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                            [BROADBAND VENTURES LOGO]
                                                                   EXHIBIT 10.24

                                                                JANUARY 23, 2004

TERAYON COMMUNICATION SYSTEMS, INC
4988 GREAT AMERICA PARKWAY
SANTA CLARA, CA 95054

Dear Zaki,

1)    INTRODUCTION

We look forward to the opportunity to use our broadband expertise to work with
your organization and potentially create value for your cable modem termination
system (CMTS) business unit (the "Project"). In our consulting engagements, we
believe it benefits both parties to describe our respective obligations in
advance and this engagement letter engages us as a consultant to your
organization and is designed to provide for our mutual responsibilities during
and after the consulting engagement.

2)    PROJECT SCOPE (STATEMENT OF WORK)

YAS Corporation, a Massachusetts Corporation ("YAS"), will provide to Terayon
Communication Systems, Inc., a Delaware corporation ("Terayon" or "Client") the
consulting and market development services in connection with the Project
described in the Statement of Work attached as Annex A (the "SOW") and on the
terms and conditions set forth below, in the SOW and in the Standard Engagement
Terms attached as Annex B. The SOW sets forth the work to be performed and may
change over time. If either you or we believe the work to be performed should be
expanded, modified, or otherwise changed, the changes must be agreed to by both
parties in writing.

This letter agreement is being delivered to you in duplicate. Kindly execute and
return one copy of this letter which (together with annexes hereto) will
constitute our agreement with respect to the subject matter of this letter.

Very truly yours,

YAS CORPORATION

By: /s/ Rouzbeh Yassini-Fard
    -------------------------------
Name: Rouzbeh Yassini-Fard
Title: President and Chief Executive Officer

Accepted and agreed to:

TERAYON COMMUNICATION SYSTEMS, INC.

By: /s/ Zaki Rakib
    -------------------------------
Name: Zaki Rakib
Title: Chief Executive Officer
Tax Identification Number of Client:

<PAGE>

                                                                         Annex A

                                STATEMENT OF WORK

Client Project Manager is: Doug Sabella, Terayon's Chief Operating Officer

YAS Project Manager is: Rouzbeh Yassini-Fard

Executive Summary: Terayon wishes to retain YAS to assist it in identifying,
establishing and implementing cable modem termination system (CMTS) product
requirements for the cable market in North America and in positioning Terayon's
CMTS product for deployment with major North American multiple system operators
(MSO). Terayon has selected YAS for this engagement due to its members' long
tenure, knowledge and expertise in the broadband cable industry and the specific
skill sets they possess in the areas that Terayon is seeking assistance.

The YAS Consulting Team dedicated on a non-exclusive basis to Terayon for the
provision of the consulting and marketing development services set forth below
will consist of the following five (5) individuals, subject to substitution
based on monthly consulting tasks and continued affiliation with YAS:

Rouzbeh Yassini-Fard - Project Manager

Jorge SalingerDoug JonesPaul Nikolich

Frank Wimler

Nancy Devoust

1. YAS CONSULTING SERVICES

In connection with the Project, the YAS Consulting Team will provide the
following consulting services and deliverables:

      a.    Weekly meetings and/or conference calls with the Terayon CMTS
            architecture team to evaluate and advise in technology areas such as
            IP, Security, and NMS and other areas with the goal of further
            refining Terayon's CMTS product to meet the product requirement
            needs of the North American cable market.

      b.    Help evaluate the strategic voice and data options for Terayon to
            drive the CMTS silicon road map.

      c.    Provide assessment of overall voice and data architecture and
            recommend make/buy decisions for current platform components and
            CMTS, with the goal of reducing as much as possible the cost of the
            CMTS product.

      d.    Assist Terayon in developing a plan to successfully parlay its
            expertise in RF, DOCSIS, and IP into an Intelligent Network Access
            company.

      e.    Provide Terayon management with monthly written reports setting
            forth the progress in CMTS development.

2. YAS MARKETING DEVELOPMENT SERVICES

      In connection with the Project, the YAS Consulting Team will provide the
      following marketing development services and deliverables:

      a.    Industry assessment and knock down analysis, CMTS deployment kit,
            and voice and data network strategy that may be utilized by Terayon
            to train the Terayon Sales and Marketing team on how Terayon can
            better, and more successfully compete in market.

