off, or claim with regard to his tenancy pursuant to the lease,
any law or otherwise.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the best of Seller's
knowledge, all utilities required by law or by the normal use and operation of
the Property are and at the time of Closing will be installed to the property
lines of the Real Property, are and at the time of Closing will be connected
and operating pursuant to valid permits, and are and at the time of Closing
will be adequate to service the Property and to permit full compliance with all
requirements of law and normal usage of the Property by Seller and its
licensees and invitees.&nbsp; All public utilities required for the operation of the
Property either enter the Property through adjoining public streets, or if they
pass through adjoining private land do so in accordance with valid public
easements or private easements which will inure to the benefit of Buyer at
Closing and thereafter.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To the best of Seller's
knowledge, the heating, ventilation, air conditioning, mechanical, electrical
and other systems and equipment forming a part of or used in connection with
the Property are operative and in good working condition and in compliance with
all applicable laws, ordinances, regulations and requirements.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Seller is not a foreign person as
defined in Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To the best of Seller's
knowledge, no asbestos, PCBs or urea formaldehyde were used in the construction
of the improvements on the Property.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To the best of Seller's knowledge,
the Property complies with all applicable requirements of the Equal Opportunity
for Individuals Act (ADA), 42 U.S.C. 12101 and the regulations promulgated and
set forth at 28 CFR 36.401 <u>et</u> <u>seq</u>.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To the best of Seller's
knowledge, mechanical and structural plans and specifications, soils reports,
certificates of occupancy, if delivered by Seller to Buyer, are and at the time
of Closing will be in full force and effect and all such documents relating to
or affecting the Property have been, made available to or delivered to Buyer
pursuant to this Agreement.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">19.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>












<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To the best of Seller's
knowledge, the copies of the Contracts and all Information previously delivered
to Buyer are true and correct copies of all such Contracts and Information and
are in full force and effect.&nbsp; There are no unpaid amounts due and owing by
Seller under any such Contract, except for amounts for which Buyer is to
receive full credit through proration at Closing.&nbsp; There are no other service
or maintenance contracts relating to the Property.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Seller is not party to, or
otherwise bound by, any collective bargaining agreement or multi-employer
pension fund covering employees who service the Property.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To the best of Seller's
knowledge, Seller has obtained all licenses, permits, approvals, easements and
rights of way required from all governmental authorities having jurisdiction
over the Property or from private parties for the normal use and operation of
the Property and to ensure free and unimpeded vehicular and pedestrian ingress
to and egress from the Property as required to permit the normal intended usage
of the Property by the tenants thereof, their invitees and customers.&nbsp; Seller
has materially complied with all such licenses and permits and has not received
any notice that any such licenses or permits will not be renewed upon
expiration, or of any material conditions which will be imposed in order to
receive any such renewal.</p>



<p class=MsoNormal style='margin-left:0pt;text-align:justify;text-indent:72.0pt'>(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Seller knows of no facts nor has
Seller failed to disclose to Buyer any fact which would prevent Buyer from using
and operating the Property after Closing in the manner in which the Property
has been used and operated prior to the date hereof.</p>



<p class=MsoNormal style='margin-top:0pt;margin-right:0pt;margin-bottom:12.0pt;
margin-left:0pt;text-align:justify;text-indent:72.0pt'>(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Seller shall hold as confidential
all information concerning Buyer or the transaction contemplated hereby
disclosed to Seller in connection with said transaction; and Seller shall not,
prior to Closing, release any such information to third parties without Buyer's
prior written consent, except pursuant to a court order requiring such release
or as otherwise may be required by law.</p>

<p class=MsoNormal style='margin-top:0pt;margin-right:0pt;margin-bottom:12.0pt;
margin-left:0pt;text-align:justify;text-indent:72.0pt'>(w)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>&nbsp;OFAC</u>.&nbsp; Neither Seller nor any of its Affiliates is (i) a
Prohibited Person (defined below) and (ii) is in full compliance with all
applicable orders, rules, regulations and recommendations of The Office of
Foreign Assets Control (<b>&quot;OFAC&quot;</b>) of the U.S. Department of the
Treasury.&nbsp; The term <b>&quot;Prohibited Person&quot;</b> shall mean any person
or entity:</p>

<p class=MsoNormal style='margin-top:0pt;margin-right:0pt;margin-bottom:12.0pt;
margin-left:72.0pt;text-align:justify;text-indent:36.0pt'>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
listed in the Annex to, or
otherwise subject to the provisions of the Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (the <b>&quot;Executive Order&quot;</b>);</p>

<p class=MsoNormal style='margin-top:0pt;margin-right:0pt;margin-bottom:12.0pt;
margin-left:72.0pt;text-align:justify;text-indent:36.0pt'>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
that is owned or controlled by,
or acting for or on behalf of, any person or entity that is listed in the Annex
to or is otherwise subject to the provisions of the Executive Order;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">20.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-top:0pt;margin-right:0pt;margin-bottom:12.0pt;
margin-left:72.0pt;text-align:justify;text-indent:36.0pt'>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; with whom Buyer is prohibited
from dealing or otherwise engaging in any transaction by any terrorism or money
laundering law, including the Executive Order;</p>

<p class=MsoNormal style='margin-top:0pt;margin-right:0pt;margin-bottom:12.0pt;
margin-left:72.0pt;text-align:justify;text-indent:36.0pt'>(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; who commits, threatens or
conspires to commit or supports <b>&quot;terrorism&quot; </b>as defined in the
Executive Order;</p>

<p class=MsoNormal style='margin-top:0pt;margin-right:0pt;margin-bottom:12.0pt;
margin-left:72.0pt;text-align:justify;text-indent:36.0pt'>(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
that is named as a <b>&quot;specially
designated national and blocked person&quot;</b> on the most current list
published by the U.S. Treasury Department Office of Foreign Assets Control at
its official website, <i>www.ustreas.gov/offices/enforcement/ofac</i> or at any
replacement website or other replacement official publication of such list; or </p>

<p class=MsoNormal style='margin-top:0pt;margin-right:0pt;margin-bottom:12.0pt;
margin-left:72.0pt;text-align:justify;text-indent:36.0pt'>(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; who is an Affiliate of a person
or entity listed above.</p>

<p class=MsoNormal style='margin-left:72.0pt;text-align:justify;text-indent:
36.0pt'>(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The term <b>&quot;Affiliate&quot;</b>
as used in this clause (l) shall mean, as to any person or entity, any other
person or entity that, directly or indirectly is in control of, controlled by,
or is under common control with such person or entity or is a director or
officer of such person or entity or of an Affiliate of such person or entity.&nbsp;
As used herein, the term &quot;control&quot; means the possession, directly of
indirectly, of the power to direct or cause the direction of management,
policies or activities of a person or entity, whether through ownership of
voting securities, by contract or otherwise.</p>



<p class=MsoNormal style='text-align:justify'>No
examination or investigation of the Property by or on behalf of the Buyer prior
to the Closing shall in any way modify, affect, or diminish Seller's obligation
under the representations, warranties, covenants, and agreements contained in
this Agreement, provided that Buyer has notified Seller before Closing of any
information that Buyer has acquired that indicates or discloses that a
representation, warranty, covenant or agreement contained in this Agreement is
not true and correct.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>10.3&nbsp;&nbsp;&nbsp; <b>Continuation and Survival of
Representations and Warranties.&nbsp; </b>All representations and warranties by the
respective parties contained in this <u>Article X</u>&nbsp; are intended to and
shall remain true and correct as of the time of the Closing, shall be deemed to
be material, and shall survive the execution and delivery of this Agreement,
the delivery of the Deed and transfer of title to the Property for a period of
one (1) year following the Closing Date. </p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE XI</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>POSSESSION</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>Possession of the Property shall be delivered to
Buyer immediately following the Closing.&nbsp; </p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">21.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE XII</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>OPERATION OF THE PROPERTY</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>During the Escrow Period, Seller: (i) shall manage,
maintain, operate, and service the Property consistent with Seller's presently
existing standards, maintaining present services; (ii) shall keep the Property
and every portion thereof in reasonably good working order and repair; (iii)
shall maintain a sufficient inventory of supplies, materials, equipment and
other personal property for the proper management, maintenance, operation and
servicing of the Property; and (iv) shall not, except with Buyer's prior
written consent (which consent shall not be unreasonably withheld or delayed by
Buyer), approve, consent to, or otherwise permit any material change in the
operations of the Property during the Escrow Period, including, without
limitation:</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; any material alterations to the
Improvements except as may be necessary in order to perform ordinary, scheduled
maintenance;</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; cancellation of or material reduction in
the amount or scope of coverage under any insurance currently maintained with
respect to the Property;</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cancellation or surrender of any existing
Permit; and</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; any other material variation from Seller's
ordinary course of business in connection with the Property.</p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE XIII</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>LOSS BY FIRE OR OTHER CASUALTY; CONDEMNATION</u></b></p>

<p class=MsoNormal style='text-align:justify;page-break-after:avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.1&nbsp;&nbsp;&nbsp; <b>Damage or Destruction.</b></p>

<p class=MsoNormal style='text-align:justify;page-break-after:avoid'><b>&nbsp;</b></p>

<p class=MsoNormal style='text-align:justify'><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Before the Closing, risk of loss with
regard to the Properties shall be borne by Seller.&nbsp; If, before the Closing, the
Improvements or the Personal Property are destroyed or materially damaged,
Buyer's rights and obligations with respect to the Properties shall be as
follows:</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; if
the destruction or damage is an insured loss which involves a cost to repair
and restore the Properties to its condition existing prior to such loss or
damage equal to or less than $50,000.00 (the <b>&quot;Loss Threshold&quot;</b>),
Buyer shall be obligated to proceed to close the transaction (subject to
satisfaction of the other provisions hereof) and, if, but only if, Escrow
actually closes, Buyer shall receive a credit against the Purchase Price equal
to the lesser of (A) the cost to repair the damage or destruction and (B) the
amount of the deductible under Seller's casualty insurance policy (provided,
that Seller shall assign to Buyer all proceeds payable therefor under Seller's
casualty insurance policy); or</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">22.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; if
the destruction or damage is an insured loss which involves a cost to repair
and restore the Properties to its condition existing prior to such loss or damage
which is greater than the Loss Threshold, Buyer shall have the option (which
must be exercised by Buyer within fifteen (15) calendar days after Buyer's
receipt of written notice from Seller advising of such destruction or damage
and the fact that the cost to repair such damage or destruction is greater than
the Loss Threshold), to terminate this Agreement or to proceed with the Closing
and, if Buyer elects to proceed with Closing, Buyer shall receive a credit
against the Purchase Price equal to the lesser of (A) the cost to repair the
damage or destruction and (B) the amount of the deductible under Seller's
casualty insurance policy (provided, that Seller shall assign to Buyer all
proceeds payable therefor under Seller's casualty insurance policy).</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If
Buyer and Seller cannot agree as to the cost of repair, then the same shall be
determined a licensed and bonded neutral General Contractor (who has had no
personal or business relationship with either Seller or Buyer), with at least
five (5) years of full time experience in the construction and/or
reconstruction of properties similar to the Real Properties,&nbsp; appointed by two
(2) other licensed and bonded General Contractor nominated one (1) each by
Seller and Buyer.&nbsp; The expense of the neutral General Contractor shall be borne
equally by Buyer and Seller.</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
Buyer is obligated or elects to proceed to close the transaction under either
subsection (a)(i) or (a)(ii) above, all casualty insurance proceeds from
Seller's casualty insurance policy shall be assigned by Seller to Buyer at the
Closing and forwarded to Buyer immediately upon receipt thereof by Seller.</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If
Buyer elects to terminate this Agreement under subsection (a)(ii) above, this
Agreement shall become null and void and of no further force or effect as to
all unperformed rights and obligations of the parties and, except as provided
in <u>Sections 5.3, 5.5, 15.2(b)</u> and <u>15.10</u> hereof, neither Buyer nor
Seller shall have any further rights, duties, liabilities or obligations to the
other by reason thereof, other than those rights and obligations that, by their
terms, survive termination of this Agreement.&nbsp; In the event of such
termination, Escrow Holder is hereby instructed to return to Buyer the Deposit
and to return any other documents or things to the party which deposited the
same; and in such event&nbsp; the costs of the Title Company and Escrow Holder shall
be borne equally by Buyer and Seller.&nbsp; Also, each party shall bear its own
costs incurred hereunder.</p>



