Document:

Unassociated Document

    
      

    

    Exhibit
10.1

    

    M-WAVE,
INC.

    

    SEPARATION AGREEMENT AND
RELEASE

    

    This
Separation Agreement and Release (“Agreement”) is made by and between Jeff
Figlewicz (“Employee”) and M-Wave, Inc. (the “Company”) (collectively referred
to as the “Parties” or individually referred to as a “Party”).

    

    RECITALS

    

    WHEREAS,
Employee is currently employed as the Chief Financial Officer and Corporate
Secretary of the Company;

    

    WHEREAS,
Employee and the Company are party to a letter agreement dated July 12, 2006,
regarding Employee’s severance (the “2006 Severance Agreement”);
and

    

    WHEREAS,
the specific reverse merger activities that prompted the 2006 Severance
Agreement between the Employee and the Company have been
terminated;

    

    WHEREAS,
Employee signed an “Employee Confidentiality And Property Agreement” with  the
Company (the “Confidentiality Agreement”);

    

    WHEREAS,
the Company and Employee have entered into Nonqualified Stock Option Agreements,
dated July 23, 2004 and February 3, 2006, granting Employee the option to
purchase shares of the Company’s common stock subject to the terms and
conditions of the Company’s 2003 Stock Option Plan and the Stock Option
Agreement (collectively the “Stock Agreements”);

    

    WHEREAS,
the Company terminated Employee’s employment with the Company effective the
signing date of this agreement by both Parties (the “Termination Date”);
and

    

    WHEREAS,
the Parties wish to resolve any and all disputes, claims, complaints,
grievances, charges, actions, petitions, and demands that the Employee may have
against the Company and any of the Releases as defined below, including, but not
limited to, any and all claims arising out of or in any way related to
Employee’s employment with or separation from the Company;

    

    NOW,
THEREFORE, in consideration of the mutual promises made herein, the Company and
Employee hereby agree as follows:

    

    COVENANTS

    

    1.           
  Consideration.  In
consideration of Employee’s execution of this Agreement and Employee’s
fulfillment of all of its terms and conditions, and provided that Employee does
not revoke the Agreement under paragraph 6 below, the Company agrees as
follows:

    

    a.           Consulting
Agreement.  The Company agrees to enter into the Consulting
Agreement with Employee as set forth under and subject to the terms of paragraph
16 below.

    

    b.           Separation
Payment.  The Company further agrees to pay Employee a total
lump sum of Twenty Thousand Dollars and No/Cents ($20,000.00), less applicable
withholding.  This payment will be made to Employee within ten (10)
business days after the Effective Date of this Agreement.

     

    
      
        	
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    c.           General.  Employee
acknowledges that without this Agreement, he is otherwise not entitled to the
consideration listed in this paragraph 1.

    

    2.         
   Stock.  The
Parties agree that for purposes of determining the number of shares of the
Company’s common stock that Employee is entitled to purchase from the Company,
pursuant to the exercise of outstanding options, Employee will be considered to
have vested only up to the Termination Date.  Employee acknowledges
that as of the Termination Date, Employee will have vested in 25,000 options and
no more.  The exercise of Employee’s vested options and shares shall
continue to be governed by the terms and conditions of the Company’s Stock
Agreements.

    

    3.         
    Benefits.  Employee’s
health insurance benefits shall cease on the Termination Date, subject to
Employee’s right to continue his health insurance under COBRA
determined.  Employee’s participation in all benefits and incidents of
employment, including, but not limited to, vesting in stock options, and the
accrual of bonuses, vacation, and paid time off, ceased as of the Termination
Date.

    

    4.            
 Payment of
Salary and Receipt of All Benefits.  Employee acknowledges and
represents that, other than the consideration set forth in this Agreement, the
Company has paid or provided all salary, wages, bonuses, accrued vacation/paid
time off, leave, housing allowances, relocation costs, interest, severance,
outplacement costs, fees, reimbursable expenses, commissions, stock, stock
options, vesting, and any and all other benefits and compensation due to
Employee.

    

    5.         
    Release of
Claims.  Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company and its current and former officers, directors, employees, agents,
investors, attorneys, shareholders, founders, administrators, affiliates,
benefit plans, plan administrators, parents, divisions, and subsidiaries, and
predecessor and successor corporations and assigns (collectively, the
“Releasees”).  Employee, on his own behalf and on behalf of his
respective heirs, family members, executors, agents, and assigns, hereby and
forever releases the Releasees from, and agrees not to sue concerning, or in any
manner to institute, prosecute, or pursue, any claim, complaint, charge, duty,
obligation, or cause of action relating to any matters of any kind, whether
presently known or unknown, suspected or unsuspected, that Employee may possess
against any of the Releasees arising from any omissions, acts, facts, or damages
that have occurred up until and including the Effective Date of this Agreement,
including, without limitation:

    

    a.           any
and all claims relating to or arising from Employee’s employment relationship
with the Company and the termination of that relationship;

    

    b.           any
and all claims relating to all prior or contemporaneous agreements whether
written or oral, including the 2006 Severance Agreement;

    

    c.           any
and all claims relating to, or arising from, Employee’s right to purchase, or
actual purchase of shares of stock of the Company, including, without
limitation, any claims for fraud, misrepresentation, breach of fiduciary duty,
breach of duty under applicable state corporate law, and securities fraud under
any state or federal law;

     

    
      	
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    d.           any
and all claims for wrongful discharge of employment; termination in violation of
public policy; discrimination; harassment; retaliation; breach of contract, both
express and implied; breach of covenant of good faith and fair dealing, both
express and implied; promissory estoppel; negligent or intentional infliction of
emotional distress; fraud; negligent or intentional misrepresentation; negligent
or intentional interference with contract or prospective economic advantage;
unfair business practices; defamation; libel; slander; negligence; personal
injury; assault; battery; invasion of privacy; false imprisonment; conversion;
and disability benefits;

    

    e.           any
and all claims for violation of any federal, state, or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964;
the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with
Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act,
except as prohibited by law; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection
Act; the Employee
Retirement Income Security Act of 1974; the Worker Adjustment and Retraining
Notification Act; the Family and Medical Leave Act, except as prohibited by law;
the Sarbanes-Oxley Act of 2002; the Uniformed Services Employment and
Reemployment Rights Act; Texas Workers’ Compensation Act; Chapter 21 of the
Texas Labor Code (also known as the Texas Commission on Human Rights Act); the
Illinois Workers’ Compensation Act; and the Illinois Human Rights
Act;

    

    f.       
    any and all claims for violation of the federal or any
state constitution;

    

    g.           any
and all claims arising out of any other laws and regulations relating to
employment or employment discrimination;

    

    h.           any
claim for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by
Employee as a result of this Agreement; and

    

    i.         
  any and all claims for attorneys’ fees and costs.

