Exhibit 10.2


    
      
        

      

      EXHIBIT
        B

      to
        Subscription Agreement

       

      REGISTRATION
        RIGHTS AGREEMENT

       

      AGREEMENT
        dated as
        of December 29,
        2006,
        between MERCATOR MOMENTUM FUND, L.P., MERCATOR MOMENTUM FUND III, L.P,
        MONARCH POINTE FUND, LTD. (collectively, the "Funds")
        and
        M.A.G. CAPITAL, LLC ("MAG")
        (the
        Funds and MAG are referred to individually as a "Holder"
        and
        collectively as the "Holders"),
        and
        M-WAVE, INC., a Delaware corporation (the "Company").

       

      WHEREAS,
        pursuant to that certain Subscription Agreement, dated as of December 29,
        2006,
        among the Company and the Holders (the "Subscription
        Agreement"),
        the
        Funds are purchasing, in exchange for certain securities and the cancellation
        of
        certain indebtedness, an aggregate of 5,000 shares of Series B Convertible
        Preferred Stock (together, the "Series B
        Stock")
        from
        the Company, and have the right to cause their Series B Stock to be
        converted into shares of Common Stock (the "Common
        Stock"),
        of
        the Company, pursuant to the conversion formula set forth in the Certificate
        of
        Designations of Preferences and Rights of Series B Convertible Preferred
        Stock
        of M-Wave, Inc. (the "Certificate
        of Designations"); 

       

      WHEREAS,
        the
        Company desires to grant to the Holders the registration rights set forth
        herein
        with respect to the shares of Common Stock issuable upon the conversion of
        the
        Series B Stock.

       

      NOW,
        THEREFORE,
        the
        parties hereto mutually agree as follows:

       

      1.   Registrable
        Securities.
        As used
        herein the terms "Registrable
        Security"
        means
        each of the shares of Common Stock issued upon the conversion of the Series
        B
        Stock (the "B
        Conversion Shares"),
        provided, however, that with respect to any particular Registrable Security,
        such security shall cease to be a Registrable Security when, as of the date
        of
        determination that (a) it has been effectively registered under the
        Securities Act of 1933, as amended (the "Securities
        Act"),
        and
        disposed of pursuant thereto, or (b) registration under the Securities Act
        is no longer required for the immediate public distribution of such security.
        The term "Registrable
        Securities"
        means
        any and/or all of the securities falling within the foregoing definition
        of a
        "Registrable Security." In the event of any merger, reorganization,
        consolidation, recapitalization or other change in corporate structure affecting
        the Common Stock, such adjustment shall be made in the definition of
        "Registrable Security" as is appropriate in order to prevent any dilution
        or
        enlargement of the rights granted pursuant to this Section 1.

       

      2.   Registration.

       

      (a)   The
        Company shall file a registration statement (the "Registration
        Statement")
        with
        the Securities and Exchange Commission (the "Commission")
        on or
        prior to the Filing Deadline (as defined below), in order to register the
        resale
        of the Registrable Securities under the Securities Act. Once effective, the
        Company shall maintain the effectiveness of the Registration Statement until
        the
        earlier of (i) the date that all of the Registrable Securities have been
        sold, or (ii) the date that the Company receives an opinion of counsel to
        the Company that all of the Registrable Securities may be freely traded without
        registration under the Securities Act, under Rule 144 promulgated under the
        Securities Act or otherwise. The term "Filing Deadline" means (i) in the
        event
        that within 45 days after the Closing Date (as that term is defined in the
        Subscription Agreement) the Company enters into any agreement (a "Merger
        Agreement") to effect a merger, reorganization, consolidation, recapitalization,
        sale of substantial assets or similar transaction, the date that is 45 days
        after the Company enters into such Merger Agreement, or (ii) in the event
        that
        the Company does not enter into a Merger Agreement within 45 days after the
        Closing Date, the date that is 60 days after the Closing Date.

       


      
        
           

        

        
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      (b)   The
        Company
        will initially include in the Registration Statement as Registrable Securities
        the
        number of shares
        of
        Common Stock into which the Series B Stock is convertible at the date of
        the
        initial filing of the Registration Statement.

       

      (c)   Depending
        on whether the Registration Statement has previously become effective with
        the
        Commission, the Company shall register additional shares if and as required
        pursuant to the Subscription Agreement or the Certificate of Designations
        either
        by amending the Registration Statement to increase the number of shares that
        it
        covers or by filing a new registration statement. Any such new registration
        statement shall thereafter be deemed part of the Registration Statement for
        the
        purposes of this Agreement.