<p class=MsoNormal style='text-align:justify;page-break-after:avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.2&nbsp;&nbsp;&nbsp; <b>Condemnation.</b></p>
<p class=MsoNormal style='text-align:justify;page-break-after:avoid'><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If, before the Closing, all of the
Properties shall be taken by condemnation or eminent domain, or by a sale in
lieu thereof (all such takings being collectively referred to as <b>&quot;Condemnation&quot;</b>)
this Agreement shall become null and void and of no further force or effect as
to all unperformed rights and obligations of the parties and, except as
provided in <u>Sections 5.3, 5.5, 15.2(b)</u> and <u>15.10</u> hereof, neither
Buyer nor Seller shall have any further rights, duties, liabilities or
obligations to the other by reason hereof, other than those rights and
obligations that, by their terms, survive the termination of this Agreement.&nbsp;
In the event of such termination, Escrow Holder is hereby instructed to return
to Buyer the Deposit and all interest accrued thereon, and to return any other
documents or things to the party which deposited the same; and in such event&nbsp;
the costs of the Title Company and Escrow Holder shall be borne equally by
Buyer and Seller.&nbsp; Also, each party shall bear its own costs incurred
hereunder.</p>



<p class=MsoNormal align="center">23.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If,
before the Closing, (i) less than all of the Properties shall be taken by
Condemnation, (ii) there is any Condemnation of land lying in the bed of any
street, road, highway or avenue, open or proposed, in front of or adjoining all
or any part of the Land, or (iii) there is any change of grade of such street,
road, highway or avenue, provided such Condemnation or change of grade results
in a diminution in value of the Properties of more than the Loss Threshold,
then Buyer, at Buyer's option, may terminate this Agreement.&nbsp; If Buyer elects
to terminate this Agreement under this subsection (b), this Agreement shall
become null and void and of no further force or effect and, except as provided
in <u>Sections 5.3, 5.5, 15.2(b)</u> and <u>15.10</u> hereof, neither Buyer nor
Seller shall have any further rights, duties, liabilities or obligations to the
other by reason hereof, other than those rights and obligations that, by their
terms, survive the termination of this Agreement.&nbsp; In the event of such
termination, Escrow Holder is hereby instructed to return to Buyer the Deposit,
and to return any other documents or things to the party which deposited the
same; and in such event&nbsp; the costs of the Title Company and Escrow Holder shall
be borne equally by Buyer and Seller.&nbsp; Also, each party shall bear its own
costs incurred hereunder. </p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If
Buyer and Seller cannot agree as to the diminution in value, then such
diminution in value shall be determined by subtracting from the Purchase Price
the fair market value of the Properties after the Condemnation or change of
grade, as determined by neutral M.A.I. appraiser having had no previous
business or personal relationship with Seller or Buyer, appointed by two (2)
other M.A.I. appraisers nominated one (1) each by Seller and Buyer.&nbsp; The expense
of the appraiser shall be borne equally by Buyer and Seller.</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If&nbsp;
this Agreement is not terminated in accordance with the foregoing, or if such
Condemnation or change of grade&nbsp; results in a diminution in value equal to or
less than the Loss Threshold, Buyer shall accept title to the Properties
remaining after such Condemnation and/or subject to such change of grade.&nbsp; In
such event, Buyer shall receive a credit against the cash portion of the
Purchase Price in the amount of the diminution in value.</p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE XIV</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>ENVIRONMENTAL RESPONSIBILITIES AND LIABILITIES</u></b></p>





<p class=MsoNormal align="justify" style="text-indent: 36pt">14.1&nbsp;&nbsp;&nbsp; Seller represents and warrants to Buyer that
Seller, during any period of time that Seller held title to or otherwise
controlled the Property, has not caused or permitted any Hazardous Material to
be brought upon, kept, or used in or about the Property by Seller, or to
Seller's knowledge,&nbsp; any of its agents, employees, contractors or invitees,
except for Hazardous Materials which are necessary or convenient to the
operation of the businesses currently operated on the Property and which at all
times have been used, kept and stored in a manner that complies with all laws
regulating any such Hazardous Material so brought upon or used or kept in or
about the Property.&nbsp; Seller shall indemnify, protect, defend and hold Buyer,
and its assigns and transferees, and each of their respective representatives,
employees, trustees, officers, directors and agents (collectively, the <b>&quot;Indemnified
Parties&quot;</b>) harmless from any and all claims, judgments, damages,
penalties, fines, costs, expenses, liabilities or losses (including, without
limitation, sums paid in settlement of claims, attorneys' fees, consultant fees
and expert fees) which Buyer or any other Indemnified Party may incur or suffer
as a result of the inaccuracy of the foregoing representation and warranty.&nbsp;
The foregoing obligation of Seller to indemnify, protect, defend and hold Buyer
and the other Indemnified Parties harmless includes, without limitation, costs
incurred in connection with any investigation of site conditions or any
cleanup, remedial, removal, restoration or other response work required by any
federal, state, or local governmental agency or political subdivision because
of Hazardous Material present as a result of any action or inaction on the part
of Seller, its agents, employees, contractors, invitees or tenants in any
improvements on the Property or the soil or ground water on, under or adjacent
to the Property.</p>
<p class=MsoNormal align="center">24.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>&nbsp;</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>14.2&nbsp;&nbsp;&nbsp; The provisions of this <u>Article XIV</u>
shall survive the Closing for a period of one (1) year.</p>



<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>ARTICLE XV</b></p>

<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b><u>MISCELLANEOUS</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.1&nbsp;&nbsp;&nbsp; <b>Notices.&nbsp; </b>Any communication, notice or
demand of any kind whatsoever that either party may be required or may desire
to give to or serve upon the other shall be in writing, addressed to the parties
at the addresses set forth below, and delivered by personal service, by Federal
Express or other reputable overnight delivery service, or by facsimile
transmission:</p>





<p class=MsoNormal style='text-align:justify;text-indent:72.0pt;page-break-after:
avoid'>If to Seller:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; M. D.
Glover, Inc.<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5 University Circle<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Rancho Mirage, California&nbsp; 92270<br>
&nbsp;</p>



<p class=MsoNormal style='text-align:justify;text-indent:180.0pt;page-break-after:
avoid'>Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Malcolm Glover</p>



<p class=MsoNormal style='text-align:justify;text-indent:180.0pt;page-break-after:
avoid'>Telephone No.:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (760) 341-1404<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Facsimile No.:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (760) 341-1404</p>







<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal align="center">25.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:72.0pt;page-break-after:
avoid'>With a copy to:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Robison, Belaustegui, Sharp &amp; Low<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 71 Washington Street<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reno, Nevada&nbsp; 89503</p>
<p class=MsoNormal style='text-align:justify;text-indent:72.0pt;page-break-after:
avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F. DeArmond Sharp,
Esq.</p>
<p class=MsoNormal style='text-align:justify;text-indent:72.0pt;page-break-after:
avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Telephone No.:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (775) 329-3151<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Facsimile No.:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (775) 329-7941</p>





<p class=MsoNormal style='text-align:justify;text-indent:72.0pt;page-break-after:
avoid'>If to Buyer:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pro-Dex,
Inc.<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 151 East Columbine Avenue<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Santa Ana, California&nbsp; 92707</p>



<p class=MsoNormal style='text-align:justify;text-indent:180.0pt;page-break-after:
avoid'>Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Patrick Johnson<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Telephone No.:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (714) 241-4411</p>

<p class=MsoNormal style='text-align:justify;text-indent:180.0pt;page-break-after:
avoid'>Facsimile No.:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (714) 433-7200</p>





<p class=MsoNormal style='text-align:justify;text-indent:72.0pt;page-break-after:
avoid'>With a copy to:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jones Vargas<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 100 West Liberty Street, 12th Floor<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reno, Nevada&nbsp;&nbsp; 89501</p>



<p class=MsoNormal style='text-align:justify;text-indent:180.0pt;page-break-after:
avoid'>Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dave Davis, Esq.</p>



<p class=MsoNormal style='text-align:justify;text-indent:180.0pt'>Telephone No.:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(775) 786-5000<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Facsimile No.:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (775) 786-1177</p>



<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>Any such notice shall be deemed delivered as follows:
(a) if personally delivered, the date of delivery to the address of the person
to receive such notice; (b) if sent by Federal Express or other reputable
overnight courier service, the date of delivery to the address of the person to
receive such notice; or (c) if sent by facsimile transmission, on the Business
Day transmitted to the person to receive such notice if sent by 5:00 p.m.,
Pacific time, on such Business Day, and the next Business Day if sent after
5:00 p.m., Pacific time, or on a day other than a Business Day.&nbsp; Any notice
sent by facsimile transmission must be confirmed by sending by Federal Express
or other reputable overnight delivery service a copy of the notice sent by
facsimile transmission.&nbsp; Any party may change its address for notice by written
notice given to the other at least five (5) calendar days before the effective
date of such change in the manner provided in this <u>Section 15.1</u>.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>15.2&nbsp;&nbsp;&nbsp; <b>Brokers and Finders.</b></p>