    

    Employee
agrees that the release set forth in this section shall be and remain in effect
in all respects as a complete general release as to the matters
released.  This release does not extend to any obligations incurred
under this Agreement.  This release does not release claims that
cannot be released as a matter of law, including, but not limited to Employee’s
right to file a charge with or participate in a charge by the Equal Employment
Opportunity Commission, or any other local, state, or federal administrative
body or government agency that is authorized to enforce or administer laws
related to employment, against the Company (with the understanding that any such
filing or participation does not give Employee the right to recover any monetary
damages against the Company; Employee’s release of claims herein bars Employee
from recovering such monetary relief from the Company).

    

    6.         
    Acknowledgment of Waiver of
Claims under ADEA. Employee acknowledges that he is waiving and releasing
any rights he may have under the Age Discrimination in Employment Act of 1967
(“ADEA”), and that this waiver and release is knowing and
voluntary.  Employee agrees that this waiver and release does not
apply to any rights or claims that may arise under the ADEA after the Effective
Date of this Agreement.  Employee acknowledges that the consideration
given for this waiver and release is in addition to anything of value to which
Employee was already entitled.  Employee further acknowledges that he
has been advised by this writing that: (a) he should consult with an attorney
prior to
executing this Agreement; (b) he has twenty-one (21) days within which to
consider this Agreement; (c) he has seven (7) days following his execution of
this Agreement to revoke this Agreement; (d) this Agreement shall not be
effective until after the revocation period has expired; and (e) nothing in this
Agreement prevents or precludes Employee from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA, nor
does it impose any condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law.  In the event Employee signs
this Agreement and returns it to the Company in less than the 21-day period
identified above, Employee hereby acknowledges that he has freely and
voluntarily chosen to waive the time period allotted for considering this
Agreement.  Employee acknowledges and understands that revocation must
be accomplished by a written notification to Joe Turek, Chairman, M-Wave, Inc.,
1300 Norwood Avenue Itasca, Illinois 60143, that is received prior to the
Effective Date.

     

    
      	
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    7.       
      Unknown
Claims.  Employee acknowledges that he has been advised to
consult with legal counsel and that he is familiar with the principle that a
general release does not extend to claims that the releaser does not know or
suspect to exist in his favor at the time of executing the release, which, if
known by him, must have materially affected his settlement with the
releasee.  Employee, being aware of said principle, agrees to
expressly waive any rights he may have to that effect, as well as under any
other statute or common law principles of similar effect.

    

    8.           
  No Pending
or Future Lawsuits.  Employee represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any of the other
Releasees.  Employee also represents that he does not intend to bring
any claims on his own behalf or on behalf of any other person or entity against
the Company or any of the other Releasees.

    

    9.   
         Application for
Employment.  Employee understands and agrees that, as a
condition of this Agreement, Employee shall not be entitled to any employment
with the Company, and Employee hereby waives any right, or alleged right, of
employment or re-employment with the Company.  Employee further agrees
not to apply for employment with the Company.

    

    10.       
    Confidentiality.  Employee
agrees to maintain in complete confidence the existence of this Agreement, the
contents and terms of this Agreement, and the consideration for this Agreement
(hereinafter collectively referred to as “Separation
Information”).  Except as required by law, Employee may disclose
Separation Information only to his immediate family members, the Court in any
proceedings to enforce the terms of this Agreement, Employee’s undersigned
counsel, and Employee’s accountant and any professional tax advisor to the
extent that they need to know the Separation Information in order to provide
advice on tax treatment or to prepare tax returns, and must prevent disclosure
of any Separation Information to all other third parties.  Employee
agrees that he will not publicize, directly or indirectly, any Separation
Information.

    

    Employee
acknowledges and agrees that the confidentiality of the Separation Information
is of the essence.  The Parties agree that if the Company proves that
Employee breached this Confidentiality provision, the Company shall be entitled
to an award of its costs spent enforcing this provision, including all
reasonable attorneys’ fees associated with the enforcement action, without
regard to whether the Company can establish actual damages from Employee’s
breach, except to the extent that such breach constitutes a legal action by
Employee that directly pertains to the ADEA. Any such
individual breach or disclosure shall not excuse Employee from his obligations
hereunder, nor permit him to make additional disclosures.  Employee
warrants that he has not disclosed, orally or in writing, directly or
indirectly, any of the Separation Information to any unauthorized
party.

     

    
      	
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    11.       
    Trade Secrets and
Confidential Information/Company Property.  Employee reaffirms
and agrees to observe and abide by the terms of the Confidentiality Agreement,
specifically including the provisions therein regarding nondisclosure of the
Company’s trade secrets and confidential and proprietary
information.  Employee’s signature below constitutes his certification
under penalty of perjury that he has returned all documents and other items
provided to Employee by the Company, developed or obtained by Employee in
connection with his employment with the Company, or otherwise belonging to the
Company.