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      b.    Assistance in specific U.S. account (including Comcast) planning,
            including sales strategy development and tactical methodologies to
            help assist Terayon in securing a winning value proposition. Terayon
            will continue to do its own customer sales efforts and YAS
            assistance will only be provided to members of the Terayon executive
            team.

      c.    Assistance in developing and executing CMTS operational readiness
            planning with U.S. customers as reasonably required within the scope
            of this agreement.

      d.    Work with Terayon to develop and implement a detailed voice and data
            customer deployment plan, including costs, for positioning the
            Company's strategic focus, and value proposition to cable operators.

      e.    Provide monthly progress reports regarding marketing development
            efforts projects and have a weekly conference call with Terayon's
            COO and Vice President, North American Sales.

3. TERAYON RESPONSIBILITIES

Terayon will work with the YAS Consulting Team to provide resources and the
information necessary for YAS to perform plan, and will, on a timely basis:

      a.    Provide access to Terayon executive team and CMTS business unit
            management.

      b.    Participate in an open and dynamic dialogue with YAS Consulting Team
            members to make the right strategic and operational tradeoffs.

      c.    There will be no public announcement of the existence of the Letter
            Agreement, unless previously agreed to in writing, or as may be
            required by SEC or other regulatory disclosure requirements,
            provided that Terayon hereby agrees to provide YAS with prior
            written notice of disclosure of the Letter Agreement pursuant to SEC
            and regulatory disclosure requirements.

<PAGE>

                                                                         ANNEX B

                            STANDARD ENGAGEMENT TERMS

1) ROLES

      a)    Client Support. Client support and cooperation is in the best
            interests of both Client and YAS to ensure an efficient and
            effective assignment result. YAS' ability to provide the services
            set out in the SOW requires Client's good faith support and
            cooperation, including Client's support and cooperation in gaining
            access to key people and information.

      b)    Timetable. YAS will use all reasonable efforts to achieve the
            deadlines, if any, set forth in any timetable and or dates for
            delivery by YAS contained in the SOW attached as Annex A to the
            letter agreement (the "Letter Agreement") to which this Annex B is
            also attached. (The Letter Agreement and all annexes thereto are
            referred to herein as the "Agreement.")

2) CONSULTING FEES AND EXPENSES

      a)    Base Fee. In consideration of YAS' consulting services in connection
            with the Project, Client shall pay YAS the following fixed monthly
            fees:

            i)      Calendar year 2004 - $140,000 per month, with the first
                  payment on January 20, 2004 and thereafter on the first day of
                  each month, February through December.

            ii)     Calendar year 2005 - $50,000 per month on the first day of
                  each month, January through December.

            iii)    Calendar year 2006 - $40,000 per month on the first day of
                  each month, January through December.

      b)    Sales Commission. In consideration of YAS' marketing development
            services in connection with the Project, Client hereby agrees to pay
            YAS a commission on sales of Terayon's CMTS equipment during the
            term of this Agreement to the top fifteen (15) (based on number of
            subscribers at the time a CMTS sale is made) North American MSOs
            ("NA CMTS Sales"). Notwithstanding the foregoing, the parties hereby
            acknowledge and agree that NA CMTS Sales shall exclude any and all
            (i) CMTS sales to Adelphia and (ii) any and all CMTS sales to any
            successor to Adelphia's business by merger, consolidation, or sale
            of any or substantially all of Adelphia's assets, to the extent that
            any such CMTS sale is intended for deployment in a former Adelphia
            property. Commission payments will be calculated in accordance with
            the commission table set forth below and will be paid quarterly
            within thirty (30) days of the end of each calendar quarter during
            the term hereof.