<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Buyer and Seller each represents to the
other that it has not dealt with any broker or agent in connection with the
proposed purchase and sale of the Property.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">26.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:72.0pt'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the event of a claim for broker's fees,
finder's fees, commissions or other similar compensation in connection
herewith: (i) Buyer, if such claim is based upon any agreement alleged to have
been made by Buyer, shall indemnify, defend (using counsel reasonably
satisfactory to Seller) and hold Seller harmless from and against any and all
damages, liabilities, costs, expenses and losses (including, without
limitation, attorneys' fees and costs) that Seller sustains or incurs by reason
of such claim; and (ii) Seller, if such claim is based upon any agreement
alleged to have been made by Seller, shall indemnify, defend (using counsel
reasonably satisfactory to Buyer) and hold Buyer harmless from and against any
and all damages, liabilities, costs, expenses and losses (including, without
limitation, attorneys' fees and costs) that Buyer sustains or incurs by reason
of such claim.&nbsp; The provisions of this subsection shall survive the termination
of this Agreement or the Closing.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.3&nbsp;&nbsp;&nbsp; <b>Successors and Assigns.</b>&nbsp; Seller may
assign its rights and obligations hereunder.&nbsp; Buyer's interest under this
Agreement may be assigned to an affiliate of Buyer provided Buyer guarantees in
writing to Seller the full performance by such affiliate of Buyer's obligations
hereunder.&nbsp; All other assignments of Buyer's interest shall be subject to the
prior written consent of Seller, which consent shall not be withheld
unreasonably.&nbsp; This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their respective heirs, administrators and permitted
successors and assigns.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.4&nbsp;&nbsp;&nbsp; <b>Amendments.&nbsp; </b>This Agreement may be
amended or modified only by a written instrument executed by both parties.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.5&nbsp;&nbsp;&nbsp; <b>Interpretation.</b>&nbsp; Words used in the
singular shall include the plural, and vice-versa, and any gender shall be
deemed to include the other.&nbsp; The captions and headings of the Articles and
Sections of this Agreement are for convenience of reference only, and shall not
be deemed to define or limit the provisions hereof.&nbsp; Further, each party hereby
acknowledges that such party and its counsel, after negotiation and
consultation, have reviewed and revised this Agreement.&nbsp; As such, the terms of
this Agreement shall be fairly construed and the usual rule of construction, to
the effect that any ambiguities herein should be resolved against the drafting
party, shall not be employed in the interpretation of this Agreement or any
amendments, modifications or exhibits hereto or thereto.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.6&nbsp;&nbsp;&nbsp; <b>Governing Law.&nbsp; </b>This Agreement shall
be governed by and construed in accordance with the laws of the State of Nevada.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.7&nbsp;&nbsp;&nbsp; <b>Merger of Prior Agreements.</b>&nbsp; This
Agreement constitutes the entire understanding of the parties with respect to
the subject matter hereof and supersedes all prior and contemporaneous oral or
written representations, warranties, statements, documents, understandings and
agreements with respect thereto.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">27.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.8&nbsp;&nbsp;&nbsp; <b>Attorneys' Fees and Costs.&nbsp; </b>If either
Buyer or Seller brings any suit or other proceeding with respect to the subject
mater or the enforcement of this Agreement, the prevailing party (as determined
by the court, agency or other authority before which such suit or proceeding is
commenced), in addition to such other relief as may be awarded, shall be
entitled to recover reasonable attorneys' fees, expenses and costs of
investigation actually incurred.&nbsp; The foregoing includes, without limitation,
attorneys' fees, expenses and costs of investigation incurred in appellate
proceedings, costs incurred in establishing the right to indemnification, or in
any action or participation in, or in connection with, any case or proceeding
under Chapter 7, 11 or 13 of the Bankruptcy Code, 11 United States Code Section
101 <u>et seq</u>., or any successor statutes.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.9&nbsp;&nbsp;&nbsp; <b>&nbsp;Time of Essence.</b>&nbsp; Time is of the
essence of this Agreement.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.10&nbsp; <b>Confidentiality.&nbsp; </b>Buyer and Seller
agree that, to the extent reasonably practical, they shall keep the contents of
this Agreement and the contents of any environmental report prepared by or for
Buyer in connection with this Agreement confidential and that no publicity or
press release to the general public or otherwise with respect to this
transaction shall be made by either party without the prior written consent of
the other party (which consent may be given or denied in the other party's sole
and absolute discretion), except that Buyer is hereby authorized to prepare and
issue a press release to the general public announcing its purchase of the
Property at the Closing.&nbsp;&nbsp; Otherwise, the confidentiality provisions of this <u>Section
15.10</u> shall survive the Closing.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.11&nbsp; <b>No Waiver.</b>&nbsp; No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver.&nbsp; No waiver shall be binding unless executed in writing by
the party make the waiver.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.12&nbsp; <b>Further Acts.</b>&nbsp; Each party, at the
request of the other, shall execute, acknowledge (if appropriate) and deliver
whatever additional documents, and do such other additional acts, as may be
reasonably required in order to accomplish the intent and purposes of this
Agreement.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.13&nbsp; <b>&nbsp;Exhibits.</b>&nbsp; <u>Exhibits A</u> through <u>E</u>,
inclusive, are attached hereto and incorporated herein by reference.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.14&nbsp; <b>Counterparts.</b>&nbsp; This Agreement may be
executed in one or more counterparts, each of which shall be deemed to
constitute an original, but all of which, when taken together, shall constitute
one and the same instrument, with the same effect as if all of the parties to
this Agreement had executed the same counterpart.&nbsp; Any signature page of any
counterpart of this Agreement may be detached and reattached to any other
counterpart of this Agreement.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.15&nbsp; <b>No Intent To Benefit Third Parties.</b>&nbsp;
Seller and Buyer do not intend by any provision of this Agreement to confer any
right, remedy or benefit upon any third party, and no third party shall be
entitled to enforce, or otherwise shall acquire any right, remedy or benefit by
reason of, any provision of this Agreement.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.16&nbsp; <b>Performance Due On Day Other Than Business
Day.</b>&nbsp; If the time period for the performance of any act called for under
this Agreement expires on a Saturday, Sunday or Holiday, the act in question
may be performed on the next succeeding Business Day.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">28.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.17&nbsp; <b>Joint and Several Obligations.</b>&nbsp; If
Buyer or Seller is comprised of more than one person or entity, then all
persons or entities that comprise Buyer and Seller, as applicable, shall be
jointly and severally liable for all the covenants, agreements, and obligations
of Buyer or Seller, as the case may be, contained in this Agreement.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.18&nbsp; <b>1031 Exchange.</b>&nbsp; Seller and/or Buyer may
desire to effect a tax-deferred like kind exchange with respect to its sale or
purchase, respectively, of the Property (in either case <b>&quot;Exchange&quot;</b>)
pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended (the
&quot;<b>Code</b>&quot;).&nbsp; If either party elects to effect an Exchange (the <b>&quot;Exchangor&quot;</b>),
then, subject to the terms and provisions of this Section, the other party (the
<b>&quot;Non-Exchangor&quot;</b>) shall reasonably cooperate with the Exchangor
in effecting the Exchange; provided, however, in no event shall the
Non-Exchangor be required to incur any additional delays, expenses or risk of
ownership, title or conveyance in connection with such cooperation.&nbsp; The
Exchange will be structured by the Exchangor at its sole cost and expense such
that the Non-Exchangor will have no obligation to acquire or enter into the
chain of title to any property other than the Property.&nbsp; The Non-Exchangor's
sole obligation in connection with the Exchange shall be to review and execute
certain documentation reasonably acceptable to the Non-Exchangor necessary to
effectuate the Exchange in accordance with the foregoing and the applicable
rules governing such exchanges.&nbsp; The Non-Exchangor shall not by this Agreement
or acquiescence to the Exchange have its rights under this Agreement modified
or diminished in any manner or be responsible for compliance with or be deemed
to have warranted to the Exchangor that the exchange in fact complies with
Section 1031 of the Code.&nbsp; The Non-Exchangor hall have the right to review and
approve any documents to be executed by the Non-Exchangor in connection with
the Exchange, provided that the Non-Exchangor shall have no obligation to
execute any documents or to undertake any action by which the Non-Exchangor
would or might incur any liability or obligation not otherwise provided for in
the other provisions of this Agreement.&nbsp; Neither the conveyance of title to the
Property by the Exchangor's designated intermediary (if applicable) or the
Exchange shall amend or modify the representations, warranties and covenants of
the Exchangor to the Non-Exchangor under this Agreement or the survival thereof
pursuant to this Agreement.&nbsp; The Deed and all closing documents with respect to
the Property shall run directly between the Non-Exchangor and the Exchangor.&nbsp;
The Closing shall not be extended as a result of the Exchange.&nbsp; The Exchangor
shall indemnify and hold the Non-Exchangor harmless from and against any and all
claims, liabilities, losses, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees but excluding costs incurred to review
the exchange documents) arising from the Exchange (other than what would have
been applicable under this Agreement without the Exchange) which
indemnification agreement shall expressly survive the Closing.&nbsp; The Exchangor
further acknowledges that the Exchange is at the request and initiation of the
Exchangor, and the Non-Exchangor in no manner, expressly or implicitly,
participated in or offered tax advice or planning to or for the benefit of the
Exchangor.&nbsp; The Exchangor is relying solely upon the advice and counsel of
professionals of the Exchangor's choice in structuring, executing and
consummating the Exchange.</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal align="center">29.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.19&nbsp; <b>Survival of Obligations.</b>&nbsp; In addition
to terms which by their express provision are to survive the Closing, all other
terms and provisions which by their nature are to be performed or be applicable
after the Closing shall survive the Closing.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>15.20&nbsp; <b>As-Is
Purchase.</b>&nbsp; Upon entering into this Agreement, Buyer represents
and warrants that it has performed or will perform a full range of
investigation and inspection of the Property, and will or has satisfied itself
as to the condition of the Property and its suitability for the development
purposes intended by Buyer.&nbsp; Buyer acknowledges and agrees that Seller has made
no representations or warranties with respect to the toxic or hazardous
materials or other condition of the Property whatsoever except as expressly set
forth otherwise in <u>Section 10.2 or Article XIV</u> above, and, otherwise,
that Buyer=s purchase of the Property is &quot;As Is&quot; in
its present state and condition, including, without limitation, as to toxic or
hazardous materials, and that any and all improvements and utilities required
within the perimeter of the Property and any and all improvements, utilities,
and utility extensions outside of the perimeter of the Property required to
serve the Property, and all costs and expenses thereof, shall be the sole
responsibility of Buyer.&nbsp; Except as above provided, in purchasing the Property
Buyer is relying solely upon its own inspection and investigation of the
Property, including, without limitation, as to toxic or hazardous materials
contamination, and not upon any representation, warranty, statement, study,
report, description, guideline, or other information or materials made or
furnished by Seller or any of its officers, employees, agents, brokers,
attorneys, or representatives, whether written or oral, express or implied, of
any nature whatsoever.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the dates written below.</p>



<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>&quot;Seller&quot;</b></p>



<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>M. D. GLOVER, INC.,<br>
a Nevada corporation</b></p>

<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>&nbsp;</b></p>

<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>&nbsp;</b></p>

<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>By:</b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ &nbsp;&nbsp;<b>M. D.
GLOVER</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; M. D. GLOVER<br>
Its:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; President</b></p>







<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal align="center">30.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>&quot;Buyer&quot;</b></p>

<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>&nbsp;</b></p>

<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>PRO-DEX, INC.,<br>
a Colorado corporation</b></p>

<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>&nbsp;</b></p>

<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>&nbsp;</b></p>

<p class=MsoNormal style='margin-left:252.0pt;text-align:justify;page-break-after:
avoid'><b>By:</b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/&nbsp;&nbsp;<b>PATRICK
JOHNSON</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PATRICK JOHNSON<br>
Its:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; President</b></p>





<p class=MsoNormal align=center style='text-align:center;page-break-after:avoid'><b>
<br>
ACCEPTANCE OF ESCROW INSTRUCTIONS</b></p>

<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>The undersigned, as Escrow Holder in
connection with the purchase and sale of the Property, hereby acknowledges the
terms and conditions of the escrow instructions set forth in this Agreement and
agrees to perform its obligations in connection therewith.</p>



<p class=MsoNormal style='text-align:justify;text-indent:252.0pt;page-break-after:
avoid'><b>&quot;ESCROW HOLDER&quot;</b></p>







<p class=MsoNormal style='text-align:justify;text-indent:252.0pt;page-break-after:
avoid'>By: ______________________________</p>



<p class=MsoNormal style='text-align:justify;text-indent:252.0pt;page-break-after:
avoid'>Print Name: _______________________</p>



<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>Print Title: ________________________</p>





<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal align="center">31.</p>

<p class=MsoNormal style='text-align:justify'>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoNormal align=center style='text-align:center'><b>EXHIBIT A</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>LEGAL DESCRIPTION</b></p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>

<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoNormal align=center style='text-align:center'><b>EXHIBIT B</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>FORM OF DEED</b></p>



<p class=MsoNormal align=center style='text-align:center'>[See Following Pages]</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>

<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:justify'>APN:____________________<br>
<b>WHEN
RECORDED, MAIL TO:</b></p>

















<p class=MsoNormal style='text-align:center'><b><u>GRANT,
BARGAIN AND SALE DEED</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>FOR A VALUABLE CONSIDERATION, receipt of which is
hereby acknowledged, _______________________________________________________,
does hereby GRANT, BARGAIN and SELL to _____________________________________,
(whose address is: __________________________________), the real property
situate in the County of Carson City, State of Nevada, described in <u>Exhibit
A</u> attached hereto and incorporated herein by this reference.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>TOGETHER with the tenements, hereditaments and
appurtenances, including easements and water rights, if any, thereto belonging
or appertaining, and any reversions, remainders, rents, issues or profits
thereof.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>Assessor's Parcel No. ___________________.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>DATED: this _____ day of _______________, 2006.</p>



<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>________________________________<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ________________________________</p>







<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>By:______________________________</p>



<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>Its:_____________________________</p>















<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>1.</p>

<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:justify'>STATE
OF NEVADA&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; )<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; )ss.<br>
COUNTY
OF _____________&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; )</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>This instrument was acknowledged before
me on _______________, 2006, by
________________________________, as ____________________________________ of
__________________________________, a ________________________________.</p>







<p class=MsoNormal style='text-align:justify;text-indent:252.0pt;page-break-after:
avoid'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notary Public<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; My Commission Expires: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>









<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;2.</p>

<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:center'><b>EXHIBIT
C</b></p>



