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                              SEPARATION AGREEMENT


         SEPARATION AGREEMENT (this "Agreement") made as of the 19th day of
October, 1998 (the "Effective Date") by and between FRANK H. HOSEA, residing at
the address indicated following his signature below (hereinafter referred to as
"Employee") and CS WIRELESS SYSTEMS, INC., a Delaware corporation having its
principal place of business at 1101 Summitt Avenue, Plano, 75074 (hereinafter
referred to as the "Company").

         WHEREAS, Employee and the Company are parties to that certain
Employment Agreement dated as of April 2, 1997 (the "Employment Agreement") and
the Non-Qualified Stock Option Agreements dated as of June 3, 1996, January 1,
1997 and April 2, 1997 (the "Stock Option Agreements"); and

         NOW THEREFORE, in consideration of their mutual promises, and for other
good and valuable consideration, the parties, intending to be legally bound,
agree as follows:

1. TERMINATION OF EMPLOYMENT. The Employment Agreement is hereby terminated as
of the Effective Date, and shall be of no further force and effect, except as
provided in PARAGRAPH 2 and PARAGRAPH 5 below.

2. NON-DISCLOSURE. The non-disclosure covenants contained in PARAGRAPH 9(A) of
the Employment Agreement shall survive the termination of the Employment
Agreement in accordance with their terms, and the Non-Disclosure Agreement dated
as of April 2, 1997 (the "Non-Disclosure Agreement") between the parties shall
remain in full force and effect.

3. SEVERANCE. From the date hereof and continuing until April 1, 2000 (the
"Term") the Company shall pay Employee severance in an amount (the "Severance
Amount") equal to the Base Salary (defined herein) that would have been payable
pursuant to the Employment Agreement for the balance of the Term, payable in
equal monthly installments. All payments will be made according to Company's
normal payroll schedule and shall be made subject to applicable payroll
withholding. For the purposes of this Agreement, the term "Base Salary" shall be
defined as and deemed to be the sum of $140,000 payable annually during a
calendar year. The Parties acknowledge that such sum represents Employee's
annual base salary as of the Effective Date.

4. STOCK OPTIONS. The parties acknowledge that options (the "Original Options")
to purchase 66,000 shares of the Company's common stock, par value $.001
("Common Stock"), were granted to Employee under the 1996 CS Wireless Systems,
Inc. Incentive Stock Plan, as amended from time to time (the "Plan"). The
parties further acknowledge that of the Original Options, options to purchase
14,000 shares of Common Stock at an exercise price of $6.50 per share, and
options to purchase 5,000 shares of Common Stock at an exercise price of $9.40
per share, are fully vested (the "Remaining Options") and 

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the balance of the Original Options, which represent options to purchase 
47,000 shares of Common Stock, are hereby surrendered by Employee to the 
Company. The Remaining Options shall continue to be governed by the Plan.

5. NON-COMPETITION. (a) Employee and the Company acknowledge and agree that 
the Non-Competition provisions and restrictions (the "Non-Compete 
Restrictions") set forth in PARAGRAPH 8 of the Employment Agreement are in 
full force and effect as of the date hereof. Employee has requested Company 
to modify the Non-Compete Restrictions. In consideration of the agreement of 
the Company to modify the terms of the Non-Compete Restrictions and perform 
the terms of this Separation Agreement. Employee agrees to be bound by the 
covenants contained in PARAGRAPH 5.(b) below.

