Document:

stellarexh10_1.htm

    
      
        

      

    

    
      
         

        Exhibit
10.1

         

         

         

         

         

         

        CANAFRA
MINERAL EXPLORATION CORP.

         

         

        STELLAR
RESOURCES LTD.

      

       

       

       

       

       

       

       

       

       

      FARM-IN
AGREEMENT

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          Table of Contents

        

      

       

       

      TABLE OF CONTENTS

       

       

      
        	 1.             DEFINITIONS
      AND INTERPRETATIONS	 2
	 	 
	 2.             PARAMOUNT
      AGREEMENT	 5
	 	 
	 3.             REGULATORY
      APPROVAL	 5
	 	 
	 4.             FARM-IN
      ASSIGNMENT	 5
	 	 
	 5.             CANAFRA’S
      OBLIGATIONS	 9
	 	 
	 6.             OPERATOR	 9
	 	 
	 7.             INFORMATION	 10
	 	 
	 8.             CANAFRA
      WARRANTIES	 11
	 	 
	 9.             STELLAR
      WARRANTIES	 11
	 	 
	 10.             ASSIGNMENT	 12
	 	 
	 11.             NOTICES	 13
	 	 
	 12.             STAMP
      DUTY AND COSTS	 13
	 	 
	 13.             GOVERNING
      LAW AND JURISDICTION	 14
	 	 
	 14.             TERMINATION	 14
	 	 
	 15.             CUMULATIVE
      RIGHTS	 14
	 	 
	 16.             FURTHER
      ASSURANCE	 14
	 	 
	 17.             EXECUTION
      BY COUNTERPARTS	 14
	 	 
	 18.             MERGER	 15
	 	 
	 19.             SOLE
      AGREEMENT	 15
	 	 
	 SCHEDULE
      "A"	 17
	 	 
	 SCHEDULE
      "B"	 18
	 	 
	 SCHEDULE
      "C"	 21
	 	 
	 SCHEDULE
      "D"	 22
	 	 
	 SCHEDULE
      "E"	 23
	 	 
	 SCHEDULE
      "F"	 24

      

      
 

       

       

       

       

       

      
        
          
            
            

          

          
             

            
              

            

          

          
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    FARM-IN
AGREEMENT

     

     

    THIS
AGREEMENT made on this __________ day of September,
2008:

     

     

    BETWEEN:

     

    Canafra
Mineral Exploration Corp.

    of
303-1030 Hamilton Street, Vancouver, BC, V6B2R9 and its Partner Two Drums G
& C 

    Company
Limited of Mbeya Tanzania 

    (hereinafter
called, "Canafra")

     

    
      	
               
      

            	
              OF
      THE FIRST PART

            

    

     

    And:

     

    Stellar
Resources Ltd.,

    of 375
North Stephanie Street, Suite 1411, Henderson, NV 89014-8909

    (hereinafter
called, "Stellar")

     

    
      	
               
      

            	
              OF
      THE SECOND PART

            

    

     

    BACKGROUND

     

    1.        Stellar
has represented the following:

     

    
      	 	
               A.

            	
              Stellar
      is a corporation incorporated under the laws of the State of Nevada, in
      the United States of America;

            

    

     

    
      	 	
               B.

            	
              Stellar
      is a reporting company in the State of Nevada, in the United States of
      America;

            

    

     

    
      	
               
      

            	C.	
              The
      common shares of Stellar are listed in the United States of America and on
      the Over the Counter Bulletin Board
(“OTCBB”);

            

    

     

    
      	 	
               D.

            	
              Stellar
      has issued 28,640,196 of its common
shares.

            

    

     

    2.        Canafra
has represented the following:

     

    
      	 	
              A.

            	
              That
      Canafra Mineral Exploration Corp. and Two Drums G & C are private
      corporations incorporated under the laws of British Columbia and Tanzania
      respectively with registered offices at 1681 West 7th
      Avenue Vancouver, British Columbia V6J 1S4 and Mbeya Tanzania
      respectively;

            

    

     

    
      	
               
      

            	
              B.

            	
              Canafra
      owns 100% of three Mining and Prospecting Licenses the Granted Mining and
      Prospecting Concessions consisting of approximately 26 square kilometers
      more or less, in the Chunya mining district Mbeya Tanzania which upon
      receipt of the formal licensing documentation will form part of this
      Agreement free and clear of all liens, charges and
      encumbrances.

            

    

     

    
      
        
        

      

      
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    3.        Proposal

     

    Subject
to Canafra supplying to Stellar within 90 days of the execution of this
Agreement the Mining and Prospecting Licenses showing the geographic
coordinates, the parties agree as follows:

     

    
      	 	
              A.

            	
              The
      proposed terms of this Agreement are generally described as an aggregate
      payment of $1,100,000.00 towards working capital and exploration
      expenditure, and the issue of 4,000,000 restricted common
      shares.

            

    

     

    
      	 	
              B.

            	
              Canafra
      agrees to grant Stellar or its nominee the right to earn up to 50% Net
      Profit Interest in the Granted Mining and Prospecting Concessions on and
      subject to the terms and conditions contained in this
      Agreement

            

    

     

    
      	
               
      

            	
              C.

            	
              Canafra
      and Stellar wish to execute this Agreement to record their entire
      understanding of the basis upon which Stellar will Farm-In to the Granted
      Mining and Prospecting Concessions.

            

    

     

    
      	 	
              D.

            	
              The
      Parties hereby enter into this Agreement to set out the terms on which
      Stellar may earn up to 50% Net Profit Internet in the Granted Mining and
      Prospecting Concessions.

            

    

     

    OPERATIVE
PROVISIONS

     

    
      
        	
                1.

              	
                DEFINITIONS AND
      INTERPRETATIONS

              

      

       

       

    

    
      	
               
      

            	
              1.1

            	
              Definitions

            

    

     

    In this
Agreement:

     

    STELLAR
Farm-In Interest means the Farm-In Agreement entered into between Stellar
and Canafra as identified in Recital B;

     

    Act
means the legislation and other laws, regulations or statutory instruments of
the Republic of Tanzania regulating the application, grant and working of mining
tenements and any amendment or statutory replacements of
that.

     

    Activities
means mining exploration and exploitation (and any related) activities
within the tenements comprising the Granted Mining and Prospecting
Concessions.

     

    Agreement
means this Farm-In Agreement and includes any schedules or
annexures.

     

    Business
Day means a day on which all the major trading banks are open for
business in New York.

     

    Declared
Encumbrances and Royalties means those royalties and other third party
interests relating the Granted Mining and Prospecting
Concessions.

     

     

    
      
        
          
          

        

        
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    Drilling
means drilling, evaluation and completing for production or plugging and
abandoning.

     

    Effective
Date means the date of this Agreement.

     

    Encumbrance
means a mortgage, charge, bill of sale, lien, pledge, plaint, writ,
warrant, caveat, royalty interest, Net Profit interest or other third party
interest, right, claim or demand.

     

    Farm-In
Interest means 50%
Net Profit Interest in the Granted Mining and Prospecting
Concessions.

     

    Farm-In
Obligations means the obligations to be assumed by the Operator under
this the Agreement, as set out under clause
4.4.

     

    Farm-In
Costs means the costs incurred by the Operator of the Granted Mining and
Prospecting Concessions, as set out under clause
4.5.

     

    Granted
Mining and Prospecting Concessions means the tenements relating to mining
exploration and exploitation concession listed in Schedule
“A” and including any part of, any and all renewals of, modifications to,
conversions of, substitutions for or any additions to those
tenements.

     

    JORC
means the Joint Ore Reserve Committee code for reporting of mineral
resources and ore reserves as stated in appendix 5A of the Listing
Rules.

     

    Lease
has the same meaning as in the Act

     

    Operator
for the sole purposes of the Farm-In Operations is Canafra Mineral Exploration
Corp.

     

    Net
Profit Interest means: - the net profit derived from the concession after
all the Hard and Soft costs have been paid.  Hard Cost include but are
not limited to equipment costs, mining costs, smelting costs, staff costs,
labour costs, exploration costs while Soft Costs include but are not limited to
royalties, administration costs, travel costs, interest, financing costs,
consulting costs and other allowable costs.

     

     

    
      
        
          
          

        

        
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    Participating
Interest means, in relation to a Party, the proportionate Net Profit
Interest expressed as a percentage of the Party.

     

    
      	
               
      

            	
              (a)

            	
              a
      proportionate interest in any resources discovered or recovered from the
      Granted Mining and Prospecting Concessions;
and

            

    

     

    and which
Participating Interest carries with it the obligations expressed, referred to or
implied in this Agreement.

     

    Party
or Parties means a party or the parties to this
Agreement.

     

    Statutory
Encumbrances and Royalties means the encumbrances and royalties imposed
under the Act;

     

    
      	
               
      

            	
              1.2

            	
              Interpretation

            

    

     

    In this
Agreement:

     

    
      	
               
      

            	
              (a)

            	
              reference
      to a person includes any other entity recognised by
  law;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      singular includes the plural and vice
versa;

            

    

     

    
      	
               
      

            	
              (c)

            	
              words
      importing one gender include every
gender;

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      reference to any of the Parties by their defined terms includes that
      party's executors, administrators or permitted assigns or, being a
      company, its successors or permitted
assigns;

            

    

     

    
      	
               
      

            	
              (e)

            	
              an
      agreement, representation, or warranty on the part of two or more persons
      binds them jointly and severally;

            

    

     

    
      	
               
      

            	
              (f)

            	
              an
      agreement, representation, or warranty in favour of two or more persons is
      for the benefit of them jointly and
severally;

            

    

     

    
      	
               
      

            	
              (g)

            	
              clause
      headings are for reference purposes
only;

            

    

     

    
      	
               
      

            	
              (h)

            	
              references
      to currency are to American currency unless otherwise
    stated;

            

    

     

    
      	
               
      

            	
              (i)

            	
              reference
      to an Annexure or Schedule is a reference to the corresponding Annexure or
      Schedule to this Agreement;

            

    

     

    
      	
               
      

            	
              (j)

            	
              reference
      to a statute, ordinance, code, or other law includes regulations and other
      instructions under it and consolidations, amendments, re-enactments, or
      replacements of it.

            

    

     

     

    
      
        
          
          

        

        
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              2.

            	
              Paramount
      Agreement

            

    

     

    
      	
               
      

            	
              2.1

            	
              Stellar
      Farm-in Agreement Paramount

            

    

     

    The
Parties acknowledge and agree that the Stellar Farm-In Agreement is paramount to
this Agreement and Stellar will remain responsible for ensuring compliance
thereunder.

     

    
      	
               
      

            	
              2.2

            	
              Notices

            

    

     

    Canafra
will forward to Stellar immediately on receipt a copy of any notices, reports or
correspondence (including without limitation any Default Notice or Notice of
Termination) received by Canafra under this Farm-In Agreement.

     

    If for
any reason the Stellar Farm-In Agreement is terminated in accordance with its
terms prior to Stellar receiving an assignment and transfer of the 50% Net
Profit Interest, then this Agreement must terminate immediately.

     

    Neither Party will be
liable to the other for any failure of any provision of this Agreement that is
contingent upon the operation of a provision of the Stellar Farm-In Agreement
provided that Stellar must use every reasonable effort to ensure that any such
provision of the Stellar Farm-In Agreement is complied with as required in clause
2.1.

     

    
      
        	
                3.

              	
                REGULATORY
      APPROVAL

              

      

       

    

    
      	
               
      

            	
              3.1

            	
              Condition
      Subsequent

            

    

     

    Any
provision of this Agreement which constitutes regulatory approval will have no
force or effect until such regulatory approval has been obtained and, if
appropriate, so registered.

     

    
      
        	
                4.

              	
                FARM-IN
      ASSIGNMENT

              

      

       

    

    
      	
               
      

            	
              4.1

            	
              Farm-In
      Consideration

            

    

     

    The total
value for 50% Net Profit Interest in the Canafra Concession is US$1,100,000.
Stellar will earn its actual Net Profit Interest at a vested rate of
10% based on its funding efforts. Therefore, for example, if Stellar funds
Canafra US$550,000 and either party terminates the Agreement for any reason,
Stellar would have earned 2.5% Net Profit Interest in the Mining

     

     

    
      
        
          
          

        

        
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    Concession.,
If Stellar fails to earn its full interest and the agreement terminates, Canafra
will have the option of purchasing Stellars’ vested interest at a discount of
50% to the funds invested.

     

    The
project is broken down into three (3) major Phases. Descriptions of each Phase,
along with the obligations of both Parties, are in general terms detailed:
below.  Canafra will collaborate with Stellar on obtaining technical
expertise and equipment.

