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                                                                   EXHIBIT 10.18


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                         TABLE OF CONTENTS
ARTICLE 1 OBJECT OF THE AGREEMENT..............................................1
ARTICLE 2 PRODUCT..............................................................1
ARTICLE 3 PURCHASE COMMITMENT AND SUBSEQUENT PURCHASE ESTIMATES................2
ARTICLE 4 ORDERS...............................................................3
ARTICLE 5 PRICES...............................................................3
ARTICLE 6 TERMS OF PAYMENT.....................................................4
ARTICLE 7 TERMS OF DELIVERY....................................................5
ARTICLE 8 PACKING..............................................................5
ARTICLE 9 DELIVERY TIMES.......................................................5
ARTICLE 10 RESCHEDULING AND CANCELLATION.......................................6
ARTICLE 11 INSPECTIONS.........................................................7
ARTICLE 12 QUALITY REQUIREMENTS................................................8
ARTICLE 13 FACILITY SURVEYS....................................................8
ARTICLE 14 WARRANTY............................................................8
ARTICLE 15 PRODUCT LIABILITY...................................................9
ARTICLE 16 DISCONTINUATION OF PRODUCTION......................................10
ARTICLE 17 ENVIRONMENTAL MANAGEMENT...........................................10
ARTICLE 18 INDUSTRIAL PROPERTY RIGHTS AND PATENT INDEMNIFICATION..............10
ARTICLE 19 CONFIDENTIALITY....................................................11
ARTICLE 20 FORCE MAJEURE......................................................12
ARTICLE 21 EFFECTIVE DATE AND TERM............................................12
ARTICLE 22 PREMATURE TERMINATION..............................................13
ARTICLE 23 APPLICABLE LAW AND SETITLEMENT OF DISPUTES.........................14
ARTICLE 24 FINAL PROVISIONS...................................................14
APPENDIX 1 PARTS/PRODUCTS PURCHASE VOLUMES AND PRICES
APPENDIX 2 SPECIFICATIONS
APPENDIX 3 QUALITY REQUIREMENTS
APPENDIX 4 ROLLING FORCAST






[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.



<PAGE>


                              PRODUCTION AGREEMENT

     TRW Inc., a corporation incorporated in Ohio (hereinafter referred to as
the "Buyer") of the first part and Endwave Corporation, a Delaware corporation
(hereinafter referred to as the "Seller") of the second part have as parties
(hereinafter referred to as the "Parties") of this agreement made and entered
into this Production Agreement (hereinafter referred to as the "Agreement") as
of the 31st day of March, 2000.


     WITNESSETH THAT

     WHEREAS Buyer and Nokia Telecommunications OY ("Nokia") previously entered
into a Production Agreement, dated as of July 23, 1996 (the "Nokia Agreement")
whereby Buyer agreed to provide to Nokia the transceiver modules referred to
herein.

     WHEREAS Buyer and Buyer's previously wholly owned subsidiary, TRW Milliwave
Inc. ("MW"), entered into purchase orders, whereby MW would perform the work
under the Nokia Agreement for Buyer (the "MW Purchase Orders").

     WHEREAS MW was acquired by Seller on the date hereof pursuant to the terms
of that certain Agreement and Plan of Merger, dated February 28, 2000, by and
among Buyer, Seller and MW.

     WHEREAS Buyer and Seller wish to terminate the MW Purchase Orders and enter
into this Agreement, whereby Seller will perform the work under the Nokia
Agreement for Buyer.

     NOW THEREFORE THE PARTIES HERETO HEREBY AGREE AS FOLLOWS:


                                    ARTICLE I
                             OBJECT OF THE AGREEMENT

     The Seller wishes to sell to the Buyer and the Buyer wishes to purchase
from the Seller, in accordance with the terms and conditions hereof, certain
parts (hereinafter referred to as "Product" or "Products") which are to be
ordered by the Buyer from time to time and which are specified in Appendix 1
hereto and which are manufactured and/or marketed by the Seller in accordance
with the specifications (HEREINAFTER REFERRED TO AS "Specifications") provided
in Appendix 2 hereto.


                                    ARTICLE 2
                                     PRODUCT

2.1  The Products to be supplied hereunder are specified in Appendix 1 hereto.

2.2  The Parties may, upon mutual agreement, amend Appendix 1 to include any new
item to, or to delete any item from the definition of Product.


<PAGE>

2.3  Notwithstanding Clause 2.2 above, the Buyer may, upon notice to the Seller,
delete any item from the definition of Product for the following reasons:

          (1) Standardization of the Buyer's components and/or products;

          (2) The particular item may no longer be used by the Buyer due to
changes in production, production methods and/or products; and

          (3) The particular item does not meet the Specifications and/or causes
serious quality problems in the Buyer's products.

2.4  Appendix 1 hereto includes a list of the Products and Buyer-specific
components thereof which the parties mutually agree shall be kept in buffer
stock by the Seller. The Parties may mutually agree to amend the buffer stock
levels and to add new Products and Buyer-specific components to be kept in
buffer stock by he Seller.

2.5  The Seller agrees to inform the Buyer of any export or re-export
restrictions relating to the Products

2.6. The Seller agrees that it will not make, have made, use or sell under the
patents or using the technical data generated under the Development Agreement,
dated as January 8, 1996, between TRW and Nokia (the "Development Agreement"),
as specifically set forth in Article 17 of the Development Agreement, Buyer or
Nokia-specific 18 GHz or 38 GHz package designs, ____ Buyer or Nokia-specific
transceiver modules or Buyer or Nokia-specific DC/ALC/IF board designs developed
as a result of performance under the Development Agreement to parties other than
the Buyer or Nokia, without the express written consent of the Buyer.


                                    ARTICLE 3
              PURCHASE COMMITMENT AND SUBSEQUENT PURCHASE ESTIMATES

3.1  The Seller hereby agrees to sell to the Buyer and the Buyer hereby agrees
to buy from the Seller, on and subject to the terms and conditions contained in
this Agreement, the Products listed in Appendix 1.

3.2  The Buyer shall buy from the Seller and Seller agrees to sell the Buyer no
less than the minimum quantities of Products set forth in Appendix 1.

3.3  Other than with respect to the minimum quantities of Products as referenced
in Clause 3.2 above, the Parties hereto acknowledge that the purchase volumes
determined in Appendix 1 are regarded as estimates only based on the best
assumptions of the Buyer, it being agreed however, that under no circumstances,
except as set forth in Clause 3.2 above, shall such estimates be regarded as
binding purchase orders on behalf of the Buyer hereunder.

3.4  Notwithstanding the before said under Clause 3.3, the Buyer may provide the
Seller with a specific purchase forecast for a fixed period of time as shall be
agreed from time to time between the Parties. Such purchase forecast shall not,
however, be regarded as a binding order.


<PAGE>


                                    ARTICLE 4
                                     ORDERS

4.1  The Buyer shall place written orders for the Products by telefax. The
Seller shall forthwith and not later than one (1) week thereafter send the Buyer
and Buyer's designee, Nokia, a confirmation of the order. The Seller shall not
have the right to refuse to supply the Parts ordered by the Buyer in accordance
with the purchase quantities referred to in Clause 3.2 above.

4.2  In case either the Buyer's order or the Seller's confirmation of order
contains terms and conditions not mutually agreed upon between the Parties as
set forth herein, such terms and conditions shall be regarded null and void in
respect of such order.


                                    ARTICLE 5
                                     PRICES

5.1  RESERVED

5.2  The prices are specifically determined in Appendix 1 hereto.

5.3  The prices as set forth in Appendix 1 shall remain unchanged during the
period identified therein.

     Notwithstanding the beforesaid, it is agreed however, that in case the
Buyer exceeds the estimated purchase quantities referred to in Clause 3.2 above,
then the fixed prices shall be renegotiated to take into accord the revised
purchase quantities; in the case where the Buyer does not meet the estimated
purchase quantities referred to in Clause 3.2 above, then the fixed prices also
shall be renegotiated.

