EXHIBIT

10.26




 




[*]

CONFIDENTIAL TREATMENT REQUESTED. 

CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED AND HAVE BEEN

SEPARATELY FILED WITH THE COMMISSION. 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED

PORTIONS.




 




 




TECHNOLOGY LICENSE AGREEMENT




 




 




This

Technology License Agreement, including the exhibits attached hereto (together,

the “Agreement”), is entered into by and between interWAVE

Communications International Ltd. (“ICI”), a Bermuda corporation,

interWAVE Advanced Communications, Inc. (“IACI”), a Delaware Corporation

(ICI and IACI, collectively, “Interwave”), and Telos Engineering

(Bermuda) Ltd. (“Telos”), an exempted limited liability company

organized under the laws of Bermuda, effective as of October 10, 2002 (the “Effective

Date”).




 




Recitals




 




A.          Interwave

has entered into that certain Asset Purchase Agreement dated August 16, 2002

(the “APA”) with GBase Communications (“GBase”) to purchase

certain assets, technology, and intellectual property rights of GBase; and




 




B.           Telos

desires to acquire and Interwave is willing to provide a license and certain

services pertaining to the technology and intellectual property purchased from

GBase, on the terms and conditions set forth herein.




 




For good and valuable consideration, therefore, the

receipt and sufficiency of which is hereby acknowledged, the parties agree as

follows:




 




1.           DEFINITIONS.  The terms defined below shall have the

meanings set forth below for purposes of this Agreement:




 




“Acquisition Effective Date” shall mean the

final closing date for the purchase of GBase’s assets by Interwave in

accordance with the APA.




 




“Affiliate” with respect to a subject entity,

means any entity fifty percent (50%) or more of whose voting shares (or other

interest representing the right to make decisions) is now or hereafter

beneficially owned or controlled, directly or indirectly, by such subject

entity.  An entity shall be an Affiliate

only so long as such beneficial ownership or control exists.





























 




“GBase IPR” shall mean any and all patents,

copyrights, trade secret rights, moral rights, and other intellectual property

rights that are in existence as of the Acquisition Effective Date and that are

owned by Interwave, or licensed to Interwave with a right to sublicense, solely

as a result of Interwave’s purchase of GBase’s assets pursuant to the APA.  For avoidance of doubt, GBase IPR shall

include intellectual property rights licensed to Interwave under the Milroute

Agreement.




 




“Licensed IPR” shall mean (i) GBase IPR and

(ii) subject to and conditioned upon payment of the Supplemental License Fee,

Manufacturing IPR.  Licensed IPR shall

not include any third party intellectual property for which Interwave does not

have the right to sublicense hereunder, including, without limitation,

intellectual property licensed from Qualcomm Incorporated pursuant to that

certain Enterprise Infrastructure Equipment License Agreement between Qualcomm

Incorporated and GBase dated November 22, 2000. For avoidance of doubt,

Licensed IPR shall include intellectual property rights licensed to Interwave

under the Milroute Agreement.




 




“Licensed Products” shall mean the IP-based

1xRTT base station products acquired by Interwave from GBase as further

described in Exhibit A, any and all hardware, software, ASICs, components,

and other parts thereof.




 




“Manufacturing IPR” shall mean (i)

modifications, improvements, and additions to, and derivative works of, the

Licensed Products and Technical Materials, and (ii) any and all patents,

copyrights, trade secret rights, moral rights, and other intellectual property

rights, in each case that are made,

invented, created or otherwise obtained by Interwave after the Acquisition

Effective Date pursuant to the Statement of Work (as defined in Section

4.2).  Manufacturing IPR shall not include

any intellectual property rights (i) that were invented, created or otherwise

obtained prior to the Acquisition Effective Date, or (ii) that are invented,

created or otherwise obtained after the Acquisition Effective Date

independently, and outside the scope, of the Statement of Work.




 




“Milroute Agreement” shall mean that certain

License Agreement between Interwave and Milroute Technologies, Inc. dated

August 16, 2002.




 




“Restricted Entities” shall mean [***], and any

Affiliates of the foregoing entities.




 




“Sublicense Fees” shall

mean the license

issuance fees, running royalties, minimum royalties and other similar royalties

or consideration received by Telos or due and payable to Telos in connection

with sublicensing the rights granted hereunder to third parties. Sublicense

Fees shall include other payments or consideration which are not identified in

the applicable license agreement as a license issuance fee, running royalty,

minimum royalty or other similar royalty to the extent that such payments or

consideration are paid or owing in actual exchange for the sublicense rights

granted by Telos to such third parties.