     

    Phase
I

     

    The
conditions outlined in Phase I are Subject to Canafra supplying to Stellar
within 90 days of the execution of this agreement the Mining and Prospecting
Licenses showing the geographic coordinates.  The time frames stated
below will begin upon this condition being met.

     

    Canafra
will perform the following work on the Mining Concession within 180 days of
execution of this Agreement or within a time frame that is mutually agreed upon
taking into consideration mobilization times and conditions.  Subject
to the advice of Canafra’s geologist and agreed to by all parties they could
include

     

    (a)            Geologic
Mapping and prospecting (rock sampling)

     

    (b)            Soil
Sampling

     

    (c)            Trenching

     

    (d)            Administrative
activities

     

    Stellar
will provide to Canafra US, $380,000in the timeframe set forth below, as part of
the opportunity to earn its Farm-In Interest, as well as provide Canafra the
necessary financial resources to perform the above-mentioned work:

     

    (a)            US
$60,000 payable within 30 days of execution of this Agreement;

     

    (b)            US
$80,000 payable within 60 days of execution of this Agreement;

     

    (c)            US
$80,000 payable within 90 days of execution of this Agreement;

     

     

    
      
        
          
          

        

        
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    (d)            US
$80,000 payable within 120 days of execution of this Agreement; and

     

    (e)           
US $80,000 payable within 150 days of execution of this Agreement.

     

    Phase
II

     

    Canafra
will perform the following work on the mining concessions with 90 days of the
completion of phase I or within a time frame that is mutually agreed upon taking
into consideration mobilization times and conditions.  Subject to the
advice of Canafra’s geologist and agreed to by all parties they could
include

     

    (a)            An
induced polarization investigation

     

    (b)            A
gravity investigation

     

    (c)            A
magnetic investigation

     

    (d)            Administrative
activities

     

    Additionally,
Stellar will provide to Canafra 2,000,000 Rule 144 restricted commons stock to
secure its right to further earn its Farm-In Interest, subject to the successful
completion of Phase I.

     

    Stellar
will also provide to Canafra subject to the successful completion of Phase II
and geological reports rationalizing the expenditure. $380,000 to be paid within
30 days of the presentation of the geological reports.

     

    Phase
III

     

    Canafra
will perform the following work on the mining concessions with 90 days of the
completion of phase II or within a time frame that is mutually agreed upon
taking into consideration mobilization times and conditions.  Subject
to the advice of Canafra’s geologist and agreed to by all parties they could
include

     

    (a)            Diamond
Drilling

     

     

    
      
        
          
          

        

        
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    (b)            Administrative
activities

     

    Stellar
will provide to Canafra a further 2,000,000 Rule 144 restricted common
stock to secure its right to further earn its Farm-In Interest, subject to the
successful completion of Phase II.

     

    Stellar
will also provide to Canafra US$340,000 subject to the successful completion of
Phase II and Geological Reports rationalizing the expenditure to be paid within
30 days after the presentation of the Geological Reports.

     

    
      	
               
      

            	
              4.2

            	
              Assignment

            

    

     

    
      	
               
      

            	
              (a)

            	
              With
      effect from the Effective Date and upon Stellar paying all of the monies
      as set out in clause 4.1 above, Canafra will assign to Stellar 50% Net
      Profit Interest in the Granted Mining and Prospecting Concessions, free of
      any Encumbrances (apart from Statutory Encumbrances and Royalties and the
      Declared Encumbrances and
Royalties).

            

    

     

    
      	
               
      

            	
              4.3

            	
              Assumption

            

    

     

    Stellar
accepts the Farm-In Interest assigned to it under clause
4.1
and assumes and agrees to be bound by the Farm-In Obligations which accrue, on
or after the Effective Date.

     

    
      	
               
      

            	
              4.4

            	
              Scope
      of the Farm-In Obligations

            

    

     

    With
effect from the Effective Date, Canafra's Farm-In Obligations are:

     

    
      	
               
      

            	
              (a)

            	
              to
      maintain the good standing of the Granted Mining and Prospecting
      Concessions;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Canafra
      to provide the legal description of the Mining Exploitation Concessions
      within 90 days upon execution of this agreement, which will form part of
      the attached Schedule “A” to this
Agreement.

            

    

     

    
      	
               
      

            	
              (c)

            	
              to
      undertake exploration activities as agreed between Canafra and Stellar and
      to prove the resources in the Granted Mining and Prospecting Concessions
      to compliant standards; and

            

    

     

    
      	
               
      

            	
              4.5

            	
              Scope
      of the Farm-In Costs

            

    

     

    
      
        	
                 
      

              	
                (a)

              	
                Stellar
      is to fund 100% of the costs arising from the Farm-In
      Obligations;

              

      

       

      
        
          
          

        

        
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                (b)

              	
                Stellar
      is to fund the budget for the basic administration of accounting records
      in Vancouver, attached hereto as Schedule “C” to this
      Agreement;

              

      

       

    

    
      	
               
      

            	
              (c)

            	
              Stellar
      is to fund the budget for the operation of an office in Dar es Salaam and
      basic administration activities for such office.  The budget is
      attached hereto as part of Schedule “C” to this
  Agreement.

            

    

     

    
      
        	
                5.

              	
                CANAFRA’S
      OBLIGATIONS

              

      

       

    

    
      	
               
      

            	
              5.1

            	
              Canafra's
      obligations

            

    

     

    Canafra
must during the period from the Effective Date to the date upon which the
Farm-In Interest is assigned to Stellar, hold or ensure that a sufficient
undivided percentage interest in the Granted Mining and Prospecting Concessions
is kept free of all Encumbrances (other than the Statutory Encumbrances and
Royalties and the Declared Encumbrances and Royalties) so as to be able to
provide the Farm-In Interest to Stellar in accordance with this
Agreement.

     

    
      
        	
                6.

              	
                OPERATOR

              

      

       

    

    
      	
               
      

            	
              6.1

            	
              Appointment
      of Canafra Mineral Exploration
Corp.

            

    

     

    Canafra
Mineral Exploration Corp. (“Canafra”) will be the Operator solely for the
purpose of carrying out the Activities and that Canafra will have the exclusive
right to conduct and manage the tenements comprising the Grant Mining Concession
and must perform any Activity in accordance with good mining exploration
practice and all applicable legislation, regulations and codes of
practice.

     

    
      	
               
      

            	
              6.2

            	
              Responsibilities
      of Canafra

            

    

     

    Canafra
must:

     

    
      	
               
      

            	
              (a)

            	
              keep
      Stellar fully and immediately informed of all material matters concerned
      with the undertaking of the Activities;
and

            

    

     

     

    
      
        
          
          

        

        
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              (b)

            	
              if
      required by Stellar, provide Stellar with such written reports concerning
      the Activities and to keep the Granted Mining and Prospecting Concessions
      in good standing.

            

    

     

    
      	
               
      

            	
              6.3

            	
              Authority

            

    

     

    Canafra
must not bind or commit (or purport to bind or commit):

     

    
      	
               
      

            	
              (a)

            	
              Stellar
      in any way whatsoever or hold (or purport to hold) it out as having
      authority to do so, except in accordance with this Agreement or with
      Stellar’s prior written consent; or

            

    

     

    
      	
               
      

            	
              (b)

            	
              issue
      any public statement or communication in any way directly or indirectly
      affecting Canafra other than with Stellar’s prior written
      consent.

            

    

     

    
      	
               
      

            	
              6.4

            	
              Canafra’s
      liability

            

    

     

    If
Canafra incurs liability to a third party (other than Farm-In Costs incurred in
the discharge of its Farm-In Obligations), then Canafra must indemnify and keep
indemnified Stellar for all of that liability.

     

    
      
        	
                7.

              	
                INFORMATION

              

      

       

    

    
      	
               
      

            	
              7.1

            	
              Provision
      of Information

            

    

     

    Canafra
will provide Stellar with all Activities information and copies of all related
statements, reports and records that are in possession, or under the control, of
Canafra as Stellar may reasonably require.

     

    
      	
               
      

            	
              7.2

            	
              Confidentiality

            

    

     

    All data,
reports, records and other information relating to the Granted Mining and
Prospecting Concessions which is disclosed to either of the Parties will be kept
strictly confidential by the Party to which disclosure is made, except
where:

     

    
      	
               
      

            	
              (a)

            	
              the
      other Party consents to the disclosure of that information to a third
      party;

            

    

     

    
      	
               
      

            	
              (b)

            	
              a
      Party is required to disclose that information pursuant to any
      law;

            

    

     

    
      	
               
      

            	
              (c)

            	
              it
      is necessary to disclose that information to the Party’s professional
      advisors, bankers or to a bona fide potential assignee of that Party's
      Participating Interest under this Agreement;
or

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      disclosure is necessary to a Related Body Corporate of the Party, a
      Party's seed capitalists, substantial shareholders, underwriters or
      investors.

            

    

     

     

    
      
        
          
          

        

        
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              8.

            	
              CANAFRA warranties

            

    

     

    
      	
               
      

            	
              8.1

            	
              Warranties

            

    

     

    Canafra
represents and warrants to Stellar that as at the Effective Date:

     

    
      	
               
      

            	
              (a)

            	
              Canafra
      has the necessary power and authority, and all necessary corporate and
      other action has been taken to enable it, to enter into and perform its
      obligations under this Agreement and each further document and assurance
      required under Clause
      16
      of this Agreement;

            

    

     

    
      	
               
      

            	
              (b)

            	
              this
      Agreement does not conflict with, constitute or result in a breach or
      default of Canafra’s constituent documents, or the terms or provisions of
      any agreement, writ, deed, order, injunction, judgement, law, rule or
      regulation to which Canafra is a party or by which Canafra is
      bound;

            

    

     

    
      	
               
      

            	
              (c)

            	
              Canafra
      will duly and punctually perform and discharge all of its obligations
      imposed upon it under this
Agreement;

            

    

     

    
      	
               
      

            	
              (d)

            	
              Stellar,
      subject to the satisfaction of this Farm-In Agreement, will have a right
      to a 50% Net Profit Interest in the Granted Mining and Prospecting
      Concessions;

            

    

     

    
      	
               
      

            	
              (e)

            	
              Stellar
      can assign to a third Party the Net Profit Interest to be earned by
      Stellar in accordance with this Agreement, with written approval by
      Canafra such approval not to be unreasonably denied other than in respect
      of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              Statutory
      Encumbrances and Royalties; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Declared Encumbrances and
Royalties;

            

    

     

    
      	
               
      

            	
              and

            

    

     

    
      	
               
      

            	
              (f)

            	
              no
      part of the area comprising the Granted Mining and Prospecting Concessions
      has been relinquished or surrendered, and there are no circumstances or
      occurrences of which Stellar is aware which may jeopardise Stellar's
      interest in the Granted Mining and Prospecting Concessions other than
      disclosed in this Agreement.

            

    

     

    
      	
               
      

            	
              8.2

            	
              Indemnity

            

    

     

    Canafra
will indemnify Stellar and keep Stellar indemnified against all liability,
costs, losses and damage which Stellar suffers or incurs as a result of a breach
of any warranty referred to in clause
8.1,
excluding any indirect or consequential losses.

     

    
      
        	
                9.

              	
                STELLAR WARRANTIES

              

      

       

    

    
      	
               
      

            	
              9.1

            	
              Warranties

            

    

     

    Stellar
represents and warrants to liability that:

     

     

    
      
        
          
          

        

        
          11

          
            

          

        

        
          Table of Contents

        

      

    

    
       

      
        	
                 
      

              	
                (a)

              	
                Stellar
      has the necessary power and authority, and all necessary corporate and
      other action has been taken to enable it, to enter into and perform its
      obligations under this Agreement and each further document and assurance
      required under Clause
      16
      of this Agreement;

              

      

       

    

    
      	
               
      

            	
              (b)

            	
              this
      Agreement does not conflict with, constitute or result in a breach or
      default of Stellar’s constituent documents, or the terms or provisions of
      any agreement, writ, deed, order, injunction, judgement, law, rule or
      regulation to which Stellar is a party or by which Stellar is bound;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              Stellar
      will duly and punctually perform and discharge all of its obligations
      imposed upon it under this
Agreement.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Stellar
      will submit all press releases for approval to Canafra to assure
      acceptance by the authorities in Tanzania.  Approval will not be
      unreasonably withheld.

            

    

     

    
      	
               
      

            	
              9.2

            	
              Indemnity

            

    

     

    Stellar
will indemnify Canafra and keep Canafra indemnified against all liability,
costs, losses and damage which Canafra suffers or incurs as a result of a breach
of any warranty referred to in clause
9.1,
excluding any indirect or consequential losses.

