Document:

<PAGE>

                                                                   EXHIBIT 10.17

1-21-04                                                                        1

                         ASSET PURCHASE & SALE AGREEMENT

         AGREEMENT made as of this 28 day of January, 2004, by and between Poly
Circuits, INC. a Illinois corporation, having its principal business office at
475 Industrial Drive, West Chicago, Illinois 60185 (hereinafter referred to as
"Seller" and "Poly Circuits"), and M-Wave Inc., a Delaware corporation at said
address and, AM-Wave LLC a Illinois Limited Liability Company, with its
principal office to be at 3615 Wolf Road, Franklin Park, Illinois 60131
(hereinafter referred to as "Purchaser");

                                   WITNESSETH

         WHEREAS, Purchaser is willing to purchase and Seller is willing to sell
substantially all of the equipment (hereinafter referred to as the "Equipment")
owned by Seller at its premises located at 475 Industrial Drive, West Chicago,
Illinois (hereinafter referred to as "Premises") which is used by Seller in its
business of development, manufacturing and marketing of high performance circuit
boards (collectively, the "Products") on the terms and conditions set forth
herein; and

         WHEREAS, Seller is a wholly owned subsidiary of M-Wave, Inc. a Delaware
corporation.

         NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration the receipt and adequacy
whereof are hereby acknowledged, the parties hereby agree as follows:

         1.       PREAMBLES. The foregoing Preambles are a part of this
Agreement and are hereby incorporated herein.

         2.       EQUIPMENT. The Purchaser hereby agrees to purchase from Seller
all the Equipment used in the business of manufacturing circuit boards by Seller
and M-Wave, Inc. including but not limited that equipment set forth on Exhibit
"A" attached hereto and made a part hereof (except only the equipment
specifically excluded on Exhibit "A") and Seller agrees to sell the Equipment to
Purchaser. Said Equipment being sold shall be free and clear of all liens and
encumbrances.

<PAGE>

1-21-04                                                                        2

         3.       PURCHASE PRICE. The purchase price for the equipment shall be
$1,577,200 of which $800,000 shall be paid to Seller at closing and the balance
shall be paid by way of Seller being given a 20% equity interest in Purchaser
and American Standard Circuits, Inc. will own the remaining 80% equity interest.

         4.       REPRESENTATIONS AND WARRANTIES OF SELLER AND M-WAVE, INC.
Seller and M-Wave, Inc. represent and warrant as follows:

                  (a)      Seller is a corporation duly organized, validly
         existing, and in good standing under the laws of Illinois and owns all
         of the assets being sold hereunder;

                  (b)      This Agreement and the sale of the Equipment have
         been approved by the unanimous consent of the Board of Directors and
         Shareholder of Seller by appropriate resolutions;

                  (c)      There is no litigation or proceeding pending or
         threatened against or relating to Seller and M-Wave, Inc. and their
         properties or business. Additionally, they are not in default with
         respect to any order, writ, injunction or decree of any court or in
         default of any order, regulation or demand of any governmental agency,
         default under which might have consequences which would materially and
         adversely affect the business, properties or assets, or the condition,
         financial or otherwise, of the Seller and/or M-Wave, Inc.;

                  (d)      This instrument or the execution hereof will not
         constitute a breach or default of any contract or agreement which will
         materially or adversely affect the business of Seller;

                  (e)      The Seller has filed or will promptly file, all
         United States income tax returns and all state and municipal tax
         returns which are required to be filed, and have paid, or will pay, all
         taxes which have or will become due pursuant to said returns or
         pursuant to any assessment received by it. Seller shall provide stop
         orders from the Illinois Department of Revenue and Illinois Department
         of Employment Security prior to closing. Seller represents that to the
         best of Seller's knowledge, Seller is not delinquent on any taxes,
         which might interfere with Purchaser's rights under this Agreement;

<PAGE>

1-21-04                                                                        3

                  (f)      All equipment being sold under this Agreement shall
         be in good working condition at the time of closing;

                  (g)      Seller has not employed any broker in connection with
         this transaction and will be solely responsible for the payment of any
         broker's commission should any become due;

                  (h)      Seller has provided all books, records and financial
         information requested by Purchaser on which Purchaser has relied and
         will transfer to Purchaser all warranties pertaining to the equipment
         being sold hereunder;

                  (i)      Seller shall conduct its present business only in the
         ordinary course until closing.

         5.       CASUALTY PRIOR TO CLOSING. In the event that prior to the
Closing, the Equipment, being sold hereunder shall be lost or damaged on account
of fire, flood, accident, act of God, civil commotion or any other cause or
event, the Purchaser shall have the option of terminating this Agreement without
liability or to waive any diminution in value and close under this Agreement,
buying the Equipment "as is," in which event Purchaser shall be entitled to
receive the proceeds of any insurance paid by reason of such loss or damage. If
the Purchaser elects to terminate this Agreement pursuant to the provisions of
this paragraph, all monies heretofore paid by the Purchaser, if any, in
accordance with the provision of this Agreement, shall be returned to the
Purchaser and all parties shall be released from any further obligations
hereunder.

         6.       INDEMNIFICATION. The Seller and M-Wave, Inc. jointly and
severally agree to indemnify and hold harmless the Purchaser from and against:

                  (a)      Any damage, loss, liabilities, deficiency, payment,
         and expenses, including reasonable attorney's fees and costs which the
         Purchaser shall suffer resulting from Seller's or M-Wave's breach of
         any representation, warranty, covenant or agreement contained in this
         Agreement or any third-party claim, suit or action based upon or
         attributable to or caused by the acts or omissions of Seller or M-Wave,
         Inc.

<PAGE>

1-21-04                                                                        4

                  (b)      Any damage, loss, deficiency or payment which the
         Purchaser shall suffer or have as the result of the Seller's failure to
         conform to, or comply with, any law or regulation of the United States
         of America, any state; municipality, governmental unit or agency, or
         the failure of the Seller to make payments of any tax, debt, obligation
         or liability of the Seller arising out of, or in any way related to,
         Seller's conduct of its business prior to the closing hereof;

                  (c)      Any and all alleged or real actions, suits,
         proceedings, demands, assessment, judgments, costs and expenses
         incident to any of the foregoing, including, but not limited to, all
         costs and attorneys' fees incurred by the Purchaser attributable to the
         defense or settlement of any of the foregoing.

                  (d)      The Seller and M-Wave, Inc. shall reimburse the
         Purchaser, on demand, for any payment made by the Purchaser with
         respect to any obligation, liability or claim to which the foregoing
         relates, or any liability arising out of the conduct of the business of
         Seller prior to closing.

                  (e)      Seller and M-Wave, Inc. shall defend, including the
         payment of reasonable attorneys' fees and costs, indemnify and hold
         harmless Seller from and against any claim or cause of action
         whatsoever arising out of the assets sold herein and Seller's business;

                  (f)      The provisions of this Section shall survive the
         closing.

         7.       CONDITIONS PRECEDENT. The parties agree that the transaction
covered by this Agreement and the Closing are contingent upon the fulfillment of
each of the following conditions:

                  (a)      AMI Partners, L.L.C. shall conclude the purchase from
         Seller of the real estate commonly known as 475 Industrial Drive, West
         Chicago, Illinois, concurrently with the closing of the purchase of the
         Equipment from Seller hereunder. This Agreement is contingent on the
         closing of said transaction;

<PAGE>

1-21-04                                                                        5

                  (b)      That the Seller has received and delivered to
         Purchaser the appropriate stop orders issued by any governmental agency
         and provision has been made for same by way of escrow. Marvin W. Temple
         will act as Escrowee for any funds which are required to be held back
         as a result of the aforesaid stop order;

                  (c)      That prior to or at the Closing, the Seller shall
         deliver to the Purchaser all documents provided for in this Agreement.

                  (d)      American Standard Circuits Inc. ("ASC") and M-Wave,
         Inc. shall conclude their final agreement for a Strategic Operating
         Alliance pursuant to which ASC shall manufacture and sell high
         performance circuit boards (herein called the "Products") at the
         Premises for M-Wave, Inc. and which agreement will supercede the
         Interim Agreement for a Strategic Operating Alliance, dated as of
         September 2, 2003, between M-Wave, Inc. and American Standard Circuits
         Inc.

                  (e)      AMI Partners, L.L.C. as Lessor, and M-Wave Inc., as
         Lessee shall have entered into a lease of the second floor of the
         building at the Premises for a term of approximately five (5) years.

         8.       CLOSING. At closing of the transaction, including the sale and
lease of real estate, shall take place at the Wheaton, Illinois offices of the
Chicago Title Insurance Company on January 26, 2004, at 10:00 a.m. or at such
other place, date and time as shall be mutually agreed upon, provided that each
and every condition set forth above has been fully complied with. The parties
each warrant to the other that this Agreement and its full and complete
performance has been duly authorized by appropriate corporate action and that
all documents shall be executed by representatives of the respective parties
duly authorized to do so.

         9.       CLOSING DOCUMENTS. At or prior to closing, Seller shall
tender the following documents where appropriate, executed by duly authorized
representatives of Seller.

                  (a)      A warranty bill of sale for the Equipment,
         transferring good and marketable title to Purchaser free and clear of
         all liens and encumbrances;

<PAGE>

1-21-04                                                                        6

                  (b)      Stop Orders from the Illinois Department of Revenue
         and Illinois Department of Employment Security. Marvin W. Temple will
         act as Escrowee for any funds which are required to be held back as a
         result of the aforesaid stop order;

                  (c)      Uniform Commercial Code searches from the States of
         Delaware and Illinois and judgment and lien searches indicating the
         assets to be transferred being free of security interests in others. If
         such searches disclose any judgments or liens Seller shall also deposit
         releases or pay-off letters showing the amounts due and totaling not
         more than the net proceeds from the sale of the Equipment which
         proceeds shall be used to pay the judgments and/or liens at closing.
         Such searches shall include Seller and M-Wave, Inc. as the Debtors.

                  (d)      Certificates of Good Standing that Seller is
         incorporated in Illinois and in good standing there;

                  (e)      Certified copies of corporate resolutions of Seller
         and M-Wave, Inc. authorizing execution of this Agreement and the
         transaction hereby contemplated;

         At closing, Purchaser shall tender the purchase price, plus or minus
agreed adjustments and prorations, if any in the form of a cashier's or
certified check, payable to Seller or check of the title company.