 




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“Technical Materials” shall mean all technical

information and documentation pertaining to the Licensed Products that are

reasonably necessary for Telos to manufacture and sell Licensed Products,

including without limitation any designs, ASICs, software source and object

code, schematics, layouts, algorithms, mask works, circuit designs,

specifications, technical drawings, prototypes, documentation, inventions,

processes, formulae, or methods relating to the Licensed Products, and the

GBase developed design, load test, and calibration tools for the Licensed

Products.




 




2.           DILIGENCE;

INITIAL MANUFACTURING AGREEMENT.




 




2.1           IP Diligence.  Commencing on October 11, 2002, and

continuing through October 18, 2002, (the “IP Diligence Period”),

Interwave will provide all cooperation, assistance, access to personnel,

documents and other materials reasonably requested by Telos in order to assess

whether: (i) the Licensed Products and Licensed IPR are owned or properly

licensable by Interwave pursuant to valid and enforceable agreements with all

relevant third parties; (ii) Interwave has all rights necessary, including

rights to sublicense any third party licenses, to grant the rights licensed to

Telos under this Agreement (the “Licensed Rights”); (iii) granting the

Licensed Rights to Telos will put Interwave in breach of any agreements or

understanding with any third parties; (iv) the exercise by Telos of any rights

granted by Interwave will infringe any third party’s intellectual property

rights; and (v) there are any claims, allegations, or proceedings alleging that

the Licensed Products infringe any third party’s intellectual property rights,

or any bases for any such claims or allegations.




 




2.2           Initial Manufacturing Agreement.  For a period of thirty (30) days after the

Effective Date, the parties will negotiate in good faith effort to agree upon

terms and conditions of a separate OEM agreement pursuant to which Interwave

will manufacture and provide to Telos certain components of the Licensed

Products that are subject to rights granted to Interwave from Qualcomm

Incorporated (the “Initial OEM Agreement”).  The Initial OEM Agreement will include mutually agreed upon terms

and conditions, which shall include at a minimum (i) commercially reasonable

terms and conditions for a product in a stage of development similar to that of

the Licensed Products, (ii) that for twelve months after the Effective Date,

the price charged to Telos for such components will not exceed Interwave’s

fully burdened costs plus [***], and (iii) that from the end of the twelve

month period described in (ii) above, through the following eighteen  month period of the Initial OEM Agreement,

the price charged to Telos for such components will not exceed Interwave’s

fully burdened costs plus [***]. 

Interwave’s fully burdened costs will be defined in the Initial OEM

Agreement.




 




 




 




3.           GRANT

OF RIGHTS; DELIVERY; SUPPORT




 




              3.1           License Grant.  Subject to and conditioned upon Telos’

payment of the Initial License Fee in accordance with Section 5.1, Interwave

hereby grants to Telos a perpetual, 




 




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irrevocable (except as set forth in Section 9.5),

non-exclusive, worldwide, royalty free license under the Licensed IPR to use,

develop, make, have made, copy, modify, create derivatives of, offer to sell,

sell, distribute, export and import the Licensed Products and the Technical

Materials.  The foregoing license shall

also include the Manufacturing IPR, subject to and conditioned upon payment of

the Supplemental License Fee in accordance with Section 5.2.  Interwave also covenants not to bring any

claim against Telos based on any allegation that Telos’ use, manufacture,

copying, modification, marketing, sale, distribution, export and/or import of

the Licensed Products and/or the Technical Materials, as they exist as of the

Acquisition Effective Date or as modified pursuant to the Statement of Work (as

defined in Section 4.2), infringes any Interwave patents or patent rights;

provided that Telos does not bring any claim against Interwave based on any

allegation that Interwave’s use, manufacture, copying, modification, marketing,

sale, distribution, export and/or import of the Licensed Products and/or the

Technical Materials as they exist as of the Acquisition Effective Date or as

modified pursuant to the Statement of Work (as defined in Section 4.2), infringes

any Telos patents or patent rights.




 




3.2           Sublicensing Rights.  From the Effective Date through March 31,

2004, the rights and licenses granted to Telos hereunder shall not include the

right to sublicense rights to manufacture Licensed Products, except to Telos’

parent and any Affiliates of Telos’ parent and to subcontractors and contract

manufacturers for purposes of manufacturing Licensed Products on Telos’

behalf.  For a period of three (3) years

following the Acquisition Effective Date, the rights and licenses granted to

Telos hereunder shall not include the right to sublicense any Restricted

Entities to manufacture Licensed Products. 

For the avoidance of doubt, nothing herein will prevent or restrict

Telos from selling Licensed Products to any third party, including without

limitation to a Restricted Entity. 

Except as set forth in this Section 3.2, Telos shall have unrestricted

rights to sublicense the rights and licenses granted in Section 3.1, by any

means now known or developed in the future, through multiple tiers of

distribution, including without limitation resellers, distributors, VARS and

OEMs.