     

    
      
        	
                10.

              	
                ASSIGNMENT

              

      

       

    

    Stellar
may, with the consent of Canafra, assign all or part of its Farm-In interest
under this Agreement to a third party but in any case, shall not be entitled to
sell or transfer all or any part of its interest in this Agreement prior to
becoming entitled to the Farm-In Interest.  

     

    
      	
               
      

            	
              (a)

            	
              In
      this clause, the expressions "consideration, "input tax credit", "supply",
      "tax invoice", "recipient" and "taxable supply" have the meanings given to
      those expressions in accordance with Nevada State
  Tax.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Unless
      otherwise expressly stated, all amounts, prices and other sums stated in
      and consideration to be provided under or in accordance with this
      Agreement are exclusive of tax.

            

    

     

    
      	
               
      

            	
              (c)

            	
              If
      GST is imposed on any supply of services in British Columbia, under or in
      connection with this Agreement, the recipient of the taxable supply must
      pay to the supplier an additional amount equal to the GST payable on or
      for the taxable supply subject to the recipient receiving a valid tax
      invoice in respect of the supply at or before the time of payment. Payment
      of the additional amount must be made at the same time as payment for the
      taxable supply is required to be made in accordance with this
      Agreement.

            

    

     

     

    
      
        
          
          

        

        
          12

          
            

          

        

        
          Table of Contents

        

      

    

     

    
      	
              11.

            	
              NOTICES

            

    

     

    
      	
               
      

            	
              11.1

            	
              Service

            

    

     

    Any
notice, approval, request, demand or other communication (notice)
to be given for the purposes of this Agreement must be in writing and must be
served personally or sent by ordinary or registered mail (airmail if overseas)
to the address of the Party specified in Schedule
“A” Item
2, or any other address as that Party may notify the other parties, in
writing, from time to time or by facsimile transmission to the facsimile number
of that Party specified in Schedule
“A” Item
2 (if any) or any other facsimile number as that Party may notify the
other Parties, in writing, from time to time.

     

    
      	
               
      

            	
              11.2

            	
              Receipt

            

    

     

    A notice
given:

     

    
      	
               
      

            	
              (a)

            	
              personally
      is served upon delivery;

            

    

     

    
      	
               
      

            	
              (b)

            	
              by
      post (other than overseas airmail) is served three business days after
      posting;

            

    

     

    
      	
               
      

            	
              (c)

            	
              by
      overseas airmail is served seven business days after
    posting;

            

    

     

    
      	
               
      

            	
              (d)

            	
              by
      facsimile transmission is served upon receipt of a transmission report by
      the machine from which the facsimile was sent indicating that the
      facsimile had been sent in entirety to the facsimile number of the
      receiving Party specified in Schedule
      “A” Item
      2 or any other number as may have been notified by the receiving
      Party to the other Party and if the facsimile has not been completely
      transmitted by 5.00 pm (determined by reference to the time of day at
      the recipient's address) it is deemed served on the next business
      day.

            

    

     

    
      
        	
                12.

              	
                STAMP DUTY AND
      COSTS

              

      

       

    

    
      	
               
      

            	
              12.1

            	
              Stamp
      Duty

            

    

     

    Stellar
must pay any stamp duty (if necessary) on or arising in connection with this
Agreement and any other related documentation.

     

    
      	
               
      

            	
              12.2

            	
              Costs

            

    

     

    Each
Party must bear its own legal and other costs and expenses arising directly or
indirectly with respect to the preparation, execution, completion and
performance of this Agreement or any other related documentation.

     

     

    
      
        
          
          

        

        
          13

          
            

          

        

        
          Table of Contents

        

      

    

     

    
       

      
        	
                13.

              	
                GOVERNING LAW AND
      JURISDICTION

              

      

       

      This
Agreement is governed by and must be construed in accordance with the laws of
the State of Nevada, Canada and of the United Republic of Tanzania for the time
being in force, and the parties agree to submit to the non-exclusive
jurisdiction of the courts of that jurisdiction.

    

     

    WAIVER:  The
failure or omission of a Party at any time to:

     

    
      	
               
      

            	
              (a)

            	
              enforce
      or require the strict observance of or compliance with any provision of
      this Agreement; or

            

    

     

    
      	
               
      

            	
              (b)

            	
              exercise
      any election or discretion under this Agreement, will not operate as a
      waiver of them or of the rights of a Party, whether Stellar or implied,
      arising under this Agreement.

            

    

     

    
      
        	
                14.

              	
                TERMINATION

              

      

      
This
agreement may be terminated by either party if the other party is in breach of
any of the clauses of this agreement.  If a party is in breach the
second party may in writing within 30 days of the breach give notice under
section 11 of this agreement to the party in breach that they wish to terminate
the agreement.  The agreement will be terminated upon the party in
breach receiving notice under section 11 of the wish to terminate by the second
party.

    

     

    
      
        	
                15.

              	
                CUMULATIVE
      RIGHTS

              

      

       

      The
rights or remedies conferred on any Party by this Agreement are in addition to
all rights and remedies of that Party at law or in equity.

    

     

    
      
        	
                16.

              	
                FURTHER
      ASSURANCE

              

      

       

    

    Each
Party must sign, execute and complete all such further documents as may be
necessary to effect, perfect or complete the provisions of this Agreement and
the transactions to which it relates.

     

    
      
        	
                17.

              	
                EXECUTION BY
      COUNTERPARTS

              

      

       

    

    
      	
               
      

            	
              (a)

            	
              This
      Agreement may consist of one or more counterpart
  copies.

            

    

     

    
      	
               
      

            	
              (b)

            	
              All
      counterparts of this Agreement, when taken together, constitute the one
      document.

            

    

     

     

    
      
        
          
          

        

        
          14

          
            

          

        

        
          Table of Contents

        

      

    

     

    
      	
              18.

            	
              MERGER

            

    

     

    This
Agreement remains and continues in full force and effect after the Effective
Date in respect of any matters, agreements, rights, obligations and warranties
contained in this Agreement.

     

    
      
        	
                19.

              	
                SOLE AGREEMENT

              

      

       

    

    
      	
               
      

            	
              (a)

            	
              This
      Agreement constitutes the sole understanding of the Parties with respect
      to its subject matter and with respect to the rights and obligations of
      the Parties and replaces all other agreements with respect
      thereto.

            

    

     

    
      	
               
      

            	
              (b)

            	
              No
      modification or alteration of the terms of this Agreement is binding
      unless made in writing dated subsequent to the date of this Agreement and
      duly executed by the Parties.

            

    

     

    EXECUTED
as an agreement on this _______ day of August, 2008.

     

     

    
      	
              Executed by CANAFRA
      MINERAL

              EXPLORATION
      CORP.

               

               

               

               

            	
              )

              )

            	 
      
	
              Authorized
      Signatory

               

               

               

            	 
      	
              Witness

            
	
              Name

            	 
      	
              Per:

            

    

     

    
      	
              Executed by TWO
      DRUM G & C

              COMPANY
      LIMITED

               

               

               

               

            	
              )

              )

            	 
      
	
              Authorized
      Signatory

               

               

            	 
      	
              Witness

            
	
              Name

            	 
      	
              Per:

            

    

     

     

    
      	 	 	 
	
              Authorized
      Signatory

               

               

            	 
      	
              Witness

            
	
              Name

            	 
      	
              Per:

            

    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        Table of Contents

      

    

     

    
      	
              Executed by STELLAR
      RESOURCES

              LTD.

               

               

               

               

            	
              )

              )

            	 
      
	
              Authorized
      Signatory

               

               

            	 
      	
              Witness

            
	
              Name

            	 
      	
              Per:

            

    

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
          
          

        

        
          16

          
            

          

        

        
          Table of Contents

        

      

    

     

    SCHEDULE “A”

     

    
      	
              1.

            	
              GRANTED
      MINING AND PROSPECTING CONCESSIONS

            

    

     

    
      	
               
      

            	
              Mining
      and Prospecting Licenses of the Granted Mining and Prospecting Concessions
      consisting of approximately 26 square kilometers more or less, in the
      Chunya Mining District, Mbeya,
Tanzania.

            

    

     

    
      	
              2.

            	
              ADDRESS
      FOR NOTICES

            

    

     

    
      	
               
      To:

            	
              Canafra
      Mineral Exploration Corp.

            

    

    
      	
               
      

            	
               &
      Two
      Drum G & C Company Limited:

            

    

     

    
      	
               
      

            	
              303-1030
      Hamilton Street

            

    

    
      	
               
      

            	
              Vancouver,
      British Columbia

            

    

    
      	
               
      

            	
              Canada
      V6C 1E1

            

    

    
      	
               
      

            	
              Fax:
      (604) 734-7601

            

    

    
      	
               
      

            	
              Email:
      canafra@shawcable.com

            

    

     

     
And To:

     

     Stellar
Resources Ltd.:

     375 North
Stephanie Street, Suite 1411

     Henderson,
NV 89014-8909

     U.S.A.

     Fax:
(702) 547-3552

     Email:
info@stellar-resources.com

     

     

     

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        Table of Contents

      

    

     

    SCHEDULE “B”

    Deed
of Assignment

     

    THIS
DEED is made on the _______ day of August, 2008

     

    BETWEEN:

     

    Canafra
Mineral Exploration Corp.,

    & Two
Drum G & C Company Limited,

    303-1030
Hamilton Street, Vancouver, BC, V6B 2R9, Canada

     

    ("Canafra").

     

    
      	
               
      

            	
              And:

            

    

     

    Stellar
Resources Ltd.,

    375 North
Stephanie Street, Suite 1411, Henderson, NV 89014-8909, USA

     

    ("Stellar").

     

    RECITALS

     

    
      	 	
              A.

            	
              Canafra
      along with its Partner Two Drum G&C Company limited is the beneficial
      owner of a 100% interest in certain mining and prospecting Licenses which
      shall part of this Agreement “the Granted Mining and Prospecting
      Concessions”.

            

    

     

    
      	 	
              B.

            	
              Pursuant
      to the terms of a farm-in agreement between Canafra and Stellar, Canafra
      agrees to assign to Stellar, upon Stellar discharging certain financial
      obligations required under that Agreement, a 50% Net Profit Interest in
      the Granted Mining and Prospecting
Concessions.

            

    

     

    
      	 	
              C.

            	
              Stellar
      agrees to discharge the financial obligations required under the Stellar /
      Canafra Farm-In Agreement, entitling it to the 50% Net Profit Interest in
      the properties described herein and accordingly the parties have entered
      into this deed in order to effect the above
  assignment.

            

    

     

    THE
PARTIES AGREE as follows:

     

    
      
        	
                1.

              	
                INTERPRETATION

              

      

       

    

    
      	
               
      

            	
              1.1

            	
              Definitions

            

    

     

    In this
Deed, words have the same meaning as defined in the Stellar / Canafra Farm-In
Agreement and:

     

     

    
      
        
          
          

        

        
          18

          
            

          

        

        
          Table of Contents

        

      

    

     

    'Assigned
Interest' means the 50% Net Profit Interest in the Granted Mining and
Prospecting Concessions.

     

    
      	
               
      

            	
              1.2

            	
              Interpretation
      Rules

            

    

     

    In this
deed, unless the context otherwise requires:

     

    
      	
               
      

            	
              (a)

            	
              a
      word importing the plural includes the singular and vice
      versa;

            

    

     

    
      	
               
      

            	
              (b)

            	
              a
      reference to either of the parties includes its permitted successors and
      assigns;

            

    

     

    
      	
               
      

            	
              (c)

            	
              a
      reference to any statute includes any proclamations, declarations,
      regulations and other instruments made or issued under that
      statute;

            

    

     

    
      	
               
      

            	
              (d)

            	
              headings
      are for convenience only and do not affect the interpretation of this
      Deed; and

            

    

     

    
      	
               
      

            	
              (e)

            	
              references
      to clauses, paragraphs and schedules are references to clauses, paragraphs
      and schedules of this Deed.

            

    

     

    
      	
               
      

            	
              1.3

            	
              No
      Partnership

            

    

     

    Nothing
in this Deed, or in the relationship between Canafra and Stellar, will be
construed as creating a partnership in any sense between them.

     

    
      
        	
                2.

              	
                ASSIGNMENT

              

      

       

      With
effect from the Effective Date, Canafra assigns and transfers Following the
completion by Stellar of its financial obligations as set out above to Stellar a
50% Net Profit Interest in and to the Assigned Interest, and Stellar accepts
that assignment.

    

     

    
      
        	
                3.