<TABLE>
<CAPTION>
                                    Cumulative Commissions Paid to
Time Period in which NA             YAS under this Agreement as of
   CMTS Sale Occurs                  the Date of a NA CMTS Sale                 Commission Rate
-----------------------             ------------------------------              ---------------
<S>                                 <C>                                         <C>
Jan '04 thru March `05              Up to $1,000,000                                 10%
                                    $1,000,001 to $2,000,000                         10%
                                    $2,000,001 to $3,000,000                         10%
                                    $3,000,001 to $4,920,000                          9%

April '05 thru Dec `05              Up to $1,000,000                                  9%
                                    $1,000,001 to $2,000,000                          9%
</TABLE>

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<TABLE>
<S>                                 <C>                                              <C>
                                    $2,000,001 to $3,000,000                          9%
                                    $3,000,001 to $4,920,000                        7.5%

Jan '06 thru Dec `06                Up to $1,000,000                                  5%
                                    $1,000,001 to $2,000,000                          5%
                                    $2,000,001 to $3,000,000                          5%
                                    $3,000,001 to $4,920,000                          5%
</TABLE>

      Terayon's obligation to pay YAS commission on NA CMTS Sales shall cease
      upon the earlier of (i) expiration of this Agreement or (ii) once YAS has
      been paid a cumulative total of $4,920,000 in sales commissions. Client's
      obligation to pay sales commissions shall survive the termination of this
      Agreement as provided in Section 7 b) below.

      c)    Invoices/Expenses. YAS will send all invoices for services rendered
            to Client on a monthly basis to the attention of Doug Sabella, Chief
            Operating Officer. Payments for services rendered shall be made in
            the amounts and on the dates set for the in Section 2(a) above. With
            each invoice for services, YAS will include the amount of its travel
            and out-of-pocket expenses incurred in connection with the provision
            of services under this Letter Agreement, along with appropriate
            backup for such expenses, provided, YAS shall obtain Client's prior
            approval of YAS' travel expenses in excess $10,000 for a month
            during the Project. Client will reimburse YAS for all of these
            expenses within thirty days of the date of the invoice.

3) CONFIDENTIAL INFORMATION

      a)    Client Confidential Information. YAS recognizes that in the course
            of performing services pursuant to the Agreement, YAS will have
            access to certain of Client's Confidential Information (as defined
            below), and YAS agrees that, without Client's prior written consent,
            YAS will not disclose any such Confidential Information to any third
            party, unless disclosure is required by law or the lawful order of a
            court or government agency, in which case, YAS shall notify Client
            of the required disclosure and reasonably cooperate with Client if
            Client chooses to seek a protective order maintaining the
            confidentiality of such information. YAS will also:

            i)    disclose Client Confidential Information only to those YAS
                  employees, consultants or agents with a need to know such
                  information for the purposes of this Agreement and, prior to
                  disclosing any Client Confidential Information to any such YAS
                  employee, consultant or agent, advise such employee,
                  consultant or agent of the confidentiality of such
                  Confidential Information and of the restrictions contained
                  herein regarding the disclosure and use of such Confidential
                  Information;

            ii)   use Client Confidential Information only for performing the
                  services described in the SOW in connection with the Project;

            iii)  at Client's request, or upon termination or expiration of this
                  Agreement, promptly deliver to Client all copies of
                  Confidential Information furnished to YAS by Client in
                  tangible form and destroy all copies of any analyses,
                  compilations, studies or other documents or materials prepared
                  by YAS and embodying any Client Confidential Information,
                  provided that YAS may retain for archival purposes a copy of
                  any report and/or presentation and any supporting documents
                  which YAS develops for Client and may retain a copy of such
                  report and/or presentation and any supporting documents and
                  use them for reference in any future consulting sales efforts.

      b)    Confidential Information. "Confidential Information" means any and
            all tangible and intangible information hereinbefore or hereinafter
            provided by Client or Client representatives to YAS as

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            long as all tangible materials that disclose or embody Confidential
            Information are marked as "confidential," "proprietary" or the
            substantial equivalent thereof and Confidential Information that is
            disclosed orally or visually shall be identified by Client as
            confidential at the time of disclosure and is followed up with a
            written statement of confidentiality within thirty (30) days of
            disclosure, other than information which (i) may be known to YAS or
            any of its employees, consultants or agents prior to disclosure to
            YAS by Client, (ii) may at any time become available to the general
            public without fault of YAS, (iii) is disclosed or lawfully
            available to YAS by a third party with no obligation of
            confidentiality to Client, (iv) is disclosed by Client to third
            parties without restrictions on disclosure or use, or (v) is
            independently developed by YAS or any of its employees, consultants
            or agents without reference to Client's Confidential Information.
            YAS' obligations under this Section 3 shall survive for the
            three-year period following termination of its engagement under the
            Agreement.

      c)    Use of Client Name. YAS will not use Client's name in any of its
            sales promotion material or activities without Client's prior
            written approval.

      d)    Use of YAS Name. Except as may otherwise be required by law, Client
            agrees (i) not to publish or otherwise disclose to any third party
            any study, report or other material prepared for Client by YAS
            without the prior written consent of YAS and (ii) except for
            internal purposes, not to use, identify, publish or otherwise reveal
            YAS' name or the name of any officer, employee or consultant of YAS
            without the prior written consent of YAS in each instance.