       

      3.   Covenants
        of the Company with Respect to Registration.

       

      The
        Company covenants and agrees as follows:

       

      (a)   The
        Company shall use its best efforts to cause the Registration Statement to
        become
        effective with the Commission
        as
        promptly as possible and (i) in the event that the Company enters into a
        Merger
        Agreement within 45 days after the Closing Date, not later than 150 days
        after
        the date the Company enters into such Merger Agreement and (ii) in the event
        that the Company does not enter into a Merger Agreement within 45 days after
        the
        Closing Date, within 60 days of the date the Registration Statement is filed
        with the Commission. If any stop order shall be issued by the Commission
        in
        connection therewith, the Company shall use its best efforts to obtain promptly
        the removal of such order. Following the effective date of the Registration
        Statement, the Company shall, upon the request of any Holder, forthwith supply
        such reasonable number of copies of the Registration Statement, preliminary
        prospectus and prospectus meeting the requirements of the Securities Act,
        and
        any other documents necessary or incidental to the public offering of the
        Registrable Securities, as shall be reasonably requested by the Holder to
        permit
        the Holder to make a public distribution of the Holder's Registrable Securities.
        The obligations of the Company hereunder with respect to the Holder's
        Registrable Securities are subject to the Holder's furnishing to the Company
        such appropriate information concerning the Holder, the Holder's Registrable
        Securities and the terms of the Holder's offering of such Registrable Securities
        as the Company may reasonably request in writing.

       

      (b)   The
        Company shall pay all costs, fees and expenses in connection with the
        Registration Statement filed pursuant to Section 2 hereof including,
        without limitation, the Company's legal and accounting fees, printing expenses,
        and blue sky fees and expenses; provided, however, that each Holder shall
        be
        solely responsible for the fees of any counsel retained by the Holder in
        connection with such registration and any transfer taxes or underwriting
        discounts, commissions or fees applicable to the Registrable Securities sold
        by
        the Holder pursuant thereto.

       


      
        
           

        

        
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      (c)   The
        Company will take all necessary actions which may be required to qualify
        or
        register the Registrable Securities included in the Registration Statement
        for
        the offer and sale under the securities or blue sky laws of such states as
        are
        reasonably requested by each Holder of such securities, provided that the
        Company shall not be obligated to execute or file any general consent to
        service
        of process or to qualify as a foreign corporation to do business under the
        laws
        of any such jurisdiction.

       

      4.   Additional
        Terms.

       

      (a)   The
        Company shall indemnify and hold harmless the Holders and each underwriter,
        within the meaning of the Securities Act, who may purchase from or sell for
        any
        Holder, any Registrable Securities, from and against any and all losses,
        claims,
        damages and liabilities caused by any untrue statement of a material fact
        contained in the Registration Statement, any other registration statement
        filed
        by the Company under the Securities Act with respect to the registration
        of the
        Registrable Securities, any post-effective amendment to such registration
        statements, or any prospectus included therein or caused by any omission
        to
        state therein a material fact required to be stated therein or necessary
        to make
        the statements therein not misleading, except insofar as such losses, claims,
        damages or liabilities are caused by any such untrue statement or omission
        based
        upon information furnished or required to be furnished in writing to the
        Company
        by the Holders or underwriter expressly for use therein, which indemnification
        shall include each person, if any, who controls any Holder or underwriter
        within
        the meaning of the Securities Act and each officer, director, employee and
        agent
        of each Holder and underwriter; provided, however, that the indemnification
        in
        this Section 4(a) with respect to any prospectus shall not inure to the
        benefit of any Holder or underwriter (or to the benefit of any person
        controlling any Holder or underwriter) on account of any such loss, claim,
        damage or liability arising from the sale of Registrable Securities by the
        Holder or underwriter, if a copy of a subsequent prospectus correcting the
        untrue statement or omission in such earlier prospectus was provided to such
        Holder or underwriter by the Company prior to the subject sale and the
        subsequent prospectus was not delivered or sent by the Holder or underwriter
        to
        the purchaser prior to such sale and provided further, that the Company shall
        not be obligated to so indemnify any Holder or any such underwriter or other
        person referred to above unless the Holder or underwriter or other person,
        as
        the case may be, shall at the same time indemnify the Company, its directors,
        each officer signing the Registration Statement and each person, if any,
        who
        controls the Company within the meaning of the Securities Act, from and against
        any and all losses, claims, damages and liabilities caused by any untrue
        statement of a material fact contained in the Registration Statement, any
        registration statement or any prospectus required to be filed or furnished
        by
        reason of this Agreement or caused by any omission to state therein a material
        fact required to be stated therein or necessary to make the statements therein
        not misleading, insofar as such losses, claims, damages or liabilities are
        caused by any untrue statement or omission based upon information furnished
        in
        writing to the Company by the Holder or underwriter expressly for use
        therein.