              	
                ASSUMPTION

              

      

       

    

    
      	
               
      

            	
              (a)

            	
              Stellar
      accepts the Assigned Interest assigned to it and assumes and agrees to be
      bound by all of the obligations which accrue, on or after the Effective
      Date, in relation to the Assigned Interest in every way as if Stellar had
      held that Assigned Interest at all time in lieu of
  Canafra.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Canafra
      to the extent that the obligations relate to the Assigned Interest in and
      to the Granted Mining and Prospecting Concessions, assigned and
      transferred to Stellar, hereby consents to such assignment and transfer to
      Stellar.

            

    

     

     

    
      
        
        

      

      
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        Table of Contents

      

    

    
       

      
        	
                4.

              	
                COSTS
      AND STAMP DUTY

              

      

       

    

    
      	
               
      

            	
              (a)

            	
              The
      parties will bear their own legal costs arising out of the preparation,
      negotiation and execution of this
Deed.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Stellar
      will bear all stamp duty and registration fees payable on this Deed (if
      necessary).

            

    

     

    
      
        	
                5.

              	
                MISCELLANEOUS

              

      

       

    

    
      	
               
      

            	
              (a)

            	
              This
      Deed will be binding upon and inure for the benefit of the parties and
      their respective successors.

            

    

     

    
      	
               
      

            	
              (b)

            	
              This
      Deed will be governed by and construed in accordance with the laws of
      Tanzania, Canada and the State of
Nevada.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      parties submit to the non-exclusive jurisdiction of the courts of
      Tanzania, Canada and the State of Nevada and all courts competent appeals
      therefrom.

            

    

     

    
      	
               
      

            	
              (d)

            	
              This
      Deed may be executed in any number of counterparts and all such
      counterparts taken together will be deemed to constitute one and the same
      instrument.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Each
      of the parties will take such steps, execute all such documents and do all
      such acts and things as may be reasonably required by any other party to
      give effect to the intent of this
Deed.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Each
      of the parties agrees to forward a copy of any notice issued or received
      to each of the other parties.

            

    

     

    
      	
               
      

            	
              (g)

            	
              Each
      attorney executing this deed states that he has no notice of the
      revocation of his power of
attorney.

            

    

     

    THE
REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        20ex10-1.htm

    
      
        

      
Exhibit
10.1

     

    ASSET
PURCHASE AGREEMENT

     

    THIS
ASSET PURCHASE AGREEMENT (this “Agreement”) is made
as of September 6, 2008, by and among M-Wave International, LLC, an
Illinois limited liability company (“Purchaser”), M-Wave,
Inc., a Delaware corporation (“Seller”), Joseph
Turek (“Turek”)
and Robert Duke (“Duke”), individual
residents of the State of Illinois.  Certain capitalized terms used
herein are defined in Article I.

     

    RECITAL

     

    WHEREAS,
Purchaser wishes to purchase from Seller and Seller wishes to sell to Purchaser
all of the Acquired Assets (as defined below), and Purchaser wishes to assume
all of the Assumed Obligations (as defined below), all upon the terms and
subject to the conditions set forth in this Agreement.

     

    AGREEMENT

     

    NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants,
agreements and warranties herein contained, the parties agree as
follows:

     

    ARTICLE
I

     

    DEFINITIONS

     

    1.1           Defined
Terms.  The following terms shall have the corresponding
meanings for the purposes of this Agreement:

     

    “Acquired Assets” has
the meaning provided in Section
2.2.

     

    “Adverse Recommendation
Change” has the meaning set forth in Section
5.3(d).

     

    “Agreement” has the
meaning set forth in the Preamble.

     

    “Assumed Obligations”
has the meaning provided in Section
2.5.

     

    “Board” means the
Board of Directors of Seller.

     

    “Business” means
Seller’s existing business.

     

    “Closing” has the
meaning set forth in Section
6.1.

     

    “Closing Date” has the
meaning set forth in Section
6.1.

     

    “Contemplated
Transactions” means all of the transactions contemplated by this
Agreement.

     

    “Contract” means any
contract, lease, commitment, understanding, sales order, purchase order,
agreement, indenture, mortgage, note, bond, right, warrant, instrument, plan,
permit or license, whether written or verbal, which is intended or purports to
be binding and enforceable.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Customer Deposits”
has the meaning set forth in Section
2.2(h).

     

    “Duke” has the meaning
provided in the Preamble.

     

    “Employees” means all
current employees of Seller and any independent contractors who regularly
perform services for Seller as of the Closing Date.

     

    “Excluded Assets” has
the meaning provided in Section
2.4.

     

    “Excluded Contracts”
means the Contracts listed on Schedule
1.1.

     

    “Excluded Obligations”
has the meaning provided in Section
2.6.

     

    “Governmental
Authority” means the government of the United States or any foreign
country or any state or political subdivision thereof and any entity, body or
authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

     

    “Law” means any law,
statute, regulation, ordinance, rule, order, decree, judgment, consent decree,
settlement agreement or governmental requirement enacted, promulgated, entered
into, agreed or imposed by any Governmental Authority.

     

    “Lien” means any
mortgage, lien (except for any lien for taxes not yet due and payable), charge,
restriction, pledge, security interest, option, lease or sublease, claim, right
of any third party, or encumbrance.

     

    “Material Adverse
Change” means a material adverse change in the assets, business as
currently conducted, property, financial condition or operations of
Seller.

     

    “No-Shop Period Start
Date” has the meaning set forth in Section
5.3.

     

    “Notice Period” has
the meaning set forth in Section
5.3(e)(i)(1).

     

    “Ordinary Course of
Business” means consistent with past custom and practice (including with
respect to nature, quantity and frequency) in normal day-to-day business
operations of Seller.

     

    “Permits” has the
meaning set forth in Section
5.2.

     

    “Person” means any
individual, corporation, proprietorship, firm, partnership, limited partnership,
trust, association or other entity or Governmental Authority.

     

    “Premises” means the
premises located at 1300 Norwood Avenue, Itasca, Illinois 60143.

     

    “Premises Lease” means
the lease for the Premises.

     

    “Proxy Statement”
means the proxy statement of Seller relating to the Seller Stockholder Approval
of the Contemplated Transactions.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Purchaser” has the
meaning set forth in the Preamble.

     

    “Purchaser Indemnified
Persons” has the meaning provided in Section
5.6(b).

     

    “Related Agreements”
means the following documents, each of which are dated as of the Closing Date:
(i) the Bill of Sale by Seller in favor of Purchaser relating to the transfer of
assets, (ii) the Assignment and Assumption Agreement between Seller and
Purchaser, (iii) the Assignment of Patents between Seller and Purchaser, (iv)
the Assignment of Uniform Resource Locators (“URLs”) between Seller
and Purchaser, (v) the Assignment of the “M-Wave” trademark, (vi) an assignment
of the name “M-Wave” that will enable Purchaser to use such name in the State of
Illinois as its limited liability company name in a form reasonably acceptable
to Purchaser and (vii) the Application for Withdrawal and Final Report of Seller
(IL Form BCA 13.45).

     

    “Required Consents”
has the meaning set forth in Section
7.3.

     

    “SEC” means the
Securities and Exchange Commission.

     

    “Seller” has the
meaning set forth in the Preamble.

     

    “Seller Indemnified
Persons” has the meaning provided in Section
5.6(a).

     

    “Seller
Recommendation” shall have the meaning set forth in Section
5.4.

     

    “Seller
Representatives” has the meaning set forth in Section
5.3.

     

    “Seller Stockholder
Approval” has the meaning set forth in Section
5.4.

     

    “Seller Stockholder
Meeting” has the meaning set forth in Section
5.4.

     

    “Superior Proposal”
means any Takeover Proposal that, on its terms, the Board or any committee
thereof determines in its good faith judgment would, if consummated, be more
favorable to Seller or Seller’s stockholders from a financial point of view than
the Contemplated Transactions (x) after taking into account the likelihood
and timing of consummation (as compared to the Contemplated Transactions) and
(y) after taking into account all material legal, financial (including the
financing terms of any such Takeover Proposal), regulatory or other aspects of
such Takeover Proposal.

     

    “Takeover Proposal”
means any proposal or offer, on its most recently amended and modified terms,
from any Person or group of Persons (other than Purchaser and its affiliates)
relating to any direct or indirect acquisition or purchase of all or
substantially all of the equity securities or consolidated assets of Seller and
its subsidiaries.

     

    “Termination Fee”
means $25,000.

     

    “Turek” has the
meaning provided in the Preamble.

    
      
         

      

      
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    1.2           Interpretation.  The
headings preceding the text of Articles and Sections included in this Agreement
and the headings to Schedules attached to this Agreement are for convenience
only and shall not be deemed part of this Agreement or be given any effect in
interpreting this Agreement.  The use of the terms “including” or
“include” shall in all cases herein mean “including, without limitation” or
“include, without limitation,” respectively.  References to Articles,
Sections, clauses, Exhibits or Schedules shall refer to those portions of this
Agreement, and any references to a clause shall, unless otherwise identified,
refer to the appropriate clause within the same Section in which such reference
occurs.  The use of the terms “hereunder”, “hereof”, “hereto” and
words of similar import shall refer to this Agreement as a whole and not to any
particular Article, Section or clause of or Exhibit or Schedule to this
Agreement.

     

    ARTICLE
II

     

    PURCHASE
AND SALE

     

    2.1           Payment of
Consideration.  In consideration for the purchase and sale of
the Acquired Assets and the assumption of the Assumed Obligations, Purchaser and
Turek, jointly and severally, agree to cause Purchaser to deliver to Seller the
following:

     

    (a)           Not
later than forty-five (45) days from the execution hereof, Purchaser will
advance the sum of $500,000 to Seller on the terms and conditions of the
Promissory Note and Security Agreement attached hereto as Exhibits 2(a) and 2(b)
and made a part hereof.  The Promissory Note and Security Agreement
will be executed by Seller and delivered to Purchaser simultaneously with the
advance of such funds.  The proceeds so advanced will be maintained by
Seller in a separate segregated account and used only for operating expenses
incurred subsequent to one (1) month prior to the date hereof in the Ordinary
Course of Business.  For avoidance of doubt, the proceeds shall not be
used to repay expenses incurred in connection with any prior business
combinations attempted by Seller or its affiliates.  Disbursements
from this account will require the signatures of at least one (1) of Turek or
Duke; and

     

    (b)           On
the Closing Date, Purchaser shall deliver to Seller the sum of $500,000 cash by
wire transfer of immediately available funds.

     

    2.2           Acquired
Assets.  At the Closing, upon the terms and subject to the
conditions of this Agreement, Seller hereby agrees to sell, transfer, assign,
convey and deliver to Purchaser, and Purchaser hereby agrees to acquire and take
assignment and delivery from Seller all of the assets owned by Seller (wherever
located), except for those assets specifically excluded pursuant to Section 2.4 (all of
the assets sold, transferred, assigned, conveyed and delivered to Purchaser
hereunder are referred to collectively herein as the “Acquired Assets”).
The Acquired Assets include, but are not limited to, all of Seller’s right,
title and interest in and to the following:

     

    (a)           All
equipment, computers, furniture, fixtures, samples, marketing materials and all
other items of tangible personal property, of every kind and description, used
in the operation of or relating to the Business or currently located on the
Premises;

    
      
         

      

      
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    (b)           All
inventories wherever located, including all raw materials, work in process and
finished goods inventories, and supplies and packaging used in the operation of
the Business;

     

    (c)           Any
and all accounts receivable, trade receivables, prepaid assets such as insurance
and other receivables;

     

    (d)           All
documents, records and files, whether in tangible or electronic
format;

     

    (e)           All
intangible property used in or relating to the Business, the Acquired Assets or
used on or related to the Premises, including without limitation:  all
trademarks, service marks, whether registered or existing at common law, trade
names, trade dress, logos, slogans, other indicia of origin and general
intangibles of like nature, together with all goodwill, registrations and
applications related to the foregoing; patents and industrial design
registrations or applications (including any continuations, divisionals,
continuations-in-part, renewals, reissues, reexaminations and applications for
any of the foregoing); copyrights, whether registered or existing at common law
(including any registrations and applications for any of the foregoing);
editorial content; Internet domain names (including any registrations,
reservations and applications for any of the foregoing), URLs and the
corresponding Internet sites, including without limitation mwav.com; software;
“mask works” (as defined under 17 USC Sec. 901) and any registrations and
applications for “mask works”; and trade secrets and proprietary information or
material of any type not otherwise listed in this Section 2.2(e),
including without limitation, inventions (whether or not patentable or reduced
to practice), technical data, customer lists, corporate and business names,
trade names, know-how, formulae, methods (whether or not patentable), designs,
processes, procedures, technology, software programs, databases, data
collections and all derivatives, improvements and refinements thereof, howsoever
recorded, or unrecorded; all Contracts relating to the foregoing intellectual
property used by or related to the Business, including those items set forth on
Schedule
2.2(e);

     

    (f)           Goodwill,
causes of action, rights in actions and other similar claims;

     

    (g)           All
telephone and fax numbers used in Seller’s Business or at the
Premises;

     

    (h)           Any
cash customer deposit for a purchase order, where such cash has not already been
used to fulfill such purchase order as of the Closing Date, as reasonably
determined by Seller (“Customer
Deposits”);

     

    (i)      
     Cash and cash equivalents; and

     

    (j)      
     All other assets of Seller (except for Excluded
Assets and those assets previously described in this Section 2.2),
including prepaid expenses and lease, utility and similar deposits of Seller and
any and all deposits, prepayments, guaranties, letters of credit and other
security held by Seller.