         10.      LEGAL PROCEEDINGS. In the event that either party is required
to commence any legal proceedings for the enforcement of any provision of this
Agreement, the prevailing parry shall be entitled to recover its reasonable
attorneys' fees and costs incurred in connection therewith.

         11.      ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties as to the subject matter hereof, merges all prior
discussions, negotiations and agreements between the parties, and may not be
modified except in a writing signed by the parties.

         12.      SURVIVAL OF AGREEMENT. This Agreement shall survive the
closing of the within transaction.

<PAGE>

1-21-04                                                                        7

         13.      GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Illinois.

         14.      NOTICES. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand, sent via overnight courier, sent by facsimile, or mailed by first class
certified or registered mail, return receipt requested, postage prepaid:

If to____________________________, Purchaser:

_________________________________________
3615 Wolf Road
Franklin Park, Illinois 60131-1425
Attention: Gordhan Patel
Fax: (847)455-1518 WITH a copy to:

Marvin W. Temple, Esq.
555 Skokie Blvd. Suite 500
Northbrook, Illinois 60062
Fax: (847)480-1414

If to Poly Circuits Inc., Seller, and M-Wave, Inc.
c/o M-Wave, Inc.
475 Industrial Drive
West Chicago, Illinois 60185
Attention: Joseph Turek
Fax: (630)562-2430

with a copy to:
Freeborn & Peters
311 S. Wacker Drive, Suite 3000
Chicago, Illinois 60606
Attn: Carl R. Klein, Esq.
Fax: (312)360-6571

<PAGE>

1-21-04                                                                        8

or to such other person or entity or at such other address as any Party shall
designate by notice to the other in accordance with this Paragraph 14.

         Notices provided in accordance with this Paragraph 14 shall be deemed
delivered (i) upon personal delivery with signature required (ii) one (1)
business day after they have been sent to the recipient by reputable overnight
courier service (charges prepaid and signature required), (iii) upon
confirmation, answer back received, of successful transmission of a facsimile
message containing such notice if sent between 9 a.m. and 5 p.m., local time of
the recipient, on any Business Day, and as of 9 a.m. local time of the recipient
on the next business day if sent at any other time, or (iv) three (3) business
days after deposit in the mail.

         15.      MISCELLANEOUS.

                  (a)      Building Effect and Assignment: This Agreement shall
         be binding upon and inure to the benefit of the Parties and their
         respective successors, assigns and representatives. Neither Party shall
         have the right to assign or otherwise transfer its rights or
         obligations under this Agreement except with the prior written consent
         of the other Party, not to be unreasonably withheld.

                  (b)      Waiver. Except as specifically provided for herein,
         the waiver from time to time be either of the Parties of any of their
         rights or their failure to exercise any remedy shall not operate or be
         construed as a continuing waiver of same or of any other of such
         Party's rights or remedies provided in this Agreement.

                  (c)      Severability. If any term, covenant or condition of
         this Agreement or the application thereof to any Party or circumstance
         shall, to any extent, be held to be invalid or unenforceable, then the
         remainder of this Agreement, or the application of such term, covenant
         or condition to Parties or circumstances other than those as to which
         it is held invalid or unenforceable, shall not be affected thereby and
         each term, covenant or condition of this Agreement shall be valid and
         be enforced to the fullest extent permitted by law.

<PAGE>

1-21-04                                                                        9

                  (d)      Counterparts. This Agreement may be executed in any
         number of counterparts, each of which will be deemed to be an original,
         but all of which together will constitute one and the same agreement.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective authorized representatives effective on the date
first set forth herein.

SELLER:                                      PURCHASER:

POLY CIRCUITS INC.,                          /s/ AM Wave LLC
                                             -----------------------------------
a Illinois corporation                       a Illinois L.L.C.

By /s/ ***                                   By /s/ ***
   ----------------------------------           --------------------------------
                President                                   Manager

Attest  /s/ ***
       ------------------------------
              Asst Secretary

M-WAVE, INC., a Delaware corporation

By:  /s/ ***
    ---------------------------------
               President

Attest:  /s/ ***
        -----------------------------
        Asst Secretary

<PAGE>

                                    RIDER TO
                       ASSET PURCHASE AND SALE AGREEMENT

         This Rider to Asset Purchase and Sale Agreement ("Rider") is dated
January 28, 2004 by and between Polycircuits, Inc., an Illinois corporation
("Seller") and M-Wave, Inc., a Delaware corporation ("M-Wave") and AM-WAVE, LLC,
an Illinois limited liability company ("Purchaser").

         This Rider is attached to and made a part of that certain Asset
Purchase and Sale Agreement (the "Contract") dated of even date herewith by and
between Seller, M-Wave and Purchaser. To the extent of any conflict between the
terms of the Contract and this Rider, the terms of this Rider shall control. All
terms herein that are capitalized but are not defined shall have the meaning in
respect thereof as set forth in the Contract.

         R-1      The second sentence of Paragraph 4(e) of the Contract is
                  deleted. Seller and M-Wave represent and warrant that there
                  are no delinquent amounts due to the Illinois Department of
                  Revenue and Illinois Department of Employment Security by the
                  owner of the Equipment which is the subject of the Contract,
                  and Seller and M-Wave will indemnify and hold Purchaser
                  harmless from any claims therefor.

         R-2      Paragraph 4(f) of the Contract is hereby deleted. The
                  Equipment is being sold without representation or warranty,
                  except as otherwise expressly set forth in the Contract (as
                  amended hereby) or this Rider, and Seller shall have no
                  obligation to make any repairs in respect thereof. Without
                  limiting the foregoing, neither Seller nor M-Wave makes any
                  representation or warranty to Purchaser, express or implied,
                  as to (a) the suitability of the Equipment for Purchaser's
                  intended use or any particular purpose, or the merchantability
                  thereof, (b) the profitability of the operations or the income
                  to be derived therefrom, (c) the state of repair or lack of
                  repair, or quality of the Equipment, (d) any other matter with
                  respect to the condition of the Equipment, and (e) any tax
                  consequences, favorable or otherwise, resulting from
                  Purchaser's acquisition or operation of the Equipment; and all
                  such representations and warranties are hereby expressly
                  disclaimed by Seller and M-Wave, and Purchaser hereby releases
                  Seller and M-Wave from any and all responsibility and
                  liability in respect thereof. Any representations, warranties
                  or statements made by any agent or representative of Seller or
                  M-Wave, including without limitation any broker, may not be
                  relied upon by Purchaser and do not constitute a part of the
                  Contract or this Rider.

         R-3      The provisions of Paragraphs 4(i), 5, 7, and 9(b) are hereby
                  deleted.

         R-4      If there shall be any breach of any of the representations and
                  warranties set forth herein and/or in the Contract, as amended
                  hereby, or the closing documents, Purchaser shall be required
                  to act, if at all, on said breach by giving notice thereof to
                  Seller and/or M-Wave within one (1) year after the date hereof
                  and by filing action against Seller and/or M-Wave in court in
                  respect thereof within one (1) year after the date hereof.
                  Further, there shall be no liability of Seller and/or M-

<PAGE>

                  Wave in respect of any breach of representation and warranty
                  set forth herein and/or in the Contract, as amended hereby,
                  and/or the closing documents in respect of claims which
                  together with all other claims in respect thereof, exceed an
                  aggregate of $100,000, and there shall be no liability of
                  Seller and/or M-Wave in respect of any breach of
                  representation and warranty set forth herein and/or in the
                  Contract, as amended hereby, and/or the closing documents in
                  respect of claims which together with all other claims in
                  respect thereof do not exceed in the aggregate 55,000.
                  Further, no representation or warranty of Seller and/or M-Wave
                  hereunder and/or in the Contract, as amended hereby, and/or
                  the closing documents shall be deemed to have been breached if
                  Purchaser closes the purchase and sale contemplated hereby
                  with knowledge by it or its agents of any such breach.

                                   Polycircuits, Inc., an Illinois corporation

                                   By:  /s/ Joe Turek
                                        ----------------------------------------
                                   Its: Joe Turek
                                        President

                                   M-Wave, Inc., a Delaware corporation

                                   By:  /s/ Joe Turek
                                        ----------------------------------------
                                   Its: Joe Turek
                                        President

                                   AM-WAVE, LLC, an Illinois limited liability
                                   company

                                   By:  /s/ ***
                                        ----------------------------------------
                                   Its: Manager

                                       2

<PAGE>

                                 SECOND RIDER TO
                        ASSET PURCHASE AND SALE AGREEMENT

         This Second Rider to Asset Purchase and Sale Agreement ("Second Rider")
is dated January 28, 2004 by and between Polycircuits, Inc., an Illinois
corporation ("Seller") and M-Wave, Inc., a Delaware corporation ("M-Wave") and
AM-WAVE, LLC, an Illinois limited liability company ("Purchaser").

         This Second Rider is attached to and made a part of that certain Asset
Purchase and Sale Agreement (the "Contract") dated of even date herewith by and
between Seller, M-Wave and Purchaser. To the extent of any conflict between the
terms of the Contract and this Rider, the terms of this Rider shall control. All
terms herein that are capitalized but are not defined shall have the meaning in
respect thereof as set forth in the Contract.

         R-1      Paragraph 3 of the Contract is deleted and the following
                  language is substituted in lieu thereof:

                           "3 (a). In consideration for and upon the
                           contribution of the assets pursuant to this
                           Agreement, and the satisfaction of the other
                           conditions precedent set forth herein, Purchaser
                           shall, in addition to the consideration described in
                           subparagraph (b) below, issue to the Seller a
                           membership interest in the Purchaser having the
                           rights and subject to the limitation as set forth in
                           the Operating Agreement of AM-Wave, L.L.C., which is
                           attached hereto as Exhibit B (the "Operating
                           Agreement").

                           (b). Purchaser and Seller have agreed that the fair
                           market value of the assets is $1,577,000.00 and that
                           the fair market value of the membership interests is
                           $777,000.00. As additional consideration for the
                           contribution of the Equipment, Purchaser shall pay an
                           amount equal to $800,000.00 to the Seller upon the
                           contribution of the assets pursuant to this
                           Agreement."