<p class=MsoNormal style='text-align:center'><b>FORM
OF BILL OF SALE</b></p>



<p class=MsoNormal style='text-align:center'>[See
Following Pages]</p>

<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:center'><b><u>BILL
OF SALE</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>For valuable consideration, the receipt and
sufficiency of which are hereby acknowledged,
________________________________________________________ (<b>&quot;Transferor&quot;</b>),
hereby sells, bargains, transfers, assigns, grants, delivers and conveys to
__________________________________________________________ (<b>&quot;Transferee&quot;</b>),
all of the personal property owned by Transferor and located on, or used in
connection with, the real property located in the County of Carson City, State
of Nevada, described in <u>Exhibit A</u> attached hereto and incorporated
herein by this reference, including, without limitation, those items described
on <u>Exhibit B</u> attached hereto and incorporated herein by this reference
(collectively, the <b>&quot;Personal Property&quot;</b>).</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>TO HAVE AND TO HOLD the Personal Property, together
with, all and singular, the rights and appurtenances thereto belonging to
Transferee, its successors and assigns.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>Transferor hereby covenants that it will, at any time
and from time to time, following a written request therefor, execute and
deliver to Transferee and its successors and assigns, any additional or
confirmatory instruments and take such further acts as Transferee may
reasonably request to evidence fully the conveyance contained herein.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>DATED: this _____ day of _______________, 2006.</p>



<p class=MsoNormal style='text-align:justify;margin-left:252pt'>_________________________________<br>
_________________________________</p>







<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>By:______________________________</p>



<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>Its:_____________________________</p>



<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Assignor&quot;</p>



<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:center;line-height:200%'><b>EXHIBIT
D</b></p>

<p class=MsoNormal style='text-align:center;line-height:200%'><b>FORM OF
CONTRACT ASSIGNMENT</b></p>

<p class=MsoNormal style='text-align:center;line-height:200%'>[See
Following Pages]</p>
<p class=MsoNormal style='text-align:center;line-height:200%'>&nbsp;</p>
<p class=MsoNormal style='text-align:center;line-height:200%'>&nbsp;</p>
<p class=MsoNormal style='text-align:center;line-height:200%'>&nbsp;</p>
<p class=MsoNormal style='text-align:center;line-height:200%'>&nbsp;</p>
<p class=MsoNormal style='text-align:center;line-height:200%'>&nbsp;</p>

<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:center'><b><u>ASSIGNMENT
 AND ASSUMPTION OF CONTRACTS,<br>
PERMITS
 AND OTHER RIGHTS</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS, PERMITS AND OTHER RIGHTS (this <b>&quot;Assignment&quot;</b>)
is made as of this _____ day of _____________,2006, by
_________________________________________________(<b>&quot;Assignor&quot;</b>),
and _______________________________________________________ (<b>&quot;Assignee&quot;</b>).</p>



<p class=MsoNormal style='text-align:center'><b><u>R
E C I T A L S</u> :</b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Assignor is a party to and presently has
certain rights under those contracts more particularly described in <b><u>Schedule
1</u></b> attached hereto and incorporated herein by this reference
(collectively, the <b>&quot;Agreements&quot;</b>); and</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant that certain Purchase and Sale
Agreement and Escrow Instructions, dated as of ___________, 2006 (the <b>&quot;Agreement&quot;</b>),<b>
</b>by and between Assignor and Assignee, Assignee has agreed to purchase from
Assignor all of Assignor's right, title and interest in and to the real
property located in the County of Carson City, State of Nevada, described in <b><u>Exhibit
A</u></b> attached hereto and incorporated herein by this reference (the <b>&quot;Real
Property&quot;</b>), together with all of Assignor's right, title, and interest
in and to the Agreements.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>NOW, THEREFORE, in order to carry out the terms of
the Agreement, and in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby
agree as follows:</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Assignment</u>.&nbsp; Assignor hereby
assigns, transfers and conveys to Assignee, subject to the provisions of the
Agreements, all of Assignor's right, title, and interest (if any) in and to the
Agreements, all plans, drawings and specifications for the improvements located
upon the Real Property, and all intangible property used or useful in
connection with the Real Property or the improvements thereon to the extent
assignable by Assignor, including, without limitation, all tradenames,
approvals, variances, entitlements, contract rights, guarantees, licenses,
permits, approvals and warranties.&nbsp; The Agreements and the other property and
rights assigned in this <u>Section 1</u> are hereinafter collectively referred
to as the &quot;<b>Contracts</b>&quot;.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Assumption</u>.&nbsp; Assignee hereby
accepts such assignment of the Contracts and, in addition, (i) assumes and
agrees to be bound by all of the terms of the Contracts, and (ii) agrees to keep,
perform, fulfill, and observe all of the terms, covenants, obligations,
agreements and conditions required to be kept, performed, fulfilled, and
observed by Assignor under, or with respect to, the Contracts from and after
the execution and delivery of this Assignment by Assignor and Assignee.</p>





<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>1</p>

<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Indemnification of Assignor</u>.&nbsp;
Assignee hereby agrees to indemnify, defend, and hold Assignor harmless from
and against any and all liability, loss, cost, damage and expense (including,
without limitation, reasonable attorneys' fees and costs) directly or
indirectly arising out of or based upon the failure of Assignee to keep,
perform, fulfill, and observe all of the terms, covenants, obligations,
agreements, and conditions required to be kept, performed, fulfilled, or
observed by Assignor under, or with respect to, the Contracts from and after
the execution and delivery of this Assignment by Assignor and Assignee.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Indemnification of Assignee</u>.&nbsp;
Assignor hereby agrees to indemnify, defend, and hold Assignee harmless from
and against any and all liability, loss, cost, damage and expense (including,
without limitation, reasonable attorneys' fees and costs) directly or
indirectly arising out of or based upon the failure of Assignor to keep,
perform, fulfill, and observe all of the terms covenants, obligations,
agreements, and conditions required to be kept, performed, fulfilled, or
observed by Assignor under, or with respect to, the Contracts prior to the
execution and delivery of this Assignment by Assignor and Assignee.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Contract Payments</u>.&nbsp; All amounts
payable by Assignor or to Assignor under or pursuant to the Contracts shall be
prorated as between Assignor and Assignee pursuant to, and in accordance with,
the terms of the Agreement.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Further Assurances</u>.&nbsp; Assignor
hereby covenants that it will, at any time and from time to time following a
written request therefor, execute and deliver to Assignee and its successors
and assigns, any additional or confirmatory instruments and take such further
acts as Assignee may reasonably request to evidence fully the assignment
contained herein.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Appointment</u>.&nbsp; Assignor hereby
irrevocably appoints Assignee and its successors and assigns, as the true and
lawful attorney and agent of Assignor, in Assignor's name and stead, to enforce
the provisions of the Contracts.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Counterparts</u>.&nbsp; This Assignment may
be executed in any number of counterparts, each of which shall be deemed an
original, but all of which when taken together shall constitute one and the
same instrument.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Governing Law</u>.&nbsp; This Assignment
shall be construed in accordance with and governed by the laws of the State of Nevada.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Binding Effect</u>.&nbsp; This Assignment
shall inure to the benefit of and shall be binding upon the parties hereto and
their respective successors and assigns.</p>





<p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center'>2</p>

<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Survival of Certain
Provisions</u>.&nbsp; The provisions of <u>Sections 2, 3, 4, 5, 6 and 7</u> hereof
shall survive the execution and delivery of this Assignment by Assignor and
Assignee and the assignment of the Contracts pursuant hereto.</p>



<p class=MsoNormal style='text-align:justify;page-break-after:
avoid; margin-left:216pt'>_____________________________________<br>
______________________________________</p>





<p class=MsoNormal style='text-align:justify;text-indent:216.0pt;page-break-after:
avoid'>By:____________________________________</p>



<p class=MsoNormal style='text-align:justify;text-indent:216.0pt;page-break-after:
avoid'>Its:___________________________________</p>



<p class=MsoNormal style='text-align:justify;text-indent:324.0pt'>&quot;Assignor&quot;</p>





<p class=MsoNormal style='text-align:justify;page-break-after:
avoid; margin-left:216pt'>_____________________________________<br>
______________________________________</p>





<p class=MsoNormal style='text-align:justify;text-indent:216.0pt;page-break-after:
avoid'>By:__________________________________</p>



<p class=MsoNormal style='text-align:justify;text-indent:216.0pt;page-break-after:
avoid'>Its:__________________________________</p>





<p class=MsoNormal style='text-align:justify;text-indent:324.0pt;page-break-after:
avoid'>&quot;Assignee&quot;</p>
<p class=MsoNormal style='text-align:justify;text-indent:324.0pt;page-break-after:
avoid'>&nbsp;</p>
<p class=MsoNormal style='text-align:justify;text-indent:324.0pt;page-break-after:
avoid'>&nbsp;</p>
<p class=MsoNormal style='text-align:justify;text-indent:324.0pt;page-break-after:
avoid'>&nbsp;</p>
<p class=MsoNormal style='text-align:justify;text-indent:324.0pt;page-break-after:
avoid'>&nbsp;</p>





<p class=MsoNormal align=center style='text-align:center'>3</p>

<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:center;line-height:200%'><b>EXHIBIT
E</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>

<p class=MsoNormal style='text-align:center;line-height:200%'><b>FORM OF SELLER'S
NON-FOREIGN AFFIDAVIT</b></p>

<p class=MsoNormal style='text-align:center;line-height:200%'>[See
Following Pages]</p>

<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br clear=all style='page-break-before:always'>












<p class=MsoNormal style='text-align:center'><b><u>NON-FOREIGN
AFFIDAVIT</u></b></p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>Section 1445 of the Internal Revenue Code of 1986, as
amended (the <b>&quot;IRC&quot;</b>), provides that a transferee of a U.S. real
property interest must withhold tax if the transferor is a foreign person, to
inform the transferee that withholding of tax is not required upon the
disposition of a U.S. real property interest by&nbsp; <b>__________________________________
__________________________________________________________</b> (<b>&quot;Transferor&quot;</b>),
the undersigned hereby certifies the following on behalf of Transferor:</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transferor is not a foreign person,
foreign corporation, foreign partnership, foreign trust, or foreign estate (as
those terms are defined in the IRC and the regulations promulgated thereunder);</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transferor's U.S. taxpayer I.D. number is
_________________; and</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transferor's office address is
___________________________________.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>Transferor understands that this certification may be
disclosed to the Internal Revenue Service and that any false statement
contained herein could be punished by fine, imprisonment, or both.</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt'>Under penalties of perjury, I declare that I have
examined the foregoing certification and, to the best of my knowledge and
belief, it is true, correct, and complete, and I further declare that I have
authority to sign this document on behalf of the Transferor.</p>



<p class=MsoNormal style='text-align:justify;text-indent:216.0pt'><b>&quot;Transferor&quot;</b></p>



<p class=MsoNormal style='text-align:justify;margin-left:216pt'>______________________________________<br>
______________________________________</p>







<p class=MsoNormal style='text-align:justify;text-indent:216.0pt'>By:____________________________________</p>



<p class=MsoNormal style='text-align:justify;text-indent:216.0pt'>Its:___________________________________</p>



<p class=MsoNormal align=center style='text-align:center;line-height:12.0pt'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center;line-height:12.0pt'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center;line-height:12.0pt'>&nbsp;</p>
<p class=MsoNormal align=center style='text-align:center;line-height:12.0pt'>1.</p>

<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all style='page-break-before:always'>










<p class=MsoNormal style='text-align:justify;page-break-after:avoid; margin-top:0; margin-bottom:0.001pt'>STATE OF NEVADA&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; )</p>

<p class=MsoNormal style='text-align:justify;text-indent:144.0pt;page-break-after:
avoid; margin-top:0; margin-bottom:0.001pt'>)ss.</p>

<p class=MsoNormal style='text-align:justify;page-break-after:avoid; margin-top:0; margin-bottom:0.001pt'>COUNTY OF__________&nbsp;&nbsp; )</p>



<p class=MsoNormal style='text-align:justify;text-indent:36.0pt;page-break-after:
avoid'>This instrument was acknowledged before
me on _______________, 2006, by
________________________________, as ____________________________________ of
__________________________________, a _________________________________.</p>







<p class=MsoNormal style='text-align:justify;text-indent:252.0pt;page-break-after:
avoid'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>

<p class=MsoNormal style='text-align:justify;text-indent:252.0pt;page-break-after:
avoid'>Notary Public</p>