 




              3.3           Technical Materials.  Upon October 31, 2002, at a time and place

and in a manner and format to be mutually agreed, Interwave will deliver to Telos

copies of all Technical Materials pertaining to the Licensed Products that were

acquired from GBase in tangible form pursuant to the APA.   Interwave shall only be obligated to

deliver third party Technical Materials to the extent it has the right to do

so.  For avoidance of doubt, Interwave

will provide any Technical Materials pertaining to technology licensed to

Interwave under the Milroute Agreement.




 




              3.4           Documentation; Technical Support.  After Telos pays the Initial License Fee,

Interwave will work with Telos in good faith to develop and provide to Telos

complete technical documentation for the Licensed Products within six (6) weeks

after such payment.  During such six

week period, Interwave will allow reasonable access to Interwave’s facilities

and personnel working on the documentation for up to four (4) of Telos’

technical personnel to enable them to participate in documenting the Licensed

Products and to obtain knowledge and know how 




 




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pertaining to the Technical Materials and Licensed

Products.  The final documentation

delivered to Telos shall be deemed part of the Technical Materials.  After delivery of the final documentation

and through February 28, 2003, Interwave will provide up to one hundred and

fifty (150) hours of technical support, via telephone, email, and any other

mutually agreed medium, for any technical questions related to the Licensed

Products and the Technical Materials, at no charge Telos.  Thereafter and through December 31, 2003,

Interwave will provide technical support reasonably requested by Telos on a

time and materials basis at Interwave’s fully burdened costs, expenses and

materials costs, as mutually agreed in advance of Interwave’s incurring such

costs and expenses.




 




              3.5           Ownership.  Interwave and its licensors shall retain

ownership of all right, title, and interest in and to the Licensed Products,

Licensed IPR, and Technical Materials, and in any modifications, updates,

improvements, additions, and derivative works thereof that are created by or

for Interwave, and all intellectual property rights therein.  Subject to Interwave’s and its licensors’

ownership of the underlying intellectual property, Telos shall retain ownership

of all right, title, and interest in and to any modifications, improvements,

additions, and derivative works of the Licensed Products, Licensed IPR,

Technical Materials, and Manufacturing IPR that are created by or for Telos

(other than Manufacturing IPR created or developed pursuant to the Statement of

Work), and all intellectual property rights therein.  Except as expressly set forth in this Agreement, nothing in this

Agreement shall be construed as granting to either party, by implication,

estoppel or otherwise, any ownership of, or license to, any intellectual

property rights of the other party.




 




4.           MANUFACTURING

SUPPORT




 




              4.1           Interwave Manufacturing Audit

Report.  No later than November 15,

2002, Interwave will deliver to Telos a complete copy of a report to be

prepared by or for Interwave assessing the following aspects of the Licensed

Products:  (i) manufacturability and

estimated manufacturing cost (by part/component); and (ii) steps needed to make

the Licensed Products ready for manufacturing and distribution to the public,

including without limitation government and industry standards compliance

issues (the “Manufacturing Audit Report”).




 




              4.2           Statement of Work; Manufacturing

Acceptance Criteria.  Between the

date that Interwave delivers the Manufacturing Audit Report to Telos and

December 1, 2002, the parties will mutually engage in a good faith effort to

agree upon a statement of work for non-recurring engineering to be completed by

Interwave and setting forth at least the following: (i) any non-recurring

engineering necessary to modify the Licensed Products as acquired from GBase in

order to ready them for manufacturing and release to the general public in

accordance with general industry manufacturing and governmental standards for

similar products; (ii) a specific timeline and set of milestones for Interwave

to complete that engineering; (iii) a complete set of engineering requirements

for the final deliverables once that engineering is completed; (iv) a complete

set of acceptance criteria to be used to certify that such engineering is complete

and that the final deliverables conform to the engineering requirements (the “Manufacturing






 




5





























 




Acceptance Criteria”); and (v) procedures for addressing any

changes in engineering requirements or scope 

(collectively, the “Statement of Work”).   One deliverable specified in the Statement

of Work, if any, will be a complete bill of materials for each of the Licensed

Products, including at least the source or sources of each component and each

subpart thereof (if any), and the current cost for each such component. If the

parties are unable to agree upon a Statement of Work by December 1, 2002, then

either party may terminate this Section 4 and Section 5.2 in accordance with

Section 9.3.




 




              4.3           Initial Non-Recurring Engineering.  If the parties have agreed to the Statement

of Work, then commencing upon the start date set forth in the Statement of

Work, Interwave will perform the non-recurring engineering and develop the

Manufacturing IPR in accordance with the schedule and milestones set forth

therein, at no additional charge to Telos (other than the Supplemental License

Fee, as defined in Section 5.2). 

Interwave shall solely own all Manufacturing IPR created or developed

pursuant to the Statement of Work.