                                   Poly Circuits, Inc., an Illinois corporation

                                   By:  /s/ Joe Turek
                                        ----------------------------------------
                                   Its: Joe Turek

                                   M-Wave, Inc., a Delaware corporation

                                   By:  /s/ Joe Turek
                                        ----------------------------------------
                                   Its: Joe Turek

<PAGE>

                                   AM-WAVE, LLC, an Illinois limited liability
                                   company

                                   By:  /s/ ***
                                        ----------------------------------------
                                   Its: Manager

                                       2

<PAGE>

                                   EXHIBIT "A"
                    BILL OF SALE & ASSET PURCHASE AGREEMENT
                       POLYCIRCUITS, INC. to AM-WAVE, LLC
                                     1-28-04

                                    Appraisal

                                  M-Wave, Inc.
                              475 Industrial Drive
                             West Chicago, Illinois

                              Machinery & Equipment

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
                    Fabrication Department - 1st Floor

  1         1-      Excellon Model Mark VI-E480 5-Spindle Circuit Board Drilling
                    Machine, S/N 5133, (1992); with CNC; 6-Control; 18" x 24"
                    Capacity; Air Operated; Granite Bed

  2         1-      Excellon Model Mark VI-E480 5-Spindle Circuit Board Drilling
                    Machine, S/N 5132, (1992); with CNC; 6-Control; 18" x 24"
                    Capacity; Air Operated; Granite Bed

  3         1-      Excellon Model Mark V 4-Spindle Circuit Board Drilling
                    Machine, S/N 735-R; with 18" x 24" Capacity; with Tool
                    Changer; Excellon CNC; 6-Control; Air Operated; Granite Bed

  4         1-      Excellon Model Mark V 4-Spindle Circuit Board Drilling
                    Machine, S/N 731-R; with 18" x 24" Capacity; with Tool
                    Changer; Excellon CNC; 6-Control; Air Operated; Granite Bed
</TABLE>

DOVEBID

                                       10

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
   5        1-      Excellon Model EX-110D/R-230 Single Spindle Circuit Board
                    Driller/Router, S/N 4529, (1995); with Excellon CNC
                    6-Control; 18" x 24" Capacity; Air Operated; Granite Bed

   6        1-      Excellon Model EX-110D/R-230 Single Spindle Circuit Board
                    Driller/Router, S/N 4521, (1995); with Excellon CNC
                    6-Control; 18" x 24" Capacity; Air Operated; Granite Bed

   7        1-      Excellon Model EX-110D/R-230 Single Spindle, Circuit-Board
                    Driller/Router, S/N 4528; (1995); with Excellon CNC 6-
                    Control; 18" x 24" Capacity; Air Operated; Granite Bed

   8        1-      Excellon Model EX-110D/R-230 Single Spindle Circuit Board
                    Driller/Router, S/N 4522, (1995); with Excellon CNC
                    6-Control; 18" x 24" Capacity; Air Operated; Granite Bed

   9        1-      Excellon Model EX-110D/R-230 Single Spindle Circuit Board
                    Driller/Router, S/N 4519, (1995); with Excellon CNC
                    6-Control; 18" x 24" Capacity; Air Operated; Granite Bed

  10        1-      Excellon Model EX-110D/R-230 Single Spindle Circuit Board
                    Driller/Router, S/N 4520, (1995); with Excellon CNC
                    6-Control; 18" x 24" Capacity; Air Operated; Granite Bed

  11        1-      Excellon Model Mark VI-E D/R230 5-Spindle Circuit Board
                    Driller/Router, S/N 6417, (1995); with Excellon CNC
                    6-Control; 18" x 24" Capacity; Air Operated; Granite Bed
</TABLE>

DOVEBID

                                       11

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
  12        1-      Excellon Model Mark VI D/R230 5- Spindle Circuit Board
                    Driller/Router, S/N 6333, (1995); with Excellon CNC
                    6-Control; 18" x 24" Capacity; Air Operated; Granite Bed

  13        1-      Excellon Model Concept 4-208 4-Spindle Circuit Board
                    Drilling Machine, S/N 1354, (1996); with Excellon CNC
                    7-Control; Granite Bed

  14        1-      Excellon Model Concept 4-208 4-Spindle Circuit Board
                    Drilling Machine, S/N 1355, (1996); with Excellon CNC
                    7-Control; Granite Bed

  15        1-      Excellon Model Concept 1 230 Single Spindle Circuit Board
                    Drilling Machine, S/N 2551, (1995); with Excellon CNC
                    7-Control; 18" x 24" Capacity; Air Operated; Granite Bed

  16        1-      ESI Model 100MC Smart Single Spindle Circuit Board Drilling
                    Machine, S/N MD060, (2001); with PC Control; 18" x 24"
                    Capacity; Manual Tool Change

  17        1-      Anita Industries, Inc. Model Proscore L02N Scoring Machine,
                    S/N 1-L02N-006-J064; Computer Control; 30" Capacity

  18        1-      APS Model PWB-16 Plasma Machine, S/N 263, (2001); 16-Panel;
                    with IBM PC Control; Advanced Energy Model PEII10K Power
                    Supply; Equipped with Stokes Vacuum Pump System (Used for
                    De-Smear Edge Back for Circuit Boards)
</TABLE>

DOVEBID

                                       12

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
  19        1-      Barnaby Model 802F Stack Master Circuit Board
                    Driller/Pinner, S/N 4766; 36" Capacity; 2 Vacuum Hoses;
                    Bench Top

  20        1-      Radoll Model 035 Bevelmate Beveller

                    Total Fabrication Department - 1st Floor:

                    LABORATORY DEPARTMENT

  21        2-      Buehler Model Ecomet 4-Variable Speed
                    Grinders/Polishers
                    Each Value: $1,750/$2,250

  22        1-      Lot Consisting of:
                    Hamilton Industries Fume Hood with Fisher Scientific Model
                    610 Portable PH Meter

  23        1-      Varian Model Spectra 220 Atomic Absorption Spectrometer

  24        1-      Precision 1300-Watt Bench Laboratory Oven, S/N 602011485

  25        1-      Ram Optical Instrumentation Model OMIS III Optical
                    Inspection Machine, S/N 501024-98-607; 18" x 24" Capacity;
                    on Granite Surface Plate; PC Control with (2) Monitors

  26        1-      Lot Consisting of Miscellaneous Equipment Including Bench
                    Drill; Microscopes; (6) Workstations with Desks; Lights;
                    Illuminated Inspection Equipment; Laboratory Furniture and
                    Fixtures; etc.
</TABLE>

DOVEBID

                                       13

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
  27        1-      Roper Whitney Model 29 Kick Press, S/N 2781-8-73

  28        1-      Kenco Industries Model 600 Omega Meter; with Microprocessor
                    Control

                    Total Laboratory Department:

                    ELECTRICAL TEST ROOM

  29        1-      TTI Grid Bare Board Testing Machine, S/N U01517, (2001);
                    Testing Area 20" x 27"; Can Test Single and Double Sided;
                    with PC Control

  30        1-      Microcraft Corp. Model ELH6146S Flying Probe Electrical Test
                    System, S/N A3966400, (2000); with Emma Moving Probe Tester;
                    PC Control

  31        1-      Microcraft Corp. Model EM5141 Flying Probe Electrical Test
                    System, S/N B4695400, (2001); with Emma Moving Probe Tester;
                    PC Control

  32        1-      Orbotech Model SK-75 AOI Automatic Optical Inspection
                    Tester, S/N SR1336, (2001); with PC Control; Orbo Tech Power
                    Conditioner; 24" x 24" Capacity

  33        1-      Lot Consisting of Miscellaneous Equipment Including:-
                    Personal Computers; Desks; Illuminated Visual Test Station;
                    File Cabinets; etc.

                    Total Electrical Test Room:
</TABLE>

DOVEBID

                                       14

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
                    Imaging Screening Department

  34        1-      Olec Model LT1 Digital Core Punch, S/N 17122, (2001); Table
                    Size 44" x 48"; with PC Control; 4-Station

  35        1-      Jeol Model JSM-820 Scanning Microscope, S/N SNM1 10024-126;
                    with Microscope; Control Panel; Tracor Northern PC Control

  36        1-      Grieve Model AB-500 Electric Oven, S/N 350094; 300 degrees F
                    Max. Temperature; Dimensions 42" x 42" X 36" High

  37        1-      Grieve Model AB-500 Electric Oven, S/N 350092; 300 degrees F
                    Max. Temperature; Dimensions 42" x 42" x 36" High

  38        1-      Colight Model DMVL-1630W/C Exposure Unit, S/N 7409-422,
                    (2001)

  39        1-      Coates ASI Model Ninety 25 Series Developer; with Control
                    Panel; 24" Capacity; Unit Equipped with Nubal Stackman
                    Stacking System

  40        1-      Olite Model Olec Exposure System; 25" x 30" Capacity; Olix
                    AI21 Light Integrator; Olite Model 53 Power Supply

  41        1-      Colight Model UV36-CEI UV Curing Oven, S/N 7336-336, (1995);
                    Equipped with Heater; Blower Unit; Conveyor Type; 38" Width
                    Capacity

  42        1-      Grieve Model AB-500 Electric Oven, S/N 350493; 350(degree)F
                    Maximum Temperature; Dimensions 42" x 42" x 36" High
</TABLE>

DOVEBID

                                       15

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date; October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>

  43        1-      Miscellaneous Equipment in Electrical Test Department Area
                    Consisting of: work Tables; Carts; Illuminated Work Tables;
                    Hydrobooth Screen Spray Sink; Screen Stacker; etc.