     

    2.3           Assignment of Contracts,
Leases and Other Assets.  At the Closing, Seller hereby agrees
to assign and transfer to Purchaser all of Seller’s right, title and interest in
and to, and Purchaser hereby agrees to take assignment of, the following (and
all of the following shall be deemed included in the term “Acquired Assets” as
used herein).

    
 

    
      
        
        

      

      
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    (a)           All
trade payables and accrued expenses;

     

    (b)           All
customer orders;

     

    (c)           The
Premises Lease and all other Contracts (other than the Excluded Contracts),
including those items set forth on Schedule 2.3(c);
and

     

    (d)           To
the extent assignable, all Permits necessary to operate the Business and the
Premises.

     

    2.4           Excluded
Assets.  The following assets of Seller shall be retained by
Seller and are not being contributed or assigned to Purchaser hereunder (all of
the following are referred to collectively as the “Excluded
Assets”):

     

    (a)           All
corporate books and records, including stock ledgers and corporate minute
books;

     

    (b)           All
accounting and tax information and records, including all tax returns; provided,
that Purchaser shall be entitled to receive a copy of Seller’s accounting and
tax records upon written request and shall be entitled to access during normal
business hours to the originals of such records upon written request;
and

     

    (c)           The
Excluded Contracts;

     

    2.5           Assumed
Obligations.  At the Closing, Purchaser hereby agrees to assume
and to pay, perform, fulfill and discharge, all debts, claims, obligations and
liabilities of Seller, whether accrued or unaccrued, absolute or contingent,
other than the Excluded Obligations (the “Assumed
Obligations”).  The Assumed Obligations include all debts,
claims, obligations and liabilities of Seller, whether accrued or unaccrued,
absolute or contingent, relating to or arising out of (i) the violation of any
environmental law or the handling, use or storage of any hazardous substance,
toxic substance or pollutant, (ii) the violation of any employment law or any
other employment matter, including any claim for compensation or severance and
(iii) any product warranty made by Seller.

     

    2.6           No Other Liabilities
Assumed.  Anything in this Agreement to the contrary
notwithstanding, Purchaser shall not assume or otherwise be liable in respect
of, or be deemed to have assumed or otherwise be liable in respect of the
following obligations (the “Excluded
Obligations”):

     

    (a)           All
costs, expenses, liabilities and obligations under any Excluded
Contract;

     

    (b)           All
costs, expenses, liabilities and obligations of Seller related to Sidley &
Austin and Latham & Watkins;

    
      
         

      

      
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    (c)           All
costs, expenses, liabilities and obligations of Seller related to the
Contemplated Transactions;

     

    (d)           All
liabilities and obligations relating to any violation or any alleged violation
of state or federal securities laws;

     

    (e)           Any
severance liabilities relating to the termination of employment of Seller’s
employees; and

     

    (f)           Accrued
payroll expenses for Seller’s employees (“Accrued Payroll”); provided that
Accrued Payroll shall not be an Excluded Liability to the extent Seller’s
liabilities exceed its assets, as determined in accordance with generally
accepted accounting principles, after the consummation of the Contemplated
Transactions.

     

    ARTICLE
III

     

    REPRESENTATIONS
AND WARRANTIES OF SELLER

     

    Seller
represents and warrants to Purchaser, as of the date of this Agreement and as of
the Closing Date (as if such representations and warranties were remade on the
Closing Date), as follows:

     

    3.1           Due
Incorporation.  Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware, with all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as it is now being owned, leased, operated and
conducted.

     

    3.2           Due
Authorization.  Seller has the full power and authority to
enter into this Agreement and to consummate the Contemplated
Transactions.  Seller has duly and validly executed and delivered this
Agreement subject to Seller Stockholder Approval.  This Agreement
constitutes a legal, valid and binding obligation of Seller, enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect that affect the enforcement of creditors’ rights generally and by
equitable limitations on the availability of specific remedies.

     

    3.3           Consents and Approvals; No
Conflicts, etc.

     

    (a)           Except
for the consents set forth on Schedule 3.3, no
consent, authorization or approval of, filing or registration with, or
cooperation from, any Governmental Authority or any other Person not a party to
this Agreement is necessary in connection with the execution, delivery and
performance by Seller of this Agreement or the consummation of the Contemplated
Transactions.

     

    (b)           Except
as set forth on Schedule 3.3,
the execution, delivery and performance by Seller of this Agreement do not and
will not (i) violate any Law applicable to Seller or any of its properties
or assets; (ii) violate or conflict with, result in a breach or termination of,
constitute a default or give any third party any additional right (including a
termination right) under, permit cancellation of, result in the creation of any
Lien upon any of the assets or properties of Seller under, or result in or
constitute a circumstance which, with or without notice or lapse of time or
both, would constitute any of the foregoing under, any Contract to which Seller
is a party or by which any of its assets or properties are bound; (iii) permit
the acceleration of the maturity of any indebtedness of Seller or indebtedness
secured by any of the assets or properties of Seller; or (iv) violate or
conflict with any provision of the Charter or Bylaws of Seller.

    
      
         

      

      
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    3.4           Brokers.  Except
for B. Riley & Co., Seller has not used a broker or finder in connection
with the Contemplated Transactions and neither Purchaser nor any affiliate of
Purchaser has or will have any liability or otherwise suffer or incur any damage
as a result of or in connection with any brokerage or finder’s fee or other
commission of any Person retained by Seller in connection with any of the
Contemplated Transactions.

     

    ARTICLE
IV

     

    REPRESENTATIONS
AND WARRANTIES OF PURCHASER

     

    Purchaser,
Turek and Duke, jointly and severally, represent and warrant to Seller, as of
the date of this Agreement and as of the Closing Date (as if such
representations and warranties were remade on the Closing Date), as
follows:

     

    4.1           Due
Incorporation.  Purchaser is a limited liability company duly
organized, validly existing and in good standing under the laws of Illinois,
with all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being owned, leased,
operated and conducted.

     

    4.2           Due
Authorization.  Purchaser has full power and authority to enter
into this Agreement and to consummate the Contemplated
Transactions.  The execution, delivery and performance by Purchaser of
this Agreement have been duly and validly approved by the members of Purchaser
and no other actions or proceedings on the part of Purchaser are necessary to
authorize this Agreement and the Contemplated
Transactions.  Purchaser, Turek and Duke have duly and validly
executed and delivered this Agreement.  This Agreement constitutes
legal, valid and binding obligations of Purchaser, Turek and Duke, and upon the
execution and delivery of the Related Agreements by Purchaser, the Related
Agreements will constitute, legal, valid and binding obligations of Purchaser,
in each case, enforceable in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws in effect which affect the
enforcement of creditors’ rights generally and by equitable limitations on the
availability of specific remedies.

     

    4.3           Consents and Approvals; No
Conflicts, etc.

     

    (a)           No
consent, authorization or approval of, filing or registration with, or
cooperation from, any Governmental Authority or any other Person not a party to
this Agreement is necessary in connection with the execution, delivery and
performance by Purchaser, Turek or Duke of this Agreement and the consummation
of the Contemplated Transactions.

     

    (b)           The
execution, delivery and performance by Purchaser, Turek or Duke of this
Agreement do not and will not (i) violate any Law applicable to Purchaser or any
of its properties or assets; (ii) violate or conflict with, result in a breach
or termination of, constitute a default or give any third party any additional
right (including a termination right) under, permit cancellation of, result in
the creation of any Lien upon any of the assets or properties of Purchaser,
Turek or Duke under, or result in or constitute a circumstance which, with or
without notice or lapse of time or both, would constitute any of the foregoing
under, any Contract to which Purchaser, Turek or Duke is a party or by which
Purchaser, Turek or Duke or any of their respective assets or properties are
bound; or (iii) violate or conflict with any provision of Purchaser’s Articles
of Organization or Limited Liability Company Agreement.

     

    
      
         

      

      
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    4.4           Brokers.  Neither
Purchaser, Turek nor Duke have used a broker or finder in connection with the
Contemplated Transactions and neither Seller nor any affiliate of any Seller has
or will have any liability or otherwise suffer or incur any Damage as a result
of or in connection with any brokerage or finder’s fee or other commission of
any Person retained by Purchaser, Turek or Duke in connection with any of the
Contemplated Transactions.

     

    4.5           MWAV Ticker
Symbol.  Purchaser acknowledges that, while Seller’s name will
be changed upon the Closing Date, Seller’s common stock will continue to trade
on an electronic quotation system under the ticker symbol “MWAV” or a similar
symbol until such symbol can be changed in accordance with applicable
administrative procedures.  Seller will use its commercially
reasonable efforts to change its ticker symbol to a different ticker symbol as
promptly as possible.

     

    4.6           Limitation of
Liability.  Purchaser, Turek and Duke each acknowledges that,
except as expressly set forth in this Agreement, neither Seller nor any of its
representatives or affiliates makes or has made any representations or
warranties, express or implied, in connection with the Contemplated
Transactions.  Without limiting the generality of the foregoing,
except as expressly set forth in this Agreement, (i) the Acquired Assets
shall be transferred to Purchaser pursuant to this Agreement in their present
condition, “AS IS”, with all faults, and without any warranty, express or
implied; and (ii) no patent or latent physical or other condition or defect
in any of the Acquired Assets or the Business, whether or not now known or
discovered, or the existence or occurrence of any obligation or liability,
whether absolute, contingent, accrued or unaccrued, shall affect the rights of
either party hereunder.

     

    ARTICLE
V

     

    COVENANTS

     

    5.1           Implementing
Agreement.  Subject to the terms and conditions hereof, Seller,
Turek, Duke and Purchaser shall take all action required of it to fulfill their
respective obligations under the terms of this Agreement and shall otherwise use
their commercially reasonable efforts to facilitate the consummation of the
Contemplated Transactions.  Except as otherwise expressly permitted
hereby, Seller, Turek, Duke and Purchaser agree that they will not take any
action that would have the effect of preventing or impairing the performance of
their obligations under this Agreement.

     

    5.2           Consents and
Approvals.  Seller, Turek, Duke and Purchaser shall each use
its commercially reasonable efforts to obtain all consents, approvals,
certificates and other documents required in connection with the performance by
them of this Agreement and the consummation of the Contemplated Transactions;
provided that
no contact will be made by Seller, Turek or Duke (or any representative of
Seller, Turek or Duke) with any third party to obtain any such consent or
approval except in accordance with a plan previously agreed to by
Purchaser.  Seller shall make all filings, applications, statements
and reports to all Governmental Authorities and other Persons that are required
to be made prior to the Closing Date by or on behalf of Seller or any of its
affiliates pursuant to any applicable Law or Contract in connection with this
Agreement and the Contemplated Transactions, including expedited submission of
all materials required by any Governmental Authority in connection with such
filings.  Seller shall use its commercially reasonable efforts to
obtain all required consents and approvals (if any) to assign and transfer
Seller’s licenses and permits (“Permits”) to
Purchaser at Closing if such transfer is required by applicable law, and, to the
extent that one or more of the Permits are not transferable, to obtain
replacements therefor.  If certain Permits are not transferable or
replacements therefor are not obtainable on or before the Closing, but such
Permits are transferable or replacements therefor are obtainable after the
Closing, Seller shall continue to use such efforts in cooperation with Purchaser
after the Closing as may be required to obtain all required consents and
approvals to transfer, or obtain replacements for, such Permits after
Closing.

    
      
         

      

      
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    5.3           Solicitation; Change in
Recommendation.