 




              4.4           Telos Property.  During the term of this Agreement, Telos may

provide equipment, designs, materials, software and other property of Telos

(collectively “Telos Property”) to Interwave for its use in fulfilling

its obligations hereunder.  All Telos

Property furnished to Interwave by Telos shall (i) be clearly marked or tagged

as the property of Telos; (ii) be used only to provide the non-recurring

engineering services or manufacturing services described in this Agreement to

Telos and Telos’ authorized subcontractors, if any; (iii) be kept free of liens

and encumbrances; and (iv) be kept separate from other materials, tools, or

property of Interwave.  Telos shall

retain all rights, title and interest in the Telos Property, and Interwave

shall treat and maintain the Telos Property with the same degree of care as

Interwave uses with respect to its own valuable equipment, but in no event with

less than a reasonable degree of care for equipment of a similar kind and

importance.




 




              4.5           Project Managers. Each party

has appointed a single project manager (“Project Manager”).  The names, addresses and telephone and fax

numbers of the Project Managers are attached to this Agreement as Exhibit B.  The Project Managers shall act as liaisons

between the parties with respect to their respective performance of this

Agreement.  In the event that either

party appoints a new Project Manager, such party will promptly notify the

other.




 




5.           FEES

AND PAYMENTS




 




              5.1           Initial License Fee.  In consideration for the rights granted in

Section 3 above, and provided that neither party has terminated this Agreement

in accordance with Sections 9.2, Telos shall pay to IACI upon delivery of the

Technical Materials in accordance with Section 3.3 an initial license fee of

two million dollars ($2,000,000) (the “Initial License Fee”).




 




5.2           Supplemental License Fee.  If neither party has terminated the

Agreement prior to final delivery of the deliverables described in the

Statement of Work (as defined in Section 4.2), then subject only to verification

at Interwave’s facilities that the deliverables set forth in the 




 




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Statement of Work meet the Manufacturing Acceptance

Criteria (as defined in Section 4.2), Telos will pay to IACI a supplemental

license fee of [***] (the “Supplemental License Fee”).  Upon payment of the Supplemental License

Fee, Interwave will deliver to Telos the Manufacturing IPR and other

deliverables set forth in the Statement of Work.




 




5.3           Contingent Liability Payments.  In the event that, pursuant to the APA

executed between Interwave and GBase, after the Acquisition Effective Date

Interwave is required to pay to GBase shareholders any cash and/or stock

payments in addition to the initial acquisition price, in order to cover changes

in the value of Interwave’s securities between the Acquisition Effective Date

and December 31, 2003, then Telos will pay to IACI [***] of any such required

payments that are actually made by IACI, by wire transfer and at the same time

as such payments are made by IACI, up to a maximum of cumulative payments from

Telos of [***] (the “Contingent Liability Payments”).  Such payments shall be made within thirty

(30) days of receipt of notice from Interwave that Interwave is required to

make such an additional payment to GBase shareholders.




 




5.4           Sublicense Royalty.  In the event that Telos sublicenses rights

to manufacture or sell Licensed Products to any entity other than (i) Telos’

parent and any Affiliates of Telos’ parent, and (ii) subcontractors and contract

manufacturers for purposes of manufacturing or selling Licensed Products on

Telos’ behalf, Telos shall pay to Interwave the following:  (i) from 

April 1, 2004 through September 31, 2005, [***] of any Sublicense Fees

received by Telos or due and payable to Telos during that period; and (ii) from

October 1, 2005, through September 31, 2006, [***] of any Sublicense Fees

received by Telos or due and payable to Telos during that period.  After [***], Telos will no longer be

required to pay any further Sublicense Fees.




 




(a)           Reporting and Payment.  During the period from April 1, 2004 through

September 31, 2006 (“Fee Sharing Period”), Telos shall notify Interwave

in writing each time it enters into a sublicense agreement for which Sublicense

Fees apply, within five (5) days after entering into each such agreement.  During the Fee Sharing Period, Telos shall

provide reports to Interwave no later than five (5) days prior to the last day

of each calendar quarter (the last day of each calendar quarter being March 31,

June 30, September 30, and December 31), which shall set forth the amount of

Sublicense Fees received by Telos or due and payable to Telos during the three

calendar months preceding the month in which such report is due.   Interwave’s percentage share of Sublicense

Fees shall be due and payable no later than five (5) days prior to the last day

of each calendar quarter, and shall accompany such reports.  Interwave will have the right, at its own

expense, to have an independent auditor inspect and audit Telos’ relevant books

and records to verify the accuracy of payments under this Section 5.4. Such

audits shall take place no more than two times per calendar year, upon no less

than thirty (30) days written notice to Telos, during Telos’ standard business

hours.  The auditor shall report to

Interwave only the results of such audits, and shall not reveal any

confidential information of Telos or the identities of any Telos

sublicensees.  If any such audit should

disclose a shortfall of more than five percent (5%), Telos shall pay for the

shortfall and the reasonable costs and expenses of such audit (including fees

paid to the auditor).  Late payments

shall accrue interest at the prime rate as 




 




7





























 




reported by the Wall Street Journal on the day such

payment is due plus two percent (2%) or the maximum rate permitted by law, if

less.