4) OWNERSHIP AND LICENSE.

      a)    Ownership of YAS Materials. In connection with the performance of
            the Project hereunder, YAS may utilize or provide certain materials
            and information proprietary to YAS, including, but not limited to,
            methods, procedures, programs, systems, inventions, know-how,
            software, and other information (collectively, "YAS Materials").
            Client acknowledges that all right, title and interest in and to all
            YAS Materials is and remains the exclusive property of YAS or its
            licensors. Client will not, and will not allow any employee,
            consultant or agent of Client to, copy, reverse engineer, modify,
            enhance, improve and/or create derivative works of YAS Materials, or
            copy, reverse engineer, or retrieve or read all or any portion of
            the source code of the YAS Materials. In the event that Client, or
            any of its employees, consultants or agents modifies, enhances,
            improves or creates derivative works of the YAS Materials, whether
            or not in violation of this Agreement, Client agrees that all
            intellectual property rights and all ownership of any ideas,
            modifications, enhancements, improvements, inventions, derivative
            works, works of authorship, or any other suggestions it or any of
            its personnel proposes, creates, authors or develops relating to the
            YAS Materials and all embodiments thereof (collectively,
            "Enhancements") are hereby assigned to YAS, and Client will provide,
            and will use commercially reasonable efforts to cause its employees,
            agents, consultants and contractors to provide, all reasonable
            cooperation which YAS determines is reasonably necessary to
            accomplish the complete transfer to YAS of the Enhancements and the
            Intellectual Property relating thereto, including without limitation
            executing further assignments, consents, releases and other
            commercially reasonable documentation, and at YAS' expense, using
            its commercially reasonable efforts to provide, and to cause any
            such third party to provide, good faith testimony by affidavit,
            declaration, deposition, in-person or other proper means in support
            of any effort by YAS to establish, perfect or defend its rights
            acquired pursuant to this Agreement through prosecution of patents
            or other governmental recordings, registrations or filings, and
            through regulatory proceedings, litigation, or other means. Subject
            to third-party rights and Client's payment of YAS's fees and
            expenses for the Project, YAS grants to Client a royalty-free,
            fully-paid, non-exclusive and non-transferable license to use the
            Enhancements during the term of this Agreement and thereafter in the
            normal course of Client's business.

      b)    Ownership of Client Materials. The parties acknowledge and agree
            that all right, title and interest in and to all materials and
            information supplied by Client for use in the performance of the
            Project (collectively, "Client Materials") will be owned exclusively
            by Client. YAS acknowledges that all