5.4  [Reserved]

5.5  All changes in prices shall become effective for all orders placed after
such change in price.

5.6  All prices are exclusive of all taxes and expressed in USD. All duties,
levies and income taxes imposed by any governmental authorities of the United
States in respect of payments due herein shall be to the account of Seller. All
duties, levies and taxes imposed by the authorities of Finland in respect of
payments due herein shall be to the account of Buyer.


                                    ARTICLE 6
                                TERMS OF PAYMENT

     The Buyer shall pay for the Products within sixty (60) days from the date
of the Seller's invoice, provided always, that the Buyer or Buyer's designee,
Nokia, has, prior to payment, received the Products in agreed amounts and in
acceptable condition; provided, however, that the Buyer or Buyer's designee,
Nokia, shall advise the Seller, within two (2) weeks of its receipt of the


<PAGE>

Products, if the Products are not in acceptable condition. Payment shall be made
within sixty (60) days of Buyer's receipt of Seller's invoice for the relevant
Products by electronic transfer of immediately available funds to Seller's
account as follows:

                             [ADD ENDWAVE ACCT INFO]

     In the event that payment is not made within such sixty (60) days, Buyer
shall pay a penalty of twelve (12) per cent per annum, not to exceed the rate of
one (1) per cent per month, of the amount owed to Seller.


                                    ARTICLE 7
                                TERMS OF DELIVERY

7.1  The terms of delivery are:
     FCA loaded Diamond Springs, CA. Incoterm ECA is modified pursuant to
     paragraph 7.3.

7.2  The forwarding agent in Finland is Oy Huolintakeskus Ab.
     The forwarding agent in USA is Emery Worldwide.

7.3  Notwithstanding Clause 7.1 hereof, risk of loss, title to, beneficial
ownership of, right of possession to, and all property rights in the Products to
be delivered hereunder shall remain with the Seller and pass to Buyer's
designee, Nokia, at the point of entry into Finland (but prior to unloading or
customs inspection at such point).


                                    ARTICLE 8
                                     PACKING

     Products are to be packed properly to withstand transportation and when
applicable, as required and instructed by the Buyer. Prices for the Products
shall include the cost of packing and/or protection required to prevent damage
to the Products during transportation. The Seller agrees to indemnify the Buyer
against any damage that the Products may suffer due to improper packing.


                                    ARTICLE 9
                                 DELIVERY TIMES

9.1  The agreed delivery times are of the essence in this Agreement.

9.2  The schedule terms are as described in Appendix 4. Shipment shall be made
strictly as per the orders (requested quantity and delivery time).

9.3  In case the Seller cannot deliver the Products in accordance with the
agreed delivery time, the Seller shall, not less than ten working days prior to
the agreed delivery time, inform the Buyer thereof in writing stating the reason
for the delay and propose a new date for delivery.

9.4  In case the Parties have not agreed on a new date of delivery in accordance
with


<PAGE>

Clause 9.3 above, and in case the respective delivery of the Products is delayed
ten (10) working days or more from the agreed delivery time due to reasons
solely attributable to the Seller, the Buyer shall have the right to cancel the
respective order without any liability to the Seller. Should the Buyer in any
such case purchase the respective Products from a third party supplier, then the
Seller shall be liable to compensate the Buyer up to the value of the respective
order.

9.5  In case the Buyer does not wish to exercise the right of cancellation
provided under Clause 9.4 above, then in case of delays in delivery attributable
to the Seller, the Buyer shall be entitled to [*].

9.6  Notwithstanding Clause 9.5 above, in case the Seller fails to notify the
Buyer of the delay in accordance with Clause 9.3 above and the Buyer does not
wish to exercise the right of cancellation provided under Clause 9.4 above, then
the Seller shall be obliged to pay to the Buyer liquidated damages equivalent to
the liquidated damages that Buyer shall owe to Nokia under the Nokia Agreement..

9.7  The liquidated damages determined above in Clauses 9.5 and 9.6 and in
Clause 11.2 below, or Buyer's right to cancel an order pursuant to Clause 9.4,
shall constitute Buyer's exclusive remedy in respect of delays in delivery under
this Agreement. The Buyer shall not be obligated to show evidence to the Seller
in respect of having suffered actual damage as a result of the delay in delivery
in order to claim the liquidated damages. The Buyer shall be entitled to deduct
the liquidated damages from any payments to be made to the Seller under this
Agreement, and the Seller shall be obliged, upon request by the Buyer, to
provide the Buyer with a credit advice therefor.


                                   ARTICLE 10
                          RESCHEDULING AND CANCELLATION

10.1 The Buyer may, without additional costs, upon notice to (the Seller not
less than three (3) weeks prior to the intended date of delivery, re-schedule
the respective delivery to take place within a four (4) month period following
the intended date of delivery.

10.2 The Buyer may, without additional costs, upon notice to the Seller not
less than seven (7) weeks (according to the normal lead time of each Product)
prior to the intended date of delivery, cancel the respective delivery.

10.3 In the event of delivery cancellation, the Seller shall submit to the
Buyer, and the Buyer shall pay to the Seller, the costs incurred by the Seller
in support of Buyer-specific components and the price, as defined in Appendix 1,
of Products in buffer stock of any completed Products incurred by the Seller in
connection with such cancellation, as supported by a detailed written statement
and supporting documentation (such as a Seller-incurred cost report and vendor
invoices), and, if requested by the Buyer, verified to the Buyer by the Seller's
independent auditors at the Buyer's expense. Upon payment of such amount, the
Buyer shall have no further liability towards the Seller in connection with such
delivery cancellation.

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>

                                   ARTICLE 11
                                   INSPECTIONS

11.1 The Buyer, or the Buyer's designee, Nokia, shall inspect the Products upon
delivery to ascertain correct quantities and whether there exists any visible
damage in the Products delivered. The Seller agrees to replace all faulty
Products, at Seller's expense, and deliver additional Products in order to meet
the correct quantities without delay. In any such cases, the relevant incoming
inspection report will be given to the Seller without delay. The Buyer, or the
Buyer's designee, Nokia, shall return immediately the rejected Products to the
Seller unless otherwise agreed upon between the Parties. Return of the Parts
shall be made at the Seller's expense.

11.2 Without affecting the generality of the beforesaid in Clause 11.1, the
Buyer, or the Buyer's designee, Nokia, may use statistical sampling methods in
the incoming inspection as is specifically determined under Appendix 3 hereto.
In case the delivered Products do not pass this inspection, then the Buyer, or
the Buyer's designee, Nokia, has the right to reject the whole particular
delivery. In any such case, the Buyer shall have the option to either (i) demand
the Seller to forthwith replace the rejected delivery or (ii) cancel the
respective delivery without any liability thereof to the Seller. In case of
replacement by the Seller of the rejected delivery, then the Seller shall be
obliged to pay the Buyer liquidated damages in accordance with Clause 9.5 above
calculated from the date of original delivery to the date of replacement
delivery as Buyer's sole remedy for Seller's breach of its obligations under
this Clause 11.2.

11.3 Notwithstanding Clause 11.2, in case the Buyer or Nokia wishes to sort a
delivery that has failed the inspection referred to above in Clause 11.2 in
order to ascertain whether certain Products may nevertheless be suitable (or use
by the Buyer), then the Buyer or Nokia may do so upon agreement with the Seller
of the compensation of the additional costs accrued thereof to the Buyer.

11.4 In certain cases, the Buyer and the Seller may agree, that the Seller shall
undertake the incoming inspection of the Parts on behalf of the Buyer. In any
such case, the procedures determined in Appendix 3 shall be strictly followed.


