SETTLEMENT AND RELEASE AGREEMENT

SETTLEMENT AND RELEASE AGREEMENT

This Settlement and Release Agreement (this “Release”) is entered into as of March 23, 2005 by and between Endwave Corporation (“Endwave”) and Northrop Grumman Space & Mission Systems Corp. (“NGST”).

WHEREAS, NGST and Endwave have entered into an Amended and Restated Supply Agreement No. 1F088, dated as of March 26, 2004 (together with the predecessor Supply Agreement, the “Supply Agreement”), whereby NGST agreed to provide Endwave certain VCO wafers containing circuit name B31-0018-001 (Part Name OXB 114) and circuit name B31-0065-001 (Part Name OXB120) (the “VCO Wafers”) and other products listed in the Supply Agreement (“Other Supply Agreement Products”); Other Supply Agreement Products specifically do not include VCO Wafers;

WHEREAS, NGST and Endwave entered into a MMIC Supply and Module Repair Agreement, dated as of December 30, 2001 (the “Repair Agreement”), whereby, among other things, NGST agreed to provide Endwave replacement VCO Wafers for use in Nokia products;

WHEREAS, NGST and Endwave entered into a Settlement Agreement, dated as of July 24, 2002 (the “Settlement Agreement”), whereby, among other things, Endwave agreed to settle certain Nokia product related claims through the payment of certain sums to NGST;

WHEREAS, NGST has asserted that Endwave owes NGST $2.4 million in connection with the Settlement Agreement (the “NGST Claim”), a figure that Endwave disputes;

WHEREAS, NGST and Endwave wish to settle such dispute in the manner set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants, promises and obligations set forth herein, the Parties agree as follows:

1

Definitions.

(a) “Agreements” as used in this Release means, collectively, the Repair Agreement, and the Settlement Agreement.

(b) “Business Relationship” as used in this Release means the entire business, trading, and commercial relationship between the parties established under the Agreements for the period commencing upon execution of the Supply Agreement until the date of execution of this Release, including, without limitation, the Agreements and the Supply Agreement, to the extent dealing with VCO Wafers.

(c) “Dispute” as used in this Release means any and all disputes between NGST and Endwave, whether pending, actual, contingent, or prospective, arising out of or in connection with the Business Relationship and/or goods/services supplied in connection with the Business Relationship.

(d) “NGST” as used in this Release means Northrop Grumman Space & Mission Systems Corp., a corporation duly organized under the laws of the State of Ohio, and any of its predecessors, successors, assigns, businesses, affiliates, subsidiaries, divisions, parent companies, partnerships, limited partnerships, partners, predecessors, officers, directors, trustees, conservators, employees, agents, contractors, representatives, shareholders, members and attorneys and all persons or entities claiming through NGST or any of its predecessors, successors, assigns, businesses, affiliates, subsidiaries, divisions, parent companies, partnerships, limited partnerships, partners, predecessors, officers, directors, trustees, conservators, employees, agents, contractors, representatives, shareholders, stockholders, members and attorneys, who are in privity with them or any of them and all other persons firms, entities, and corporations whatsoever to whom and for whom whose conduct NGST may be liable.

(e) “Endwave” as used in this Release means Endwave Corporation and any of its successors, assigns, businesses, affiliates, subsidiaries, divisions, parent companies, partnerships, limited partnerships, partners, predecessors, officers, directors, trustees, conservators, employees, agents, contractors, representatives, shareholders, members and attorneys and all persons or entities claiming through Endwave or any of its successors, assigns, businesses, affiliates, subsidiaries, divisions, parent companies, partnerships, limited partnerships, partners, predecessors, officers, directors, trustees, conservators, employees, agents, contractors, representatives, shareholders, members and attorneys, who are in privity with them or any of them and all other persons firms, entities, and corporations whatsoever to whom and for whom whose conduct Endwave may be liable.

2.  Termination and Release.

(a) Promptly following the execution hereof by Endwave and NGST, NGST shall:

(b) Promptly following the execution hereof by Endwave and NGST, Endwave shall pay to NGST, by wire transfer, the sum of US$300,000 (Three Hundred Thousand US Dollars) in satisfaction of its obligations under the Settlement Agreement.

(c) Endwave shall, within 30 days of the invoice (or each respective invoice, to the extent that the Supply Agreement Wafers are not all delivered at once) for the Supply Agreement Wafers, pay to NGST the sum of US$103,000 (One Hundred and Three Thousand US Dollars) as payment for the Supply Agreement Wafers.

(d) The Repair Agreement Wafers and the Supply Agreement Wafers will satisfy the requirements set forth in Attachment 1 hereto and shall be delivered in accordance with the schedule set forth in Attachment 1 hereto. Acceptance of the Repair Agreement Wafers and the Supply Agreement Wafers shall occur within 14 days of delivery to Endwave; to the extent that Endwave has not rejected in writing any Repair Agreement Wafer or Supply Agreement Wafer within 30 days of delivery, such Repair Agreement Wafer or Supply Agreement Wafer shall be deemed accepted for all purposes. NGST’s sole obligation and liability with respect to properly rejected (prior to acceptance or deemed acceptance) Repair Agreement Wafers and Supply Agreement Wafers shall be to provide a replacement. Further, with regard to Other Supply Agreement Products delivered by NGST to Endwave after the date hereof, NGST’s obligation and liability with respect to such Other Supply Agreement Products shall be limited to repair or replacement as provided in Section 7 of the Supply Agreement; the Parties agree that NGST shall have no other liability with regard to Other Supply Agreement Products.

(e) Upon acceptance as provided in (d) above, the Repair Agreement Wafers and the Supply Agreement Wafers are subject to the following limitations:

THE REPAIR AGREEMENT WAFERS AND SUPPLY AGREEMENT WAFERS ARE DELIVERED ON AN “AS IS, WHERE IS”, NO WARRANTY BASIS AND NGST DISCLAIMS ALL OTHER WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF INFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, WHETHER ARISING BY LAW, CUSTOM, CONDUCT OR USAGE OF TRADE, ARE HEREBY WAIVED AND DISCLAIMED.

(f) The Agreements and all obligations of the Parties thereunder are terminated. The Parties agree that this Release constitutes the amendment of the Supply Agreement whereby Endwave’s ability to purchase, and NGST’s obligation to supply, VCO Wafers is hereby eliminated.

(g) Endwave hereby releases and forever discharges NGST from and against any and all claims, demands, suits, causes of action, obligations and liabilities of whatever nature or kind, whenever or wherever arising, whether or not known or unknown, suspected or claimed, which Endwave now has or ever had, or may hereafter have, against NGST and which relate directly or indirectly to the Repair Agreement, the Settlement Agreement, the Supply Agreement (provided, that NGST shall continue to have the obligation to provide Endwave Other Supply Agreement Products to the extent Endwave orders such Other Supply Agreement Products as permitted in the Supply Agreement and NGST s