    

    12.       
    No
Cooperation.  Employee agrees not to act in any manner that
might damage the business of the Company.  Employee further agrees
that he will not knowingly encourage, counsel, or assist any attorneys or their
clients in the presentation or prosecution of any disputes, differences,
grievances, claims, charges, or complaints by any third party against any of the
Releasees, unless under a subpoena or other court order to do so or as related
directly to the ADEA waiver in this Agreement.  Employee agrees both
to immediately notify the Company upon receipt of any such subpoena or court
order, and to furnish, within three (3) business days of its receipt, a copy of
such subpoena or other court order.  If approached by anyone for
counsel or assistance in the presentation or prosecution of any disputes,
differences, grievances, claims, charges, or complaints against any of the
Releasees, Employee shall state no more than that he cannot provide counsel or
assistance.

    

    13.      
     Non-Disparagement.  Employee
agrees to refrain from any disparagement, defamation, libel, or slander of any
of the Releasees, and agrees to refrain from any tortious interference with the
contracts and relationships of any of the Releasees.  Employee shall
direct any inquiries by potential future employers to the Company’s human
resources department.

    

    14.       
    Breach.  Employee
acknowledges and agrees that any material breach of this Agreement, unless such
breach constitutes a legal action by Employee challenging or seeking a
determination in good faith of the validity of the waiver herein under the ADEA,
or of any provision of the Confidentiality Agreement shall entitle the Company
immediately to recover and/or cease providing the consideration provided to
Employee under this Agreement, except as provided by law.  Except as
provided by law, Employee shall also be responsible to the Company for all
costs, attorneys’ fees, and any and all damages incurred by the Company in:
(a) enforcing Employee’s obligations under this Agreement or the
Confidentiality Agreement, including the bringing of any action to recover the
consideration, and (b) defending against a claim or suit brought or pursued
by Employee in violation of the terms of this Agreement.

    

    15.           
No Admission of
Liability.  Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all actual or
potential disputed claims by Employee.  No action taken by the Company
hereto, either previously or in connection with this Agreement, shall be deemed
or construed to be: (a) an admission of the truth or falsity of any actual
or potential claims or (b) an acknowledgment or admission by the Company of
any fault or liability whatsoever to Employee or to any third
party.

    

    16.           
Consulting
Agreement.  As referenced under paragraph 1 above, in
consideration of this Agreement, the Company agrees to allow Employee to serve
as a Company consultant, contingent upon his non-revocation of this Agreement
and pursuant to the terms and conditions of the Consulting Agreement attached
hereto as Exhibit A (the “Consulting Agreement”).  The scope of the
consulting relationship and any related compensation shall be set forth under
the Consulting Agreement.  Employee understands that the payment of
such compensation is contingent upon Employee’s execution of and compliance with
the Consulting Agreement as well as Employee’s compliance with the terms and
conditions of this Agreement.  Employee further understands and
acknowledges that the Consulting Agreement attached hereto shall be deemed null
and void and the Company shall have no obligations thereunder (including any
obligations to provide compensation for consulting services) if this Agreement
is revoked under Section 6 above.  Employee agrees that he is not
entitled to begin performing any services as a consultant until the Consulting
Agreement becomes effective (i.e., upon the Effective Date of this
Agreement).

     

    
      
        	
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    17.      
     Non-Solicitation.  Employee
agrees that for a period of twelve (12) months immediately following the
Effective Date of this Agreement, Employee shall not directly or indirectly
solicit any of the Company’s employees to leave their employment at the
Company.

    

    18.           Cooperation with
Company/Transition Assistance.  Employee agrees to cooperate,
at the reasonable request of the Company, in the defense and/or prosecution of
any charges, claims, investigations (internal or external), administrative
proceedings and/or lawsuits relating to matters occurring during Employee’s
period of employment.  The Company agrees to pay Employee a reasonable
fee commensurate with the required services for the time expended in the defense
and prosecution of such matters.  Employee also agrees to assist in
the transition of his duties following his separation of employment, as
reasonably requested by the Company.  Employee acknowledges and agrees
that he is not entitled to any additional compensation or other benefits, other
than as set forth in this Agreement, in connection with his performance of the
transition duties.

    

    19.        
   Costs.  The
Parties shall each bear their own costs, attorneys’ fees, and other fees
incurred in connection with the preparation of this Agreement.

    

    20.           ARBITRATION.  THE
PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS
AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL
BE SUBJECT TO ARBITRATION IN DU PAGE COUNTY, ILLINOIS BEFORE JAMS, PURSUANT TO
ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”).  THE
ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH
DISPUTES.  THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION
IN ACCORDANCE WITH ILLINOIS LAW, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND
PROCEDURAL ILLINOIS LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY
CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION.  TO THE EXTENT THAT
THE JAMS RULES CONFLICT WITH ILLINOIS LAW, ILLINOIS LAW SHALL TAKE
PRECEDENCE.  THE DECISION OF THE ARBITRATOR SHALL BE FINAL,
CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION.  THE
PARTIES AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO
INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE
ARBITRATION AWARD.  THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN
EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND EACH PARTY SHALL
SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES; PROVIDED, HOWEVER,
THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING
PARTY, EXCEPT AS PROHIBITED BY LAW.  THE PARTIES HEREBY AGREE TO WAIVE
THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A
JUDGE OR JURY.  NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT
PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL
REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT
MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS
INCORPORATED HEREIN BY REFERENCE.  SHOULD ANY PART OF THE ARBITRATION
AGREEMENT CONTAINED IN THIS PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION
AGREEMENT BETWEEN THE PARTIES, THE PARTIES AGREE THAT THIS ARBITRATION AGREEMENT
SHALL GOVERN.

     

    
      	
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    21.        
   Tax
Consequences.  The Company makes no representations or
warranties with respect to the tax consequences of the payments and any other
consideration provided to Employee or made on his behalf under the terms of this
Agreement.  Employee agrees and understands that he is responsible for
payment, if any, of local, state, and/or federal taxes on the payments and any
other consideration provided hereunder by the Company and any penalties or
assessments thereon.  Employee further agrees to indemnify and hold
the Company harmless from any claims, demands, deficiencies, penalties,
interest, assessments, executions, judgments, or recoveries by any government
agency against the Company for any amounts claimed due on account of: (a)
Employee’s failure to pay or the Company’s failure to withhold, or Employee’s
delayed payment of, federal or state taxes, or (b) damages sustained by the
Company by reason of any such claims, including attorneys’ fees and
costs.