 




5.5           Expenses; Third Party License Fees.  Except as otherwise explicitly set forth in

this Agreement, each party shall bear its own costs and expenses for any work

required to fulfill its obligations hereunder. 

Interwave shall pay any and all license fees and royalties, if any, with

respect to any third party intellectual property sublicensed to Telos

hereunder.




 




              5.6           Taxes.  The amounts paid pursuant to this Agreement

are not subject to sales tax, use tax, or value added tax.  All items of tax, tariffs, and fees based in

whole or in part on the income of a party shall be the sole responsibility of

such party.




5.7           Currency.  All fees are calculated and payable to

Interwave in United States Dollars.




 




                5.8       Non-Refundability of Payments.  All amounts payable by Telos under this

Agreement shall be non-refundable. In no event shall Telos have any right to

have any amount paid by Telos hereunder refunded, credited or offset against

any other amount due under this Agreement or any other agreement.




 




 




 




6.             REPRESENTATIONS

AND WARRANTIES




 




              6.1           Representations and Warranties of

Interwave.  Interwave hereby

represents and warrants to Telos as follows: 

(a) Interwave has the full power and authority to enter into this

Agreement, to carry out its obligations under this Agreement and to grant the

rights and licenses granted to Telos in this Agreement; and (b) to Interwave’s

actual knowledge, there are no pending claims or actions as of the Effective

Date alleging that the Licensed Products infringe any intellectual property

rights of a third party.




 




              6.2           Representations and Warranties of

Telos.  Telos hereby represents and

warrants to Interwave that Telos has the full power and authority to enter into

this Agreement and to carry out its obligations under this Agreement.




 




              6.3           Disclaimer of Warranties.  EXCEPT AS EXPRESSLY STATED IN THIS SECTION

6, THE PARTIES EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS,

IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED

WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.  AS SOME JURISDICTIONS DO NOT ALLOW

LIMITATIONS ON IMPLIED WARRANTIES, THE ABOVE DISCLAIMERS AND LIMITATIONS SHALL

ONLY APPLY TO THE EXTENT PERMITTED UNDER APPLICABLE LAW.




 




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7.           CONFIDENTIALITY




 




7.1           Confidential Information.  “Confidential Information” is all

information (i) identified in written or oral format by the Disclosing Party as

confidential, trade secret or proprietary information, and, if disclosed

orally, summarized in written format within thirty (30) days of disclosure, or

(ii) the Receiving Party knows or has reason to know is confidential, trade

secret or proprietary information of the Disclosing Party. “Disclosing Party”

is the party disclosing Confidential Information. “Receiving Party” is the

party receiving Confidential Information.




 




              7.2           Exclusions.  The Receiving Party shall have no obligation

with respect to information which (i) was rightfully in possession of or known

to the Receiving Party without any obligation of confidentiality prior to

receiving it from the Disclosing Party; (ii) is, or subsequently becomes,

legally and publicly available without breach of this Agreement; (iii) is

rightfully obtained by the Receiving Party from a source other than the

Disclosing Party without any obligation of confidentiality; (iv) is developed

by or for the Receiving Party without use of the Confidential Information and

such independent development can be shown by documentary evidence; (v) becomes

available to the Receiving Party by wholly lawful inspection or analysis of

products offered for sale; or (vi) is disclosed by the Receiving Party pursuant

to a valid order issued by a court or government agency, provided that the

Receiving Party provides the Disclosing Party (a) prior written notice of such

obligation and (b) the opportunity to oppose such disclosure or obtain a

protective order.




 




7.3           Confidentiality Obligation. 

For a period of five (5) years after initial disclosure, Receiving Party shall

not use or disclose any of the other party’s Confidential Information except to

the extent reasonably necessary to exercise its rights or perform its obligations

under this Agreement.  Receiving Party

shall use the same degree of care to protect the Confidential Information of

the Disclosing Party as it takes with respect to its own Confidential

Information of like or similar importance, but in no event less than reasonable

care.




 




7.4           Disclosure of Agreement. 

Each party shall keep the existence and terms of this Agreement confidential

unless disclosure is agreed to by the other party; provided that each party

shall have the right to disclose the existence and terms of this Agreement

without such agreement (a) to the party’s attorneys, advisors, or investors,

(b) to the extent required by law, (c) in connection with financing activities,

securities filings or SEC filings, or (d) in connection with a merger or

acquisition or proposed merger or acquisition, or the like.