                                   ARTICLE 12
                              QUALITY REQUIREMENTS

     The Seller has established quality requirements together with the Buyer
(hereinafter referred to as "Quality Requirements"), set forth in Appendix 3,
which describe the various measures Seller shall undertake in order to meet the
quality requirements and specifications for this Agreement. Seller's obligations
under this Agreement shall be performed in accordance with those Quality
Requirements


                                   ARTICLE 13
                                FACILITY SURVEYS

     Each of the Buyer and Nokia reserves the right, by itself or through its
appointed representative, during regular business hours and following reasonable
notice to the Seller, to review the Seller's physical facilities and the
Seller's quality control procedures, both prior to first delivery


<PAGE>

of the Products under this Agreement and periodically thereafter, in order to
assure compliance with the requirements of Appendices 2 and 3. The right
determined herein above shall also apply to the Buyer's and Nokia's customers.
The Seller shall maintain quality control procedures mutually agreement upon by
the Parties as a result of such facility survey. In the event that the Buyer or
Nokia determines, in good faith, during any facility survey, that the quality
procedures applied by the Seller are insufficient to insure consistent
acceptable quality as set forth in Appendices 2 and 3, then the Buyer or Nokia
shall specifically inform the Seller thereof and request corrective measures to
be undertaken by the Seller. The Seller hereby agrees to undertake any such
mutually agreed upon corrective measures without delay. Seller agrees to request
its subcontractors to comply with the requirements of this Article 13 as they
relate to the work to be performed by such subcontractors.


                                   ARTICLE 14
                                    WARRANTY

14.1 The Seller shall give a warranty for a period of [*]
from delivery (hereinafter referred to as the "Warranty Period") for the
Products supplied hereunder. The warranty period provided hereunder shall
include that the Products supplied shall be new and unused, (free from defects
in material and workmanship and shall meet the Specifications (Appendix 2) and
Quality Requirements (Appendix 3).

14.2 The Seller shall repair or replace, at its own option and cost and without
delay, all Products that fail to satisfy the foregoing warranty within the
Warranty Period.

14.3 In case more than [*]of the Products in a particular
delivery prove to be defective within the Warranty Period, then the Seller
shall, at its own cost and without delay, replace the respective remaining
Products of that particular delivery with new ones and this warranty shall apply
to such replacement Products for the unexpired portion of the Warranty Period or
[*], whichever is longer.

14.4 With reference to Clause 14.2 above, in case the Parties mutually agree
that the Buyer shall undertake the repair or replacement of such defects on
behalf of the Seller, then the Seller shall compensate the Buyer for the costs
accrued thereof.

14.5 THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, WHETHER ORAL,
WRITTEN, EXPRESS, IMPLIED, OR STATUTORY. IMPLIED WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE AND MERCHANTABILITY SHALL NOT APPLY. SELLER'S WARRANTY
OBLIGATIONS AND BUYER'S REMEDIES HEREUNDER (EXCEPT AS TO TITLE) ARE SOLELY AND
EXCLUSI\TELY AS STATED HEREIN.


                                   ARTICLE 15
                                PRODUCT LIABILITY

     Notwithstanding the above in Article 14, the Seller shall be liable for
damage to property other than the Products and/or to persons caused by a
manufacturing defect in the Products for which the Seller is solely responsible.
The Seller shall compensate the Buyer for any damage that the Buyer shall be
obliged to pay to its customer or any other by court or arbitration award or by

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>


settlement out of court; provided, however, that the total liability of the
Seller on any such claim, whether in contract, tort (including sole or
concurrent negligence), or otherwise, arising out of, connected with, or
resulting from such manufacturing defect [*]. The Buyer
shall, and at the cost of the Seller, assist the Seller against any product
liability claim with reasonable efforts.


                                   ARTICLE 16
                          DISCONTINUATION OF PRODUCTION

     If the Seller shall, at any time during the validity of this Agreement or
thereafter, discontinue to manufacture any specific Products, a notice to this
respect must be given to the Buyer and Nokia [*] prior to the intended date of
discontinuation, in order to give the Buyer a chance to place an end-of-life
order before the discontinuation. Such Products shall be delivered in one or
more partial deliveries in accordance with the Buyer's instructions within [*]
from the order date.


                                   ARTICLE 17
                            ENVIRONMENTAL MANAGEMENT

     Nokia endeavors to comply with the principles of the Business Charter for
Sustainable Development (published by the International Chamber of Commerce in
1991) for environmental management. The Buyer encourages the adoption of the
principles therein by (he Seller and its subsuppliers. The Buyer may, where
appropriate, request improvements in the Seller's practices to ensure compliance
with the said principles.


                                   ARTICLE 18
              INDUSTRIAL PROPERTY RIGHTS AND PATENT INDEMNIFICATION

18.1 Ownership of the copyright in all drawings, specifications, manuals,
documents, data, and software provided by one Party hereto to the other under
this Agreement shall remain with the Party first referred to above but the
receiving Party shall be deemed to have the right to use such copy right for the
performance of the Agreement hereunder.

18.2 Seller agrees that it shall to the extent its design is concerned, at its
own expense and at its option, defend or settle any claim, suit, or proceeding
brought against Buyer, Nokia or any customer of Buyer or Nokia, based on an
allegation that a Product furnished under this Agreement constitutes a direct or
a contributory infringement of any claim of any patent, mask work, or copyright,
which exists as of the date of this Agreement. This obligation shall be
effective only if Buyer shall have made all payments then due and if Seller is
notified of said allegation promptly in writing and given authority,
information, and assistance for the settlement or defense of such claim, suit,
proceedings. Seller shall pay all damages and costs assessed in such suit or
proceedings. In the event of a final adjudication by a court of competent
jurisdiction that its Product infringes or violates any third party intellectual
property right or if the use or sale thereof is enjoined, or if the provisions
of any negotiated settlement Agreement prohibit the use of the Product, Seller
shall at its sole option and its own expense, use commercially reasonable
efforts to either: (a) procure for Buyer the right to continue using the
Product; (b) replace it with a substantially equivalent non-infringing

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>

Product; or (c) modify it so it becomes non-infringing but substantially
equivalent.

18.3 The foregoing indemnity does not apply to the following: (1) Infringement
by a combination of Products furnished under this Agreement with other parts not
furnished hereunder unless Seller is a contributory infringer; (2) Infringement
resulting from changes or modifications made to or from the Part by Buyer or
Nokia; and (3) Any settlements of a claim, suit, or proceeding made without
Seller's written consent.

18.4 The foregoing states the entire liability of Seller with respect to
infringement or violation of third party intellectual property rights in
connection with Parts furnished under this Agreement.

18.5 In the event any Product to be furnished under this Agreement is to be made
in accordance with drawings, samples or manufacturing specifications designated
by Buyer or Nokia and is not the design of Seller, Buyer agrees to defend to the
extent Buyer's or Nokia's design is concerned, indemnify and hold Seller
harmless to the same extent and subject to the same requirements as set forth in
Seller's indemnifications of Buyer as set forth in Section 18.2 above.


                                   ARTICLE 19
                                 CONFIDENTIALITY

19.1 Each Party (`Receiving Party') shall not disclose to third parties nor use
for any purpose other than for the proper fulfillment of this Agreement any
technical or commercial information (`Information') received from the other
Party (`Disclosing Party') in whatever form under or in connection with this
Agreement without the prior written permission of the disclosing Party except
information which

     (a) was in the possession of the Receiving Party prior to disclosure
hereunder; or

     (b) was in the public domain at the time of disclosure or later became part
of the public domain without breach of the confidentiality obligations herein
contained; or

     (c) was disclosed by a third party without breach of any obligation of
confidentiality owed to the Disclosing Party; or

     (d) was independently developed by personnel of the Receiving Party having
no access to the Information.

19.2 The provisions of this Article 19 shall survive the termination of this
Agreement for whatsoever reason.


                                   ARTICLE 20
                                  FORCE MAJEURE

20.1 Neither Party shall be liable to the other for any delay or non-performance
of its obligations hereunder in the event and to the extent that such delay or
non-performance is due to an


<PAGE>

event of Force Majeure.

20.2 Events of Force Majeure are events beyond the control of the Party which
occur after the date of signing of this Agreement and which were not reasonably
foreseeable at the time of signing of this Agreement and whose effects are not
capable of being overcome without unreasonable expense and/or loss of time to
the Party concerned. Events of Force Majeure shall include (without being
limited to) war, civil unrest, strikes, lock-outs and other general labor
disputes, acts of government, natural disasters, exceptional weather conditions,
breakdown or general unavailability of transport facilities, accidents, fire,
explosions, and general shortages of energy and materials.

20.3 In the event that the delay or non-performance of either Party hereto
continuous for a period of six (6) months due to reasons of Force Majeure, then
either Party shall have the right to terminate this Agreement with immediate
effect.