  44        1-      Minuteman Model 200X Floor Scrubber

  45        1-      Lot of Coates/ASI Line Consisting of: Anita Model H0311
                    Dryer; Coates/ASI 2-Chamber Rinse with Airknife; Research
                    Inc. Reflow

  46        1-      Lantronic Model 207 Vertical Hot Air Solder Leveler Unit;
                    with Allen Bradley Microprocessor Controls; Stainless
                    Steel Exterior

  47        1-      Lot Consisting of Wesero Preposit Model Micro AT2-18" Etch
                    Line; S/N 29418 (1994)

  48        1-      IPS Fluxer, S/N AG02002

                    Total Imaging Screening Department:

                    WET PROCESS DEPARTMENT

  49        1-      Lot Consisting of Trionetics Inc. Waste Water
                    Treatment/Water Filtration System, to Include:

                    Delkaliser Unit; Water Softener Unit; Brine Tank; Carbon
                    Column; Ion Exchange Unit with (2) Column Tanks; Final
                    Polishing Column; Belco Large Reverse Osmosis Water Storage
                    Tank; Belco Recycled Water Storage Tank; Sterilizer Unit;
                    Main Control Panel; Underground Are (7) Large Storage Tanks
                    (2001)
</TABLE>

DOVEBID

                                       16

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date; October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
  50        2-      700-Gallon Plastic Storage Tanks Each Value: $250/$350

  51        1-      Lot Consisting of Trionetics 96" Wide Completely Automatic
                    Copper Plating Line, with (42) Stations; (26) Rectifiers;
                    Steel, Tanks (2) Overhead Computer Controlled Hoists;
                    Trionetics Control; Control Panel; PC with Monitor (2001)

  52        1-      Lot Consisting of Dalux CF Series, Interlayer DES Line, with
                    Alkaline Etch System; 30" Wide Conveyor; with Stations to
                    Develop; Rinse; Etch; Ammonia Rinse; Strip; Cool; Heat Unit
                    (2001)

  53        1-      Coates ASI Model Resist Stripper Line; with 24" Conveyor;
                    Water Rinse Clean Line with 24" Conveyor

  54        1-      ASI (Coates Group) Microetch Line; with Water Rinse Tanks;
                    24" Wide Conveyor

  55        1-      Anita Industries, Inc. Model T0100 Crimson Microetch Line;
                    with (8) Tanks/Stations; with Water Rinse Stations;
                    Reactivator Station; Converter Station; Enhancer Station;
                    Stabilizer Station; with Dayton 1/2-Ton Overhead Hoist on
                    Rail

  56        1-      Custom Made by Poly Circuits Solder Strip and Tin Dip Line;
                    (7) Dip Stations; (3) Rinse Stations

  57        1-      Dalux Equipment America Ltd. Model CF Series Akaline Etch
                    System, (2001); 30" Wide Conveyor
</TABLE>

DOVEBID

                                       17

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date; October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
  58        1-      Dalux Equipment America Ltd. Model CF Series Micro Etch
                    Line; Consisting of: Micro Etch Spray Tanks; Water Rinse
                    Tanks; Cooling Tank; Heating Tank; 30" Wide Conveyor;
                    Control Panel (2001)

  59        1-      ASI Scrubber; Equipped with Top Brush; High Pressure Rinse;
                    24" Wide Conveyor; Water Suction; Heat Dryer and Blower

  60        1-      Eidschun Model E40 Nickel/Gold Plating Line, S/N 101454,
                    (2002); (21) Stations/Tanks; Rectifiers

  61        1-      Grieve Model AB-500 Electric Oven, S/N 350495; with 300
                    degrees F Max. Temperature

  62        1-      Stutz Products Corp. 5-Station Rinse Line

  63        1-      11-Station Stripping/ Rinse Line

  64        1-      Anita Industries, Inc. Model H01B High Pressure Rinser/
                    Dryer; with 30" Wide Conveyor

  65        1-      Unifab 15-Station Tin Dip Line; with Tin and Water Rinse
                    Stations

  66        1-      Custom Made 4-Station Water Rinse Line; with Filters

  67        1-      Lot Consisting of Manual 40-Station Silver/Golf/Nickel/Zinc
                    Plating Line; Immersion Type; Equipped with (3) 1/2-Ton
                    Dayton Hoists
</TABLE>

DOVEBID

                                       18

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date; October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
  68        1-      PMC Model 54"X42"X60" CFTO Walk-in Bake Oven, S/N 4-305-E-3

                    Total Wet Process Department:

                    Multi-Layer Bonding Department

  69        1-      TMP 100-Ton Hydraulic Circuit Board Laminating Press, S/N
                    20467, (1991); with 20" x 26" Platen Size; 13" Stroke; 4" x
                    3" Opening; Allen Bradley Controls

  70        1-      TMP 100-Ton Hydraulic Circuit Board Laminating Press, S/N
                    20605, (1992); with 20" x 26" Platen Size; 13" Stroke; 4" x
                    3-3/4" Opening; Allen Bradley Controls

  71        1-      TMP Model HVP 100-Ton Hydraulic Circuit Board Laminating
                    Press, S/N 21761, (1999); with 20" x 26" Platen Size; 13"
                    Stroke; 4" x 3-3/4" Opening; GE Fanuc Controls

  72        1-      Roper Whitney Model PH52A Shear, S/N 37141-81; with
                    16-Gallon x 52" Capacity

  73        1-      Anita Industries, Inc. Model L53AA Loader/Unloader Oven
                    Cart; Electrically Operated; on Rail; (8) Boards Capacity

  74        1-      Anita Industries, Inc. Model L54AA De-Pinner Machine, S/N
                    L54AA-001-N0906

                    Total Multi-Layer Bonding Department:
</TABLE>

DOVEBID

                                       19

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
                    BREAKDOWN AREA

  75        1-      Lot Consisting of Rolling Conveyor; Small Jib Cranes;
                    Punching Machine; Tadco PC 5000 Pin Cleaners; Edgemate
                    Multilayer Slitter; Desks; PC; Steel Rack; etc,

                    Total Breakdown Area:

                    SHIPPING RECEIVING AREA

                    Total Shipping Receiving Area:

                    UPSTAIRS INSPECTION AREA
</TABLE>

DOVEBID

                                       20

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
  82        1-      Microdek Model DEK249 Solder Screening Machine, S/N Not
                    Available

  83        1-      Ceco Model 630 Copper Clad Peel Tester

  85        1-      Lot Consisting of Upstairs Inspection Room, to Include: (10)
                    Inspection Work Stations; Small Bench Top Jet Drill Press;
                    Work Benches; PCB Storage Racks; Desks; Chairs; Shop Carts;
                    Personal Computers; Inspection Related Equipment;
                    Microscopes; Illuminated Surface Tables; Magnifying Light
                    Lamps; Fireproof Cabinets; Belt Sander; Arbor Presses; etc.

  88        1-      Anita Industries, Inc. Rinser Machine; with 18" Conveyor;
                    Water; Dryer; Filter; High Pressure
</TABLE>

DOVEBID

                                       21

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
  89        1-      Anita Industries, Inc. Model H1CB/Dryer Machine

  93        1-      TMP 250-Ton Multilayer Hydraulic Circuit Board Laminating
                    Press, S/N 21895, (2000); with (6) Openings; 32" x 32"
                    Platens; 24" Stroke; Allen Bradley Controls

  94        1-      TMP 10-Ton Cooling Press, (2001); (6) Cooling Stations; 32"
                    x 32" Platens

  95        1-      TMP 250-Ton Multilayer Hydraulic Circuit Board Laminating
                    Press, S/N 21954, (2001); with (6) Openings of 32" x 32"
                    Platens; 24" Stroke; Allen Bradley Controls

  96        1-      TMP 250-Ton Multilayer Hydraulic Circuit Board Laminating
                    Press, S/N 21954, (2001); with (6) Openings of 32" x 32"
                    Platens; 24" Stroke; Allen Bradley Controls

  97        1-      TMP 10-Ton Cooling Press; (6) Cooling Stations; 32" x 32"
                    Platens
</TABLE>

DOVEBID

                                       22

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
  98        1-      TMP 250-Ton Multilayer Hydraulic Circuit Board Laminating
                    Press, S/N 21954, (2001); with (6) Openings of 32" x 32"
                    Platens; 24" Stroke; Allen Bradley Controls

  99        1-      TMP 100-Ton Multilayer Hydraulic Circuit Board Laminating
                    Press, S/N 20772, (1994); with (6) Openings of 26" x 26"
                    Platens; 13" Stroke

 100        1-      TMP Multilayer Press Loader; with (6) Loading Stations; on
                    Wheels on Rails; TMP Pendant Control; with (6) Station
                    Loader on Wheels; (3) Loading Carts

 102        1-      Jet Bench Drilling/Milling Machine

 103        1-      Lot Consisting of Upstairs Office Workstation to Include:
                    File Cabinets; Desk; Chairs; Personal Computer; Printer;
                    Lateral File Cabinets; 2-Door Steel Cabinets

 104        1-      Lot Consisting of Cafeteria to Include: Microwave Ovens;
                    Refrigerator; Lockers; Vending Machines; TV; etc.
</TABLE>

DOVEBID

                                       23

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
 111        1-      Lot Consisting of CAD Room, to Include: (14) Partitioned
                    Work Stations; Desks; Chairs; PCs; File Cabinets; Credenzas;
                    Also Conference Table 3' Wide x 8' Long with (6) Chairs;
                    Canon AP6050 Copier; HP Laser Printer; etc.

                    Total Upstairs Inspection Area:

                    IMAGING DEPARTMENT

 113        1-      Colight Model DMVL-1630/WC Exposure Machine, S/N 7409-421,
                    (2001)

 114        1-      Colight Model DMVL-1630 Exposure Machine, S/N 7409-1080,
                    (1995)
</TABLE>

DOVEBID

                                       24

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
 115        1-      Morton Model CSL 1500C Cut Sheet Laminating Machine; with
                    Morton International Controls; Dynachem Model 800 Hot Roll
                    Pre-Heater

 116        1-      Dynachem Model 724 Vacuum Laminator/Vacuum Applicator; with
                    Dynachem Vacuum indicator Readout Control

 117        1-      Dupont Riston Model LC-2400 Manual Laminator

 119        1-      Mitutoyo Microscope; with 2-Axis Digital Readout; Equipped
                    with Merlin Keyboard and Control

 120        1-      Teaneck Model L1250 Fast Draw Vacuum System Exposure
                    Machine; with Olec Model L 1250 Lamp

 121        1-      Glenbrook Ammonia Exposing Machine

 123        1-      Lot Consisting of: First Eiesa Model RP208-NT Developer;
                    with Giunz & Jensen Plotter with Roller Conveyor Joining
                    Both Machines

 124        1-      ASI 24" 4-Station Developer; Feed Thru by Roller Conveyor

 125        1-      Resco Products Co. Model Jet Scrubber RPHP Pumice Scrub
                    Machine, S/N 2RE010715664, (2001)
</TABLE>