 




8.           LIMITATION

OF LIABILITY




 




EXCEPT FOR LIABILITY ARISING FROM BREACH OF THE

PARTIES’ RESPECTIVE WARRANTIES UNDER SECTION 6 OR CONFIDENTIALITY OBLIGATIONS

UNDER SECTION 7, UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE 




 




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OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE

OR OTHER LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES

OR LOST PROFITS IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT.




 




9.           TERM

AND TERMINATION




 




              9.1           Term.  This Agreement shall remain in effect from

the Effective Date and until terminated by either party in accordance with this

Section 9.




 




              9.2           Termination During IP Diligence

Period.  Telos may terminate this

Agreement upon written notice to Interwave at any time between the Effective

Date and the end of the day on October 18, 2002, if: (i) Interwave does not

provide the cooperation, assistance, access to personnel, documents and other

materials described in Section 2.1; or (ii) as a result of the due diligence

described in Section 2.1, Telos reasonably concludes that Interwave lacks

sufficient rights in or title to the Licensed Products, Licensed IPR, and

Technical Materials to enable Telos to exercise the rights granted herein

without risk of claims by third parties. 

In the event of termination under this Section 9.2, the parties shall

have no further rights, obligations, or liability under this Agreement.




 




              9.3           Termination for Failure to Agree

to Statement of Work.  In the event

that the parties are unable to agree to the Statement of Work described in

Section 4.2 by December 1, 2002, either party may terminate Sections 4.2, 4.3,

and 5.2 (together, not individually) upon written notice to the other.  Any such termination will be effective upon

December 1, 2002.  Except for rights and

obligations set forth in those Sections, all other rights and obligations under

this Agreement shall survive termination under this Section 9.3.




 




              9.4           Termination for Failure to Make

Final Delivery.  In the event that

Interwave does not or cannot deliver the final deliverables specified in the

Statement of Work (as defined in Section 4.2) or the final deliverables do not

conform to the Manufacturing Acceptance Criteria after the final acceptance

testing set forth in the Statement of Work, then Telos may terminate Sections

4.2, 4.3, and 5.2 (together, not individually) upon written notice to

Interwave.  Except for rights and

obligations set forth in those Sections, all other rights and obligations under

this Agreement shall survive termination under this Section 9.4.




 




              9.5           Termination for Failure to Make

Contingent Liability Payments.  In

the event that Telos materially breaches any obligation to make Contingent

Liability Payments in accordance with Section 5.3, the parties will enter into

an expedited arbitration proceeding pursuant to Section 10.12.  If such arbitration results in a judgment

that Telos breached its obligations to make any Contingent Liability Payments,

and Telos does not cure any such breach within thirty (30) days of such adverse

judgment, then Interwave may terminate this Agreement upon written notice to

Telos and revoke any license rights granted by Interwave hereunder.  In the event of termination under this

Section 9.5, Sections 1, 3.5, 4.4, 5.5, 5.6, 6, 7, 8, 9 and 10 shall survive




 




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              9.6           Termination for Cause.  This Agreement may be terminated by a party

for cause immediately upon the occurrence of and in accordance with the

following:




 




                              (a)           Insolvency Event.  Either party may terminate this Agreement by

delivering written notice to the other party upon the occurrence of any of the

following events: (i) a receiver is appointed for either party or its property;

(ii) the other party makes a general assignment for the benefit of its

creditors; (iii) the other party commences, or has commenced against it,

proceedings under any bankruptcy, insolvency or debtor’s relief law, which

proceedings are not dismissed within sixty (60) days; or (iv) the other party

is liquidated or dissolved.




 




                              (b)           Default.  Either party may terminate this Agreement

effective upon written notice to the other if the other party violates any

covenant, agreement, representation or warranty contained herein in any

material respect or defaults or fails to perform any of its obligations or

agreements hereunder in any material respect, which violation, default or

failure is not cured within thirty (30) days after notice thereof from the

non-defaulting party stating its intention to terminate this Agreement by

reason thereof.




 




In the event of termination under this Section 9.6,

Sections 1, 3.1, 3.2, 3.5, 4.4, 5, 6, 7, 8, 9 and 10 shall survive termination

or expiration of this Agreement. 

Notwithstanding anything to the contrary in this Agreement, in the event

of any termination of this Agreement all end-user licenses granted by Telos in

connection with Licensed Products sold prior to such termination shall remain

in effect.




 




10.         MISCELLANEOUS




 




              10.1         Force Majeure.  Except for payment of money, neither party

shall be liable to the other for delays or failures in performance resulting

from causes beyond the reasonable control of that party, including, but not

limited to, acts of God, labor disputes or disturbances, material shortages or

rationing, riots, acts of war, governmental regulations, communication or

utility failures, or casualties.