                                      -3-
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            right, title and interest in and to all Client Materials is and
            remains the exclusive property of Client or its licensors. YAS will
            not, and will not allow any employee, consultant or agent of YAS to,
            copy, reverse engineer, modify, enhance, improve and/or create
            derivative works of Client Materials, or copy, reverse engineer, or
            retrieve or read all or any portion of the source code of the Client
            Materials. In the event that YAS, or any of its employees,
            consultants or agents modifies, enhances, improves or creates
            derivative works of the Client Materials, whether or not in
            violation of this Agreement, YAS agrees that all intellectual
            property rights and all ownership of any ideas, modifications,
            enhancements, improvements, inventions, derivative works, works of
            authorship, or any other suggestions it or any of its personnel
            proposes, creates, authors or develops relating to the Client
            Materials and all embodiments thereof (collectively, "Client
            Enhancements") are hereby assigned to Client, and YAS will provide,
            and will use commercially reasonable efforts to cause its employees,
            agents, consultants and contractors to provide, all reasonable
            cooperation which Client determines is reasonably necessary to
            accomplish the complete transfer to Client of the Client
            Enhancements and the Intellectual Property relating thereto,
            including without limitation executing further assignments,
            consents, releases and other commercially reasonable documentation,
            and at Client's expense, using its commercially reasonable efforts
            to provide, and to cause any such third party to provide, good faith
            testimony by affidavit, declaration, deposition, in-person or other
            proper means in support of any effort by Client to establish,
            perfect or defend its rights acquired pursuant to this Agreement
            through prosecution of patents or other governmental recordings,
            registrations or filings, and through regulatory proceedings,
            litigation, or other means. In addition, the performance of the
            Project may include reports, information and analysis as described
            in the SOW (collectively, "Reports") which may be created by YAS
            specifically for Client. All right, title and interest in and to all
            Reports will be owned exclusively by Client and Client shall have
            the right to use any such Reports for Client's own internal
            purposes, provided YAS does not convey nor will Client obtain any
            right, title, or interest in YAS Materials used, provided or
            developed by YAS, or obtained by Client from YAS, in the performance
            of YAS's services, all of which are and will at all times remain the
            property of YAS and Client agrees that YAS retains the right to
            re-use, distribute and license to any of its current and future
            clients or any broadband industry organizations any of its YAS
            Materials, Enhancements, know-how, ideas, concepts, or similar
            information, however characterized, whether in tangible or
            intangible form, and whether used by YAS in the performance of the
            Project or not, at any time as long as such use, distribution or
            license does not disclose Client's Confidential Information. Client
            shall not disclose any YAS Materials, or any know-how, ideas or
            concepts to any third parties without the prior written consent of
            YAS, unless required by applicable law or legal process.

5) PERSONNEL

      a)    Independent Contractor. YAS' and its employees' and consultants'
            relationship to Client is that of an independent contractor. Nothing
            in this Agreement shall be deemed to create any form of partnership,
            principal-agent relationship, employer-employee relationship, or
            joint venture between the parties hereto and YAS shall have no
            authority to commit Client contractually, or otherwise, to any third
            party.

      b)    Non-Solicitation, Non-Hiring. Client and YAS agree that, except as
            otherwise hereafter agreed in writing, each party shall not directly
            or indirectly, individually, or together with, or through any other
            person, firm, corporation, or entity: (i) during and for two (2)
            years after the term of this Agreement, in any manner, approach,
            counsel, or attempt to induce any person who is then in the employ
            of or an independent contractor of the other party, to leave the
            other party's employ or engagement, or employ, engage or attempt to
            employ or engage any such person.

6) INDEMNIFICATION AND LIMITATION OF LIABILITY

      a)    Indemnification. Client agrees to indemnify YAS and its affiliates
            and respective directors, officers, employees, agents and
            controlling persons (YAS and each such person being hereinafter
            referred to as an "Indemnified Party") from and against any and all
            losses, claims, damages and

                                      -4-
<PAGE>

            liabilities, joint or several, to which such Indemnified Party may
            become subject under any applicable federal or state law, or
            otherwise and related to or arising out of YAS' engagement with
            Client or any services provided by YAS to Client under this
            Agreement ("YAS' Engagement") and will reimburse any Indemnified
            Party for all reasonable expenses (including reasonable counsel fees
            and disbursements) as they are incurred in connection with the
            investigation of, preparation for or defense of any pending or
            threatened claim or any action or proceeding arising therefrom;
            provided, however, if any Indemnified Party is specifically found in
            a final judgment by a court of competent jurisdiction to not be
            entitled to indemnification from Client for any loss, claim,
            damages, liability or expense, then that Indemnified Party shall
            repay to Client that portion of such Indemnified Party's expenses
            that had been reimbursed by Client, and that is the express subject
            of such final judgment.

            i)       Client will not be liable under the foregoing
                  indemnification provision to the extent that any loss, claim,
                  damage,liability or expense is specifically found in a final
                  judgment by a court of competent jurisdiction to have resulted
                  from YAS' willful misconduct or gross negligence. Client also
                  agrees that no Indemnified Party shall have any liability
                  (whether direct or indirect, in contract or tort or otherwise)
                  to Client related to or arising out of the YAS's Engagement
                  except to the extent that any loss, claim, damage or liability
                  is specifically found in a final judgment by a court of
                  competent jurisdiction to have resulted from YAS's willful
                  misconduct or gross negligence.