<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>My Commission Expires: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>&nbsp;</p>
<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>&nbsp;</p>
<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>&nbsp;</p>
<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>&nbsp;</p>
<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>&nbsp;</p>
<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>&nbsp;</p>
<p class=MsoNormal style='text-align:justify;text-indent:252.0pt'>&nbsp;</p>



<p class=MsoNormal align=center style='text-align:center;line-height:12.0pt'>2.</p>

<p class=MsoNormal>&nbsp;</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>







</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>ex10-3.htm
<TEXT>
<html>

<head>


<title>Exhibit 10.3</title>



</head>

<body lang=EN-US>















<p align="right"><b>Exhibit 10.3</b></p>







<table border="0" width="100%" id="table1" style="border-left-width: 0px; border-right-width: 0px; border-bottom-width: 0px">
	<tr>
		<td width="571" style="border-bottom: 1px solid #000000">







<p class=MsoNormal>WELLS FARGO</p></td>
		<td style="border-bottom: 1px solid #000000">
		<p align="left">
<i>TERM NOTE</i></td>
	</tr>
	<tr>
		<td width="571" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom: medium none #000000"><b>
		$1,000,000.00
</b></td>
		<td style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom: medium none #000000">Irvine, California<br>
		January 4, 2006</td>
	</tr>
</table>

<p class=MsoNormal>FOR VALUE RECEIVED, the
undersigned <b>Pro-Dex, Inc. </b>(&quot;Borrower&quot;) promises to pay to the order of
WELLS FARGO BANK, NATIONAL ASSOCIATION (&quot;Bank&quot;) at its office at <b>Orange</b> <b>County
RCBO, 2030 Main Street, Suite #900, Irvine, CA 92614</b>, or at such other
place as the holder hereof may designate, in lawful money of the United States
of America and in immediately available funds, the principal sum of <b>$1,000,000.00</b>,
with interest thereon as set forth herein.</p>



<p class=MsoNormal style='text-align:justify'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>DEFINITIONS:</b></p>



<p class=MsoNormal style='text-align:justify'>As used herein, the following
terms shall have the meanings set forth after each, and any other term defined
in this Note shall have the meaning set forth at the place defined:</p>



<p class=MsoNormal style='text-align:justify'>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Business Day&quot; means
any day except a Saturday, Sunday or any other day on which commercial banks in
  California re authorized or required by law to close.</p>



<p class=MsoNormal style='text-align:justify'>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Fixed Rate Term&quot; means
a period commencing on a Business Day and continuing for <b>1,</b> <b>2, 3, or
6 months</b>, as designated by Borrower, during which all or a portion of the
outstanding principal balance of this Note bears interest determined in
relation to LIBOR; provided, however, that no Fixed Rate Term may be selected
for a principal amount less than <b>$1,000,000.00</b>; and provided further,
that no Fixed Rate Term shall extend beyond the scheduled maturity date
hereof.&nbsp; If any Fixed Rate Term would end on a day which is&nbsp; not a Business
Day, then such Fixed Rate Term shall be extended to the next succeeding
Business Day.</p>



<p class=MsoNormal style='text-align:justify'>1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;LIBOR&quot; means the rate
per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%)
determined by dividing Base LIBOR by a percentage equal to 100% less any LIBOR
Reserve Percentage.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Base
LIBOR&quot; means the rate per annum for United States dollar deposits quoted by
Bank as the Inter-Bank Market Offered Rate, with the understanding that such
rate is quoted by Bank for the purpose of calculating effective rates of
interest for loans making reference thereto, on the first day of a Fixed Rate
Term for delivery of funds on said date for a period of time approximately
equal to the number of days in such Fixed Rate Term in an amount approximately
equal to the principal amount to which such Fixed Rate Term applies. &nbsp;Borrower
understands and agrees that Bank may base its quotation of the Inter-Bank
Market Offered Rate upon such offers or other market indicators of the
Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.</p>
<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>&nbsp;</p>
<p class=MsoNormal style='text-align:center'>-1-</p>





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<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;LIBOR
Reserve Percentage&quot; means the reserve percentage prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for &quot;Eurocurrency
Liabilities&quot; (as defined in Regulation D of the Federal Reserve Board, as
amended), adjusted for Bank for expected changes in such reserve percentage
during the applicable Fixed Rate Term.</p>

<p class=MsoNormal style='text-align:justify'>1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Prime Rate&quot; means at
any time the rate of interest most recently announced within Bank at its
principal office as its Prime Rate, with the understanding that the Prime Rate
is one of Bank's base rates and serves as the basis upon which effective rates
of interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Bank may designate.</p>



<p class=MsoNormal style='text-align:justify'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>INTEREST:</b></p>

<p class=MsoNormal style='text-align:justify'>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Interest</u>.&nbsp; The
outstanding principal balance of this Note shall bear interest (computed on the
basis of a 360-day year, actual days elapsed) either (a) at a fluctuating rate
per annum <b>equal to</b> the Prime Rate in effect from time to time, or (b) at
a fixed rate per annum determined by Bank to be <b>2.50000%</b> above LIBOR in
effect on the first day of the applicable Fixed Rate Term.&nbsp; When interest is
determined in relation to the Prime Rate, each change in the rate of interest
hereunder shall become effective on the date each Prime Rate change is
announced within Bank.&nbsp; With respect to each LIBOR selection hereunder, Bank is
hereby authorized to note the date, principal amount, interest rate and Fixed
Rate Term applicable thereto and any payments made thereon Bank's books and
records (either manually or by electronic entry) and/or on any schedule
attached to this Note, which notations shall be prima facie evidence of the
accuracy of the information noted.</p>



<p class=MsoNormal style='text-align:justify'>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Selection of
Interest Rate Options</u>.&nbsp; At any time any portion of this Note bears interest
determined in relation to LIBOR, it may be continued by Borrower at the end of
the Fixed Rate Term applicable thereto so that all or a portion thereof bears
interest determined in relation to the Prime Rate or to LIBOR for a new Fixed
Rate Prime Rate, Borrower may convert all or a portion thereof so that it bears
interest determined in relation to LIBOR for a Fixed Rate Term designed by
Borrower.&nbsp; At the time this Note is disbursed or Borrower wishes to select a
LIBOR option for all or a portion of the outstanding principal balance hereof,
and at the end of each Fixed Rate Term, Borrower shall give Bank notice
specifying: (a) the interest rate option selected by Borrower; (b) the
principal amount subject thereto; and (c) for each LIBOR selection, the length
of the applicable Fixed Rate Term.&nbsp; Any such notice may be given by telephone
(or such other electronic method as Bank may permit) so long as, with respect
to each LIBOR selection, (i) if requested by Bank, Borrower provides to Bank
written confirmation thereof not later than 3 Business Days after such notice
is given, and (ii) such notice is given to Bank prior to 10:00 a.m. on the
first day of the Fixed Rate Term, or at a later time during any Business Day if
Bank, at its sole option but without obligation to do so, accepts Borrower's
notice and quotes a fixed rate to Borrower.&nbsp; If Borrower does not immediately
accept a fixed rate when quoted by Bank, the quoted rate shall expire and any
subsequent LIBOR request from Borrower shall be subject to a redetermination by
Bank of the applicable fixed rate.&nbsp; If no specific designation of interest is
made at the time this Note is disbursed or at the end of any Fixed Rate Term,
Borrower shall be deemed to have made a Prime Rate interest selection for this
Note of the principal amount to which such Fixed Rate Term applied.</p>
<p class=MsoNormal style='text-align:justify'>&nbsp;</p>
<p class=MsoNormal style='text-align:center'>-2-</p>





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<p class=MsoNormal style='text-align:justify'>2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Taxes and Regulatory
Costs</u>.&nbsp; Borrower shall pay to Bank immediately upon demand, in addition to
any other amounts due or to become due hereunder, any and all (a) withholdings,
interest equalization taxes, stamp taxes or other taxes (except income and
franchise taxes) imposed by any domestic or foreign governmental authority and
related in any manner to LIBOR, and (b) future, supplemental, emergency or
other changes in the LIBOR Reserve Percentage, assessment rates imposed by the
Federal Deposit Insurance Corporation, or similar requirements or costs imposed
by any domestic or foreign governmental authority or resulting from compliance
by Bank with any request or directive (whether or not having the force of law)
from any central bank or other governmental authority and related in any manner
to LIBOR to the extent they are included in the calculation of LIBOR.&nbsp; In
determining which of the foregoing are attributable to any LIBOR option
available to Borrower hereunder, any reasonable allocation made by Bank among
its operations shall be conclusive and binding upon Borrower.</p>



<p class=MsoNormal style='text-align:justify'>2.4&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; <u>Payment of Interest</u>.&nbsp;
Interest accrued on this Note shall be payable on the <b>4<sup>th</sup></b> day
of each <b>month</b>, commencing <b>February 4, 2006</b>.</p>





<p class=MsoNormal style='text-align:justify'>2.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Default Interest</u>.&nbsp;
From and after the maturity date of this Note, or such earlier date as all
principal owing hereunder becomes due and payable by acceleration or otherwise,
the outstanding principal balance of this Note shall bear interest until paid
in full at an increased rate per annum (computed on the basis of a 360-day
year, actual days elapsed) equal to 4% above the rate of interest from time to
time applicable to this Note.</p>



<p class=MsoNormal style='text-align:justify'>2.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Collection of&nbsp;
Payment</u>.&nbsp; Borrower authorizes Bank to collect all principal and interest
due hereunder by charging Borrower's account number <b>4169-538501</b> with
Bank, or any other deposit account maintained by any Borrower with Bank, for
the full amount thereof.&nbsp; Should there be insufficient funds in any such
deposit account to pay all such sums when due, the full amount of such
deficiency shall be immediately due and payable by Borrower.</p>



<p class=MsoNormal style='text-align:justify'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>REPAYMENT AND
PREPAYMENT:</b></p>

<p class=MsoNormal style='text-align:justify'>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Repayment</u>.&nbsp;
Principal shall be payable on the <b>4<sup>th</sup></b> day of each month in
installments of <b>$20,833.33</b> each, commencing <b>February 4, 2006</b>, and
continuing up to and including <b>December</b> <b>4, 2009</b>, with a final
installment consisting of all remaining unpaid principal due and payable in
full on <b>January 4, 2010.</b></p>

<p class=MsoNormal style='text-align:justify'>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Application of
Payments</u>.&nbsp; All payments credited to principal shall be applied first, to
the outstanding principal balance of this Note which bears interest determined
in relation to the Prime Rate, if any, and second to the outstanding principal
balance of this Note which bears interest determined in relation to LIBOR, with
such payments applied to the oldest Fixed Rate Term first.</p>



<p class=MsoNormal style='text-align:justify'>3.3&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; <u>Prepayment</u>.&nbsp; </p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Prime
Rate</u>.&nbsp; Borrower may prepay principal on any portion of this Note which
bears interest determined in relation to the Prime Rate at any time, in any
amount and without penalty.</p>
<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>&nbsp;</p>
<p class=MsoNormal style='text-align:center'>-3-</p>





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<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>LIBOR</u>.&nbsp;
Borrower may prepay principal on any portion of this Note which bears interest
determined in relation to LIBOR at any time and in the minimum amount of
$1,000,000.00; provided however, that if the outstanding principal balance of
such portion of this Note is less than said amount, the minimum prepayment amount
shall be the entire outstanding principal balance thereof.&nbsp; In consideration of
Bank providing this prepayment option to Borrower, or if any such portion of
this Note shall become due and payable at any time prior to the last day of the
Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall
pay to Bank immediately upon demand a fee which is the sum of the discounted
monthly differences for each month from the month of prepayment through the
month in which such Fixed Rate Term matures, calculated as follows for each
such month:</p>



<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Determine</u>
the amount of interest which would have accrued each month&nbsp; on the amount of
prepaid at the interest rate applicable to such amount had it remained
outstanding until the last day of the Fixed Rate Term applicable thereto.</p>



<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Subtract</u>
from the amount determined in (i) above the amount of interest which would have
accrued for the same month on the amount prepaid for the remaining term of such
Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made
for such term and in a principal amount equal to the amount prepaid.</p>