                             ARTICLE 21
                      EFFECTIVE DATE AND TERM

21.1 This Agreement shall become valid and effective on the date of signature
hereof and shall remain valid until July 23, 2001.

21.2 RESERVED

21.3 The termination of this Agreement in accordance with Clause 22.1 below
shall not affect the delivery of the Products, in accordance with the terms and
conditions hereof, which have been ordered and confirmed prior to the
termination.

21.4 At the conclusion of this Agreement Seller shall promptly submit to Buyer,
and Buyer shall pay to Seller, the total costs incurred by Seller in supporting
the Buyer-specific components in buffer stock and the price of Products held in
buffer stock detailed in Appendix 1 and Clause 2.4, as supported by a detailed
written statement and supporting documentation (such as Seller incurred cost
report and vendor invoices), as determined in accordance with Seller's standard
accounting practices and, if requested by Buyer, verified to Buyer by Seller's
independent auditors at Buyer's expense. Upon payment of such amount, Buyer
shall have no further liability towards Seller in connection with this
Agreement.



                             ARTICLE 22
                       PREMATURE TERMINATION

22.1 In the event that a Party hereto is in default of a material obligation
under this Agreement and fails to remedy such default within a reasonable time
fixed by the non-defaulting Party (which period shall not be less than thirty
(30) days) in a written notice drawing the attention of the defaulting Party to
the default and requiring the same to be remedied, then the non-defaulting Party
shall have the right to terminate this Agreement with immediate effect after the
expiry of the


<PAGE>

period fixed. In the event of bankruptcy, receivership or comparable procedure
under applicable bankruptcy Ordinance of a Party hereto or in case the default
is not capable of being remedied within a reasonable time (which period shall
not be less than thirty (30) days) then the non-defaulting Party may terminate
this Agreement forthwith.

22.2 The termination of this Agreement in accordance with Clause 22.1 above,
shall also terminate the carrying out of any outstanding orders, whether
confirmed or not.

22.3 In the event of termination by Seller for Buyer's nonpayment as stated in
Clause 22.1, Seller shall promptly submit to Buyer, and Buyer shall pay to
Seller, the total costs incurred by Seller of Buyer-specific components and
work-in-process, and the price, as defined in Appendix 1, of any completed
Products in buffer stock, incurred by Seller in connection with such
cancellation, as supported by detailed written statement and supporting
documentation (such as Seller incurred cost report and VENDOR invoices), and ,if
requested by Buyer, verified to Buyer by Seller's independent auditors at
Buyer's expense. Upon payment of such amount, Buyer shall have no further
liability towards Seller in connection with such nonpayment.


                                   ARTICLE 23
                    APPLICABLE LAW AND SETTLEMENT OF DISPUTES

23.1 This Agreement shall be governed by the laws of the State of California. In
addition, the United Nations Convention on the International Sale of Goods (the
Vienna Convention) shall apply to all sales contracts pertaining to the Parts
between the Parties.

23.2 Any and all disputes arising out of or in connection with this Agreement
shall be finally settled according to commercial arbitration rules of the
American Arbitration Association by three (3) arbitrators appointed in
accordance with the Rules of that organization. The arbitration proceedings
shall be conducted in Los Angeles, CA in the English language. The arbitration
award shall be final and binding on the Parties.


                                   ARTICLE 24
                                FINAL PROVISIONS

24.1 Neither Party shall assign or transfer to any third party, without the
prior written consent of the other Party, this Agreement or any of its share or
interest therein. Such consent shall not be unreasonably withheld in case of
assignment to an affiliate of the assigning Party, on condition that the
assigning Party shall remain fully responsible towards the other Party for the
proper fulfillment of this Agreement.

24.2 This Agreement contains the entire understanding between the Parties in
respect of this matter and all previous correspondence, memoranda, minutes of
meetings, offers, enquiries and other documents exchanged between the Parties
prior to the date of this Agreement shall be


<PAGE>

cancelled and superseded by this Agreement.

24.3 In addition to this Agreement the following documents are hereby made part
of this Agreement:

     APPENDIX 1 Parts, Purchase volumes and Prices

     APPENDIX 2 Specifications

     APPENDIX 3 Quality Requirements

     APPENDIX 4 Operating Model

     In case of any discrepancies between the above documents, the text of this
Agreement document shall always prevail over any of the Appendices (with the
exception of Appendix 4) or the Schedules thereto. The terms and conditions of
Appendix 4 hereto shall alter the contents of this Agreement only to the extent
expressly stated in Appendix 4. All other conditions of this Agreement shall
remain unchanged. The Appendices shall apply in the order set forth above.

24.4 Alterations or amendments to this Agreement shall be made in writing with
the signature or both parties.

24.5 The following persons shall act as the representatives of the Parties
regarding notices, performance, extension, termination and changes in respect of
this Agreement.

     REPRESENTING THE SELLER: Endwave Corporation
                              321 Soquel Way
                              Sunnyvale, CA 94086


     REPRESENTING THE BUYER:  TRW Inc.
                              Space & Electronics Group

                              One Space Park
                              Redondo Beach, CA 90278 USA

24.6 [RESERVED]

24.7 Notwithstanding any other provision of this Agreement, neither Party shall
under any circumstances be liable for any indirect nor consequential damage
howsoever arising under or in connection with this Agreement, except in cases of
intentional misconduct or gross negligence

     24.8 No failure or delay of either Party in exercising its rights hereunder
(including but not limited to the right to require performance of any provision
of this Agreement) shall be deemed to be a waiver of such rights unless
expressly made in writing by the Party waiving its rights.

     24.9 In the event that any provision of this Agreement shall be held
invalid as contrary to any law, statute or regulation in that regard, the
invalidity of such provision shall in no way affect the validity of any other
provision of this Agreement and each and every provision shall be severable from
each and every other.


<PAGE>

     24.10 Buyer agrees that it shall not knowingly sell, transfer, or deliver,
directly or indirectly, and part of portion of the Products or related
documentation supplied by Seller pursuant to this Agreement to any person or
organization in any country where such sale, transfer, or delivery by Buyer
would be prohibited by law or regulation nor or hereafter in effect which
imposes any restrictions on United States trade with foreign countries. Seller's
obligations hereunder are conditioned upon Seller's obtaining, from the
appropriate agencies or departments of the United States Government, all export
licenses and other governmental permits that may be required by law to enable
Seller to export the Parts supplied by Seller pursuant to this Agreement. Seller
agrees to take all reasonable steps to obtain such licenses and permits. In the
event that the required approvals are not granted, withdrawn, or not extended,
then either party may terminate this Agreement and such termination for purposes
of determination of costs shall be considered caused by Force Majeure as defined
in Article 20 of this Agreement.

24.10 The headings used in this Agreement are inserted for convenience only and
shall not affect the interpretation of the respective provisions of this
Agreement

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by
their duly authorized representatives.

/s/ EDWARD A. KEIBLE, JR.                        /s/ WESLEY G. BUSH
----------------------------                     --------------------------

SIGNED FOR
AND ON BEHALF                                    TRW Inc.
OF                                               Space & Electronics Group

Endwave                                          Division
Corporation


SIGNED FOR
AND ON BEHALF
OF
<PAGE>


APPENDIX 1           PARTS, PURCHASE VOLUMES AND PRICES
APPENDIX 2           SPECIFICATIONS
APPENDIX 3           QUALITY REQUIREMENTS
APPENDIX 4           ROLLING FORECAST


                                       18
<PAGE>

                                   APPENDIX 1

                   PARTS/PRODUCTS, PURCHASE VOLUMES AND PRICES


     1. PRICES

     1.1 UNIT PRICE FOR 18/38 and 23/26 GHz MODULES

               The agreed unit prices for cumulative order volume are as follows

                                       [*]

          The per unit pricing above is based on [*]and the
          number of units delivered by the Seller hereunder. For example, if on
          the date hereof, Nokia has alreeady ordered from the Buyer under the
          Nokia Agreement[*].