    

    22.      
     Section
409(A).  If the Company determines that any cash severance
benefits, health continuation coverage, or additional benefits provided under
this Agreement shall fail to satisfy the distribution requirement of Section
409A(a)(2)(A) or the Internal Revenue Code of 1986, as amended (the “Code”) as
result of Section 409A(a)(2)(B)(i) of the Code, the payment of such benefit
shall be accelerated to the minimum extent necessary so that the benefit is not
subject to the provisions of Section 409(a)(1) of the Code.  (It is
the intention of the preceding sentence to apply the short-term deferral
provisions of Section 409A of the Code, and the regulations and other guidance
thereunder, to such payments, and the payment schedule as revised after the
application of the preceding sentence shall be referred to as the “Revised
Payment Schedule.”)  However, if there is no Revised Payment Schedule
that would avoid the application of Section 409A(a)(1) of the Code, the payment
of such benefits shall not be paid pursuant to a Revised Payment Schedule and
instead shall be delayed to the minimum extent necessary so that such benefits
are not subject to the provisions of Section 409A(a)(1) of the
Code.  The Company may attach conditions to or adjust the amounts paid
pursuant to this paragraph to preserve, as closely as possible, the economic
consequences that would have applied in the absence of this paragraph; provided,
however, that no such condition or adjustment shall result in the payments being
subject to Section 409A(a)(1) of the Code.

    

    23.       
    Authority.  The
Company represents and warrants that the undersigned has the authority to act on
behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement.  Employee represents
and warrants that he has the capacity to act on his own behalf and on behalf of
all who might claim through him to bind them to the terms and conditions of this
Agreement.  Each Party warrants and represents that there are no liens
or claims of lien or assignments in law or equity or otherwise of or against any
of the claims or causes of action released herein.

     

    
      	
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    24.        
   No
Representations.  Employee represents that he has had an
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement.  Employee
has not relied upon any representations or statements made by the Company that
are not specifically set forth in this Agreement.

    

    25.       
    No
Waiver.  The failure of the Company to insist upon the
performance of any of the terms and conditions in this Agreement, or the failure
to prosecute any breach of any of the terms or conditions of this Agreement,
shall not be construed thereafter as a waiver of any such terms or
conditions.  This entire Agreement shall remain in full force and
effect as if no such forbearance or failure of performance had
occurred.

    

    26.       
    Severability.  In
the event that any provision or any portion of any provision hereof or any
surviving agreement made a part hereof becomes or is declared by a court of
competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this
Agreement shall continue in full force and effect without said provision or
portion of provision.

    

    27.       
    Attorneys’
Fees.  Except with regard to a legal action challenging or
seeking a determination in good faith of the validity of the waiver herein under
the ADEA, in the event that either Party brings an action to enforce or effect
its rights under this Agreement, the prevailing Party shall be entitled to
recover its costs and expenses, including the costs of mediation, arbitration,
litigation, court fees, and reasonable attorneys’ fees incurred in connection
with such an action.

    

    28.      
     Entire
Agreement.  This Agreement represents the entire agreement and
understanding between the Company and Employee concerning the subject matter of
this Agreement and Employee’s employment with and separation from the Company
and the events leading thereto and associated therewith, and supersedes and
replaces any and all prior agreements and understandings concerning the subject
matter of this Agreement and Employee’s relationship with the Company with the
exception of the Confidentiality Agreement and the Stock
Agreements.

    

    29.        
   No
Oral Modification.  This Agreement may only be amended in a
writing signed by Employee and the Company’s Chief Executive
Officer.

    

    30.        
   Governing
Law.  This Agreement shall be governed by the laws of the State
of Illinois, without regard for choice-of-law provisions.  Employee
consents to personal and exclusive jurisdiction and venue in the State of
Illinois.

    

    31.       
    Effective
Date.  Each Party has seven (7) days after that Party signs
this Agreement to revoke it.  This Agreement will become effective on
the eighth (8th) day after Employee signed this Agreement, so long as it has
been signed by the Parties and has not been revoked by either Party before that
date (the “Effective Date”).

    

    32.      
     Counterparts.  This
Agreement may be executed in counterparts and by facsimile, and each counterpart
and facsimile shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

     

    
      	
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    33.        
   Voluntary Execution of
Agreement.  Employee understands and agrees that he executed
this Agreement voluntarily, without any duress or undue influence on the part or
behalf of the Company or any third party, with the full intent of releasing all
of his claims against the Company and any of the other
Releasees.  Employee acknowledges that:

    

    
    

    
      
        	
                 
      

              	
                a.

              	
                he
      has read this Agreement;

              

      

      

      
        	
                 
      

              	
                b.

              	
                he
      has been represented in the preparation, negotiation, and execution of
      this Agreement by legal counsel of his own choice or has elected not to
      retain legal counsel;

              

      

      

      
        	
                 
      

              	
                c.

              	
                he
      understands the terms and consequences of this Agreement and of the
      releases it contains; and

              

      

      

      
        	
                 
      

              	
                d.

              	
                he
      is fully aware of the legal and binding effect of this
      Agreement.

              

      

    
    

     

    IN
WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

    

    
      	 
      	 
      	 
      	
              JEFF FIGLEWICZ, an
      individual

            
	 
      	 
      	 
      	 
      	 
      
	
              Dated:

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Jeff
      Figlewicz

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              M-WAVE,
      INC.