<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If
the result obtained in (ii) for any month is greater than zero, discount that
difference by LIBOR used in (ii) above.</p>



<p class=MsoNormal style='text-align:justify'>Each Borrower acknowledges that
prepayment of such amount may result in Bank incurring additional costs,
expenses and/or liabilities, and that it is difficult to ascertain the full
extent of such costs, expenses and/or liabilities.&nbsp; Each Borrower, therefore,
agrees to pay the above-described prepayment fee and agrees that said amount
represents a reasonable estimate of the prepayment cots, expenses and/or
liabilities of Bank.&nbsp; If Borrower fails to pay any prepayment fee when due, the
amount of such prepayment fee shall thereafter bear interest until paid at a
rate per annum <b>2.000%</b> above the Prime Rate in effect from time to time
(computed on the basis of a 360-day year, actual days elapsed).&nbsp; Each change in
the rate of interest on any such past due prepayment fee shall become effective
on the date each Prime Rate change is announced within Bank.</p>



<p class=MsoNormal style='text-align:justify'>All prepayments of principal
shall be applied on the most remote principal installment or installments then
unpaid. </p>



<p class=MsoNormal style='text-align:justify'>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>COLLATERAL:</b></p>
<p class=MsoNormal style='text-align:justify'>As security for the payment and
performance of all obligations of Borrower under this Note, Borrower grants to
Bank security interests of first priority (except as agreed otherwise by Bank
in Writing) in the following property of Borrower, now owned or at any time
hereafter acquired:&nbsp; <b>all accounts receivable other rights to payment and
general intangibles</b>; <b>all inventory; all</b> <b>equipment</b>, together
with security interests in all other personal property of Borrower now owned or
at any time hereafter pledged to Bank as collateral for any other commercial
credit accommodation granted by Bank to Borrower.&nbsp; All of the foregoing shall
be evidenced by and subject to the terms of such security agreements, financing
statements and other documents as Banks hall reasonably require, all in form
and substance satisfactory to Bank. &nbsp;Borrower shall reimburse Bank immediately
upon demand for all costs and expenses incurred by Bank in connection with any
of the foregoing security, including without limitation, filing fees and
allocated costs of collateral audits.</p>
<p class=MsoNormal style='text-align:center'>-4-</p>





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<p class=MsoNormal style='text-align:justify'>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>EVENTS OF DEFAULT:</b></p>

<p class=MsoNormal style='text-align:justify'>Any default in the payment or
performance of any obligation under this Note, or any defined event of default
under any loan agreement now or at any time hereafter in effect between
Borrower and Bank (whether executed prior to, concurrently with or at any time
after this Note), shall constitute an &quot;Event of Default&quot; under this Note.</p>



<p class=MsoNormal style='text-align:justify'>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>MISCELLANEOUS:</b></p>

<p class=MsoNormal style='text-align:justify'>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Remedies</u>.&nbsp; Upon
the occurrence of any Event of Default, the holder of this Note, at the
holder's option, may declare all sums of principal, interest, fees and other
charges outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice and dishonor, all of which are expressly waived by each Borrower, and
the obligation, if any, of the holder to extend any further credit hereunder
shall immediately cease and terminate.&nbsp; Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel),
expended or incurred by the holder in connection with the enforcement of the
holder's rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.</p>



<p class=MsoNormal style='text-align:justify'>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Obligations Joint
and Several</u>.&nbsp; Should more than one person or entity sign this Note as a
Borrower, the obligations of each Borrower shall be joint and several.</p>



<p class=MsoNormal style='text-align:justify'>6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Governing Law</u>.&nbsp;
This Note shall be governed by and construed in accordance with the laws of the
State of California.</p>



<p class=MsoNormal style='text-align:justify'>IN WITNESS WHEREOF, the
undersigned has executed this Note as of the date first written above.</p>



<p class=MsoNormal>Pro-Dex, Inc.</p>



<p class=MsoNormal>By: ______<u>/s/ Jeffrey Ritchey</u> ________________________<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jeffrey Ritchey, CFO, Treasurer, Secretary</p>



<p class=MsoNormal>By: _____<u>/s/ Patrick Johnson</u> ________________________<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Patrick Johnson, President, CEO</p>
<p class=MsoNormal>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>
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<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>ex10-4.htm
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<title>Exhibit 10.4</title>



</head>

<body lang=EN-US>















<p align="right"><b>Exhibit 10.4</b></p>















<table border="0" width="100%" id="table1">
	<tr>
		<td>WELLS FARGO</td>
		<td width="582">















<p class=MsoBodyText style='text-align:center'><i>LOAN
AGREEMENT</i></p>

		</td>
	</tr>
</table>

<p class=MsoBodyText style='text-align:justify'>This Loan Agreement (this
&quot;Agreement&quot;) is entered into by and between <b>Pro-Dex, Inc</b>. (&quot;Borrower&quot;)
and WELLS FARGO BANK, NATIONAL ASSOCIATION (&quot;Bank&quot;) and sets forth the terms
and conditions which govern all Borrower's commercial credit accommodations
from Bank, whether now existing or hereafter granted (each, a &quot;Credit&quot; and
collectively, &quot;Credits&quot;), which terms and conditions are in addition to those
set forth in any other contract, instrument or document (collectively with this
Agreement, the &quot;Loan Documents') required by this Agreement or heretofore or at
any time hereafter delivered to Bank in connection with any Credit.</p>

<p class=MsoBodyTextFirstIndent2 style='margin-left:0pt;text-align:justify;
text-indent:0pt'><b>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; REPRESENTATIONS AND WARRANTIES</b>.&nbsp; Borrower
makes the following representations and warranties to Bank, which
representations and warranties shall be true as of the date hereof and on the
date of each extension of credit under each Credit with the same effect as
though made on each such date.</p>

<p class=MsoNormal style='text-align:justify'>1.1&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;<u>Legal Status</u>.&nbsp;
Borrower is a corporation, duly organized and existing and in good standing
under the laws of <b>Colorado</b>, and is qualified or licensed to do business
in all jurisdictions in which such qualification or licensing is required or in
which the failure to be qualified or licensed could have a material adverse
effect on Borrower.</p>



<p class=MsoNormal style='text-align:justify'>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Authorization and
Validity</u>.&nbsp; Each of the Loan Documents has been duly authorized, and upon
its execution and delivery to Bank will constitute a legal, valid and binding
obligation of Borrower or the party which executes the same, enforceable in
accordance with its respective terms.</p>



<p class=MsoNormal style='text-align:justify'>1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>No Violation</u>.&nbsp;
The execution, delivery and performance by Borrower of each of the loan
Documents do not violate any provision of law or regulation, or contravene any
provision of Borrower's Articles of Incorporation or By-Laws, or result in any
breach of or default under any agreement, indenture or other instrument to
which Borrower is a party or by which Borrower may be bound.</p>



<p class=MsoNormal style='text-align:justify'>1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Litigation</u>.&nbsp;
There are no pending, or to the best of Borrower's knowledge threatened,
actions, claims, investigations, suits or proceedings by or before any
governmental authority, arbitrator, court or administrative agency which could
have a material adverse effect on the financial condition or operation of
Borrower except as disclosed by Borrower to Bank in writing prior to the date
hereof.</p>



<p class=MsoNormal style='text-align:justify'>1.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Financial Statements</u>.&nbsp;
The most recent annual financial statement of Borrower, and all interim
financial statements delivered to Bank since the date of said annual financial
statement, true copies of which have been delivered by Borrower to Bank prior
to the date hereof, are complete and correct, present fairly the financial
condition of Borrower and disclose all liabilities of Borrower, and have been
prepared in accordance with generally accepted accounting principles.&nbsp; Since
the dates of such financial statements there has been no material adverse
change in the financial condition of Borrower, nor has Borrower mortgaged,
pledged, granted a security interest in or otherwise encumbered any of its
assets or properties except in favor of Bank or as otherwise permitted by Bank
in writing.</p>
<p class=MsoNormal style='text-align:justify'>&nbsp;</p>
<p class=MsoNormal style='text-align:center'>-1-</p>



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<p class=MsoNormal style='text-align:justify'>1.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Tax Returns</u>.&nbsp;
Borrower has no knowledge of any pending assessments or adjustments of its
income tax payable with respect&nbsp; to any year except as disclosed by Borrower to
Bank in writing prior the date hereof.</p>



<p class=MsoNormal style='text-align:justify'><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ADDITIONAL TERMS</b></p>

<p class=MsoNormal style='text-align:justify'>2.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Conditions Precedent</u>.&nbsp;
The obligation of Bank to grant any Credit is subject to the condition that
Bank shall have received all contracts, instruments and documents, duly
executed where applicable, deemed necessary by Bank to evidence such Credit and
all terms and conditions applicable thereto, all of which shall be in form and
substance satisfactory to Bank.</p>



<p class=MsoNormal style='text-align:justify'>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Application of
Payments</u>.&nbsp; Each payment made on each Credit shall be applied first, to any
interest then due, second, to any fees and charges then due, and third, to the
outstanding principal balance thereof.</p>



<p class=MsoNormal style='text-align:justify'><b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; COVENANTS.&nbsp; </b>So
long as any Credit remains available or any amounts under any Credit remain
outstanding, Borrower shall, unless Bank otherwise consents in writing:</p>



<p class=MsoNormal style='text-align:justify'>3.1&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; <u>Insurance</u>.&nbsp;
Maintain and keep in force, for each business in which Borrower is engaged,
insurance of the types and in amounts customarily carried in similar lines of
business, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, carried with
companies and in amounts satisfactory to Bank, and deliver to Bank from time to
time at Bank's request schedules setting forth all insurance then in effect.</p>



<p class=MsoNormal style='text-align:justify'>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Compliance; Laws and
Regulations</u>.&nbsp; Preserve and maintain all licenses, permits, governmental
approvals, rights, privileges and franchises necessary for the conduct of
Borrower's business; and comply with the provisions of all documents pursuant
to which Borrower and/or its business, including without limitation, all state
or federal environmental, hazardous waste, health and safety statues, and any
rules or regulations adopted pursuant thereto, which govern or affect any operations
and/or properties of Borrower.</p>



<p class=MsoNormal style='text-align:justify'>3.3&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;<u>Other indebtedness</u>.&nbsp;
Not create, incur, assume or permit to exist any indebtedness or other
liabilities, whether secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, direct or continent (including any contingent
liability under any guaranty of the obligations of any person or entity),
except (a) the liabilities of Borrower to Bank, (b) trade debt incurred by
Borrower in the normal course of its business, and (c) and other liabilities of
Borrower existing as of, and disclosed to Bank in writing prior to, the date
hereof.</p>



<p class=MsoNormal style='text-align:justify'>3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Merger;
Consolidation; Transfer of Assets</u>.&nbsp; Not merge into or consolidate with any
other entity; nor make any substantial change in the nature of Borrower's
business as conducted as of the date hereof; nor acquire all or substantially
all of the assets of any other person or entity; nor sell, lease, transfer or
otherwise dispose of all or a substantial or material portion of Borrower's
assets except in the ordinary course of its business.</p>



<p class=MsoNormal style='text-align:justify'>3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Pledge of Assets</u>.&nbsp;
Not mortgage, pledge, grant or permit to exist a security interest in, or lien
upon, all or any portion of Borrower's assets now owned or hereafter acquired,
except in favor of Bank and except any of the foregoing existing as of, and
disclosed to Bank in writing prior to, the date hereof.</p>
<p class=MsoNormal style='text-align:center'>-2-</p>



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<p class=MsoNormal style='text-align:justify'>3.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Financial Statements</u>.&nbsp;
Provide to Bank all of the following, in form and detail satisfactory to Bank,
together with such current financial and other information as Bank from time to
time may reasonably request:</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As
soon as available, but in no event later than <b>90</b> days after and as of
the end of each fiscal year, an audited financial statement of Borrower,
prepared by an independent certified public accountant acceptable to Bank, to
include a balance sheet, income statement and statement of cash flow, together
with all supporting scheduled and footnotes.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As
soon as available, but in no event later than <b>45</b> days after and as of
each fiscal quarter, a financial statement of Borrower, prepared by Borrower
and certified as correct by an officer of Borrower authorized to borrow under
the most current Corporate Borrowing Resolution delivered by Borrower to Bank,
to include a balance sheet and income statement, together with all supporting
schedules and footnotes.</p>