DOVEBID

                                       25

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
 126        1-      CMI Model CMI-960 Plating Thickness Gauge, S/N 810996;
                    Plating Thickness Measurement System

 127        1-      CMI Model CMI-909 Plating Thickness Gauge, S/N 00937;
                    Plating Thickness Measurement System

                    Total Imaging Department:

                    COMPRESSOR ROOM

 128        1-      Kaeser Model DSD125 125 hp Air Compressor, (2002); with
                    Sigma PC Control

 129        1-      Kaeser Model KRD Series Dryer, (2002)

 130        1-      Sullair Model 16BS-75H 75 hp Skid Mounted Screw Type Air
                    Compressor, S/N 003-83208

 131        1-      Jet Edge Model 55-50B Water Jet Cutting Machine, S/N 12342,
                    (1999); with Accuchiller Thermocare Chilling Unit (Machine
                    Disassembled)

 132        1-      Spencer Model 30104E3 25 hp Vacuum Producer, S/N 312004;
                    with Spencer Bag Separator

 133        1-      Chill Process Pump Control Unit; with Control Panel; (4)
                    Motors and Pumps

 134        1-      Kaeser Model Sigma Profile CS90 90 hp Air Compressor;
                    45,279-Hours at Time of Inspection (Not In Service)

 135        1-      Craftsman Model LT1000 Riding Mower
</TABLE>

DOVEBID

                                       26

<PAGE>

APPRAISAL -M-WAVE, INC.
           WEST CHICAGO, ILLINOIS

<TABLE>
<CAPTION>
Item #     Qty.                  Effective Date: October 9, 2003
------     ----                  -------------------------------
<S>        <C>      <C>
                    Total Compressor Room:

                    RECEPTION AREA

 139        1-      Lot Consisting of Miscellaneous Items Found Throughout the
                    Building, to Include:
                    Desks; Chairs; File Cabinets; 2-Door Steel Cabinets;
                    Punching Machine; Steel Racks on Wheels; etc.

                    Total Reception Area:
</TABLE>

            TOTAL APPRAISED VALUES -
            M-WAVE, INC.
            475 INDUSTRIAL DRIVE
            WEST CHICAGO, ILLINOIS

DOVEBID

                                       27

<PAGE>

EQUIPMENT RETAINED BY M-WAVE

<TABLE>
<CAPTION>
Lot #      Qty Description
<S>        <C> <C>
SHIPPING AND RECEIVING:
  76       10  Pallet Racks
  77        1  Misc

UPSTAIRS INSPECTION AREA:
  78        1  TTI testing machine
  79        1  Utron testing machine
  80        1  TTI testing machine
  81        1  TTI testing machine
  84        1  ESM Coordinate measuring
  86       70  Steel storage carts
  87        1  Trace testing machine
  91        1  Heat shrink machine
  92        1  Heat shrink machine
 101        1  Heat shrink machine
 105        1  Misc office
 106        1  Computer room
 107        1  Lot work area
 108        3  Executive office desks
 109        1  Lot work area
 110        1  Lot work area
 112        1  Lot conference room

IMAGING:
 118        1  Orbotech Power Conditioner
 122        1  Orbotech LDI

DOCK:
 136        1  Clark fork lift
 137        1  Clark fork lift

RECEPTION AREA:
 138        1       Lot of furniture

                    Total retained by M-Wave

                    Total Dove Appraisal

                    Less M-Wave retained equipment
</TABLE>
<PAGE>

                                    RIDER TO
                        ASSET PURCHASE AND SALE AGREEMENT

         This Rider to Asset Purchase and Sale Agreement ("Rider") is dated
January _____, 2004 by and between Polycircuits, Inc., an Illinois corporation
("Seller") and M-Wave, Inc., a Delaware corporation ("M-Wave") and AM-WAVE, LLC,
an Illinois limited liability company ("Purchaser").

         This Rider is attached to and made a part of that certain Asset
Purchase and Sale Agreement (the "Contract") dated of even date herewith by and
between Seller, M-Wave and Purchaser. To the extent of any conflict between the
terms of the Contract and this Rider, the terms of this Rider shall control. All
terms herein that are capitalized but are not defined shall have the meaning in
respect thereof as set forth in the Contract.

         R-1      The second sentence of Paragraph 4(e) of the Contract is
                  deleted. Seller and M-Wave represent and warrant that there
                  are no delinquent amounts due to the Illinois Department of
                  Revenue and Illinois Department of Employment Security by the
                  owner of the Equipment which is the subject of the Contract,
                  and Seller and M-Wave will indemnify and hold Purchaser
                  harmless from any claims therefor.

         R-2      Paragraph 4(f) of the Contract is hereby deleted. The
                  Equipment is being sold without representation or warranty,
                  except as otherwise expressly set forth in the Contract (as
                  amended hereby) or this Rider, and Seller shall have no
                  obligation to make any repairs in respect thereof. Without
                  limiting the foregoing, neither Seller nor M-Wave makes any
                  representation or warranty to Purchaser, express or implied,
                  as to (a) the suitability of the Equipment for Purchaser's
                  intended use or any particular purpose, or the merchantability
                  thereof, (b) the profitability of the operations or the income
                  to be derived therefrom, (c) the state of repair or lack of
                  repair, or quality of the Equipment, (d) any other matter with
                  respect to the condition of the Equipment, and (e) any tax
                  consequences, favorable or otherwise, resulting from
                  Purchaser's acquisition or operation of the Equipment; and all
                  such representations and warranties are hereby expressly
                  disclaimed by Seller and M-Wave, and Purchaser hereby releases
                  Seller and M-Wave from any and all responsibility and
                  liability in respect thereof. Any representations, warranties
                  or statements made by any agent or representative of Seller or
                  M-Wave, including without limitation any broker, may not be
                  relied upon by Purchaser and do not constitute a part of the
                  Contract or this Rider.

         R-3      The provisions of Paragraphs 4(i), 5, 7, and 9(b) are hereby
                  deleted.

         R-4      If there shall be any breach of any of the representations and
                  warranties set forth herein and/or in the Contract, as amended
                  hereby, or the closing documents, Purchaser shall be required
                  to act, if at all, on said breach by giving notice thereof to
                  Seller and/or M-Wave within one (1) year after the date hereof
                  and by filing action against Seller and/or M-Wave in court in
                  respect thereof within one (1) year after the date hereof.
                  Further, there shall be no liability of Seller and/or

<PAGE>

                  M-Wave in respect of any breach of representation and
                  warranty set forth herein and/or in the Contract, as amended
                  hereby, and/or the closing documents in respect of claims
                  which together with all other claims in respect thereof,
                  exceed an aggregate of $100,000, and there shall be no
                  liability of Seller and/or M-Wave in respect of any breach of
                  representation and warranty set forth herein and/or in the
                  Contract, as amended hereby, and/or the closing documents in
                  respect of claims which together with all other claims in
                  respect thereof do not exceed in the aggregate $5,000.
                  Further, no representation or warranty of Seller and/or M-Wave
                  hereunder and/or in the Contract, as amended hereby, and/or
                  the closing documents shall be deemed to have been breached if
                  Purchaser closes the purchase and sale contemplated hereby
                  with knowledge by it or its agents of any such breach.

                                     Polycircuits, Inc., an Illinois corporation

                                     By:________________________________________
                                     Its:_______________________________________

                                     M-Wave, Inc., a Delaware corporation

                                     By:________________________________________
                                     Its:_______________________________________

                                     AM-WAVE, LLC, an Illinois limited liability
                                     company

                                     By:________________________________________
                                     Its:_______________________________________

                                        2

<PAGE>

                                 SECOND RIDER TO
                        ASSET PURCHASE AND SALE AGREEMENT

         This Second Rider to Asset Purchase and Sale Agreement ("Second Rider")
is dated January _____, 2004 by and between Polycircuits, Inc., an Illinois
corporation ("Seller") and M-Wave, Inc., a Delaware corporation ("M-Wave") and
AM-WAVE, LLC, an Illinois limited liability company ("Purchaser").

         This Second Rider is attached to and made a part of that certain Asset
Purchase and Sale Agreement (the "Contract") dated of even date herewith by and
between Seller, M-Wave and Purchaser. To the extent of any conflict between the
terms of the Contract and this Rider, the terms of this Rider shall control. All
terms herein that are capitalized but are not defined shall have the meaning in
respect thereof as set forth in the Contract.

         R-1      Paragraph 3 of the Contract is deleted and the following
                  language is substituted in lieu thereof:

                           "3 (a). In consideration for and upon the
                           contribution of the assets pursuant to this
                           Agreement, and the satisfaction of the other
                           conditions precedent set forth herein, Purchaser
                           shall, in addition to the consideration described in
                           subparagraph (b) below, issue to the Seller a
                           membership interest in the Purchaser having the
                           rights and subject to the limitation as set forth in
                           the Operating Agreement of AM-Wave, L.L.C., which is
                           attached hereto as Exhibit B (the "Operating
                           Agreement").

                           (b). Purchaser and Seller have agreed that the fair
                           market value of the assets is $1,577,000.00 and that
                           the fair market value of the membership interests is
                           $777,000.00. As additional consideration for the
                           contribution of the Equipment, Purchaser shall pay an
                           amount equal to $800,000.00 to the Seller upon the
                           contribution of the assets pursuant to this
                           Agreement."

                                    Poly Circuits, Inc., an Illinois corporation

                                    By:________________________________________
                                    Its:_______________________________________

                                    M-Wave, Inc., a Delaware corporation

                                    By:________________________________________
                                    Its:_______________________________________

<PAGE>

                                    AM-WAVE, LLC, an Illinois limited liability
                                    company

                                    By:________________________________________
                                    Its:_______________________________________

590205

                                        2<PAGE>

                                                                   EXHIBIT 10.18

                   AGREEMENT FOR STRATEGIC OPERATING ALLIANCE

         THIS AGREEMENT R A STRATEGIC OPERATING ALLIANCE (the "Agreement") is
made this 28th day of January 2004 by and between American Standard Circuits,
Inc., an Illinois corporation ("American Standard"), with a principal place of
business at 3615 Wolf Road, Franklin Park, Illinois, and M-Wave, Inc., a
Delaware corporation ("M-Wave"), with a principal place of business at 475
Industrial Drive, West Chicago, Illinois. American Standard and M-Wave may be
referred to herein individually as a "Party" and collectively as the "Parties."