(b) Because Employee's services to the Company have been and are special and 
because Employee had access to and been responsible for developing a portion 
of the Company's confidential information, Employee covenants and agrees that 
from the date hereof through April 1, 2000 that he will not, directly or 
indirectly, either on his own behalf or on behalf of any person, partnership, 
corporation or otherwise, (i) engage in any business or undertaking directly 
competitive with the wireless cable television, cable television, 
subscription television, direct broadcast satellite, direct-to-home, wired 
video programming, non-wired video programming, wireless Internet access, 
wireless fixed telephony or other fixed wireless information businesses (the 
"Related Business") being carried on by the Company or its subsidiaries in 
any market serviced by the Company or any such subsidiary or (ii) be employed 
by or provide consulting services to or be an investor, limited partner or 
shareholder in, any entity or other person engaged in the Related Business 
within 25 miles from the originally listed and approved FCC broadcast point 
for each operating entity from which the Company or any of its subsidiaries 
does business at the Effective Date. The parties agree that the time period 
and geographical area of non-competition specified above are applicable to 
the restrictions set forth in (i) and (ii) of the preceding sentence and are 
reasonable and necessary in light of the transactions entered into in this 
Agreement. If, however, it shall be determined at any time by a court of 
competent jurisdiction that either the time period restriction or the 
geographical area restriction, or both, are invalid or unenforceable, the 
parties agree that any such invalid restriction shall be amended and reformed 
to the extent necessary to make same valid and enforceable in the 
determination of said court, and such restriction, as so amended, shall be 
enforceable between the parties to the same extent as if such amendment had 
been made as of the date of this Agreement. This PARAGRAPH 5 shall not apply 
to investments constituting not more than 5% of the common equity of a 
publicly traded or privately held company.

6. INSURANCE. To the extent permitted by the Company's insurance carriers and 
applicable law, and provided you elect to continue such coverage and make any 
required contributions, the Company agrees that you will remain eligible to 
participate in the Company's medical and dental plans through the earlier to 
occur of (i) the expiration of one year from the Effective Date or (ii) such 
time as you accept full time employment.

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7. RELEASE. (a) Employee hereby releases, remises, and forever discharges, 
and by these presents does, for himself, his heirs, executors, 
administrators, legal representatives and assigns, release, remise, and 
forever discharge the Company, its subsidiaries and Affiliates, its past, 
present and future divisions; its past, present and future subsidiary and 
parent corporations; its past, present and future Affiliates and related 
companies; its successors and assigns; its past, present and future 
directors, officers, stockholders, agents and employees both personally and 
as directors, officers, stockholders, agents and employees; and the past, 
present and future directors, officers, stockholders, agents and employees of 
its parents, subsidiaries, divisions, Affiliates, related companies and 
successors and assigns (hereinafter collectively referred to as "the Company 
and/or its Affiliates"), from any claim, known or unknown, asserted or 
unasserted, suspected or unsuspected, arising in any way from any actions 
taken by the Company and/or its Affiliates up to and including the date of 
the execution of this Agreement, including any claims, demands and causes of 
action under federal or state law, regulation or decision including any 
rights to bring any demands, complaints, causes of action, claims and charges 
under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. 
section 2000e ET SEQ., the Civil Rights Act of 1991, 42 U.S.C. section 1981a 
ET SEQ., the Employee Retirement Income Security Act, 29 U.S.C. section 1001 
ET SEQ., the Age Discrimination Employment Act of 1967, as amended, 29 U.S.C. 
section 601 ET SEQ. the Americans with Disabilities Act of 1990, 42 U.S.C. 
section 12101 ET SEQ, and any other federal or state law, regulation or 
decision, including but not limited to any claims arising out of his 
employment or the termination or resignation of his employment, including 
claims for wages owed, constructive discharge, wrongful discharge, infliction 
of emotional distress, breach of contract, breach of any implied covenant of 
good faith and fair dealing, violation of public policy, violation of company 
policy or any other common law claims, and any claims, demands or causes of 
action for injunctive or declaratory relief, reinstatement, compensation for 
lost wages, workers' compensation, employee or fringe benefits, compensatory 
or punitive damages, and any claims for attorneys' fees, interest and 
expenses and costs of litigation, and any other or additional relief.