<p class=MsoNormal style='text-align:justify'>3.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Financial Condition</u>.&nbsp;
Maintain Borrower's financial condition as follows using generally accepted
accounting principles consistently applied and used consistently with prior
practices, except to the extent modified by the following definitions:</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
Liabilities divided by Tangible Net Worth not greater than <b>0.75</b> to 1.0
at any time with &quot;Total Liabilities&quot; defined as the aggregate of current
liabilities and non-current liabilities less subordinated debt, and with
&quot;Tangible Net Worth&quot; defined as the aggregate of total stockholders' equity
plus subordinated debt less any intangible assets.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net
income after taxes not less than <b>$1.00</b> on an annual basis, determined as
of each fiscal year end, and pre-tax profit not less than <b>$1.00</b> on a
quarterly basis, determined as of each fiscal quarter end.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EBITDA
Coverage Ratio not less than <b>1.50</b> to 1.0 as of each fiscal year end with
&quot;EBITDA&quot; defined as net profit before tax plus interest expense (net of capitalized
interest expense), depreciation expense and amortization expense, and with
&quot;EBITDA Coverage Ratio&quot; defined as EBITDA divided by the aggregate of interest
expense plus the prior period current maturity of long-term debt and the prior
period current maturity of subordinated debt.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'><b>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; DEFAULT;
REMEDIES.</b></p>

<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Events
of Default</u>.&nbsp; The occurrence of any of the following shall constitute an
&quot;Event of Default&quot; under this agreement:</p>



<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
failure to pay any principal, interest, fees or other charges when due under
any of the Loan Documents.</p>

<p class=MsoNormal style='margin-left:72.0pt;text-align:justify;text-indent:
- -36.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any representation or warranty hereunder or
under any other Loan Document shall prove to be incorrect, false or misleading
in any material respect when made.</p>
<p class=MsoNormal style='margin-left:72.0pt;text-align:justify;text-indent:
- -36.0pt'>&nbsp;</p>
<p class=MsoNormal style='text-align:center;'>-3-</p>



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<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any
violation or breach of any term or condition of this Agreement or any other of
the Loan Documents.</p>



<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any
default in the payment or performance of any obligation, or any defined event
of default, under any provisions of any contract, instrument or document
pursuant to which Borrower or any guarantor hereunder has incurred debt or any
other liability or any kind to any person or entity, including Bank.</p>



<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
filing of a notice of judgment lien against Borrower or any guarantor
hereunder; or the recording of any abstract of judgment against Borrower or any
such guarantor has an interest in real property; or the service of a notice of
levy and/or of a writ of attachment or execution, or other like process,
against the assets of Borrower or any such guarantor; or the entry of a
judgment against Borrower or any such guarantor.</p>



<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
filing of a petition by or against Borrower or any guarantor hereunder under
any provisions of the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time, or under any similar or other
law relating to bankruptcy, insolvency, reorganization or other relief for
debtors; the appointment of a receiver, trustee, custodian or liquidator of or
any part of the assets or property of Borrower or any such guarantor; or
Borrower or any such guarantor becomes insolvent, makes a general assignment
for the benefit of creditors or is generally not paying its debts as they
become due.</p>



<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any
material adverse change, as determined solely by Bank, in the financial
condition of Borrower.</p>



<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
death or incapacity of any individual guarantor hereunder; or the dissolution
or liquidation of Borrower or of any guarantor hereunder which is a
corporation, partnership or other type of entity.</p>



<p class=MsoNormal style='margin-left:72.0pt;text-align:justify'>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any
change in ownership during the term hereof of an aggregate of 25% or more of
the common stock of Borrower.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Remedied</u>.&nbsp;
Upon the occurrence of any Event of Default: (a) the entire balance of
principal, interest, fees and other charges on each Credit shall, at Bank's
option, become immediately due and payable without presentment, demand, protest
or notice of dishonor, all of which are expressly waived by Borrower; (b) the
obligation, if any, of Bank to extend any further credit to Borrower under any
of the Loan Documents shall immediately cease and terminate; and (c) Bank shall
have all rights, powers and remedies available under each of the Loan
Documents, or accorded by law, including without limitation the right to resort
to any security for any Credit.&nbsp; All rights, powers and remedies of Bank shall
be cumulative.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>&nbsp;</p>

<p class=MsoNormal style='text-align:center'>&nbsp;-4-</p>



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<b>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; MISCELLANEOUS.</b></p>










<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No
Waiver.</u>&nbsp; No delay, failure or discontinuance of Bank in exercising any
right, power or remedy under any of the Loan Documents shall effect or operate
as a waiver of such right, power or remedy; nor shall any single or partial
exercise of any such right, power or remedy preclude, waive or otherwise affect
any other or further exercise thereof or the exercise of any other right, power
or remedy.&nbsp; Any waiver, permit, consent or approval of any kind by Bank of any
breach of or default under any of the Loan Documents, or any such waiver of any
provisions or conditions hereof, must be in writing and shall be effective only
to the extent set forth in writing.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Notices.</u>&nbsp;
All notices, request and demands required under this Agreement must be in
writing, addressed to the applicable party at its address specified below or to
such other address as any party may designate by written notice to each other
party, and shall be deemed given or made as follows:&nbsp; (a) if personally delivered,
upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or
3 days after deposit in the U.S. mail, first class and postage prepaid; and (c)
if sent by telecopy, upon receipt.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Costs,
Expenses and Attorneys' fees. </u>&nbsp;&nbsp;Borrower shall pay to Bank immediately upon
demand the full amount of all payments, advances, charges, costs and expenses,
including reasonable attorneys' fees (to include outside counsel fees and all
allocated costs of Bank's in-house counsel), extended or incurred by Bank in
connection with (a) the negotiation and preparation of this Agreement and the
other Loan Documents, and amounts which become due to Bank under any of the
Loan Documents, and (c) the prosecution or defense of declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and any adversary proceeding, contested matter or motion brought
by Bank or any other person) relating to Borrower or any other person or
entity.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Successors:
Assignment</u>.&nbsp; This Agreement shall be binding upon and inure to the benefit
of the heirs, executors, administrators, legal representatives, successors and
assigns of the parties; provided however, that Borrower may not assign or
transfer its interests or rights hereunder without Bank's prior written
consent.&nbsp; Bank reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Bank's rights and
benefits under each of the Loan Documents.&nbsp; In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any Credit, Borrower or its business, any guarantor of any
Credit or the business of any such guarantor, or any collateral for any Credit.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Controlling
Agreement; Amendment</u>.&nbsp; In the event of any direct conflict between any
provision of this Agreement and any provision of any other Loan Document, the
terms of this Agreement shall control.&nbsp; This Agreement may be amended or
modified only in writing signed by Bank and Borrower.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>5.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No
Third Party Beneficiaries</u>.&nbsp; This Agreement is made and entered into for the
sole protection and benefit of the parties hereto and their respective
permitted successors and assigns, and no other person or entity shall be a
third party beneficiary of, or have any direct or indirect cause of action in
connection with, this Agreement or any other Loan Document to which hit is not
a party.</p>
<p class=MsoNormal style='text-align:center'>-5-</p>





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<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>5.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Severability
of Provisions</u>.&nbsp; If any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or any remaining provisions of
this Agreement.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>5.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Governing
Law</u>.&nbsp; This Agreement shall be governed by and construed in accordance with
the laws of the State of California.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>5.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Cancellation
of Prior Loan Agreements</u>.&nbsp; This Agreement cancels and supersedes all prior
loan agreements between Borrower and Bank relating to any Credit.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'><b>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ARBITRATION.</b></p>

<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Arbitration</u>.&nbsp;
The parties hereto agree, upon demand by any party, to submit to binding
arbitration all claims, disputes and controversies between or among them (and
their respective employees, officers, directors, attorneys, and other agents),
whether in tort, contract or otherwise arising out of or relating to in any way
(a) the loan and related Loan Documents which are the subject of this Agreement
and its negotiation, execution, collateralization, administration, repayment, modification,
extension, substitution, formation, inducement, enforcement, default or
termination; or (b) requests for additional credit.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Governing
Rules</u>.&nbsp; Any arbitration proceeding will (a) proceed in a location in
California selected by the American Arbitration (&quot;AAA&quot;); (b) be governed by the
Federal Arbitration Act (Title 9 of the United States Code), notwithstanding
any conflicting choice of law provision in any of the documents between the
parties; and (c) be conducted by the AAA, or such other administrator as the
parties shall mutually agree upon, in accordance with the AAA's commercial
dispute resolution procedures, unless the claim or counterclaim is at least
$1,000,000.00 exclusive of claimed interest, arbitration fees and costs in
which case the arbitration shall be conducted in accordance with the AAA's
optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the &quot;Rules&quot;).&nbsp; If
there is any inconsistency between the terms hereof and the Rules, the terms
and procedures set forth herein shall control.&nbsp; Any party who fails or refuses
to submit to arbitration following a demand by any other party shall bear all
costs and expenses incurred by such other party in compelling arbitration of
any dispute.&nbsp; Nothing contained herein shall be deemed to be waiver by any
party that is a bank of the protections afforded to it under 12 U.S.C. &sect;91 or
any similar applicable state law.</p>
<p class=MsoNormal style='text-align:center'>-6-</p>





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<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Arbitrator
Qualifications and Powers</u>.&nbsp; Any arbitration proceeding in which the amount
in controversy is $5,000,000.00 or less will be decided by a single arbitrator
selected according to the Rules, and who shall not render an award of greater
than $5,000,000.00.&nbsp; Any dispute in which the amount in controversy exceeds
$5,000,000.00 shall be decided by majority vote of a panel three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.&nbsp; The arbitrator will be a neutral attorney licensed
in the State of California or a neutral retired judge of the state or federal
judiciary of California, in either case with a minimum of ten years experience
in the substantive law applicable to the subject matter of the dispute to be
arbitrated.&nbsp; The arbitrator will determine whether or not an issue is
arbitratable and will give effect to the statues of limitation in determining
any claim.&nbsp; In any arbitration proceeding the arbitrator will decide (by
documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to
state a claim or motions for summary adjudication.&nbsp; The arbitrator shall
resolve all disputes in accordance with the substantive law of California and
may grant any remedy or relief that a court of such state could order or grant
within the scope hereof and such ancillary relief as is necessary to make
effect any award.&nbsp; The arbitrator shall also have the power to award recovery
of all costs and fees, to impose sanctions and to take such other action as the
arbitrator deems necessary to the same extent a judge could pursuant to the
Federal Rules of Civil Procedure, the California Rules of Civil Procedure or other
applicable law.&nbsp; Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction.&nbsp; The institution and maintenance of
an action for judicial relief or pursuit of a provisional or ancillary remedy
shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any other party
contests such action for judicial relief.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>6.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Discovery</u>.&nbsp;
In any arbitration proceeding discovery will be permitted in accordance with
the Rules.&nbsp; All discovery shall be expressly limited to matters directly
relevant to the dispute being arbitrated and must be completed no later than 20
days before the hearing date and within 180 days of the filing of the dispute
with the AAA.&nbsp; Any requests for an extension of the discovery periods, or any
discovery disputes, will be subject to final presentation and that no
alternative means for obtaining information is available.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>6.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Class
Proceedings and Consolidations</u>.&nbsp; The resolution of any dispute arising
pursuant to the terms of this Agreement shall be determined by a separate
arbitration proceeding and such dispute shall not be consolidated with other
disputes or included in any class proceeding.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>6.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Payment
of Arbitration Costs And Fees</u>.&nbsp; The arbitrator shall award all costs and
expenses of the arbitration proceeding.</p>
<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>&nbsp;</p>
<p class=MsoNormal style='text-align:center'>&nbsp;-7-</p>