     

    (a)           During
the period beginning on the date of this Agreement and continuing until the date
the Proxy Statement is mailed to Seller’s stockholders (the “No-Shop Period Start
Date”), Seller and its subsidiaries and their respective officers,
directors, employees, agents, advisors and other representatives (such Persons,
together with the subsidiaries of Seller, collectively, the “Seller
Representatives”) shall have the right to: (i) initiate, solicit,
facilitate and encourage Takeover Proposals, including by way of providing
access to non-public information to any other Person or group of Persons and
(ii) enter into and maintain or continue discussions or negotiations with
respect to Takeover Proposals or otherwise cooperate with or assist or
participate in, or facilitate any inquiries, proposals, discussions or
negotiations regarding a Takeover Proposal.

     

    (b)           Except
as permitted by this Section 5.3
Seller and its subsidiaries and their respective directors and officers shall,
and Seller shall use its commercially reasonable efforts to cause the other
Seller Representatives, to (i) on the No-Shop Period Start Date,
immediately cease any discussions or negotiations with any Persons that may be
ongoing with respect to a Takeover Proposal; and (ii) from the No-Shop
Period Start Date until the Closing Date or, if earlier, the termination of this
Agreement in accordance with Article IX, not
(A) solicit, initiate or knowingly facilitate or encourage (including by
way of furnishing non-public information other than in the ordinary course of
business) any inquiries regarding, or the making of any proposal or offer that
constitutes, or could reasonably be expected to result in, a Takeover Proposal
or (B) engage in, continue or otherwise participate in any discussions or
negotiations regarding a Takeover Proposal.

     

    (c)           Notwithstanding
anything to the contrary contained in Section 5.3(b),
if, at any time on or after the No-Shop Period Start Date and prior to obtaining
the Seller Stockholder Approval, Seller or any of the Seller Representatives
receives a written Takeover Proposal by any Person or group of Persons, which
Takeover Proposal was made on or after the No-Shop Period Start Date,
(i) Seller and the Seller Representatives may contact such Person or group
of Persons to clarify the terms and conditions thereof and (ii) if the
Board or any committee thereof determines in good faith (A) after
consultation with its investment bankers, that such Takeover Proposal
constitutes or could reasonably be expected to lead to a Superior Proposal and
(B) after consultation with outside legal counsel, that failure to take
such action could be inconsistent with its fiduciary duties under applicable
law, Seller and the Seller Representatives may (x) furnish information
(including non-public information) with respect to Seller and its subsidiaries
to the Person or group of Persons who has made such Takeover Proposal and
(y) engage in or otherwise participate in discussions and negotiations
regarding such Takeover Proposal.  From and after the No-Shop Period
Start Date, Seller shall promptly advise Purchaser of the receipt by Seller of
any Takeover Proposal made on or after the No-Shop Period Start Date or any
request for non-public information made by any Person or group of Persons that
has informed Seller it is considering making a Takeover Proposal or any request
for discussions or negotiations with Seller or the Seller Representatives
relating to a Takeover Proposal, and Seller shall provide to Purchaser, at
Seller’s option, either (i) a copy of any such Takeover Proposal made in
writing provided to Seller or any of its subsidiaries (which, at the option of
Seller, may be redacted to remove the identity of the Person or group of Persons
making the Takeover Proposal) or (ii) a written summary of the material
terms of such Takeover Proposal (it being understood that such material terms do
not have to include the identity of the Person or group of Persons making the
Takeover Proposal). Following the No-Shop Period Start Date, Seller shall keep
Purchaser informed on a prompt basis of any material change to the terms and
conditions of any Takeover Proposal.

    
      
         

      

      
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    (d)           Except
as set forth in this Section 5.3,
neither the Board nor any committee thereof shall (i) withdraw or modify,
or propose publicly to withdraw or modify in a manner adverse to Purchaser, the
Seller Recommendation; (ii) approve or recommend, or propose publicly to
approve or recommend, any Takeover Proposal (any of the actions referred to in
the foregoing clauses
(i) and (ii), whether taken
by the Board or a committee thereof, an “Adverse Recommendation
Change”); or (iii) cause or allow Seller or any of its subsidiaries
to enter into any letter of intent, acquisition agreement or any similar
agreement or understanding (other than a confidentiality agreement) to implement
a Takeover Proposal.

     

    (e)           (i) Notwithstanding
anything to the contrary in this Agreement, at any time prior to obtaining the
Seller Stockholder Approval, if Seller has received a Takeover Proposal that has
not been withdrawn or abandoned and that the Board or any committee thereof
concludes in good faith constitutes a Superior Proposal after giving effect to
all of the adjustments which may be offered by Purchaser pursuant to clause
(2) below, if applicable, the Board or any committee thereof may
(x) make an Adverse Recommendation Change and/or (y) terminate this
Agreement to enter into a definitive agreement with respect to such Superior
Proposal if the Board or any committee thereof determines in good faith, after
consultation with outside counsel, that failure to do so would be inconsistent
with its fiduciary duties under applicable law; provided, however, if the
Adverse Recommendation Change pursuant to the foregoing clause (x)
and/or termination of this Agreement pursuant to the foregoing clause (y) is to
be effected, in either case, as the result of receipt by Seller of a Superior
Proposal, then the Board or a committee thereof may not effect an Adverse
Recommendation Change pursuant to the foregoing clause
(x) and/or terminate this Agreement pursuant to the foregoing clause
(y) unless:

    
      
         

      

      
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    (1)           Seller
shall have provided prior written notice to Purchaser, at least five calendar
days in advance (the “Notice Period”), of
its intention to effect an Adverse Recommendation Change in response to such
Superior Proposal and/or to terminate this Agreement to enter into a definitive
agreement with respect to such Superior Proposal, which notice shall specify the
material terms and conditions of any such Superior Proposal (it being understood
that such material terms and conditions do not have to include the identity of
the Person or group of Persons making the Superior Proposal), and
contemporaneously with providing such notice shall have provided a copy of the
relevant proposed transaction agreements with the party making such Superior
Proposal and other material documents (provided that such copies of such
agreements and other material documents, may exclude the identity of the Person
or group of Persons making the Superior Proposal); and

     

    (2)           prior
to effecting such Adverse Recommendation Change in response to a Superior
Proposal and/or terminating this Agreement to enter into a definitive agreement
with respect to such Superior Proposal, Seller shall, and shall cause its legal
and financial advisors to, during the Notice Period, negotiate with Purchaser in
good faith (to the extent Purchaser desires to negotiate) to make such
adjustments to the terms and conditions of this Agreement that are proposed by
Purchaser so that such Takeover Proposal ceases to constitute a Superior
Proposal.

     

    In the
event that during the Notice Period any revisions are made to the Superior
Proposal to which the proviso in this Section 5.3(e)(i)
applies and the Board or any committee thereof in its good faith judgment
determines such revisions are material (it being agreed that any change in the
purchase price in such Superior Proposal shall be deemed a material revision),
Seller shall be required to deliver a new written notice to Purchaser and to
comply with the requirements of this Section 5.3(e)(i)
with respect to such new written notice, except that the Notice Period shall be
reduced to two calendar days.

     

    (ii)           In
addition to the rights of the Board and any committee thereof under clause (i) of
this Section 5.3(e)
and notwithstanding anything to the contrary in this Agreement, at any time
prior to obtaining the Seller Stockholder Approval, the Board or any committee
thereof may, other than in response to any Takeover Proposal, (x) make an
Adverse Recommendation Change and/or (y) terminate this Agreement if the
Board or any committee thereof determines in good faith, after consultation with
outside counsel, that the failure to do so would be inconsistent with its
fiduciary duties under applicable law; provided that prior
to taking either of the actions set forth in the foregoing clause (x) or
clause (y),
Seller shall take the actions set forth in clauses (1) and
(2) of
Section 5.3(e)(i)
above as if a Superior Proposal that is not an Excluded Superior Proposal had
been received by Seller. No Adverse Recommendation Change shall change the
approval of the Board for purposes of causing any state takeover statute or
other state law to be inapplicable to the Contemplated
Transactions.

     

    
      
         

      

      
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    (f)      
     Nothing contained in this Agreement shall prohibit
Seller or the Board or any committee thereof from complying with Rules 14a-9,
14d-9 or 14e-2 promulgated under the Exchange Act of 1934, as amended, or from
making any disclosure to the Seller’s stockholders if, in the good faith
judgment of the Board or any committee thereof, after consultation with outside
counsel, the failure to do so would be inconsistent with its fiduciary duties
under applicable law or is otherwise required under applicable law.

     

    5.4           Seller Stockholder
Approval. Subject to the terms and conditions of this Agreement, Seller
shall, as soon as practicable after the Proxy Statement is cleared by the SEC
for mailing to Seller’s stockholders, duly call, give notice of, convene and
hold a meeting of its stockholders (including any adjournment or postponement
thereof, the “Seller
Stockholder Meeting”) for the purpose of obtaining the adoption of this
Agreement by the requisite vote of Seller’s stockholders (the “Seller Stockholder
Approval”). Seller shall, through the Board or any committee thereof, but
subject to the right of the Board or any committee thereof to make an Adverse
Recommendation Change pursuant to Section 5.3(e)(i)
or Section 5.3(e)(ii),
recommend to its stockholders that the Seller Stockholder Approval be given (the
“Seller
Recommendation”) and shall include the Seller Recommendation in the Proxy
Statement, and, unless there has been an Adverse Recommendation Change, Seller
shall take all reasonable lawful action to solicit the Seller Stockholder
Approval.

     

    5.5           Employees.  As
of the Closing Date, (i)  Seller shall terminate the employment or
engagement of all of Seller’s Employees and (ii) Purchaser shall offer an
employment or consulting arrangement, on an at-will basis, to all of such
Employees.  Purchaser shall require each Employee who is hired by
Purchaser, including Turek and Duke, to execute and deliver to Seller at the
Closing a release and waiver of all claims against Seller and its directors,
officers, employees, representatives and affiliates in a form reasonably
acceptable to Seller; provided that, in the case or Turek and Duke, such release
and waiver shall not be applicable to this Agreement and in the case of all
Employees, such release shall not be applicable to any stock option agreement
relating to Seller stock options.

     

    5.6           Indemnification.

     

    (a)           Purchaser
shall indemnify and hold harmless Seller, its affiliates and their respective
officers, directors and other representatives (collectively, the “Seller Indemnified
Persons”) for, and will pay to the Seller Indemnified Persons the amount
of, any cost, loss, liability, claim, obligation, lawsuit, demand, damage,
expense or diminution of value, whether or not involving a third-party claim,
including without limitation, interest, penalties, damages to the environment,
reasonable attorney's fees and all amounts paid in investigation, defense or
settlement of any of the foregoing, arising, directly or indirectly, from or in
connection with any Assumed Obligation, including all liabilities to Employees
required to hired by Purchaser pursuant to Section 5.5 arising
on or after the Closing Date.

     

    (b)           Seller
shall indemnify and hold harmless Purchaser, its affiliates and their respective
officers, directors and other representatives (collectively, the “Purchaser Indemnified
Persons”) for, and will pay to the Purchaser Indemnified Persons the
amount of, any cost, loss, liability, claim, obligation, lawsuit, demand,
damage, expense or diminution of value, whether or not involving a third-party
claim, including without limitation, interest, penalties, damages to the
environment, reasonable attorney's fees and all amounts paid in investigation,
defense or settlement of any of the foregoing, arising, directly or indirectly,
from or in connection with any Excluded Obligation.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (c)           Promptly
after receipt by an indemnified party under Section 5.6(a) or
Section 5.6(b)
of notice of the commencement of any proceeding against it, such indemnified
party shall, if a claim is to be made against an indemnifying party under such
section, give notice to the indemnifying party of the commencement of such
claim, but the failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified party,
except to the extent (and only the extent) that the indemnifying party
demonstrates that the defense of such action is prejudiced by the indemnifying
party's failure to give such notice.

     

    (d)           If
any proceeding referred to in Section 5.6(c) is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such proceeding, the indemnifying party will be
entitled to participate in such proceeding and, unless the claim involves taxes,
to the extent that it wishes (unless the indemnifying party is also a party to
such proceeding and the indemnified party determines in good faith that joint
representation would be inappropriate), to assume the defense of such proceeding
with counsel reasonably satisfactory to the indemnified party and, after notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such proceeding, the indemnifying party will not, as long as it
diligently conducts such defense, be liable to the indemnified party under this
Section 5.6 for
any fees of other counsel or any other expenses with respect to the defense of
such proceeding, in each case subsequently incurred by the indemnified party in
connection with the defense of such proceeding, other than reasonable costs of
investigation.  If the indemnifying party assumes the defense of an
proceeding, (i) it will be conclusively established for purposes of this
Agreement that the claims made in that proceeding are within the scope of and
subject to indemnification under this Section 5.6 and (ii)
no compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent (which consent may not be
unreasonably withheld, delayed or conditioned) unless (A) there is no finding or
admission of any violation of Law or any violation of the rights of any Person
and no effect on any other claims that may be made against the indemnified
party, and (B) the sole relief provided is monetary damages that are paid in
full by the indemnifying party.  If notice is given to an indemnifying
party of the commencement of any proceeding and the indemnifying party does not,
within 15 days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such proceeding, the
indemnifying party will be bound by any determination made in such proceeding or
any compromise or settlement effected in good faith by the indemnified
party.