                                    RECITALS

         M-Wave and American Standard are each value-added service providers
that develop, manufacture, and market high performance circuit boards
(collectively, the "Products").

         M-Wave has a manufacturing facility located at 475 Industrial Drive,
West Chicago, Illinois (the "Manufacturing Facility") at which M-Wave has
heretofore manufactured Products and which M-Wave is selling, together with
certain related manufacturing equipment, to affiliates of American Standard,
concurrently with the execution and delivery of this Agreement.

         American Standard and M-Wave desire to enter into a strategic alliance
pursuant to which American Standard shall manufacture Products in place of
M-Wave at the Manufacturing Facility and M-Wave shall assist American Standard
in the sales and marketing of Products, subject to the terms and conditions of
this Agreement.

         The Parties have been party to an Interim Agreement for a Strategic
Operating Alliance, dated as of September 2, 2003 amended on November 14, 2003
(the "Prior Agreement") that is null and void upon execution and delivery of
this Agreement, except for accounts receivable due either party thereunder which
are accrued and unpaid as of the date of execution hereof.

         In consideration of the mutual promises contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, hereby agrees as
follows:

                                    AGREEMENT

         1.       RECITALS. The foregoing recitals are a part of this Agreement
and are hereby adopted by this reference and incorporated herein.

         2.       No CONDITIONS PRECEDENT. This Agreement shall be effective
upon its execution and delivery by the Parties and supercedes all previous
writings relating to the subject matter hereof, including without limitation the
Prior Agreement.

                                        1

<PAGE>

         3.       MANUFACTURING. American Standard shall manufacture Products
for M-Wave customers at the Manufacturing Facility in accordance with the terms
of this Agreement. Nothing set forth in this Agreement shall preclude M-Wave,
within in its sole discretion, from fulfilling customer orders for Products
outside the Manufacturing Facility from one or more Asian third party vendors
(such Products are herein referred to as "VM Products").

         4.       SALES.

         (a)      Selling. During the Term, M-Wave may sell (1) VM Products to
American Standard's current customers, all of which are listed on Schedule
4(a)(i) attached hereto, and any customers subsequently obtained by American
Standard (collectively, "American Standard's Customers") and (ii) Products and
VM Products to its current customers, all of which are listed on Schedule
4(a)(ii) attached hereto, and any customers subsequently obtained by M-Wave
(collectively, "M-Wave's Customers"). American Standard will receive a six
percent (6%) commission on the sale of VM Products procured by M-Wave for resale
to American Standard's customers. It is the intent of the parties, albeit not
binding on either of them and subject to the making by them in writing of mutual
agreements, that within the Term (as defined hereinbelow) M-Wave will commence,
and thereafter during the Term continue, to sell, as a representative of
American Standard, all Products to the American Standard Customers, and not
merely VM Products.

         (b)      Administration. During the Term, M-Wave will administer,
invoice, collect and service all VM Products it has sold to the American
Standard Customers and all Products and VM Products it has sold to the M-Wave
Customers.

         5.       PURCHASE ORDERS. M-Wave will obtain written purchase orders,
which shall specify all Work to be completed, for review by American Standard.
For the purposes of this Agreement, "Work" shall mean to procure labor,
components, raw materials, equipment and other supplies, and to manufacture,
bond, test, label and deliver the Products to M-Wave. Each purchase order shall
specify the quantity of all Products ordered, the part number, the requested
delivery date and delivery address, price, and reference the applicable written
Specifications. As used herein, "Specifications" shall include, without
limitation, manufacturing plans, test data, quality control data, compositions,
bills of material, samples, schematics, process documentation, labels and test
specifications. Purchase orders shall normally be deemed approved by American
Standard upon receipt, provided, however that American Standard may in good
faith reject any order that (a) American Standard does not have the
technological capacity to manufacture or that does not substantially conform to
the terms and conditions of this Agreement, (b) following a credit check by
American Standard, comes from a customer who does not meet American Standard's
reasonable credit requirements, or (c) does not provide a price that is
reasonably acceptable to American Standard. American Standard shall notify
M-Wave of its disapproval of any purchase order within three (3) business days
of receipt of such order. M-Wave and American Standard will use reasonable
efforts to satisfy any order changes made by a customer and will respond to the
customer regarding meeting the requested change within seven (7) business days
of receipt of a written order requesting such change. The Parties agree that the

                                        2

<PAGE>

terms and conditions contained in this Agreement shall prevail over any terms
and conditions of any purchase order, acknowledgment form or other instrument.

         6.       PRICE AND PAYMENT TERMS.

         (a)      Unit Price. For each Product manufactured for M-Wave
Customers, M-Wave shall pay to American Standard the "Unit Price," which shall
be the standard cost of such Product as set forth in the pricing matrix
spreadsheet used by M-Wave based upon "version 14 of the Calculator" heretofore
agreed upon by the Parties, as may be changed hereafter from time to time by
mutual agreement of the Parties. The standard cost on such pricing matrix
spreadsheet generally equals the difference between (i) the price of such
Product to the customer and (ii) an agreed-upon discount ("Discount"). M-Wave
shall retain the excess of the amount paid by its customer for the Product over
the Unit Price paid by M-Wave to American Standard and disclose this amount to
American Standard.

         (b)      Terms and Lien. Except as otherwise set forth in Section 6(c)
below, payment for each Product by M-Wave to American Standard hereunder is due
within the first to occur of (i) twenty (20) days following the earlier of
shipment to M-Wave or M-Wave's invoicing of the respective receivable or (ii)
five (5) business days following M-Wave's receipt of payment of the applicable
receivable. M-Wave will make best efforts to ship its finished Products within
one (1) business day of manufacture. To secure payment of certain of its
obligations under this Paragraph 6(b), M-Wave hereby grants American Standard a
security interest in its accounts receivable with respect to the payment of such
obligations to American Standard..

         (c)      Revised Terms. M-Wave and American Standard agree that, upon
M-Wave obtaining a credit facility to finance its accounts receivable and
inventory separate from its other assets, American Standard shall immediately
provide M-Wave with thirty (30) day payment terms and a maximum credit limit of
$300,000 and, upon receipt of payment from M-Wave of all amounts due under this
Paragraph 6 in excess of $300,000, shall release the security interest in
M-Wave's accounts receivables granted to American Standard pursuant to Paragraph
6(b) above.

         (d)      Other. The Unit Price is exclusive of federal, state and local
excise, sales, use and similar taxes, and any duties; and M-Wave shall be
responsible for the collection of all such amounts from customers and the
remission of such amounts to the appropriate authorities. The Unit Price is also
exclusive of freight, insurance and other shipping expenses.

         7.       MANUFACTURING EXPENSES. During the Term, the Parties shall
mutually agree in writing as to the allocation between them of the expenses
incurred in connection with the manufacturing activities at the Manufacturing
Facility, including employee costs, insurance, permits and licenses, leasing,
maintenance and repair of equipment, utilities and replacement of equipment.

         8.       PACKAGING AND LABELING. M-Wave, at its own expense, will
package and include Labels on or with all M-Wave Products and packaging to be
supplied in accordance with the applicable Specifications. As used herein,
"Label(s)" shall mean all (a) labels and other written,

                                        3

<PAGE>

printed or graphic matter placed upon the Products, (b) containers and/or
wrappers utilized with the Products including, without limitation, Product
inserts which bear the trademarks or trade dress of M-Wave, and (c) other matter
designated in the Specifications or on approved prototypes/samples.

         9.       SHIPMENTS. M-Wave, at its own expense, shall ship all Products
to the customer in accordance with the applicable Specifications.

         10.      ACCEPTANCE AND REJECTION. If a customer (a) rejects in whole
or in part any shipment of Products because such Products were determined not to
be in accordance with the applicable Specifications (the "Nonconforming
Products") or (b) informs M-Wave of any shortage in quantity of any shipment of
Products, M-Wave shall promptly provide American Standard written notice of such
rejection or shortage and American Standard shall use reasonable efforts to
replace the Nonconforming Products or make up the shortage, at no additional
cost to the customer and as quickly as possible, but in any event within ten
(10) business days of receiving notice of such rejection or shortage. Shipments
of Nonconforming Products may, at M-Wave's option and American Standard's
expense, be returned to M-Wave or destroyed by the customer. The remedy of
replacement or refund will not be available for Nonconforming Products if such
nonconformance was caused by the customer's misuse, unauthorized modifications,
neglect, improper testing or improper storage of such Nonconforming Products.

         11.      CUSTOMER COMPLAINTS. If M-Wave receives a consumer complaint
relating to a defect in any Product or the packaging or Label of any Product,
M-Wave may, in a prompt and reasonable manner, seek the resolution of such
complaint by American Standard in accordance with the terms of this Agreement.

         12.      HAZARDOUS OR UNSAFE CONDITION OF PRODUCTS. In the event
American Standard or M-Wave learns of any condition relating to a potential
safety hazard or unsafe condition in any of the Products, or is advised of such
by any state or federal regulatory authorities having jurisdiction over such
Products, such Party shall immediately advise the other Party and provide all
relevant information, and the Parties shall exert all reasonable efforts to
promptly resolve the situation.

         13.      TERM AND TERMINATION.

         (a)      Term This Agreement shall commence on the date hereof and
shall continue in effect for two (2) years thereafter (the "Term").

         (b)      Early Termination.

                  (i)      Notwithstanding the above, the non-breaching Party
         shall have the right to terminate this Agreement immediately, if the
         other Party materially breaches this Agreement at any time and such
         breach is not cured (x) within seven (7) days of written notice of a
         breach caused by the failure of the other Party to make any payment
         required

                                        4

<PAGE>

         under this Agreement or (y) within thirty (30) days of written notice
         thereof for any other material breach of this Agreement. In either case
         such notice shall specify in detail the nature of the breach.

                  (ii)     Either Party may terminate this Agreement, effective
         immediately upon the giving of written notice, if the other Party shall
         file a petition for bankruptcy, or shall be adjudicated a bankrupt or
         insolvent, or shall take advantage of the insolvency laws of any state
         of the United States, or shall make an assignment for the benefit of
         creditors, or shall have a receiver appointed, whether by private
         instrument or by court officer, for its property, or become subject to
         an involuntary petition for bankruptcy, or have a major portion of its
         assets become subject to attachment that is not rescinded within
         forty-five (45) days.