            
	 
      	 
      	 
      	 
      	 
      
	
              Dated:

            	 
      	 
      	
              By

            	 
      
	 
      	 
      	 
      	 
      	
              Joseph
      A. Turek

            
	 
      	 
      	 
      	 
      	
              Chief
      Executive Officer and CEO

            

    

     

    
      	
              SEPARATION
      AGREEMENT

            	
              9

            	
              COMPANY
      CONFIDENTIAL

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
A

    

    Consulting
Agreement

     

     

    
      
        	
                SEPARATION
      AGREEMENT

              	
                10

              	
                COMPANY
      CONFIDENTIALex10_2.htm

    
      

    

    Exhibit
10.2

    

    M-WAVE,
INC.

    

    CONSULTING
AGREEMENT

    

    This
Consulting Agreement (the “Agreement”) is made by and between M-Wave, Inc., (the
“Company”), and Jeff Figlewcz, an individual residing at the address set forth
on the signature page hereto (the “Consultant”).  This Agreement shall
commence and become effective immediately upon the Effective Date of the
Separation Agreement (as defined in that agreement) referenced under paragraph
13 below and subject to the terms and conditions of the Separation Agreement
(including paragraph 16 of that agreement).  The Company desires to
retain Consultant as an independent contractor to perform consulting services
for the Company and Consultant is willing to perform such services, on terms set
forth more fully below.  In consideration of the mutual promises
contained herein, the parties agree as follows:

    

    
      	
               
      

            	
              1.

            	
              SERVICES
      AND COMPENSATION

            

    

    

    (a)
Consultant agrees to perform for the Company the services (“Services”) described
in Exhibit 1
attached hereto.

    

    (b) The
Company agrees to pay Consultant the compensation set forth in Exhibit 1 for the
performance of the Services.

    

    
      	
               
      

            	
              2.

            	
              CONFIDENTIALITY

            

    

    

    (a) Definition.  “Confidential
Information” means any Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research, product plans,
products, services, customers, customer lists, markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances or other business
information disclosed by the Company either directly or indirectly in writing,
orally or by drawings or inspection of parts or equipment.

    

    (b) Non-Use and
Non-Disclosure.  Consultant will not, during or subsequent to
the term of this Agreement, use the Company’s Confidential Information for any
purpose whatsoever other than the performance of the Services on behalf of the
Company or disclose the Company’s Confidential Information to any third
party.  It is understood that said Confidential Information shall
remain the sole property of the Company.  Consultant further agrees to
take all reasonable precautions to prevent any unauthorized disclosure of such
Confidential Information including, but not limited to, having each employee of
Consultant, if any, with access to any Confidential Information, execute a
nondisclosure agreement containing provisions in the Company’s favor identical
to Section 2 of this Agreement.  Confidential Information does
not include information which: (i) is known to Consultant at the time of
disclosure to Consultant by the Company as evidenced by written records of
Consultant; (ii) has become publicly known and made generally available through
no wrongful act of Consultant; or (iii) has been rightfully received by
Consultant from a third party who is authorized to make such
disclosure.  Without the Company’s prior written approval, Consultant
will not directly or indirectly disclose to anyone the existence of this
Agreement or the fact that Consultant has this arrangement with the
Company.

     

    
      	
              CONSULTING
      AGREEMENT

            	
              1

            	
              COMPANY
      CONFIDENTIAL

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) Third Party Confidential
Information.  Consultant recognizes that the Company has
received and in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes.  Consultant agrees that Consultant owes the Company and such
third parties, during the term of this Agreement and thereafter, a duty to hold
all such confidential or proprietary information in the strictest confidence and
not to disclose it to any person, firm or corporation or to use it except as
necessary in carrying out the Services for the Company consistent with the
Company’s agreement with such third party.

    

    (d) Other Consultant
Confidential Information.  Consultant agrees that Consultant
will not, during the term of this Agreement, improperly use or disclose any
proprietary information or trade secrets of any third party with which
Consultant has an agreement or duty to keep in confidence information acquired
by Consultant, if any, and that Consultant will not bring onto the premises of
the Company any unpublished document or proprietary information belonging to
such party unless consented to in writing by such party.  Consultant
will indemnify the Company and hold it harmless from and against all claims,
liabilities, damages and expenses, including reasonable attorneys fees and costs
of suit, arising out of or in connection with any alleged or actual violation or
misappropriation of a third party’s rights resulting in whole or in part from
the Company’s use of the work product of Consultant under this
Agreement.

    

    (e) Return of
Materials.  Upon the termination of this Agreement, or upon
Company’s earlier request, Consultant will deliver to the Company all of the
Company’s property or Confidential Information that Consultant may have in
Consultant’s possession or control.

    

    
      	
               
      

            	
              3.

            	
              OWNERSHIP

            

    

    

    (a) Assignment.  Consultant
agrees that all copyrightable material, notes, records, drawings, designs,
inventions, improvements, developments, discoveries and trade secrets
(collectively, “Work Product”) conceived, discovered, developed or reduced to
practice by Consultant, solely or in collaboration with others, during the term
of this Agreement which relate in any manner to the business of the Company that
Consultant may be directed to undertake, investigate or experiment with, or
which Consultant may become associated with in work, investigation or
experimentation in the Company’s line of business in performing the Services
hereunder, are the sole property of the Company.  Consultant further
agrees to assign (or cause to be assigned) and does hereby assign fully to the
Company all Work Product and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto.  Consultant hereby
waives any and all moral rights.

    

    (b) Further
Assurances.  Consultant agrees to assist the Company, or its
designee, at the Company’s expense, in every proper way to secure the Company’s
rights in the Work Product and any copyrights, patents, mask work rights or
other intellectual property rights relating thereto in any and all countries,
including the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments which the Company shall deem necessary in
order to apply for and obtain such rights and in order to assign and convey to
the Company, its successors, assigns and nominees the sole and exclusive right,
title and interest in and to such Work Product, and any copyrights, patents,
mask work rights or other intellectual property rights relating
thereto.  Consultant further agrees that Consultant’s obligation to
execute or cause to be executed, when it is in Consultant’s power to do so, any
such instrument or papers shall continue after the termination of this
Agreement.