     

    (e)           Notwithstanding
the foregoing, if any party entitled to indemnification hereunder determines in
good faith that there is a reasonable probability that an proceeding may
adversely affect it or its affiliates other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume the exclusive
right to defend, compromise, or settle such proceeding, but the indemnifying
party will not be bound by any determination of an proceeding so defended or any
compromise or settlement effected without its consent (which may not be
unreasonably withheld, delayed or conditioned).

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    5.7           Insurance.  Seller
shall purchase a six-year extended reporting period endorsement (“reporting tail
coverage”) under Seller’s existing directors’ and officers’ liability insurance
coverage, provided that such reporting tail coverage shall extend the director
and officer liability coverage in force as of the date hereof from the Closing
Date on terms that in all material respects are no less advantageous to the
intended beneficiaries thereof than the existing directors’ and officers’
liability insurance.

     

    5.8           Seller Proxy
Statement.  Purchaser, Turek and Duke shall reasonably
cooperate with Seller in the preparation of the Proxy Statement and shall
furnish all information concerning itself and its affiliates, officers, members
or managers that is required to be included in the Proxy Statement or, to the
extent applicable, any other documents to be filed with the SEC in connection
with the Contemplated Transactions, or that is customarily included in proxy
statements prepared in connection with transactions of the type contemplated by
this Agreement.  None of the information supplied by Purchaser, Turek
or Duke for inclusion or incorporation by reference in the Proxy Statement or
any other documents to be filed with the SEC in connection with the Contemplated
Transactions will, in the case of the Proxy Statement, at the date it is first
mailed to Seller’s stockholders or at the time of the Seller Stockholder Meeting
or at the time of any amendment or supplement thereto, in the case of any other
documents to be filed with the SEC in connection with the Contemplated
Transactions, at the date it is first mailed to Seller’s stockholders or, at the
date it is first filed with the SEC, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.  If at any time prior to
the Seller Stockholder Meeting, any information relating to Purchaser, Turek or
Duke or any of their respective affiliates, officers, members or managers, is
discovered by Purchaser, which is required to be set forth in an amendment or
supplement to the Proxy Statement or any other documents to be filed with the
SEC in connection with the Contemplated Transactions, so that the Proxy
Statement or any other document to be filed with the SEC in connection with the
Contemplated Transactions shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.  If Purchaser, Turek or
Duke discovers any such information it shall (i) promptly (and in any event
within two business days) notify Seller and (ii) cooperate reasonably with
Seller in the preparation and filing with the SEC of an appropriate amendment or
supplement describing such information.

     

    5.9           No Other Sale of Acquired
Assets.  Except as contemplated by Section 2.2 and Section 5.3 or except
for sales of assets in the Ordinary Course of Business, prior to the Closing
Date, Seller shall not sell, lease, mortgage, pledge or otherwise dispose of all
or any substantial portion of the Acquired Assets to any third party, nor may
Seller agree to do so.

     

    5.10           Conduct of
Business.  Until the Closing Date, and unless Purchaser
otherwise consents in writing, Seller shall operate the Business substantially
as previously operated and only in the Ordinary Course of Business, including
using its best efforts to preserve intact its organization and
goodwill.  All disbursements in excess of $5,000 (whether singly or in
a series of similar transactions) shall require the signatures of at least one
(1) of Turek or Duke.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    ARTICLE
VI

     

    CLOSING

     

    6.1           Closing.  The
Closing of the Contemplated Transactions (the “Closing”) shall take
place at the offices of Shefsky & Froelich Ltd., 111 East Wacker Drive,
Suite 2800, Chicago, Illinois 60601, on the date of the satisfaction or waiver
of the conditions precedent set forth in Articles VII and
VIII.  The
date on which the Closing actually occurs is referred to herein as the “Closing
Date”.

     

    6.2           Deliveries by
Seller.  At the Closing, in addition to any other documents or
agreements required under this Agreement, Seller shall deliver to Purchaser the
following:

     

    (a)           The
Related Agreements;

     

    (b)           A
certificate dated the Closing Date of Seller certifying as to the compliance by
Seller with Sections 7.1 and
7.2;

     

    (c)           A
certificate of Seller’s secretary certifying resolutions of the board of
directors of Seller approving this Agreement and the Contemplated Transactions
(together with an incumbency and signature certificate regarding the officer(s)
signing on behalf of Seller);

     

    (d)           Seller
will as soon as is reasonably practicable following the Closing change its name
to a name not confusingly similar to the name M-Wave and deliver a certificate
of amendment to its Certificate of Incorporation to be filed immediately upon
the name change.

     

    6.3           Deliveries by
Purchaser.  At the Closing, in addition to any other documents
or agreements required under this Agreement, Purchaser shall deliver to Seller
the following:

     

    (a)           Turek
and Duke will each resign their current positions with Seller;

     

    (b)           A
certificate, dated the Closing Date, of an executive officer of Purchaser,
certifying as to compliance by Purchaser with Sections 8.1 and
8.2;

     

    (c)           A
certificate of Purchaser’s secretary or equivalent officer certifying
resolutions of the board of managers of Purchaser approving this Agreement and
the Contemplated Transactions (together with an incumbency and signature
certificate regarding the officer(s) signing on behalf of Purchaser);
and

     

    (d)           Termination
and return to Seller of the Note and Security Agreement mentioned in Section 2.1(a)
above.

    
      
         

      

      
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    ARTICLE
VII

     

    CONDITIONS
PRECEDENT

    TO
OBLIGATIONS OF PURCHASER

     

    The
obligations of Purchaser under Article II are
subject to the satisfaction or waiver by Purchaser of the following conditions
precedent on or before the Closing Date:

     

    7.1           Warranties True as of Both
Present Date and Closing Date.  The representations and
warranties of Seller contained herein shall have been true, accurate and correct
in all material respects on and as of the date of this Agreement, and shall also
be true, accurate and correct in all material respects on and as of the Closing
Date with the same force and effect as though made by Seller on and as of the
Closing Date.

     

    7.2           Compliance with Agreements
and Covenants.  Seller shall have performed and complied in all
material respects with all of its covenants, obligations and agreements
contained in this Agreement to be performed and complied with by it on or prior
to the Closing Date.

     

    7.3           Consents and
Approvals.  Purchaser shall have received written evidence
reasonably satisfactory to it that all of the consents, approvals and filings
set forth on Schedule 3.3
(“Required
Consents”) have been made or obtained.

     

    7.4           Documents.  Purchaser
shall have received all of the agreements, documents and items specified in
Section 6.2.

     

    7.5           Actions or
Proceedings.  No action or proceeding by any Governmental
Authority or other Person shall have been instituted or threatened that would
reasonably be expected to enjoin, restrain or prohibit, or would reasonably be
expected to result in substantial damages in respect of, the performance of any
provision of this Agreement or the consummation of the Contemplated
Transactions.

     

    7.6           No Material Adverse
Change.  No Material Adverse Change in the Business shall have
occurred from the date hereof through the Closing and the Business shall have
been operated in the Ordinary Course of Business with no contracts or agreements
being entered into which extend beyond the Closing Date except for customer
orders and orders to vendors for merchandise in the Ordinary Course of
Business.

     

    7.7           Loan
Commitment.  Purchaser shall have obtained a binding lending
arrangement with a lender satisfactory to it to fund its obligations to purchase
the Acquired Assets, including sufficient working capital to operate the
Business subsequent to the Closing Date.

     

    ARTICLE
VIII

     

    CONDITIONS
PRECEDENT

    TO
OBLIGATIONS OF SELLER

     

    The
obligations of Seller under Article II are
subject to the satisfaction or waiver by Seller of the following conditions
precedent on or before the Closing Date:

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    8.1           Warranties True as of Both
Present Date and Closing Date.  The representations and
warranties of Purchaser contained herein shall have been true, accurate and
correct in all material respects on and as of the date of this Agreement, and
shall also be true, accurate and correct in all material respects on and as of
the Closing Date with the same force and effect as though made by Purchaser on
and as of the Closing Date.

     

    8.2           Compliance with Agreements
and Covenants.  Purchaser shall have performed and complied in
all material respects with all of its covenants, obligations and agreements
contained in this Agreement to be performed and complied with by it on or prior
to the Closing Date.

     

    8.3           Consents and
Approvals.  Seller shall have received written evidence
reasonably satisfactory to it that all of the Required Consents have been made
or obtained.

     

    8.4           Documents.  Seller
shall have received all of the agreements, documents and items specified in
Section 6.3.

     

    8.5           Actions or
Proceedings.  No action or proceeding by any Governmental
Authority or other Person shall have been instituted or threatened that would
reasonably be expected to enjoin, restrain or prohibit, or would reasonably be
expected to result in substantial damages in respect of, the performance of any
provision of this Agreement or the consummation of the Contemplated
Transactions.

     

    8.6           Seller Stockholder
Approval. The Seller Stockholder Approval shall have been
obtained.

     

    ARTICLE
IX

     

    TERMINATION

     

    9.1           Termination. This
Agreement may be terminated at any time prior to the Closing, whether before or
after the Seller Stockholder Approval is obtained, as follows:

     

    (a)           by
mutual written consent of Seller and Purchaser;

     

    (b)           by
either Seller or Purchaser:

     

    (i)           if
the Closing shall not have occurred on or before December 31, 2008 (such date,
as it may be extended pursuant to the provisions hereof, the “Termination Date”);
provided, however, that the
right to terminate this Agreement pursuant to this Section 9.1(b)(i)
shall not be available to any party whose failure to fulfill any obligation or
other breach under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before the Termination Date;

     

    (ii)           if
any Governmental Authority of competent jurisdiction shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the Contemplated Transactions and such order, decree or
ruling or other action shall have become final and nonappealable; provided, however, that the
right to terminate this Agreement pursuant to this Section 9.1(b)(ii)
shall not be available to any party who has not used its commercially reasonable
efforts to cause such order to be lifted or otherwise taken such action as is
required to comply with Section 5.2;
or

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    (iii)           if
the Seller Stockholder Approval shall not have been obtained at the Seller
Stockholder Meeting or any adjournment or postponement thereof at which a vote
on the adoption of this Agreement was taken or the Seller Stockholder Meeting
shall not have been held because of action taken by Seller pursuant to the
proviso in the first sentence of Section 5.4;

     

    (c)           by
Seller if Purchaser shall have breached any representation, warranty, covenant,
obligation or other agreement contained in this Agreement or any such
representation or warranty shall have become untrue after the date of this
Agreement that (i) would give rise to the failure of a condition set forth
in Section 8.1, or
8.2 to be
satisfied and (ii) cannot be or has not been cured prior to the earlier to
occur of (A) 30 days after the giving of written notice to Purchaser by
Seller of such breach or (B) the Termination Date;

     

    (d)           by
Seller (i) pursuant to Section 5.3(e)(i)
or (ii) pursuant to Section 5.3(e)(ii);
provided that
prior to or concurrently with such termination, Seller pays as directed by
Purchaser in immediately available funds the Termination Fee;

     

    (e)           by
Purchaser if Seller shall have breached any representation, warranty, covenant,
obligation or other agreement contained in this Agreement or any such
representation or warranty shall have become untrue after the date of this
Agreement that (i) would give rise to the failure of a condition set forth
in Section 7.1, or
7.2 to be
satisfied and (ii) cannot be or has not been cured prior to the earlier to
occur of (A) 30 days after the giving of written notice to Seller by
Purchaser of such breach or (B) the Termination Date; or

     

    (f)       
    By Purchaser if the employment of Turek and Duke by
Seller is terminated prior to the Closing Date without cause.  For
purposes of this clause (6), “cause” shall mean any cause for termination of
employment, as determined by the Board of Directors of Seller in good
faith.

     

    9.2           Effect of
Termination. In the event of a termination of this Agreement by either
Seller or Purchaser as provided in Section 9.1,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Seller or Purchaser or their respective officers,
directors, stockholders or affiliates, except for the payment of the Termination
Fee as provided in Section 9.1(d); provided, however, that nothing
herein shall relieve any party for liability for any willful or knowing breach
of this Agreement.