       

      (b)   If
        for
        any reason the indemnification provided for in the preceding section is held
        by
        a court of competent jurisdiction to be unavailable to an indemnified party
        with
        respect to any loss, claim, damage, liability or expense referred to therein,
        then the indemnifying party, in lieu of indemnifying such indemnified party
        thereunder, shall contribute to the amount paid or payable by the indemnified
        party as a result of such loss, claim, damage or liability in such proportion
        as
        is appropriate to reflect the relative fault of the indemnified party and
        the
        indemnifying party, as well as any other relevant equitable
        considerations.

       


      
        
           

        

        
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      (c)   Neither
        the filing of a Registration Statement by the Company pursuant to this Agreement
        nor the making of any request for prospectuses by the Holder shall impose
        upon
        any Holder any obligation to sell the Holder's Registrable
        Securities.

       

      (d)   Each
        Holder, upon receipt of notice from the Company that an event has occurred
        which
        requires a Post-Effective Amendment to the Registration Statement or a
        supplement to the prospectus included therein, shall promptly discontinue
        the
        sale of Registrable Securities until the Holder receives a copy of a
        supplemented or amended prospectus from the Company, which the Company shall
        provide as soon as practicable after such notice.

       

      (e)   If
        the
        Company fails to keep the Registration Statement referred to above continuously
        effective during the requisite period, then the Company shall, promptly upon
        the
        request of any Holder, use its best efforts to update the Registration Statement
        or file a new registration statement covering the Registrable Securities
        remaining unsold, subject to the terms and provisions hereof.

       

      (f)   Each
        Holder agrees to provide the Company with any information or undertakings
        reasonably requested by the Company in order for the Company to include any
        appropriate information concerning the Holder in the Registration Statement
        or
        in order to promote compliance by the Company or the Holder with the Securities
        Act.

       

      (g)   The
        Company agrees that it shall cause each of its directors, officers and
        shareholders owning ten percent (10%) or more of the Company's outstanding
        Common Stock to refrain from selling any shares of the Company's Common Stock
        until the Registration Statement has been declared effective.

       

      (h)   Each
        Holder, on behalf of itself and its affiliates and the permitted assignee
        of any
        Conversion Shares, hereby covenants and agrees not to, directly or indirectly,
        offer to "short sell", contract to "short sell" or otherwise "short sell"
        any
        securities of the Company, including, without limitation, shares of Common
        Stock
        that will be received as a result of the conversion of the Series B
        Stock.

       

      5.   Governing
        Law.
        The
        Registrable Securities will be, if and when issued, delivered in California.
        This
        Agreement shall be deemed to have been made and delivered in the State of
        California
        and
        shall be governed as to validity, interpretation, construction, effect and
        in
        all other respects by the internal substantive laws of the State of California,
        without
        giving effect to the choice of law rules thereof.

       

      6.   Amendment.
        This
        Agreement may only be amended by a written instrument executed by the Company
        and the Holders.

       


      
        
           

        

        
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      7.   Entire
        Agreement.
        This
        Agreement constitutes the entire agreement of the parties hereto with respect
        to
        the subject matter hereof, and supersedes all prior agreements and
        understandings of the parties, oral and written, with respect to the subject
        matter hereof.

       

      8.   Execution
        in Counterparts.
        This
        Agreement may be executed in one or more counterparts, each of which shall
        be
        deemed an original, but all of which together shall constitute one and the
        same
        document.

       

      9.   Notices.
        All
        notices, requests, demands and other communications hereunder shall be in
        writing and shall be deemed duly given when delivered by hand or mailed by
        registered or certified mail, postage prepaid, return receipt requested,
        as
        follows:

       

      If
        to the
        Holders,                 
M.A.G.
        Capital, LLC

      Mercator
        Momentum Fund, L.P.

      Mercator
        Momentum Fund III, L.P.

      Monarch
        Pointe Fund, Ltd. 

      555
        South
        Flower Street, Suite 4200

      Los
        Angeles, CA 90071

      Attention:
        David Firestone

      


      With
        a
        copy
        to                    
Latham
        & Watkins LLP

      633
        West
        Fifth Street

      40th
        Floor

      Los
        Angeles, CA 90071

      Telephone
        No.: (213) 891-7874

      Facsimile
        No.: (213) 891-8763

      Attention:
        Justin O’Neill

       

      If
        to the
        Company,  M-Wave,
        Inc. 