     2. PURCHASE COMMITMENT VOLUME

               The Buyer commits to purchase volume of [*] provided however, the
               production capability of the Seller to start shipments at below
               stated week of each frequency band at following table defined
               estimated level. The customer demand levels will be given in the
               bi-weekly sent Rolling Forecast and the agreed committed maximum
               capacity may be reviewed in the monthly management meetings and
               will be in alignment relative to the Rolling Forecast and the
               general business outlook. The minimum order commitment takes into
               account the number of units previously ordered by Nokia under the
               Nokia Agreement. For example, if on the date hereof, Nokia has
               already ordered from the Buyer under the Nokia Agreement [*] the
               minimum number of additional units (18/38 GHZ and 23/26 GHZ units
               combined) that the Buyer must order hereunder will be an
               [*]. To the extent that the Buyer fails to order such minimum
               amount, the Seller agrees that the only liability that the Buyer
               shall have to the Seller is assignment of the contractual claim
               that the Buyer has against Nokia under the Nokia Agreement for
               failure to procure the requisite minimum orders thereunder.

               The units manufactured for the rate demonstration will be
               shippable products according to the product specification.
               The same procedure will take place always when taking a new
               frequency product to the volume production.

               The committed volume is divided to different frequency bands as
               follows

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>


                   I)       18/38 Ghz                               [*]
                   II)      23/26 Ghz                               [*]


                   Minimum order quantity / frequency band is [*] and
                   if the total order volume of I) or II) exceeds the above
                   mentioned amount then the other will diminish accordingly and
                   the total commitment will stay as agreed [*]. As
                   indicated above, [*]

--------------------------------------------------------------------------------

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.


<PAGE>


                                   APPENDIX 2

                                 SPECIFICATIONS

                                      [*]

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

<PAGE>


                                   APPENDIX 3

                              QUALITY REQUIREMENTS                         1(1)
Cellular Transmission                            APPENDIX 3
                                                  3/5/98

                                                                    CONFIDENTIAL


QUALITY REQUIREMENTS FOR PRODUCTION AGREEMENT OF MMIC-MODULES

1. PURPOSE

     The purpose of this document is to incorporate the manufacturing and the
     quality control process of the Seller into one entity, in a way that makes
     it possible to dispense with the Buyer and Nokia's receipt control as a
     routine procedure and normally forward the Products directly to production.
     The aim is to develop quality systems in a joint effort to the point where
     the Seller can assume full responsibility for his activities and for the
     quality of his products. In this way, the Buyer and Nokia's quality policy
     with regard to their Sellers is fulfilled (i.e. responsibility for quality
     is on the party carrying out the task). Both the Buyer and Nokia and the
     Seller regard the fulfillment of the final consumer's expectations and
     needs as the basis of their business operation. Their mutual business
     relations are considered enduring and the aim is to be successful together.

2. APPLICATION

This quality document is complementary to General conditions of Purchase. This
document applies to all components, units and devices supplied by the Seller to
the Buyer and Nokia (hereinafter referred to as "the Products").

3. DUTIES

In order to build up a fruitful co-operation, the parties assume the following
duties:
A. The Buyer and Nokia

-    Inform the Seller of any development projects that will have notable
     influence on the formers Seller relations.

-    Create the conditions, as far as is in his power, for mutually beneficial
     business relations

-    Disclose the quantities for and the nature of deliveries in good time

-    Supply, with every order of a new product, written documentation giving the
     expected quality requirements. In co-operation with the Seller the Buyer
     and Nokia make sure that the requirements are unambiguous.

-    Inform the Seller of reasons that are attributable to the latter and may
     result in the termination of business relations, early enough to allow the
     Seller to take the necessary measures in order to eliminate the said
     reasons.


<PAGE>

NOKIA
                                                QUALITY REQUIREMENTS        2(2)
Cellular Transmission                            APPENDIX 3
                                                  3/5/98

                                                                    CONFIDENTIAL

B. The Seller

-    Engages himself to produce and to deliver Products that comply with the
     quality requirements agreed upon and to respect the agreed delivery times.

-    Keeps an up-to-date list of his approved Sellers.

-    Provides evidence of ISO 9000 certification and permits control visits at
     his premises with reference to deliveries to the Buyer and Nokia.

-    Assumes responsibility for the quality of all his deliveries up to ex
     carrier including responsibility for products purchased as raw materials
     from his own Seller. Concerning the quality of the product up to the final
     consumer, this is not valid if previous integration of the products into
     the system or mishandling had caused a failure.

-    Informs the Buyer and Nokia without delay of any circumstances that may
     affect his deliveries or business relations.

-    Provides the Buyer and Nokia with the quality records when requested.

-    Continuously develops his quality systems and the quality of his products,
     in an effort to satisfy the needs of the final consumer.

-    Responsibility cannot be assured if the Quality of the Product is
     compromised by any kind of failure propagation (electrical, mechanical,
     functional, mishandling) from the System to the Product.

4. QUALITY ASSURANCE

     The Seller shall run an effective quality system capable of assuring that
     the requirements will be fulfilled. The quality system shall be in
     accordance with international quality standards ISO 9000 (EN 29000).

     Seller shall to the extent and within the time frames requested by the
     Buyer and Nokia send to the Buyer and Nokia a report of the results of the
     quality assurance measures described in the Seller's quality system
     documentation. Seller shall present agreed reports monthly. The reports
     shall cover the observations set out in the quality inspection program
     described in the Sellers Quality Plan.

     When a reported result deviates from the quality level according the
     incoming inspection plan, Seller shall, when requested, inform the Buyer
     and Nokia of the measures that Seller


<PAGE>

NOKIA
                                                QUALITY REQUIREMENTS        3(3)
Cellular Transmission                            APPENDIX 3
                                                  3/5/98

                                                                    CONFIDENTIAL

     has taken or will take in order to achieve the said quality level.
     Representatives of the Buyer and Nokia or the end user shall have the right
     to visit now and then the factories of the Seller or his subcontractors in
     order to observe the quality assurance or to make sure that the procedures
     and rules described in Seller's quality system documentation or Quality
     Plan are followed. Seller shall, when requested, demonstrate the working
     places and the instructions that are used during the production of the
     product.

5. QUALITY PLAN

     The Seller shall produce a total Quality Plan for the Product (according to
     ISO 9000) and deliver it to the Buyer and Nokia's quality assurance
     personnel at least two months prior to the commencement of production. The
     documentation shall clearly state the criteria that will be employed when
     releasing items to the Buyer and Nokia or when releasing items from any
     stage of production to next.

6. INSPECTION AND CONTROL

     The Buyer and Nokia donot accept any faulty [defective] Products. They have
     the right to return all faulty Products, regardless of at which stage of
     production the fault has been detected.

     Representatives of the Buyer and Nokia and the end user shall have the
     opportunity of visiting the factory of the Seller or his subcontractor
     before and during the production phase to inspect the production of the
     equipment to be supplied and to carry out any measurements considered
     necessary.

     The incoming inspection will be based on standard IEC410 (MIL-STD 105 E)
     and Nokia Telecommunications Quality Requirements. The sampling plan will
     be General inspection level II, single sample, AQL 2,5 for visual
     inspection. If the amount of defective products[*] in electrical
     incoming inspection or in the production test process, the delivery lot
     will be rejected. Defective product returned to the Seller will be at the
     cost of the Seller.

7. RELIABILITY

     The Seller's quality system shall clearly set out the procedures to be
     followed during the design and production of the product in order to
     prevent any departure from the Seller's internal reliability criteria.

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>

NOKIA
                                                QUALITY REQUIREMENTS        4(4)
Cellular Transmission                            APPENDIX 3
                                                  3/5/98

                                                                    CONFIDENTIAL

     Seller shall analyze field data of MWUs provided by Buyer and Nokia to
     verify that MTBF and Expected Lifetime for MWUs are within the
     specification. In the case that any adverse deviation from specification is
     identified Seller shall immediately start and implement all the necessary
     preventive and corrective actions for future shipments to meet expected
     lifetime and MTBF.

     If requested by the Buyer and Nokia, the Seller shall provide a list of
     materials, which are used in the Product to the Buyer and Nokia's component
     quality assurance personnel. If unreliable materials or components are
     found, the Seller shall make appropriated modifications to prevent any
     possible reliability problems.