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<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>6.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Real
Property Collateral: Judicial Reference</u>.&nbsp; Notwithstanding anything herein
to the contrary, no dispute shall be submitted to arbitration if the dispute
concerns indebtedness secured directly or indirectly, in whole or in part, by
any real property unless (a) the holder of the mortgage, lien or security
interest specifically elects in writing to proceed with the arbitration, or (b)
all parties to the arbitration waive any rights or benefits that might accrue
to them by virtue of the single action rule statue of California, thereby
agreeing that all indebtedness and obligations of the parties, and all
mortgages, liens and security interests securing such indebtedness and
obligations, shall remain fully valid and enforceable.&nbsp; If any such dispute is
not submitted to arbitration, the dispute shall be referred to a referee in
accordance with California Code of Civil Procedure Section 638 et seq., and
this general reference agreement is intended to be specifically enforceable in
accordance with said Section 638.&nbsp; A referee with the qualifications required
herein for arbitrators shall be selected pursuant to the AAA's selection
procedures.&nbsp; Judgment upon the decision rendered by a referee shall be entered
in the court in which such proceeding was commenced in accordance with
California Code of Civil Procedure Sections 644 and 645.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>6.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Miscellaneous</u>.&nbsp;
To the maximum extent practicable, the AAA, the arbitrators and the parties
shall take all action required to conclude any arbitration proceeding within
180 days of the filing of the dispute with the AAA.&nbsp; No arbitrator or other
party to an arbitration proceeding may disclose the existence, content or
results thereof, except for disclosures of information by a party required in
the ordinary course of its business, by applicable law or regulation, or to the
extent necessary to exercise any judicial review rights set forth herein.&nbsp; If
more than one agreement for arbitration by or between the parties potentially
applies to a dispute, the arbitration provision most directly related to the
Loan Documents or the subject matter of the dispute shall control.&nbsp; This
arbitration provision shall survive termination, amendment or expiration or any
of the Loan Documents or any relationship between the parties.</p>



<p class=MsoNormal style='margin-left:36.0pt;text-align:justify'>IN WITNESS
WHEREOF, Borrower and Bank have executed this Agreement as of January 4, 2006.</p>



<p class=MsoNormal style='margin-left:36.0pt'>Pro-Dex, Inc.</p>



<p class=MsoNormal style='margin-left:36.0pt'>By<u>:/s/ Jeffrey Ritchey&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jeffrey Ritchey, CFO,
Treasurer, Secretary</p>



<p class=MsoNormal style='margin-left:36.0pt'>By: _<u>/s/ Patrick Johnson</u>__________________<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Patrick Johnson, President
and CEO</p>



<p class=MsoNormal style='margin-left:36.0pt'>Address:&nbsp; 151 East Columbine
  Avenue<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Santa Ana, CA&nbsp; 92707</p>



<p class=MsoNormal style='margin-left:36.0pt'>WELLS FARGO BANK NATIONAL
ASSOCIATION</p>



<p class=MsoNormal style='margin-left:36.0pt'>By: ______<u>/s/ Tim Sandell V.P.
for</u> _______<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Manishi G. Parikh,
Relationship Manager</p>



<p class=MsoNormal style='margin-left:36.0pt'>Address:&nbsp; 2030 Main Street, Suite
  #900<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Irvine, CA&nbsp; 92614</p>





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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>6
<FILENAME>ex991.htm
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<head>


<title>Pro-Dex Reports Financial Results for Fiscal 2001; </title>



</head>

<body lang=EN-US link=blue vlink=purple>















<p align=left style='text-align:right;line-height:normal'><b>Exhibit 99.1</b></p>
<p align=left style='text-align:left;line-height:normal'><img
width=175 height=77 src="image001.jpg">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>

<div align="center">
	<table border="0" width="100%" id="table1" cellspacing="1">
		<tr>
			<td width="504">

<p align=left style='margin-left:216.0pt;text-align:right;line-height:
normal'>Contact:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>

			</td>
			<td>Patrick Johnson, President &amp; CEO</td>
		</tr>
		<tr>
			<td width="504">

<p style='text-align:justify'>&nbsp;</p>



			</td>
			<td>(714) 241-4411</td>
		</tr>
		<tr>
			<td width="504">



<p style='text-align:justify'>&nbsp;</p>

			</td>
			<td>Matthew Hayden, Investor Relations</td>
		</tr>
		<tr>
			<td width="504">

<p style='text-align:justify'>&nbsp;</p>

			</td>
			<td>Hayden Communications, Inc.</td>
		</tr>
		<tr>
			<td width="504">

<p style='text-align:justify'>&nbsp;</p>

			</td>
			<td>(858) 704 - 5065</td>
		</tr>
	</table>
</div>

<p style='text-align:justify'><b><i>For
Immediate Release</i></b>&nbsp;</p>

<p><b>&nbsp; PRO-DEX, INC. ANNOUNCES THE COMPLETION OF KEY
STRATEGIC ACQUISITION </b> </p>



<p style='text-align:justify;text-autospace:none'><b>SANTA ANA, CA,</b> January 5, 2006 - PRO-DEX,
INC. (NASDAQ: PDEX), an enabler of speed-to-market, through developing and
manufacturing <em style="font-style: normal">embedded motion
control and miniature rotary drive systems, currently serving the medical, dental,
factory automation, and scientific research markets,</em> today
announced that it has acquired substantially all assets related to the business
of Astromec Inc., a developer and manufacturer of a broad range of
custom fractional horsepower DC motors designed specifically for the adverse
environmental conditions found in the medical device, aerospace and military
markets.</p>



<p style='text-align:justify;text-indent:36.0pt;text-autospace:
none'>Patrick
Johnson, President and Chief Executive Officer commented, &quot;We're excited to
have completed this acquisition as it represents the culmination of an almost three-year
search to acquire specialized motor manufacturing capability. &nbsp;Fully
autoclavable DC motors are one of the most critical components in rapidly
developing and manufacturing surgical systems, our largest and fastest-growing
market segment. The acquisition of Astromec not only expands our capabilities
as a medical device manufacturer, but more importantly, it allows us to more
rapidly develop new electric motor technology for the ever-changing medical
device market. We believe this added capability will make us more attractive to
existing and new customers alike as this increased scope in design and
manufacturing expertise will expand the breadth of our product offering and
core competencies. Additionally, with the completion of the acquisition, Astromec's
responsiveness will improve as historically it has been constrained by limited access
to short-run/quick-turn precision machined parts. Going forward, Pro-Dex will
be able to supply these components in a more cost-effective and expeditious
manner.&nbsp; This capability reduces a key bottleneck in Astromec's manufacturing
process and increases its flexibility to meet urgent customer requests.</p>



<p style='text-align:justify;text-indent:36.0pt;text-autospace:
none'>Pro-Dex
paid approximately $2.6 million in cash to close the transaction with an additional
cash payment of $100,000 to be paid six months after closing, subject to any
adjustments made as a result of post-closing audits of the Astromec closing
financial statements. The Company used $1.6 million in cash on hand to fund the
acquisition and paid the remainder of the purchase price with cash borrowed
against a new $1.0 million four-year term loan. &nbsp;In conjunction with the asset
purchase, Pro-Dex has also entered into a real estate purchase agreement to
acquire the 20,000 square foot facility and the 4.4 acres of land occupied by
Astromec in Carson City, Nevada. At close of escrow, Pro-Dex will pay $2.2
million for the building and land, funding the transaction with a new $1.6
million 10-year first mortgage.&nbsp; &nbsp;The balance of the purchase price will be
funded by cash on hand. &nbsp;Escrow on the real estate transaction is scheduled to
close before July 1, 2006.&nbsp; In the meantime Pro-Dex will pay rent to the
current owner of the property.</p>





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<p style='text-align:justify;text-indent:36.0pt;text-autospace:
none'>Pro-Dex's current
facilities lease in Santa Ana, California expires in July of 2006. While Pro-Dex
expects to maintain its presence in central Orange County, the operating costs
of the Carson City facility are projected to be approximately half that of
Orange County and there are significant advantages to operating a business in
Nevada compared to California. As the Carson City facility is less than 50
percent utilized, the acquisition represents a substantially lower-cost
alternative to Orange County facilities for Pro-Dex to consolidate current
operations and expand future operations. Plans concerning the potential
expanded use of the Carson City facility have not been finalized.</p>



<p style='text-align:justify;text-indent:36.0pt;text-autospace:
none'>&quot;The
Astromec acquisition will also allow Pro-Dex to cross-market current product
offerings to existing Astromec customers as these represent new market
opportunities for Pro-Dex to penetrate,&quot; continued Mr. Johnson. &quot;While we
expect to substantially improve Astromec's presence in the medical device
industry, we believe the acquisition will help Pro-Dex penetrate Astromec's
existing customer base in the aerospace and military markets, where they have
been second and third-tier suppliers to Boeing, Airbus and NASA. &nbsp;Astromec's
market presence in these segments will boost Pro-Dex's visibility with these
customers and offer the opportunity to promote its 'speed-to-market' value
proposition by bundling its existing rotary drive systems and motion control
products with Astromec's custom motor technology. We are excited about this
acquisition as our core competency has increased and we are better equipped to
sell a broad range of products into both existing and new markets.&quot; </p>



<p style='text-align:justify;text-indent:36.0pt;text-autospace:
none'>Astromec
reported annual un-audited sales of approximately $2.7 million at the end of
calendar year 2005. &nbsp;Pro-Dex projects that its own consumption of DC motors
will increase Astromec's production volume by 20 to 30 percent during the 12
months following the close of the transaction. &nbsp;Entering the new calendar year,
Astromec had approximately $1.9 million in open orders scheduled for shipment
during 2007. &nbsp;As a result, the income from Astromec's legacy business combined
with the base-case assumptions for synergies highlighted above are estimated to
add $0.03 to $0.05 to Pro-Dex's earnings per share during the 12 months
following the close of the transaction. The acquired business will operate
under the name Pro-Dex/Astromec. </p>



<p style='text-align:justify;text-indent:36.0pt;text-autospace:
none'>Commenting
on the Company's performance during the just completed fiscal second quarter
and considering the acquisition, Mr. Johnson said, &quot;New order bookings were
strong during the quarter, resulting in a total order backlog of approximately
$7.0 million at the end of the second quarter compared to $4.7 million last
year, a 49 percent year-over-year increase and compared to $7.6 million at the
end of the previous quarter.&nbsp; It is important to note however, that we
cancelled approximately $900,000 of backlog during the second quarter in
connection with our acquisition of the IntraFlow patents. Accordingly, total
open orders increased $300,000 quarter over quarter, when excluding this
acquisition related adjustment. A significant portion of second quarter
bookings were derived from a one-year blanket purchase order received from our
largest medical device customer,&nbsp; including orders for a new iterative product
design that will be delivered during the second half of this fiscal year.&nbsp; In
addition, this blanket purchase order alone will drive a 15 percent increase in
production volume for our newly acquired Pro-Dex/Astromec business unit during
the next 12 months, validating the synergistic value of the acquisition.&quot;</p>



<p style='text-align:justify'>Pro-Dex Inc., with operations in
Santa Ana, California and Beaverton, Oregon, specializes in bringing speed to
market&nbsp;in the&nbsp;development and manufacture of&nbsp;technology-based
solutions that incorporate embedded motion control and miniature rotary drive
systems, serving the medical, dental, factory automation, and scientific
research markets. Pro-Dex's products are found in hospitals, dental offices,
medical engineering labs, scientific research facilities and high tech
manufacturing operations&nbsp;around the world. For more information, visit the Company's website at
<font color="#0000FF"> <u>www.pro-dex.com</u></font>.
</p>



<p><font size="2">Statements
herein concerning the Company's plans, growth and strategies may include
'forward-looking statements' within the context of the federal securities laws.
Statements regarding the Company's future events, developments and future
performance, as well as management's expectations, beliefs, plans, estimates or
projections relating to the future, are forward-looking statements within the meaning
of these laws. The Company's actual results may differ materially from those
suggested as a result of various factors. Interested parties should refer to
the disclosure concerning the operational and business concerns of the Company
set forth in the Company's filings with the Securities and Exchange Commission.</font></p>
<p>&nbsp;</p>












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