(b) Without in any way limiting the scope and effect of this PARAGRAPH 7, 
Employee acknowledges that (i) he would not otherwise be entitled to all of 
the consideration described herein, and that the Company is providing such 
consideration in return for Employee's agreement to be bound by the terms of 
this Agreement; (ii) among the rights he knowingly and voluntarily waives by 
executing this Agreement is his right to bring against the Company any 
demands, complaints, causes of action, claims and charges under the Age 
Discrimination in Employment Act, 29 U.S.C. subsection 621 ET SEQ., or under 
any other federal or state law, regulation or decision prohibiting 
discrimination on the basis of race, color, religion, sex, age, national 
origin, sexual orientation or physical or mental handicap; (iii) he has been 
advised to consult with an attorney regarding this Agreement and he has, in 
fact, consulted with an attorney regarding this Agreement; and (iv) he has 
been given a reasonable period of time within which to consider this 
Agreement and if he wanted additional time, such time was available to him, 
up to and including October 29, 1998 which is more than twenty-one (21) 
calendar days from October 8, 1998 the date on which Employee first was 
provided with this Agreement and Employee further acknowledges that he does 
not want more time to consider this 

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Agreement and that he has requested that the Agreement be executed on this 
date. Employee understands that he may revoke this Agreement during the first 
seven days after he signs it by delivering written notice of his revocation 
to the Company. Employee understands that if he does not revoke this 
Agreement within the first seven days after he signs it, it will become 
effective on the eighth day after he signs it.

8. NOTICES. Any notice permitted or required hereunder shall be deemed 
sufficient when hand-delivered or mailed by certified mail, postage prepaid, 
and addressed if to the Company at the address indicated above and if to 
Employee at the address indicated below (or to such other address as may be 
provided by notice).

9. MISCELLANEOUS. This Agreement (i) together with the Non-Disclosure 
Agreement, constitutes the entire agreement between the parties concerning 
the subjects hereof and supersedes any and all prior agreements or 
understandings, (ii) may not be assigned by Employee without the prior 
written consent of the Company and (iii) may be assigned by the Company and 
shall be binding upon, and inure to the benefit of, the Company's successors 
and assigns. Headings herein are for convenience of reference only and shall 
not define, limit or interpret the contents hereof.

10. AMENDMENT. This Agreement may be amended, modified or supplemented by the 
mutual consent of the parties in writing, but no oral amendment, modification 
or supplement shall be effective.

11. SPECIFIC PERFORMANCE. The parties acknowledge that the Company would be 
irreparably damaged and there would be no adequate remedy at law for 
Employee's breach of PARAGRAPH 5 of this Agreement, and accordingly, the 
terms thereof shall be specifically enforced. Employee hereby consents to the 
entry of any temporary restraining order or preliminary or ex parte 
injunction, in addition to any other remedies available at law or in equity, 
to enforce the provisions hereof.

12. AFFILIATES. As used herein, the term "Affiliate" shall mean any 
individual or entity controlling, controlled by or under common control with 
the Company, now or in the future, including without limitation, partnerships 
in which the Company or any Affiliate may invest as a limited or general 
partner and limited liability companies in which the Company or any Affiliate 
may become a member.

13. SEVERABILITY. The provisions of this Agreement are severable. The 
invalidity of any provision shall not affect the validity of any other 
provision.

14. GOVERNING LAW. This Agreement shall be construed and regulated in all 
respects under the laws of the State of Texas.

         IN WITNESS WHEREOF, this Agreement is entered into as of the date 
and year first above written.

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                                 CS WIRELESS SYSTEMS, INC.


                                 BY: 
                                     ------------------------------------
                                          NAME:  DAVID WEBB
                                          TITLE: PRESIDENT AND
                                                 CHIEF EXECUTIVE OFFICER


                                 EMPLOYEE:
                                           ------------------------------
                                            NAME:     FRANK H. HOSEA
                                            ADDRESS:  1811 FOREST HILLS DRIVE
                                                      MCKINNEY, TX 75070

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