 




              10.2         Compliance with Laws. Each party

warrants that in performance of work under this Agreement it shall comply with

all applicable federal, state, local laws and ordinances now or hereafter

enacted.




 




              10.3         Import and Export.  Interwave shall provide all information

under its control which is necessary or useful for Telos to obtain any export

or import licenses required for Telos to receive the Technical Materials. This

information is to be provided within ten (10) business days of Telos’

request.  The parties agree to comply

with all applicable export laws and regulations of the United States.




 




11





























 




              10.4         Relationship of Parties.  The parties are independent contractors

under this Agreement and no other relationship is intended, including a

partnership, franchise, joint venture, agency, employer/employee, fiduciary,

master/servant relationship, or other special relationship.  Neither party shall act in a manner that

expresses or implies a relationship other than that of independent contractor,

nor bind the other party.




 




              10.5         No Third Party Beneficiaries.  Unless otherwise expressly provided, no

provisions of this Agreement are intended or shall be construed to confer upon

or give to any person or entity other than Telos and Interwave any rights,

remedies or other benefits under or by reason of this Agreement.




 




              10.6         Equitable Relief.  Each party acknowledges that a breach by the

other party of any confidentiality or proprietary rights provision of this

Agreement may cause the non-breaching party irreparable damage, for which the

award of damages would not be adequate compensation.  Consequently, the non-breaching party may institute an action to

enjoin the breaching party from any and all acts in violation of those

provisions, which remedy shall be cumulative and not exclusive, and a party may

seek the entry of an injunction enjoining any breach or threatened breach of

those provisions, in addition to any other relief to which the non-breaching

party may be entitled at law or in equity.




 




              10.7         Notices.  Any notice required or permitted to be given

by either party under this Agreement shall be in writing and shall be

personally delivered or sent by a reputable overnight mail service (e.g.,

Federal Express), or by first class mail (certified or registered), or by

facsimile confirmed by first class mail (registered or certified), to the other

party.  Notices will be deemed effective

(i) three (3) working days after deposit, postage prepaid, if mailed, (ii) the

next day if sent by overnight mail, or (iii) the same day if sent by facsimile

and confirmed as set forth above. 

Notices shall be sent in accordance with the following contact

information, or any updated contact information provided by written notice in

accordance with this Section 10.7:




 








	

  Telos

  Engineering (Bermuda) Ltd.


  	

  InterWAVE

  Communications International Ltd.


  
	

  Clarendon

  House


  	

  312

  Constitution Drive


  
	

  2

  Church Street


  	

  Menlo

  Park, California 94025


  
	

  Hamilton

  HM CX, Bermuda


  	

  Attn:

  Priscilla Lu, CEO


  
	

  Attn:  Chief Executive Officer


  	

  Copy

  to Attn: Robin Foor, VP


  
	

  With

  a Copy To:


  	

  Fax:  650-321-6270


  
	

  Telos

  Technology (Canada) Inc.


  	

  Copy

  to Fax:  650-321-6381


  
	

  4600

  Jacombs Road, Suite 120


  	

   


  
	

  Richmond,

  BC


  	

   


  
	

  V6V

  3 B1 Canada


  	

   


  
	

  Attn:  Chief Executive Officer


  	

   


  
	

  Copy

  to Attn:  Chief Counsel


  	

   


  
	

  Fax:  604-303-8559


  	

   


  










 




12





























 




              10.8         Assignment. 

Neither party shall have the right to assign this Agreement without the

consent of the other party, provided, however, that each party shall have the

right to assign this Agreement without the consent of the other party to an

entity that acquires all or substantially all of its stock or assets, whether

by way of merger, acquisition, operation of law or otherwise.  Notwithstanding the foregoing, for a period

of three (3) years after the Acquisition Effective Date, this Agreement may not

be assigned by Telos to any Restricted Entity without Interwave’s prior written

consent.  Subject to the foregoing, the

rights and liabilities of the parties under this Agreement will bind and inure

to the benefit of the parties’ respective successors and permitted assigns.




 




              10.9         Waiver and Modification.  Failure by either party to enforce any

provision of this Agreement will not be deemed a waiver of future enforcement

of that or any other provision.  Any

waiver, amendment or other modification of any provision of this Agreement will

be effective only if in writing and signed by the parties.




 




              10.10       Severability.  If for any reason a court of competent

jurisdiction finds any provision of this Agreement to be unenforceable, that

provision of the Agreement will be enforced to the maximum extent permissible

so as to effect the intent of the parties, and the remainder of this Agreement

will continue in full force and effect.




 




              10.11       Controlling Law.  This Agreement and any action related

thereto shall be governed, controlled, interpreted and defined by and under the

laws of the State of California and the United States, without regard to the

conflicts of laws provisions thereof. 

The parties specifically disclaim the UN Convention on Contracts for the

International Sale of Goods.