8. WARRANTY AND AFTER-SALES SUPPORT

8.1    Seller shall give a warranty for Products for a period specified in the
       Production Agreement. The warranty shall cover any defects in design,
       engineering, software, materials and workmanship of the Products.
       Defective units identified during said period shall be repaired or
       replaced free of charge to the Buyer and Nokia by Seller within the
       Production Agreement agreed time scales after receiving such Product to
       Seller's premises. The replaced or repaired Product shall be delivered to
       the Buyer and Nokia at the cost of the Seller.

8.2    Repairs and replacements covered by the above mentioned warranty shall be
       warranted to be free from defects in design, engineering, software,
       materials and workmanship as defined by Production Agreement.

8.3    Post-warranty repairs during the period of [*] after the last delivery
       shall be effected at "reasonable repair charges". A "reasonable repair
       charge" means [*]. Any repair, the cost of which to Seller that exceeds
       the "reasonable repair charge" shall not be performed by Seller, unless
       Seller agrees to perform such repair. Seller may choose whether to
       repair the defaulting product or to provide a new product to replace the
       defaulting product.

8.4    In the event that a Customer of the Buyer and Nokia requires a warranty
       period longer than agreed upon by the Parties hereunder Seller shall
       provide such extra warranty as long as the extra cost of such warranty is
       mutually agreed by the Parties.

8.5    A sufficient stock of spare Products will be made available to meet Buyer
       and Nokia's requirements. The quantities and price of this stock to be
       mutually agreed upon by Buyer and Nokia and Seller.

8.6.1  Within the Warranty period, if the percentage of defective Product in a
       particular delivery exceeds the maximum allowed by the Production
       Agreement, the Seller shall, at its own

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

<PAGE>

NOKIA
                                                QUALITY REQUIREMENTS        5(5)
Cellular Transmission                            APPENDIX 3
                                                  3/5/98

                                                                    CONFIDENTIAL

       cost and without delay, replace the respective remaining Products of that
       particular delivery with new ones and this warranty shall apply to such
       replacement Products for the unexpired portion of the Warranty Period or
       as defined by Production Agreement.

8.6.2  In the event that Seller would be unable to fulfill any of its
       obligations under clause 8.0 of this Document within 90 days, the Buyer
       and Nokia may take the corrective measures itself or through any other
       Manufacturer at the expense of the Seller.

8.7    In any case, repairs of all the individual units shall be duly documented
       in writing.

8.8    Seller shall inform Buyer and Nokia according to Production Agreement if
       it intends to stop manufacturing any units or spare parts for the Product
       in operation. At the same time Seller shall offer to supply Products that
       Buyer and Nokia will require for future needs. The offer shall be based
       on reasonable and agreed prices and commercial conditions.


9. COMPLAINTS

     In case of complaint, the Buyer and Nokia inform the Seller of the detected
     fault [defect] in writing within 14 days from its detection. On this
     occasion, the Buyer and Nokia and the Seller agree on the measures to be
     taken, such as:

     -    The Buyer and Nokia return the rejected lot to the Seller at the
          Seller's expense

     -    The Buyer and Nokia sort out the rejected lot at the Seller's expense
          and returns the faulty Products to the Seller, who either replaces
          them with faultless [conforming] Products or makes a credit note on
          the whole sum, depending on the Buyer and Nokia's choice.

     -    The Seller sorts out the lot and replaces the faulty Products on the
          Buyer and Nokia's or customer's premises in a time schedule mutually
          agreed between the parties.

     -    The Buyer and Nokia have the right to invoice the Seller for mutually
          agreeable controlling and handling cost involved.


10. MODIFICATIONS

     In accordance with paragraph 3, the Parties must inform in writing each
     other of any modifications concerning electrical components and raw
     materials as defined in the Seller supplied Project Parts Lists. The
     parties are under obligation to verify that the information


<PAGE>

NOKIA
                                                QUALITY REQUIREMENTS        6(6)
Cellular Transmission                            APPENDIX 3
                                                  3/5/98

                                                                    CONFIDENTIAL

     provided is unambiguous and, in case ambiguities exist, to contact the
     other party without delay in order to straighten them out. If required, a
     sample must be submitted for approval.

11  NO PREJUDICE

     Neither the presence of Buyer and Nokia's representatives nor any express
     or implied acceptance of e.g. work, materials, components, equipment or
     method of manufacturing nor the fact that the Buyer and Nokia or their
     representatives have not brought any defect or deficiency to the attention
     of the Seller or his representatives shall relieve Seller from its
     obligations under this Document to perform according to and to meet all
     requirements set out in this Document or prejudice any warranty of the
     Seller under this Document.

12 SECRECY

     To the extent applicable laws so prescribe and collective bargaining
     agreements so permit Buyer and Nokia will treat as secret all information
     about Seller's or his subcontractor's production.

13 BUSINESS SECRETS

     Both parties respect each other's business secrets and will not disclose
     the information received to any third party.

14 QUALITY METRICS

     The purpose of quality metrics and reports is to evaluate the effectiveness
     of key processes during manufacturing, delivery and maintenance phases of
     MMIC-modules. The key process targets are regularly checked and the
     corrective actions defined in the case of process deviations.
     Quality metrics of competition sensitive data shall be available for review
     but not delivered in written forms.


<PAGE>

NOKIA
                                                QUALITY REQUIREMENTS        7(7)
Cellular Transmission                            APPENDIX 3
                                                  3/5/98

                                                                    CONFIDENTIAL
<TABLE>
<CAPTION>

-------------------- --------------------- -------------------------------------------- -----------
PROCESS PHASE        METRICS               DESCRIPTION                                  TARGET
-------------------- --------------------- -------------------------------------------- -----------
<S>                  <C>                   <C>                                          <C>
MANUFACTURING        SPC VALUES            TO BE AGREED                                 TBD
PHASE
-------------------- --------------------- -------------------------------------------- -----------
MANUFACTURING        [*]                   [*]                                          TRW
PHASE                                                                                    and
                                                                                        Supplier
                                                                                        Mutually
                                                                                        Agreed
                                                                                        Targets
                                                                                        TBD
                                           [*]
-------------------- --------------------- -------------------------------------------- -----------
MANUFACTURING        [*]                   [*]                                          TBD
PHASE
                                           [*]                                          TBD

                                           [*]                                          [*]
                                                                                        TBD
-------------------- --------------------- -------------------------------------------- -----------
DELIVERY PHASE       [*]                   [*]                                          [*]

                                           [*]
-------------------- --------------------- -------------------------------------------- -----------
                     [*]                   [*]                                          [*]

                                           [*]
-------------------- --------------------- -------------------------------------------- -----------
OPERATION AND        [*]                   [*]                                          [*]FITs
MAINTENANCE
-------------------- --------------------- -------------------------------------------- -----------
                     [*]                   [*]                                          One
                                                                                        Month
-------------------- --------------------- -------------------------------------------- -----------
                     [*]                   [*]                                          TBD

                                           [*]
-------------------- --------------------- -------------------------------------------- -----------
</TABLE>

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

<PAGE>
NOKIA

                                                     REPORT            1(23)
Radio Access Systems(RAS)                            MWU Specifications
System Development (SD)                              15.02.1999 Mko
Markku Koivisto                                      Confidential

<PAGE>

                                   APPENDIX 4

                                 OPERATING MODEL


<PAGE>
                                                                               1


Cellular Transmission                                    Operating model between
                                                         CT and SUPPLIER

                    OPERATING MODEL BETWEEN CT AND SUPPLIER

INTRODUCTION

The Operating Model between the CT plant and the suppliers describes the main
operating principles between CT and suppliers, subcontractors and vendors. It is
a logistics appendix to the purchasing contracts. All logistics principles can
be developed, taught and updated more systematically with the help of this
document between CT and suppliers.

The cursive text in the operating model will be updated in the purchasing
agreement negotiations and the right parts of the operating model will be chosen
by the SUPPLIER and the BUYER. The operating model will be used in purchases
relating to Cellular Transmission. In case of any discrepancies between the
Operating model and the text of Purchasing agreement or its other appendixes,
the terms of the Operating model shall always prevail.