                  (iii)    This Agreement may be terminated by either Party upon
         sixty (60) days written notice to the other if any conditions
         constituting a Force Majeure as described in Section 25(b) herein exist
         for a period in excess of forty-five (45) days in any one-year period.

(c)      Effect of Termination. Termination or expiration of this Agreement
shall not (i) affect any other rights of either Party which may have accrued up
to the date of such termination or expiration, or (ii) relieve either Party of
its obligation to pay to the other Party sums due in respect of Products
delivered and accepted prior to termination or expiration of this Agreement. The
provisions of Sections 14 (Intellectual Property), 17 (Product Warranty), 18
(Records and Audit), 19 (Confidentiality), 20 (Non-Solicitation of Customers and
Employees), 22 (Indemnification), and 25 (Miscellaneous) of this Agreement shall
survive termination or expiration of this Agreement.

         14.      INTELLECTUAL PROPERTY. Unless specifically and expressly
granted herein and notwithstanding a Party's use thereof, no licenses or rights
under either Party's intellectual property rights including, without limitation,
copyrights, trademarks, trade names, trade secrets, patents or any other
proprietary rights issued, honored and/or enforceable under any applicable laws,
are implied or granted in this Agreement. Each Party shall retain full ownership
of all its intellectual property.

         15.      REGULATORY MATTERS.

         (a)      Each Party represents and warrants that it currently has all
material licenses and permits necessary for the operation of its business as
currently conducted.

         (b)      American Standard will be responsible for any reporting of
matters regarding the manufacture of Products, as applicable, to relevant
regulatory authorities, in accordance with pertinent laws and regulations and
shall notify M-Wave of any occurrence or information that arises out of its
manufacturing activities that has adverse regulatory compliance and/or reporting
consequences concerning a Product.

                                        5

<PAGE>

         (c)      American Standard shall be responsible for handling and
responding to any governmental agency inspections with respect to manufacturing
of Products during the Term and shall provide to M-Wave copies of any
information requested by any governmental agency in connection with any
governmental inspection related to the Products.

         (d)      Each Party shall comply with all applicable laws, rules and
regulations in fulfilling their obligations under this Agreement.

         16.      MANUFACTURING CERTIFICATIONS. American Standard and M-Wave
each represents and warrants that it currently has UL and ISO certifications
appropriate to the manufacture and sale of Products respectively.

         17.      PRODUCT WARRANTY. M-Wave warrants to its customers that all
Products shall substantially conform to the applicable Specifications and will
be free from defects in workmanship. Third-party materials used to manufacture
the Products are warranted by M-Wave to the same extent that the original
manufacturer warrants the materials. These warranties do not apply to (a)
Products that have been abused, damaged, altered or misused by any person or
entity after title passes from or (b) any work done to a Product or material
added to a Product after shipment of the Product to the customer. American
Standard will bear all costs of repairing any defective Product within the above
warranties in a manner consistent with its obligations under Paragraph 10.

         18.      RECORDS AND AUDIT

         (a)      During the Term and for five (5) years thereafter, each Party
shall keep complete and accurate accounts, notes, data and records of the Work
performed under this Agreement (collectively the "Records"). American Standard
shall maintain complete and adequate records pertaining to the methods and
facilities used by it for the manufacture, processing, testing, packing,
labeling, pricing and distribution of the Products in accordance with the
applicable regulations in the United States and other countries, if applicable.

         (b)      During the Term and for five (5) years thereafter, each Party
shall be permitted, at the expense of the requesting Party, to audit and make
copies of the Records of the other Party to verify the proper allocation and
payment of revenue and expenses under this Agreement. Any Confidential
Information (as defined below) provided pursuant to this Section shall be
subject to the provisions of Section 19 below, provided that a Party may
disclose such Confidential Information to its advisors and attorneys, as
necessary to complete the audit described in this Section. Each such audit will
be conducted only during normal business hours of the audited Party.

         19.      CONFIDENTIALITY.

         (a)      Each Party acknowledges that any and all Confidential
Information disclosed or submitted by one Party (the "Disclosing Party") to the
other (the "Receiving Party") hereunder (i)

                                        6

<PAGE>

shall be received and maintained by the Receiving Party with at least the same
degree of care to avoid disclosure of such Confidential Information as it uses
with respect to its own Confidential Information, and (ii) shall not be used for
any purposes other than those expressly permitted under this Agreement and shall
not be disclosed to any third party without the prior written consent of the
Disclosing Party.

         (b)      For the purposes of this Agreement, "Confidential Information"
shall mean any information or material that is special, unique, proprietary, or
gives such Party or its affiliates a competitive advantage and/or enhances such
Party's or its affiliates' good will, whether such information or material is
designated "confidential" or not, and whether such information or material is
written or oral, or obtained by viewing such Party's premises, data or files,
including, but not limited to, formulae or revisions thereto, processes and
methods, business plans, financial data, customers, product development plans,
marketing plans or strategies, distributor or representative lists,
manufacturing methodologies, and research data, except to the extent that it can
be established by the Receiving Party by competent proof that such Confidential
Information: (i) was already known to the Receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the Disclosing
Party; (ii) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the Receiving Party; (iii) became
generally available to the public or otherwise part of the public domain after
its disclosure and other than through any act or omission of the Receiving Party
in breach of this Agreement; or (iv) was disclosed to the Receiving Party, other
than under an obligation of confidentiality, by a third party who had no
obligation to the Disclosing Party not to disclose such information to others.

         (c)      Each Party may disclose the other's Confidential Information
to the extent such disclosure is reasonably necessary in complying with
applicable governmental regulations or, with respect to M-Wave, by rules of the
NASDAQ Stock Market, provided that if a Party is required to make any such
disclosure of the other Party's Confidential Information it will give reasonable
advance notice to the other Party of such disclosure requirement, and will use
its best efforts to secure confidential treatment of such Confidential
Information required to be disclosed.

         (d)      All Confidential Information disclosed by a Disclosing Party
to a Receiving Party shall be and shall remain the property of the Disclosing
Party, regardless of such disclosure and regardless of the use of such
Confidential Information by the Receiving Party.

         (e)      It is further understood and agreed that money damages would
not be sufficient remedy for any breach of this Section 19 and that the
Disclosing Party shall be entitled to injunctive relief, including specific
performance, as a remedy for any such breach by the Receiving Party. Such remedy
shall not be deemed to be the exclusive remedy for breach of this Section 23 but
shall be in addition to all other remedies available at law or equity.

         20.      NON-SOLICITATION OF CUSTOMERS AND EMPLOYEES.

         (a)      Customers. Each Party agrees that, during the Term, such Party
shall not directly or indirectly induce or attempt to induce any customer of the
other Party to cease doing business

                                        7

<PAGE>

with the other Party, or in any way interfere with the relationship between any
such customer and the other Party, except as necessary to fulfill a Party's
specific rights, obligations and duties hereunder.

         (b)      Employees. During the Term and for six (6) months thereafter;
provided the other Party has not ceased business operations, each Party shall
not directly or indirectly through another entity (i) induce or attempt to
induce any employee of the other Party to leave the employ of the other Party,
or in any way interfere with the relationship between the other Party AND any
employee thereof, or (ii) hire any person who was an employee of the other Party
at any time during the Contract Term (unless such employee was terminated by the
other Party).

         (c)      Blue Pencil Doctrine. If, at the time of enforcement of this
Section 20, a court shall hold that the duration, scope or area restrictions
stated herein are. unreasonable under circumstances then existing, the parties
agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and
that the court shall be allowed to revise the restrictions contained herein to
cover the maximum period, scope and area permitted by law. Each Party agrees
that the restrictions contained in this Section 20 are reasonable.

         (d)      Breach. In the event of the breach or a threatened breach by a
Party of any of the provisions of this Section 20, the other Party, in addition
and supplementary to other rights and remedies existing in its favor, may apply
to any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violations
of the provisions hereof (without posting a bond or other security).

         21.      PRESS RELEASES. Except as and to the extent required by law,
rule or regulation or, with respect to M-Wave, by rules of the NASDAQ Stock
Market, neither Party shall permit its representatives to make any public
communication or press release regarding the proposed transaction without the
prior written consent of the other Party. If M-Wave determines that a public
press release is appropriate, the Parties shall first agree on the text of such
release, such approval not to be unreasonably withheld. Notwithstanding the
foregoing, M-Wave may make any and all communications, releases and disclosures
that it reasonably determines to be required or desirable under any securities
laws, rules or regulations or rules and regulations of the NASDAQ Stock Market.
Either Party shall provide the other Party with a complete copy of any press
release it issued, within 24 hours of issuance.

         22.      INDEMNIFICATION.

         (a)      Indemnification by American Standard . American Standard
agrees to indemnify, defend and hold harmless M-Wave and its officers,
directors, shareholders, representatives, agents and employees (the "M-Wave
Indemnities"), from and against any and all losses, liabilities, damages, costs,
fees and expenses, including reasonable legal costs and attorneys' fees
("Losses") resulting from (i) American Standard's breach of any representation,
warranty, covenant or agreement contained in this Agreement; (ii) any
third-party claim, suit or action based upon, attributable to or caused by the
acts or omissions of American Standard; or (iii) the negligent or intentional
wrongful act or omission of American Standard.

                                        8

<PAGE>

         (b)      Indemnification by M-Wave. M-Wave agrees to indemnify, defend
and hold harmless American Standard and its officers, directors, shareholders,
representatives, agents and employees (the "American Standard Indemnities"),
from and against any and all Losses (as defined above) resulting from (i)
M-Wave's breach of any representation, warranty, covenant or agreement contained
in this Agreement; (ii) any third-party claim, suit or action based upon,
attributable to or caused by the acts or omissions of M-Wave; or (iii) the
negligent or intentional wrongful act or omission of M-Wave.