            ii)      If the indemnification of an Indemnified Party provided for
                  herein is for any reason unavailable, Client agrees to
                  contribute to the losses, claims, damages and liabilities for
                  which such indemnification is unavailable in such proportion
                  as is appropriate to reflect the relative fault of Client, on
                  the one hand, and YAS, on the other hand, as well as any other
                  relevant equitable considerations.

            iii)     Client agrees that, without YAS's prior written consent,
                  Client will not settle, compromise or consent to the entry of
                  any judgment in any pending or threatened claim, action or
                  proceeding in respect of which indemnification could be sought
                  hereunder unless such settlement, compromise or consent
                  includes an unconditional release of each Indemnified Party
                  from all liability arising out of such claim, action or
                  proceeding.

      b)    Covenant Not to Sue. Client agrees not to maintain any type of
            action and agrees not to assist in maintaining any type of action
            against YAS unless such action is premised on the willful misconduct
            or gross negligence on YAS' part.

      c)    Limitation of Liability. In no event shall either party to this
            Agreement have any liability, obligation or responsibility for any
            indirect, incidental, consequential, special or exemplary damages,
            or damages for loss of profits, revenue, data or use, arising in any
            way in connection with this Agreement, including, but not limited
            to, damage to property, injury to persons, lost profits, or delays
            or inconvenience, even if such party has been advised of the
            possibility of such damages. To the maximum extent permitted by
            applicable law, YAS' liability for damages hereunder shall not
            exceed the amount of fees actually paid by Client to YAS under the
            applicable SOW from which such claim arises.

                                      -5-
<PAGE>

      d)    Warranty Disclaimer and Limitation of Liability. YAS GIVES AND MAKES
            NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH
            RESPECT TO THE SERVICES TO BE PROVIDED IN CONNECTION WITH THE
            PROJECT. NO REPRESENTATIVE OF YAS IS AUTHORIZED TO GIVE OR MAKE ANY
            REPRESENTATION OR WARRANTY ON BEHALF OF YAS. WITHOUT LIMITING THE
            FOREGOING DISCLAIMER, NO IMPLIED WARRANTY OF MERCHANTABILITY, NO
            IMPLIED WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE, AND NO
            IMPLIED WARRANTY ARISING BY USAGE OR TRADE, COURSE OF DEALING, OR
            COURSE OF PERFORMANCE IS GIVEN OR MADE BY YAS OR SHALL ARISE BY OR
            IN CONNECTION WITH THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT,
            AND IN NO EVENT SHALL YAS HAVE ANY LIABILITY OR OBLIGATION
            WHATSOEVER IN CONNECTION WITH ANY SUCH WARRANTY. ALL SERVICES AND
            MATERIALS PROVIDED BY YAS UNDER THIS AGREEMENT, INCLUDING YAS
            MATERIALS ARE PROVIDED AS IS.

7) OTHER MATTERS

      a)    Defined Terms. Terms defined elsewhere in the Agreement and not
            otherwise defined herein are used herein with the meanings so
            defined.

      b)    Term and Termination. YAS' consulting engagement pursuant to this
            Agreement shall be in full force and effect on the date of the
            Letter Agreement and shall continue thereafter until December 31,
            2006, unless sooner terminated as provided herein. Client may
            terminate YAS' consulting engagement hereunder on ten (10) days'
            prior written notice if Mr. Rouzbeh Yassini-Fard ceases to be
            employed or affiliated with YAS during the term hereof. Moreover,
            either party may terminate YAS' engagement under the Agreement if
            the other party has materially breached any of the provisions of the
            Agreement, on ten (10) days' prior written notice to the breaching
            party unless such breach shall have been cured to the reasonable
            satisfaction of the non breaching party within such ten (10) days.
            In the event of any termination by either party pursuant to the
            previous two (2) sentences, Client's obligation to pay YAS the fixed
            monthly fee in accordance with Section 2 a) above shall thereupon
            cease as of the effective date of such termination and YAS will make
            reasonable efforts to bring closure to any in-process work prior to
            the effective date of termination of YAS' engagement and will be
            paid (1) fees to the effective date of termination, pro rated for
            any portion of a month and (2) a prorated portion of the commission
            then due and payable through the effective date of the termination.
            Any such termination by (i) YAS or (ii) Client after the earlier of
            (A) December 31, 2004 or (B) the date on which Client becomes an
            approved, qualified vendor to one (1) of the top three (3) North
            American MSOs (excluding Adelphia) will not terminate Client's
            obligation to pay commissions payable in accordance with Section
            2(b), provided, however, that in no event shall Client's obligation
            to pay YAS commissions extend beyond the scheduled expiration date
            of this Agreement, December 31, 2006. All out-of-pocket expenses
            reasonably incurred by YAS up to the effective date of termination
            shall also be reimbursed by Client. Client will pay YAS for any work
            performed by YAS at Client's request after the stated end date of
            YAS' engagement or after the termination of its engagement by either
            party at its customary rates on a time incurred basis unless
            otherwise agreed to by Client and Client and will reimburse YAS for
            all reasonable expenses incurred in connection with the performance
            of such work. In addition, subject to the limitation of liability in
            section 6, in the event of a breach of this Letter Agreement by the
            other party, a party hereto may seek such other legal action and
            other remedies as the deem appropriate. The terms and provisions of
            Sections 2(b) and (c), 3, 4, 5, 6 and 7 of this Agreement shall
            survive in accordance with their terms the expiration or termination
            of this Agreement by any party for any reason.