     

    ARTICLE
X

     

    MISCELLANEOUS

     

    10.1          Expenses.  Each
party hereto shall bear its own expenses with respect to the Contemplated
Transactions.

     

    10.2          Amendment.  This
Agreement may be amended, modified or supplemented but only in writing signed by
Purchaser and Seller.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    10.3          Notices.  Any
notice, request, instruction or other document to be given hereunder by a party
hereto shall be in writing and shall be deemed to have been given (a) when
received if given in person or by courier or a courier service, (b) on the date
of transmission if sent by telex, facsimile or other wire transmission, (c) on
the next business day if sent by
reputable  overnight  courier on a next day basis or (d)
three business days after being deposited in the mail, certified or registered,
postage prepaid:

     

    If to
Seller, addressed as follows:

     

    M-Wave,
Inc.

    1300
Norwood Avenue

    Itasca,
IL  60143

    Attn:  Jeff
Figlewicz

    Telephone
No.: (630) 562-5550

    Facsimile
No.:  (630) 562-2431

    

    With a
copy to:

    

    Ellenoff
Grossman & Schole LLP

    150 East
42nd
Street

    New York,
NY  10017

    Attn:  James
J. Mangan

    Telephone
No.:  212-370-1300

    Facsimile
No.:  212-370-7889

    

    If to
Purchaser, addressed as follows:

     

    M-Wave
International, LLC

    1300
Norwood Avenue

    Itasca,
IL  60143

    Attn:  Joe
Turek

    Telephone
No.: (630) 562-5550

    Facsimile
No.:  (630) 562-2431

    

    With a copy to:

    

    Shefsky
& Froelich Ltd.

    111 East
Wacker Drive

    Suite
2800

    Chicago,
IL  60601

    Attn:  Jeffry
A. Melnick

    Telephone
No.:  (312) 836-4010

    Facsimile
No.:  (312) 275-7591

    

    or to
such other individual or address as a party hereto may designate for itself by
notice given as herein provided.

    
      
         

      

      
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    10.4          Waivers.  The
failure of a party hereto at any time or times to require performance of any
provision hereof shall in no manner affect its right at a later time to enforce
the same.  No waiver by a party of any condition or of any breach of
any term, covenant, representation or warranty contained in this Agreement shall
be effective unless in writing, and no waiver in any one or more instances shall
be deemed to be a further or continuing waiver of any such condition or breach
in other instances or a waiver of any other condition or breach of any other
term, covenant, representation or warranty.

     

    10.5          Assignment.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that no
assignment of any rights or obligations shall be made by Seller without the
written consent of Purchaser or by Purchaser without the written consent of
Seller.

     

    10.6          No Third Party
Beneficiaries.  This Agreement is solely for the benefit of the
parties hereto and, to the extent provided herein, their respective affiliates,
directors, officers, employees, agents and representatives, and no provision of
this Agreement shall be deemed to confer upon third parties any remedy, claim,
liability, reimbursement, cause of action or other right.

     

    10.7          Further
Assurances.  Upon the reasonable request of Purchaser, Seller
will on and after the Closing Date execute and deliver to Purchaser such other
documents, releases, assignments and other instruments as may be required to
effectuate completely the transfer and assignment to Purchaser of, and to vest
fully in Purchaser title to, the Acquired Assets, and to otherwise carry out the
purposes of this Agreement.

     

    10.8          Severability.  If
any provision of this Agreement shall be held invalid, illegal or unenforceable,
the validity, legality or enforceability of the other provisions hereof shall
not be affected thereby, and there shall be deemed substituted for the provision
at issue a valid, legal and enforceable provision as similar as possible to the
provision at issue.

     

    10.9          Entire
Understanding.  This Agreement sets forth the entire agreement
and understanding of the parties hereto in respect to the Contemplated
Transactions and supersede any and all prior agreements, arrangements and
understandings among the parties relating to the subject matter
hereof.

     

    10.10        Applicable
Law.  This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Illinois without
giving effect to the principles of conflicts of law thereof.

     

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

     

    10.12        Facsimile
Signatures.  Any signature page delivered pursuant to this
Agreement  or any other document delivered pursuant hereto via
facsimile shall be binding to the same extent as an original
signature.  Any party who delivers such a signature page agrees to
later deliver an original counterpart to any party that requests
it.

    
      
         

      

      
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    10.13        Exclusion of Certain
Damages.  Each of the parties hereto agrees that none of the
parties hereto shall be liable to the other for any incidental, consequential or
special damages arising out of the breach of this Agreement by such
party.  In the event of litigation pursuant to this Agreement
(including pursuant to the advance described in Section 2.1(a)
above), however, the party prevailing in any such action shall be entitled to
reasonable attorneys’ fees and enforcement costs.

     

    10.14        Certain Agreements of Turek
and Duke.  For the avoidance of doubt, Turek and Duke are
executing this Agreement only for purposes of being bound by Sections 2.1, 5.1, 5.2, 5.8, 5.10, Article IV, Article IX and Article X, as
applicable.  Further, Turek and Duke acknowledge and agree to the
provisions of Section
5.3, Section
6.1 and Article
VIII.  Turek and Duke agree that the defined terms used in any such
Section or Article shall have the meaning ascribed to them in Article
I.  Turek and Duke's acknowledgement and agreement of
Section 5.3,
Section 6.1 and
Article VIII
shall not be deemed to create any additional liability to either Turek or
Duke.

     

    [Signature
Page Follows]

    
      
         

      

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

     

    
       

      
        	 	 	M-WAVE, INC.	 
	 	 	 	 
	 	 	By: 	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	 	 	 
	 	 	M-WAVE INTERNATIONAL,
      LLC	 
	 	 	 	 
	 	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	JOSEPH
      TUREK	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	ROBERT DUKE	 

      

    

     

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    Schedule
1.1

     

    Excluded
Contracts

    

     

    
      1.       
Exercise
Agreement dated as of January 26, 2007, by and among M-Wave, Inc., MAG Capital,
LLC, Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP and Monarch
Pointe Fund, Ltd.

    

     

    
      2.       
Legal
services agreement dated June 9, 2005, between M-Wave, Inc. and Ellenoff,
Grossman, & Schole LLP.

    

     

    
      3.       
All
agreements, documents and instruments related to the offering or sale of
Seller’s Series A Preferred Stock, including, but not limited to, any dividend
obligations arising therefrom.

    

     

    
      4.       
All
agreements, documents and instruments related to the offering or sale of
Seller’s Series B Preferred Stock, including, but not limited to, any dividend
obligations arising therefrom.

    

     

    
      5.       
All Stock
Option Agreements.

    

     

    
      6.       
All
Warrants to purchase securities of Seller.

    

     

    
      7.       
All
D&O insurance policies, including any D&O “tail”
policy.

    

     

    
      8.       
2003
Stock Incentive Plan of Seller.

    

     

    
      9.       
Consulting
Agreement between Seller and Jeff Figlewicz, CFO, dated June 13,
2008.

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    Schedule
2.2(e)

    

    Intellectual
Property

    

    The
following patents:

    

    
      	
              Item

            	
              Description

            	
              Serial
      #

            	
              Filing
      Date

            
	 
      	 
      	 
      	 
      
	
              1

            	
              Multilayer
      PC Board Using Polymer Thick Films

            	
              4775573

            	
              10/4/1988

            
	
              2

            	
              Method
      of Making Multilayer PC Board Using Polymer Thick Films

            	
              4854040

            	
              8/8/1989

            
	
              3

            	
              Method
      For Making Circuit Board Having a Metal Support

            	
              5210941

            	
              5/18/1993

            
	
              4

            	
              Circuit
      Board Having A Bonded Metal Support

            	
              5366027

            	
              11/22/1994

            
	
              5

            	
              Conductive
      Adhesive for Use in a Circuit Board

            	
              5432303

            	
              7/11/1995

            
	
              6

            	
              Circuit
      Board Assembly With Foam Substrate and Method of Making
    Same

            	
              5733639

            	
              3/21/1998

            
	
              7

            	
              Printed
      Circuit Board Process Using Plasma Spraying of Conductive
      Metal

            	
              5891527

            	
              4/6/1999

            
	
              8

            	
              Printed
      Circuit Board Process Using Plasma Spraying of Conductive
      Metal

            	
              5891528

            	
              4/6/1999

            

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    Schedule
2.3(c)

    

    Assigned
Contracts

    

    1.        Supply
chain service agreement dated February 1, 2005 between M –Wave, Inc. and
Pennatronics.

    

    2.        Supply
chain service agreement dated December 4, 2001 between M –Wave, Inc. and Federal
Signal Corp.

    

    3.        Supply
chain service agreement dated November 9, 2005 between M –Wave, Inc. and Federal
Signal APD.

    

    4.        Consigned
inventory agreement dated March 4, 2006 between M-Wave, Inc. and Federal Signal
Vama.

    

    5.        VAP
agreement dated November 9, 2006 between M –Wave, Inc. and Richardson
Electronics Corporation.

    

    6.        Logistics
services agreement dated November 13, 2006 between M –Wave, Inc. and NRC
Corporation.

    

    7.        Logistics
services agreement dated November 13, 2006 between M –Wave, Inc. and RS
Electronics Corporation.

    

    8.        IT
service agreement dated August 3, 2005 between M –Wave, Inc. and External
IT.

    

    9.        Cellular
phone service agreement dated June 1, 2005 between M –Wave, Inc. and
T-Mobile.

    

    10       Lease
agreement dated February 27, 2008 between M-Wave, Inc. and 1300 Norwood
Associates, LLC.

    

    11       Freight
provider agreement dated February 1, 2005 between M-Wave, Inc. and United Parcel
Service Inc.

    

    12       Maintenance
agreement dated October 1, 2004 between M-Wave, Inc. and Microsoft Business
Solutions, Inc.

    

    1
        Voice over internet protocol
service agreement dated October 3, 2005 between M-Wave, Inc. and Aptela
Inc.

    

    1
        Sales representative agreement
dated February 2, 1996 between M-Wave, Inc. and Giga-Tron.

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    15.      Sales
representative agreement dated September 1, 2004 between M-Wave, Inc. and DLS
Electronics.

    

    16.      Sales
representative agreement dated June 1, 2004 between M-Wave, Inc. and Frontier
Cable.

    

    17.      Sales
representative agreement dated September 1, 2003 between M-Wave, Inc. and Raven
Hill.

    

    18.      Sales
representative agreement dated November 1, 2002 between M-Wave, Inc. and Bager
Sales.

    

    19.      Sales
representative agreement dated March 11, 2002 between M-Wave, Inc. and New
England Group.

    

    20.      Sales
representative agreement dated September 1, 2002 between M-Wave, Inc. and
Tri-Tech.

    

    21.      Sales
representative agreement dated March 1, 2002 between M-Wave, Inc. and Unity
Sales.

    

    22.      Sales
representative agreement dated March 1, 2003 between M-Wave, Inc. and
PowerTek.

    

    23.      Sales
representative agreement dated April 1, 2005 between M-Wave, Inc. and
Dragonfly.

    

    24.      Joint
venture agreement dated October 10, 2006 between M-Wave, Inc. and
I.W.R.E.

    

    25.      Sales
agreement dated November 1, 2006 between M-Wave, Inc. and 3XA.

    

    26.      To
the extent assignable, the following insurance policies:

    
    

     

    
      	Policy Name	Policy
Number	Expires	Insurer
	Commercial   	3583-41-06 	7/5/2007 	Chubb
	Workers
      Comp  	7171-18-78	7/5/2007     	Chubb
	Umbrella    	7982-24-44 	7/5/2007  	Chubb
	Ocean/Air
      Cargo-Marine  	OC96076500   	7/13/2007  	Fireman
  Fund

    

    

    27.           Medical
Plan between M-Wave, Inc. and Blue Cross/Blue Shield, HMO and PPO.

    

    28.           Dental
Plan between M-Wave, Inc. and First Commonwealth (HMO) Guardian
(PPO).

    

    29.           Vision
Plan between M-Wave, Inc. and Vision Service Plan.

    

    30.           Life
and Long Term Disability Plan between M-Wave, Inc. and Jefferson
Pilot/Guardian.

    
      
         

      

      
        v

        
          

        

      

      
         

      

    

    Schedule
3.3

    

    Required
Consents

    

    1.        The
approval of Seller’s shareholders.

    

    2.        The
approval of the SEC of the Proxy Statement or the expiration of any applicable
period during which the SEC could review the Proxy Statement.

     

     vi

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