      11533
        Franklin Avenue, 2nd
        Floor

      Franklin
        Park, Illinois 60131

      Telephone
        No.: 630-562-4751

      Facsimile
        No.: 630-562-1775

      Attention:
        Jeff
        Figlewicz

       

      With
        a
        copy
        to                     Ellenoff
        Grossman & Schole LLP

      370
        Lexington Avenue, Floor 19

      New
        York,
        New York 10017

      Telephone
        No.: 212-370-1300

      Facsimile
        No.: 212-370-7889

      Attention:
        Barry I. Grossman

       

      10.   Binding
        Effect; Benefits.
        Any
        Holder may assign its rights hereunder. This Agreement shall inure to the
        benefit of, and be binding upon, the parties hereto and their respective
        heirs,
        legal representatives, successors and assigns. Nothing herein contained,
        express
        or implied, is intended to confer upon any person other than the parties
        hereto
        and their respective heirs, legal representatives and successors, any rights
        or
        remedies under or by reason of this Agreement.


      
        
          
             

          

          
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      11.   Headings.
        The
        headings contained herein are for the sole purpose of convenience of reference,
        and shall not in any way limit or affect the meaning or interpretation of
        any of
        the terms or provisions of this Agreement.

       

      12.   Severability.
        Any
        provision of this Agreement which is held by a court of competent jurisdiction
        to be prohibited or unenforceable in any jurisdiction(s) shall be, as to
        such
        jurisdiction(s), ineffective to the extent of such prohibition or
        unenforceability without invalidating the remaining provisions of this Agreement
        or affecting the validity or enforceability of such provision in any other
        jurisdiction.

       

      13.   Jurisdiction.
        Each of
        the parties irrevocably agrees that any and all suits or proceedings based
        on or
        arising under this Agreement may be brought only in and shall be resolved
        in the
        federal or state courts located in the City of Los Angeles, California
        and
        consents to the jurisdiction of such courts for such purpose. Each of the
        parties irrevocably waives the defense of an inconvenient forum to the
        maintenance of such suit or proceeding in any such court. Each of the parties
        further agrees that service of process upon such party mailed by first class
        mail to the address set forth in Section 8 shall be deemed in every respect
        effective service of process upon such party in any such suit or proceeding.
        Nothing herein shall affect the right of other
        party
        to serve
        process in any other manner permitted by law. Each of the parties agrees
        that a
        final non-appealable judgment in any such suit or proceeding shall be conclusive
        and may be enforced in other jurisdictions by suit on such judgment or in
        any
        other lawful manner.

       

      14.   Attorneys'
        Fees and Disbursements.
        If any
        action at law or in equity is necessary to enforce or interpret the terms
        of
        this Agreement, the prevailing party or parties shall be entitled to receive
        from the other party or parties reasonable attorneys' fees and disbursements
        in
        addition to any other relief to which the prevailing party or parties may
        be
        entitled.

       

      [The
        balance of this page is intentionally left blank.]

      

        
          
             

          

          
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      IN
        WITNESS WHEREOF,
        this
        Agreement has been executed and delivered by the parties hereto as of the
        date
        first above written.

       

      
        	 	
                M-WAVE,
                  INC.

              
	 	 	 
	 	 	 
	 	
                By:
                  

              	
                /s/
                  Joesph A. Turek

              
	 	
                Name:

              	
                Joseph
                  A.Turek

              
	 	
                Its:

              	
                President

              
	 	 	 
	 	
                HOLDERS:

              
	 	 	 
	 	
                MERCATOR
                  MOMENTUM FUND, L.P.

              
	 	
                BY:
                  M.A.G. CAPITAL, LLC

              
	 	
                ITS
                  GENERAL PARTNER

              
	 	 	 
	 	 	 
	 	
                By:
                  

              	 
	 	
                Name:

              	 
	 	
                Its:

              	 
	 	 	 
	 	
                MERCATOR
                  MOMENTUM FUND III, L.P.

              
	 	
                BY:
                  M.A.G. CAPITAL, LLC

              
	 	
                ITS
                  GENERAL PARTNER

              
	 	 	 
	 	 	 
	 	
                By:
                  

              	 
	 	
                Name:

              	 
	 	
                Its:

              	 
	 	 	 
	 	
                M.A.G.
                  CAPITAL, LLC

              
	 	 	 
	 	 	 
	 	
                By:
                  

              	 
	 	
                Name:

              	 
	 	
                Its:

              	 
	 	 	 
	 	
                MONARCH
                  POINTE FUND, LTD.

              
	 	 	 
	 	 	 
	 	
                By:
                  

              	 
	 	
                Name:

              	 
	 	
                Its:

              	 


      

       

       

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