      c)    Non-Assignment. Neither party shall assign its rights or delegate
            its duties under the Agreement without the prior written consent of
            the other party.

      d)    Amendment, Waiver or Modification of Agreement. No provision of the
            Agreement shall be

                                      -6-
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            amended, modified or waived except by written agreement executed by
            both parties. The Agreement contains the entire agreement of the
            parties as to YAS' services to Client with respect to the Project,
            and supersedes all prior agreements, arrangements and understandings
            between the parties regarding the Project.

      e)    No Third Party Beneficiaries. The Agreement is made solely for the
            benefit of Client, YAS and the other Indemnified Parties and their
            respective successors, permitted assigns, heirs and personal
            representatives, and no other person shall acquire or have any right
            under or by virtue of the Agreement.

      f)    Governing Law. The Agreement shall be governed by and construed
            under the laws of The Commonwealth of Massachusetts without
            reference to conflicts of laws principles.

      g)    Notices. All notices and other communications in connection with
            this Agreement shall be in writing and shall be deemed to have been
            received by a party when actually received in the case of hand
            delivery or facsimile transmission with confirmed receipt, or five
            (5) days after mailing by first class mail, postage prepaid, or two
            (2) business days after being sent by reputable overnight courier
            service, to each party at the addresses shown below.

                  If to YAS, then to:
                  Name: Rouzbeh Yassini-Fard
                  Title: President and Chief Executive Officer
                  YAS Corporation
                  300 Brickstone Square
                  Andover, MA 01810
                  Facsimile: (978) 470-2670

                  If to the Client, then to:
                  Name: Doug Sabella
                  Chief Operating Officer
                  Terayon Communication Systems, Inc.
                  4988 Great America Parkway
                  Santa Clara, CA 95054
                  Facsimile:

      h)    Dispute Resolution. In the event of a dispute, either party may
            submit the dispute to the Chief Executive Officer of Client and
            Chief Executive Officer of YAS who shall negotiate in good faith in
            an effort to resolve the dispute, if the Chief Executive Officers
            determine in good faith that resolution through continued
            discussions does not appear likely, the matter shall be submitted to
            binding arbitration. One arbitrator, provided by JAMS/ENDISPUTE and
            mutually acceptable to the parties, shall preside over the matter.
            Any such arbitration shall take place in Boston, Massachusetts and
            be conducted in accordance with the then existing Comprehensive
            Arbitration Rules and Procedures of JAMS (the "Arbitration Rules").
            In any arbitration, each party shall pay its own attorneys' fees and
            one-half (-1/2) of the other arbitration costs, subject to final
            apportionment by the arbitrator. The arbitrator or mediator shall
            apply the law set forth herein and shall have the power to make any
            recommendation available at law or in equity; provided, however,
            that the arbitrator shall have no power to amend this Letter
            Agreement and the arbitrator shall have no authority to award any
            damages that are excluded by this Letter Agreement.

      i)    Injunctive Relief. The parties agree that any breach of the
            provisions of this Agreement relating to intellectual property
            rights, confidentiality or indemnification will cause the aggrieved
            party irreparable harm, and that such party will be entitled to
            injunctive relief for such unauthorized use or breach, in addition
            to such other rights and remedies as may be available to it.

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