     

    
      	
              CONSULTING
      AGREEMENT

            	
              2

            	
              COMPANY
      CONFIDENTIAL

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) Pre-Existing
Materials.  Consultant agrees that if in the course of
performing the Services, Consultant incorporates into any Work Product developed
hereunder any invention, improvement, development, concept, discovery or other
proprietary information owned by Consultant or in which Consultant has an
interest: (i) Consultant shall inform Company, in writing before incorporating
such invention, improvement, development, concept, discovery or other
proprietary information into any Work Product; and (ii) the Company is hereby
granted and shall have a nonexclusive, royalty-free, perpetual, irrevocable,
worldwide license to use, perform, display, make, reproduce, make derivative
works, import, sell, offer for sale, license, distribute, and otherwise dispose
of such invention, improvement, development, concept, discovery or other
proprietary information as part of or in connection with such Work Product, with
the right to license such rights to others.  Consultant shall not
incorporate any invention, improvement, development, concept, discovery or other
proprietary information owned by any third party into any Invention without
Company’s prior written permission.

    

    (d) Attorney in
Fact.  Consultant agrees that if the Company is unable because
of Consultant’s unavailability, dissolution, mental or physical incapacity, or
for any other reason, to secure Consultant’s signature to apply for or to pursue
any application for any United States or foreign patents or mask work or
copyright registrations covering the Work Product assigned to the Company above,
then Consultant hereby irrevocably designates and appoints the Company and its
duly authorized officers and agents as Consultant’s agent and attorney in fact,
to act for and in Consultant’s behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyright and mask work registrations
thereon with the same legal force and effect as if executed by
Consultant.

    

    
      	
               
      

            	
              4.

            	
              WARRANTIES

            

    

    

    (a) Consultant
Warranty.  Consultant shall perform the obligations described
herein in a good and workmanlike manner with due diligence and in full
compliance with the terms and conditions of this Agreement and all mutually
agreed to specifications, statements of work, and acceptance
criteria.  Consultant, at its expense, shall use reasonable efforts to
correct any Services or Work Product performed by or delivered by Consultant
that do not conform to the foregoing warranty.

    

    (b) Further Warranties.
Consultant further warrants that: (i) the Work Product is or will be original to
Consultant; (ii) Consultant has not previously granted and will not grant any
rights in the Work Product to any third party that are inconsistent with the
rights granted to Company herein; (iii) each of Consultant’s employees,
consultants, contractors, partners, or agents who has been or will be involved
in the performance of the Services has or will have signed an agreement with
Consultant conveying all proprietary and intellectual property rights in or
relating to the Work Product to Consultant and agreeing to maintain in
confidence all trade secrets and non-Consultant proprietary information embodied
in the Work Product or acquired while performing the Services or having access
to Work Product; (iv) all Work Product, and the intended uses thereof, shall be
free of any third party claims with respect to intellectual property or other
proprietary rights and shall be free of any third party liens, encumbrances,
security interests, or any similar restrictions; (v) unless provided
by Company, Consultant will provide all
necessary personnel, facilities, and materials to facilitate efficient and
effective completion of the Services; (vi) Consultant will exert Consultant’s
best efforts to use a repeatable and proven process to design, develop, test,
deliver, and document the Work Product, or any part thereof; and (vii)
Consultant has full power and authority to enter into this Agreement, to carry
out its obligations under this Agreement and to grant the rights granted to
Company hereunder.

     

    
      	
              CONSULTING
      AGREEMENT

            	
              3

            	
              COMPANY
      CONFIDENTIAL

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) Warranty
Indemnity.  Consultant shall indemnify and hold the Company
harmless from and against any claims, damages, or liabilities resulting from
Consultant’s breach of the foregoing warranties.

    

    
      	
               
      

            	
              5.

            	
              CONFLICTING
      OBLIGATIONS

            

    

    

    (a)
Consultant certifies that Consultant has no outstanding agreement or obligation
that is in conflict with any of the provisions of this Agreement, or that would
preclude Consultant from complying with the provisions hereof, and further
certifies that Consultant will not enter into any such conflicting agreement
during the term of this Agreement.

    

    (b) In
view of Consultant’s access to the Company’s trade secrets and proprietary
know-how, Consultant further agrees that Consultant will not, without Company’s
prior written consent, design identical or substantially similar designs as any
that may be developed in connection with this Agreement for any third party
during the term of this Agreement and for a period of twelve (12) months after
the termination of this Agreement. Consultant acknowledges that the obligations
in this Section 5 are ancillary to Consultant’s nondisclosure obligations under
Section 2.

    

    
      	
               
      

            	
              6.

            	
              REPORTS

            

    

    

    Consultant
agrees that he will from time to time during the term of this Agreement or any
extension thereof keep the Company advised as to Consultant’s progress in
performing the Services hereunder and that Consultant will, as requested by the
Company, prepare written reports with respect thereto.  It is
understood that the time required in the preparation of such written reports
shall be considered time devoted to the performance of Consultant’s
Services.

    

    
      	
               
      

            	
              7.

            	
              TERM AND
      TERMINATION

            

    

    

    (a) Term.  This
Agreement will become effective and commence as of the Effective Date and will
continue until termination as provided below.

    

    (b) Termination.  The
Company may terminate this Agreement at any time and for any reason immediately
and without any prior notice. The Consultant may terminate this Agreement at any
time and for any reason with a two (2) week prior notice.

    

    (c) Survival.  Upon
termination of this Agreement pursuant to Section 7(a) or (b), all rights and
duties of the parties toward each other shall cease except:

    

    (i)   that
the Company shall be obliged to pay, within thirty (30) days of the effective
date of termination, all amounts owing to Consultant for Services completed and
accepted by the Company prior to the termination date and related expenses, if
any, in accordance with the provisions of Section 1; and

     

    
      	
              CONSULTING
      AGREEMENT

            	
              4

            	
              COMPANY
      CONFIDENTIAL

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)  Sections 2
(Confidentiality), 3 (Ownership), 4 (Warranties), 5 (Conflicting
Obligations), 9 (Independent Contractor), and 11 (Arbitration and Equitable
Relief) shall survive termination of this Agreement.