1.       FORECASTING

1.1.1    VARIABLE

                  The SUPPLIER must always have the capacity to deliver based on
                  previously informed maximum capacity. The following
                  flexibilities are in use between the BUYER and the SUPPLIER.
                  The BUYER has also some flexibility with the customers.


                  The BUYER AND NOKIA will forecast the need for the different
                  variables also for longer period than 20 weeks, but a
                  commitment to the demand is given for 2 weeks. After that the
                  next 2 weeks the BUYER has the right to change the variables
                  +/-50%.

                  MIX:

                  0-2 weeks: Mix is fixed         = commitment by the BUYER
                  3-4 weeks: +/-50% flexibility for
                             weekly forecast      = 50% commitment by the BUYER.
                  Week 5>:   Unfixed mix          = no commitment by the BUYER

                  VOLUME:

                  0-2 weeks: Volume is fixed      = commitment by the BUYER
                  3-4 weeks: +/-50% flexibility
                  in weekly volumes               = 50% commitment by the BUYER.

                  NOTE!      The BUYER AND NOKIA ARE allowed to increase up
                             to the maximum capacity from the 3rd week onwards.
                             i.e. the SUPPLIER needs to always have flexibility
                             E. Exact delivery dates and quantities are known
                             only after the weekly order.


<PAGE>
                                                                               2


Cellular Transmission                                    Operating model between
                                                         CT and SUPPLIER

         The BUYER specific components are listed here:

                  [*]


                  [*]


                  [*]


                  [*]

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
                                                                               3


Cellular Transmission                                    Operating model between
                                                         CT and SUPPLIER

                  The BUYER will commit to buffer stock of these components up
                  to 2 weeks 100% according to the forecast plus 6 weeks
                  according to the agreed maximum capacity.

                  SENDING THE ROLLING FORECAST

                  The BUYER AND/OR NOKIA will send the forecast bi-weekly for
                  following 6 months and monthly update the forecast for
                  following 12 months.

                  CONFIRMATION OF THE ROLLING FORECAST

                  The SUPPLIER will confirm to Buyer and Nokia the forecast sent
                  by the BUYER AND/OR NOKIA within max. 5 working days.

                  MAXIMUM CAPACITY

                  Maximum capacity and buffer stock levels will be agreed in the
                  yearly contract negotiation and will be reviewed and agreed if
                  needed in the monthly management meetings to remain in
                  alignment relative to the Rolling Forecast and the general
                  business outlook.

2.       ORDERING

         2.1      EDI               (LONG TERM DEVELOPMENT)

                  Official orders are made automatically. If the serial number
                  label is used and the information is generated by NOKIA'S MRP
                  II system and delivered to the SUPPLIER. The SUPPLIER is
                  responsible for sticking the BUYER's AND/OR NOKIA'S serial
                  number labels onto the unit. The information on the serial
                  number label and in the unit's flash memory has to be same.

         2.2      PURCHASE ORDER BY FAX

                  A purchase order is based on NOKIA'S MRP II system and
                  delivered to the SUPPLIER after the Purchase Order creation.
                  The BUYER OR BUYER'S DESIGNEE, NOKIA, will send the order
                  documentation by fax 5 working days before scheduled delivery
                  week. The BUYER's aim is to send (or have sent by Nokia) the
                  fax on Monday by 4 p.m. Helsinki time. The SUPPLIER shall
                  confirm the order within 1 working day. If the BUYER has not
                  received the confirmation within the agreed time, the BUYER
                  AND NOKIA shall consider the order confirmed. The SUPPLIER is
                  responsible for sticking the BUYER's AND/OR NOKIA'S serial
                  number onto the unit if asked by the BUYER OR BUYER'S
                  DESIGNEE, NOKIA.

3.       DELIVERY

         3.1      VARIABLE

                  The following requirements need to be ensured:

                  -Minimum lead-time for the weekly order is 5 working days


<PAGE>
                                                                               4


Cellular Transmission                                    Operating model between
                                                         CT and SUPPLIER

                  -Orders are made once a week on Monday by 4 p.m. Helsinki time

                  -Delivery dates according to the order.

                  -Delivery from the Emergency Stock within 24 hours

4.       INSPECTION

         4.1      Inspection

                  The SUPPLIER is responsible for 100% quality. Both functional
                  and visual inspection will be made by the SUPPLIER. The BUYER
                  AND/OR NOKIA may do a functional and visual inspection if
                  needed. The BUYER AND/OR NOKIA will arrange the quality
                  training if needed.

                  The BUYER AND/OR NOKIA is also allowed to audit both the
                  visual and electrical inspection performed by the SUPPLIER.

                  The electrical tests and visual inspections are made according
                  to Appendix 2 Specifications and Appendix 3 Quality
                  Requirements.

5.       INVOICING

                  An invoice has to be created for each delivery, but it is also
                  possible to collect invoices and send them to the BUYER
                  afterwards. The invoice has to include at the very least THE
                  following information:

                  - Invoicing address:

                           -TRW SPACE & ELECTRONICS GROUP, ACCOUNTS PAYABLE,
                            ------------------------------------------------
                            P.O. BOX 922, EL SEGUNDO, CALIFORNIA 90245
                            -----------------------------------------

                  -NOKIA TRW purchase order number and purchaser.

                  -Terms of payment (currency).

                  -Bankers:

                         -Name of bank.
                         -Account number.

                  -Suppliers contact information.

                  -Delivery or shipment day.

                  -Country of origin and dispatch:


<PAGE>
                                                                               5


Cellular Transmission                                    Operating model between
                                                         CT and SUPPLIER

                  -Mention whether the goods are in free circulation within the
                   EU countries or not.

                  -Description of goods:

                     -General product identification
                     -Suppliers type
                     -NTC-code

                  -Invoicing currency and it's international abbreviation

                  -VAT-code:

                     -For example Finland FI01011203, Sweden SE516401891201 and
                      Germany DE812035381.

                  -The SUPPLIER has their own customer number for every Nokia
                   site.

                  -Barcode if available

                  -Shipment details

                     -Net and gross weight.
                     -Dimensions of each package.
                     -Number of packages.

                  -Terms of delivery by Incoterms 1990.

                  -Number of waybill.

                  -Forwarder and it's representative in country of departure.

                  -Customs tariff code.

                  -Delivery note number.

         5.1      RESERVED

                  Netting is recommended for use with foreign suppliers. Below
                  is a general description about netting.


<PAGE>
                                                                               6

Cellular Transmission                                    Operating model between
                                                         CT and SUPPLIER


6.       SYSTEM IMPROVEMENT

                  The target of this chapter is to achieve cost efficiency from
                  both sides -the BUYER and the SUPPLIER. The targets for the
                  following issues are clarified in other chapters of this
                  document. However even tighter targets in the long run will be
                  set at least for delivery accuracy, delivery time/call off
                  time and product price. Those targets will be set after the
                  realization of the present targets has been monitored. Each
                  target will be set case by case.

                                                                  6/2000

                  Delivery accuracy                               xx

                  Call off lead-time                              xx

                  Quality                                         xx

                  Price                                           xx

                  Failure reports and                             xx
                   corrective actions

                  Fixed period                                    xx

                  THIS TABLE WILL BE UPDATED 6 MONTHS AFTER THE START OF THE
                  VOLUME PRODUCTION

7.       FORWARDING AND TRANSPORTATION METHODS

                  Transportation and responsibility according to the terms of
                  delivery. The BUYER AND/OR NOKIA will define the forwarding
                  agents and transportation method in the weekly orders.

8.       COMMON MEASUREMENTS

         8.1      Measured by the BUYER AND/OR NOKIA

                  The BUYER AND/OR NOKIA will do the following measurements ONCE
                  A MONTH:

              1.  DELIVERY ACCURACY (DA)


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                  -Time period is +/- 3 days.

                  Formula:

                  =(received of promised PO's in a time period/promised PO's in
                   a time period) *100

              2.  DELIVERY COMPLETENESS

-        Time period is +/- 3 days.