         (c)      Indemnity Procedure. In the event that a Party (the
"Indemnified Party") is seeking indemnification under this Section 22, it shall
provide prompt written notice to the other Party (the "Indemnifying Party") as
soon as reasonably practicable after it receives notice of the claim, provided
that the failure to so notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent such
failure shall have materially prejudiced the Indemnifying Party. The Indemnified
Party shall permit the Indemnifying Party to assume direction and control of the
defense of the claim (including the right to settle the claim solely for
monetary consideration), and, at the Indemnifying Party's expense, shall
cooperate as reasonably requested in the defense of the claim; provided that the
Indemnifying Party may not assume direction and control of the defense of the
claim if (i) the claim seeks non-monetary relief against the Indemnified Party,
(ii) the claim involves criminal allegations against the Indemnified Party, or
(iii) the Indemnified Party reasonably determines that the Indemnifying Party
has failed or is failing to vigorously defend against such claim. The
Indemnified Party shall have the right to retain its own counsel, and the fees
and expenses of the Indemnified Party's counsel will be paid by the Indemnifying
Party if representation of the Indemnified Party by the counsel retained by
Indemnifying Party would be inappropriate due to an actual or potential conflict
of interest. The Indemnifying Party may not settle such action or claim, or
otherwise consent to an adverse judgment in such action or claim, without the
express written consent of the Indemnified Party if such settlement or adverse
judgment diminishes the rights or interests of the Indemnified Party.

         23.      M-WAVE WARRANTS. On the date hereof, M-Wave shall issue a
non-transferable stock purchase warrant to Gordhan Patel (owner of all the
outstanding capital stock of American Standard) in the form attached hereto as
Exhibit A. American Standard represents and warrants that Mr. Patel (a) is an
"accredited investor," as defined in Regulation D promulgated under the
Securities Act of 1933, as amended, and is able to evaluate the merits and risks
of the warrant and the securities acquirable upon exercise thereof; (b) is
accepting and will hold such warrant, and the securities acquirable upon
exercise thereof, for his own account and without intention to distribute the
same; and (c) is aware that M-Wave makes filings with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended,
and that such filings are publicly available. The Warrant shall be for a term of
five (5) years, have an exercise price of $1.35 per share and vest in full at
the end of the first year of the Term or upon the earlier occurrence of an
"Extraordinary Transaction," as defined in Paragraph 24 below, with respect to
M-Wave or its capital stock.

                                        9

<PAGE>

         24       EQUITY INTEREST IN AMERICAN STANDARD.

         (a)      Grant to M-Wave. M-Wave shall have the right to receive 8% of
the Net Gain (as defined below), if any, received by American Standard or its
stockholders upon an Extraordinary Transaction, which shall be paid to M-Wave
upon the consummation of the Extraordinary Transaction. This right shall be
vested in full at the end of the first year of the Term. American Standard
represents it is not presently aware of any Extraordinary Transaction with
respect to it or its capital stock.

         (b)      "Extraordinary Transaction " shall mean any of the following
involving American Standard or any of its material subsidiaries for which
negotiations commenced during the Term and which was consummated no later than
nine (9) months after the termination of this Agreement: (i) any merger,
consolidation, share exchange, recapitalization, business combination or other
similar transaction, which in each case is effected in such a way that the
holders of shares of American Standard's equity interests are entitled to
receive stock, securities or assets with respect to or in exchange for such
equity interests; (ii) any sale, lease, exchange, transfer or other disposition
of 80% or more of the assets of American Standard and its subsidiaries, taken as
a whole, in a single transaction or series of similar transactions; (iii) any
tender offer or exchange offer for 80% or more of the outstanding shares of
capital stock of American Standard; (iv) any voluntary or involuntary
dissolution, liquidation or other winding up of American Standard or any of its
material subsidiaries; (v) any "person" or "group" (as such term is used in
Section 13(d)(3) and 14(d) of the Securities Exchange Act of 1934, as amended),
other than Gordhan Patel, becomes, directly or indirectly, the "beneficial
owner" (as defined in Rule 13(d)(3) and 13(d)(5) under the Exchange Act) of more
than 50% of the combined voting power of the then outstanding securities of
American Standard entitled to vote generally in the election of directors of
American Standard ("Voting Power"); or (vi) the sale by American Standard of
equity interests (or securities convertible into equity interests) that
represent greater than 50% of the outstanding Voting Power before such issuance.

         (c)      "Net Gain " means the difference between (A) the aggregate
purchase price paid in such Extraordinary Transaction plus the value of any
assumption of American Standard's liabilities by the purchaser, minus (B) (i)
any of American Standard's liabilities on the date of the Extraordinary
Transaction (other than the obligations of American Standard under this Section)
not assumed by the purchaser, (ii) the reasonable out-of-pocket expenses
incurred by American Standard or its stockholders in connection with the
Extraordinary Transaction and (iii) the book value of American Standard as
stated in its financial statements as of the last day of the month immediately
prior to the execution of binding agreements that define the Extraordinary
Transaction prepared in accordance with those financial statements it generally
provides its bank or other creditors.

         25       MISCELLANEOUS.

         (a)      Assignment and Succession. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors,
assigns and representatives. Neither

                                       10

<PAGE>

Party shall have the right to assign or otherwise transfer its rights or
obligations under this Agreement except with the prior written consent of the
other Party, not to be unreasonably withheld.

         (b)      Force Majeure. In the event that either Party is prevented
from performing or is unable to perform any of its obligations under this
Agreement due to any act of God, fire, casualty, flood, earthquake, war, strike,
lockout, epidemic, destruction of production facilities, riot, insurrection,
material unavailability, or any other cause beyond the reasonable control of the
Party invoking this Section 26(b), and if such Party shall have used its
commercially reasonable efforts to mitigate its effects, such Party shall give
prompt written notice to the other Party, its performance shall be excused, and
the time for the performance shall be extended for the period of delay or
inability to perform due to such occurrences.

         (c)      Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand, sent via overnight courier, sent by facsimile, or mailed by first class
certified or registered mail, return receipt requested, postage prepaid:

         If to American Standard:

         American Standard Circuits, Inc.
         3615 Wolf Road
         Franklin Park, IL 60131-1425
         Attention: Gordhan Patel
         Fax: (847) 455-1518

         With a copy to:
         Marvin W. Temple, Esq.
         555 N. Skokie Blvd.
         Northbrook, Illinois
         Fax: (847) 480-1414

         If to M- Wave:

         M-Wave, Inc.
         475 Industrial Drive West
         Chicago, IL 60185
         Attention: Joseph Turek
         Fax: (630) 562-2430

         With a copy to:
         Carl R. Klein, Esq.
         Freeborn and Peters
         311 S. Wacker Dr.
         Suite 3000
         Chicago, IL 60606
         Fax: (312) 360-6571

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<PAGE>

or to such other person or entity or at such other address as any Party shall
designate by notice to the other in accordance with this Section 25(c).

Notices provided in accordance with this Section 25(c) shall be deemed delivered
(i) upon personal delivery with signature required, (ii) one (1) business day
after they have been sent to the recipient by reputable overnight courier
service (charges prepaid and signature required), (iii) upon confirmation,
answer back received, of successful transmission of a facsimile message
containing such notice if sent between 9 a.m. and 5 p.m., local time of the
recipient, on any Business Day, and as of 9 a.m. local time of the recipient on
the next business day if sent at any other time, or (iv) three (3) business days
after deposit in the mail.

         (d)      Waiver. Except as specifically provided for herein, the waiver
from time to time by either of the Parties of any of their rights or their
failure to exercise any remedy shall not operate or be construed as a continuing
waiver of same or of any other of such Party's rights or remedies provided in
this Agreement.

         (e)      Severability. If any term, covenant or condition of this
Agreement or the application thereof to any Party or circumstance shall, to any
extent, be held to be invalid or unenforceable, then the remainder of this
Agreement, or the application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law.

         (t)      Entire Agreement. This Agreement sets forth all the covenants,
promises, agreements, warranties, representations, conditions and understandings
between the Parties hereto with regard to the subject matter discussed herein
and supersedes and terminates all prior agreements and understanding between the
Parties with regard to the subject matter discussed herein. There are no
covenants, promises, agreements, warranties, representations conditions or
understandings, either oral or written, between the Parties with regard to the
subject matter discussed herein other than as set forth in this Agreement.
Notwithstanding the foregoing sentence, nothing in this Agreement shall limit
the rights and obligations of the respective parties to the lease of a portion
of the Manufacturing Facility by M-Wave from an affiliate of American Standard
or the operating agreement for the limited liability company formed by an
affiliate of M-Wave and American Standard, both concurrently with the execution
of this Agreement.

         (g)      Independent Contractor. Neither Party shall, for any purpose,
be deemed to be an agent or partner of the other Party and the relationship
between the Parties shall only be that of independent contractors. Neither Party
shall have any right or authority to assume or create any obligations or to make
any representations or warranties on behalf of the other Party, whether express
or implied, or to bind the other Party in any respect whatsoever.

         (h)      Governing Law and Venue. This Agreement shall be governed by
and construed under the laws of the State of Illinois, excluding its choice of
law principles. For any claim or

                                       12

<PAGE>

proceeding arising under or out of this Agreement ("Proceeding"), each Party
agrees to submit to the exclusive jurisdiction of the state and federal courts
located in the State of Illinois and hereby waives any objection it may now or
hereafter have to venue or to convenience of forum, agrees that all claims in
respect of the Proceeding shall be heard and determined only in any such court
and agrees not to bring any Proceeding arising out of or relating to this
Agreement or any contemplated transaction in any other court. The Parties agree
that either or both of them may file a copy of this paragraph with any court as
written evidence of the knowing, voluntary and bargained agreement between the
Parties irrevocably to waive any objections to venue or to convenience of forum.

         (i)      Injunctive Relief. Notwithstanding the foregoing, the Parties
acknowledge and agree that money damages may not be an adequate remedy for any
breach or threatened breach of this Agreement, and that, in such event, any
Party may, in addition to any other rights and remedies existing in its favor,
bring an action in any court of competent jurisdiction situated in Cook, County,
Illinois for specific performance or injunctive relief or for other provisional
relief to compel another Party hereto to comply with its obligations under this
Agreement whether or not any arbitration proceedings have been initiated.

         (j)      Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, but all of which
together will constitute one and the same agreement.

         IN WITNESS WHEREOF, the Parties hereto have caused their duly
authorized representatives to execute this Agreement on this 28th day of
January, 2004 under seal to be effective as of the day and year indicated above:

                                        AMERICAN STANDARD CIRCUITS, INC.

M-WAVE, INC.                            By: /s/ ***
                                            -------------------
By: /s/ ***                             Title:
    -------------------

Title: ***
                                              ------------------

                                       13

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