    

    
      	
               
      

            	
              8.

            	
              ASSIGNMENT

            

    

    

    Neither
this Agreement nor any right hereunder or interest herein may be assigned or
transferred by Consultant without the express written consent of the
Company.  The Company may assign this Agreement in its
discretion.

    

    
      	
               
      

            	
              9.

            	
              INDEPENDENT
      CONTRACTOR

            

    

    

    (a) Nature of
Relationship.  It is the express intention of the parties that
Consultant is an independent contractor.  Nothing in this Agreement
shall in any way be construed to constitute Consultant as an employee other than
a representative of the Company as an Acting CFO and Corporate Secretary, but
Consultant shall perform the Services hereunder as an independent
contractor.  Consultant agrees to furnish (or reimburse the Company
for) all tools and materials necessary to accomplish this contract, and shall
incur all expenses associated with performance, except as expressly provided on
Exhibit 1 of
this Agreement.  Consultant acknowledges and agrees that Consultant is
obligated to report as income all compensation received by Consultant pursuant
to this Agreement, and Consultant agrees to and acknowledges the obligation to
pay all self-employment and other taxes thereon.

    

    (b) Independent Contractor
Indemnification.  Consultant agrees to indemnify and hold
harmless the Company and its directors, officers and employees from and against
all taxes, losses, damages, liabilities, costs and expenses, including
attorneys’ fees and other legal expenses, arising directly or indirectly from or
in connection with: (i) any negligent, reckless or intentionally wrongful act of
Consultant or Consultant’s assistants, employees or agents; (ii) a determination
by a court or agency that the Consultant is not an independent contractor; (iii)
any breach by the Consultant or Consultant’s assistants, employees or agents of
any of the covenants contained in this Agreement; (iv) any failure of Consultant
to perform the Services in accordance with all applicable laws, rules and
regulations; or (v) any violation or claimed violation of a third party’s rights
resulting in whole or in part from the Company’s use of the work product of
Consultant under this Agreement.

    

    
      	
               
      

            	
              10.

            	
              BENEFITS

            

    

    

    Consultant
acknowledges and agrees and it is the intent of the parties hereto that neither
Consultant nor any employees or contractors of Consultant receive any
Company-sponsored benefits from the Company either as a consultant or
employee.  Such benefits include, but are not limited to, paid
vacation, sick leave, medical insurance, and 401(k) participation.  If
Consultant is reclassified by a state or federal agency or court as an employee,
Consultant will become a reclassified employee and will receive no benefits
except those mandated by state or federal law, even if by the terms of the
Company’s benefit plans in effect at the time of such reclassification
Consultant would otherwise be eligible for such benefits.

     

    
      	
              CONSULTING
      AGREEMENT

            	
              5

            	
              COMPANY
      CONFIDENTIAL

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              11.

            	
              ARBITRATION
      AND EQUITABLE RELIEF

            

    

    

    (a) Disputes.  Except
as provided in Section 11(d), the Company and Consultant agree that any dispute
or controversy arising out of, relating to or in connection with the
interpretation, validity, construction, performance, breach or termination of
this Agreement shall be settled by binding arbitration to be held in DuPage
County, Illinois, in accordance with the rules then in effect of the American
Arbitration Association.  The arbitrator may grant injunctions or
other relief in such dispute or controversy.  The decision of the
arbitrator shall be final, conclusive and binding on the parties to the
arbitration.  Judgment may be entered on the arbitrator’s decision in
any court of competent jurisdiction.

    

    (b) Consent to Personal
Jurisdiction.  The arbitrator(s) shall apply Illinois law to
the merits of any dispute or claim, without reference to conflicts of law
rules.  Consultant hereby consents to the personal jurisdiction of the
state and federal courts located in DuPage County, Illinois for any action or
proceeding arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.

    

    (c) Costs.  The
Company and Consultant shall each pay one-half of the costs and expenses of such
arbitration, and each shall separately pay its counsel fees and expenses unless
otherwise required by law.

    

    (d) Equitable
Relief.  The parties may apply to any court of competent
jurisdiction for a temporary restraining order, preliminary injunction, or other
interim or conservatory relief, as necessary, without breach of this arbitration
agreement and without abridgment of the powers of the arbitrator.

    

    (e) Acknowledgment.  CONSULTANT
HAS READ AND UNDERSTANDS SECTION 11, WHICH DISCUSSES
ARBITRATION.  CONSULTANT UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
CONSULTANT AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF, TO BINDING ARBITRATION, EXCEPT AS
PROVIDED IN SECTION 11(d), AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER
OF CONSULTANT’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP BETWEEN THE
PARTIES.

    

    
      	
               
      

            	
              12.

            	
              GOVERNING
      LAW

            

    

    

    This
Agreement shall be governed by the internal substantive laws, but not the choice
of law rules, of the State of Illinois.

    

    
      	
               
      

            	
              13.

            	
              ENTIRE
      AGREEMENT

            

    

    

    This
Agreement is the entire agreement of the parties and supersedes any prior
agreements between them, whether written or oral, with respect to the subject
matter hereof, with the exception of the Separation Agreement and Release
between Consultant and the Company (the “Separation Agreement”), and any
agreement expressly survived under the Separation Agreement.  No
waiver, alteration, or modification of any of the provisions of this Agreement
shall be binding unless in writing and signed by Consultant and a duly
authorized representative of the Company.

     

    
      	
              CONSULTING
      AGREEMENT

            	
              6

            	
              COMPANY
      CONFIDENTIAL

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              14.