                  Formula:

                  =(quantity of delivered items in a time period/total quantity
                  of ordered or called off items) * 100

              3.  CUSTOMER SATISFACTION

                  The customer satisfaction chart gives a rating for the
                  following areas with a maximum mark of 20 for each (max. 100
                  in total, the target is 95):

                  -Early warning of technical changes

                  -Early warning of non-deliveries

                  -Quick response to changed demands

                  -Quick response to inquiries

                  -Quick response to corrective actions

                  The scoring system for this chart is as follows:

                  -0 - 5 marks for a poor performance

                  -6 - 10 marks for a fair performance

                  -11 - 14 marks for a satisfactory performance

                  -15 - 18 marks for a good performance

                  -19 - 20 marks for an excellent performance

              4.  RECEIVED AND REJECTED MATERIAL

                  In the received and rejected material chart. There are
                  reported received material in FIM and rejected material in %
                  (pcs).

         8.2      Measured by the SUPPLIER



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              To be required from the SUPPLIER in the future:

              1.  DELIVERY ACCURACY (DA)

                  -Time period is +/- 1 day.

                  Formula:

                  =(shipped items of promised PO's in a time period/promised
                  PO's in a time period) *100

              2.  DELIVERY COMPLETENESS

                  -Time period is +/- 1 day.

                  Formula:

                  =(quantity of delivered items in a time period/total quantity
                  of ordered or called off items *100

              3.  BUFFER LEVELS

                  The SUPPLIER delivers information of agreed buffer items to
                  the BUYER AND NOKIA ONCE A MONTH.

9.       PACKING

         9.1      MWU shipping package requirements

                  MWU shipping package have to fulfill following requirements:

                  The whole package have to be 100% antistatic including packing
                  tape and extra filling.

                  The packing material should be recyclable (Material and needed
                  markings from manufacturer).

                  The package must have ESD-warning notices.

                  Single unit packing, double packing as an option (MWU's for
                  one radio hop in the same package).

                  Package note including the correct serial numbers of the
                  units.

                  Package markings according "LABEL SPECIFICATION FOR PACKAGES"
                  NESS 099B60.

                  The boxes should be strong enough to remain undamaged during
                  the transportation. The boxes should be flat on all sides.


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                  The markings on the top of each shipment unit should include
                  at least:

                  -Dispatcher and address

                  -Receiver and address

                  IF THE PACKAGING DOES NOT MEET THESE REQUIEMENTS A CLAIM WILL
                  BE LODGED AGAINST THE SUPPLIER.

                  THE GOODS should be packed in boxes of maximum dimensions:

                  Height                    22 cm

                  Width                     45 cm

                  Length                    50 cm

                  Maximum weight            20 kg

         9.2      Packing List

                  Packing list should include the following labeling:

                  1. SUPPLIER's name and mailing address

                  2. NOKIA'S name and address

                    o Delivery address

                    o Mailing -and invoicing address

                    o If needed precise location (for example production line or
                      warehouse)

                  3. Nokia purchasing order number (in written and barcode form)

                  4. Nokia's order position (in written and barcode form)

                  5. Identification information for the goods

                    o  Nokia type

                    o  Nokia code (in written and barcode form)

                    o  Manufacturer type

                  6. Item quantity (in written and barcode form)

                  7. Quantity of packages

                  8. Terms of delivery (Incoterms 1990)


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                  9. Date of consignment

                  10.Production date or other traceability code (in written and
                     barcode form)

                  11.Packing list number (in written and barcode form)

                  NOTE!

                  -The lowest level of package should contain only one Nokia
                  code.

         9.3      Waybill

                  Waybill should contain waybill number in written, barcode form
                  and all other necessary information.

         9.4      Identification of MWU

                  9.4.1    Identification in electrical formal

                           -Nokia code

                           -Serial number including manufacturing date
                            (week/year)

                           -Manufacturing date (week/year) of chip

                           -Unit version/stepping

                           -Frequency band Rx/Tx

                           -Calibration data

                  9.4.2    Identification in printed format

                           -Text format:

                           -Nokia code

                           -Serial number including manufacturing date
                            (week/year) (height 5mm)

                           -Frequency, for example "38 GHz"  (height 10mm)

                           -Frequency band, for example:

                                 Rx/Tx=37058-37338/38318-38598 MHz  (height 5mm)

                           -Unit version/stepping  (height 5mm)


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                           -Barcode format according to NESS 099B60

10.      RETURN AND REJECTED MATERIALS

         10.1     Return and rejected materials

                  In the case of defective products, the SUPPLIER is responsible
                  for taking the necessary action to avoid more damage. This and
                  the explanation of actions to be taken have to be made within
                  [*] from the reclamation. Within [*] the SUPPLIER has to ship,
                  based on the delivery terms DDU NOKIA'S premises, new products
                  which will replace the defective ones. The BUYER AND/OR NOKIA
                  will return defective products based on the delivery term Ex
                  works at BUYER's AND/OR NOKIA'S premises. SUPPLIER shall
                  inform the BUYER AND NOKIA the SUPPLIER's forwarding agent
                  (e.g. UPS) and the customer number. The BUYER AND NOKIA shall
                  inform the SUPPLIER the awb number, the date of the return
                  shipment and the copy of the proforma invoice by fax. The
                  SUPPLIER shall send a credit note for defective products or
                  return the units[*].

                  The SUPPLIER has to provide a failure analyses report of the
                  returned products.

[GRAPHIC]

11.      CONTACT PERSONS

         THE BUYER                         RESPONSIBLE        TEL.
         ---------                         -----------        ----
         ALL ISSUES                        MAUREEN MILLER     +310.813.7701

         NOKIA

                - Production issues        Asko Remes         +358 9 51127752
                - Technical issues         Hans Somerma       +358 9 51127735
                - Quality control          Asko Remes         +358 9 51127752
                - Commercial issues        Merja Leinonen     +358 9 51127298


[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

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         The SUPPLIER

                - Production issues        Mike Roush         +530 6425934
                - Technical issues         Duncan Smith
                - Quality control          John Esqurra       +530 6425442
                - Commercial issues        Peggy Willis       +530 6425406


12.      VOLUME INCREASE

                  The SUPPLIER has to clarify what equipment investment and
                  personnel training is needed in each capacity step and how
                  long it takes.

                  Total maximum production capacity will be given by the BUYER
                  and Nokia.

                  INVESTMENT STEP 01

                  EQUIPMENT INVESTMENTS

                  WHAT EQUIPMENTS ARE NEEDED TO INCREASE VOLUME FROM 0 TO 01?
                  WHAT IS THE DELIVERY AND IMPLEMENTATION TIME?

                  PERSONNEL TRAINING

                  HOW MANY PERSONS MORE ARE NEEDED? HOW LONG RECRUITMENT AND
                  TRAINING WILL TAKE?

                  SPACE

                  IS THERE ENOUGH SPACE TO REACH 01 LEVEL CAPACITY? HOW LONG
                  SPACE INCREASING WILL TAKE?

                  INVESTMENT STEP 02

                  EQUIPMENT INVESTMENTS

                  WHAT EQUIPMENTS ARE NEEDED TO INCREASE VOLUME FROM 01 TO 02?
                  WHAT IS THE DELIVERY AND IMPLEMENTATION TIME?

                  PERSONNEL TRAINING

                  HOW MANY PERSONS MORE ARE NEEDED? HOW LONG RECRUITMENT AND
                  TRAINING WILL TAKE?

                  SPACE

                  IS THERE ENOUGH SPACE TO REACH 02 LEVEL CAPACITY? HOW LONG
                  SPACE INCREASING WILL TAKE?

                  INVESTMENT STEP 03

                  EQUIMENT INVESTMENTS


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                  WHAT EQUIPMENTS ARE NEEDED TO INCREASE VOLUME FOR 02 TO 03?
                  WHAT IS THE DELIVERY AND IMPLEMENTATION TIME?

                  PERSONNEL TRAINING

                  HOW MANY PERSONS MORE ARE NEEDED? HOW LONG RECRUITMENT AND
                  TRAINING WILL TAKE?

                  SPACE

                  IS THERE ENOUGH SPACE TO REACH 03 LEVEL CAPACITY? HOW LONG
                  SPACE INCREASING WILL TAKE?

                  ETC.

                  THE INVESTMENT STEPS WILL BE UPDATED LATEST 6 MONTHS AFTER THE
                  PRODUCTION STARTS.