 




              10.12       Dispute Resolution.  In the

event that there is a dispute arising out of or relating to this Agreement,

including without limitation the interpretation, making, performance, breach or

termination thereof, the dispute shall be finally settled by binding

arbitration in San Francisco, California under and in accordance with the

Judicial Arbitration and Mediation Service (JAMS) Rules, by a single arbitrator

who is a retired judge.  Judgment on the

award rendered by the arbitrator may be entered in any court having

jurisdiction thereof.  The arbitrator

shall apply California law to the merits of any dispute or claim, without

reference to rules of conflicts of law. 

Notwithstanding the foregoing, the parties may apply to any court of competent

jurisdiction in San Francisco County, California for a temporary restraining

order, preliminary injunction, or other interim or conservatory relief, as

necessary, without breach of this Section 10.12 and without any abridgment of

the powers of the arbitrator.  The costs

of the arbitration, including administrative and arbitrator’s fees, shall be

shared equally by the parties.  Each

party shall bear the cost of its own attorneys’ fees and expert witness

fees.  The arbitrator shall be selected

by mutual agreement within ten (10) days of the notice of arbitration. If no

agreement is reached as to the selection of the arbitrator within ten (10)

days, then JAMS shall select one retired judge to serve as the arbitrator.




 




13





























 




              10.13       Headings.  Headings used in this Agreement are for ease

of reference only and shall not be used to interpret any aspect of this

Agreement.




 




              10.14       Entire Agreement.  This Agreement, including all exhibits that

are incorporated herein by reference, constitutes the entire agreement between

the parties with respect to the subject matter hereof, and supersedes and

replaces all prior and contemporaneous understandings or agreements, written or

oral, regarding such subject matter.




 




              10.15       Counterparts.  This Agreement may be executed in two

counterparts, each of which shall be an original and together which shall

constitute one and the same instrument.




 




              10.16       Basis of Bargain.  EACH PARTY RECOGNIZES AND AGREES THAT THE

WARRANTY DISCLAIMERS AND LIABILITY AND REMEDY LIMITATIONS IN THIS AGREEMENT ARE

MATERIAL BARGAINED FOR BASES OF THIS AGREEMENT AND THAT THEY HAVE BEEN TAKEN

INTO ACCOUNT AND REFLECTED IN DETERMINING THE CONSIDERATION TO BE GIVEN BY EACH

PARTY UNDER THIS AGREEMENT AND IN THE DECISION BY EACH PARTY TO ENTER INTO THIS

AGREEMENT.




 




(Remainder

of this page intentional left blank.




The signatures of the parties appear on the next succeeding

page.)




 




14





























 




IN WITNESS WHEREOF, the parties hereto

have executed this Agreement by persons duly authorized as of the date and year

first above written.




 




	

  TELOS ENGINEERING (BERMUDA) LTD.


  	

  INTERWAVE COMMUNICATIONS INTERNATIONAL, LTD.


  
	

   


  	

   


  
	

  By: 


  	

  /s/ JACK MAR


  	

   


  	

  By:


  	

   /s/

  PRISCILLA LU


  	

   


  
	

   


  	

   


  
	

  Name: Jack Mar


  	

  Name: Priscilla Lu


  
	

   


  	

   


  
	

  Title: Chief Executive Officer


  	

  Title: Chief Executive Officer


  
	

   


  	

   


  
	

  Date: October      ,

  2002


  	

  Date: October      ,

  2002


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  INTERWAVE ADVANCED COMMUNICATIONS, INC.


  
	

   


  	

   


  
	

   


  	

  By: 


  	

  /s/ PRISCILLA LU


  	

   


  
	

   


  	

   


  
	

   


  	

  Name: Priscilla Lu


  
	

   


  	

   


  
	

   


  	

  Title: Chief Executive Officer


  
	

   


  	

   


  
	

   


  	

  Date: October       ,

  2002


  
							





 




15





























 




 




 




TABLE OF

EXHIBITS




 




 




	

  EXHIBIT A - 


  	

  DESCRIPTION OF LICENSED PRODUCTS


  
	

  EXHIBIT B -


  	

  PROJECT MANAGERS


  





 




16





























 




EXHIBIT A




 




DESCRIPTION OF LICENSED PRODUCTS




 




The Licensed Products will include the following 1xRTT products:




 




	

  1.


  	

  IP pico-BSS (Indoor and Outdoor)


  
	

  2.


  	

  IP micro-BSS


  
	

  3.


  	

  Windows NT/PC based PDSN


  
	

  4.


  	

  Sun/cPCI Form Factor PDSN


  
	

  5.


  	

  GBase developed design, load test, and calibration

  test tools for the foregoing.


  





 




17





























 




EXHIBIT B




 




PROJECT MANAGERS




 




Telos:                     Colin

Quon




Interwave:




 




 




18