            	
              ATTORNEY’S
      FEES

            

    

    

    In any
court action at law or equity which is brought by one of the parties to enforce
or interpret the provisions of this Agreement, the prevailing party will be
entitled to reasonable attorney’s fees, in addition to any other relief to which
that party may be entitled.

    

    
      	
               
      

            	
              15.

            	
              SEVERABILITY

            

    

    

    The
invalidity or unenforceability of any provision of this Agreement, or any terms
thereof, shall not affect the validity of this Agreement as a whole, which shall
at all times remain in full force and effect.

    

    
      	
               
      

            	
              16.

            	
              NOTICES

            

    

    

    Any
notice shall be addressed to the party being notified at the address set forth
in this Agreement or such other address as either party may notify the other of
and shall be deemed given upon delivery if personally delivered or transmitted
via facsimile or reliable overnight carrier (with tracking capability), or
forty-eight (48) hours after being deposited in the United States mail, postage
prepaid, registered or certified mail, return receipt requested.

    

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

    

    

    
      	
              Company:

            	 
      	
              Consultant:

            
	
              M-Wave,
      Inc.

            	 
      	 
      	 
      
	
              By:

            	 
      	 
      	 
      	 
      
	
              Print
      Name:

            	
              Joseph A. Turek

            	 
      	
              Print
      Name:

            	 
      
	
              Title:

            	
              CEO

            	 
      	
              Date:

            	 
      
	
              Date:

            	 
      	 
      	
              Address:

            	 
      
	
              Address:

            	
              1300
      Norwood St.

            	 
      	 
      	 
      
	 
      	
              Itasca,
      IL 60143

            	 
      	 
      	 
      

    

     

    
      	
              CONSULTING
      AGREEMENT

            	
              7

            	
              COMPANY
      CONFIDENTIAL

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
1

    

    SERVICES AND
COMPENSATION

    

    
      	
               
      

            	
              1.

            	
              Contact.  Consultant’s
      principal Company contact:

            

    

    

    (a)  Name:  Joseph A.
Turek

    

    (b)  Title:  Chairman of
the Board and CEO

    

    
      	
               
      

            	
              2.

            	
              Services.  Consultant
      will render to the Company the following
  Services:

            

    

    

    Consultant
will perform the services requested by the Company, including the Consultant’s
responsibilities as the former Chief Financial Officer and Corporate Secretary
of the Company and assistance regarding business matters of the
Company.  Consultant shall also perform such other duties and
responsibilities as the Company’s CEO and/or the Board of Directors shall from
time to time assign to him.

    

    Consultant
shall carry the title of “Acting CFO and Corporate Secretary” and shall certify
the SEC and Audited financial reports as necessary.

    

    Consultant
shall provide a written report to the Company, weekly, of all Services performed
under this Agreement.

    

    
      	
               
      

            	
              3.

            	
              Compensation.  Consultant
      will receive the following compensation for the
  Services:

            

    

    

    (a)  Payment: Consultant shall
receive Five Hundred Dollars and No/Cents ($500.00) per day for the Services
provided under this Agreement. Consultant shall provide invoices for all
Services performed under this Agreement, which shall be provided at the end of
the Bi-Monthly period in which the relevant Services were
provided.  The Company shall provide payment for such Services within
five (5) business days from receipt of the invoice from Consultant.

    

    (b) Expenses: The Company shall
provide reimbursement of certain pre-approved expenses incurred by Consultant
with the prior written consent of the Company’s Board of Directors, in its sole
discretion, in connection with the performance of the Serivices
hereunder.  The Company shall provide reimbursement for such expenses
within five (5) business days from receipt of the expense report and any
required supporting documentation (as requested by the Company) from
Consultant.

    

    (c)  Incentive Compensation: In addition to the daily
payment to which Consultant is entitled pursuant to Section 3(a), Company
will pay to Consultant additional compensation (“Bonus”):

    

    
      	
               
      

            	
              (i)

            	
              A
      Bonus payment equal to Twenty Thousand dollars and No/Cents ($20,000.00)
      at the earlier of five (5) days after Company consumates a “change of
      control” event or sixty (60) days after the Effective Date provided the
      consulting agreement is not terminated prior to either date;
      and

            

    

     

    
      	
              CONSULTING
      AGREEMENT

            	
              8

            	
              COMPANY
      CONFIDENTIAL

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (ii)

            	
              A
      Bonus payment equal to Twenty Thousand dollars and No/Cents ($20,000.00)
      at the earlier of sixty (60) days after Company completes a “change of
      control” transaction or one hundred and eighty (180) days after the
      Effecitve Date provided the consulting agreement is not terminated prior
      to either date.

            

    

    

    
      	
               
      

            	
              (iii)

            	
              The
      foregoing not withstanding, in the event Consultant’s employment is
      terminated by the Company for any reason after the initial Separation
      Payment or a Bonus Payment, the next available Bonus payment will be due
      otherwise the Consultant shall not be entitled to receive any Bonus
      payable after the effective date of such termination. If the Consultant
      terminates this Agreement for any reason at any time or is terminated for
      breach of this Agreement, the Consultant shall not be entitled to receive
      any Bonus payable after the effective date of such
      termination.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Records and Reports:
      Consultant agrees to keep accurate and complete records regarding the
      performance of all Services for the Company and to provide such detailed
      records in his weekly report.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Definition of “change of
      control”: For all purposes under this Agreement, “change of
      control” shall mean the occurrence of an event as a result of which the
      Company consolidates with, or merges with or into another corporation or
      other entity, or sells, assigns, conveys, transfers, leases or otherwise
      disposes of all or substatntially all of its assets to any person, or any
      corporation consolidates with, or merges with or into, the Company, in any
      such efvent pursuant to a transactionin which the outstanding voting stock
      of the Company is changed into or exchanged for cash, securities or other
      property, or the Company is liquidated or dissioved or adopts a plan of
      liquidation.

            

    

     

     

    
      	
              CONSULTING
      AGREEMENT

            	
              9

            	
              COMPANY
      CONFIDENTIAL

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